TCR_Public/060605.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, June 5, 2006, Vol. 10, No. 132

                             Headlines

A PARTNERS: Files Plan & Disclosure Statement in E.D. of Calif.
ADMIRAL CBO: Moody's Places Caa3 Rating on $47.5 Million Notes
AEGIS COMMS: Equity Deficit Narrows to $5.9 Million at March 31
AES CORP: Inks Prelim Pact with BNDES to Repay Brasiliana's Debt
AK STEEL: Modifying 4,600 Retirees' Health Care Benefits Plans

ALR TECH: March 31 Balance Sheet Upside Down by $20.4 Million
AMERICAN TOWER: Facing Class Action Lawsuit in Massachusetts
AMERISOURCEBERGEN: Moody's Lifts Corporate Family Rating to Ba1
AMERIVEST PROPERTIES: Stockholders Approve Liquidation Plan
APHTON CORP: U.S. Trustee Holds Organizational Meeting Today

APRIA HEALTHCARE: S&P Affirms BB+ Rating With Stable Outlook
APX HOLDINGS: 341(a) Creditors Meeting Scheduled for June 9
ARGENT SECURITIES: Moody's Puts Ba1 Rating on Class M-10 Certs.
ARVINMERITOR: DBRS Puts Rating on 2 Notes at BB Negative
ASARCO LLC: Ct. to Hear Gerald's Lift Stay Plea in Adv. Proceeding

AUTHENTIC CAJUN: Case Summary & 19 Largest Unsecured Creditors
AVAYA INC: Citicorp Extends Debt Deal Termination Date to 2011
BLAZE DIGITAL: Case Summary & 16 Largest Unsecured Creditors
BLB PROPERTIES: Case Summary & 7 Largest Unsecured Creditors
BRISTOL CDO: Moody's Junks Rating on $13MM Notes & May Downgrade

BUZZARDS BAY: Case Summary & 13 Largest Unsecured Creditors
C-BASS MORTGAGE: Fitch Rates $3.6 Million Class B-4 Certs. at BB+
CA INC: Moody's Holds Senior Unsecured Rating at Ba1
CELERO TECHNOLOGIES: 341(a) Meeting Scheduled for July 12
CENTRAL FREIGHT: Posts $10 Mil. Net Loss in Quarter Ended April 1

CHEMTURA CORP: Amends Terms of Citibank Credit Agreement
COMVERSE TECH: Unit Acquires Netcentrex for $159 Million
CONEXANT SYSTEMS: Incurs $10 Million Net Loss in Second Quarter
CONSPIRACY ENT: Chisholm Bierwolf Raises Going Concern Doubt
CRESCENT JEWELERS: Has Until June 30 to Make Lease Decisions

CSK AUTO: Moody's Lowers Rating on $225 Mil. Sr. Sub. Notes to B3
CYOP SYSTEMS: Losses & Capital Deficiency Spur Going Concern Doubt
DANA CORP: Wants to Continue Divestiture Program Obligations
DANA CORP: Committee Wants to Set Up Information-Sharing Protocol
DANA CORP: Court Extends Period to Remove Actions Until Sept. 29

DELTA MILLS: Posts $2.1 Million Net Loss in Quarter Ended April 1
DELPHI CORP: Wants to Conduct Rule 2004 Probe on Barclays Bank
DELPHI CORP: Panel Hires Buck Consultants as Actuary
DIMAIO FAMILY: Automatic Stay Didn't Stay Debtor's Lawsuit
DIRECTV HOLDINGS: Moody's Affirms Corporate Family Rating at Ba2

DRESSER INC: Settles Commerce Department Charges for $1 Million
DRESSER INC: Secures Consents to Amend 9 3/8% Sr. Notes Indenture
EL PASO: Moody's Raises Rating on Sr. Unsec. Debt to B2 from Caa1
EXECUTE SPORTS: Posts $824,621 Net Loss in 2006 1st Fiscal Qtr.
FALCONBRIDGE LTD: Acquisition Transaction Important to Inco Ltd.

G+G RETAIL: Selling Remaining Assets to Max Rave for $300,000
GATEWAY INC: District Ct. Dismisses SEC's Suit Against Former CEO
GMAC COMM: Moody's Cuts Rating on $10.9 Mil. Class L Certs. to C
HANOVER INSURANCE: S&P Affirms Low-B Ratings & Revises Outlook
HAWK CORPORATION: S&P Affirms B+ Rating & Revises Outlook to Neg.

HEALTHSOUTH CORP: Plans $1 Billion Senior Notes Issue
HELLER FINANCIAL: Moody's Holds Caa1 Rating on $9.5 Mil. of Certs.
HONEY CREEK: Amended Disclosure Statement Adds MuniMae's Comments
INCO LTD: Board Describes Teck Cominco Offer as Opportunistic
INNUITY INC: Posts $2.4 Mil. Net Loss in 2006 1st Fiscal Qtr.

INTELSAT LTD: Justice Dept. Closes Antitrust Investigation
INTERSTATE BAKERIES: Asks Court to Enforce Stay Against Sara Lee
IVOICE INC: Posts $682,797 Net Loss in 2006 First Fiscal Quarter
JACOBS INDUSTRIES: Selling Fraser Lots to Comerica for $3.9 Mil.
KAISER ALUMINUM: Asks Court to Okay ACE Insurers Settlement Pact

KARTA CORP: Confirmation Appeal Not Rendered Equitably Moot
KC CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
MACTEC INC: Moody's Puts B1 Rating on $155 Million Debt Facilities
MAXXAM Inc: Buying Back Stock from Scion for $22.3 Million
MERCHANT FIRST: Case Summary & 20 Largest Unsecured Creditors

MERRILL LYNCH: Moody's Holds Low-B Rating on Five Cert. Classes
MILLIPORE CORP: S&P Downgrades Corporate Credit Rating to BB+
MIRANT CORP: Sells Wichita Falls Facility to Signal Hill
MIRANT CORP: Battles Ensues Over Wilson's Multi-Mil. Admin. Claim
MKP CBO: Moody's Reviews B3 Rating on $25MM Floating Rate Notes

MUELLER GROUP: Moody's lifts Rating on Sr. Sec. Sub. Debt to B3
NADER MODANLO: Faces Contempt Charges over UBS Bank Account Order
NATIONAL ENERGY: Project Lenders Insist on Inclusion of Claims
NATIONAL ENERGY: Asks Court to Disallow Lehman's $7.2 Mil. Claim
NATIONAL ENERGY: Fights Tennessee Gas' $28-Million Rejection Claim

NETWORK PLUS: Miller Coffey Hired as Trustee's Tax Accountants
NEW CENTURY: Ample Liquidity Prompts DBRS' BB Issuer Rating
NEW TAOHUAYUAN: March 31 Working Capital Deficit Tops $9.9 Million
NOMURA ASSET: Moody's Puts Low-B Rating on Two Certificate Classes
NORTH AMERICAN: Posts $3 Mil. Net Loss for Period Ended March 26

NRG ENERGY: Mirant's Proposed Merger Cues S&P's Neg. CreditWatch
PARKWAY HOSPITAL: Court Extends Plan-Filing Period to June 30
PARKWAY HOSPITAL: Wants Until July 31 to Decide on Four Leases
PARMALAT USA: Investors File Amended Complaint in S.D.N.Y
PREDIWAVE CORP: Committee Hires Pachulski Stang as Counsel

PREDIWAVE CORP: Files Schedules of Assets and Liabilities
PREFERREDPLUS TRUST: S&P Raises Class A & B Cert. Ratings to B
PROBE MANUFACTURING: March 31 Stockholders' Deficit Tops $900,000
RENEWABLE FUELS: Case Summary & 20 Largest Unsecured Creditors
REUNION INDUSTRIES: Earns $4.4 Million in 2006 First Quarter

SACO I: Moody's Assigns Ba1 Rating on Class B-4 Certificates
SECURAC: Posts CA$527,332 Net Loss in 2006 1st Fiscal Qtr.
SILICON GRAPHICS: U.S. Trustee Argues Lenders' Security Interest
SILICON GRAPHICS: Has Interim Access to $130 Mil. DIP Financing
SILICON GRAPHICS: Common Stock "SGID" Symbol Changed to "SGIDE"

SITESTAR CORP: March 31 Working Capital Deficit Tops $1.8 Million
SKINVISIBLE INC: Posts $376,000 Net Loss in 2006 First Quarter
SOUTHERN FAMILY: Fitch Withdraws CC Insurer Fin. Strength Rating
SPORTS CLUB: Dec. 31 Balance Sheet Upside Down by $32 Million
SPRUCE COMM: Case Summary & 19 Largest Unsecured Creditors

STAR TELECOMMS: Trust Wants Case Kept Open Until August 31
SUMMIT CBO: Moody's Puts $232 Mil. B2 Rated Notes on Watchlist
THUNDERBIRD COVE: Case Summary & 20 Largest Unsecured Creditors
TRINITY INDUSTRIES: S&P Assigns B+ Rating to $450 Million Notes
UNITED AMERICAN: Posts $286,481 Net Loss in 2006 1st Fiscal Qtr.

UNIVERSAL DETECTION: March 31 Balance Sheet Upside Down by $3MM
US AIRWAYS: Faces Two Complaints from Midatlantic Workers
USG CORP: S&P Rates Proposed $2.8 Billion Bank Facility at BB+
UTIX GROUP: Posts $1.5 Mil. Net Loss in 2006 1st Fiscal Quarter
VELOCITY EXPRESS: April 1 Working Capital Deficit Tops $27.7 Mil.

VENTAS INC: Moody's Rates Sub. Debt & Preferred Stock at (P)B1
VIEW SYSTEMS: Posts $219,143 Net Loss in 2006 1st Fiscal Quarter
VIKING SYSTEMS: Hires Donald Tucker as Chief Executive Officer
VOIP INC: Posts $13.8 Mil. Net Loss in 2006 1st Fiscal Quarter
WALTER HORNE: Case Summary & 10 Largest Unsecured Creditors

WASHINGTON COUNTY: Moody's Withdraws B3 Corporate Family Rating
WINDSTREAM CORP: Moody's Rates Planned $2.9BB Debt Facility at Ba2

* BOND PRICING: For the week of May 29 - June 2, 2006

                             *********

A PARTNERS: Files Plan & Disclosure Statement in E.D. of Calif.
---------------------------------------------------------------
A Partners LLC filed a chapter 11 plan and an accompanying
disclosure statement with the U.S. Bankruptcy Court for the
Eastern District of California on May 26, 2006.

The Plan proposes that Ronald Allison will continue to act as the
Debtor's manager after the plan effective date.

                      Treatment of Claims

Fresco County Tax Collector's $44,324 claim, secured by a lien on
the Helm Building, will be paid over a 60-month period, with
interest accruing at 5-1/4% per annum.

The $1,219,824 secured claim collectively held by Scripps
Investments & Loans, Inc., et al., will be paid over a period of
60 months, accruing 9% interest per annum.

AB Parking Facilities, LLC's $28,600 unsecured claim will be
offset against its $4.5 million obligation to the Debtor.

The Debtor contests the amount of Mauldin-Dorfmeier Construction,
Inc.'s claim.  Mauldin-Dorfmeier asserts a $1,809,974 claim.
However, the Debtor acknowledges owing Mauldin-Dorfmeier
$1,044,974.  The amount allowed by the Court will be paid over 60
months, with interest accruing at 9% per year.

The Debtor is contesting the $630,000 claim filed by St. Pail Fire
and Marine Insurance Company.  If the Court allows the claim, the
Debtor will pay it over 60 months earning a 9% annual interest.

Metropolitan National Bank filed a claim for an unknown amount for
its claim on the ownership of the Debtor's fuel cells.  The fuel
cells are valued at $5,855,000.

Holders of general unsecured claims of $5,000 or less will be paid
in full 60 days after the plan's effective date.

The Scripps entities assert a $4,628,642 claim based on an alleged
guaranty agreement the Debtor signed over AB Parking's obligation
to the Scripps entities.  If proven in Court, the Debtor will pay
the obligation over a five-year period, earning interest at 2.5%
per annum.

Mr. Allison's $400,813 claim will be paid after all other
creditors are paid in full.

Ronald Allison Family Trust, holding a 99.5% interest in the
Debtor and Cathy Westlund, holding a 0.5% equity stake will retain
their equity interests.  No dividends will be paid until all
claims are paid in full.

A copy of the Disclosure Statement is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060604224552

The Court will consider approval of the Disclosure Statement on
July 20, 2006.

Headquartered in Fresno, California, A Partners LLC --
http://www.apartnersllc.com/-- owns the Helm Building, a 10-story
building with over 55,000 square feet of office space available
for rent.  The Debtor previously filed for chapter 11 protection
on Oct. 28, 2005 (Bankr. E.D. Calif. Case No. 05-62656).  That
case was dismissed because the Debtor failed to timely file its
Schedules and Statements.  The Company filed for its second
bankruptcy on Jan. 26, 2006 (Bankr. E.D. Calif. Case No.
06-10069).  Estela O. Pino, Esq., at Pino & Associates represent
the Debtor in its restructuring efforts.  When the Debtor filed
for its second bankruptcy, it reported assets and debts amounting
to $10 million to $50 million.  A rents receiver, Hal Kisller, was
appointed by the Superior Court of California in and for the
County of Fresco to operate the Guarantee Savings Building, which
houses the Debtor's fuel cells and other energy generating
equipment.  The receiver was appointed in connection with a
judicial foreclosure originally commenced against AB Parking
Facilities by Capital Source Finance, LLC.


ADMIRAL CBO: Moody's Places Caa3 Rating on $47.5 Million Notes
--------------------------------------------------------------
Moody's Investors Service placed these notes issued by Admiral CBO
Ltd. on watch for possible upgrade:

   * $171,500,000 Class A-1 Senior Secured Floating Rate Notes
     Due 2011

     Prior Rating: Baa3

     Current Rating: Baa3 (on watch for possible upgrade)

   * $47,500,000 Class A-2 Senior Secured Fixed Rate Notes
     Due 2011

     Prior Rating: Caa3

     Current Rating: Caa3 (on watch for possible upgrade)

According to Moody's, the rating actions are primarily the result
of significant delevering of the Class A-1 notes.


AEGIS COMMS: Equity Deficit Narrows to $5.9 Million at March 31
---------------------------------------------------------------
Aegis Communications Group, Inc., reported $765,000 of net income
on $29.8 million of revenues for the three months ended March 31,
2006, compared to a $4.4 million net loss on $15.7 million of
revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $20,029,000
in total assets and $25,985,000 in total liabilities, resulting in
a $5,956,000 stockholders' deficit.  The Company reported a
$6,721,000 stockholders' deficit at Dec. 31, 2005.

A full-text copy of the Company's 2006 Quarterly Report is
available for free http://researcharchives.com/t/s?a61

                   About Aegis Communications

Aegis Communications Group, Inc. -- http://www.aegiscomgroup.com/
-- is a worldwide transaction-based business process outsourcing
Company that enables clients to make customer contact programs
more profitable and drive efficiency in back office processes.
Aegis' services are provided to a blue chip, multinational client
portfolio through a network of client service centers employing
approximately 2,200 people and utilizing approximately 2,700
production workstations.


AES CORP: Inks Prelim Pact with BNDES to Repay Brasiliana's Debt
----------------------------------------------------------------
The AES Corporation disclosed that AES Transgas Emprendimentos
S.A., a wholly owned subsidiary of Brasiliana Energia S.A., plans
to sell a portion of its interest in Eletropaulo Metropolitana
Eletricidade de Sao Paulo S.A., the largest regulated electric
utility in Brazil.

AES and the Brazilian National Development Bank jointly own
Brasiliana.

Proceeds from the secondary sale are expected to be used by
Brasiliana to repay in full its debt to BNDES, which was
$582 million as of March 31, 2006.  Upon completion of the
proposed sale, Brasiliana will continue to control Eletropaulo by
maintaining a 76.5 percent stake of the controlling shares.  The
offering, which is subject to regulatory approval, is expected to
be completed this summer.

Eletropaulo serves approximately 5.3 million customers in Sao
Paulo state.  Through its interest in Brasiliana, AES currently
has:

   -- a 34% economic interest in Eletropaulo;

   -- a 24% economic interest in Tiete, a 2,650 megawatt
      hydroelectric power generation business; and

   -- a 46% economic interest in Uruguaiana, a 639 megawatt
      gas-fired power plant.

AES has a controlling interest in all of these businesses and also
owns AES Sul, a regulated electric utility serving approximately
one million customers in the state of Rio Grande do Sul in
southern Brazil.

                          About AES Corp

AES Corporation (NYSE:AES) -- http://www.aes.com/-- is a global
power company.  The Company operates in South America, Europe,
Africa, Asia and the Caribbean countries.  Generating 44,000
megawatts of electricity through 124 power facilities, the Company
delivers electricity through 15 distribution companies.

                            *   *   *

As reported in the Troubled Company Reporter on May 25, 2006,
Fitch affirmed The AES Corporation's Issuer Default Rating at
'B+'.  Fitch also affirmed and withdrew the ratings for the
company's junior convertible debt.  The Rating Outlook for all
remaining instruments is Stable.

As reported in the Troubled Company Reporter on March 31, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on diversified energy company The AES Corp. to 'BB-' from
'B+'.  S&P said the outlook is stable.

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


AK STEEL: Modifying 4,600 Retirees' Health Care Benefits Plans
--------------------------------------------------------------
AK Steel Corporation will modify the health care benefit plans,
effective Oct. 1, 2006, for about 4,600 of its current retirees in
order to be more cost competitive with other steel makers, and to
be consistent with the company's other retiree health care benefit
plans.  The 4,600 retirees were hourly and salaried members of the
Armco Employees Independent Federation, the union at AK Steel's
Middletown Works, the company's largest plant located in Ohio.

Currently, AEIF retirees do not share in the cost of their
virtually unlimited health care benefits, except for minimal
co-pays for office visits and prescription drugs.  AK Steel said
that about 70% of its retirees company-wide already share, in a
significant way, in the cost of their health care benefits,
including non-union salaried retirees who have shared in the costs
since 1996.  AK Steel said only its AEIF retirees, and retirees
from its Butler Works plant in Pennsylvania who were union-
represented, do not currently share in the cost of their health
care benefits, but for the minimal co-pays.

The retiree benefit modifications are similar to those AK Steel
has negotiated with the United Autoworkers of America and the
United Steelworkers of America unions, which represent AK Steel
employees at its other plants.  For example, the USW and AK Steel
agreed in 2005 to health care benefit cost sharing covering
approximately 8,000 hourly USW retirees associated with AK Steel's
Ashland Works in Kentucky, as well as numerous operations
previously shut down.  Last month, AK Steel and the UAW negotiated
health care cost sharing for about 400 current hourly retirees of
the company's Zanesville Works in Ohio.  All of the negotiated
changes cap the company's retiree health care costs at a future
date, after which the covered retirees assume all further cost
increases.

AK Steel said that its retiree health care costs have risen nearly
50% since 1999, when the now-expired AEIF contract was ratified.
Notably, the increase has been led by prescription drug costs,
which have more than doubled during that period.

"The continued rise in the cost of health care has contributed
significantly to AK Steel's lack of cost competitiveness," James
L. Wainscott, chairman, president and CEO of AK Steel, said.
"Most of our competitors have lowered their employment and
retirement costs with the aid of bankruptcy laws -- dumping
pensions onto the federal government and abandoning retiree health
care benefits.  The management of AK Steel has worked tirelessly
to reduce that cost disadvantage while continuing to fund the
generous pension and health care benefits of retirees who worked
for many generations in support of this great company."

The company sought to discuss the need to address current AEIF
retiree health care costs with the union at the outset of contract
negotiations, which began Nov. 30, 2005.  At that time, AK Steel
presented a proposal to preserve current AEIF retiree benefits
while implementing a cost-sharing plan.

"The leadership of the AEIF chose not to negotiate retirees'
health care benefits at the bargaining table," Mr. Wainscott said.
"We had hoped that the AEIF would be responsive to the dramatic
increases in health care costs and how they have threatened AK
Steel and the survival of many of the customers we depend upon for
our own livelihoods."

AK Steel is notifying the AEIF and current AEIF retirees that,
effective Oct. 1, 2006, current AEIF retirees will be subject to
monthly health care premiums, which will be adjusted annually
thereafter.  In addition, vision, dental and Medicare subsidy
benefits will be eliminated, and life insurance coverage will be
reduced for current AEIF retirees.  AEIF retirees under age 65
will pay 10% of the monthly health care premium until 2008, and
thereafter will pay all increases in the monthly premium.  Because
AK Steel is self-insured, the monthly premium amount is based on
the actual costs the company incurs to provide retiree health care
benefits.  Medicare-eligible retirees will pay 50% of the monthly
health care premium until 2008, and thereafter will pay all
increases in the monthly premium.

Effective Jan. 1, 2007, AK Steel will offer a modified health care
plan for current AEIF retirees which provides both flexibility and
cost-containment features for retirees under age 65, as well as
those age 65 and older and eligible for Medicare.  Medicare-
eligible retirees will have an option of a traditional plan or a
new Medicare Advantage Preferred Provider Organization.  The MA-
PPO option is being offered to help minimize the cost impact on
retirees.  With these modified plans, retirees will be responsible
for deductibles and co-pays for covered services.  Most of the
plans provide for maximum out-of-pocket cost protection for
catastrophic illnesses.

The table illustrates average estimated monthly costs for typical
single, two-party and family coverage under the modified plans,
beginning Jan. 1, 2007:

       Average Monthly Premium Costs For Typical Coverage

                                                        Medicare
                        Pre-65     Medicare-Eligible   Advantage
   Payment Made By   Traditional     Traditional          PPO
   ---------------   -----------     -----------          ---

   AK Steel             $1,260           $300            $200
   Retiree                 140 (1)        300 (2)         200 (2)

   AK Steel                440            150             100
   Surviving Spouse         50 (3)        150 (3)         100 (3)

   (1) Family coverage
   (2) Two-party coverage
   (3) Single coverage

AK Steel spent more than $230 million for health care benefits for
employees, retirees and their dependents in 2005.  In total, AK
Steel provides health care benefits to about 54,000 active and
retired employees and their dependents and surviving spouses.
Last month AK Steel made an early contribution of $84 million to
its employee pension fund trusts, which followed an early
$150 million voluntary contribution in 2005.

"Unlike scores of companies, AK Steel has refused to simply 'throw
in the towel' and force the government and taxpayers to shoulder
our legacy costs," Mr. Wainscott said.  "We believe there should
be a place in this country for at least one integrated steel
company that hasn't turned its back on a single retiree."

Headquartered in Middletown, Ohio, AK Steel Corp. (NYSE: AKS) --
http://www.aksteel.com/-- produces flat-rolled carbon, stainless
and electrical steel products, as well as carbon and stainless
tubular steel products, for automotive, appliance, construction
and manufacturing markets.

                         *     *     *

AK Steel Corp.'s 7-3/4% Senior Notes due 2012 carry Moody's
Investors Service's and Standard & Poor's single-B rating.


ALR TECH: March 31 Balance Sheet Upside Down by $20.4 Million
--------------------------------------------------------------
Alr Technologies Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 18, 2006.

The Company reported a $796,952 net loss on $17,417 of sales for
the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $57,850 in
total assets and $8,140,298 in total liabilities resulting in
$20,403,247 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $35,363 in total current assets available to pay
$2,662,908 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?a6c

                        Going Concern Doubt

KPMG LLP, in New York, raised substantial doubt about Alr
Technologies' 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, negative cash flows from operations and working
capital deficiency.

                          About ALR Tech

ALR Technologies, Inc., based in Winston-Salem, North Carolina,
develops and sells medical monitoring systems in the United
States.


AMERICAN TOWER: Facing Class Action Lawsuit in Massachusetts
------------------------------------------------------------
American Tower Corporation disclosed that a lawsuit purporting to
be a securities class action was filed in United States District
Court for the District of Massachusetts against the Company and
certain of its officers.  The Company intends to vigorously defend
the lawsuit.

The action alleges violations of the federal securities laws in
connection with public statements by American Tower relating to
its stock option practices and related accounting.  The Company
announced on May 19, 2006 that it was conducting an internal
review of its historic stock option granting practices.

American Tower also reported that a shareholder derivative lawsuit
was filed in state court in Massachusetts by an individual
identifying himself as a shareholder of the Company, purporting to
act on behalf of the corporation, against certain current and
former officers and directors for alleged breaches of fiduciary
duties with respect to the Company's historic stock option
granting practices.  In response to the derivative lawsuit, the
Company's board of directors plans to establish a special
litigation committee to evaluate this lawsuit.

Headquartered in Boston, Massachusetts, American Tower Corporation
(NYSE: AMT) -- http://www.americantower.com/-- is the leading
independent owner, operator and developer of broadcast and
wireless communications sites in North America.  American Tower
owns and operates over 22,000 sites in the United States, Mexico,
and Brazil.  Additionally, American Tower manages approximately
2,000 revenue producing rooftop and tower sites.

                            *   *   *

As reported in the Troubled Company Reporter on May 24, 2006,
Standard & Poor's Rating Services placed its ratings on American
Tower Corp., including its 'BB+' corporate credit rating, on
CreditWatch with negative implications.  The action followed the
Company's announcement that its board of directors has created a
special committee to conduct an internal review of the company's
historical stock option practices and related accounting.


AMERISOURCEBERGEN: Moody's Lifts Corporate Family Rating to Ba1
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of
AmerisourceBergen Corporation.  The speculative grade liquidity
rating of SGL-1 is affirmed.  The rating outlook is stable.

This rating action is based on expectations that:

   (1) drug distribution margins - though significantly lower
       under a new fee-for-service business model - will be
       sufficient to sustain current cash flow levels;

   (2) the company has enough cash resources to support its
       shareholder initiatives -- including buybacks and
       moderate-sized acquisitions, and as a result;

   (3) debt levels should remain relatively steady.

Ratings upgraded:

AmerisourceBergen Corporation:

   * Corporate Family Rating -- to Ba1 from Ba2

   * Senior unsecured notes -- to Ba1 from Ba2

Rating affirmed:

AmerisourceBergen Corporation:

    * SGL-1

ABC's Ba1 rating reflects its position as one of nation's three
major drug distributors.  The company's core drug distribution
margins are now stable to improving compared to a low point
reached during fiscal 2005 due largely to the elimination of buy
and hold opportunities.

The key non-core operating segment for the company is PharMerica,
an institutional pharmacy business that benefits from
significantly stronger margins but comprises about 15% of the
company's operating earnings.  New regulations stemming from the
Medicare Modernization Act of 2003, which became effective January
1, 2006, have resulted in reduced profitability for PharMerica.

Despite reduced margins and issues at PharMerica, ABC's cash flow
has been very strong, benefiting from one-time reductions in
inventory.  Although cash flow for the first half of 2006 was
affected by a one-time increase in accounts payable, we anticipate
cash flows for the balance of fiscal 2006 to be more
representative of a sustainable level.

ABC's cash balance of about $1.8 billion at March 31, 2006 is
expected to provide sufficient flexibility so that ABC can engage
in moderate shareholder initiatives without raising leverage.
Moody's anticipates that ultimately, much of ABC's excess cash
will be used to finance shareholder initiatives.

The stable outlook assumes ABC will be able to demonstrate top
line growth consistent with the pharmaceutical sector and generate
sufficient operating cash flow to make moderate-sized acquisitions
without significantly increasing financial leverage.

The ratings could be upgraded if the company is able to realize
margin improvement and can sustain ratios of operating cash flow
and free cash flow to adjusted debt above the range of 25%-30% and
15%-20%, respectively.

However, the ratings and outlook are sensitive to event risk, such
as any significant acquisition or decapitalization.  If ABC
experiences further deterioration in margins or its ratios of
operating and free cash flow to adjusted debt fall below the range
of 20%-25% and 10%-15%, respectively, the ratings or outlook could
face downward pressure.

AmerisourceBergen Corporation, headquartered in Valley Forge, PA,
is one of the nation's leading wholesale distributors of
pharmaceutical products and related services.


AMERIVEST PROPERTIES: Stockholders Approve Liquidation Plan
-----------------------------------------------------------
AmeriVest Properties Inc.'s stockholders approved a Plan of
Liquidation at its annual meeting, previously approved by the
Company's Board of Directors on Feb. 9, 2006.  Approval of the
Plan required the affirmative vote of the holders of a majority of
the Company's outstanding shares.  Holders of approximately 15.1
million of the outstanding shares, representing 62.6% of the votes
outstanding and 86.9% of the votes cast, voted to approve the
Plan.

                        Terms of the Plan

Under the Plan, the Company's remaining 12 office properties will
be sold on an orderly basis and proceeds distributed to
stockholders.  All 12 properties are listed with Trammell Crow
Company and the sales process is being managed through Trammell
Crow's Denver office.  Detailed information regarding the
properties was released to over 4,000 prospective purchasers on
May 1, 2006.  Now that the Plan has been approved, the Company
expects to call for offers on or about June 7, 2006.

Persons interested in making offers on all or some of the
properties should contact:

     Steve Suechting
     Executive Vice President
     Trammell Crow Company
     Telephone (303) 224-6366

"The approval of the Plan by our stockholders was the culmination
of a lengthy and thoughtful process by our Board," Charles Knight,
CEO of AmeriVest, stated.  "The sale of our remaining properties
will also follow a process designed to maximize the value achieved
for all stockholders in liquidation through a fair, open and
complete marketing and sales effort, conducted in an orderly and
professional manner.  Interest in the properties remains very
strong, and we look forward to translating that interest into
solid offers for these high quality properties."

                        Board Re-election

At the annual meeting, stockholders also re-elected Robert W.
Holman Jr., John A. Labate and Jerry J. Tepper to the Company's
Board of Directors to serve until their successors are elected.

                   About AmeriVest Properties

Headquartered in Denver, Colorado, AmeriVest Properties Inc.
(AMEX: AMV) -- http://www.amvproperties.com/-- provides Smart
Space for Small Business(TM) in Denver, Phoenix, and Dallas
through the acquisition, repositioning and operation of multi-
tenant office buildings in those markets.


APHTON CORP: U.S. Trustee Holds Organizational Meeting Today
------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Aphton
Corporation's creditors at 10:00 a.m. today, June 5, 2006, at the
J. Caleb Boggs Federal Building, 844 North King Street, Suite
5209, in Wilmington, Delaware.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation --
http://www.aphton.com/-- is a clinical stage biopharmaceutical
company focused on developing targeted immunotherapies for cancer.
Aphton's products seek to empower the body's own immune system to
fight disease.  Aphton filed for chapter 11 protection on May 23,
2006. (Bankr. D. Del. Case No. 06-10510).  Michael G. Busenkell,
Esq., at Eckert Seamans Cherin & Mellot, LLC, represents the
Debtor in its restructuring efforts.   Aphton estimated its assets
and debts at $1 million to $10 million when it filed for
protection from its creditors.


APRIA HEALTHCARE: S&P Affirms BB+ Rating With Stable Outlook
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Lake
Forest, California-based home respiratory care, durable medical
equipment, and infusion therapy services provider Apria Healthcare
Group Inc. (BB+/Stable/--).

This affirmation follows Apria's proposed upsizing of its revolver
to $600 million from $500 million.

"While the transaction will lower the company's cost of borrowing
under the revolver and extend maturities by about 18 months, the
effect is not enough to outweigh the concerns that remain
regarding reimbursement in the respiratory services industry and
the effect reimbursement cuts have had on Apria's results," said
Standard & Poor's credit analyst Alain Pelanne.

These concerns are in addition to the company's weaker financial
risk profile and more aggressive financial policy as a result of
$175 million of share repurchases.

The ratings on Apria reflect:

   * the exposure of the company's narrowly focused business to
     variable third-party reimbursement policies;

   * its weaker performance in the second half of 2005; and

   * its recently more aggressive financial risk and liquidity
     profiles.

These concerns are partially mitigated by:

   * the company's leading position in providing specialized home
     health care services and equipment; and

   * its history of generating significant cash flows.


APX HOLDINGS: 341(a) Creditors Meeting Scheduled for June 9
-----------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of APX
Holdings LLC's creditors at 10:00 a.m., on June 9, 2006, at the
Office of the U.S. Trustee, Room 2610, 725 S. Figueroa St., in Los
Angeles, California.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Santa Fe Springs, California, APX Holdings LLC
-- http://www.shipapx.com/-- provides small parcel and freight
delivery services to high volume commercial customers.  The Debtor
and eight of its affiliates filed for chapter 11 protection on
Mar. 16, 2006 (Bankr. C.D. Calif. Case No. 06-10875).  Martin R.
Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represents
the Debtors in their restructuring efforts.  David W. Meadows,
Esq., and Rodger M. Landau, Esq., represent the Official Committee
of Unsecured Creditors.  When the Debtors filed for protection
from their creditors, they estimated assets and debts of more than
$100 million.


ARGENT SECURITIES: Moody's Puts Ba1 Rating on Class M-10 Certs.
---------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Argent Securities Trust 2006-W5, Asset-
Backed Pass-Through Certificates, Series 2006-W5, and ratings
ranging from Aa1 to Ba1 to the subordinate certificates in the
deal.

The securitization is backed by adjustable-rate and fixed rate
subprime mortgage loans originated through Ameriquest's wholesale
division, Argent Mortgage Company using underwriting guidelines
that are slightly less stringent than those used by Ameriquest's
retail channel -- Ameriquest Mortgage Company.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
overcollateralization, mortgage insurance, and an interest rate
swap agreement.  After taking into account the benefit from the
mortgage insurance Moody's expects collateral losses to range from
4.45% to 4.95%.

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

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

ACC has recently announced that it had entered into a settlement
agreement with forty-nine states and District of Columbia.  Under
the terms of the settlement agreement, ACC agreed to pay $295
million toward restitution to borrowers and $30 million to cover
the States' legal costs and other expenses.

In addition, ACC has agreed on behalf of itself, AMC and AMC's
retail affiliates, to supplement several of its business practices
and to submit itself to independent monitoring.

The agreement is not expected to have any material credit
implications on securitizations backed by collateral originated by
AMC, Argent or their affiliates.

The complete rating actions:

Argent Securities Trust 2006-W5, Asset-Backed Pass-Through
Certificates, Series 2006-W5

   * Cl. A-1, Assigned Aaa

   * Cl. A-2A, Assigned Aaa

   * Cl. A-2B, Assigned Aaa

   * Cl. A-2C, Assigned Aaa

   * Cl. A-2D, Assigned Aaa

   * Cl. M-1, Assigned Aa1

   * Cl. M-2, Assigned Aa2

   * Cl. M-3, Assigned Aa3

   * Cl. M-4, Assigned A1

   * Cl. M-5, Assigned A2

   * Cl. M-6, Assigned A3

   * Cl. M-7, Assigned Baa1

   * Cl. M-8, Assigned Baa2

   * Cl. M-9, Assigned Baa3

   * Cl. M-10, Assigned Ba1


ARVINMERITOR: DBRS Puts Rating on 2 Notes at BB Negative
--------------------------------------------------------
Dominion Bond Rating Service placed the ratings of ArvinMeritor
Inc. "Under Review with Negative Implications".

   * Senior Unsecured Notes Under
     Review -- Negative BB

   * Convertible Senior Unsecured Notes
     Under Review -- Negative BB

The rating action follows ARM's plans to replace its existing
unsecured bank facility with secured credit facilities.  If the
proposal is successful and there is sufficient structural
subordination, the ratings of the above-noted unsecured debt would
be reduced by one notch upon closing of the new secured
facilities.

DBRS will confirm any revisions to the Company's credit ratings
once the terms, approval process, and timing of the new facilities
are known.


ASARCO LLC: Ct. to Hear Gerald's Lift Stay Plea in Adv. Proceeding
------------------------------------------------------------------
Gerald Metals, Inc., ASARCO LLC and its debtor-affiliates and
Mitsui Company (U.S.A.), Inc., stipulated that if the Debtors file
an Adversary Proceeding, the Lift Stay Motion and its response
will be consolidated and heard concurrently by the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi.

The Debtors have commenced an Adversary Proceeding against Gerald.

In a Court-approved stipulation, the parties agree that:

    (a) Gerald may assert the allegations and claims in its Lift
        Stay Motion by way of counterclaim in the Adversary
        Proceeding;

    (b) Gerald's retention of the amounts owed to ASARCO pending
        resolution of the Adversary Proceeding will not be deemed
        a violation of the automatic stay;

    (c) all future pleadings concerning the Lift Stay Motion and
        the Stipulations will be filed in the Adversary
        Proceeding; and

    (d) Mitsui reserves its right to seek to intervene timely in
        the Adversary Proceeding.

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).


AUTHENTIC CAJUN: Case Summary & 19 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Authentic Cajun Foods, LLC
        6773 Mire Highway
        Church Point, Louisiana 70525
        Tel: (337) 873-6933

Bankruptcy Case No.: 06-50382

Type of Business: The Debtor retails meat and other food products.

Chapter 11 Petition Date: June 1, 2006

Court: Western District of Louisiana (Lafayette/Opelousas)

Judge: Gerald H. Schiff

Debtor's Counsel: H. Kent Aguillard, Esq.
                  Hoychick & Aguillard
                  P.O. Drawer 391
                  Eunice, Louisiana 70535
                  Tel: (337) 457-9331
                  Fax: (337) 457-2917

Total Assets:   $886,492

Total Debts:  $1,146,366

Debtor's 19 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Leroy Istre                      Real Estate           $301,903
6515 Mire Highway
Church Point, LA 70525

Ann Logan                        Personal Loan          $46,500
205 Long Plantation Boulevard
Lafayette, LA 70508

AICCO                                                   $35,585
1630 East Shaw Avenue, Suite 160
Fresno, CA 93710

Targil                           Open Account            $6,452

Risco                                                    $6,000

Prejeans Wholesale               Open Account            $5,983

Stelly's Auto                    Open Account            $5,261

LUBA Workers Comp.               Open Account            $3,757

Interco Companies                Open Account            $2,938

Wright Express                   Open Account            $2,579

Scairano                         Open Account            $2,280

Win Pak                          Open Account            $1,422

Tri-State Refrigeration          Open Account            $1,208

Blanchard Equipment              Open Account              $832

Falcon Rice                      Open Account              $660

Cajun Chemical                   Open Account              $629

Blanchard Service                Open Account              $578

Liberty Label                    Open Account              $514

Cochern Scales                   Open Account              $482


AVAYA INC: Citicorp Extends Debt Deal Termination Date to 2011
--------------------------------------------------------------
Avaya Inc., Avaya International Sales Limited, and Citicorp USA,
Inc., as agent for the lenders that are party to a Credit
Agreement dated Feb. 23, 2005, entered into Amendment No. 2 to the
Credit Agreement on May 26, 2006.

Among other things, Amendment No. 2:

     -- extends the termination date of the Credit Agreement to
        the earlier of May 24, 2011, and the date of termination
        in whole of the commitments pursuant to the terms of the
        Credit Agreement; and

     -- amends certain definitions which result in reductions in
        interest and various fees payable to the Lenders under
        the Credit Agreement.

A full-text copy of Amendment No. 2 is available for free
at http://researcharchives.com/t/s?a83

                           About Avaya

Headquartered in Basking Ridge, New Jersey, Avaya, Inc. (NYSE:AV)
-- http://www.avaya.com/-- designs, builds and manages
communications networks for more than one million businesses
worldwide, including more than 90% of the FORTUNE 500(R).  Focused
on businesses large to small, Avaya is a world leader in secure
and reliable Internet Protocol telephony systems and
communications software applications and services.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 31, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Avaya, Inc., to 'BB' from 'B+'.

As reported in the Troubled Company Reporter on Jan. 21, 2005,
Moody's Investors Service upgraded the senior implied rating of
Avaya, Inc., to Ba3 from B1.  Moody's said the ratings outlook is
positive.


BLAZE DIGITAL: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Blaze Digital Printing Services, LLC
        Burlington County Business Center
        140 Mount Holly By-Pass, Suite 5
        Lumberton, New Jersey 08048
        Tel: (609) 265-2207
        Fax: (609) 265-2276

Bankruptcy Case No.: 06-14957

Type of Business: The Debtor is digital printing company
                  providing regional businesses with
                  on-demand, high-quality digital print services.
                  See http://www.blazedigital.com

Chapter 11 Petition Date: June 2, 2006

Court: District of New Jersey (Trenton)

Judge: Raymond T. Lyons, Jr.

Debtor's Counsel: Allison M. Berger, Esq.
                  Fox Rothschild LLP
                  997 Lenox Drive, Building 3
                  Lawrenceville, New Jersey 08648
                  Tel: (609) 896-3600
                  Fax: (609) 896-1469

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 16 Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
Xerox Corporation                         $811,818
P.O. Box 827598
Philadelphia, PA 19182-7598

Chris Ognibene                            $100,000
c/o David Alan Klein, Esq.
Ten Grove Street
P.O. Box 117
Haddonfield, NJ 08033

Cadmus                                     $37,117
1801 Bayberry Court, Suite 200
Richmond, VA 23226

RIS Paper Company                          $36,680

Mountain Printing Co. Inc.                 $30,017

Mailroom Systems, Inc.                     $27,471

Print Finishing Systems, Inc.              $24,538

Central Lewmar Paper Company               $23,345

Enterprise Group                           $19,036

Mount Holly By-Pass, LLC                   $16,920

James R. Nicodemus                         $11,800

Aetna                                      $11,157

Neopost Leasing, Inc.                       $9,871

James A. Hillman, CPA                       $6,702

TPG Graphics, LLC                           $6,257

Northern Machine Works, Inc.                $5,650


BLB PROPERTIES: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: BLB Properties, LLC
        P.O. Box 6858
        Lees Summit, Missouri 64064

Bankruptcy Case No.: 06-41351

Chapter 11 Petition Date: June 1, 2006

Court: Western District of Missouri (Kansas City)

Debtor's Counsel: Frank Wendt, Esq.
                  Brown & Dunn, P.C.
                  911 Main Street, Suite 2300
                  Kansas City, Missouri 64105-5319
                  Tel: (816) 292-7000
                  Fax: (816) 292-7050

Total Assets: $1,174,459

Total Debts:    $881,223

Debtor's 7 Largest Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
King Hershey, P.C.                       $55,121
2345 Grand Boulevard, Suite 2100
Kansas City, MO 64108

Hawkins, Shipley, Mitchell & Co.          $8,516
200 Northwest Executive Way
Lees Summit, MO 64063

Kapke Willerth & Leonard, LLC             $5,679
221 West Lexington Street, Suite 250
P.O. Box 180
Independence, MO 64108

Cochran, Oswald & Roam, LLC               $2,019

City of Independence Utilities            $1,168

AAA Disposal Service                        $833

Missouri Gas Energy                         $583


BRISTOL CDO: Moody's Junks Rating on $13MM Notes & May Downgrade
----------------------------------------------------------------
Moody's Investors Service placed on watch for possible downgrade
the ratings of the following classes of notes issued by Bristol
CDO I, Limited, a collateralized debt obligation issuer:


   * $30,000,000 Class B Second Priority Senior Secured Floating
     Rate Notes Due 2037

     Prior Rating: A2

     Current Rating: A2, on watch for possible downgrade

   * $13,000,000 Class C Third Priority Secured Floating
     Rate Notes Due 2037

     Prior Rating: Caa3

     Current Rating: Caa3, on watch for possible downgrade

The rating actions reflect the deterioration in the credit quality
of the transaction's underlying collateral portfolio, the
occurrence of asset defaults and par losses, and the failure of
certain coverage tests, according to Moody's.

As reported in the April 2006 trustee report, the weighted average
rating factor of the portfolio was 1282, compared to the
transaction's initial level of 165, the Class A/B interest
coverage ratio was 106.9%, compared to the trigger level of
107.5%, the Class C interest coverage ratio was 94.9%, compared to
the trigger level of 102.5%, the Class A/B overcollateralization
ratio was 101.5%, compared to the trigger level of 104.5%, and the
Class C overcollateralization ratio was 92.5%, compared to the
transaction's trigger level of 102%.


BUZZARDS BAY: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Buzzards Bay Golf, Inc.
        19 Bay Pointe Drive
        Onset, Massachusetts 02558

Bankruptcy Case No.: 06-11659

Type of Business: The Debtor maintains a golf course.

Chapter 11 Petition Date: June 1, 2006

Court: District of Massachusetts (Boston)

Judge: William C. Hillman

Debtor's Counsel: Pamela A. Harbeson, Esq.
                  Looney and Grossman, LLP
                  101 Arch Street
                  Boston, Massachusetts 02110
                  Tel: (617) 951-2800

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 13 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
US Small Business Admin.         Bank Loan             $103,061
Joanne Bouchard
c/o SEED Corp.
80 Dean Street
Taunton, MA 02781

Daniel Friel, CPA                Services               $11,975
275 Syman Street, Suite 280
Waltham, MA 02717

Bisco                            Trade Debt              $2,039
60 Stergis Way
Dedham, MA 02026

Turf Enhancement Enterprises     Trade Debt              $1,435

R&R Products, Inc.               Trade Debt                $802

Diamond Chemical                 Trade Debt                $547

Turf Products Corporation        Trade Debt                $342

Cape Cod Battery, Inc.           Trade Debt                $112

Do It Yourself Auto Parts        Trade Debt                 $85

Steve Willand, Inc.              Trade Debt                 $72

Douglas Machine Shop             Trade Debt                 $49

Collector - Town of Wareham      Taxes                      $20

Hi-Line                          Trade Debt                 $17


C-BASS MORTGAGE: Fitch Rates $3.6 Million Class B-4 Certs. at BB+
-----------------------------------------------------------------
C-BASS mortgage loan asset-backed certificates, series 2006-CB4,
were rated by Fitch Ratings:

   -- $411,826,000 class A senior certificates 'AAA'
   -- $18,222,000 class M-1 'AA+'
   -- $17,181,000 class M-2 'AA'
   -- $10,152,000 class M-3 'AA-'
   -- $8,850,000 class M-4 'A+'
   -- $8,850,000 class M-5 'A'
   -- $8,069,000 class M-6 'A-'
   -- $9,631,000 class B-1 'BBB+'
   -- $8,069,000 class B-2 'BBB'
   -- $5,206,000 class B-3 'BBB-'
   -- $3,644,000 class B-4 'BB+'

The 'AAA' rating on the senior certificates reflects:

   * the 20.90% initial credit enhancement provided by the 3.50%
     class M-1;

   * 3.30% class M-2;

   * 1.95% class M-3;

   * 1.70% class M-4;

   * 1.70% class M-5;

   * 1.55% class M-6;

   * 1.85% privately offered class B-1;

   * 1.55% privately offered class B-2;

   * 1.00% privately offered class B-3;

   * 0.70% privately offered class B-4; and

   * overcollateralization.

The initial and target OC is 2.10%.  All certificates have the
benefit of excess interest.

In addition, the ratings also reflect:

   * the quality of the loans;

   * the soundness of the legal and financial structures; and

   * the capability of Litton Loan Servicing LLP (rated 'RPS1' by
     Fitch) as servicer.

The collateral pool consists of fixed- and adjustable-rate
mortgage loans and totals $520.6 million as of the cut-off date.
The weighted average original loan-to-value ratio is 79.8%.

The average outstanding principal balance is $206,603, the
weighted average coupon is 7.836% and the weighted average
remaining term to maturity is 352 months.  The weighted average
credit score is 634.  The loans are geographically concentrated
in:

   * California (37.20%),
   * Florida (16.66%), and
   * Arizona (7.94%).

The mortgage loans in the mortgage pool were originated or
acquired by various mortgage loan originators.  Approximately
19.83%, 17.07%, 12.91% and 12.75% of the mortgage loans were
originated or acquired by Encore Credit Corp., Ownit Mortgage
Solutions, Ameriquest Mortgage Company and First NLC Financial
Services, LLC., respectively.

The remaining mortgage loans were originated by mortgage loan
originators that each originated less than 10% of the entire pool
of mortgage loans.


CA INC: Moody's Holds Senior Unsecured Rating at Ba1
----------------------------------------------------
Moody's Investors Service affirmed the Ba1 senior unsecured rating
for CA, Inc. and has revised its rating outlook to negative from
positive.  The outlook revision to negative is prompted by the
company's May 30th announcement that it will delay the release of
its fourth quarter and fiscal year ended March 31, 2006 earnings
report and has yet to conclude its review of forecasting,
processing, and monitoring of sales commissions.

The revision reflects challenges the company has to implement
effective financial controls, the recent departure of key
personnel, including the company's chief software architect,
financial officer, and operating officer, as well as subdued
billings performance, which the company announced on May 30
declined slightly in fiscal 2006, excluding acquisition related
products and accelerated customer payments.

The company's Ba1 senior unsecured rating reflects its portfolio
of mission critical software product offerings and large installed
base of a diverse set of creditworthy clients.  However, the
rating also reflects the company's unsettled fulfillment of the
terms of the Deferred Prosecution Agreement, subdued organic
client billings growth, competition from integrated and non-
integrated technology vendors, and exposure to mature mainframe
and Unix markets.

CA's SGL-1 liquidity rating reflects the company's sizable free
cash flow and ample internal and external sources of liquidity.
Liquidity sources include cash and marketable securities balances
of $1.8 billion at Dec. 31, 2005 and a $1 billion unused revolving
credit facility.

Headquartered in Islandia, New York, CA, Inc. is an enterprise
software vendor for enterprise management, security, and storage
applications.


CELERO TECHNOLOGIES: 341(a) Meeting Scheduled for July 12
---------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Celero
Technologies, Inc., fka Sima Training Holdings, Inc.'s, creditors
at 2:30 p.m., on July 12, 2006, at the Office of the U.S.
Trustee, Meeting Room, Suite 501, 833 Chestnut Street in
Philadelphia, Pennsylvania.  This is the first meeting of
creditors after the Debtors' chapter 11 case was converted to a
chapter 7 proceeding.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

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.  Edward J. Didonato Fox Rothschild LLP
represent the chapter 7 trustee.


CENTRAL FREIGHT: Posts $10 Mil. Net Loss in Quarter Ended April 1
-----------------------------------------------------------------
Central Freight Lines, Inc., filed its first quarter financial
statements for the three months ended April 1, 2006, with the
Securities and Exchange Commission on May 16, 2006.

The Company reported a $10,341,000 net loss on $78,933,000 of
revenues for the three months ended April 1, 2006.

At April 1, 2006, the Company's balance sheet showed $157,467,000
in total assets, $119,292,000 in total liabilities, and
$38,175,000 in stockholders' equity.

The Company's April 1 balance sheet also showed strained liquidity
with $53,612,000 in total current assets available to pay
$64,994,000 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 April 1, 2006, are available for free at
http://ResearchArchives.com/t/s?a86

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
McGladrey & Pullen, LLP, in Dallas, Texas, raised substantial
doubt about Central Freight Lines, 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 and negative
working capital.

Central Freight Lines, Inc. -- http://www.centralfreight.com/--  
is a regional less-than-truckload trucking company that has
operations in the Southwest, Midwest, and Northwest regions of the
United States.  The Company offers inter-regional service between
operating regions and maintain alliances with other similar
companies to complete transportation of shipments outside the
Company's operating territory.


CHEMTURA CORP: Amends Terms of Citibank Credit Agreement
--------------------------------------------------------
Effective May 24, 2006, Chemtura Corporation entered into
amendment No. 4 to the Credit Agreement, dated as of July 1, 2005,
with certain of its lenders and Citibank, N.A., as agent.

Amendment No. 4:

   a) amended the definition of "EBITDA" in Section 1.01 by
      increasing the basket of expenses in connection with the
      merger with Great Lakes Chemical Corporation from
      $50 million to $75 million and by increasing the basket of
      antitrust related legal expenses from $20 million to
      $40 million; and

   b) amended Section 5.03(b) (Interest Coverage Ratio) by
      changing the required ratio of Consolidated EBITDA of the
      Company and its subsidiaries to Interest Expense of the
      Company and its subsidiaries on June 30, 2006 from 4.25:1.00
      to 4.00:1.00; on September 30, 2006 from 4.25:1.00 to
      4.00:1.00; and on Dec. 31, 2006 from 4.50:1.00 to 4.25:1.00.

A copy of Amendment No. 4 to the Credit Agreement is available for
free at http://researcharchives.com/t/s?a7e

                         About Chemtura

Headquartered in Middlebury, Connecticut, Chemtura Corporation
(NYSE: CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop protection
and pool, spa and home care products.  With pro forma 2005 sales
of $3.9 billion, the company has approximately 7,300 employees
around the world.

                          *     *     *

As reported in the Troubled Company Reporter on Mar 17, 2006,
Standard & Poor's Ratings Services revised its outlook on
Middlebury, Connecticut-based Chemtura Corp. to positive from
stable and affirmed the existing 'BB+' ratings.

As reported in the Troubled Company Reporter on Sept. 26, 2005,
Moody's Investors Service affirmed Ba1 ratings on all of Chemtura
Corporation's outstanding $1.27 billion of senior unsecured debt
obligations, and changed the outlook on the company's ratings to
negative from stable.


COMVERSE TECH: Unit Acquires Netcentrex for $159 Million
--------------------------------------------------------
Comverse Technology, Inc.'s subsidiary, Comverse Ltd., completed
its acquisition of privately held Netcentrex S.A., for
approximately $159 million in cash, subject to certain post-
closing adjustments and a contingent earnout of up to $16 million
based upon achievement of certain financial targets by the
Netcentrex business.

The combination of Netcentrex with Comverse's portfolio of value-
added services and billing solutions, is expected to benefit
operators deploying services in the Voice-over-Internet Protocol
and IP Multimedia Subsystem domains.

Raz Alon, interim Chief Executive Officer of Comverse Technology,
said, "The acquisition of Netcentrex is yet another example of our
strategy to augment the strong product portfolio and market
presence of our business units with talented people and leading
technologies focused on emerging growth opportunities.  We believe
this combination opens new avenues of growth for Comverse, and
strengthens its position as a leader in VoIP- and IMS-related
solutions."

Zeev Bregman, Chief Executive Officer of Comverse, Inc., the
company's network systems subsidiary, said, "Netcentrex
complements our product portfolio, technology, and strategic
direction.  Netcentrex's leading telco-grade application server,
rich IP Centrex, Class 5 and video services and proven market
position (with over 3M live VoIP lines), together with Comverse
Inc.'s telecom value-added services and billing leadership, create
a synergetic, unique VoIP, FMC and IMS offering serving wireless,
cable, fixed, MVNO and Internet-based communication service
providers."

Olivier Hersent, Chairman and CTO of Netcentrex, said, "We are
pleased to join the Comverse team.  We believe the combination of
Comverse and Netcentrex will benefit our customers, and will
enable us to be a leading provider in the emerging IMS and FMC
domains."

Netcentrex brings to Comverse, Inc. a broad suite of software-
based converged voice-video-data-over-IP solutions, supporting the
consumer and enterprise offerings of approximately 50 service
providers, including AOL Germany, Comunitel (Tele2), Fastweb,
France Telecom, Telefonica Deutschland GmbH and Tiscali.

For the year ended December 31, 2005, Paris-based Netcentrex
generated revenues of approximately $50 million.

The acquisition is projected to be neutral to the company's fiscal
2006 (year ending January 31, 2007) pro forma net income.  Pro
forma net income excludes the impact of, among other items,
purchase accounting adjustments related to the write-down of
deferred revenue, amortization of intangibles, and other
acquisition-related costs.

                            About Comverse

Comverse, a unit of Comverse Technology, Inc. (NASDAQ: CMVT) --
http://www.comverse.com/-- provides software and systems that
enable network-based multimedia enhanced communication and billing
services.  Over 450 communication and content service providers in
more than 120 countries use Comverse products to generate
revenues, strengthen customer loyalty and improve operational
efficiency.

                         *     *     *

As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services held its ratings on Comverse
Technology Inc. on CreditWatch with negative implications, where
they were placed on March 15, 2006, on the disclosure that the
board of directors at Comverse had created a special committee to
review matters relating to the company's stock option grants and
the likely need to restate prior-period financial results.

As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's placed its corporate credit and senior unsecured
debt ratings on Comverse Technology on CreditWatch with negative
implications.  The company has S&P's 'BB-' corporate credit and
senior unsecured debt ratings.


CONEXANT SYSTEMS: Incurs $10 Million Net Loss in Second Quarter
---------------------------------------------------------------
Conexant Systems, Inc., reported its financial results for the
second quarter ended March 31, 2006, to the Securities and
Exchange Commission on April 28, 2006.

For the three months ended March 31, 2006, the Company disclosed a
$10.1 million net loss on $242.5 million of net revenues, compared
to a $73.1 million net loss on $169.7 million of net revenues for
the year ended Sept. 30, 2005.

As of March 31, 2006, the Company's balance sheet showed total
assets of $1.8 billion and total debts of $1.3 billion.  At March
31, 2006, the Company had an accumulated deficit of
$4,087,569,000, compared to a $4,053,166,000 deficit for the year
ended Sept. 30, 2005.

A full-text copy of Conexant Systems' Quarterly Report is
available for free at http://researcharchives.com/t/s?a54

Conexant Systems, Inc. -- http://www.conexant.com/-- is a fables
semiconductor company.  The company has approximately 2,400
employees worldwide, and is headquartered in Newport Beach,
California.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 20, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Newport Beach, California-based Conexant Systems, Inc.,
to 'B-' from 'B' on projections of sharply reduced sales and
profitability over the next few quarters.  The outlook is
negative.


CONSPIRACY ENT: Chisholm Bierwolf Raises Going Concern Doubt
------------------------------------------------------------
Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, raised
substantial doubt about Conspiracy Entertainment Holdings, 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
operating losses and lack of working capital.

The Company reported a $1,051,105 net loss on $1,397,891 of total
revenues for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $1,027,873 in
total assets and $3,450,109 in total liabilities, resulting in a
$2,422,236 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $194,265 in total current assets available to pay $1,911,659
in total current liabilities coming due within the next 12 months.

A full-text copy of the Company's 2005 Annual Report is available
http://ResearchArchives.com/t/s?a71

                  About Conspiracy Entertainment

Conspiracy Entertainment Holdings, Inc., develops,  publish, and
markets interactive video games software.  The company also
publishes titles for hardware platforms like Sony's PlayStation,
Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance.


CRESCENT JEWELERS: Has Until June 30 to Make Lease Decisions
------------------------------------------------------------
The Hon. Edward D. Jellen of the U.S. Bankruptcy Court for the
Northern District of California extended, the period within which
Crescent Jewelers, Inc., can assume, assume and assign, or reject
non-residential real property leases to the earlier of June 30,
2006, or the confirmation of a plan of reorganization in the
Debtor's case.

The Court will convene a hearing no later than July 21, 2006, for
lease rejection or assumption requests made before the June 30
deadline.

Steven G. Varner, the Debtor's chief restructuring officer, states
that the Debtor can't make fully-informed lease decisions that
maximize value and minimize loss to its estate until there is
greater clarity regarding the outcome of its merger and
acquisition and plan processes.

Mr. Varner assures the Court that the Debtor is timely performing
all postpetition obligations and intends to continue to meet those
obligations attributable to postpetition occupancy unless and
until a particular lease is rejected.

A 17-page list of the Debtor's remaining nonresidential real
property leases is available for free at:

                http://researcharchives.com/t/s?a46

Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- is the largest jewelry retailer
on the West Coast with over 160 stores in six western states.  The
Company filed for chapter 11 protection on August 11, 2004 (Bankr.
N.D. Cal. Case No. 04-44416).  Lee R. Bogdanoff, Esq. at Klee,
Tuchin, Bogdanoff and Stern represents the Debtor in its chapter
11 case.  John D. Fiero, Esq., Kenneth H. Brown, Esq., and Tobias
S. Keller, Esq., at Pachulski, Stang, Ziehl, Young and Jones
represent the Official Committee of Unsecured Creditors.


CSK AUTO: Moody's Lowers Rating on $225 Mil. Sr. Sub. Notes to B3
-----------------------------------------------------------------
Moody's Investors Service downgraded all long term ratings of CSK
Auto, Inc., and lowered the company's speculative grade rating to
SGL-4 from SGL-2.

Ratings downgraded and left on review for further possible
downgrade:

   * Corporate family rating to B1 from Ba3;

   * $100 million senior unsecured convertible notes due 2025
     to B1 from Ba3;

   * $125 million senior unsecured notes due 2025
     to B1 from Ba3, and

   * $225 million senior subordinated notes due 2014
     to B3 from B2.

Rating lowered:

Speculative grade liquidity rating to SGL-4 from SGL-2.

This downgrade action follows CSK's recent announcement that due
to the continuing Audit Committee-led investigation into potential
accounting errors and irregularities, it is unlikely to file its
financial statements with the SEC by the July 2, 2006 deadline for
filing financial statements as required by its convertible debt
instruments and its credit agreement lenders.

Absent waivers and agreements with its lenders and convertible
debt holders or committed replacement funding, the failure to file
financial statements would likely result in severely impaired
liquidity due to the ability of lenders and convertible debt
holders to accelerate.

The company has obtained a waiver of default from its credit
agreement lenders; however, the Company has received notices of
default relative to its convertible notes. In addition, the
trustee for the senior subordinated notes has issued a default
notice, which CSK is presently contesting.

Moody's noted that the company has announced that it is in the
process of negotiating alternative liquidity arrangements should
it not receive an additional waiver from its lenders and
agreements with its convertible debt holders, and has received a
highly confident letter for such alternative financing from a
major investment bank.

In addition, as a result of the inability to file financials for
FYE 2005 as well as Q1 2006, there is a lack of visibility with
respect to CSK's financial performance since the end of Q3 2005,
though the company's limited disclosures regarding revenues and
cash flows indicate that the investigation is not having a
material impact on the operations of the business.

The downgrade of the speculative grade liquidity rating to SGL-4
reflects the likelihood that the company will require waivers and
agreements with its lenders and convertible debt holders or
alternative financing arrangements and the near term risk that
debt could be accelerated if such waivers and agreements are not
obtained or alternative financing arrangements put in place.

While CSK has announced that it is continuing to generate free
cash flow, there is currently a lack of visibility regarding the
company's cash generation and liquidity profile.

Moody's ongoing review is focusing on CSK's plans to ensure that
it has adequate liquidity to accommodate the likelihood that it
will be unable to file financial statements by July 2, as well as
for the duration of the ongoing review into accounting
irregularities.

The company's long term ratings could be lowered if the company is
unable to demonstrate that it has received all necessary waivers
and entered into all necessary agreements well ahead of July 2 or
that it has certain alternative financing arrangements in place.

CSK Auto, Inc. is the operating subsidiary of CSK Auto Corp.,
headquartered in Phoenix, Arizona. CSK, operating primarily in the
Western U.S., is one of the largest auto parts retailers with
1,273 stores and revenues of $1.6 billion in the year ended
January 2005.  The Company operates stores under the names Checker
Auto Parts, Schuck's Auto Supply, Kragen Auto Parts, and Murray's
Discount Auto Stores.


CYOP SYSTEMS: Losses & Capital Deficiency Spur Going Concern Doubt
------------------------------------------------------------------
De Leon & Company, P.A., in Pembroke Pines, Florida, raised
substantial doubt about CYOP Systems International Incorporated'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 from operations and capital deficiency.

The Company reported a $2,012,050 net loss on $8,138 of revenues
for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $2,432,962 in
total assets and $3,064,916 in total liabilities, resulting in a
$631,953 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $693,073 in total current assets available to pay $3,064,915
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?a70

CYOP Systems International Incorporated and its subsidiaries
provide multimedia transactional technology solutions and services
for the entertainment industry.  The Company's range of products
and services include financial transaction platforms for on-line
video games, licensed online gaming software and integrated
e-commerce transaction technology for on-line merchants.


DANA CORP: Wants to Continue Divestiture Program Obligations
------------------------------------------------------------
Dana Corporation and its debtor-affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of New York
to continue to honor certain obligations under their historic
divestiture practice.

Prior to their bankruptcy filing and as part of the Divestiture
Program and their overall restructuring efforts, the Debtors
announced the sale or planned closure of several of their
businesses and facilities.  Among other things, the Debtors
disclosed:

   (a) the sale and exit of their flight operations business;

   (b) the closure of their facilities in Bristol, Virginia, and
       Buena Vista, Virginia, in their Automotive Systems Group
       as part of their move to a lower-cost production
       footprint; and

   (c) the planned divesture of their Engine Hard Parts Division,
       Fluids Division and Pump Products Division, which
       collectively employ more than 9,800 employees, generate
       more than $1,200,000,000 in revenues and operate in 44
       locations worldwide.

Consistent with past practice under their Divestiture Program,
the Debtors entered into 59 agreements with many of their
employees in the ordinary course of business related to the
Divestitures.

According to Corinne Ball, Esq., at Jones Day, in New York, five
of those agreements provide for severance on the termination of
the Flight Operations employees as a result of the sale and exit
of that division, and 22 of them provide for severance on the
closure of the Bristol and Buena Vista Facilities.  The remaining
32 Divestiture Agreements relate to the three proposed Division
Divestitures and provide for a sale completion incentive payment
to be paid only upon the sale and transition of the business to a
new owner.

Specifically, under the five Flight Operations Agreements:

   1. the Debtors are required to make a payment to each Flight
      Operations employee equal to 25% of annual salary within 60
      days after termination, provided that certain circumstances
      have been satisfied; and

   2. the Flight Operations employee is required to maintain the
      confidentiality of the agreement and sign a release prior
      to receiving payment.

Under the 22 Bristol and Buena Vista Facilities Agreements:

   1. the Debtors are required to make a payment to each
      employee, in an amount generally representing between two
      and five months of salary within 15 days after termination,
      provided that certain circumstances have been satisfied;
      and

   2. the employee must, among other things:

        -- remain employed with the company until termination;

        -- cooperate in the transfer of production to other
           facilities;

        -- maintain the confidentiality of the agreement; and

        -- sign a release prior to receiving payment.

Under the 32 Division Divestiture Agreements:

   1. upon the sale of the business and subject to certain
      conditions, the Debtors are required to make a sale
      completion incentive payment in two separate installments;

   2. the first installment, equal to 50% of the Incentive
      Payment, will be paid in cash within 60 days after the
      closing of any sale, provided that the employee remains
      employed by the company in his or her current position on
      the closing date;

   3. the second installment, equal to 50% of the Incentive
      Payment, will be paid in cash within 60 days after the
      expiration of six months from the closing date, provided
      that the employee accepts employment with the buyer as of
      the closing date and remains employed by the buyer for six
      months after the closing date;

   4. alternatively, the second installment will be paid by the
      Debtors within 60 days after the closing date if the
      employee does not receive an offer of employment with the
      buyer;

   5. in addition to the Incentive Payment, the Division
      Divestiture employee is entitled to a severance payment
      between 50% and 100% of annual salary in the event of a
      termination other than for cause, by the employee for good
      reason or for disability.  The severance payment must be
      paid within 60 days of the Qualifying Termination.

The Debtors' obligations under the Flight Operations Divestiture
Agreements total around $147,000, and the obligations under the
Bristol and Buena Vista Facilities Agreements amount to $206,000,
Ms. Ball relates.  The Debtors' aggregate obligations under the
Division Divestiture Agreements total approximately $2,486,000
for the Incentive Payments and $3,524,000 for the severance
payments.

Under the Divestiture Program, the Debtors have historically
caused the buyer of their assets to assume the severance portion
of those agreements.  Accordingly, the Debtors expect that their
obligations under the Division Divestiture Agreements will be
limited to the Incentive Payment portion.

The Debtors have confirmed with Miller Buckfire & Co., their
current investment banker, that providing for the Divestiture
Agreements to ensure the assistance of critical employees during
the closure and selling process is not only critical to insure a
smooth and successful transition, but is also an ordinary course
industry practice.

The Divestiture Agreements were handled by the Debtors' corporate
development specialists and extended to employees that they
identified as necessary to:

   * assist in the marketing of the business;

   * assist in the sale and related diligence requirements;

   * enable them to assure potential buyers of adequate
     management to transition and maintain the business until a
     sale closes; and

   * assure that the value of the business is maintained and
     hence, the sale price obtained is maximized during a
     process that takes many months.

The offering memorandum for the Engine Hard Parts Division has
recently been distributed, and the offering memoranda for the
Fluids and Pump Products Divisions will follow, Ms. Ball
discloses.

According to Ms. Ball, the Debtors' Chapter 11 cases have caused
a great sense of uncertainty among the Debtors' employees, which
has led to the departure of at least a few individuals that had
Divestiture Agreements.  The loss of more people will seriously
jeopardize the Debtors' ability to preserve the value of the
businesses to be divested and will pose a serious threat to the
ability to transition business to Mexico or other facilities and
to asset buyers.

                      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 No. 10;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


DANA CORP: Committee Wants to Set Up Information-Sharing Protocol
-----------------------------------------------------------------
In compliance with Section 1102(b)(3) of the Bankruptcy Code, the
Official Committee of Unsecured Creditors appointed in Dana
Corporation and its debtor-affiliates' chapter 11 cases will
establish and maintain a Web site to make certain non-Confidential
Information available to general unsecured creditors.

The information available on the Committee Web site will include:

   (a) the Debtors' bankruptcy filing;

   (b) the case number;

   (c) the contact information for the Debtors and any
       information hotlines that they establish, the Debtors'
       counsel and the Committee counsel;

   (d) the voting deadline with respect to any plan filed in
       the Debtors' cases;

   (e) access to the claims docket as and when established by the
       Debtors or any claims and noticing agent retained in the
       Debtors' cases;

   (f) a general overview of the Chapter 11 process;

   (g) press releases, if any, issued by the Committee or by the
       Debtors;

   (h) links to other relevant Web sites -- e.g. the Debtors'
       corporate Web site, the Bankruptcy Court Web site and the
       Web site of the Office of the United States Trustee; and

   (i) any other information that the Committee, in its sole
       discretion, deems appropriate, subject to certain
       restrictions and limitations.

In addition, the Committee will establish an e-mail address to
allow unsecured creditors to send questions and comments in
connection with the Debtors' cases.  A link to this e-mail
address will be made available on the Committee Web site.

As reported in the Troubled Company Reporter on April 6, 2006, at
the Debtors' request, the U.S. Bankruptcy Court for the Southern
District of New York clarified that the Committee was not
authorized or required to provide confidential or privileged
information to the general creditor constituency at large pursuant
to Section 1102(b)(3)(A) of the Bankruptcy Code.  The Initial
1102(b)(3)(A) Order did not set forth a detailed protocol for
disseminating information.  Instead, it envisioned that the
particular procedures for disseminating information would be
addressed by a future motion to be brought by the Committee.

Subject to the Initial 1102(b)(3)(A) Order's restrictions
relating to Confidential Information, the Committee through its
professionals or designated representatives will, pursuant to
Section 1102(b)(3)(A), be authorized to:

   (a) provide access to non-confidential information to
       unsecured creditors; and

   (b) solicit and receive comments from unsecured creditors.

In responding to any comment or request for information from any
person or entity, the Committee and its professionals may
exercise their reasonable judgment to determine whether the
person or entity is a bona fide unsecured creditor and whether
the comment or request is made in good faith and in connection
with that person or entity's interests as an unsecured creditor.

Accordingly, the Committee asks the Court, effective as of
March 10, 2006, to:

   (a) deem the Committee and its advisors to be in compliance
       with Section 1102(b)(3) of the Bankruptcy Code as a result
       of the implementation of the Procedures; and

   (b) find that the Committee is not required to share the
       Debtors' Confidential Information with its constituents.

                      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 No. 10;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


DANA CORP: Court Extends Period to Remove Actions Until Sept. 29
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended  the period  within which Dana Corporation and its
debtor-affiliates' may seek to remove actions to federal court
until the later of:

   (x) September 29, 2006; or

   (y) 30 days after the entry of an order terminating the
       automatic stay with respect to the particular Action
       sought to be removed.

As of their bankruptcy filing, the Debtors were parties to
numerous civil actions pending in multiple courts and tribunals.
The Debtors continue to evaluate whether they may seek to remove
certain of the Actions from state to federal court and
subsequently transfer some or all of those Actions to the U.S.
District Court for the Southern District of New York, or the
Bankruptcy Court.

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 and 11;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


DELTA MILLS: Posts $2.1 Million Net Loss in Quarter Ended April 1
-----------------------------------------------------------------
Delta Mills, Inc., filed its third quarter financial statements
for the three months ended April 1, 2006, with the Securities and
Exchange Commission on May 16, 2006.

The Company reported a $2,120,000 net loss on $32,659,000 of
revenues for the three months ended April 1, 2006.

At April 1, 2006, the Company's balance sheet showed $89,179,000
in total assets, $80,346,000 in total liabilities, and $8,833,000
in stockholders' equity.

The Company's April 1 balance sheet also showed strained liquidity
with $27,093,000 in total current assets available to pay
$48,857,000 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 April 1, 2006, are available for free at
http://ResearchArchives.com/t/s?a84

                        Going Concern Doubt

KPMG LLP in Greenville, South Carolina, raised substantial doubt
about Delta Mills, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended July 2, 2005.  The auditor pointed to the Company's
recurring losses from operations and uncertainties with regard to
its ability to operate within the covenants and availability
established by its  revolving credit facility with GMAC Commercial
Finance LLC.

Delta Mills, Inc., a wholly owned subsidiary of Delta Woodside
Industries, Inc. (OTCBB:DLWI) -- http://www.deltawoodside.com/--
produces a broad range of finished apparel fabrics in four
manufacturing plants in South Carolina.  Delta Mills sells and
distributes its fabrics through a marketing office in New York
City, with sales agents also operating from Atlanta, Chicago,
Dallas, Los Angeles, San Francisco and Mexico.

                           *     *     *

As reported in the Troubled Company Reporter on April 26, 2002,
Standard & Poor's lowered on April 24, 2002, its corporate
credit rating on Delta Mills Inc. (a wholly owned subsidiary of
Delta Woodside Inc.) to 'CCC'.


DELPHI CORP: Wants to Conduct Rule 2004 Probe on Barclays Bank
--------------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to:

   (a) authorize examination of Barclays Bank PLC pursuant to Rule
       2004 of the Federal Rules of Bankruptcy Procedure,
       pertaining to its assertion of a right of set-off regarding
       its payment obligations to Delphi pursuant to a Master
       Agreement; and

   (b) direct Barclays to produce all documents in its
       possession or control pertaining to the assertion.

Delphi Corporation and Delphi Automotive Systems Risk Management
Corporation entered into separate master swap agreements with
Barclays -- one agreement dated Nov. 23, 2001, and one dated
Dec. 6, 2001.

On Oct. 10, 2005, Barclays sent a notice of early termination to
Delphi Risk Management to terminate the December Agreement.
Barclays paid the Debtor $1,999,658 on account of that
termination.

Barclays also sent Delphi a notice of termination of the Master
Agreement on Oct. 10, 2005, but has yet to tender a termination
payment as required under the Master Agreement.

Barclays agreed in writing that it owes a matured and liquidated
debt of at least $9,049,399 to Delphi on account of the swap
Master Agreement but it has refused to pay that amount, Neil
Berger, Esq., at Togut, Segal & Segal LLP, in New York, tells the
Court.

Barclays had elected to withhold payment of the Termination
Payment to protect its set-off rights against any indemnification
payments owed by Delphi.

According to Barclays, its indemnification rights arise from
potential liability in connection with the involvement of
Barclays Capital, Inc., in the prepetition issuance of certain
Delphi bonds.

Mr. Berger notes that Barclays Capital has been named as a
defendant in a class action filed in the U.S. District Court for
the Southern District of New York, styled In re Delphi Corp.
Securities Litigation, 1:05-cv-2637.  However, Mr. Berger relates
that Delphi is not aware of any claims having been asserted in
the Litigation against Barclays Bank PLC -- the counterparty to
the Master Agreement.

Mr. Berger contends that Barclays failed to articulate any
justifiable basis or authority for the alleged set-off right.

Mr. Berger explains that the examination is intended to assist
Delphi in its efforts to recover its liquidated and matured claim
against Barclays.

"The Documents, including those related to Barclays' corporate
structure and potential liability in the Litigation, will enable
Delphi to assess the validity of any set-off claim that is being
asserted by Barclays," Mr. Berger says.

Bankruptcy Rule 2004 expressly authorizes the Court to allow an
examination of an entity upon request of a party-in-interest.

Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology.  The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481).  John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts.  Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors.  As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts.  (Delphi Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELPHI CORP: Panel Hires Buck Consultants as Actuary
----------------------------------------------------
The Official Committee of Unsecured Creditors of Delphi
Corporation and its debtor-affiliates obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
retain Buck Consultants, LLC, as its pension and benefits actuary,
nunc pro tunc to Jan. 23, 2006.

As actuary, Buck will assist and advice the Committee:

   a. with respect to all pension and benefits actuarial issues
      arising in or relating to the Debtors' Chapter 11 cases;

   b. in analyzing the Debtors' various labor agreements as they
      pertain to pension and benefit actuarial issues;

   c. in its analysis of claims and potential claims arising from
      or relating to the Debtors' pension and other post-
      employment benefits;

   d. in evaluating the impacts of modifying the Debtors' pension
      and OPEB, including the impact on the prepetition,
      postpetition and post-reorganization obligations of the
      Debtors;

   e. in its negotiations with the Debtors and other entities
      regarding the Debtors' pension and OPEB liabilities; and

   f. in preparing expert reports and provide testimony, as may
      be necessary, relating to the Debtors' obligations arising
      from pension and OPEB.

Buck will also perform necessary due diligence or litigation
support services, as requested.

The Debtors will pay Buck's professionals at standard hourly
rates.  The professionals who will primarily render services for
the Committee are:

                                             Rate per hour
                                             -------------
   Mary P. Mitchell, Director - Retirement       $448
   Duane Lee, Principal Consulting Actuary       $500

Ms. Mitchell assures the Court that Buck's professionals hold no
adverse interest against the Debtors or other parties-in-interest
in their Chapter 11 cases.

Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology.  The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481).  John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts.  Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors.  As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts.  (Delphi Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DIMAIO FAMILY: Automatic Stay Didn't Stay Debtor's Lawsuit
----------------------------------------------------------
DiMaio Family Pizza & Luncheonette, Inc., and Anthony A. DiMaio
operated the Villa DiMaio Restaurant in Whately, Massachusetts.
On February 25, 2000, DiMaio Family Pizza filed for Chapter 11
bankruptcy protection.  On December 18, 2000, the Restaurant
sustained substantial damage in a fire.  Charter Oak Fire
Insurance Company insured the property.

After the fire, on March 21, 2001, DiMaio Family Pizza's
bankruptcy case was converted from a Chapter 11 case to a Chapter
7 liquidation proceeding.  On December 27, 2001, DiMaio filed for
personal bankruptcy under Chapter 7.  Two bankruptcy trustees were
appointed, one to represent each estate, and both appellants were
represented by counsel in their respective bankruptcy proceedings.

After the fire, the Town of Whately requested that DiMaio demolish
the building and remove the destroyed property.  Because DiMaio
was without funds, the Town undertook to demolish the building and
remove the wreckage.  The Town then made a claim against DiMaio
for the demolition and debris removal, and DiMaio in turn made a
claim against Charter Oak.  Charter Oak issued an "advance" check
of $20,000 to cover these costs, payable to both DiMaio and the
Town.  After DiMaio filed for personal bankruptcy, Charter Oak
paid approximately $345,000 on the insurance claim to CIT Small
Business Lending Corporation, DiMaio's lender.

The Debtors sued the insurer to recover additional money under the
Policy for property damage and business income losses allegedly
sustained as a result of the fire, but the lawsuit was filed on
February 12, 2004 -- more than ten months after the time to sue
under Mass. Gen. Laws, ch. 175, Sec. 99, as extended with the
insurer's consent, had expired.

The Debtors say the lawsuit was timely because their respective
bankruptcies enjoined them from filing suit or action under the
Policy until their chapter 7 trustees abandoned their claims.  The
insurers say the lawsuit is time-barred and must be dismissed.

A decision by the United States Court of Appeals for the First
Circuit entered on May 30, 2006, and reported at 2006 WL 1461122,
says the Debtors are wrong because their position is predicated on
an erroneous assumption that bankruptcy proceedings created an
"automatic stay" that enjoined or abated their suit against
Charter Oak.  They correctly note that the filing of a bankruptcy
petition triggers an automatic stay under Sec. 362(a) of the
bankruptcy code, the First Circuit says, but that section provides
that a petition in bankruptcy stays the commencement or
continuation of all non-bankruptcy judicial proceedings "against
the debtor."  The stay is designed to give "breathing room" to the
debtor, and has absolutely no effect on the debtors' ability to
bring suit against other parties.


DIRECTV HOLDINGS: Moody's Affirms Corporate Family Rating at Ba2
----------------------------------------------------------------
Moody's Investors Service affirmed DIRECTV Holdings LLC's Ba2
Corporate Family rating, senior unsecured notes rating, and the
Ba1 rating on DIRECTV's senior secured credit facility.  The
rating outlook is stable.

DIRECTV's Ba2 rating and stable outlook reflect the company's
improved financial operating performance which have had a positive
impact on credit metrics and financial flexibility, though the
rating also reflects recent large share repurchase activity at The
DIRECTV Group, Inc., and concern for increasing competition.

The improved performance reflects DIRECTV's recent slower growth
rates and slightly improved churn, which have resulted in lower
subscriber acquisition costs thereby increasing EBITDA and free
cash flow.

Moody's anticipates that the company will continue to possess
strong credit metrics for its ratings despite the potential for
incremental debt in part to fund future share repurchase activity
at DTVG and in part to fund expansion of its product offerings for
competitive reasons, such as the potential investment in broadband
applications.

Moody's remains concerned that competition from Cable TV and
Telecommunications industries will negatively impact DIRECTV given
its single product offering as compared to three-plus product
bundles that will be provided by cablecos and telcos.  This
concern is a constraining factor for the rating.

Since DTVG's February 2006 announcement of its $3.0 billion stock
repurchase program, the company has already redeemed $2.56 billion
with cash and short-term investments.

The DIRECTV Group, Inc. is headquartered in El Segundo, California
and is a world-leading provider of multi-channel television
entertainment, and broadband satellite networks and services.  The
DIRECTV Group, Inc. is 38% owned by News Corporation.


DRESSER INC: Settles Commerce Department Charges for $1 Million
---------------------------------------------------------------
Dresser, Inc. and its affiliates entered into agreements with the
U.S. Department of Commerce to settle charges involving the export
and re-export of energy industry products to sanctioned countries.

On May 23, 2006, the Department of Commerce signed the orders
implementing the terms of the settlement agreements.  The Company
had identified the export transactions at issue after an
independent third party investigation.  Dresser voluntarily
reported its findings to the Department of Commerce.

On May 26, 2006, the Company paid a total of $1,100,400 in
settlement of the charges.  Under the agreements, neither the
Company nor its affiliates admitted or denied the allegations of
the Department of Commerce.

                        About Dresser

Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/
-- designs, manufactures and markets equipment and services sold
primarily to customers in the flow control, measurement systems,
and compression and power systems segments of the energy industry.
The Company has a comprehensive global presence, with over 8,500
employees and a sales presence in over 100 countries worldwide.

                          *     *     *

As reported in the Troubled Company Reporter on March 30, 2006,
Moody's Investors Service placed the Ba3 Corporate Family Rating;
the Ba3 rated senior secured Tranche C term loan maturing 2009;
the B1 rated senior unsecured term loan maturing 2010; and the B2
rated senior subordinated notes maturing 2011 for Dresser, Inc.,
under review for possible downgrade as a result of the company's
inability to file its 2005 Annual Report on Form 10-K by the
March 31, 2006, requirement.


DRESSER INC: Secures Consents to Amend 9 3/8% Sr. Notes Indenture
-----------------------------------------------------------------
Dresser, Inc., received the requisite consents to amend the
indenture governing its 9 3/8% Senior Subordinated Notes Due 2011
effective May 31, 2006.  Among the provisions to be amended, the
deadlines for reporting the company's 2005 annual and 2006
quarterly financial statements have been extended to Dec. 31,
2006, and March 31, 2007, respectively.  Various payments and
interest rate increases are associated with these deadlines and
other aspects of the amendment.

Additional details regarding the amendment and waiver are
contained in the company's Consent Solicitation Statement dated
May 9, 2006, as amended on May 26, 2006.

The Supplement seeks an amendment and waiver of certain reporting
requirements related to Dresser's previously announced delay in
issuing its 2005 annual and 2006 quarterly financial statements.

The Supplement also includes the following additional terms:

     -- An increase in the consent payment offered by the company
        from $1.25 to $2.50 per $1,000 principal amount;

     -- A 0.50% increase in the interest rate on the notes until
        the company files certain periodic reports required under
        the indenture's reporting covenant;

     -- A one-time payment of 0.50% of the outstanding principal
        amount of notes to holders of record on Dec. 31, 2006, if
        the company has not filed its financial statements for the
        quarters ended March 31, June 30, and Sept. 30, 2006, on
        or before Dec. 31, 2006, in which case the company would
        have until March 31, 2007, to make these filings;

     -- A 0.25 % interest rate increase for any time period during
        which the notes are rated CCC+ or lower  by Standard &
        Poor's; and

     -- An additional 0.25 % interest rate increase for any time
        period during which the notes are rated Caa1 or lower by
        Moody's Investors.

The consent solicitation closed at 5 p. m. New York City time on
May 31, 2006.  The supplemental indenture giving effect to the
amendment and waiver has been executed, and consents may no longer
be revoked.

                        About Dresser

Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/
-- designs, manufactures and markets equipment and services sold
primarily to customers in the flow control, measurement systems,
and compression and power systems segments of the energy industry.
The Company has a comprehensive global presence, with over 8,500
employees and a sales presence in over 100 countries worldwide.

                          *     *     *

As reported in the Troubled Company Reporter on March 30, 2006,
Moody's Investors Service placed the Ba3 Corporate Family Rating;
the Ba3 rated senior secured Tranche C term loan maturing 2009;
the B1 rated senior unsecured term loan maturing 2010; and the B2
rated senior subordinated notes maturing 2011 for Dresser, Inc.,
under review for possible downgrade as a result of the company's
inability to file its 2005 Annual Report on Form 10-K by the
March 31, 2006, requirement.


EL PASO: Moody's Raises Rating on Sr. Unsec. Debt to B2 from Caa1
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings on the debt and
supported obligations of El Paso Corporation and its subsidiaries,
all with a positive rating outlook. EP's Corporate Family Rating
is upgraded to B1 from B3; the parent company's senior unsecured
debt to B2 from Caa1; its pipeline subsidiaries' senior unsecured
debt to Ba2 from B1; and its E&P subsidiary El Paso Exploration &
Production Co.'s senior unsecured debt to B1 from B3.  Its
speculative grade liquidity rating remains SGL-3.

These rating actions end a review for possible upgrade begun on
February 15.  They follow EP's progress in meeting its 2006
financial goals by reducing roughly $2 billion in debt since the
beginning of this year and selling $500 million of common stock
last week.

"The substantial debt reduction this year and the common stock
offering mark a turning point in EP's credit history that warrants
a two-notch upgrade," says Moody's Vice President Mihoko Manabe.
"The offering allowed for reduction of debt and demonstrated
access to the stock market."

De-leveraging has stabilized EP's credit profile and supports its
long-term viability.  Over the last three years, the company has
reduced its business risks through sales of more volatile,
unprofitable business assets.  With its divestment program and
business restructuring about complete, Moody's expects EP's
financial results to gain traction and to reflect more clearly the
steady-state performance of its core pipeline and E&P businesses
than has come through during the past few years of financial
distress and restructuring.

Although EPEP has yet to demonstrate sustained organic production
volume growth in the offshore and South Texas regions that have
been problematic in the past, its reserve portfolio and spending
program have become more balanced so as to promote more
repeatability in the future.  It has demonstrated sustained
organic growth in its predominant onshore region and has recently
had some drilling successes.  The company continues to maintain
adequate liquidity resources to meet its foreseeable cash
requirements over the near term.

EP's ratings remain constrained by its still substantial debt
compared to its relatively modest shareholders' equity.
Profitability and cash flow showed improvement from debt and risk
reduction for the first quarter of 2006, although it remains to be
seen whether EP will be successful in meeting its goal of
generating roughly $400 million of positive free cash flow for the
year, which would be the first time in many years.

The positive outlook acknowledges the positive momentum in EP's
credit quality, which could accelerate as much of its remaining
legacy power and trading assets are eliminated over the course of
2006.  Nevertheless, Moody's remains cautious as to the aggressive
financial goals that EP has set out for itself in 2006, which
incorporates expectations of a dramatic year-over-year turnaround
in the company's profitability.

Negative variances could result from commodity prices, EPEP's
operating performance, as well as unusual items related to its
residual legacy assets and contingent liabilities.  If the company
fully achieves its current financial plan, its ratings could again
be upgraded over the next 12 to 18 months.

Upgrades:

Issuer: ANR Pipeline Company

   * Issuer Rating, Upgraded to Ba2 from B1

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to Ba2 from B1

Issuer: Colorado Interstate Gas Company

   * Issuer Rating, Upgraded to Ba2 from B1

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to Ba2 from B1

Issuer: El Paso Capital Trust II

   * Preferred Stock Shelf, Upgraded to a range of (P)B3 to (P)B2
     from a range of (P)Caa3 to (P)Caa1

Issuer: El Paso Capital Trust III

   * Preferred Stock Shelf, Upgraded to a range of (P)B3 to (P)B2
     from a range of (P)Caa3 to (P)Caa1

Issuer: El Paso Corporation

   * Corporate Family Rating, Upgraded to B1 from B3

   * Preferred Stock Shelf, Upgraded to (P)Caa1 from (P)Ca

   * Senior Secured Bank Credit Facility, Upgraded to B1 from B3

   * Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded
     to B2 from Caa1

   * Senior Unsecured Medium-Term Note Program, Upgraded
     to B2 from Caa1

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to B2 from Caa1

   * Senior Unsecured Shelf, Upgraded to (P)B2 from (P)Caa1

   * Subordinated Conv./Exch. Bond/Debenture, Upgraded
     to B3 from Caa3

   * Subordinated Shelf, Upgraded to (P)B3 from (P)Caa3

Issuer: El Paso Energy Capital Trust I

   * Preferred Stock, Upgraded to B3 from Caa3

Issuer: El Paso Exploration & Production Company

   * Corporate Family Rating, Upgraded to B1 from B3

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to B1 from B3

Issuer: El Paso Natural Gas Company

   * Issuer Rating, Upgraded to Ba2 from B1

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to Ba2 from B1

Issuer: El Paso Tennessee Pipeline Co.

   * Preferred Stock 2 Shelf, Upgraded to (P)Caa1 from (P)Ca

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to B2 from Caa1

   * Senior Unsecured Shelf, Upgraded to (P)B2 from (P)Caa1

Issuer: Southern Natural Gas Company

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to Ba2 from B1

Issuer: Tennessee Gas Pipeline Company

   * Senior Unsecured Regular Bond/Debenture, Upgraded
     to Ba2 from B1

Outlook Actions:

Issuer: ANR Pipeline Company

   * Outlook, Changed To Positive From Rating Under Review

Issuer: Colorado Interstate Gas Company

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Capital Trust II

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Capital Trust III

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Corporation

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Energy Capital Trust I

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Exploration & Production Company

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Natural Gas Company

   * Outlook, Changed To Positive From Rating Under Review

Issuer: El Paso Tennessee Pipeline Co.

   * Outlook, Changed To Positive From Rating Under Review

Issuer: Southern Natural Gas Company

   * Outlook, Changed To Positive From Rating Under Review

Issuer: Tennessee Gas Pipeline Company

   * Outlook, Changed To Positive From Rating Under Review

Headquartered in Houston, Texas, El Paso Corporation is a
diversified natural gas company.


EXECUTE SPORTS: Posts $824,621 Net Loss in 2006 1st Fiscal Qtr.
---------------------------------------------------------------
Execute Sports, Inc., fka Padova International USA, Inc., filed
its first quarter financial statements for the three months ended
March 31, 2006, with the Securities and Exchange Commission on
May 18, 2006.

The Company reported an $824,621 net loss on $117,592 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,724,693
in total assets, $1,993,347 in total liabilities and $731,346 of
stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $1,414,332 in total current assets available to pay
$1,993,347 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?a72

                        Going Concern Doubt

Bedinger & Company, in Concord, California, raised substantial
doubt about Greens Worldwide Incorporated'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.

                        About Execute Sports

Execute Sports markets and sells water sports clothing and apparel
and motorcycle accessories.  On March 3, 2005 the Company changed
its name from Padova International U.S.A., Inc., to Execute
Sports, Inc.


FALCONBRIDGE LTD: Acquisition Transaction Important to Inco Ltd.
----------------------------------------------------------------
The Board of Directors of Inco Limited has unanimously recommended
that shareholders reject the unsolicited offer by Teck Cominco
Limited to acquire all of the outstanding shares of Inco.  The
Board characterized Teck's offer as opportunistic, inadequate and
contrary to the interests of Inco shareholders, and strongly
reiterated its support for Inco's friendly acquisition of
Falconbridge Limited.

"Our Board views Teck's offer as an opportunistic and calculated
attempt to grab Inco at a bargain basement price when we are
focused on completing our Falconbridge transaction," Inco Chairman
and CEO Scott Hand said.  "Teck appears to hope that our board
will be constrained by our Falconbridge transaction from exploring
alternatives to the transaction in the event it were not
completed."

"We are confident that Inco shareholders will see through Teck's
maneuver and reject its inadequate offer," he said.  "Inco has
some of the most highly prized mining assets in the world.  Our
shareholders deserve full value for those assets.  And our Board
is determined to make sure that they get it."

"The best way to accomplish that is through the route we've been
pursuing -- namely, our friendly acquisition of Falconbridge.  It
clearly remains the alternative with the greatest potential to
generate strong shareholder value, whether you are looking short-
term, medium-term or long-term," he said.

Teck's unsolicited offer is conditional on Inco terminating the
Falconbridge transaction.

In a Director's Circular filed on May 31, 2006, Inco's Board
outlined a number of compelling reasons why Teck's offer is
disadvantageous to Inco shareholders.

"When you compare what both companies would bring to the
combination Teck is proposing, and especially over the long term,
it's clear that most of the 'power' in the Canadian powerhouse
they talk about would come from Inco's assets," Mr. Hand said.

"We are the company with the great portfolio of properties, the
great growth projects and expansions under development, and all
the options for further growth down the road.  And our strength is
in nickel, which we believe has the best long-term fundamentals of
any metal going forward," he said.

"Teck, by contrast, has declining resources and limited growth
prospects.  Not surprisingly, they'd very much like to bind their
fortunes with Inco to fashion a more inspiring future for their
shareholders.  But for Inco shareholders, this combination can
only dilute their participation in Inco's world-class nickel
business at a time when our company is poised to outperform from
both a production and a financial perspective," he added.

Furthermore, Teck is only offering Inco shareholders its Class B
subordinated voting shares in exchange for Inco shares.  "This
would disenfranchise Inco's shareholders who currently have one
share, one vote," Mr. Hand said.

Inco's Board has reiterated its strong support for Inco's friendly
acquisition of Falconbridge as offering superior value for Inco
shareholders compared to the Teck offer.

The Board notes that the synergies offered by the Falconbridge
transaction are clearly superior and more tangible than those
proposed by Teck.  After several months of working together, Inco
and Falconbridge operations personnel have now jointly identified
the potential to realize estimated average annual pre-tax
operating and corporate synergies of approximately $550 million,
an increase of $200 million from the estimated synergies at the
time of the announcement of the Falconbridge transaction.

This increase in the synergies estimate is attributable to
developed improvements in the Inco-Falconbridge integration plan
and to changes in commodity price assumptions as a result of the
improved commodity market outlook since October 2005.  Inco
believes that it should be able to achieve synergies approaching
the average annual pre-tax run rate by approximately 24 months
after completion of the Falconbridge Transaction.  The net present
value of the estimated annual average pre-tax run-rate operating
and corporate synergies of $550 million, using a 7% discount rate,
is approximately $3.5 billion on an after tax basis.

By contrast, combining Inco and Teck offers no apparent
operational synergies, given that their respective operations will
be geographically dispersed and there is relatively little overlap
in metal production.

The large-scale synergies that the New Inco will achieve in the
Sudbury Basin will require major changes in materials flows as
well as long-term commitments and investments.  The Board believes
that synergies on this scale can only be achieved by combining the
assets of Inco and Falconbridge, not through a joint venture as
Teck as suggested.

Additionally, the New Inco would have world-leading nickel and
copper reserve bases, with an attractive portfolio of long-life,
low-cost development properties, and would provide a more
attractive asset mix than the group of products represented by the
current Teck portfolio.

"The test for assessing any merger or acquisition is simple: Does
this combination create real value?" Mr. Hand said.  "However you
look at the New Inco, the answer is 'yes'.  Our immediate earnings
and cash flow will be very impressive.  As our integration
proceeds, we will generate significant value through the
tremendous synergies of our combined operations.  And our growth
projects in nickel and copper, the two metals with the best
fundamentals going forward, plus our excellent portfolio of
greenfield and brownfield projects will allow us to continue
expanding and strengthening our position as a world-scale mining
company in the coming years."

"By contrast, where is the value in what Teck is proposing?" he
said.  "At the end of the day, it amounts to putting two disparate
mid-sized companies together simply for the sake of getting
bigger."

"We believe Inco shareholders deserve better," he said.  "We are
confident that they will get it when we complete our transaction
with Falconbridge and create the New Inco."

                       About Teck Cominco

Headquartered in Vancouver, Canada, Teck Cominco --
http://www.teckcominco.com/-- is a diversified mining company.
The Company is a world leader in the production of zinc and
metallurgical coal and is a significant producer of copper, gold,
and specialty metals.

                           About Inco

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

                       About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited --
http://www.falconbridge.com/-- is a leading copper and nickel
company with investments in fully integrated zinc and aluminum
assets.  Its primary focus is the identification and development
of world-class copper and nickel orebodies.  It employs 14,500
people at its operations and offices in 18 countries.  The Company
owns nickel mines in Canada and the Dominican Republic and
operates a refinery and sulfuric acid plant in Norway.  It is also
a major producer of copper (38% of sales) through its Kidd mine in
Canada and its stake in Chile's Collahuasi mine and Lomas Bayas
mine.  Its other products include cobalt, platinum group metals,
and zinc.

                          *     *     *

Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.


G+G RETAIL: Selling Remaining Assets to Max Rave for $300,000
-------------------------------------------------------------
G+G Retail Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York for permission to sell certain personal
property to Max Rave, LLC, for $300,000.

Early this year, Max Rave, and Guggenheim Corporate Funding LLC,
won the auction of substantially all of the Debtor's assets for
$35 million.  GCF provided equity and loan commitments to Max Rave
to:

     * fund the purchase of the company,
     * provide fresh inventory for stores, and
     * provide operating working capital for operations.

The assets sold at the auction did not include the inventory of
network servers and related equipment and certain computer
software and software licenses that Max Rave wants to own.

Other key terms to the asset purchase agreement on the personal
property also includes:

   (a) the release and discharge of the Debtors from any further
       obligation to provide computer or information technology
       services to Max Rave under that Feb. 17, 2006, Transition
       Services Agreement;

   (b) reasonable access for the Debtor to records, information
       and certain personnel until the closing of the Debtor's
       bankruptcy sale; and

   (c) the Debtor to have the right to occupy and use certain
       areas at Max Rave's facility located at 8501 West Side,
       North Bergen, New Jersey.

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


GATEWAY INC: District Ct. Dismisses SEC's Suit Against Former CEO
-----------------------------------------------------------------
The Honorable Roger Benitez of the U.S. District Court for the
Southern District of California in San Diego dismissed on May 23,
2006, the civil fraud charges filed by the Securities and Exchange
Commission against Gateway Inc.'s former Chief Executive Officer,
Jeffrey Weitzen.

Judge Benitez ruled the SEC didn't offer enough evidence to
support its allegations that Mr. Weitzen had "substantial
participation" in making material misstatements in the Company's
regulatory filing.

The SEC sued Mr. Weitzen, Gateway's Chief Financial Officer John
J. Todd, and former Controller Robert Manza, in November 2003 for
inflating 2000 third quarter revenues to meet analysts'
expectations.  The three officers left the Company in 2001.

Richard Marmaro, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
represented Mr. Weitzen.

Based in Irvine, California, Gateway Inc. (NYSE: GTW) --
http://www.gateway.com/-- develops, manufactures, supports and
markets a wide range of personal computers, computer monitors,
servers, and computer accessories.  The company also offers third-
party peripherals including printers, storage drives, and
networking equipment. Its services include training, support, and
financing.


GMAC COMM: Moody's Cuts Rating on $10.9 Mil. Class L Certs. to C
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes,
downgraded the ratings of three classes and affirmed the ratings
of six classes of GMAC Commercial Mortgage Securities, Inc.,
Series 2000-C1 Mortgage Pass-Through Certificates:

   * Class A-1, $22,287,383, Fixed, affirmed at Aaa

   * Class A-2, $537,173,000, Fixed, affirmed at Aaa

   * Class X, Notional, affirmed at Aaa

   * Class B, $37,395,000, Fixed, upgraded to Aaa from Aa2

   * Class C, 41,794,000, Fixed, upgraded to Aaa from A2

   * Class D, $8,798,000, Fixed, upgraded to Aa1 from A3

   * Class E, $30,796,000, WAC, upgraded to A3 from Baa2

   * Class F, $15,398,000, WAC, upgraded to Baa2 from Baa3

   * Class G, $21,997,000, Fixed, affirmed at Ba2

   * Class H, $15,398,000, Fixed, affirmed at B1

   * Class J, $6,599,000, Fixed, affirmed at B2

   * Class K, $8,798,000, Fixed, downgraded to Caa1 from B3

   * Class L, $10,998,000, Fixed, downgraded to C from Caa3

   * Class M, $2,758,494, Fixed, downgraded to C from Ca

As of the May 15, 2006 distribution date, the transaction's
aggregate balance has decreased by approximately 13.6% to $760.2
million from $879.9 million at securitization.  The Certificates
are collateralized by 126 mortgage loans, ranging in size from
less than 1.0% to 6.0% of the pool, with the top 10 loans
representing 32.8% of the pool.  The pool includes a shadow rated
loan, representing 5.5% of the pool.  Thirty-four loans,
representing 37.2% of the pool, have defeased and are
collateralized by U.S. Government securities.  The defeased loans
include five of the pool's top 10 loans, including the pool's
largest loan -- 80 Lafayette Street.

Nine loans have been liquidated from the pool, resulting in
aggregate realized losses of approximately $16.8 million.  Two
loans, representing 1.8% of the pool, are in special servicing.
Moody's estimates losses of approximately $5.1 million from the
specially serviced loans.  Thirty-five loans, representing 17.9%
of the pool, are on the master servicer's watchlist.

Moody's was provided with year-end 2005 operating results for
97.6% of the performing loans. Moody's loan to value ratio for the
conduit component is 85.0%, compared to 89.8% at Moody's last full
review in November 2004 and compared to 85.2% at securitization.

The upgrade of Classes B, C, D, E and F is due to a high
percentage of defeased loans and stable overall pool performance.
The downgrade of Classes K, L and M is due to realized and
expected losses from the specially serviced loans and LTV
dispersion.  Classes N and O have been eliminated entirely due to
losses and Class M has sustained losses of approximately $3.8
million.  Based on Moody's analysis, 13.7% of the pool has a LTV
greater than 100.0%.

The shadow rated loan is the Equity Inns Portfolio Loan, which
represents a 50.0% participation interest in two cross
collateralized loans secured by a portfolio of 18 extended stay
and limited service hotels.  The properties are located in 13
states, total 2,327 guestrooms and are flagged by AmeriSuites,
Hampton Inn, Homewood Suites and Residence Inn.

The portfolio's financial performance has improved since last
review due to higher occupancy and rate.  The overall RevPAR for
calendar year 2005 was $61.60, compared to $50.96 at last review
and compared to $68.05 at securitization.  The loan has amortized
by approximately 9.8%.  Moody's current shadow rating is Ba1,
compared to Ba3 at last review.

The top three non-defeased conduit loans represent 10.2% of the
pool balance.  The largest non-defeased conduit loan is the World
Savings Center Loan, which is secured by a 270,000 square foot
Class A office building located in the CBD of Oakland, California.
The property is 98.0% occupied compared to 91.9% at Moody's last
review.  The building is anchored by World Savings and Loan
Association, which occupies 54.5% of the building on a lease that
expires in December 2007.  Moody's LTV is 77.7%, compared to 79.1%
at last review.

The second largest non-defeased conduit loan is the Freeman Web
Portfolio Loan, which is secured by three Class B garden-style
multifamily properties located in Nashville and Knoxville,
Tennessee.  The 814-unit portfolio is 93.5% occupied, compared to
91.0% at last review.  Property performance has been stable since
Moody's last review.  Moody's LTV is in excess of 100.0%, the same
as at last review.

The third largest non-defeased conduit loan is the Minnesota
Industrial Venture Loan, which is secured by a portfolio of 14
office and industrial properties located in suburban
Minneapolis/St Paul, Minnesota.  The portfolio totals 774,000
square feet and approximately 18.0% of the space is built out as
office.

The portfolio is 84.6% occupied, compared to 76.6% at last review
and compared to 95.0% at securitization.  Even though occupancy
has improved since last review, market rents have declined
resulting in a decline in the portfolio's net operating income.
The loan is on the master servicer's watchlist due to debt service
coverage below 1.0x. Moody's LTV is in excess of 100.0%, compared
to 96.3% at last review.

The pool's collateral is a mix of U.S. Government securities,
office and mixed use, multifamily, retail, industrial and self
storage and lodging.  The collateral properties are located in 32
states.  The highest state concentrations are California,
Minnesota, New York, Florida and New Jersey.  All of the loans are
fixed rate.


HANOVER INSURANCE: S&P Affirms Low-B Ratings & Revises Outlook
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Hanover
Insurance Group Inc. (NYSE:THG) and its operating company
subsidiaries (collectively, Hanover) to positive from stable.

At the same time, Standard & Poor's affirmed its 'BB+'
counterparty credit and senior unsecured debt ratings, and
affirmed its 'B+' preferred stock rating on THG.

Standard & Poor's also affirmed its 'BBB+' counterparty credit and
financial strength ratings on:

   * Hanover Insurance Co.,
   * Citizens Insurance Co. of America (MI),
   * Hanover Lloyd's Insurance Co., and
   * Massachusetts Bay Insurance Co.

"The positive outlook reflects improving core underwriting
results, a changing business mix with better growth prospects, and
stronger capitalization," explained Standard & Poor's credit
analyst John Iten.

The ratings reflect:

   * the group's relatively low financial leverage;
   * the disposal of THG's runoff variable products business; and
   * the strong capitalization of the P/C operations.

Partly offsetting these positive factors are:

   * THG's modest fixed charge coverage in 2005;

   * the relatively high geographic concentration of P/C
     operations in states that have historically been challenging
     for personal lines writers;

   * a lack of premium growth during the recent hard market; and

   * an increased expense structure that is laying the groundwork
     for profitable growth but is uncompetitive at the current
     volume of business.

In addition, underwriting performance has lagged that of many of
its competitors, particularly other personal lines writers.

In December 2005, THG sold its primary runoff life affiliate
Allmerica Financial Life Insurance & Annuity Co.  This sale
removes the guaranteed minimum death benefit-exposed business that
has been Standard & Poor's primary concern on the life side and
leaves THG with a much smaller, more stable block of runoff life
liabilities -- along with its core (P/C) operations.

Standard & Poor's expects Hanover's underwriting performance to
improve in 2006, reflecting primarily a return to more normal
catastrophe loss experience.  Hanover's 2005 combined ratio again
trailed the P/C industry average but this difference is expected
to narrow in 2006 assuming a more normal level of catastrophe
losses.

Net premium written is expected to grow at a mid-single-digit
rate, driven by an increase in policy count in personal
lines and continued growth in commercial lines.  Excluding the
impact of catastrophes and prior year loss development, Standard &
Poor's expects the combined ratio to be flat or slightly better
than in 2005.  The remaining runoff life operations should not
have a material impact on earnings in 2006.

Hanover's capital adequacy should improve further in 2006 because
THG's cash requirements should be fully met from the life
operations and cash on hand at the holding company.  This allows
Hanover to grow its surplus.  Financial leverage should remain at
or less than 21% in 2006, while GAAP fixed-charge coverage should
improve from about 2.2x in 2005 to 4x-5x in 2006.

The outlook period for these ratings is 12-24 months.  Should the
company perform in line with expectations, the ratings on THG and
Hanover might be raised within this time frame.  Otherwise, the
ratings are likely to remain at their current levels and the
outlook revised to stable.


HAWK CORPORATION: S&P Affirms B+ Rating & Revises Outlook to Neg.
-----------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on
Cleveland-based Hawk Corporation to negative from stable.

At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'B+' corporate credit rating.

"The outlook revision reflects the continuing effect of high costs
associated with the relocation and start-up of the company's new
manufacturing facility in Tulsa.  It also reflects the risk that
if inefficiencies were to affect Hawk's operating performance
further in the third quarter, both positive cash flow generation
for 2006 and a return to more adequate credit measures, which are
currently stretched for the rating, are likely to be challenged,"
said Standard & Poor's credit analyst Gregoire Buet.

While the company's cyclical and competitive end markets are
experiencing an ongoing recovery, its operating performance has
been impaired by issues related to facility relocation.  Income
from operations decreased by about 20% in 2005, and return to
historical profitability is not expected until the second half of
2006.

Once start-up inefficiencies are fully addressed, the company
should benefit from a more competitive cost structure at this new
facility.  The company is expected to generate good revenue growth
in 2006, with continued sales growth at about 10%, stemming from
strong end markets in:

   * heavy-duty trucking,
   * construction and mining,
   * fluid power,
   * lawn and garden, and
   * aerospace.


HEALTHSOUTH CORP: Plans $1 Billion Senior Notes Issue
-----------------------------------------------------
HealthSouth Corporation intends to issue $1 billion in aggregate
principal amount of senior notes.  The notes will be offered to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended, and to persons outside the
United States under Regulation S of the Securities Act.  The
interest rate, offering price and other terms of the notes are to
be determined.

The Company intends to use the proceeds from the issue, along with
cash on hand, to repay all outstanding borrowings under its
interim loan agreement that it entered into on March 10, 2006.

                         About HealthSouth

Headquartered in Birmingham, Alabama, HealthSouth Corporation
(OTC Pink Sheets: HLSH) -- http://www.healthsouth.com/-- provides
outpatient surgery, diagnostic imaging and rehabilitative
healthcare services, operating facilities nationwide.

                         *     *     *

As reported in the Troubled Company Reporter on May 30, 2006,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
HealthSouth Corp.'s $1 billion of floating-rate senior unsecured
notes due 2014 and fixed-rate senior unsecured notes due 2016.

At the same time, existing ratings on HealthSouth, including the
'B' corporate credit rating, were affirmed.  The rating outlook is
stable.

Moody's placed HealthSouth's debt and corporate family ratings
at B2 and B3 respectively.  The ratings were placed on April 18,
2006, with a stable outlook.


HELLER FINANCIAL: Moody's Holds Caa1 Rating on $9.5 Mil. of Certs.
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes and
affirmed the ratings of nine classes of Heller Financial
Commercial Mortgage Asset Corp., Mortgage Pass-Through
Certificates, Series 2000 PH-1:

   * Class A-1, $22,760,484, Fixed, affirmed at Aaa

   * Class A-2, $532,326,000, Fixed, affirmed at Aaa

   * Class X, Notional, affirmed at Aaa

   * Class B, $43,062,000, WAC, affirmed at Aaa

   * Class C, $47,846,000, WAC, upgraded to Aa1 from A1

   * Class D, $11,962,000, WAC, upgraded to Aa2 from A2

   * Class E, $35,885,000, WAC, upgraded to A2 from Baa1

   * Class F, $14,354,000, WAC, upgraded to Baa1 from Baa3

   * Class H, $19,139,000, Fixed, affirmed at Ba2

   * Class J, $9,570,000, Fixed, affirmed at Ba3

   * Class K, $7,177,000, Fixed, affirmed at B1

   * Class L, $9,570,000, Fixed, affirmed at B2

   * Class M, $9,570,000, Fixed, affirmed at Caa1

As of the May 15, 2006 distribution date, the transaction's
aggregate balance has decreased by approximately 16.0% to $803.5
million from $957.0 million at securitization.  The Certificates
are collateralized by 193 mortgage loans ranging in size from less
than 1.0% to 4.3% of the pool, with the top ten loans representing
25.6% of the pool.

Twenty-eight loans, representing 23.1% of the pool, have defeased
and are collateralized with U.S. Government securities.  Three of
the pool's top 10 loans have been defeased, including the pool's
largest loan -- The Barlow Building.

Six loans have been liquidated from the trust resulting in
realized losses of approximately $5.1 million.  Five loans,
representing 3.3% of the pool, are in special servicing.  Moody's
has estimated aggregate losses of approximately $1.8 million for
all of the specially serviced loans.  Forty-five loans,
representing 28.5% of the pool, are on the master servicer's
watchlist.  Five of the top 10 loans are included on the master
servicer's watchlist and the ninth largest loan is in special
servicing.

Moody's was provided with partial or full year 2005 operating
results for 85.8% of the performing loans.  Moody's loan to value
ratio is 84.1%, compared to 84.7% at Moody's last full review in
April 2005 and compared to 86.6% at securitization.  The upgrade
of Classes C, D, E and F is a due to a high percentage of defeased
loans, stable overall pool performance and increased subordination
levels.

The top three non-defeased loans represent 9.5% of the outstanding
pool balance.  The largest non-defeased loan is the 475 Fifth
Avenue Loan, which is secured by a 243,700 square foot office
building located in the Grand Central submarket of New York City.
The property is 86.0% leased, compared to 84.0% at last review and
compared to 93.0% at securitization.

The decline in occupancy since securitization is largely
attributed to several tenants vacating their spaces due to
bankruptcy and a number of other tenants that are in financial
difficulty and not paying rent on a timely basis.  The loan is on
the master servicer's watchlist due to low debt service coverage.
However, the property is located in a strong office submarket,
with a reported current vacancy of 5.0%.  Moody's analysis of this
property is based on a stabilized net cash flow.  Moody's LTV is
75.1%, compared to 85.3% at last review.

The second largest non-defeased loan is the Valencia Marketplace
Loan, which is secured by a 179,000 square foot community center
located approximately 28 miles northwest of Los Angeles in
Valencia, California.  The property is 100.0% leased, compared to
93.0% at last review.  The anchor tenant is Vons Grocery Store.
The property's performance has been stable.  Moody's LTV is 78.5%,
compared to 80.4% at last review.

The third largest non-defeased loan is the Tannery Office Park
Loan, which is secured by a 328,000 square foot office complex
located in Milwaukee, Wisconsin.  The property was originally an
industrial complex built in 1913 but was redeveloped into an
office complex in 1997.  The property was 96.0% occupied as of
August 2005, essentially the same as at securitization. T he
borrower has not submitted financial statements since 2003 and the
loan has been on the master servicer's watchlist since that time.
Moody's LTV is in excess of 100.0%, the same as at last review.

The pool's collateral is a mix of retail, U.S. Government
securities, multifamily, office, industrial and self storage,
lodging and healthcare.  The collateral properties are located in
39 states.  The highest state concentrations are California,
Texas, Georgia, New York and Ohio.  All of the loans are fixed
rate.


HONEY CREEK: Amended Disclosure Statement Adds MuniMae's Comments
-----------------------------------------------------------------
Honey Creek Kiwi, L.L.C., amended its Disclosure Statement
explaining its Amended Plan of Reorganization and filed the
Amended Disclosure Statement with the U.S. Bankruptcy Court for
the Northern District of Texas on May 9, 2006.

                       Material Amendments

The Debtor believes the value of its principal asset, Honey Creek
Apartments, is $15.75 million based on estimated current market
value.  MuniMae Portfolio Services, LLC, opined that the value of
the Honey Creek Apartments is in excess of $22,674,881.89.  The
Court has not ruled on the value of the Apartments.  MuniMae is
the servicing agent for Bank of New York, the indenture trustee,
for the $20,485,000 Multifamily Mortgage Revenue Bonds.

The Honey Creek Apartments is a 656-unit apartment community built
in 1984 on a 22.49 acre site located in east Dallas, west of the
intersection of Interstate 635 and Ferguson Road.  The Project
consists of 37 two and three-story buildings with a total of
487,368 net rentable square feet and an average unit size of 743
square feet.  There is a central clubhouse and office building.
Site amenities include limited access gates, three swimming pools,
a jogging trail, three laundry facilities, and four tennis courts.

The disclosure statement added MuniMae's position regarding the
Debtor's narrative of its financial troubles.  MuniMae argues that
it was unfairly characterize as partly responsible for the
Debtor's financial distress.  MuniMae disputes much of the
Debtor's claims and in particular disputes the suggestion that it
is responsible for the Debtor's litigation with its former
management company, Shelter Corporation.

MuniMae pointed out that although it is not relevant to the Plan,
the real cause of the Debtor's dispute with Shelter is that
Alternative Building Concepts Group, Inc., a Hawaii nonprofit
corporation and the Debtor's sole member, signed a letter
agreement with Shelter concerning the sharing of proceeds from the
Project.  MuniMae was not even aware that Shelter and ABC executed
the letter agreement until the matter was in dispute.  It is
unfair and inaccurate for the Debtor to advance the notion that
MuniMae was responsible for the litigation, MuniMae argues.

                       Overview of the Plan

The Plan provides for a reduction in debt service on the bonds by
means of a reduction in principal balance and interest rate or a
reduction in interest rate, at the option of the Bondholders.  The
Plan also provides for a partial payout, over time, of prepetition
claims.

The reduction in debt service allows the Debtor's existing cash
flow to service the restructured bond debt, the debt service on
prepetition claims, preserves the tax exempt status of the bonds,
and allows the Debtor to pay post petition operating expenses on a
current basis.  This results in all creditors receiving more than
they would if the Debtor were to liquidate in a Chapter 7
proceeding .

A copy of the proposed distributions under the plan is available
for free at http://ResearchArchives.com/t/s?a7d

A copy of the Blacklined Amended Disclosure Statement is Available
for a fee at:

  http://www.ResearchArchives.com/bin/download?id=060602035200

Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a
656-unit apartment complex known as the Honey Creek Apartments.
The company filed for chapter 11 protection on August 24, 2005
(Bankr. N.D. Tex. Case No. 05-39524).  Richard G. Grant, Esq., at
Roberts & Grant, P.C., represents the Debtor in its restructuring
efforts.  No Official Committee of Unsecured Creditors has been
appointed in the Debtor's case.  When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.


INCO LTD: Board Describes Teck Cominco Offer as Opportunistic
-------------------------------------------------------------
The Board of Directors of Inco Limited has unanimously recommended
that shareholders reject the unsolicited offer by Teck Cominco
Limited to acquire all of the outstanding shares of Inco.  The
Board characterized Teck's offer as opportunistic, inadequate and
contrary to the interests of Inco shareholders, and strongly
reiterated its support for Inco's friendly acquisition of
Falconbridge Limited.

"Our Board views Teck's offer as an opportunistic and calculated
attempt to grab Inco at a bargain basement price when we are
focused on completing our Falconbridge transaction," Inco Chairman
and CEO Scott Hand said.  "Teck appears to hope that our board
will be constrained by our Falconbridge transaction from exploring
alternatives to the transaction in the event it were not
completed."

"We are confident that Inco shareholders will see through Teck's
manoeuvre and reject its inadequate offer," he said.  "Inco has
some of the most highly prized mining assets in the world.  Our
shareholders deserve full value for those assets.  And our Board
is determined to make sure that they get it."

"The best way to accomplish that is through the route we've been
pursuing -- namely, our friendly acquisition of Falconbridge.  It
clearly remains the alternative with the greatest potential to
generate strong shareholder value, whether you are looking short-
term, medium-term or long-term," he said.

Teck's unsolicited offer is conditional on Inco terminating the
Falconbridge transaction.

In a Director's Circular filed on May 31, 2006, Inco's Board
outlined a number of compelling reasons why Teck's offer is
disadvantageous to Inco shareholders.

"When you compare what both companies would bring to the
combination Teck is proposing, and especially over the long term,
it's clear that most of the 'power' in the Canadian powerhouse
they talk about would come from Inco's assets," Mr. Hand said.

"We are the company with the great portfolio of properties, the
great growth projects and expansions under development, and all
the options for further growth down the road.  And our strength is
in nickel, which we believe has the best long-term fundamentals of
any metal going forward," he said.

"Teck, by contrast, has declining resources and limited growth
prospects.  Not surprisingly, they'd very much like to bind their
fortunes with Inco to fashion a more inspiring future for their
shareholders.  But for Inco shareholders, this combination can
only dilute their participation in Inco's world-class nickel
business at a time when our company is poised to outperform from
both a production and a financial perspective," he added.

Furthermore, Teck is only offering Inco shareholders its Class B
subordinated voting shares in exchange for Inco shares.  "This
would disenfranchise Inco's shareholders who currently have one
share, one vote," Mr. Hand said.

Inco's Board has reiterated its strong support for Inco's friendly
acquisition of Falconbridge as offering superior value for Inco
shareholders compared to the Teck offer.

The Board notes that the synergies offered by the Falconbridge
transaction are clearly superior and more tangible than those
proposed by Teck.  After several months of working together, Inco
and Falconbridge operations personnel have now jointly identified
the potential to realize estimated average annual pre-tax
operating and corporate synergies of approximately $550 million,
an increase of $200 million from the estimated synergies at the
time of the announcement of the Falconbridge transaction.

This increase in the synergies estimate is attributable to
developed improvements in the Inco-Falconbridge integration plan
and to changes in commodity price assumptions as a result of the
improved commodity market outlook since October 2005.  Inco
believes that it should be able to achieve synergies approaching
the average annual pre-tax run rate by approximately 24 months
after completion of the Falconbridge Transaction.  The net present
value of the estimated annual average pre-tax run-rate operating
and corporate synergies of $550 million, using a 7% discount rate,
is approximately $3.5 billion on an after tax basis.

By contrast, combining Inco and Teck offers no apparent
operational synergies, given that their respective operations will
be geographically dispersed and there is relatively little overlap
in metal production.

The large-scale synergies that the New Inco will achieve in the
Sudbury Basin will require major changes in materials flows as
well as long-term commitments and investments.  The Board believes
that synergies on this scale can only be achieved by combining the
assets of Inco and Falconbridge, not through a joint venture as
Teck as suggested.

Additionally, the New Inco would have world-leading nickel and
copper reserve bases, with an attractive portfolio of long-life,
low-cost development properties, and would provide a more
attractive asset mix than the group of products represented by the
current Teck portfolio.

"The test for assessing any merger or acquisition is simple: Does
this combination create real value?" Mr. Hand said.  "However you
look at the New Inco, the answer is 'yes'.  Our immediate earnings
and cash flow will be very impressive.  As our integration
proceeds, we will generate significant value through the
tremendous synergies of our combined operations.  And our growth
projects in nickel and copper, the two metals with the best
fundamentals going forward, plus our excellent portfolio of
greenfield and brownfield projects will allow us to continue
expanding and strengthening our position as a world-scale mining
company in the coming years."

"By contrast, where is the value in what Teck is proposing?" he
said.  "At the end of the day, it amounts to putting two disparate
mid-sized companies together simply for the sake of getting
bigger."

"We believe Inco shareholders deserve better," he said.  "We are
confident that they will get it when we complete our transaction
with Falconbridge and create the New Inco."

                       About Teck Cominco

Headquartered in Vancouver, Canada, Teck Cominco --
http://www.teckcominco.com/-- is a diversified mining company.
The Company is a world leader in the production of zinc and
metallurgical coal and is a significant producer of copper, gold,
and specialty metals.

                       About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited --
http://www.falconbridge.com/-- is a leading copper and nickel
company with investments in fully integrated zinc and aluminum
assets.  Its primary focus is the identification and development
of world-class copper and nickel orebodies.  It employs 14,500
people at its operations and offices in 18 countries.  The Company
owns nickel mines in Canada and the Dominican Republic and
operates a refinery and sulfuric acid plant in Norway.  It is also
a major producer of copper (38% of sales) through its Kidd mine in
Canada and its stake in Chile's Collahuasi mine and Lomas Bayas
mine.  Its other products include cobalt, platinum group metals,
and zinc.

                           About Inco

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

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


INNUITY INC: Posts $2.4 Mil. Net Loss in 2006 1st Fiscal Qtr.
-------------------------------------------------------------
Innuity, Inc. filed its 1st 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 $2,456,357 net loss on $4,957,871 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $9,674,640
in total assets, $9,406,331 in total liabilities, and $268,309 in
stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $5,375,434 in total current assets available to pay
$8,933,823 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://researcharchives.com/t/s?a92

                        Going Concern Doubt

Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised
substantial doubt about Innuity'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 accumulated deficit, losses from
operations, negative cash flows from operating activities and
working capital, and capital deficiency.

Innuity, Inc. -- http://innuity.com/-- is an Internet technology
company that designs, acquires, and integrates applications to
deliver software for small business.  The company's Internet
technology is based on an affordable, on-demand model that allows
small businesses to interact simply with customers, business
partners, and vendors and to manage their businesses efficiently.
Using the company's on-demand applications, small businesses can
grow their revenues, reach and serve customers, and run everyday
operations.


INTELSAT LTD: Justice Dept. Closes Antitrust Investigation
----------------------------------------------------------
The U.S. Department of Justice informed Intelsat, Ltd., that it is
closing its antitrust investigation of the Company's proposed
merger with PanAmSat Holding Corporation.  The Justice Department
is not seeking any conditions on the proposed merger and is not
otherwise commenting on it.  The transaction remains under review
by the U.S. Federal Communications Commission.

"We are gratified that the Justice Department's Antitrust
Division, after a comprehensive review, agreed with us that the
Intelsat-PanAmSat merger does not pose any threat to competition,"
said Phillip Spector, Executive Vice President & General Counsel
of Intelsat.  "We demonstrated that the combination of Intelsat
and PanAmSat will create powerful efficiencies, with complementary
fleets assuring enhanced protection and flexibility for our
diverse sets of customers."

The Chief Executive Officer of Intelsat, David McGlade, said:
"With the Justice Department's decision not to challenge our
transaction, we are moving full speed ahead with our integration
planning and preparations.  We will be finalizing our financing
over the next few weeks, and should be in a position to close soon
after receiving FCC approval.  The new Intelsat post-merger will
be one, fully-integrated, world-class provider of advanced
communications solutions, with an employee team focused on
customer service and technical excellence."

Intelsat and PanAmSat announced their merger agreement on Aug. 29,
2005.  Under the agreement, Intelsat will acquire PanAmSat for $25
per share in cash, or $3.2 billion.  In addition, approximately
$3.2 billion in debt of PanAmSat and its subsidiaries will remain
outstanding or be refinanced.  Closing of the transaction is
subject, among other things, to the receipt of financing by
Intelsat and to obtaining regulatory approval from the FCC.  All
other regulatory approvals required prior to closing have been
obtained.

Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony,
corporate network, video and Internet solutions around the globe
via capacity on 25 geosynchronous satellites in prime orbital
locations.  Customers in approximately 200 countries rely on
Intelsat's global satellite, teleport and fiber network for high-
quality connections, global reach and reliability.

                         *     *     *

As reported in the Troubled Company Reporter on April 11, 2006,
Standard & Poor's Ratings Services held all ratings on fixed
satellite services provider Intelsat Ltd. (BB-/Watch Neg/--) on
CreditWatch with negative implications.


INTERSTATE BAKERIES: Asks Court to Enforce Stay Against Sara Lee
----------------------------------------------------------------
The American Bakers Association Retirement Plan is a pension plan
that is subject to Title V of the Employee Retirement Income
Security Act of 1974.  The ABA Plan was established to provide
benefits to certain employees of various unrelated employers in
the bakery industry.  The ABA Plan provides benefits to the
Interstate Bakeries Corporation and its debtor-affiliates'
430 active participants, 400 retirees and beneficiaries and
650 terminated vested participants.  The ABA Plan also provides
retirement benefits to around 1,083 current and former employees
of other bakery companies, and covers 2,675 union and non-union
participants.

On May 3, 2006, Sara Lee Corporation instituted proceedings
against the ABA Plan and the Board of Trustees of the Plan, in
the United States District Court for the District of Columbia.
Sara Lee sought, among other things, a mandatory injunction that
would compel the ABA Plan and the Board Trustees to:

    * require all participating employers in the ABA Plan with
      negative asset balances to make payments to the Plan; and

    * cut off the payment of benefits to the Debtors' employee-
      participants.

According to Paul M. Hoffmann, Esq., at Stinson, Morrison, Hecker
LLP, in Kansas City, Missouri, that relief violates the automatic
stay provisions of Section 362(a) of the Bankruptcy Code, in that
the Sara Lee litigation seeks to:

    (a) obtain possession of the property of the Debtors' estates
        by compelling the collection of payments from the Debtors
        to the ABA Plan;

    (b) cut off the payment of benefits to the Debtors' employee-
        participants; and

    (c) determine ownership of certain funds held by the ABA Plan
        in which the Debtors assert an interest.

Mr. Hoffmann relates that a violation of the stay will have
serious negative implications on the Debtors' reorganization
efforts.  Sara Lee's basis for its request is its contention that
the ABA Plan is an aggregate of single employer plans.  The
Debtors, however, maintain that ABA is a multiple employer plan.

According to Sara Lee's and the Plan's theory regarding the
status of the Plan as an aggregate of single employer plans, the
Debtors anticipate that the Plan will assert an underfunding by
the Debtors of around $62,800,000.

If the Plan were characterized as a multiple employer plan, there
would not be a negative asset balance attributable to the
Debtors, Mr. Hoffmann maintains.

The dispute over the Plan's status affects the calculation of the
quarterly assessments owed by Participating Employers.  Prior to
January 2006, in calculating quarterly assessments under the
multiple employer plan methodology, assessments for the Debtors
in the last quarter of 2005 would have been approximately
$1,200,000.  However, the January 15, 2006 assessment Plan
applied a methodology, which attempted to adopt the funding
requirements applicable to an aggregate of single employer plans.
Under the new methodology, the Plan assessed the Debtors with a
quarterly assessment of around $3,500,000.

Sara Lee, the ABA Plan, and the Debtors have already submitted
the dispute to the Pension Benefit Guaranty Corporation, and the
Parties entered into a standstill agreement in order to allow the
PBGC to issue a ruling.

                       Standstill Agreement

The Parties entered into a standstill agreement on July 20, 2005,
which provided that no actions would be taken to withdraw, or
prevent the withdrawal of, the disputed portion of the remaining
Plan Assets for 120 days.

Under the terms of the Standstill Agreement, the No-action period
was automatically extended to April 16, 2006, and then for
another 30-day period to May 16, 2006.  Without the receipt of
notice not to renew by May 6, the Agreement automatically
extended to June 15, 2006, and is, thus, currently in force, Mr.
Hoffman says.

On April 6, 2006, Mark Blank from the PBGC informed the counsel
of the ABA Plan, Sara Lee, and the Debtors that due to the
complexity of the matter, the PBGC would not be able to complete
their determination as to the status of the ABA Plan until
June 15, 2006.  The ABA Plan Trustees and the Debtors agreed to
the extension of the Standstill Agreement.  Sara Lee, however,
filed its Complaint.

Mr. Hoffmann notes that nowhere in its Complaint does Sara Lee
even mention that the determination as to the Plan's status is
currently before the PBGC, nor that the dispute involves and
implicates the assets of a debtor-in-possession protected by the
provisions of the automatic stay.

Mr. Hoffmann contends that by filing its Complaint, Sara Lee is
seeking to evade the automatic stay of the Bankruptcy Code and
end-run the PBGC process to which Sara Lee willingly submitted in
December 2005, when it filed a position paper with the PBGC.

Mr. Hoffmann maintains that the Sara Lee Litigation is an attempt
to preempt the PBGC process.  The Sara Lee Litigation would also
mean that the issue of the proper nature of the ABA Plan would be
decided in another court room, wherein the Debtors would not even
be named as a party.  Moreover, the Sara Lee Litigation does not
disclose, and has cited no reason for disregarding the PBGC
process and the clear prohibitions of the automatic stay because
"there are none," Mr. Hoffman says.

Mr. Hoffman points out that if the Debtors are forced to
participate in the Sara Lee Litigation, then the Debtors will be
exposed to potentially significant, duplicative proceedings and
expenses, and possibly inconsistent results, which could
adversely affect their ability to reorganize.

Accordingly, the Debtors ask the Court to:

    (a) enforce the automatic stay;

    (b) require Sara Lee to withdraw its Complaint and dismiss
        its Litigation; and

    (c) declare the Sara Lee Litigation to be void, as being
        violative of the automatic stay.

The Official Committee of Unsecured Creditors supports the
Debtors' request.

                    About Interstate Bakeries

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

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors.  Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal, LLP, represents the Official Committee of
Equity Security Holders.  When the Debtors filed for protection
from their creditors, they listed $1,626,425,000 in total assets
and $1,321,713,000 (excluding the $100,000,000 issue of 6.0%
senior subordinated convertible notes due August 15, 2014, on
August 12, 2004) in total debts.  (Interstate Bakeries Bankruptcy
News, Issue No. 41; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


IVOICE INC: Posts $682,797 Net Loss in 2006 First Fiscal Quarter
----------------------------------------------------------------
iVoice Inc. filed its 1st 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 $682,797 net loss on $993 of revenues for
the three months ended March 31, 2006.  The sales in 2006
represent initial product sales of the Company's Acid-All product
that was introduced in March and is being promoted by the
Company's subsidiary, Thomas Pharmaceuticals.

At March 31, 2006, the Company's balance sheet showed $12,003,269
in total assets, $6,582,302 in total liabilities, and $5,420,967
in stockholders' equity.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://researcharchives.com/t/s?a93

                        Going Concern Doubt

Bagell, Josephs, Levine & Company, LLC, in Gibbsboro, New Jersey,
raised substantial doubt about iVoice 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 substantial accumulated deficits.

iVoice, Inc. (OTCB: IVOC) -- http://www.ivoice.com/index2.htm--  
designs, manufactures, and markets innovative speech-enabled
applications and computer telephony communications systems.


JACOBS INDUSTRIES: Selling Fraser Lots to Comerica for $3.9 Mil.
----------------------------------------------------------------
Jacobs Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Michigan to approve a
settlement agreement with Comerica Bank.

The agreement calls for the sale of six lots in Fraser, Michigan,
to Comerica for a $3,918,172 credit bid.  Comerica is a secured
creditor who holds a lien on the Fraser properties.  Instead of
Comerica foreclosing the properties, the Debtors will sell the
property to Comerica in exchange for the extinguishments of their
debts and a $125,000 cash payment.

Howard Borin, Esq., at Schafer and Weiner, PLLC, in Bloomfield
Hills, Michigan, tells the Court that the settlement agreement was
negotiated, proposed and entered into by the parties without
collusion, in good faith and at arm's length.

Headquartered in Fraser, Michigan, Jacobs Industries, Inc.,
manufactures automotive interiors in roll forming and channel,
stampings and assembled product.  The company along with its three
affiliates filed for chapter 11 protection on Sept. 26, 2005
(Bankr. E.D. Mich. Case No. 05-72613).  Charles J. Taunt, Esq.,
and Erika D. Hart, Esq., at Charles J. Taunt & Associates,
P.L.L.C., represents the Debtors in their restructuring.  Deborah
Kovsky-Apap, Esq., at Pepper Hamilton LLP represents the Official
Committee of Unsecured Creditors.  When the Debtor filed for
protection from its creditors, it listed $19,513,913 in total
assets and $21,413,576 in total debts.


KAISER ALUMINUM: Asks Court to Okay ACE Insurers Settlement Pact
----------------------------------------------------------------
Kaiser Aluminum & Chemical Corporation asks the U.S. Bankruptcy
Court for the District of Delaware to:

      (i) approve the ACE Insurers Settlement Agreement;

     (ii) authorize the sale of the Subject Policies to the ACE
          Related Companies, free and clear of liens, claims,
          interests and other encumbrances; and

    (iii) enjoin all Claims against the ACE Parties relating to
          or attributable in any way to the Subject Policies,
          including, but not limited to, any Claims in the nature
          of, or sounding in, tort, contract, warranty, or any
          other theory of law, equity or admiralty.

Some of the Kaiser Aluminum Corporation and its debtor-affiliates'
insurance policies are currently the subject of two coverage
actions pending in the Superior Court of California for the County
of San Francisco.  These insurance policies were issued by the ACE
Related Companies:

    (1) ACE Property & Casualty Company, formerly known as CIGNA
        Property & Casualty Company, formerly known as Aetna
        Insurance Company, on its own behalf and as transferee of
        liabilities under Policy EX 05-1009, originally issued by
        St. Paul Mercury Insurance Company;

    (2) Central National Insurance Company by and through Cravens,
        Dargen and Company, its Managing General Agent;

    (3) Century Indemnity Company, successor to CCI Insurance
        Company, successor to Insurance Company of North America;
        also successor to CIGNA Specialty Insurance Company,
        formerly known as California Union Insurance Company;

    (4) Pacific Employers Insurance Company; and

    (5) Westchester Group of Insurance Companies, which includes
        Industrial Underwriters Insurance Company and Industrial
        Indemnity Company.

The ACE Related Companies and related persons and entities - the
ACE Parties -- also issued certain other policies, which are not
involved in the Coverage Actions.

To resolve the dispute regarding the Subject Policies, Kaiser
Aluminum & Chemical Corporation, on behalf of itself and other
KACC Parties, and the ACE Parties entered into a settlement
agreement.

The Settlement Agreement will resolve all:

    * claims against the ACE Related Companies with respect to the
      Subject Policies, including coverage for Channeled Personal
      Injury Claims;

    * present and future liabilities; and

    * tort claims against the ACE Parties with respect to the
      Other Policies.

A full-text copy of the Settlement Agreement is available for free
at http://researcharchives.com/t/s?a68

The principal terms of the Settlement Agreement are:

    (a) The ACE Related Companies will pay $108,750,000 as
        settlement amount according to their shares:

        Payment Date          Payment Amount     Payor
        ------------          --------------     -----
        February 15, 2007      $13,000,000       Century Indemnity
        February 15, 2008       13,000,000       Century Indemnity
        February 15, 2009       15,000,000       Century Indemnity
        February 15, 2010       16,000,000       Century Indemnity
        February 15, 2011          360,000       Century Indemnity
        February 15, 2011        9,640,000       ACE P&C
        February 15, 2012        1,190,000       ACE P&C
        February 15, 2012       12,560,000       PEIC
        February 15, 2013       12,100,000       Westchester Group
        February 15, 2013        1,900,000       PEIC
        February 15, 2014       14,000,000       Westchester Group

        Payment of the Settlement Amount will be made to U.S. Bank
        National Association, as settlement account agent, unless
        a Trigger Date has occurred, in which case, to Wells Fargo
        Bank, N.A., as insurance escrow agent, for distribution to
        the Funding Vehicle Trust.  The Trigger Date is the day
        that the last of these events has occurred:

        (1) the order approving the settlement agreement becomes a
            Final Order;

        (2) the Confirmation Order becomes final; and

        (3) the occurrence of the Plan Effective Date.

        A full-text copy of the Escrow Agreement and the Bank
        Trust Agreement is available for free at:

        http://researcharchives.com/t/s?a69

    (b) The ACE Parties agree to receive all of the benefits of
        being designated as Settling Insurance Companies in the
        Plan of Reorganization, including, but not limited to, the
        Personal Injury Channeling Injunctions;

    (c) The KACC Parties will release all of their rights under
        the Subject Policies and certain other rights under the
        Other ACE Parties Policies, and will dismiss each of the
        ACE Related Companies from the Coverage Actions;

    (d) KACC will sell the Subject Policies back to the ACE
        Related Companies, and the ACE Related Companies will buy
        back the Subject Policies free and clear of all liens on,
        claims against, or interests in the Subject Policies, with
        the ACE Related Companies' payment of the Settlement
        Amount constituting the consideration for the buy-back;

    (e) If any claim is brought against any of the ACE Parties
        that is subject to a PI Channeling Injunction, the Funding
        Vehicle Trust will establish that the claim is enjoined as
        to the ACE Parties; and

    (f) Except to the extent of a limited right to assert claims
        against non-settling insurers that have pursued the ACE
        Parties, the ACE Parties will not seek from any entity
        other than the ACE Parties' reinsurers or
        retrocessionaires:

        * reimbursement of any payments that the ACE Related
          Companies are obligated to make under the Settlement
          Agreement; or

        * any other payments the ACE Related Companies have made
          to or for the benefit of any KACC part under the Subject
          Policies or the Other ACE Parties Policies, whether by
          way of contribution, subrogation, indemnification or
          otherwise.

        In no event will the ACE Parties make any claim for or
        relating to insurance, reinsurance or retrocession against
        any KACC Party.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, notes that through the Settlement
Agreement:

    (1) KACC will eliminate its continuing costs of prosecuting
        the Coverage Actions against the ACE Related Companies;

    (2) uncertainty regarding future payments by the ACE Related
        Companies will be eliminated; and

    (3) installment payment of a substantial aggregate amount from
        the ACE Related Companies is secured without further delay
        and cost to KACC.

                       About Kaiser Aluminum

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 97; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KARTA CORP: Confirmation Appeal Not Rendered Equitably Moot
-----------------------------------------------------------
The U.S. District Court for the Southern District of New York says
that an appeal taken by Pasquale Cartalemi from an order
confirming the Fifth Amended Joint Plan of Reorganization proposed
by Karta Corp. was not rendered equitably moot by the Debtor's
substantial consummation of that chapter 11 plan.  Mr. Cartalemi
did not request a stay of the confirmation order pending his
appeal.  Judge McMahon says that doesn't make any difference.  Mr.
Cartalemi sought and obtained permission to pursue an expedited
appeal on the second business day after entry of the plan
confirmation order, and the debtor and its affiliates, Judge
McMahon sees, clearly sought to moot the appeal by consummating
their transactions prior to the effective date of the plan.  The
decision is published at 2006 WL 1458100.

That ruling, however, was a hollow victory for Mr. Cartalemi.  The
District Court also ruled that the non-debtor release and
channeling injunction of all claims held by Appellant under the
plan, to which Mr. Cartalemi objected, are proper.  Further, the
District Court held that the Bankruptcy Court did not err in
permitting the Debtor to use all or substantially all of the
property of a non-debtor to fund the Plan and to guaranty payments
under the Plan.

Karta Corp., Karta Container & Recycling, Inc., and Global
Recycling & Collection, Inc., filed voluntarily chapter 11
petitions in January 2002 (Bankr. S.D.N.Y. Case Nos. 02-22028
through 02-22030).  Lots of litigation followed.  The bankruptcy
proceedings culminated in Judge Hardin confirming the Debtors'
Fifth Amended Plan of Reorganization on April 28, 2006.


KC CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: K C Construction Services, Inc.
        42065 Zevo Drive, Suite B7
        Temecula, California 92590

Bankruptcy Case No.: 06-11328

Type of Business: The Debtor is a project contractor.
                  See http://www.kccsinc.com/

Chapter 11 Petition Date: June 2, 2006

Court: Central District Of California (Riverside)

Judge: Peter Carroll

Debtor's Counsel: Don Bokovoy, Esq.
                  Bernard J. Gartland, P.C.
                  69930 Highway 111, Suite 212
                  Rancho Mirage, California 92270
                  Tel: (760) 202-7020
                  Fax: (760) 202-7021

Total Assets:   $225,462

Total Debts:  $1,483,719

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Hughes Supply, Inc.              Materials               $227,369
One Hughes Way
Orlando, FL 32805

Wells Fargo Bank                 Cross Complaint         $150,000
1350 Fashion Valley, 2nd Floor
San Diego, CA 92108

The Invironmentalist DuPont      Materials & Labor        $85,000
114 Town Park Drive, Suite 260
Canton, GA 30114

Reilly Electric                  Materials & Labor        $34,230

C&C Glass                        Materials & Labor        $31,067

Angus Asphalt                    Materials & Labor        $18,000

Thiem Mechanical Co.             Contract                 $15,019

TMCI                             Materials & Labor        $13,350

United National Insurance        General Liability        $13,293

Alberto's Marble                 Materials & Labor        $10,343

ANA Trends                       Construction Contract    $10,000

Builders Plasterers              Materials & Labor        $10,000

Flow Master Plumbing             Materials                 $9,748

Labor Ready Southwest, Inc.      Labor                     $9,330

Waste Management                 Trash Pickup              $9,000

Home Depot Credit Services       Materials                 $8,786

Internal Revenue Service         Payroll Taxes             $6,500

Quality Iron Products            Materials                 $6,403

HCC Surety Group                 Surety Bond               $5,000

Franchise Tax Board              Payroll Taxes             $3,500


MACTEC INC: Moody's Puts B1 Rating on $155 Million Debt Facilities
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to MACTEC, Inc.'s
proposed $35 million senior secured revolving credit facility due
2011 and $120 million senior secured first lien term loan due 2012
and a B2 corporate family rating.  These are initial public
ratings for the company.  The outlook is stable.

Proceeds from the term loan, existing cash and revolver borrowings
will be used to refinance all existing debt of the company.  The
transaction is expected to close in June 2006.  Accordingly, the
ratings are subject to final documentation.

The B2 corporate family rating considers:

   1) MACTEC's relatively high leverage of 5.4 times adjusted
      debt to EBITDA and projected break even free cash flow
      during 2006,

   2) that the balance sheet includes a significant amount of
      goodwill and other intangible assets resulting in weak
      tangible asset coverage of debt,

   3) the company's diversified, recurring revenue base and
      positive growth prospects, following periods of weak
      organic growth, drive continued expansion in contract
      backlogs and

   4) the strong relationships MACTEC maintains with its blue
      chip customer base, balanced between governmental,
      commercial and industrial sectors, drive the company's
      consistent EBITDA generation.


Moody's noted that the B1 rating for the bank facility
incorporates the benefits and limitations of the collateral.  The
term loan is expected to represent substantially all of MACTEC's
debt, while the revolver is expected to be used modestly at close.
The facilities are well collateralized, resulting in a one notch
upgrade from the corporate family rating.

The stable outlook reflects Moody's view that MACTEC's key
customer relationships, increasing backlogs, resolution of legacy
contract issues and an improved capital structure will drive
EBITDA expansion and return free cash flow (CFO minus dividends
and capital expenditures) to positive levels over the next year.
Further, the stable outlook anticipates that the company's
revolver will remain significantly unused throughout 2006.

MACTEC Inc., headquartered in Alpharetta, Ga., is a leading
provider of engineering, environmental consulting and
environmental construction services focusing on water
infrastructure, transportation and building and facility market
segments. The company generated net sales of $280 million in 2005.


MAXXAM Inc: Buying Back Stock from Scion for $22.3 Million
----------------------------------------------------------
MAXXAM Inc. entered, on May 25, 2006, into a Stock Purchase
Agreement with Scion Qualified Value Fund and Scion Value Fund to
purchase:

      -- the 546,541 shares of MAXXAM Inc. common stock held by
         SQVF; and

      -- the 157,559 shares of the MAXXAM Common Stock held by
         SVF.

The purchase price for the shares is $31.70 per each share of
MAXXAM Common Stock, for an aggregate purchase price of
$22,319,970.

A full-text copy of the Stock Purchase Agreement is available for
free at http://researcharchives.com/t/s?a7b

                           About MAXXAM Inc.

MAXXAM Inc. (AMEX: MXM) is engaged in a wide range of businesses
from aluminum and timber products to real estate and horse racing.
The Company's timber subsidiary, Pacific Lumber, owns about
205,000 acres of old-growth redwood and Douglas fir timberlands in
Humboldt County, California.  MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, and Texas, and Puerto Rico.  The company also owns the
Sam Houston Race Park, a horseracing track near Houston.

At Dec. 31, 2005, the company's stockholders' deficit widened to
$661,300,000 from a $657,100,000 deficit at Dec. 31, 2004.

                             *   *   *

As reported in the Troubled Company Reporter on April 5, 2006,
Deloitte & Touche LLP in Houston, Texas, raised substantial doubt
about MAXXAM Inc. and its subsidiaries' ability to continue as a
going concern.  Deloitte pointed to the difficulties of:

   -- MAXXAM Inc. and its subsidiaries in realizing their
      timber-related assets and discharge their timber-related
      liabilities in the normal course of business;

   -- The Pacific Lumber Company, an indirect subsidiary, in
      meeting its loan agreement covenants; and

   -- Scotia Pacific Company LLC, an indirect subsidiary, in
      paying the interest on the timber notes.


MERCHANT FIRST: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Merchant First, Inc.
        1512 Highland Pines Court
        Reno, Nevada 89503

Bankruptcy Case No.: 06-50350

Chapter 11 Petition Date: June 2, 2006

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtor's Counsel: Stephen R. Harris, Esq.
                  Belding, Harris & Petroni, Ltd.
                  417 West Plumb Lane
                  Reno, Nevada 89509
                  Tel: (775) 786-7600
                  Fax: (775) 786-7764

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Vital Processing Services        Goods & Services      $537,600
8320 South Hardy Drive
Tempe, AZ 85282-2007

Gene Clothier                    Loan                  $477,889
P.O. Box 4939
Blue Jay, CA 92317

Artistic Investment, Inc.        Loan                  $470,675
1512 Highland Pines Court
Reno, NV 89503

1200 KJamm Del Taco              ISO                    $13,330

Merchant Transaction Systems     Goods & Services        $9,900

Vision One Services LLC          ISO                     $9,491

AZTEC ATM - 8004                 ISO                     $9,491

Promenade                        Goods & Services        $4,949

1300 KJamm, Inc.                 ISO                     $4,411

8004 - Select Payment Service    ISO                     $3,129

Pacific Care of California       Goods & Services        $2,903

Fleet Wireless Solution          Goods & Services        $2,423

AZTEC-Concord                    ISO                     $2,323

Pueblo Bank & Trust              Goods & Services        $2,200

Broadwing (FOCAL) LaSalle Bank   Goods & Services        $1,758

Preferred Employers Ins.         Goods & Services        $1,610

5010 - Security Check Plus       ISO                     $1,580

Golden Eagle Insurance           Goods & Services        $1,444

Jan Martinez                     Goods & Services        $1,500

Anita Pawlowski - 8040           ISO                     $1,429


MERRILL LYNCH: Moody's Holds Low-B Rating on Five Cert. Classes
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes and
affirmed the ratings of 11 classes of Merrill Lynch Financial
Assets Inc., Commercial Mortgage Pass-Through Certificates, Series
2002-Canada 8::

   * Class A-1, $175,146,480, Fixed, affirmed at Aaa

   * Class A-2, $188,450,000, Fixed, affirmed at Aaa

   * Class X-1, Notional, affirmed at Aaa

   * Class X-2, Notional, affirmed at Aaa

   * Class B, $11,700,000, Fixed, upgraded to Aa1 from Aa2

   * Class C, $12,880,000, Fixed, upgraded to A1 from A2

   * Class D, $12,888,000, Fixed, affirmed at Baa2

   * Class E, $4,684,000, Fixed, affirmed at Baa3

   * Class F, $4,683,000, Fixed, affirmed at Ba1

   * Class G, $4,683,000, Fixed, affirmed at Ba2

   * Class H, $1,171,000, Fixed, affirmed at Ba3

   * Class J, $4,683,000, Fixed, affirmed at B2

   * Class K, $3,513,000, Fixed, affirmed at B3

As of the May 12, 2006 distribution date, the transaction's
aggregate principal balance has decreased by approximately 7.6% to
$432.7 million from $468.3 million at securitization.  The
Certificates are collateralized by 69 loans, ranging in size from
less than 1.0% to 6.4% of the pool.

Three loans, representing 6.6% of the pool, have defeased and are
collateralized by Canadian Government securities.  The largest
defeased loans include The Oaks at 160 Chalkfarm Drive, and The
Oaks-200 Chalkfarm Drive Loan.  There have been no realized losses
since securitization.  There are no loans in special servicing.

Moody's was provided with year-end 2004 and partial year 2005
operating results for 84.1% and 38.1% of the pool's loans
respectively, excluding the defeased loans.  Moody's weighted
average loan to value ratio is 75.1%, compared to 80.6% at
securitization.

Based on Moody's analysis, 6.8% of the pool has an LTV greater
than 100.0%, compared to 0.0% at securitization.  The upgrade of
Classes B and C is due to increased subordination levels and
improved overall pool performance.

The top three loans represent 16.9% of the outstanding pool
balance.  The largest loan is Electra Ltd Portfolio, which is
secured by a crossed collateralized/cross defaulted three loan
portfolio secured by three office buildings.  The three office
buildings comprise a total of 484,164 square feet of Class B
office space and were built in 1966, 1930, and 1948.  The
properties are located in or near the Montreal CBD.  The weighted
average occupancy is 92.1%, compared to 93.8% at securitization.
Moody's LTV is 78.2%, compared to 80.3% at securitization.

The second largest loan is the Crosswinds Apartments Loan, which
is secured by a 347-unit, 26-story apartment building built in
1975.  The property is located in Ottawa, Ontario.  The current
occupancy is 94.5%, compared to 97.0% at securitization.  The Loan
is full recourse to the borrower and Shelter Canadian Properties
Limited.  Moody's LTV is 82.1%, compared to 81.2% at
securitization.

The third largest loan is the Montenach Mall, which is secured by
a 313,200 square foot community shopping center built in 1975 and
renovated and expanded in 1989.  It is located in Beloil, Quebec,
a suburb of Montreal.  The current occupancy is 96.1%, compared to
93.0% at securitization.  The anchor tenants are Zellers, Super C
and Citation.  The loan is non-recourse and amortizes on a 25-year
schedule.  The loan sponsor is Engel Europe Ltd.  Moody's LTV is
79.1%, compared to 82.7% at securitization.

The pool's collateral is a mix of retail, multifamily, office and
mixed-use, industrial, assisted living and Canadian Government
securities.  The collateral properties are located in six
provinces.  The highest provincial concentrations are Ontario,
Quebec, Alberta, British Columbia and Manitoba.  All of the loans
are fixed rate.


MILLIPORE CORP: S&P Downgrades Corporate Credit Rating to BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Millipore Corp. to 'BB+'
from 'BBB'.  The ratings were removed from CreditWatch, where they
were placed with negative implications April 25, 2006, in light of
Millipore's agreement to purchase Serologicals Corp.  (B+/Watch
Pos/--) in a $1.4 billion all-cash transaction.  The rating
outlook is stable.

"The downgrade reflects the significantly expanded debt burden,
the uncertain integration success and, over the longer term, the
potential for additional debt-financed acquisitions," said
Standard & Poor's credit analyst David Lugg.

Pro forma for the acquisition, credit measures sharply weaken,
with total debt to EBITDA rising to more than 5x from just less
than 3x, and funds from operations to total debt falling to about
15% from greater than 30% at Dec. 31, 2005.  Given Millipore's
solid business position and sustainable cash generation, these
measures could steadily improve over the next two years.  However,
this potential improvement could be deferred if expected operating
improvements are slow to materialize or additional debt-financed
acquisitions are undertaken.

Under new management, Millipore has abandoned a previously very
cautious approach to acquisitions, spending $101 million in 2005
after spending less than $12 million over the previous six years.
Given the ongoing consolidation in the relatively fragmented
laboratory supply industry, it is likely that Millipore will be
presented with additional acquisition opportunities.

Millipore manufactures a range of products for life science
research laboratories and biopharmaceutical production, with
particular strength in purification technologies.  The company's
reputation and constant upgrading of its products are more
important to its customers than price.  Because Millipore's
customers need to replenish consumable supplies, they provide the
company with a secure stream of recurring revenues that enhances
sales predictability and limits the effects of changes in
government spending and biopharmaceutical industry consolidation.
The company is also geographically diversified, with sales outside
of the Americas accounting for about 58% of the total.

The acquisition of Serologicals adds cell culture components used
in biotechnology manufacturing and, more importantly, a range of
reagents used in biological research.  Although the latter is a
new business for Millipore, these products are sold to Millipore's
existing Bioscience customer base.  Their addition should enable
new product offerings, promising accelerating growth and higher
margins.


MIRANT CORP: Sells Wichita Falls Facility to Signal Hill
--------------------------------------------------------
Mirant Corporation has completed the sale of its Wichita Falls
facility to Signal Hill Power LLC.  Wichita Falls is a combined
cycle facility consisting of three gas turbines and a steam
turbine.  The facility, which is located near Wichita Falls,
Texas, has a total capacity of 77-megawatts.  Financial terms of
the transaction were not disclosed.

The sale of Wichita Falls is consistent with Mirant's U.S.
strategy to focus on core asset operations.

The purchase of Wichita Falls furthers Signal Hill's goal of
owning, operating, managing and developing power generation assets
in North America.

                        About Signal Hill

Signal Hill Power LLC is a Houston, Texas, company with more
than 30 years of combined experience in the development,
ownership, operations and management of energy infrastructure
projects around the world. R. Clay Spears and Frost W. Cochran
founded Signal Hill Power LLC with the intent of building a
portfolio of North American power generation assets.  Signal Hill
will use the Wichita Falls plant to competitively produce and
sell electricity in the ERCOT market.

                          About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation
(NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America, the
Caribbean, and the Philippines.  Mirant owns or leases more than
18,000 megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts.  (Mirant Bankruptcy News,
Issue No. 97; Bankruptcy Creditors' Service, Inc., 215/945-7000)

                          *     *     *

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


MIRANT CORP: Battles Ensues Over Wilson's Multi-Mil. Admin. Claim
-----------------------------------------------------------------
Certain shareholders, on behalf of The Wilson Law Firm, P.C.,
filed two separate applications for payment of $712,518 in fees
and expenses, and $6,450,000 in fee enhancement in the chapter 11
cases of Mirant Corporation and its debtor-affiliates.

The Shareholders represented by the Wilson Firm are:

    (1) Frank Smith,
    (2) Kent Koerper,
    (3) Peter Depavloff,
    (4) Bart Engram,
    (5) Mary Leight, and
    (6) L. Matt Wilson.

Wilson's $6,450,000 fee enhancement is based on "1% of the
$645,000,000 gain realized by existing shareholders".

According to Jason D. Schauer, Esq., at White & Case, LLP, in
Miami, Florida, the $7,162,518 cannot be recovered under Section
503(b) of the Bankruptcy Code.  Section 503(b) requires the
Shareholders to have actually incurred the amounts for which
reimbursement is sought.

Mr. Schauer noted that under the fee agreements between the
Shareholders and the Firm, the Shareholders are not liable for
any of the fees and costs requested in the Applications.
Consequently, the Applications must be denied as a matter of law.

Even if the Shareholders have some obligation to compensate the
Firm for its attorney's fees, the Firm represented five
shareholders with less than 0.06% of the old Mirant common stock.
At most, the Shareholders' individual obligations to the Firm for
its attorney's fees would not exceed $9,567 under the terms of
the Fee Agreements, Mr. Schauer asserted.

Specifically, New Mirant wanted to resolve the issues on whether:

    -- Wilson or the Shareholders should be paid the $7,162,518
       under Section 503(b) when the Shareholders are not liable
       to the firm for the amounts requested; and

    -- Wilson should be paid an amount in excess of $9,567, which
       is the maximum amount that Wilson could possibly be
       entitled to under any possible theory or interpretation of
       the Fee Agreements.

New Mirant, therefore, asked the U.S. Bankruptcy Court for the
Northern District of Texas to:

     (i) deny the Applications outright and award nothing to the
         Shareholders or the Firm; or

    (ii) enter a partial summary adjudication determining that the
         maximum possible recovery by Wilson under the
         Applications cannot exceed $9,567.

                         Wilson Responds

A law firm that represents creditor or equity holders who have
made a "substantial contribution" should be afforded an
administrative claim for its reasonable fees and expenses under
Section 503(b)(4) of the Bankruptcy Code even though the client
might not be obligated to pay and has not paid those fees and
expenses, L. Matt Wilson, Esq., at The Wilson Law Firm, P.C., in
Atlanta, Georgia, asserted.

That "rule" encourages the type of public participation afforded
by The Wilson Law Firm, P.C., on behalf of the Debtors'
shareholders, Mr. Wilson noted.

Mr. Wilson contended that the only way the Court can encourage
sufficient participation by interested parties in a Chapter 11
case is to reward their substantial contribution by permitting
recovery of attorney's fees and expenses.  Any other result
effectively closes the door to the courthouse, rendering it
impractical for anyone but the very largest creditors or
shareholders to afford representation, and removes the many
safeguards traditionally provided by public participation.

Mr. Wilson told the Court that, among other authority, In re
Western Asbestos Company, 318 B.R. 527 (Bankr. N.D.Cal. 2004),
remains the only case that is both directly on point and good
authority for the grant of the fee applications.  According to
Western Asbestos case, Section 503(b)(4) permits an
administrative claim for fees and expenses of an attorney who
represents a creditor who made a substantial contribution
regardless of whether the fees and expenses were incurred by the
creditor.

Aside from matters that concern him, Mr. Wilson said there is no
dispute of material fact with respect to the relationship between
the Firm and himself and the other client-shareholders -- Frank
Smith, Kent Koerper, Peter Depavloff, Bart Engram and Mary
Leight.

There are no factual disputes or issues raised by the New Mirant
Entities' Motion, other than as to his personal obligation, as
the sole shareholder of the Firm, for any un-reimbursed fees and
expenses, Mr. Wilson says.  The Shareholders are not responsible
for hourly fees or expenses, and are only obligated for 1% of
each of their profit as provided in their fee agreements.

In addition, the Shareholders do not dispute the statements
regarding their acquisition of shares, as stated in the third
amended verified statement that the Firm submitted with the Court
pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure.

Mr. Wilson pointed out that it cannot be disputed that the fees
and expenses to be reimbursed are those of the Firm, and not his.
Although he is an attorney of the Firm, who did, in fact, bill
for his time, it is the Firm's fees and expenses that are to be
paid by the Shareholders.

The Shareholders, therefore, asked the Court to deny New Mirant's
request in its entirety.

          Mirant Committee Supports New Mirant's Request

The Official Committee of Unsecured Creditors of Mirant
Corporation, et al., agrees with New Mirant that the maximum
award for which the Shareholders may be eligible is $9,567.

Mirant Committee's attorney, Fredric Sosnick, Esq., at Shearman &
Sterling LLP, in New York, asserted that there is no genuine
dispute that the Shareholders never incurred any obligation to
pay any of the Firm's hourly professional fees or expenses.
Accordingly, the Wilson Shareholders may not seek reimbursement
of the fees under Section 503(b) of the Bankruptcy Code.

Even if the Court were to conclude that the Wilson Shareholders
made a substantial contribution in Mirant's Chapter 11 cases, Mr.
Sosnick argues that there is no factual basis for awarding a
contingency fee under Section 503(b), because no party ever
incurred, or was ever obligated to pay, that fee.

Any payment to the Wilson Shareholders would be measured at best
by the limited share holdings of the Wilson Shareholders, and the
obligations actually incurred by the Wilson Shareholders, Mr.
Sosnick pointed out.

Thus, the Mirant Committee asked the Court to grant New Mirant's
request for summary judgment against the Shareholders.

                       New Mirant's Reply

Section 503(b) provides for reimbursement of expenses, including
attorney's fees, incurred by an "entity" in providing a
substantial contribution to the bankruptcy case, Jason D.
Schauer, Esq., at White & Case LLP, in Miami, Florida, noted.

As the Shareholders have admitted that they have no obligation to
pay the Firm's fees and expenses, they do not meet the statutory
requirements of Section 503(b)(4), Mr. Schauer said.  Hence, he
asserts, the Court must deny the fee requests as a matter of law.

Mr. Schauer contended that granting the fee applications would
undermine the policy behind Section 503(b).  There are two
conflicting policies underlying Section 503(b):

    (1) to encourage meaningful creditor participation, and
    (2) to keep administrative expenses to a minimum.

To reconcile these two conflicting policies, Mr. Schauer noted
that courts have construed Section 503(b) narrowly and required
strict compliance with the requirements of Sections 503(b)(3) and
(4).  Mr. Schauer insists that the Shareholders have failed to
meet those statutory standards and policy objectives.

The Shareholders' reliance on Western Asbestos is misplaced, Mr.
Schauer argued.  The case has been heavily criticized by other
courts, and takes a position contrary to the majority of the case
law and learned treatises.

To permit a law firm to be paid its fees and expenses and a
healthy "bonus" under Section 503(b)(4), even though the "client"
was not obligated to pay those fees and expenses is contrary to
the plain language of the statute, established caselaw, and the
purpose underlying Section 503(b)(4), Mr. Schauer said.

For these reasons, New Mirant asked the Court to:

    (a) overrule the Shareholders' objection; and
    (b) approve its summary judgment request.

                          Court Ruling

Judge Lynn denies New Mirant's request without prejudice,
provided, however, that the Court reserves the right to further
address the legal issues raised when it writes its opinion on
fees.

                           About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation
(NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America, the
Caribbean, and the Philippines.  Mirant owns or leases more than
18,000 megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts.  (Mirant Bankruptcy News,
Issue Nos. 96 & 97; Bankruptcy Creditors' Service, Inc.,
215/945-7000)

                          *     *     *

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


MKP CBO: Moody's Reviews B3 Rating on $25MM Floating Rate Notes
---------------------------------------------------------------
Moody's Investors Service placed under review for downgrade four
classes of notes issued by MKP CBO I, Ltd.:

   * $250,000,000 Class A-IL Floating Rate Notes Due
     February 2036;

   * $25,000,000 Class A-2L Floating Rate Notes Due
     February 2036;

   * $7,375,000 Class B-1A 8.75% Notes Due
     February 2036; and

   * $7,000,000 Class B-1L Floating Rate Notes due
     February 2036.

According to Moody's, its rating action results primarily from
significant deterioration in the coverage tests.  Moody's noted
that, as of the most recent monthly report on the transaction, the
Class A Overcollateralization Test was at 95.3% and the Class B
Overcollateralization Test was at 86.8%.

This transaction closed on February 8, 2001.

Rating action: review for downgrade

Issuer: MKP CBO I, LTD.

   * Class Description: U.S. $250,000,000 Class A-IL Floating
     Rate Notes Due February 2036

     Prior Rating: A3

     Current Rating: A3 (under review for downgrade)

   * Class Description: U.S. $25,000,000 Class A-2L Floating Rate
     Notes Due February 2036

     Prior Rating: B3

     Current Rating: B3 (under review for downgrade)

   * Class Description: U.S. $7,375,000 Class B-1A 8.75% Notes
     Due February 2036

     Prior Rating: Caa3

     Current Rating: Caa3 (under review for downgrade)

   * Class Description: U.S. $7,000,000 Class B-1L Floating Rate
     Notes due February 2036

     Prior Rating: Caa3

     Current Rating: Caa3 (under review for downgrade)


MUELLER GROUP: Moody's lifts Rating on Sr. Sec. Sub. Debt to B3
---------------------------------------------------------------
Moody's Investors Service upgraded the long term senior secured
debt ratings of Mueller Group LLC to B1 from B2 and senior secured
subordinated debt rating to B3 from Caa1.  The outlook is stable.

This concludes the review for possible upgrade for Group,
initiated on February 9, 2006, following Group's parent, Mueller
Water Products, Inc., filing of an S-1 registration statement
regarding its intention to complete an IPO.

Moody's anticipates that the proceeds of the equity offering, net
of transaction fees, will be used entirely for debt reduction,
allocated to Mueller's senior discount notes, and Group's senior
subordinated notes and term loan.  In a related action, Moody's
assigned a Caa1 rating to the Senior Unsecured Discount Notes due
2014 previously issued by Mueller.  Further, the B2 Corporate
Family Rating for Group has been withdrawn and a Corporate Family
Rating of B1 assigned to Mueller.

The key factors influencing the upgrade include:

   1) debt reduction following the completion of Mueller's IPO,
      which provided $432 million for debt reduction.  Mueller's
      ratings also capture its:

   2) strong North American market position,

   3) consistent free cash flow generation, offset by Moody's
      expectation that

   4) margins could be challenged by raw material cost inflation,
      and

   5) weakening of residential construction activity that could
      suppress operating performance going forward.

Moody's previous rating action on Group was on February 9, 2006,
when Group's ratings were placed under review for possible upgrade
prompted by Mueller's filing of an S-1 registration statement
regarding its intention to complete the IPO.

Upgrades:

Issuer: Mueller Group, Inc.

   * Senior Secured Bank Credit Facility, Upgraded to B1 from B2

   * 10.00% Senior Secured Subordinated Bond/Debenture due 2012,
     Upgraded to B3 from Caa1

Assignments:

Issuer: Mueller Water Products, Inc.

   * Corporate Family Rating, Assigned B1

   * 14.75% .Senior Unsecured Discount Bond/Debenture due 2014,
     Assigned Caa1

Outlook Actions:

Issuer: Mueller Group, Inc.

   * Outlook, Changed To Stable from Rating Under Review

Issuer: Mueller Water Products, Inc.

   * Outlook, Assigned Stable

Based in Decatur, Illinois, Mueller is a leading North American
full line supplier of water infrastructure and flow control
products for use in water distribution networks, water and
wastewater treatment facilities, gas distribution systems and
piping systems.  Its principal products are fire hydrants, water
and gas valves, ductile iron pressure pipe and a complete range of
pipe fittings, couplings, hangers and related products.  For the
trailing twelve months ending March 31, 2006, Mueller reported pro
forma annual sales of $1.86 billion.


NADER MODANLO: Faces Contempt Charges over UBS Bank Account Order
-----------------------------------------------------------------
W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, asks the
U.S. Bankruptcy Court for the District of Maryland to enter an
order of civil contempt and issue sanctions against Nader Modanlo.

Lynn A. Kohen, a U.S. Department of Justice Trial Attorney,
reminds the Court that Christopher Mead was appointed as the
chapter 11 trustee, who has since initiated his investigation into
the condition of the estate and the Debtor's assets and
liabilities.  To fulfill his duties to the estate, the Chapter 11
Trustee requested that the Debtor to sign a document authorizing
UBS AG, a Swiss bank in which the Debtor admits holding at least
one account, to turn over directly to the chapter 11 trustee
information relating to the Debtor's account there.  The Debtor
refused to sign the documents, despite several demands by the
Chapter 11 Trustee.

In response to the Debtor's refusal to cooperate and to sign the
letter to UBS AG, the Chapter 11 Trustee asked the Court to compel
the Debtor to sign the letter.  The Court then specifically
directed the Debtor to sign the letter that the Chapter 11 Trustee
had drafted to UBS AG to ascertain the bank documents.

Despite this explicit Order, Ms. Kohen relates the Debtor has
refused to sign the letter to UBS AG, and failed to cooperate with
the Chapter 11 Trustee.  The Debtor's refusal to obey the Court's
order and to cooperate with the Chapter 11 Trustee is
contemptuous, Ms. Kohen says.

Four days after the Court ordered Mr. Modanlo to cooperate with
the Chapter 11 Trustee and to sign the letter to UBS AG requesting
that UBS AG produce all bank statements to the Chapter 11 Trustee,
Mr. Modanlo sent UBS AG his own letter requesting that it produce
all bank statements to his counsel.

Ms. Kohen points out that the proof of noncompliance is clear and
convincing.  Mr. Modanlo has refused to execute any document in a
form acceptable to the Chapter 11 Trustee to cause UBS to deliver
the funds in the UBS account and historical information relating
to the UBS account to the Chapter 11 Trustee.  The Debtor cannot
dispute this fact, Ms. Kohen asserts.

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


NATIONAL ENERGY: Project Lenders Insist on Inclusion of Claims
--------------------------------------------------------------
The steering committees of Lake Road and La Paloma project lenders
filed a request for inclusion of their disallowed claims -- a
$10,616,672 claim for postpetition expenses; and a $90,872,297
claim for postpetition interest -- in the Disputed Claims Reserve
in the chapter 11 cases of PG&E National Energy Group, Inc.,
nka National Energy & Gas Transmission, Inc., as reported in
the Troubled Company Reporter on March 15, 2006.

"Perhaps in an effort to obtain leverage to settle the claims,
the [Steering Committee's] Motion was filed to include the
disallowed claims in the Disputed Claims Reserve," Judge Mannes
opined.

While seeing little merit in the Steering Committee's request,
the Bankruptcy Court ordered National Energy & Gas Transmission,
Inc., to include the Additional Claims in the Reserve through the
conclusion of the Lenders' appeal on the Disallowance Order
before the United States District Court for the District of
Maryland.

On May 10, 2006, the U.S. District Court for the District of
Maryland affirms and vacates in part the Bankruptcy Court's
February 26, 2006, order disallowing the additional claims of the
La Paloma Lenders and the Lake Road Lenders, specifically:

    -- $10,616,672 claim for postpetition expenses; and
    -- $90,872,297 claim for postpetition interest.

District Court Judge Alexander Williams, Jr., notes that Section
502(b)(2) of the Bankruptcy Code bars unsecured creditors from
collecting postpetition interest on their claims.  The Lenders,
however, argue that they may make a claim for postpetition
interest because the interest accrued on direct obligations of
the non-Debtor project companies.

The District Court does not agree with the Lenders that Section
502(b)(2) should not protect debtor-guarantors.  Judge Williams
notes that the Lenders have not cited a single case that holds
that Section 502(b)(2)'s prohibition applies only to direct
obligations of a debtor.

Judge Williams notes that several courts have reached similar
conclusions.  In In re Loewen Group International, Inc., 274 B.R.
427 (Bankr. D. Del. 2002), the Delaware bankruptcy court found
that Section 502(b)(2) did not allow unsecured creditors to
collect postpetition interest from the guarantor of two
promissory notes.

The Lenders appeal the Bankruptcy Court's ruling that their
claims for expenses and attorney's fees are prohibited under
Section 506(b).  They argue that the Bankruptcy Court erred by
casting their claim as one for postpetition expenses.  They
contend that, because they seek fees and expenses under a
contract executed prior to the Petition Date, their claim is
actually a contingent claim under a prepetition indemnification
agreement.

The District Court agrees with the Lenders' arguments with
respect to their Expenses claims.  Judge Williams notes that the
court in Insurance Company of North America v. Sullivan, 333 B.R.
55 (D. Md. 2005), held that Section 506(b) does not bar
contingent prepetition claims made by an unsecured creditor even
though the triggering contingency did not occur until after the
filing of the Bankruptcy petition.

Judge Williams explains that the Lenders had a right to payment
for expenses and fees under NEGT's prepetition agreement to
indemnify the expenses accrued by its subsidiaries on the
Projects.  The Lenders do not seek general attorney's fees for
representation in connection with the bankruptcy petition, but
fees related to the indemnity agreements.

The District Court concedes that, whether the indemnity
agreements authorize the Lenders to recover the $10,616,672 they
claim in expenses, however, remains an open question.  The
particular loan documents are not part of the record, and as the
Bankruptcy Court is familiar with the case, it sits in a better
position to judge the merits of this argument.  Therefore, the
District Court remands this matter to the Bankruptcy Court for
further proceedings related to interpretation of the applicable
documents.

The District Court renders as moot the Lenders' arguments that
the Bankruptcy Court abused its discretion in failing to consider
the Lenders' argument that the equities militate in favor of
allowance of their Interest Claim and Expenses Claim.

Judge Williams explains that, as the District Court has affirmed
the Bankruptcy Court's disallowance of Lenders' Interest Claim,
it need not address Lenders' equitable arguments relating to this
claim.

              Lenders' Motion for Reconsideration

The Lenders informs Judge Mannes that they intend to seek leave
to pursue, on an expedited basis to the U.S. Court of Appeals for
the Fourth Circuit, an immediate appeal from the portion of the
District Court's decision regarding the Interest claims.

Accordingly, the Lenders ask the Bankruptcy Court to reconsider,
or in the alternative to extend, its order authorizing the
inclusion of the Additional Claims in the Claims Reserve.

The Lenders are concerned that NEGT is intending to reduce the
Disputed Claims Reserve so it can retain insufficient reserves to
make the pro rata distribution to the Lenders on account of the
Additional Claims, if they are ultimately allowed.

If NEGT fails to properly reserve for all disputed claims,
including the additional claim amounts and the disputed claims
are subsequently allowed, the Lenders have the right to compel
NEGT to recover the excess distribution paid to other Class 3
claimants, Patricia A. Borenstein, Esq., at Miles & Stockbridge
P.C., in Baltimore, Maryland, asserts.

According to Ms. Borenstein, approval of the Lenders' request
will ensure that the Debtor does not make an improvident
distribution and prejudice the rights of the Lenders and other
creditors in the case.

                          NEGT Objects

Matthew A. Feldman, Esq., at Willkie Farr & Gallagher LLP, in New
York, tells the Court that NEGT has assured the Lenders that it
would maintain sufficient funds in the Claims Reserve to cover a
full ratable distribution on the entire amount of the Lenders'
expense claims.

With respect to the Interest claims, NEGT has never questioned
the Lenders' motives in pursuing the allowance of the claims even
if they have presented no evidence until now.

NEGT is willing to assume for current purposes that the Lenders
are furthering what they perceive to be their legitimate self-
interest by seeking the allowance of the claims.  Mr. Feldman,
however, asserts that the Lenders' motives are irrelevant given
that the purity of their motives would not:

    -- make for an intervening change in controlling law,

    -- constitute new evidence not available previously, or

    -- render the denial of the reconsideration request a
       manifest injustice.

Mr. Feldman asserts that denial of the Lenders' request for
reconsideration will work no "manifest injustice" upon them.

He notes that the Lenders, consisting of multi-billion dollar
lending institutions represented by sophisticated, experienced
counsel, had waited nearly two years to even raise the issue
presented in their Claims Reserve Motion.

In addition, the confirmed Plan expressly provides that for the
purposes of the Disputed Claims Reserve, the appropriate amount
to be segregated on account of any particular Class 3 Claim is
the "face amount," which by definition excludes the Interest
claims.

NEGT asks the Court to deny the Lenders' reconsideration request.

                    Lenders Defend Request

The steering committees of Lake Road and La Paloma project
lenders reiterate their request that the Bankruptcy Court
reconsider or, in the alternative, to extend its order
authorizing the inclusion of the Additional Claims in the Claims
Reserve through the conclusion of the Lenders' appeal before the
U.S. District Court for the District of Maryland.

As previously reported, the District Court, on May 10, 2006,
entered an order:

   (1) affirming Judge Mannes' Disallowance Order insofar as it
       relates to the Interest claims; and

   (2) vacating the Disallowance Order insofar as it concerns the
       Expenses claims.

NEGT has conveyed in its objection to the Lenders' request for
reconsideration that it does not intend to maintain the Disputed
Claims Reserve at a level sufficient to pay the Interest Claims
if they are ultimately allowed, Luc A. Despins, Esq., at Milbank,
Tweed, Hadley & McCloy LLP, in New York, notes.

If the Lenders are successful on their appeal to U.S. Court of
Appeals for the Fourth Circuit with respect to the Interest
claims, they risk being left with having to engage in additional
litigation with NEGT or other creditors to obtain disgorgement of
funds released improvidently, Mr. Despins avers.

He asserts that, contrary to NEGT's contentions, the Lenders'
request is not moot.  Regardless of whether NEGT maintains
sufficient funds in the Disputed Claims Reserve to cover a full
ratable distribution on the entire amount of the Expense Claim,
the serious risk of prejudice to Lenders remains if NEGT does not
maintain sufficient funds to cover the Tranche A Interest Claim,
which is significantly larger than the Expenses claims.

Mr. Despins points out that there is absolutely no prejudice to
NEGT if the Lenders' request is granted because the result merely
maintains the status quo.  No creditor would suffer any
cognizable harm because NEGT's current reserve will continue to
accrue interest that would ultimately be released to the lawful
creditors.

The Lenders maintain that the Tranche A Interest Claim is a
prepetition indemnification claim, regardless of when the
underlying obligation accrued.  As a result, Section 502(b)(2) of
the Bankruptcy Code is inapplicable to the Interest Claim.

The issue of whether Section 502(b)(2) applies at all to the
Interest Claim is effectively one of first impression for any
circuit court of appeals.  The Lenders should be permitted a
reasonable time to pursue their appeal to the Fourth Circuit
Court of Appeals without fear that, if ultimately successful,
NEGT will have already dispersed the funds necessary to pay their
Interest claim, Mr. Despins contends.

The Lenders' request should be granted because NEGT itself
concedes that the Lenders' motive in pursuing the Claims is pure,
Mr. Despins further argues.  Even if the Bankruptcy Court does
not agree that the harm to the Lenders from the potential mooting
of their appeal does not constitute a manifest injustice, the
Court should nonetheless direct NEGT to maintain the status quo.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NATIONAL ENERGY: Asks Court to Disallow Lehman's $7.2 Mil. Claim
----------------------------------------------------------------
Before PG&E National Energy Group, Inc., (nka National Energy &
Gas Transmission, Inc.) and its debtor-affiliates filed for
bankruptcy, National Energy and Lehman Brothers, Inc., entered
into an investment banking agreement, wherein Lehman Brothers
provided advisory services concerning the potential sale of some
of NEGT's assets.

As a result of Lehman's statutory conflict and its legal
inability to perform under the Agreement, the Debtors had to
replace Lehman.

On the Debtors' bankruptcy petition date, the Debtors filed, and
subsequently obtained Court approval of, an application under
Sections 327(a) and 328(a) of the Bankruptcy Code to employ Lazard
Freres and Co., LLC, as their financial advisor and investment
banker.

In November 2003, Lazard initiated a competitive sale process for
the sale of NEGT's equity stock in Gas Transmission Northwest
Corporation, formerly known as PG&E Gas Transmission Northwest
Corporation.

On February 24, 2004, NEGT and TransCanada Corporation entered
into a purchase and sale agreement, pursuant to which TransCanada
agreed to purchase all of the issued and outstanding shares of
capital stock of GTNC for $1,203,000,000 in cash and the
assumption of $500,000,000 in debt.

On March 2, 2005, the Court granted Lazard's application for
allowance of $10,830,593 in fees, including a $9,787,375 success
fee for its efforts in the GTNC sale.

After the announcement of the sale of GTNC, Lehman pursued claims
against the Debtors.  Lehman filed Claim No. 14 asserting an
unliquidated claim for services performed and for damages arising
out of the Debtors' rejection of the Agreement.

Lehman also timely filed Claim No. 699 for $7,217,000 as a
rejection damages claim under the "tail" provision of the
Agreement.  This sum allegedly represents the success fee owed to
Lehman for the sale of GTNC to TransCanada.  Lehman claims that
it had contacted TransCanada and introduced it to NEGT for the
purpose of facilitating discussions about the purchase of GTNC.

                 Debtors Want Claims Expunged

The Debtors ask the Court to expunge and disallow Lehman's claims
in their entirety.

The Agreement provides that it would be of no force and effect if
not approved by the Bankruptcy Court, John F. Carlton, Esq., at
Whiteford, Taylor & Preston L.L.P., in Baltimore, Maryland,
points out.  The Court has never approved the Agreement.

Neither Lehman nor NEGT assumed the risk of liability in the
event that Court approval could not be obtained, Mr. Carlton
notes.  The Agreement does not provide that the failure to obtain
Court approval is an elective termination of the Agreement by
either party.  Any obligations owed by NEGT to Lehman under the
Agreement, including the tail provision, terminated automatically
upon the Debtors' bankruptcy filing, Mr. Carlton relates.

Moreover, Lehman's eligibility to be retained as a professional
person in NEGT's bankruptcy case was a basic mutual assumption on
which the Agreement was made, Mr. Carlton asserts.  However,
Lehman was legally prohibited from performing its obligations as
investment-banking services provider because it was not
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.

The Agreement's conditions precedent to the existence of any
claim did not occur or were not satisfied, Mr. Carlton also
points out.  The Agreement provides that should NEGT elect to
terminate the Agreement, Lehman will promptly provide NEGT with a
list of entities contacted with respect to any transaction
contemplated by the Agreement.

Should NEGT, subsequent to the termination of the Agreement and
within 12 months of the termination, announce a transaction with
any party on the list, NEGT will pay Lehman a fee in accordance
with the Agreement.  Lehman has never supplied the list necessary
for it to invoke the tail compensation referenced in the
Agreement, Mr. Carlton tells Judge Mannes.

Claim No. 14 is facially filed against PG&E National Energy
Group, Inc., et al., while Claim No. 699 asserts a claim only
against NEGT.  Lehman is attempting to assert its claims not only
against NEGT, the only Debtor who is a party to the Agreement,
but also against all the other Debtors.  Lehman obviously has no
valid basis for any claims against the other Debtors, Mr. Carlton
contends.

                        Lehman Responds

Marcell Solomon, Esq., at Marcell Solomon & Associates, P.C., in
Greenbelt, Maryland, clarifies that the Agreement's provision
requiring Lehman to submit a list of entities is not a condition
precedent to NEGT's obligation to pay the tail compensation fee.

According to Mr. Solomon, the list provision is simply a notice
provision, which was satisfied as NEGT was fully aware that it
was Lehman that brought TransCanada to the sale transaction.
Lehman's failure to provide the list was clearly inconsequential
under the circumstances.

Even if the provision of the list were determined to be a
condition precedent, which clearly it is not, the failure to
provide the list should be excused when, its enforcement would
otherwise result in a disproportionate forfeiture of Lehman's
right to its fees, Mr. Solomon asserts.

He notes that Lehman knew it would face a substantial forfeiture
if it could not recover the tail compensation totaling over
$7,000,000 if written notice of something NEGT was well aware of
was not furnished.

The Debtors assert that Lehman was ineligible and disqualified
from being retained as NEGT's broker during its bankruptcy case
under Section 327 of the Bankruptcy Code because it was not
"disinterested."

However, Mr. Solomon argues that Section 327 is inapplicable
because it only pertains to employment of professionals during
the bankruptcy case.  NEGT had no intention of seeking Lehman's
employment during its bankruptcy case and even moved to reject
the Agreement when it filed for bankruptcy, at the same time
seeking approval of Lazard's employment as investment banker.
Section 327 has no bearing on Lehman's claim, which is defined as
a right to payment, whether or not unliquidated, unmatured,
disputed or contingent.

Mr. Solomon also points out that the Agreement contains no
language invalidating Lehman's claims or the tail provision in
the absence of a Court approval.  He notes that the absence of
Court approval was directly occasioned by the Debtors' request to
reject the Agreement, in direct violation of their contractual
undertaking to use reasonable efforts to seek approval from the
Court.  A party cannot take advantage of the failure of a
condition whose nonoccurrence it has caused.

The Debtors' allegation that the announcement of the sale to
TransCanada took place more than 12 months after all work by
Lehman on the sale of GTNC was completed is meritless,
Mr. Solomon contends.  The duration of the tail period was 12
months after termination, not 12 months after work was completed.

In rejecting the Agreement, the Debtors said Lehman refused to
perform under the Agreement.  The Debtors now say that work
stopped as of the Petition Date because it was legally impossible
for Lehman to perform the contract, Mr. Solomon notes.

He asserts that the premise of the objection -- that Lehman's
claim be disallowed because Lazard performed the work that Lehman
was engaged to perform and Lehman would receive a windfall if its
claim were allowed -- has been eliminated because the Debtors now
concede that Lehman performed substantial services for NEGT.
Hence, Lehman will receive no windfall by receiving the success
fee it earned in light of the substantial efforts and time it
expended on its engagement.

Accordingly, Lehman asks the Court to overrule the Debtors'
objections, and fix and allow its claim for $7,217,000.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 60; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NATIONAL ENERGY: Fights Tennessee Gas' $28-Million Rejection Claim
------------------------------------------------------------------
USGen New England, Inc., a National Energy & Gas Transmission,
Inc., debtor-affiliate, asks the U.S. Bankruptcy Court for the
Middle District of Maryland to deny Tennessee Gas Pipeline
Company's request for summary judgment relating to their disputes
on the computation of Tennessee Gas' claims for damages.

The Claim arises from USGen's rejection of their contracts for the
transportation of natural gas for use at several New England power
plants owned and operated by USGen.

                 Rejection Damage Calculations

Jay Lukens, Tennessee Gas' expert, argued that Tennessee Gas is
entitled to $28,000,000 in rejection damages, discounted to
present value at a 6.37% rate.

On the other hand, USGen's expert, Thomas Norris, said Tennessee
Gas' damages are zero.  By his calculations, Mr. Norris asserted
that Tennessee Gas has received a net benefit of $3,000,000 from
the rejection of the Contracts, using the 18% discount rate
required by Texas law.

Gordon A. Coffee, Esq., at Winston & Strawn LLP in Washington
D.C., explains that the difference between the parties' damage
calculations is attributable primarily to differences over what
should be credited as mitigation in arriving at Tennessee Gas' net
damages.  The differences fall into these categories:

   (i) assessment of future mitigation,
  (ii) throughput commitment, and
(iii) backhauls.

Mr. Coffee notes that Tennessee Gas sold two thirds of all of the
USGen turnback capacity through 2008.  TGP is not presently making
any effort to market the remaining available USGen turnback
capacity for the period 2007 through 2013.

USGen complains that Tennessee Gas is asking full payment of the
full contract amount for the future years without any reduction
for expected sales for the remaining USGen capacity.  If it
actually succeeds in reselling the USGen capacity, Tennessee Gas
would essentially receive a double recovery of over $25,000,000,
Mr. Coffee tells Judge Mannes.

In addition, under a throughput commitment, USGen guaranteed
Tennessee Gas' receipt of a certain amount of commodity and fuel
charges.  However, Tennessee Gas has refused to give USGen credit
against the throughput commitment for the commodity and fuel
charges paid by shippers who purchased the USGen capacity after
rejection of the Contracts.

In effect, Tennessee Gas is seeking to recover commodity and fuel
charges twice, first from the shippers who flowed gas using the
USGen capacity and then from USGen, Mr. Coffee points out.
Tennessee Gas is seeking approximately $4,400,000, undiscounted,
from USGen based on an assumption of zero throughput.  USGen has
estimated that Tennessee Gas is only due approximately $1,900,000
under the throughput commitment.

Moreover, in several instances, Tennessee Gas has been able to
segment the capacity or combine the USGen capacity with other
pipeline capacity, resulting in revenues greater than what USGen
would have paid under the Contracts.  The availability of the
USGen turnback capacity also has enabled Tennessee Gas to sell
backhauls from Dracut, Massachusetts, it otherwise could not have
sold.

As it does with forwardhaul customers, Tennessee Gas charges (i)
purchasers of backhauls a reservation charge and commodity charge
and (ii) the shippers a nominal fuel charge.  For backhauls with a
receipt point at Dracut, however, it characterizes the contracts
as forwardhauls, rather than as backhauls, on the grounds that the
gas flows inland from Dracut for a short distance, even though the
gas otherwise moves by displacement.  This results in a windfall
profit for Tennessee Gas at USGen's expense.

Because Tennessee Gas could not have entered into the Dracut
backhauls but for the USGen turnback capacity, USGen asserts
mitigation credit for the forward and Dracut backhauls, as well as
the excess fuel recovery generated by the transactions.

                       Mitigation Credits

Tennessee Gas' expert, Dr. Lukens, has conceded that USGen is
entitled to mitigation credit for two of the Dracut backhauls.
Nevertheless, Tennessee Gas has adopted a more restrictive view.
It argues that none of the revenues it derives from Dracut
backhauls made possible by the USGen capacity should be credited
as mitigation.

Tennessee Gas contends that (x) USGen would not have received
credit for backhauls or IT sales if it were still a shipper under
contract with Tennessee Gas, and (y) giving USGen mitigation
credit for the sales would violate the filed rate doctrine.

Mr. Coffee, however, asserts that none of Tennessee Gas'
contentions are supportable.  Mr. Coffee explains that an analysis
of the data provided by Tennessee Gas revealed that the amount of
revenue derived from IT sales of the USGen capacity was minimal.
Accordingly, USGen has not included any IT sales in its damage
calculation.

Tennessee Gas has cited no evidentiary support for the proposition
that shippers receive lower rates because of backhaul sales or
fuel charges, Mr. Coffee argues.  He avers that shippers do not
receive credit, in the form of a rebate or reduced rates, should
Tennessee Gas have greater backhaul sales or actually consume less
fuel than it charges.

USGen, Mr. Coffee points out, derives no financial benefit from
the revenues Tennessee Gas has obtained, and will obtain in the
future, from the Dracut backhauls and fuel excess recovery made
possible by the USGen turnback capacity.  Giving USGen mitigation
credit for those revenues thus confers no "windfall" on USGen.

By contrast, denying USGen mitigation credit for the backhaul
revenues and excess fuel charges that USGen's capacity generated
would give Tennessee Gas a double recovery and unjustly enrich it
at USGen's expense.  Neither result is permissible under Texas
law, which is well established that Tennessee Gas is entitled only
to recover actual damages, Mr. Coffee argues.

If the gains would not have been realized but for the USGen
turnback capacity, USGen is entitled to mitigation credit for the
full amount of the gains, Mr. Coffee asserts.

Mr. Coffee notes that Tennessee Gas' own expert, Dr. Lukens,
describes the "but for" test in his report:

     "The 'but for' standard asks whether TGP could have sold
     capacity absent USGen's turnback.  If the answer is no --
     that is, USGen's capacity and calculation in fact enabled TGP
     to sell gas transportation services that otherwise could not
     have been sold -- then USGen is accorded mitigation."

As a result of this principle, to the extent that the Dracut
backhauls and fuel excess recovery were made possible by the USGen
turnback of capacity, and thus satisfy the "but for" test, USGen
should receive mitigation credit for the revenues from the
transactions, Mr. Coffee contends.

                       Filed Rate Doctrine

In its effort to generate a double recovery at USGen's expense,
Tennessee Gas has mischaracterized the nature and purpose of the
filed rate doctrine, Mr. Coffee argues.

The filed rate doctrine is designed to avoid judicial interference
with regulated rates.  The doctrine accordingly bars judicial
recourse against a regulated entity based upon allegations that
the entity's filed rate is too high, unfair or unlawful.

Mr. Coffee clarifies that the disputed issue in the case is not
what Tennessee Gas was owed under the gas transportation
contracts, but the extent to which USGen should receive mitigation
credit for revenues that Tennessee Gas has received and will
receive through use of the USGen turnback capacity.  That issue is
not impacted by the filed rate doctrine because no court has held
that the filed rate doctrine impairs or restricts the "but for
test" or the traditional rules governing mitigation of damages.

Mr. Coffee also refutes Tennessee Gas' claims that USGen would
effectively pay a lower rate than other shippers if the Court
takes mitigation into account.  He avers that, allowing USGen
mitigation credit does not mean that USGen would be paying a lower
rate than other shippers.  Tennessee Gas' damage claim would
always be calculated according to the same rates as other
shippers, which means there is no effective rebate or discount.

                        Sullivan's Report

Tennessee Gas, invoking the filed rate doctrine, also asks the
Court to strike the expert report of Barry Sullivan.

Mr. Sullivan, a former manager of the Federal Energy Regulatory
Commission who had responsibility at the FERC to review gas
pipeline rates, undertook a detailed analysis of Tennessee Gas'
tariff.  He determined that Tennessee Gas is realizing a return on
equity far in excess of what the FERC has approved in recent
years.  He concluded that the FERC will likely reduce Tennessee
Gas' rates by October 31, 2009.

USGen contends that Tennessee Gas' request is premature.  USGen's
primary position is that if and when Tennessee Gas puts the
remaining USGen turnback capacity back on the market, Tennessee
Gas will sell that capacity with the same degree of success it
enjoyed in 2005.  If the Court concurs with that position,
Tennessee Gas will have no future damages and its future rates
would be a moot issue, Mr. Coffee notes.

However, should the Court agree with Tennessee Gas' contentions
that it will not sell a single dekatherm more of the turnback
capacity before October 31, 2013, the issue then arises whether
its rates will change between today and 2013, Mr. Coffee asserts.
If the rates go down, as predicted by Mr. Sullivan, Tennessee Gas'
damages would likewise decrease.

Based on the formulas and standards the FERC has used in other
rate cases, Mr. Sullivan calculated a $6,000,000 reduction in
Tennessee Gas' claim for the period from October 31, 2009, through
October 31, 2013.  Should the FERC order a rate reduction before
October 31, 2009, the reduction would be even more pronounced.

The relevance of Mr. Sullivan's testimony thus hinges on the
Court's ruling regarding future sales, Mr. Coffee tells Judge
Mannes.  As a result, USGen asserts that the Court need not
address the admissibility of Mr. Sullivan's expert report until
the time as it rules on the issue of future sales.

Given that reality, Mr. Coffee relates that USGen asked Tennessee
Gas to agree to defer any action on Mr. Sullivan's report until
the Court passes judgment on whether Tennessee Gas has any
expected future damages.  USGen also asked that if the Court found
Tennessee Gas to have future damages, Tennessee Gas agree to stay
the case pending a FERC adjudication of the reasonableness of
TGP's rates.

USGen noted that a stay would not prejudice Tennessee Gas,
particularly since USGen is paying interest on all allowed claims.
In addition, the stay would impact only part of the case, as the
remaining aspects of Tennessee Gas' claim and USGen's defenses
would remain to be adjudicated.

However, Tennessee Gas has refused USGen's offer.

While the filed rate doctrine does not permit the Court to assess
the reasonableness of Tennessee Gas' rates, numerous cases
recognize the Court's authority to seek a determination from the
FERC on the issue, Mr. Coffee points out.  He asserts that USGen's
submission of a written report from Mr. Sullivan satisfies any
required threshold or prima facie showing of unreasonableness of
Tennessee Gas' rates.

Mr. Sullivan's report demonstrates that Tennessee Gas' existing
rates, which were established over 10 years ago, are now resulting
in a rate of return far beyond that permitted by the FERC.  At the
current rates, Tennessee Gas will likely receive an after tax
return on equity of 23% for 2006, which greatly exceeds returns
recently approved by the FERC.  Given Mr. Sullivan's exhaustive
analysis and detailed calculations, the Court has sufficient
evidence to warrant staying the case pending a determination by
the FERC as to the reasonableness of TGP's rates, Mr. Coffee
maintains.

USGen asks the Court to either stay the case now and grant leave
so USGen may file a complaint with the FERC, or defer the action
on Mr. Sullivan's report until the issue of future sales of the
remaining USGen turnback capacity is addressed.

In either event, USGen asks Judge Mannes to deny Tennessee Gas'
request to strike the Sullivan report.

            Tennessee Gas' Post-Hearing Memorandum

During oral arguments at the April 27, 2006 hearing, USGen New
England, Inc., relied on three authorities to support its
contentions that it is entitled to mitigation credits from
backhauls, IT sales, and excess fuel charges:

    -- the U.S. Federal Energy Regulatory Commission decision in
       in Tennessee Gas Pipeline Co., 103 F.E.R.C. (2003);

    -- the FERC's ruling in Gulf South Pipeline Company, LP, 107
       F.E.R.C. (2004); and

    -- Sections 4.5 and 4.9 of the General Terms & Conditions of
       Tennessee Gas' tariff.

However, Kenneth W. Irvin, Esq., at McDermott Will & Emery LLP,
in Washington DC, contends that the cited authorities offer no
support for USGen's position on the mitigation credits.

To the contrary, the FERC held in the 2003 Tennessee Gas case
that unmitigated damages consist of "the difference between the
highest net present value bid for the capacity and the net
present value of the remaining terms of the [defaulting]
shipper's contract," Mr. Irvin notes.  In addition, the FERC held
in Gulf South that "one of Gulf South's options, upon suspending
a contract, is to resell under its tariff access to the capacity
used to provide what has become the suspended service."

"That is precisely what [Tennessee Gas] has done here," Mr. Irvin
tells Judge Mannes.   He points out that because the capacity
reserved under the USGen Gas Transportation Agreements was for
forward, firm transportation, Tennessee Gas is entitled to
mitigation credit for the highest net present value bid for the
capacity.  An example of which is the forward, firm
transportation using any or all of the 60,000Dth/day formerly
reserved for USGen, in which its sales total over $12,000,000,
Mr. Irvin says.

Nowhere does the FERC Orders or tariff provisions authorize
granting mitigation credit for the sale of something other than
the capacity reserved for USGen, Mr. Irvin points out.

USGen also argues that the Court may grant a stay pending USGen's
putative challenge to Tennessee Gas' prospective rates for 2009
to 2013, based on rulings in N.Y. State Elec. & Gas Corp. v. N.Y.
Indep. Sys. Operator, Inc., 168 F. Supp 2d 23 (N.D.N.Y. 2001);
Wagner & Brown v. ANR Pipeline Co., 837 F. 2d 199 (5th Cir.
1988); Williams Pipeline Co. v. Empire Gas Corp., 76 F. 3d 1491
(10th Cir 1996).

Mr. Irvin, however, notes that each of these cases concerned a
dispute about historic matters not a challenge to prospective
rates.  Accordingly, none of the cases support USGen's
proposition that it may obtain a stay.

                        USGen Responds

Gordon A. Coffee, Esq., at Winston & Strawn LLP, in Washington,
D.C., clarifies that the FERC in the 2003 Tennessee Gas case was
not defining how mitigation should be measured.  It did not say
that mitigation is limited to certain types of revenues derived
by a pipeline from resale of turnback capacity.

Mr. Coffee also contends that the FERC in Gulf South noted of its
expectation that a breaching shipper like USGen would be liable
only for the difference between what it would have paid and the
amount the pipeline can recover from other customers.

USGen agrees that Tennessee Gas' damages should be measured by
the difference between what USGen agreed to pay for the Wright,
New York, to Mendon, Massachusetts, capacity and the revenues
Tennessee Gas has received from reselling the same capacity to
other shippers.

Mr. Coffee, however, notes that what Tennessee Gas is trying to
do is to exclude some of those revenues on the theory that it
sold the capacity in a different manner -- as a "backhaul" rather
than as a forwardhaul.  In short, Tennessee Gas is refusing to
give full credit for the value it has derived from the USGen
turnback capacity.

Tennessee Gas' distinction between forwardhauls and backhauls is
entirely artificial, Mr. Coffee maintains.  While Tennessee Gas
has a separate rate for true backhauls, when it sold capacity
from Dracut to Bridgeport or other points in Connecticut, the
capacity was sold pursuant to forward, firm transportation
contracts, just like the USGen contracts.

Tennessee Gas' argument about capacity ignores the rights of
shippers to designate alternate receipt and delivery points
anywhere along a contract path, Mr. Coffee argues.  Shippers also
could flow gas in the opposite direction under a forwardhaul
contract.

Perhaps for that reason, Tennessee Gas' own expert agreed that
two of the Dracut contracts that Tennessee Gas signed after
rejection used the USGen turnback capacity and satisfy the "but
for" test, Mr. Coffee notes.  Tennessee Gas' expert, Jay Lukens,
concurred that USGen should receive mitigation credit for the
revenues derived from the contracts.

In the oral argument during the hearing, Tennessee Gas' counsel
agreed to stand by the concession of Tennessee Gas' expert, but
he failed to explain why USGen should receive mitigation credit
for some Dracut backhauls, but not for other Dracut backhauls,
Mr. Coffee notes.  "There is no logical or legal consistency in
[Tennessee Gas'] position."

Tennessee Gas' attempts to distinguish between forwardhauls and
Dracut backhauls have nothing to do with the filed rate doctrine,
Mr. Coffee further clarifies.  The filed rate doctrine requires
the Court to use the rates approved by the FERC when calculating
damages.

USGen has calculated Tennessee Gas' damages using the rates
approved by the FERC, Mr. Coffee informs the Court.  USGen is not
challenging, directly or indirectly, the exclusive authority of
the FERC to set or approve Tennessee Gas' rates.

The FERC has stated that "[p]ipelines are required to post
capacity for sale after a termination."  USGen has presented
evidence that Tennessee Gas in recent months has not posted the
remaining USGen capacity for sale on its Web site or through open
seasons.

While Tennessee Gas' counsel disputed USGen's assertion that
Tennessee Gas was keeping the remaining USGen capacity off the
market at the oral argument, Tennessee Gas still has not
presented any evidence to the contrary, Mr. Coffee further notes.

According to Mr. Coffee, if the Court concludes that Tennessee
Gas has failed to honor the FERC directive to post the remaining
capacity and, hence, has failed to mitigate its future damages,
certain issues become moot, including the testimony of Barry
Sullivan, USGen's expert.

He adds that Mr. Sullivan's testimony also becomes moot if the
Court accepts the testimony of USGen's other expert, Thomas
Norris, who has opined that Tennessee Gas will be successful in
reselling the remaining USGen capacity if and when Tennessee Gas
puts the capacity on the market.

If, however, the Court finds that Tennessee Gas' failure to
market the remaining capacity and its presumption of zero future
sales are reasonable, the reasonableness of Tennessee Gas' rates
becomes an issue, in which case Mr. Sullivan's conclusions become
relevant, Mr. Coffee asserts.  Consequently, the Court should
stay the proceedings to allow the FERC to address the
reasonableness of Tennessee Gas' rates.

                          Court Ruling

The Court notes that it has not been presented with a single case
under the Natural Gas Act on either side of the issue as to
whether a pipeline is required to modify its filed rate on
account of resales of interruptible and backhaul transportation
and retained fuel.

Considering the thoroughness with which the papers were prepared
by the large law firms involved in the case, Judge Mannes says he
is convinced that the Court's limited resources would not produce
a different result.

"[T]his is an issue to be determined either by a far higher level
of court or perhaps initially by the FERC," according to Judge
Mannes.

After studying the parties' submissions, the Court approves
Tennessee Gas' request for partial summary judgment against USGen
on (x) its allegations that Tennessee Gas' rates are not just and
reasonable under the Natural Gas Act and (y) its claims to
mitigation credit for Tennessee Gas' sale of interruptible and
backhaul transportation and retained fuel.

Judge Mannes explains that, as stated in the case of Arkansas
Louisiana Gas Company v. Hall, 453 U.S. 571, 580-83 (1981),
enforcement of the federal filed-rate doctrine does present an
opportunity for Tennessee Gas to be compensated twice for the
same capacity.

The Court also grants Tennessee Gas' request to exclude the report
and the proffered opinions and testimony of Mr. Sullivan.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue Nos. 58 & 59; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


NETWORK PLUS: Miller Coffey Hired as Trustee's Tax Accountants
--------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware authorized Michael B. Joseph, Esq., the
Chapter 7 Trustee overseeing the liquidation of Network Plus Corp.
and Network Plus, Inc., to employ Miller Coffey Tate, LLP as his
tax accountants.

Miller Coffey is expected to:

   a) review and assist the Trustee in preparation and filing of
      any tax returns; and

   b) provide additional tax-related services.

The Firm will bill the Debtor for its services on an hourly basis
in accordance with its customary rates:

        Designation                Hourly Rate
        ------------               -----------
        Partners & Principals      $270 - $400
        Managers                   $200 - $265
        Senior Accountants         $155 - $195
        Staff Accountants           $85 - $150

Matthew R. Tomlin, a Miller Coffey partner, assures the Court that
his Firm does not hold or represent any interest adverse to the
Trustee or to the Debtors' estates.

Network Plus Corp., a network-based integrated communications
provider, which offers broadband data and telecommunications
services, filed for chapter 11 protection on Feb. 4, 2002
(Bankr. Del. Case No. 02-10341).  On June 11, 2003, Judge Walsh
converted the Debtors' cases into chapter 7 liquidation
proceedings.  Michael B. Joseph, Esq., was appointed chapter 7
trustee.  Raymond H. Lemisch, Esq., Gary M. Schildhorn, Esq., and
Anne R. Myers, Esq., at Adelman Lavine Gold and Levin, PC, and
Jonathan M. Stemerman, Esq., of Wilmington, Del., represent the
Chapter 7 Trustee.  Edward J. Kosmowski, Esq., Joel A. White,
Esq., and Maureen D. Like, Esq., at Young Conaway Stargatt &
Taylor represent the Debtors.  As of Sept. 30, 2001, the Debtors
posted $433,239,000 in total assets and $371,300,000 in total
debts.


NEW CENTURY: Ample Liquidity Prompts DBRS' BB Issuer Rating
-----------------------------------------------------------
Dominion Bond Rating Service assigned an Issuer Rating of BB to
New Century Financial Corporation.  The trend is Stable.  The
rating is based on New Century's solid business franchise and
market position, experienced management team, improving earnings
quality, and ample liquidity.

New Century's significant growth has positioned the company as the
second-largest non-prime mortgage banker, and the ninth-largest
mortgage banker in the U.S.  The growth has given New Century
significant market presence and franchise strength, providing the
size and scale necessary for success in the highly competitive
mortgage industry.

Rating offsets include the reliance on wholesale and other market
funding, the company's fast growth, the REIT structure, which
retards capital retention, and New Century's participation in the
highly competitive and volatile non-prime residential mortgage
business.

DBRS believes that New Century's growing loan origination volume
exemplifies the Company's strong franchise strength and sizable
market reach.  Total mortgage originations in 2005 were an
impressive $56.1 billion, increasing 33% from 2004.  The strong
originations volume has given the company a stable 8% market share
of non-prime originations.

First quarter 2006 mortgage originations remained strong at $13.4
billion.  However, growth has been swift.  Accordingly, DBRS
believes that New Century's rating will benefit from a more
established track record of managing a large balance sheet.

The company's strategic acquisitions of the retail operations of
RBC Mortgage in late 2005 and more recently, Access Lending, have
bolstered the mostly organic growth.  More importantly, these
acquisitions further round out the company's business profile, as
they should foster growth in retail originations, Alt-A and Jumbo
loans and, lastly, warehouse lending.  A more diversified product
mix will be viewed positively by DBRS.

Despite the cyclical mortgage environment, New Century continues
to perform well.  Earnings on an absolute basis continue to trend
positively; however, profitability measures were reduced with
return on average assets declining slightly to 1.63% in the first
quarter of 2006.

The company's income before taxes and provisions to assets has
also trended downward to 2.2% at March 31, 2006.  In addition to
the cyclical challenges, the reduced profitability also reflects
the Company's shift to an originate and hold strategy.
Nonetheless, profitability measures are still considered tolerable
on a risk-adjusted basis.

As with the company's peers, maintaining satisfactory
profitability measures in the current interest rate environment
and highly competitive atmosphere will continue to be a challenge
for New Century.  DBRS believes that the company's size and scale
bode well for continued profitability in this highly competitive
market.

New Century's large owned loan portfolio allows for a level of
earnings diversity as it adds significant interest income into the
revenue stream; consequently, earnings are somewhat less volatile.
Additionally, the mortgage portfolio allows the company a
competitive advantage over many of its smaller REIT peers, owing
to significant recurring income produced by the assets.  However,
as a mortgage originator, New Century's earnings are likely to
remain closely related to the level of interest rates and to
origination volumes.

DBRS believes New Century appropriately manages the risk inherent
in its balance sheet, which largely consists of residential
mortgage loans to borrowers with a non-prime credit profile.
Given the nature of the portfolio, DBRS expects a moderate level
of credit-quality pressure, attributed to seasoning of the
portfolio as well as to New Century's typical borrowers, who are
likely to be impacted by higher interest rates, the slowing
housing market, and increased fuel costs.  Accordingly, DBRS
considers New Century to have an above-average risk profile.

New Century's liquidity position is solid; however, the lack of
funding diversification, as illustrated by the company's large
reliance on securitizations and other forms of market and secured
funding, is significantly negative in the rating.  Additionally,
this puts New Century at a competitive disadvantage to its peers
with deposit-gathering abilities.  With an equity base of $2.1
billion or 8.6% of assets at March 31, 2006, capitalization is
adequate.

DBRS believes the REIT structure retards capital retention, as the
company must distribute at least 90% of income generated at the
REIT to shareholders.  Although the existence of the taxable REIT
subsidiary affords some flexibility for equity retention, the
company's ability to raise new equity to grow its balance sheet is
largely dependent on the equity markets and their appetite for the
company's stock and other forms of capital.

The Stable rating trend is based on the DBRS view that the company
will continue to maintain a strong market position through its
wide-reaching origination platform, while being challenged with
compressed margins caused by the highly competitive market,
although DBRS expects that the industry fundamentals will improve
throughout 2006.

DBRS expects a certain level of earnings volatility, which,
however, is expected to be somewhat muted by the company's
substantial on-balance-sheet portfolio.  Lastly, the Stable trend
incorporates DBRS's belief that New Century will continue to
navigate through the more difficult operating environment and use
its scale to seek opportunities to further gain market share while
protecting profitability and the quality of its balance sheet.

With nearly $25 billion in total assets, Irvine, California-based
New Century Financial Corporation (NYSE:NEW) operates as a REIT in
the United States.  The company originates and purchases
residential mortgage loans to homeowners with largely non-prime
credit histories.


NEW TAOHUAYUAN: March 31 Working Capital Deficit Tops $9.9 Million
------------------------------------------------------------------
New Taohuayuan Culture Tourism Company Limited filed its first
quarter financial statements for the three months ended March 31,
2006, with the Securities and Exchange Commission on May 17, 2006.

The Company reported a $64,532 net loss on $1,195,487 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $26,345,005
in total assets, $10,876,316 in total liabilities, and $15,468,689
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $954,814 in total current assets available to pay
$10,876,316 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?a73

                        Going Concern Doubt

Moores Rowland Mazars, Chartered Accountants, in Hong Kong, raised
substantial doubt about New Taohuayuan Culture Tourism Company
Limited'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.

New Taohuayuan Culture Tourism Company Limited owns and operates
the Taohuayuan Inn hotel and resort located in the city of Xi'an,
province of Shaanxi, in the People's Republic of China.  The
Taohuayuan Inn has 23 courtyards with 146 rooms and 292 beds.  The
air-conditioned Inn is a full-service hotel that offers
traditional Chinese-style accommodations.  The Company manages the
DongJin Taoyuan Villas, a hotel and resort property approximately
10 miles from downtown Xi'an.  DongJin Taoyuan Villas has 84 rooms
and 168 beds.  The Company also manages a chain of three
traditional Chinese restaurants.  Two of the restaurants are in
Xi'an, and one is in Beijing.


NOMURA ASSET: Moody's Puts Low-B Rating on Two Certificate Classes
------------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Nomura Asset Acceptance Corporation,
Alternative Loan Trust, Series 2006-S2, and ratings ranging from
Aa1 to Ba2 to the subordinate certificates in the deal.

The securitization is backed by First Horizon Home Loan Corp,
First National Bank of Nevada, Indymac Bank, F.S.B., and various
other originators originated second lien fixed-rate loans acquired
by Nomura Credit & Capital, Inc.

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 cap
agreement.  Moody's expects collateral losses to range from 6.55%
to 7.05%.

GMAC Mortgage Corporation will service the mortgage loans.  Wells
Fargo Bank, N.A. will act as master servicer.

The complete rating actions:

Nomura Asset Acceptance Corporation, Alternative Loan Trust,
Series 2006-S2

   * Cl. A-1, Assigned Aaa

   * Cl. A-2, Assigned Aaa

   * Cl. A-3, Assigned Aaa

   * Cl. A-IO, Assigned Aaa

   * Cl. M-1, Assigned Aa1

   * Cl. M-2, Assigned Aa2

   * Cl. M-3, Assigned Aa3

   * Cl. M-4, Assigned A1

   * Cl. M-5, Assigned A2

   * Cl. M-6, Assigned A3

   * Cl. B-1, Assigned Baa1

   * Cl. B-2, Assigned Baa2

   * Cl. B-3, Assigned Baa3

   * Cl. B-4, Assigned Ba1

   * Cl. B-5, Assigned Ba2


NORTH AMERICAN: Posts $3 Mil. Net Loss for Period Ended March 26
----------------------------------------------------------------
North American Technologies Group, Inc., filed its financial
statements for the period ended March 26, 2006, with the
Securities and Exchange Commission on May 17, 2006.

The Company reported a $3,054,686 net loss on $1,919,296 of
revenues for the period ended March 26, 2006.

At March 26, 2006, the Company's balance sheet showed $18,166,317
in total assets and $26,067,297 in total liabilities, resulting in
a $7,900,980 stockholders' deficit.

The Company's March 26 balance sheet also showed strained
liquidity with $4,917,782 in total current assets available to pay
$14,867,297 in total current liabilities coming due within the
next 12 months.

Full-text copies of the Company's financial statements for the
period ended March 26, 2006, are available for free at
http://ResearchArchives.com/t/s?a75

                      Going Concern Doubt

Ham, Langston & Brezina, LLP, in Houston, Texas, raised
substantial doubt about North American Technologies Group, 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 and debt service and working capital
requirements that reach beyond its current available cash.

North American Technologies Group, Inc. -- http://www.natk.com/--  
through its TieTek subsidiary manufactures and sells composite
railroad crosstie known as TieTek(TM) made from recycled composite
materials that is a direct substitute for wood crossties, but with
a longer life and with several environmental advantages.


NRG ENERGY: Mirant's Proposed Merger Cues S&P's Neg. CreditWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-2' short-term
rating on NRG Energy Inc. on CreditWatch with negative
implications in response to Mirant Corp.'s (B+/Stable/--) recently
announced unsolicited bid to acquire NRG for about $7.9 billion in
cash and stock.  NRG is actively resisting the acquisition.

The long-term corporate credit rating on NRG is 'B+'.  The outlook
is stable.

Because this transaction, if successful, would involve two
companies with equivalent ratings that already incorporate
financial capacity to pursue speculative investment, if the
transaction is consummated in accordance with Mirant's public
description of its terms, it is unlikely that either Mirant's
or NRG's current long-term ratings will be affected.  This initial
assessment could change as the proposed capital structure for the
acquisition evolves.

"We placed the short-term credit rating on NRG on Watch Neg
because the transaction's consummation may erode or even possibly
exhaust NRG's liquidity cushion," said Standard & Poor's credit
analyst Arleen Spangler.

Currently, NRG has about $800 million of short-term liquidity in
the form of cash.  Standard & Poor's expect Mirant to fund
approximately $3.9 billion of the acquisition price with cash.

Standard & Poor's also said that the transaction presents
considerable asset integration risk.  Longer term, economies of
scale from the larger entity could potentially yield economies of
scale, but such potential synergies have yet to be quantified.


PARKWAY HOSPITAL: Court Extends Plan-Filing Period to June 30
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended, until June 30, 2006, the time within which The Parkway
Hospital, Inc., has the exclusive right to file a chapter 11 plan.
The Debtor also has until Aug. 31, 2006, to solicit acceptances of
that plan.

The Debtor says the extension will give it more time to complete
final negotiations on the last remaining unresolved items on the
plan term sheet and prepare a plan and disclosure statement
containing adequate information.

Since the Debtor's bankruptcy filing, it has been devoted to:

   a) streamlining its business operations,

   b) completing the transition to operating as a chapter 11
      Debtor-in-Possession,

   c) negotitating with potential postpetition lenders, and

   d) developing a chapter 11 plan.

The Parkway Hospital, Inc., operates a 251-bed proprietary, acute
care community hospital located in Forest Hills, New York.  The
Company filed for chapter 11 protection on July 1, 2005 (Bankr.
S.D.N.Y. Case No. 05-14876).  Timothy W. Walsh, Esq., at DLA Piper
Rudnick Gray Cary US LLP, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $28,859,000 in total assets and
$47,566,000 in total debts.


PARKWAY HOSPITAL: Wants Until July 31 to Decide on Four Leases
--------------------------------------------------------------
The Parkway Hospital, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to further extend until July 31,
2006, the period within which it can elect to assume, assume and
assign, or reject unexpired nonresidential real property leases.

The Debtor is party to four unexpired nonresidential real property
leases consisting of:

   a) a finance and business office located at 69-15 Yellowstone
      Boulevard, Forest Hills, New York 11375;

   b) primary operations located at 70-35th 113th Street, Forest
      Hills, New York 11375;

   c) an extension clinic located at 90-33 Elmhurst Avenue,
      Jackson Heights, New York 11372; and

   d) a credentialing staff office located at 2nd floor 22-02
      Steinway Street, Astoria, New York 11105.

The Debtor gives the Court three reasons supporting the extension:

   1) prematurely assuming the leases now could lead to
      unnecessary administrative claims against the Debtor's
      estate if those leases are eventually rejected or
      terminated;

   2) if the Debtor rejects the leases now, it may forego
      significant value in those leases, create large unwarranted
      rejection damage claims and be forced to move its operations
      at great expense; and

   3) it is current on all pre-petition and post-petition
      obligations under the leases and the landlords of those
      leases will not be prejudiced by the requested extension.

The Parkway Hospital, Inc., operates a 251-bed proprietary, acute
care community hospital located in Forest Hills, New York.  The
Company filed for chapter 11 protection on July 1, 2005 (Bankr.
S.D.N.Y. Case No. 05-14876).  Timothy W. Walsh, Esq., at DLA Piper
Rudnick Gray Cary US LLP, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $28,859,000 in total assets and
$47,566,000 in total debts.


PARMALAT USA: Investors File Amended Complaint in S.D.N.Y
---------------------------------------------------------
Lawyers leading a securities class action against Parmalat have
filed a fresh motion seeking permission to amend their complaint
to assert claims against Parmalat S.p.A., the entity that recently
emerged from Extraordinary Administration Proceedings, akin to
U.S. bankruptcy, in Italy.

Until recently, the class plaintiffs were prevented from filing
claims against Parmalat Finanziaria and its subsidiaries and
affiliates, or Old Parmalat, due to a stay issued in the Italian
bankruptcy proceedings against all creditors, including class
plaintiffs, and also a preliminary injunction issued by the U.S.
bankruptcy court against all creditors and class plaintiffs.  The
newly filed complaint allows Parmalat investors who lost billions
of dollars in the dairy giant's fraud-soaked collapse to seek
claims against the company itself.

In October 2005, the court in Parma, Italy issued a decree
approving a "composition" or agreement with Old Parmalat's
creditors causing Parmalat S.p.A. to formally succeed Old Parmalat
and triggering the transfer of Old Parmalat's assets and
liabilities to New Parmalat.  Thus, unlike U.S. bankruptcy,
Parmalat S.p.A., or "New Parmalat" did not get a "fresh start"
with its pre-petition debts being discharged.  Rather, it emerged
with the assets and liabilities of its predecessor companies that
were not discharged in the Extraordinary Administration.

In its first official prospectus, New Parmalat recognized that
plaintiffs in the United States securities class action could
assert claims against it in the United States.  For these reasons,
lead plaintiffs moved for leave to assert federal securities fraud
claims against New Parmalat based on the actions of Old Parmalat
and its officers, directors, statutory auditors and others prior
to Extraordinary Administration.

The amended complaint was filed in U.S. District Court for the
Southern District of New York.  Grant & Eisenhofer represents
Parmalat shareholders, including UK-based Hermes Focused Asset
Management Europe Ltd.  Law firm Cohen Milstein Hausfeld & Toll,
P.L.L.C. represents Parmalat's former bondholders.

"Our new filing is an important milestone in this case - for the
first time since the rapid implosion of Parmalat nearly three
years ago, investors have the opportunity and the right to seek
compensation from the company itself, an option that was not
available while Parmalat was in bankruptcy proceedings in Italy,"
said Stuart Grant, name partner at Grant & Eisenhofer.

As alleged in the original securities fraud complaint, during the
Class Period - January 5, 1999 through December 18, 2003 (and thus
prior to the Extraordinary Administration) - those individuals,
along with Old Parmalat's banks and accounting firms, structured
and participated in a panoply of fraudulent schemes designed to
hide Old Parmalat's growing debts to third parties and
artificially inflate its assets, revenues and ultimately, the
market prices of its securities.

The scheme culminated in Old Parmalat's financial collapse when it
was revealed that the company's total consolidated debt had been
understated by nearly $10 billion and its total net assets (or
shareholder equity) had been overstated by $16.4 billion.
Parmalat, an international food and dairy company, filed for
bankruptcy in Italy in December 2003.

The amended complaint also contains new allegations against
accounting Grant Thornton LLP (which had previously been dismissed
from the case) showing that it controlled its U.S. affiliate,
defendant Grant Thornton International, which had participated in
the fraud.  Plaintiffs also amended their claims against Credit
Suisse First Boston (now known as Credit Suisse) and added new
claims against related entities Credit Suisse First Boston
International (now known as Credit Suisse International), Credit
Suisse First Boston (Europe) Limited (now known as Credit Suisse
Securities (Europe) Limited), and Credit Suisse Group, for their
direct participation in, or control of entities that participated
in, the fraud.

A Copy of Parmalat's 412-Page Third Amended Consolidated Class
Action Complaint is available for free at:

                  http://researcharchives.com/t/s?a8f

                      About Grant & Eisenhofer

Wilmington, Delaware and New York-based Grant & Eisenhofer --
http://www.gelaw.com/-- represents institutional investors and
shareholders nationally in securities class actions, corporate
governance actions and derivative litigation.  The firm has
recovered more than $2 billion for shareholders in the last five
years and was named one of the Top 5 firms for shareholder
recovery in 2005 by Institutional Shareholder Services.
Currently, Grant & Eisenhofer is lead counsel in shareholder cases
against Tyco, Global Crossing, Parmalat, Marsh & McLennan and
Refco.

                          About Parmalat

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.


PREDIWAVE CORP: Committee Hires Pachulski Stang as Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized the Official Committee of Unsecured Creditors appointed
in Prediwave Corporation's chapter 11 case, to employ Pachulski
Stang Ziehl Young Jones & Weintraub LLP as its counsel.

Pachulski Stang will:

   a) assist, advise, and represent the Committee in its
      consultations with the Debtor and other creditor
      constituencies or parties in interest regarding the
      administration of this case;

   b) assist, advise, and represent the Committee in analyzing the
      Debtor's assets and liabilities, investigating the extent
      and validity of liens, and participating in and reviewing
      any proposed asset sales, other asset dispositions,
      financing arrangements, and cash collateral stipulations or
      proceedings;

   c) assist, advise, and represent the Committee in any manner
      relevant to reviewing and determining the Debtor's rights
      and obligations under unexpired leases and executory
      contracts;

   d) assist, advise, and represent the Committee in connection
      with any review of management, compensation issues, analysis
      of retention or severance benefits, or other management
      related issues;

   e) assist, advise, and represent the Committee in investigating
      the acts, conduct, assets, liabilities, and financial
      condition of the Debtor, the operation of the Debtor's
      business and the desirability of the continuance of any
      portion of the business, and any other matters relevant to
      this case or to the formulation of a plan;

   f) assist, advise, and represent the Committee in its
      participation in the negotiation, formulation, and drafting
      of a plan;

   g) provide advice to the Committee on the issues concerning the
      appointment of a trustee or examiner under section 1104 of
      the Bankruptcy Code;

   h) assist, advise, and represent the Committee in the
      performance of all of its duties and powers under the
      Bankruptcy Code and the Bankruptcy Rules and in the
      performance of such other services as are in the interests
      of those represented by the Committee; and

   i) assist, advise, and represent the Committee in the
      evaluation of claims and any litigation matters.

The Firm's professionals bill:

        Attorney                    Hourly Rate
        --------                    -----------
        John D. Fiero, Esq.            $450
        Ramon M. Naguiat, Esq.         $295
        Patricia J. Jeffriesm, Esq.    $175

John D. Fiero, Esq., at Pachulski Stang assures the Court that his
Firm is disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Fremont, California, PrediWave Corporation --
http://www.prediwave.com/-- provides cable and satellite
operators with end-to-end digital broadcast platforms, and offers
products like Video On Demand, Digital Video Recording,
interactive video shopping, and subscription services.  The Debtor
filed for chapter 11 protection on April 14, 2006 (Bankr. N.D.
California Case No. 06-40547).  Robert A. Klyman, Esq., at Latham
& Watkins, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated more than $100 million in assets and more than $100
million in debts.


PREDIWAVE CORP: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Prediwave Corporation delivered its Schedules of Assets and
Liabilities to the U.S. Bankruptcy Court for the Northern District
of California, disclosing:

     Name of Schedule                 Assets          Liabilities
     ----------------                 ------          -----------
  A. Real Property
  B. Personal Property             $145,282,246
  C. Property Claimed
     as Exempt
  D. Creditors Holding
     Secured Claims
  E. Creditors Holding                                    $75,055
     Unsecured Priority Claims
  F. Creditors Holding                               $772,958,316
     Unsecured Nonpriority
     Claims
                                   -------------     ------------
     Total                          $145,282,246     $773,033,371

Headquartered in Fremont, California, PrediWave Corporation --
http://www.prediwave.com/-- provides cable and satellite
operators with end-to-end digital broadcast platforms, and offers
products like Video On Demand, Digital Video Recording,
interactive video shopping, and subscription services.  The Debtor
filed for chapter 11 protection on April 14, 2006 (Bankr. N.D.
California Case No. 06-40547).  Robert A. Klyman, Esq., at Latham
& Watkins, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated more than $100 million in assets and more than $100
million in debts.


PREFERREDPLUS TRUST: S&P Raises Class A & B Cert. Ratings to B
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
A and B certificates from PreferredPLUS Trust Series ELP-1 to 'B'
from 'B-'.

The upgrades reflect the raising of the corporate credit and
senior unsecured debt ratings on El Paso Corp. on May 30, 2006.

PreferredPLUS Trust Series ELP-1 is a swap-independent synthetic
transaction that is weak-linked to the underlying collateral, El
Paso Corp.'s senior unsecured debt.  The rating actions reflect
the credit quality of the underlying securities issued by El Paso
Corp.


PROBE MANUFACTURING: March 31 Stockholders' Deficit Tops $900,000
-----------------------------------------------------------------
Probe Manufacturing, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 17, 2006.

The Company earned $64,802 of net income on $2,049,322 of sales
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,688,669
in total assets and $3,656,176 in total liabilities, resulting in
a $967,507 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?a74

                        Going Concern Doubt

Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt
about Probe Manufacturing, 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 from operations
and its difficulties in generating sufficient cash flow to meet
its obligations and sustain its operations

Based in Costa Mesa, California, Probe Manufacturing, Inc.,
designs and manufactures electronics and provides services to
original equipment manufacturers of industrial, automotive,
semiconductor, medical, communication, military, and high
technology products.  The Company's engineering services include
product design, printed circuit board layout, prototyping, and
test development.  The Company's manufacturing services include
surface mount and through hole assembly, cable assembly,
mechanical assembly, and fully integrated box build systems for
high complexity electronics.


RENEWABLE FUELS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Renewable Fuels, Inc.
        121 West 3rd Street
        West Liberty, Iowa 52776

Bankruptcy Case No.: 06-01017

Chapter 11 Petition Date: June 1, 2006

Court: Southern District of Iowa (Des Moines)

Judge: Lee M. Jackwig

Debtor's Counsel: Jeffrey D. Goetz, Esq.
                  Bradshaw, Fowler, Proctor & Fairgrave, P.C.
                  801 Grand Avenue, Suite 3700
                  Des Moines, Iowa 50309-8004
                  Tel: (515) 246-5817
                  Fax: (515) 246-5808

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Todd & Sargent, Inc.             Judgment            $1,100,000
620 Arrasmith Trl.
Ames, IA 50010-9761

MinnIowa Distributing, Inc.      Loan                $1,000,000
P.O. Box 503
Buffalo Center, IA 50424

Pharmacist Mutual Ins. Co.       Bondholder            $500,000
P.O. Box 370
Algona, IA 50511

Scott Stevenson                  Bondholder            $500,000
7427 Floranda Way
Delray Beach, FL 3446

Easy Automation                  Judgment              $335,000
102 Mill Street
Welcome, MN 56181

Pharmacist Life Co.              Bondholder            $250,000
P.O. Box 370
Algona, IA 50511

Fobian Farms                     Loan                  $250,000
3639 Oasis Road, Northeast
West Branch, IA 52358

Henningsen Construction, Inc.    Judgment              $200,000

Manskey & Son Excavating, Inc.   Judgment               $95,000

Emmetsburg Ready Mix Co.         Judgment               $95,000

Scott Stevenson                  Judgment               $69,500

Stateline Cooperative            Trade Debt             $66,915

Richard Hellmich                 Bondholder             $50,000

Richard & Connie Hopper          Bondholder             $50,000

Ronn Naig                        Bondholder             $50,000

D. LeRoy Wikert                  Bondholder             $50,000

Elmer Alt                        Bondholder             $50,000

Melvin & Judy Janssen            Bondholder             $50,000

Bruce Hackbarth                  Bondholder             $50,000

Ken Clark                        Bondholder             $50,000


REUNION INDUSTRIES: Earns $4.4 Million in 2006 First Quarter
------------------------------------------------------------
Reunion Industries, Inc., filed its financial statements for the
first quarter ended Mar. 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.

For the three months ended Mar. 31, 2006, the Company reported
$4.4 million of net income on $13.6 million of revenues, compared
to a $1.4 million net loss on $12.4 million of revenues for the
same period in 2005.

At March 31, 2006, the Company's balance sheet showed $45.1
million in total assets and $68.2 million in total liabilities,
resulting in a $23 million stockholders' deficit.

                         Event of Default

The Company failed to make a $700,000 interest payment on its
senior notes that was due on April 1, 2006.  As a result, another
event of default has occurred under the Indenture under which the
senior notes were issued.

With an Indenture Default, holders of more than 25% of the
principal amount of the senior notes may, by written notice to the
Company and to the Trustee, declare the principal of and accrued
but unpaid interest on all the Senior Notes to be immediately due
and payable.

However, under an Intercreditor and Subordination Agreement
entered into in December 2003 among Wachovia, the senior notes
holders and certain other lenders, the senior note holders cannot
commence any action to enforce their liens on any collateral for a
180-day period beginning after the date of receipt by Wachovia,
the senior secured lender, of a written notice from the Senior
Note holders informing Wachovia of the Indenture Default and
demanding acceleration.

Neither the Company nor Wachovia has received written notice of
any acceleration.  The April 1 default also constitutes cross
defaults under the Wachovia loan agreement and under the documents
securing a $3.5 million loan from a private capital fund.

A full-text copy of the Company's 2006 Quarterly Report is
available for free http://researcharchives.com/t/s?a60

                        Going Concern Doubt

Mahoney Cohen & Company, CPA, P.C., in New York, raised
substantial doubt about Reunion Industries'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 loss from continuing
operations, and working capital and stockholders' equity
deficiencies.

                     About Reunion Industries

Headquartered in Pittsburgh, Pennsylvania, Reunion Industries,
Inc. -- http://www.reunionindustries.com/-- owns and operates
industrial manufacturing operations that design and manufacture
engineered, high-quality products for specific customer
requirements, such as large-diameter seamless pressure vessels,
hydraulic and pneumatic cylinders, grating and precision plastic
components.


SACO I: Moody's Assigns Ba1 Rating on Class B-4 Certificates
------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by SACO I Trust 2006-6, Mortgage-Backed
Certificates, Series 2006-6, and ratings ranging from Aa1 to Ba1
to the mezzanine and subordinate certificates in the deal.

The securitization is backed by closed-end, second lien, fixed-
rate and adjustable-rate, Alt-A and subprime mortgage loans.
Approximately 56.09% of the mortgage loans were purchase by EMC
Mortgage Corporation from various originators through the conduit
correspondent channel and the remainder of the mortgage loans were
purchased in bulk from various originators, none of which
represented 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 7.15%
to 7.65%.

EMC and GMAC Mortgage Corporation will act as primary servicers
and LaSalle Bank N.A. will act as master servicer.

The complete rating actions:

Issuer: SACO I Trust 2006-6

Mortgage-Backed Certificates, Series 2006-6

   * Class 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 B-1, Assigned Baa1

   * Class B-2, Assigned Baa2

   * Class B-3, Assigned Baa3

   * Class B-4, Assigned Ba1


SECURAC: Posts CA$527,332 Net Loss in 2006 1st Fiscal Qtr.
----------------------------------------------------------
Securac Corp., filed its first quarter financial statements for
the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 26, 2006.

The Company reported a CA$527,332 net loss on CA$613,579 revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed CA$1,825,732
in total assets, CA$2,768,545 in total liabilities, and CA$942,813
in stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with CA$403,195 in total current assets available to pay
CA$2,762,166 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?a4f

                        Going Concern Doubt

As reported in Troubled Company Reporter on Dec. 5, 2005,
Chisholm, Bierwolf & Nilson, LLC, raised substantial doubt about
the Company's ability to continue as a going concern based on
significant losses which have resulted in an accumulated deficit
of CA$12,412,396 at September 30, 2005, a working capital deficit
of approximately CA$2,010,000, and limited internal financial
resources.

                        About Securac Corp

Securac Corp. provides enterprise risk management software
and services for the public sector, financial and Global 2000
companies.  The Company has developed risk management and
compliance solutions designed to enable organizations to identify,
measure, and manage information and physical risks,
and to assess their compliance against best practice standards.


SILICON GRAPHICS: U.S. Trustee Argues Lenders' Security Interest
----------------------------------------------------------------
As reported in the Troubled Company Reporter on May 24, 2006, the
U.S. Bankruptcy Court for the Southern District of New York
permitted Silicon Graphics, Inc., and its debtor-affiliates to
borrow up to $23,000,000 under the DIP Loan Documents, on an
interim basis.  The Court granted the DIP Lenders superpriority
claims, and first and senior priority liens and security interests
in the Collateral.


                            Objections

(A) U.S. Trustee

Lisa L. Lambert, Esq., trial attorney for the U.S. Trustee for
Region 2, recounts that the Debtors' request provides that the
lenders will obtain a security interest in Chapter 5 causes of
action.

However, since the Debtors obtained an extension of time to file
their statements of financial affairs and schedules of assets and
liabilities, creditors cannot quantify the value of the avoidance
actions at this time, Ms. Lambert points out.

Ms. Lambert notes that the Form 8-Ks filed with the Securities and
Exchange Commission during the months before the Debtors'
bankruptcy filing reflect that the Debtors "entered into severance
agreements and paid severance to terminated officers, and
characterize the financing of the pre-petition debt."

Ms. Lambert asserts that the creditors should be given time to
investigate, make demands on the Debtors, and ultimately pursue
any meritorious claims.

The DIP financing should not preclude the litigation, Ms. Lambert
adds.  The Final DIP order should also provide a mechanism for
unwinding transactions that are subject to a judgment based on
avoidance, lender liability, or other legal theories.

Moreover, Ms. Lambert notes that the DIP Motion contemplates
paying professional fees as adequate protection payments to the
bondholders.  If the bondholders providing financing are over-
secured, they are entitled to attorneys' fees under Section 506(b)
of the Bankruptcy Code.  Correspondingly, if the bondholders are
over-secured, it is unlikely that they are eligible for adequate
protection payments, which address diminution in value, Ms.
Lambert relates.

Ms. Lambert contends that the Court should enforce the express
provisions of the Bankruptcy Code and deny professional fees as
adequate protection payments.

"Silicon Graphics and the lenders have not established facts
supporting the itemized deviations from Bankruptcy Code
protections," Ms. Lambert tells Judge Gropper.

Diana G. Adams, acting U. S. Trustee for Region 2, asks the Court
to deny the DIP Motion in part, and tailor the Final DIP Order in
accordance with the objections raised.

(B) IBM

International Business Machines Corporation and Silicon Graphics,
Inc., are parties to a license agreement under which IBM granted
to the Debtors a license to certain of its patents.  The Debtors,
in turn, granted to IBM a license in certain of their patents.
IBM holds a fully paid license to the patents subject to the IBM
License.

Pursuant to the Cross License Agreement:

    (i) the Debtors may not assign or grant rights in the Debtor
        Licensed Patents unless the rights are subject to IBM's
        rights under the Debtor Licensed Patents.  In the same
        way, IBM may not assign or grant rights under the IBM
        Licensed Patents unless the rights are subject to the
        Debtors' rights under the IBM Licensed Patents; and

   (ii) neither party may assign their rights or delegate their
        obligations under the Cross License Agreement.

Steven W. Meyer, Esq., at Oppenheimer Wolff & Donnelly LLP, in
Minneapolis, Minnesota, tells the Court that the Debtors' request
to obtain postpetition financing, and the Court's interim
approval, grants the DIP Lenders a lien in license agreements and
in patents.  The liens granted are subject only to some
encumbrances, but there is no indication that the lien granted in
patents is subject to the IBM License.

Mr. Meyer discloses that pursuant to the Interim Order, the DIP
Lenders' lien in license agreements is "perfected" without the
need to obtain the consent of the licensor.

Against this backdrop, IBM objects to the entry of a Final DIP
Order to the extent that it purports to grant the DIP Lenders:

    -- a security interest in the Debtor Licensed Patents that are
       not subject to the IBM License; and

    -- any rights in the Debtor License under the Cross License
       Agreement that would permit the DIP Lenders to foreclose
       against, sell or assign the parties' rights under the Cross
       License Agreement.

Mr. Meyer argues that the Cross License Agreement is not
assignable, and any effort to cause a sale, foreclosure or
assignment of the license is prohibited.

Mr. Meyer further argues that as a matter of black letter patent
law, the Debtor License cannot be assigned without the consent of
IBM.  Section 9-408(d) of the Uniform Commercial Code precludes a
secured party from using or assigning rights under a patent
license agreement, Mr. Meyer says.

                 Debtors Amend Interim DIP Agreement

The Debtors have been exploring a $130 million postpetition
financing arrangement.

The Debtors have also engaged in discussions with certain parties-
in-interest to resolve issues regarding various aspects of the
$70,000,000 DIP Financing Arrangement, Stephen A. Youngman, Esq.,
at Weil, Gotshal & Manges LLP, in New York, relates.

The Debtors have determined that it is in the best interests of
all parties-in-interest to adjourn the Final DIP Hearing on the
$70,000,000 DIP Financing Arrangement to June 15, 2006, to allow
for more time to engage in further discussions.

Mr. Youngman notes that during the continued interim period, the
Debtors require additional liquidity for the operation of their
business pending the rescheduled Final DIP Hearing.

To address this concern, Quadrangle Master Funding Ltd., Watershed
Technology Holdings, LLC, and Encore Fund, L.P., have agreed to:

    -- a modification of the availability of the Term Loans under
       the DIP Loan Agreement and the Term Loan Availability Dates
       to permit the Debtors to borrow an additional $5,000,000
       prior to the entry of the Final DIP Order;

    -- amend certain provisions of the $70,000,000 DIP Loan
       Agreement, including sections relating to the Debtors'
       financial covenants and the definition of Permitted Liens
       to clarify that the $70,000,000 DIP Financing Arrangement
       does not prime certain existing liens; and

    -- extend the date by which the Debtors must obtain entry of
       the Final DIP Order to June 20, 2006.

The Debtors and the DIP Lenders have also agreed to an amended
budget and amended schedules relating to financial statements,
reports and certificates.

A full-text copy of the Amended Interim DIP Loan Agreement is
available for free at http://researcharchives.com/t/s?a62

Accordingly, the Debtors ask the Court to enter a bridge order:

    -- authorizing them to incur an additional $5,000,000 under
       the DIP Facility;

    -- adjourning the Final DIP Hearing to June 15, 2006; and

    -- approving the Amendment.

Wells Fargo Foothill, Inc., and Ableco Finance, LLC, consent to
the entry of the Bridge Order, Mr. Youngman says.

                   Responses to Proposed Amendment

A. Committee

The Official Committee of Unsecured Creditors says it does not
oppose the Debtors' request for authorization to borrow an
additional $5,000,000; provided that nothing in the Committee's
consent will be construed as an agreement to any of the terms of
the DIP Financing Motion.

David Neier, Esq., at Winston & Strawn LLP, in New York, informs
the Court that the Committee has material concerns with the terms
of the Original DIP Financing Motion and Interim Order.

The Committee wants the Proposed Bridge Order modified to include
a provision for the reservation of the Committee's rights to
object to any of the terms of the Interim Order.

B. Lampe Conway

Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in New York, informs the Court that Lampe Conway & Co., LLC - as
holder of 6% Convertible Subordinated Debentures due 2011 issued
by Cray Research, Inc. -- does not object to the Debtors' proposed
amendment.

                      About Silicon Graphics

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGIDE) -- http://www.sgi.com/-- offers high-performance
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Has Interim Access to $130 Mil. DIP Financing
---------------------------------------------------------------
Quadrangle Master Funding Ltd., Watershed Technology Holdings,
LLC, and Encore Fund, L.P., agreed to provide up to $70,000,000 in
preliminary postpetition financing to Silicon Graphics, Inc., and
its debtor-affiliates.  On an interim basis, the U.S. Bankruptcy
Court for the Southern District of New York authorized the Debtors
to borrow up to $23,000,000 under the DIP Loan Documents.

Since the entry of the Court's Interim Order, the Debtors
continued discussions regarding a permanent postpetition financing
agreement with:

    -- the Interim DIP Lenders,
    -- Wells Fargo Foothill, Inc., and Ableco Finance, LLC,
    -- U.S. Bank, and
    -- the Ad Hoc Committee.

These negotiations culminated in a $130,000,000 DIP financing
arrangement, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges
LLP, in New York, relates.

The Debtors ask the Court to authorize Silicon Graphics, Inc.,
Silicon Graphics Federal, Inc., and Silicon Graphics World Trade
Corporation to obtain senior secured, superpriority, postpetition
financing up to $130,000,000, from Quadrangle Master, Watershed
Technology, Encore Fund, Morgan Stanley Senior Funding, Inc., as
administrative agent, and Wells Fargo Foothill, Inc., as
collateral agent.

       Lender                                Total Commitment
       ------                                ----------------
       Wells Fargo Foothill, Inc.                 $15,000,000
       Morgan Stanley Senior Funding, Inc.        $30,000,000
       Quadrangle Master Funding Ltd.             $40,000,000
       Watershed Technology Holdings, LLC         $35,000,000
       Encore Fund, L.P.                          $10,000,000
                                                 ------------
                                                 $130,000,000

According to Mr. Youngman, as a result of the satisfaction of the
amounts owing under the Prepetition Credit Agreement, the Senior
Secured Replacement Liens and Senior Secured SuperPriority Claims
will no longer be junior to the liens and claims of the
Prepetition Lenders.

The $130,000,000 DIP Facility will provide all of the benefits
that the Interim DIP Facility provided, in addition to
facilitating the Debtors' restructuring, Mr. Youngman says.
Also, Mr. Youngman notes that the $130,000,000 DIP Financing
Arrangement is appropriate because it:

    -- unifies the Debtors' prepetition first lien credit
       facility and the Debtors' postpetition financing into one
       loan, thus avoiding potential future inter-creditor/debtor
       disputes;

    -- allows the Debtors to avoid potential default interest
       charges and the risks associated with litigation regarding
       the Prepetition Lenders' ability to exercise remedies under
       the Prepetition Credit Agreement;

    -- provides the Debtors with $1,500,000 of additional
       availability, net of fees, and provides the Debtors with
       the potential to develop additional liquidity if the
       Debtors are successful in reducing outstanding letter of
       credit exposure; and

    -- satisfies the Debtors' obligations regarding the Interim
       DIP Loan Agreement.

Mr. Youngman tells the Court that the Debtors, their major
prepetition creditors, and the DIP Lenders engaged in extensive,
arm's-length negotiations with respect to the terms and conditions
of the $130,000,000 DIP Facility.

                      Terms of the DIP Agreement

The $130,000,000 Commitment -- in forms of cash advances and other
extensions of credit -- consists of:

    * up to $15,000,000 as Revolver A Commitment;
    * up to $15,000,000 as Revolver B Commitment;
    * $80,000,000 as Term Loan A; and
    * up to $20,000,000 as Term Loan B.

      Loan                  Date Available
      ----                  --------------
      $80,000,000           Closing Date
      $10,000,000           July 14, 2006
      $10,000,000           July 28, 2006

The term of the DIP Agreement will run from the Closing Date to
the earliest to occur of:

    (i) the date a plan of reorganization confirmed in any of the
        Chapter 11 cases becomes effective;

   (ii) the date on which an Event of Default occurs and is
        continuing under the $130,000,000 DIP Facility;

  (iii) the date of any decision by the board of directors of any
        Borrower to proceed with the sale or liquidation of any
        Borrowers without the consent of all of the $130,000,000
        DIP Lenders;

   (iv) November 10, 2006; or

    (v) the date it is earlier terminated in accordance with its
        terms.

The DIP Facility will bear interest at a rate equal to:

    -- with respect to advances under Revolver A, at the
       Administrative Borrower's election, either:

       (a) the Base Rate plus 0.75 percentage points; or
       (b) LIBOR Rate plus 3.00 percentage points;

    -- with respect to advances under Revolver B, at the
       Administrative Borrower's election, either:

       (a) the Base Rate plus 3.25 percentage points; or
       (b) LIBOR Rate plus 5.25 percentage points; and

    -- with respect to the Term Loans, at the Base Rate plus 7.00
       percentage points.

During the continuance of an Event of Default, the DIP Facility in
each case will bear cash interest at an additional 2% per annum,
calculated on a 360-day and actual days-elapsed basis.

Mr. Youngman says the proceeds of the DIP Facility will be used
to:

    (i) refinance the Interim DIP Facility,

   (ii) repay all outstanding obligations under the Prepetition
        Credit Agreement,

  (iii) prepay funds into the L/C Prepaid Account, and

   (iv) pay postpetition and other agreed operating expenses of
        the Borrowers and other costs and expenses of
        administration of the Chapter 11 cases in accordance with
        an Approved Budget.

A full-text copy of the Approved Budget is available for free at:

                http://researcharchives.com/t/s?a66

The Borrowers' obligations will be secured by a first priority
perfected priming security interest in, and lien on, substantially
all of their assets, with some exceptions, subject only to:

    -- valid and enforceable liens of record as of the Petition
       Date as are acceptable to the DIP Lenders, and

    -- the Carve-Out for fees payable to the U.S. Trustee, and
       fees and expense of professionals not exceeding $1,500,000.

All amounts owing by the Borrowers under the DIP Facility will
constitute allowed superpriority administrative expense claims
against the Debtors.

Mandatory repayments of the $130,000,000 DIP Facility will be
required in an amount equal to (i) 100% of the net cash proceeds
from all asset sales outside the ordinary course of business to
the extent that the proceeds exceed $500,000, and (ii) 100% of
insurance and condemnation proceeds received by the Borrowers to
the extent that the proceeds are in excess of $250,000.

The Borrowers agree to pay to the DIP Lenders a commitment fee,
termination fee, legal fees, expenses and other amounts.

The Borrowers will jointly and severally indemnify and hold
harmless each of the DIP Lenders from and against all claims,
damages, losses, liabilities, etc., arising out of or in
connection with the Financing Arrangement.

A full-text copy of the $130,000,000 DIP Agreement is available
for free at http://researcharchives.com/t/s?a67

Mr. Youngman asserts that "approval of the $130,000,000 DIP
Financing Arrangement will provide the Debtors with the liquidity
they need to complete their restructuring and send a clear signal
to their customers, vendors and employees that they are on track
to quickly emerge from their Chapter 11 cases as a healthy, viable
enterprise that can continue its dominance in world-class
computing solutions."

The Court will convene a hearing on the Debtors' request on
June 15, 2006, at 10:00 a.m.

Objections must be filed and served no later than June 8, 2006,
on:

    (i) counsel to the Debtors
        Weil, Gotshal & Manges LLP
        767 Fifth Avenue
        New York, NY 10153
        Attn: Gary Holtzer, Esq.,
              Stephen A. Youngman, Esq., and
              Shai Y. Waisman, Esq.

   (ii) Office of the U.S. Trustee
        33 Whitehall Street, 21st floor
        New York, NY 10004
        Attn: Lisa L. Lambert, Esq.

  (iii) counsel to the Statutory Creditors Committee
        Winston & Strawn LLP
        200 Park Avenue
        New York, NY 10166
        Attn: David Neier, Esq.

        333 S. Grand Avenue,
        Los Angeles, CA 90071
        Attn: Eric Sagerman, Esq.

   (iv) counsel to Wells Fargo Foothill Inc.
        Jeffer, Mangels, Butler & Marmaro LLP
        Two Embarcadero Center, Fifth Floor
        San Francisco, CA 94111-3824
        Attn: Nicolas De Lancie, Esq. and Robert B. Kaplan, Esq.

        Pryor Cashman Sherman & Flynn LLP
        410 Park Avenue, 10th Floor
        New York, NY 10022
        Attn: Richard Levy, Jr., Esq.

    (v) counsel to Ableco Finance LLC
        Paul, Hastings, Janofsky & Walker LLP
        600 Peachtree Street, N.E.
        Atlanta, GA 30308
        Attn: Jesse H. Austin III, Esq.,

        75 E. 55th Street
        New York, NY 10022
        Attn: Kristine M. Shryock, Esq.

   (vi) counsel to the Ad Hoc Committee
        Goodwin Procter LLP
        599 Lexington Avenue
        New York, NY 10022
        Attn: Allan S. Brilliant, Esq. and Emanuel C. Grillo, Esq.

  (vii) counsel to U.S. Bank
        Shipman & Goodwin LLP
        One Constitution Plaza
        Hartford, CT 06103-1919
        Attn: Ira H. Goldman, Esq.

(viii) counsel to JPMorgan Chase Bank
        Kelley Drye & Warren LLP
        101 Park Avenue
        New York, NY 10178
        Attn: James S. Carr, Esq.,
              Eric R. Wilson, Esq., and
              David E. Retter, Esq.

        -- and --

   (ix) counsel to Morgan Stanley Senior Funding, Inc.,
        Sullivan & Cromwell LLP
        125 Broad Street
        New York, NY 10004-2498
        Attn: Eric Lindauer, Esq.

                     About Silicon Graphics

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGIDE) -- http://www.sgi.com/-- offers high-performance
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Common Stock "SGID" Symbol Changed to "SGIDE"
---------------------------------------------------------------
The symbol for Silicon Graphics, Inc.'s Common Stock has been
changed from "SGID" to "SGIDE" on the OTCBB because the company is
delinquent in required filings with the Securities and Exchange
Commission.

The Company's Security Symbol will be ineligible for quotation and
subject to removal from the OTCBB in 30 calendar days if the NASD
does not receive information indicating that the company is
current in its public reporting obligations pursuant to Rule
6530.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGIDE) -- http://www.sgi.com/-- offers high-performance
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SITESTAR CORP: March 31 Working Capital Deficit Tops $1.8 Million
-----------------------------------------------------------------
Sitestar Corporation 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 reported a $187,682 net loss on $1,457,523 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $4,080,714
in total assets, $2,975,234 in total liabilities, and $1,105,480
in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $267,030 in total current assets available to pay
$2,101,623 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?a88

                          Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Bagell, Josephs & Company, L.L.C. expressed substantial doubt
about Sitestar Corporation's ability to continue as a going
concern after auditing the Company's financial statements for the
years ended Dec. 31, 2005 and 2004.  The auditing firm points to
the Company's $1,715,797 working capital deficiency as of Dec. 31,
2005.

Headquartered in Lynchburg, Virginia, Sitestar Corporation --
http://www.sitestar.com/-- is an Internet access and computer
solutions provider that offers narrow and broadband Internet
access, Web hosting and design and other value-added services to
residential and commercial customers.  The company's customers
include residential and commercial accounts throughout the United
States and Canada.  Sitestar's wholly owned subsidiaries include:
Sitestar.net http://www.sitestar.net/netROVER, Inc.
http://www.netrover.com/Prolynx http://www.prolynx.com/
SurfWithUs.Net http://www.surfwithus.net/Lynchburg.net
http://www.lynchburg.net/Advanced Internet Services
http://www.advi.net/Computers by Design
http://www.computersbydesign.com/and CBD Toner Recharge
http://www.recharge.net/ The Company was founded in 1999 and is
traded on the over-the-counter bulletin board exchange under the
symbol SYTE.


SKINVISIBLE INC: Posts $376,000 Net Loss in 2006 First Quarter
--------------------------------------------------------------
Skinvisible, 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 $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 $1,286,669
in total assets and $1,308,386 in total liabilities, resulting in
a de minimis $21,717 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $325,187 in total current assets available to pay
$1,308,386 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?a38

                       Going Concern Doubt

Sarna & Company, Certified Public Accountants, expressed
substantial doubt about Skinvisible's ability to continue as a
going concern after auditing the Company's financial statements
for the years ended Dec. 31, 2005 and 2004.  The auditing firm
pointed to the Company's losses from operations.

                        About Skinvisible

Skinvisible, Inc. -- http://www.skinvisible.com/-- through its
wholly owned subsidiary, Skinvisible Pharmaceuticals, Inc.,
develops innovative polymer delivery vehicles and related
compositions which when topically applied hold active ingredients
on the skin for up to four hours thereby affording the active
agent an extended timeframe to perform its intended function.
Aligned with its research and development focus, Skinvisible's
primary objective is to license its patented technology and sell
its trademarked polymer delivery vehicles to established brand
manufacturers and marketers of prescription and over-the-counter
products in the dermatological, medical, cosmetic, and skincare
markets.  The Company also produces a variety of products that
incorporate its technology for private label clients, including
antimicrobial hand sanitizers, sunless tanning sprays, sunscreens
and skincare products.


SOUTHERN FAMILY: Fitch Withdraws CC Insurer Fin. Strength Rating
----------------------------------------------------------------
Fitch Ratings withdrew the 'CC' insurer financial strength rating
of Southern Family Insurance Company, part of the Poe Financial
Group.  The company's liquidation orders were approved by a Leon
County Circuit judge effective today as the Florida Department of
Financial Services will take control of the company and liquidate
assets to pay outstanding claims.

This rating has been withdrawn by Fitch:

  Southern Family Insurance Company:

   -- Insurer Financial Strength 'CC'


SPORTS CLUB: Dec. 31 Balance Sheet Upside Down by $32 Million
-------------------------------------------------------------
The Sports Club Company, Inc., reported a consolidated net loss
attributable to common stockholders of $24.5 million for the year
ended Dec. 31, 2005, versus a loss of $22.6 million for the year
ended Dec. 31, 2004.

Total revenue from continuing operations for the year ended
Dec. 31, 2005, was $56.2 million, an increase of $4.1 million or
7.8% compared to $52.1 million for the same period in 2004.

Revenue increased by $2.6 million as a result of membership growth
at The Sports Club/LA-Beverly Hills.  Revenue increased by $1.7
million at The Sports Club/LA - Los Angeles, The Sports Club/LA -
Orange County and The Sports Club/LA-Rockefeller Center as a
result of dues increases, higher ancillary revenues and to the
reopening of the Spa at The Sports Club/LA - Los Angeles which was
closed for remodeling during part of 2004.  There was a decrease
in revenue of approximately $233,000 at the two of the Company's
SportsMed locations primarily due to decreased patient visits.

The Company incurred an impairment charge during the year ended
Dec. 31, 2005, of $18.6 million.  This impairment charge consisted
of the write down of fixed assets at The Sports Club/LA - New York
at Rockefeller Center.  The future estimated cash flows from this
Club were not adequate to recover the net book value of its fixed
assets.  As a result, the Company was required to write down the
fixed assets to their estimated fair value.

At Dec. 31, 2005, the company's balance sheet showed $212.5
million in total assets, $228.5 million in total liabilities and
$16 million in commitment and contingencies, resulting in a $32
million stockholders deficit.

A full-text copy of the Company's 2005 annual report is available
for free at http://researcharchives.com/t/s?a6a

                       Sr. Secured Note Payment

The Company was required to repay its $100 million Senior Secured
Notes on March 15, 2006.  In order to generate funds for the March
2006 payment, the Company sold five Clubs in January 2006 for $80
million and completed a $60 million financing of The Sports
Club/LA - Los Angeles.  The net proceeds from these two
transactions were used to retire the Senior Secured Notes.

As a result of these two transactions, as of Jan. 31, 2006, the
Company has over $30 million of cash on hand to fund its
operations going forward.  The Company's remaining consolidated
operations are expected to generate sufficient cash flows to cover
its operating costs and debt service obligation for at least the
next twelve months.  Due to these events and management's plan of
operations uncertainty as to the Company's ability to continue as
a going concern for the next twelve-month period has been
eliminated.

The Sports Club Company, based in Los Angeles, California, owns
and operates luxury sports and fitness complexes nationwide under
the brand-name "The Sports Club/LA."


SPRUCE COMM: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Spruce Communications, LP
        dba Crandall - Combine Telephone Company
        dba Seagoville Telephone Company
        dba Blue Vista Phone Service
        dba Blue Vista Energy
        14901 Quorum Drive, Suite 250
        Dallas, Texas 75254
        Tel: (972) 715-8100

Bankruptcy Case No.: 06-32181

Type of Business: The Debtor is a local exchange carrier providing
                  local and long distance telephone services.

Chapter 11 Petition Date: June 2, 2006

Court: Northern District of Texas (Dallas)

Judge: Stacey G. Jernigan

Debtor's Counsel: David L. Woods, Esq.
                  John Mark Chevallier, Esq.
                  McGuire, Craddock & Strother, P.C.
                  3550 Lincoln Plaza
                  500 North Akard Street
                  Dallas, Texas 75201
                  Tel: (214) 954-6800
                  Fax: (214) 954-6801

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 19 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
SBC                              Trade Debt            $885,033
P.O. Box 650502
Dallas, TX 75268-0502

RiverRock Systems, Ltd.          Trade Debt            $250,602
14901 Quorom Drive, Suite 250
Dallas, TX 75254

Prosodie Interactive             Trade Debt             $48,078
(Canada) Inc.
113A 7015 Macleod Tr. S.
Calgary, AB T2H2K6

KDAF-TV                          Trade Debt             $45,449

KHWB-TV                          Trade Debt             $42,181

MCI                              Trade Debt             $41,657

KTXH UPN20                       Trade Debt             $36,380

KRIV Fox 26                      Trade Debt             $35,105

KDFW-TV                          Trade Debt             $32,831

ACE Cash Express, Inc.           Trade Debt             $24,445

Voicecom                         Trade Debt             $24,180

UDP                              Trade Debt             $21,971

KTXA-TV                          Trade Debt             $19,726

Pitney Bowes Purchase Power      Trade Debt             $13,424

USAC                             Trade Debt             $13,102

Authentic Barr                   Trade Debt             $11,366

KNVA TV                          Trade Debt              $6,745

Greensheet                       Trade Debt              $6,357

Prime Printing and               Trade Debt              $6,244
Promotions, Inc.


STAR TELECOMMS: Trust Wants Case Kept Open Until August 31
----------------------------------------------------------
Gordon Hutchings, Jr., the liquidating trustee of the Star
Creditors Liquidating Trust -- the successor-in-interest of Star
Telecommunications, Inc., and its debtor-affiliates -- asks the
U.S. Bankruptcy Court for the District of Delaware to set August
31, 2006, as the deadline by which he must file a final report in
the Debtors' chapter 11 cases, and delay entry of a final decree
closing the cases until that date.

The Liquidating Trustee needs the additional time to resolve a
directors' and officers' liability action brought by the Post-
Confirmation Creditors' Committee in the U.S. District Court for
the District of Delaware.  The parties to the D&O Action have
reached an agreement in principle, subject to documentation,
settling the D&O Action (on undisclosed terms).

The Liquidating Trustee wants the chapter 11 cases to remain open
until the D&O Action settlement is documented and the settlement
agreement is executed.  Mr. Hutchings says that should happen "in
the near future."

The Liquidating Trustee, pursuant to the terms of the Chapter 11
Plan confirmed in the Debtors' cases, had made two distributions
to creditors and has resolved all other actions to recover
additional
assets.

Headquartered in Santa Barbara, California, Star
Telecommunications, Inc., was a leading provider of global
telecommunications services to consumers, long distance carriers,
multinational corporations and Internet service.  The Company and
its debtor-affiliates filed for chapter 11 protection on March 13,
2001 (Bankr. D. Del. Case No. 01-00830).  Daniel A. Lowenthal,
III, Esq., at Thelen Reid & Priest LLP represents the Debtors.
When the Debtors filed for chapter 11 protection, they listed
total assets of $630,065,000 and total debts of $284,634,000.  The
Court confirmed the Debtors and Unsecured Creditors Committee's
chapter 11 Plan on July 31, 2002, and the Plan took effect on Aug.
13, 2002.  Gordon Hutchins, Jr. is the Liquidating Trustee for the
confirmed Plan.  Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub P.C. represents the Liquidating
Trustee.


SUMMIT CBO: Moody's Puts $232 Mil. B2 Rated Notes on Watchlist
--------------------------------------------------------------
Moody's Investors Service placed on the watchlist for possible
upgrade the following tranche issued by Summit CBO I, Limited/
Summit CBO I Funding Corp., a collateralized debt obligation
issuer:

   * $232,000,000 Class A First Priority Senior Secured Notes,
     due May 23, 2011

Moody's noted that Summit CBO I, which closed on April 21, 1999,
has shown a improvement in the deal's Maximum Rating Distribution
Test levels.  Furthermore, the Class A Notes have undergone
significant amortization - the current outstanding balance is
$45,738,409 - leading to an improved outlook for this class of
notes.

Rating action details: Placement on watchlist for possible upgrade

Issuer: Summit CBO I, Ltd.

   * $232,000,000 Class A First Priority Senior Secured Notes,
     due May 23, 2011

     Rating prior to rating action: B2

     Current rating: B2 on watch for possible upgrade


THUNDERBIRD COVE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Thunderbird Cove Realty
        9201 West Olympic Boulevard, Suite 200
        Beverly Hills, California 90212

Bankruptcy Case No.: 06-12346

Type of Business: The Debtor is a real estate developer
                  and home builder.
                  See http://www.thunderbirdrealty.com/

Chapter 11 Petition Date: June 2, 2006

Court: Central District Of California (Los Angeles)

Judge: Alan M. Ahart

Debtor's Counsel: John P. Byrne, Esq.
                  John P. Byrne, P.C.
                  20969 Ventura Boulevard, Suite 230
                  Woodland Hills, California 91364
                  Tel: (818) 593-5520
                  Fax: (818) 593-5522

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
Adel Awad                                $58,000
389 White Cap Lane
Newport Coast, CA 92657

Meinardo Gomez Gardening                 $22,000
2303 East Desert Park Avenue
Palm Springs, CA 92262

AI's Upholstery                          $16,000
74884 Velje Way, Suite 7
Palm Desert, CA 92260

Pete's Pool Service                       $5,400

Powers Carpet One                         $3,176

Maple Leaf Plumbing & Air Conditioning    $1,200

BFO                                       $1,000

Coachella Valley Water District             $500

Bradley Electric                             $20

First Choice Transport                       $19

Waste Management of the Desert               $18

Thunderbird Homeowners Associates            $17

The Gas Company                              $16

Sun Rise Roofing & Tile                      $15

State Farm Insurance                         $14

Southern California Edison                   $13

Sola Lite                                    $12

Palm Springs Glass & Mirror                   $9

OMAG                                          $8

Mike Petrovich Painting Contractors           $7


TRINITY INDUSTRIES: S&P Assigns B+ Rating to $450 Million Notes
---------------------------------------------------------------
Standard & Poor's assigned its 'B+' rating to Trinity Industries
Inc.'s announced $450 million subordinated convertible notes due
2036.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit rating on the metal-bending goods manufacturer and revised
its outlook to positive from stable.

In addition, Standard & Poor's raised its rating on the company's
$300 million senior unsecured notes due 2014 to 'BB' from 'BB-',
following the release of collateral on the company's credit
facility and the announcement of the unsecured convertible debt
issuance.

Trinity will use a significant portion of the proceeds from the
notes to make additions to its rental fleet, which consisted of
more than 26,000 owned or leased railcars at March 31, 2006.  The
company expects capital spending on its lease fleet will approach
$300 million for the second half of 2006 and $500 million in 2007.
Trinity may also use a portion of the proceeds to repay or
repurchase a portion of its outstanding indebtedness.

The convertible notes have a 30-year maturity, but can be put back
to the company by investors on the 12th anniversary of the closing
date of the transaction.  Trinity has the option to call the notes
at any time after the 12-year mark.

"The outlook revision reflects the company's improved financial
risk profile, as well as the expectation of continued strength in
its key end-markets", said credit analyst James Siahaan.

The company has exhibited improvements in operating performance
and is benefiting from enhanced industry dynamics.  Railcar demand
is expected to be strong through 2008, as the rail industry's
backlog level of almost 90,000 railcars approaches its highest
level since the early 1980's.  High oil prices, increased demand
for coal and ethanol, and the high average age of all railcars in
service should provide the impetus for increased demand for new
railcars or the service of existing railcars.  Trinity's rail
operations are benefiting from these industry drivers, as its
fleet utilization remains at over 99%.


UNITED AMERICAN: Posts $286,481 Net Loss in 2006 1st Fiscal Qtr.
----------------------------------------------------------------
United American Corporation filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 22, 2006.

The Company reported an $286,481 net loss on $2,463,170 of sales
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $780,310
in total assets and $934,260 in total liabilities resulting in
$153,950 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $189,709 in total current assets available to pay
$934,260 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?a6d

                       Going Concern Doubt

As reported in the Troubled Company Report on May 19, 2006,
Michael Pollack CPA in Cherry Hill, New Jersey, raised substantial
doubt about United American 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 operating losses and capital deficits.

                      About United American

United American Corporation is a holding company of next
generation voice over Internet protocol telecommunication
companies.  The Company's network provides services from local
IP-based telecommunication to international telecommunication
carrier.  United American also provides customer financial
services.


UNIVERSAL DETECTION: March 31 Balance Sheet Upside Down by $3MM
---------------------------------------------------------------
Universal Detection Technology 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 $826,411 net loss on zero revenues for the
three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $744,699
in total assets, $3,840,944 in total liabilities, and $3,096,245
in stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $602,505 in total current assets available to pay
$3,811,122 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a7a

                        Going Concern Doubt

AJ. Robbins, PC, in Denver, Colorado, raised substantial doubt
about Universal Detection Technology'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 operation losses, working capital and
net capital deficiencies.

                    About Universal Detection

Universal Detection Technology provides environmental monitoring
technologies, including bio-terrorism detection devices, air
monitoring systems, and medical diagnostic equipment.


US AIRWAYS: Faces Two Complaints from Midatlantic Workers
---------------------------------------------------------
Pilots and flight attendants employed by the MidAtlantic division
of US Airways filed separate complaints against the Company, Derek
J. Kerr, US Airways senior vice president and chief financial
officer, informs the Securities and Exchange Commission.

In its Form 10-Q filed on May 9, 2006, Mr. Kerr discloses that:

    -- 240 pilots filed a complaint on October 7, 2005, in the
       federal district court for the Eastern District of New York
       against the Air Line Pilots Association, US Airways, US
       Airways Group, Republic Airways Holdings, Inc., Wexford
       Capital LLC and America West Airlines; and

    -- 103 flight attendants filed a complaint on February 8,
       2006, against the Association of Flight Attendants, the
       AFA's international president, Pat Friend, and US Airways.

The pilots and the attendants allege that the defendants
conspired to deceive them into believing that MidAtlantic was a
separate entity from US Airways so as to deprive them of the
benefits they are due as employees of US Airways pursuant to the
US Airways collective bargaining agreement.

The pilots' and the attendants' claims against the airline
defendants include:

    * breach of collective bargaining agreement;

    * violation of the Railway Labor Act; and

    * racketeering under the Racketeering Influenced and Corrupt
      Organizations Act.

According to Mr. Kerr, the pilots' complaint requests
$2,000,000,000 in damages from the airline defendants, while the
flight attendants' complaint requests $400,000,000 in damages
from US Airways.  Both plaintiffs seek injunctive relief from the
Court.

Because the complaints have not yet been served on US Airways, no
action is due on its part at this time, Mr. Kerr says.

                         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)


USG CORP: S&P Rates Proposed $2.8 Billion Bank Facility at BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' bank loan
rating to the proposed $2.8 billion senior unsecured bank facility
of USG Corp. (D/--/--), based on preliminary terms and conditions.
The bank facility is comprised of:

   * a $650 million revolving credit facility due in 2011;
   * a $1.0 billion delayed draw term loan due in 2011; and
   * a $1.15 billion delayed-draw term loan due in 2009.

The bank loan ratings also assume that other conditions precedent
to the bank facility becoming effective are satisfied; the ratings
are subject to review once final documentation is received.

"We expect to assign our 'BB+' corporate credit rating to USG --
the borrower-when it and its major U.S. subsidiaries -- the
guarantors--emerge from Chapter 11 bankruptcy proceedings in
mid-2006," said Standard & Poor's credit analyst Kenneth L. Farer.
"We expect the outlook to be stable."

USG and its major U.S. subsidiaries entered voluntary bankruptcy
protection in June 2001 to resolve mounting asbestos-litigation
costs and to resolve its asbestos claims.  Proceeds from the
delayed-draw term loans, in addition to the company's $1.8 billion
rights offering, will be used to resolve pre-bankruptcy
liabilities and fund contributions to the company's Section 524(g)
asbestos personal injury trust.

Chicago, Illinois-based USG Corp. manufactures and distributes
building materials mainly for North American markets.  Its primary
businesses are gypsum wallboard and related products, ceiling
systems, and specialty distribution.

If Congress creates a national trust for payment of asbestos
personal-injury claims by the 10th day after final adjournment of
the 109th Congress, USG's debt levels will decline significantly
in 2007, because of the cancellation of its contingent note
obligations, with cash balances of more than $1 billion.  Standard
& Poor's does not believe USG will maintain such high cash
balances, because of acquisitions to expand its specialty building
materials distribution business and possible shareholder
initiatives.

As with all exit financings, several standard conditions precedent
relate to the bankruptcy proceeding before funding of these
facilities.  Among these are an order from the Bankruptcy Court
confirming USG's plan of reorganization.  Our bank loan ratings,
therefore, apply only if USG fulfills all conditions precedent.


UTIX GROUP: Posts $1.5 Mil. Net Loss in 2006 1st Fiscal Quarter
---------------------------------------------------------------
Utix Group, 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 an $1,541,110 net loss on $448,513 net
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $5,148,712
in total assets and $5,475,582 in total liabilities resulting in a
$8,243,520 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $4,833,493 in total current assets available to pay
$1,980,273 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a56

                     Going Concern Doubt

As reported in the Troubled Company Reporter on January 23, 2006,
Vitale, Caturano & Company, Ltd., expressed substantial doubt
about Utix Group, Inc., fka Corporate Sports Incentives, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the years ended Sept. 30, 2005
and 2004.  The auditing firm pointed to the Company's recurring
losses from operations, net working capital deficiency and
stockholders' deficit.

                        About Utix

Headquartered in Burlington, Massachusetts, Utix Group, Inc.
-- http://www.utix.com/-- provides gift tickets to retail buyers
and corporations that are redeemable at golf courses, ski resorts,
spas, and movie theaters in the United States.  The company's
products consist of recreation products, such as Utix Golf
Tickets, SwingPack, and Utix Ski Tickets; and leisure products,
including Utix Spa Ticket and Movie Ticket.  It distributes its
products through prepaid manual plastic gift tickets to
corporations and other business users, as well as sells prepaid
magnetic strip gift tickets through mass merchandise retail
chains.


VELOCITY EXPRESS: April 1 Working Capital Deficit Tops $27.7 Mil.
-----------------------------------------------------------------
Velocity Express Corporation filed its third quarter financial
statements for the three months ended April 1, 2006, with the
Securities and Exchange Commission on May 16, 2006.

The Company reported a $3,733,000 net loss on $50,476,000 of
revenues for the three months ended April 1, 2006.

At April 1, 2006, the Company's balance sheet showed $75,989,000
in total assets, $55,083,000 in total liabilities, and $20,906,000
in stockholders' equity.

The Company's April 1 balance sheet also showed strained liquidity
with $23,973,000 in total current assets available to pay
$51,698,000 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 April 1, 2006, are available for free at
http://ResearchArchives.com/t/s?a82

Velocity Express Corporation, fka United Shipping & Technology,
Inc., provides same-day transportation and distribution and
logistics services to individual consumers and businesses.


VENTAS INC: Moody's Rates Sub. Debt & Preferred Stock at (P)B1
--------------------------------------------------------------
Moody's Investors Service changed the rating outlook for Ventas,
Inc. to positive.  This rating action results from Ventas' recent
refinancing of its bank facility from a secured facility to an
unsecured facility, once again demonstrating the REIT's commitment
to balance sheet enhancement.

The REIT's secured debt is expected to be under 15% of gross
assets over the intermediate term -- a notable credit positive.
The positive rating outlook also reflects Moody's belief that
Ventas will continue to unencumber its assets and make meaningful
progress growing and diversifying its healthcare property
portfolio, diversifying tenant base, and strengthening its
operational infrastructure.

Moody's stated that an upgrade to Ba1 would depend on the ability
of the REIT to bring its secured debt level below 15% of gross
assets, reduce its top two tenant exposure closer to 40% of
revenue, while continuing to increase its exposure to private pay
health care segments, and grow overall in size.  A rating
downgrade would likely result if Ventas were to change to a more
aggressive capital strategy, demonstrated by a rise in secured
debt from its existing levels, most likely driven by a leveraged
strategic transaction.

These ratings were affirmed with a positive outlook:

Ventas Realty Limited Partnership

   * Senior debt at Ba2;
   * Senior debt shelf to (P)Ba2;
   * Subordinated debt shelf at (P)B1

Ventas, Inc.

   * Senior debt shelf at (P)Ba3;
   * Subordinated debt shelf at (P)B1;
   * Preferred stock shelf at (P)B1

Ventas Capital Corporation

   * Senior debt shelf at (P)Ba2;
   * Subordinated debt shelf at (P)B1

In its previous rating actionwith respect to Ventas, Moody's
upgraded the senior debt rating to Ba2 with a stable outlook.

Ventas, Inc. is a health care real estate investment trust that
owns 393 health care and senior housing assets in 42 states,
including 41 hospitals, 200 skilled nursing facilities and 152
senior housing and other assets.  At March 31, 2006, Ventas had
$2.7 billion in book assets.


VIEW SYSTEMS: Posts $219,143 Net Loss in 2006 1st Fiscal Quarter
----------------------------------------------------------------
View Systems, Inc., filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 18, 2006.

The Company reported an $219,143 net loss on $402,575 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,185,284
in total assets and $982,602 in total liabilities, resulting in
a $1,202,682 in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $418,475 in total current assets available to pay
$982,602 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a6b

                        Going Concern Doubt

Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, raised
substantial doubt about View 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 losses from operation and debt
obligations in default.

                         About View Systems

View Systems, Inc., develops and markets computer software for
security surveillance applications.


VIKING SYSTEMS: Hires Donald Tucker as Chief Executive Officer
--------------------------------------------------------------
Viking Systems, Inc., named Donald E. Tucker as its Chief
Executive Officer, President and Director, effective May 23, 2006.

Mr. Tucker replaces interim CEO Nathan Harrison, MD who continues
to serve as a director of the Registrant.  Mr. Tucker is a
significant shareholder of the Company, and has recently retired
from his employment as a senior executive with Accenture, an
international consulting company.  Viking anticipates that
employment compensation terms for Mr. Tucker will be finalized
within the next several weeks.

Over his 26-year career with Accenture, Mr. Tucker has worked
extensively with start-up companies, emerging growth businesses
and Fortune 50 companies.  Mr. Tucker was the Managing Partner for
the Accenture Medical Products, Diagnostics and Devices industry
segments, as well as, the Accenture lead partner for the west
coast biopharmaceutical market.  His areas of specialization
include product and market development, logistics and supply chain
management, and strategy formulation.  Mr. Tucker has extensive
experience in merger integration, new product launch and complex
business change.

Based in La Jolla, California, Viking Systems, Inc. (OTCBB: VKSY)
-- http://www.vikingsystems.com/-- provides high performance 3D
endoscopic vision systems to hospitals for minimally invasive
surgery.  Viking is leveraging that position to become a market
leader in bringing integrated solutions to the digital surgical
environment.  The company's focus is to deliver integrated
information, visualization and control solutions to the surgical
team, enhancing their capability and performance in MIS and
complex surgical procedures.

                            *   *   *

As reported in the Troubled Company Reporter on May 16, 2006,
Peterson & Co., LLP, in San Diego, California, raised substantial
doubt about Viking Systems, 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
recurring losses from operations and working capital deficit.


VOIP INC: Posts $13.8 Mil. Net Loss in 2006 1st Fiscal Quarter
--------------------------------------------------------------
VoIP Inc., filed its first quarter financial statements for the
three months ended March 31, 2006, with the Securities and
Exchange Commission on May 18, 2006.

The Company reported a $13,807,034 net loss on $10,361,546 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $53,991,563
in total assets, $29,867,132 in total liabilities and
$24,124,431 of stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $6,439,237 in total current assets available to pay
$29,598,026 in total current liabilities coming due within the
next 12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a6f

                        Going Concern Doubt

Berkovits, Lago & Company, LLP, in Fort Lauderdale, Florida,
raised substantial doubt about VoIP 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 lack of sufficient working
capital and recurring losses.

                            About VoIP

VoIP, Inc. provides communications services to communication
companies, businesses, and residential consumers.  The company
also sells various communication hardware to broadband service
providers.


WALTER HORNE: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Walter Bruce Horne
        Janet Griffen Horne
        219 Versailles Drive
        Cary, North Carolina 27511

Bankruptcy Case No.: 06-00810

Chapter 11 Petition Date: June 1, 2006

Court: Eastern District of North Carolina (Raleigh)

Debtors' Counsel: Jason L. Hendren, Esq.
                  Brady, Nordgren, Morton & Malone, PLLC
                  2301 Sugar Bush Road, Suite 450
                  Raleigh, North Carolina 27612
                  Tel: (919) 782-3500
                  Fax: (919) 573-1430

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtors' 10 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Capital One                      Credit Card            $54,133
P.O. Box 70884
Charlotte, NC 28277-0844

MBNA                             Credit Card            $34,200
P.O. Box 15026
Wilmington, DE 19850-5026

AT&T                             Credit Card            $21,400
Payment Department
1500 Bottonfield Street
Columbus, OH 43228

Discover                         Credit Card            $11,500

Regions Bank                     Credit Card             $8,885

Bank of America                  Credit Card             $7,000

CitiBank                         Credit Card             $6,100

North Carolina Department        Property Taxes          $3,000
of Revenue

Lowes                            Credit Card             $1,000

Sears                            Credit Card               $300


WASHINGTON COUNTY: Moody's Withdraws B3 Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service withdrew the B3 corporate family rating
of Washington County Casino Resort, LLC and assigned a B3
corporate family rating to Riverside Casino and Golf Resort, LLC.

This action follows a change in the organization's final capital
structure that occurred just prior to closing of its bank
facility.  The issuer of the bank debt was Riverside, instead of
WCCR.  The credit profile of the transaction remains the same as
all of the assets of WCCR were down streamed to Riverside.

Riverside's assets provide security for the bank loans, and WCCR
provides a downstream guaranty. Additionally, the senior secured
bank credit facility contains a $10 million revolver and a $100
million term loan, rather than, as originally planned before
close, a $15 million revolver and $95 million term loan.

Moody's last rating action was both the assignment of first time
ratings, subject to final documentation, to WCCR's senior secured
bank credit facility and assignment of a WCCR long-term corporate
family rating on October 19, 2005.

Riverside is the single operating, and wholly owned subsidiary of
WCCR.  Riverside is a development stage company that is developing
a casino, hotel and golf resort in Washington County, Iowa.


WINDSTREAM CORP: Moody's Rates Planned $2.9BB Debt Facility at Ba2
------------------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating,
a Ba2 rating for the proposed $2.9 billion in senior secured
credit facilities, and a Ba3 rating for the $2.5 billion in senior
notes at Windstream Corporation, an entity to be created following
the spinoff of the Alltel wireline operations and the reverse
Morris Trust merger with Valor Telecommunications.

In addition, Moody's downgraded the ratings of the existing Alltel
Georgia Communications to Baa2 and Alltel Communications Holdings
of Midwest to Ba2.  Valor's corporate family rating was upgraded
to Ba2, along with the senior secured credit facilities and the
senior notes, reflecting the strong likelihood that the spinoff
will be implemented as planned.

The upgrade of Valor's senior notes reflects the pari-passu
treatment they will receive relative to Windstream's secured
credit facilities.  Upon the conclusion of the merger, Valor's
corporate family and the senior secured facility ratings will be
withdrawn.  The outlook is stable.

Issuer

Windstream Corporation

   * Corporate Family Rating -- Assigned Ba2

   * $500 million Senior Secured Revolving Credit
     Facility -- Assigned Ba2

   * $500 million Senior Secured
     Term Loan A -- Assigned Ba2

   * $1,900 million Senior Secured
     Term Loan B -- Assigned Ba2

   * $800 million Senior Notes -- Assigned Ba3

   * $1,703 million Senior Notes due 2016 -- Assigned Ba3

Outlook -- Assigned Stable

Issuer

Valor Telecommunications Enterprises, LLC:

   * Corporate Family Rating -- Changed to Ba2 from Ba3

   * $100 million Senior Secured Revolving Credit
     Facility -- Changed to Ba2 from Ba3

   * $780 million Senior Secured Term Loan B - Changed
     to Ba2 from Ba3

   * $400 million Senior Notes due 2015 -- Changed to Ba2 from B1

Outlook -- Changed to Stable from positive

Issuer

Alltel Communications Holdings of the Midwest, Inc:

   * $100 million Senior Notes due 2028 -- Changed to Ba2 from A2

Issuer

Alltel Georgia Communications:

   * $80 million Senior Notes due 2013 -- Changed to Baa2 from A3

The Ba2 corporate family rating reflects the high debt levels that
Windstream will incur, in large part to fund a dividend to Alltel
shareholders at the spinoff.  It also reflects expected downward
pressure on wireline revenue and cash flow growth in the future.
Coupled with the significant dividends that Windstream plans to
pay in the future, cash flows available for debt reduction are
likely to remain below 3.1% in the next two years, and Moody's
does not expect debt to decline below 3.3 times EBITDA over the
ratings horizon.

The ratings and the outlook benefit from the stability of the
company's operations, and management's track record of delivering
on expected results.

Windstream, headquartered in Little Rock, AR, is an ILEC to be
formed via merger of Alltel's wireline operations and Valor.


* BOND PRICING: For the week of May 29 - June 2, 2006
-----------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
ABC Rail Product                     10.500%  01/15/04     0
ABC Rail Product                     10.500%  12/31/04     0
Adelphia Comm.                        3.250%  05/01/21     1
Adelphia Comm.                        6.000%  02/15/06     1
Adelphia Comm.                        7.500%  01/15/04    47
Adelphia Comm.                        7.750%  01/15/09    47
Adelphia Comm.                        7.875%  05/01/09    46
Adelphia Comm.                        8.125%  07/15/03    47
Adelphia Comm.                        8.375%  02/01/08    47
Adelphia Comm.                        9.250%  10/01/02    48
Adelphia Comm.                        9.375%  11/15/09    52
Adelphia Comm.                        9.500%  02/15/04    50
Adelphia Comm.                        9.875%  03/01/05    46
Adelphia Comm.                        9.875%  03/01/07    48
Adelphia Comm.                       10.250%  06/15/11    52
Adelphia Comm.                       10.250%  11/01/06    48
Adelphia Comm.                       10.500%  07/15/04    46
Adelphia Comm.                       10.875%  10/01/10    47
Aetna Industries                     11.875%  10/01/06     8
Allegiance Tel.                      11.750%  02/15/08    46
Allegiance Tel.                      12.875%  05/15/08    45
Amer & Forgn Pwr                      5.000%  03/01/30    66
Amer Color Graph                     10.000%  06/15/10    68
Amer Plumbing                        11.625%  10/15/08    18
Antigenics                            5.250%  02/01/25    58
Anvil Knitwear                       10.875%  03/15/07    56
Arvin Capital I                       9.500%  02/01/27    70
At Home Corp.                         0.525%  12/28/18     2
At Home Corp.                         4.750%  12/15/06     4
Atlantic Coast                        6.000%  02/15/34    21
Atlas Air Inc                         8.010%  01/02/10    73
Atlas Air Inc                         9.702%  01/02/08    74
Autocam Corp.                        10.875%  06/15/14    60
Aviation Sales                        8.125%  02/15/08    44
Banctec Inc                           7.500%  06/01/08    75
Bank New England                      8.750%  04/01/99     6
BBN Corp                              6.000%  04/01/12     0
Builders Transpt                      6.500%  05/01/11     1
Burlington North                      3.200%  01/01/45    53
CCH II/CCH II CP                     10.250%  01/15/10    62
Charter Comm Hld                     10.000%  05/15/11    61
Charter Comm Hld                     11.125%  01/15/11    64
Charter Comm Inc                      5.875%  11/16/09    74
Chic East Ill RR                      5.000%  01/01/54    61
CIH                                   9.920%  04/01/14    53
CIH                                  10.000%  05/15/14    61
CIH                                  11.125%  01/15/14    64
Clark Material                       10.750%  11/15/06     0
CMI Industries                        9.500%  10/01/03     0
Collins & Aikman                     10.750%  12/31/11    40
Comcast Corp.                         2.000%  10/15/29    39
Concentric Network                   12.750%  12/15/07     0
CPNL-Dflt12/05                        4.000%  12/26/06    27
CPNL-Dflt12/05                        4.750%  11/15/23    43
CPNL-Dflt12/05                        4.750%  11/15/23    45
CPNL-Dflt12/05                        6.000%  09/30/14    35
CPNL-Dflt12/05                        7.625%  04/15/06    56
CPNL-Dflt12/05                        7.750%  04/15/09    63
CPNL-Dflt12/05                        7.750%  06/01/15    32
CPNL-Dflt12/05                        7.875%  04/01/08    65
CPNL-Dflt12/05                        8.500%  02/15/11    46
CPNL-Dflt12/05                        8.625%  08/15/10    45
CPNL-Dflt12/05                        8.750%  07/15/07    63
CPNL-Dflt12/05                       10.500%  05/15/06    56
Cray Research                         6.125%  02/01/11     9
Curagen Corp.                         4.000%  02/15/11    74
Curative Health                      10.750%  05/01/11    62
Dal-Dflt09/05                         9.000%  05/15/16    26
Delco Remy Intl                       9.375%  04/15/12    58
Delco Remy Intl                      11.000%  05/01/09    57
Delphi Trust II                       6.197%  11/15/33    61
Delta Air Lines                       2.875%  02/18/24    26
Delta Air Lines                       7.700%  12/15/05    26
Delta Air Lines                       7.900%  12/15/09    27
Delta Air Lines                       8.000%  06/03/23    26
Delta Air Lines                       8.187%  10/11/17    36
Delta Air Lines                       8.270%  09/23/07    75
Delta Air Lines                       8.300%  12/15/29    27
Delta Air Lines                       8.540%  01/02/07    71
Delta Air Lines                       8.950%  01/12/12    66
Delta Air Lines                       9.200%  09/23/14    70
Delta Air Lines                       9.250%  03/15/22    26
Delta Air Lines                       9.320%  01/02/09    73
Delta Air Lines                       9.375%  09/11/07    73
Delta Air Lines                       9.480%  06/05/06    58
Delta Air Lines                       9.590%  01/12/17    67
Delta Air Lines                       9.750%  05/15/21    27
Delta Air Lines                       9.875%  04/30/08    68
Delta Air Lines                       9.950%  06/01/06    70
Delta Air Lines                       9.950%  06/01/06    70
Delta Air Lines                      10.000%  06/01/07    66
Delta Air Lines                      10.000%  06/01/08    66
Delta Air Lines                      10.000%  06/01/09    66
Delta Air Lines                      10.000%  06/01/10    66
Delta Air Lines                      10.000%  06/01/10    67
Delta Air Lines                      10.000%  06/01/11    51
Delta Air Lines                      10.000%  06/01/12    63
Delta Air Lines                      10.000%  08/15/08    27
Delta Air Lines                      10.060%  01/02/16    74
Delta Air Lines                      10.080%  06/16/07    59
Delta Air Lines                      10.125%  05/15/10    27
Delta Air Lines                      10.375%  02/01/11    28
Delta Air Lines                      10.375%  12/15/22    26
Delta Air Lines                      10.500%  04/30/16    68
Deutsche Bank NY                      8.500%  11/15/16    64
Diva Systems                         12.625%  03/01/08     1
Dov Pharmaceutic                      2.500%  01/15/25    61
Dura Operating                        9.000%  05/01/09    59
Dura Operating                        9.000%  05/01/09    61
DVI Inc                               9.875%  02/01/04    13
Eagle-Picher Inc                      9.750%  09/01/13    66
Emergent Group                       10.750%  09/15/04     0
Encysive Pharmacy                     2.500%  03/15/12    71
Epix Medical Inc.                     3.000%  06/15/24    67
Exodus Comm. Inc.                     5.250%  02/15/08     0
Exodus Comm. Inc.                    11.250%  07/15/10     0
Falcon Products                      11.375%  06/15/09     3
Federal-Mogul Co.                     7.375%  01/15/06    62
Federal-Mogul Co.                     7.500%  01/15/09    61
Federal-Mogul Co.                     8.160%  03/06/03    55
Federal-Mogul Co.                     8.250%  03/03/05    63
Federal-Mogul Co.                     8.330%  11/15/01    47
Federal-Mogul Co.                     8.370%  11/15/01    57
Federal-Mogul Co.                     8.370%  11/15/01    58
Federal-Mogul Co.                     8.800%  04/15/07    63
Finova Group                          7.500%  11/15/09    32
Ford Motor Co                         6.500%  08/01/18    68
Ford Motor Co                         6.625%  02/15/28    68
Ford Motor Co                         7.125%  11/15/25    69
Ford Motor Co                         7.400%  11/01/46    68
Ford Motor Co                         7.500%  08/01/26    70
Ford Motor Co                         7.700%  05/15/97    69
Ford Motor Co                         7.750%  06/15/43    69
Ford Motor Cred                       5.650%  01/21/14    73
Ford Motor Cred                       5.700%  01/20/12    74
Ford Motor Cred                       5.750%  01/21/14    73
Ford Motor Cred                       5.750%  02/20/14    74
Ford Motor Cred                       5.750%  02/20/14    74
Ford Motor Cred                       6.000%  01/20/15    72
Ford Motor Cred                       6.000%  01/21/14    75
Ford Motor Cred                       6.000%  02/20/15    75
Ford Motor Cred                       6.000%  03/20/14    74
Ford Motor Cred                       6.000%  11/20/14    73
Ford Motor Cred                       6.000%  11/20/14    73
Ford Motor Cred                       6.000%  11/20/14    74
Ford Motor Cred                       6.050%  02/20/14    75
Ford Motor Cred                       6.050%  02/20/15    73
Ford Motor Cred                       6.050%  03/20/14    75
Ford Motor Cred                       6.050%  04/21/14    74
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.100%  02/20/15    73
Ford Motor Cred                       6.200%  03/20/15    74
Ford Motor Cred                       6.250%  01/20/15    75
Ford Motor Cred                       6.250%  03/20/15    74
Ford Motor Cred                       6.300%  05/20/14    73
Ford Motor Cred                       7.500%  08/20/32    72
Gateway Inc.                          2.000%  12/31/11    72
GB Property Fndg                     11.000%  09/29/05    62
General Motors                        7.400%  09/01/25    70
General Motors                        7.700%  04/15/16    75
General Motors                        8.100%  06/15/24    71
General Motors                        8.250%  07/15/23    75
Glenoit Corp                         11.000%  04/15/07     0
Global Health SC                     11.000%  05/01/08     2
GMAC                                  5.750%  01/15/14    75
GMAC                                  5.900%  01/15/19    73
GMAC                                  5.900%  01/15/19    75
GMAC                                  5.900%  02/15/19    75
GMAC                                  6.000%  02/15/19    73
GMAC                                  6.000%  03/15/19    72
GMAC                                  6.000%  03/15/19    75
GMAC                                  6.000%  09/15/19    74
GMAC                                  6.000%  09/15/19    75
GMAC                                  6.050%  08/15/19    72
GMAC                                  6.050%  08/15/19    73
GMAC                                  6.125%  10/15/19    71
GMAC                                  6.250%  07/15/19    73
GMAC                                  6.250%  12/15/18    74
GMAC                                  6.500%  01/15/20    74
GMAC                                  6.500%  02/15/20    74
Golden Books Pub                     10.750%  12/31/04     0
Graftech Intl                         1.625%  01/15/24    74
GST Network Fndg                     10.500%  05/01/08     0
Gulf States Stl                      13.500%  04/15/03     0
HNG Internorth                        9.625%  03/15/06    34
Imperial Credit                       9.875%  01/15/07     0
Incyte Corp.                          3.500%  02/15/11    75
Inland Fiber                          9.625%  11/15/07    62
Insight Health                        9.875%  11/01/11    46
Iridium LLC/CAP                      10.875%  07/15/05    29
Iridium LLC/CAP                      11.250%  07/15/05    29
Iridium LLC/CAP                      13.000%  07/15/05    28
Iridium LLC/CAP                      14.000%  07/15/05    29
Isolagen Inc.                         3.500%  11/01/24    57
JL French Auto                       11.500%  06/01/09     0
Kaiser Aluminum & Chem.               9.875%  02/15/02    54
Kaiser Aluminum & Chem.              10.875%  10/15/06    55
Kaiser Aluminum & Chem.              10.875%  10/15/06    55
Kaiser Aluminum & Chem.              12.750%  02/01/03    12
Kellstrom Inds                        5.500%  06/15/03     0
Kellstrom Inds                        5.750%  10/15/02     0
Kevco Inc                            10.375%  12/01/07     0
Kmart Corp.                           8.800%  07/01/10    75
Kmart Corp.                           8.990%  07/05/10     7
Kmart Corp.                           9.780%  01/05/20    10
Kmart Funding                         9.440%  07/01/18    43
Lehman Bros Hldg                     10.000%  10/30/13    73
Lehman Bros Hldg                     11.000%  10/25/17    75
Liberty Media                         3.750%  02/15/30    59
Liberty Media                         4.000%  11/15/29    64
Lifecare Holding                      9.250%  08/15/13    73
Macsaver Financl                      7.400%  02/15/02     2
Macsaver Financl                      7.600%  08/01/07     3
Macsaver Financl                      7.875%  08/01/03     0
Merisant Co                           9.500%  07/15/13    70
Metamor WorldWide                     2.940%  08/15/04     1
Metricom Inc                         13.000%  02/15/10     0
Missouri Pac RR                       5.000%  01/01/45    74
Motorola Inc                          5.220%  10/01/97    75
MSX Int'l Inc.                       11.375%  01/15/08    66
Muzak LLC                             9.875%  03/15/09    59
New Orl Grt N RR                      5.000%  07/01/32    66
Northern Pacific RY                   3.000%  01/01/47    53
Northern Pacific RY                   3.000%  01/01/47    53
Northwest Airlines                    6.625%  05/15/23    49
Northwest Airlines                    7.039%  01/02/06     5
Northwest Airlines                    7.248%  01/02/12    40
Northwest Airlines                    7.625%  11/15/23    49
Northwest Airlines                    7.875%  03/15/08    52
Northwest Airlines                    8.130%  02/01/14    74
Northwest Airlines                    8.700%  03/15/07    51
Northwest Airlines                    8.875%  06/01/06    49
Northwest Airlines                    9.179%  04/01/10    25
Northwest Airlines                    9.875%  03/15/07    53
Northwest Airlines                   10.000%  02/01/09    48
Nutritional Src.                     10.125%  08/01/09    65
Oakwood Homes                         8.125%  03/01/09    10
Oscient Pharm                         3.500%  04/15/11    71
Osu-Dflt10/05                        13.375%  10/15/09     0
O'Sullivan Ind                       10.630%  10/01/08    59
Outboard Marine                       7.000%  07/01/02     0
Outboard Marine                      10.750%  06/01/08     9
Overstock.com                         3.750%  12/01/11    69
Overstock.com                         3.750%  12/01/11    69
PCA LLC/PCA Fin                      11.875%  08/01/09    22
Pegasus Satellite                     9.625%  10/15/49    10
Pegasus Satellite                    12.375%  08/01/06     9
Pegasus Satellite                    12.500%  08/01/07    10
Phar-Mor Inc                         11.720%  09/11/02     1
Piedmont Aviat                        9.900%  11/08/06     0
Pixelworks Inc.                       1.750%  05/15/24    73
Pliant-DFLT/06                       13.000%  06/01/10    46
Pliant-DFLT/06                       13.000%  06/01/10    47
Polaroid Corp.                        6.750%  01/15/02     0
Polaroid Corp.                        7.250%  01/15/07     0
Polaroid Corp.                       11.500%  02/15/06     0
Primedex Health                      11.500%  06/30/08    64
Primus Telecom                        3.750%  09/15/10    50
Primus Telecom                        8.000%  01/15/14    69
Radnor Holdings                      11.000%  03/15/10    64
Read-Rite Corp.                       6.500%  09/01/04     9
Reliance Group Holdings               9.000%  11/15/00    20
Reliance Group Holdings               9.750%  11/15/03     1
RJ Tower Corp.                       12.000%  06/01/13    73
Salton Inc.                          12.250%  04/15/08    69
Solectron Corp.                       0.500%  02/15/34    70
Spinnaker Inds                       10.750%  10/15/06     0
Tekni-Plex Inc.                      12.750%  06/15/10    74
Tom's Foods Inc                      10.500%  11/01/04     9
Toys R Us                             7.375%  10/15/18    74
Transtexas Gas                       15.000%  03/15/05     0
Tribune Co                            2.000%  05/15/29    69
Trism Inc                            12.000%  02/15/05     1
Triton Pcs Inc.                       8.750%  11/15/11    74
Triton Pcs Inc.                       9.375%  02/01/11    74
United Air Lines                      7.270%  01/30/13    45
United Air Lines                      7.870%  01/30/19    47
United Air Lines                      9.020%  04/19/12    55
United Air Lines                      9.350%  04/07/16    29
United Air Lines                      9.560%  10/19/18    55
United Air Lines                     10.360%  11/13/12     5
Univ Health Svcs                      0.426%  06/23/20    57
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49    11
US Air Inc.                          10.300%  01/15/49     1
US Air Inc.                          10.550%  01/15/49     1
US Air Inc.                          10.610%  06/27/07     0
US Air Inc.                          10.680%  06/27/08     2
US Air Inc.                          10.700%  01/01/49    20
US Air Inc.                          10.850%  01/01/49    48
US Air Inc.                          11.200%  03/19/05     0
Werner Holdings                      10.000%  11/15/07    28
Westpoint Steven                      7.875%  06/15/05     0
Winsloew Furniture                   12.750%  08/15/07    20
Winstar Comm                         14.000%  10/15/05     0
Winstar Comm Inc                     10.000%  03/15/08     0
World Access Inc.                     4.500%  10/01/02     4
World Access Inc.                    13.250%  01/15/08     4

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland, USA.  Marie
Therese V. Profetana, Shimero Jainga, Joel Anthony Lopez, Emi Rose
S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo,
Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara
Marie A. Martin and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***