TCR_Public/060601.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Thursday, June 1, 2006, Vol. 10, No. 129

                             Headlines

900 ORIOLE: Voluntary Chapter 11 Case Summary
A21 INC: Posts $2.4 Million Net Loss in 2006 First Fiscal Quarter
ABB LUMMUS: Ct. Okays Connecticut Valley as Special Claims Manager
ACE SECURITIES: Moody's Cuts Class B Cert.'s Ba2 Rating to Caa2
ADELPHIA COMMS: Court Disallows Lenders' Multi-Bil. Interest Claim

ADELPHIA COMMS: Selling Real Property & Equipment for $1.2 Million
AIMS WORLDWIDE: Posts $485,389 Net Loss in 2006 1st Fiscal Quarter
AIRADIGM COMMS: Gets Court's Interim Nod on Cash Collateral Use
ALBERTSONS INC: Moody's Lowers Corporate Family Rating to Ba3
AMARILLO BRACE: Case Summary & 5 Largest Unsecured Creditors

AMCAST INDUSTRIAL: Court Approves Asset Sale to Monomoy Capital
ASARCO LLC: Settles Dispute with Units Over Insurance Proceeds
ASARCO LLC: Assumes Five Salt River Project Agreements
ASARCO LLC: Wants to Ink two Tohono O'odham Settlement Agreements
B-FAST CORP: March 31 Balance Sheet Upside Down by $26.9 Million

BAY POINT: Moody's Puts (P)Ba2 Rating on Sr. Sec. Term Loan
BEAR STEARNS: Moody's Assigns Low-B Rating on 2 Cert. Classes
BREK ENERGY: Posts $124,398 Net Loss in 2006 First Fiscal Quarter
BRITESMILE INC: Faces Nasdaq Delisting Due to Late 10-Q Filing
CALHOUN CBO: Moody's Puts Ba2 Rated Notes on Watch for Upgrade

CALPINE CORP: CCAA Creditor Can File Proofs of Claim Until June 30
CELERO TECHNOLOGIES: Ch. 7 Trustee Hires Fox Rothschild as Counsel
CENDANT MORTGAGE: S&P Affirms Low-B Ratings on Four Cert. Classes
CENVEO CORP: Moody's Rates Proposed $525 Million Loan at Ba3
CGC APARTMENTS: Voluntary Chapter 11 Case Summary

CHANNEL-TRACK: Case Summary & 20 Largest Unsecured Creditors
CITYSCAPE HOME: S&P Affirms BB Rating on Class B-1F Certificates
CLEAN EARTH: Hires General Capital as Investment Banker
CLEAN EARTH: SunBridge Fails in Bid to Get Decision on Lease
COEUR D'ALENE: Earns $14.3 Million in Three Months Ended March 31

CORD BLOOD: March 31 Balance Sheet Upside Down by $4.3 Million
CRF-18 LLC: S&P Assigns Double-B Rating to Class D Revenue Notes
CUMMINS INC: Fitch Raises Jr. Conv. Sub. Debentures' Rating to BB
CWALT INC: Fitch Assigns Low-B Ratings to Class B-3 & B-4 Certs.
CWMBS INC: Fitch Assigns Low-B Ratings to Class B-3 & B-4 Certs.

D&G INVESTMENTS: Plans to Pay Unsec. Creditors in Full under Plan
DANA CORP: Gets Court Okay to Implement Travelers Bonding Program
DANA CORPORATION: Adds 12 Claims to Tooling Claim Schedule
DANA CORP: Sets off Allied Ring's $1.1 Million Claim Against Debt
DELTA AIR: Pilots Ratify $280 Million Labor Cost Savings Contract

DRAGON PHARMA: Earns $1.2 Million in 2006 First Fiscal Quarter
EASYLINK SERVICES: Posts $376,000 Net Loss in 2006 First Quarter
EL PASO CORP: S&P Upgrades Corporate Credit Rating to B+ from B
ENRON CORP: Flagstaff Holds $360.1 Million of Allowed Claims
ENRON CORP: Inks Settlements Expunging $121 Million of Claims

ENRON CORP: Settling Lewis and Fiserv Transfers Dispute
FRANKLIN CLO: Moody's Rates $13 Million Class E Notes at Ba2
FUNCTIONAL RESTORATION: Panel Can Hire Chief Restructuring Officer
FUNCTIONAL RESTORATION: Taps Novian & Novian as Special Counsel
GENERAL MOTORS: Troy Clarke Named President of GM North America

GENERAL MOTORS: Investing $170MM for Michigan Production Project
GMAC COMMERCIAL: S&P Removes Class F Cert.'s BB Rating from Watch
GPC SYSTEMS: Case Summary & 8 Largest Unsecured Creditors
GSR MORTGAGE: Fitch Places Low-B Ratings on Class B-4 & B-5 Certs.
HANGER ORTHOPEDIC: Completes Tender Offer  for $205 Mil. Sr. Notes

HEWETTS ISLAND: Moody's Rates $17 Million Class E Notes at Ba2
INSPIRE INSURANCE: Liquidating Trustee Can Make Initial Payments
INTERLINE BRANDS: S&P Assigns BB- Sr. Unsecured & B Sub. Ratings
INVERNESS MEDICAL: Posts $2.6MM Net Loss in Quarter Ended March 31
ITC HOMES: Christopher Linscott Names as Examiner

ITC HOMES: Hires Dustin Allred as Real Estate Broker
ITC HOMES: Selling Gray Hawk Property for $270,000
JEROME DUNCAN: Court Converts Case to Chapter 7 Liquidation
JEROME DUNCAN: Ch. 7 Trustee Hires Jacob & Weingarten as Counsel
JT THORPE: Seeks Court Approval for St. Paul Insurance Pact

K'S MERCHANDISE: Nears Out-of-Court Settlement with Creditors
KENNEDY ROAD: Voluntary Chapter 11 Case Summary
MARKSON ROSENTHAL: Sells Packaging Fulfillment Assets to Sonoco
MARSH SUPERMARKETS: Gets Purchase Offer from Drawbridge/Cardinal
MIRANT CORP: Brings NRG Takeover Bid Dispute to Delaware Court

MULTICANAL SA: Court Grants Permanent Injunction v. U.S. Creditors
NANTICOKE HOMES: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7
NES RENTALS: Moody's Reviews Low-B Rating on Corp. Family & Loan
NETWORK INSTALLATION: Posts $1.3MM Net Loss in 2006 1st Quarter
NRG ENERGY: Mirant Sues NRG for Obstructing $8 Bil. Takeover Bid

OWENS CORNING: Compromising 37 Asbestos Property Damage Claims
OWENS CORNING: Larry E. Tyree Co. Holds $335,128 Allowed Claim
PLIANT CORP: Court Approves Securities Screening Wall Procedures
POGO PRODUCING: Moody's Lowers Corp. Family Rating from Ba2 to Ba3
PUREBEAUTY INC: Moves to Reject 24 Store Leases

QUANTA CAPITAL: Plans to Place Three Units in Run-Off
RENATA RESORT: Case Summary & 20 Largest Unsecured Creditors
RESIDENTIAL ACCREDIT: Fitch Rates Two Cert. Classes at Low-Bs
SEARCHHELP INC: Posts $1.3 Million Net Loss in 2006 First Quarter
SECURECARE TECHNOLOGIES: KBA Group Raises Going Concern Doubt

SEMINOLE TRIBE: Moody's Affirms Ba1 Corp. Family & Bond Ratings
SENSE HOLDINGS: Posts $1.2 Mil. Net Loss in 2006 1st Fiscal Qtr.
SEQUENOM INC: Posts $3.7 Million Net Loss in 2006 First Quarter
SOLA COMMS: Louisiana Bankr. Court Confirms Plan of Reorganization
SOUTHWEST GAS: Moody's Lowers Preferred Shelf Rating to (P)Ba2

STARBOUND RE: S&P Assigns BB+ Rating to $91 Million Bank Loan
SUPERIOR ESSEX: Plans 2.7 Million Stock Offering to Pay Debts
SUPERVALU INC: Moody's Lowers Rating on Sr. Unsec. Notes to B2
SUN MICROSYSTEMS: Board Approves Restructuring Initiatives
TEXAS STAR: Voluntary Chapter 11 Case Summary

TRANS-ACTION EQUITY: Beal Bank Wants Chapter 11 Case Dismissed
TRIBUNE CO: Fitch Cuts Sub. Exchangeable Debentures' Rating to BB+
ULTRASTRIP SYSTEMS: Posts $2.2 Million Net Loss in First Quarter
UNITED ENERGY: Case Summary & 18 Largest Unsecured Creditors
US AIRWAYS: Court Dismisses Fraizer's Complaint & Disallows Claim

US AIRWAYS: Resolving Charlotte's Multi-Mil. Priority Tax Claims
USG CORP: Battle Ensues Over Elm's $57.55 Mil. Asbestos PD Claims
USG CORP: Investor Consortium's $12.5MM Claim Request Draws Fire
VALENTEC SYSTEMS: Posts $119,909 Net Loss in 2006 First Quarter
VERILINK CORP: Court OKs Maynard Cooper as Panel's Bankr. Counsel

VERILINK CORP: Panel Hires Arnall Golden as Bankruptcy Counsel
VOICE MOBILITY: March 31 Balance Sheet Upside Down by $7.4 Million
WELLS FARGO: Fitch Puts Low-B Ratings on Four Certificate Classes
WG HORIZIONS: Moody's Rates $12 Million Class D Notes at Ba2
WIZZARD SOFTWARE: Amends 2005 & 2004 Annual Financial Statements

XM SATELLITE: Intends to Redeem 8.25% Series B Preferred Stock

* Keith Gercken Joins Sheppard Mullin in San Francisco as Partner

* Chapter 11 Cases with Assets & Liabilities Below $1,000,000

                             *********

900 ORIOLE: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: 900 Oriole LLC
        5405 Alton Parkway, Suite 5A 545
        Irvine, California 92604

Bankruptcy Case No.: 06-10808

Type of Business: The Debtor previously filed for chapter 11
                  protection on December 29, 2004 (Bankr. C.D.
                  Calif. Case No. 04-17784).  Its affiliate, 925
                  Oriole, LLC, also filed for chapter 11
                  protection on March 29, 2006 (Bankr. C.D. Calif.
                  Case No. 06-10392).

Chapter 11 Petition Date: May 31, 2006

Court: Central District Of California (Santa Ana)

Judge: John E. Ryan

Debtor's Counsel: Michael G. Spector, Esq.
                  2677 North Main Street, Suite 320
                  Santa Ana, California 92705
                  Tel: (714) 835-3130

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

The Debtor does not have creditors who are not insiders.


A21 INC: Posts $2.4 Million Net Loss in 2006 First Fiscal Quarter
-----------------------------------------------------------------
a21, Inc., filed its first quarter financial statements for the
three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.

The Company reported a $2,416,000 net loss on $2,935,000 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $20,732,000
in total assets, $14,608,000 in total liabilities, Minority
Interest of $2,800,000 and $3,324,000 in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $4,000,000 in total current assets available to pay
$4,711,000 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?a23

                        Going Concern Doubt

BDO Seidman LLP , in Charlotte, North Carolina, raised substantial
doubt about a21, Inc.'s ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31, 2005.  The auditor pointed to the Company's working
capital deficit and losses from operations.

                          About A21 Inc.

a21, Inc., markets advertising prints & Web mails through its
subsidiary SuperStock, Inc.  It offers services to advertising
agencies, publishing and media companies.


ABB LUMMUS: Ct. Okays Connecticut Valley as Special Claims Manager
------------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware allowed ABB Lummus Global Inc. to
employ Connecticut Valley Claim Service Company, Inc., nunc pro
tunc to April 21, 2006.

Connecticut Valley will provide specialized claims management,
administration, processing and support services.  The Firm will:

   (a) prepare reports on the settlement or other resolution of
       claims by the Debtor prior to its bankruptcy filing;

   (b) provide analyses with respect to the Debtor's
       asbestos-related cases, including, but not limited to,
       those that have been opened or closed against the Debtor
       before it filed for bankruptcy, and the amount incurred
       and spent on indemnity and defense in the litigation of
       the case;

   (c) maintain existing claims file -- includes pleading,
       discovery materials and any existing settlement documents
       -- on asbestos-related cases filed against the Debtor
       before it filed for bankruptcy;

   (d) maintain and provide data and analysis concerning the
       amount of outstanding defense counsel bills; and

   (e) provide other data management analysis support as may be
       required by the interests of the Debtor.

John Disckhoff, the president of Connecticut Valley, discloses
that the Firm's professionals bill:

       Designation                         Hourly Rate
       -----------                         -----------
       President                               $220
       IT Manager                              $175
       Account Manager                         $150
       Contract Specialist                     $125
       Account Representative                  $125
       Senior Claim Analyst                    $110
       Senior Specialist                        $80

Mr. Dickhoff assures the Court that Connecticut Valley does not
hold or represent an interest adverse to the Debtor and is
disinterested as that term is defined in Section 101(14), as
modified by Section 1107(b) of the Bankruptcy Code.

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.


ACE SECURITIES: Moody's Cuts Class B Cert.'s Ba2 Rating to Caa2
----------------------------------------------------------------
Moody's Investors Service downgraded six certificates from two ACE
subprime mortgage deals issued in 2002 and 2004.  The pools are
backed by fixed-rate and adjustable-rate subprime mortgage loans
that were originated by various lenders.  Ocwen Federal Bank, FSB
and Saxon Mortgage Services service the loans in the 2002-HE1
deal.  Ocwen Federal Bank, FSB services the loans in the 2004-HE1
transaction.

The three most subordinate certificates from both deals are being
downgraded based on the weaker than anticipated performance of the
mortgage collateral and the resulting erosion of credit support.  
In both of the transactions, overcollateralization amounts are
currently below their targets and pipeline losses are likely to
cause eventual depletion of the overcollateralization and losses
on the most subordinate tranches.  Furthermore, existing credit
enhancement levels may be low given the current projected losses
on the underlying pools.

Complete rating actions:

Issuer: ACE Securities Corp. Home Equity Loan Trust

Downgrades:

   * Series 2002-HE1, Class M-2, downgraded from A2 to Baa1
   * Series 2002-HE1, Class M-3, downgraded from Baa2 to B1
   * Series 2002-HE1, Class M-4, downgraded from Baa3 to B3
   * Series 2004-HE1, Class M-5, downgraded from Baa2 to Baa3
   * Series 2004-HE1, Class M-6, downgraded from Baa3 to Ba2
   * Series 2004-HE1, Class B, downgraded from Ba2 to Caa2


ADELPHIA COMMS: Court Disallows Lenders' Multi-Bil. Interest Claim
------------------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York sustained the objection of
Adelphia Communications Corporation, its debtor-affiliates and the
Official Committee of Unsecured Creditors against claims for
additional interest asserted by the administrative agents for six
of the Debtors' prepetition credit facilities, on behalf of the
lenders of those facilities.

In its 26-page decision, Judge Gerber finds, among others:

    (a) that the Debtors' taking of an accrual for liabilities
        that might be imposed with respect to Grid Interest was
        focused only on financial accounting obligations, with a
        mindset based on the importance of conservative
        accounting, particularly after the excesses of the Rigas
        era;

    (b) no evidence that the Debtors' accounting personnel
        intended to waive any defenses the Debtors might have to
        those claims, and finds no intent to waive those defenses;

    (c) that the Debtors did not waive their defenses to bank
        lender claims for the additional interest;

    (d) that the bank lenders' actions too were based solely on
        financial accounting concerns, and that there is no
        indication that the bank lenders intended to waive claims
        for the recovery of sums that they did not accrue; and

    (e) that the bank lenders did not waive their claims to the
        additional interest sought.

The Credit Facilities are:

     1. Century-TCI Facility -- dated as of December 3, 1999,
        among Century-TCI California, L.P., certain lenders and
        Citibank, N.A., as the Administrative Agent;

     2. UCA-HHC Facility -- dated as of May 6, 1999, among Hilton
        Head Communications, L.P., UCA Corp. and certain
        Borrowers, various Lenders and Wachovia Bank, N.A., as the
        Administrative Agent;

     3. FrontierVision Facility -- a second amended and restated
        credit agreement dated as of December 19, 1997, among
        FrontierVision Operating Partners, L.P., various Lenders
        and JP Morgan Chase Bank, as the Administrative Agent;

     4. The Parnassos Facility -- dated as of December 30, 1998
        among Parnassos, L.P., various Lenders and The Bank of
        Nova Scotia, as the Administrative Agent;

     5. The Century Facility -- dated as of April 14, 2000, among
        Century Cable Holdings LLC and certain other Borrowers,
        various Lenders and Bank of America, N.A., as
        Administrative Agent; and

     6. The HVA Facility -- amended and restated credit agreement
        dated as of March 29, 1996, among Highland Video
        Associates, L.P., and Global Acquisition Partners, L.P.,
        various Lenders and BNS as the Administrative Agent.

The Debtors are also a party to the Olympus Facility dated as of
September 28, 2001, among Olympus Cable Holdings, LLC, and
certain Borrowers, various Lenders and Bank of Montreal, as
Administrative Agent.  But BMO did not seek additional interest
in the proof of claim it filed on behalf of the lenders of the
Olympus Facility.

Representing the ACOM Debtors, Marc Abrams, Esq., at Willkie Farr
& Gallagher LLP, in New York, related that in January 2004, the
Administrative Agents filed these claims for the principal and
interest under the Credit Facilities:

    Claimant          Claim No.             Claim Amount
    --------          ---------             ------------
    BMO                 11158             $1,265,000,000
    BNS                 13383               undetermined
    BNS                 13384                    623,000
    BofA                15928              2,480,000,000
    Citibank             8810              1,000,000,000
    JP Morgan            9888                617,312,500
    Wachovia            11204                831,375,000

Mr. Abrams told the Court that the Lenders have received
approximately $1,500,000,000 in postpetition adequate protection
payments with respect to interest charges under the very same
Credit Facilities used by the Rigas family to defraud the
Debtors.

Moreover, the Lenders will have their claims for principal and
interest on the Credit Facilities paid in full under the Debtors'
proposed plan of reorganization even though the ACOM Debtors
never received the benefits of at least $3,000,000,000 of those
funds, Mr. Abrams added.

Notwithstanding the extraordinary benefits they have received,
the Administrative Agents amended their proofs of claim asserting
that the compliance certificate delivered to them were not
accurate, and thus the interest rates that they would have
charged the ACOM Debtors under the certain grid pricing schedules
could have been higher than the interest rates actually charged,
resulting in approximately $300,000,000 of additional interest
charges, Mr. Abrams related.  The Administrative Agents now seek
to recover the $300,000,000 from the ACOM Debtors' unsecured
creditors.

From September through November 2005, the Administrative Agents
filed these claims for additional interests:

    Claimant          Claim No.                Claim Amount
    --------          ---------                ------------
    BNS                 18058        $2,100,000 to $41,900,000
    BNS                 18059        $4,100,000 to $81,000,000
    BofA                17701                     undetermined
    Citibank            17724        $4,800,000 to $92,000,000
    JP Morgan           17702        $2,500,000 to $70,000,000
    Wachovia            17722                      $87,000,000

Mr. Abrams argued that the Administrative Agents' claims for
additional interest should be disallowed because:

    -- there is no basis under the relevant loan agreements for
       awarding additional "grid" interest after inaccurate
       compliance certificates have been delivered;

    -- the Administrative Agents voluntarily waived any right to
       default interest in exchange for numerous benefits they
       received under the DIP Financing;

    -- the Agents waived their right to receive additional grid
       interest by continuing to accept, without objection,
       payments for interests at the grid rates in effect as of
       the Petition Date pursuant to the Final DIP Order; and

    -- the grid interest claims are untimely, since they have been
       asserted for the first time during a period of more than
       seven months to nearly two years after the Bar Date.

                         Court's Ruling

The Court disagreed with bank lenders' contention that they have
a contractual entitlement to the incremental interest, and that
the asserted contractual entitlement is recoverable as a secured
claim under Section 506(b) of the Bankruptcy Code.

Judge Gerber found that the amount payable as Grid Interest, as a
matter of contract law, is determined by the compliance
certificates.  "Under the agreements, whatever is said in the
compliance certificates is controlling.  And there is no
mechanism in the agreements for a re-computation of the
Applicable Margin if the compliance certificates turn out to be
inaccurate, by reason of either mistake or fraud."

The Court noted that Wachovia Bank, N.A., and a number of the
other bank lenders also contend that most of the contracts have a
very broad definition of "Obligations," and include all
obligations "arising under or in connection with the credit
agreements."  Thus, they argue, the incremental interest
collectible is one of the "Obligations" under the credit
agreements, and the Grid Interest, as one of the "Obligations,"
is thus recoverable.

"But the argument is circular, and the Court must reject it,"
Judge Gerber opined.  The desired additional interest constitutes
part of the "Obligations" under the facilities to the extent --
but only the extent -- that it is provided for under the
contracts, Judge Gerber emphasized.

Moreover, Judge Gerber said, the Court is not persuaded by
Wachovia and other bank lenders' contention that they have the
necessary contractual entitlement because in some or all of the
agreements, each borrower must indemnify the bank lenders against
all losses and damages incurred in connection with the bank
lenders entering into and performing under the credit agreements.

Judge Gerber pointed out that the key word there is "indemnify,"
which has long been held to be synonymous with "hold harmless,"
and which has been variously defined as "[t]o restore the victim
of a loss, in whole or in part, by payment, repair, or
replacement, or "to make good a loss that someone has suffered
because of another's act or default."  The Court clarifies that
indemnification provisions give rise to restitutionary rights,
and are not back-door means to get the benefit of one's bargain.

The Court considered it inappropriate to penalize the Debtors or
the bank lenders for their accounting decisions with respect to
accrual of additional interest claims.

The Court believed that it has greater expertise in analyzing
contractual obligations than do the Debtors' or the bank lenders'
accounting personnel.

Judge Gerber said the measure of the bank lenders' damages for
fraud or misrepresentation would be their out-of-pocket loss --
essentially or entirely their outstanding principal -- and not
the profits they would have realized in the absence of fraud.

The Debtors will pay that principal back upon confirmation, and,
so far as the record reflects, the bank lenders will have no
further out-of-pocket damages.

According to Judge Gerber, he does not need to address the
Creditors' Committee's and the Debtors' other contentions,
asserting waiver of the claims for incremental interest; that
bank lenders should be judicially estopped from asking for it;
and that proofs of claim filed on behalf of the bank lenders
before the Bar Date failed to assert the claims for the
additional interest.  "There were no valid claims to waive.  The
other arguments are likewise academic."

For these reasons, the Court ruled that the bank lenders will not
have a claim for the incremental interest under their contracts.

The Court noted that while most of the bank lenders did indeed
retain remedies against Adelphia Communications Corporation in
tort, those tort remedies do not include expectancy damages and
at that time as the bank lenders are fully repaid the principal
on their loans, they will have no claims in tort.

Judge Gerber further ruled that the Debtors do not have to
reserve sums under their reorganization plan to satisfy bank
lender claims for the Grid Interest.

The bank lenders' rights to seek allowance of other aspects of
their claims remains in effect and all parties' rights with
respect to future aspects of the bank lenders' claims are
reserved and preserved.

A full-text copy of the Court's Decision is available for free at
http://ResearchArchives.com/t/s?a34

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)


ADELPHIA COMMS: Selling Real Property & Equipment for $1.2 Million
------------------------------------------------------------------
Pursuant to the excess assets sale procedures approved by the
U.S. Bankruptcy Court for the Southern District of New York,
Adelphia Communications Corporation and its debtor-affiliates
inform the Court that they will sell these assets for $1,225,703:

    1. Asset:            Two electrical transformers
       Purchaser:        Doug Beat Company
       Purchase Price:   $10,000
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

    2. Asset:            Real property at Lot 31, Bloody Point,
                         83 Fuskie Lane, Hilton Head,
                         South Carolina
       Purchaser:        Jeff Bradley
       Purchase Price:   $1,050,000
       Agent:            Charter One Realty
       Deposit:          $10,000
       Appraised Value:  $820,000

    3. Asset:            Cable and electronics equipment
       Purchaser:        West 1 CATV Supplies, Inc.
       Purchase Price:   $6,000
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

    4. Asset:            Cable and electronics equipment
       Purchaser:        Quality Cable & Electronics, Inc.
       Purchase Price:   $3,213
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

    5. Asset:            Cable and electronics equipment
       Purchaser:        Adams Global Communications, Inc.
       Purchase Price:   $3,453
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

    6. Asset:            Cable and electronics equipment
       Purchaser:        Broadband Remarketing International, LLC
       Purchase Price:   $42,661
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

    7. Asset:            Cable and electronics equipment
       Purchaser:        Digicomm International, Inc.
       Purchase Price:   $110,376
       Agent:            none
       Deposit:          (not mentioned)
       Appraised Value:  No appraisal was conducted

The maximum consideration to be paid for assets sold pursuant to
the Court-approved Excess Asset Sale Procedures is $1,000,000.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, contends that the sale of the South Carolina Real Property
may be authorized because:

    -- the net recovery to the Debtors' estate as a result of the
       Sale will not exceed $1,000,000; and

    -- the appraised value of the Property does not exceed
       $1,000,000.

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


AIMS WORLDWIDE: Posts $485,389 Net Loss in 2006 1st Fiscal Quarter
------------------------------------------------------------------
AIMS Worldwide, Inc., filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.

The Company reported a $485,389 net loss on $249,715 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,786,270
in total assets and $4,346,491 in total liabilities, resulting in
a $1,560,221 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $927,826 in total current assets available to pay
$4,130,491 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?a2d

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
Cordovano & Honeck LLP in Denver, Colorado, raised substantial
doubt about AIMS Worldwide, 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 operating losses and working capital deficiency.

AIMS Worldwide, Inc. -- http://www.aimsworldwide.com/-- is a   
marketing communications consultancy firm providing organizations
with its AIMSolutions branded focused marketing solutions.  The
Company says AIMS(TM) or Accurate Integrated Marketing Solutions
increases the accuracy of the strategic direction of its client's
marketing program, improves results and reduces the cost, by
refocusing "mass marketing" to a more strategic "One-2-One(TM)"
relationship with the ideal customer.


AIRADIGM COMMS: Gets Court's Interim Nod on Cash Collateral Use
---------------------------------------------------------------
The Honorable Robert D. Martin of the U.S. Bankruptcy Court for
the Western District of Wisconsin allowed Airadigm Communications,
Inc., on an interim basis, to use cash collateral securing
repayment of its debts to Telephone and Data Systems, Inc.

Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell, Black,
Rosenbloom & Moritz, Ltd., in Chicago, Illinois, informed the
Court that the Debtor would use the cash collateral to fund its
reorganization and continuing business operations.

Ms. Pamenter told the Court that the Debtor previously filed for
bankruptcy on July 28, 1999.  TDS, the Oneida Enterprise
Development Authority and Ericsson, Inc., held significant secured
claims against the Debtor in the prior bankruptcy case.  In
November 2000, the W.D. of Wisconsin Bankruptcy Court confirmed a
plan of reorganization in the Debtor's first bankruptcy case.

In connection with the prior bankruptcy case and in accordance
with the 2000 Plan and other loan documents, TDS made advances to
the Debtor from time to time and acquired the secured claims of
OEDA and Ericsson.

When the Debtor filed its second chapter 11 petition, it owed TDS
approximately $136,652,535.  Of the total prepetition
indebtedness, at least $96,652,535 is secured by security
interests in all of the Debtor's assets except for the Debtor's
licenses issued by the Federal Communications Commission.  The
licenses are encumbered by liens securing indebtedness to the FCC
in the approximate amount of $64,000,000.

As adequate protection for its interests, the Court granted TDS
replacement liens and security interests to the extent of any
diminution in the value of its collateral.

The Court will consider approving the Debtor's request on a final
basis on June 6, 2006.

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 second 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.


ALBERTSONS INC: Moody's Lowers Corporate Family Rating to Ba3
-------------------------------------------------------------
Moody's Investors Service lowered the long-term ratings of
Albertson's, Inc. and its subsidiary American Stores, including
the corporate family rating to Ba3 from Ba2.  The rating outlook
is stable.  This rating action concludes the review for possible
downgrade initially begun on Sept. 6, 2005.

Ratings lowered:

Albertson's, Inc.

   * Corporate family rating to Ba3 from Ba2
   * Senior unsecured notes, Medium Term Notes, debentures,
     mandatory convertible debt and bonds to B2 from Ba3

American Stores Company

   * Senior unsecured notes, Medium Term Notes, debentures and
     bonds, guaranteed by Albertson's, Inc., to B2 from Ba3

Rating affirmed:

   * Albertson's, Inc.
   * Commercial paper at Not Prime

Upon completion of the acquisition of Albertsons by SUPERVALU
INC., Moody's will withdraw Albertson's corporate family rating.
Should Albertson's commercial paper program be terminated after
the pending acquisition of the company, Albertson's short term
rating will also be withdrawn.


The key drivers of the downgrade of the long-term ratings:

   (1) the imminent sale of the entire company to a consortium
       composed of SUPERVALU Inc., CVS Corporation and an
       investor group led by CERBERUS CAPITAL MANAGEMENT, L.P.
       Albertson's shareholders have approved the transaction;

   (2) the pending division of Albertson's assets and operations,
       post-transaction, with SUPERVALU acquiring about 1124
       stores and related support operations, CVS acquiring all
       of Albertson's standalone drugstore business, and the
       CERBERUS-led consortium acquiring about 655
       underperforming stores in Dallas/Fort Worth, Florida,
       Northern California, Rocky Mountains and Southwestern
       divisions;

   (3) the high leverage of new parent SUPERVALU post-
       transaction, with debt to EBITDA (based on Moody's
       standard analytical adjustments) for the combined company
       likely to be about 4.6 times, even without Albertson's
       share of under-funded multi-employer pension plans; and

   (4) Moody's expectation that the legacy debt of both
       Albertsons and American Stores will likely be held post
       merger by subsidiaries of SUPERVALU and that it will
       therefore be effectively subordinated to $4 billion of
       senior bank facilities at SUPERVALU that will benefit from
       the guarantees of operating subsidiaries.

The Ba3 corporate family rating of Albertsons is based on the
company's prospective position as a subsidiary of SUPERVALU.  The
combined Albertsons and SUPERVALU will be the third largest
grocery retailing, with scale in terms of revenues that scores at
the investment grade level.

However, the significant increase in debt to fund the transaction
will make the new SUPERVALU highly leveraged, with pro-forma
credit metrics that fall into the Ba-range.  The business risk of
the combined entity is at the low-Baa or high-Ba level because of
expected challenges in achieving the promised post-merger
efficiencies, as well as continued competitive inroads by non-
traditional retailers who continue to gain market share.

The stable rating outlook reflects Moody's expectation that credit
metrics of the combined company will remain near pro-forma current
levels over the medium-term, as fixed charge burden for debt
service, capital investment, and dividend payments will remain
substantial relative to operating cash flow, and as grocery
retailing competition will remain intense.

An upgrade is unlikely within the medium-term because of the
lengthy integration process for the combination.  Over the longer
term, ratings could move upward if the combined company
establishes that it can obtain a material portion of the promised
post-merger operating efficiencies and if its many geographies are
able to maintain market share and operating margins in spite of
the high level of competition.

Additionally, an upgrade would require a strengthening of
financial flexibility such that free cash flow to debt can be
sustained above 10%, EBIT covers interest expense by more than 3
times, and debt to EBITDA falls toward 4.25 times.  Factors that
could lead Moody's to consider a negative rating action include a
reversal in debt protection measure improvements such as debt to
EBITDA approaching 5 times, EBIT to interest falling below 1.5
times, free cash flow to debt declining to break-even, permanent
market share declines in several of the company's key markets, or
extended challenges in combining the Albertson's stores with the
existing SUPERVALU operations.

Headquartered in Boise, Idaho, Albertsons, Inc., operates about
2500 food and drug stores in 37 states.  Revenues for the fiscal
year ended February 2, 2006 exceeded $40.3 billion.


AMARILLO BRACE: Case Summary & 5 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Amarillo Brace & Limb, Inc.
        dba Aslan Orthotic & Prosthetic Centers
        817 Hoover Drive
        Lubbock, Texas 79416

Bankruptcy Case No.: 06-50122

Type of Business: The Debtor offers orthotic and prosthetic
                  products and services.

Chapter 11 Petition Date: May 31, 2006

Court: Northern District of Texas (Lubbock)

Judge: Robert L. Jones

Debtor's Counsel: Max Ralph Tarbox, Esq.
                  McWhorter, Cobb & Johnson, LLP
                  P.O. Box 2547, 1722 Broadway
                  Lubbock, Texas 79408
                  Tel: (806) 762-0214
                  Fax: (806) 762-8014

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 5 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service         941 Taxes             $668,682
Austin, TX 73301

                                 Income Taxes            $8,663

John Hanley                      Partner Buy-Out       $542,505
726 Orange Park Avenue           Note
Lakeland, FL 33801

State National Bank                                    $276,259
1617 Broadway
Lubbock, TX 79408

J & E Investments                                       $38,500

Ford Motor Credit                                       $24,068


AMCAST INDUSTRIAL: Court Approves Asset Sale to Monomoy Capital
---------------------------------------------------------------
Monomoy Capital Partners, L.P. agreed to purchase Casting
Technology Company, a subsidiary of Amcast Industrial Corporation
that manufactures aluminum automotive components for domestic and
transplant original equipment manufacturers.  Financial terms of
the transaction were not disclosed.

Monomoy will acquire all of the operating assets of CTC from the
estate of Amcast through a pre-negotiated sale of assets under
Section 363 of the Bankruptcy Code.  The U.S. Bankruptcy Court for
the Southern District of Indiana approved the sale on May 24,
2006, and the parties expect to close the transaction by no later
than June 7, 2006.

CTC utilizes proprietary squeeze cast technology to cast and
produce steering knuckles and compressor scrolls for Honda,
Nissan, GM and Opel-Europe.  The squeeze cast process allows the
Company to produce lightweight, safety critical automotive parts
with the shape and strength characteristics of a forged component
at a fraction of the cost.  CTC is located in Franklin, Indiana
and has operated as a successful but largely neglected division of
Amcast since 1992.

"CTC is a terrific operating division of a troubled, bankrupt
company," stated Justin Hillenbrand, a Monomoy principal.  "We
believe in the Company's squeeze cast technology; we have great
confidence in Craig Conaty and his management team; and we admire
the Company's spotless manufacturing record over the past five
years.  The Monomoy acquisition will transform CTC into a
standalone business and provide CTC with unprecedented financial
and strategic resources."

Monomoy will retain the current operating management of CTC,
including Craig Conaty, Jerry Pilman, Dave Gerken and Mark George,
and will provide the new company with a new financial team.  Craig
Conaty, the current general manager of the CTC division, will
assume the position of Chief Executive Officer of the new company.  
Conway, Mackensie and Dunleavy will provide interim management
services over the next six months.

"This transaction presents a tremendous opportunity for CTC," Mr.
Conaty explained.  "Monomoy has made a substantial investment in
our core business and has developed a comprehensive program that
will improve every aspect of the Company.  Their experience in
business restructuring and bankruptcy has helped us turn a
difficult situation into an exciting new direction for CTC, its
employees and customers."

Monomoy has reached agreement in principle with SMW, Sanden, GM,
Metaldyne, TRW and Opel to continue and expand CTC's current
component contracts and has concluded discussions with the
Company's largest suppliers to provide trade terms upon the
closing of the acquisition.  "The cooperation of SMW and Nissan
were instrumental to this transaction," said Mr. Hillenbrand.  "We
thank both for their support and we look forward to a seamless
transition to the new CTC on June 7."

The acquisition of CTC is the fourth by Monomoy since August of
2005 and will join Awrey Bakeries, LLC, Hess Industries, Inc., and
Barjan, LLC in the Monomoy portfolio. Richard Porter, Kevin Morris
and James Mazza of Kirkland & Ellis, L.P. represented Monomoy in
the transaction.

                 About Monomoy Capital Partners

Monomoy Capital Partners, L.P. -- http://www.mcpfunds.com/-- is  
a private equity fund founded in March 2005 to make controlling
investments in smaller middle-market companies that require
operational or financial restructuring.  Monomoy targets
fundamentally sound businesses with revenues less than
$150 million and acquires businesses through bankruptcy,
out-of-court restructurings, corporate divestitures and other
complex transactions.

                     About Amcast Industrial

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

Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for chapter 11 protection a second time on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq.,
and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C.,
represent the Debtors in their restructuring efforts.  Henry A.
Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors.  Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor.  The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC.  When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.


ASARCO LLC: Settles Dispute with Units Over Insurance Proceeds  
--------------------------------------------------------------
Before ASARCO LLC and its debtor-affiliates filed for bankruptcy,
certain insurance policies were purchased to cover, among other
things, asbestos-related liabilities.  In June 2005, the Debtors
received $2,200,000 from the KWELM group of insolvent London
market carriers pursuant to asbestos insurance coverage.

ASARCO LLC and its Asbestos Subsidiary Debtors had competing
interests in the insurance proceeds, which resulted to a dispute.

To settle the dispute, the parties agreed that the insurance
proceeds will be used to pay for the services of bankruptcy
professionals and advisors of the Debtors and the Official
Committee of Unsecured Creditors for the Asbestos Subsidiary
Debtors.  The insurance proceeds will cover reorganization-
related services.

The parties also agreed that after the Initial Disbursements,
ASARCO will deposit the remainder of the Proceeds into an
interest-bearing escrow account to be maintained by Wells Fargo
Bank, National Association.  Withdrawals, transfers or
disbursements from the Escrow Account will be made only upon
presentation of a demand to Wells Fargo with the approval of
ASARCO, the Asbestos Debtors and the Asbestos Committee, or upon
Court order.

In July 2005, the Debtors received $955,037 from Bermuda Fire &
Marine Insurance Company for the asbestos insurance coverage.
The Additional Proceeds was deposited into the Escrow Account and
was used to pay the Debtors' bankruptcy professionals and
advisors.

In December 2005, the Debtors received an additional $761,847
from the KWELM group.  The December Proceeds will be deposited
into the Escrow Account and will be used to pay bankruptcy
professionals and advisors.  The December Proceeds may also be
used to compensate officers and directors of the Asbestos
Subsidiary Debtors and any post-bankruptcy expenses and costs
incurred by the Asbestos Subsidiary Debtors in the ordinary
course.

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: Assumes Five Salt River Project Agreements
------------------------------------------------------
Salt River Project Agricultural Improvement and Power District
provides electricity to ASARCO LLC's mines in the Gila and Pinal
counties through five separate Electrical Service Agreements with
supplemental Interruptible Riders.

SRP asked the U.S. Bankruptcy Court for the Southern District of
Texas in Corpus Christi to compel ASARCO to decide whether to
assume or reject the five Electric Service Agreements.

At the parties' agreement, the Bankruptcy Court authorizes ASARCO
to assume all five Agreements and the related Interruptible
Riders.

The Court directs ASARCO to pay these monetary defaults to SRP:

    -- $3,134,436 as principal payment to SRP;

    -- 7% interest per annum from Aug. 9, 2005, until payment
       date; and

    -- $57,723 for attorneys' fees.

In addition, ASARCO is directed to pay $16,510 to the Pima County
Treasurer all ad valorem property taxes due for 2005 on the real
estate secured and encumbered by two Deeds of Trust.

SRP will continue to offer the Interruptible Rider service for
each substation until the earlier of:

    -- 12 months from the confirmation of a plan of reorganization
       for ASARCO;

    -- April 30, 2008; or

    -- the date the SRP Board of Directors eliminates
       Interruptible Rider service for all Large General Service
       customers.

ASARCO, SRP, the Official Committee of Unsecured Creditors and
The CIT Group/Business Credit, Inc., stipulate and agree that:

    (a) SRP will extend secured credit for electricity through
        monthly billing in arrears for all electrical service,
        with payment to be made no later than 16 days after
        billing date.  If ASARCO fails to pay, SRP will send a
        notice of default.  On the 6th day after receipt of notice
        of default, if ASARCO still has not paid, SRP may
        terminate electric service without notice or court
        approval.

    (b) The existing security deposit of $560,000 will be applied
        by SRP to ASARCO's Cure Payment.

    (c) The two Deeds of Trust filed on record in Pima County
        presently create valid, enforceable and perfected first
        priority liens in favor of SRP on the real property to
        secure all credit extended by SRP for electricity sold to
        ASARCO.  The first priority lien interest created by the
        Deeds of Trust will be superior to any liens of any ASARCO
        creditor.

    (d) The Deeds of Trust will be renewed and modified, and the
        liens extended, without compromising their first priority
        lien status, to reduce the default rate of interest to
        10%, and to clarify that the default rate of interest
        applies to all sums ASARCO owes SRP that are past due.

    (e) If ASARCO's daily average electricity usage exceeds
        $90,000 over any consecutive 14-day period, SRP may
        require an additional security deposit in the amount
        necessary to secure the additional increased usage.  At no
        time will SRP be required to extend unsecured credit to
        ASARCO.

    (e) SRP's right to and interest in any cash payments and
        additional security deposits will be superior to the
        claimed interest of any creditor of ASARCO, including CIT,
        except to the extent that an unused balance of any cash
        security deposit might remain in the hands of SRP after
        SRP has been paid in full on any postpetition claim
        against ASARCO.

    (f) All of ASARCO's existing and future indebtedness to SRP
        will constitute an administrative expense against the
        estate.

    (g) Any post-confirmation extension of credit will be subject
        to analysis and approval by SRP in accordance with its
        standard Business Credit Policy and without reference to
        any agreement or arrangement contained within this
        Stipulation.  SRP will have no obligation to extend post
        confirmation credit to ASARCO and may in its sole
        discretion require additional security subsequent to the
        entry of an order confirming a plan, or in the appointment
        of a trustee, or a conversion to Chapter 7.

    (h) The Stipulation will be governed by Arizona laws.

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: Wants to Ink two Tohono O'odham Settlement Agreements
-----------------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to enter into the
ASARCO and Tohono O'odham Settlement Agreements.

ASARCO LLC is a defendant in United States v. Tucson (U.S.
District Court, District of Arizona, No. CV-75-039 TUC FRZ) and
Alvarez v. Tucson (U.S. District Court, District of Arizona, No.
CV 93-0039 TUC FRZ), in which it is claimed that ASARCO
contaminated groundwater through operation of its mines on the
San Xavier District of the Nation.

Pursuant to the Southern Arizona Water Rights Settlement Agreement
of 2004, ASARCO is required to execute these agreements for the
adjudication process of ASARCO's lawsuits:

A. The ASARCO Agreement

    Parties to this Agreement are ASARCO, the Tohono O'odham
    Nation, the San Xavier District, two classes of San Xavier
    allottees and the United States government.

    The key provisions of the Agreement are:

       (a) ASARCO may take up to 10,000 acre-feet per year of the
           Nation's allocation of Central Arizona Project water to
           reduce ASARCO's pumping of groundwater on and near the
           Reservation.

           Subject to a 13% increase every five years, ASARCO will
           pay:

             -- $15 per acre-foot to replace water pumped on the
                Reservation under wells leased to ASARCO at the
                Mission Mine by the Nation, and

             -- $20 per acre-foot to reduce off-Reservation
                pumping.

      (b) ASARCO's option to renew the Well Site Lease for an
          additional 25 years is recognized as already having
          occurred as of 1997.

      (c) ASARCO will reduce its groundwater pumping under the
          Well Site Lease by the same volume as the CAP water
          delivered to it.

      (d) ASARCO will construct and maintain the CAP
          infrastructure at Mission Mine.  To finance the
          construction of the infrastructure, ASARCO may borrow up
          to $800,000, on a secured basis from the Nation for up
          to 14 years at 6% interest.  The loan will be repaid
          from the value of Arizona groundwater storage credits
          available as a result of the Arizona Water Settlements
          Act of 2004 and state legislation.

      (e) The parties reached a contingent settlement of the
          Alvarez groundwater contamination claim.  The ground
          water contamination settlement is effective only if
          ASARCO begins to use CAP water leased from the Nation.

          Payments for CAP water will go to a special account
          called "The Ground Water Contamination Settlement
          Account" until Asarco has paid $1,500,000.

          If ASARCO does not use enough CAP water to pay the
          $1,500,000 within 14 years, ASARCO will supplement the
          CAP payments based on the schedules set out in the
          Agreement.

          If ASARCO chooses to receive CAP water during the first
          three years after the Effective Date, the Nation, the
          District, the Allottees and the United States government
          will waive and release ASARCO from claims for damages to
          groundwater.

      (f) The Nation, the Allottees and the United States
          government waive all claims arising from ASARCO's
          withdrawal of underground water through the date of the
          execution of the agreement.  They will also release all
          claims against ASARCO after the date of execution of the
          agreements to the extent claims arise out of ASARCO's
          withdrawal of water pursuant to Type 1 and Type 2 state
          water rights, which grant the holders the right to pump
          groundwater in certain geographical areas.

B. The Tohono O'odham Settlement Agreement

    This Agreement incorporates the ASARCO Agreement.  Parties to
    this Agreement are the United States government, the state of
    Arizona, the Nation, the city of Tucson, Farmers Investment
    Co., the United States v. Tucson Allottee Class, the Alvarez
    v. Tucson Allottee Class, and ASARCO.

    The key provisions of the Agreement relevant to ASARCO are:

       (a) The Nation is obligated to allocate, as a "first right
           of beneficial use" to the Allottees and the District,
           35,000 acre-feet per year of the 50,000 acre-feet per
           year delivered to the San Xavier District.

       (b) United States v. Tucson and the water claims in Alvarez
           v. Tucson will be dismissed with prejudice once the
           court determines that the Settlement is fair and
           conditioned only on the anticipated publication of the
           findings required by the Secretary of the Interior.

Judith W. Ross, Esq., at Baker Botts LLP, in Dallas, Texas,
asserts that execution of the Agreements is an advantage to
ASARCO since it already provides congressionally approved waivers
from the United States government and the Indian entities
concerning ASARCO's use of its wells.

Ms. Ross adds that the ASARCO Agreement settles the dispute
whether ASARCO properly exercised its option to renew the Well
Site Leases as of 1997.  The ASARCO Agreement also provides a
possible new water source subject to payment of $1,500,000 over a
14-year period.  The new water source will cost ASARCO less,
lowering costs of production and pumping.  The Agreement also
provides waivers for claims in the Alvarez lawsuit.

In addition, Ms. Ross says, the ASARCO Agreement provides that
"minimum royalties" satisfy the covenants to "diligently
prospect, develop and operate" the Mission Mine lands leased to
ASARCO, preserving the option not to mine under the Mission Mine
Indian leases when it is not profitable to do so.

The SAWRSA Proposal provides for a study of a possible land
exchange of on-Reservation Mission Mine complex lands for other
lands in order to change the jurisdiction for land reclamation
responsibilities after the closure.

Without the Agreements, Ms. Ross contends that ASARCO will suffer
a number of negative consequences, including the continuation of
the litigation of the lawsuit concerning the water rights.

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).


B-FAST CORP: March 31 Balance Sheet Upside Down by $26.9 Million
----------------------------------------------------------------
b-Fast Corp. filed its second 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 $432,000 net loss applicable to common
stockholders on $1,098,000 of net sales for the three months ended
March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $7,306,000
in total assets, $29,683,000 in total liabilities, and $4,609,000
in Redeemable Preferred Stock, resulting in a $26,986,000
stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $544,000 in total current assets available to pay
$28,904,000 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?a39

                        Going Concern Doubt

WithumSmith+Brown, P.C., in Princeton, New Jersey, raised
substantial doubt about b-Fast Corp.'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 working capital and stockholders' deficiencies.

Based in Newtown, Pennsylvania, b-Fast Corp. supplies ground
support services for general aviation aircraft at the Harrisburg
International Airport located in Middletown, Pennsylvania.  These
services include fueling, de-icing, ground handling and storage of
aircraft along with the subleasing of hangar and office space to
tenants.


BAY POINT: Moody's Puts (P)Ba2 Rating on Sr. Sec. Term Loan
-----------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba2 rating to
the senior secured term loan of Bermuda-domiciled Bay Point
Holdings Ltd. and a provisional (P)Baa3 insurance financial
strength rating to Bay Point Re Ltd, its wholly-owned Bermuda-
based operating subsidiary.

The outlook for the provisional ratings is stable.  Moody's noted
that it expects to confirm these ratings upon review of final
executed documentation for both Bay Point Holdings and Bay Point
Re, provided the documentation is consistent with the terms and
conditions specified to date that underlie the provisional
ratings.

The privately-placed senior secured term loan of Bay Point
Holdings, which is being syndicated to financial institutions and
other institutional lenders under Section 144A guidelines, is
scheduled to incept on May 31, 2006 and to mature on December 31,
2010.  The loan is secured by the capital stock of Bay Point Re,
and is non-amortizing, but allows for voluntary prepayments,
requires mandatory prepayments under certain circumstances, and is
callable at a premium.

According to Moody's, Bay Point Holdings is a privately held
holding company for Bay Point Re, a newly formed Class 3 licensed
Bermuda reinsurer that has entered into a quota-share reinsurance
treaty with Bermuda-based Harbor Point Re Limited.

Bay Point Re will assume specified percentages of certain lines of
reinsurance -- including property, marine, energy and certain
other lines of business underwritten by Harbor Point Re Limited
for the 2006 and 2007 underwriting years.

Initial capitalization for Bay Point Re is expected to be up to
$250 million, comprised of up to $125 million in a senior secured
term loan, cumulative preferred shares and common equity.  The
company's capital and risk assumption capacity -- or "minimum
capital cushion" - is gauged to support a maximum risk load over
the life of the transaction as calibrated by the greater of two
tests, one involving the ratio of maximum projected in-force
premiums, and the other involving a combination of modeled return-
periods for the in-force portfolio.

Bay Point Re will post its total paid-in capital as cash and
securities into a trust to collateralize its reinsurance
obligations to Harbor Point Re Limited.  Investment holdings are
expected to be entirely investment-grade, with an average quality
toward the high end of rating spectrum, and a duration that is
reasonably matched to Bay Point's expected liability duration.

Moody's analysis focused on both structural and contractual
features of the Bay Point vehicle, as well as stochastic analysis
of the company's existing and expected underwriting and investment
portfolios, and its expense and capital structures, which were
components of analyzing both the probability of loss, and expected
severity of loss for both Bay Point Holdings' debt-holders, and
Bay Point Re's policyholder.

Moody's stated that Bay Point Re's ratings primarily reflect the
company's capitalization level and balance sheet that is
unencumbered by legacy exposures, structural characteristics that
are designed to offer protection to debt investors, and its
conservative investment policy.

The rating agency stated that these fundamental strengths are
significantly tempered by Bay Point Re's relatively high debt
leverage profile, the inherent underwriting volatility of its
catastrophe-exposed reinsurance portfolio, some uncertainty about
the overall risk composition of its portfolio over time -- given
its multi-line and global span, and by parameter risk in the
assumptions underlying the risk modeling that forms the basis of
the company's capitalization.

Moody's further noted that its expectations at the current rating
level are that Bay Point Holdings will continue to maintain a
financial leverage profile at no more than 50% debt to total
capital and that shareholders' equity will not decline by more
than 15% over a 12 month period.

That said, the rating agency noted that the ratings will likely
reflect updated analysis of the cumulative performance of the
company, its future overall risk-adjusted capitalization level,
and updated prospective probabilistic analysis of its reinsurance
portfolio at future points in time.

These provisional ratings have been assigned:

Bay Point Holdings Ltd.

   * senior secured term loan due 2010 at (P)Ba2;

Bay Point Re Ltd.

   * insurance financial strength at (P)Baa3.

Bay Point Holdings Ltd., based in Bermuda, is the holding company
for Bay Point Re Ltd., which is a licensed Class 3 Bermuda insurer
that has entered into a quota-share reinsurance treaty with
Bermuda-based Harbor Point Re Limited pursuant to which Bay Point
Re will assume specified percentages of certain lines of
reinsurance business underwritten by Harbor Point on behalf of
ceding companies for the 2006 and 2007 underwriting years.

Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.


BEAR STEARNS: Moody's Assigns Low-B Rating on 2 Cert. Classes
-------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Bear Stearns Asset Backed Securities I
Trust 2006-HE5, Asset-Backed Certificates, Series 2006-HE5, and
ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.

The securitization is backed by fixed-rate and adjustable-rate,
closed-end, subprime mortgage loans acquired by EMC Mortgage
Corporation.  The collateral was originated by Fieldstone Mortgage
Company, Town & Country Credit Corporation, and various other
originators, none of which originated more than 10% of the
mortgage loans.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization, excess spread, and an interest rate swap
agreement.  Moody's expects collateral losses to range from 5.35%
to 5.85%.

EMC Mortgage Corporation will service the loans and act as master
servicer.  Moody's has assigned EMC Mortgage Corporation its
highest servicer quality rating of SQ1 as a primary servicer of
first lien subprime loans and a servicer quality rating of SQ2 as
a primary servicer of second lien loans.

The Complete Rating Actions:

Bear Stearns Asset Backed Securities I Trust 2006-HE5

Asset-Backed Certificates, Series 2006-HE5

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


BREK ENERGY: Posts $124,398 Net Loss in 2006 First Fiscal Quarter
-----------------------------------------------------------------
Brek Energy Corporation filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.

The Company reported a $124,398 net loss on $150,763 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $6,629,883
in total assets, $1,275,341 in total liabilities, and $5,284,409
in stockholders' equity.

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?a30

                        Going Concern Doubt

Mendoza Berger & Company, LLP, in Irvine, California, raised
substantial doubt about Brek Energy 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.

Headquartered in Reno, Nevada, Brek Energy Corporation --
http://www.brekenergy.com/-- is a natural gas and petroleum  
exploitation, development, and production company that acquires,
operates and develops unconventional hydrocarbon prospects,
primarily in the Rocky Mountain region.  The Company drills in the
Riverbend Project located in the Unita Basin of northeastern Utah,
targeting the Wasatch, Mesaverde and Blackhawk formations.


BRITESMILE INC: Faces Nasdaq Delisting Due to Late 10-Q Filing
--------------------------------------------------------------
BriteSmile, Inc., received, on May 23, 2006, a written
notification from the staff of the Nasdaq Stock Market stating
that the Company's failure to timely file its Quarterly Report on
Form 10-Q for the quarterly period ended April 1, 2006, as
required by NASD Marketplace Rule 4310(c)(14), would serve as an
additional basis for delisting the Company's securities from the
Nasdaq Stock Market.  The Quarterly Report on Form 10-Q that was
the subject of the Staff's notification was filed by the Company
on May 23, 2006.

The May 23 Notice is in addition to the previously disclosed
written notification from the Staff received on Jan. 25, 2006,
stating that the Company's common stock would be delisted from The
Nasdaq SmallCap Market at the opening of business on Feb. 3, 2006
pursuant to Marketplace Rule 4300 unless the Company provided a
specific plan to achieve and sustain compliance with all listing
requirements.

The Company appealed the Staff's January 25 determination to
delist the Company's common stock.  A hearing on the matter was
held on March 9, 2006, at which representatives of the Company
appeared before the Panel to request that the Panel continue to
list the Company's common stock on the Nasdaq SmallCap Market.  
Since that date, the Company has worked to comply with the Panel's
conditions for continued listing, which included filing a
Quarterly Report on Form 10-Q for the quarterly period ended April
1, 2006 reflecting actual stockholders' equity at April 1, 2006 of
at least $2.5 million.  The equity reported in the filed Form 10-Q
for the period ending April 1, 2006 was $9.3 million.

The May 23 Notice further provided that the Panel will consider
this additional deficiency in rendering a determination regarding
the Company's continued listing on the Nasdaq Capital Market and
requested that the Company present its views with respect to this
matter to the Panel no later than May 30, 2006.  The Company
continues to cooperate with the Panel and plans to present it
views with respect to this matter in accordance with the NASD
Marketplace Rules.

Until the Panel renders its decision with respect to the continued
listing of the Company's common stock, the Company's common stock
will continue to trade on the Nasdaq SmallCap Market.  The Company
can make no assurance that the Panel will grant the Company's
request for continued listing.  If the Company's common stock is
delisted from the Nasdaq SmallCap Market, it may become eligible
thereafter for quotation on the OTC Bulleting Board or in the
"Pink Sheets."

                        About BriteSmile

Headquartered in Walnut Creek, California, BriteSmile, Inc.
(Nasdaq: BSML) -- http://www.britesmile.com/-- develops and  
markets the most advanced teeth whitening technology available, as
well as manages state-of-the-art BriteSmile Professional Teeth
Whitening Centers.  BriteSmile Spa Centers currently operates in
Beverly Hills, Irvine, Palo Alto, Walnut Creek, San Francisco and
La Jolla, California; Houston, Texas; Denver, Colorado; Boston,
Massachusetts; McLean, Virginia; Atlanta, Georgia; New York, New
York; Chicago and Schaumburg, Illinois; and, Phoenix, Arizona.

                          *     *     *

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 22, 2006,
Stonefield Josephson, Inc., expressed substantial doubt about
BriteSmile, Inc.'s ability to continue as a going concern after
auditing the company's financial statement for the year ended Dec.
31, 2005.  The auditing firm pointed to the company's accumulated
deficit and net loss.  The auditing firm also noted that the
company is in the process of selling its entire operations as well
as the legal claims against the company.

At Dec. 31, 2005, the company's balance sheet showed total assets
of $27,842,000 and total liabilities of $30,293,000, resulting in
a shareholders' deficit of $2,451,000.


CALHOUN CBO: Moody's Puts Ba2 Rated Notes on Watch for Upgrade
--------------------------------------------------------------
Moody's Investors Service placed on watch for possible upgrade the
rating on these notes issued in 1998 by Calhoun CBO Ltd.:

   * The U.S. $240,000,000 Senior Secured Floating Rate Notes,
     Due 2010
  
     Prior Rating: Ba2

     Current Rating: Ba2, on watch for possible upgrade

The rating action reflects the improvement in the credit quality
of the transaction's underlying collateral portfolio since the
last rating action, as well as the ongoing delevering of the
transaction, according to Moody's.


CALPINE CORP: CCAA Creditor Can File Proofs of Claim Until June 30
------------------------------------------------------------------
The Court of Queen's Bench of Alberta, Judicial District of
Calgary, set June 30, 2006, at 5:00 p.m., as the deadline for all
creditors owned money by Calpine Corporation's Canadian
subsidiaries, collectively called as the CCAA debtors, to file
formal written Proofs of Claim.

The June 30 bar date applies only to Calpine's subsidiaries
currently under Canada's "Companies Creditors Arrangement Act."  
The CCAA Debtors are:

     -- Calpine Canada Energy Limited;
     -- Calpine Canada Power Ltd.;
     -- Calpine Canada Energy Financial ULC
     -- Calpine Energy Services Canada Ltd.;
     -- Calpine Canada Resources Company;
     -- Calpine Canada Power Services Ltd.;
     -- Calpine Canada Energy Finance II ULC;
     -- Calpine Natural Gas Services Limited;
     -- 3094479 Nova Scotia Company;
     -- Calpine Energy Services Canada Partnership;
     -- Calpine Canada Natural Gas Partnership; and
     -- Calpine Canadian Saltend Limited Partnership

Any creditor or party-in-interest asserting a claim, arising prior
to Dec. 20, 2005, against any of the CCAA Debtors, should send
separate Proofs of Claim for each CCAA Debtor where it asserts a
claim by the June 30 Deadline.  Proofs of Claim must be sent to
Ernst & Young, Inc., the appointed monitor for the CCAA parties.

Holders of claims arising as a result of the repudiation or
termination by a CCAA Debtor after Dec. 20, 2005, but before April
10, 2006, of any contract lease or other type of agreement should
also send a proof of claim to the monitor by the deadline.  

A separate bar date will be set by further order of the Court for
claims arising from the repudiation or termination of any
contract, lease or other agreement by a CCAA Debtor after
April 10, 2006

Individual Bondholders are not required to file Proofs of Claim
since the Trustees under the applicable bond indentures are
authorized to file aggregated Proofs of Claim for each series of
bonds issued by the CCAA Debtors.

A copy of the Claims Procedure Order and the Proof of Claim
Document Package is available for free at:

                 http://www.ey.com/ca/calpinecanada

Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with   
electricity from clean, efficient, natural gas-fired and
geothermal power plants.  Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces.  Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.  The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts.  Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.  (Calpine Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


CELERO TECHNOLOGIES: Ch. 7 Trustee Hires Fox Rothschild as Counsel
------------------------------------------------------------------
The Honorable Diane W. Sigmund of the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania gave Terry P. Dershaw, Esq.,
the chapter 7 trustee appointed in Celero Technologies, Inc.'s
bankruptcy case, permission to hire Fox Rothschild LLP as its
counsel.

The chapter 7 trustee said he selected Fox Rothschild for its
ability, integrity and professional experience.  

Fox Rothschild will:

   (a) give the chapter 7 trustee legal advice with respect to his        
       powers and duties in the bankruptcy proceedings;

   (b) prepare in behalf of the chapter 7 trustee the necessary
       applications, answers, orders, reports and other legal
       papers;

   (c) perform all of the chapter 7 trustee's legal services;

   (d) review all proofs ordinary course claims and prepare a
       final accounting and distribution.  

Documents filed with the Court did not disclose the firm's
compensation.  

Edward J. DiDonato, Esq., a partner at the firm assured the Court
that the firm and its professionals do not hold material interests
adverse to the Debtor's estate and are disinterested as that term
defined in Section 101(14) of the Bankruptcy Code.  

Headquartered in Philadelphia, Pennsylvania, Celero Technologies,
Inc., filed for chapter 11 protection on August 22, 2005 (Bankr.
E.D. Pa. Case No. 05-31273).  Amy E. Vulpio, Esq., Michelle A.
Schultz, Esq., and Robert A. Kargen, Esq., at White and Williams
LLP represent the Debtor.  When the Company filed for protection
from its creditors, it listed $500,000 to $1 million in assets and
$10 million to $50 million in liabilities.  The Court converted
the chapter 11 case to a chapter 7 liquidation proceeding on
February 22, 2006.  The Court appointed Terry P. Dershaw, Esq., as
chapter 7 trustee.


CENDANT MORTGAGE: S&P Affirms Low-B Ratings on Four Cert. Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 61
classes of asset-backed certificates from five Cendant Mortgage
Capital LLC transactions.

In addition, ratings are affirmed on 12 classes from one PHH
Mortgage Corp. transaction.
     
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings.  These transactions
benefit from credit enhancement provided by subordination.
     
As of the April 2006 remittance date, total delinquencies ranged
from 0.32% (series 2003-4) to 1.88% (series 2002-1).  There were
no cumulative losses on these transactions with the exception of
series 2003-1, for which cumulative losses (as a percentage of the
original trust balance) were 0.05%.  The outstanding pool balances
ranged from 13.83% (series 2002-1) to 71.74% (series 2003-6) of
their original sizes.
     
The collateral for these transactions consists of conventional
fixed-rate residential mortgage loans.  The loans are secured by
first liens on one- to four-family residential properties.
    
Ratings Affirmed:
   
Cendant Mortgage Capital LLC:

Series    Class                                           Rating
------    -----                                           ------
2002-1    A-3, A-4, P, X, B-1, B-2                        AAA
2002-1    B-3                                             AA
2002-8    A-1, A-3, A-4, A-5, A-6, A-7, A-8, A-9, P, X    AAA
2003-1    A-1, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10    AAA
2003-1    P, X                                            AAA
2003-1    B-1                                             AA
2003-1    B-2                                             A
2003-1    B-3                                             BBB
2003-1    B-4                                             BB
2003-1    B-5                                             B
2003-4    I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-P, I-X     AAA
2003-4    II-A-1, II-A-2, II-A-3, II-A-4, II-P, II-X      AAA
2003-4    B-1                                             AA
2003-4    B-2                                             A
2003-4    B-3                                             BBB
2003-4    B-4                                             BB
2003-4    B-5                                             B
2003-6    A-1, A-2, A-3, A-4, A-5, A-6, A-7, P, X         AAA
2003-6    B-3                                             BBB

PHH Mortgage Corp.:

        Series    Class                              Rating
        ------    -----                              ------
        2003-3P   A-1, A-2, A-3, A-4, A-5, A-6, X     AAA
        2003-3P   B-1                                 AA
        2003-3P   B-2                                 A
        2003-3P   B-3                                 BBB
        2003-3P   B-4                                 BB           
        2003-3P   B-5                                 B


CENVEO CORP: Moody's Rates Proposed $525 Million Loan at Ba3
------------------------------------------------------------
Moody's assigned a Ba3 rating to Cenveo Corporation's proposed
senior secured credit facilities and affirmed other ratings.  
Details of the rating action are as follows:

Ratings assigned:

   * $200 million senior secured revolving credit facility,
     due 2012 -- Ba3
   * $325 million senior secured term loan facility,
     due 2013 -- Ba3

Ratings affirmed:

   * Corporate Family rating -- B1
   * $320 million 7-7/8% senior subordinated notes,
     due 2008 -- B3

Ratings affirmed, subject to withdrawal:

   * $300 million senior secured credit facility, due 2008 -- Ba3
   * $350 million 9-5/8% senior unsecured notes, due 2012 --B1

The rating outlook is negative.

The ratings reflect Cenveo's high leverage of 6.3 times debt to
EBITDA, and its reported free cash flow loss in the last twelve
months ended March 2006.  The ratings also reflect the high degree
of competition faced by Cenveo's commercial printing and envelope
businesses, and the decline in the traditional documents printing
market, exacerbated by the impact of electronic substitution.

However, Moody's recognizes the recent stabilization of Cenveo's
top line and expects that continued improvement in profitability
and reduction in debt would lead to improved operating margins and
free cash flow in addition to reduced leverage.

The continuing negative outlook is reflective of the event-risk
implicit in management's stated intention to pursue acquisitions,
and Moody's concern that the company's success in restoring
profitability on the cost side will be offset by market-driven
margin compression outside of management's control.

Proceeds from the proposed term loan, together with $64 million of
cash on hand, will be largely used to fund Cenveo's tender offer
for its $350 million senior unsecured notes.  Pro-forma for the
proposed refinancing, Cenveo expects that total debt will decrease
by approximately $29 million.

Headquartered in Stamford, Connecticut, Cenveo is a leading
manufacturer of envelopes and a leading provider of insert and
direct mail advertising products.  The company reported 2005 sales
of approximately $1.7 billion.


CGC APARTMENTS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: CGC Apartments-Grimmett Drive Development LLC
        c/o Cindy G. Cimerring
        1 South Hopper Street
        Montgomery, Alabama 36107

Bankruptcy Case No.: 06-10927

Chapter 11 Petition Date: May 30, 2006

Court: Western District of Louisiana (Shreveport)

Debtor's Counsel: Grant E. Summers, Esq.
                  Davidson, Jones & Summers, APLC
                  509 Market Street, Suite 800
                  Shreveport, Louisiana 71101
                  Tel: (318) 424-4342
                  Fax: (318) 226-0168

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


CHANNEL-TRACK: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Channel-Track & Tube-Way Industries, Inc.
        P.O. Box 70067
        Houston, Texas 77270
        Tel: (713) 864-2551
        Fax: (713) 868-4550

Bankruptcy Case No.: 06-32247

Debtor affiliate filing separate chapter 11 petition:

      Entity                           Case No.
      ------                           --------
      Channel-Way Industries, Inc.     06-32248

Type of Business: The Debtor is a manufacturer of support
                  systems for wire, tubing and cable.
                  See http://channel-track.com/

Chapter 11 Petition Date: May 31, 2006

Court: Southern District of Texas (Houston)

Debtors' Counsel: Gretchen Gauer McCord, Esq.
                  Ronald J. Sommers, Esq.
                  Nathan Sommers Jacobs
                  2800 Post Oak Boulevard, 61st Floor
                  Houston, Texas 77056-6102
                  Tel: (713) 892-4816
                  Fax: (713) 892-4800

                            Estimated or     Estimated or
                            Total Assets     Total Debts
                            -------------    ------------

Channel-Track & Tube-Way    $1 Million to    $500,000 to
Industries, Inc.            $10 Million      $1 Million

Channel-Way                 $350             $1,067,000
Industries, Inc.

A. Channel-Track & Tube-Way Industries, Inc.'s 20 Largest
   Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
Summer Group                            $200,000

C and H Financial                        $99,511
4929 Wilshire Boulevard, Suite 280
Los Angeles, CA 90010

Ocean 1 Marine Products, Ltd.            $60,928
P.O. Box 4346
Houston, TX 77210

Herbert Lackshin                         $48,014
3555 Timmons Lane, Suite 1450
Houston, TX 77027

Triple S Steel Supply Co.                $31,185

Weinstein Spira & Co.                    $25,858

Arbor Metals                             $24,514

Non-Ferrous Extrusions                   $22,402

Fabrication Technology Association       $21,228

Advanced Machine Maintenance             $20,855

DIVSPEC                                  $19,942

Spectrum Metals, Inc.                    $19,486

U.S. Healthworks                         $14,288

CL Alloys                                $13,901

Curls Steel Corp.                        $12,262

Guardomation, Inc.                       $12,089

Smith Rubin & Associates                 $11,444

AFCO Aluminum Products                   $11,194

Tide Air, Inc.                           $10,923

Southwest Stainless Inc.                 $10,077

B. Channel-Way Industries, Inc. does not have any creditors who
are not insiders.


CITYSCAPE HOME: S&P Affirms BB Rating on Class B-1F Certificates
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
M-2F of Cityscape Home Equity Loan Trust 1997-C to 'BBB' from 'A'.
At the same time, the rating is placed on CreditWatch negative.

Concurrently, ratings were affirmed on all other classes from this
series and all other Cityscape Home Equity Loan Trust transactions
rated by Standard & Poor's.
     
The lowered rating reflects decreased credit support due to losses
that have consistently and significantly outpaced excess interest,
resulting in the depletion of overcollateralization.
     
The affirmations reflect adequate credit support, which is
provided by subordination, overcollateralization, and excess
interest.  In addition, various classes from series 1996-2,
1996-3, and 1996-4 are insured by policies issued by:

   * MBIA Insurance Corp.,
   * Financial Security Assurance Inc., or
   * Financial Guaranty Insurance Co.  

The ratings on these classes reflect the financial strength of the
underlying insurance providers.
     
As of the April 2006 distribution date, total delinquencies for
the two non-bond-insured transactions ranged from 37.75% (series
1997-C group 1) to 53.05% (series 1997-B group 2).  Serious
delinquencies ranged from 31.24% (series 1997-B group 1) to 53.05%
(series 1997-B group 2), and cumulative losses ranged from 4.39%
(series 1997-C group 2) to 9.84% (series 1997-C group 1).
     
As of the April 2006 distribution date, total delinquencies for
the bond-insured transactions ranged from 36.37% (series 1996-2)
to 43.73 (series 1996-3).  Serious delinquencies ranged from
25.33% (series 1996-4) to 29.93% (series 1996-3), and cumulative
losses ranged 9.02% (series 1996-4) to 11.88% (series 1996-2).
     
All of the transactions are backed by fixed- or adjustable-rate
subprime home equity mortgage loans secured by first and second
liens on owner-occupied one- to four-family residences.
    
Rating Lowered And Placed On Creditwatch Negative:
   
                Cityscape Home Equity Loan Trust
               Home equity pass-thru certificates
                           
                             Rating

             Series   Class        To          From
             ------   -----        --          ----
             1997-C   M-2F    BBB/Watch Neg.    A
    
Ratings Affirmed:
    
                Cityscape Home Equity Loan Trust
               Home equity pass-thru certificates

               Series    Class             Rating
               ------    -----             ------
               1996-2    A-5                AAA
               1996-3    A-8, A-IO          AAA
               1996-4    A-8, A-9, A-IO     AAA
               1997-B    A-6, A-7           AAA
               1997-B    M-1F               AA+
               1997-B    M-2A               BBB
               1997-B    M-2F               A
               1997-B    B-1F               BB
               1997-C    A-3, A-4, M-1A     AAA
               1997-C    M-1F, M-2A         AA
               1997-C    B-1A               BBB
  

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

As reported in the Trouble Company Reporter on March 31, 2006,
General Capital will:

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

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

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

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

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

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

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

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

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

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

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


CLEAN EARTH: SunBridge Fails in Bid to Get Decision on Lease
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
denied SunBridge Capital, Inc., fka Commercial Leasing
Corporation's request to compel Clean Earth Environmental Group,
LLC to decide whether to accept or reject an unexpired lease.

SunBridge and the Debtor are parties to an Equipment Lease dated
Oct. 3, 2003.  Pursuant to the terms of the Lease, the Debtor has
to make 60 monthly rental payments of $3,322 per month.  

The Debtor was able to pay up to 27 monthly payments and is in
default on the terms of the lease.  Under the lease, the Debtor
was required to pay a late charge, equal to 5% any delayed monthly
payment.

SunBridge complained that the Debtor had not made any postpetition
payments on the lease and that its interests are not being
adequately protected.  For this reason, SunBridge wanted to get
the Debtor's decision on the lease prior to the confirmation of
any Plan of Reorganization.

The Court Directs the Debtor to provide SunBridge with proof of
insurance coverage for the property covered by the Equipment
Lease.  The Debtor is also required to identify the sublessee of
the leased equipment and provide a copy of the sublease agreement.

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


COEUR D'ALENE: Earns $14.3 Million in Three Months Ended March 31
-----------------------------------------------------------------
Coeur D'Alene Mines Corporation reported $14,338,000 of net income
on $44,854,000 of revenues for the three months ended March 31,
2006.

At March 31, 2006, the Company's balance sheet showed $749,569,000
in total assets and $247,482,000 in total liabilities and
stockholders' equity of $502,087,000.

Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:

               http://ResearchArchives.com/t/s?a2c

Coeur D'Alene Mines Corporation -- http://www.coeur.com/-- is the  
world's largest primary silver producer, as well as a significant,
low-cost producer of gold.  The Company has mining interests in
Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia.

Coeur D'Alene Mines Corp.'s 1.25% Convertible Senior Notes due
2024 carry Standard & Poor's B- rating.


CORD BLOOD: March 31 Balance Sheet Upside Down by $4.3 Million
--------------------------------------------------------------
Cord Blood America, Inc., filed its 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 three months ended
March 31, 2006, showed a net loss of $1,711,479 on revenues of
$656,628.

At March 31, 2006, the Company's balance sheet showed $1,301,630
in total assets and $5,658,995 in total liabilities, resulting in
a $4,357,364 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $957,487 in total current assets available to pay
$5,654,254 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?a27

                       Going Concern Doubt

Rose, Snyder & Jacobs, in Encino, California, raised substantial
doubt about Cord Blood America, 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 recurring operating losses, insufficient
working capital, and accumulated deficit.

Headquartered in West Hollywood, California, Cord Blood America,
Inc. (OTCBB:CBAI) -- http://www.cordblood-america.com/-- is the  
parent company of Cord Partners, which facilitates umbilical cord
blood stem cell preservation for expectant parents and their
children.  Its mission is to be the most respected stem cell
preservation company in the industry.  Collected through a safe
and non-invasive process, cord blood stem cells offer a powerful
and potentially life-saving resource for treating a growing number
of ailments, including cancer, leukemia, blood, and immune
disorders.


CRF-18 LLC: S&P Assigns Double-B Rating to Class D Revenue Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to CRF-18 LLC's $47.59 million CRF USA community
reinvestment revenue notes series 18.
     
The preliminary ratings are based on information as of May 30,
2006.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
     
The preliminary ratings reflect the credit enhancement consisting
of:

   * overcollateralization,
   * subordination,
   * an interest reserve account, and
   * excess spread.

The ratings are also based on CRF's demonstrated servicing
ability.  This securitization is a pool of small business
development loans that are not insured or guaranteed by any
governmental agency.
     
Preliminary Ratings Assigned:

CRF-18 LLC:
   
               Class     Rating        Amount
               -----     ------        ------
                A-1       AAA      $12.97 million
                A-2       AAA      $12.97 million
                A-3       AAA      $12.97 million
                 B        A         $4.83 million
                 C        BBB       $1.60 million
                 D        BB        $2.25 million
                 E        NR        $5.00 million
                 F        NR        $2.16 million
   
                        NR -- Not rated.


CUMMINS INC: Fitch Raises Jr. Conv. Sub. Debentures' Rating to BB
-----------------------------------------------------------------
Fitch upgraded Cummins Inc. as:

  -- Issuer Default Rating to 'BBB-' from 'BB+'
  -- Senior Unsecured Bank facility to 'BBB-' from 'BB+'
  -- Senior Unsecured Notes to 'BBB-' from 'BB+'
  -- Junior Convertible Subordinated Debentures to 'BB' from 'BB-'

The Rating Outlook is Stable.  Approximately $1.3 billion of debt
is impacted by this rating action.

The rating upgrade reflects:

   * CMI's strong operating performance in 2005 and into 2006 in
     each of its segments;

   * the company's international growth and diversification; and

   * improved balance sheet.

Although 2006 is expected to be a cyclical peak for the Class 8
market, Cummins is well positioned from a product, competitive,
and financial standpoint to support an investment grade rating
through a cyclical downturn.

In 2005, CMI achieved record sales in each of its operating
segments which led to the highest gross sales and profits in the
company's history.  First-quarter results followed with double
digit percentage sales and operating profit growth from the prior
year.  Cash and marketable securities totaled $840 million at
year-end 2005 and were $734 million at first-quarter end 2006.

Operating EBITDA increased 53.1% to $1.0 billion in 2005, free
cash flow increased 26.3% to $518 million, and debt decreased $278
million or 16.9% to $1.367 billion.  These led to improved credit
metrics, with Total Debt-to-EBITDA at 1.3x at year-end 2005 versus
2.4x year-end 2004.  Total Adjusted Debt-to-Operating EBITDAR
decreased to 1.8x at year-end 2005 from 3.0x at the prior year-
end.

Additionally, Operating EBITDA-to-Gross Interest Expense stood at
9.7x at year-end versus 6.1x year-end 2004.  This occurred despite
heavy working capital requirements to support the company's solid
growth.  CMI's balance sheet will improve further in 2006 with the
expected conversion of $300 million in convertible subordinated
debentures in June 2005, and the company's intent to repay $250
million in unsecured notes in December 2006.

CMI's 2006 free cash flow is expected to increase further in 2006,
which is reinforced by first quarter results.  Uses of cash will
include:

   * higher capital expenditures;
   * higher pension contributions; and
   * debt reduction.

There also exists the potential for accelerated share repurchases.

Negative pressure include:

   * rising commodity costs;

   * the impact of higher interest rates and fuel prices on end
     demand; and

   * the expected downturn in Class 8 demand in 2007.

The company is expected to enter 2007 with a very healthy cash
cushion.

The first-quarter results ended April 2, 2006, were strong and
like 2005 were driven by higher volume and improved price
realization as well as improved plant efficiencies.  CMI sales
increased 21.2% to $2.6 billion and operating profit was up 47.6%
to $248 million from the first quarter of 2005.

CMI's engine segment reported record EBIT of $179 million.  
Fitch's expectation is that sales and profitability will continue
to be strong throughout the year based on the U.S. trucking
industry's continued 2007 EPA emissions pre-buy of heavy duty
trucks.

Over the long-term, Cummins will be required to make continued
heavy capital investment in R&D to meet ever-stricter emissions
regulations, and faces competition from better-capitalized
companies.  The industry has also become much more vertically
integrated over the last cycle, potentially allowing key customers
to turn to more in-house engine sourcing.  Nevertheless, the
company's recent products have been well-received by the end
consumers, and Cummins retains a strong brand reputation for its
technology.

CMI designs, manufacturers, distributes and services diesel and
natural gas engines, electric power generations systems and
engine-related component products, including filtration and
emissions equipment, fuel systems, controls, and air handling
systems.

Cummins sells its products to Original Equipment Manufactures,
distributors and other customers worldwide.  Slightly over half
their sales are outside the U.S.


CWALT INC: Fitch Assigns Low-B Ratings to Class B-3 & B-4 Certs.
----------------------------------------------------------------
Fitch rated CWALT, Inc.'s mortgage pass-through certificates,
alternative loan trust 2006-18CB:

   -- $1.005 billion classes A-1 through A-16, X, PO and A-R
      certificates (senior certificates) 'AAA'

   -- $21 million class M certificates 'AA'

   -- $7.9 million class B-1 certificates 'A'

   -- $5.8 million class B-2 certificates 'BBB'

   -- $4.2 million class B-3 privately offered certificates 'BB'

   -- $3.2 million class B-4 privately offered certificates 'B'

The 'AAA' rating on the senior certificates reflects:

   * the 4.25% subordination provided by the 2.00% class M;
   * the 0.75% class B-1;
   * the 0.55% class B-2;
   * the 0.40% privately offered class B-3;
   * the 0.30% privately offered class B-4; and
   * the 0.25% privately offered class B-5 (not rated by Fitch).

Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB',
'BB', and 'B' based on their respective subordination only.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults.  In addition, the rating also
reflects:

   * the quality of the underlying mortgage collateral;

   * strength of the legal and financial structures; and

   * the master servicing capabilities of Countrywide Home Loans
     Servicing LP, rated 'RMS2+' by Fitch, a direct wholly owned
     subsidiary of Countrywide Home Loans, Inc.

Approximately 52.49% and 47.51% were originated under CHL's
Standard Underwriting Guidelines and Expanded Underwriting
Guidelines, respectively.  Mortgage loans underwritten pursuant to
the Expanded Underwriting Guidelines may have higher loan-to-value
ratios, higher loan amounts, higher debt-to-income ratios and
different documentation requirements than those associated with
the Standard Underwriting Guidelines.  In analyzing the collateral
pool, Fitch adjusted its frequency of foreclosure and loss
assumptions to account for the presence of these attributes.

The certificates represent an ownership interest in a group of
primarily 30-year conventional, fully amortizing mortgage loans.
The pool consists of 30-year fixed-rate mortgage loans totaling
$1,049,999,240 as of the initial cut-off date (May 1, 2006),
secured by first liens on one-to four- family residential
properties.  The average loan balance is $219,436.

The mortgage pool, as of the initial cut-off date, demonstrates an
approximate weighted-average original loan-to-value ratio of
71.75%.  The weighted average FICO credit score is approximately
718.  Cash-out refinance loans represent 32.35% of the mortgage
pool and second homes 5.33%.  The states that represent the
largest portion of mortgage loans are:

   * California (20.96%), and
   * Florida (10.22%).

All other states represent less than 5% of the pool as of the cut-
off date.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

CWALT purchased the mortgage loans from CHL and deposited the
loans in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust.  The Bank of New York
will serve as trustee.  For federal income tax purposes, an
election will be made to treat the trust fund as one or more real
estate mortgage investment conduits.


CWMBS INC: Fitch Assigns Low-B Ratings to Class B-3 & B-4 Certs.
----------------------------------------------------------------
Fitch rated CWMBS, Inc.'s mortgage pass-through certificates,
CHL Mortgage Pass-Through Trust 2006-J3:

   -- $210.7 million classes A-1 through A-4, X, A-R, PO (senior
      certificates) 'AAA'

   -- $3.6 million class M 'AA'

   -- $1.1 million class B-1 'A'

   -- $651,800 class B-2 'BBB'

   -- $434,600 class B-3 'BB'

   -- $325,900 class B-4 'B'

The 'AAA' rating on the senior certificates reflects:

   * the 3.00% subordination provided by the 1.65% Class M;
   * the 0.55% Class B-1;
   * the 0.30% Class B-2;
   * the 0.20% privately offered Class B-3;
   * the 0.15% privately offered Class B-4; and
   * the 0.15% privately offered Class B-5 (not rated by Fitch).

Classes M and B-1 through B-4 are rated 'AA', 'A', 'BBB', 'BB' and
'B' based on their respective subordination only.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults.  In addition, the ratings also
reflect:

   * the quality of the underlying mortgage collateral;

   * strength of the legal and financial structures; and

   * the master servicing capabilities of Countrywide Home Loans
     Servicing LP, rated 'RMS2+' by Fitch, a direct wholly owned
     subsidiary of Countrywide Home Loans, Inc.

As of the cut-off date, May 1, 2006, the mortgage pool consists of
30-year fixed-rate mortgage loans secured by first liens on one-to
four- family residential properties totaling $217,254,137.  The
average loan balance is $576,271.  The weighted-average original
loan-to-value is 68.36%.  The weighted average FICO credit score
is approximately 748.  Cash-out refinance loans represent 36.65%
of the mortgage pool and second homes 5.99%.

The states that represent the largest portion of mortgage loans
are:

   * California (49.81%),
   * Colorado (7.33%), and
   * Florida (5.51%).

All other states represent less than 5% of the cut-off date pool
balance.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

CWMBS purchased the mortgage loans from CHL and other sellers, and
deposited the loans in the trust, which issued the certificates,
representing undivided beneficial ownership in the trust.  The
Bank of New York will serve as trustee.  For federal income tax
purposes, an election will be made to treat the trust fund as one
or more real estate mortgage investment conduits.


D&G INVESTMENTS: Plans to Pay Unsec. Creditors in Full under Plan
-----------------------------------------------------------------
D & G Investments of West Florida, Inc., proposes to pay holders
of unsecured claims in full under the Amended Plan of
Reorganization filed with the U.S. Bankruptcy Court for the Middle
District of Florida in Tampa.  

J.C. Benefield, on account of his secured claim will be paid
monthly.  The claims bears and interest at a prime plus 1.5% per
annum starting from the confirmation date with a 20-year
amortization and a balloon payment 24 months from the effective
date of the plan.  All allowed arrears (interest at 8% per annum),
costs, and other fees will be added to the mortgage balance at the
time of the confirmation to obtain the mortgage balances.  Mr.
Benefield will retain his lien until his claim is paid in full.  

For two years after confirmation, the Debtor will try to sell the
real property, which secures repayment of the Debtor's debt to
Mr. Benefield.  The Debtor will pay Mr. Benefield the balance of
the loan if it successfully sells the property.

Insiders on account of their claims will be paid only after
unsecured creditors are paid in full.  

A copy of the plan is available for a fee at:

http://www.researcharchives.com/bin/download?id=060531221535

Headquartered in Seminole, Florida, D & G Investments of West
Florida, Inc., filed for chapter 11 protection on July 20, 2005
(Bankr. M.D. Fla. Case No. 05-14434).  Thomas C. Little, Esq., at
Thomas C. Little, PA, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets of $10 million to $50 million and debts of
$1 million to $10 million.


DANA CORP: Gets Court Okay to Implement Travelers Bonding Program
-----------------------------------------------------------------
Dana Corporation and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
maintain, continue and renew their existing financial guarantee
and performance bonding program with Travelers Casualty and Surety
Company of America and perform their obligations under the
program.

In the ordinary course of their businesses, the Debtors are
required to provide financial guarantee and performance bonds to
third parties to secure the payment or performance of certain
obligations, including, without limitation:

   (a) U.S. customs requirements;

   (b) notary or permit obligations;

   (c) court-ordered bonds related to replevin and mechanic's
       liens;

   (d) workers' compensation obligations; and

   (e) various state-required bonds related to taxes and highway
       use.

The Bonds can be drawn by the applicable beneficiary of the Bond
should the Debtors default on their payment or performance
obligations to the beneficiary.  Failure to provide, maintain or
to timely replace the Bonds could jeopardize the Debtors' ability
to conduct certain of their operations and could significantly
and adversely impact their reorganization efforts, Corinne Ball,
Esq., at Jones Day, in New York, told the Honorable Burton R.
Lifland.

The Debtors placed substantially all of their Bonds, which had
face value of approximately $64,100,000 as of March 3, 2006, with
Travelers, pursuant to various prepetition agreements, including:

   (i) a General Contract of Indemnity Agreement, dated May 10,
       2002, and as amended by a Rider dated Feb. 24, 2005;

  (ii) a Collateralized Bond Surety Program Registered Pledge
       and Master Security Agreement, dated Aug. 20, 2001; and

(iii) a Pledged Collateral Account Agreement, dated Aug. 20,
       2001.

The Debtors provided collateral for the Bonds in the form of cash
deposits in a pledged account under Travelers' control.  In
addition, the Debtors were obligated to reimburse Travelers for
any draws, costs, expenses, damages, attorneys' fees and losses
that may arise in connection with the Bonds issued by Travelers.

                 Continuation of Bonding Program

Ms. Ball further told Judge Lifland that the Debtors have explored
various alternatives to continuing the Bonding Program with
Travelers.

The Debtors have determined that Travelers is best situated to
continue providing the Bonding Program on a postpetition basis
due to:

   (a) Traveler's willingness to provide Bonds to the Debtors on
       more favorable terms and conditions; and

   (b) the administrative and other benefits to the Debtors by
       maintaining a single program to satisfy substantially all
       of their bonding needs with one surety.

Pursuant to a term sheet, Travelers agreed to continue acting as
the Debtors' surety and, at it option and sole discretion, issue
Bonds on the Debtors' behalf in the aggregate amount of no more
than $150,000,000 outstanding at any time.  

Travelers will pay any claims made against the Bonds and may
incur the expenses as Travelers deems necessary in handling Bond
Claims.

Dana will assume the Prepetition Agreements, as modified by the
Term Sheet, pursuant to Section 365.

Moreover, the parties agree to execute a side letter agreement to
govern the pricing of the Bonding Program, which will be
maintained as strictly confidential, provided, however, that Dana
may disclose its estimate of the annual aggregate cost of the
Bonding Program and provide additional information to the
Creditors Committee on a confidential basis.

                            Collateral

Dana will maintain the Collateral in an amount equal to at least
100% of the penal amount of the Bonds to secure any and all
losses, costs, expenses, damages, premium obligations, attorneys'
fees or other obligations arising out of the Bonds, the
Prepetition Agreements or the Bonding Program generally.  

If additional or replacement Collateral is necessary, the
Replacement Collateral must be in the form of (i) an irrevocable
letter of credit in form, content and issuer acceptable to
Travelers or (ii) cash or cash equivalents pledged to Travelers
in an account maintained at Smith Barney and under the control of
Travelers.

All Collateral will be held as security for all Bonds issued
under the Bonding Program.  Dana will not be required to provide
additional security unless and until the amount of the aggregate
penal sum of all Bonds outstanding exceeds the then current
required security amount by $500,000.

Travelers will be granted a first-priority lien and security
interest in all Collateral obtained or held by Travelers,
pursuant to the Term Sheet.  The Collateral will not be subject
to surcharge, assessment or other liens, pursuant to Sections 506
or 364.

In addition, Travelers will be granted a "super-priority"
administrative expense claim, subordinate to the claims of the
Debtors' postpetition DIP lenders, for any claims related to
Bonds it may have in excess of the Collateral.

The Collateral is not subject to the liens or security interests
of any of the Debtors' creditors, including those of the Debtors'
postpetition senior lenders in connection with the Debtors'
postpetition debtor-in-possession financing agreements.

Because the value of the Collateral already posted with Travelers
exceeds the value of the outstanding Bonds, the assumption of the
Prepetition Agreement does not improve Travelers' position and
will not require any additional cash outlay by the estates,
Ms. Ball informs the Court.

The automatic stay of Section 362 will be modified solely to the
extent necessary to permit Travelers consistent with the terms,
conditions and limitations of the Bonding Program and any
relevant Bond to (i) cancel any Bond after five business       
days' advance written notice to the Debtors and the Creditors
Committee, and (ii) liquidate or use Collateral pledged to
Travelers or under their control in accordance with the      
Bonding Program.

                        Broker's Statement

Hylant Group provides the Debtors with brokerage services for
their insurance programs.

Brian Sullivan, vice president of Hylant Group, informed the Court
that the firm explored various alternatives to continue the
Debtors' Bonding Program with Travelers Casualty and Surety
Company of America.

Mr. Sullivan said that the Travelers Bonding Program represents
the best program for the Debtors because, among other things:

   -- the terms and conditions of the Bonds are at least as
      favorable, if not more so, than those of Traveler's
      competitors;

   -- a new bonding program with a different provider would
      require the Debtors to post duplicate collateral for a
      period of times; and

   -- there are additional administrative and other benefits to
      the Debtors by maintaining a single program to satisfy
      substantially all of their bonding needs with one surety.

                      About Dana Corporation

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 Nos. 8, 9 &
10; Bankruptcy Creditors' Service, Inc., 215/945-7000).


DANA CORPORATION: Adds 12 Claims to Tooling Claim Schedule
----------------------------------------------------------
Dana Corporation and its debtor-affiliates discovered additional
claims that were not identified in their original motion to pay
claims of certain suppliers of tooling, machinery or other
equipment.

In a supplemental list to the Tooling Claim Schedule, the Debtors
identified Buy-Outside Tooling Claims of these suppliers:

        Tooling Supplier      P.O. No.     Amount
        ----------------      --------     ------
        Danaven                 2416     $270,000
        Conicos                 3253      341,505
        Freudenburg NOK         4449      119,549
        General Aluminum        1662       71,350
        General Aluminum        2807       91,100
        L&W Engineering         2811        9,500
        Metaldyne               5567        6,000
        New Jernberg            2155       45,000
        ODM Tool & Mfg          5538        7,670
        Waukesha Tool           4144       27,000
        Waukesha Tool           4177       27,150
        Automatic Spring        3192       20,495
                                        ---------
        Total                           1,036,319
                                        =========

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).


DANA CORP: Sets off Allied Ring's $1.1 Million Claim Against Debt
-----------------------------------------------------------------
As of March 3, 2006, Dana Corporation owed $1,165,805 to its
nondebtor affiliate, Allied Ring Corporation.  Allied Rings
supplies parts to Dana.

On the other hand, Allied Ring owed $2,610,554 to Dana for:

      * various services provided by Dana Corp.; and

      * various amounts that the Debtor paid that are
        reimbursable by Allied Ring pursuant to various
        agreements.

The Debtors inform the U.S. Bankruptcy Court for the Southern
District of New York that they intend to set off the Allied Claim
against the Dana Debt.  The Set-Off will result in a net creditor
obligation of $1,444,749 by Allied Ring to Dana.

Allied Ring will pay its net obligation to Dana by May 28, 2006.

Dana and Allied Ring assert that the proposed set-off complies
with the requirements of Sec. 553 of the Bankruptcy Code.

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).


DELTA AIR: Pilots Ratify $280 Million Labor Cost Savings Contract
-----------------------------------------------------------------
Delta Air Lines confirmed that its pilots, represented by the Air
Line Pilots Association International, ratified a new contract
that the company hailed as crucial to Delta's successful
reorganization.  With 95% of eligible pilots participating, 61%
voted in favor of the agreement.  The contract, subject to U.S.
Bankruptcy Court approval, provides the company with approximately
$280 million in average annual pilot labor cost savings through a
combination of changes to pay, benefits and work rules.  If
approved by the Court, the agreement will become effective June 1,
2006 and amendable on Dec. 31, 2009.

"The additional pilot savings are a significant, necessary and
appreciated component of Delta's restructuring plan," Gerald
Grinstein, Delta's chief executive officer, said.  "Everyone at
Delta at every level is contributing, personally and
professionally, to Delta's long-term success and their efforts,
coupled with network and revenue improvements and other
restructuring initiatives, are delivering measurable results.  We
stand unified and focused on the shared goal of transforming our
airline into a strong, fiercely competitive and profitable company
-- one that can grow and provide good jobs and financial rewards
for its people and superior service and amenities to its
customers.  Our company has a solid plan for the future and Delta
people are making real progress together."

Barring any disruptions, the company is on track to achieve
approximately 70% of its business plan's $3 billion annual
targeted financial benefits by the end of the year with the goal
of successfully emerging from bankruptcy in the first half of
2007.

"We believe this new pilot agreement helps provide the competitive
framework necessary for Delta's successful restructuring, and is
in the best interest of all stakeholders," Edward H. Bastian,
Delta's executive vice president, chief financial officer and head
of the company's in-court restructuring efforts, said.

                    Delta-DP3 Inc. Agreement

Delta also reached an agreement with DP3, Inc., the organization
representing retired Delta pilots on pension issues and, in
addition to the Pension Benefit Guaranty Corporation, was one of
only two parties objecting to the pilot agreement.  With its
concerns resolved, the retired pilot organization has withdrawn
its opposition, and the federal pension agency is now the sole
objector to the pilot contract.  The company strongly disagrees
with the PBGC objection and maintains those assertions are without
merit.  The matter is pending before the U.S. Bankruptcy Court.

                           About ALPA

Founded in 1931, the Air Line Pilots Association represents 62,000
pilots at 39 airlines in the U.S. and Canada.  ALPA represents
approximately 6,000 active Delta Air Lines pilots and 500
furloughed Delta pilots.  Visit the ALPA website at
http://www.alpa.org/and the Delta pilots' website at  
http://www.deltapilots.org/.

                         About Delta Air

Based in Atlanta, Ga., 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.


DRAGON PHARMA: Earns $1.2 Million in 2006 First Fiscal Quarter
--------------------------------------------------------------
Dragon Pharmaceutical Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.

The Company reported a $1,223,633 net income on $16,637,377 of net
sales for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $102,915,911
in total assets, $68,766,980 in total liabilities, and $34,148,931
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $28,739,605 in total current assets available to
pay $45,316,802 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?a32

                        Going Concern Doubt

Webb & Company, P.A., in Boynton Beach, Florida, raised
substantial doubt about Dragon Pharmaceutical 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 recurring working
capital deficiency.

                    About Dragon Pharmaceutical

Dragon Pharmaceuticals Inc. engages in Biotechnology for
therapeutic use.  The company also develops genetic engineered
supplements.


EASYLINK SERVICES: Posts $376,000 Net Loss in 2006 First Quarter
----------------------------------------------------------------
Easylink Services Corporation filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.

The Company reported a $376,000 net loss on $18,461,000 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $41,005,000
in total assets, $28,996,000 in total liabilities, and $12,009,000
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $18,069,000 in total current assets available to
pay $27,328,000 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?a37

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Grant Thornton LLP expressed substantial doubt about Easylink
Services Corporation's ability to continue as a going concern
after it audited the Company's financial statement for the year
ended Dec. 31, 2005.  The accounting firm pointed to the Company's
history of operating losses, accumulated deficit and negative
working capital.

                     About Easylink Services

Headquartered in Piscataway, New Jersey, Easylink Services
Corporation -- http://www.EasyLink.com/-- provides outsourced
business process automation services to medium and large
enterprises, including 60 of the Fortune 100, to improve
productivity and competitiveness by transforming manual and paper-
based business processes into efficient electronic
business processes.


EL PASO CORP: S&P Upgrades Corporate Credit Rating to B+ from B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on pipeline giant El Paso Corp. and its subsidiaries
to 'B+' from 'B'.  The outlook is positive.
     
Houston, Texas-based El Paso reported about $17.1 billion of debt
outstanding as of March 31, 2006.
      
"The upgrades recognize the considerable progress that the company
has made refocusing on the core pipeline and oil and gas
exploration and production operations and stabilizing its
financial position," said Standard & Poor's credit analyst Ben
Tsocanos.
     
The company's ventures into diverse unregulated business, which
entailed significant financial leveraging and market risk, now
represent a minimal component of El Paso's profile.
      
"The upgrade also incorporates our assessment that El Paso has
firmed up its once precarious liquidity position ahead of still
sizable near-term maturities, though refinancing risk remains,"
said Mr. Tsocanos.
     
The positive outlook indicates:

   * that additional near-term ratings improvement is possible;

   * contingent on further improvement in the financial profile;

   * demonstrated operational progress in the E&P business; and

   * completion of the company's exit from power generation and
     marketing and trading.


ENRON CORP: Flagstaff Holds $360.1 Million of Allowed Claims
-------------------------------------------------------------
Enron Corp. and Enron North America Corp. have reached a
stipulation with Flagstaff Capital Corporation, SPCP Group, LLC,
Goldman Sachs Credit Partners, L.P., Stanfield Offshore Leveraged
Assets, Ltd., and Bear Stearns Investment Products Inc.,
resolving their disputes in connection with various credit and
related agreements they entered into June 22, 2001.

On Nov. 30, 2001, Flagstaff determined that an Event of
Default had occurred or was occurring under the Flagstaff
Transactions, and Flagstaff exercised its rights under a Put
Option Agreement to require Enron to purchase certain Warrant
Rights.  On that same day, Flagstaff provided Enron with an
executed assignment of the Warrant Rights.  Once Flagstaff
delivered the Put Notice, it was irrevocable and Flagstaff's sole
recourse with respect to the Flagstaff Transactions was to allege
claims against Enron for payment of a make whole amount.

The Royal Bank of Scotland; Mizuho Corporate Bank, Ltd., formerly
known as The Industrial Bank of Japan, Limited, New York Branch;
The Bank of Tokyo-Mitsubishi Ltd.; Hansen Investments Co.; and
Newman Investments Co. were parties to the Flagstaff
Transactions.

The Flagstaff Parties assert various causes of action against the
Debtors in connection with the Flagstaff Transactions.  Among
others, on March 28, 2003, Mizuho and Banco Bilbao Vizcaya
Argentaria S.A. commenced Adversary Proceeding No. 03-2288A
against Enron.

On Nov. 13, 2003, the Court (1) authorized the sale of
Compagnie Papiers Stadacona, which owned Enron's principal
newsprint and directory paper asset in Quebec, Canada, and (2)
upon consummation of the transactions, directed the escrow of the
proceeds.

The Flagstaff Parties assert claims for, among others,
termination payment pursuant to agreements under the Flagstaff
Transactions, Make Whole Amount payments, attorneys' fees and
indemnities:

      Claimant               Debtor          Claim No.
      --------               ------          ---------
      Mizuho                 Enron             10780
      Mizuho                 ENA               11087
      JPMCB                  Enron             11137
      JPMCB                  Enron             11151
      Flagstaff              Enron             11152
      JPMCB                  Enron             11153
      JPMCB                  ENA               11154
      Flagstaff              ENA               11155
      Bank of Tokyo          ENA               12862
      Bank of Tokyo          Enron             12863
      RBS Entities           ENA               12889
      RBS Entities           Enron             12890
      Banco Bilbao           ENA               14068
      Mitsubishi Trust and
      Banking Corp.          ENA               13661

Claim No. 11153 asserts a contingent secured claim for not less
than $367,621,000, and unsecured nonpriority and miscellaneous
other claims.  The other Flagstaff Claims were filed in
unliquidated or contingent amounts.

The Reorganized Debtors objected to the validity, priority and
amounts asserted in the Claims.

Pursuant to a Court-approved Stipulation, the parties agree that:

  (1) Enron and ENA will pay $20,000,000 to SPCP, as agent for
      the Flagstaff Claimholders, for distribution on a pro rata
      basis to the Claimholders in accordance with these
      percentages:

          Claim Holder    Pro Rata Share
          -----------     --------------
          SPCP               33%
          Goldman            46%
          Stanfield          14%
          Bear Stearns        8%

  (2) the Warrant and Warrant Rights, as defined in the Warrant
      Agreement, dated as of June 22, 2001, will be assigned to
      Enron by Flagstaff, and Flagstaff will have no further
      rights against Hansen in accordance with the Agreement.
      At the option of Enron, the Flagstaff Claimholders will:

       (i) waive any and all of their interests under the
           Stadacona Proceeds, or

      (ii) assign to Enron any and all of their interests or
           rights under the Stadacona Proceeds;

  (3) Claim Nos. 10780, 11087, 11151, 11153, 11154, 11155, 13661,
      14068 and portions of Claim Nos. 12862 and 12863, which
      specifically relate to the Flagstaff Transactions will be
      disallowed and expunged with prejudice; and

  (4) in consideration for the disallowance and expungement of
      the Flagstaff Claims, five Class 4 claims will be allowed
      in these amounts:

          Claim Holder           Amount
          -----------            ------
          SPCP                $70,831,670
          Goldman              97,227,000
          Stanfield            29,074,355
          Bear Stearns         16,514,305
          Enron               146,452,670
                              -----------
              Total          $360,100,000

The RBS Entities consist of The Royal Bank of Scotland plc,
National Westminster Bank plc, Ulster Bank Ireland Limited, and
The Royal Bank of Scotland Commercial Svcs. Limited.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply.  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 171; Bankruptcy Creditors'
Service, Inc., 15/945-7000)


ENRON CORP: Inks Settlements Expunging $121 Million of Claims
-------------------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
approve six settlement agreements between:

   (1) Enron Energy Marketing Corp., and CHB Partnership;

   (2) EEMC and Enron Energy Services, Inc., on one hand, and
       the College Districts, consisting 37 entities, including
       the Community College League of California, and the North
       Orange County Community College District, on the other;

   (3) EESI, and Freedman's Steak and Seafood, doing business as
       Forty-One North;

   (4) EESI, and Hi Tecmetal Group, Inc.; and

   (5) Enron Energy Services North America, Inc.; Enron Energy
       Information Solutions, Inc.; EEMC; and EESI, on one hand,
       and Johnson & Johnson; Johnson & Johnson Worldwide Energy  
       Management Division; Johnson & Johnson Services, Inc.; and
       ALZA Corporation, on the other.

Before the Debtors filed for bankruptcy, the parties entered into
contracts relating to the Debtors' sale of power, Evan R. Fleck,
Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates.

Following negotiations, the parties entered into the Settlement
Agreements, which provide that:

   (i) each Counterparty will make settlement payments to the
       applicable Reorganized Debtor or Debtor; and

  (ii) they will mutually release each other from all claims
       related to the contracts.

Most of the Settlement Agreements also provide that each
scheduled liability or proof of claim related to the
Counterparties will be deemed irrevocably withdrawn, with
prejudice, and to the extent applicable, expunged and disallowed
in its entirety.

The parties also agree to the dismissal of three adversary
proceedings filed by the Debtors against the Johnson & Johnson
Parties:

         Case No.           Debtor
         --------           ------
         05-01555           EEMC
         05-01832           EESI
         05-01833           EEIS

The proofs of claim filed by the College Districts against the
Debtors will be expunged:

       Claimant                        Claim No.   Claim Amount
       --------                        ---------   ------------
       Allan Hancock Joint Community     15680       $1,809,523
       Barstow College District          18257          692,215
       Butte-Glen Comm. Coll. Dist.      16357        2,951,840
       Cerritos Community Coll. Dist.    15431        7,299,675
       Coast Community Coll. Dist.       14788        7,624,976
       College of the Sequoias Dist.     15678          644,108
       Comm. College League of Calif.    15422           42,500
       Contra Costa Comm. Coll. Dist.    15967        7,846,007
       El Camino Community Coll. Dist.   17647        5,119,279
       Feather River College Dist.       15978          694,164
       Foothill-DeAnza Community         18598        4,299,330
       Fremont-Newark Comm. Coll. Dist.  15755        3,076,232
       Gavilan Joint Comm. Coll. Dist.   18265        1,263,955
       Grossmont-Cuyamaca Community      15630          372,769
       Hartnell Comm. College District   14865        2,713,625
       Los Angeles Comm. Coll. Dist.     25113        5,654,028
       Mira Costa College District       15840          174,707
       North Orange County Community     15391       12,594,975
       Palomar Comm. College District    16647          447,822
       Rio Hondo Comm. Coll. District    14871        3,444,266
       San Joaquin Delta Community       16351        6,822,690
       San Jose/Evergreen Community      16650        5,512,391
       San Luis Obispo County --
         Questa College                  16541        3,022,765
       San Mateo County Comm.            16352        6,383,923
       Santa Clarita Comm. Coll. Dist.   14926        3,928,155
       Santa Monica Comm. Coll. Dist.    16008        4,656,558
       Shasta-Tehama-Trinity Comm.       14861        3,071,315
       Sierra Joint Comm. Coll. Dist.    14981        4,243,792
       Sonoma County Jr. College Dist.   17320        5,038,155
       Southwestern Comm. Coll. Dist.    15695          252,966
       Victor Valley Coll. Dist.         16545        4,226,145
       West Valley Mission               14744        3,327,884
       Yuba Comm. College District       17333        2,631,429
                                                   ------------
               T O T A L                           $121,884,162

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply.  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 173; Bankruptcy Creditors'
Service, Inc., 15/945-7000)


ENRON CORP: Settling Lewis and Fiserv Transfers Dispute
-------------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
approve a settlement with Lewis & Clark College and Fiserv
Securities, Inc., now known as NF Clearing, Inc.

According to Richard L. Wasserman, Esq., at Venable LLP, in
Baltimore, Maryland, Enron Corp., in 2001, transferred over
$1,000,000,000 to various entities to prepay or redeem, prior to
the stated maturity date, commercial paper that it had previously
issued.  

On Nov. 6, 2003, Enron filed Adversary Proceeding No. 03-92667,
styled Enron Corp. v. J.P. Morgan Securities Inc., et al.,
against a number of parties, including Lewis & Clark College and
Fiserv Securities, Inc., now known as NF Clearing, Inc., to avoid
and recover preferential or fraudulent transfers in connection
with the early redemption transfers.

Enron sought to recover $249,979 from the Lewis Parties in
connection with one of the commercial paper debt prepayments.

The Lewis Parties denied Enron's material allegations and sought
dismissal of the Complaint.

After negotiations, Enron and the Lewis Parties entered into a
settlement agreement to resolve their dispute.

The parties agree that:

   (1) the Lewis Parties will make a $100,000 settlement payment
       to Enron;

   (2) the Lewis Parties will forfeit, waive and release any
       claim against Enron; and

   (3) the Reorganized Debtors will dismiss with prejudice the
       Adversary Proceeding, as against the Lewis Parties.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply.  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 172; Bankruptcy Creditors'
Service, Inc., 15/945-7000)


FRANKLIN CLO: Moody's Rates $13 Million Class E Notes at Ba2
------------------------------------------------------------
Moody's Investors Service assigned ratings to six classes of notes
issued by Franklin CLO V, Limited:

Moody's Ratings:

   (1) Aaa to the $50,000,000 Class A-1 Senior Revolving
       Notes Due 2018;

   (2) Aaa to the $303,000,000 Class A-2 Senior Term Notes
       Due 2018;

   (3) Aa2 to the $49,000,000 Class B Senior Floating rate
       notes Due 2018;

   (4) A2 to the $23,500,000 Class C Deferrable Mezzanine
       Floating Rate Notes Due 2018;

   (5) Baa2 to the $21,500,000 Class D Deferrable Mezzanine
       Floating Rate Notes Due 2018; and

   (6) Ba2 to the $13,000,000 Class E Deferrable Mezzanine
       Floating Rate Notes Due 2018.

These ratings address the ultimate cash receipt of all interest
and principal payments required by the notes' governing documents,
and are based on the expected loss posed to holders of the notes
relative to the promise of receiving the present value of such
payments.  The ratings are also based upon the transaction's legal
structure and the characteristics of the collateral pool.

Franklin Advisers Inc., will manage the selection, acquisition and
disposition of collateral on behalf of the Issuer.


FUNCTIONAL RESTORATION: Panel Can Hire Chief Restructuring Officer
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
issued a tentative ruling favoring the appointment of a chief
restructuring officer for Functional Restoration Medical Center
Inc.

The Official Committee of Unsecured Creditors appointed in the
Debtor's bankruptcy case requested the retention of a CRO after
Siemens Financial Services and Siemens Medical Solutions,
creditors of the Debtor, filed a motion appointing a chapter 11
trustee or in the alternative, an examiner with expanded powers.

The Committee believes that it would be inappropriate to appoint a
chapter 11 trustee since the problem is incompetence.  According
to the Committee failed to:

     -- timely file its Schedules of Assets and Liabilities and
        Statement of Financial Affairs;

     -- provide the Committee with information regarding the
        affiliated corporations of Moosa Heikali, M.D., the
        Debtor's founder and current president;

     -- respond to the Committee's document requests; and

     -- operate within the budget approved by the Court because it
        does not have a centralized accounting system.  

The Committee asserts that the Debtor's management is incapable of
guiding the Debtor through the chapter 11 process.  Consequently,
the Committee concluded that the Debtor needs the expertise of a
professional in order to successfully reorganize its business
under chapter 11.

                          Court Ruling

The Court contends that the Debtor needs more financial assistance
and agreed that the Debtor needs a new and specialized management.  
The Court declared that reorganization under chapter 11 requires
sophisticated business skills that Dr. Heikali lacks.

According to the Court, only a fully independent professional can
adequately assure creditors and other parties in interest that the
money is properly accounted for and that effective accounting
controls are in place.  If the Debtor and the Committee fails to
agree on the appointment of a CRO, the Court, on a statutory
basis, will assign a chapter 11 trustee.   

Headquartered in Encino, California, Functional Restoration
Medical Center, Inc. is the second largest owner and operator of
MRI centers in Southern California.  The Debtor filed for chapter
11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-
10306).  Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.


FUNCTIONAL RESTORATION: Taps Novian & Novian as Special Counsel
---------------------------------------------------------------
Functional Restoration Medical Center, Inc., asks the U.S.
Bankruptcy Court for the Central District of California for
permission to employ Novian & Novian, LLP, as its special
corporate and litigation counsel.

Novian & Novian will:

     a) advise the Debtor on corporate restructuring and finance
        issues;

     b) assist in the raising and documentation of additional
        financing via a debt or equity interests;

     c) advise the Debtor on employment law issues and
        restructuring of its labor force;

     d) advise the Debtor on real estate lease negotiations; and

     e) provide legal representation in connection with various
        pending or threatened litigation matters as identified in
        the Debtor's schedules and statement of affairs, and to
        represent the Debtor in actions filed by or against the
        Debtor in the future.

The Debtor discloses that the Firm's professionals bill:

       Professionals        Designation        Hourly Rate
       -------------        -----------        -----------
       Farid Novian           Partner             $375
       Farhad Novian          Partner             $375
       Susan Rodriguez       Associate            $325
       Josh Mendlesohn       Associate            $295
       Paralegals                                 $95
       Law Clerks                                 $75

Mr. Farid Novian assures the Court that the firm is disinterested
as the term is defined in Section 101(14) of the Bankruptcy Code
and does not hold or represent any interest adverse to the
Debtors' estates.

Headquartered in Encino, California, Functional Restoration
Medical Center, Inc. is the second largest owner and operator of
MRI centers in Southern California.  The Debtor filed for chapter
11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-
10306).  Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts.  XRoads Solutions Group, LLC,
serves as its financial advisor.  When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.


GENERAL MOTORS: Troy Clarke Named President of GM North America
---------------------------------------------------------------
Troy Clarke has been appointed president of GM North America and
GM group vice president, effective July 1, General Motors Chairman
and CEO Rick Wagoner reported on May 30, 2006.

Mr. Clarke, president of GM Asia Pacific since 2004, will work
closely with Mr. Wagoner in implementing the GMNA turnaround plan,
and will oversee day-to-day operations of GM's largest sales
region.  Mr. Wagoner has been leading GMNA since April 2005 to
develop and drive the region's turnaround strategy.

"While much work remains to be done, we have reached several
significant milestones in our turnaround plan over the past year,"
Mr. Wagoner said.  "This is the right time to turn the region's
day-to-day operations over to Troy, who has the experience and
skills to help lead the GMNA team as it continues this
unprecedented restructuring.  Troy has a track record of success
in general management, manufacturing and labor relations in the
United States and globally, which will be invaluable in his new
assignment."

Mr. Wagoner said he and his senior leadership team will continue
to be actively involved in executing the next key steps in the
GMNA turnaround plan, including:

   * a successful resolution of the Delphi reorganization;

   * completion of the accelerated attrition and capacity-
     reduction programs, and achievement of the $7 billion
     structural cost-reduction target;

   * flawless launches of key new cars, trucks and advanced
     technologies; and

   * ongoing refinement and acceleration of GM's brand and
     product-focused marketing strategy.

David "Nick" Reilly, a GM vice president and president and CEO of
GM Daewoo Auto & Technology Co. in South Korea, will replace Mr.
Clarke as president of GM Asia Pacific and will become a GM group
vice president, also effective July 1.  Mr. Reilly also will
succeed Mr. Clarke as chairman of the GMDAT Board of Directors.  A
replacement for Mr. Reilly as CEO of GMDAT will be announced at a
later date.

"Nick has demonstrated his managerial strength, most recently in
growing GM Daewoo into a profitable enterprise that has quickly
become a key part of our global expansion plans, well in advance
of what was generally expected," Mr. Wagoner said.  "The success
of GM Daewoo is a tribute to Nick's leadership and commitment."

Vice Chairman John Devine, 62, who reported in December that he
planned to retire this year, has decided to make his retirement
effective June 1, Mr. Wagoner said.

"We all owe John a tremendous debt of gratitude for his vast
contributions to GM over the past five years," Mr. Wagoner said.  
"John took on a number of challenging and important assignments
during his tenure as vice chairman and chief financial officer.  
His extensive experience and expertise in the auto business, along
with the respect he enjoys on Wall Street, enabled him to
contribute to our turnaround in an exceptional manner."

Mr. Clarke, 51, joined GM at the Pontiac division in 1973 and over
the succeeding decade held several engineering and manufacturing
assignments there.  He was named director of manufacturing for GM
de Mexico in 1997, and president and managing director in 1998,
when he also became a corporate vice president.

In 2001, Mr. Clarke was appointed vice president of labor
relations in Detroit, and he became group vice president of
manufacturing and labor relations in 2002.  He served as GM's
chief negotiator during the 2003 labor negotiations in North
America.

Mr. Reilly, 56, has been at GM Daewoo since 2002, when he was
named to lead the transition team for the company's formation.  He
has been a GM vice president since 1997.

He began his GM career in 1975 at the former Detroit Diesel
Allison Division in the United Kingdom.  From 1978 to 1984, he
held assignments in Belgium, the United States and Mexico.  After
serving in operations and manufacturing posts with Vauxhall and
the Isuzu joint venture in Luton, England, Mr. Reilly became vice
president of quality and reliability for GM Europe in Zurich,
Switzerland.

Mr. Reilly returned to the United Kingdom in 1996 as chairman and
managing director of Vauxhall, and returned to Zurich in 2001 as
vice president of sales, marketing and after-sales for GME.

                      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.


GENERAL MOTORS: Investing $170MM for Michigan Production Project
----------------------------------------------------------------
General Motors will invest $125 million in its GM Powertrain
Ypsilanti Transmission Operations facility for additional capacity
to produce a family of Hydra-Matic six-speed rear-, and all-wheel
drive automatic transmissions for GM's cars, trucks and SUVs.  GM
will invest another $45 million for vendor tooling, containers and
investment at other locations necessary to support the expanded
Ypsilanti operations.

At YTO, the investment will help transition hourly and salaried
employees from four-speed to six-speed transmission production.  
It includes partial facility renovation, new machinery, equipment
and tooling to support the new processes.

Six-speed transmissions are gaining market popularity because
they help save fuel while also improving acceleration performance.  
The six-speed automatic enables a reduced engine rpm at highway
cruising speeds, which reduces engine wear and noise, and improves
fuel economy.  GM is launching new six-speed automatic
transmission variants for front-, rear- and all-wheel-drive
applications in nearly 40 global GM models in 2006 and 2007.  
By 2010, GM will have introduced 10 new variants of six-speed
automatic transmissions and produced as many as three million
six-speeds annually.

"The six-speed automatic is a best-of-both-worlds scenario,
delivering great fuel economy and improved performance," John
Buttermore, GM Powertrain vice president of manufacturing, said.  
"It is almost like having two transmissions in one -- the high
numerical first gear provides tremendous off-the-line
acceleration, but the transmission is able to use the six gears
to evenly distribute the torque and settle at an overdrive gear
that helps deliver great fuel economy.

"On behalf of GM, I commend the United Auto Workers, UAW Local
735, and local and state leaders for helping to provide the
business case and securing the necessary incentives to support
this investment in six-speed transmission production."

"This new investment in the Ypsilanti powertrain facility
demonstrates GM's confidence that UAW Local 735 members build a
world-class quality six-speed RWD transmission," Richard
Shoemaker, UAW vice president and director of the GM Department,
said.

"Six speed transmissions improve fuel economy and engine
performance, and we're pleased that UAW Local 735 members will be
expanding production of these important components for GM cars and
trucks."

In 2005, Ypsilanti Transmission Operations began production of
the Hydra-Matic 6L80 six-speed transmission, the result of a
$300-million investment announced in 2003.  Additional capacity
was added by a $152-million investment in 2005.  Both of these
investments were made possible by local and state incentives.

The Hydra-Matic 6L50 from Ypsilanti Transmission Operations will
debut in certain 2007 Cadillac STS rear- and all-wheel drive
performance sedans and the V8-powered SRX crossover SUV.  The 6L50
also uses the Driver Shift Control feature, which allows the
driver to shift the transmission like a clutchless manual gearbox.

"Technology is the driving force of Michigan 's automotive
future," Governor Jennifer M. Granholm said.  "We are pleased to
have worked closely with General Motors to bring this very high-
tech development to Michigan and retain jobs in Ypsilanti."

"From both a social and an economic standpoint, Ypsilanti
Transmission Operations is a vitally important part of our
community, and we were pleased to support the incentives necessary
for preserving jobs and making the plant competitive for future
production," Ypsilanti Township Supervisor Ruth Ann Jamnick, said.  
"This cooperation benefits GM and the YTO workforce, as well as
the citizens of Ypsilanti Township."

Kingsley P. Wootton, GM Powertrain Ypsilanti Transmission
Operations plant manager, said the investment helps ensure that
the plant will continue to be an important part of the community.  
"Our strong partnership with the UAW and Local 735 resulted in an
innovative work agreement that helped usher in a new era of
competitively produced world-class six-speed transmissions."

"A new team concept arrangement was developed for six-speed
production, which includes hourly members of UAW Local 735 and
salaried employees.  The team concept includes cohesive teams of
four to six members, with a designated leader that assists the
team, ensuring an efficient operation.  Team members work with
engineering personnel to provide input on product design and its
impact on manufacturing, with a goal of 'zero defects.'  A
heightened safety initiative, with a workplace goal of 'zero
incidents,' is also included in the team concept arrangement."

The historic Willow Run/Ypsilanti Transmission Operations facility
produced planes during World War II.  It was converted to a
dedicated transmission plant in 1953, after a fire destroyed
another transmission facility in Livonia, Michigan.  The 4.8
million-square-foot facility employs 3,600 hourly and salaried
employees.

                      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.


GMAC COMMERCIAL: S&P Removes Class F Cert.'s BB Rating from Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on four
classes of GMAC Commercial Mortgage Securities Inc.'s mortgage
pass-through certificates from series 2003-FL1.  

Concurrently, the rating on class F is taken off CreditWatch with
negative implications, where it was placed Oct. 24, 2005.
     
The removal of the CreditWatch negative placement on class F
rating reflects the recent full payoff of the Greenspoint
Technology Center loan and the payment of all fees related to the
loan's modification by the junior participation held outside the
trust.  The affirmed ratings reflect Standard & Poor's analysis of
the underlying collateral.
     
As of the remittance report dated May 11, 2006, the trust
principal balance was $45.1 million, down from $411.4 million at
issuance.  There are two remaining loans, down from 16 at
issuance.  Both loans are senior participations with floating
rates based on a margin over the one-month LIBOR rate.  The junior
participations are held outside the trust and are not part of the
trust collateral.  The transaction has not experienced a loss to
date.
     
The Hartman portfolio secures the larger remaining loan ($32.1
million), which has a $2.3 million junior participation held
outside of the trust.  The loan is secured by 18 properties in
Houston, Texas, with 1.3 million total sq. ft.  The 18 properties
include:

   * eight industrial buildings,

   * eight retail properties (consisting of two anchored and six
     unanchored buildings), and

   * two office properties.

The net cash flow is stable compared with the level at issuance,
as indicated by the performance for the nine months ended Sept.
30, 2005.  The loan was scheduled to mature on Jan. 1, 2006, but
the borrower exercised the option to extend the maturity by two
years, or until Jan. 1, 2008.  No other maturity extensions are
available.
     
The Upstate New York portfolio secures the smaller remaining loan
($13 million), which has a $9.5 million junior participation held
outside of the trust.  Eight office properties with 343,270 total
sq. ft. located in and around Albany, Syracuse, and Rochester,
N.Y., secure the loan.  

The net cash flow is stable compared with the level at issuance,
as indicated by the performance for the nine months ended
Sept. 30, 2005.  The loan was transferred to Capmark Finance Inc.,
the special servicer, after the borrower did not repay the loan at
maturity on Jan. 1, 2006.  The loan became 90 days delinquent but
is now operating under a forbearance agreement that extends
through year-end 2006.  

The forbearance agreement gives the borrower time to sell the
collateral properties as well as other noncollateral properties in
order to pay off the debt on the Upstate New York portfolio.

As was the case with the Greenspoint Technology Center loan, any
fees related to the workout of the Upstate New York portfolio will
be borne by the junior participation held outside of the trust.
There is one two-year extension of the loan's maturity date
available.
   
Rating Affirmed And Removed From Creditwatch Negative:
   
            GMAC Commercial Mortgage Securities Inc.
       Mortgage pass-through certificates series 2003-FL1

                             Rating

                                       Credit enhancement
        Class   To        From         (pooled interests)
        -----   --        ----         ------------------
          F     BB    BB/Watch Neg.          0.00%
   
Ratings Affirmed:
   
            GMAC Commercial Mortgage Securities Inc.
       Mortgage pass-through certificates series 2003-FL1

                                 Credit enhancement
              Class    Rating    (pooled interests)
              -----    ------    ------------------
                C       AAA            93.25%
                D       AAA            43.13%
                E       AA             22.73%


GPC SYSTEMS: Case Summary & 8 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: GPC Systems, Inc.
        2108-B Gallows Road
        Vienna, Virginia 22182

Bankruptcy Case No.: 06-10560

Type of Business: The Debtor develops enhanced custom
                  software systems and Microsoft Great
                  Plains Accounting Applications for
                  companies throughout the Washington,
                  D.C. area.  See http://www.gpcsystems.com/

Chapter 11 Petition Date: May 30, 2006

Court: Eastern District of Virginia (Alexandria)

Judge: Robert G. Mayer

Debtor's Counsel: Thomas P. Gorman, Esq.
                  Tyler, Bartl, Gorman & Ramsdell, PLC
                  700 South Washington Street, Suite 216
                  Alexandria, Virginia 22314
                  Tel: (703) 549-5010
                  Fax: (703) 549-5011

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 8 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service         Taxes               $1,181,662
Special Procedures -
Support Staff
P.O. Box 10025
Richmond, VA 23240-0025

American Express - Flex Acct.                           $53,634
P.O. Box 1270
Newark, NJ 07101

Wells Fargo                      Line of Credit         $27,889
P.O. Box 6426
Carol Stream, IL 60197

MBNA America Bank                                       $21,210

GE Capital Colonial Pacific      Lease                  $19,672

American Line of Credit                                  $3,048

US Bank - Visa Card                                      $2,966

Guy & Patsy Caron                Office Lease           Unknown


GSR MORTGAGE: Fitch Places Low-B Ratings on Class B-4 & B-5 Certs.
------------------------------------------------------------------
Fitch rated GSR Mortgage Loan Trust, series 2006-5F, residential
mortgage pass-through certificates as:

   -- $497,513,214 classes 1A-1, 2A-1 through 2A-6, 3A-1 through
      3A-7, 4A-1, 4A-2, 5A-1, A-P, and A-X (senior certificates)
      'AAA'

   -- $3,881,000 class M-1 'AA+'

   -- $6,978,000 class B-1 'AA'

   -- $3,101,000 class B-2 'A'

   -- $2,067,000 class B-3 'BBB'

   -- $1,292,000 class B-4 'BB'

   -- $775,000 class B-5 'B'

The 'AAA' rating on the senior certificates reflects:

   * the 3.75% subordination provided by the 0.75% class M-1;
   * 1.35% class B-1;
   * 0.60% class B-2;
   * 0.40% class B-3;
   * 0.25% privately offered class B-4;
   * 0.15% privately offered class B-5; and
   * 0.25% privately offered class B-6.

Class B-6 is not rated by Fitch.

The ratings also reflect:

   * the quality of the underlying collateral;

   * the strength of the legal and financial structures; and

   * the master servicing capabilities of Wells Fargo Bank, N.A.,
     which is rated 'RMS1' by Fitch.

This transaction contains certain classes designated as
exchangeable certificates and others as regular certificates.
Classes 3A-1 through 3A-7 are the exchangeable certificates.
Classes 1A-1, 2A-1 through 2A-6, 3A-1, 3A-2, 4A-1, 4A-2, 5A-1,
A-P, A-X, M-1, B-1 through B-6 are the regular certificates.

All or a portion of certain classes of offered certificates may be
exchanged for a proportionate interest in the related exchangeable
certificates.  All or a portion of the exchangeable certificates
may also be exchanged for the related offered certificates in the
same manner.  This process may occur repeatedly.

The classes of offered certificates and of exchangeable
certificates that are outstanding at any given time and the
outstanding principal balances and notional amounts of these
classes will depend upon any related distributions of principal,
as well as any exchanges that occur.  Offered certificates and
exchangeable certificates in any combination may be exchanged only
in the proportions shown in the governing documents.

Holders of exchangeable certificates will be the beneficial owners
of a proportionate interest in the certificates in the related
combination group and will receive a proportionate share of the
distributions on those certificates.

On each distribution date when exchangeable certificates are
outstanding, principal distributions from the applicable related
certificates are allocated to the related exchangeable
certificates that are entitled to principal.  The payment
characteristics of the classes of exchangeable certificates will
reflect the payment characteristics of their related classes of
regular certificates.

As of the cut-off date, May 1, 2006, the pool of loans consists of
884 fixed-rate mortgage loans, which have both 15 and 30-year
amortization terms, with an approximate balance of
$516,901,283.63.  The mortgage pool has an average unpaid
principal balance of $584,729.96 and a weighted average FICO score
of 739.

The weighted average amortized current loan-to-value ratio is
70.45%.  Rate/Term and cash-out refinances represent 20.56% and
27.38%, respectively, of the mortgage loans.  

The states that represent the largest geographic concentration of
mortgaged properties are:

   * California (34.66%),
   * New Jersey (6.56%),
   * Virginia (6.45%),
   * Florida (6.22%), and
   * New York (5.46%).

All other states comprise fewer than 5% of properties in the pool.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

GS Mortgage Securities Corp. purchased the mortgage loans from
each seller and deposited the loans in the trust, which issued the
certificates, representing undivided and beneficial ownership in
the trust.  For federal income tax purposes, the securities
administrator will cause multiple real estate mortgage investment
conduit elections to be made for the trust.  Wells Fargo Bank,
N.A. will act as securities administrator and U.S. Bank, N.A. will
serve as the trustee.


HANGER ORTHOPEDIC: Completes Tender Offer  for $205 Mil. Sr. Notes
------------------------------------------------------------------
Hanger Orthopedic Group, Inc., purchased $190,397,000 principal
amount of its outstanding 10-3/8% Senior Notes due 2009 (CUSIP No.
41043FAE9) and $15,485,000 principal amount of its outstanding 11-
1/4% Senior Subordinated Notes due 2009 (CUSIP No. 41043FAB5).  As
a result, the supplemental indentures dated as of May 22, 2006
became operative on May 26, 2006.

The tender offer is scheduled to expire at 11:59 p.m., New York
City time, on June 6, 2006, unless such date is extended or
earlier terminated.  Holders of Notes who tender their Notes at or
prior to the Expiration Date will be eligible to receive only the
Tender Offer Consideration set forth in the Offer to Purchase and
Consent Solicitation Statement.  Holders who tender Notes must
also deliver consents to the proposed amendments with respect to
the series of such Notes and with respect to the indentures, which
governs such Notes.  Holders may not deliver consents without also
tendering their Notes and Holders who validly tender their Notes
will be deemed to have delivered their consents.

Lehman Brothers Inc. and Citigroup Corporate and Investment
Banking are the co-dealer managers for the Offers and co-
solicitation agents for the Consent Solicitations.  Questions
about the Offers should be directed to:

     Lehman Brothers Inc.
     Telephone (212) 528-7581 (collect)
     Toll Free (800) 438-3242

                   or

     Citigroup Corporate and Investment Banking
     Attention: Liability Management
     Toll Free (800) 558-3745

The information agent for the Offers is D.F. King & Co. Inc.
Requests for additional sets of the tender offer materials may be
directed to:

     D.F. King & Co. Inc.
     Toll Free (800) 735-3107

                     About Hanger Orthopedic

Headquartered in Bethesda, Maryland, Hanger Orthopedic Group, Inc.
(NYSE: HGR) -- http://www.hanger.com/-- is the world's premier  
provider of orthotic and prosthetic patient care services.  Hanger
is the market leader in the United States, owning and operating
621 patient care centers in 46 states including the District of
Columbia, with 3,290 employees including 1,021 practitioners (as
of 12/31/05).  Hanger is organized into four units.  The two key
operating units are patient care, which consists of nationwide
orthotic and prosthetic practice centers and distribution which
consists of distribution centers managing the supply chain of
orthotic and prosthetic componentry to Hanger and third party
patient care centers.  The third is Linkia, which is the first and
only provider network management company for the orthotics and
prosthetics industry. The fourth unit, Innovative Neurotronics,
introduces emerging neuromuscular technologies developed through
independent research in a collaborative effort with industry
suppliers worldwide.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services assigned its 'B' senior secured
bank loan rating to Hanger Orthopedic Group Inc.'s (B/Negative/--)
proposed $75 million revolving credit facility due in 2011 and
$230 million term loan B due in 2013.  A recovery rating of '2'
also was assigned to the secured loan, indicating the expectation
for substantial recovery of principal in the event of a payment
default.

At the same time, Standard & Poor's assigned its 'CCC+' senior
unsecured debt rating to the company's proposed $190 million of
senior unsecured notes due in 2014.  The rating agency also
affirmed its 'B' corporate credit rating.  The rating outlook
remains negative.


HEWETTS ISLAND: Moody's Rates $17 Million Class E Notes at Ba2
--------------------------------------------------------------
Moody's Investors Service assigned ratings to six classes of notes
issued by Hewett's Island CLO IV, Ltd.

Moody's Ratings:

   (1) Aaa to the $300,000,000 Class A First Priority Senior
       Secured Floating Rate Notes Due 2018;

   (2) Aa2 to the $33,000,000 Class B Second Priority Senior
       Secured Floating Rate Notes Due 2018;

   (3) A2 to the $14,500,000 Class C Third Priority Senior
       Secured Deferrable Floating Rate Notes Due 2018;

   (4) Baa2 to the $11,000,000 Class D-1 Fourth Priority
       Mezzanine Deferrable Floating Rate Notes Due 2018;

   (5) Baa2 to the $3,000,000 Class D-2 Fourth Priority
       Mezzanine Deferrable Fixed Rate Notes Due 2018; and

   (6) Ba2 to the $17,000,000 Class E Fifth Priority
       Mezzanine Deferrable Floating Rate Notes Due 2018.

The collateral manager is CypressTree Investment Management
Company, Inc and the collateral pool is primarily broadly
syndicated loans.


INSPIRE INSURANCE: Liquidating Trustee Can Make Initial Payments
----------------------------------------------------------------
The Honorable D. Michael Lynn of the U.S. Bankruptcy Court for the
Northern District of Texas in Forth Worth authorized Michael G.
Lawrence, the Liquidating Trustee of INSpire Trust --
successor-in-interest to INSpire Insurance Solutions, Inc., and
INSpire Claims Management, Inc., -- to pay holders of allowed
claims as much as 20% of their allowed claims from Trust funds.

J. Robert Forshey, Esq., Forshey & Prostok, LLP, told the Court
that one of the largest claims against the Trust, as asserted by
Sul America Compania Nacional de Seguros, was for an amount in
excess of $5.2 million.  The Trust didn't make any distributions
to other creditors due the size of Sul America's claim.  But since
the Liquidating Trustee has already resolved through settlement
Sul America's claim, he deems it timely to make distributions.  

The allowed claims aggregate $1,966,360.  The remaining unresolved
claims amount to $1,229,488.  A copy of the list of allowed and
disputed claims is available for free at
http://ResearchArchives.com/t/s?a29

INSpire Insurance Solutions, Inc., and INSpire Claims Management,
Inc., filed for chapter 11 protection on Feb. 15, 2002 (Bankr.
N.D. Tex. Case No. 02-41228).  The Bankruptcy Court confirmed the
First Amended Plan of Reorganization of the Debtors on Nov. 13,
2002.  Michael G. Lawrence is the Liquidating Trustee of INSpire
Trust under the Plan.  J. Robert Forshey, Esq., Forshey & Prostok,
LLP, represents the Liquidating Trustee.


INTERLINE BRANDS: S&P Assigns BB- Sr. Unsecured & B Sub. Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
'BB-' senior unsecured rating and 'B' subordinated rating to the
recently filed unlimited shelf registration of Jacksonville,
Florida-based Interline Brands Inc. (BB-/Stable/--).

The actual senior unsecured debt rating at the time of issuance
could be one or two notches below the corporate credit rating,
based on the amount of priority liabilities expected to rank ahead
of senior unsecured lenders in the event of bankruptcy.
     
Standard & Poor's expects proceeds from any securities issued in
the near term to be used to refinance Interline Brands' existing
indebtedness.  Interline Brands had about $314 million of total
debt, including capitalized operating leases, as of March 31,
2006.
     
The ratings on Interline, which competes in the highly fragmented
maintenance, repair, and operations distribution industry, reflect
its aggressive capital structure and modest financial scope in a
competitive industry, partially offset by:

   * good customer, product, and geographic diversity;
   * a relatively favorable industry outlook; and
   * competitive operating margins.
      
Ratings List:

Interline Brands Inc.:

  Corporate credit rating:  BB-/Stable/--
  Senior secured debt:      BB (Recov rtg: 1)
  Subordinated debt:        B

Ratings Assigned:

  Unlimited shelf registration:
  
    Senior unsecured debt (prelim):  BB-
    Subordinated debt (prelim):      B


INVERNESS MEDICAL: Posts $2.6MM Net Loss in Quarter Ended March 31
------------------------------------------------------------------
Inverness Medical Innovations, Inc., reported a $2,630,000 net
loss on $122,753,000 of sales for the three months ended March 31,
2006.

At March 31, 2006, the Company's balance sheet showed $906,269,000
in total assets, $399,564,000 in total liabilities and
stockholders' equity of $506,705,000.

Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, are available at no charge at
http://ResearchArchives.com/t/s?a2b

Based in Waltham, Massachusetts, Inverness Medical Innovations,
Inc. -- http://www.invernessmedical.com/-- is a leading global  
developer of advanced diagnostic devices and is presently
exploring new opportunities for its proprietary electrochemical
and other technologies in a variety of professional diagnostic and
consumer-oriented applications including immuno-diagnostics with a
focus on women's health and cardiology.

Inverness Medical Innovations, Inc.'s 8-3/4% Senior Subordinated
Notes due 2012 carry Moody's Investors Service's Caa3 rating and
Standard & Poor's CCC+ rating.


ITC HOMES: Christopher Linscott Names as Examiner
-------------------------------------------------
The Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for
the District of Arizona authorized the appointment of Christopher
G. Linscott as examiner for ITC Homes, Inc.

In an order dated April 25, 2006, the Court directed Ilene J.
Lashinsky, the U.S. Trustee for Region 14, to appoint an examiner
for the Debtor.

The Debtor had asked the Court to appoint an examiner in its
Chapter 11 case to:

     a) investigate and report to the Court, findings regarding
        allegations made by M&S Unlimited, LLC, and Moshe and
        Susie Gedalia, that it had engaged in self-dealing,
        conflicted transactions, conversion or other acts of
        misconduct;  

     b) review its records regarding the profits, if any, received
        from the sales of property sold to the Debtor by M&S
        Unlimited; and

     c) calculate the amount of M&S Unlimited's claim, taking into
        account all credits, offsets, setoffs, recruitments, and
        other matters affecting the claim.

M&S Unlimited and the Gedalias supported the Debtor's request.
Michael J. Crawford, at Mesch, Clark & Rothschild, PC, told the
Court that in addition to the tasks listed in the Debtor's
original motion, the Gedalias also want the examiner to:

     a) investigate the Debtor's business practices to determine
        if fraudulent transfers were conducted or whether the
        Debtors engaged in self-dealing and conversion of other
        ITC assets;

     b) investigate whether the Debtor and its principal, Ron
        Amiran, have taken advantage of other corporate
        opportunities, including the development of the area
        immediately adjacent to the Gedalias' property and the
        investment on other companies or parcels for development;
        and

     c) examine, calculate and report to the Court the amount of
        the Gedalias' claims against the Debtor.

                Nevada District Court Action

As reported in the Troubled Company Reporter on March 28, 2006,
M&S Unlimited, the Gedalia's, Mr. Amiran and the Debtor are
parties to an agreement to develop a tract of land in Vail,
Arizona, named Santa Rita Acres Estate.  Mr. Amiran formed ITC
Homes for the sole purpose of developing that property.  M&S
Unlimited told the bankruptcy court that during this time, Mr.
Amiran had no funds so it agreed to borrow capital for the
project.

The Gedalias subsequently filed an action in the Nevada state
court against Mr. Amiran, the Debtor and related entities seeking
emergency relief to stop further diversion of the assets of the
real estate development and permanent relief for an accounting and
for damages.  On Dec. 1, 2005, the Nevada state court entered an
order enjoining any further payments to Mr. Amiran and ordering an
accounting.

M&S Unlimited and the Gedalias pursued the court-ordered
accounting through the court-approved auditors and discovered
apparent misappropriation of assets.  

On Jan. 4, 2006, the Nevada Court appointed an independent
receiver, retired Brigadier General Ashley Hall.  Even after the
appointment of Mr. Hall, M&S Unlimited alleges that Mr. Amiran
continued to attempt to exert control over ITC Homes.  Since
assuming operational control, the receiver has continued sales and
construction in the ordinary course but has periodically been
confronted with various attempts by Mr. Amiran to direct and
divert funds from the receivership, or to interfere with the
operation of the business.

After seeking bankruptcy protection, the Debtor successfully asked
the bankruptcy court to require the receiver to turnover its
assets.  Pursuant to the bankruptcy court's turnover order, the
receiver turned over operational control of Debtor's business to
Debtor.  The Debtor now has control over its assets while the
receiver remains in operational control of related non-Debtor
entities.

M&S Unlimited and the Gedalias asked the Bankruptcy Court to
dismiss the Debtor's chapter 11 proceedings.  Judge Hollowell
denied their request.

Headquartered in Vail, Arizona, ITC Homes, Inc. --
http://www.itchomesinc.net/-- develops residential real estates.     
The Company filed for chapter 11 protection on Jan. 26, 2006
(Bankr. D. Ariz. Case No. 06-00053).  Scott D. Gibson, Esq., at
Gibson, Nakamura & Decker, PLLC, represents the Debtor.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.


ITC HOMES: Hires Dustin Allred as Real Estate Broker
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
ITC Homes, Inc., to retain Dustin Allred Real Estate, LLC, as
broker.  Dustin Allred will market and sell several homes located
at the Debtor's new subdivision in Tucson, Arizona.

The Debtor will pay Dustin Allred a 1% commission on the sale
price, plus a $350 service fee, upon the closing of each new sale
in the subdivision.  Upon the closing of each home for resale,
Dustin Allred is entitled to a 6% commission on the sale price.

The Debtor assures the Court that Dustin Allred does not hold or
represent any material interest that is adverse to the Debtor or
its estate.

Dustin Allred can be reached at:

          Dustin Allred Real Estate
          4040 N Weimer #8
          Tucson, Arizona 85719
          Tel: (520)241-0433

Headquartered in Vail, Arizona, ITC Homes, Inc. --
http://www.itchomesinc.net/-- develops residential real estates.     
The Company filed for chapter 11 protection on Jan. 26, 2006
(Bankr. D. Ariz. Case No. 06-00053).  Scott D. Gibson, Esq., at
Gibson, Nakamura & Decker, PLLC, represents the Debtor.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.


ITC HOMES: Selling Gray Hawk Property for $270,000
--------------------------------------------------
ITC Homes, Inc., asks the U.S. Bankruptcy Court for the District
of Arizona for permission to sell real property, located at 10202
East Gray Hawk Road in Tucson, Arizona.

The Debtor wants to sell the property, free and clear of all
liens, to Sue Ellen Amiran for approximately $270,000.  Ms. Amiran
is the wife of Ron Amiran, the Debtor's general manager.

Ms. Amiran will buy the property pursuant to a Purchase Agreement.
A copy of this purchase agreement is available for a fee at:  

  http://www.researcharchives.com/bin/download?id=060530214841

The Debtor obtained an appraisal for the property from Madson
Brown & Associates to ensure maximum benefit for the Debtor from
the sale.  A copy of the Uniform Residential Appraisal Report is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060530215526

Headquartered in Vail, Arizona, ITC Homes, Inc. --
http://www.itchomesinc.net/-- develops residential real estates.     
The Company filed for chapter 11 protection on Jan. 26, 2006
(Bankr. D. Ariz. Case No. 06-00053).  Scott D. Gibson, Esq., at
Gibson, Nakamura & Decker, PLLC, represents the Debtor.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.


JEROME DUNCAN: Court Converts Case to Chapter 7 Liquidation
-----------------------------------------------------------
The Hon. Marci B. McIvor of the U.S. Bankruptcy Court for the
Eastern District of Michigan, approved the conversion of Jerome
Duncan, Inc.'s chapter 11 case to a chapter 7 liquidation
proceeding.

Judge McIvor appointed Shelia J. Solomon to serve as the Debtor's
interim chapter 7 trustee.

As reported in the Trouble Company Reporter on March 27, 2006,
Saul Eisen, Esq., the U.S. Trustee for Region 9, told the Court
that there was no practical reason for the case to remain under
chapter 11 since the Debtor's operation will come to an end
shortly.  Mr. Eisen concluded that converting the case to a
chapter 7 liquidation and have an independent trustee investigate
potential claims and causes of action will be more beneficial and
efficient.

Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc.,
was the largest dealer of automobiles manufactured by Ford Motor
Company in the state of Michigan.  The Debtor employed over 200
individuals in its operations and generated between $300 and $500
million in annual sales.  The company filed for chapter 11
protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728).
Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents
the Debtor in its restructuring efforts.  Judith Greenstone
Miller, Esq., at Jaffe, Raitt, Heuer & Weiss, PC, represents the
Official Committee of Unsecured Creditors.


JEROME DUNCAN: Ch. 7 Trustee Hires Jacob & Weingarten as Counsel
----------------------------------------------------------------
The Hon. Marci B. McIvor of the U.S. Bankruptcy Court for the
Eastern District of Michigan gave Shelia J. Solomon, the interim
chapter 7 Trustee appointed in Jerome Duncan, Inc.'s case,
permission to employ Jacob & Weingarten, P.C., as her legal
counsel.

Jacob & Weingarten will assist Ms. Soloman with all legal matters
related to her duties as interim Trustee.

Steven P. Schubiner, Esq., a Jacob & Weingarten member, disclosed
that the Firm's professionals bill:

    Professional                         Hourly Rate
    ------------                         -----------
    Steven P. Schubiner, Esq.               $340
    S. Sher, Esq.                           $340
    Stuart Lee Sherman, Esq.                $325
    E. David Brockman, Esq.                 $280
    Don W. Blevins, Esq.                    $260
    Robert K. Siegel, Esq.                  $250
    Michael P. Herzoff, Esq.                $250
    Alan J. Schwartz, Esq.                  $225
    Carole Crosby, Esq.                     $200
    Scott R. Schubiner, Esq.                $200

Mr. Schubiner assures the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc.,
was the largest dealer of automobiles manufactured by Ford Motor
Company in the state of Michigan.  The Debtor employed over 200
individuals in its operations and generated between $300 and $500
million in annual sales.  The company filed for chapter 11
protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728).
Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents
the Debtor.  On April 12, 2006, Judge McIvor converted the case to
chapter 7 liquidation.  Shelia J. Solomon served as the Debtor's
interim chapter 7 trustee.


JT THORPE: Seeks Court Approval for St. Paul Insurance Pact
-----------------------------------------------------------
JT Thorpe, Inc., and its debtor affiliates is seeking approval
from the U.S. Bankruptcy Court for the Central District of
California for a settlement agreement with St. Paul Fire and
Marine Insurance Company, Travelers Casualty and Surety Company
fka The Aetna Casualty and Surety Company and The Travelers
Indemnity Company.  The Settlement Agreement resolves insurance
coverage disputes between the Debtors and the St. Paul Parties.

Any objections to the Settlement Agreement must be filed not later
than June 7, 2006, with the Clerk of the Bankruptcy Court at this
address:

   Office of the Clerk
   U.S. Bankruptcy Court
   Central District of California
   Edward R. Roybal Federal Building and Courthouse
   255 East Temple Street
   Los Angeles, CA 90012-3332

Copies of the objections must also be served to:

   a) Attorneys for the St. Paul Parties

      John A. Nadas, Esq.
      Douglas R. Gooding, Esq.
      Choate, Hall & Stewart LLP
      Two International Place
      Boston, MA 02110
      Tel: 617-248-5000
      Fax: 617-248-4000

   b) Attorneys for the Official Committee of Unsecured Creditors

      Michael H. Ahrens, Esq.
      Sheppard Mullin Richter & Hampton LLP
      17th Floor Four Embarcadero Center      
      San Francisco, CA 94111
      Tel: (415) 434-9100
      Fax: (415) 434-3947

   c) Attorneys for the future representatives

      Gary S. Fergus, Esq.
      Fergus
      595 Market Street, Suite 2430
      San Francisco, CA 94115
      Tel: (415) 537-9032
      Fax: (415) 537-9038

A hearing to consider approval on the Settlement Agreement is
scheduled on June 21, 2006, 10:00 a.m., at Courtroom 1475
Edward R. Roybal Federal Building and Courthouse
No. 255 East Temple Street in Los Angeles, California.

Copies of the settlement agreement and related documents are
available at http://www.cacb.uscourts.gov/and through written  
request by mail or facsimile to the Debtors' counsel at this
address:

   Brian L. Davidoff, Esq.
   Jeanne C. Wanlass, Esq.
   Rutter Hobbs & Davidoff, Inc.
   1901 Avenue of the Stars, Suite 1700
   Los Angeles, CA 90067
   Tel: (310) 286-1700
   Fax: (310) 286-1728


K'S MERCHANDISE: Nears Out-of-Court Settlement with Creditors
-------------------------------------------------------------
Gordon Brothers Group, a Boston-based merchant banking and finance
company, announced Friday that an out-of-court settlement between
Decatur-based K's Merchandise and its creditors is on the horizon.  
The settlement will allow K's to continue operations and avoid
bankruptcy.

While speculation over the future of K's, which operates 17 stores
in Illinois, Indiana, Iowa, Missouri and Kentucky, has been
soaring over the past few weeks, the promise of a settlement marks
a pivotal point in the outcome of the 50-year old, family-owned
business.

Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP,
representing an ad-hoc committee of major unsecured creditors that
was formed in April to assess and negotiate repayment options,
confirmed that an agreement has been reached between the committee
and Gordon Brothers Group.

"Now that the ad-hoc committee and Gordon Brothers Group have
reached an agreement, the next step is to send it out to some
2,000 creditors for vote," Mr. Indyke said.  "The information is
being provided to creditors right now and the committee hopes and
expects that we will achieve approval from the creditors on this
deal before the end of June."

Earlier this year, Gordon Brothers Group stepped in with new
financing after LaSalle Retail Finance, K's previous lender,
declared the company in default.  This much-needed cash infusion
along with Gordon Brother Group's retail operating and advisory
expertise helped K's avoid legal action by creditors.

Now, with a creditor settlement appearing likely, senior
management from K's and Gordon Brothers Group can focus on their
endeavor to find opportunities for renewed profitability and keep
K's legacy alive.  Already underway are plans for improving the
breadth and depth of K's merchandise selection.  These include
revamping the furniture department to capitalize on current trends
and aggressively expanding the jewelry selection.  

"Helping retailers like K's find value in their business is what
we do best," said Frank Morton, Managing Director, Gordon Brothers
Group.  "We are enthusiastic about a potential creditor settlement
because that means we can deliver on K's current marketing and
merchandising plans in an effort bring value to their customers
and bolster the business."

The 103-year-old Gordon Brothers Group has a history of helping
troubled retailers find success by bringing in the necessary
operating, advisory and financial expertise needed during
challenging times.

                        About K's Merchandise

Beginning with one store in Decatur, IL in 1957, K's Merchandise
currently operates 17 stores in Illinois, Iowa, Missouri, Indiana
and Kentucky.  The privately owned company sells a broad range of
merchandise from sporting goods to furniture to electronics to
jewelry.

                   About Gordon Brothers Group, LLC

Gordon Brothers Group -- http://www.gordonbrothers.com-- was  
founded in 1903, is based in Boston, Mass., and has 20 offices
worldwide.  Gordon Brothers provides global advisory, operating
and financial services to companies at times of growth or
restructuring.  Gordon Brothers Group purchases and/or sells in
excess of $10 billion in assets (including inventory, real estate,
industrial assets, accounts receivable and intellectual property)
annually and appraises over $30 billion in assets. The firm also
provides debt financing and equity capital to consumer products
companies, and facilitates mergers and acquisitions with strategic
partners.


KENNEDY ROAD: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Kennedy Road Ltd.
        16211 North Scottsdale Road, Suite 498
        Scottsdale, Arizona 85254

Bankruptcy Case No.: 06-01586

Type of Business: The Debtor's president, Scott Alan Rubin, filed
                  for chapter 11 protection on March 8, 2006
                  (Bankr. D. of Arizona Case No. 06-00575).

Chapter 11 Petition Date: May 30, 2006

Court: District of Arizona (Phoenix)

Judge: Sarah Sharer Curley

Debtor's Counsel: D. Lamar Hawkins, Esq.
                  Hebert Schenk P.C.
                  4742 North 24th Street, Suite 100
                  Phoenix, Arizona 85016
                  Tel: (602) 248-8203
                  Fax: (602) 248-8840

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


MARKSON ROSENTHAL: Sells Packaging Fulfillment Assets to Sonoco
---------------------------------------------------------------
Sonoco (NYSE: SON) completed the acquisition of certain point-of-
purchase display and packaging fulfillment assets of Markson
Rosenthal & Co.  The assets were acquired by way of an auction
conducted by the U.S. Bankruptcy Court for the District of New
Jersey, as part of Markson Rosenthal's Chapter 11 filing.  Terms
of the acquisition were not disclosed.

"We are pleased to have been successful in obtaining these assets,
which include display design and packaging fulfillment operations
in Bolingbrook, Illinois.  These operations tie well with Sonoco's
existing P-O-P and service center operations in the United
States," Charles Sullivan, executive vice president of Sonoco's
global consumer packaging and services operations, said.  
"Following our acquisition of CorrFlex Graphics in 2004, we have
been working to expand our point-of-purchase display and
fulfillment operations to meet the needs of our customers.  We
will continue to look for opportunities to further build this
important business."

                          About Sonoco

Headquartered in Hartsville, South Carolina, Sonoco --
http://www.sonoco.com/-- founded in 1899, is a $3.5 billion  
global manufacturer of industrial and consumer packaging products
and provider of packaging services, with more than 300 operations
in 35 countries serving customers in some 85 nations.

                     About Markson Rosenthal

Headquartered in Englewood Cliffs, New Jersey, Markson Rosenthal &
Company, Inc. -- http://www.marksonrosenthal.com-- manufactures
point of purchase displays and offers contract packaging services.
The Company filed for chapter 11 protection on April 14, 2006
(Bankr. D. N.J. 06-13163).  Allen J. Underwood, Esq., and Ben
Becker, Esq., at Becker, Meisel LLC represent the Debtor in its
restructuring efforts.  The Official Committee of Unsecured
Creditors has selected Douglas J. McGill, Esq., and Robert Malone,
Esq., at Drinker, Biddle & Reath as its counsel.  When the Debtor
filed for protection from its creditors, it reported zero assets
and $11,870,120 in debts.


MARSH SUPERMARKETS: Gets Purchase Offer from Drawbridge/Cardinal
----------------------------------------------------------------
Marsh Supermarkets, Inc. received an unsolicited letter, dated
May 22, 2006, from Drawbridge Special Opportunities Advisors LLC
and Cardinal Paragon, Inc. making a proposal to acquire Marsh for
$13.625 per share in cash, subject to completion of due diligence,
and otherwise on substantially the same terms as the merger
agreement with MSH Supermarkets Holding Corp., an affiliate of Sun
Capital Partners, Inc.

Attached to the May 22 letter from Drawbridge/Cardinal is the form
of merger agreement that Drawbridge and Cardinal stated they would
be prepared to execute immediately following:

   (i) the Company's consent to their making their proposal to
       acquire the Company for $13.625 per share and

  (ii) a few days for Drawbridge/Cardinal to review and discuss
       with the Company's management the non-public schedules to
       the merger agreement with MSH.

                      Marsh-MSH Merger Deal

As reported in the Troubled Company Reporter on May 5, 2006, Marsh
signed a definitive merger agreement to be acquired by MSH in an
all cash transaction for $11.125 per share, and the Board of
Directors determined to recommend that the Company's shareholders
approve the merger with MSH.  The Company's Board of Directors has
made no determination to change its recommendation in favor of the
MSH merger agreement at this time.

Cardinal, like other participants in the strategic alternative
process conducted by the Company, executed a confidentiality
agreement containing an agreement not to make an offer to acquire
Marsh without Marsh's consent.  Marsh forwarded the May 22 letter
(as well as two other letters it previously received from
Drawbridge/Cardinal) to MSH and requested that MSH consent to the
Company granting Drawbridge/Cardinal's request.

On May 26, 2006, Marsh received a letter from MSH in which MSH
indicated its willingness, subject to certain terms, to consent to
Marsh granting Drawbridge/Cardinal's request.  These terms
include:

   * granting Drawbridge/Cardinal three days to execute a
     definitive merger agreement with Marsh;

   * requiring that any definitive agreement entered into
     between Drawbridge/Cardinal and Marsh expressly waive
     all standstill agreements with all parties and that
     Drawbridge/Cardinal forego any breakup fee other than
     a reimbursement for the breakup fee paid to MSH; and

   * the merger agreement with MSH be amended to require the
     Company to reimburse MSH for transaction expenses as well
     as the breakup fee in the event the Merger Agreement is
     terminated.

The Company has rejected these conditions in view of the existing
protection afforded MSH under the provisions of the merger
agreement regarding competing proposals, including the $10 million
breakup fee.  Moreover, even if the Company were to accept those
terms, there is no assurance that Drawbridge/Cardinal would make
an offer under those conditions.

                    About Marsh Supermarkets

Headquartered in Indianapolis, Indiana, Marsh Supermarkets, Inc.
-- http://www.marsh.net/-- is a leading regional chain, operating  
69 Marsh(R) supermarkets, 38 LoBill(R) Foods stores, eight
O'Malia(R) Food Markets, 154 Village Pantry(R) convenience stores,
and two Arthur's Fresh Market(R) stores in Indiana, Illinois, and
western Ohio.  The Company also operates Crystal Food
Services(SM), which provides upscale catering, cafeteria
management, office coffee, coffee roasting, vending, and
concessions, and restaurant management and Primo Banquet Catering
and Conference Centers, Floral Fashions(R), McNamara Florist(R),
and Enflora(R) -- Flowers for Business.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2006,
Moody's Investors Service placed the ratings of Marsh
Supermarkets, Inc., including the B3 Corporate Family Rating and
Caa2 rating of 8.875% Senior Subordinated Notes due 2007 on
review-direction uncertain.


MIRANT CORP: Brings NRG Takeover Bid Dispute to Delaware Court
--------------------------------------------------------------
Mirant Corporation sought a court order in Delaware directing NRG
Energy Inc. not to obstruct its unsolicited takeover bid.  

Mirant, according to the Associated Press, claimed that the New
Jersey based energy producer is unfairly rejecting its nearly
$8 billion takeover bid by using a "transaction ploy" to turn
aside the offer by alleging that Mirant is using confidential
information from NRG's former financial adviser.

In the lawsuit, Sophia Pearson of Bloomberg News reports that
Mirant also accused NRG directors of breaching their fiduciary
duties to stockholders by not considering the offer.

Mirant is asking a judge to declare that it isn't barred from
attempting the takeover, and that NRG cannot rely on the alleged
breach of confidentiality as the sole basis to reject the offer,
the Bloomberg News said.

As reported in the Troubled Company Reporter on May 31, 2006,
Mirant made a proposal to acquire NRG at a premium of
approximately 33% to NRG's share price as of May 30, 2006.  The
proposal would be immediately accretive to the pro forma free cash
flow per share of Mirant.  Mirant received a financing commitment
from JPMorgan of approximately $11.5 billion
for the transaction.

Mirant said that NRG flatly rejected the proposal without engaging
in any discussions.  Mirant continues to believe that the proposal
creates significant value for the owners of both companies and has
decided to make its proposal public in a letter to NRG's board of
directors.

In a press statement covered by the Troubled Company Reporter on
May 31, 2006, NRG said it rejected Mirant's hostile offer and
declined to enter into talks because the proposal undervalues NRG.

                        About NRG Energy

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

                           About Mirant

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 Jan. 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.

At Dec. 2, 2005, Moody's Investors Service assigned a B1 long-term
corporate family rating to Mirant Corp.


MULTICANAL SA: Court Grants Permanent Injunction v. U.S. Creditors  
------------------------------------------------------------------
The Hon. Allan Gropper of the U.S. Bankruptcy Court for the
Southern District of New York placed his final stamp of approval
on the Section 304 petition filed by Martin G. Rios in behalf of
Multicanal SA.

The Court's final order means a permanent injunction against
Multicanal's creditors in the United States.  Consequently, all
creditors of the company in the U.S. are enjoined from taking any
action against Multicanal.

With the Court's approval in hand, Multicanal can now proceed with
the implementation of its restructuring plan under the "Acuerdo
Preventivo Extrajudicia" proceedings commenced in Argentina.

The National Court of First Instance on Commercial Matters No. 4
confirmed Multicanal's restructuring plan on Apr. 14, 2004.  The
plan got the US Court's recognition, pursuant to Section 304 of
the US Bankruptcy Code, on Sept. 28, 2005.  

Judge Gropper issued the order making the Sec. 304 final after
Multicanal informed the Court that the fairness issue under
Section 3(a)(10) of the US Securities Act has been cured.  

According to Multicanal's regulatory filing, a purchaser of the
debt previously held by one of its creditors -- Huff Alternative
Income Fund L.P. -- had undertaken to correct the discrimination
against U.S. retail holders in a manner compatible with U.S.
securities law.  

Judge Gropper previously ruled that the APE plan discriminated
against US creditors by not allowing them a choice other than the
cash option.  Judge Gropper wanted that flaw remedied before
issuing a final order.  

A copy of Judge Gropper's decision is available free of charge
at http://researcharchives.com/t/s?a42

Multicanal is represented by:

       Andres de la Cruz, Esq.
       Lindsee P. Granfield, Esq.
       Cleary Gottlieb Steen & Hamilton LLP
       One Liberty Plaza
       New York, NY 10006-1470
       Tel: +1 212 225 2000
       Fax: +1 212 225 3999

          -- and --

       Jose Maria Saenz Valiente
       Maria Lucila Romero
       Ivan Lorenzo
       Saenz Valiente Asociados
       Parana 754 - 8 Piso (C1017AAP)
       Ciudad Autonoma de Buenos Aires
       Argentina
       Tel: (54 11) 4816-6996
       
Multicanal S.A. -- http://www.multicanal.com.ar/-- is an
Argentinean multiple cable systems operator with its principal
operations in Argentina and smaller operations in Uruguay and
Paraguay.  Grupo Clarin SA owns Multicanal.

Multicanal filed a petition under Section 304 of the Bankruptcy
Code on Jan. 16, 2004 (Bankr. S.D.N.Y. Case No.: 04-10280).  The
Company estimated its assets and debts at more than $100 Million
when it filed the petition.


NANTICOKE HOMES: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7
------------------------------------------------------------------
The U.S. Trustee for Region 3, Kelley Beaudin Stapleton, asks the
U.S. Bankruptcy Court for the District of Delaware to convert
Nanticoke Homes, Inc.'s chapter 11 case to a chapter 7 liquidation
proceeding.  

If the case won't or can't be converted, the U.S. Trustee wants
the case dismissed.  

When the Debtors' counsel, Phillips, Goldman & Spence LLP, moved
to withdraw representation for the Debtor, it acknowledged that
the Debtor is administratively insolvent as it does not have the
financial wherewithal to pay its debts when due.  Moreover,
funding for a plan was allegedly to be provided by the Debtor's
principals.  But the principals are no longer cooperating with
Debtor's counsel in the prosecution of this chapter 11 case.

William K. Harrington, Esq., trial attorney at the Office of the
U.S. Trustee, informs the Court that no funds remain from the
avoidance action proceeds or from the proceeds of any sales as
those funds were previously used to pay administrative expense
claims.  

Accordingly, "cause" exist to convert the case to a case under
chapter 7 of the Bankruptcy Code as there is a continuing
diminution of the assets of the estate and the absence of a
reasonable likelihood of rehabilitation and the Debtor appears to
be unable to effectuate a plan, Mr. Harrington contends.

Nanticoke Homes, Inc., filed for chapter 11 protection on March
01, 2002 (Bankr. Del. Case No. 02-10651).  Stephen W. Spence,
Esq., at Philippe, Goldman & Spence, P.A., represented the Debtor
in its restructuring efforts.  James E. Huggett, Esq., at Margolis
Edelstein and Jennifer Lee Scoliard, Esq., Stephanie Ann Fox,
Esq., and Steven K. Kortanek, Esq., at Klehr Harrrison Harvey
represented the Official Committee of Unsecured Creditors.  When
the Company filed for protection from its creditors, it listed
estimated debts and assets of more than $10 million each.


NES RENTALS: Moody's Reviews Low-B Rating on Corp. Family & Loan
----------------------------------------------------------------
Moody's Investors Service is reviewing the long-term ratings of
NES Rentals Holdings, Inc. for possible downgrade in response to
the company's announcement that it has signed a definitive
agreement to be acquired by affiliates of Diamond Castle Holdings,
LLC, a New York-based private equity firm, in a transaction valued
at approximately $850 million including the assumption of certain
liabilities.

Ratings under review:

   * Corporate Family Rating -- B2; and
   * second lien senior secured bank credit facility - B3.

The company's speculative grade liquidity rating remains at the
SGL-3 level and is not affected by the current review.

Moody's review is focusing on the impact that the proposed
transaction will have on NES' future capital structure, financial
strategy and credit metrics.  The review is also assessing the
degree to which the company's operating strategy will be able to
sustain earnings, cash flow generation and liquidity.

NES Rentals Holdings, Inc., based in Chicago, Illinois, is one of
the largest equipment rental companies in the US.


NETWORK INSTALLATION: Posts $1.3MM Net Loss in 2006 1st Quarter
---------------------------------------------------------------
Network Installation Corp. filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.

The Company reported a $1,329,230 net loss on $1,006,844 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $14,005,708
in total assets, $13,252,768 in total liabilities, and $752,940
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $6,049,792 in total current assets available to pay
$8,164,848 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?a1b

                        Going Concern Doubt

Jaspers + Hall, PC, in Denver, Colorado, raised substantial
doubt about Network Installation Corp.'s ability to continue
as a going concern after auditing the Company's financial
statements for the year ended Dec. 31, 2005.  The auditor
pointed to the Company's recurring losses from operations and
stockholders deficiency.

                    About Network Installation

Headquartered in Irvine, California, Network Installation Corp.
-- http://www.networkinstallationcorp.net/-- is a single source
provider of communications infrastructure, specializing in the
design, installation, deployment and integration of specialty
systems and computer networks.  Through its wholly-owned
subsidiaries, Com Services and Kelley Technologies, the Company
provides its services to these customers and industries: Gaming &
casinos, local and regional municipalities, K-12 and education.


NRG ENERGY: Mirant Sues NRG for Obstructing $8 Bil. Takeover Bid
----------------------------------------------------------------
Mirant Corporation sought a court order in Delaware directing NRG
Energy Inc. not to obstruct its unsolicited takeover bid.  

Mirant, according to the Associated Press, claimed that the New
Jersey based energy producer is unfairly rejecting its nearly
$8 billion takeover bid by using a "transaction ploy" to turn
aside the offer by alleging that Mirant is using confidential
information from NRG's former financial adviser.

In the lawsuit, Sophia Pearson of Bloomberg News reports that
Mirant also accused NRG directors of breaching their fiduciary
duties to stockholders by not considering the offer.

Mirant is asking a judge to declare that it isn't barred from
attempting the takeover, and that NRG cannot rely on the alleged
breach of confidentiality as the sole basis to reject the offer,
the Bloomberg News said.

As reported in the Troubled Company Reporter on May 31, 2006,
Mirant made a proposal to acquire NRG at a premium of
approximately 33% to NRG's share price as of May 30, 2006.  The
proposal would be immediately accretive to the pro forma free cash
flow per share of Mirant.  Mirant received a financing commitment
from JPMorgan of approximately $11.5 billion
for the transaction.

Mirant said that NRG flatly rejected the proposal without engaging
in any discussions.  Mirant continues to believe that the proposal
creates significant value for the owners of both
companies and has decided to make its proposal public in a letter
to NRG's board of directors.

In a press statement covered by the Troubled Company Reporter on
May 31, 2006, NRG said it rejected Mirant's hostile offer and
declined to enter into talks because the proposal undervalues NRG.

                           About Mirant

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 Jan. 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.

                        About NRG Energy

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

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 16, 2006,
Fitch Ratings placed a 'BB' rating to NRG's $5.2 billion secured
credit facility, consisting of a $3.2 billion secured term loan B
and $2 billion of revolving credit/synthetic letter of credit
facilities, a 'B' rating to NRG's proposed $3.6 billion issuance
of senior unsecured notes, and a 'CCC+' rating to NRG's proposed
issuance of $500 million mandatory convertible preferred stock.

In addition, Fitch has assigned NRG a 'B' issuer default rating,
as well as recovery ratings for the debt instruments.  Fitch said
the Rating Outlook is Stable.

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

Standard & Poor's assigned its 'BB-' rating and '1' recovery
rating to NRG's $3.2 billion first lien term loan B and
$2 billion revolving credit and LOC facilities, 'B-' rating
to NRG's $3.6 billion unsecured notes, and 'CCC+' rating to
NRG's $500 million mandatory convertible securities.

The 'BB-' rating and '1' recovery rating on the $3.2 billion
term loan B and $2 billion revolving credit and LOC facilities
indicate the expectation of full recovery of principal in the
event of a payment default.  Standard & Poor's affirmed its 'CCC+'
ratings on NRG's preferred stock issues.  The stable outlook
reflects Standard & Poor's view that NRG's credit quality should
not significantly deteriorate in the short term.


OWENS CORNING: Compromising 37 Asbestos Property Damage Claims
--------------------------------------------------------------
Owens Corning and Fibreboard Corporation ask the U.S. Bankruptcy
Court for the District of Delaware to approve settlements
compromising 37 asbestos property damage claims with these
claimants:

                                   Owens Corning     Fibreboard
   Claimant                          Claim No.        Claim No.
   --------                        -------------     ----------
   880 Third Avenue                     8609            8362
   Altoonal School District             8752            9557
   Anderson Memorial Hospital           8822            8795
   Athens Board of Education            8687            8809
   Clara Mass Hospital                  8648            8500
   Clarksville-Montgomery Board         8727            8831
   Fair Lawn Professional Center        8628            8441
   Garrison Public School               8783            8926
   Green Bay Area Public Schools        8709            8871
   Hall County School District          8771            9573
   Jacksonville City Hall               8608            8357
   Kindred Public School Dist. 2                        8886
   Langley Professional Office          8596            8328
   One Liberty Plaza                    8576            8299
   Presbyterian Church of Jamesburg     8573            8271
   Saint Peter & Paul Congregation      8683            8633
   The City of Rock Hill Buildings      8735            8959
   Wauwatosa School District            8678            9556
   Winneconne Public School Dist.       8677            9555
   
Pursuant to the Settlements, the Debtors and the claimants agree
to resolve the Property Damage Claims on these terms:

   a. Each of the Property Damage Claims against Owens Corning
      will be allowed as a general unsecured non-priority claim
      for $5,000.  The Claim will be paid as a Convenience Claim
      pursuant to the Debtors' Fifth Amended Plan of
      Reorganization.

   b. Each of the Property Damage Claims against Fibreboard will
      be allowed as a general unsecured non-priority claim for
      $5,000, which will be paid by Fibreboard's property damage
      insurers on the Initial Distribution Date under the Plan.

   c. As a precondition to receiving the payments, each of the
      claimants will release Owens Corning and Fibreboard from
      any liability associated with the Claims.

The Debtors assert that the continued litigation over the Claims
would involve substantial cost, likely exceeding the cost of the
Settlements.

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: Larry E. Tyree Co. Holds $335,128 Allowed Claim
--------------------------------------------------------------
Owens Corning and its debtor-affiliates have allowed Larry E.
Tyree Co. Inc.'s claim at a reduced amount

On March 11, 2002, Tyree filed Claim No. 5813 in an unliquidated
amount, asserting "indemnification and/or contribution for
warranty and environmental claims" with respect to damages
incurred for product failure of the Debtors' underground storage
tanks.

Tyree purchased and installed over 1,000 Owens Corning storage
tanks during the late 1970s through the 1980s.  Tyree attached to
the claim a copy of a complaint filed by Tartan Corp. Liquidating
Trust against Tyree and Owens Corning, which among other things,
is based on Tyree's contribution or indemnification claims with
respect to product failure.

The Debtors disputed Tyree's claims.  At the Debtors' request,
the Court disallowed Claim No. 5813.

On March 25, 2002, Tyree filed Claim No. 6049, which in addition
to the copy of the Tartan Complaint, attaches a copy of a summons
and notice of a complaint filed by Lakehill Associates, Inc.,
against Tyree.  Thus, in addition to the claims asserted in the
Tartan Complaint, Claim No. 6049 asserts a claim against the
Debtors for indemnification and contribution with respect to the
Lakehill Complaint.

Tyree amended Claim No. 6049 on March 21, 2005.  Tyree waived all
of its claims against the Debtors with respect to the Lakehill
Complaint, but retained its asserted claims for indemnification
and contribution with respect to the Tartan Complaint.

Pursuant to Section 502 of the Bankruptcy Code, the Debtors ask
the Court to disallow Amended Claim No. 6049 because:

   a. Tyree has no basis to assert a claim against the Debtors
      under the warranty; and

   b. the Amended Claim asserts an unliquidated claim for
      contribution and indemnification.

Tyree has no basis to assert a claim based on the warranty
because the warranties are held by the storage tank owners,
Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, argues.  Tyree purchased the tanks from Owens Corning
and installed them for Tyree's own customers.

In the alternative, the Debtors ask the Court, pursuant to
Section 509(c), to subordinate the Tyree Claim to the claim filed
by Tartan.

The Debtors' books and records show that Tartan filed Claim No.
5942 for $1,000,000.  The Debtors settled the Tartan Claim by
allowing Tartan a general unsecured claim for $335,128.

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


PLIANT CORP: Court Approves Securities Screening Wall Procedures
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases of Pliant Corporation and its debtor-affiliates
seeks the U.S. Bankruptcy Court for the District of Delaware's
authority to trade in the Debtors' Securities upon the
establishment and implementation of an "Ethical Wall".

Don A. Beskrone, Esq., at Ashby & Geddes, P.A., in Wilmington,
Delaware, relates that certain of the Committee members are
directly investment advisors or manages that provide investment-
advisory services to institutional, pension, mutual fund and high
net-worth clients and affiliates funds and accounts.  These
Members may buy and sell Securities and other financial assets
for their own portfolios.

If Members are barred from trading Securities during the pendency
of the Debtors' cases because of their service on the Committee,
they risk the loss of potentially beneficial investment
opportunities for their clients and themselves.

In the alternative, if Members resign from the Committee, their
clients' interests may be compromised by virtue of the Members
taking a less active role in the reorganization process.

Accordingly, the Committee asks the Court to:

   (a) declare that a Committee Member is permitted to trade in
       the Debtors' Securities and will not be deemed to have
       violated its duties as a Committee Member by trading in
       Securities during the pendency of the Debtors' cases
       provided that the Committee Member implements an Ethical
       Wall to insulate its trading activities from the
       activities related to its Committee service and the
       reorganization process;

   (b) declare that the Ethical Wall procedures to be employed
       by an Ethical Wall Entity will include these information-
       blocking procedures:

       * The Ethical Wall Entity will cause all Committee
         Personnel to execute a letter, acknowledging that they
         may receive non-public information and that they are
         aware of the Ethical Wall Procedures; and

       * Committee Personnel will not share non-public Committee
         Information with any other employees of that Ethical
         Wall Entity other than in compliance with the Ethical
         Wall Procedures except:

         -- senior management of the Ethical Wall Entity who, due
            to their duties and responsibilities, have a
            legitimate need to know certain information provided
            that those individuals (i) otherwise comply with the
            Ethical Wall, and (ii) use the information only in
            connection with their senior managerial
            responsibilities and not for trading purposes; and

         -- regulators, auditors, and designated legal personnel
            for the purpose of rendering legal advice to
            Committee personnel and who will not share the non-
            public information in files accessible to other
            employees;

       * Committee Personnel will keep non-public information
         generated from Committee activities in files
         inaccessible to other employees;

       * Committee Personnel will receive no information
         regarding the Ethical Wall Entity's trades in Securities
         in advance of those trades, except the Committee
         Personnel may receive the usual and customary internal
         and public reports showing the Ethical Wall Entity's
         purchases and sales and the amount and class of
         securities owned by the Ethical Wall Entity, including
         the Securities; and

       * the Ethical Wall Entity will review from time to time
         the Ethical Wall Procedures to ensure compliance with
         the Court Order and will keep and maintain records of
         their review;

   (c) apply to an Ethical Wall Entity only if it is engaged in
       trading of Securities as a regular part of its business;

   (d) declare that the provisions of the Order will apply to an
       Ethical Wall Entity during the pendency of the cases in
       the event that the Ethical Wall Entity ceases to be a
       Committee Member; and

   (e) declares that nothing in the Committee's request or Court
       Order will lead to the conclusion that the Debtors' debt
       obligations constitute "securities."

Mr. Beskrone argues that the Securities and Exchange Commission
supports the concept of committee members trading in debtor's
securities while being regulated by an Ethical Wall.

Moreover, the Committee Members have the resources, experience,
and knowledge of the Debtors' business to safely trade in
Debtors' Securities, Mr. Beskrone points out.  The Committee
Members are among the Debtors' largest creditors and have the
incentive to pursue the Committee's work for a Chapter 11 plan
confirmation.

On the contrary, denial of the Committee's request will
discourage large creditors with expertise and experience in
reorganization from joining creditors' committees, Mr. Beskrone
says.

The Court rules that if an Ethical Wall entity divests itself of
all or substantially all of its Securities position, the Ethical
Wall entity will notify the Official Committee of Unsecured
Creditors.

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 Nos. 12 & 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


POGO PRODUCING: Moody's Lowers Corp. Family Rating from Ba2 to Ba3
------------------------------------------------------------------
Moody's Investors Service downgraded Pogo Producing Company's
Corporate Family Rating from Ba2 to Ba3.  Per Moody's current
notching practice for senior subordinated notes, Moody's
downgraded Pogo's senior subordinated note rating from Ba3 to B2.

Action concludes a review for downgrade begun April 17, 2006 when
Pogo announced the acquisition of Latigo Petroleum for $750
million and its sale of 50% of its Gulf of Mexico properties for
$500 million Prior to that, Pogo's standing within its ratings had
been weak given its rising unsustainable reserve replacement
costs, inconsistent production trends, and a sharp decline in
organic reserve replacement.  Latigo's properties are located in
the Permian Basin of West Texas and, to a lesser degree, the Texas
Panhandle.

The rating outlook is stable. Up-cycle prices and cash flows
before capital spending provide a cushion of time during which
Pogo will need to demonstrate stabilized-to-rising sequential
quarter trends for production at tolerable production and reserve
replacement costs for the rating, as well as restrain further
leverage this year.

Towards the end of 2006 and throughout 2007, Pogo will also need
to generate sustained debt reduction from current levels that are
elevated after recent acquisitions.  The rating outlook and new
ratings could be pressured during the course of 2006 if sequential
quarter production, reserve replacement, full cycle costs continue
to remain weak, and/or Pogo's leverage rises beyond current
forecasted levels.

Beginning with first quarter 2007, Pogo will additionally need to
significantly reduce leverage on proven developed reserves in
2007.  The ratings would also be pressured if management engages
in further material shareholder friendly activities that add debt
and/or delay debt reduction.

The downgrade reflects Moody's assessment of Pogo's operating
profile, leverage, and results as it continues to restructure its
asset portfolio.  Through acquisitions and divestitures at a time
of historic up-cycle acquisition costs, Pogo is transitioning
itself from being a producer focused on short-lived Gulf of
Thailand and shallow water GOM properties to a predominantly
onshore property portfolio.

Pogo did retain approximately 50% of its GOM holdings.  The
downgrade reflects the high leverage which Moody's estimates will
approach $8/barrel of PD reserves by the end of 2006, a very high
full-cycle cost structure in the high $30/barrel range due to
several years of surging reserve replacement costs and due to
inconsistent-to-weak organic production trends.  As Pogo's
operating and equity market performance has weakened, the
attendant ongoing risk of a strategic event has mounted.

Pogo's acquisition of Latigo and sale of 50% of its Gulf of Mexico
assets follows $84 million of other minor acquisitions in Canada
and U.S., the $1.725 billion 2005 acquisition of Northrock
Resources in Canada, and its $820 million 2005 sale of its GOT
properties.

Pogo paid a hefty $17.41/boe for Latigo's proven reserves and a
very high $112,500 per unit of current daily production.  The
company sold its GOM properties for $20.98/boe or $62,500 per unit
of daily production.

Excluding the GOT properties, Pogo's first quarter 2006 production
from continuing operations increased 6% over fourth quarter 2005.  
Including the GOT properties, first quarter 2006 production was
down by in the range of 18%.  Now that the sharp production
declines of Pogo's GOT properties is removed, and 50% of Pogo's
short-lived GOM properties have been divested, the smaller longer-
lived pro-forma production base should be less challenging to
grow.  While the pro-forma reserve base is approximately 20%
larger than at year-end 2004, the onshore properties produce at a
lower rate than the flush production from divested short-lived
reserves.

During Pogo's transformation, it has also been compelled to
address weak equity performance and shareholder pressure by
launching a $375 million share repurchase program, of which Pogo
had repurchased $360 million through February 2006.  Pogo also
raised its dividend since 2004 by over 50%.  After a long period
of very low leverage, since the end of 2004 Pogo has continued to
add leverage, having incurred over $1.2 billion of debt since the
beginning of 2005.

Per Moody's global ratings methodology for independent exploration
and production firms, on historic pro-forma estimates, Pogo's
composite operating, financial, and strategy profile maps to a B2
corporate family rating.  Leverage maps to the B category, overall
returns also map to the B category, and historic reserve
replacement costs map to the Caa range.  Pogo displays a very high
full-cycle cost structure, poor organic reserve replacement
trends, and very high leverage on PD reserves.

However, other factors warrant a Ba3 rating at this time. These
factors include a high price environment to assist Pogo's post-
acquisition reinvestment activity, a comparatively large reserve
and production scale and diversification for the new ratings, the
fact that Pogo's acquisitions and divestures are yielding a
reserve and prospect portfolio likely to have lower reinvestment
risk, expected lower reserve replacement costs on the newer
properties versus the divested properties, a seasoned historically
fiscally conservative management team, the fact that Pogo's
leverage was incurred for asset acquisitions, and that management
is expected to reduce leverage materially in 2007.

The ratings are also supported by longer lived pro-forma
production, having a PD reserve life in the range of 8 years
compared to approximately 5 years in 2003 and 6 years in 2006.

Pogo Producing Company is headquartered in Houston, Texas.


PUREBEAUTY INC: Moves to Reject 24 Store Leases
-----------------------------------------------
PureBeauty, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Central District of California in San
Fernando for authority to reject certain unexpired nonresidential
real property leases and sub-leases, effective April 18, 2006.

A list of the leases and subleases the Debtors want to reject is
available for free at http://researcharchives.com/t/s?a2f

Stacia A. Neeley, at Klee, Tuchin, Bogdanaff & Stern, LLP, says
the Debtors have vacated the premises subject to the rejected
leases and subleases prior to their bankruptcy filing.  Ms. Neeley
said the Debtors will accrue unnecessary and potentially
burdensome administrative costs if they do not reject the leases
immediately.

The Debtors had determined that continued operation on the
rejected leases was not feasible.  They based their decision on
poor performance at these retail locations, the above-market
rental rates contained in the leases, and relatively short terms
remaining under the leases.

The Debtors also want the Court to approve go-forward procedures
regarding their rejection of other nonresidential real property
leases.  The Debtors are party to approximately 69 leases as of
their bankruptcy filing.  According to Ms. Neeley, the proposed
rejection procedures will streamline the Debtors' ability to
reject leases and prevent the Debtors from incurring unnecessary
administrative costs.

A summary of the proposed lease rejection procedures is available
for free at http://researcharchives.com/t/s?a3c

PureBeauty, Inc. -- http://www.purebeauty.com/-- operates   
48 retail stores and salons offering professional hair care and
skincare services, featuring a leading assortment of professional
and prestige personal care products.  PureBeauty also operates six
"brand" stores, providing customers with a variety of aspirational
products and services.  PureBeauty Inc. and Pure Salons, Inc., an
affiliate, filed for chapter 11 protection on April 18, 2006
(Bankr. C.D. Calif. Case No. 06-10545).  Stacia A. Neeley, Esq.,
at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtors in
their restructuring efforts.  The Debtors' Official Committee of
Unsecured Creditors selected Eric E. Sagerman, Esq., and David J.
Richardson, Esq., at Winston & Strawn, LLP, as its counsel.  When
the Debtors filed for protection from their creditors, they
estimated assets between $10 million and $50 million and debts
between $50 million and $100 million.


QUANTA CAPITAL: Plans to Place Three Units in Run-Off
-----------------------------------------------------
Quanta Capital Holdings disclosed in a regulatory filing its
intention to put into run-off its Bermuda, United States and
Europe units.  

An insurer that closes to new business is said to be in run-off.
The net effect is a slow winding down of operations that allow
claims to be met on policies previously sold.

The company's decision came as a result of A.M. Best's Mar. 2
downgrade of the insurers financial strength rating to B++, which
is too low to attract business from insurance buyers.

Quanta Capital hired financial advisors Friedman, Billings and
Ramsey and Co. and JP Morgan Chase Co. to help the company explore
strategic alternatives.

The company also disclosed plans to cease selling:

     -- casualty reinsurance,
     -- marine and aviation reinsurance, and
     -- trade credit and political risk.

The company's Lloyd's of London operation, Syndicate 4000, and an
environmental consulting business, ESC, will remain in business.

Quanta Capital Holdings Ltd. (NASDAQ: QNTA) provides specialty
insurance, reinsurance, risk assessment and risk consulting
products and services through its subsidiaries.  Through
operations in Bermuda, the United States, Ireland and the United
Kingdom, Quanta focuses on writing coverage for specialized
classes of risk through a team of experienced, technically
qualified underwriters.  The company offers specialty insurance
and reinsurance products that often require extensive technical
underwriting skills, risk assessment resources and engineering
expertise.


RENATA RESORT: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Renata Resort, LLC
        fdba Sunset Pier Resort, LLC
        fdba The Sunset Pier Resort, LLC
        P.O. Box 18199
        Panama City, Florida 32417

Bankruptcy Case No.: 06-50114

Type of Business: The Debtor operates a hotel and resort.

Chapter 11 Petition Date: May 31, 2006

Court: Northern District of Florida (Panama City)

Judge: Lewis M. Killian Jr.

Debtor's Counsel: John E. Venn, Jr., Esq.
                  John E. Venn, Jr., P.A.
                  220 West Garden Street, Suite 603
                  Pensacola, Florida 32502
                  Tel: (850) 438-0005
                  Fax: (850) 438-1881

Total Assets: $19,947,271

Total Debts:   $8,524,196

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Tome Murphree                    Expense                $69,087
914 West 26th                    Reimbursement
Lynn Haven, FL 32444

Burke Blue & Hutchison           Legal Fees             $60,000
P.O. Box 70
Panama City, FL 32402

CBRE                             Breach of Contract      $4,500
201 East Kennedy Boulevard       for Appraisal
Suite 1500
Tampa, FL 33602

Sylvia Harrison                  Claim for Fraud,       Unknown
                                 Conspiracy, Wrongful
                                 Termination and
                                 Constructive Trust

Butche and Starla Metcalf        Breach of Contract     Unknown

Bruce McInnis                    Breach of Contract     Unknown

Bruce and Melissa Robinson       Breach of Contract     Unknown

Bradley Robinson                 Breach of Contract     Unknown

Bill Arnett                      Breach of Contract     Unknown

Bill and Gwen Perkins, Jr.       Breach of Contract     Unknown

Benny and Brenda Eaton           Breach of Contract     Unknown

Barry and Allison Zweig          Breach of Contract     Unknown

Barbara Mitulski                 Breach of Contract     Unknown

Baker Morgan                     Breach of Contract     Unknown

Ari and Helen Flechner           Breach of Contract     Unknown

Anthony and Debbie Teal          Breach of Contract     Unknown

Angelo and Rita Pyroulis         Breach of Contract     Unknown

Angela McLean                    Breach of Contract     Unknown

Adam Slutsky                     Breach of Contract     Unknown

Adam and Jennifer Slutsky        Breach of Contract     Unknown


RESIDENTIAL ACCREDIT: Fitch Rates Two Cert. Classes at Low-Bs
-------------------------------------------------------------
Fitch rated Residential Accredit Loans, Inc.'s mortgage pass-
through certificates, series 2006-QS5:

   -- $650,856,995 classes A-1 - A-9, A-P, A-V, R-I and R-II
      senior certificates 'AAA'

   -- $25,825,800 class M-1 'AA'

   -- $6,979,700 class M-2 'A'

   -- $5,234,800 class M-3 'BBB'

In addition, these privately offered subordinate certificates are
rated by Fitch:

   -- $3,838,900 class B-1 'BB'
   -- $2,791,900 class B-2 'B'

The $2,442,910 class B-3 is not rated by Fitch.

The 'AAA' rating on the senior certificates reflects:

   * the 6.75% subordination provided by the 3.75% class M-1;
   * 1% class M-2;
   * 0.75% class M-3;
   * privately offered 0.55% class B-1;
   * 0.40% privately offered class B-2; and
   * 0.35% privately offered class B-3.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts.  In addition, the
ratings reflect the quality of the mortgage collateral, strength
of the legal and financial structures, and Residential Funding
Corp.'s (RFC; rated 'RMS1' by Fitch) servicing capabilities as
master servicer.

As of the cut-off date (May 1, 2006), the mortgage pool consists
of 3377 conventional, fully amortizing, 30-year fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties, with an aggregate principal balance of
$697,971,005.  

The mortgage pool has a weighted average original loan-to-value
ratio of 74.9%.  The pool has a weighted average FICO score of
714, and approximately 42.9% and 10.4% of the mortgage loans
possess FICO scores greater than or equal to 720 and less than
660, respectively.

Equity refinance loans account for 30.3%, and second homes account
for 3.9%.  The average loan balance of the loans in the pool is
$206,684.  The three states that represent the largest portion of
the loans in the pool are:

   * California (16.9%),
   * Florida (14.5%), and
   * Texas (6.3%).

All of the mortgage loans were purchased by the depositor through
its affiliate, Residential Funding, from unaffiliated sellers as
described in this prospectus supplement and in the prospectus,
except in the case of 28.1% of the mortgage loans, which were
purchased by the depositor through its affiliate, Residential
Funding, from Homecomings.  Approximately 16.3% of the mortgage
loans were purchased from National City Mortgage Corporation, an
unaffiliated seller.  

Except as described in the preceding sentence, no unaffiliated
seller sold more than 7.2% of the mortgage loans to Residential
Funding.

Approximately:

   * 70.5% of the mortgage loans are being subserviced by
     Homecomings, a wholly-owned subsidiary of Residential Funding
     Corporation;

   * 3.2% of the mortgage loans are being subserviced by GMAC
     Mortgage Corporation, an affiliate of Residential Funding
     Corporation; and

   * 16.3% of the mortgage loans are being subserviced by National
     City Mortgage Corporation, an unaffiliated subservicer.

None of the mortgage loans were subject to the Home Ownership and
Equity Protection Act of 1994.  Furthermore, none of the mortgage
loans are loans that, under applicable state or local law in
effect at the time of origination of the loan are referred to as:

   1) 'high-cost' or 'covered' loans; or

   2) any other similar designation if the law imposes greater
      restrictions or additional legal liability for residential
      mortgage loans with high interest rates, points and/or fees.

The mortgage loans were originated under GMAC-RFC's Expanded
Criteria Mortgage Program (Alt-A program).  Alt-A program loans
are often marked by one or more of these attributes:

   * a non-owner-occupied property;

   * the absence of income verification; or

   * an LTV or debt service/income ratio that is higher than other
     guidelines permit.

In analyzing the collateral pool, Fitch adjusted its frequency of
foreclosure and loss assumptions to account for the presence of
these attributes.

Deutsche Bank Trust Company Americas will serve as trustee.  RALI,
a special purpose corporation, deposited the loans in the trust,
which issued the certificates.  For federal income tax purposes,
an election will be made to treat the trust fund as two real
estate mortgage investment conduits.


SEARCHHELP INC: Posts $1.3 Million Net Loss in 2006 First Quarter
-----------------------------------------------------------------
SearchHelp, Inc., 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 $1,305,495 net loss on $26,029 of total
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,427,214
in total assets and $2,637,891 in total liabilities, resulting in
a $210,677 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $510,342 in total current assets available to pay
$1,296,249 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?a35

                       Going Concern Doubt

Lazar, Levine and Felix LLP in New York raised substantial doubt
about SearchHelp, 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 recurring losses from operations, negative working
capital and capital deficiency.

SearchHelp, Inc., sells family oriented software through its
subsidiary, FamilySafe, Inc., and sells film and cameras through
its subsidiary, E-Top-Pics, Inc.


SECURECARE TECHNOLOGIES: KBA Group Raises Going Concern Doubt
-------------------------------------------------------------
KBA Group LLP in Dallas, Texas, raised substantial doubt about
SecureCARE Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the years ended Dec. 31, 2005, and 2004.  The
auditor pointed to the Company's recurring losses and negative
cash flows from operations.

The Company reported a $2,985,285 net loss on $387,159 of revenues
for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $258,407 in
total assets and $2,669,217 in total liabilities, resulting in a
$2,410,810 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $61,241 in total current assets available to pay $2,260,850
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 at http://ResearchArchives.com/t/s?a36

                $7 Million Loan From Euro Financial

As reported in the Troubled Company Reporter on April 12, 2006,
SecureCARE Technologies, Inc., gets access to a $7 million loan
under a Loan Agreement with Euro Financial Fidelity, Inc.

The Loan will be represented by a ten year 6% promissory note
providing for quarterly payments of accrued interest commencing
April 1, 2007, and a balloon payment of all accrued interest and
principal on April 1, 2016.  The Loan Agreement restricts the
Company's use of the Loan proceeds to certain items agreed to by
the Company and Euro Financial.

Payment of the Note is secured by 1,000 shares of newly authorized
Series C Contingently Convertible Preferred Stock.  Each share of
Series C Stock is convertible into 56,000 shares of the Company's
Common Stock (an aggregate of 56,000,000 shares) if the Company
defaults under the Note and Loan Agreement, but otherwise has no
voting rights, no rights to receive dividends nor any liquidation
preference.  

Since the Company does not have sufficient shares of its common
stock authorized to meet this contingent obligation, it agreed to
increase its authorized shares of common stock at its next
shareholders' meeting.  

The Company will also timely register the shares, which are
contingently issuable upon conversion of the Series C Preferred.  
Upon repayment of the Loan, the Series C Stock will have no
further rights.  

The issuance of the Series C Stock was exempt from registration by
reason of Section 4(2) of the Securities Act of 1933, as amended,
as not involving any public offering.

Based in Austin, Texas, SecureCARE Technologies, Inc., fka
eClickMD, Inc., provides Internet-based document exchange and
e-signature solutions for the healthcare industry.  The Company's
SecureCARE.net application is a secure, HIPAA-ready (Health
Insurance Portability and Accountability Act) tracking and
reporting tool that streamlines operations.  The Company's
software is tailored to the needs of physicians, clinics, home
healthcare, hospice and durable medical equipment providers.


SEMINOLE TRIBE: Moody's Affirms Ba1 Corp. Family & Bond Ratings
---------------------------------------------------------------
Moody's Investors Service revised the ratings outlook of the
Seminole Tribe of Florida to negative from developing.  The
Tribe's Ba1 corporate family rating and Ba1 rating on its Gaming
Division Bonds Series 2005A due 2013 and Series 2005B due 2020
were affirmed.

These rating actions follow the Tribe's decision to file a lawsuit
against Power Plant Entertainment, a subsidiary of Cordish Company
and Coastal Development and the Tribe's former financial advisor.  
Additionally, it takes into consideration that the National Indian
Gaming Commission still has not issued its audit findings
regarding the Tribe's use of net gaming revenue.

The negative outlook considers the complexity of the Tribe's
lawsuit against Power Plant as well as the uncertainty associated
with the outcome, particularly given the lack of legal precedent
with respect to this particular type of lawsuit between a Native
American Tribe and a commercial casino developer.

This makes it difficult for Moody's to assume that any legal
ruling will be neutral or favorable to the Tribe, or identify any
medium to long-term possible unintended consequences that may
impact the Tribe's casino operations.  The negative outlook also
takes into account that despite the completion of fieldwork in
Dec. 2005 and the Tribe's expectation that there will not be NIGC
audit issues that will negatively impact the Tribe and/or its
casino operation, the NIGC has not yet issued its findings.

The NIGC audit issue was the primary reason that a developing
outlook was initially assigned to the Tribe in Sep. 2005.  Any
material adverse legal decision or audit finding that impairs the
Tribe's ability to operate its casino at its current level could
result in a ratings downgrade.

The affirmation of the Tribe's Ba1 ratings is based on the
expectation that the lawsuit will not negatively impact the
Tribe's financial results over the near-term given that Power
Plant has no operational ties to the casino.  In addition to the
Tribe's strong financial profile, the ratings continue to
recognize the high quality of the Tribe's casino assets, and the
favorable demographics of the densely populated central and
southern Florida gaming markets.

The ratings also acknowledge the Tribe's geographic concentration
and other risks common in Native American gaming financings
including the likely difficulty bondholders would face in
recovering their investment in a liquidation scenario, and
significant cash distributions.

The Tribe initiated a lawsuit against Power Plant based on its
belief that it has the fiduciary duty to dispute the development
agreement that has been in effect for approximately six years
between the Tribe and Power Plant.

Power Plant developed the Tribe's Hard Rock brand casino in
Hollywood, Florida. As part of the existing agreement between the
Tribe and Power Plant, Power Plant is being paid 30 percent of all
the Tribes gaming revenues as an advisory fee, although it is not
currently providing any services.  The Tribes lawsuit claims the
agreement violates a federal law prohibiting non-Indians from
acquiring a proprietary interest in a tribal gaming operation.

Under tribal laws and the National Indian Gaming Regulatory Act,
it is illegal for gambling revenue to go to a third party. The
Tribe's decision to sue Power Plant follows several years of
unsuccessful negotiations related to a buy-out of the development
agreement.

Moody's previous rating action on the Tribe occurred on Sep. 29,
2005 when a Ba1 rating was assigned to the Tribe's taxable Series
A and Series B Gaming Division Bonds, as well as a Ba1 corporate
family rating and developing outlook.

The Seminole Tribe of Florida is a federally recognized Indian
tribe with enrolled membership of about 3,100 members, most of who
reside on Tribal lands in Florida.  The Tribe owns and operates
six Class II gaming facilities located on Tribal lands throughout
southern and central Florida.  The gaming operations are managed
by the Seminole Gaming Division, an organizational unit of the
Tribal government with no separate legal existence.


SENSE HOLDINGS: Posts $1.2 Mil. Net Loss in 2006 1st Fiscal Qtr.
----------------------------------------------------------------
Sense Holdings, Inc. filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.

The Company reported a $1,174,168 net loss on $30,381 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $1,642,299
in total assets, $355,317 in total liabilities, and $1,286,982 in
stockholders' equity.

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?a19

                        Going Concern Doubt

As reported in the Troubled Company Reporter on Nov. 29, 2005,
Sherb & Co., LLP, expressed substantial doubt about Sense
Holdings' ability to continue as a going concern after auditing
the Company's financial statements for the year ended Dec. 31,
2005.  The auditing firm pointed to the Company's losses, negative
cash flows, and accumulated deficit.

Sense Holdings, Inc. -- http://www.senseme.com/-- designs,  
develops, manufactures and sells fingerprint-based identification
products and systems that incorporate state-of-the-art biometric
technology to verify a person's identity.  The Company has
developed two proprietary BioClock(R) hardware platform:
CheckPrint(R) T/A system verifies the presence of employees at the
workplace and monitors their time and attendance at work; and,
CheckPrint(R) A/C system permits access to locked buildings,
offices or other secured areas only to selected individuals, whose
identities can be verified using the Company's fingerprint
identification software.


SEQUENOM INC: Posts $3.7 Million Net Loss in 2006 First Quarter
---------------------------------------------------------------
Sequenom, Inc., filed its first quarter financial statements for
the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.

The Company reported a $3,720,000 net loss on $6,911,000 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $19,583,000
in total assets, $11,254,000 in total liabilities, and $8,329,000
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $12,174,000 in total current assets available to
pay $8,774,000 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?a33

                        Going Concern Doubt

Ernst & Young, LLP, in San Diego, California, raised substantial
doubt about Sequenom, 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 recurring losses from operations, including a net
loss of $26.5 million for the year ended December 31, 2005 and
$442.6 million accumulated deficit as of December 31, 2005.

                        About Sequenom Inc

Sequenom -- http://www.sequenom.com/-- is a genetics company
committed to providing the best genetic analysis products that
translate genomic science into superior solutions for biomedical
research and molecular medicine. Its proprietary MassARRAY^r
system is a high performance nucleic acid analysis platform that
efficiently and precisely measures the amount of genetic target
material and variations therein. Its system is able to deliver
reliable and specific data from complex biological samples and
from genetic target material that is available only in trace
amounts.


SOLA COMMS: Louisiana Bankr. Court Confirms Plan of Reorganization
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
confirmed, on May 31, 2006, SOLA Communications, LLC's Plan of
Reorganization, paving the way for the Company to emerge from
Chapter 11.

At the hearing, held on May 23, 2006, Hon. Gerald H. Schiff ruled
that the Company's Plan of Reorganization is in the best interests
of creditors, that it affords proper treatment to all parties
under the Bankruptcy Code, and that the Company's business plan is
sound and feasible.

SOLA and its Miami-based lender and equity sponsor, Bayside
Capital, reached an agreement earlier this year to provide SOLA
with necessary capital for emergence from bankruptcy and funding
for future business opportunities.  Bayside exchanged its secured
loans for a combination of new indebtedness and majority ownership
of reorganized SOLA.  The exchange substantially strengthens
SOLA's balance sheet and provides more cash flow to grow the
business.

"We are excited to support the Company as it moves forward and
implements its strategic growth plan," Bayside Managing Director
Anthony DiSimone, said.  "This is a momentous day for the Company,
its employees and its customers and we are proud to welcome SOLA
to the Bayside family of companies."  Bayside and its affiliates
have available in excess of $2.5 billion of committed equity
capital to support and grow middle market businesses.

"New SOLA is born today -- the Judge's ruling is the commencement
of a bright future for this Company," SOLA Manager and Chief
Executive Officer Lyndon James, said.  Mr. James, along with the
assistance of the management team and employees, will continue to
lead SOLA following its exit from Chapter 11.

SOLA's unsecured creditors voted overwhelmingly to accept the Plan
of Reorganization.  The creditors in the two general unsecured
classes voted approximately 85% and 95% in favor of the plan.
Under the Plan of Reorganization, the Company anticipates making
payments to creditors in early June 2006.  "We are extremely
gratified to have received the strong support of our trade
partners for our plan," Lyndon James commented.  "We value those
relationships and we look forward to continuing to grow with
them."

"Today's achievement would not have been possible without the
dedication of every employee, customer, vendor and business
partner during the reorganization process," Mr. James continued.  
"We thank and salute them, and our success going forward will be
testament to each one's support."

"Our customers can look forward to the superior reliability and
service they have come to expect from the SOLA team," SOLA General
Manager Deryl Rice noted, "and we look forward to demonstrating to
our loyal business partners what SOLA can accomplish for them as a
stronger company."

                      About Bayside Capital

Headquartered in Miami, Florida, Bayside Capital, LLC --
http://www.bayside.com/-- is a private investment firm, which  
actively invests in the debt and equity of middle market companies
that can benefit from operational enhancements, improved access to
capital, or balance sheet realignments.  With the ability to
provide capital through a broad array of securities including
senior and subordinated debt, equity, debtor-in-possession lending
facilities, and special situation loans, Bayside has the
experience and resources to help companies quickly resume growth
initiatives and improve their strategic position.  With offices in
Atlanta, Boston, and San Francisco, the firm is one of the most
active private equity investors in small and medium-sized
companies.

                    About SOLA Communications

Based in Lafayette, Louisiana, and with offices in Houston, Texas,
Mobile, Alabama and Larose, Louisiana, SOLA Communications, LLC --
http://www.solacomm.com/-- specializes in the design,  
installation, enhancement and service of Telecommunications,
Safety & Control, Antenna & Tower and Satellite solutions.  SOLA
has a long-standing reputation for delivering superior service and
innovative products and solutions.  SOLA's products and services
have no geographic boundaries and are available worldwide.


SOUTHWEST GAS: Moody's Lowers Preferred Shelf Rating to (P)Ba2
--------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured long-
term debt ratings of Southwest Gas Corporation to Baa3 from Baa2
with stable outlook.  This action concludes the rating review
initiated on March 10, 2006.

The downgrade reflects the view that the credit measures of SWX
remain weak when compared with its gas utility peers in light of
its continued rapid growth and sensitivity to decline in earnings
on account of warmer than normal weather and the absence of
revenue decoupling in Arizona and Nevada that would serve to
protect this company from weather variation and customer
conservation.

The company's heightened sensitivity to warmer than normal weather
is exacerbated by the fact that in 2005 it experienced one of the
10 warmest years on record with 2003 being one of the warmest
years in over 100 years.  The cumulative effects of this warmer
than normal weather has continued into the recent quarter ending
March 31, 2006 which was mostly responsible for the company's loss
of $9 million in operating margin.

While the company was able to obtain some rate relief in recent
years, the fact that it is among the fastest growing gas utilities
in the country continues to expose it to regulatory lag as rate
cases in its key state of Arizona take at least a year to resolve
and even then, typically deliver only part of the rate improvement
necessary for it to earn its allowed rate of return.

While the company has been encouraged in certain jurisdictions to
further pursue discussions with interested parties as to the
possibilities of adopting some form of weather normalization
clause protection or conservation tracker, these efforts will take
more time before they could be implemented even if agreed upon by
all the stakeholders concerned.

For a few years the company has been performing at the lower end
of its peers in terms of the financial rating indicators employed
by Moody's which include, as example, fiscal 2005 return on equity
of 6.0%, EBIT/Interest Expense coverage of 1.7, Retained Cash Flow
to Adjusted Debt of 10.0% and Adjusted Debt to Adjusted Cap. of
62.5%.

The comparable ratios for Baa2 peers averaged 8.9% ROE, 2.8
EBIT/Interest Exp. coverage, 13% RCF to Adj. Debt and 55% Adj.
Debt to Cap. In addition, cash flow from operations after dividend
payments has been insufficient to cover the active level of
capital expenditures, a trend that has existed for several years
and which is likely to continue into the foreseeable future given
the company's very rapid growth rate.

In addition, operating expenditures rose 14% in fiscal 2005 and 6%
in the first quarter of 2006, reflecting the impact of general
cost increases and incremental costs associated with providing
service to a growing customer base, pressures that are expected to
continue in the foreseeable future.

The challenges for this company which bear directly on the
aforementioned financial indicators are the ability to obtain the
most comprehensive rate design possible to protect against warmer
than normal weather, the reduction of regulatory lag by
incorporating forward period test data along with pursuing more
profitable growth alternatives, the correction for margin losses
on account of customer conservation, and exercising strong control
over operating expenses.

The stable outlook anticipates a gradual improvement on the key
rating drivers mentioned above that have negatively impacted the
company's credit metrics and have prompted this rating adjustment.

Downgraded Ratings of SWX:

Southwest Gas Corporation

   * Baa3 from Baa2 senior unsecured;

Southwest Gas Capital II

   * Ba1 from Baa3 preferred trust securities;

Southwest Gas Corporation

   * (P) Ba2 from (P) Ba1 preferred shelf.

Southwest Gas Corporation is headquartered in Las Vegas, Nevada,
and provides natural gas service to over 1.7 million customers in
Arizona, Nevada and California.


STARBOUND RE: S&P Assigns BB+ Rating to $91 Million Bank Loan
-------------------------------------------------------------
On May 26, 2006, Standard & Poor's Ratings Services assigned:

   a) its 'A+' senior unsecured bank loan rating to Starbound Re
      Ltd.'s $46.5 million (Debt III) bank loan;

   b) its 'BBB-' senior unsecured bank loan rating to Starbound's
      $46.5 million bank loan; and

   c) its 'BB+' senior secured bank loan rating to Starbound's
      $91 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 provide
additional capacity to the Florida insurance market, and
Renaissance Reinsurance Ltd. (Ren Re; A+/Stable/--) has agreed to
underwrite policies on behalf of the facility.
      
"The ratings on Starbound are based on a very remote (0.2%)
modeled probability of even the lowest-rated 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 more than 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 $184 million from a consortium of banks
for a term of about 1.75 years.  The entity's capital structure
will also include $126.5 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 retain a minimum of 20% of the premium from a defined
selection of its property catastrophe business ceded 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.


SUPERIOR ESSEX: Plans 2.7 Million Stock Offering to Pay Debts
-------------------------------------------------------------
Superior Essex Inc. plans to offer 2.7 million shares of its
common stock in an underwritten public offering.  This offering
will be made under the company's effective shelf registration
statement filed with the Securities and Exchange Commission.  
Superior Essex intends to grant the underwriters
an over-allotment option covering an additional 405,000 shares.

Superior Essex intends to use the net proceeds from this offering
to reduce outstanding borrowings under its senior secured
revolving credit facility, to fund working capital needs due to
rising copper costs, and for other general corporate purposes,
including potential strategic acquisitions, which are evaluated
from time to time as part of the company's business strategy.

UBS Investment Bank and JPMorgan Securities Inc. will be joint
book running managers for the offering, with Morgan Joseph serving
as co-manager.  A copy of the prospectus supplement and related
base prospectus relating to this offering may be obtained from:

     UBS Investment Bank
     Attn: Prospectus Department
     299 Park Avenue
     New York, NY 10171
     Telephone (800) 223-3006

         or from:

     JPMorgan Securities Inc.
     Prospectus Library
     4 Chase Metrotech Center, CS Level
     Brooklyn, NY 11245
     Telephone (718) 242-8002
     Fax (718) 242-1350

Headquartered in Atlanta, Georgia, Superior Essex Inc.
(Nasdaq:SPSX)  -- http://www.superioressex.com/-- manufactures a  
broad portfolio of wire and cable products with primary
applications in the communications, magnet wire and related
distribution markets.  It is a leading manufacturer and supplier
of copper and fiber optic communications wire and cable products
to telephone companies, distributors and system integrators; a
leading manufacturer and supplier of magnet wire and fabricated
insulation products to major original equipment manufacturers for
use in motors, transformers, generators and electrical controls;
and a distributor of magnet wire, insulation, and related products
to smaller OEMs and motor repair facilities.

                          *     *     *

As reported in the Troubled Company Reporter on March 27, 2006,
Standard & Poor's Rating Services revised its outlook on
Atlanta, Georgia-based Superior Essex Inc. to positive from
stable, and affirmed its 'B+' corporate credit rating; 'BB'
secured bank loan rating; and 'B' senior unsecured debt rating.


SUPERVALU INC: Moody's Lowers Rating on Sr. Unsec. Notes to B2
--------------------------------------------------------------
Moody's Investors Service downgraded certain ratings of SUPERVALU,
Inc., including the senior unsecured long-term rating to B2 and
the corporate family rating to Ba3.  Moody's also withdrew the Not
Prime short-term rating because the company has canceled its
commercial paper program.

The downgrade is prompted by the increased business risk and
weakened financial flexibility following the pending purchase of
about 1,124 supermarkets from Albertson's by SUPERVALU.  The
rating outlook is stable.  This rating action concludes the review
for downgrade that commenced on January 23, 2006 and was continued
on April 13, 2006.

Ratings downgraded:

   * Senior unsecured note rating to B2 from Ba3,
   * Corporate family rating to Ba3 from Ba2.

This rating is withdrawn:

   * Short-term commercial paper rating of Not Prime.

Moody's does not rate the proposed $4 billion bank loan that will
partially fund the pending transaction.

The Ba3 corporate family rating of SUPERVALU reflects that the
most important quantitative and qualitative rating factors will be
consistent with a Ba-rated retail company after the pending
acquisition.  In contrast to previous investment grade attributes,
the company's more aggressive financial policy merits a Ba score
and weaker pro-forma credit metrics fall near the lower end of the
Ba-range.

The ratings also recognize Moody's view that business risk is at
the low-Baa or high-Ba level because of expected challenges in
achieving the promised post-merger efficiencies and intense
grocery retailing competition, including from non-traditional
competitors, in spite of the company's position as the third-
largest grocery retailer and the non-seasonal nature of food
retailing.

The stable outlook reflects Moody's expectation that credit
metrics will remain near pro-forma current levels over the medium-
term, that the fixed charge burden for debt service, capital
investment, and dividend payments will remain substantial relative
to operating cash flow, and that grocery retailing competition
will remain intense.

An upgrade is unlikely within the medium-term because of the
lengthy integration process as SUPERVALU more than doubles the
size of the company and expands into new markets.  Over the longer
term, ratings could move upward if the company establishes that it
can obtain a material portion of the promised post-merger
operating efficiencies and if the company's many geographies are
able to maintain market share and operating margins in spite of
the high level of competition.

Additionally, an upgrade would require a strengthening of
SUPERVALU's financial flexibility such that Free Cash to Debt
sustainably exceeds 10%, EBIT covers interest expense by more than
3 times, and Debt to EBITDA falls toward 4.25 times.

Factors that could lead Moody's to consider a negative rating
action include a reversal in debt protection measure improvements
such as debt to EBITDA approaching 5 times, EBIT to interest
falling below 1.5 times, or free cash flow to debt declining to
break-even, permanent market share declines in several of the
company's key markets, or extended challenges in combining the
Albertson's store with the existing SUPERVALU operations.

SUPERVALU, Inc., headquartered in Eden Prairie, Minnesota,
currently is the second-largest independent grocery distributor.
Following the pending acquisition of about 1,124 supermarkets from
Albertson's, Inc, the company will become the third-largest
grocery retailer as the operator or licenser of about 2,500
supermarkets in many regions of the country.  Total pro-forma
sales equal about $44 billion.


SUN MICROSYSTEMS: Board Approves Restructuring Initiatives
----------------------------------------------------------
Sun Microsystems Inc.'s board of directors approved a growth plan
with the goal of accelerating Sun's return to consistent
profitability.  The plan provides for increasing investment in
core technology and channel resources, while accelerating
acquisition synergies and disinvestments in non-core processes and
research and development activities.

Over the past month, a team led by Sun's president and chief
executive officer, Jonathan Schwartz, and chief financial officer,
Michael Lehman, conducted thorough reviews of the company's global
operations.  As a result of this ongoing analysis, the company is
instituting a number of initiatives to better align expenses with
its core business strategy and drive the company's operating
income goals of at least 4% of revenues for Q4FY07 and of at least
10% of revenues long-term.

More specifically, the plan addresses several cost cutting
initiatives including a 11-13% reduction in force and the
consolidation of its real estate portfolio.  The company is
reducing the approximately 37,500 worldwide employee headcount by
4,000 to 5,000 people over the next six months and is selling its
Newark campus and exiting leased facilities in Sunnyvale,
California.  The company will continue operations of its two major
Bay Area campuses, Menlo Park and Santa Clara, California.

These initiatives are designed to focus and streamline the company
and are expected to result in an annual cost savings between
$480 million and $590 million, with the full impact expected to
take effect by Q4 of Fiscal 2007.  The company expects to incur
restructuring charges ranging from $340 million to $500 million
over the next several quarters in connection with the plan, the
majority of which will be incurred in the fiscal quarter ended
June 30, 2006.

"Momentum is clearly increasing around Sun's core technology and
channel programs, with Java, Solaris, SunFire and StorageTek
platforms all gaining share," Mr. Schwartz said.  "We've worked
hard to reinvent the entirety of Sun's product line, from software
to systems, storage and services.  It's on that rebuilt
foundation, that we are reinventing our business model on a far
simpler base and focusing our energies on the automation, energy
efficiency and network innovation at the heart of our technology
leadership."

In addition to these restructuring activities, Sun's board has
approved the company's operational goals and priorities for its
fiscal 2007 business plan.  Key components of that plan include:

   * a Q4 Fiscal 2007 operating income goal of at least 4% of
     revenue, excluding any amounts related to restructuring, but
     including amounts related to stock-based compensation (FAS
     123R) and amortization of purchased intangibles;

   * a longer term operating income goal of at least 10% of
     revenue;

   * expected Fiscal 2007 full year revenue growth in the low to
     middle single digits;

   * expected Fiscal 2007 gross margin of around 43%; and

   * expected Fiscal 2007 operating expenses in the range of
     $5.6 billion to $6 billion, excluding any amounts related to
     restructuring, but including amounts related to stock-based
     compensation (FAS 123R) and amortization of purchased
     intangibles.

                     Executive Appointments

Since taking over as CEO on April 24, Mr. Schwartz reported a
number of important executive moves including the appointment of
Richard Green to EVP of Software, John Fowler to EVP of Systems
and David Yen to EVP of Storage.  Additionally, Sun disclosed the
expanded roles of Don Grantham to EVP of Global Sales and
Services, Greg Papadopoulos to CTO and EVP of Research and
Development, Crawford Beveridge to EVP and Chairman, EMEA, APAC
and Americas and Bill MacGowan as Chief Human Resources Officer
and EVP of People and Places.

"The team that I have aligned, combined with today's announcement,
represents Sun's reinvigorated focus and recommitment to driving
customer and shareholder value," Mr. Schwartz said.  "I'm
confident that we're on the right path -- revenues and gross
margins were up in Q3 year-over-year and our investments in core
R&D activities are paying off.  We have a solid foundation -- a
strong balance sheet with approximately $4.4 billion in cash and
marketable securities, long-term partnerships with other
technology leaders worldwide, and strong relationships with
virtually every Fortune 1000 company.  I believe that execution of
our strategy to provide innovation and choice will pay off in
value to customers and that value will be reflected in business
performance."

                     About Sun Microsystems

Headquartered in Santa Clara, California, Sun Microsystems, Inc.
-- http://www.sun.com/-- provides products and services for  
network computing. It provides network computing infrastructure
solutions that consist of computer systems, network storage
systems, support services, and professional and knowledge
services.

Sun Microsystems, Inc.'s 7-1/2% Senior Notes due Aug. 15, 2006,
and 7.65% Senior Notes due Aug. 15, 2009, carry Moody's Investors
Service's Ba1 rating and Standard & Poor's BB+ rating.


TEXAS STAR: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Texas Star Industrial Group, Ltd. Co.
        dba Texas Star Business Centre
        1205 Texas Star Parkway, Suite 120
        Euless, Texas 76040
        Tel: (817) 545-3717

Bankruptcy Case No.: 06-41518

Chapter 11 Petition Date: May 31, 2006

Court: Northern District of Texas (Fort Worth)

Debtor's Counsel: J. Robert Arnett, II, Esq.
                  Arnett Gaubert, LLP
                  4650 Trammell Crow Center
                  2001 Ross Avenue
                  Dallas, Texas 75201
                  Tel: (214) 760-0900
                  Fax: (214) 760-0905

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


TRANS-ACTION EQUITY: Beal Bank Wants Chapter 11 Case Dismissed
--------------------------------------------------------------
Beal Bank SSB asks the U.S. Bankruptcy Court for the District of
Colorado to dismiss Trans-Action Equity Investors III, Co.'s
chapter 11 case.

The Debtor was involved in more than nine years of litigation with
Beal Bank over a failed single asset real estate apartment in
Colorado Springs.  The Debtor owes Beal Bank over $28 million
pursuant to promissory notes and secured by deeds of trust
encumbering the apartment project.

Donald D. Allen, Esq., at Block Markus & Williams LLC, relates
that the Debtor has filed the chapter 11 case in bad faith
because:

   1) The Debtor chose to file the bankruptcy case the day before
      Beal Bank's foreclosure was to occur;

   2) The Debtor chose to file the bankruptcy case only after Beal
      Bank had finally obtained a decree of foreclosure, after
      more than nine years litigation between Beal Bank and the
      Debtor;

   3) The Debtor has no significant creditors other than the Bank;

   4) The Debtor's schedules are inaccurate that they list
      unsecured debts that are not owed and they list creditors
      that have no claim against the Debtor;

   5) There is little likelihood of rehabilitation of the Debtor;

   6) The Debtor is using bankruptcy as a vehicle to resolve
      disputes solely between the Debtor and Beal Bank as its sole
      creditor; and

   7) The Debtor will be unable to effectuate confirmation of a
      plan.

Mr. Allen adds that the Debtor is insolvent and is unlikely to be
able to pay its sole secured creditor, Beal Bank.

The Court will convene a hearing at June 8, 2006, 1:30 p.m., to
consider Beal Bank's request.

Headquartered in Colorado Springs, Colorado, Trans-Action Equity
Investors III, Co. develops real estate and maintains apartments.  
The Debtor filed for chapter 11 protection on April 18, 2006
(Bankr. D. Col. Case No. 06-11886).  Robert M. Duitch, Esq., at
Robert M. Duitch, P.c., represents the Debtors in their
restructuring efforts.  When the Debtor filed for protection from
their creditors, they listed $5,613,120 in assets and $28,333,020
in debts.


TRIBUNE CO: Fitch Cuts Sub. Exchangeable Debentures' Rating to BB+
------------------------------------------------------------------
Fitch Ratings downgraded Tribune Co.'s Issuer Default Rating to
'BBB-' from 'A-'.  The Rating Outlook is Negative.  Approximately
$3.2 billion of outstanding senior unsecured and subordinated debt
on the balance sheet as of March 31, 2006 is affected by this
action.

-- Issuer Default Rating to 'BBB-' from 'A-'

-- Senior unsecured revolving credit facility to 'BBB-' from 'A-'

-- Senior unsecured notes due 2006-2027 to 'BBB-' from 'A-'

-- Subordinated exchangeable debentures due 2029 to 'BB+' from
   'BBB+'

-- Commercial paper program to 'F3' from 'F2'

The downgrade reflects the significant debt load that Tribune is
assuming in order to return capital to shareholders.  Tribune
announced that it will incur over $2 billion in additional bank
debt and publicly issued bonds to fund its tender of 25% of its
outstanding shares.  The leveraged share buy-back represents a
significant departure from Tribune's historically conservative
financial policies and emphasizes the pressures that slower
growing traditional media companies are under to boost their stock
prices.

With pro forma leverage of over 4.0x, Tribune's metrics are
strained for a 'BBB-' company with Tribune's business risk profile
as its core business lines, newspapers and broadcasting, each face
significant secular challenges.

However, Fitch expects Tribune to generate meaningful free cash
flow over the next several years which should be supported by $200
million in additional cost cuts the company has identified.
Tribune has stated that the majority of free cash flow and the net
proceeds from $500 million in non-core asset sales are expected to
be applied toward debt repayment, which should return the capital
structure to an investment grade credit profile.

Leverage, calculated as debt (with the PHONES at $1 billion at
year-end 2005) to operating EBITDA, is expected to be 3.5x or
lower by year-end 2007, and that leverage would be reduced further
in subsequent periods.  

Also factored into the new ratings is Fitch's expectation that
Tribune will supplement free cash flow generation shortfalls with
additional asset sales, if necessary, to meet its debt repayment
targets and timing.  Tribune's track record of repaying debt
following the Times Mirror acquisition in 2000 was considered,
although margins and equity prices are expected to be under
significantly more pressure during this debt pay-down period.
Further downgrades could occur if Fitch's view changes regarding
Tribune's capacity, commitment or incentive to maintain investment
grade ratings.

In addition, the 'BBB-' rating continues to reflect:

   * declining circulation trends for newspapers;

   * pressures on newspaper advertising revenue streams;

   * significant substitution risk and competitive threat from
     online rivals (particularly in high margin classified
     categories);

   * volatile newsprint prices;

   * the threat of emerging technologies on the economics of the
     pure-play broadcasting business; and

   * the volatility of cash flow due to cyclical and political
     fluctuations.

The Negative Rating Outlook reflects:

   * the risks of accelerated deterioration in Tribune's major
     business lines and markets;

   * additional stock price pressure; and

   * potential further financial policy revisions.

These concerns are balanced somewhat by Tribune's strong free cash
flow characteristics and solid liquidity.  While growth prospects
for Tribune's businesses remain weak, Fitch believes its assets
will generate positive free cash flow through a downturn.  The
quality and geographic diversity of Tribune's assets, as well as
the success of several of the company's online investments support
the rating as well.

Fitch has been mindful of heightened event risk across the
newspaper space and this announcement of Tribune's departure from
high investment grade capital structure parameters exemplifies
this risk.  Circulation was down around 4% for the six-month
period ended Mar. 31, 2006.  Newspaper advertising revenue has
been down 0.5% year to date through April with significant
pressure coming from national advertising and the automotive sub-
segment of the classified category.  Retail has also been under
pressure due to major retailer consolidations.

Tribune's broadcasting revenue has been down 2% through April year
to date as its WB stations have suffered lower ratings due in part
to the introduction of Local People Meters in its markets.  
Tribune expects the introduction of the CW network will improve
ratings and reduce ad inventory and could have a positive affect
on pricing and revenue growth.

Fitch believes there are significant secular pressures facing
these two industries (particularly in large markets) as
advertising dollars are being redirected toward the internet and
cable to the detriment of traditional media.  Consolidated
operating EBITDA margins remain healthy, above 20%, but both
businesses face the risk of margin compression as these revenue
pressures are coupled with cost structures that are largely fixed
or contain elements that are largely outside of management's
control.

These secular issues have placed pressure on Tribune's stock,
which was down 18% in 2004, 28% in 2005 and is down around 7% year
to date.  In an attempt to stem the stock price slide, Tribune has
dedicated over a billion dollars of free cash flow toward share
repurchases over the past several years buying back over $700
million in 2004, $440 million in 2005 and $140 million in the
first quarter of 2006.  

While Tribune has stated its intention to improve its credit
metrics more reflective of its current rating, the Negative
Outlook incorporates the risk that the stock might not rebound and
that further financial policy revisions may be contemplated.

Fitch calculates leverage assigning 50% equity credit to PHONES
subordinated debt per Fitch's hybrid criteria and alternatively by
taking the face value of the PHONES and deducting the value of the
Time Warner stock.  Both measures are slightly over 4.0x pro forma
for the transaction and Fitch expects both measures to be at or
below 3.5x by year-end 2007.

Tribune has stated it would meet its de-leveraging targets through
a combination of operating cash flow and potential asset sales.
Fitch does not believe acquisition risk will be significant over
the intermediate term as the company will likely spend less than
$100 million per year for internet related assets that complement
its portfolio of online investments.

Tribune's liquidity will be supported by $750 million in pro-forma
un-drawn bank credit facilities, and the company's solid free cash
flow of over $400 million.  After terming out the company's
commercial paper balances, TRB will have approximately $1.25
billion of bank debt.  Tribune's debt generally has a long tenor
with over half of its debt coming due after 2010.  As this
transaction demonstrates, bond indentures do not provide a
significant level of protection against the risk of leveraging
transactions as there are no financial covenants and no material
change of control, asset sales, or additional debt provisions.

However, there is a limitation on secured debt of 10% of net
assets. (There is presently no secured debt in the capital
structure.)


ULTRASTRIP SYSTEMS: Posts $2.2 Million Net Loss in First Quarter
----------------------------------------------------------------
UltraStrip Systems, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.

The Company reported a $2,272,010 net loss on $679,316 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $1,733,411
in total assets and $4,791,771 in total liabilities, resulting in
a $3,058,360 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $1,561,767 in total current assets available to pay
$4,791,771 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?a1d

                           Going Concern

Tedder, James, Worden & Associates, P.A., in Orlando, Florida,
raised substantial doubt about UltraStrip Systems, 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 working capital
deficit and losses from operations.

                          About UltraStrip

UltraStrip Systems, Inc. is a water-engineering firm that develops
and sells patented equipment to provide solutions to environmental
problems.  The Company's Mobile Water Filtration Systems, provided
through its Ecosphere Technologies subsidiary, provides a solution
to use its powerful water-filtration and purification technology
in the world's most challenging applications, both in developing
regions, and in areas hit by man-made or natural events that
damage vital water resources.  UltraStrip's patented robotic water
jetting systems are designed to provide an environmentally safe
coatings removal process in both heavy marine, automobile, and
above ground storage tank applications. The robotic systems have
been utilized for U.S. Naval ships.


UNITED ENERGY: Case Summary & 18 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: United Energy Coal, Inc.
        32 Enterprise Drive
        Oakland, Maryland 21550
        Tel: (301) 533-0933
        Tel: (301) 533-0933

Bankruptcy Case No.: 06-00453

Type of Business: The Debtor is an affiliate of Buffalo Coal
                  Company, Inc., which previously filed for
                  chapter 11 protection on May 5, 2006 (N.D. W.
                  Va. Case No. 06-00366).

Chapter 11 Petition Date: May 31, 2006

Court: Northern District of West Virginia (Elkins)

Debtor's Counsel: David A. Hoyer, Esq.
                  Hoyer, Hoyer & Smith, PLLC
                  22 Capitol Street
                  Charleston, West Virginia 25301
                  Tel: (304) 344-9821
                  Fax: (304) 344-9519

Total Assets: $103,575,293

Total Debts:   $94,016,306

Debtor's 18 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Virginia Electric and            Lawsuit            $88,408,616
Power Company
701 East Cary Street
Richmond, VA 23219

Lehigh Cement Company            Consent Judgment    $1,800,000
7660 Imperial Way
Allentown, PA 18195

Maxus Leasing                    UCC                   $494,665
345 Mount Lebanon Boulevard
Suite 24
Pittsburgh, PA 15234

Savage Services Corp.            Goods and Services    $370,708
P.O. Box 57908
Salt Lake City, UT 84157-0908

GMS Mine Repair and              Services              $306,593
Maintenance, Inc.
P.O. Box 2446
Mount Lake Park, MD 21550

Bill Miller Equipment            Goods and Services    $292,870
Sales, Inc.
P.O. Box 112
Eckhart, MD 21528

Anker Energy Corp.               Goods and Services    $275,000
2708 Cranberry Square
Morgantown, WV 26508

Austin Powder Company            Goods and Services    $264,982
P.O. Box 6049-C
Cleveland, OH 44191

Guttman Oil Company              Goods and Services    $203,947

BB&T                             UCC                   $209,833

King's Tire Service, Inc.        Goods and Services    $113,767

Rockwood Casualty Insurance Co.  Services               $69,782

Tri-County Petroleum             Goods and Services     $53,201

U.S. Treasury                    Federal Income Tax     $44,918

A&D Well Co., Inc.               Goods and Services     $40,742

American Express                 Credit Card Charges    $35,433

CBIZ Benefits & Insurance        Services               $23,514
Services

L. Robert Kimball and            Goods and Services     $18,450
Associates, Inc.


US AIRWAYS: Court Dismisses Fraizer's Complaint & Disallows Claim
-----------------------------------------------------------------
As previously reported, Reorganized US Airways, Inc., its debtor-
affiliates and Phillip H. Frazier filed summary judgment motions
on account of Mr. Frazier's Claim No. 3463 and the Reorganized
Debtors' objections to the Claim.

The Court rules in favor of US Airways, and denies Mr. Frazier's
request for summary judgment.

Judge Mitchell holds that Mr. Frazier's evidence is not
sufficient to establish a triable issue of material fact on any
of the three causes of action asserted in his complaint.

Accordingly, Claim No. 3463 is disallowed and Mr. Frazier's
complaint is dismissed, Judge Mitchell says.

                       Frazier's Complaint

Mr. Frazier, a long-time employee of US Airways, filed a claim in
US Airways' first Chapter 11 case based on alleged employment
discrimination.  After US Airways objected to his claim, Mr.
Frazier filed a pleading that included a request for relief from
the automatic stay to pursue his claim in state court.

Prior to the hearing on Mr. Frazier's motion, USAir I's Plan of
Reorganization was confirmed.  The Bankruptcy Court treated Mr.
Frazier's pleading as a motion for relief from the discharge
injunction, but denied the motion on the ground that the
Bankruptcy Court was the appropriate forum in which to liquidate
the claim.  The Court did note, however, that there might be some
aspect of Mr. Frazier's claim that arose post-confirmation and
was, therefore, not encompassed by the discharge injunction.

Mr. Frazier subsequently filed an Equal Opportunity Employment
Commission complaint in California in June 2003 asserting
discrimination claims that mirrored the claims that he had filed
in the Bankruptcy Court.  US Airways responded first by sending
Mr. Frazier a letter demanding that he withdraw the complaint
because it violated the discharge injunction.  When Mr. Frazier
refused to do so, US Airways filed a motion to have him held in
civil contempt for violation of the discharge injunction.

During the hearing on the contempt motion, the Bankruptcy Court
expressed doubt that the EEOC complaint necessarily violated the
discharge injunction.  Although the Court agreed that the claims
resembled, and could be read as embracing, those that had been
asserted in Mr. Frazier's proof of claim, they could also be read
more narrowly to allege only post-confirmation discrimination.
Perceiving which way the wind was blowing, US Airways' counsel
withdrew the contempt motion.  After a trial held in the
Bankruptcy Court in February 2004, Mr. Frazier's discrimination
claims were disallowed.

Following US Airways' second Chapter 11 petition, Mr. Frazier
commenced an adversary proceeding seeking $9,060,000 in
compensatory and punitive damages, as well as reinstatement to
his former position for alleged:

    (1) employment discrimination;
    (2) intentional infliction of emotional distress; and
    (3) malicious use of process.

The Bankruptcy Court stayed the adversary proceeding and ordered
that the complaint be treated as a proof of claim.  Subsequently,
USAir II's Plan of Reorganization was confirmed under which
allowed claims will receive a pro-rata distribution of stock in
the parent holding company, US Airways Group, Inc.

After USAir II's Plan was confirmed, Mr. Frazier filed an amended
complaint, and both Mr. Frazier and the Reorganized Debtors have
filed motions for summary judgment.

                    Employment Discrimination

US Airways argued that Mr. Frazier cannot establish that the
bringing of the contempt motion was an "adverse employment
action," since it did not directly affect the terms, conditions,
or benefits of his employment.  US Airways proffered that the
reason for filing the contempt motion was to protect the estate
from what it believed was a violation of the discharge injunction
as set forth in the Debtors' confirmed Plan of Reorganization.

To show US Airways' proffered explanation was merely a pretext
for discrimination, Mr. Frazier told the Court that US Airways
admitted in open court that the request for contempt was filed to
retaliate against him.

However, after examining the transcript of the contempt hearing,
Judge Mitchell did not find the purported admission.  Judge
Mitchell, instead, discovered that Mr. Frazier provided his own
declaration that he was discriminated against.

"Mr. Frazier's naked opinion, without more, is not sufficient to
establish even a prima facie case, let alone to rebut a proffered
non-discriminatory explanation," Judge Mitchell explains.

Mr. Frazier's reliance on an EEOC finding of "reasonable cause"
of retaliation to support his claim, is likewise inadequate,
Judge Mitchell adds.

                     Malicious Use of Process

According to Judge Mitchell, Mr. Frazier is alleging "malicious
prosecution" rather than "abuse of process," because the gist of
the claim is that the motion for contempt was a groundless civil
proceeding instituted against him.

Judge Mitchell points out that malicious prosecution differs from
abuse of process in that malicious prosecution lies for
maliciously causing process to issue while abuse of process lies
for the improper use of process after it has been issued.

Moreover, to establish a prima facie case of malicious
prosecution under Virginia law, a plaintiff must prove that:

    (1) the defendant instituted a prior proceeding against the
        plaintiff;

    (2) the proceeding was instituted without probable cause;

    (3) the proceeding was instituted with malice;

    (4) the underlying proceeding terminated in the plaintiff's
        favor; and

    (5) the plaintiff sustained special damages as a result of the
        proceeding.

Judge Mitchell holds that the malicious prosecution claim fails
because Mr. Frazier has not shown special damages, as required
under Virginia law.

Judge Mitchell further stresses that given the ambiguous
description by Mr. Frazier of the scope of his claim, US Airways
was not required to sit and trust that only post-confirmation
claims were to be prosecuted when the charge itself did not
contain express language to that effect.

                        Emotional Distress

"Mr. Frazier's argument that US Airways should be found liable as
a matter of law for intentional infliction of emotional distress,
is also without merit," Judge Mitchell maintains.

To prevail on a claim for "intentional infliction of emotional
distress," the alleged act must have an effect on the plaintiff
that is so severe that no reasonable person could be expected to
endure it, Judge Mitchell says.

However, even if the Court were to find that the bringing of the
contempt motion was completely unjustified, Judge Mitchell notes
that the Court would be unable to find that Mr. Frazier has shown
severe distress because by its very nature, litigation frequently
engenders anxiety and distress.

"This is not a case where Mr. Frazier was accused by US Airways
of especially heinous conduct likely to make him the object of
public obloquy, or where Mr. Frazier suffered imprisonment or
other severe repercussions as a result of the charges being
brought," Judge Mitchell remarks.

While it very well may be that Mr. Frazier suffered sleepless
nights and depression after being served with the contempt
motion, there is no evidence that his level of distress and
anxiety exceeded what would be expected in any person who was
charged with contempt of court, the Court declares.

                         About US Airways

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.

The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 120; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


US AIRWAYS: Resolving Charlotte's Multi-Mil. Priority Tax Claims
----------------------------------------------------------------
In the first bankruptcy case of US Airways, Inc., and its debtor-
affiliates, the tax collector for the city of Charlotte and
Mecklenburg County, in North Carolina, filed two priority claims
aggregating $7,151,708 for year 2002 personal property taxes.

The Reorganized Debtors objected to the USAir I Priority Tax
Claims, and by order dated June 19, 2003, the claims were
disallowed by default because the Tax Collector failed to respond
to the objection.

The Tax Collector then sought to alter and amend the June 2003
Order, asserting that neither the Tax Collector nor its attorneys
received a copy of the objection.

In March 2004, the Tax Collector filed amended priority tax
claims for $7,090,964.

The request to alter and the USAir I Amended Priority Tax Claims
were not resolved during the Reorganized Debtors' first
bankruptcy case.

In the present bankruptcy case, the Tax Collector filed two
priority claims aggregating $4,434,003 for year 2004 personal
property taxes and re-filed the USAir I Amended Priority Tax
Claims for $7,090,964.

The Tax Collector also filed administrative claims for $4,202,279
for year 2005 personal property taxes.

The Tax Collector asked the Court to lift the automatic stay to
determine the amount of its priority tax claims.

The Reorganized Debtors objected to the USA I Amended Priority
Tax Claims and the USAir II Priority Tax Claims, to which the Tax
Collector responded.

Pursuant to Section 1129(a)(9)(C) of the Bankruptcy Code and the
Reorganized Debtors' confirmed Plan of Reorganization, if any of
the Claims are allowed, the Tax Collector is entitled to receive
deferred cash payments over a period not exceeding six years
after the assessment of the tax.

In a Court-approved stipulation, the parties agreed to resolve
all claims and matters at issue pursuant to these terms:

    (1) The USAir I Amended Priority Tax Claims and the USAir II
        Priority Tax Claims are allowed for $8,800,000 in full
        satisfaction of all the Tax Collector's claims which have
        been, or could have been, asserted through tax year 2004
        against the Reorganized Debtors and their estates in both
        bankruptcy cases;

    (2) The Allowed Claim will be paid to the Tax Collector, in
        full, on or before June 25, 2006.

    (3) The Administrative Claims are withdrawn as they have been
        paid, in full.

    (4) All other claims asserted against any of the Reorganized
        Debtors in the bankruptcy cases by or on behalf of the Tax
        Collector, are forever and irrevocably disallowed,
        discharged, waived and expunged in their entirety, and the
        Tax Collector releases the Reorganized Debtors and their
        estates from any Claims, except the Allowed Claim.

    (5) The Motion to Alter and Amend and the Motion to Lift Stay
        are granted only to the extent necessary to reinstate the
        USAir I Amended Priority Tax Claim, and the requests will
        be marked satisfied.

    (6) All claim objections with respect to the claims addressed,
        and any responses, are withdrawn and deemed satisfied.

                         About US Airways

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.

The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 121; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


USG CORP: Battle Ensues Over Elm's $57.55 Mil. Asbestos PD Claims
-----------------------------------------------------------------
USG Corporation and its debtor-affiliates object to Claim Nos.
4788 and 4786 filed by 1401 Elm 1999 Acquisition Limited
Partnership.  The Debtors assert that the Claims are barred by the
applicable statute of limitations.

Elm asserts a $57,550,986 claim for asbestos contamination of its
single commercial office building in Dallas, Texas.  Claim No.
4788 alleges that Elm acquired ownership of the property in "1964
(approx.)."  Claim No. 4786, which amends Claim No. 4788,
indicates that Elm purchased floors 10 to 49 of the building in
1999.  No details of the transaction are disclosed.

Paul N. Heath, Esq., at Richards, Layton & Finger, P.A.,
Wilmington, Delaware, tells the Court that under Tex. Civ. Prac.
& Rem. Code Ann. Section 16.003(a), Elm's asbestos property
damage claim must be brought within two years after the claim
accrues.

Elm states that at least some of the asbestos-containing
materials in the building were removed from the building
beginning in 1996.  By that time, the presence in the building of
the asbestos-containing products for which Elm seeks recovery
from the Debtors was actually known by the owners, Mr. Heath
contends.  He also notes that well before 1996, commercial
building owners in the United States generally, and certainly in
large metropolitan areas like Dallas, were well aware of
potential risks that had been raised regarding in-place asbestos-
containing materials of the type allegedly present in Elm's
building.

In addition, Mr. Heath says, the U.S. Court of Appeals for the
Third Circuit in Prudential Ins. Co. of Amer. v. United States
Gypsum Co., 359 F.3d 226, 230 (3d Cir. 2004), has recognized that
potential dangers from asbestos-containing materials in buildings
were widely known at least as early as October 20, 1983.

With respect to renovation activities which disturb in-place
asbestos-containing materials, Environmental Protection Agency
regulations have been in effect since the early 1970s with
respect to potential releases of asbestos during those
activities.

To the extent that any ownership interest was acquired after the
alleged asbestos abatement was commenced in 1996, there is
significant reason to believe that the ownership interest was
acquired with actual knowledge of the existence of asbestos-
containing materials in its building by virtue of the alleged
abatement activities and related due diligence performed by a
sophisticated purchaser of commercial real estate, Mr. Heath
maintains.

"[G]iven the widespread awareness in the commercial real estate
community regarding the issue, it is virtually certain that [Elm]
was aware of the presence of asbestos in the building, and of the
potential hazards allegedly associated with that material, a
decade or more before the 1996 abatement," Mr. Health asserts.

"The applicable statute of limitations began to run as to [Elm]
not when it actually knew of the elements of its claim, but when
it knew or should have known it had suffered injury," he adds.

The Debtors also object to the Claims on the ground that Elm
failed to provide sufficient evidence relating to product
identification.

Accordingly, the Debtors ask the Court to disallow the Claims.

                           Elm Responds

1401 Elm 1999 Acquisition Limited Partnership clarifies that at
the time it purchased floors 10 through 49 of the basement and
sub-basement, it was aware that asbestos-containing fireproofing
had been removed from portions of the basements and first floors
as part of a major renovation in the Tower.  However, it was not
aware of any removal of the asbestos-containing fireproofing in
the Tower.  Since purchasing the Tower, Elm has not removed any
of the fireproofing in the tower.

Elm retained Material Analytical Services, Inc., in November 2002
to inspect the floors that it owns.  Elm filed a PD claim in
January 2003 based on MAS' report.

Elm wants the Debtors' objection overruled.  Elm says the Debtors
failed to apply the proper trigger regarding limitations on its
claim.

Theodore J. Tacconelli, Esq., at Ferry Joseph & Pearce, P.A., in
Wilmington, Delaware, notes that that courts throughout the
country have consistently held that general knowledge regarding
the hazards of asbestos does not cause injury, much less property
damage.  Mr. Tacconelli points Judge Fitzgerald to:

      * MDU Res. Group v. W.R. Grace & Co., 14 F.3d 1274, 1278-79
        (8th Cir. 1994), cert. denied, 15 U.S. 824 (1994), wherein
        the court rejected W.R. Grace's argument that knowledge of
        the mere presence of asbestos triggers the statute of
        limitations was rejected, and held that the proper
        question was when MDU could have learned, with the
        exercise of reasonable diligence, that its building had
        been contaminated by asbestos;

      * Adams-Arapahoe Sch. Dist. v. GAF Corp., 959 F.2d 868, 872
        (10th Cir. 1992), wherein the court held that "[o]nly
        asbestos contamination constitutes a physical injury
        compensable under tort law";

      * California Sansome v. U.S. Gypsum Co., 55 F.3d 1402 (9th
        Cir. 1995), wherein the court held that contamination
        must occur in the first instance in order to trigger the
        running of statute of limitations;

      * City of Wichita v. United States Mineral Products Co.,
        72 F.3d 1491 (10th Cir. 1996), wherein the court held that
        actual physical injury by "contamination" is an essential
        element of any negligence claim and liability may not be
        premised upon the risk of future harm not yet suffered;
        and

      * BellSouth Communications v. W.R. Grace & Co., 77 F.3d 603
        (2d Cir. 1996), wherein the court held that claim does not
        accrue until contamination of the building by asbestos and
        consequent health risk occurs.

Texas courts have required that there be a "legal injury" in
order for limitations to run, Mr. Tacconelli notes, citing Baker
v. City of Fort Worth, 146 Tex. 600, 210 S.W.2d 564 (1948),
wherein the court held that "where bridge erected on adjoining
land without invasion of plaintiff's rights or premises at time
of construction, no legal injury resulted at that time and
plaintiff's cause of action did not accrue until water diverted
onto his land by reason of the bridge."

The court in Waxler v. Household Credit Services, Inc., 106
S.W.3d 277 (Tex. App. -Dallas 2003) (citing Black v. Wills, 758
S.W.2d 809, 816 (Tex. App. - Dallas 1988, no writ), also held
that "[u]nder the 'legal injury' rule, a cause of action sounding
in tort generally accrues when the tort is completed, that is the
act committed and damage suffered. . . .  This is the date of
legal injury and the statute of limitations begins to run at that
time."

Mr. Tacconelli also contends that the fact that a building owner
may have knowledge of federal rules and regulations regarding
asbestos-containing building products does not constitute
"constructive notice" so as to trigger limitations.  Mr.
Tacconelli notes that in Kansas City v. W.R. Grace & Co., 778
S.W.2d 264, (Mo. App. 1989), the court held that "simply because
Kansas City had notice of NESHAPs, its causes of action for
negligence and strict liability were not caused to accrue.  In
California Sansome Co. v. U.S. Gypsum, 55 F.3d 1402, 1403 (9th
Cir. 1995), the court held that "ruling that articles,
publications, regulations, and seminars on the hazards of
asbestos did not put plaintiff 'on inquiry notice' of asbestos
contamination."

Mr. Tacconelli further notes that in support of its claim, Elm
attached a constituent analysis performed by MAS regarding the
asbestos-containing product in the building and MAS' letter
report dated November 22, 2002.  The report and the results from
the various tests performed by MAS establish that the asbestos-
containing material in Elm's building is SprayDon fireproofing
manufactured by USG.

Moreover, the Debtors have in prior cases accepted MAS findings
that the Debtors manufactured asbestos-containing materials
installed in buildings, Mr. Tacconelli adds.  Product
identification findings by MAS have also been recognized in other
bankruptcies as proof that a debtor's asbestos-containing
material was installed in a particular building for which a claim
had been filed.

                          About USG Corp.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 111; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


USG CORP: Investor Consortium's $12.5MM Claim Request Draws Fire
----------------------------------------------------------------
A request for a $12.5 million administrative expense priority
claim against USG Corporation and its debtor-affiliates received
flak form various parties-of-interest.  As reported in the
Troubled Company Reporter on April 13, 2006, a consortium of
investors tapped by the Statutory Committee of Equity Security
Holders proposed an equity backstop commitment agreement to
compete with another backstop agreement the Debtors inked with
Berkshire Hathaway, Inc., in connection with the Debtors' proposed
rights offering.

The Consortium is comprised of investment funds managed by eight
fund groups including:

   * Deephaven Capital Management LLC,
   * Fidelity Management & Research Company,
   * Silver Point Capital, L.P.,
   * D.E. Shaw & Co., L.P.,
   * Abrams Capital Partners,
   * Redwood Capital Management, LLC,
   * Citadel Limited Partnership, and
   * Caspian Capital Advisors LLC.

The Consortium's agreement got rejected.  The Consortium argued
that its competing proposal drove up Bershire's terms in the
equity backstop pact inked by the Debtors with Berkshire and had
contributed substantially to the Debtors' estates.

        Consortium's Efforts Have No Impact, Debtors Say

The Debtors ask the Bankruptcy Court to deny, in its entirety,
the request of the Consortium of Investors because it failed to
demonstrate that it is entitled to a $12,500,000 payment as an
administrative claim under Section 503(b) of the Bankruptcy Code.

The Debtors argue that even if the Consortium could demonstrate
that it made a substantial contribution in their Chapter 11
cases, the Consortium would still not be entitled to an
administrative claim in connection with the Consortium's role as
unsuccessful bidders in the Debtors' case.

The Debtors acknowledge that the Consortium's participation in
the Debtors' cases resulted in the renegotiation of the initial
proposal by Berkshire Hathaway, Inc., and a reduction of
Berkshire's $100,000,000 commitment fee.

However, Paul N. Heath, Esq., at Richards, Layton & Finger PA, in
Wilmington, Delaware, tells Judge Fitzgerald that the Consortium
proposal was demonstrably inferior to both the proposals by
Berkshire and Credit Suisse Securities (USA) LLC, since it lacked
essential terms like the $1,800,000,000 escrow.

Mr. Heath contends that the Consortium proposal did not impact
the Debtors' analysis of the bids or their negotiations with the
other two bidders.  Despite the Consortium's assertion, it did
not entice Credit Suisse to prepare its proposal.  Although the
Debtors were informed of the Consortium's interest early in the
bidding process, the Debtors were in contact with Credit Suisse
regarding its interest in making a proposal well before receiving
the Consortium's proposal.

Notwithstanding their objections to the proposed $12,500,000
payment, the Debtors remain willing to reimburse the Consortium's
reasonable attorney's fees even if it fell short of providing the
Debtors with an acceptable alternative to the Berkshire proposal.

      U.S. Trustee Argues Consortium Failed to Meet Burder

Kelly Beaudin Stapleton, the United States Trustee for Region 3,
tells the Bankruptcy Court that the Consortium consistently fails
to meet its burden with respect to its proposed $12,500,000
reimbursement plus additional attorneys' fees.

Under Section 503(b)(3)(D) of the Bankruptcy Code, administrative
expenses are allowed for actual and necessary expenses incurred
by, among others, a creditor or an equity security holder in
making a substantial contribution in a case.  In addition,
Section 503(b)(4) provides that reasonable compensation is
allowed as an administrative expense for professional services
rendered by an attorney or an accountant of an entity whose
expense is allowable under Section 503(b)(3).

The U.S. Trustee asks Judge Fitzgerald to deny the Consortium's
request because:

   (a) The Consortium has completely failed to meet its burden
       under Section 503(b) because there is nothing to support
       the $12,500,000 payment or the reasonable attorneys fees
       requested.

   (b) There is nothing to support that the proposed $12,500,000
       fee is an actual, necessary expense of the Consortium as
       required by Section 503(b)(3)(D).

   (c) No substantial contribution to the estate was made.

   (d) The Consortium has failed to overcome the presumption
       that they were acting primarily in their own self-
       interest and not in the estate's best interest.

   (e) The proposed amount is completely unreasonable.

                  Creditors Panel Thinks So Too

The Official Committee of Unsecured Creditors Committee argues
that the Consortium's proposed $12,500,000 "termination fee" is
not an actual, necessary expense that conferred a direct and
tangible benefit on the Debtors' estates.  The Consortium's
request fails to provide information in support of the
Termination Fee, specific amount for attorneys' fees, and
invoices, time records or other documentation to substantiate the
actual and necessary services rendered by the Consortium in
making a substantial contribution to the Debtors' cases.

Michael Lastowski, Esq., at Duane Morris LLP, in Wilmington,
Delaware, says there is no basis to reward the Consortium with
its Termination Fee because the Debtors did not and were not
required by the Bankruptcy Code to conduct any type of auction.

Mr. Lastowski states that even if the alternative backstop
proposal could be analogized in some manner to an auction
situation, Berkshire Hathaway constituted the "stalking horse"
bidder by enticing other alternative proposals to come in.

Mr. Lastowski further notes that although the Consortium's
efforts may have indirectly saved the estate financial resources,
the Consortium's actions were not extraordinary nor do they
warrant any type of premium or salvage fee.

Moreover, Mr. Lastowski argues that the Consortium's proposed fee
is unreasonable and bears no relationship to the Consortium's
efforts or to the net value ultimately conferred on the Debtors'
estate.

                   How was the Fee Determined?

The Official Committee of Property Damage Claimants wants the
Consortium's request denied because it fails to offer any basis
for its assertions other than some "revisionist history."

The PD Committee also contends that the Consortium fails to
instruct how the proposed fee was determined except that the
Official Committee of Equity Security Holders purportedly
prevailed on the Consortium to reduce its fee request from
$15,000,000 as a condition of the Equity Committee's agreement to
support the Consortium's request.

However, the PD Committee maintains, neither the Consortium nor
the Equity Committee saw fit to seek the Court's prior approval
of the Consortium's right to any fee in the event its proposal
for an equity rights offering backstop was unsuccessful.

                          About USG Corp.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 111; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VALENTEC SYSTEMS: Posts $119,909 Net Loss in 2006 First Quarter
---------------------------------------------------------------
Valentec Systems, Inc., 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 $119,909 net loss on $5,972,891 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $25,612,236
in total assets, $22,660,210 in total liabilities, and $2,952,026
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $17,671,397 in total current assets available to
pay $22,588,461 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?a3b

                        Going Concern Doubt

Webb & Company, P.A., in Boynton Beach, Florida, raised
substantial doubt about Valentec Systems, 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 working capital
deficiency and negative cash flow from operations.

Valentec Systems, Inc., designs, develops, manufactures, and sells
ammunition and light weapons for military use.


VERILINK CORP: Court OKs Maynard Cooper as Panel's Bankr. Counsel
-----------------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur authorized the Official
Committee of Unsecured Creditors appointed in Verilink Corporation
and its debtor-affiliate Larscom, Inc.'s bankruptcy cases to
employ Maynard, Cooper, Gale, P.C., as its bankruptcy co-counsel,
nunc pro tunc to April 10, 2006.

Maynard Cooper will:

   (a) provide legal advice to the Committee with respect to its
       duties and powers in the Debtors' bankruptcy cases;

   (b) consult with the Committee and the Debtors concerning the
       administration of the the Debtors' bankruptcy cases;

   (c) assist the Committee in its investigation of the acts,
       conduct, assets, liabilities, and financial condition of
       the Debtors, their operations, the desirability of
       continuing or selling the businesses or assets, and any
       other matter relevant to the Debtors' bankruptcy cases or
       the formulation of a chapter 11 plan;

   (d) assist the Committee in evaluating claims against Debtors'
       estates, including analysis of possible objections to the
       validity, priority, amount, subordination, or avoidance of
       claims and transfers fo property in consideration of those
       claims;

   (e) assist the Committee in participating in the formulation of
       a plan, including the Committee's communications with
       unsecured creditors concerning the plan;

   (f) assist the Committe with any effort to request the
       appointment of a trustee or examiner;

   (g) advise and represent the Committee in connection with
       administrative matters arising in the Debtors' bankruptcy
       cases, including obtaining credit, selling assets, and
       rejection or assumption of executory contracts and
       unexpired leases;

   (h) appear before the Bankruptcy Court and any Federal, State
       or Applellate Courts; and

   (i) perform other legal services as may be required and in the
       interests of unsecured creditors.

Maynard Cooper will coordinate with Arnall Golden Gregory LLP, the
Committee's co-counsel, to ensure that their legal services are
not duplicative.

Jayna Partan Lamar, Esq., a shareholder at Maynard, Cooper, Gale,
P.C., discloses that the Firm's professionals bill:

   Designation                        Hourly Rate
   -----------                        -----------
   Partners                           $245 - $425
   Associates and Staff Attorneys     $170 - $245
   Legal Assistants                   $110 - $150

Mr. Lamar assures the Court that Maynard, Cooper, Gale, P.C., does
not hold or represent any interest adverse to the Committee or to
the Debtors and is disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.

Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks.  The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers.  The
Company and its debtor-affiliate, Larscom Inc., filed for chapter
11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567).  Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors.  Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP and Jayna Partain Lamar, Esq., at
Maynard, Cooper & Gale, P.C., give legal advice to the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.


VERILINK CORP: Panel Hires Arnall Golden as Bankruptcy Counsel
--------------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur authorized the Official
Committee of Unsecured Creditors appointed in Verilink Corporation
and its debtor-affiliate Larscom, Inc.'s bankruptcy cases to
employ Arnall Golden Gregory LLP as its bankruptcy co-counsel,
nunc pro tunc to April 28, 2006.

Arnall Golden will:

   (a) advise the Committee with respect to its rights, powers and
       duties in the Debtors' bankruptcy cases;

   (b) assist and advise the Committee in its consultations with
       the Debtors relative to the administration of these cases;

   (c) assist the Committee in analyzing the claims of the
       Debtors' creditors and negotiate with those creditors;

   (d) assist the Committee's investigation of the acts, conduct,
       assets, liabilities and financial condition of the Debtors
       and of the operation of the Debtors' businesses;

   (e) advise and represent the Committee in connection with the
       administrative matters arising in the Debtors' cases,
       including obtaining credit, selling of assets, and the
       rejection or assumption of executory contracts and
       unexpired leases;

   (f) assist the Committee in its analysis of, and negotiations
       with the Debtors or any third party concerning matters
       related to the terms of a chapter 11 plan or plans of the
       Debtors;

   (g) assist and advise the Committee with respect to its
       communications with the general creditor body regarding
       significant matters in the Debtors' cases;

   (h) review and analyze all applications, orders, statements of
       operations and schedules filed with the Court, and advise
       the Committee as to their propriety;

   (i) assist the Committee in evaluating and pursuing, if
       necessary, claims and clauses of action against the
       Debtors' secured lenders;

   (j) assist the Committee in preparing pleadings and
       applications as may be necessary in furtherance of the
       Committee's interests and objectives;

   (k) represent the Committee at all hearings and other
       proceedings; and

   (l) perform other legal services as may be required and deemed
       to be in the interests of the Committee.

Arnall Golden Gregory LLP will coordinate with, Maynard, Cooper,
Gale, P.C., the Committee's co-counsel, to ensure that their legal
services are not duplicative.

Hayden J. Kepner, Jr., Esq., a partner at Arnall Golden Gregory
LLP, discloses that the Firm's professionals bill:

   Designation                   Hourly Rate
   -----------                   -----------
   Attorneys                     $225 - $425
   Paralegals                    $120 - $145

Mr. Kepner assures the Court that Arnall Golden Gregory LLP does
not hold or represent any interest adverse to the Committee or to
the Debtors and is disterested as that term is defined in Section
101(14) of the Bankruptcy Code.

Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks.  The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers.  The
Company and its debtor-affiliate, Larscom Inc., filed for chapter
11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567).  Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors.  Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP and Jayna Partain Lamar, Esq., at
Maynard, Cooper & Gale, P.C., give legal advice to the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.


VOICE MOBILITY: March 31 Balance Sheet Upside Down by $7.4 Million
------------------------------------------------------------------
Voice Mobility International, Inc. filed its first quarter
financial statements for the three months ended March 31, 2006,
with the Securities and Exchange Commission on May 15, 2006.

The Company reported a $776,749 net loss on $39,000 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,520,749
in total assets and $9,940,767 in total liabilities, resulting in
a $7,420,018 stockholders' deficit.

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?a2e

                        Going Concern Doubt

Ernst & Young LLP, in Vancouver, Canada, expressed substantial
doubt about Voice Mobility International, 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 recurring net losses
and shareholders' deficiency.

Based in Burnaby, British Columbia, Canada, Voice Mobility
International, Inc. -- http://www.voicemobility.com/-- markets  
and deploys next generation messaging solutions that provide
enhanced messaging features and functionality while ensuring
integration with, or replacement of, existing first generation
voicemail messaging systems.


WELLS FARGO: Fitch Puts Low-B Ratings on Four Certificate Classes
-----------------------------------------------------------------
Wells Fargo mortgage pass-through certificates, series 2006-7, are
rated by Fitch Ratings as:

  Group 1:

     -- $211,787,497 classes I-A-1, I-A-PO, and I-A-R 'AAA'
        (senior certificates)

     -- $2,699,000 class I-B-1 'AA'

     -- $432,000 class I-B-2 'A'

     -- $323,000 class I-B-3 'BBB'

     -- $216,000 class I-B-4 'BB'

     -- $216,000 class I-B-5 'B'

  Groups 2 and 3:

     -- $200,137,757 classes II-A-1, III-A-1, and A-PO 'AAA'
        (senior certificates)

     -- $4,251,000 class Cr-B-1 'AA'

     -- $1,245,000 class Cr-B-2 'A'

     -- $415,000 class Cr-B-3 'BBB'

     -- $726,000 class Cr-B-4 'BB'

     -- $311,000 class Cr-B-5 'B'

The 'AAA' rating on the Group I senior certificates reflects:

   * the 1.90% subordination provided by the 1.25% class I-B-1;
   * the 0.20% class I-B-2;
   * the 0.15% class I-B-3;
   * the 0.10% privately offered class I-B-4;
   * the 0.10% privately offered class I-B-5; and
   * the 0.10% privately offered class I-B-6.

The ratings on the class I-B-1, I-B-2, I-B-3, I-B-4, and I-B-5
certificates are based on their respective subordination.  Class
I-B-6 is not rated by Fitch.

The 'AAA' rating on the Group 2 and 3 senior certificates reflects
the:

   * 3.50% subordination provided by the 2.05% class Cr-B-1;
   * 0.60% class Cr-B-2;
   * 0.20% class Cr-B-3;
   * 0.35% privately offered class Cr-B-4;
   * 0.15% privately offered class Cr-B-5; and
   * 0.15% privately offered class Cr-B-6.

The ratings on the class Cr-B-1, Cr-B-2, Cr-B-3, Cr-B-4 and Cr-B-5
certificates are based on their respective subordination.  Class
Cr-B-6 is not rated by Fitch.

Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses.  The ratings also reflect:

   * the high quality of the underlying collateral;

   * the integrity of the legal and financial structures; and

   * the primary servicing capabilities of Wells Fargo Bank, N.A.
     (rated 'RPS1' by Fitch).

Group 1 consists of 346 fully amortizing, fixed interest rate,
first lien mortgage loans, with original weighted average months
to maturity of approximately 178.  The aggregate unpaid principal
balance of the pool is $215,890,167 as of May 1, 2006 (the cut-off
date), and the average principal balance is $623,960.

The weighted average original loan-to-value ratio of the loan pool
is approximately 63.08%.  The weighted average coupon of the
mortgage loans is 5.887%, and the weighted average FICO score is
750.  Equity take-out and rate/term refinance represent 38.62% and
20.80%, respectively.  

The states that represent the largest geographic concentration
are:

   * California (33.37%),
   * Texas (8.16%),
   * Florida (6.87%), and
   * New York (5.59%).

All other states represent less than 5% of the outstanding balance
of the pool.

Group 2 and Group 3 consist of 510 fully amortizing, fixed
interest rate, first lien mortgage loans, with original WAM of
approximately 359.  The aggregate unpaid principal balance of the
pool is $207,397,006 as of May 1, 2006 (the cut-off date), and the
average principal balance is $406,661.

The weighted average OLTV of the loan pool is approximately
72.88%.  The WAC of the mortgage loans is 6.399%, and the weighted
average FICO score is 744.  Equity take-out and rate/term
refinance represent 21.21% and 12.36%, respectively.

The states that represent the largest geographic concentration
are:

   * California (39.10%),
   * Virginia (9.95%),
   * Washington (6.65%), and
   * New York (6.26%).

All other states represent less than 5% of the outstanding balance
of the pool.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

All of the mortgage loans were generally originated in conformity
with underwriting standards of Wells Fargo Bank, N.A.  WFB sold
the loans to Wells Fargo Asset Securities Corporation, a special
purpose corporation, who deposited the loans into the trust.  The
trust issued the certificates in exchange for the mortgage loans.

WFB will act as servicer and custodian, and HSBC Bank USA, N.A.
will act as trustee.  Elections will be made to treat the trust as
a real estate mortgage investment conduit for federal income tax
purposes.


WG HORIZIONS: Moody's Rates $12 Million Class D Notes at Ba2
------------------------------------------------------------
Moody's Investors Service assigned ratings to five classes of
Notes issued by WG Horizons CLO I:

   (1) Aaa to the $296,000,000 Class A-1 Floating Rate
       Notes Due 2019,

   (2) Aa2 to the $24,000,000 Class A-2 Floating Rate
       Notes Due 2019,

   (3) A2 to the $21,000,000 Class B Deferrable Floating
       Rate Notes Due 2019,

   (4) Baa2 to the $16,000,000 Class C Floating Rate
       Notes Due 2019, and

   (5) Ba2 to the $12,000,000 Class D Floating Rate Notes
       Due 2019.

The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.

Moody's also analyzed the risk of diminishment of cash flows from
the underlying portfolio of corporate debt due to defaults, the
characteristics of these assets and the safety of the
transaction's legal structure.

West Gate Horizons Advisors, LLC will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.


WIZZARD SOFTWARE: Amends 2005 & 2004 Annual Financial Statements
----------------------------------------------------------------
Wizzard Software Corporation filed with the Securities and
Exchange Commission on May 26, 2006, its amended financial
statements for the years ended Dec. 31, 2005, and Dec. 31, 2004.

The company's Statement of Operations showed:

                                    For the Year Ended
                                 -----------------------
                                  12/31/05     12/31/04
                                 -----------  ----------
   Revenues                      $3,027,160   $2,711,555

   Net loss                     ($5,961,572) ($5,341,731)

The company's Balance Sheet showed:

                                    For the Year Ended
                                 -----------------------
                                  12/31/05     12/31/04
                                 -----------  ----------
   Current Assets                $1,210,047    $619,833

   Total Assets                  $2,358,147    $727,284

   Current Liabilities           $1,558,708    $222,941

   Total Liabilities             $1,677,932    $100,000

   Total Stockholders' Equity      $680,215    $404,343

                       Going Concern Doubt

Gregory & Associates, LLC, in Salt Lake City, Utah, raised
substantial doubt about Wizzard Software 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, and incurred losses since its inception.

Full-text copies of the company's financial statements are
available for free at:

   Amended 2005    http://ResearchArchives.com/t/s?a24
   Amended 2004    http://ResearchArchives.com/t/s?a31

                      About Wizzard Software

Wizzard Software -- http://www.wizzardsoftware.com/-- architects  
solutions to business problems using its expertise in consulting,
speech development tools and building speech based applications
for the Desktop and Internet.   


XM SATELLITE: Intends to Redeem 8.25% Series B Preferred Stock
--------------------------------------------------------------
XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) issued a notice to
redeem all of its outstanding 8.25% Series B Convertible
Redeemable Preferred Stock due 2012.

Each share of Series B preferred stock has a liquidation
preference of $50 and is convertible into shares of XM's Class A
common stock at $40 per share.

As of May 26, 2006, there were 107,985 shares of Series B
preferred stock outstanding.

The redemption of the Series B preferred stock, plus payment of
accrued dividends, is expected to
occur on June 26, 2006.

Headquartered in Washington, D.C., XM Satellite Radio Inc. --
http://www.xmradio.com/-- an emerging force in broadcasting, was  
incorporated in 1992 and is a wholly owned subsidiary of XM
Satellite Radio Holdings Inc. XM is publicly traded on the NASDAQ
exchange since October 5, 1999.  XM has broadcast facilities in
New York and Nashville, and additional offices in Boca Raton,
Florida; Southfield, Michigan; and Yokohama, Japan.

XM Satellite Radio Holdings Inc.'s 1.75% Convertible Senior Noted
due 2009 carry Moody's Investors Service's Caa3 rating and
Standard & Poor's CCC- rating.


* Keith Gercken Joins Sheppard Mullin in San Francisco as Partner
-----------------------------------------------------------------
Keith R. Gercken has joined the San Francisco office of Sheppard,
Mullin, Richter & Hampton LLP as a partner.  Mr. Gercken, most
recently with Pillsbury Winthrop Shaw Pittman in San Francisco, is
a member of the firm's Tax, Employee Benefits, Trusts and Estate
Planning practice group.

Mr. Gercken's practice includes all areas of business income
taxation, with emphasis on corporate and partnership taxation and
international transactions.  He advises corporate and individual
clients on the U.S. federal and international tax consequences on
a wide range of transactions, including taxable and tax-free
mergers and acquisitions; partnerships and joint ventures; the
formation and operation of equity funds; finance transactions;
tax-free exchanges; international licensing; foreign operations
(including cross-border joint ventures between U.S. and non-U.S.
partners); and inbound investment into the United States by non-
U.S. investors.

"Keith is a very accomplished tax attorney, and we are extremely
pleased to welcome him to the firm," Guy Halgren, chairman of the
firm, said.  "He brings nearly 20 years of experience from a
variety of organizations, including Ernst & Young and private
corporations.  His tax specialty expertise in international trade,
M&A and private equity, among others, adds a great deal of value
to the service and counsel we bring to clients."

"Sheppard Mullin is a premier law firm," commented Mr. Gercken.  
"I look forward to expanding the firm's tax practice in San
Francisco and working with my new Corporate colleagues in other
offices.  Joining a firm with a growing and successful
transactional practice offers significant opportunity for my
practice."

"We are thrilled to have Keith join us in San Francisco and
continue the expansion we've experienced in the last month," Betsy
McDaniel, managing partner of the San Francisco office, said.  
"Keith is the third partner to join us in May, along with
healthcare partner Maureen Corcoran and media defense litigator
James Chadwick.  The office, with more than 75 attorneys, now has
greater depth and breadth in these three areas of specialization."

Mr. Gercken's recent representative matters include:

     (i) representing Zions Bancorporation in connection with its
         $1.7 billion acquisition of Amegy Bancorporation,

    (ii) representing Bank of the West in connection with its $1.4
         billion acquisition of Commercial Federal Bank,

   (iii) representing SICOR Inc. in connection with its $3.4
         billion acquisition by Teva Pharmaceutical Industries
         Ltd.,

    (iv) representing Applied Molecular Evolution, Inc. in
         connection with its $400 million acquisition by Eli Lilly
         and Company,

     (v) representing a large public pension fund in connection
         with the establishment and restructuring of numerous U.S.
         domestic and international real estate investment funds,

    (vi) advising a multinational telecommunications company in
         connection with several significant stock and asset
         acquisitions and dispositions in Latin America and Asia,

   (vii) representing a Hong Kong-based restaurant developer in
         connection with the formation of a worldwide joint
         venture, and

  (viii) representing a U.S.-based financial services company in
         connection with the partial sale and restructuring of its
         investment in a Puerto Rico electric generation facility.

Mr. Gercken graduated, magna cum laude, from University of
California, Hastings College of the Law in 1987 and earned a B.A.
from University of California at Berkeley in 1983.

          About Sheppard, Mullin, Richter & Hampton LLP

Founded in 1927, Sheppard, Mullin, Richter & Hampton LLP --
http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm  
with more than 480 attorneys in nine offices located throughout
California, New York and Washington, D.C.  The firm's California
offices are located in Los Angeles, San Francisco, Santa Barbara,
Century City, Orange County, Del Mar Heights and San Diego.  
Sheppard Mullin provides legal expertise and counsel to U.S. and
international clients in a wide range of practice areas, including
antitrust, corporate and securities; entertainment, media &
communications; finance and bankruptcy; government contracts;
intellectual property; labor and employment; litigation; real
estate/land use; tax, employee benefits, trusts and estate
planning; and white collar defense.


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:

In re Bailey Asaka System Engineering Corp.
   Bankr. E.D. Va. Case No. 06-10547
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/vaeb06-10547.pdf

In re Jeff Young
   Bankr. D. Minn. Case No. 06-31099
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/mnb06-31099.pdf

In re Jonathan Creek Hideaway, Inc.
   Bankr. W.D. N.C. Case No. 06-10325
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/ncwb06-10325.pdf

In re Osaka at Docksider, Inc.
   Bankr. D. N.J. Case No. 06-14668
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/njb06-14668.pdf

In re Salon 5, Inc.
   Bankr. D. N.J. Case No. 06-14648
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/njb06-14648.pdf

In re Thomas W. Michaelis
   Bankr. N.D. Ohio Case No. 06-31227
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/ohnb06-31227.pdf

In re WILMAX Clinical Research, Inc.
   Bankr. S.D. Ala. Case No. 06-10757
      Chapter 11 Petition filed May 25, 2006
         See http://bankrupt.com/misc/alsb06-10757.pdf

In re ATP Restaurants, Inc.
   Bankr. E.D. Pa. Case No. 06-12186
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/paeb06-12186.pdf

In re American Port-O-Let Services Corp.
   Bankr. S.D. Fla. Case No. 06-12228
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/flsb06-12228.pdf

In re Double C Transportation, Inc.
   Bankr. W.D. Ark. Case No. 06-71029
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/arwb06-71029.pdf

In re George F. Rayner
   Bankr. D. Maine Case No. 06-10164
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/mnb06-10164.pdf

In re National Packaging Corporation
   Bankr. N.D. Tex. Case No. 06-32096
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/txnb06-32096.pdf

In re Palm Beach Bobcat & Trash Services, Inc.
   Bankr. S.D. Fla. Case No. 06-12231
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/flsb06-12231.pdf

In re TVL Dynamics Inc.
   Bankr. E.D. N.Y. Case No. 06-71182
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/nyeb06-71182.pdf

In re WAS, Inc.
   Bankr. N.D. Ind. Case No. 06-10796
      Chapter 11 Petition filed May 26, 2006
         See http://bankrupt.com/misc/innb06-10796.pdf

In re Budapest Restaurant Corp.
   Bankr. N.D. Ohio Case No. 06-12129
      Chapter 11 Petition filed May 29, 2006
         See http://bankrupt.com/misc/ohnb06-12129.pdf

In re Hydro-Engineering, Inc.
   Bankr. S.D. Tex. Case No. 06-32218
      Chapter 11 Petition filed May 30, 2006
         See http://bankrupt.com/misc/txsb06-32218.pdf

In re Imperial House, Inc.
   Bankr. E.D. Mich. Case No. 06-46803
      Chapter 11 Petition filed May 30, 2006
         See http://bankrupt.com/misc/mieb06-46803.pdf

In re Tex-Mex Z, Inc.
   Bankr. S.D. Tex. Case No. 06-32204
      Chapter 11 Petition filed May 30, 2006
         See http://bankrupt.com/misc/txsb06-32204.pdf

                             *********

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 G.
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.

                    *** End of Transmission ***