TCR_Public/060608.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Thursday, June 8, 2006, Vol. 10, No. 135

                             Headlines

ABS CAPITAL: Moody's Places Junk Rated Priority Notes on Watch
ACE SECURITIES: Moody's Assigns Low-B Rating on Two Cert. Classes
ALLIED HOLDINGS: Wants to Borrow Against Insurance Policies
AMR CORP: S&P Lifts Corp. Credit Rating One Notch to B from B-
ANDREW CORP: Inks Merger Agreement with ADC Telecommunications

ANTEON INT'L: Moody's Holds Ba2 Rating on $200MM Secured Revolver
ATRIUM COS: S&P Puts B Rating on Proposed $475MM Debt Facilities
BPK RESOURCES: Posts $1.5 Mil. Net Loss in Quarter Ended March 31
BTSC HOLDINGS: S&P Rates Proposed $100 Million Sr. Notes at CCC+
BUFFALO COAL: U.S. Trustee Appoints Eight-Member Official Panel

BUFFALO COAL: Court Approves Hoyer Hoyer as Bankruptcy Counsel
BUFFALO COAL: List of 20 Largest Unsecured Creditors
CALPINE CORP: Wants to Amend and Assume Cogeneration Plant Deals
CALPINE CORP: CCFC Asks for Waivers Under $800MM Loans Contracts
CAREGIVERS: Case Summary & 20 Largest Unsecured Creditors

CASCADES INC: Moody's Assigns Ba1 Rating to CA$550 Mil. of Loans
CCS MEDICAL: Moody's Lowers rating on $110 Mil. Term Loan to Caa3
CHOICE ONE: Moody's Rates Planned $400MM Debt Facility at Ba3
CITIUS I: Moody's Rates $4 Million Class E Notes at Ba1
COGECO CABLE: Agrees to Buy Cable Operator Cabovisao for EUR464MM

COMMUNICATIONS CORP: Case Summary & 11 Largest Unsecured Creditors
CONSOLIDATED CONTAINER: Equity Deficit Tops $84.5MM at March 31
CONSUMERS ENERGY: Reports $10 Million Net Income in First Quarter
COPAMEX SA: S&P Affirms BB- Senior Unsecured Currency Ratings
CREDIT SUISSE: Moody's Affirms Rating on $8.8MM Certs. at Caa2

DANA CORP: Court Directs Debtors to Pay US Bancorp Lease Debts
DANA CORP: Wants Court to Approve Agreement with Underwriters
DANA CORP: Committee Hires UBS Securities as Investment Bankers
DATATEL INC: S&P Assigns CCC+ Rating to Amended $100 Million Loan
DELTA AIR: Amended Company By-Laws Allow CEO to Choose Top Execs

DELTA AIR: Plays to Lay-Off 9,000 Employees by Year-End 2007
DOBSON COMMS: Unit Buys $234.4MM of Tendered Floating Rate Notes
E*TRADE: Moody's Lifts B1 Rating on Sr. Unsec. Notes to Ba2
FALCONBRIDGE LTD: To Sell Assets to LionOre Mining for $650 Mil.
FISHER COMMS: Sells 24 Radio Stations to Cherry Creek for $33.3MM

FREESTAR TECH: Incurs $2.2 Mil. Net Loss in 2006 1st Fiscal Qtr.
GALLERIA INVESTMENTS: Receiver Hires Moskowitz as Special Counsel
GLOBAL ENERGY: Posts $377,793 Net Loss in Quarter Ended March 31
GOODYEAR TIRE: Fitch Affirms Senior Unsecured Debt's CCC+ Rating
GRANDE COMMS: S&P Raises Corp. Credit & Sr. Notes' Ratings to B-

GRANITE BROAD: Moody's Lowers B3 Rating on $400MM Notes to Caa1
GRANT PRIDECO: Moody's Lifts Corp. Family Rating to Ba1 from Ba2
GUARDIAN TECHNOLOGIES: Posts $2 Mil. Net Loss in 2006 1st Quarter
HECTOR MORALES: Case Summary & 13 Largest Unsecured Creditors
HORIZON NATURAL: Zurich's Administrative Claim is Disallowed

HOST MARRIOTT: Moody's Ups $37.8MM Class G Cert.'s Rating to Baa1
HOVNANIAN ENTERPRISES: Fitch Rates $250 Mil. Senior Notes at BB+
ICEWEB Inc: Posts $666,126 Net Loss in 2006 1st Fiscal Quarter
IMMUNE RESPONSE: March 31 Balance Sheet Upside-Down by $134.7 Mil.
INCO LTD: To Sell Falconbridge Assets to LionOre Mining for $650MM

INDYMAC BANCORP: DBRS Rates Preferred Securities at BB (High)
ITC DELTACOM: Works to Regain Nasdaq Listing Compliance
JMJ TECHNOLOGIES: Voluntary Chapter 11 Case Summary
LATHAM: Moody's Puts B2 Rating on Planned $200 Mil. Debt Facility
L-3 COMMS: Mourns Death of Chief Executive Officer Frank C. Lanza

LEVEL 3: S&P Assigns CCC- Rating to Proposed $150MM Notes Issue
LORAL SPACE: Unstayed Confirmation Order Moots Appeal
LORBER INDUSTRIES: Wants Until Sept. 12 to Decide on Leases
MARKSON ROSENTHAL: Brings In NachmanHaysBrownstein as Advisors
MARKSON ROSENTHAL: Court OKs Drinker Biddle as Committee Counsel

MARKSON ROSENTHAL: Panel Employs Weiser as Financial Consultants
MCCLATCHY CO: Agrees to Sell Five Knight Ridder Publications
MERIDIAN AUTOMOTIVE: Projected Financial Data Underpinning Plan
MERIDIAN: Wants to Enter into Fee Letters with 3 Potential Lenders
MERIDIAN AUTOMOTIVE: Asks for Court's Nod on $375MM Exit Facility

MERRILL LYNCH: DBRS Puts Low-B Rating on Six Certificate Classes
NIGHTHAWK SYSTEMS: Posts $1.3 MM Net Loss in 2006 1st Fiscal Qtr.
NORTEL CORP: DBRS Holds Rating on $1.8 Billion Notes at B (low)
NORTHWEST AIRLINES: Has Until June 15 to File Statements
NORTHWEST AIRLINES: Wants to Enter Into Amended IAM CBA Amendment

NORTHWEST AIRLINES: Asks Court to Extend Removal Period to Nov. 15
NORTHWESTERN CORP: Seeks Approval of Asset Sale to Babcock & Brown
NRG VICTORY: U.S. Court Hearing on Chapter 15 Petition Deferred
OLYMPIA GROUP: Assets Auction Set for June 13 in California
ORIS AUTOMOTIVE: Court Okays Johnston Barton as Bankruptcy Counsel

ORIS AUTOMOTIVE: Bids for Assets Must be Submitted by June 16
OVERSEAS SHIPHOLDING: Earns $128.3 Million in First Quarter
PATRON SYSTEMS: Posts $4.4 Mil. Net Loss in 2006 1st Fiscal Qtr.
PICK UPS PLUS: Post $412,449 Net Loss in 2006 1st Fiscal Quarter
PINNACLE ENT: To Buy Harrah Entertainment's Assets for $25 Million

PMA CAPITAL: Fitch Affirms Low-B Issuer Default & Sr. Debt Ratings
POGO PRODUCING: Closes Sale of 50% Stake in Gulf of Mexico Assets
POGO PRODUCING: Prices $450 Million of 7-7/8% Senior Sub. Notes
PROTOCALL TECHNOLOGIES: Founder Bruce Newman Assumes CEO Post
PROTOCALL TECHNOLOGIES: Eisner LLP Raises Going Concern Doubt

Q COMM: Posts $1.8 Mil. Net Loss in 2006 1st Fiscal Quarter
QWEST COMMS: March 31 Working Capital Deficit Tops $923 Million
REFCO INC: Can Assumes and Assign Fifth Avenue Lease to Undertow
REFCO INC: Chap. 11 Trustee Withdraws Request to Hire Klee Tuchin
SATELLITE ENTERPRISES: Meyler & Company Raises Going Concern Doubt

SEARS CANADA: DBRS Reviews BB Rating on Revolving Term Facility
SAINT VINCENTS: Can Use Sun Life's Collateral Until August 2
SILICON GRAPHICS: Final DIP Hearing Rescheduled to June 20
SILICON GRAPHICS: Inks Lease Settlement Pact with Three Landlords
SKNM INC: Case Summary & 20 Largest Unsecured Creditors

SOLUTIA INC: Ad Hoc Panel Says Disclosure Statement is Inadequate
THICKSTUN BROS: Litigation with Encompass Services Continues
TOMBALL CENTER: Case Summary & Largest Unsecured Creditor
TOWER AUTOMOTIVE: Wants Court to Deny Fuji Dietec's Request
TRANSPORT IND: Moody's Holds Senior Secured Debt Rating at B2

UGS CAPITAL: Moody's Puts Rating on Proposed $300MM Notes at Caa1
UNITED RENTALS: Fitch Affirms Low-B Issuer Default & Debt Ratings
US MICROBICS: Posts $722,230 Net Loss in 2006 1st Fiscal Quarter
VALOR COMMS: Windstream Merger Cues S&P to Hold Ratings on Watch
VARIG S.A.: Preliminary Injunction Continued to June 13

VARIG S.A.: Promises to Pay ILFC Arrears by June 13
VIRTRA SYSTEMS: March 31 Working Capital Deficit Tops $4.5 Million
VOCALSCAPE: Posts $493,269 Net Loss in 2006 1st Fiscal Qtr
WHITE KNIGHT: Case Summary & 18 Largest Unsecured Creditors
WILD OATS: S&P Withdraws CCC+ Corp. Credit & Sr. Unsecured Ratings

WINDSTREAM CORP: S&P Rates Proposed $2.5 Billion Notes at BB-
XTO ENERGY: Acquires Peak Energy Resources for $105 Million
Y3K SECURE: March 31 Balance Sheet Upside Down by $11.2 Mil.
YOUTH & FAMILY: S&P Puts B Rating on Proposed $170MM Debt Facility

* David Mitchell Joins Fried Frank as Partner in New York
* Larry Engel Joins Morrison & Foerster in San Francisco

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

                             *********

ABS CAPITAL: Moody's Places Junk Rated Priority Notes on Watch
--------------------------------------------------------------
Moody's Investors Service placed on watch for possible downgrade
the ratings of these classes of notes issued by ABS Capital
Funding, Ltd.:

   * $28,000,000 Class B Second Priority Notes, Due 2033
    
     Prior Rating: Caa2

     Current Rating: Caa2, on watch for possible downgrade

According to Moody's, the current rating action reflects a
continued deterioration in the overall credit quality of the
underlying collateral pool which consists primarily of asset-
backed securities.

According to the deal surveillance reports as of April 2006, the
weighted average rating factor of the portfolio was 2152, compared
to the transaction's trigger level of 450 and the diversity score
was 18.5, compared to the trigger level of 20.

The overcollateralization level for the Class B Notes is currently
100.69% as compared with its trigger level of 101.4% and the
interest coverage level for the Class B Notes is currently 66.5%
as compared with its trigger level of 105%.


ACE SECURITIES: Moody's Assigns Low-B Rating on Two Cert. Classes
-----------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Ace Securities Corp.  Home Equity Loan
Trust, Series 2006-OP1, Asset Backed Pass-Through Certificates,
and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.

The securitization is backed by Option One Mortgage Corporation
originated adjustable-rate and fixed-rate subprime mortgage loans
acquired by DB Structured Products, Inc.  The ratings are based
primarily on the credit quality of the loans, and on the
protection from subordination, excess spread,
overcollateralization, and an interest rate swap agreement.
Moody's expects collateral losses to range from 5.15% to 5.65%.

Option One Mortgage Corporation will service the loans.  Moody's
has assigned Option One its top servicer quality rating as a
primary servicer of subprime loans.

The complete rating actions:

Ace Securities Corp. Home Equity Loan Trust, Series 2006-OP1,
Asset Backed Pass-Through Certificates

   * Cl. A-1A, Assigned Aaa

   * Cl. A-1B, 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

   * Cl. M-11, Assigned Ba2


ALLIED HOLDINGS: Wants to Borrow Against Insurance Policies
-----------------------------------------------------------
Before their bankruptcy filing, Allied Holdings, Inc., and its
debtor-affiliates provided retiree benefits to 24 non-bargaining
retired employees pursuant to the Employee Death Benefit Plan
adopted November 1, 1989, by Allied Systems, Ltd.  On April 19,
2006, the Debtors sought to terminate the Plan.

According to Harris B. Winsberg, Esq., at Troutman Sanders LLP, in
Atlanta, Georgia, the Plan was funded by universal life insurance
policies acquired and owned by Allied from Pacific Life Insurance
Company and Jefferson Pilot.

The cash values of the Policies as of the Petition Date are:

       Insurer             Insured                Cash Value
       -------             -------                ----------
       Pacific Life        Francis Barnes            $76,286
                           Robert Brogan, Jr.         20,871
                           Jimmie Creed               63,056
                           James Gartin               79,225
                           Julius Griggs               2,774
                           Maurice Harris             33,169
                           Alfred Hart                75,179
                           Richard Kee                65,784
                           William Lyle               75,647
                           Raymond Sell               61,120
                           Thomas Sims                92,382
                           Thomas Suber               34,071
                           Jesse White                34,315
                           Irvin Williams             55,093
                           John Williams              38,329

       Jefferson Pilot     Thomas Argo                15,747
                           Ashley Grandy              12,744
                           Vernon Grimes               7,449
                           Charles Vining             31,930
                                                   ---------
       Total                                        $857,180
                                                   =========

The Policies provide that Allied may borrow any amount up to the
cash surrender value of the Policies.

Allied is the sole owner and beneficiary of the Policies.  Allied
possesses and exercises all incidents of ownership and the
proceeds of the Policies are the Debtors' sole and exclusive
property.

Mr. Winsberg tells the Court that Allied is prepared to withdraw
its interest in and borrow against the Policies.

By this motion, the Debtors ask the Court to authorize them:

    (i) in their discretion, to obtain loans against or surrender
        their interest in the Policies; and

   (ii) to use the sums obtained in the ordinary course of
        business to preserve the value of their estates and the
        interests of creditors.

Mr. Winsberg relates that the Debtors notified the DIP Lenders
that they would be in default of several financial covenants,
including EBITDA.  The DIP Lenders are not willing to provide
additional availability to fund the Debtors' projected cash flow
deficits and require the Debtors to present and implement a plan
to fund the estimated shortfall.

The Debtors have identified their interest in the Policies as a
potential source of liquidity, to which the DIP Lenders have
agreed.  Mr. Winsberg says the Debtors intend to promptly reinvest
the proceeds of the Policies in the ordinary course of their
business.

In addition, the Debtors propose that any borrowings be deemed
nonrecourse so that the Insurer's rights and remedies are limited
to the Policies.

Mr. Winsberg maintains that the Debtors have satisfied the legal
prerequisites to obtain postpetition financing out of the ordinary
course of business because:

     -- the proposed borrowing is an exercise of the Debtors'
        sound and reasonable business judgment;

     -- no alternative financing is available on any other basis;

     -- the financing is in the best interests of the estates and
        their creditors; and

     -- no better offers, bids, or timely proposals are before the
        Court.

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


AMR CORP: S&P Lifts Corp. Credit Rating One Notch to B from B-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on AMR Corp.
and subsidiary American Airlines Inc., including raising the long-
term corporate credit ratings on each entity to 'B' from 'B-'.  
The short-term rating on AMR was raised to 'B-2' from 'B-3'.

The ratings were removed from CreditWatch with positive
implications, where they were placed on April 21, 2006.  

The outlook is stable.  

Rating actions on individual debt issues varied, with not all
securities upgraded, depending on specific circumstances of
secured obligations.  Fort Worth, Texas-based AMR has consolidated
debt and leases of about $22 billion.
      
"The upgrade reflects improving earnings and cash flow prospects,
driven by better revenue generation and ongoing cost-cutting
efforts, which have more than offset the effect of high fuel
prices," said Standard & Poor's credit analyst Philip Baggaley.

"In addition, AMR recently bolstered its liquidity with a $400
million equity offering that supplements $4.3 billion of
unrestricted cash at March 31, 2006," the credit analyst
continued.
     
In its review, Standard & Poor's evaluated secured obligations
individually, and in certain cases affirmed existing ratings,
rather than upgrading them.  American Airlines' 1999-1 pass-
through certificates, Class A-2 and Class B were affirmed,
because, although these certificates are secured by desirable
planes that American would likely want to keep in any bankruptcy
reorganization, they have large bullet maturities due in October
2009.

Standard & Poor's considers it possible that negotiations between
American and certificateholders would result in full recovery but
an extension of payments (which would cause a default if debt
amortization was extended beyond the final legal maturity dates of
these certificates).

In contrast, the 1999-1 Class A-1 certificates were upgraded, as
they are amortizing obligations that are paying down fairly
rapidly.  The various classes of American's 2001-1 certificates
are secured by a combination of desirable new aircraft and older
(relatively fuel-inefficient) MD83's; existing ratings on these
securities were affirmed, rather than upgraded.  Ratings of older
(unenhanced) equipment trust certificates and pass-through
certificates were mostly upgraded one notch, in line with the
upgrade of American's corporate credit rating, except in cases
where evaluation of the collateral indicated a greater or lesser
upgrade.
     
The 'B' long-term corporate credit ratings on AMR Corp. and
subsidiary American Airlines Inc. reflect:

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

   * erosion of financial strength by substantial, albeit
     declining, losses; and

   * a heavy debt and pension burden.

Satisfactory liquidity, with $4.3 billion of unrestricted cash at
March 31, 2006, is a positive.  American Airlines is the world's
largest airline, measured by traffic, with solid market shares in
the U.S. domestic, trans-Atlantic, and Latin American markets, but
a minimal presence in the Pacific.
     
A healthy cash balance and other potential sources of liquidity
support credit quality, despite substantial debt maturities.
Improving revenue trends in the U.S. domestic market should allow
greatly improved operating results in 2006, which is incorporated
into the revised ratings.

Accordingly, and given still difficult industry conditions and a
heavy debt burden, an outlook revision to positive is not
considered likely.  A material deterioration in airline industry
conditions, most likely due to higher fuel prices not offset by
higher fares, could prompt a revision of the outlook to negative.


ANDREW CORP: Inks Merger Agreement with ADC Telecommunications
--------------------------------------------------------------
Andrew Corporation and ADC Telecommunications Inc. entered into a
definitive merger agreement to create a global leader in wireline
and wireless network infrastructure solutions.  The transaction,
which was approved by the boards of directors of both companies,
will build upon the complementary strengths of each company to
create significant growth opportunities and global economies of
scale to expand earnings.  For the most recent reported twelve
months as of May 31, 2006, combined sales for the two companies on
a pro forma basis totaled approximately $3.3 billion.  The
proposed business combination remains subject to shareholder and
regulatory approvals.

             Strategic Combination of ADC and Andrew

The wireline and wireless markets for next-generation broadband,
video, data and voice services are rapidly expanding and have
strong growth potential.  Carriers in every part of the world are
upgrading their networks to expand high-speed data and video
offerings.  These trends hold significant promise for the
strategic combination of ADC and Andrew.

"Today we are announcing plans for a promising new growth stage
for our two great companies," Robert E. Switz, president and chief
executive officer of ADC, said.  "With this strategic combination,
we will be a world leader in communications network infrastructure
products and services.  The strategic, operational and financial
synergies of our two strong companies create a significant
opportunity to grow value for our customers, shareholders and
employees."

Mr. Switz will be president and CEO of the combined company after
closing.

"With accelerating globalization and consolidation among
telecommunications service providers and communications equipment
suppliers, now is the right time for ADC and Andrew to join forces
and grow value as a world leader in network infrastructure
solutions," said Ralph E. Faison, president and CEO of Andrew.  
"As we join ADC's leadership position in wireline connectivity
solutions and Andrew's leadership position in wireless
infrastructure solutions, ADC and Andrew will have a substantially
greater global presence, customer base, economies of scale,
product breadth, innovation ability and financial strength. The
synergies that we expect to create will enable us to better serve
our converging customer base worldwide as their wireline and
wireless networks deliver high-speed, any-content, anywhere
communications services."  Mr. Faison will serve as a consultant
to the combined company to facilitate an efficient transition.

                 Strengths of a Combined Company

As a combined company, ADC and Andrew will be a leader in wireline
and wireless infrastructure solutions with strong global market
presence and customer relationships.  The strengths of the
combined company include:

   * broad-based connectivity solutions for copper, coaxial,
     fiber, radio frequency, broadcast and enterprise networks,
     combined with broad-based wireless solutions for antennas,
     cable products, base station subsystems, in-building and
     distributed coverage, geolocation systems and satellite
     communications;

   * approximately $3.3 billion in sales (on a pro forma basis for
     the trailing twelve months) into more than 140 countries
     comprised of approximately 23% to wireline customers, 44% to
     wireless customers, 6% to enterprise customers, 24% to
     original equipment manufacturers and 3% to other customers.  
     The combined customer base currently includes nearly all
     major wireline and wireless service providers in the world,
     as well as many of the world's largest communications OEMs,
     and large corporate, government and education enterprises;

   * geographic sales distribution (on a pro forma basis for the
     trailing twelve months) of approximately 53% in the United
     States & Canada, 29% in Europe, Middle East and Africa, 11%
     in Asia-Pacific and 7% in Latin America;

   * approximately 20,000 employees worldwide of which
     approximately 37% are in the United States & Canada, 22% are
     in Europe, Middle East and Africa, 25% are in Asia-Pacific
     and 16% in Latin America;

   * facilities around the world including locations in 35
     countries;

   * strong research and development efforts and a significant
     portfolio of U.S. and foreign patents on wireline and
     wireless infrastructure solutions.

                      Transaction Overview

The strategic business combination is structured as a stock-for-
stock merger with Andrew becoming a wholly owned subsidiary of
ADC.  The transaction is expected to qualify as a tax-free
reorganization.  Under the terms of the agreement, Andrew
shareholders will receive 0.57 of an ADC common share for each
common share of Andrew they hold.  Upon completion of the
transaction, ADC shareholders will own approximately 56 percent of
the combined company and Andrew shareholders will own
approximately 44% of the combined company.  ADC will assume all
debt of Andrew and Andrew's convertible notes will become
convertible into ADC shares.

"We are committed to moving forward quickly and aggressively after
closing to combine our operations and integrate our corporate
cultures.  We will be focused on capturing the full benefits of
this combination for our customers, shareholders and employees,"
Mr. Switz said.

Post closing, the transaction is expected to be non-dilutive to
earnings per share in the first year of the combined company and
accretive thereafter, excluding purchase accounting adjustments
and other acquisition-related expenses.  ADC and Andrew have
estimated that synergies will generate additional annual pre-tax
earnings of $70 million to $80 million in the third year after
closing the transaction.

The combined company will be based at ADC's world headquarters in
Minnesota with ADC's John A. Blanchard continuing as non-executive
chairman, and ADC's Robert E. Switz continuing as its president
and CEO.  The board of directors of the combined company will be
composed of 12 members of which eight will be current ADC
directors, including Blanchard and Switz, and four will be current
Andrew directors.  Key members of the management team from both
companies will comprise the management team of the combined
company after closing.  The name of the combined company will be
ADC Andrew.

The merger is subject to customary regulatory and governmental
reviews in the United States and elsewhere, as well as the
approval by shareholders of both companies and other customary
conditions to closing.  Assuming there is not a significant delay
in obtaining the required approvals, the transaction is expected
to be completed in four to six months.  Until the merger is
completed, both companies will continue to operate their
businesses independently.

                  Financial and Legal Advisors

Credit Suisse Securities (USA) LLC acted as the primary financial
advisor to ADC and Dresdner Kleinwort Wasserstein Securities LLC
provided a fairness opinion to ADC.  Dorsey & Whitney LLP served
as ADC's primary outside legal counsel.  Citigroup Corporate and
Investment Banking acted as the primary financial advisor to
Andrew with additional assistance from Lehman Brothers, Inc., and
Merrill Lynch provided a fairness opinion to Andrew.  Mayer,
Brown, Rowe & Maw LLP served as Andrew's primary outside legal
counsel.

                            About ADC

Based in Minneapolis, Minnesota, ADC Telecommunications Inc. --
http://www.adc.com/-- provides the connections for wireline,  
wireless, cable, broadcast, and enterprise networks around the
world. ADC's innovative network infrastructure equipment and
professional services enable high-speed Internet, data, video, and
voice services to residential, business and mobile subscribers.  
ADC (NASDAQ: ADCT) has sales into more than 140 countries.

                          About Andrew

Headquartered in Westchester, Illinois, Andrew Corporation
(NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures  
and delivers innovative and essential equipment and solutions for
the global communications infrastructure market.  The company
serves operators and original equipment manufacturers from
facilities in 35 countries. Andrew is an S&P 500 company founded
in 1937.

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2006,
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings on Andrew Corp. on CreditWatch
with positive implications.  The CreditWatch listing followed the
announcement that the company has agreed to be acquired by unrated
ADC Telecommunications Inc., in a transaction expected to close in
four to six months.  


ANTEON INT'L: Moody's Holds Ba2 Rating on $200MM Secured Revolver
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Anteon
International Corporation.  Anteon entered into a merger agreement
with General Dynamics Corporation under which the latter will
acquire Anteon for $2.1 billion and the assumption of net debt.  
Anteon's stockholders have approved the merger.  As a condition of
the merger, Anteon's credit facilities must be repaid.  If the
merger is consummated as Moody's expects, Anteon's ratings will be
withdrawn.

Moody's affirmed these ratings:

   * $200 million senior secured revolver maturing
     Dec. 31, 2008, Ba2

   * $165 million senior secured Term Loan B due
     Dec. 31, 2010, Ba2

   * Corporate Family Rating, Ba2

Pending acquisition of Anteon by General Dynamics, the ratings
outlook is stable.  Anteon's credit profile is strong for the Ba2
rating category.  For the twelve months ended March 31, 2006
Anteon exhibited, on a lease adjusted basis, total debt to EBITDA
of 1.9 times and EBIT interest coverage of 6.5 times.

Headquartered in Fairfax, Virginia, Anteon International
Corporation provides information technology solutions and advanced
systems engineering services to US government clients.  The
company also designs, integrates, maintains, and upgrades
information systems for national defense, intelligence, emergency
response, and other high priority government missions.  Revenues
for the fiscal year ended December 31, 2005 were approximately
$1.5 billion.


ATRIUM COS: S&P Puts B Rating on Proposed $475MM Debt Facilities
----------------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'B' corporate
credit ratings on Dallas, Texas-based Atrium Cos. Inc. and its
parent, Atrium Corp.

At the same time, Standard & Poor's assigned its 'B' bank loan
rating and '2' recovery rating to Atrium Cos.' proposed first-lien
$50 million revolving credit facility due 2011 and $425 million
term loan B due 2012, based on preliminary terms and conditions.
The debt rating and recovery rating indicate expectations of
substantial (80%-100%) recovery of principal in the event of a
payment default.  

Standard & Poor's also affirmed its 'CCC+' senior unsecured rating
on Atrium's Corp.'s $174 million 11.5% holding company discount
notes.  The outlook is stable.
     
The proceeds from the $425 million term loan, which includes a $47
million delayed draw portion, will be used to refinance the
existing term loan B and to acquire unrated Champion Window
Holdings Inc., as well as another U.S. window manufacturer.

The addition of the two window manufacturers will increase:

   * Atrium's penetration in local markets;
   * its scale and purchasing power; and
   * its sales through the direct-to-builder distribution channel.  

However, the acquisitions do not materially improve Atrium's
business position because they do not add product diversity and
Atrium already has a strong presence in the states where Champion
and the other acquisition do business.  Pro forma for the proposed
transactions, Atrium will have total debt, including capitalized
operating leases, of $718 million, with pro forma total debt to
EBITDA of 6.3x as of March 31, 2006.
     
"Although we expect a softening of demand in the near-term,
relatively favorable long-term end-market conditions and Atrium's
business position support the ratings," said Standard & Poor's
credit analyst Lisa Wright.

"We could revise the outlook to negative if new construction
markets or repair and remodeling demand weaken more than we expect
or if Atrium experiences significant raw-material cost increases
that it cannot pass through to customers.  We see a ratings
upgrade as unlikely, given Atrium's very aggressive financial
policy, which we expect will prevent the company from achieving
meaningful debt reduction over the intermediate term."
     
Atrium is a leading low-cost manufacturer of aluminum and vinyl
windows, with a national footprint.


BPK RESOURCES: Posts $1.5 Mil. Net Loss in Quarter Ended March 31
-----------------------------------------------------------------
BPK Resources, Inc., 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 a $1,547,896 net loss with no revenues for
the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $3,180,417
in total assets and $2,343,307 in total liabilities, resulting in
a $837,110 stockholders' equity.

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

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
L J Soldinger Associates, LLC, in Deer Park, Illinois, raised
substantial doubt about BPK Resources' 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 net losses since inception.

                        About BPK Resources

Based in Totowa, New Jersey, BPK Resources, Inc., used to acquire,
explore and develop natural gas and oil properties. Over the past
18 eighteen months, the Company divested substantially all of its
oil and gas interests. During the fourth quarter of 2005, the sole
well in which the Company retained an interest had been completely
depleted. The Company recorded an impairment charge of $3,528 to
fully impair the remaining balance of the well.


BTSC HOLDINGS: S&P Rates Proposed $100 Million Sr. Notes at CCC+
----------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'B-' corporate
credit rating to Delaware-based BTSC Holdings Inc.

At the same time, Standard & Poor's assigned its 'CCC+' senior
secured rating and '3' recovery rating to the company's proposed
$100 million senior secured second-lien floating-rate notes due in
2011 and issued as a private placement, based on preliminary terms
and conditions.  The debt rating and recovery rating indicate
expectations of meaningful (50%-80%) recovery of principal in the
event of a payment default.  The outlook is stable.
     
The proceeds from the notes and $36 million of management equity
will be used to:

   * purchase a foundation contractor and a dry and wet utility
     contractor;

   * repay existing indebtedness; and

   * fund working capital.

Pro forma for the proposed transaction, BTSC will have total debt
of $106 million, with pro forma total debt to EBITDA of 3.0x as of
March 31, 2006.
     
"BTSC's leading regional market position supports the ratings, but
the company remains vulnerable to regional housing market
downturns, rising interest rates, and adverse weather conditions,"
said Standard & Poor's credit analyst Lisa Wright.

"The company's modest revenue base, thin cash flow, and
expectations for debt-financed acquisitions limit upside rating
prospects.  We could revise the outlook to negative if BTSC's
markets experience a sharper-than-expected slowdown in new
residential construction or if liquidity is constrained by
increasing material or labor costs that the company is unable to
pass through to its customers."
     
BTSC is a specialty contractor for new residential construction
that is controlled by private equity firm Parallel Investment
Partners.


BUFFALO COAL: U.S. Trustee Appoints Eight-Member Official Panel
---------------------------------------------------------------
The U.S. Trustee for Region 4 appointed eight creditors to serve
on an Official Committee of Unsecured Creditors in Buffalo Coal
Company, Inc.'s chapter 11 case:

    1. Thomas J. Fleury
       Beckwith Machinery Company
       4565 William Penn Highway
       Murraysville, Pennsylvania 15668
       Tel: (724) 325-9394
       Fax: (724) 325-9299
       
    2. Amy Bates
       Austin Powder Company
       25800 Science Park Drive
       Cleveland, Ohio 44122
       Tel: (216) 464-2400
       Fax: (216) 464-5476
       
    3. William H. Mayer, III
       Bill Miller Equipment Sales, Inc.
       P.O. Box 112
       Eckert, Maryland 21528
       Tel: (301) 689-1013
       Fax: (301) 689-0112
       
    4. Richard B. Bolen
       Double H Mining Co. Inc.
       P.O. Box 338
       Reedsville, West Virginia 26547
       Tel: (304) 288-3424
       Fax: (304) 693-7649
       
    5. William H. Murphy
       Godwin Pumps of America
       1 Floodgate Road
       Bridgeport, New Jersey 08014
       Tel: (856) 467-3636
       Fax: (856) 467-7025
       
    6. Darroll L Talbott
       Guttman Oil Company
       P.O. Box 1728
       Elkins, West Virginia 26241
       Tel: (304) 636-2600
       Fax: (304) 636-8133
       
    7. Randolph King, Jr.
       Kings Tire Service
       P.O. Box 3511
       Bluefield, West Virginia 24701
       Tel: (304) 323-3977
       Fax: (304) 325-0572
       
    8. Dion W. Hayes
       Virginia Electric and Power Company
       c/o Dion Hayes
       McGuire Woods
       One James Center
       Richmond, Virginia
       Tel: (804) 775-1144
       Fax: (804) 689-2078

Court documents do not show who the Committee has retained to
represent them in the Debtor's case.
       
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.

Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is
engaged in coal mining and processing services.  The company filed
for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case
No. 06-00366).  David A Hoyer, Esq., at Hoyer, Hoyer & Smith,
PLLC, represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it listed
total assets of $119,323,183 and total debts of $105,887,321.


BUFFALO COAL: Court Approves Hoyer Hoyer as Bankruptcy Counsel
--------------------------------------------------------------
Buffalo Coal Company, Inc., obtained authority from the U.S.
Bankruptcy Court for the Northern District of West Virginia to
employ Hoyer, Hoyer & Smith, PLLC, as its bankruptcy counsel.

Hoyer Hoyer is expected to:

    a. give the Debtor legal advice with respect to its powers and
       duties as a debtor-in-possession and in the management of
       its assets;

    b. prepare on behalf of the debtor all necessary motions,
       application, answers, orders, reports and other legal
       papers; and

    c. perform all other legal services for the Debtor as may be
       necessary.

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

       Professional                      Hourly Rate
       ------------                      -----------
       Ralph W. Hoyer, Esq.                 $275
       Christopher S. Smith, Esq.           $250
       Stephen P. Hoyer, Esq.               $225
       David A. Hoyer, Esq.                 $200
       Jennelle L. Harper, Esq.             $125

The Debtor says that paralegals at the firm bill $75 per hour.  
The Debtor discloses that its non-debtor sister-company, United
Energy Coal, has paid the firm a $125,000 retainer.

To the best of the Debtor's knowledge, the firm does not represent
any interest adverse to the Debtor or its estate.

The firm's attorneys can be reached at:

       Ralph W. Hoyer, Esq.
       Christopher S. Smith, Esq.
       Stephen P. Hoyer, Esq.
       David A. Hoyer, Esq.
       Jennelle L. Harper, Esq.
       Hoyer, Hoyer & Smith, PLLC  
       22 Capitol Street
       Charleston, West Virginia 25301
       Tel: (304) 344-9821
       http://www.hhsmlaw.com/

Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is
engaged in coal mining and processing services.  The company filed
for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case
No. 06-00366).  David A Hoyer, Esq., at Hoyer, Hoyer & Smith,
PLLC, represents the Debtor in its restructuring efforts.  Court
documents do not show who the Official Committee of Unsecured
Creditors has retained to represent them in the Debtor's case.
When the Debtor filed for protection from its creditors, it listed
total assets of $119,323,183 and total debts of $105,887,321.


BUFFALO COAL: List of 20 Largest Unsecured Creditors
------------------------------------------------------
Buffalo Coal Company, Inc., released a list of its 20 Largest
Unsecured Creditors with the U.S. Bankruptcy Court for the
Northern District of West Virginia, disclosing:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
Virginia Electric and Power   Lawsuit                $88,406,616
Company
701 E. CAry Street
Richmond, VA 23219

CDS Trust, LLC                Royalties               $1,542,515
c/o C. Del Signore
P.O. Box 6
Terra Alta, WV 25764

WV State Tax Department       West Virginia           $1,219,598
Internal Auditing Division    Severance Tax
P.O. Box 425
Charleston, WV 25322-0425

Austin Powder Company         Goods and Services      $1,053,543
P.O. Box 6049-C
Cleveland, OH 44191

Guttman Oil Company           Goods and Services        $812,878
P.O. Box 1728
Elkins, WV 26241

Savange Services, Inc.        Goods and Services        $714,178
P.O. Box 57908
Salt Lake City, UT 84157-0908

King's Tire Service, Inc.     Goods and Services        $555,603
US Route 52
North Bluewell, WV 24701

Komatsu Financial LP          UCC                       $427,157
P.O. Box 99303
Chicago, IL 60693-9303

United States Treasury        Federal Excise Tax        $422,106
IRS Center
Cincinnati, OH 45999-0009

Godwin Pumps of America, Inc.                           $355,110
P.O. Box 191
Bridgeport, NJ 08014

West Virginia State           West Virginia             $300,829
Tax Department                Severance Tax
Compliance Division
P.O. Box 229
Charleston, WV 25321-0229

Double H Mining, Inc.                                   $243,153

Bill Miller Equipment Sales                             $195,280

Sherrif of Grant County       Real Property Taxes       $134,454

Airgas Specialty Products,    Goods and Services        $130,159
Inc.

Benefit Assistance Corp.      Claims Services           $124,828

WV State Tax Department       West Virginia             $122,171
Internal Auditing Division    Severance Tax

Ashby Fire Equipment                                    $120,098
Company LLC

Massie Reclamation, Inc.      Goods and Services         $92,250

Strum Environmental Services  Goods and Services         $80,884

Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is
engaged in coal mining and processing services.  The company filed
for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case
No. 06-00366).  David A Hoyer, Esq., at Hoyer, Hoyer & Smith,
PLLC, represents the Debtor in its restructuring efforts.  Court
documents do not show who the Official Committee of Unsecured
Creditors has retained to represent them in the Debtor's case.
When the Debtor filed for protection from its creditors, it listed
total assets of $119,323,183 and total debts of $105,887,321.


CALPINE CORP: Wants to Amend and Assume Cogeneration Plant Deals
----------------------------------------------------------------
Calpine Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to amend and assume:

   (a) a Ground Lease Agreement among Texas City Cogeneration,
       L.P., as successor-in-interest to Northern Cogeneration
       One Company and Cogenron, Inc., and Union Carbide
       Corporation;

   (b) a Steam Agreement between Union Carbide and Texas City
       Cogeneration, as successor-in-interest to Cogenron, Inc.;

   (c) a Refinery Gas Agreement between Texas City Cogeneration
       and BP Products North America Inc.; and

   (d) a Confidentiality Agreement between Texas City
       Cogeneration and BP Products.

Texas Cogeneration Company owns all of the equity of Clear
Lake Cogeneration, L.P., a debtor-affiliate of Calpine
Corporation, and Texas City Cogeneration.

Texas City Cogeneration, which operates a cogeneration plant on
land leased from Union Carbide, sells steam to UCC.  Based on the
configuration of the Texas City Facility, Texas City Cogeneration
must run its combustion turbines to generate steam for UCC around
the clock.  

Revenues from the sale of steam to UCC and the sale of
electricity to other parties are not sufficient to cover the
costs of generation.  Thus, except in certain periods in which
electricity is in great demand, under the current Steam
Agreement, the Texas City Facility generally operates at a loss,
Bennett L. Spiegel, Esq., at Kirkland & Ellis LLP, in Los
Angeles, California, explains.

The Debtors negotiated a short-term, interim Master Power
Purchase Agreement with Dow Pipeline Company, an affiliate of
UCC, pursuant to which Texas City Cogeneration provides
electricity to Dow Pipeline and Dow Pipeline delivers natural gas
to Texas City Cogeneration and covers Texas City Cogeneration's
operating costs.  The Master Power Purchase Agreement enabled
Texas City Cogeneration to meet its steam obligations to UCC
under the Current Steam Agreement.  However, because the Master
Power Purchase Agreement is costly to Dow Pipeline and does not
generate a profit for the Debtors, neither the Debtors nor Dow
Pipeline have agreed to operate indefinitely under the Master
Power Purchase Agreement.

To address all of these issues and to facilitate a reorganization
of Texas City Cogeneration's arrangements, the Debtors engaged in
several months of good faith, arm's-length negotiations.  As a
result, the Debtors determined that amendments to existing
contracts would be necessary.

The proposed amendments are:

   (1) Second Amendment to Steam Agreement

       -- reduces the amount of steam that Texas City
          Cogeneration must supply to UCC, thereby reducing the
          costs associated with the 24-hour operation of two
          turbines;

       -- increases the price of steam charged to UCC;

       -- modifies the term of the Steam Agreement to extend it
          10 years from the Effective Date of the Second
          Amendment;

       -- grants UCC the ability to dispatch a second turbine for  
          incremental steam needs or reliability needs, with UCC
          paying for the incremental costs, including any losses
          from power sales as a result if such dispatch;

       -- provides for a Take or Pay of 400 kpph on an
          instantaneous basis; and

       -- requires Texas City Cogeneration to burn a limited
          quantity of off-gas, priced at 15% below the amended
          price of natural gas.

   (2) Amendment to Ground Lease

       -- modifies the term of the Ground Lease so that it
          expires 15 years from the Effective Date of the Second
          Amendment to the Steam Agreement, rather than five
          years after termination of the Steam Agreement; and

       -- provides Texas City Cogeneration with one year to
          perform certain restoration obligations under the
          Ground Lease in the event it is terminated.

   (3) Amendment to Refinery Gas Agreement

       -- allow Texas City Cogeneration to accept third-party gas
          up to a maximum rate of 250MMBtu/hour and an annual
          maximum quantity of 210,000 MMBtu for use in its heat
          recovery steam generators.

   (4) Amendment to the Confidentiality Agreement

       -- extends the confidentiality obligations through the end
          of the term of the Refinery Gas Agreement.

Pursuant to the Amendments, the parties also agree that Texas
City Cogeneration will cure any prepetition obligations under the
Ground Lease and the Steam Agreement.  UCC will pay Texas City
$177,716 in prepetition amounts due.  The parties will also
exchange mutual releases.

The Debtors are current under the Refinery Gas Agreement and have
no existing cure obligations.

                       About Calpine Corp.

Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants.  Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces.  Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.  The Company filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts.  Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors.  As of Dec. 19, 2005, the
Debtors listed $26,628,755,663 in total assets and $22,535,577,121
in total liabilities.  (Calpine Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CALPINE CORP: CCFC Asks for Waivers Under $800MM Loans Contracts
----------------------------------------------------------------
Calpine Construction Finance Company, L.P. and CCFC Finance Corp.
commenced a consent solicitation, for holders of record as of June
1, 2006, to seek a waiver under the indenture governing their
$415,000,000 principal amount of Second Priority Senior Secured
Floating Rate Notes due 2011.  CCFC is also requesting a similar
waiver from the lenders under the credit and guarantee agreement
governing its $385,000,000 First Priority Senior Secured
Institutional Term Loans due 2009.

The proposed waivers would waive certain existing defaults and
events of default under the Indenture and Credit Agreement that
occurred following the Chapter 11 bankruptcy filing on Dec. 20,
2005 by Calpine Corporation (OTC Pink Sheets: CPNLQ), the
Company's ultimate parent, and certain of Calpine Corporation's
controlled subsidiaries.  The defaults and events of default under
the Indenture and Credit Agreement resulted from

   (i) the failure of Calpine Energy Services, L.P., one of
       Calpine Corporation's controlled subsidiaries that filed
       for bankruptcy, to make a portion of the payments due to
       CCFC in March 2006 under a gas sale and power purchase
       agreement and to cure such defaults within the applicable
       cure period; and

  (ii) the failure of CCFC to timely deliver certain financial
       reports required pursuant to the Indenture and Credit
       Agreement.

With respect to the Indenture, a waiver agreement will be executed
following receipt by the Company of the consent of at least a
majority in aggregate principal amount of outstanding Notes.  With
respect to the Credit Agreement, a similar waiver agreement will
be executed following receipt by CCFC of the consent of lenders
holding more than 50% of the aggregate outstanding Term Loans.

The effectiveness of each of the waivers is conditioned, among
other things, upon the effectiveness of the other.  The waivers
will be effective immediately upon satisfaction of the conditions
precedent to their effectiveness, which may occur prior to the
expiration of the consent solicitation under the Indenture and the
request for waiver under the Credit Agreement.  The waivers will
require the Company to reach agreement with the holders of the
Notes and the lenders under the Credit Agreement regarding the
treatment of the gas sale and power purchase agreement by Aug. 4,
2006.  Consents given in the consent solicitation may be revoked
at any time prior to the effectiveness of the waiver under the
Indenture, but not thereafter.

Upon their effectiveness, the respective waiver agreements will
implement the waivers for all holders of the Notes and lenders
under the Term Loans whether or not they provided their consent.

The consent solicitation under the Indenture and waiver request
under the Credit Agreement will expire at 5:00 p.m., New York City
time, on June 9, 2006, unless extended.

The consent solicitation may be amended, extended or terminated,
at the option of the Company, as set forth in the solicitation
letter and consent form from the Company.  For a complete
statement of the terms and conditions of the consent solicitation,
holders of the Notes should refer to the solicitation letter and
consent form.

Global Bondholder Services Corporation will act as Information
Agent in connection with the consent solicitation.  Questions
concerning the terms of the consent solicitation, and requests for
copies of the solicitation letter, the consent form or other
related documents should be directed to the Information Agent by
calling (866) 736-2200.  Wilmington Trust Company will act as
Tabulation Agent.  Requests for assistance in delivering consents
should be directed to the Tabulation Agent at (302) 636-6181.

Goldman Sachs Credit Partners L.P. is the administrative agent
under the Credit Agreement.

                   About CCFC and CCFC Finance

CCFC is an indirect subsidiary of Calpine Corporation.  It was
formed to develop, own and operate power-generating facilities.  
CCFC currently owns and operates six natural gas-fired combined-
cycle facilities located in California, Texas, Oregon, Florida and
Maine, which have a combined estimated peak capacity of nearly
3,700 megawatts.  CCFC Finance Corp. is a direct subsidiary of
CCFC that was formed solely to act as co-issuer of the Notes.

                       About Calpine Corp.

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


CAREGIVERS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Caregivers, Non-Profit Corp.
        2111 Woodward Avenue, Suite 700
        Detroit, Michigan 48226

Bankruptcy Case No.: 06-47132

Type of Business: The Debtor is a non-profit organization
                  offering caregiving services to patients.

Chapter 11 Petition Date: June 6, 2006

Court: Eastern District of Michigan (Detroit)

Judge: Phillip J. Shefferly

Debtor's Counsel: Debra Beth Pevos, Esq.
                  25800 Northwestern Highway, Suite 1000
                  Southfield, Michigan 48075
                  Tel: (248) 746-2842
                  Fax: (248) 746-2760

                        -- and --

                  Wallace M. Handler, Esq.
                  Sullivan, Ward, Asher & Patton, P.C.
                  25800 Northwestern Highway
                  1000 Maccabees Center
                  Southfield, Michigan 48075-1000
                  Tel: (248) 746-0700

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

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
Business Creditline Chase Bank            $300,000
P.O. Box 196
Detroit, MI 48231

Films Media Group                           $4,360
2572 Burnswick Pine
Lawrenceville, NJ 8648

Forbes Management                           $4,360
2111 Woodward Avenue, Suite 900
Detroit, MI 48201

World Medical Relief                        $1,985

Standard Insurance                          $1,757

Accident Fund of Michigan                   $1,490

SBC Internet Services                         $884

Concentra Occupational Health                 $737

Konica Minolta - Albin                        $628

Megapath Networks                             $580

Nextel                                        $569

Assurant Employee Benefits                    $555

Impact Publications                           $550

Comdata Corp.                                 $467

Office Max Contract, Inc.                     $438

Citicorp Vendor Finance, Inc.                 $390

Imagistics                                    $375

Verizon Wireless Messaging                    $335

Viking Office Products                        $241

Office Depo                                   $221


CASCADES INC: Moody's Assigns Ba1 Rating to CA$550 Mil. of Loans
----------------------------------------------------------------
Moody's affirmed Cascades' Ba2 corporate family rating, assigned
Ba1 ratings to both its C$450 million senior secured five-year
revolver and C$100 million senior secured seven-year term loan,
and affirmed its Ba3 senior unsecured rating.  Cascades' Ba2
corporate family rating is based primarily on its high leverage,
weak debt protection measurements, and modest size in relation to
other industry participants.

The rating is supported by the diversity derived from its
boxboard, packaging and tissue businesses and, through its 50%
interest in Norampac, in the Canadian containerboard segment,
which provide greater earnings stability than typically seen in
the industry.  Importantly, the Ba2 rating considers the steps
taken by Cascades over the past two years to significantly
rationalize high cost operations, derive efficiencies from
existing operations and, more recently, its efforts to rationalize
industry capacity in the boxboard segment in a financially
supportable manner.

However, the Ba2 rating also reflects relatively high financial
leverage for the rating category, as well as the company's
exposure to the stronger Canadian dollar and to cyclical pricing,
particularly in the containerboard and boxboard segments, and to
volatile raw material costs, including recycled fibers, energy,
and chemicals.  The rating outlook is stable.

Assignments:

Issuer: Cascades Inc.

   * Senior Secured Bank Credit Facility, Assigned Ba1

Withdrawals:

Issuer: Cascades Inc.

   * Senior Secured Bank Credit Facility, Withdrawn, previously
     rated Ba1

The most recent rating action for Cascades was an affirmation of
the Ba2 Corporate Family Rating on November 24, 2004, which
followed a downgrade of the Corporate Family Rating to Ba2 from
Ba1 on November 11, 2004.

Headquartered in Kingsey Falls, Quebec, Cascades Inc. is a Quebec-
based packaging and paper company producing boxboard,
containerboard, specialty packaging products and tissue.
Consolidated revenues in 2005 were C$3.5 billion.


CCS MEDICAL: Moody's Lowers rating on $110 Mil. Term Loan to Caa3
-----------------------------------------------------------------
Moody's Investors Service lowered CCS Medical Inc.'s ratings.  The
downgrades reflect material negative variance of cash flow and
EBITDA levels relative to Moody's expectations when initial
ratings were assigned in September 2005.  The shortfall results
from the convergence:

   (1) greater than anticipated cuts in Medicare reimbursement
       rates for its respiratory business;

   (2) higher than expected bad debt levels due to poor
       collections; and

   (3) higher near-term working capital needs. These issues place
       continued near-term pressure on liquidity and exacerbate
       already high financial leverage and modest debt service
       coverage.

The ratings outlook is changed to negative from stable reflecting
the absence of visibility into the company's earnings and ongoing
concern about its ability to remain in compliance with its
financial covenants.  Non-compliance could result from slower than
expected sales growth or ongoing cash flow constraints, including
working capital, bad debt or reimbursement changes.

If the company faces ongoing or additional pressures on cash flow,
including slower than expected volume growth, such that free cash
flow remains negative or liquidity is further impaired, the
ratings could be lowered.  Moody's does not anticipate that the
ratings outlook would revert to stable without evidence of
continued growth in sales and improvement in working capital
trends and cash flow.

Moody's downgraded these ratings:

CCS Medical Inc.:

   * Caa1 from B3 corporate family rating;

   * Caa1 from B3 $50 million secured revolver;

   * Caa1 from B3 $320 million first priority secured term loan;

   * Caa3 from Caa2 $110 million second priority secured term
     loan

The Caa1 ratings reflect Moody's expectation that based on first
quarter 2006 results, free cash flow is well-below expectations
and will remain negative over the near-term.  The ratings also
reflect CCS Medical's very high financial leverage, lack of
operating history and reliance on governmental payors.  This is
highlighted by rate reductions put in place by the Centers for
Medicare and Medicaid Services that were significantly worse than
anticipated.

However, the ratings acknowledge management's efforts to identify
and address operating issues and focus on new strategies -
including engagement of a third party firm - to better manage
working capital and more effectively execute integration.

CCS Medical Inc., based in Clearwater, Florida, is a newly formed
holding company whose operating subsidiaries are Chronic Care
Solutions, Inc. and MPTC Holdings, Inc.

The company is a leading mail-order provider of medical supplies -
including diabetes, respiratory and wound care products - to
chronically-ill patients.  On a combined basis, pro-forma revenues
at year end 2005 are estimated at approximately $400 million.
Warburg Pincus is the company's largest shareholder.


CHOICE ONE: Moody's Rates Planned $400MM Debt Facility at Ba3
-------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating, a
Ba3 rating for the proposed $30 million senior secured revolving
credit facility and for the proposed $400 million first lien term
loan facility, and a B2 rating for the $160 million second lien
term loan facility at Choice One Communications, Inc., with the
company's name expected to change at closing.  The outlook is
stable.

The bank facilities, along with $150 million in additional sponsor
equity will be used to fund the creation of the second largest
competitive local exchange carrier in the US, through the
combination of Choice One, CTC and Conversent.

In addition, Moody's has upgraded the ratings of the senior
secured revolving credit facility and the senior secured term loan
of Conversent Holdings, Inc. and Mountaineer Telecommunications,
LLC to B1, given the high probability of the proposed merger
concluding, and the repayment of Conversent's debt in full at
closing.  Conversent's corporate family rating was also upgraded
to B1.

Moody's assigned these ratings:

Issuer -- Choice One Communications, Inc.

   * Corporate Family Rating -- Assigned B1

   * Senior Secured Revolving Credit Facility -- Assigned Ba3

   * 1st Lien Term Loan -- Assigned Ba3

   * 2nd Lien Term Loan -- Assigned B2

   * Outlook is Stable

Issuer -- Conversent Holdings, Inc. and Mountaineer
Telecommunications, LLC

   * Corporate Family Rating -- Upgraded to B1 from B2

   * Senior Secured Revolving Credit Facility -- Upgraded to
     B1 from B2

   * 1st Lien Term Loan -- Upgraded to B1 from B2

   * Outlook is changed to Stable from Developing

The B1 corporate family rating reflects the Company's moderate
financial risk, free cash flow generation and the company's
emerging operating scale in the northeastern USA.  The ratings are
tempered by the Company's challenging competitive position as a
CLEC, the complexity of integrating three companies with distinct
corporate cultures and operating systems, and the potential for
further acquisitions, which may postpone debt reduction.

The Company's leverage at closing is expected to be 3.9x 2006
EBITDA, and excluding the integration costs, Moody's expects the
Company to generate $38 million in free cash flow in 2006.  
Moody's also views favorably the $150 million of new equity to be
contributed by the company's equity sponsors.  Additionally,
proforma for the pending transaction, with $26 million of cash in
hand and full availability of the $30 million revolver, the
company has ample liquidity.

The combination of Choice One, CTC and Conversent is continuing
the consolidation trend in the telecommunications industry that is
gradually easing the overcapacity that was built up over the last
decade.  The combined entity is expected to benefit from a
geographic concentration in a heavily populated region that has a
higher number of business lines per telephone company central
office, than the national average.  Moody's expects the Company to
drive cost synergies by optimizing the combined transport and
colocation facilities, and to drive revenue and cash flow growth
by expanding customer penetration in its existing markets without
significant additional capital.

The stable rating outlook considers the company's growth plans and
the reasonable likelihood of achieving merger synergies and
continuing free cash flow growth accompanied by the modest
deleveraging over the rating horizon.

Given the challenges management will face in integrating the
operations and achieving cost synergies to drive free cash flow
growth, the ratings are somewhat prospective in nature.  Should
the company fail to quickly realize on the expected merger
benefits, the outlook and/or the rating could come under downward
pressure.

The Company will be a CLEC, with executive management based in
Rochester, NY, Waltham, MA and Marlborough, MA.


CITIUS I: Moody's Rates $4 Million Class E Notes at Ba1
-------------------------------------------------------
Moody's Investors Service assigned the following ratings to the
specified tranches of notes issued by Citius I Funding, Ltd:

   * Prime 1 to the U.S. $1,800,000,000 Class A CP Notes;

   * Aaa to the Up to U.S. $1,800,000,000 Class A ST Notes;

   * Aaa to the Up to U.S. $1,800,000,000 Class A LT Notes;

   * Aaa to the U.S. $70,000,000 Class A-1 Secured Floating
     Rate Notes, due 2046;

   * Aaa to the U.S. $25,000,000 Class A-2 Secured Floating
     Rate Notes, due 2046;

   * Aa2 to the U.S. $45,000,000 Class B Secured Floating Rate
     Notes, due 2046;

   * A2 to the U.S. $25,000,000 Class C Deferrable Floating
     Rate Notes, due 2046;

   * Baa2 to the U.S. $15,000,000 Class D Deferrable Floating
     Rate Notes, due 2046; and

   * Ba1 to the U.S. $4,000,000 Class E Deferrable Floating Rate
     Notes, due 2046.

Moody's noted that its ratings on this cash flow high grade ABS
CDO reflect the credit quality of the underlying assets, which
consist primarily of structured finance securities, including
residential mortgage backed securities, commercial mortgage-backed
securities and collateralized debt obligations, as well as the
credit enhancement for the Notes inherent in the capital structure
and the transaction's legal structure.

Moody's stated that the ratings of the long term notes generally
addresses the ultimate cash receipt of all required interest and
principal payments as provided by the governing documents, and are
based on the expected loss posed to the noteholders relative to
the promise of receiving the present value of such payments.

According to Moody's, the short term rating assigned to the Class
A CP Notes addresses the promise of receiving timely payments
principal amount of and all accrued interest on such notes, and in
addition to the credit quality of the underlying collateral,
depends on the short term rating of Barclays Bank PLC as Liquidity
Provider under the Issuer's Liquidity Facility Agreement

Aladdin Capital Management LLC is serving as the collateral
manager on this transaction.


COGECO CABLE: Agrees to Buy Cable Operator Cabovisao for EUR464MM
-----------------------------------------------------------------
Cogeco Cable Inc. entered into an agreement with Cable
Satisfaction International Inc., Catalyst Fund Limited Partnership
I and Cabovisao-Televisao por Cabo, S.A., to purchase, at a cost
of EUR464.9 million, all the shares of the second largest cable
operator in Portugal, an indirect wholly-owned subsidiary of CSII.

The price includes the purchase of senior debt and reimbursement
of certain other liabilities of Cabovisao.  The agreed-upon
purchase price for the shares and senior debt corresponds to a
multiple of 10.6 of operating income before amortization for the
first quarter ended March 31, 2006, and a multiple of 12.6 of
operating income before amortization over the last 12 months ended
March 31, 2006.  The final purchase price will be determined
following completion of a post-closing working capital adjustment.  
This acquisition is in accordance with the external growth
strategy announced by Cogeco Cable last October.

"Cabovisao is well positioned in the high-growth cable
telecommunications market in Portugal, including the Aveiro, the
Lisboa-Palmela, the Caldas and the Alentejo regions," Louis Audet,
President and Chief Executive Officer of Cogeco Cable, said.  
"Cogeco Cable is pleased with its growth potential and expects to
make attractive additions to the services already provided to its
customers thanks to its modern distribution infrastructure.  In
addition, Cogeco Cable will share with Cabovisao its knowledge of
the cable distribution industry which it has developed over the
last 35 years and which will also foster stability in the
ownership and management of that company.  Cogeco Cable believes
that there will be continued growth in the dynamic
telecommunications market in Portugal.  This acquisition is
consistent with Cogeco Cable's pursuit of external growth
opportunities in the past and enables the Corporation to take
part in the development of the cable telecommunications sector in
Europe.  In the future, Cogeco Cable's shareholders can expect
management to use the same level of discipline and seriousness
with which the Corporation has secured growth and creation of
value for its shareholders in the past."

Cogeco Cable believes this is an important measure as it allows
the Corporation to assess its ongoing business without the impact
of depreciation or amortization expenses as well as non-operating
factors.  It is intended to indicate Cogeco Cable's ability to
incur or service debt, invest in capital expenditures or deferred
charges and allows the Corporation to compare to its peers who may
have different capital structures.  This measure is not a defined
term under Canadian or Portuguese Generally Accepted Accounting
Principles.

The transaction is subject to usual conditions and to the
obtaining of a further orders of the Superior Court of Quebec as
part of the implementation of a plan of arrangement and
reorganization of CSII which has already been approved by the
Court.  A motion anticipated to be filed later today with the
Court for this purpose would be heard June 15, 2006.  The
implementation of this plan and the sale to Cogeco Cable will
enable Cabovisao to refocus on its growth opportunities in the
Portuguese market.

Cogeco Cable will finance the acquisition of Cabovisao through an
underwritten credit facility of $900 million over five years
committed by Canadian Imperial Bank of Commerce.  CIBC World
Markets has acted as financial advisor in connection with the
proposed transaction.  The total debt ratio on Cogeco Cable's
consolidated EBITDA1 following the acquisition of Cabovisao will
be 4.8 compared to 3.1 before this transaction.

                         About Cabovisao

Cabovisao-Televisao por Cabo, S.A., is a leader in cable
telecommunications in its market, providing analog television,
high-speed Internet and telephony services to approximately
611,000 revenue-generating units and 820,000 homes passed in
Portugal.  Approximately 264,000 customers subscribe to
Cabovisao's analog television service, 130,000 customers subscribe
to HSI service and 217,000 subscribe to its telephony service.  
Cabovisao's distribution infrastructure is fully integrated and
interconnected by a fiber optic network connecting and servicing
all areas of Portugal.  The hybrid fiber optic and two-way 750 MHz
coaxial cable network, built recently over a 10-year period, meets
the DOCSIS 1.1 standard and reaches approximately 20% of all
Portuguese households.

                       About Cogeco Cable

Headquartered in Montreal, Quebec, Cogeco Cable Inc. --
http://www.cogeco.ca/-- is evolving into one of Canada's major  
telecommunications companies, by building on its cable
distribution base with the offering of analog, digital television,
high-speed Internet and digital telephony services.

Cogeco Cable provides about 1,464,000 revenue-generating units
(basic, digital, Internet and telephony service customers) to
approximately 1,462,000 households in its service territory.  It
is the second largest cable system operator in both Ontario and
Quebec and the fourth largest in Canada.  72% of the Corporation's
service units are located in the Province of Ontario and 28% are
located in the Province of Quebec.

                        *      *      *

As reported in the Troubled Company Reporter on June 6, 2006,
Standard & Poor's Ratings Services placed its ratings on Cogeco
Cable Inc., including its long-term 'BB+' corporate credit rating,
on CreditWatch with negative implications, following Cogeco's
announcement that it has entered into an agreement to purchase the
second-largest cable TV operator in Portugal, Cabovisao-Televisao
por Cabo S.A.  The CreditWatch placement reflects an expected
material weakening of the company's financial metrics resulting
from the debt-financed acquisition.

As reported in the Troubled Company Reporter on June 6, 2006,
Dominion Bond Rating Service placed the rating of Cogeco Cable
Inc. "Under Review with Negative Implications", following the
report that the Company intends on purchasing the second-
largest cable operator in Portugal, Cabovisao-Televisao por Cabo,
S.A., for approximately EUR465 million, using 100% bank debt
financing.  The Company's Senior Secured Notes & Debentures are   
Under Review - Negative BB (high) and the Company's Second Secured
Debentures, Series A are Under Review - Negative BB.


COMMUNICATIONS CORP: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Communications Corporation of America
        700 St. John Street, Suite 300
        Lafayette, Louisiana 70501

Bankruptcy Case No.: 06-50410

Debtor affiliates filing separate chapter 11 petitions:

      Entity                           Case No.
      ------                           --------
      ComCorp Holdings, Inc.           06-50411
      ComCorp Broadcasting, Inc.       06-50412
      ComCorp of Texas, Inc.           06-50413
      ComCorp of Lafayette, Inc.       06-50414
      ComCorp of Baton Rouge, Inc.     06-50415
      ComCorp of Bryan, Inc.           06-50416
      ComCorp of El Paso, Inc.         06-50417
      ComCorp of Louisiana, Inc.       06-50418
      ComCorp of Tyler, Inc.           06-50419
      ComCorp of Indiana, Inc.         06-50420
      ComCorp of Monroe, Inc.          06-50421

Type of Business: The Debtors are media and broadcasting
                  companies. Along with media company White Knight
                  Holdings, Inc., it owns and operates around 23
                  TV stations in Indiana, Texas, and Louisiana.

                  The Debtors filed for chapter 11 protection
                  concurrently with White Knight Holdings
                  (Bankr. W.D. La. Case No. 06-50422) and its
                  subsidiaries, which are also engaged in media,
                  television, and the broadcasting industry.

                  The entities have asked the Bankruptcy Court for
                  joint administration of their chapter 11 cases.  
                  Both Debtors have entered into commercial
                  inventory agreements, joint sales agreements,
                  and shared services agreements, as part of the
                  ordinary course of business. Communications
                  Corporation and White Knight Holdings however,
                  are independent companies, and each is not an
                  affiliate of the other.

                  Alvarez & Marsal, LLC, continue to provide
                  restructuring management services to the
                  Debtors.

Chapter 11 Petition Date: June 7, 2006

Court: Western District of Louisiana (Lafayette/Opelousas)

Judge: Gerald H. Schiff

Debtors' Counsel: Douglas S. Draper, Esq.
                  William H. Patrick III, Esq.
                  Tristan Manthey, Esq.
                  Heller, Draper, Hayden, Patrick & Horn, LLC
                  650 Poydras Street, Suite 2500
                  New Orleans, LA 70130-6103
                  Tel: (504) 568-1888
                  Fax: (504) 522-0949

Estimated Assets: More than $100 Million

Estimated Debts:  More than $100 Million

Debtors' Consolidated List of their 11 Largest Unsecured
Creditors:

   Entity                           Claim Amount
   ------                           ------------
Preston-Patterson Co., Inc.             $406,074
P.O. Box 244
Conshohocken, PA 19428

Fox Broadcasting Company                $232,506
c/o Ernst & Young
7578 Collections Center Drive
Chicago, IL 60693-6616

Gamut Communications, Inc.               $76,241
8 Twin Tree Court
Cedar Crest, NM, 87008

Millennium TV                            $52,382

Katz Media                               $17,130

Continental TV                           $13,385

The Lamar Companies                       $8,700

Katz Media Corp.                          $8,381

Harris Corporation                        $8,274

ITT Hartford                              $7,470

Thompson, Coe, Cousins & Iron             $1,905


CONSOLIDATED CONTAINER: Equity Deficit Tops $84.5MM at March 31
---------------------------------------------------------------
Consolidated Container Company LLC reported $2.2 million of net
income on $223.5 million of revenues for the three months ended
March 31, 2006, compared to a $11.1 million net loss on $205
million of revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $685.4
million in total assets and $769.9 million in total liabilities,
resulting in a $84.5 million equity deficit.

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

Headquartered in Atlanta, Georgia, Consolidated Container Company
LLC -- http://www.cccllc.com/-- which was created in 1999,  
develops, manufactures and markets rigid plastic containers for
many of the largest branded consumer products and beverage
companies in the world.  CCC has long-term customer relationships
with many blue-chip companies including Dean Foods, DS Waters of
America, The Kroger Company, Nestle Waters North America, National
Dairy Holdings, The Procter & Gamble Company, Coca-Cola North
America, Quaker Oats, Scotts and Colgate-Palmolive.  CCC serves
its customers with a wide range of manufacturing capabilities and
services through a nationwide network of 61 strategically located
manufacturing facilities and a research, development and
engineering center.  Additionally, the company has 4 international
manufacturing facilities in Canada, Mexico and Puerto Rico.


CONSUMERS ENERGY: Reports $10 Million Net Income in First Quarter
-----------------------------------------------------------------
Consumers Energy Company reported $10 million of net income on
$1.8 million of revenues for the three months ended March 31,
2006, compared to $157 million of net income on $1.6 million of
revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $12.9
billion in total assets and $10 billion in total liabilities.

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

Headquartered in Jackson, Michigan, Consumers Energy Company --
http://www.consumersenergy.com/-- the primary subsidiary of CMS  
Energy, is a combination electric and natural gas utility that
serves more than 3.3 million customers in Michigan's Lower
Peninsula.

                            *    *    *

As reported in the Troubled Company Reporter on April 4, 2006,
Fitch assigned a rating of 'BB+' to Consumers Energy Company's
$300 million 364-day revolving credit facility.  The facility is
secured by a second lien on the collateral securing Consumers'
first mortgage bonds.  Fitch said the rating outlook is stable.


COPAMEX SA: S&P Affirms BB- Senior Unsecured Currency Ratings
-------------------------------------------------------------
Fitch Ratings affirmed Copamex, S.A. de C.V.'s senior unsecured
foreign and local currency Issuer Default Ratings at 'BB-' and
the senior unsecured national scale rating at 'A-(mex)'.

Fitch also affirmed the rating of Copamex's peso-denominated
medium-term notes or Certificados Bursatiles at 'A(mex)' and the
short-term rating at 'F2(mex)'.  The Outlook is Stable.

The ratings are supported by:

   * the company's market position;
   * stable operating performance; and
   * improved debt maturity profile.

Copamex continues to maintain a strong market position in its core
business lines and a stable revenue base.  During 2005, 53% of
revenues were derived from products with leading market shares in
Mexico.

Over the past several years, the company has maintained stable
EBITDA levels of around US$40 million per year.  The combination
of a favorable outlook in Mexico on consumer demand for paper
products and cost efficiencies in energy consumption should enable
moderate increases in revenues and EBITDA during 2006.

At March 31, 2006 total on-balance sheet debt reached MXP1.422
billion on a gross basis and MXP1.317 billion net of restricted
cash related to a 15% collateral on MXP700 millions outstanding
CBs.

The debt was composed of peso-denominated medium-term notes issues
totaling MXP1.267 billion, MXP54 million of U.S. dollar-
denominated commercial paper and MXP101 of bank debt.

During 2005, the company completed a US$40 million five-year
revolving assignment of receivables to an irrevocable trust
administered by Banco Invex as trustee and borrower.  Proceeds
from the transaction (funded by Rabobank) were used by Copamex
for:

   * working capital purposes;
   * liquidation of a factoring facility;
   * cash collateral; and
   * debt repayment.

Although this transaction was structured without recourse, the
asset coverage (unencumbered receivables) on unsecured creditors
of Copamex has diminished.  The company's leverage including off-
balance sheet liabilities remains high and credit protection
measures are in the weak range of the rating category.

At March 31, 2006, the company had a ratio of on-balance sheet
debt (net of restricted cash) to last 12 months EBITDA of 3.1x and
a ratio of EBITDA to interest expense of 2.9x.  During 2005,
Copamex improved its debt maturity profile with the refinancing of
debt with MXP700 million of CBs due 2008 and 2009.  The company is
at present seeking to extend the maturity of MXP100 million of CBs
due 2006 to 2010.

Management's strategy is focused on organic growth with modest
capital expenditures, which should allow the company to generate
modest free cash flow during 2006 and reduce debt.  This should
translate into moderate improvements in credit protection measures
during the year and beyond.  Failure to meet these financial
targets could affect the ratings negatively.

Copamex was founded in 1928 as an industrial paper manufacturer.
During 2003 and 2004, the company divested its multi-wall bag
business and its consumer division and used proceeds for debt
reduction.  Copamex has three main business divisions: packaging,
printing and writing, and child diapers.  In 2005 sales and EBITDA
reached US$434 million and US$39 million respectively.  Packaging
accounted for 48% of revenues, printing and writing for 45%, and
diapers for the remaining 7%.


CREDIT SUISSE: Moody's Affirms Rating on $8.8MM Certs. at Caa2
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes and
affirmed the ratings of 14 classes of Credit Suisse First Boston
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2003-CPN1:

   * Class A-1, $231,282,440, Fixed, affirmed at Aaa

   * Class A-2, $533,863,000, Fixed, affirmed at Aaa

   * Class A-SP, Notional, affirmed at Aaa

   * Class A-X, Notional, affirmed at Aaa

   * Class A-Y, Notional, affirmed at Aaa

   * Class B, $30,192,000, Fixed, upgraded to Aa1 from Aa2

   * Class C, $10,064,000, Fixed, upgraded to Aa2 from Aa3

   * Class D, $12,888,000, Fixed, upgraded to A1 from A2

   * Class E, $10,064,000, Fixed, upgraded to A2 from A3

   * Class F, $10,064,000, WAC Cap, upgraded to A3 from Baa1

   * Class G, $17,612,000, WAC Cap, affirmed at Baa2

   * Class H, $10,064,000, WAC Cap, affirmed at Baa3

   * Class J, $20,127,000, Fixed, affirmed at Ba1

   * Class K, $15,096,000, Fixed, affirmed at Ba2

   * Class L, $7,548,000, Fixed, affirmed at Ba3

   * Class M, $7,548,000, Fixed, affirmed at B1

   * Class N, $6,290,000, Fixed, affirmed at B2

   * Class O, $5,032,000, Fixed, affirmed at B3

   * Class P, $8,806,000, Fixed, affirmed at Caa2

As of the May 17, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4.0%
to $966.4 million from $1.0 billion at securitization.  The
Certificates are collateralized by 170 mortgage loans ranging from
less than 1.0% to 8.2% of the pool, with the top 10 loans
representing 36.0% of the pool.

The pool includes a shadow rated component, representing 10.5% of
the pool, which consists of 73 loans secured by residential
cooperative properties.  These loans are shadow rated Aaa by
Moody's.  Eight loans, representing approximately 8.1% of the
pool, have defeased and are collateralized by U.S. Government
securities.

The trust has not experienced any realized losses to date. One
loan, representing less than 1.0% of the pool, is in special
servicing.  Moody's estimates a minimal loss from this loan.
Nineteen loans, representing 15.7% of the pool, are on the master
servicer's watchlist.

Moody's was provided with partial and full year 2005 operating
results for 95.4% and 76.1% of the performing conduit loans,
respectively.  Moody's weighted average loan-to-value ratio for
the conduit component is 89.9%, compared to 92.2% at
securitization.  The upgrade of Classes B, C, D, E and F is due to
stable overall pool performance, a relatively high percentage of
defeased loans and increased credit support.

The three largest loans represent 18.8% of the outstanding pool
balance. The largest loan is the Northgate Mall Loan, which is
secured by a portion of a 1.1 million square foot regional mall
located approximately 10 miles northwest of Cincinnati in
Colerain, Ohio.  The mall is anchored by Lazarus, Sears, J.C.
Penney and Dillard's.  Occupancy in the in-line stores is 81.0%,
compared to 85.9% at securitization. The property is performing
in-line with expectations.  Moody's LTV is 88.2%, essentially the
same as at securitization.

The second largest loan is the Quaker Headquarters Loan, which is
secured by a 416,000 square foot Class A office building located
in the West Loop submarket of downtown Chicago, Illinois.  The
property serves as the world headquarters for the Quaker Oaks
Company, which leases 97.1% of the premises under a lease expiring
in August 2012.  The loan is interest only for the entire five-
year term. Moody's LTV is 93.8%, compared to 94.1% at
securitization.

The third largest loan is the Metroplex Portfolio Loan, which is
secured by three industrial flex/tech buildings located within the
Dallas Metroplex.  The portfolio totals 344,000 square feet and is
98.2% leased, compared to 100.0% at securitization.  The property
is performing in-line with expectations. Moody's LTV is 99.9%,
essentially the same as at securitization.

The pool's collateral is a mix of office and mixed use,
multifamily and residential cooperatives, retail, U.S. Government
securities and industrial.  The collateral properties are located
in 28 states.  The highest state concentrations are Ohio, New
York, Illinois, Texas, and Maryland.  All of the loans are fixed
rate.


DANA CORP: Court Directs Debtors to Pay US Bancorp Lease Debts
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
directed Dana Corporation and its debtor-affiliates to pay and
perform to U.S. Bancorp Equipment Finance, Inc., all past due and
future obligations under a lease which arose on or after
March 3, 2006, except those specified in Section 365(B)(2) of the
Bankruptcy Code, until the Lease is rejected.

The Court deemed U.S. Bancorp's request withdrawn, without
prejudice.

The Court further ruled that U.S. Bancorp may not renew its
request so long as the Debtors complies with the Court's orders.

As reported in the Troubled Company Reporter on May 19, 2006,
U.S. Bancorp asked the Court to compel Dana to assume or reject
the master lease agreement it entered into with U.S. Bancorp prior
to its bankruptcy filing.

U.S. Bancorp also asked the Court to compel Dana to pay and
perform all its past due and future postpetition obligations to
U.S. Bancorp until such time Dana decides to reject the Lease.

Under the Master Lease Agreement, U.S. Bancorp and Dana entered
into three schedules pursuant to which U.S. Bancorp leased
equipment to Dana.  Dana is obligated to make 36 consecutive
monthly payments, with the first due 30 days after Dana's
acceptance of the equipment subject to the Schedules:

    Schedule No.     Acceptance Date       Monthly Payment
    -----------      ---------------       ---------------
    23897B-022-       March 30, 2004               $5,029
    0027343-001

    23897C-022-        June 30, 2004               $8,692
    0027343-002

    23897D-022-        July 28, 2004               $8,492
    0027343-003

According to U.S. Bancorp, Dana defaulted under the Master Lease
and Schedule No. 1 by failing to make the rental installment due
on March 1, 2006.  Dana also defaulted under the Master Lease,
Schedule No. 2 and Schedule No. 3 by failing to make the rental
installments due on Feb. 1, 2006.  Since its bankruptcy filing,
the Debtors have failed to make any payments to U.S. Bancorp in
connection with the Lease, U.S. Bancorp said.

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: Wants Court to Approve Agreement with Underwriters
-------------------------------------------------------------
Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to approve the
settlement agreement they entered into with certain underwriters
at Lloyds' London.

In February 2001, the Underwriters commenced an action in the
Court of Common Pleas of Lucas County, Ohio, against Allstate
Insurance Company, as successor-in-interest to Northbrook Excess
and Surplus Insurance Company, among others.  The Underwriters
seek contribution and interest, and declaratory judgment, arising
from their payment of indemnity and defense expenses to the
Debtors, relating to asbestos-related bodily injury claims made
against the Debtors.  The Debtors were not a party to the Ohio
Contribution Action.

The London Underwriters are certain underwriters and companies
that subscribe portions of excess comprehensive general liability
insurance policies placed by the Debtors in the London insurance
market.

Allstate also provided comprehensive general liability insurance
to the Debtors.

In the Ohio Contribution Action, the Underwriters asserted that
they have paid asbestos bodily injury claims on the Debtors'
behalf for many years.  The Underwriters sought to recover from
Allstate their contribution payments.

Subsequently, the Debtors were joined as a party to the Ohio
Contribution Action.  As against Allstate, the Ohio Contribution
Action was stayed pending the completion of an arbitration
between the Debtors and the Underwriters over the Underwriters'
right to pursue the relief sought against Allstate in the Ohio
Contribution Action.

The Underwriters and the Debtors resolved the arbitration through
confidential settlements, pursuant to which:

   (a) the Debtors agreed that the Underwriters were entitled to
       pursue the Ohio Contribution Action against Allstate;

   (b) the Debtors agreed that it would take no steps to stay or
       prevent the Underwriters' pursuit of the Ohio Contribution
       Action against Allstate; and

   (c) the Underwriters agreed to limit the amount they may
       obtain from Allstate solely to interest on amounts they
       paid to the Debtors as indemnity or defense expenses for
       asbestos bodily injury claims.

The Underwriters have not brought any claim or action against the
Debtors in the Ohio Contribution Action.

After the Debtors' bankruptcy filing, Allstate sent a letter to
the Ohio Court, suggesting the automatic stay may affect the
Underwriters' pursuit of their claims in the Ohio Contribution
Action.

Accordingly, the Debtors and the Underwriters stipulate that the
automatic stay:

   (1) is modified solely to permit the Underwriters to pursue
       the Ohio Contribution Action against Allstate;

   (2) is modified to permit the Underwriters to collect from
       Allstate the interest portion of any judgment or
       settlement entered in the Ohio Contribution Action, so
       long as the collection will not reduce the available
       limits of the Allstate Policies; and

   (3) precludes the Underwriters from collecting from, or
       enforcing against, Allstate the contribution portion of
       any judgment entered in the Ohio Contribution Action.

                      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 Hires UBS Securities as Investment Bankers
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Dana Corporation
and its debtor-affiliates' chapter 11 cases obtained permission
from the U.S. Bankruptcy Court for the Southern District of New
York to retain UBS Securities LLC as its investment bankers, nunc
pro tunc to March 14, 2006.

As reported in the Troubled Company Reporter on May 8, 2006, UBS
is expected to:

   (a) advise and assist the Creditors Committee in its analysis
       of the liquidity position, assets and liabilities, and
       financial condition of the Debtors;

   (b) advise and assist the Committee in the Committee's review
       and analysis of the Debtors' business plan;

   (c) advise the Committee in its analysis of the Debtors' debt
       capacity in light of their projected cash flows;

   (d) advise and assist the Committee in its review and analysis
       of any proposed capital structure for the Debtors;

   (e) assist the Committee in its analysis of any valuation of
       the Debtors or their separate businesses;

   (f) attend Committee meetings as well as due diligence
       meetings with the Debtors or other third parties as
       appropriate;

   (g) advise and assist the Committee in its analysis of the
       Debtors' financing alternatives;

   (h) advise and assist in the Committee's assessment of the
       financial issues and options concerning the sale of any
       assets of the Debtors in analyzing strategic alternatives
       available to the Debtors;

   (i) advise and assist the Committee in its review and analysis
       of all Plans;

   (j) advise and assist the Committee in its review and analysis
       of any new securities, other consideration or other
       inducements to be offered or issued under any Plan;

   (k) assist the Committee or participate in negotiations with
       the Debtors and other parties-in-interest;

   (l) provide testimony in Court on behalf of the Committee, if
       necessary, with respect to the financial aspects of any
       Plan; and

   (m) provide other financial advisory services in the
       Reorganization Cases reasonably or as may be agreed to be
       performed by UBS.

UBS will be paid:

   (i) a $175,000 monthly cash advisory fee; provided that 50% of
       the fee will be credited, to the extent actually paid,
       against the restructuring transaction fee.

  (ii) a $2,250,000 restructuring transaction fee, payable
       upon the consummation of any Restructuring Transaction,
       including, without limitation on the effective date of any
       Chapter 11 plan of reorganization.

                      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).


DATATEL INC: S&P Assigns CCC+ Rating to Amended $100 Million Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Fairfax, Virginia-based Datatel Inc. to 'B' from 'B+'.

At the same time, Standard & Poor's assigned its 'B+' debt rating,
with a recovery rating of '1' to Datatel's amended $155 million
first-lien bank facility, which will consist of a $35 million
revolving credit facility and a $120 million term loan.

Standard & Poor's also assigned its 'CCC+' debt rating, with a
recovery rating of '4' to Datatel's amended $100 million second-
lien term loan.  The rating outlook is negative.

"The first-lien bank loan rating, which is one notch higher than
the corporate credit rating, along with the '1' recovery rating,
reflect our expectation of full recovery of principal by creditors
in the event of a payment default," said Standard & Poor's credit
analyst Ben Bubeck.

The second-lien bank loan rating, which is two notches below the
corporate credit rating, along with the '4' recovery rating,
reflect Standard & Poor' expectation of marginal (25%-50%)
recovery of principal by creditors in the event of a payment
default, given their priority in the capital structure.  Proceeds
from the amended facilities, which represent a net incremental
borrowing of $127 million, will primarily be used to redeem a
portion of Datatel's outstanding redeemable preferred stock.
     
The ratings downgrade reflects the substantial increase to
Datatel's operating lease adjusted debt leverage, which will be
above 8x following this transaction, including approximately $26
million of remaining redeemable preferred stock.  While leverage
should improve modestly into the low-7x area in the near term
given expectation for substantial cash inflows in the summer
months, the company is expected to draw on its revolver again
prior to next year's cash inflow.  This heightened level of debt
leverage leaves Datatel minimal cushion for any operating
disruptions, particularly given its modest EBITDA and free
operating cash flow base.

The ratings on Datatel reflect a narrow product focus in a
competitive market and high debt leverage.  These factors are only
partially offset by:

   * a solid business position in its addressed niche market;
   * a significant base of recurring revenues;
   * solid profit margins; and
   * expectation for modest free operating cash flow generation.


DELTA AIR: Amended Company By-Laws Allow CEO to Choose Top Execs
----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Delta Air Lines, Inc., discloses that on May 25, 2006,
its Board of Directors amended the company's By-Laws relating to
the officers of the corporation to allow its chief executive
officer to appoint:

   -- vice presidents, other than executive vice presidents and
      senior vice presidents;

   -- assistant secretaries and assistant treasurers.

The By-Laws previously stated that the Board of Directors would
elect all officers of the corporation.

Leslie P. Klemperer, Delta's vice president, deputy general
counsel and secretary, discloses that, under the amendment, the
Board of Directors retains the sole authority to elect the chair,
a vice chair, the chief executive officer, the chief operating
officer, the chief financial officer, executive vice presidents,
senior vice presidents, the secretary, the controller and the
treasurer of the company.  The Board of Directors also has the
authority to elect vice presidents, assistant secretaries and
assistant treasurers.

A full-text copy of Delta's By-Laws, as amended, is available for
free at http://ResearchArchives.com/t/s?acc

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


DELTA AIR: Plays to Lay-Off 9,000 Employees by Year-End 2007
------------------------------------------------------------
Delta Air Lines, Inc., expects to cut 9,000 jobs as it completes
its Chapter 11 cases, Bloomberg News reports.

In an interview with Bloomberg, Gerald Grinstein, Delta's chief
executive officer, said that Delta is on track of its plan to
achieve $3,000,000,000 in annual savings and new revenues to exit
Chapter 11 by 2007.

Delta's plan of reorganization "anticipated that [the Debtors]
have to lay off between 7,000 and, now, 9,000 people," Mr.
Grinstein said.  By the end of 2006, Delta expects that it would
be 70% of the way towards its overall restructuring goal.

With regards to Comair Holdings LLC, Delta's commuter unit which
has been struggling to reach an agreement with its flight
attendants, Mr. Grinstein stated that Delta has no plans to sell
or spin off Comair.  "We [are] now actively negotiating with [the
flight] attendants."

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


DOBSON COMMS: Unit Buys $234.4MM of Tendered Floating Rate Notes
----------------------------------------------------------------
Dobson Communications Corporation reported that the cash tender
offer for any and all of the First Priority Senior Secured
Floating Rate Notes due 2011 (CUSIP No. 256067AF6) issued by its
wholly owned subsidiary Dobson Cellular Systems, Inc. expired at
12:00 midnight, New York City time, on June 5, 2006.  Dobson
Cellular has received validly tendered Notes from holders of
$234.4 million, or 93.8% of the aggregate outstanding principal
amount of Notes.

Dobson Cellular accepted for purchase $232.4 million in aggregate
principal amount of tendered Notes on May 23, 2006, the initial
settlement date.  Holders who validly tendered Notes prior to the
consent time (5:00 p.m., New York City time, on Friday, May 19,
2006) received total consideration per $1,000 principal amount of
Notes tendered of $1,038.45, which includes a consent payment of
$30, plus accrued and unpaid interest up to, but not including,
the initial settlement date.

An additional $2 million in aggregate principal amount of Notes
was tendered subsequent to the consent time and prior to the
expiration time.  Dobson Cellular will accept for payment these
additional tendered Notes on the final settlement date, expected
to be June 6, 2006.  Holders who validly tendered Notes after the
consent time and prior to the expiration time will receive tender
consideration per $1,000 principal amount of Notes tendered of
$1,008.45, plus accrued and unpaid interest up to, but not
including, the final settlement date.

Morgan Stanley & Co. Incorporated acted as Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation.  
Bondholder Communications Group served as the Information and
Tender Agent for the tender offer and consent solicitation.

Headquartered in Oklahoma City, Dobson Communications Corporation
(NASDAQ: DCEL) -- http://www.dobson.net/-- provides wireless  
phone services to  rural markets in the United States and owns
wireless operations in 16 states.

                            *   *   *

As reported in the Troubled Company Reporter on April 24, 2006,
Fitch assigned Dobson Communications Corp. a 'B-' issuer default
rating; a 'CCC+/RR5' rating for its $160 million senior floating
rate notes; 'CCC+/RR5' rating for its $150 million senior
convertible debentures; 'CCC+/RR5' rating for its $420 million
senior notes; and 'CCC-/RR6' rating for its $136 million
convertible preferred stock.

Fitch Ratings assigned Dobson Cellular Systems Inc. a 'B-'
issuer default rating; 'BB-/RR1' rating for its $75 million
senior secured credit facility; 'BB-/RR1' rating for its
$500 million first priority secured notes; and 'BB-/RR1' rating
for its $325 million second priority secured notes.

Dobson Communications Corp.' 8-7/8% Senior Notes due 2013 carry
Moody's Investors Service's Caa2 rating and Standard & Poor's CCC
rating.


E*TRADE: Moody's Lifts B1 Rating on Sr. Unsec. Notes to Ba2
-----------------------------------------------------------
Moody's Investors Service upgraded the senior unsecured rating of
E*TRADE Financial to Ba2 from B1 and long term deposit rating of
E*TRADE's thrift subsidiary, E*TRADE Bank, to Baa3 from Ba2.  The
rating outlook remains positive.

The last rating action on E*TRADE and E*TRADE Bank was on
September 29, 2005, when Moody's affirmed all outstanding ratings
of E*TRADE and raised the outlook on the long-term and bank
financial strength ratings from stable to positive.

In explaining today's upgrade, Moody's noted the improved
profitability and more diversified revenue mix of the firm, as
well as the reduction in the firm's earnings volatility over the
past several years.  The rating agency also recognized E*TRADE's
significant progress reducing its dependence on volatile trading
commissions, and the increased proportion of spread income
attributable to the firm's growing base of low-cost free credit
balances and sweep deposits.

"E*TRADE has come a long way since the days of the equities
'bubble'.  Today, it is a larger, more disciplined company with a
more diversified product offering and sustainable earnings," says
Moody's Senior Vice President Blaine Frantz.

Nonetheless, Moody's still views the discount brokerage industry
as characterized by strong competition and pricing pressures, and
E*TRADE's revenues remain broadly tied to retail investor
sentiment, albeit no longer to trading commissions per se.

The rating agency also cited E*TRADE's improved scale and size
brought about by the recent acquisitions of Harrisdirect and
BrownCo as one of the factors underpinning the rating upgrade.
Noting the predominantly successful integration of Harrisdirect as
measured by lower-than expected attrition levels of customer
accounts and balances, Moody's said that it expects E*TRADE to be
able to both extract cost savings and realize increased revenue
opportunities as it begins to offer its newly acquired customers
easy access to a range of trading, loan and cash management
products.

Weighing on the ratings is E*TRADE's sizable amount of holding
company debt and high double leverage.  However, Moody's views
positively E*TRADE's recent conversion of approximately $185
million of convertible bonds to common equity as indicative of the
issuer's commitment to keeping its financial leverage in check.

The positive outlook on E*TRADE's ratings reflects Moody's
expectation that E*TRADE will continue to improve its operating
leverage and profitability, starting with successfully managing
the BrownCo integration.  Continuing diversification of revenues,
as well as further reductions in the cross-cycle volatility of
earnings and debt leverage are also factors that would be
influential in considering any further positive rating actions.

The upgrade of E*TRADE Bank's deposit ratings to Baa3 reflects the
thrift's improved risk-adjusted profitability, growing deposit
base, strong asset quality and sound capitalization.  Annual pre-
tax income at the thrift has risen steadily over time, more than
doubling since 2002.  Through both acquisitions and organic
growth, the thrift has also doubled deposits from $9 billion in
2002 to $19 billion as of March 31, 2006.

While the thrift's overall GAAP profitability and net interest
margin are somewhat modest compared to peers, Moody's recognizes
that this is in large part a result of the thrift's focus on low-
credit-risk assets, principally prime or above home equity loans,
mortgages and high quality mortgage- and asset-backed securities.
Due to its high-quality asset mix and low overhead ratio, E*TRADE
Bank's risk-adjusted profitability is much improved and is quite
competitive in comparison to the same or even higher rated peers.

Although it considers the liquidity of the thrift as sound,
Moody's believes that the use of market-sensitive funding does
present a fair amount of roll-over risk that could see the thrift
having to liquidate securities at an inopportune time or result in
reduced earnings and cash flow generated from the securities
portfolio.  E*TRADE maintains substantial collateralized borrowing
capacity at the Federal Home Loan Bank to mitigate this risk.

Moody's upgrade of E*TRADE Bank's BFSR to D+ is based on the
thrift's improved financial and operating fundamentals.  However,
the rating agency also noted that the thrift's BFSR reflects its
limited capacity to originate loans and deposits on its own, as
well as its heavy dependence on acquired residential mortgages.
Without clients from the broker affiliate, the thrift would have a
significantly less viable stand-alone business franchise.

The positive rating outlook on the thrift's ratings reflects our
expectation that E*TRADE will continue successfully monetizing
growing customer assets, while maintaining a conservative approach
to credit risk.  E*TRADE has so far successfully managed interest
rate and market risks; continuing to do so is a pre-requisite for
an upgrade, just as failure to do so would weigh negatively on the
ratings.

These ratings of E*TRADE Financial were upgraded:

   * Senior Unsecured to Ba2 from B1

   * Long-term Issuer to Ba2 from B1

   * Senior Unsecured Shelf to (P)Ba2 from (P)B1

   * Subordinate Shelf to (P)Ba3 from (P)B3

   * Preferred Shelf to (P)B1 from (P)Caa1

   * The outlook on all of the above ratings is positive.

These ratings of E*TRADE Bank were upgraded:

   * Long-term Bank Deposits to Baa3 from Ba2

   * Bank Financial Strength to D+ from D

   * Long-term Other Senior Obligations to Ba1 from Ba3

   * Long-term Issuer to Ba1 from Ba3

   * Short-term Bank Deposits to Prime-3 from Not Prime

   * Short-term Other Senior Obligations to Prime-3 from
     Not Prime

   * The outlook on all of the above ratings is positive.

E*TRADE provides internet-based brokerage and banking services
through its operating subsidiaries.  The company generated $676
million in pre-tax profit in 2005.


FALCONBRIDGE LTD: To Sell Assets to LionOre Mining for $650 Mil.
----------------------------------------------------------------
Falconbridge Limited and Inco Limited reached a definitive
agreement with LionOre Mining International Ltd. covering the sale
to LionOre of certain assets and related operations of
Falconbridge.

Inco and Falconbridge have been discussing with the U.S.
Department of Justice and European Commission about the assets
and related operations that would be divested and the associated
arrangements that would be necessary as the proposed remedy
to address potential competition issues that the DOJ and the
Commission have identified relating to Inco's pending acquisition
of Falconbridge.  The sale of these assets and related operations
to LionOre will include Falconbridge's Nikkelverk refinery in
Norway and the Falconbridge marketing and custom feed
organizations that market and sell the finished nickel and other
products produced at Nikkelverk and obtain third-party feeds for
this facility.

Inco also agreed to supply up to 60,000 tonnes of nickel in matte
under a 10-year supply agreement, which approximates the current
volume of feed provided by Falconbridge's operations to the
facility.  The closing of this sale is conditioned on, and
expected to be completed upon receipt of, the clearance by both
the DOJ and the Commission of the pending acquisition of
Falconbridge by Inco, as well as Inco taking up and paying for
Falconbridge shares pursuant to its offer and certain other
standard terms and conditions to closing.

The purchase price to be paid by LionOre for the assets and
related operations to be sold is $650 million, of which
$400 million will be in cash and $250 million of LionOre common
shares.  This purchase price is subject to certain adjustments
tied to changes in the final working capital levels of the
operations to be sold to LionOre and certain other adjustments.

"We are pleased in having reached this agreement with LionOre,"
said Scott Hand, Chairman and CEO of Inco.  "This is an important
milestone in the regulatory clearance process and we look forward
to completing this process so that the acquisition can be cleared
by the U.S. Department of Justice and the European Commission."

Inco and Falconbridge understand that the DOJ and the Commission
are reviewing the final terms of the proposed remedy that they
have been discussing with these regulatory agencies, including the
terms of this sale to LionOre.

Inco and Falconbridge expects that the DOJ and the Commission will
advise them whether the acquisition will be cleared based upon
this sale to LionOre prior to the end of June 2006.  Both
companies believe that the competition issues that have been
identified by the DOJ and the Commission are addressed by the
agreements entered into covering this sale to LionOre.  The
parties will continue to cooperate with the DOJ and the Commission
in connection with their respective final reviews of the terms of
the remedy.

                           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.


FISHER COMMS: Sells 24 Radio Stations to Cherry Creek for $33.3MM
-----------------------------------------------------------------
Fisher Communications, Inc., signed a definitive agreement to sell
its twenty-four small-market radio stations located in Montana and
eastern Washington to Cherry Creek Radio LLC for $33.3 million.  
This sale, which is subject to FCC approval and certain other
conditions, is expected to close by the end of third quarter 2006.  
Fisher will continue to own three radio stations in Seattle, as
well as television stations in Washington, Oregon, and Idaho.  In
2005, Fisher's small-market radio stations generated revenue of
$12.2 million.

"By selling our small-market radio stations we are able to focus
on increasing the synergies and operating performance of our
remaining cluster of Northwest stations," Fisher Communications'
President and CEO, Colleen B. Brown, said.  "We are pursuing new
opportunities, such as our entrance into Spanish-language
television announced in late 2005."

The Company expects to use a portion of the net proceeds to pay
for the purchase of a television station in the Portland, Oregon
DMA reported in December 2005, which is also expected to close by
Sept. 30, 2006.  The Company intends to use any remaining net
proceeds from the sale to invest further in its business
operations.  Kalil & Co., Inc. acted as the exclusive broker for
this transaction.

Fisher Communications, Inc. (NASDAQ:FSCI) -- http://www.fsci.com/
-- is a Seattle-based integrated media company.  The Company's
nine network-affiliated television stations, and a tenth station
50% owned by Fisher Communications, are located in Washington,
Oregon, and Idaho, and its 27 radio stations broadcast in
Washington and Montana.  The Company also owns and operates Fisher
Plaza, a facility located near downtown Seattle.

Fisher Communications, Inc.'s 8-5/8% Senior Notes due 2014 carry
Moody's Investors Service's B2 rating and Standard & Poor's B-
rating.


FREESTAR TECH: Incurs $2.2 Mil. Net Loss in 2006 1st Fiscal Qtr.
----------------------------------------------------------------
FreeStar Technology 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 a $2,216,696 net loss on 494,296 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $9,464,211
in total assets and $1,483,050 in total liabilities resulting in
$7,981,160 stockholders' equity.

The Company's March 31 balance sheet showed strained liquidity
with $4,888,796 in total current assets available to pay
$1,483,050 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?ade

                        Going Concern Doubt

As reported in the Troubled Company Reporter on March 3, 2006,
Russell Bedford Stefanou Mirchandani LLP raised substantial doubt
about FreeStar's ability to continue as a going concern after it
audited the company's financial statements for the fiscal year
ended June 30, 2005.  The auditors cited the company's difficulty
in generating sufficient cash flow to meet its obligations and
sustain operations.

                      About FreeStar Technology

FreeStar Technology Corporation is a payment processing company.
Its wholly owned subsidiary Rahaxi Processing Oy., based in
Helsinki, is a robust Northern European BASE24 credit card
processing platform.  Rahaxi currently processes in excess of 1
million card payments per month for such companies as Finnair,
Ikea, and Stockman.  FreeStar is focused on exploiting a first-to-
market advantage for its Enhanced Transactional Secure Software,
which is a software package that empowers consumers to consummate
e-commerce transactions with a high level of security using
credit, debit, ATM (with PIN), electronic cash or smart cards.


GALLERIA INVESTMENTS: Receiver Hires Moskowitz as Special Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
allowed GlassRatner Management and Realty Advisors, LLC, as
Receiver of Galleria Investments, LLC's property, to employ Neil
A. Moskowitz, P.C., as its special counsel.

Neil Moskowitz will:

   a) handle tenant disputes, tenant-related matters, and other
      lease-related matters;

   b) advise, assist, and represent the Receiver in the
      collection of rents, resolution of tenant disputes, analysis
      of whether new leases are appropriate; and to advise and
      represent the Receiver; and

   c) perform any and all other legal services incident or
      necessary to the proper administration of this case and the
      representation of the Custodian in the performance of its
      duties and exercise of its rights and powers under the
      Bankruptcy Code.

Neil A. Moskowitz, Esq., the principal of Neil A. Moskowitz, P.C.,
bills the Debtor $250 per hour for his services.

Neil Moskowitz is owed $2,779 for prepetition services rendered.  
The firm will not waive that claim and will pursue reimbursement
as an allowable cost of the Receiver under Section 543 of the
Bankruptcy Code.

Mr. Moskowitz assures the Court that his firm does not hold any
interest materially adverse to the Debtor or its estate.

                  About Galleria Investments LLC

Headquartered in Decatur, Georgia, Galleria Investments, LLC,
operates a shopping center in Duluth, Georgia.  The company filed
for chapter 11 protection on Mar. 6, 2006 (Bankr. N.D. Ga. case
No. 06-62557).  G. Frank Nason, IV, Esq., at Lamberth Cifelli
Stokes & Stout, P.A., represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million and $50 million.

Galleria Investments has been under state court receivership since
Feb. 24, 2006.


GLOBAL ENERGY: Posts $377,793 Net Loss in Quarter Ended March 31
----------------------------------------------------------------
Global Energy Group, Inc., 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 a $377,793 net loss on $285,518 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $17,287,808
in total assets and $8,311,037 in total liabilities resulting in a
$8,976,771 stockholders' equity.

The Company's March 31 balance sheet showed strained liquidity
with $437,924 in total current assets available to pay $2,895,053
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?adf

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 19, 2006,
Baumann, Raymondo & Company Pa, in Tampa, Florida, raised
substantial doubt about Global Energy 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 negative working
capital and its accumulated deficit of $12,025,561.

                        About Global Energy

Global Energy Group, Inc., invents, develops, and commercializes
new technologies that improve the energy efficiency of existing
products and processes. The Company focuses on thermodynamics,
heat transfer and heat exchange, which are important to the
heating, ventilation, air conditioning, and refrigeration
industries.


GOODYEAR TIRE: Fitch Affirms Senior Unsecured Debt's CCC+ Rating
----------------------------------------------------------------
Fitch affirmed ratings for The Goodyear Tire & Rubber Company.
Existing recovery ratings were also affirmed.  Goodyear's debt
and recovery ratings are:

  -- Issuer Default Rating 'B'
  -- $1.5 billion first lien credit facility 'BB/RR1'
  -- $1.2 billion second lien term loan 'BB/RR1'
  -- $300 million third lien term loan 'B/RR4'
  -- $650 million third lien senior secured notes 'B/RR4'
  -- Senior Unsecured Debt 'CCC+/RR6'

Goodyear Dunlop Tires Europe B.V.:

  -- EUR505 million European secured credit facilities 'BB/RR1'

The Rating Outlook is Stable.  Approximately $5.3 billion of debt
is affected by the ratings.

The ratings incorporate:

   * Goodyear's well-recognized brand name;

   * its position as one of the three largest global tire
     companies; and

   * a manageable debt structure.

Goodyear has demonstrated improved operating results, reflecting
benefits from previously initiated efforts to:

   * improve its product mix;
   * build stronger margins; and
   * reduce its cost structure.

However, despite a series of successful new product introductions
and recent solid results in Latin America, GT's ability to
generate better margins and cash flow remains challenged due to:

   * high raw material costs;

   * a competitive environment; and

   * weak conditions in original equipment and low-end consumer
     tire markets.

The recovery ratings reflect Fitch's expectation that most of the
secured bank debt would experience substantial recovery in a
distressed scenario, supporting higher ratings relative to the
Issuer Default Rating.  However, third-lien and unsecured debt-
holders face a higher risk of material losses based on GT's
current operating performance.

GT's financial flexibility has improved from very weak levels
prior to 2005, but cash requirements in 2006 for pension
contributions and capital expenditures are likely to require most
of, or perhaps exceed, GT's cash flow from operations.  Pension
plans were underfunded by $3.0 billion at the end of 2005, and the
company estimates it will be required to make contributions of
$650-$875 million during 2006, up sharply from recent years.

Future required contributions could remain substantial, depending
on asset returns, interest rates and the outcome of federal
pension legislation currently being considered.

The expiration in July 2006 of the union contract at GT's North
American operations creates additional uncertainty about the
effectiveness and timing of the company's efforts to reduce costs.
The North American Tire segment suffers from a high cost structure
due in part to GT's high labor costs and a manufacturing footprint
that is more concentrated in the U.S. than its competitors.  The
terms of a new contract will partly determine how much flexibility
GT will have with respect to its plans to eliminate or replace
high-cost production capacity in the U.S.

A strike, if it were to occur, could have a negative impact on the
company's liquidity and competitive position.

On the other hand, the successful resolution of contract
negotiations and continued progress in restructuring operations
could contribute to a stronger credit profile and support GT's
plan to reduce leverage.  The company may consider an equity
offering that would help it reduce debt and leverage, but the
amount and timing of any offering remains uncertain.

Liquidity at March 31, 2006, consisted of nearly $1.6 billion of
cash, and availability under a domestic $1.0 billion bank credit
facility, offset by $568 million of current debt.

In addition to debt maturities, cash requirements include pension
contributions and $720 million for capital expenditures planned by
GT.  Fitch anticipates that other expenditures for legal
settlements and working capital will be relatively stable, but
operating results and cash flow will also be dependent on raw
material costs, any additional restructuring and, as mentioned
earlier, the resolution of labor negotiations.


GRANDE COMMS: S&P Raises Corp. Credit & Sr. Notes' Ratings to B-
----------------------------------------------------------------
Standard & Poor's Ratings Services raised the ratings on
San Marcos, Texas-based Grande Communications Holdings Inc.,
including its corporate credit rating and senior secured notes, to
'B-' from 'CCC+'.

The ratings were simultaneously removed from CreditWatch, where
they had been placed with positive implications on April 17, 2006.
The outlook is stable.
     
In addition, Standard & Poor's assigned the $168 million senior
secured notes (principal amount at maturity) a '4' recovery
rating, indicating an expectation for marginal (25%-50%) recovery
of principal in the event of a payment default or bankruptcy.  

At March 31, 2006, the company had $160 million of debt (accreted
value) and $508 million of preferred stock.
      
"The upgrade reflects our more favorable view of prospects for
Grande's business plan," said Standard & Poor's credit analyst
Catherine Cosentino.

Nevertheless, the business risk profile remains vulnerable for
Grande, a cable TV over-builder and competitive local exchange
carrier.  The company has made progress through the first quarter
of 2006 in continuing to grow its cable TV subscriber base, as
well as its telephone and broadband customers in the face of
greater competition from both the incumbent telephone company
(primarily AT&T Inc.) and franchised cable TV operator,
predominantly Time Warner Cable .

For 2005, the company's cable TV base grew by 7.6% to 89,417 and
its total connections expanded by 10.6% to 276,142.  For the first
quarter of 2006, this trend continued despite the institution of a
cable TV rate increase.  Through such growth, the company has been
able to achieve a customer penetration of marketable homes and
small businesses of about 41%, which is a good performance for an
over-builder.
     
Grande has also benefited from the significant concentration of
multiple dwelling units in its subscriber base, in which
availability of competitive satellite TV is not ubiquitously
available.  Among the MDUs, there is also some benefit from
exclusive on-site marketing arrangements that the company has with
landlords to offer cable TV in their buildings.

The company has also been successful in selling bundled services
to its cable customers through some discounting relative to the
incumbent telephone and cable TV providers.  The vast majority of
these retail communications subscribers take at least two
services.  These efforts have all translated into increased
bundled consumer revenues and consolidated EBITDA, at 15.1% and
39.8% growth, respectively, for 2005 (9.8% and 9.1%, respectively,
for the first quarter of 2006, on a year-over-year basis).
     
However, the company's EBITDA margin continues to be very limited,
at 15.4% for the first quarter of 2006 due to its relatively high
ongoing marketing and other customer retention expenses, as well
as a fairly high cost structure for its cable TV service due to
its relatively small size.

In addition, the company's margin is constrained by the network
services business, which represents about 24% of total revenues,
and which has a much lower gross profit margin than the bundled
consumer business, largely due to pricing pressures in the carrier
services sector.


GRANITE BROAD: Moody's Lowers B3 Rating on $400MM Notes to Caa1
---------------------------------------------------------------
Moody's Investors Service downgraded Granite Broadcasting
Corporation's $400 million of 9.75% senior secured notes due 2010
to Caa1 from B3.  Additionally, Moody's affirmed the company's
existing ratings, including its Caa2 corporate family rating. The
outlook remains negative.

The downgrade to Caa1 is prompted by Moody's belief that the
company's precarious liquidity situation may depress the valuation
of the company's portfolio of middle market television stations,
providing a reduced cushion to senior secured bondholders in a
distress scenario.  Further, Moody's notes that following the loss
of the WB affiliation, Granite received a discounted purchase
price for its re-marketed WB stations, providing the company less
proceeds to either reinvest in replacement assets or apply to debt
reduction.  Thus, the Caa1 rating reflects Moody's belief that
asset coverage of the senior secured debt has deteriorated and may
be insufficient to cover the senior secured notes.

The Caa2 corporate family rating incorporates the company's
inability to service its debt with cash on hand or internally
generated funds.  While the company did not make its scheduled
$19.7 million coupon payment on June 1, 2006 to senior secured
bondholders, Moody's believes that it is likely that Granite's
pending sale of its WB stations will close prior to the end of the
30-day grace period provided under the terms of the indenture,
thus providing the company with sufficient liquidity to avoid a
default scenario.

The negative outlook continues to reflect Moody's belief that even
if Granite applies the remaining proceeds from asset sales to debt
reduction, Granite's improvements in operations from cost
reduction efforts and investment in replacement assets may not be
sufficient to cover the company's funding requirements over the
intermediate term.

Moody's lowered this rating:

   * Sr. Secured Debt -- to Caa1 from B3

Moody's affirmed these ratinggs:

   * Preferred Stock - C

   * Corporate Family Rating -- Caa2

The outlook is negative.

Granite Broadcasting Corporation is a television broadcaster
headquartered in New York, New York.


GRANT PRIDECO: Moody's Lifts Corp. Family Rating to Ba1 from Ba2
----------------------------------------------------------------
Moody's Investors Service upgraded Grant Prideco, Inc.'s corporate
family and senior unsecured note ratings to Ba1 from Ba2, with a
stable rating outlook.  GRP, is a leading provider of drill stem
technology and drill pipe manufacturing, drill bit technology and
manufacturing, and high-performance engineered connections and
premium tubular products.

The company has 25 manufacturing facilities and more than one
hundred sales, service and repair facilities strategically located
in all major oil and gas regions around the world.

At a Ba1 rating level, and especially this late in the up-cycle,
Moody's would expect GRP to sustain a capital structure that can
absorb a very major contraction in cash flow without threatening
the rating.  Accordingly, the outlook or ratings would be
sensitive to substantial leveraged acquisitions, though well-
bought acquisitions that add a welcome degree of product
diversification could be leveraged more than acquisitions that
intensify current product and business lines.

The outlook or ratings could also suffer if GRP executed equity
repurchases in excess of the previously announced $150 million.

The upgrades are supported by GRP's very low leverage after a
sustained historic sector up-cycle, its larger scale and greater
product and geographic marketing diversification than it carried
during the last sector downturn, expected strong cash flow and
earnings through 2006 and through much or all 2007, very strong
order backlog, fiscal discipline, expected prudent funding of any
future acquisition activity, and overall strong credit metrics
that compare favorably with investment grade oilfield services
companies.

GRP is led by a seasoned disciplined business and financial
management team sensitive to the risks of up-cycle acquisitions,
suitable acquisition funding strategies, and continuing to improve
the business and constrain leverage in advance of an inevitable
sector down-cycle.  This is particularly vital given the extreme
cyclicality of the drilling products and services and Tubular
Technology and Services segments.

The ratings also benefit from a comparatively low level of
maintenance capital spending and rising diversification through a
rising level of international activity where demand tends to be
less cyclical.

The ratings are restrained by GRP's comparatively small size and
low degree of diversification relative to investment grade
oilfield services companies; acquisition risk associated with
GRP's desire to add diversifying dimensions to its business lines;
the extreme cyclicality of its mainline drillpipe business and a
very substantial exposure to very price sensitive North American
drilling activity that drives much of its drillpipe demand
patterns, and the potential margin impact of a secular shift in
producer capital spending to unconventional plays that may reduce
the demand for premium drill pipe, tubulars, and drilling
products.

Furthermore, in the past, sharp declines in North American
drilling activity triggered very sharp contractions in contract
driller and producer sector purchases of drill pipe and other oil
field products with a commensurate impact on GRP's cash flows.

Downturns, in drill pipe orders were amplified and extended when
rig count contractions occurred at times of high drill pipe
inventories held by GRP, its competitors, contract drillers, and
oil and gas producers.  While Moody's expects GRP to be somewhat
less cyclical than in the past we would continue to expect major
contractions in cash flows to accompany major contractions in
drilling activity.

Moody's estimates that GRP's 2006 adjusted EBITDA would be in the
range of $500 million to $560 million, easily covering
approximately $17 million to $20 million of adjusted interest
expenses; $30 million to $50 million of working capital needs; $35
million or more of maintenance capital expenditures; and $50
million to $70 million of budgeted growth capital spending.

In a sharp downturn, Moody's envisions a sharp decline in EBITDA.
At the end of the first quarter 2006, GRP had $59 million of cash
on hand and $344 million of undrawn fixed asset and working
capital secured bank revolver availability taking into account
approximately $6 million of letters of credit.  This provides GRP
with ample liquidity for growth capital outlays and modest
acquisitions.

In spite of GRP's strong credit metrics, the company's modest
scale, modest diversification, and our expectation that it will
conduct acquisitions to augment its business portfolio make it
highly unlikely that it will be considered for an investment-grade
rating, in the near-term.

The outlook or ratings could suffer if GRP executed a leveraged
material acquisition, especially if the sector outlook appears to
be softening.  If GRP implements equity purchases in excess of the
previously announced $150 million, the outlook or ratings may also
be pressured.

Grant Prideco, Inc. is headquartered in Houston, Texas.


GUARDIAN TECHNOLOGIES: Posts $2 Mil. Net Loss in 2006 1st Quarter
-----------------------------------------------------------------
Guardian Technologies International, Inc., 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 $2,004,360 net loss on $309,669 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $3,755,343
in total assets, $1,046,981 in total liabilities, $1,138,934 in
common shares subject to repurchase, and $1,569,428 in
stockholders' equity.

Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?ae3

                        Going Concern Doubt

Goodman & Company, L.L.P., in Norfolk, Virginia, raised
substantial doubt about Guardian Technologies International,
Inc.'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 auditor pointed to the Company's significant
operating losses since inception and need for additional
financing.

Based in Dulles, Virginia, Guardian Technologies International,
Inc. -- http://www.guardiantechintl.com/-- designs and develops  
imaging informatics solutions for the healthcare, aviation and
homeland security industries.  The Company utilizes high-
performance imaging technologies and advanced analytics to create
integrated information management technology products and services
that address critical problems in healthcare and homeland security
for corporations and governmental agencies.


HECTOR MORALES: Case Summary & 13 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Hector B. Perez Morales
        aka Bernardo Perez Hector
        1504 Calle Martin Travieso
        San Juan, Puerto Rico 00911

Bankruptcy Case No.: 06-01802

Type of Business: The Debtor is a principal of MB Joma, Inc.,
                  which previously filed for chapter 11 protection
                  on August 30, 2005 (Bankr. D. P.R. Case No. 05-
                  08110).

Chapter 11 Petition Date: June 6, 2006

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Teresa M. Lube Capo, Esq.
                  Lube & Soto Law Office, P.S.C.
                  702 Calle Union Apartment G-1
                  Condominio Unimar
                  San Juan, Puerto Rico 00907-4202
                  Tel: (787) 722-0909
                  Fax: (787) 977-1709

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 13 Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
MAS Inc.                                $4,175,000
Mr. Nelson Matos
Apartado 3004
Guaynabo, PR 00970

Felix Olomo c/o Lic. Emilio Soler       $2,800,000
Cobian Plaza 213
Avenue Ponce de Leon 1607
Santurce, PR 00989

Mabel Ladycany                          $1,500,000
Calle Loiza 1903
Santurce, PR 00911-1827

Doral Financial Corp.                   $1,184,250
P.O. Box 71529
San Juan, PR 00936

Citi Cards                                 $20,375

Hormigonera Mayaguezana                    $14,000

Carmen L. Ortiz                             $4,000

Sears Roebuck and Co.                       $2,926

Banco Bilbao Vizcaya                        $1,236

First Premier Bank                          $1,252

NCO Financial Systems                         $130

Puerto Rico Telephone Co.                     $108

AFNI Inc.                                      $26


HORIZON NATURAL: Zurich's Administrative Claim is Disallowed
------------------------------------------------------------
The Honorable William S. Howard of the U.S. Bankruptcy Court for
the Eastern District of Kentucky ruled last week that Zurich
American Insurance Company does not hold an allowable
administrative expense claim against HNRC DISSOLUTION CO., fka
Horizon Natural Resources Company, based on alleged post-
confirmation deductible losses arising under workers'
compensation, commercial automobile, and general liability
policies with the company and its two affiliates that were assumed
by the debtors before their assets were sold to Lexington Coal
Company, LLC.  

Judge Howard's Opinion is published at 2006 WL 1477601.

Judge Howard says that Zurich's decision not to participate in the
plan process until after the debtors' plans were confirmed
deprived creditors and other parties in interest of the
opportunity to factor in the insurer's claim, which would have had
a major effect on the consideration of the feasibility of the
debtors' proposed plan, and Zurich's post-confirmation request for
estimation of its claim was neither appropriate nor timely under
the circumstances.

This dispute was litigated by:

     Gregory R. Schaaf, Esq.
     Greenebaum Doll & McDonald PLLC
     300 West Vine Street, Suite 1100
     Lexington, Kentucky 40507

representing Lexington Coal Company; and:

Douglas T. Logsdon, Esq.
     McBrayer, McGinnis, Leslie & Kirkland, PLLC
     201 East Main Street, Suite 1000
     Lexington, Kentucky 40507-1361

          - and -

     Karen Lee Turner, Esq.
     Eckert Seamans Cherin & Mellott, LLC
     1515 Market Street, 9th Floor
     Philadelphia, Pennsylvania 19102-1909

representing Zurich American Insurance Company.

Headquartered in Ashland, Kentucky, Horizon Natural Resources, fka
AEI Resources Holding, is one of the United States' largest
producers of steam (bituminous) coal.  The Company filed for
chapter 11 protection on February 28, 2002 (Bankr. E.D. Ky. Case
No. 02-14261).  Ronald E. Gold, Esq., at Frost Brown Todd LLC,
represents the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed over
$100 million in total assets and total debts.  On Sept. 16, 2005,
the Court confirmed the Debtors' Plan of Liquidation.  HNRC
DISSOLUTION CO. is the successor to the Debtor pursuant to that
Plan of Liquidation.


HOST MARRIOTT: Moody's Ups $37.8MM Class G Cert.'s Rating to Baa1
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes and
affirmed the ratings of two classes of Host Marriott Pool Trust,
Commercial Mortgage Pass-Through Certificates, Series 1999-HMT:

   * Class A, $87,650,985, Fixed, affirmed at Aaa

   * Class B, $174,862,895, Fixed, affirmed at Aaa

   * Class C, $56,475,000, Fixed, upgraded to Aaa from Aa1

   * Class D, $98,990,000, Fixed, upgraded to Aa1 from A2

   * Class E, $35,875,000, Fixed, upgraded to Aa3 from A3

   * Class F, $46,800,000, Fixed, upgraded to A3 from Baa3

   * Class G, $37,880,000, Fixed, upgraded to Baa1 from Ba1

The Certificates evidence beneficial interests in a trust fund,
the principal asset of which is a mortgage loan secured by eight
hotel properties located in six states and Washington, D.C.  The
portfolio contains a total of 6,055 guest rooms, compared to 5,716
guest rooms at securitization due to the substitution of the New
York Drake Swissotel with the Hyatt Regency Washington, D.C.

The New York Marriott Marquis, located in midtown Manhattan,
comprises 40.8% of the pool balance.  Other significant assets
include the San Francisco Airport Hyatt Regency, the Hyatt Regency
Washington, D.C. and the Chicago Swissotel.

As of the May 3, 2006 distribution date, the transaction's
certificate balance has decreased by approximately 19.0% from $665
million at securitization to $538.5 million as a result of
amortization on a 20-year schedule.

The operating performance of the individual hotels has been mixed
with five properties exceeding Moody's expectations and two, the
San Francisco Airport Hyatt Regency and the Cambridge Hyatt
Regency, performing below Moody's expectations.  The pool has
benefited from an increase in net cash flow by the substitution of
the New York Drake Swissotel with the larger Hyatt Regency
Washington, D.C.  Moody's is upgrading Classes C, D, E, F and G
due to the improved operating performance of the overall portfolio
and increased subordination levels.

The better performing properties in the pool include the New York
Marriott Marquis, which achieved a RevPAR of $241.50 for the
trailing 12-month period ending March 2006, representing a 34.9%
increase over Moody's recognized RevPAR of $179.00 at
securitization and a 23.3% increase in net cash flow to $49.3
million from $40.0 million at securitization.

The Reston Hyatt Regency achieved RevPAR of $138.41 for the same
period, representing a 31.2% increase over Moody's RevPAR of
$105.50 at securitization and a 50.6% increase in net cash flow to
$11.9 million from $7.9 million at securitization.  The Westin
Buckhead experienced an 18.6% increase in RevPAR to $123.95 from
$104.50 at securitization and a 49.0% increase in net cash flow to
$7.3 million from $4.9 million at securitization.

The San Francisco Hyatt Regency and the Cambridge Hyatt Regency
each experienced a decline in RevPAR of 23.3% and 10.4%
respectively.  The San Francisco Hyatt Regency's net cash flow
decreased by 84.6% to $1.6 million from $10.4 million at
securitization and the Cambridge Hyatt Regency's net cash flow
decreased by 21.7% to $6.1 million from $7.8 million at
securitization.

Moody's loan to value ratio is 48.7%, compared to 71.0% at
securitization.  The properties are owned by entities associated
with Host Hotels & Resorts, Inc.  On April 17, 2006 Host Marriott
Corporation changed its name to Host Hotels & Resorts, Inc.


HOVNANIAN ENTERPRISES: Fitch Rates $250 Mil. Senior Notes at BB+
----------------------------------------------------------------
Fitch Ratings assigned a 'BB+' rating to Hovnanian Enterprises,
Inc.'s $250 million senior unsecured notes due 2017.

Fitch affirmed Hovnanian's Issuer Default Rating of 'BB+', senior
unsecured debt and unsecured bank credit facility ratings.  Fitch
affirmed the 'BB-' senior subordinated notes rating.  The series A
noncumulative perpetual preferred stock rating of 'B+' is also
affirmed.

The $250 million issue will be ranked on a pari passu basis with
all other senior unsecured debt, including Hovnanian's revolving
and letter of credit facility.  Proceeds from the new debt issue
will be used for general corporate purposes and repayment of
existing debt.  The Rating Outlook is Stable.

Ratings for Hovnanian are based on the company's:

   * successful execution of its business model;
   * conservative land policies and geographic, price point; and
   * product line diversity.

The company has been an active consolidator in the homebuilding
industry which has contributed to above average growth during the
past seven years, but has kept debt levels somewhat higher than
its peers.  Management has also exhibited an ability to quickly
and successfully integrate its acquisitions.  

In any case, now that the company has reached current scale there
may be somewhat less use of acquisitions going forward and
acquisitions may be smaller relative to Hovnanian's current size.
Significant insider ownership aligns management's interests with
the long term financial health of the company.

Risk factors include the inherent, although somewhat tempered,
cyclicality of the homebuilding industry.  The ratings also
manifest the company's aggressive, yet controlled growth strategy,
concentration in California (22% of consolidated deliveries in the
first half of fiscal 2006) and Hovnanian's capitalization and
size.

The company's EBITDA, EBIT and FFO to interest ratios tend to be
somewhat below the average public homebuilder, while inventory
turnover tends to be similar.  Hovnanian's leverage is higher and
debt to EBITDA ratio is slightly above the averages of its peers.
Although the company has certainly benefited from the generally
strong housing market of recent years, a degree of profit
enhancement is also attributed to purchasing design and
engineering, access to capital and other scale economies that have
been captured by the large national and regional public
homebuilders in relation to non-public builders.

These economies, the company's presale operating strategy and a
return on equity and assets orientation provide the framework to
soften the margin impact of declining market conditions in
comparison to previous cycles.  Hovnanian's ratio of sales value
of consolidated backlog to debt since 2001 has ranged between 1.6x
to 3.2x and is currently 2.3x -- a comfortable cushion.

Hovnanian employs conservative land and construction strategies.
The company typically purchases land only after necessary
entitlements have been obtained so that development or
construction may begin as market conditions dictate.  Hovnanian
extensively uses lot options.  The use of land option contracts
without specific performance clauses gives the company the ability
to renegotiate price/terms or void the option which limits down
side risk in market downturns and provides the opportunity to hold
land with minimal investment.

At present 72% of its lots are controlled through options -- a
higher percentage than most public builders.  Total consolidated
lots, including those owned, were 121,829 at April 30, 2006.  This
represents a 6.1 year supply based on latest twelve months home
deliveries.

However, the company has one of the lowest owned lot positions in
the industry, typically owning only a one to two year supply.  An
estimated 85%-90% of its homes are pre-sold.  The balance is homes
under construction or homes completed in advance of a customer's
order.  Hovnanian's unconsolidated joint venture activity is
growing, but is still moderate in size and conservatively levered.

Fitch estimates that in recent years at least half of Hovnanian's
growth has resulted from a series of acquisitions -- seventeen
during the past eight years. (However, in each of the last five
years more than 90% of the company's growth in earnings has come
from operations owned more than one year.)

The acquisitions have enabled the company to grow its position and
increase market share, often broadening product and customer bases
in existing markets.  They have also enabled the company to enter
new markets.  The combinations typically were funded by debt and
to a lesser degree by stock and retained earnings.  At times there
were earn-outs which reduced risk and served to retain key
management.

Hovnanian's current acquisition strategy focuses on purchasing
smaller builders and land portfolios in current markets and on
making selected acquisitions in new markets if there is a good
strategic fit and appropriate returns can be achieved.  The key
analysis will be return on capital as to whether an acquisition
will be executed.  Fitch believes that management would balance
debt and stock as acquisition currency to maintain current credit
ratios.  The company is publicly committed to maintaining an
average net debt/equity ratio of 1.0:1.0.

Hovnanian maintains a $1.5 billion revolving and letter of credit
facility.  The facility contains an accordion feature under which
the aggregate commitment can be increased to $2.0 billion subject
to the availability of additional commitments.  As of April 30,
2006 the outstanding balance under the agreement was $275 million.

Also, at the end of the second quarter of 2006, Hovnanian had
issued $411 million of letters of credit which reduces cash
available under the agreement.  The revolving credit agreement
matures in July 2009.  The company has irregularly purchased
moderate amounts of its stock in the past.  Hovnanian repurchased
600,000 shares of common stock in fiscal 2005 at a cost of $34
million and repurchased 500,000 shares of common stock at a cost
of $21 million so far in fiscal 2006.  Just under one million
shares remain in the current class A common stock repurchase
authorization as of June 1, 2006.


ICEWEB Inc: Posts $666,126 Net Loss in 2006 1st Fiscal Quarter
--------------------------------------------------------------
IceWEB, Inc., 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 a $666,126 net loss on $642,059 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $2,326,830
in total assets and $1,818,283 in total liabilities, and $508,547
of stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $1,099,775 in total current assets available to pay
$1,593,283 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?ae0

                        Going Concern Doubt

As reported in the Troubled Company Reported on January 24, 2006,
Sherb & Co., LLP, expressed substantial doubt about IceWEB, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended
Sept. 30, 2005 and 2004.  The auditing firm pointed to the
Company's consecutive net loss for fiscal year 2005 and 2004

                           About IceWEB

Headquartered in Herndon, Virginia, IceWEB, Inc. (OTC BB: IWEB)
-- http://www.iceweb.com/-- enables small and medium sized  
organizations with its, hardware, software and professional
services. The Company's application service provider software
delivery model reduces the customer's Total Cost of Ownership and
improves the efficiency of IT environments.


IMMUNE RESPONSE: March 31 Balance Sheet Upside-Down by $134.7 Mil.
------------------------------------------------------------------
The Immune Response Corporation reported $6.5 million of net
income on $11 million of revenues for the three months ended
March 31, 2006, compared to a $4.3 million net loss on $11 million
of revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $9.9 million
in total assets and $144.7 million in total liabilities, resulting
in a $134.7 million equity deficit.

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

                       Going Concern Doubt

Levitz, Zacks & Ciceric expressed substantial doubt about The
Immune Response'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 stockholders' deficit and comprehensive loss for each of
the years in the two-year period ended Dec. 31, 2005.

Headquartered in Carlsbad, California, The Immune Response
Corporation (Nasdaq: IMNR) -- http://www.imnr.com/-- is an  
immuno-pharmaceutical company focused on developing products to
treat autoimmune and infectious diseases.  The Company's lead
immune-based therapeutic product candidates are NeuroVax(TM) for
the treatment of multiple sclerosis (MS) and IR103 for the
treatment of Human Immunodeficiency Virus (HIV) infection.  Both
of these therapies are in Phase II clinical development and are
designed to stimulate pathogen-specific immune responses aimed at
slowing or halting the rate of disease progression.


INCO LTD: To Sell Falconbridge Assets to LionOre Mining for $650MM
------------------------------------------------------------------
Falconbridge Limited and Inco Limited reached a definitive
agreement with LionOre Mining International Ltd. covering the sale
to LionOre of certain assets and related operations of
Falconbridge.

Inco and Falconbridge have been discussing with the U.S.
Department of Justice and European Commission about the assets
and related operations that would be divested and the associated
arrangements that would be necessary as the proposed remedy
to address potential competition issues that the DOJ and the
Commission have identified relating to Inco's pending acquisition
of Falconbridge.  The sale of these assets and related operations
to LionOre will include Falconbridge's Nikkelverk refinery in
Norway and the Falconbridge marketing and custom feed
organizations that market and sell the finished nickel and other
products produced at Nikkelverk and obtain third-party feeds for
this facility.

Inco also agreed to supply up to 60,000 tonnes of nickel in matte
under a 10-year supply agreement, which approximates the current
volume of feed provided by Falconbridge's operations to the
facility.  The closing of this sale is conditioned on, and
expected to be completed upon receipt of, the clearance by both
the DOJ and the Commission of the pending acquisition of
Falconbridge by Inco, as well as Inco taking up and paying for
Falconbridge shares pursuant to its offer and certain other
standard terms and conditions to closing.

The purchase price to be paid by LionOre for the assets and
related operations to be sold is $650 million, of which
$400 million will be in cash and $250 million of LionOre common
shares.  This purchase price is subject to certain adjustments
tied to changes in the final working capital levels of the
operations to be sold to LionOre and certain other adjustments.

"We are pleased in having reached this agreement with LionOre,"
said Scott Hand, Chairman and CEO of Inco.  "This is an important
milestone in the regulatory clearance process and we look forward
to completing this process so that the acquisition can be cleared
by the U.S. Department of Justice and the European Commission."

Inco and Falconbridge understand that the DOJ and the Commission
are reviewing the final terms of the proposed remedy that they
have been discussing with these regulatory agencies, including the
terms of this sale to LionOre.

Inco and Falconbridge expects that the DOJ and the Commission will
advise them whether the acquisition will be cleared based upon
this sale to LionOre prior to the end of June 2006.  Both
companies believe that the competition issues that have been
identified by the DOJ and the Commission are addressed by the
agreements entered into covering this sale to LionOre.  The
parties will continue to cooperate with the DOJ and the Commission
in connection with their respective final reviews of the terms of
the remedy.

                       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.


INDYMAC BANCORP: DBRS Rates Preferred Securities at BB (High)
-------------------------------------------------------------
Dominion Bond Rating Service confirmed the ratings of IndyMac
Bancorp Inc. and its subsidiaries, as indicated below, and has
revised the rating trend to Positive from Stable.  Concurrently,
DBRS assigned a rating of BB (high) to IndyMac's Trust Preferred
Securities.

   * Short-Term Instruments Confirmed R-2 (middle)

   * Short-Term Instruments Confirmed R-2 (low)

   * Deposits & Senior Debt Confirmed BBB Pos

   * Issuer & Senior Debt Confirmed BBB (low) Pos

   * Trust Preferred Securities New Rating BB (high)

The Positive rating trend reflects DBRS's expectation that IndyMac
will continue to grow origination volumes and demonstrate robust
earnings, despite the difficult operating environment.

DBRS believes that IndyMac's solid market position, expanding
product line, respectable credit performance, and expanding
deposit franchise, will serve as a solid foundation for continued
sound profitability. Additionally, the Positive rating trend
reflects DBRS's belief that IndyMac's liquidity and funding
profile will be further strengthened with demonstrated use of its
recently inaugurated asset-backed commercial paper program.

This adds to the diversity of funding, while reducing IndyMac's
reliance on other sources of market funding, which is considered a
weakness and is factored into the rating.  DBRS will monitor the
Company's ability to navigate through the anticipated downturn in
the mortgage cycle, brought on by increased competition and
interest rates, slowing industry originations, and potentially
slowing housing markets.

DBRS may be in the position to raise IndyMac's ratings over the
next 12 to 18 months, should IndyMac maintain the positive
momentum as illustrated by continued solid earnings, strong
originations volume, and further diversification of funding, while
maintaining asset quality.

DBRS's ratings incorporate the Company's track record in gaining
market share under various economic and interest rate
environments, overall good asset quality measures, solid financial
performance, and sufficient capitalization.

DBRS believes that IndyMac's growing deposit base and its bank
charter provide the Company with a source of reliable low-cost
funding. Importantly, IndyMac's "hybrid thrift and mortgage
banking" business model allows the Company to take advantage of
the higher returns of the mortgage banking industry, while also
benefiting from a layer of earnings stability added by the thrift
segment. Nonetheless, the company's overall dependency on the
cyclical and often volatile mortgage business is viewed as its
primary weakness as IndyMac's earnings are still closely
correlated with the level of originations.

IndyMac's profitability is dependent on its ability to maintain
its originations levels in the current environment.  Additionally,
as a participant in the residential lending industry to borrowers
with Alt-A credit, IndyMac remains challenged to sustain its
profitability while protecting its credit quality and the quality
of its balance sheet.

DBRS's ratings recognize IndyMac's strong franchise and prominent
market position in the residential lending industry.  IndyMac has
a significant market presence as one of the largest originators of
Alt-A mortgages in the U.S. and as the largest originator of
reverse mortgage products in the U.S.

The growing reverse mortgage business segment adds growth
potential with minimal credit risk, as these loans are sold to
third parties.  Despite cyclical industry-wide challenges,
IndyMac's earnings continue to grow, with the Company recording
net income of $79.9 million for the first quarter 2006 and $300
million for 2005.

The notable growth in profitability reflects the Company's
increase in net interest income at the thrift and the strength of
the mortgage operations.  This confirms the success of the
Company's hybrid business model.  Despite the increasing interest
rate environment, IndyMac continues to generate strong origination
volumes, which increased to a record $20 billion in the first
quarter of 2006.

Originally established in 1985, with assets of $25 billion,
IndyMac Bancorp Inc., a thrift holding company, operates through
IndyMac Bank, F.S.B. IndyMac provides residential mortgage
financing and services nationwide through 15 regional offices, and
traditional thrift services through 26 branches in southern
California.  The emphasis of the branch network is on deposit
collection and on providing relationship-based residential
mortgage, home equity, consumer construction, and sub-division
construction financing.


ITC DELTACOM: Works to Regain Nasdaq Listing Compliance  
-------------------------------------------------------
ITC DeltaCom, Inc., received a staff determination letter from the
Nasdaq Stock Market indicating it has failed to maintain a minimum
market value of publicly held shares of $15 million as required by
Marketplace Rule 4450(b)(3) and that, as a result, ITC DeltaCom's
common stock is subject to delisting from the Nasdaq National
Market.

On June 6, 2006 ITC DeltaCom appealed the Nasdaq staff's
determination to a Nasdaq listing qualifications panel.  To
succeed on its appeal, ITC DeltaCom must establish that it has a
plan that will enable it to achieve and sustain compliance with
the rule in future periods.  ITC DeltaCom's common stock will
continue to trade on the Nasdaq National Market while the panel
considers ITC DeltaCom's appeal.

"Despite our limited public float, we plan to appeal before the
Nasdaq panel and, given our significant ownership by a limited
number of parties, there will be no impact on our ability to
continue to provide outstanding value and service to our many
business customers across the Southeast," Richard E. Fish, Jr.,
Executive Vice President and Chief Financial Officer, said.  "The
Company's management team remains focused on its goal of
continuing the encouraging progress in strengthening ITC
DeltaCom's operating results that we announced last month."

ITC DeltaCom received the determination letter because, although
the market value of its publicly held shares exceeded the
$15 million minimum requirement at times during May 2006, it did
not do so for ten consecutive trading days during the past three
months, as required for ITC DeltaCom to regain compliance with
this requirement.

The market value of ITC DeltaCom's publicly held shares has been
adversely affected by the substantial number of shares that have
been excluded from the minimum market value calculation under
Nasdaq's rules.  This calculation excludes the market value of
outstanding shares of common stock held by officers, directors and
10% stockholders, who collectively own a majority of ITC
DeltaCom's total outstanding common stock, from the minimum
required value.  In addition, because the market value of publicly
held shares is based exclusively on the market value of ITC
DeltaCom's outstanding common stock, it does not reflect the value
of any of ITC DeltaCom's outstanding preferred stock, which had a
book value of approximately $70.3 million as of March 31, 2006.

                       About ITC DeltaCom

Headquartered in Huntsville, Alabama, ITC DeltaCom, Inc. (Nasdaq:
ITCD)  -- http://www.deltacom.com/-- provides, through its  
operating subsidiaries, integrated telecommunications and
technology services to businesses and consumers in the
southeastern United States.  ITC DeltaCom has a fiber optic
network spanning approximately 14,500 route miles, including more
than 11,000 route miles of owned fiber, and offers a comprehensive
suite of voice and data communications services, including local,
long distance, broadband data communications, Internet
connectivity, and customer premise equipment to end-user
customers.  The Company is one of the largest competitive
telecommunications providers in its primary eight-state region.  
The Company has interconnection agreements with BellSouth,
Verizon, SBC, CenturyTel and Sprint for resale and access to
unbundled network elements and is a certified competitive local
exchange carrier in Arkansas, Texas, Virginia and all nine
BellSouth states.

At March 31, 2006, the Company's balance sheet showed a
stockholders' deficit of $47,956,000, compared to a $31,654,000
deficit at Dec. 31, 2005.


JMJ TECHNOLOGIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: JMJ Technologies, Inc.
        3100 Cumberland Boulevard Southeast, Suite 1750
        Atlanta, Georgia 30039
        Tel: (770) 919-7220
        Fax: (770) 919-9112

Bankruptcy Case No.: 06-66182

Type of Business: The Debtor designs and develops software for the
                  healthcare industry.

Chapter 11 Petition Date: June 2, 2006

Court: Northern District of Georgia (Atlanta)

Judge: Robert Brizendine

Debtor's Counsel: Kathleen J. St. John, Esq.
                  Nurenberg, Paris, Heller & McCarthy Co., LPA
                  1206 Timberland Drive
                  Marietta, Georgia 30067
                  Tel: (770) 984-1123

Total Assets: $1,000,000

Total Debts:  $1,466,176

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


LATHAM: Moody's Puts B2 Rating on Planned $200 Mil. Debt Facility   
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Latham
Manufacturing Corporation proposed $200 million senior secured
credit facilities comprised of a $45 million senior secured
revolver and a $155 million senior secured term loan B.  As a
result of the refinancing, Moody's has withdrawn the ratings on
the company's $40 million senior secured revolver and on its $155
million senior secured term loan B.  Key factors affecting the
ratings include: high product and customer concentration,
leverage, free cash flow, and market position.

These rating actions were taken:

   * $45 million Revolving Credit Facility due 2009, assigned B2;

   * $155 million Senior Secured Term B due 2010, assigned B2.

These rating was affirmed:

   * Corporate Family Rating, rated B2.

The rating's outlook has been changed to stable from positive.

Proceeds from the transaction are to be used to finance, in part,
to make a complimentary acquisition, to refinance existing debt,
and for general corporate purposes.

The ratings are constrained by the company's product concentration
-- pools and pool related accessories; high customer
concentration; seasonality of its business; and reliance on
discretionary income.

The company's top 5 clients represent around 50% of sales.
Pools are discretionary purchases and new sales are likely to vary
depending on consumer confidence and general economic activity
levels.  The company's business is primarily based in the
Northeastern United States and Canada. The company's total
leverage is in the mid 4 times, thereby placing the company in the
B2 rating category on this measure.

The ratings benefit from the company's strong customer
relationships and a high amount of interdependence with one of its
owners.  The company's pool liners have an estimated useful life
that is likely to be around 10 years thereby creating a recurring
revenue stream.  Similarly, the contemplated acquisition while
expanding the company's product offering, will also create an
additional recurring revenue.  The company's portfolio of packaged
pools and one piece fiberglass pools gives the company greater
product diversity.

The ratings outlook has been changed to stable from positive to
reflect the company's acquisition appetite and the belief that its
credit metrics are likely to remain within the B2 rating category
for the next 18 months.

The facilities will be issued by Latham Manufacturing Corp., a
subsidiary of Latham Acquisition Corp.  The facilities are to be
secured by a first priority perfected lien on and security
interest in the borrower and each existing and subsequently
acquired or organized direct or indirect domestic and first tier
foreign subsidiary of the borrower, and substantially all the
tangible and intangible assets of the parent, and of the borrower.

Latham Manufacturing, based in Latham, NY, is a wholly owned
subsidiary of Latham Acquisition Corp, a company formed by
Brockway Moran & Partners, Inc. Total revenues for 2005 totaled
$176 million.


L-3 COMMS: Mourns Death of Chief Executive Officer Frank C. Lanza
-----------------------------------------------------------------
L-3 Communications disclosed that Frank C. Lanza, its chairman and
chief executive officer, suddenly passed away yesterday evening.
He was 74.

"We are all shocked and saddened by the passing of Frank C.
Lanza," Robert B. Millard, lead director of the L-3 Communications
Board of Directors, said.  "On behalf of the Board of Directors
and all L-3 employees we would like to extend our deepest
condolences to the Lanza family."

Mr. Millard noted that Mr. Lanza visited his doctors on June 6,
2006, and it was determined that he was proceeding satisfactorily
in his recovery from surgery two months ago.  His death was sudden
and unexpected.

"There is no question that Frank Lanza has been one of the most
visionary business leaders in the defense industry," Mr. Millard
continued.  "Frank worked to build Loral into a leading defense
firm.  Frank went on to co-found L-3, the fastest-growing high
technology defense company in the world by acquiring a number of
small and large businesses that he transformed into leaders in
their niche markets."

"What was not widely known about Frank is that he and his wife Pat
were involved in numerous charitable activities through their
family foundation," Mr. Millard said.  "Frank was blessed by a
wonderfully supportive family and he will be greatly missed by all
those who appreciated his insight, his leadership, his candor and
his credibility. The defense industry has lost a great advocate
for innovation, excellence and personal integrity."

Mr. Lanza began his career as an engineer with the Philco Western
Development Laboratory.  In 1959, he joined the Dalmo Victor
Division of Textron where he managed the development and
production of major electronic warfare programs.  He was named
vice president of Dalmo Victor in 1970.

He joined Loral in 1972 as president of Loral Electronic Systems
and served as president and chief operating officer of Loral
Corporation from 1981 to 1996.  Then that same year, Mr. Lanza
became executive vice president of Lockheed Martin Corporation and
president and chief operating officer of Lockheed Martin's C3I and
Systems Integration Sector, a $6 billion sector comprising many of
the heritage Loral businesses that were strategically combined
with Lockheed Martin.  He co-founded L-3 Communications in 1997
and the company was listed on the New York Stock Exchange in 1998.

Mr. Lanza was a member of the Board of Governors for the Aerospace
Industries Association.  He was also a member of the Board of
Directors for the Coast Guard Foundation and received the 2003
Distinguished Corporate Leadership award from the Soldiers',
Sailors', Marines' and Airmen's Club.  The National Management
Association selected Mr. Lanza as the 1978 Gold Knight of
Management.  Mr. Lanza was also on the board of the American
Italian Cancer Foundation.  Mr. Lanza served in the U.S. Coast
Guard during the Korean War.

                            About L-3

Headquartered in New York City, L-3 Communications Corporation --
http://www.L-3com.com/-- is a leading provider of Intelligence,  
Surveillance and Reconnaissance systems, secure communications
systems, aircraft modernization, training and government services.  
The company is a leading merchant supplier of a broad array of
high technology products, including guidance and navigation,
sensors, scanners, fuzes, data links, propulsion systems,
simulators, avionics, electro optics, satellite communications,
electrical power equipment, encryption, signal intelligence,
antennas and microwave components.  L-3 also supports a variety of
Homeland Security initiatives with products and services.  Its
customers include the Department of Defense, Department of
Homeland Security, selected U.S. Government intelligence agencies
and aerospace prime contractors.

L-3 Communications Corporation's 7-5/8% Senior Subordinated Notes
due 2012 carry Moody's Investors Service's Ba3 rating and Standard
& Poor's BB+ rating.


LEVEL 3: S&P Assigns CCC- Rating to Proposed $150MM Notes Issue
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC-' rating to
the proposed $150 million convertible senior notes due 2012 being
offered by Level 3 Communications Inc. (CCC+/Stable/B-3), a
wholesale long-haul telecommunications carrier.

Offering proceeds, together with approximately $600 million in
cash from a proposed primary offering of 125 million shares of
common stock, will be used:

   * to purchase some or all of the $398 million of 9.125% senior
     notes due 2008 and the $62 million of 10.5% senior discount
     notes due 2008; and

   * for general corporate purposes.

All ratings on Level 3 are affirmed.
     
The planned repayment of some or all of the two 2008 debt issues
could reduce the remaining amount outstanding due in that year to
about $140 million, providing modest financial profile
improvement.

In addition, Broomfield, Colorado-based Level 3's recent
acquisitions have included significant equity components,
deleveraging the company somewhat.  Level 3's relatively good
access to debt and equity financing continues to bolster
liquidity.  Still, revenue growth remains under pressure from
price compression, despite rising traffic volumes and the
company's initial indications of improving industry conditions.
     
"We expect negative discretionary cash flow through at least the
medium term, making the company potentially reliant on its cash
balance and external financing for its operating needs for an
extended period," said Standard & Poor's credit analyst Eric Geil.

"The company is likely to use potential below-par or maturity-
lengthening debt exchanges to extend its debt maturities, and we
could view these transactions as tantamount to a default on
original debt issue terms."
     
Level 3's liquidity and access to capital markets provides some
cushion to weather the weak industry climate.
     
"We could consider a positive outlook if recent industry
improvement proves sustainable and the company's considerable
capital investments and acquisitions yield consistent revenue
growth that translates into expanding EBITDA and discretionary
cash flow," Mr. Geil said.

"However, if revenue gained from recent acquisitions does not lead
to sustainable growth of EBITDA and discretionary cash flow and if
access to external liquidity falters, we could revise the outlook
to negative.  In addition, if Level 3 engages in potential debt-
exchange transactions that we deem to be coercive, we would
temporarily lower the rating to 'SD', indicating a selective
default."


LORAL SPACE: Unstayed Confirmation Order Moots Appeal
-----------------------------------------------------
The Loral Stockholders Protective Committee took an appeal to the
U.S. District Court for the Southern District of New York from
Bankruptcy Judge Robert Drain's Aug. 1, 2005, order confirming
Loral Space & Communications Ltd.'s Fourth Amended Joint Plan of
Reorganization.  In an Order entered May 26, 2006, District Judge
Marrero tells the shareholder group that their appeal is moot and
must be dismissed.

Judge Marrero's Decision is published at 2006 WL 1458465.  

The District Court observes that the committee failed to seek a
stay pending appeal.  Moreover, there was no showing that the
parties who might be adversely affected by the appeal had been
notified thereof or given an opportunity to participate.  The
transactions that occurred in reliance on the confirmed plan were
simply too numerous, and a reopening of the confirmation
proceedings for re-valuation and possible redistribution of estate
assets would create an unmanageable situation for the bankruptcy
court.

                  About Loral Space

Loral Space & Communications -- http://www.loral.com/-- is a  
satellite communications company.  It owns and operates a fleet of
telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and provide
access to Internet services and other value-added communications
services.  Loral also is a world-class leader in the design and
manufacture of satellites and satellite systems for commercial and
government applications including direct-to-home television,
broadband communications, wireless telephony, weather monitoring
and air traffic management.

The Company and various affiliates filed for chapter 11 protection
(Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003.  Stephen
Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges
LLP, represented the Debtors in their successful restructuring and
prosecution of their Fourth Amended Joint Plan of Reorganization
to confirmation on Aug. 1, 2005.  As of Dec. 31, 2004, the Company
listed assets totaling approximately $1.2 billion and liabilities
totaling approximately $2.3 billion.


LORBER INDUSTRIES: Wants Until Sept. 12 to Decide on Leases
-----------------------------------------------------------
Lorber Industries of California asks the U.S. Bankruptcy Court for
the Central District of California in Los Angeles to extend, until
Sept. 12, 2006, the period within which it can assume, assume and
assign, or reject unexpired nonresidential real property lease.

The Debtor is in the process of retaining Lee & Associates, a
commercial real estate broker, to review the unexpired leases, and
to market those leases for assumption and assignment.

The Debtor gave the Court three reasons explaining why the
extension is warranted:

    a) the Debtor is paying for use of the leased property at the
       applicable lease rates and is continuing to perform its
       other obligation under the unexpired leases in a proper
       manner;

    b) pending its decision on the unexpired leases, the Debtor
       will perform all of its undisputed obligations arising from
       and after its bankruptcy filing; and

    c) some of the unexpired leases may be important assets of the
       Debtor's estates.  The Debtor may face with administrative
       claims if its marketing efforts were unsuccessful or the
       unexpired leases may not be assumed and assigned.

The extension, the Debtor says, will give more time to continue
the process of winding down its operations.

A list of the Debtor's unexpired leases is available for free
at http://researcharchives.com/t/s?af2

Headquartered in Gardena, California, Lorber Industries of
California -- http://www.lorberind.com/-- manufactures texturized  
and knitted fabrics.  The company filed for chapter 11 protection
on Feb. 10, 2006 (Bankr. C.D. Calif. Case No. 06-10399).  Joseph
P. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro LLP,
represents the Debtor in its restructuring efforts.  Reem J.
Bello, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP
represents the Official Committee of Unsecured Creditors.  The
Debtor's schedules show $25,580,387 in assets and $24,740,726 in
liabilities.


MARKSON ROSENTHAL: Brings In NachmanHaysBrownstein as Advisors
--------------------------------------------------------------
Markson Rosenthal & Co., Inc. obtained authority from the U.S.
Bankruptcy Court for the District of New Jersey in Newark to
employ NachmanHaysBrownstein, Inc. as its financial advisors.

NachmanHaysBrownstein is expected to:

   a) review and analyze the Debtor's business, management,
      operations, properties, financial condition and prospects;

   b) assist the Debtor in preparing operating budgets and cash
      flow projections;

   c) participate in planning and strategy discussions with
      regard to the sale of the Debtor's assets and manage due
      diligence requested by potential buyers through to closing
      of the sale of the Debtor's assets;

   d) support the Debtor's relationships with its lender and
      creditors;

   e) review the assumptions underlying the Debtor's periodic
      operating and cash flow statements and the business terms
      proposed in any potential transaction;

   f) review and provide analysis of proposed transactions for
      which the Debtor seeks Court approval;

   g) assist processes undertaken by the Debtor to sell all
      or substantially all of its assets;

   h) assist with preparation of the Debtor's reports to the
      Bankruptcy Court and the Office of the U.S. Trustee
      concerning its financial condition, operations, and other
      required information;

   i) assist with communications with the Debtor's secured and
      unsecured creditors, including any official committee of
      creditors;

   j) assist the Debtor's counsel in the preparation of any
      motions and for any hearings, and be available to testify
      in Bankruptcy Court as required; and

   k) assist the Debtor with winding-up and other liquidation
      activities in connection with any assets, obligations and
      operations of Debtor not covered by a sale.

Howard Brod Brownstein, a certified turnaround professional and
principal of NachManHaysBrownstein, told the Court that the firm
rendered services to the Debtor prior to its bankruptcy filing
in connection with the Debtor's liquidity problems.  

Mr. Brownstein assured the Court that NachManHaysBrownstein does
not hold any interest adverse to the Debtor and is a disinterested
person as that term is defined in Sec. 101(14) of the Bankruptcy
Code.

Mr. Brownstein also attested that NachManHaysBrownstein received a
$19,455 retainer from the Debtor.

                           Compensation

According to Mr. Brownstein, NHB's professionals bill:

     Designation                   Hourly Rate
     ------------                  -----------
     Principals                    $375 - $450
     Managing directors            $300 - $400
     Senior consultants               $300
     Other professional staff      $125 - $300

The Debtor has agreed to pay NHB additional compensation in
connection with its postpetition services for the sale of the
Debtor's business.  

In particular, the Debtor and NHB agreed that:

   a) in the event of a sale of all or part of the Debtor's
      business to Sonoco Corrflex, LLC or its affiliates, the
      additional compensation to NHB is capped at $10,000; or

   b) if the sale occurs to party other than Sonoco, and Sonoco
      or its affiliates act as the stalking horse bidder, the
      Additional Compensation will be $10,000 plus 4% of the
      amount by which the net total consideration from the
      successful buyer exceeds the net total consideration of
      Sonoco's stalking horse bid.  

Headquartered in Narberth, Pennsylvania, NachManHaysBrownstein
-- http://www.nhbteam.com/-- is a turnaround and crisis  
management consulting firm.  

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


MARKSON ROSENTHAL: Court OKs Drinker Biddle as Committee Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey in Newark
gave the Official Committee of Unsecured Creditors in Markson
Rosenthal & Co., Inc.'s chapter 11 cases authority to retain
Drinker Biddle & Reath LLP as its attorney, nunc pro tunc to
April 27, 2006.

As counsel, Drinker Biddle will:

   a) advise the Committee with respect to its rights, powers,
      and duties in the Debtor's chapter 11 cases;

   b) assist and advise the Committee in its consultations with
      the Debtor relative to the administration of the Debtor's
      cases including the sale of the Debtor's businesses as a
      going concern;

   c) assist the Committee in analyzing the claims of creditors
      and in negotiating with the creditors;

   d) assist the Committee with its investigation of the acts,
      conduct, assets, liabilities, and financial condition of
      the Debtor and of the operation of the Debtor's businesses
      in order to maximize the value of the Debtor's assets for
      the benefit of all creditors;

   e) assist the Committee in its analysis of, and negotiations
      with the Debtor or any third party concerning matters
      related to, among other things, the terms of a plan of
      reorganization or plan orderly liquidation;

   f) assist and advise the Committee with respect to any
      communications with the general creditor body regarding
      significant matters in the Debtor's cases;

   g) commence and prosecute necessary and appropriate actions     
      or proceedings on behalf of the Committee;

   h) review, analyze or prepare, on behalf of the Committee,
      all necessary applications, motions, answers, orders,
      reports, schedules, pleadings and other documents;

   i) represent the Committee at all hearings and other
      proceedings; and

   j) confer with other professional advisors retained by the
      Committee in providing advice to the members of the
      Committee.

Robert K. Malone, a partner with Drinker Biddle, told the Court
that the firm does not hold any interest adverse to the Debtor and
is a "disinterested" person as defined in Sec. 101(14) of the
Bankruptcy Code.

According to Mr. Malone, Drinker Biddle's professionals bill:

      Designation                  Hourly Rate
      ------------                 -----------
      Partners                     $515 - $350
      Counsel or Associates        $370 - $210
      Paraprofessionals            $190 - $125

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


MARKSON ROSENTHAL: Panel Employs Weiser as Financial Consultants
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Markson Rosenthal
& Co., Inc.'s chapter 11 cases obtained authority from the U.S.
Bankruptcy Court for the District of New Jersey in Newark to
retain Weiser, LLP, as its financial consultants, nunc pro tunc to
April 27, 2006.

Weiser is expected to:

   a) review all financial information prepared by the Debtor or
      its consultants as requested by the Committee;

   b) monitor the Debtor's activities regarding cash
      expenditures, receivable collections, asset sales and
      projected cash requirements;

   c) review the Debtor's business plan and financial projections
      to determine the feasibility of alternatives to the
      proposed sale of the Debtor's business;

   d) assist in the Debtor's sale process collectively or in
      segments, parts or other delineations, if any;

   e) attend at meetings including the Committee, the Debtor,
      creditors, their attorneys and consultants, Federal and
      state authorities, if required;

   f) review of the Debtor's periodic operating and cash flow
      statements;

   g) review of Debtor's books and records for related party
      transactions, potential preferences, fraudulent conveyances
      and other potential prepetition investigations;

   h) conduct any investigation that may be undertaken with
      respect to the prepetition acts, conduct, property,
      liabilities and financial condition of the Debtors,
      their management, creditors including the operation of
      their businesses, and as appropriate avoidance actions;

   i) review and analysis of proposed transactions for which the
      Debtors seek Court approval;

   j) assist in a sale process of the Debtors collectively or in
      segments, parts or other delineations, if any;

   k) assist the Committee in developing, evaluation, structuring
      and negotiating the terms and conditions of all potential
      plans of reorganization including preparation of a
      liquidation analysis;

   l) analysis of claims filed;

   m) estimate the value of the securities, if any, that may be
      issued to unsecured creditors under any such plan;

   n) provide expert testimony on the results of the Committee's
      findings;
  
   o) assist the Committee in developing alternative plans
      including contacting potential plan sponsors if
      appropriate; and

   p) provide the Committee with other and further financial
      advisory services with respect to the Debtors, including
      valuation, general restructuring and advice with respect to
      financial, business and economic issues, as may arise
      during the course of the restructuring as requested by the
      Committee.

James Horgan, a partner with Weiser LLP, assured the Court that
the firm does not hold any interest adverse to the Debtor and is a
"disinterested" person as that term is defined in Sec. 101(14) of
the Bankruptcy Code.

According to Mr. Horgan, the Weiser's professionals bill:

      Partners                   $320-$450
      Senior Managers            $264-$320
      Managers                   $204-$264
      Seniors                    $168-$204
      Assistants                 $108-$132
      Paraprofessionals          $72-$132

Weiser also seeks reimbursement of actual and necessary expenses,
charges and disbursements it incurs for services provided to the
Committee in the Debtor's case, Mr. Horgan said.

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


MCCLATCHY CO: Agrees to Sell Five Knight Ridder Publications
------------------------------------------------------------
The McClatchy Company entered into definitive agreements to sell
five more Knight Ridder newspapers.  As a result, McClatchy has
now entered into definitive sales agreements for 11 of the 12
newspapers it is seeking to divest.  The sale of the 11 newspapers
will bring total consideration of slightly more than $2 billion,
including cash proceeds of $1.935 billion.

"We are pleased with the full, fair prices we will receive, and
pleased that we were able to execute on these sales as we
promised," McClatchy CEO Gary Pruitt said.  "Some skeptics doubted
us on both counts, but these deals reaffirm the underlying
strength of the newspaper business, and the soundness of our plan
for acquiring Knight Ridder.  We expect to announce the sale of
the (Wilkes-Barre, PA) Times Leader in the next few weeks, which
will complete the sale of all 12 newspapers we are seeking to
divest."

The five newspapers are being sold for a total of $450 million.  
They include the Akron Beacon Journal (Ohio); Duluth News Tribune
(Minnesota) and Grand Forks Herald (North Dakota); The Fort Wayne
News-Sentinel (Indiana); and the (Aberdeen) American News (South
Dakota).  McClatchy reported on April 26 that it would sell three
California newspapers and the St. Paul Pioneer Press (Minnesota)
for $1 billion and announced on May 23 that it would sell Knight
Ridder's two newspapers in Philadelphia for $562 million.

The closing of each of the divestiture transactions is conditioned
upon the closing of McClatchy's acquisition of Knight Ridder.  
McClatchy's acquisition of Knight Ridder could close as soon as
June 27, following a planned Knight Ridder shareholders vote on
June 26.  Most of the divestiture transactions are expected to
close immediately or shortly following that closing.

"The prices we're receiving for these 11 newspapers are certainly
within the range we expected," Mr. Pruitt said.  Net after-tax
proceeds of approximately $1.4 billion from the sales will
immediately be applied to pay down debt incurred in the purchase
of Knight Ridder's 32 newspapers.  "We bought the Knight Ridder
papers for a multiple of about 9.5 times their 2005 cash flow;
these 11 newspapers taken together will bring us 11.1 times the
trailing 12-month cash flows through April," Pruitt said.

McClatchy said when divestiture plans were reported in March that
it expected sales of individual papers would generate widespread
interest and substantial returns.  "To buyers whose strategy is a
good fit, all of these papers represented outstanding
opportunities that come around only rarely in our industry," Mr.
Pruitt said.  "The fact that the sales attracted seven very
diverse and impressive purchasers for these papers speaks volumes
about the value of newspapers and the confidence of investors who
expect them to perform well.  This is a good news story for the
newspaper industry, and for everybody who understands the
essential role that quality newspapers play."

                  Background to the Transaction

On March 13, 2006, The McClatchy Company reported a definitive
agreement under which McClatchy will acquire Knight-Ridder, Inc.  
Knight Ridder publishes 32 daily newspapers in 29 U.S. markets,
with a circulation of 3.4 million daily and 4.5 million Sunday.  
Knight Ridder has websites in all of its markets and a variety of
investments in Internet and technology companies, publishes a
growing portfolio of targeted publications and maintains
investments in two newsprint companies.  Knight Ridder's Internet
operation develops and manages the company's online properties.  
It is the founder and operator of Real Cities --
http://www.RealCities.com/-- the largest national network of city  
and regional websites in more than 110 U.S. markets.

As part of that report, McClatchy said it planned to sell 11 of
the acquired newspapers that do not fit with the company's
longstanding operating strategies and acquisition criteria, and to
sell the St. Paul Pioneer Press due to anticipated anti-trust
concerns involving McClatchy's (Minneapolis) Star Tribune.

After McClatchy's planned divestitures and the close of the
Knight Ridder acquisition, The McClatchy Company will become
the nation's second-largest newspaper company measured by daily
circulation (approximately 3.2 million), with 32 daily newspapers
and approximately 50 non-dailies.  The expanded McClatchy will
own leading newspapers in many of the fastest-growing markets
nationwide, with an enhanced portfolio of Internet assets.  The
transaction is subject to customary terms and conditions,
including approval by the Knight Ridder shareholders and is
expected to close this summer.

On April 26, 2006, the McClatchy Company reported a definitive
agreement with MediaNews Group, Inc. and The Hearst Corporation
under which the companies will pay McClatchy $1 billion in cash to
acquire four newspapers. MediaNews will purchase two northern
California papers, the San Jose Mercury News and Contra Costa
Times, and Hearst will acquire the Monterey Herald, and the St.
Paul Pioneer Press in St. Paul, Minnesota.

As reported in the Troubled Company Reporter on May 24, 2006,
McClatchy agreed to sell Philadelphia Newspapers, Inc. to
Philadelphia Media Holdings LLC in a transaction valued at
$562 million.  The purchase covers the Philadelphia Inquirer
and Philadelphia Daily News, both daily newspapers, and related
media assets including philly.com.

                   About The McClatchy Company

Headquartered in Sacramento, California, The McClatchy Company --
http://www.mcclatchy.com/-- is a leading newspaper and Internet  
publisher. It publishes 12 daily and 16 non-daily newspapers
located in western coastal states, North and South Carolina, and
the Twin Cities of Minneapolis/St. Paul.  McClatchy has daily
circulation of 1.4 million and Sunday circulation of 1.8 million.  
McClatchy's newspapers include, among others, the Star Tribune in
Minneapolis, The Sacramento Bee, The Fresno Bee and The Modesto
Bee in California, The News & Observer (Raleigh, North Carolina),
The News Tribune (Tacoma, Washington), the Anchorage Daily News
and Vida en el Valle, a bilingual Spanish weekly newspaper
distributed throughout California's Central Valley.  McClatchy
also operates leading local websites in each of its daily
newspaper markets, offering readers information, comprehensive
news, advertising, e-commerce and other services, and owns and
operates McClatchy Interactive, an interactive operation that
provides websites with content, publishing tools and software
development.  McClatchy is listed on the New York Stock Exchange
under the symbol "MNI."

                          *     *     *

As reported in the Troubled Company Reporter on April 24, 2006,
Moody's Investors Service assigned a Ba1 Corporate Family Rating
to The McClatchy Company and a Ba1 rating to McClatchy's proposed
$3.75 billion senior unsecured bank credit facility, and lowered
its commercial paper rating to Not Prime from Prime-3.  The rating
actions conclude the review for downgrade initiated on March 13,
2006 in connection with the company's announced $6.5 billion
acquisition of Knight-Ridder.  The rating outlook is stable.


MERIDIAN AUTOMOTIVE: Projected Financial Data Underpinning Plan
---------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates filed
its projected financial data underpinning its first amended plan
of reorganization.

                  Meridian Automotive Systems, Inc.
          Projected Consolidated Balance Sheet (Unaudited)
                           ($ in millions)

                                 Projected   Projected   Projected
                                 Emergence   Dec. 2006   Dec. 2007
                                 ---------   ---------   ---------
Total Current Assets               $198.0      $177.2      $207.0

Property, Plant
& Equipment, net                   $187.8      $171.4      $146.9

Intangible & Other Assets          $136.0      $135.2      $133.6
                                 ---------   ---------   ---------
Total Assets                       $521.8      $483.7      $487.4
                                 =========   =========   =========

Total Current Liabilities           $89.2       $69.9       $78.2

Total Debt                         $280.6      $284.3      $290.1

Other Non-Current
Liabilities                         $36.6       $36.6       $36.6

Stockholders' Equity               $115.3       $93.0       $82.5
                                 ---------   ---------   ---------
Total Liabilities &
Stockholders' Equity               $521.8      $483.7      $487.4
                                 =========   =========   =========

                                 Projected   Projected
                                 Dec. 2008   Dec. 2009
                                 ---------   ---------
Total Current Assets               $226.7      $252.7

Property, Plant
& Equipment, net                   $118.3       $86.5

Intangible & Other Assets          $132.0      $130.3
                                 ---------   ---------
Total Assets                       $477.0      $469.5
                                 =========   =========

Total Current Liabilities           $84.9       $87.9

Total Debt                         $277.5      $276.2

Other Non-Current
Liabilities                         $36.6       $36.6

Stockholders' Equity                $78.0       $68.7
                                 ---------   ---------
Total Liabilities &
Stockholders' Equity               $477.0      $469.5
                                 =========   =========

                  Meridian Automotive Systems, Inc.
     Projected Consolidated Statements of Operations (Unaudited)
                           ($ in millions)

                   Projected    Projected   Projected   Projected
                   Jul-Dec 06   Dec. 2007   Dec. 2008   Dec. 2009
                   ----------   ---------   ---------   ---------
Total Sales           $343.1      $803.6      $861.6      $854.5
Cost of Sales         $326.9      $751.4      $802.7      $801.3
                   ----------   ---------   ---------   ---------
Gross Profit           $16.3       $52.1       $58.9       $53.2

Sales and
Administrative         $10.9       $22.6       $22.7       $22.8

Other admin
expenses                $1.9        $4.9        $5.7        $6.1
                   ----------   ---------   ---------   ---------
Income from
Operations              $3.4       $24.6       $30.5       $24.3
                   ----------   ---------   ---------   ---------
Other Income            $0.0        $0.0        $0.0        $0.0

Interest
Expense                $19.4       $33.9       $34.3       $33.4

Restructuring
Expense                 $5.9        $0.0        $0.0        $0.0
                   ----------   ---------   ---------   ---------
Income (Loss)
before tax            ($21.8)      ($9.3)      ($3.8)      ($9.1)
                   ----------   ---------   ---------   ---------
Taxes                   $0.6        $1.2        $0.7        $0.2
                   ----------   ---------   ---------   ---------
Net Income            ($22.4)     ($10.4)      ($4.5)      ($9.3)
                   ==========   =========   =========   =========
Adjusted
EBITDAR                $27.2       $74.6       $81.8       $76.4

                  Meridian Automotive Systems, Inc.
     Projected Consolidated Statements of Cash Flows (Unaudited)
                           ($ in millions)

                   Projected    Projected   Projected   Projected
                   Jul-Dec 06   Dec. 2007   Dec. 2008   Dec. 2009
                   ----------   ---------   ---------   ---------
Net income            ($22.4)     ($10.4)      ($4.5)      ($9.3)

Depreciation
& Other
Non-Cash
Adjustments            $23.8       $50.0       $51.3       $52.1

Changes in
Working Capital       ($11.5)     ($19.9)      ($6.9)      $15.0
                   ----------   ---------   ---------   ---------
Cash Flow from
Operations            ($10.1)      $19.6       $40.0       $57.8

Capital
Expenditures           ($7.5)     ($25.5)     ($22.7)     ($20.2)
                   ----------   ---------   ---------   ---------
Cash Flow from
Investing              ($7.5)     ($25.5)     ($22.7)     ($20.2)

Debt
Borrowings              $2.2        $7.1      ($11.4)         $0

Other Debt
Changes                $15.4       ($1.3)      ($1.3)      ($1.3)
                   ----------   ---------   ---------   ---------
Cash Flow from
Financing              $17.5        $5.9      ($12.6)      ($1.3)
                   ----------   ---------   ---------   ---------
Net Change in
Cash                    $0.0        $0.0        $4.6       $36.4
                   ==========   =========   =========   =========

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,  
at Winston & Strawn LLP represents the Official Committee of  
Unsecured Creditors.  The Committee also hired Ian Connor  
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,  
to prosecute an adversary proceeding against Meridian's First Lien  
Lenders and Second Lien Lenders to invalidate their liens.  When  
the Debtors filed for protection from their creditors, they listed  
$530 million in total assets and approximately $815 million in  
total liabilities.  (Meridian Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MERIDIAN: Wants to Enter into Fee Letters with 3 Potential Lenders
------------------------------------------------------------------
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code,
Meridian Automotive Systems, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to enter into fee letters with up to three potential
lenders or potential lending syndicate members in connection with
securing exit financing.

The Fee Letters will require the Debtors to:

    (a) pay due diligence fees and out-of-pocket expenses,
        including legal fees of the Potential Lenders in
        connection with their non-binding proposals to provide the
        Debtors with exit financing; and

    (b) provide indemnification of the Potential Lenders in
        connection with the exit financing.

A key element of the restructuring contemplated by the Debtors'
Plan of Reorganization, as amended, and a condition precedent to
the occurrence of the Effective Date, is the availability of an
Exit Facility that provides sufficient funding for the Debtors to
meet their cash obligations under the Plan as of the Effective
Date.

Although the Debtors have not entered into agreements with any
prospective lender, based on initial discussions with lending
institutions, the Debtors would like to continue discussions with
the Potential Lenders, based on their level of interest,
preliminary discussions of exit financing terms, and the receipt
of non-binding proposals from each of the Potential Lenders,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, tells the Court.

Mr. Brady notes that because the Debtors' negotiations with the
Potential Lenders are ongoing and confidential, the specific
terms of the Financing Proposals and the Potential Lenders'
identity can't be made public yet.

Mr. Brady relates that although the Debtors anticipate that one
or more of the Potential Lenders will provide the Exit Facility,
no commitments to lend have been made at this time and any actual
commitment to lend is subject to each Potential Lender's due
diligence and review of the Debtors.

The Debtors anticipate that each Potential Lender will ask the
Debtors to enter into a Fee Letter, which will require, among
other things, that the Debtors pay Work Fees associated with the
Potential Lenders' reasonable out-of-pocket expenses, including
legal fees, that may be incurred in connection with their due
diligence and documentation efforts.

The Debtors are still negotiating the specific terms of the Fee
Letters with the Potential Lenders.

The Potential Lenders do not wish to undertake a costly and time
consuming due diligence process to achieve a final financing
package if they must bear all of the execution risks attendant to
the financing not closing.  For this reason, the Potential
Lenders have asked the Debtors to seek advance authority to pay
the Work Fees.

Moreover, each Potential Lender has asked the Debtors to
indemnify the Potential Lenders from and against any and all
claims, liabilities and expenses, except to the extent the claim,
liability, or expense is found to have resulted primarily from
the Indemnified Party's gross negligence, bad faith, or willful
misconduct.

The Debtors believe that the benefits of having a competitive
financing process will outweigh the costs associated with the
Potential Lenders' due diligence efforts.

The total Work Fees payable to any single Potential Lender will
not exceed $250,000.  The Work Fees payable to all Potential
Lenders will not exceed $600,000 in the aggregate.

The Debtors believe that the total Work Fees that may be payable
to the Potential Lenders are reasonable and consistent with
amounts normally demanded in the marketplace.  Thus, Mr. Brady
asserts, the Court should authorize the Debtors to enter into the
Fee Letters and pay the Work Fees to the Potential Lenders so
that the Debtors can continue to expeditiously move toward
obtaining the Exit Facility and securing timely confirmation of
the Plan.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,  
at Winston & Strawn LLP represents the Official Committee of  
Unsecured Creditors.  The Committee also hired Ian Connor  
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,  
to prosecute an adversary proceeding against Meridian's First Lien  
Lenders and Second Lien Lenders to invalidate their liens.  When  
the Debtors filed for protection from their creditors, they listed  
$530 million in total assets and approximately $815 million in  
total liabilities.  (Meridian Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MERIDIAN AUTOMOTIVE: Asks for Court's Nod on $375MM Exit Facility
-----------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to enter into an exit facility to fund their Plan of
Reorganization.

The Debtors expect the Exit Facility, in the total amount of up
to $375,000,000, to consist of:

    (i) a senior secured revolving line of credit in the amount of
        $75,000,000;

   (ii) a term loan in the amount of approximately $125,000,000
        plus a $25,000,000 synthetic letter of credit facility;
        and

  (iii) a term loan of approximately $150,000,000.

The Debtors anticipate that the principal terms of the Exit
Facility will be no less favorable than:

A) Exit Revolving Credit Facility

           Borrower: Reorganized Meridian

         Guarantors: All domestic subsidiaries of the Borrower

            Lenders: An agent and syndicate of lenders to be
                     selected by Meridian upon the conclusion of
                     negotiations.

      Facility Type: Asset based revolving line of credit.

             Amount: $75,000,000

      Maturity Date: No sooner than 4th anniversary date of the
                     Effective Date.

    Use of Proceeds: To refinance the existing DIP Credit
                     Agreement, make Distributions to creditors
                     under the Plan, pay fees and expenses
                     associated with the Exit Facility, and to
                     fund the ongoing working capital needs and
                     general corporate purposes of the Reorganized
                     Debtors.

      Interest Rate: Market rate

   Underwriting and
    Commitment Fees: Market rate

    Unused Line Fee: Market rate

           Security: Subject to the financing markets and together
                     with the Exit Term Loan A Credit Facility, a
                     first priority lien on substantially all
                     assets of the Reorganized Debtors, including
                     100% of the capital stock of, or other equity
                     interests in, Reorganized Meridian's domestic
                     subsidiaries, and no more than 65% of the
                     capital stock of, or other equity interests
                     in, Reorganized Meridian's foreign
                     subsidiaries.

           Priority: The Exit Revolving Credit Facility and Exit
                     Term Loan A Credit Facility will be senior in
                     priority to the Exit Term Loan B Credit
                     Facility.

   Representations,
        Warranties,
        Covenants &
  Events of Default: Customary for facilities of this type.

B) Exit Term Loan A Credit Facility

           Borrower: Reorganized Meridian

         Guarantors: All domestic subsidiaries of the Borrower.

            Lenders: An agent and syndicate of lenders to be
                     selected by Meridian upon the conclusion of
                     negotiations.

      Facility Type: Term loan.

             Amount: $125,000,000, plus $25,000,000 synthetic
                     letter of credit facility.

      Maturity Date: No sooner than the 5th anniversary of the
                     Effective Date.

    Use of Proceeds: To refinance the existing DIP Credit
                     Agreement, including DIP Letters of Credit,
                     and make Distributions to creditors under the
                     Plan.

      Interest Rate: Market rate

     Commitment and
       Underwriting
               Fees: Market rate

         Letters of
         Credit Fee: Market Rate

       Amortization: 1% per year, with a bullet at maturity.

           Security: Subject to the financing markets and together
                     with the Exit Term Loan A Credit Facility, a
                     first priority lien on substantially all
                     assets of the Reorganized Debtors, including
                     100% of the capital stock of, or other equity
                     interests in, Reorganized Meridian's domestic
                     subsidiaries, and no more than 65% of the
                     capital stock of, or other equity interests
                     in, Reorganized Meridian's foreign
                     subsidiaries.

           Priority: The Exit Revolving Credit Facility and Exit
                     Term Loan A Credit Facility will be senior in
                     priority to the Exit Term Loan B Credit
                     Facility and the New Third Lien Notes.

   Representations,
      and Events of
            Default: Customary for facilities of this type.

C) Exit Term Loan B Credit Facility

           Borrower: Reorganized Meridian

         Guarantors: All domestic subsidiaries of the Borrower.

            Lenders: An agent and syndicate of lenders to be
                     selected by Meridian upon the conclusion of
                     negotiations.

      Facility Type: Term loan

             Amount: $150,000,000

      Maturity Date: No sooner than the 6h anniversary of the
                     Effective Date.

    Use of proceeds: To make Distributions to creditors under the
                     Plan.

      Interest Rate: Market rate

     Commitment and
       Underwriting
               Fees: Market rate

       Amortization: None, bullet at maturity.

           Security: Junior priority lien on substantially all
                     assets of the Reorganized Debtors, including
                     100% of the capital stock of, or other equity
                     interests in, Reorganized Meridian's domestic
                     subsidiaries, and 65% of the capital stock
                     of, or other equity interest in, Reorganized
                     Meridian's foreign subsidiaries.

           Priority: Liens securing the Exit Term Loan B Credit
                     Facility will be junior in priority to the
                     Exit Revolving Credit Facility and the Exit
                     Term Loan A Credit Facility, and senior in
                     priority to the liens securing the New Third
                     Lien Notes, if any.

   Representations,
        Warranties,
      Covenants and
  Events of Default: Customary for facilities of this type.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,  
at Winston & Strawn LLP represents the Official Committee of  
Unsecured Creditors.  The Committee also hired Ian Connor  
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,  
to prosecute an adversary proceeding against Meridian's First Lien  
Lenders and Second Lien Lenders to invalidate their liens.  When  
the Debtors filed for protection from their creditors, they listed  
$530 million in total assets and approximately $815 million in  
total liabilities.  (Meridian Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MERRILL LYNCH: DBRS Puts Low-B Rating on Six Certificate Classes
----------------------------------------------------------------
Dominion Bond Rating Service assigned provisional ratings as
indicated above to the various classes of Merrill Lynch Financial
Assets Inc.'s Commercial Mortgage Pass-Through Certificates,
Series 2006-Canada 19 AAA through B (low) (see above).  The XP and
XC balances are notional.

   * Class A-1 New Rating - Provisional AAA

   * Class A-2 New Rating - Provisional AAA

   * Class A-3 New Rating - Provisional AAA

   * Class XP-1 New Rating - Provisional AAA

   * Class XP-2 New Rating - Provisional AAA

   * Class XC New Rating - Provisional AAA

   * Class B New Rating - Provisional AA

   * Class C New Rating - Provisional A

   * Class D New Rating - Provisional BBB

   * Class E New Rating - Provisional BBB (low)

   * Class F New Rating - Provisional BB (high)

   * Class G New Rating - Provisional BB

   * Class H New Rating - Provisional BB (low)

   * Class J New Rating - Provisional B (high)

   * Class K New Rating - Provisional B

   * Class L New Rating - Provisional B (low)

Finalization of ratings is contingent upon receipt of final
documents conforming to information already received.

The collateral consists of 75 fixed-rate loans secured by 124
multi-family, mobile home parks, and commercial properties. The
pool has a total loan balance of Cdn$584,186,547.  DBRS inspected
79.6% of the pool.  Based on DBRS's site inspections, 10.8% of the
sampled properties are considered to have excellent property
quality and 39.1% of the sampled properties to have above-average
property quality.

Thirty-nine loans representing 41% of the pool provide for full or
partial recourse to the borrowers and/or guarantors. DBRS shadow-
rates three loans investment grade, representing 8% of the pool.  
The investment-grade, shadow-rated loans indicate the long-term
stability of the underlying assets.  The shadow-rated investment-
grade ratings assigned by DBRS:

   * Marriott Pooled Senior Loan - BBB (low)
   * Wal-Mart Collingwood - AA
   * Winnipeg Health - A (high)

Although the pool is heavily concentrated in the top-ten loans,
representing 45.9% of the pool balance, two of the top-ten loans,
representing 11.7% of the pool, are secured by multiple
properties, which adds diversity to the pool. Twelve loans,
representing 23.9% of the pool, have a DBRS-stressed loan-to-value
greater than 90%.  Five loans are secured by hotels and three
loans are secured by retirement homes, both property types are
considered more volatile.

The pool weighted average DBRS-stressed term debt service coverage
ratio is 1.40 times; the weighted average DBRS-stressed refinance
DSCR is 1.34 times.  The DBRS-stressed loan-to-value is 82.9%.


NIGHTHAWK SYSTEMS: Posts $1.3 MM Net Loss in 2006 1st Fiscal Qtr.
-----------------------------------------------------------------
Nighthawk Systems, Inc., 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 incurred a $1,315,681 net loss on $141,387 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $1,028,725
in total assets and $3,150,971 in total liabilities, resulting in
a $2,122,246 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $989,269 in total current assets available to pay
$1,046,135 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?abe

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
GHP Horwath, P.C., in Denver, Colorado, raised substantial doubt
about Nighthawk 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 net loss of $2.7  million, negative working
capital of 0.5 million, and stockholders' deficit of $2.5 million.

                      About Nighthawk Systems

Nighthawk Systems, Inc., designs and manufactures ready-to-deploy
intelligent remote power control products that can remotely
control virtually any device from any location.


NORTEL CORP: DBRS Holds Rating on $1.8 Billion Notes at B (low)
---------------------------------------------------------------
Dominion Bond Rating Service confirmed the ratings of Nortel
Networks Corporation, Nortel Networks Limited, Nortel Networks
Inc., and Nortel Networks Capital Corporation as indicated below,
with all trends now Stable.

   * Senior Secured Bank Debt Confirmed B

   * Secured Senior Notes Confirmed B

   * Senior Unsecured Notes Confirmed B (low)
   
   * Convertible Notes  Confirmed B (low)

   * Senior Unsecured Bank Debt Confirmed B (low)

   * Notes & Long-Term Senior Debt Confirmed B (low) Stb  

   * Class A, Redeemable Preferred Shares
     Confirmed Pfd-5 (low) Stb  

   * Class A, Non-Cumulative Redeemable Preferred Shares
     Confirmed Pfd-5 (low) Stb

Specific ratings for Nortel issues are listed at the bottom of
this press release.  This resolves the "Under Review with Negative
Implications" status that Nortel's ratings were placed under as of
March 10, 2006.  The confirmation of Nortel's ratings is a result
of Nortel filing its 2005 10-K on May 1, 2006, and its 10-Q for
the first quarter of 2006 on June 6, 2006.

Therefore, Nortel has brought its financial disclosure back in
line within the timelines of its recently received amendments and
waivers relating to both its Secured and Unsecured Bank facilities
and the Export Development Canada facility.  In addition, Nortel
is also now in compliance under its public indentures.

DBRS notes that the delay in the Company's filings related to
restatement of revenues, primarily related to contract revenues
being recognized in the wrong periods and subsequently deferred to
future periods, resulting in a negative revenue adjustment of
approximately $1.1 billion relating to the 2003-2005 period and
US$384 million for prior periods.

The impact on net earnings reported for the 2003-2005 period was a
decrease of $461 million, and $70 million for prior periods.  
Although these adjustments have increased substantially since the
initial numbers were disclosed on March 10, 2006, DBRS does
acknowledge that a portion of these revenues and earnings will
flow through into future periods.

With its filing issues resolved, DBRS has now reinstated its long-
term ratings of B at the secured level and B (low) at the
unsecured level. Nortel's current ratings remain underpinned by
its product and geographic diversity along with its ability to
generate near breakeven free cash flow on a normalized basis.

However, DBRS will continue to monitor Nortel's ability to
maintain its cash balances above $1.25 billion as required under
its bank facilities with pro forma cash currently at $2.1 billion
along with the Company's ability to extend its debt maturity
profile.  In addition, while Nortel has recently announced its
strategy to improve operating performance over the medium term,
DBRS still believes that the Company will face near-term
challenges resulting from the consolidation of its competitors and
customers along with the increased presence of emerging market
vendors in both the wireline and wireless equipment markets.

Specific DBRS ratings on Nortel debt issues:

Nortel Networks Corporation:

   * $1.8 billion Convertible Notes due September 2008 - B (low)

Nortel Networks Limited:

   * $200 million Secured Senior Notes due January 2023 - B

Nortel Networks Inc.:

   * $850 million Senior Secured Bank Debt maturing
     February 2007 - B

   * $450 million Senior Unsecured Bank Debt maturing
     February 2007 - B (low)

Nortel Networks Capital Corporation:

   * $150 million Senior Unsecured Notes due
     June 2006 - B (low)
   * $150 million Senior Unsecured Notes due
     January 2026 - B (low)

Nortel has two types of Class A Preferred Shares; for one of these
types, the unpaid dividends are non-cumulative.


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

As reported in the Troubled Company Reporter on May 30, 2006,
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, relates that the preparation and filing of the
Debtors' schedules of assets and liabilities on May 1, 2006, was
a major undertaking considering that they have more than 60,000
creditors and are party to over 100,000 executory contracts.  

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

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

                    About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NORTHWEST AIRLINES: Wants to Enter Into Amended IAM CBA Amendment
-----------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York for
permission to enter into an amended collective bargaining
agreement with the International Association of Machinist.

IAM represents the Debtors' airport agents, ground personnel,
baggage handlers, plant protection employees, clerical workers and
certain training personnel

The Debtors and IAM are parties to four collective bargaining
agreements:

   (a) the Clerical Office, Fleet and Passenger Services
       Agreement;

   (b) the Equipment Service and Stock Clerk Personnel Agreement;

   (c) the Plant Protection Employees Agreement; and

   (d) the Flight Simulator Technicians and Simulator Support
       Specialists Agreement.

The IAM CBAs became effective February 1997, and became amendable
as of February 2003.  The IAM CBAs remain in effect pursuant to
status quo provisions of the Railway Labor Act, 45 U.S.C. Section
151 et. seq.

On March 7, 2006, approximately 7,700 of the Debtors' gate
agents, reservation agents, clerical employees and security
guards covered by either the COFPS Agreement or the PP Agreement
ratified the modifications to their CBAs.

Simultaneously, IAM members covered by either the ESSC Agreement
or the Sim Tech Agreement failed to ratify the modifications to
their CBA.  The ESSC Agreement covers 5,632 IAM members and the
Sim Tech Agreement covers 42 IAM members.

On May 19, 2006, the Debtors reached a tentative agreement with
the IAM negotiating committee on terms for modification of the
ESSC Agreement.  The ESSC's ratification vote is set to conclude
on June 9, 2006.

                         Amendments

The Debtors are seeking the Court's approval at this time so that
the modified CBAs governing COFPS, PP and ESSC workers may be
implemented immediately on ratification.  Should the ESSC Letter
of Agreement not be ratified, the Debtors will withdraw their
request.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, explains that the modifications to the COFPS
Agreement, PP Agreement and ESSC Agreement will result in the
Debtors achieving cost savings targeted from those groups.

The new agreements will provide:

   -- an 11.5% reduction in base pay rates and a new pay
      progression, with pay increases of 1% in 2008 and 1.5% in
      2009-2010 from the pay reductions when implemented.  The
      wages adjustment represents a 7.5 percentage point increase
      in rates in effect as a result of the reductions
      implemented under the interim relief granted to the Debtors
      under Section 1113(e) of the Bankruptcy Code;

   -- new work rules designed to increase productivity, including
      reduced restrictions on the use of part-time employees and
      reduced vacation accrual rates, sick leave pay rates and
      paid holidays;

   -- increased ability to outsource customer service agents
      services and other services to provider greater
      flexibility; and

   -- replacement of the Debtors' current group medical and
      dental plans applicable to the IAM with a company-wide
      medical/dental plan requiring 15% employee contribution to
      the premiums, and modifying deductibles and insurance
      coverage contributions.

The CBAs, as modified, will become amendable on December 31, 2010
if the Debtors emerge from bankruptcy in 2006.  If the Debtors do
not emerge from bankruptcy until 2007, the agreement may be
extended until December 31, 2011.

                        Pension Program

The IAM Letters of Agreement contemplates changes to the IAM
members' pension plans.  

If the Debtors' defined benefit pension program remains frozen,
future pension contributions by the Debtors to employees covered
by the COFPS and ESSC Agreements will be provided under the IAM
National Pension Plan, with a 5% employer contribution.

Employees covered by the PP Agreements will be given a 5%
employer contribution to a defined contribution plan.  If the
defined benefit plan is terminated, the Debtors' contribution
will increase to 6.5% for both groups.

The Debtors may seek to terminate their defined benefit pension
plans if timely and sufficient legislation is not enacted to
reduce pension-funding costs to acceptable levels or the Debtors
suffer adverse economic circumstances.  Termination of the
defined benefit pension plan will not violate the IAM CBAs.

                        Profit Sharing

IAM members will participate in Northwest's profit sharing plan
based on this formula:

   (a) if the Debtors' pre-tax income as a percent of revenue for
       any year in which the plan is in place is less than or
       equal to 10%, the aggregate payout amount will be equal to
       10% of pre-tax income, provided the amount is in excess of
       $1,000,000;

   (b) if the Debtors' Pre-Tax Margin for a Plan Year is greater
       than 10%, the aggregate payout amount will be equal to the
       sum of:

         (i) 10% of that portion of income, which would have
             resulted in the Pre-Tax Margin being equal to 10%;
             and
    
        (ii) 15% of Income for the Plan Year in excess of the 10%
             Margin Portion,

       provided the sum is in excess of $1,000,000; and

   (c) if either the pre-tax income or the sum of 10% Margin
       Portion and the 15% Excess Margin Portion is less than
       $1,000,000, the aggregate payment amount will be zero.

                        $181,000,000 Claim

IAM will have an allowed $181,000,000 general unsecured
prepetition claim in the Debtors' Chapter 11 case.  IAM releases
all other claims with the exception of certain grievance claims.  

The IAM Claim does not arise until the effective date of a plan
of reorganization for the Debtors and will not be counted for
voting purposes to accept or reject the plan.

The Debtors and IAM reserve their rights and arguments with
respect to the issues of whether a claim for damages arises from
rejection of a collective bargaining agreement and to the amount
of that claim, should it exist.  In the event the Debtors agree
to the treatment of that claim with any other union arising from
the rejection, the IAM will be accorded consistent treatment.

                 Concessions from Other Groups

The Debtors are required to implement revisions to the labor
contracts of the Debtors' other unionized employees, which, when
combined with savings from the Debtors' nonunion employees,
results in cost savings that are reasonably projected to produce
$1,131,000,000 in average annual savings in labor costs:

   -- from January 1, 2006, to December 31, 2010; or

   -- December 31, 2011, if the Debtors do not emerge from
      bankruptcy until 2007.

                    About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NORTHWEST AIRLINES: Asks Court to Extend Removal Period to Nov. 15
------------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York to
further extend the period within which they may remove civil
actions to the earlier of:

   (a) November 15, 2006; or

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

The Debtors relate that they are parties to numerous actions
currently pending before various federal and state courts and
administrative agencies.  The civil actions involve a wide variety
of claims including breach of contract and personal injury claims.

The request is without prejudice to their right to seek a further
extension after notice and a hearing.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, explains that to determine whether to remove any of
the Civil Actions, the Debtors must:

    -- conduct a comprehensive analysis of the Civil Actions and
       evaluate various factors under, inter alia, 28 U.S.C.
       Section 1452; and

    -- determine whether the outcome of a Civil Action may alter
       the Debtors' rights and liabilities and effect the
       ultimate distribution to the Debtors' creditors.

Mr. Petrick relates that the Debtors, their management and
employees, and their professionals have not had sufficient time
to investigate fully the Civil Actions or evaluate completely the
merits of removing those actions because of the considerable time
and attention required to administer the Chapter 11 cases and to
operate their business.

Mr. Petrick explains that an extension will:

   -- afford the Debtors a sufficient opportunity to make fully
      informed decisions concerning removal of each Civil Action;

   -- assure that the Debtors do not forfeit valuable rights of
      removal under Section 1452; and

   -- not prejudice the rights of the Debtors' adversaries.

If the Debtors are ultimately successful in removing any of the
Civil Actions, any party to that action may seek to have it
remanded back to the Court or relevant administrative agency from
which it came pursuant to Section 1452(b).  

Therefore, the extension of time period during which the Civil
Actions may be removed will not prejudice the rights of other
parties, Mr. Petrick contends.

                    About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NORTHWESTERN CORP: Seeks Approval of Asset Sale to Babcock & Brown
------------------------------------------------------------------
NorthWestern Corporation, dba NorthWestern Energy, submitted
formal applications with state and federal regulatory authorities
seeking approval of its sale to Babcock & Brown Infrastructure.

NorthWestern and BBI have filed joint applications with the
Federal Energy Regulatory Commission, the Montana Public Service
Commission and the Nebraska Public Service Commission and
submitted a "petition for a declaratory ruling" to the South
Dakota Public Utilities Commission.

"We look forward to working with all of the regulatory agencies to
successfully complete this process," Steve Boulton, Chief
Executive Officer of Babcock & Brown Infrastructure, said.  "We
expect commissioners and staff to review these applications
carefully and to conduct a constructive and thorough examination
of the proposed sale of NorthWestern to BBI.  We are confident
that once this review is completed, the benefits to all
stakeholders, and particularly NorthWestern's customers, will be
confirmed."

"NorthWestern is a financially sound company and reliable utility
service provider in three states," Mike Hanson, President and
Chief Executive Officer of NorthWestern Energy, said.  "We look
forward to demonstrating how BBI's acquisition will complement
NorthWestern's existing strategy and long tradition of providing
safe and reliable service for our customers and communities.  This
transaction simply allows NorthWestern to exchange one set of
shareholders with a short-term outlook for owners with a long-term
strategy and vision of the future."

The filings initiate the regulatory approval process that is
necessary before the $2.2 billion acquisition of NorthWestern can
be completed.  The transaction, which is also subject to
NorthWestern shareholder approval, is expected to close in 2007.  
Upon closing NorthWestern's common stock will cease to be publicly
traded, and the Company will become a locally managed subsidiary
of BBI.

              About Babcock & Brown Infrastructure

Babcock & Brown Infrastructure -- http://www.bbinfrastructure.com/
-- is a utility infrastructure company based in Sydney, Australia,
listed on the Australian Stock Exchange and admitted to the ASX
200 Index.  BBI owns and manages utility and infrastructure
businesses worldwide.  BBI owns companies in electricity
transmission and distribution, gas transmission and distribution,
and transport infrastructure, and has ownership interests in
thermal and renewable power generation.  BBI has a current
enterprise value of approximately $4.9 billion.

                    About NorthWestern Energy

NorthWestern Energy -- http://www.northwesternenergy.com/-- is  
one of the largest providers of electricity and natural gas in the
Upper Midwest and Northwest, serving approximately 628,500
customers in Montana, South Dakota and Nebraska.

                          *     *      *

As reported in the Troubled Company Reporter on May 1, 2006,
Moody's Investors Service affirmed the ratings of NorthWestern
Corporation.  The rating outlook for Northwestern remains
positive.  The action follows the announcement that Northwestern
had entered into a purchase and sale agreement with Babcock &
Brown Infrastructure, for BBI's purchase of all of the shares of
NOR.  Moody's also affirmed NOR's other ratings, including its
senior secured debt of Ba1, senior unsecured debt of Ba2 and its
SGL-2 liquidity rating.


NRG VICTORY: U.S. Court Hearing on Chapter 15 Petition Deferred
---------------------------------------------------------------
The hearing to consider the chapter 15 petition filed by Alan
Boyce, as foreign representative of NRG Victory Reinsurance
Limited, in the U.S. Bankruptcy Court for the Southern District of
New York, is deferred from June 12, 2006, to a date to be
confirmed after a reconvened meeting of creditors is scheduled.

A meeting on a proposed scheme of arrangement with NRG Victory and
its creditors has been held on May 23, 2006 in London.  However,
in the days leading up to the Creditors' Meeting, certain of NRG
Victory's reinsurance policyholders asserted that they had very
significant claims against NRG and expressed concern as to how
their claims would be valued under the proposed Scheme.

Given the significant impact which the Scheme will have on both
NRG and its Creditors, NRG concluded that more time is required to
understand the nature of the claims and to discuss with
policyholders their concerns about how those claims would be
treated under the Scheme.  The decision was then taken to adjourn
the Creditors' Meeting.  NRG will notify its Creditors of the date
and location of the reconvened meeting through its Website
http://www.nrg-solventscheme.co.uk/

Notice of the Creditors' Meeting and other related documents have
been circulated to known Creditors, brokers and other
intermediaries.  Copies of the documents may be obtained from:

     NRG Victory Reinsurance Limited
     c/o NRG Victory Management Services Limited
     Attn: Martin Baker
           Lyn Davies
     Charter House, Park Street,
     Ashford, Kent,
     TN24 8EQ United Kingdom
     Tel: +44(0) 1233 722 600
     Fax: +44(0) 1233 722 601

Copies of the documents can also be downloaded and printed from
NRG's Website at http://www.nrg-solventscheme.co.uk/
  
Headquartered in Ashford, England, NRG Victory Reinsurance Ltd.
operated a reinsurance company but ceased underwriting operations
in 1993.  Alan Boyce, in his capacity as foreign representative
for the company, filed a chapter 15 petition on May 12, 2006
(Bankr. S.D.N.Y. Case No. 06-11052).  Sara M. Tapinekis, Esq.,
Andrew P. Brozman, Esq., David A. Sullivan, Esq., at Clifford
Chance US LLP, represents Mr. Boyce in the U.S. proceedings.  As
of the petition date, the Debtor estimated more than US$100
million in assets and debts.


OLYMPIA GROUP: Assets Auction Set for June 13 in California
-----------------------------------------------------------
Great American Group will conduct an auction of Olympia Group
Inc.'s assets at 10:30 a.m., on June 13, 2006, at 14635 Baldwin
Park Town Center, Baldwin Park in California.  No inventory will
be available for viewing during the auction.  However, items are
available for viewing from 8:00 a.m. to 5:00 p.m. on June 12,
2006, at 505 South 7th Avenue, City of Industry in California.

The auction, approved by the U.S. Bankruptcy Court for the Central
District of California, will feature over $15 million of branded
home and gardening tools including Olympia Tool, Roughneck,
Village Blacksmith, Thorsen, Continental, E-Z Read and Babco.

Over 200 of the Debtor's patents and trademarks, with an appraised
value of $2.5 million, are also up for sale during the auction.  
The Debtor's intellectual property rights are well known in the
consumer and trade industry and are protected in the U.S., Mexico,
Canada, China, Great Britain, and Germany.

All buyers are required to make a 25% deposit on the day of the
sale for all purchases.  A 10% buyer's premium will apply to each
item sold during the auction.  A 13% buyer's premium will apply to
on-line buyers.

Interested buyers may contact:

      Joe Rivkin
      Great American Group
      Phone: 626-336-4999 ext 113
      
Buyers can also bid in real-time along with the live auction
attendees at http://www.greatamerican.com/Online bidders are  
required to pre-register at Great American's website.

Headquartered in City of Industry, California, Olympia Group Inc.
manufactures hand & garden tools, abrasives, tool carrying
containers, pneumatics, cutting and striking tools.  The Company
filed for chapter 11 protection on Jan. 31, 2006 (Bankr. C.D.
Calif. Case No. 06-10111).  Jeffrey W. Dulberg, Esq., at Pachulski
Stang Ziehl Young & Jones PC, represents the Debtor.


ORIS AUTOMOTIVE: Court Okays Johnston Barton as Bankruptcy Counsel
------------------------------------------------------------------
The Honorable Tamara O. Mitchell of the U.S. Bankruptcy Court for
the Northern District of Alabama in Birmingham authorized Oris
Automotive Parts Alabama, Ltd., to employ Johnston, Barton,
Proctor & Powell LLP as its bankruptcy counsel.

As reported in the Troubled Company Reporter on April 10, 2006,
Johnston Barton will:

    a. give the Debtor legal advice with respect to its duties as
       debtor-in-possession in the continued operation of its
       business and management of its assets;

    b. prepare on behalf of the Debtor necessary motions,
       applications, answers, contracts, reports and other legal
       documents;

    c. perform any and all legal services on behalf of the Debtor
       arising out of or connected with the bankruptcy
       proceedings;

    d. perform other legal services for the Debtor including, but
       not limited to, work arising out of labor, tax,
       environmental, corporate, litigation and other matters
       involving the Debtor;

    e. advise and consult with the Debtor for the preparation of
       all necessary schedules, disclosure statement and plans of
       reorganization; and

    f. perform all other legal services required by the Debtor in
       connection with the Debtor's chapter 11 case.

Clark R. Hammond, Esq., a partner at Johnston Barton, told the
Court that the Firm's professionals bill:

      Professional                  Designation      Hourly Rate
      ------------                  -----------      -----------
      Clark R. Hammond, Esq.        Partner             $330
      Shayana Boyd Davis, Esq.      Associate           $230
      Max A. Moseley, Esq.          Associate           $220
      Lindan J. Hill, Esq.          Associate           $200

Mr. Hammond assured the Court that the Firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.

Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama,
Ltd. -- http://www.oris-gmbh.de/-- manufactures automotive parts.
The company filed for chapter 11 protection on March 16, 2006
(Bankr. N.D. Ala. Case No. 06-00813).  Clark R. Hammond, Esq., at
Johnston, Barton, Proctor & Powell LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million to
$10 million and debts between $10 million to $50 million.


ORIS AUTOMOTIVE: Bids for Assets Must be Submitted by June 16
-------------------------------------------------------------
The Honorable Tamara O. Mitchell of the U.S. Bankruptcy Court for
the Northern District of Alabama in Birmingham approved Oris
Automotive Parts Alabama, Ltd.'s modified sales procedures.

Judge Mitchell also approved the $6,300,000 bid of Flex-N-Gate as
the stalking horse bidder for the Debtor's leasehold interest in
real estate, equipment, inventory, intellectual property and other
related assets free and clear of liens, claims, encumbrances and
interests.  Flex-N-Gate is entitled to a $250,000 break-up fee if
the Debtor's assets are sold to another buyer.

                              Auction

The auction of the Debtor's assets will be held at the offices of
the Debtor's counsel at 9:00 a.m. on June 19, 2006.

Bids must be submitted and received no later than 12:00 p.m. on
June 16, 2006, to:

      Clark R. Hammond, Esq.
      Johnston Barton Proctor & Powell, LLP
      1901 6th Avenue North, Suite 2900
      Birmingham, AL 35203
      Fax: (205) 458-9500

All potential bidders must make a $500,000 deposit in certified
check, cashier's check or letter of credit from a financial
institution acceptable to the Debtor, or by wire transfer.

The initial Bid received by the Debtor from qualified bidders
prior to the auction must be for cash consideration of $300,000
more than the consideration payable under the EOI or the Asset
Purchase Agreement.  The initial overbid made at the Auction, must
be a qualified bid of not less than $6,600,000, and any successive
overbids, will be made in increments of not less than $50,000.

Objections, if any, must be submitted to the Court by 12:00 p.m.
on June 16, 2006.  Judge Mitchell will convene a sale hearing at
11:00 a.m. on June 19, 2006.

The Debtor believes that an immediate sale of the Assets is
essential in order to obtain the maximum value for the Debtor's
estate and its creditors.

The Debtor wants to consummate the sale at the earliest possible
date so that the value of the assets will be optimized
and not substantially diminished.

Further, the Debtor believes that if the sale process is delayed,
potential bidders who have expressed interest in the Debtor's
assets may lose interest.

Moreover, the Debtor source of funding for operations will
terminate on or before June 30, 2006.  The APA entered into with
Flex provides that it is obligated to consummate the sale only if
it closes on or before June 30, 2006.

A full-text copy of the Debtor's sales procedures is available for
free at http://ResearchArchives.com/t/s?af0

Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama,
Ltd. -- http://www.oris-gmbh.de/-- manufactures automotive parts.
The company filed for chapter 11 protection on March 16, 2006
(Bankr. N.D. Ala. Case No. 06-00813).  Clark R. Hammond, Esq., at
Johnston, Barton, Proctor & Powell LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million to
$10 million and debts between $10 million to $50 million.


OVERSEAS SHIPHOLDING: Earns $128.3 Million in First Quarter
-----------------------------------------------------------
Overseas Shipholding Group, Inc., reported $128.3 million of net
income on $291 million of revenues for the three months ended
March 31, 2006, compared to a $164.9 million net loss on $271
million of revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $3.3 billion
in total assets and $1.3 billion in total liabilities.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?ae7

With offices in New York, Athens, London, Manila, Newcastle and
Singapore, Overseas Shipholding Group, Inc. (NYSE:OSG) --
http://www.osg.com/-- is widely recognized as one of the world's  
most customer focused marine transportation companies providing
high quality tonnage and value-added services to major oil
companies and other major charterers around the globe.  The
Company is focused on identifying and meeting the needs of our
partners and customers in a rapidly changing market.

                            *    *    *

As reported in the Troubled Company Reporter on Feb. 15, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB+' corporate credit rating, on Overseas Shipholding and
removed all ratings from CreditWatch, where they were placed on
Dec. 14, 2004.  S&P's CreditWatch placement followed the Company's
announcement that it would acquire Stelmar Shipping Ltd.  Overseas
Shipholding completed its $1.3 billion acquisition of Stelmar on
Jan. 20, 2005.  S&P said the outlook is stable.

As reported in the Troubled Company Reporter on Feb. 10, 2005,
Moody's Investors Service confirmed Overseas Shipholding's senior
unsecured and senior implied ratings at Ba1.  Moody's also changed
the rating outlook to negative from stable.  This completed
Moody's ratings review opened on Dec. 13, 2004, following the
announcement by the company of its acquisition of Stelmar Shipping
(not rated) for $1.36 billion.


PATRON SYSTEMS: Posts $4.4 Mil. Net Loss in 2006 1st Fiscal Qtr.
-----------------------------------------------------------------
Patron Systems, Inc., 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 a $4,400,074 net loss on $261,785 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $12,947,755
in total assets and $7,460,745 in total liabilities, resulting in
$5,487,010 stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $1,800,847 in total current assets available to pay
$7,460,745 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?abf

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Marcum & Kliegman LLP expressed substantial doubt about Patron
Systems, Inc.'s ability to continue as going concern after
auditing the Company's financial statements for the year ended
Dec. 31, 2005.  The accounting firm pointed to the Company's net
losses incurred since its inception, its working capital
deficiency and the numerous litigation matters it is involved
with.

                       About Patron Systems

Headquartered in Boulder, Colorado, Patron Systems, Inc. --
http://www.patronsystems.com/-- offers integrated enterprise
email and data security and enforceable compliance. The Company's
suite of Active Message Management(TM) products addresses eform
creation, capture, sharing, and manages data in an industry
standard format as well as providing solutions for mailbox
management, email policy management, email retention policies,
archiving and eDiscovery, proactive email supervision, and
protection of messages and their attachments in motion and at
rest.


PICK UPS PLUS: Post $412,449 Net Loss in 2006 1st Fiscal Quarter
----------------------------------------------------------------
Pick Ups Plus, Inc., 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 a $412,449 net loss on $380,921 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $593,501
in total assets and $4,222,734 in total liabilities, resulting in
a $3,629,233 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $146,117 in total current assets available to pay
$4,162,134 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?ac0

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Lazar Levine & Felix LLP in New York raised substantial doubt
about Pick Ups Plus, Inc.'s ability to continue as a going concern
after auditing the consolidated financial statements of the
Company for the years ended Dec. 31, 2005, and 2004. The auditor
pointed to the Company's losses, negative working capital, and
accumulated deficit.

                        About Pick Ups Plus

Pick Ups Plus, Inc. (OTC BB: PUPS) -- http://www.pickupsplus.com/
-- is a retail operator and franchiser of automotive parts and
accessories stores catering to the light truck and SUV market,
with five franchised locations in the U.S. and two company
owned-stores. It markets and distributes the ValuGard line of
professional car care and environmental protection products
through its Automotive Preservation, Inc., subsidiary to
automotive dealerships for new vehicle preparation, detailing
shops and automotive specialty stores.


PINNACLE ENT: To Buy Harrah Entertainment's Assets for $25 Million
------------------------------------------------------------------
Pinnacle Entertainment, Inc., signed a definitive agreement under
which it will acquire certain Lake Charles, Louisiana gaming
assets of Harrah's Entertainment, Inc. (NYSE: HET).  The
agreement, which formalizes a letter of intent reported on April
17, also calls for the sale of certain of Pinnacle's Casino Magic
Biloxi assets to a subsidiary of Harrah's Entertainment.

                     Terms of the Agreement

Under the agreement, Pinnacle will acquire two gaming subsidiaries
of Harrah's, which own two casino boats, related licenses and
permits, and a 263-room hotel.  Harrah's Lake Charles was severely
damaged by Hurricane Rita in September 2005.  Harrah's will
acquire Pinnacle's Casino Magic Biloxi site and certain related
assets, and receive an additional payment of approximately
$25 million from Pinnacle.  Casino Magic Biloxi has been closed
since being struck by Hurricane Katrina on Aug. 29, 2005, which
destroyed the gaming barge and extensively damaged the hotel
complex.  Each company will retain its insurance claims.

"The purchase of Harrah's Lake Charles will allow us to build on
our success at L'Auberge du Lac, which just marked its first-year
anniversary and is now the state's leading generator of riverboat
gaming revenues," Daniel R. Lee, Chairman and Chief Executive
Officer, said.  "In addition to expanding L'Auberge with a 250-
room hotel project, we plan to add another riverboat casino in
the Lake Charles area.  We are also exploring options for the
other license elsewhere in Louisiana.  We enjoyed being a part of
the Biloxi community for many years and hope to return to
Mississippi at some point in the future."

The definitive agreement is subject to receipt of all required
regulatory approvals, as well as the passage of a local-option
referendum in Lake Charles that the Company anticipates will be on
the ballot in late September.  If those conditions are satisfied,
the transaction is expected to close in the fourth quarter of
2006.

                         About Harrah's

Founded in 1937, Las Vegas-based Harrahs Entertainment, Inc. --
http://www.harrahs.com/-- is the world's premier provider of  
branded casino entertainment.  The Company owns or manages through
various subsidiaries more than 40 casinos in three countries,
primarily under the Harrah's, Caesars and Horseshoe brand names.

                         About Pinnacle

Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc.
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos  
in Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in the
Los Angeles metropolitan area, has been licensed to operate a
small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged casino
previously operated in Biloxi, Mississippi.  Pinnacle opened a
major casino resort in Lake Charles, Louisiana in May 2005 and a
new replacement casino in Neuquen, Argentina in July 2005.

                          *     *     *

As reported in the Troubled Company Reporter on May 24, 2006,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Las Vegas-based casino owner and operator Pinnacle
Entertainment Inc. to positive from negative.  

As reported in the Troubled Company Reporter on March 20, 2006,
Moody's Investors Service placed the ratings of Pinnacle
Entertainment, Inc. on review for possible upgrade.  Pinnacle
ratings affected include its B2 corporate family rating, B1 senior
secured bank loan rating, and Caa1 senior subordinated debt
rating.

As reported in the Troubled Company Reporter on Mar. 15, 2006,
Fitch Ratings has placed the ratings of Pinnacle Entertainment on
Rating Watch Negative.  The ratings affected include 'B' issuer
default rating; 'BB/RR1' senior secured credit facility rating;
and 'CCC+/RR6' senior subordinated note rating.


PMA CAPITAL: Fitch Affirms Low-B Issuer Default & Sr. Debt Ratings
------------------------------------------------------------------
Fitch Ratings affirmed the issuer default rating and senior debt
rating of PMA Capital Corp. at 'BB-' and 'B+' respectively.

Fitch also affirmed the 'BBB-' insurer financial strength ratings
of the three active primary insurance subsidiaries collectively
referred to as PMA Insurance Group:

   -- Pennsylvania Manufacturers Association Insurance Company;
   -- Pennsylvania Manufacturers Indemnity Company; and
   -- Manufacturers Alliance Insurance Company.

Lastly, Fitch affirmed the 'B-' IFS rating of PMA Capital
Insurance Company's (PMA Re) run-off reinsurance subsidiary.  All
Rating Outlooks are Stable.

Fitch last reviewed and affirmed all of PMA's ratings on May 8,
2006.  That is the date when the Pennsylvania Department of
Insurance approved a $73.5 million extraordinary dividend from PMA
Re to PMA.  Since that time, Fitch met with senior management for
an annual review of the ratings.  In addition, PMA filed an 8k on
May 12, 2006 stating that it will redeem $35 million of the 6.50%
senior secured convertible debentures due 2022.

PMA's main challenge is to smoothly manage the run-off of PMA Re
and Caliber One operations while simultaneously restoring PMAIG's
competitive profile.  Fitch recognizes this is a process that will
take time and prudence; however, Fitch notes that PMA is starting
to build positive momentum in its operations.

PMA's ratings continue to be based on:

   * the company's expertise in worker's compensation;
   * strong risk based capital; and
   * conservative investment portfolio.

Offsetting these factors are:

   * the company's concentration in Pennsylvania Worker's
     compensation;

   * run-off operation uncertainty; and

   * the competitive environment of chosen markets.

As of March 31, 2006, PMAIG had net premiums written of $113.4
million, compared with $105.5 million for the same period in the
prior year and a GAAP combined ratio of 102.1%, compared with a
103.4% prior year.

PMA Capital Insurance Company:

  -- Insurer financial strength affirmed at 'B-'/Stable

Manufacturers Alliance Insurance Co.:

  -- Insurer financial strength affirmed at 'BBB-'/Stable

Pennsylvania Manufacturers Association Insurance Co.:

  -- Insurer financial strength affirmed at 'BBB-'/Stable

Pennsylvania Manufacturers Indemnity Co.:

  -- Insurer financial strength affirmed at 'BBB-'/Stable

PMA Capital Corp.:

  -- Issuer default rating affirmed at 'BB-'/Stable
  -- Senior debt rating affirmed at 'B+'/Stable
  -- $57.5 million senior notes, 8.5% due June 15, 2018
  -- $79 million convertible debt, 6.5% due Sept. 30, 2022
  -- $0.7 million convertible debt, 8.5%, due Sept. 30, 2022


POGO PRODUCING: Closes Sale of 50% Stake in Gulf of Mexico Assets
-----------------------------------------------------------------
Pogo Producing Company closed the sale of an undivided 50%
interest in each of Pogo's Gulf of Mexico oil and gas leasehold
interests to Mitsui & Co., Ltd., Mitsui & Co. (U.S.A.), Inc. and
Mitsui Oil Exploration Co., Ltd. for $500 million, subject to
customary purchase price adjustments.  Proceeds from the sale have
been used to reduce the outstanding indebtedness recently incurred
in funding the acquisition of Latigo Petroleum, Inc., which closed
on May 2, 2006.

"We are pleased with the timely closing of the Mitsui transaction.
It represents another significant step in our stated strategy to
grow Pogo's onshore North American presence," said Paul G. Van
Wagenen, Chairman and Chief Executive Officer of Pogo.  "We are
committed to enhancing the company's value and believe that our
strategy will also reduce our offshore risks."

On a pro forma basis, the sale of 50% interest in Pogo's Gulf of
Mexico assets and the nearly simultaneous acquisition of Latigo's
oil and gas assets in the Permian Basin and Texas panhandle are
expected to:

     * increase Pogo's total proven oil and gas reserves by more
       than 6% to 2,174 billion cubic feet of natural gas
       equivalent;

     * extend Pogo's indicated reserves life to over 10 years;

     * add over 400 development and exploration drilling locations
       to Pogo's inventory; and

     * complement an existing core operating area for Pogo with
       the addition of a significant amount of underdeveloped
       acreage.

The company expects to record a pre-tax gain in the second quarter
from the sale of approximately $300 million.  Additionally, Pogo
expects to incur a pre-tax non-cash charge of approximately
$10 million to $15 million related to certain of Pogo's current
Gulf of Mexico hedges, which no longer qualify for hedge
accounting treatment.

                      About Pogo Producing

Headquartered in Houston, Texas, Pogo Producing Company (NYSE:
PPP) -- http://www.pogoproducing.com/-- explores for, develops  
and produces oil and natural gas.  Pogo owns approximately
4,000,000 gross leasehold acres in major oil and gas provinces in
North America, 3,119,000 acres in New Zealand and 1,480,000 acres
in Vietnam.

                          *     *     *

As reported on the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service assigned a B2 rating to Pogo Producing
Company's pending $400 million of seven year senior subordinated
notes.  Note proceeds would fund the majority of Pogo's pending
$750 million acquisition of Latigo Petroleum.  Moody's also
affirmed Pogo's Ba3 corporate family rating, existing B2 senior
subordinated note ratings, and the stable rating outlook.

As reported in the Troubled Company Reporter on June 2, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating to oil
and gas exploration and production company Pogo Producing Co.'s
proposed $400 million senior subordinated notes due 2013.  
Proceeds from the note offering will be used to repay senior debt
that was used to finance its recent acquisition of Latigo
Petroleum Inc.  The outlook is negative.  As of March 31, 2006,
Houston, Texas-based Pogo had $1.6 billion of debt outstanding.


POGO PRODUCING: Prices $450 Million of 7-7/8% Senior Sub. Notes
---------------------------------------------------------------
Pogo Producing Company priced a private offering of $450 million
of 7-7/8% Senior Subordinated Notes due 2013.  Pogo intends to use
net proceeds from the sale of the notes to repay senior debt, a
portion of which was used to finance the recent acquisition of
Latigo Petroleum, Inc.  Pogo expects to close the sale of the
notes on June 6, 2006, subject to satisfaction of customary
closing conditions.

The notes have not been registered under the Securities Act of
1933, as amended, or any state securities laws and, unless so
registered, may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws.

                      About Pogo Producing

Headquartered in Houston, Texas, Pogo Producing Company (NYSE:
PPP) -- http://www.pogoproducing.com/-- explores for, develops  
and produces oil and natural gas.  Pogo owns approximately
4,000,000 gross leasehold acres in major oil and gas provinces in
North America, 3,119,000 acres in New Zealand and 1,480,000 acres
in Vietnam.

                          *     *     *

As reported on the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service assigned a B2 rating to Pogo Producing
Company's pending $400 million of seven year senior subordinated
notes.  Note proceeds would fund the majority of Pogo's pending
$750 million acquisition of Latigo Petroleum.  Moody's also
affirmed Pogo's Ba3 corporate family rating, existing B2 senior
subordinated note ratings, and the stable rating outlook.

As reported in the Troubled Company Reporter on June 2, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating to oil
and gas exploration and production company Pogo Producing Co.'s
proposed $400 million senior subordinated notes due 2013.  
Proceeds from the note offering will be used to repay senior debt
that was used to finance its recent acquisition of Latigo
Petroleum Inc.  The outlook is negative.  As of March 31, 2006,
Houston, Texas-based Pogo had $1.6 billion of debt outstanding.


PROTOCALL TECHNOLOGIES: Founder Bruce Newman Assumes CEO Post
-------------------------------------------------------------
Protocall Technologies Incorporated disclosed that Bruce Newman,
the company founder and a member of the board of directors, has
assumed the post of President and Chief Executive Officer,
effective immediately.  

Mr. Newman succeeds former Chief Executive Officer Donald J.
Hoffmann, who will continue in an advisory capacity with
Protocall.

"As the leader in digital on-demand technology for retailers,
Protocall is poised to take advantage of substantial opportunities
for new growth and Bruce has the experience and vision to
capitalize on these new growth areas," Peter Greenfield, chairman
of the board of directors for Protocall, said.

"We are fortunate that Don has agreed to remain available to us as
an advisor as we move into a new phase for the company."

        Develop Opportunities in Entertainment DVD Market

Protocall, whose TitleMatch(TM) system offers the ability for
retailers to have 100% in-stock availability from a virtual
inventory of compact disks, digital video disks and digital media
products, intends to build on its success in the retail software
market by focusing on developing opportunities for entertainment
DVDs, including movies, television shows and music.

"I am very excited about returning to the day-to-day management of
Protocall, as we move toward several new and very promising
business opportunities with DVD movies and TV content," Mr. Newman
said.

"Our technology offers cost efficiencies for retailers and content
owners, and more choice and availability for the consumer."

Protocall currently has licensing agreements with more than 200
software publishers covering more than 1,200 titles and is
actively working with a number of major movie studios to offer
their television and movie content through the TitleMatch system,
Mr. Newman said.

"We see substantial opportunities for new growth in the
entertainment DVD market," Mr. Newman stated.  "Our experience
with virtual inventory systems in the software market has
demonstrated the significant opportunity that our on-demand system
offers our retail clients and content owners.  We now intend to
focus our efforts on taking full advantage of the possibilities
offered by the entertainment market."

Protocall's TitleMatch virtual inventory system enables walk-in
and Internet retailers, as well as, content owners, to increase
product availability at the point of sale while reducing their
dependence on physical inventories, one of the industry's largest
cost categories.

Mr. Newman has over 20 years of hands-on entrepreneurial
experience in building successful, high margin technology
companies.  In 1998, he founded Protocall Technologies
Incorporated, which developed the world's first secure electronic
delivery system for on-demand production of fully packaged digital
media products.  Mr. Newman served as President and Chief
Executive Officer of Protocall until June 2005, and now reassumes
both those positions in addition to serving on the company's board
of directors.

During Mr. Newman's earlier tenure at Protocall, he assembled the
company's management, product development, operations and sales
teams; managed equity financings; and secured first-time ever
licensing agreements from Symantec, Intuit, Corel, Atari, Vivendi
Universal and many other software companies to reproduce their
products at point-of-sale locations.  Additionally, Mr. Newman
structured first-time electronic distribution deals with CompUSA
and other major resellers.

Prior to Protocall, Mr. Newman founded a software distribution
company that became one of the world's largest niche distributors
of high-end font software products to the book publishing and
professional design industries.  Mr. Newman is an inventor of
record on two U.S. patents in the area of electronic product
delivery and co-author of a book on computer typeface software for
professional users.

                     First Quarter Financials

Protocall is now in the process of completing its' first quarter
report ended March 31, 2006, and expects it to be filed within the
next two weeks.

Based in Commack, New York, Protocall Technologies Incorporated
(OTCBB: PCLI.OB) -- http://www.protocall.com/-- is the innovator  
of on-demand digital content distribution. Its flagship product
line, the SoftwareToGo(R) electronic delivery system, is the
industry's standard for on-site production of brand name software
media, for both traditional and Web "e-Tailers." Protocall
provides retailers and software publishers with specialized
systems programming, digital rights management and electronic
merchandising services for front and back-end fulfillment
operations.


PROTOCALL TECHNOLOGIES: Eisner LLP Raises Going Concern Doubt
-------------------------------------------------------------
Eisner LLP in New York raised substantial doubt about Protocall
Technologies 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 insignificant revenues, losses since inception,
accumulated deficit, and dependence on funds generated from the
sale of common stock and loans.

The Company reported a $5,154,005 net loss on $505,512 of net
sales for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $1,190,684 in
total assets and $3,380,565 in total liabilities, resulting in a
$2,189,881 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $557,042 in total current assets available to pay $2,340,206
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?ae9

                  Securities Purchase Agreements

The Company entered into a securities purchase agreement in
September 2005 with an investor in a private placement exempt from
the registration requirements under the Securities Act of 1933, as
amended.  

The Company sold 2,380,952 shares of common stock, par value
$0.001 per share, at $.336 per share, and warrants to purchase up
to 2,380,952 shares of its common stock, for a total of $800,000
($715,260 net of finder's fee and various other expenses).  The
Company used the net proceeds of the private offering primarily
for funding working capital.

In December 2005, the Company entered into a series of securities
purchase agreements with investors in private placements exempt
from the registration requirements under the Securities Act of
1933, as amended.

The Company sold 3,441,314 shares of common stock, par value
$0.001 per share, at prices ranging from $.173 to $.128 per share,
and warrants to purchase up to 1,720,657 shares of its common
stock, for a total of $550,000.  The Company used the net proceeds
of the private offering primarily for funding working capital.

Based in Commack, New York, Protocall Technologies Incorporated
(OTCBB: PCLI.OB) -- http://www.protocall.com/-- is the innovator  
of on-demand digital content distribution. Its flagship product
line, the SoftwareToGo(R) electronic delivery system, is the
industry's standard for on-site production of brand name software
media, for both traditional and Web "e-Tailers." Protocall
provides retailers and software publishers with specialized
systems programming, digital rights management and electronic
merchandising services for front and back-end fulfillment
operations.


Q COMM: Posts $1.8 Mil. Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------
Q Comm International, Inc., 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 a $1,802,512 net loss on $13,399,260 of sales
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $6,947,130
in total assets, $1,824,004 in total liabilities and $5,132,216 of
stockholders' equity.

Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?ae1

                        Going Concern Doubt

Hansen, Barnett & Maxwell, Salt Lake City, Utah, expressed
substantial doubt about Q Comm International's ability to continue
as a going concern after it audited the Company's financial
statements for the fiscal years ended Dec. 31, 2005 and 2004.  The
auditing firm pointed to the recurring losses from operations and
accumulated deficit.

                           About Q Comm

Q Comm International is a prepaid transaction processor that
electronically distributes prepaid products from service providers
to the point of sale.  Q Comm offers proprietary prepaid
transaction processing platforms, support of various point-of-
sale(POS) terminals, product management, merchandising, customer
support and engineering.  Q Comm's solutions are currently used by
wireless carriers or mobile operators, telecom distributors, and
various retailers to sell a wide range of prepaid products and
services including prepaid wireless or prepaid mobile, prepaid
phone cards, prepaid dial tone and prepaid bank cards, such as
prepaid MasterCard.


QWEST COMMS: March 31 Working Capital Deficit Tops $923 Million
---------------------------------------------------------------
Qwest Communications International Inc. reported $88 million of
net income on $3.5 billion of revenues for the three months ended
March 31, 2006, compared to $57 million of net income on $3.4
million of revenues for the same period in 2005.

At March 31, 2006, the Company's balance sheet showed $21.1
billion in total assets and $24.2 billion in total liabilities,
resulting in a $3 billion equity deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $3 billion in total current assets available to pay
$3.9 billion in total current liabilities coming due within the
next 12 months.

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

Qwest Communications International Inc. -- http://www.qwest.com/  
-- is a leading provider of high-speed Internet, data, video and
voice services.  With approximately 40,000 employees, Qwest is
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability.

                        *     *     *

As reported in the Troubled Company Reporter on Nov. 17, 2005,
Fitch has upgraded and removed from Rating Watch Positive Qwest
Communications International, Inc.'s Issuer Default Rating to 'B+'
from 'B'.  Fitch also upgraded specific issue ratings and recovery
ratings assigned to Qwest and its wholly owned subsidiaries,
including upgrading the senior unsecured debt rating assigned to
Qwest Corporation to 'BB+' from 'BB'.  In addition, Fitch revised
the Rating Outlook to Positive from Stable.


REFCO INC: Can Assumes and Assign Fifth Avenue Lease to Undertow
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Refco Inc., and its debtor-affiliates authority to assume and
assign to Undertow Holdings, LLC, a real estate sub-lease for
property located at 461 Fifth Avenue in New York.

J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York, relates that Refco Group Ltd., LLC, leases real
property located on the 21st floor of the Fifth Avenue building
from GMAC Commercial Finance, LLC, for $26,064 per month.

GMAC in turn leases the Premises from 461 Fifth Avenue
Associates, L.L.C., pursuant to a lease dated March 8, 2001.  

The Sublease currently expires April 30, 2008.

Prior to filing for bankruptcy, the Premises was utilized by Refco
Trading Services, a business unit associated with Refco LLC, and
Breakwater, an independent volume trading business supervised by
Mark Schneider, a former Refco employee.  In December 2005, Refco
Trading ceased its operations and its personnel vacated the
Premises.

Shortly after filing for bankruptcy, Undertow Holdings acquired
the Breakwater business conducted at the Premises.  Mr. Schneider,
whose employment with the Debtors terminated on February 28,
2006, manages the Breakwater operations at the Premises on
Undertow's behalf.

Mr. Milmoe states that no cure would be required prior to the
assignment of the Sublease to Undertow Holdings.

Upon the assignment, the Debtors and Undertow Holdings will
consummate the sale of various furniture and other equipment
owned by the Debtors at the Premises for a $10,000 cash
consideration.

The Debtors believe that the assumption and assignment of the
Sublease will relieve them from incurring about $350,000 in
damages arising from a rejection of the Sublease.

                         About Refco Inc

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000).


REFCO INC: Chap. 11 Trustee Withdraws Request to Hire Klee Tuchin
-----------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 trustee for the estate of Refco
Capital Markets, Ltd., informed the U.S. Bankruptcy Court for the
Southern District of New York that he is withdrawing his request
to employ Klee, Tuchin, Bogdanoff & Stern LLP, as his special
bankruptcy counsel for the limited purposes of analyzing factual
information being investigated by other law firms and financial
advisers

THE RCM Trustee tells the Court that Klee Tuchin has advised him
that a possible conflict exists in respect of its proposed
representation for which the firm initially believed applicable
waiver arrangements were in place.  To avoid any dispute, Klee
Tuchin has asked the RCM Trustee to withdraw the Application.

The RCM Trustee says that he will seek to retain a replacement
counsel for the purposes provided in the Application.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000).


SATELLITE ENTERPRISES: Meyler & Company Raises Going Concern Doubt
------------------------------------------------------------------
Meyler & Company, LLC, in Middletown, New Jersey, raised
substantial doubt about Satellite Enterprises Corp.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005.  The auditor pointed to the Company's losses since
inception, negative working capital, stockholders' deficiency, and
need for additional financing.

The Company reported a $2,617,485 net loss on $1,671,954 of net
sales for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed [$2,430,933]
in total assets and $5,018,526 in total liabilities, resulting in
a $2,587,593 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $398,169 in total current assets available to pay $1,792,398
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?aed

Based in Westport, Connecticut, Satellite Enterprises Corp.
(OTCBB: SNWP) -- http://www.satellitenewspapers.com/-- receives,  
distributes and sells newspaper data, whick can be printed via an
automated free-standing KiOSK(TM).  The Company also has a A user-
friendly software application, CLiENT, which can print a single
copy or bulk quantity at any given time.


SEARS CANADA: DBRS Reviews BB Rating on Revolving Term Facility
---------------------------------------------------------------
Dominion Bond Rating Service confirmed that the ratings for Sears
Canada Inc. remain "Under Review with Developing Implications", as
majority shareholder Sears Holdings Corporation has not
articulated a clear future financial strategy for Sears Canada.

   * Unsecured Debentures Under Review - Developing BB
  
   * Revolving Term Facility Under Review - Developing BB

   * Non-Revolving Term Facility Under Review - Developing BB

Sears Holdings announced that it will purchase the shares of Sears
Canada that it does not presently hold and will convert Sears
Canada into a private company.  DBRS is concerned that the
privatization will result in a more aggressive financial posture
for Sears Canada, including the potential for large upstream
payments to Sears Holdings.  It remains possible, however, that
Sears Canada will be allowed to retain cash and improve the
financial profile of the business.

In addition to concerns over ownership, Sears Canada's ratings
remain constrained by the increasing dependence on the highly
cyclical retailing business.  Previously, Sears Canada enjoyed
strong and stable cash flows from its financial services division.  
That division was sold in late F2005, with all proceeds
distributed to shareholders. Under the sale terms, Sears Canada
will receive ongoing revenue; however, the magnitude and
consistency of those revenues remain to be proven.

The Company's credit profile is significantly weakened from
previous years, due to the uncertain cash flow and because Sears
Canada has reduced the size and the quality of the asset base of
the business, with no corresponding decrease in debt.  The sale of
the financial services division also eliminated a source of
liquidity.  Earnings from continuing operations remain constrained
within a narrow band, as Sears Canada has been unable to increase
revenues or profitability.

Notwithstanding these concerns, Sears Canada has substantial
strengths including dominant position in appliance retailing,
where the company has market share of approximately 30%.  In
addition, Sears Canada enjoys a strong reputation for consistent
quality and customer service.

Sears Canada also benefits from the relationship with Sears
Holdings, which brings additional clout in areas such as
purchasing, product development, and advertising.  Improvement in
ratings will require evidence that Sears Canada can generate
improved and sustainable profits and cash flows, as well as
evidence that the balance sheet will not be further eroded. In
addition, Sears will need to demonstrate that interests of debt
holders will receive due consideration.


SAINT VINCENTS: Can Use Sun Life's Collateral Until August 2
------------------------------------------------------------
At Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates' request and with the consent of Sun Life
Assurance Company of Canada and Sun Life Assurance Company of
Canada (U.S.), the U.S. Bankruptcy Court for the Southern District
of New York extends the Termination Date for the Debtors' use of
the Sun Life Cash Collateral through and including August 2, 2006.

On July 1, 2006, and August 1, 2006, the Debtors will pay to Sun  
Life a $368,404 monthly interest due under the Loan Documents.

As reported in the Troubled Company Reporter, Saint Vincent
Catholic Medical Centers of New York issued $78.3 million in
promissory notes to the order of Sun Life Assurance Company of
Canada and Sun Life Assurance Company of Canada (U.S.) prior to
its bankruptcy filing.  The Promissory Notes are secured by first
priority liens to the Debtors' various properties.

                RCG Cash Collateral Also Extended

The Debtors and First American Title Insurance Company agree to
extend the Debtors' use of the RCG Cash Collateral, through and
including June 30, 2006.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the   
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Final DIP Hearing Rescheduled to June 20
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
grants Silicon Graphics, Inc., and its debtor-affiliates' request
for a bridge order and overrules the objections that have not been
withdrawn.

The DIP Loan Amendment is approved and the DIP Loans are extended
on an interim basis.

The Debtors are authorized to borrow an additional $5,000,000.
Thus, on an interim basis, the Debtors can borrow up to
$28,000,000 under the DIP Agreement.  Any additional DIP Loans
borrowed will be entitled to all of the approved protections and
remedies.

The Court rescheduled the Final DIP Hearing to June 20, 2006, at
10:00 a.m.

                 Debtors Amend Interim DIP Agreement

As reported in the Troubled Company Reporter on Monday, 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 copy of the Amended Interim DIP Loan Agreement is available for
free at http://researcharchives.com/t/s?a62

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Inks Lease Settlement Pact with Three Landlords
-----------------------------------------------------------------
To resolve their dispute, Silicon Graphics, Inc., and its debtor-
affiliates entered into a settlement agreement with the landlords
of three nonresidential real property leases located in Mountain
View, California:

    Lease     Landlord                      Location
    -----     --------                      --------
    CTC-A     WXIII/Crittenden Realty       1200 Crittenden Lane
              A/B, L.L.C.

    CTC-C/D   WXIII/Crittenden Realty C,    1400 Crittenden Lane
              L.L.C., and WXIII/Crittenden  and 1500 Crittenden
              Realty D, L.L.C.              Lane

    ATC       WXIII/Amphitheatre            1600 Amphitheatre
              Realty, L.L.C.                Parkway

According to Lynn P. Harrison 3rd, Esq., at Curtis, Mallet-
Prevost, Colt & Mosle LLP, in New York, under the terms of the
Settlement, the Debtors are vacating unoccupied space -- resulting
in significant savings to the estates -- and keeping space under
the CTC-A Lease until no later than Nov. 30, 2006, which space is
necessary to their reorganization efforts.

The Settlement further provides for the immediate reduction of
rent obligations owed by Silicon Graphics, Inc., and return of
portions of the Letters of Credit securing the Leases, both of
which ameliorate the Debtors' liquidity situation and increase the
value of the estate.

The salient terms of the Settlement are:

    a. As of the Closing Date, the ATC Lease is terminated and
       deemed rejected, the ATC Premises will be returned to the
       ATC Landlord, the ATC Landlord will draw $24,550,000 on ATC
       Letter of Credit and return the remainder to SGI.  Other
       than the draw on the ATC Letter of Credit, the Debtors will
       not be liable for any damages arising from termination of
       the ATC Lease.

    b. As of the Closing Date, SGI will deliver floors 2, 3 and 4
       of the CTC-C Premises and floors 3 and 4 of the CTC-D
       Premises to CTC-C Landlord and CTC-D Landlord in accordance
       with the Term Sheet, and the CTC-C/D Letter of Credit will
       be reduced by 62.5% to $2,250,000.  The Debtors waive any
       claim to the $1,750,000 lease modification payment paid by
       Debtors with respect to the March 24, 2004, amendment to
       the CTC-C/D Lease.

    c. After the Closing Date, and no later than June 30, 2006,
       SGI will deliver the remainder of the CTC-C Premises and
       the CTC-D Premises to CTC-C Landlord and CTC-D Landlord in
       accordance with the Term Sheet.  By SGI's return, the CTC-
       C/D Letter of Credit and a cash security deposit for
       $265,000 will be returned to SGI and the CTC-C/D Lease will
       be terminated and deemed rejected.  The Debtors will not be
       liable for any damages arising from termination of the CTC-
       C/D Lease.

    d. SGI will remain in possession of the CTC-A Premises after
       the Closing Date, and SGI agrees to pay of a proportional
       amount of rent under the CTC-A Lease for each floor of the
       CTC-A Premises that it possesses until the time as each
       floor is vacated.  By a floor being vacated and returned to
       the CTC-A Landlord, rent stops accruing for the floor.  By
       SGI vacating the entirety of the CTC-A Premises, the CTC-A
       Letter of Credit will be returned to SGI, and the CTC-A
       Lease will be terminated and deemed rejected.  SGI agrees
       that it will vacate the entirety of the CTC-A Premises no
       later than November 30, 2006.  The Debtors will not be
       liable for any damages arising from termination of the CTC-
       A Lease.

    e. To the extent that it remains in possession of floors at
       the CTC-A Premises, the CTC-C Premises and/or the CTC-D
       Premises more than a month beyond the date on which it is
       required to vacate them, SGI's rent obligations increase at
       a rate of 50% per month.

    f. The parties will execute mutual releases for claims related
       to Leases and Letters of Credit effective on Closing Date.
       All releases are to exclude obligations created or that are
       intended to survive as a result of the Definitive
       Agreements.  The releases will include all successors and
       assigns.

    g. The deadline for closing of the settlement is June 30,
       2006, unless the parties agree to extend.

    h. The Settlement is conditioned on:

       (1) approval by the Bankruptcy Court of the Term Sheet by
           final, non-appealable order not subject to a stay;

       (2) that no draws have been made on any of the Letters of
           Credit between the date and the closing date;

       (3) occurrence of the Closing Date;

       (4) written approval by the Landlords' existing mortgage
           lenders and return by the lenders of any of the
           Letters of Credit held by them;

       (5) execution and delivery by Landlords and Google, Inc.,
           of a purchase agreement providing for the sale of
           Landlords' leasehold interests in the ATC Premises, the
           CTC-A Premises, the CTC-C Premises and the CTC-D
           Premises and receipt by Landlords from Google, Inc.,
           within two days after a deposit;

       (6) delivery by SGI to Google, Inc., of the letter of
           credit securing the sublease of the ATC Premises;

       (7) delivery to the Debtors by Google, Inc., of an
           acknowledgement that the termination of the ATC Lease
           will not violate Google, Inc.'s sublease; and

       (8) compliance with applicable law.

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

Mr. Harrison says resolution of the Letter of Credit Adversary
Proceeding through the Settlement would (i) eliminate significant
litigation risk involving the Letters of Credit, (ii) return
significant value to the SGI estate, and (iii) free up $15,000,000
in additional liquidity.

In addition, the Settlement would provide the Debtors with the
opportunity to preserve financial resources and administer their
estates without the distraction and cost of additional litigation.

The Debtors, thus, ask the Court to approve their Settlement
Agreement with the Landlords in its entirety.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SKNM INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: SKNM, Inc.
        12214 East Main Road
        North East, Pennsylvania 16428

Bankruptcy Case No.: 06-10630

Chapter 11 Petition Date: June 6, 2006

Court: Western District of Pennsylvania (Erie)

Debtor's Counsel: Lawrence C. Bolla, Esq.
                  Quinn Buseck Leemhuis Toohey & Kroto Inc.
                  2222 West Grandview Boulevard
                  Erie, Pennsylvania 16506-4508
                  Tel: (814) 833-2222

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Independence Bank                                    $1,169,402
1370 South County Trail
East Greenwich, RI 02818

Erie Petroleum Corp.                                    $76,000
1501 Greengarden
Erie, PA 16505

North East Fueling Corp.                                $37,906

PA Department of Revenue         Sales and Use Taxes    $27,080

Tank Storage                                             $9,904

North East Township              Taxes                   $9,596

Hartford                                                 $7,609

Erie Water Works                 Utility Bills           $7,430

National Fuel Gas                Utility Bills           $4,838

Maplevale                                                $3,800

U.S. Foods                                               $3,700

PA Department of Revenue         Taxes                   $3,300

TruckStop Direct                                         $2,500

Verizon                          Utility Bills           $2,450

Liberty                                                  $2,374

Sopus                                                    $2,342

Transcore                                                $1,946

Reinholds Ice Cream                                      $1,388

Bridgestone                                              $1,193

Vine Oil & Gas                                           $1,159


SOLUTIA INC: Ad Hoc Panel Says Disclosure Statement is Inadequate
-----------------------------------------------------------------
The Ad Hoc Committee of Solutia Noteholders asks the U.S.
Bankruptcy Court for the Southern District of New York deny
approval of the Disclosure Statement explaining Solutia, Inc., and
its debtor-affiliates' Plan of Reorganization.  The Committee
consists of holders and managers, acting on behalf of entities
holding not less than $308,000,000, or 68.4%, of the Notes issued
by Solutia, Inc.

Bennett J. Murphy, Esq., at Hennigan, Bennett & Dorman LLP, in
Los Angeles, California, points out that the Debtors' Plan of
Reorganization does not disclose what the Debtors will do if the
Indenture Trustee succeeds in its Adversary Proceeding against
Solutia.  The Plan assumes that the Court will dismiss the
Adversary Proceeding.

There is no meaningful disclosure in the Disclosure Statement
about the issues in the Adversary Proceeding, and nothing at all
about the nature of the potential amendments, Mr. Murphy notes.

Mr. Murphy argues that the Disclosure Statement should not be
approved because:

   (1) proceeding to confirmation at this point in time is
       futile;

   (2) it is apparent that the Plan will not comply with
       Section 1129(a) of the Bankruptcy Code due to the Debtors'
       inability to establish that the Global Settlement is fair
       and equitable; and

   (3) the Disclosure Statement does not provide adequate
       information regarding the pending dispute between Solutia
       and the Noteholders and how its outcome would affect the
       Plan.

The Disclosure Statement and the Plan are futile because the
Debtors lack a commitment to the necessary exit financing to
consummate a Plan, Mr. Murphy asserts.

Furthermore, the Disclosure Statement do not provide adequate
information concerning certain claims against the estate,
particularly the claims filed by Monsanto Corporation and
Pharmacia Company.  The Debtors only stated that Monsanto and
Pharmacia's claims are excluded from the estimated amount of the
Allowed Claims because those Claims are being resolved pursuant
to the Global Settlements.

To evaluate the fairness of the proposed Settlement, the
creditors need to know the value and basis of the claims being
settled, Mr. Murphy maintains.  More importantly, adequate
information is needed for hypothetical investors to make an
informed judgment on the Plan.

The Plan and the Disclosure Statement also failed to establish
that the proposed Global Settlement is fair and equitable.  "The
Disclosure Statement should describe in reasonable detail the
issues to be litigated in the absence of settlement, the range of
probable outcomes in litigation, and the value being provided to
and by the settling parties," Mr. Murphy emphasizes.

Instead, the Disclosure Statement offers selected information on
a limited subset of the issues, and is utterly opaque on basic
questions about the value of the deal to Monsanto, Pharmacia and
the estate, Mr. Murphy says.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.  Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis.  Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice.  (Solutia Bankruptcy News, Issue No. 61;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


THICKSTUN BROS: Litigation with Encompass Services Continues
------------------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the Sixth Circuit told the
U.S. Bankruptcy Court for the Southern District of Ohio that it
has continuing post-confirmation jurisdiction to interpret the
provisions of a Chapter 11 plan confirmed by Thickstun Brothers
Equipment Co., Inc., and to determine whether the Plan preserved
the debtor's right to challenge a claim asserted by Encompass
Services Corporation in bankruptcy despite Thickstun's failure to
file any formal objection to Encompass' proof of claim.

Thickstun Brothers Equipment Co., Inc., and Encompass Services
Corporation, fka Reliable Mechanical, Inc., hold claims against
each other stemming from alleged breaches of a construction
contract at the Rickenbacker Air National Guard Base near
Columbus, Ohio.  In December 1997, Encompass initiated litigation
of its claims against the Debtor and the Debtor's surety in the
Circuit Court of Jefferson County, Kentucky.  The Debtor filed a
counterclaim against Encompass in the Kentucky litigation.  In
January 2000, the Debtor also filed a so-called Miller Act action
against Encompass' surety in the United States District Court for
the Southern District of Ohio.  

The 6th Cir. BAP's Opinion is published at 2006 WL 1506712.  
Thickstun has filed for chapter 11 protection twice; this appeal
arises out of its first chapter 11 filing.

Thickstun Bros. Equipment Co., Inc., installs, maintains and
repairs tanks.  Thickstun filed for chapter 11 protection on
August 8, 2003 (Bankr. S.D. Ohio Case No. 03-61982).  The Debtor
filed its first amended plan of reorganization on April 8, 2004,
and the bankruptcy court entered an order confirming the Plan on
June 17, 2004.   Thickstun filed a second chapter 11 petition on
July 5, 2005 (Bankr. S.D. Ohio Case No. 05-61638).  Michael D.
Bornstein, Esq., at Ricketts Co. LPA, represents the Debtor in its
restructuring.


TOMBALL CENTER: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------
Debtor: The Tomball Center Inc.
        3702 FM 1960 West, Suite S
        Houston, Texas 77068

Bankruptcy Case No.: 06-32508

Chapter 11 Petition Date: June 6, 2006

Court: Southern District of Texas (Houston)

Judge: Karen K. Brown

Debtor's Counsel: William F. Harmeyer, Esq.
                  William F. Harmeyer & Associates, P.C.
                  7322 Southwest Freeway, Suite 475
                  Houston, Texas 77074
                  Tel: (713) 270-5552
                  Fax: (713) 270-7128

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Largest Unsecured Creditor:

   Entity                        Claim Amount
   ------                        ------------
Wells Fargo Bank, N.A.             $6,948,929
c/o LNR Partners, Inc.
1601 Washington Avenue
Suite 700
Miami Beach, FL 33139
Tel: (305) 695-5600


TOWER AUTOMOTIVE: Wants Court to Deny Fuji Dietec's Request
-----------------------------------------------------------
Tower Automotive, Inc., and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York to:

   (a) find that Fuji Dietec Corporation has no valid security
       interest in the Customer Dies; and

   (b) dismiss Fuji Dietec's request with prejudice.

As reported in the Troubled Company Reporter on May 30, 2006, Fuji
Dietec asked the Court to lift the automatic stay in the Debtors'
chapter 11 cases to allow it to repossess the Fuji Tooling.  Fuji
Dietec also asked the Court to direct the Debtors to:

    (a) return the Fuji Tooling to Fuji Dietec; or

    (b) alternatively, provide adequate protection to Fuji Dietec
        for the use and diminution in value of the Fuji Tooling if
        they are to stay in the Debtors' possession.

                          Debtors Object

Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
relates that for several years prior to the Petition Date, the
Debtors, from time to time, issued purchase orders to Fuji Dietec
and its Japanese affiliate, Fuji Technica, Inc., for the
production and delivery of dies to be used in their manufacturing
operations.

Dies, like those produced by Fuji Dietec, were and are used by
the Debtors to manufacture automotive components for different
programs for the Debtors' customers, including DaimlerChrysler,
General Motors, Nissan, and Ford Motor Company.

The Debtors' customers, in the ordinary course of business,
advance funds toward, or reimburse the Debtors for, the purchase
and associated costs of procuring and using dies.  The Debtors
then hold a temporary possessory interest in the Customer Dies,
while the customer retains title.  This was the case with the
Customer Dies subject to Fuji Dietec's request, Mr. Sathy tells
the Court.

The total value for the various tooling programs covered by the
Purchase Orders exceeded $64,000,000.  The Debtors have paid Fuji
more than $51,000,000 for the related Customer Dies.

Mr. Sathy explains that the Debtors did not pay Fuji the amounts
that Fuji Dietec is claiming it is owed because of the quality
and delivery issues, which caused the Debtors to incur millions
of dollars in out-of-pocket expenses.

Mr. Sathy contends that Fuji Dietec's basis for a security
interest is completely unsubstantiated because:

   (a) The property at issue does not belong to Fuji Dietec.

   (b) The Debtors issued the Purchase Orders to Fuji Technica
       for the manufacture of the Customer Dies.

       Fuji Technica is a separate and foreign entity organized
       under the laws of Japan, which did not conduct business in
       the state of Michigan.  Fuji Dietec is a separate
       corporate entity originally organized under the laws of
       the state of Michigan, which according to the state of
       Michigan's Corporation Division Records, was effectively
       dissolved as of March 31, 2006.

   (c) The Michigan Act does not apply to create any liens in the
       Customer Dies.

       All of the Customer Dies were manufactured in Japan.  The
       Michigan Act cannot apply to create lien rights in the
       Customer Dies:

       * built in Japan by a foreign company; and

       * in favor of Fuji Dietec, who is not even a party to the
         Purchase Orders.

   (d) Assuming arguendo that the Michigan Act applies:

       * any lien claims by Fuji Dietec or Fuji Technica in the
         Customer Dies belonging to Nissan are invalid because
         neither party properly recorded its complete name,
         street address, city and state on the Customer Dies; and

       * neither Fuji Dietec nor Fuji Technica filed or properly
         filed its UCC-1 filings.

The very substantive basis for the purported claim against the
Debtors is wholly without merit, Mr. Sathy further contends.

                     About Tower Automotive

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo.  Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components.  The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts.  Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000).


TRANSPORT IND: Moody's Holds Senior Secured Debt Rating at B2
-------------------------------------------------------------
Moody's Investors Service affirmed the debt ratings of Transport
Industries L.P., senior secured at B2; and changed the outlook to
stable.  The affirmation reflects Moody's assessment of TI's
credit profile pro-forma for the proposed $40 million increase to
the existing term loan facility and an amendment to the permitted
acquisitions basket of the credit facility, which will permit up
to $100 million of acquisitions, up from $80 million prior to the
amendment.

The ratings consider Moody's belief that TI will continue to
pursue acquisitions in a manner that will not cause a meaningful
deterioration in leverage and coverage metrics.  The rating also
considers the risks of integration and execution that acquirers
typically confront compounded somewhat by the cyclicality of the
transportation sector, the current point in the economic cycle,
and the challenges in managing increasingly larger operations.

The rating is supported by expected positive free cash flow and a
business model in which revenues are supported by long-standing
relationships with certain key grocery retailers.  While the
ratings analysis considers the potential demand on cash from the
mandatorily redeemable preferred shares due 2010 issued by TI's
ultimate parent, Transport Industries Holdings, Inc., Moody's did
not include this obligation or the related non-cash interest
expense when calculating TI's leverage and coverage metrics.

Moody's expects that TI will continue to pursue acquisitions in
each of its segments.  TI closed seven acquisitions since May
2004, taking annual revenues to $811 million in 2005 from $342
million in 2003.  Debt / EBITDA improved to 6.7% from 4.4% and
EBIT / Interest coverage declined to 0.9 times from 1.5 times over
this same period. A key consideration of the effect of TI's
acquisition strategy on the ratings will be TI's ability to remain
a rational bidder, evidenced by modest purchase multiples,
particularly during the upside of the cycle when sellers typically
can command a premium relative to sales timed during business
cycle troughs.

Once TI utilizes the add-on term loan, TI's total debt on a pro
forma basis at March 31, 2006, will increase to approximately $558
million.  TI's pro forma balance sheet will continue to be
characterized by few fixed assets and a substantial amount of
goodwill.

Net fixed assets of $43 million at March 31, 2006 represent only
12% of total assets of $353 million; goodwill and other
intangibles represent approximately 48% of total assets,
reflecting the effects of the company's acquisition activity,
which has focused on asset light businesses.

Moody's notes that TI's dedicated services business model, which
relies on access to owner/operators to provide tractors to its
grocery trucking business rather than outright ownership of this
equipment, implies limited asset coverage for the senior secured
facilities and low likely recovery levels for debt holders in the
event of default.  As a result, the B2 rating of the senior
secured bank facility is at the same level as the Corporate Family
Rating.

TI, along with the transportation sector, has benefited from the
current cyclical strength in the U.S. and global economies. TI
will be affected by an economic downturn; however, Moody's
believes that the extent or severity of this impact could be
mitigated by two factors.  The aggregate share of total company
revenues in the truckload management, truckload brokerage and
distribution logistics segments, which could increase before the
onset of the next downturn.

Moody's estimates that these businesses accounted for
approximately 35% of total revenues in 2005. Earnings from these
segments are more highly exposed to an economic downturn although
operating costs are more variable.  Additionally, a significant
portion of the company's revenues is related to dedicated closed-
loop transport of grocery products.

In Moody's view, the potential inelastic demand for groceries
could potentially mitigate any deterioration in consolidated
results in a downturn, given that TI fulfills an integral part of
the distribution chains of its grocery customers.  However, both
of these effects are somewhat difficult to gauge given TI's
relatively short operating history and since the dedicated closed-
loop transport operations have yet to experience a cyclical
downturn.

The B2 rating assigned to the senior secured credit facilities,
which is the same as the Corporate Family Rating, continues to
reflect the preponderance of senior debt represented by these
facilities in the company's capital structure.  The $333 million
in total remaining commitments provided by these facilities is
senior to only a small amount of seller notes and the Preferred
Equity.  The rated facilities consist of a $70 million revolver
due September 2010 and term loans aggregating $275 million of
original borrowings due September 2011.

Moody's does not consider the Preferred Equity issued by TI
Holding's Inc. a key rating driver over the near term, since this
obligation would be the most junior if consolidated with TI's
capital structure.  Additionally, interest accrues up to the
maturity date on December 14, 2010 if not paid in cash and the
structure of the senior secured credit facility restricts the
payment of dividends by TI as long as Consolidated Leverage
remains above 3.0 times.

Current consolidated leverage calculated according to the terms of
the facility is 3.8x. In addition, according to the company, TI
Holdings, Inc. is not required to retire the obligation upon
maturity; rather interest would continue to accrue at a higher
rate if not retired by the due date.  However, Moody's notes that
the ratings of the secured facilities could be affected in the
future if it becomes likely that TI Holdings, Inc. seeks to obtain
inappropriate amounts of cash from TI.

The stable outlook reflects Moody's expectation that TI will
continue to pursue leveraged acquisitions; however, Moody's
believes transactions will be of a tuck-in nature and of
relatively manageable size that will not significantly increase
leverage or significantly increase integration and execution risks
rather than those of a transformational nature.  The effect, if
any, on the ratings will depend on the relative leverage in a
transaction and the increased risk from the complexity in
integrating unique characteristics of a particular acquisition,
particularly if TI seeks to expand into a segment outside of its
traditional operations.

Ratings would be subject to downward revision if TI were to make a
significant acquisition or other acquisitions for lower value but
at inappropriately high EBITDA multiples.  The loss of a major
closed-loop dedicated transportation customer would also pressure
the ratings downwards as would the sacrifice of margins in
attempts to retain existing business or in search of top line
growth.  A downgrade may ensue if Debt / EBITDA rises above 7.0
times, if EBIT/interest coverage were to be sustained below 1.0
times, or if negative free cash flow were to be sustained over the
intermediate term.

There is little upward rating pressure over the near to
intermediate term.  Moody's believes that TI will continue to
execute its strategy of growth by acquisition and will favor
financing these acquisitions with debt, which will offset
improvements in leverage due to pay downs of debt with excess cash
flow.  Over the longer term, ratings could be revised upwards if
TI were to cease making acquisitions and decrease Debt / EBITDA to
below 3.0x with a commensurate improvement in EBIT / Interest
coverage to above 2.5x.

However, Moody's notes that attaining this level of leverage,
would release TI from the restrictions on its ability to pay
dividends to its parent, Transport Industries Holdings, L.P.,
whose direct parent is TI Holdings, Inc. Under this scenario,
which could potentially arise prior to the maturity of the senior
secured revolver and term loans, the potential would exist for
cash to be transferred from TI, resulting in a deterioration in
liquidity as the maturity date of the senior secured facilities
nears.

Outlook Actions:

Issuer: Transport Industries, L.P.

   * Outlook, Changed To Stable From Negative

Transport Industries, L.P., headquartered in Dallas, Texas, is the
leading third party provider of single-source, dedicated "closed
loop" transportation services to the food retail and distribution
industry through its Dedicated Transport Services business.  The
company also provides non-asset-based freight transportation
through its Truckload Management Services segment, and warehouse
and distribution logistics services through its Distribution
Services segment.  TI is a wholly-owned subsidiary of Transport
Industries Holdings, L.P.


UGS CAPITAL: Moody's Puts Rating on Proposed $300MM Notes at Caa1
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to UGS Corp.'s  
proposed $300 million offering of holding company paid-in-kind
notes through its UGS Capital Corp II holding company.  Existing
first lien and subordinated notes ratings were affirmed at B1 and
B3, respectively.  Due to the substantial increase in financial
leverage subsequent to the issuance of the proposed notes, Moody's
downgraded UGS' corporate family rating to B2 from B1. The ratings
outlook is stable.

The downgrade of the corporate family rating to B2 from B1
reflects the significant increase of UGS' financial leverage as
measured by debt-to-EBITDA and the resulting reduction in
financial flexibility.  The company's core businesses have
performed well and are expected to continue to grow profitably.
However, the increased in financial leverage is more consistent
with a B2 corporate family rating.

The B2 corporate family rating reflects the company's strong
market position with its broad product offering of a full suite of
product lifecycle management software, its high financial leverage
as measured by debt to EBITDA less capital expenditures, and its
modest returns on assets and strong EBITDA margins.  UGS has a
long history of recurring revenues derived from providing mission
critical software and services to a large customers base from
various industry segments.

The stable outlook reflects Moody's expectation that the company
will continue to grow profitably and maintain or grow its market
share.  The outlook also reflects the expectation that any
acquisitions over the near term will not materially increase
leverage.

The affirmation of the B1 rating for the first lien senior secured
credit facilities reflects the continued expectation of full
collateral coverage in a distress scenario.  Given the absence of
incremental senior debt at the operating company, the B3 rating of
the subordinated notes was affirmed.

The assignment of a Caa1 rating for the proposed HoldCo notes
reflects the structural subordination of these notes to the debt
of the operating company.

Moody's took These ratings actions:

   * Assigned Caa1 rating to the proposed $300 million senior
     unsecured bonds, due 2011, at UGS Capital Corp. II

   * Affirmed B1 rating $725 million senior secured term loan,
     due 2011, at UGS

   * Affirmed B1 rating $125 million senior secured revolving
     credit facility, due 2010, at UGS

   * Affirmed B3 rating $550 million senior subordinated notes,
     due 2012, at UGS

   * Lowered corporate family rating to B2 from B1

The ratings outlook is stable.

The assigned rating is subject to Moody's review of final
documentation.

UGS Corp., headquartered in Plano, Texas, is a provider of product
lifecycle management software.  For the twelve months ended
March 31, 2006 revenues were $1.2 billion.


UNITED RENTALS: Fitch Affirms Low-B Issuer Default & Debt Ratings
-----------------------------------------------------------------
Fitch affirmed the ratings of United Rentals, Inc. and its
principal operating subsidiary, United Rentals (North America),
Inc., and removed them from Rating Watch Negative where they were
placed on July 14, 2005.  Approximately $2.9 billion of debt is
affected by this action.  The Rating Outlook for URI and URNA is
Stable.

Fitch's current ratings for URI and URNA are:

United Rentals, Inc.:

  -- Issuer Default Rating 'BB-'

United Rentals (North America), Inc. (Guaranteed by United
Rentals, Inc.):

  -- Issuer Default Rating 'BB-'
  -- Senior secured bank debt 'BB'
  -- Senior unsecured debt 'BB-'
  -- Subordinated debt 'B'

The affirmation primarily reflects URI's filing of restated
financial statements.  With the filing of 10-Ks for 2004 and 2005
on March 31, 2006, and the 10-Q for the first quarter of 2006 on
May 9, 2006, the company is now current on all financial filings.

The delay in the filing of the 2004 10-K reflected a need to:

   a) review matters relating to an Securities and Exchange
      inquiry of the company;

   b) complete work on an income tax restatement;

   c) complete the evaluation and testing of internal controls
      required by Sarbanes-Oxley section 404; and

   d) conduct additional testing of its self insurance reserves
      in 2004 and prior periods.

The ratings reflect:

   * the company's strong market position in the North American
     equipment rental sector;

   * solid operating cash flow; and

   * improving profitability.

Concerns include:

   * weak risk adjusted capitalization;
   * volatility of operating earnings; and
   * pending outcome of the SEC investigation.

As a result of favorable economic conditions and an increase in
nonresidential construction activity over the last three years,
URI's overall financial performance has steadily improved.  

Over the past three fiscal years, CAGR of revenue and EBITDA
equaled 11% and 19%, respectively.  Consequently, the continued
improvement in EBITDA over the last two years has resulted in
lower overall financial leverage (total debt including convertible
debentures divided by EBITDA and excluding goodwill impairment).

Leverage has fallen from 4.42x at Dec. 31, 2003, to 2.97x at Dec.
31, 2005.  However, overall leverage remains relatively high if
URI's equipment reinvestment requirements are netted from EBITDA.

However, the SEC investigation remains ongoing and has not yet
been resolved.  Based on recent discussions with URI's senior
management, they remain fully cooperative and are hopeful that
resolution of the investigation will occur sometime in 2006.  In
light of the restatement and Sarbanes-Oxley related issues, the
company has taken measures to improve overall financial controls,
including appointing new senior management in key financial
management positions.  Notwithstanding, it is Fitch's opinion that
additional work is required to address the outstanding material
deficiency.

Based on the improved financial performance and profitability
during the last two years, URI's overall capital structure and
liquidity have improved slightly since Fitch's initial rating
review was completed in the fall of 2004.  However, due to the
significant amount of goodwill, overall capitalization remains
relatively weak.  Goodwill was slightly more than common equity on
Mar. 31, 2006.

Rating factors that would generate positive rating momentum
include:

   * a final resolution to the SEC investigation that does not
     materially alter the company's financial profile, further
     strengthening of internal controls;

   * consistent profitability and generation of free cashflow
     throughout the business cycle; and

   * lower leverage as measured by total debt as a multiple of
     cashflow after net equipment replacement and other recurring
     capital expenditures.

Based in Greenwich, Connecticut, URI is the largest equipment
rental company in the world as measured by equipment fleet and
rental revenue.


US MICROBICS: Posts $722,230 Net Loss in 2006 1st Fiscal Quarter
----------------------------------------------------------------
U.S. Microbics 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 $722,230 net loss on $306,320 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $618,277
in total assets, $1,858,449 in total liabilities, and $5,832,998
in minority interest, resulting in a $7,073,170 stockholders'
deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $367,791 in total current assets available to pay
$1,858,449 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?a81

                        Going Concern Doubt

Russell Bedford Stefanou Mirchandani, LLP, in McLean, Virginia,
raised substantial doubt about U.S. Microbics Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the years ended
September 30, 2005 and 2004.  The auditor pointed to the Company's
difficulty in generating sufficient cash flow to meet its
obligations and sustain its operations.

                       About U.S. Microbics

Headquartered in Carlsbad, California, U.S. Microbics, Inc.
-- http://www.bugsatwork.com/-- is a business development and  
holding company that acquires, develops and deploys innovative
environmental technologies for soil, groundwater and carbon
remediation, air pollution reduction, modular drinking water
systems and agriculture enhancement.


VALOR COMMS: Windstream Merger Cues S&P to Hold Ratings on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings on Valor
Communications Group Inc., including the 'BB-' corporate credit
rating, on CreditWatch, where they were placed with positive
implications on Dec. 9, 2005.

The listing followed the announcement that Valor will merge with
the newly formed wireline company created by the spin-off of
ALLTEL Corp.'s wireline business.  The merged entity will be named
Windstream Corp.

Valor's existing bank debt, which totaled about $781 million at
March 31, 2006, will be repaid, and $400 million of 7.75% senior
unsecured notes will be assumed by the new company on a pari passu
basis with Windstream's senior secured credit facilities.
     
Upon completion of the spin-off and merger transactions, which are
expected to close in July 2006, Standard & Poor's will raise its
ratings on Valor's 7.75% notes due 2015 to 'BBB-' from 'B', and
withdraw its corporate and bank loan ratings on the company.
     
Valor is an Irving, Texas-based rural local exchange provider.
Debt outstanding at March 31, 2006 totaled about $1.2 billion.


VARIG S.A.: Preliminary Injunction Continued to June 13
-------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York modifies the preliminary injunction,
in effect in VARIG, S.A., and its debtor-affiliates' bankruptcy
case, to continue through and including June 13, 2006.

Instead of addressing the request for conversion to a permanent
injunction, Judge Drain extended the Preliminary Injunction in
response to a supplement filed by VARIG, S.A., Foreign
Representative Eduardo Zerwes on May 25, 2006.

Pursuant to the Supplement, the Foreign Representative modified
his conversion request to a continuation of the Preliminary
Injunction in view of developments in the Foreign Proceedings.

As previously reported, the Brazilian Court called for a meeting
of the General Assembly of Creditors in Rio de Janeiro to obtain
creditor approval of some modifications to the Judicial Recovery
Plan and a proposal that would permit the sale of the Foreign
Debtors' businesses as a going concern.

On May 9, 2006, the General Assembly of Creditors accepted the
Proposal and approved the modifications to the Recovery Plan to
implement the Proposal, which modifications are reflected in a
Consolidated Recovery Plan.

The Foreign Debtors anticipate filing more supplements to the
conversion request based on further developments in the Foreign
Proceedings.

                     Consolidated Recovery Plan

The Consolidated Recovery Plan provides two options for potential
acquirers to bid on the Foreign Debtors' businesses:

   1. The first option provides for the sale of the entire air
      transportation operation of VARIG with the proceeds of the
      sale -- after repayment of a bridge loan or other financing
      arrangement -- to be paid towards the airline's ongoing
      operations and toward the payments required under the
      Recovery Plan.

   2. The second option provides for the sale of VARIG's domestic
      or regional operations with the proceeds of the sale --
      after repayment of a bridge loan or other financing
      arrangement -- to be applied to the then outstanding
      postpetition debts. The remainder will be injected into the
      airline's International operations and to make the payments
      required under the Recovery Plan.

A full-text copy of a certified English translation of the
Consolidated Recovery Plan is available for free at:

   http://bankrupt.com/misc/VarigConsolidatedRecoveryPlan.pdf

               Representative Addresses Objections

Several parties objected to the conversion request are:

   -- Willis Lease Finance Corporation;

   -- Mitsui & Co. Ltd.;

   -- U.S. Bank National Association;

   -- Wells Fargo Bank Northwest, N.A. and Wells Fargo Bank
      National Association, as Trustees;

   -- International Lease Finance Corporation;

   -- Aircraft SPC-6, Inc.;

   -- The Boeing Company;

   -- Ansett Worldwide Aviation U.S.A., et al.;

   -- GATX Capital;

   -- the United States of America by the United States Attorney
      for the Southern District of New York; and

   -- The Port Authority of New York and New Jersey and Los
      Angeles World Airports.

The Port Authority later withdrew its objection explaining that
it had resolved issues with VARIG.

On behalf of the Foreign Representative, Rick B. Antonoff, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP, in New York, notes that
the Objections all seek the same relief -- implementation of the
Contingency Plan for the Orderly Return of Aircraft based on the
Foreign Debtors' failure to remain current with its obligations
under its aircraft leases.

The Foreign Debtors do not dispute that they are in payment
default with their lessors.  However, based on the potential
provision for payment and the protections of the Contingency
Plan, Mr. Antonoff argues that granting the Objectors' requests
now is unwarranted and would frustrate the Foreign Debtors'
successful emergence from the Foreign Proceedings.

The Foreign Representative asserts that the Consolidated Recovery
Plan and the imminent prospect of a sale of all or part of the
Foreign Debtors' businesses, as well as the protections granted
by the Contingency Plan, warrant a continuation of the
Preliminary Injunction.

Mr. Antonoff further points out that nothing in the Preliminary
Injunction Orders entered by U.S. Bankruptcy Court nor any of the
orders entered by the Brazilian Court require the Foreign Debtors
to voluntarily return aircraft pursuant to the Contingency Plan
upon a default under a lease.  Rather, he continues, the
Contingency Plan was developed to be implemented in the event
that the Foreign Debtors are required to liquidate.

If the objecting lessors believe that the Foreign Proceedings
have failed, the Foreign Representative suggests that they seek
the Foreign Debtors' liquidation before the Brazilian Court.
The Foreign Representative contends that it is for the Brazilian
Court and not the U.S. Court to decide whether the Foreign
Proceedings have failed, and to order liquidation.

The objecting lessors must not be permitted to turn the Foreign
Proceedings into a race to the U.S. courthouse, Mr. Antonoff
argues.  

If the lessors are authorized to circumvent the Brazilian
Proceedings by seeking relief in the U.S. Bankruptcy Court rather
than the Brazilian Court, the Foreign Representative foresees a
domino effect resulting in the collapse of the Foreign Debtors to
the benefit of a select few creditors and to the severe detriment
of thousands of others.  "This is exactly the harm that Section
304 [of the Bankruptcy Code] was designed to prevent, Mr.
Antonoff maintains.

                          June 13 Hearing

Judge Drain schedules a hearing on June 13, 2006, at 10:00 a.m.,
to consider the Foreign Representative's request for conversion
to a permanent injunction, as it may be modified or supplemented,
including by seeking a further extension of the Preliminary
Injunction.

On or before the June 13 hearing, the Court may, upon request of
a lessor, determine whether to order the implementation of the
Contingency Plan with respect to and to the extent of:

   a. any aircraft, engines or other equipment that is property
      of a lessor that is or is proposed to be sold, assigned or
      otherwise transferred by a Foreign Debtor to a third party
      without the lessors consent; or

   b. any aircraft or engine that is retained by a Foreign Debtor
      that is the property of a lessor where the Foreign Debtor
      is in default for nonpayment of rent or maintenance
      reserves first coming due after June 17, 2005, and not
      cured on or before January 13, 2006.

Parties-in-interest have until tomorrow, June 9, 2006, to file
objections to the continuation of the Preliminary Injunction or
the entry of a Permanent Injunction.

                            About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VARIG S.A.: Promises to Pay ILFC Arrears by June 13
---------------------------------------------------
VARIG S.A. and its debtor-affiliates have conceded that they were
in arrears to International Lease Finance Corporation for as much
as $1,600,000.  The Foreign Debtors agreed to:

   -- keep ILFC current for payments coming due between May 31,
      2006, and June 13, 2006; and

   -- pay the Arrearages no later than June 13, 2006.

Hence, Judge Drain orders the Foreign Debtors, to the extent funds
are available, to pay ILFC amounts due for rent and maintenance
reserves under the leases for the Aircraft between May 31 and June
13, no later than two days after the contractual due dates of the
payments.

The Foreign Debtors will pay ILFC the Arrearages and the Current
Payments no later than June 12, 2006, if the payments will be
taken first from the $75,000,000, which they will receive pursuant
to a successful auction.  Thus, even if the payment of the
Arrearages and Current Payments is deferred until June 12, funds
sufficient to pay the Arrearages and Current Payments will be
applied to those obligations and not used to pay the Foreign
Debtors' other obligations.

In the event that the Foreign Debtors default in making those
payments to ILFC, the Court directs VARIG, S.A., to promptly
ground all ILFC Aircraft and return them according to the
schedule set forth in the September 2005 Stipulation.  Judge
Drain makes it clear that, if necessary, he will order immediate
compliance with the Stipulation and may enter coercive sanctions
to insure compliance.

Judge Drain grants ILFC's request to impose a $5,000 fine per day
commencing on May 23, 2006.  The fine is payable to ILFC until the
Foreign Representative and the Foreign Debtors take appropriate
action in Brazilian Courts to seek:

   -- the issuance of all necessary documents; and

   -- orders to permit the export of the 737 Aircraft.

The Court allows ILFC to seek a hearing on its asserted
compensatory damages, with respect to the Foreign Debtors' failure
to properly return the 737 Aircraft, on appropriate notice.

Judge Drain continues the hearing to June 13, 2006, to consider
any other claims of non-compliance with the Stipulation.

                           About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VIRTRA SYSTEMS: March 31 Working Capital Deficit Tops $4.5 Million
------------------------------------------------------------------
VirTra Systems, Inc., delivered its first quarter financial
statements for the three months ended March 31, 2006, to the
Securities and Exchange Commission on May 25, 2006.

The Company reported a $265,471 net loss on $558,652 of total
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $1,551,394
in total assets and $4,997,430 in total liabilities, resulting in
a $3,446,036 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $421,923 in total current assets available to pay
$4,995,571 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?ae6

                        Going Concern Doubt

Ham Langston & Brezina, L.L.P., in Houston, Texas, raised
substantial doubt about VirTra 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, negative
working capital, and stockholders' deficiency.

Based in Arlington, Texas, VirTra Systems, Inc. (OTCBB: VTSI) --
http://www.virtrasystems.com/-- applies patented technology to
produce the world's most advanced virtual reality systems and 3-D
experiences.  With proprietary 360-degree, interactive
photorealistic technology, VirTra Systems constructs marksmanship,
judgmental use-of-force, and situational awareness firearms
training simulators for military branches like the U.S. Army
and U.S. Air Force, and for domestic and international law
enforcement agencies.  VirTra Systems also produces custom
advertising and promotional mobile marketing and experiential
marketing systems utilizing the sensations of motion, touch,
sound, and smell for clients like General Motors, Pennzoil, Red
Baron Pizza, and the U.S. Army.


VOCALSCAPE: Posts $493,269 Net Loss in 2006 1st Fiscal Qtr
----------------------------------------------------------
Vocalscape Networks, Inc., 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 a $493,269 net loss on $100,967 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $67,086
in total assets and $4,018,660 in total liabilities resulting in
$3,951,574 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $28,979 in total current assets available to pay
$3,996,783 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?ac1

                        Going Concern Doubt

Salberg & company, p.a., in Boca Raton, Florida, raised
substantial doubt about Vocalscape Networks, 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 net loss, working
capital deficit, and stockholders' deficit.

                          About Vocalscape

Vocalscape provides Voice over Internet Protocol (VoIP) software
for local and international long distance communication.


WHITE KNIGHT: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: White Knight Holdings, Inc.
        700 St. John Street, Suite 301
        Lafayette, Louisiana 70501
        Tel: (318) 237-9965
        Fax: (318) 235-5872

Bankruptcy Case No.: 06-50422

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                          Case No.
      ------                                          --------
      White Knight Broadcasting, Inc.                 06-50423
      White Knight Broadcasting of Shreveport, Inc.   06-50424
      White Knight Broadcasting of Baton Rouge, Inc.  06-50425
      White Knight Broadcasting of Longview, Inc.     06-50426
      White Knight Broadcasting of Natchez, Inc.      06-50427

Type of Business: The Debtors are media, television and
                  broadcasting companies and operate around 23
                  TV stations together with Communications
                  Corporation of America.

                  White Knight Holdings filed for chapter 11
                  protection together with Communications
                  Corporation of America (Bankr. W.D. La. Case No.
                  06-50410) and it subsidiaries, which are also
                  media companies.

                  White Knight Holdings and Communications
                  Corporation have asked the Court to jointly
                  administer their chapter 11 cases. White Knight
                  Holdings have entered into commercial inventory
                  agreements, joint sales agreements, and shared
                  services agreements with Communications Corp.  
                  However, both entities are independent companies
                  and are not affiliates of each other.

                  Alvarez & Marsal, LLC, continue to provide
                  restructuring management services to the
                  Debtors.

Chapter 11 Petition Date: June 7, 2006

Court: Western District of Louisiana (Lafayette/Opelousas)

Judge: Gerald H. Schiff

Debtors' Counsel: R. Patrick Vance, Esq.
                  Matthew T. Brown, Esq.
                  Jones, Walker, Waechter, Poitevent,
                  Carrere & Denegre, LLP
                  201 St. Charles Avenue, 49th Floor
                  New Orleans, Louisiana 70170-5100
                  Tel: (504) 582-8000
                  Fax: (504) 589-8216

Estimated Assets: Less than $50,000

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

Debtor's 18 Largest Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
Preston-Patterson Co., Inc.             $101,845
P.O. Box 244
Conshohocken, PA 19428-0244

Fox Broadcasting Company                 $36,880
FBC c/o Bank of America
96616 Collection Center Drive
Chicago, IL 60693

Fox Broadcasting                         $13,669
Bank of America/Ernst & Young
7576 Collection Center Drive
Chicago, IL 60693

Continental TV                           $12,752

Millennium TV                             $9,219

Nielsen Media Research                    $4,873

Katz Media                                $4,096

Kingworld Productions                     $2,961

Clear Channel Broadcasting, Inc.          $1,560

Dickstein Shapiro                         $1,436

Pillsbury Winthrop                        $1,416

Valero Marketing                          $1,212

SESAC                                       $726

Harris Corporation                          $518

Fulton Radio Supply Co., Inc.               $504

East Texas Copy Systems, Inc.               $483

Office Depot Credit Plan                    $428

Audio-Video Distributors                    $397


WILD OATS: S&P Withdraws CCC+ Corp. Credit & Sr. Unsecured Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'CCC+' corporate
credit and senior unsecured ratings on Wild Oats Markets Inc.

This rating(s) was initiated by Standard & Poor's.  It may be
based solely on publicly available information and may or may not
involve the participation of the issuer's management.  Standard &
Poor's has used information from sources believed to be reliable,
but does not guarantee the accuracy, adequacy, or completeness of
any information used.


WINDSTREAM CORP: S&P Rates Proposed $2.5 Billion Notes at BB-
-------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'BB+' corporate
credit rating to Little Rock, Arkansas-based Windstream Corp.,
a company to be formed through the merger of Valor Communications
Group Inc. with the wireline business to be spun off from ALLTEL
Corp.  

The transaction is expected to close in July.  The outlook is
negative.

At the same time, Windstream's proposed $3.3 billion senior
secured credit facility was rated 'BBB-', one notch above the
corporate credit rating, with a recovery rating of '1', indicating
expectations for full (100%) recovery of principal in the event of
a payment default.

A 'BB-'rating was assigned to the company's proposed offering of
$2.5 billion of unsecured notes, comprised of:

   * $1.7 billion of debt for debt exchange notes to be issued to
     ALLTEL; and

   * $800 million of notes that will be issued by Windstream in a
     subsequent offering.

The unsecured notes are rated two notches below the corporate
credit rating because of the significant amount of priority
obligations, largely the bank facility.  Proceeds from the
transactions will be used to pay a $2.3 billion dividend to
ALLTEL, refinance existing debt, and pay transaction fees.  Debt
outstanding at March 31, 2006, pro forma for the proposed
transactions, totaled $5.5 billion.
      
"The ratings on Windstream reflect an aggressive shareholder-
oriented financial policy, accelerating competition from cable
operators, flat to declining revenues from its mature local
telephone business, and risks related to its transition to a
stand-alone business," said Standard & Poor's credit analyst Susan
Madison.

Tempering factors include:

   * the company's position as the dominant provider of local and
     long distance telecom services in secondary and tertiary
     markets, which provides some limited insulation from
     competition, growth potential from data and Internet
     services;

   * its solid operating margin; and

   * moderate capital requirements.
     
Windstream is a rural local exchange carrier providing voice and
data communication services to about 3.4 million access lines
located in 16 states in the midwestern and southeastern U.S. and
parts of New York and Pennsylvania.


XTO ENERGY: Acquires Peak Energy Resources for $105 Million
-----------------------------------------------------------
XTO Energy Inc. agreed to purchase privately held Peak Energy
Resources Inc., a Barnett Shale producer, for equity consideration
of 2.555 million shares of XTO common stock, valued at
approximately $105 million.

This acquisition increases the Company's reserves and leasehold
acreage in the Tier 1 and Tier 2 regions of the Barnett Shale
play, predominantly in Hood, Parker and eastern Erath counties of
Texas.  XTO Energy's internal engineers estimate proved reserves
to be 64 billion cubic feet (Bcf) of natural gas, 14% of which are
proved developed.  Additional potential is more than 200 Bcf of
natural gas. Proved reserve estimates are based on the ownership
of about 37,000 gross acres (33,000 net) with new well locations
spaced at 100 acres.  Development costs for the proved undeveloped
reserves are estimated at $1.30 per thousand cubic feet (Mcf) of
natural gas.  The Company expects reserves of 1.0-1.5 Bcf for each
new well at a cost of about $1.6 million.  Production from the
properties is expected to reach 10 million cubic feet per day
(Mmcf/d) by the end of 2006 and more than 25 Mmcf/d in 2007.

"Our strategy for investment in the Barnett Shale reflects our
commitment to low operational risk and healthy economic returns,"
Bob R. Simpson, Chairman and Chief Executive Officer, stated.  
"Peak Energy offers XTO the opportunity to invest in the best non-
core areas of the play where we anticipate the greatest potential.  
About 30% of the Peak Energy acreage is held-by- production with
no lease expiration risk and, in total, expands our holdings to
almost 200,000 net acres across the Barnett Shale play.  
Importantly, we have hand-picked our properties where drilling and
economic results favor long-term development."

"As in all of our regions, we continue to build out positions
based on reservoir quality, production characteristics and
attractive returns," Keith A. Hutton, President, said.  "The Peak
Energy purchase provides us with solid drilling acreage based on
our technical assessment of well performance to date.  The
leasehold is primarily located in a thick section of the shale
reservoir, ranging from 200 feet to 250 feet, and at a shallow
average drilling depth of 4,600 feet.  Per-well reserves may be
less than those in the Core Area, but the gas composition is 25%
richer, yielding price realizations $1 to $1.50 per Mcf higher
than the Core.  A well-designed infrastructure to handle gas
production and water disposal is already in place.  In addition,
new pipelines are under construction to accommodate future
development.  XTO currently plans to drill 300 wells on the Peak
properties and looks to expand further with 50-acre drilling
locations in select areas."

This transaction is expected to close on June 30, 2006.  The
booked acquisition cost will include customary non-cash
adjustments, including a step-up for deferred income taxes.  
Lehman Brothers acted as the financial advisor to Peak Energy.

Headquartered in Fort Worth, Texas, XTO Energy Inc. (NYSE: XTO) --
http://www.xtoenergy.com/-- is a domestic natural gas producer  
engaged in the acquisition, exploitation and development of
quality, long-lived oil and natural gas properties in the United
States.  Its properties are concentrated in Texas, New Mexico,
Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah,
Louisiana and Mississippi.

                          *     *     *

As reported in the Troubled Company Reporter on March 28, 2006,
Moody's Investors Service assigned Baa3 ratings to XTO Energy's
$400 million 10-year senior note and $600 million 30-year senior
note offerings.  The new ratings are also under review for
upgrade along with XTO's existing ratings that were placed on
review Jan. 24, 2006.  

Other ratings under review for upgrade include XTO's existing Baa3
senior unsecured note ratings, Baa3 corporate family rating,
prospective (P)Ba1 subordinated note shelf rating, and prospective
(P)Ba2 preferred stock shelf rating.  If XTO is upgraded, it would
be by one rating notch.  Moody's expects to complete the review
within the next quarter.


Y3K SECURE: March 31 Balance Sheet Upside Down by $11.2 Mil.
------------------------------------------------------------
Y3k Secure Enterprise Software, Inc., fka Ecuity Inc., 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 a $2,251,868 net loss on $582,020 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $1,827,083
in total assets and $13,034,327 in total liabilities, resulting in
a $11,207,244 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $492,702 in total current assets available to pay
$8,817,487 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?ac2

                        Going Concern Doubt

As reported in the Troubled Company Reporter on Dec. 9, 2005,
De Leon & Company, PA, expressed substantial doubt on Y3k Secure
Enterprise Software Inc.'s ability to continue as a going concern
after it audited the company's financial statements for the fiscal
years ended June 30, 2005, and 2004.  The auditing firm pointed to
the company's current year losses from operations, net capital
deficiency, and cumulative deficit at June 30, 2005.

                           About Y3k Secure

Y3k Secure Enterprise Software, Inc., is a facilities-based
telecommunication carrier providing Voice over Internet Protocol
service offerings as well as legacy telecommunication services.
Ecuity currently provides VoIP services over FTTP including fiber
to residences and businesses, VoIP over WiFi, Business VoIP
Services including IP-PBX and IP-Centrix solutions, "SmartCall"
VoIP services utilizing a downloadable soft-client on a customer's
PC or other Windows compatible computing device, and conference
calling.


YOUTH & FAMILY: S&P Puts B Rating on Proposed $170MM Debt Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating, with a stable outlook, to Austin, Texas-based Youth
& Family Centered Services Inc.

At the same time, Standard & Poor's assigned its 'B' senior
secured bank loan rating and its '2' recovery rating to YFCS'
proposed $50 million revolving credit facility due in 2012 and its
$120 million term loan B due in 2013, indicating the expectation
for a substantial (80%-100%) recovery of principal in the event of
a payment default.  The company is the fourth-largest U.S.
provider of child and adolescent health, education, and long-term
support services.

"The ratings reflect the company's narrow operating focus, its
exposure to third-party reimbursement, the challenge to integrate
the proposed acquisitions, and the potential for further
acquisitions," said Standard & Poor's credit analyst Alain
Pelanne.

"These risks are partially offset by the company's local market
leadership in treating difficult patient cases, the resulting
higher margins relative to peers, its expanding service offerings,
and the relatively stable reimbursement environment in recent
years."

Net of transaction expenses, the term loan will refinance existing
debt of $76 million and fund the acquisition of Ascent Behavioral
Health, a leading outpatient service provider to young children in
Arkansas.  YFCS intends to roll over existing mezzanine debt and
to leave the revolving credit facility undrawn at closing.  In the
third quarter of 2006, YFCS is expected to acquire Psychsolutions
Inc., a leading community-based provider of child behavioral
services in Dade County, Florida, with available cash.


* David Mitchell Joins Fried Frank as Partner in New York
---------------------------------------------------------
David S. Mitchell has joined Fried, Frank, Harris, Shriver &
Jacobson LLP as a partner in the Corporate Department.  He joins
Fried Frank from Cadwalader, Wickersham & Taft LLP where he was a
partner in the Capital Markets Department.

"We are delighted to welcome David to the firm.  He is a highly
regarded practitioner in commodities, futures and derivatives,
areas which are very important to many of our clients," said
Valerie Ford Jacob, Fried Frank's Chairperson.

Mr. Mitchell provides regulatory, transactional and litigation
advice to clients in connection with structuring transactions
and funds, new product development, and regulatory, compliance
and enforcement matters.  His primary areas of practice include:

   * the structuring and regulatory analysis of complex
     derivatives and synthetic and structured products;

   * providing advice to derivatives businesses concerning
     managing and mitigating legal and regulatory risks of
     transactions, including securities and commodities laws and
     regulations; and

   * derivatives related regulatory and compliance advice relating
     to the business activities of a broker-dealer/futures
     commission merchant including assisting clients with
     regulatory agency and self regulatory organization
     examinations, investigations, and enforcement actions.

"Our clients are increasingly involved in complex structured
products and capital markets transactions, both in the United
States and internationally.  David's expertise is directly
relevant to these areas," said Justin Spendlove, the firm's
Managing Partner.

Mr. Mitchell joined Cadwalader in 1983 from the Commodity Futures
Trading Commission.  He received his LL.M. from New York
University School of Law, his J.D., magna cum laude, from New York
Law School, where he was a member of the Law Review and his B.A.,
summa cum laude, Phi Beta Kappa, from City College.

Mr. Mitchell has been named as a leading practitioner in Capital
Markets: Derivatives by both Chambers Global: the World's Leading
Lawyers for Business and Chambers USA: America's Leading Lawyers
for Business.  He is the author of numerous articles and regularly
speaks before industry and professional groups on derivatives,
futures, and securities regulation.  Mr. Mitchell is a member of
the Board of Editors of Futures & Derivatives Law Report and a
member of the Board of Directors of the Futures Industry
Association.

Fried, Frank, Harris, Shriver & Jacobson LLP --
http://www.friedfrank.com/-- is a leading international law firm  
with more than 525 attorneys in offices in New York, Washington,
D.C., London, Paris and Frankfurt.  Fried Frank lawyers regularly
represent major investment-banking firms, private equity houses
and hedge funds, as well as many of the largest companies in the
world. The firm offers legal counsel on M&A and corporate finance
matters, white-collar criminal defense and civil litigation,
securities regulation, compliance and enforcement, government
contracts, real estate, tax, bankruptcy, antitrust, benefits and
compensation, intellectual property and technology, international
trade, and trusts and estates.


* Larry Engel Joins Morrison & Foerster in San Francisco   
--------------------------------------------------------
Leading bankruptcy and workout lawyer Larry Engel has joined
Morrison & Foerster as a partner in its San Francisco office.  Mr.
Engel has over 30 years of experience covering a broad range of
legal disciplines applicable in transactions involving financially
distressed businesses.  Mr. Engel's practice focuses on
bankruptcy, workouts, cross-border insolvency, restructurings,
private equity and hedge fund distressed debt work, insurance
insolvency, leveraged buyouts, and complex financings, including
for real estate and other industries, as well as "commercial tech"
outsourcing, and intellectual property transactions, including
"bankruptcy proofing" licenses, technology ventures, and
collaborations.  He represents clients throughout the U.S. and
abroad.   Mr. Engel joins Morrison & Foerster from White & Case.  
  
"Larry's experience and abilities fit very well with our current
Bankruptcy and Restructuring practice; his credentials and track
record are exactly what clients are looking for," said Larren
Nashelsky, Chair of the firm's Bankruptcy and Restructuring group.  
"Larry will be a tremendous addition to the Bankruptcy and
Restructuring practice, and we are very pleased to welcome him to
the firm," added Keith Wetmore, Chair of Morrison & Foerster.

"We are delighted to have an attorney of Larry's caliber join the
Bankruptcy and Restructuring practice at Morrison & Foerster,"
said Dan Leventhal, partner in the Financial Transactions group.  
"Larry and I were partners for many years at the Brobeck firm, he
is a superb lawyer and I look forward to working with him again."

"Morrison & Foerster provides an excellent platform for further
developing my practice, and the firm's commitment to its core
values of teamwork, excellence, and service to the community and
the profession was of special interest to me," said Mr. Engel.  "I
am excited at the opportunity to help strengthen the firm's
bankruptcy and restructuring practice domestically and
internationally."

Mr. Engel began his legal career at Brobeck, Phleger & Harrison in
1972 and stayed with the firm until its closure in January 2003.  
He received his J.D. from Northwestern University School of Law,
cum laude, where he was the Executive Editor of the Northwestern
University Law Review and a member of the Order of the Coif.  He
received his undergraduate degree from Northwestern University,
magna cum laude and earned Phi Beta Kappa honors.  Mr. Engel is a
frequent lecturer and author for numerous business and legal
organizations, including the Practising Law Institute, the ABI,
the ABA, the State Bar of California, and the California Bankers
Association.


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:

In re EHJ LLC
   Bankr. S.D. Ohio Case No. 06-11631
      Chapter 11 Petition filed May 31, 2006
         See http://bankrupt.com/misc/ohsb06-11631.pdf

In re Intercoastal Leasing, Inc.
   Bankr. S.D. Tex. Case No. 06-32260
      Chapter 11 Petition filed May 31, 2006
         See http://bankrupt.com/misc/txsb06-32260.pdf

In re Lee C. Alison
   Bankr. N.D. Ala. Case No. 06-80946
      Chapter 11 Petition filed May 31, 2006
         See http://bankrupt.com/misc/alnb06-80946.pdf

In re Olympian Moving and Storage, Inc.
   Bankr. N.D. Ohio Case No. 06-12176
      Chapter 11 Petition filed May 31, 2006
         See http://bankrupt.com/misc/ohnb06-12176.pdf

In re Andrew J. Hartpence
   Bankr. N.D. Ga. Case No. 06-66103
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/ganb06-66103.pdf

In re B&D Commercial Fleet Management Services, L.L.C.
   Bankr. E.D. Va. Case No. 06-10582
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/vaeb06-10582.pdf

In re Chesapeake Knife and Tool Company of D.C., Inc.
   Bankr. D. Md. Case No. 06-13130
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/mdb06-13130.pdf

In re DSB, LLC
   Bankr. M.D. Tenn. Case No. 06-02704
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/tnmb06-02704.pdf

In re Genley Transfer, Inc.
   Bankr. N.D. Ohio Case No. 06-12209
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/ohnb06-12209.pdf

In re L & J Sheets Farms
   Bankr. N.D. Ind. Case No. 06-10828
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/innb06-10828.pdf

In re Ponderosa Development, L.P.
   Bankr. E.D. Tex. Case No. 06-10210
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/txeb06-10210.pdf

In re Rite Contracting Services, Inc.
   Bankr. S.D. Ill. Case No. 06-30848
      Chapter 11 Petition filed June 1, 2006
         See http://bankrupt.com/misc/ilsb06-30848.pdf

In re 11730 Plaza America Deli, LLC
   Bankr. E.D. Va. Case No. 06-10584
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/vaeb06-10584.pdf

In re Edward A. Coker, Jr.
   Bankr. W.D. Pa. Case No. 06-22518
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/pawb06-22518.pdf

In re Phillip Iniguez
   Bankr. C.D. Calif. Case No. 06-10836
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/cacb06-10836.pdf

In re Priscilla Dining in Art Restaurant, Inc.
   Bankr. W.D. Pa. Case No. 06-22524
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/pawb06-22524.pdf

In re R.B. No. 2 Limited Partnership
   Bankr. W.D. Pa. Case No. 06-22517
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/pawb06-22517.pdf

In re Rafael Andres Santos Suriel
   Bankr. D. P.R. Case No. 06-01755
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/prb06-01755.pdf

In re Rocky Mountain Homecare, Inc.
   Bankr. D. Colo. Case No. 06-13279
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/cob06-13279.pdf

In re Southern Pride Transportation, LLC
   Bankr. D. Conn. Case No. 06-20471
      Chapter 11 Petition filed June 2, 2006
         See http://bankrupt.com/misc/ctb06-20471.pdf

In re R. Smith, LLC
   Bankr. D. Md. Case No. 06-13177
      Chapter 11 Petition filed June 4, 2006
         See http://bankrupt.com/misc/mdb06-13177.pdf

In re 101 S. Shaver, L.L.C.
   Bankr. S.D. Tex. Case No. 06-32437
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/txsb06-32437.pdf

In re AMRCO, INC.
   Bankr. W.D. Tex. Case No. 06-10856
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/txwb06-10856.pdf

In re Cabalar Enterprises
   Bankr. C.D. Calif. Case No. 06-12383
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/cacb06-12383.pdf

In re Club Cool
   Bankr. D. N.J. Case No. 06-14990
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/njb06-14990.pdf

In re Collision Repair Service, Inc.
   Bankr. E.D. Calif. Case No. 06-90267
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/caeb06-90267.pdf

In re David L. Hager
   Bankr. N.D. Tex. Case No. 06-41683
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/txnb06-41683.pdf

In re Envirocor, Inc.
   Bankr. W.D. Pa. Case No. 06-22551
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/pawb06-22551.pdf

In re Forms Corporation of America
   Bankr. N.D. Ill. Case No. 06-70946
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/ilnb06-70946.pdf

In re Paul J. Tegeder
   Bankr. D. Nebr. Case No. 06-80767
      Chapter 11 Petition filed June 5, 2006
         See http://bankrupt.com/misc/neb06-80767.pdf

In re Gregory Vernon Gonzales
   Bankr. M.D. Ga. Case No. 06-40371
      Chapter 11 Petition filed June 6, 2006
         See http://bankrupt.com/misc/gamb06-40371.pdf

In re Holbrook Millennium Joint Venture, LLC
   Bankr. N.D. Tex. Case No. 06-32329
      Chapter 11 Petition filed June 6, 2006
         See http://bankrupt.com/misc/txnb06-32329.pdf

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Shimero Jainga, Joel Anthony G.
Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A.
Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M.
Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

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