TCR_Public/060612.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, June 12, 2006, Vol. 10, No. 138

                             Headlines

3 RAM: Serial Single-Asset, One-Creditor Chapter 11 Case Dismissed
AB LIQUIDATING: Wants Until Dec. 30 to File Claims Objections
ACE ELECTRICAL: Lease Guarantee Capped Revenue Bond Claims
ACCEPTANCE INSURANCE: Wants Until Feb. 2007 to File Chap. 11 Plan
ADAL GROUP: Moore Stephens Raises Going Concern Doubt

ADVANCED MEDICAL: Moody's Holds Low-B Rating on $650 Million Loan
ADVANTA BUSINESS: Moody's Rates $25 Mil. Class D Certs. at Ba2
AIR CARGO: Maryland Bankr. Court Confirms Joint Liquidating Plan
ALLIED HOLDINGS: Seeks to Assume Lexington Headquarters Lease
AMERICAN AXLE: S&P Rates $200 Million Sr. Unsec. Term Loan at BB

APIDOS CDO: Moody's Places Ba2 Rating on $6 Million Class D Notes
APHTON CORPORATION: U.S. Trustee Appoints Three-Member Committee
APHTON CORPORATION: Wants Eckert Seamans as Bankruptcy Counsel
ARMOR HOLDINGS: Has Access to $825MM Debt Facility from Wachovia
ARVINMERITOR: Fitch Lowers Trust Preferred Rating to B from BB-

ARVINMERITOR INC: S&P Puts BB+ Rating on $1.05 Billion Bank Debt
BAYOU GROUP: Court Gives Interim OK on FTI Consulting as Advisor
BAYOU GROUP: Court Gives Interim Nod on Dechert LLP as Counsel
BEAZER HOMES: Prices 8.125% $275MM Senior Notes Offering
BLUE BIRD: Court Closes Chapter 11 Cases After Plan Consummation

BRITESMILE INC: Board Rejects Futuredontics Acquisition Proposal
BUFFALO COAL: Asks Court to Approve Moran Kiker as Special Counsel
CALUMET SPECIALTY: S&P Raises $175 Million Loan's Rating to BB-
CAMPBELL RESOURCES: Creditors To Meet & Vote on Plans on June 26
CARDSYSTEMS SOLUTIONS: Taps Keegan Linscott as Accountants

CATHOLIC CHURCH: Ct. Mulls Dismissal if Plan is not Filed Soon
CATHOLIC CHURCH: Insurers Balk at Portland Tort Panel's Disclosure
CENTURY ALUMINUM: Posts $141.5 Mil. Net Loss for 1st Quarter 2006
CHARLES RIVER: Prices $300 Million Convertible Senior Notes Offer
CHESAPEAKE ENERGY: Moody's Reviews Sr. Unsecured Note's Ba2 Rating

CHICAGO HUDSON: Files Schedules of Assets and Liabilities
CHICAGO HUDSON: Hires Levenfield Pearlstein as Bankruptcy Counsel
COOPER COMPANIES: S&P Affirms BB Rating & Revises Outlook to Neg.
CRESCENT JEWELERS: Court Approves $35MM CIT Group Exit Financing
CRESCENT JEWELERS: Files 2nd Amended Chapter 11 Plan in N.D Calif.

CRESCENT JEWELERS: Exclusivity Termination Hearing Set for July 15
DANA CORP: Judge Lifland Denies American Axle's Lift Stay Motion
DANA CORP: Court Defers Ruling on AREH's Claims Trading Request
DELPHI CORP: Negotiating with UAW Over Possible Buy-Outs
DELPHI CORP: ThyssenKrupp Wants to Exercise Set-Off Rights

DELTA AIR: Recalls Pilots to Support Revenue Recovery Initiatives
DELTA AIR: Wants Court Nod on California Counties Agreement
DELTA AIR: Wants to Walk Away from 14 Embraer Aircraft Leases
ENRON CORP: Gets Court Nod to Modify Liquidation Incentive Pool
ENRON CORP: Green Market Says Unit Breached Purchase Pact

FALCON AIR: Wants to Borrow Up to $1 Million from Jetglobal
FEDERAL-MOGUL: Panel Wants Jefferies Fin'l Advisory Work Modified
FOAMEX INTERNATIONAL: Par IV Capital Discloses 7.22% Stake
FOAMEX INTERNATIONAL: Wants PwC to Work on IP License Deal
FORD MOTOR: Fitch Downgrades Issuer Default Rating to B+ from BB

GLOBAL REALTY: Posts $808,979 Net Loss in 2006 First Quarter
GULF COAST: Recruits David Hull as Chief Restructuring Officer
HIGH VOLTAGE: Plan Confirmation Hearing Set for June 27
IMAGE TEK: Case Summary & 17 Largest Unsecured Creditors
INTERNATIONAL RECTIFIER: Fitch Rates Planned $650 Mil. Notes at B+

INTERPUBLIC GROUP: Prices Capital Markets Transaction
INTERPUBLIC GROUP: Posts $170 Mil. Net Loss in 2006 First Quarter
JDA SOFTWARE: Moody's Puts B1 Rating on Proposed $50 Million Loan
KAISER ALUMINUM: Inks 2nd Amendment to Replacement DIP Financing
KEM RALPH: Case Summary & 11 Largest Unsecured Creditors

KRATON POLYMERS: Moody's Places B1 Rating on $75MM Debt Facility
L-3 COMMUNICATIONS: Appoints Michael T. Strianese as Interim CEO
LARRY'S MARKETS: Wants to Use Sterling's Cash Collateral
LEVITZ HOME: Court Grants Extension to Lease Decision Period
LEVITZ HOME: Moves to Reject Robbinsville Lease

LEXINGTON HEALTHCARE: Sansone Hired as Trustee's Tax Consultant
LIBERTAS FUNDING: Moody's Puts Ba1 Rating on $9MM Class G Notes
LIBERTY DIVERSIFIED: Chisholm Bierwolf Raises Going Concern Doubt
LLOYD MITCHELL: Case Summary & 15 Largest Unsecured Creditors
LOPERS/NOYACK PATH: Selling Luxury Home Unit on Friday

LORBER INDUSTRIES: Taps Steven Scandura as Collection Counsel
MANHATTAN INVESTMENT: Bear Stearns Suit Returns to Bankruptcy Ct.
MAXXAM INC: March 31 Balance Sheet Upside-Down By $671.3 Million
MERIDIAN AUTOMOTIVE: Wants Until Nov. 1 to File Notices of Removal
MILLIPORE CORP: S&P Assigns BB- Rating to $550 Million Sr. Notes

MIRANT CORP: Plans to Pay $4 Million More to Seven Firms
MIRANT CORP: Settles Southern Maryland Electric FFC Pact Dispute
MMI PRODUCT: Moody's Withdraws Junk Rating on $200MM Sr. Sub Notes
MUSICLAND HOLDING: Committee Has Until July 3 to File Claims
NATIONAL CENTURY: Trust Wants LTC Entities Compelled to Pay $1MM

NATIONAL MENTOR: S&P Junks Proposed $215MM Sr. Sub. Notes' Rating
NAVARRE CORP: S&P Withdraws BB- Ratings at Company's Request
NEFF RENTAL: Moody's Rates Second Lien Sr. Secured Notes at Caa1
NELLSON NUTRACEUTICAL: Valuation Hearing Starts on September 13
NORTHEAST BIOFUELS: S&P Rates Proposed $140 Million Facility at B+

NORTHWEST AIRLINES: Equipment Workers Ratify Labor Agreement
NORTEL NETWORKS: S&P Keeps B Corp. Credit Rating on Negative Watch
OWENS CORNING: Credit Suisse Files Report on Professional Advisors
OWENS CORNING: Gets Court Approval to Pay Shumaker Fixed Fee
PEAK ENTI: Case Summary & 4 Largest Unsecured Creditors

PERSISTENCE CAPITAL: Ch. 11 Trustee Hires Hahn Fife as Accountants
PLIANT: Wells Fargo Says Plan Violates 2nd Lien Notes Indenture
POKAGON GAMING: Moody's Rates $305 Million Senior Notes at B3
PREMIUM ESCROW: Trust's Negligence Suit v. Doctors is Dismissed
PUREBEAUTY INC: Sells All Assets to Cameron Capital for $9 Mil.

REGAL CINEMAS: S&P Affirms BB- Corporate Credit Rating
RELIABILITY INC: Auditor Raises Going Concern Doubt Over Losses
RENATA RESORT: Wants Court to Okay John Venn as Bankruptcy Counsel
RH DONNELLEY: Posts $71.7 Mil. Net Loss for Quarter Ended Mar. 31
ROBOTIC VISION: Fee Applications Mutate into Adversary Proceedings

ROTEC INDUSTRIES: Organization Meeting Scheduled this Wednesday
SAINT VINCENTS: Amended NYSNA Labor Deal Gets Court's Nod
SAINT VINCENTS: Bids for St. Mary's Hospital Due on June 30
SEPRACOR INC: Mar. 31 Balance Sheet Upside-Down by $127.6 Million
SILICON GRAPHICS: Can Give Adequate Assurance to Utilities

SILICON GRAPHICS: Gets Court Nod to Hire Weil Gotshal as Counsel
SIRIUS SATELLITE: Will Make Cutting-Edge Satellite for Loral
SMARTVIDEO TECHNOLOGIES: Sherb & Co. Expresses Going Concern Doubt
SOS REALTY: Court Approves Duane Morris as Bankruptcy Counsel
SOURCECORP INC: S&P Rates Proposed $125 Million Term Loan at B-

TOWN SPORTS: S&P Revises B Rating's Watch Implication to Positive
TRENWICK AMERICA: Entry of Final Decree Indefinitely Delayed
TRIPLE A POULTRY: Taps Porter & Hodges as Bankruptcy Counsel
TRIPLE A POULTRY: Wants Until June 20 to File Schedules
UNISYS CORP: Fitch Rates New $275 Million Bank Facility at BB+

USG CORP: Court Disallows Tenn. Finance Dept.'s $11-Mil. Claim
USG CORP: Illinois Wants to Pursue Tort Suit Against U.S. Gypsum
W.R. GRACE: Fights U.S. Gov't Over Doctor's Medical Records
W.R. GRACE: Settles Wauconda Environmental Dispute for $1.25 Mil.
W.S. LEE: Wants to Reject Government Supply Contract

WAMU MORTGAGE: Moody's Puts Low-B Rating on 2 Certificate Classes
WESTERN APARTMENT: Hires Smaha & Daley as Bankruptcy Counsel
WESTERN APARTMENT: U.S. Trustee Unable to Appoint Official Panel
WESTERN IOWA: Court Orders Murphy Tractor to Turnover Sold Assets
WINDSWEPT ENVIRONMENTAL: Files 2006 Third Quarter Financials

WINN-DIXIE: Bid for Louiseville Warehouse Must Be Submitted Today
WINN-DIXIE: Miami Outparcels Bids Must Be Submitted Today
WINN-DIXIE: Stockbridge Property Bids Due Today
WORLDCOM INC: Contends Whittaker is a General Unsecured Creditor
WORLDCOM INC: Court Disallows Beepwear's Claim Against SkyTel

* BOND PRICING: For the week of June 5 - June 9, 2006

                             *********

3 RAM: Serial Single-Asset, One-Creditor Chapter 11 Case Dismissed
------------------------------------------------------------------
The Honorable Diane Weiss Sigmund dismissed 3 Ram, Inc.'s second
single-asset, one-creditor chapter 11 proceeding.  Judge Sigmund
found that Old Gold, LLC, established cause under 11 U.S.C. Sec.
1112 for dismissal of the chapter 11 case because no
reorganization is possible and the proceeding is nothing more than
a two-party dispute.

3 Ram, Inc., is a non-operating corporation whose sole function is
to own a liquor license which was intended to be utilized by its
sole shareholder, Daniel Joseph Gallagher, in connection with a
restaurant and bar to be built on property he owns.  3 Ram's
Chapter 11 case was filed in order to prevent its one creditor,
Old Gold, from exercising its rights in the debtor's sole and
fully encumbered asset, based on the speculative possibility that
Mr. Gallagher would be able to refinance his home for an amount
sufficient to satisfy Old Gold's claim.  Old Gold contended that
it was entitled to much more than what Mr. Gallagher could obtain
by refinancing his home.  

Judge Sigmund's Opinion is published at 2006 WL 1517354.  

In re 3 Ram, Inc., filed for chapter 11 protection in Aug. 23,
2004 (Bankr. E.D. Pa. Case No. 04-31434) and Mr. Gallagher, 3
Ram's shareholder, sought protection under Chapter 13 on Aug. 23,
2003 (Bankr. E.D. Pa. Case No. 03-31732).  Unwilling to permit
the chapter 11 case to be resolved under a chapter 13 plan in
Mr. Gallagher's bankruptcy, the United States Trustee moved to
dismiss or convert the chapter 11 proceeding.  The chapter 11 case
was dismissed on June 6, 2005.  Mr. Gallagher defaulted on his
confirmed sixth amended plan and his chapter 13 case was dismissed
on April 10, 2006, pursuant to an Opinion and Order (now on
appeal) dated October 21, 2005, In Re Gallagher, 312 B.R. 277
(Bankr. E.D. Pa. 2005).  3 Ram filed a second chapter 11 petition
on February 21, 2006 (Bankr. E.D. Pa. Case No. 06-10656).  3 Ram
is represented by David A. Scholl, Esq., in Newtown Square,
Pennsylvania.


AB LIQUIDATING: Wants Until Dec. 30 to File Claims Objections
-------------------------------------------------------------
AB Liquidating Corp., fka Adaptive Broadband Corporation, asks the
Honorable Arthur S. Weissbrodt of the U.S. Bankruptcy Court for
the Northern District of California in San Jose to extend its
period to file objections to claims and interests from June 30,
2006, to Dec. 30, 2006.

The Reorganized Debtor needs the six-month extension to prepare
objections, which may become necessary if there is a distribution
to shareholders, David M. Bertenthal, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub LLP tells the Court.

On May 29, 2003, the Reorganized Debtor and the Official Committee
of Unsecured Creditors participated in a mediation relating to the
claims of the Securities Class Claimants, the Estate, Lloyds of
London Underwriters and individual directors and officers of the
Debtor, specifically, Donna S. Birks, Leslie G. Denend, James
Granger, Fredrick Lawrence, Peter Maloney, William Martin,
James T. Richardson, Daniel Scharre and Kenneth Wees.

As a result of that mediation, the claims of the Estate, Lloyds
and the directors and officers are settled.  Judge Weissbrodt
approved the settlement.

Additionally, the Estate has filed a lawsuit against another
claimant, Ernst & Young, LLP, which may result in the recovery of
additional monies for the Estate.  The E&Y Lawsuit is not yet
decided.

If the Estate is successful in the E&Y Lawsuit, the Debtor
believes there will be sufficient funds in the Estate for a
distribution to shareholders.

If there is a distribution, it will become necessary to set a
record date for shareholders and it may be necessary to file
objections to any proofs of claim or interest filed by equity
holders, if appropriate.

Headquartered in Sunnyvale, California, AB Liquidating Corp.
fka Adaptive Broadband Corporation provided leading-edge
technology for the deployment of broadband wireless communication
over the Internet.  The Company filed for chapter 11 protection on
July 26, 2001 (Bankr. N.D. Cal. Case No. 01-53685).  David M.
Bertenthal, Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub LLP represents the Debtor in its bankruptcy case.  The
Bankruptcy Court confirmed the Debtor's chapter 11 Plan on
Feb. 28, 2002, and the Plan took effect on Sept. 6, 2002.


ACE ELECTRICAL: Lease Guarantee Capped Revenue Bond Claims
----------------------------------------------------------
Central Bank and Trust Co., Hutchinson, Kansas, serves as the
Indenture Trustee for two industrial revenue bond issues:

   (a) the City of Columbus, Kansas Industrial Revenue Bonds,
       Series 1997 (Ace Electrical Acquisition, L.L.C. Project),
       in the original principal amount of $4,500,000, and

   (b) the City of Columbus, Kansas Industrial Revenue Bonds,
       Series 1998 (Ace Electrical Acquisition, LLC), in the
       original principal amount of $3,500,000.

The Bonds were issued pursuant to a Trust Indenture dated Dec. 1,
1997, between the City of Columbus, Kansas and the Indenture
Trustee, and a Supplemental Trust Indenture dated Aug. 1, 1998
between the Issuer and the Indenture Trustee.  The Bonds are
secured by

   (i) a Guaranty Agreement by the Debtor in favor of the
       Indenture Trustee dated Dec. 1, 1997, and

  (ii) a Guaranty Agreement by the Debtor in favor of the
       Indenture Trustee dated Aug. 1, 1998.

The City used the proceeds of the Bonds to acquire a manufacturing
facility in Columbus, Kansas.  The City leased the property to the
Debtor pursuant to a Tenant Lease dated Dec. 1, 1997, with Ace
Electrical Acquisition, LLC, as supplemented by a Tenant
Supplemental Lease No. 1 dated Aug. 1, 1998.  

The property was leased to the Debtor for the amount due under the
industrial revenue bonds.  The City assigned substantially all of
its rights as lessor under the lease to the Indenture Trustee.  
The lease runs through 2017.  Ace Electrical has the option to
purchase the property for $100 upon payment of the amount due
under the lease, which is equal to the exact amount due under the
industrial revenue bonds.  

When Ace Electrical filed for bankruptcy, the bond debt totaled
$6,589,798.  

On Sept. 22, 2004, the Bankruptcy Court authorized the Debtor to
reject the Lease.  The Indentured Trustee, in turn, filed a
$3,488,495 Proof of Claim for its claims under the Lease and the
Guarantees.  Ace Electrical objected to the Claim, arguing that
the statutory cap for rejection damage claims under 11 U.S.C. Sec.
502(b)(6) limits the Indenture Trustee's claim to $1,846,756.60.

The Honorable Arthur B. Briskman entertained cross-motions for
summary judgment and issued a decision on Feb. 3, 2005, concluding
that, in fact, the Indenture Trustee's claim is limited by the
provisions of 11 U.S.C. Sec. 502(b)(6).  Judge Briskman's decision
is published at 2005 WL 419708, 53 Collier Bankr. Cas. 2d 963, 44
Bankr. Ct. Dec. 87, and 18 Fla. L. Weekly Fed. B 128.
  
Section 502(b)(6) of the Bankruptcy Code provides that "[a] claim
of a lessor for damages resulting from the termination of a lease
of real property shall not be allowed to the extent such claim
exceeds the rent reserved by such lease, without acceleration, for
the greater of one year, or 15 percent, not to exceed three years,
of the remaining term of such lease. . .  ."  The rationale is to
compensate the landlord while providing for the unsecured
creditors.  Judge Briskman finds that the 502(b)(6) cap applies to
claims against guarantors of leases, and the obligation of the
guarantor cannot be greater than the obligation of the principal
obligor, citing In re Henderson, 297 B.R. 875, 885 (M.D. Fla.
2003) and In re Clements, 185 B.R. 895.  

The Debtor's guarantee of the bonds is in fact a guarantee of the
lease, Judge Briskman explains, so the limitation of 11 U.S.C.
Sec. 502(b)(6)(A) applies to the Debtor, and the Indenture
Trustee's claim is capped at $1,846,756.60.

Headquartered in Apopka, Florida, Ace Electrical Acquisition LLC
is engaged in manufacturing and buying-out products for the
automotive parts rebuilding industry and also sells complete
alternators and starters, and sources products from the United
States as well as China, Canada and Taiwan.  The Company filed for
chapter 11 protection on March 23, 2004 (Bankr. M.D. Fla. Case No.
04-03224).  R. Scott Shuker, Esq., at Kay, Gronek & Latham, LLP
represents the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it estimated
debts and assets of over $10 million.


ACCEPTANCE INSURANCE: Wants Until Feb. 2007 to File Chap. 11 Plan
-----------------------------------------------------------------
Acceptance Insurance Companies Inc. asks the U.S. Bankruptcy Court
for the District of Nebraska to further extend, until Feb. 9,
2007, the time within which it has the exclusive right to file a
chapter 11 plan.  The Debtor also asks the Court to extend, until
April 9, 2007, its period to exclusively solicit acceptances of
that plan from its creditors.

Two of the Debtor's principal assets are its interest in
Acceptance Insurance Company and a takings claim from the United
States of America.  An extension, the Debtor contends, would allow
it to complete the liquidation of these assets.

                       Interest in AIC

The Debtor says that it continues to diligently manage claims
within AIC in an effort to maximize the value of AIC for the
benefit of its creditors.  The Debtor discloses that the claims
resolutions process within AIC has not yet entered the stage where
it will permit the Debtor to structure an optimal plan of
reorganization.  The Debtor tells the Court that insurance
consultants have advised it that the run-off of AIC's business is
not yet at the point where claims can be determined with
sufficient precision to allow AIC's assets to be sold.

                          Takings Claim

The Debtor tells the Court that the takings claims started from
the initial stages of litigation.  The Debtor says that the United
States filed a motion to dismiss its complaint but was denied.  
The Debtor and the United States have filed cross motions for
summary judgments and the briefing on motions will close on June
26, 2006.  The Debtor expects a ruling on the cross motion in
August or September of 2006.  The Debtor says that if trial
becomes necessary, it would take place either in December 2006 or
the first quarter of 2007.

                   Granite Reinsurance Litigation

The Debtor also discloses that along with AIC, it is currently
engaged in litigation with Granite Reinsurance Ltd. regarding a:

    * $10 million claims filed against the Debtor in its
       bankruptcy proceedings, and

    * $10 million lawsuit filed against AIC.

The bankruptcy claim and lawsuit have been procedurally
consolidated and are pending in the bankruptcy court.  The Debtor
says that Granite's claim represents approximately 10% of the
total claims filed against the Debtor.  The Debtor tells the Court
that the Official Committee of Unsecured Creditors appointed in
its case has intervened in both matters.  The Debtor expects
resolution of the Granite litigation some time in December 2006 or
the first quarter of 2007.

The Debtor tells the Court that once the takings claim and Granite
litigations are resolved, the run-off from AIC's business has
progressed to a point that AIC's assets can be sold and a buyer
for the assets is identified, then it will be in a position to
propose a plan of liquidation.

The Debtor reveals that the Committee has consented to the
extension.

                   About Acceptance Insurance

Headquartered in Council Bluffs, Iowa, Acceptance Insurance
Companies Inc. -- http://www.aicins.com/-- owns, either directly   
or indirectly, several companies, one of which is an insurance
company that accounts for substantially all of the business
operations and assets of the corporate groups.  The Company filed
for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case
No. 05-80059).  The Debtor's affiliates -- Acceptance Insurance
Services, Inc., and American Agrisurance, Inc. -- filed separate
chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 & 05-
80058) on Jan. 7, 2005.  John J. Jolley, Esq., at Kutak Rock LLP,
represents the Debtor.  Robert J. Bothe, Esq., at McGrath North
Mullin & Kratz, PC LLO, represents the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $33,069,446 in total assets and
$137,120,541 in total debts.


ADAL GROUP: Moore Stephens Raises Going Concern Doubt
-----------------------------------------------------
Moore Stephens, P.C., expressed substantial doubt about Adal
Group, Inc.'s ability to continue as a going concern after
auditing the Company's financial statements for the year ended
Dec. 31, 2005.  The auditing firm pointed to the Company's
recurring losses from operations and working capital and
stockholders' deficiencies.  Moore Stephens also pointed to the
Company's default on certain financial commitments.

For the year ended Dec. 31, 2005, Adal Group incurred a $6,059,000
net loss, compared to a $2,294,000 net loss for the year ended
Dec. 31, 2004.

The Company generated consolidated revenues for the year ended
Dec. 31, 2005, of $33,519,000, a 17% increase compared to
$29,228,000 for the comparable 2004 period.   The increase is due
to revenues from Adal Guilform of $3,162,000, revenues from Adal
Structures of $372,000, incremental increase in revenues from Adal
Engineering of $449,000, and revenues from Adal Seco of $537,000,
which were mainly due to a slight increase in the average selling
price and a decrease of $228,000 from unfavorable exchange rates.

At Dec. 31, 2005, the Company's balance sheet showed $19,227,000
in total assets and $25,182,000 in total liabilities, resulting in
a $5,955,000 stockholders' deficit.

A full-text copy of the Company's 2005 annual report is available
for free at http://researcharchives.com/t/s?b3d

                       Payment Defaults

Adal Group received funding from Laurus Master Fund, Ltd., in
2005, in the form of a convertible note in the amount of
$2,000,000, to support cash flow requirements and to cover
operating losses.  In May 2006 the Company was unable to meet
interest and principal repayments under a revised repayment
schedule and is currently working with the Laurus Fund to
restructure the terms of the note.  

The Company has not received a formal notice from Laurus regarding
a default.  Laurus' management is working with the Company to
restructure the terms of the note.

Management discloses that as a result of continued losses creditor  
pressure has increased.  A former supplier has formally advised
the Company that they intend to take legal action to recover their
debt, which could lead to a bankruptcy proceeding.

In addition, several of the Company's current raw material vendors
are refusing to grant additional credit and are requiring payment
for material in advance, plus repayment of a portion of the unpaid
balances owed.

                         About Adal Group

Adal Group -- http://www.adalgroup.com/-- is a global producer of  
added value aluminum extrusions, precision engineered parts and
related products. Adal operates in high growth, large niche
markets, including such key industries as aerospace, defense,
automotive and construction.


ADVANCED MEDICAL: Moody's Holds Low-B Rating on $650 Million Loan
-----------------------------------------------------------------
Moody's Investors Service affirmed Advanced Medical Optics, Inc.'s
existing ratings, following the company's announcement that it is
issuing, through a Rule 144A offering, up to $500 million of
convertible senior subordinated notes due 2026.

Moody's expects AMO to use the net proceeds from the offering, and
roughly $100 million in borrowings under its $300 million senior
credit facility, to purchase $500 million worth of its common
stock, and up to $100 million of its outstanding convertible notes
through privately negotiated repurchases.  Moody's does not rate
the proposed issue.  Additionally, Moody's does not rate the $150
million convertible senior subordinated notes due 2025.

The rating outlook remains stable.

Ratings affirmed:

   * Corporate Family Rating -- B1

   * $300 million Sr. Secured Revolver due 2009 -- B1

   * $350 million Convertible Senior Subordinated Notes
     due 2024 -- B3

While Moody's typically believes that adding debt to the balance
sheet expressly for returning capital to shareholders weakens a
company's credit profile, we believe that the company's current
balance sheet and forward-looking cash flow can support the
additional debt at the B1 rating category.

Additionally, margin expansion and cash flow growth associated
with AMO's product rationalization strategy support the B1 rating.  
Moody's rating affirmation also assumes that the company will
refrain from further share purchases, other than that necessary to
offset the dilutive effects of stock-based compensation.  Doing so
at the continued expense of creditors could jeopardize the
ratings.

The company's cataract surgery and implants business is AMO's
largest segment and comprises over 50% of its 2005 revenues.  AMO
is the second largest player in this segment -- behind the
significantly better capitalized, Alcon Inc.  The company's
reliance on cataract surgery equipment and implant devices for
over 50% of its revenues increases the probability that event risk
-- such as that faced by Bausch & Lomb with regard to its ReNu
with MoistureLoc lens care solution -- could have a deleterious
impact on AMO's operations thereby affecting its ratings.

Moody's believes that topline growth will more likely stem from
acquisitions -- either as a complement to existing product lines
or as an entrance into new market segments such as contact lenses.
We assume that such acquisitions, if material, would have a
significant equity component with respect to financing
arrangements, as there is little room for additional leverage at
the current rating level unless AMO were to delever materially.

The rating outlook is stable.  Moody's could revise the outlook to
positive if the company continues to deliver on its product
rationalization strategy as evidenced by improving operating
margins and free cash flow over the next several quarters.

Moody's could upgrade the rating if CFO-to-adjusted debt exceeds
15% and FCF-to-adjusted debt exceeds 10% on a sustained basis due
to growth among the company's higher margin businesses, such as
intraocular lenses, and continued rationalization among its lower
margin product lines.

Event risk and ensuing product litigation, that currently faced by
AMO's competitor, Bausch & Lomb, could trigger a rating downgrade.  
AMO's failure to deliver on its product rationalization strategy,
stagnant organic revenue growth, or margin deterioration caused by
competitive or reimbursement pressures could trigger a rating
downgrade.  Specifically, cash flow from operations-to-adjusted
debt below 5% or negative free cash flow on a sustained basis, and
additional material returns of capital to shareholders without
commensurate debt reduction could precipitate a rating downgrade.

Advanced Medical Optics, headquartered in Santa Ana, California,
is a global leader in the development, manufacturing and marketing
of ophthalmic surgical and contact lens care products.  Sales
for the twelve months ended June 24, 2005 were approximately
$921 million.


ADVANTA BUSINESS: Moody's Rates $25 Mil. Class D Certs. at Ba2
--------------------------------------------------------------
Moody's Investors Service assigned a Aaa-rating to the
$250,000,000 AdvantaSeries Class A(2006-A3) Asset Backed Notes, a
Aaa-rating to the $300,000,000 AdvantaSeries Class A(2006-A4)
Asset Backed Notes and a Ba2-rating to the $25,000,000
AdvantaSeries Class D(2006-D2) Asset Backed Notes issued from the
Advanta Business Card Master Trust.

The complete ratings action:

Issuer: Advanta Business Card Master Trust, AdvantaSeries

   * $250,000,000 Class A(2006-A3) Asset Backed Notes, rated Aaa
   * $300,000,000 Class A(2006-A4) Asset Backed Notes, rated Aaa
   * $25,000,000 Class D(2006-D2) Asset Backed Notes, rated Ba2

The AdvantaSeries consists of Class A notes, Class B notes, Class
C notes and Class D notes. Credit enhancement for the Class
A(2006-A3) and Class A(2006-A4) notes is provided by the Class B
notes, Class C notes, Class D notes, a cash collateral account
sized at 2.25% of the adjusted outstanding principal balance of
the AdvantaSeries notes on the closing date and a spread account,
which is initially unfunded and may increase if excess spread
falls below prescribed levels.  Credit enhancement for the Class
D(2006-D2) notes is provided by the cash collateral account and
spread account.  All classes of Notes issued out of the
AdvantaSeries benefit from the cash collateral account and the
spread account.

Moody's Aaa rating of the Class A(2006-A3) notes, the Aaa rating
of the Class A(2006-A4) notes and the Ba2-rating of the Class
D(2006-D2) notes are based on the credit quality of the underlying
pool of credit card receivables, the transaction's structural
protections and the capability of the servicer, Advanta Bank
Corp.,  which is an unrated, wholly owned subsidiary of Advanta
Corp.

The assets of the Trust are a pool of MasterCard and, to a limited
extent, Visa receivables generated on business purpose credit
cards.  Some of the benefits of the card include additional cards
for company employees at no additional fee, detailed expense
reports, ability to earn rewards and access to valuable products
offered by alliance partners.  Advanta began originating this
product in 1994 and has steadily grown the portfolio to its
current size of over $4 billion in receivables.

Moody's Investors Service will include in the New Issue Report
accompanying this transaction, a Transaction Governance Assessment
for the Trust.  Transaction governance has always been a part of
Moody's analysis of structured finance ratings, but the added TGA
summary will provide commentary and opinion regarding the level of
oversight, controls, and procedures incorporated into this
securitization.

TGAs evaluate and comment on procedures expected to be conducted
throughout the life of a securitization, which if conducted
effectively,help mitigate the risk of loss to investors.  TGAs
cover many items including processes that minimize the risk of
errors in calculations,errors in cash flow allocations and
mismanagement of funds and assets.

TGAs also assess the transparency and detail of investor reports.  
Once implemented in the credit card sector, Moody's expects to
roll out TGAs to other asset types within the asset-backed and
residential mortgage-backed sectors.


AIR CARGO: Maryland Bankr. Court Confirms Joint Liquidating Plan
----------------------------------------------------------------
The Honorable James F. Schneider of the U.S. Bankruptcy Court for
the District of Maryland approved the Disclosure Statement
explaining the Modified Joint Plan of Liquidation filed by Air
Cargo, Inc., and its Official Committee of Unsecured Creditors and
confirmed the Plan.

The Plan will be funded by assets of:

   -- a grantor trust created under the Plan to liquidate all of
      the assets of the Debtor's estate, including but not limited
      to prosecution of all claims; and

   -- a trust created pursuant to the Plan to prosecute certain
      claims for the benefit of motor carriers that provided
      transport services to the Debtor and the Debtor's customers.

Silicon Valley Bank will be paid $1.85 million on the plan's
effective date.

Freightmasters Air Express, Inc., will be paid $17,278.  The
Debtors will pay Cargo Connection Logistics Corp. $61,321.

Truckers will be paid its pro rata share of 95% of surplus funds
from the Litigation Trust, to the extent funds are available.  

Holders of allowed general unsecured claims will be paid its pro
rata share of 5% of surplus funds from the Litigation Trust, to
the extent funds are available.  

Carlyle Partners III, LP, and CP III Coinvestment, LP, will get
their pro rata share of distributions of funds from the Litigation
Trust after general unsecured creditors are paid in full.  

Holders of equity interests will get nothing under the Plan.  

A full-text copy of the Joint Modified Plan of Liquidation is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060609220533

Headquartered in Annapolis, Maryland, Air Cargo, Inc., provided
contract management, freight bill auditing and consolidated
freight invoicing and payment services for wholesale cargo
customers.  The Company filed for chapter 11 protection on Dec. 7,
2004 (Bankr. D. Md. Case No. 04-37512).  Alan M. Grochal, Esq., at
Tydings & Rosenberg, LLP, represents the Debtor.  Carol L. Hoshal,
Esq., Dennis J. Shaffer, Esq., and Stephen B. Gerald, Esq., at
Whiteford, Taylor & Preston, represent the Official Committee of
Unsecured Creditors.   When the Debtor filed for protection from
its creditors, it listed total assets of $16,300,000 and total
debts of $17,900,000.


ALLIED HOLDINGS: Seeks to Assume Lexington Headquarters Lease
-------------------------------------------------------------
Allied Holdings, Inc., leases from LEPERCQ Corporate Income Fund
L.P., (Lexington) premises located at 160 Clairemont Avenue, in
Decatur, Georgia.  Allied uses the premises as their corporate
headquarters.

Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, relates that the current expiration date of the
Headquarters Lease is December 31, 2007.  Allied believes it is
current on its payment of fixed rent due under the Headquarters
Lease.

Mr. Walker explains that the continued use of the Premises is
vital to ensure that the Debtors' operations continue without
disruption at a critical time in their reorganization.

The Debtors ask the U.S. Bankruptcy Court for the Northern
District of Georgia to permit them to assume the Headquarters
Lease.

The Debtors will pay Lexington a $16,400 cure amount, representing
unpaid tax reimbursement.

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


AMERICAN AXLE: S&P Rates $200 Million Sr. Unsec. Term Loan at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
American Axle & Manufacturing Inc.'s $200 million senior unsecured
term loan maturing in April 2010.

At the same time, the 'BB' corporate credit ratings on the
Detroit, Michigan-based auto supplier and its on parent company,
American Axle & Manufacturing Holdings Inc. were affirmed.  The
outlook is negative.  Total consolidated debt at March 31, 2006,
was about $575 million.

Proceeds from the term loan will be used to refinance payments,
related to the conversion of Holdings' $150 million senior
convertible notes due 2024, and for general corporate purposes.  
Following completion of this transaction, American Axle will
restore its liquidity.  The company will initially draw down
on its $600 million senior unsecured revolver to make the
payments.


APIDOS CDO: Moody's Places Ba2 Rating on $6 Million Class D Notes
-----------------------------------------------------------------
Moody's Investors Service assigned ratings to five classes of
notes issued by Apidos CDO III:

   * Aaa to the $212,000,000 Class A-1 Senior Notes due 2020;
   * Aa2 to the $19,000,000 Class A-2 Senior Notes due 2020;
   * A2 to the $15,000,000 Class B Mezzanine Notes due 2020;
   * Baa2 to the $10,500,000 Class C Mezzanine Notes due 2020;
   * Ba2 to the $6,000,000 Class D Mezzanine Notes due 2020.

Apidos CDO III is a CLO backed by mostly senior secured bank
loans.  The collateral manager is Apidos Capital Management, LLC.

According to Moody's, the ratings are based primarily on the
expected loss posed to noteholders relative to the promise of
receiving the present value of such payments.  Moody's also
analyzed the risk of diminishment of cashflows from the underlying
portfolio of corporate debt due to defaults, the characteristics
of these assets and the safety of the transaction's legal
structure.


APHTON CORPORATION: U.S. Trustee Appoints Three-Member Committee
----------------------------------------------------------------
The U.S. Trustee for Region 3 appointed three creditors to serve
on an Official Committee of Unsecured Creditors in Aphton
Corporation's chapter 11 case:

    1. Xoma (US) LLC
       Attn: J. David Boyle II
       2910 Seventh Street
       Berkeley, California 94710,
       Tel: (510) 204-7234
       Fax: (510) 649-7571

    2. Solomon Edwards Group, LLC
       Attn: Robert Bermon
       1255 Drummers Lane, Suite 200
       Wayne, Pennsylvania 19087
       Tel: (610) 902-0440
       Fax: (610) 902-0441

    3. Cato Research, Ltd.
       Attn: Daniel Charles Cato
       200 Westpark Corp. Center, 4634 Alston Avenue
       Durham, North Carlina 27713
       Tel: (919) 361-2286
       Fax: (919) 361-2290

The Committee has selected William J. Burnett, Esq., as its
counsel.

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

At Dec. 31, 2005, Aphton's balance sheet showed assets totaling
$6,775,858 and debts totaling $11,641,182.


APHTON CORPORATION: Wants Eckert Seamans as Bankruptcy Counsel
--------------------------------------------------------------
Aphton Corporation asks the U.S. Bankruptcy Court for the District
of Delaware for permission to employ Eckert Seamans Cherin &
Mellot, LLC, as its bankruptcy counsel.

Eckert Seamans will:

    a. provide legal advice with respect to the reorganization and
       sale of assets, and it powers and duties as debtor-in-
       possession;

    b. attend meetings and negotiate with representative of
       creditors or other parties in interest as required of the
       Debtor;

    c. take actions to protect and preserve the Debtor's estate as
       necessary and as they arise;

    d. negotiate and prepare a plan of reorganization, disclosure
       statement and pursue confirmation and approval;

    e. prepare on behalf of the Debtor other necessary
       applications, motions, answers, orders, reports, and other
       legal papers in connection with the Debtor's bankruptcy
       proceedings;

    f. appear before the bankruptcy court, any appellate courts
       and the U.S. Trustee and protect the interest of the
       Debtor's estate before the courts and the U.S. Trustee; and

    g. perform all other legal services for the Debtor which may
       be necessary and appropriate.

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

                 Professional        Hourly Rate
                 ------------        -----------
                 Members             $235 - $525
                 Associates          $150 - $250
                 Paralegals           $95 - $160

The Debtor discloses that the attorneys who will be involved in
this engagement bill:

    Counsel                     Designation         Hourly Rate
    -------                     -----------         -----------
    Michael Busenkell, Esq.     Member                 $335
    Ronald S. Gellert, Esq.     Member                 $310
    Diane R. Sirull, Esq.       Associate              $235

Ronald S. Gellert, Esq., a member at Eckert Seamans, tells the
Court that the firm has received a $90,000 retainer.

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

The Firm's attorneys can be reached at:

         Michael Busenkell, Esq.
         Ronald S. Gellert, Esq.
         Diane R. Sirull, Esq.   
         Eckert Seamans Cherin & Mellott, LLC
         300 Delaware Avenue, Suite 1360
         Wilmington, Delaware 19801
         Tel: (302) 425-0430
         Fax: (302) 425-0432
         http://www.eckertseamans.com/

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

At Dec. 31, 2005, Aphton's balance sheet showed assets totaling
$6,775,858 and debts totaling $11,641,182.


ARMOR HOLDINGS: Has Access to $825MM Debt Facility from Wachovia
----------------------------------------------------------------
Armor Holdings, Inc., terminated its prior senior secured credit
facility and entered into a new senior secured credit facility
with Wachovia Bank, National Association, as administrative agent,
Bank of America, N.A., and SunTrust Bank, as co-syndication
agents, Key Bank National Association and JPMorgan Chase Bank, as
co-documentation agents, and the other lenders.

The Credit Facility establishes a commitment to the Company to
provide up to $825,000,000 in the aggregate of loans and other
financial accommodations consisting of:

     a) a five year senior secured term loan in an aggregate
        principal amount of $100,000,000;

     b) a thirty day senior secured interim term loan in an
        aggregate principal amount of $300,000,000;

     c) a five year senior secured revolving credit facility in an
        aggregate principal amount of up to $425,000,000.

The Revolving Facility includes a sublimit of up to an aggregate
amount of $75,000,000 in letters of credit and a sublimit of up to
an aggregate of $20,000,000 in swing line loans.  As of June 1,
2006, Armor has approximately $100 million outstanding under the
Term Loan, $20 million outstanding under the Interim Term Loan,
$245 million of funded debt outstanding under the Revolving
Facility and approximately $161 million available for borrowing
under the Revolving Facility.

All borrowings under the Credit Facility will bear interest at
either a rate equal to LIBOR, plus an applicable margin ranging
from 0.875% to 1.5% or an alternate base rate which will be the
higher of (a) the Federal Funds rate plus 0.50% or (b) the
Wachovia prime rate, plus an additional margin ranging from 0.0%
to 0.25%.

The Credit Facility is guaranteed by certain of Armor's direct and
indirect domestic subsidiaries and is secured by, among other
things:

       -- a pledge of:

             a) all of the issued and outstanding shares of stock
                or other equity interests of certain of Armor's
                direct and indirect domestic subsidiaries;

             b) 65% of the issued and outstanding shares of voting
                stock or other voting equity interests of certain
                of Armor's direct and indirect foreign
                subsidiaries, and

             c) 100% of the issued and outstanding shares of
                nonvoting stock or other nonvoting equity
                interests of certain of Armor's direct and
                indirect foreign subsidiaries pursuant to a pledge
                agreement delivered in connection with the Credit
                Facility; and

      -- a first priority perfected security interest on certain
         of Armor's domestic assets and certain domestic assets of
         certain of Armor's direct and indirect domestic
         subsidiaries pursuant to a security agreement delivered
         in connection with the Credit Facility.

Copies of the Credit Agreement, the forms of promissory notes
executed in favor of the lenders, the Pledge Agreement and the
Security Agreement are available for free at:

         http://researcharchives.com/t/s?b46

                      About Armor Holdings

Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/
-- is a diversified manufacturer of branded products for the
military, law enforcement and personnel safety markets.

                         *     *     *

Armor Holdings, Inc.'s 8.25% Senior Subordinated Notes due 2013
carry Moody's Investor Service's B1 rating and Standard & Poor's
B+ rating.


ARVINMERITOR: Fitch Lowers Trust Preferred Rating to B from BB-
---------------------------------------------------------------
Fitch Ratings downgraded ArvinMeritor:

  -- Issuer Default Rating to 'BB' from 'BB+'
  -- Senior unsecured to 'BB-' from 'BB+'
  -- Trust preferred to 'B' from 'BB-'

Fitch also assigned an indicative rating to the new secured bank
facility of 'BB+', subject to review of the final amount and terms
of the new agreement.

The rating action reflects the challenges faced by ArvinMeritor's
Light Vehicle Systems group, which has experienced persistent
margin erosion due to pricing pressures, high commodity costs and
production declines among domestic producers.

The company has embarked on a restructuring program that should
help to stabilize margins, but the operational and financial
stresses in the industry will make it difficult to substantially
improve margins in this sector in the short term.  ArvinMeritor
does have good geographic and customer diversification, and its
product position, particularly in emissions control, should
enhance results over the long term.  ArvinMeritor could also
benefit from re-sourcing contracts away from Dana.

Along with the stresses in the LVS group, ArvinMeritor's
Commercial Vehicle Systems group will face a strong downturn in
demand in 2007, related to the introduction of new emissions
standards and the associated 2006 pre-buy.  Margins in this sector
have benefited from strong cyclical conditions and have sustained
consolidated ArvinMeritor margins.  ArvinMeritor will be hard-
pressed to maintain margins by offsetting the downturn in demand
with production efficiencies and other cost-saving measures.

The downgrade of the senior unsecured debt reflects the impairment
that these debt holders will experience through the granting of
security to bank lenders.  Under ArvinMeritor's unsecured
indentures, the company has a limitation on liens of up to 15% of
the value of consolidated net tangible assets, which is defined to
exclude certain 'principal property' assets.  

Nevertheless, Fitch views the establishment of the new bank
agreement as a positive development, ensuring the company's
liquidity over the near term, in what is likely to be a very
uncertain period in the domestic auto industry (including the 2007
contract re-opening between the domestic OEM's and the UAW).

The company has made steady progress in strengthening its balance
sheet, largely with the assistance of asset sales, and this could
continue through 2006.  

Fitch expects ArvinMeritor to remain free cash flow positive in
fiscal 2006, as the company has projected, although recent free
cash flow forecasts have also benefited from substantially reduced
required pension contributions in 2006.  Stabilization of the
rating will focus on ArvinMeritor's ability to reverse the
deterioration in LVS margins and the company's operating
performance in 2007 as it faces a strong drop in end demand at its
CVS operations.


ARVINMERITOR INC: S&P Puts BB+ Rating on $1.05 Billion Bank Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' bank loan
and recovery ratings of '1' to ArvinMeritor Inc.'s $1.05 billion
bank senior secured debt, indicating the expectation for full
recovery of principal in the event of a payment default.

Standard & Poor's will withdraw the rating on ArvinMeritor's
existing unsecured bank facility upon completion of the proposed
transaction.

At the same time, Standard & Poor's lowered its senior unsecured
debt ratings on ARM to 'BB-' from 'BB' and removed them from
CreditWatch where they were placed with negative implications on
May 22.  The downgrade stems from the contractual subordination
resulting from the pending transaction to replace the unsecured
bank facility with the new senior secured credit facilities.  

In addition, ArvinMeritor's 'B-1' short-term corporate credit
rating was affirmed and removed from CreditWatch.  The new secured
facility provides the company with approximately the same-size
bank facility, but with less restrictive covenants and a longer
maturity than the existing bank facility.

The 'BB' long-term corporate credit rating on the Troy, Michigan-
based auto supplier was not on CreditWatch, and was affirmed.  The
outlook is negative.


BAYOU GROUP: Court Gives Interim OK on FTI Consulting as Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its interim approval for Bayou Group, LLC, and its debtor-
affiliates to employ FTI Consulting, Inc., as their financial
advisor.

FTI Consulting is expected to:

    (a) provide assistance in connection with the execution of the
        responsibilities of the receiver of the Debtors including
        but not limited to analysis of the books and records,
        review of banking and brokerage records, investigation of
        potentially recoverable funds, and other inquiries as may
        be mutually agreed upon.

    (b) provide reports of the work performed and testimony
        regarding FTI findings as appropriate and mutually agreed
        upon; and

   (c)  provide other general business consulting or such other
        assistance as Debtors or its counsel may deem necessary
        that are not duplicative of services provided by other
        professionals in these cases.

The Debtors assure the Court that FTI Consulting will not
duplicate the efforts of the Government Receiver as to the
forensic accounting issues involved in their chapter 11 cases.

Robert S. Paul, senior managing director of FTI Consulting, tells
the Court that the Firm's professionals bill:

         Professional                        Hourly Rate
         ------------                        -----------
         Senior Managing Directors           $595 - $655

         Managing Directors & Directors      $435 - $590

         Associates & Consultants            $215 - $405

         Administrative Personnel &
         Paraprofessionals                       $95

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

Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and
manages hedge funds.  The company and its affiliates filed for
chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No.
06-22306).  Elise Scherr Frejka, Esq., at Dechert LLP, represents
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they estimated assets
and debts of more than $100 million.


BAYOU GROUP: Court Gives Interim Nod on Dechert LLP as Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Bayou Group, LLC, and its debtor-affiliates, on an
interim basis, to employ Dechert LLP, as their bankruptcy counsel.

Dechert LLP is expected to:

    a. provide legal advice with respect to the Debtors' powers
       and duties as debtors-in-possession;

    b. take all necessary action to protect and preserve the
       estates of the Debtors, including the prosecution of
       actions on the Debtors' behalf, the defense of any actions
       commenced against the Debtors, the negotiations of disputes
       in which the Debtors are involved, and the preparation of
       objections to claims filed against the Debtors' estates;

    c. prepare on behalf of the Debtors, as debtors-in-possession,
       all necessary motions, applications, answers, orders,
       reports, and other papers in connection with the
       administration of the Debtors' estates;

    d. evaluate, institute, assert, prosecute, defend, compromise,
       or settle claims and causes of action on behalf of the
       Debtors, as well as claims and causes of actions for
       fraudulent conveyance and other third party actions on
       behalf of the Debtors;

    e. negotiate and draft the Plan and all documents related
       thereto, including, but not limited to, the disclosure
       statements and ballots for voting thereon;

    f. take all steps necessary to confirm and implement the Plan,
       including, if necessary, modifications thereof and
       negotiating financing; and

    g. perform all other necessary and appropriate legal services
       in connection with the prosecution of these cases.

The Debtor tells the Court that the firm's attorneys bill between
$235 to $875 per hour while paralegals bill between $100 to $250.  
The Debtor discloses that the attorneys who will render their
services for this case bill:

       Professional                            Hourly Rate
       ------------                            -----------
       H. Jeffrey Schwartz, Esq.                   $745
       Gary J. Mennitt, Esq.                       $575
       Elise Scherr Frejka, Esq.                   $450
       Marco-Aurelio Casalins III, Esq.            $360

H. Jeffrey Schwartz, Esq., a partner at Dechert LLP, assures the
Court that his firm is disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.

Mr. Schwartz can be reached at:

         H. Jeffrey Schwartz, Esq.
         Dechert LLP
         30 Rockefeller Plaza
         New York, New York 10112-2200
         Tel: (212) 698-3500
         Fax: (212) 698-3599
         http://www.dechert.com/

Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and
manages hedge funds.  The company and its affiliates filed for
chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No.
06-22306).  Elise Scherr Frejka, Esq., at Dechert LLP, represents
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they estimated assets
and debts of more than $100 million.


BEAZER HOMES: Prices 8.125% $275MM Senior Notes Offering
--------------------------------------------------------
Beazer Homes USA, Inc., priced its offering of 8.125% Senior Notes
due 2016.  The company also disclosed that the aggregate principal
amount of the offering was increased from $250 million to $275
million.  The offering will be made to certain initial purchasers
pursuant to a private placement.  The initial purchasers have
informed Beazer Homes that they will sell or offer the notes
within the United States to qualified institutional buyers in
accordance with Rule 144A and outside the United States in
accordance with Regulation S under the Securities Act of 1933.  
The offering proceeds will be used to repay outstanding
indebtedness under the company's unsecured revolving credit
facility and for general corporate purposes.

                        About Beazer Homes

Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) --
http://www.beazer.com/-- is one of the country's ten largest  
single-family homebuilders with operations in Arizona, California,
Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland,
Mississippi, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia and West Virginia and also provides mortgage origination
and title services to its homebuyers.  

                            *   *   *

As reported in the Troubled Company Reporter on June 7, 2006,
Moody's Investors Service assigned a Ba1 rating to the $275
million of 8.125%, 10-year senior notes of Beazer Homes USA, Inc.
At the same time, Moody's affirmed Beazer's corporate family
rating of Ba1 and the Ba1 ratings on the company's existing senior
note issues.  The ratings outlook is stable.

As reported in the Troubled Company Reporter on June 6, 2006,
Fitch Ratings assigned a 'BB+' rating to Beazer Homes USA, Inc.'s
$275 million, 8.125% senior unsecured notes due 2016.

Fitch affirmed Beazer's 'BB+' Issuer Default, senior unsecured
debt and unsecured bank credit facility ratings.  The Rating
Outlook is Stable.  The issue will be ranked on a pari passu basis
with all other senior unsecured debt, including the company's
unsecured bank credit facility.


BLUE BIRD: Court Closes Chapter 11 Cases After Plan Consummation
----------------------------------------------------------------
The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada entered a final decree closing the chapter 11
cases of Blue Bird Body Company and its debtor-affiliates.
  
The Court confirmed the Debtors' Prepackaged Joint Plan of
Reorganization on January 27, 2006.  The Plan became effective on
January 30, 2006.  

All claims under the Plan, other than the bank claims are
unimpaired by the Plan.  Under the Plan, the holders of Bank Group
Claims receive a pro rata share of a $100 million converted term
loan and a pro rata share of the new stock of Peach County
Holdings, Inc.  The Plan provides for the Reorganized Debtors to
cure, in the ordinary course of business, any monetary amounts by
which any executory contract or unexpired lease to be assumed
under the Plan was in default.

The Reorganized Debtors have substantially consummated the Plan.
They report that:

   (1) Blue Bird cancelled its old stock and issued new stock,
       Volvo and the Bank Group cancelled the former shareholders'
       agreement, and directors resigned and the Company appointed
       new directors to the board;

   (2) Blue Bird obtained the new $52.5 million revolving senior
       secured credit facility and executed the $100 million
       Converted Term Loan;

   (3) Blue Bird resumed operations, recalling over 1,000
       employees to work;

   (4) the mutual releases under the Plan became effective;

   (5) Blue Bird entered into new commercial agreements with
       Volvo, as contemplated by the Plan;

   (6) Blue Bird began manufacturing buses to fill a large order
       submitted by Laidlaw; and

   (7) Blue Bird utilized its new senior secured credit facility
       to make approximately $45 million in payments to vendors,
       suppliers, and employees.

The Reorganized Debtors have made all distributions and payments
required under the Plan.  All motions and contested matters have
been concluded.  There have been no adversary proceedings.  The
Reorganized Debtors have paid the United States Trustee all post-
confirmation quarterly fees

Blue Bird Body Company and five affiliates filed for chapter 11
protection on Jan. 26, 2006 (Bankr. D. Nev. Case No. 06-50026).  
Founded in 1927, Blue Bird -- http://www.blue-bird.com/-- has   
nearly 3,000 employees and three facilities in two countries.  The
Debtors also have an extensive network of distributors and service
parts facilities throughout North America.  Jay M. Goffman, Esq.,
Van C. Durrer II, Esq., and Mark A. McDermott, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, provided Blue Bird with legal
advice and Kroll Zolfo Cooper provided the company with financial
advisory services.


BRITESMILE INC: Board Rejects Futuredontics Acquisition Proposal
----------------------------------------------------------------
The Board of Directors of BriteSmile, Inc., unanimously rejected
the unsolicited proposal by Futuredontics, Inc. to acquire the
outstanding shares of BriteSmile for $2 per share in cash and
$2 per share in Futuredontics common stock.

The proposal, unilaterally reported by Futuredontics on June 9,
was not based on any prior discussions with BriteSmile for an
acquisition of the Company, and BriteSmile had not agreed to
public disclosure of the proposal at this time.  BriteSmile
emphasized that discussions with Futuredontics following receipt
of the proposal were very preliminary, and neither party had
conducted any due diligence with respect to the other.

                      Reasons of Rejection

Among the reasons cited by the Board, the proposal was rejected
because Futuredontics had advised BriteSmile that it does not have
the funds required to complete the transaction.  In addition,
BriteSmile believes that the reverse-merger structure of
Futuredontics' proposal is not feasible, nor does the proposal
specify the means of assuring BriteSmile's stockholders that the
stock component of the consideration would be worth $2 per share.  
Finally, BriteSmile stockholders holding approximately 55% of its
outstanding stock have informed BriteSmile that they are not
interested in approving a transaction with Futuredontics on the
proposed terms.  The stock would be sufficient to block any
transaction with Futuredontics.

                        About BriteSmile

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

                          *     *     *

                       Going Concern Doubt

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

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


BUFFALO COAL: Asks Court to Approve Moran Kiker as Special Counsel
------------------------------------------------------------------
Buffalo Coal Company, Inc., asks the U.S. Bankruptcy Court for the
Northern District of West Virginia for permission to employ Moran
Kiker Brown P.C., as its special counsel.

The Debtor tells the Court that Moran Kiker will represent it in a
lawsuit pending in the U.S. District Court for the Eastern
District of Virginia, styled, "Virginia Electric Power Company,
dba Dominion Virginia Power v. Buffalo Coal Company, Inc., et al.
Civil Action No. 06cv164 (Judge Robert E. Payne)" and related
matters.

The Debtor tells the Court that the firm's professionals who will
render services in this engagement bill:

      Professional                  Designation       Hourly Rate
      ------------                  -----------       -----------
      Martin A. Conn, Esq.          Member                $230
      C. Dewayne Lonas, Esq.        Associate             $190
      Pamela B. Sellers, Esq.       Associate             $150
      Vicki M. Douglas              Paralegal             $110

C. Dewayne Lonas, Esq., an associate at Moran Kiker, assures the
Court that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.

Mr. Lonas can be reached at:

         C. Dewayne Lonas, Esq.
         Moran Kiker Brown PC
         4110 East Parham Road
         Richmond, Virginia 23228
         Tel: (804) 421-6250
         Fax: (804) 421-6251
         http://www.morankikerbrown.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.


CALUMET SPECIALTY: S&P Raises $175 Million Loan's Rating to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its secured loan rating
on independent petroleum refiner Calumet Specialty Products
Partners LP's $175 million term loan to 'BB-' (two notches higher
than the 'B' corporate credit rating on the company) from 'B+'.  
The recovery rating on the loan was affirmed at '1', indicating a
high expectation for full recovery of principal in the event of a
payment default.

All other existing ratings on Calumet were also affirmed,
including the 'B' corporate credit rating.  The outlook is stable.

As of March 31, 2006, the Indianapolis, Indiana-based company had
about $70 million of debt.

The rating upgrade on the $175 million term loan reflects the
improved asset coverage resulting from the repayment of
outstanding borrowings under the term loan with the proceeds from
Calumet's January 2006 IPO.

The ratings on Calumet reflect:

   * its position as a small;

   * independent petroleum refiner operating in a very
     competitive;

   * erratically profitable; and

   * capital-intensive industry.

In addition, Calumet's Shreveport refinery has limited operating
history in fuels production.  Volatility is somewhat lessened
by Calumet's specialty products business, which is typically less
volatile than fuels production, as well as hedging on crude oil
purchases for specialty products and crack spreads on fuel
production.  In addition, Calumet's fuel production is Tier-II
compliant and faces minimal future environmental spending.

"The stable outlook on Calumet reflects expectations for
maintenance capital spending and distributions to unitholders to
remain within cash flows," said Standard & Poor's credit analyst
Paul B. Harvey.

Any acquisitions should be funded in a balanced manner that does
not materially increase debt leverage.  The ratings could be
negatively affected if Calumet pursues aggressive acquisitions or
internal growth at the expense of debt leverage.

"Positive rating actions are possible, if Calumet can maintain
improved debt levels while successfully expanding its fuel
facilities at the Shreveport refinery," he continued.


CAMPBELL RESOURCES: Creditors To Meet & Vote on Plans on June 26
----------------------------------------------------------------
A meeting of Campbell Resources Inc.'s creditors will be held on
June 26, 2006, to consider and approve the Plans of Arrangement
the Campbell filed pursuant to Canada's Companies' Creditors
Arrangement Act.

The Plans of Arrangement must be approved by a majority in number
representing two-thirds in value of the creditors, present or
voting by proxy, at the meeting.

The formal notice of the creditors' meeting will contain a
detailed description of the proposed Plans of Arrangement and will
outline the actions to be taken during the meeting.

Once the creditors approve the Plans of Arrangement, Campbell will
seek their approval by the Court, and then proceed with a Court
and Monitor-supervised execution of the Plans and distribution of
net proceeds from the Plans to Campbell's creditors.

                    About Campbell Resources

Headquartered in Montreal, Quebec, Campbell Resources Inc. --
http://www.ressourcescampbell.com/-- is a mining company focusing  
mainly in the Chibougamau region of Quebec, holding interests in
gold and gold-copper exploration and mining properties.  The
Superior Court of Quebec (Commercial District) granted the Company
protection under the CCAA on June 30, 2005.


CARDSYSTEMS SOLUTIONS: Taps Keegan Linscott as Accountants
----------------------------------------------------------
Cardsystems Solutions, Inc., asks the U.S. Bankruptcy Court for
the District of Arizona for permission to employ Keegan, Linscott
& Kenon, P.C., as its accountants.

Keegan Linscott will:

   a) prepare and assist the Debtor in filing its income tax
      returns, in restructuring the Debtor's books and records,
      and in filing any tax returns of previous years;

   b) assist in the bankruptcy case as may be necessary and
      appropriate; and

   c) assist or perform in auditing functions for the years 2005
      and 2006.

The Firm will bill the Debtor at its normal hourly rates, ranging
from $65 to $225.

To the best of the Debtor's knowledge, Keegan Linscott is a
"disinterested person" as that term is defined in Section 101(13)
of the Bankruptcy Code.

Headquartered in Sonoita, Arizona, Cardsystems Solutions, Inc. --
http://www.cardsystems.com/-- is a subsidiary of the electronic  
payment solutions company Pay By Touch Payment Solutions, LLC --
http://www.paybytouch.com/Pay By Touch is a global leader of  
biometric authentication, loyalty & membership, and provides
convenient and secured payment electronic transactions for
businesses and consumers.  The Company filed for bankruptcy
protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515).
Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C.,
represent the Debtor in its restructuring efforts.  When the
Debtor filed for bankruptcy protection, it disclosed assets
amounting to $13,087,515 and debts totaling $23,860,343.


CATHOLIC CHURCH: Ct. Mulls Dismissal if Plan is not Filed Soon
--------------------------------------------------------------
Judge Williams of the U.S. Bankruptcy Court for the Eastern
District of Washington says she will "seriously" entertain a
motion to dismiss the Diocese of Spokane's Chapter 11 proceeding
if the case would celebrate its two-year anniversary without a
confirmed plan.

The Diocese filed for bankruptcy protection on Dec. 6, 2004.

Judge Williams indicated the possibility of case dismissal at a
hearing on the Diocese's $45,750,000 settlement offer to 75
claimants.  The Court reiterated the possibility during an oral
ruling relating to commencement of avoidance actions.

The Court has ruled out the Diocese's $45,750,000 settlement offer
as unfair, and urged parties to go into mediation.  The parties
subsequently agreed to commence mediation in July 2006 under
Bankruptcy Judge Gregg W. Zive.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Insurers Balk at Portland Tort Panel's Disclosure
------------------------------------------------------------------
Two groups of insurance companies filed objections to the
disclosure statement accompanying the First Amended Plan of
Reorganization filed by Tort Claimants Committee in the
Archdiocese of Portland's case:

(a) ACE, et al.

The Tort Committee's Amended Disclosure Statement and Plan still
fail to address all of the concerns raised by ACE Property &
Casualty Insurance Company, General Insurance Company of America,
and St. Paul Mercury Insurance Company and St. Paul Fire and
Marine Insurance Company, Jan D. Sokol, Esq., at Stewart Sokol &
Gray, LLC, in Portland, Oregon, tells Judge Perris.

The Amended Disclosure Statement, Mr. Sokol contends, also does
not disclose many integral terms of the Amended Plan, including
the treatment of the insurance policies and the insurers' rights
under those Policies.

The Tort Committee ignores contractual rights that the ACE
Insurers may have under the Policies and under the Oregon state
law, Mr. Sokol asserts.  

According to Mr. Sokol, the Amended Plan purports to deem that the
insurance companies have consented to the assignment of their
rights to a Trust, even though the Insurers have not.

There are generalized statements under the Amended Plan that are
inconsistent with the other specific provisions, Mr. Sokol points
out.  Those general statements, Mr. Sokol says, implicate and
potentially may violate provisions of the insurance policies.

The Amended Disclosure Statement should make clear the impact of
those statements on the Insurers' obligations and rights under the
Policies, Mr. Sokol points out.

Moreover, certain of the revised provisions in the Amended Plan
raise additional issues, including the issue on "insurance
neutrality" language, Mr. Sokol contends.

The ACE Insurers find the Tort Committee's insurance neutrality
language as overbroad, Mr. Sokol says.  The insurance neutrality
language preserves not only the Insurers' rights under the
Policies, but also provides that nothing in the Amended Plan will
affect or impair the rights of the Archdiocese of Portland in
Oregon, the reorganized Archdiocese and the Trust, with respect to
the Policies.

Since the Amended Plan's provisions are inconsistent, the Amended
Disclosure Statement should be revised, Mr. Sokol asserts.

The ACE Insurers, therefore, ask the U.S. Bankruptcy Court for the
District of Oregon to deny approval of the Tort Committee's
Amended Disclosure Statement because it fails to provide adequate
information regarding certain material aspects of, and to disclose
material risks associated with, the Amended Plan, in violation of
Section 1125 of the Bankruptcy Code.

(b) London Market Insurers

Certain Underwriters at Lloyd's, London, and Certain Solvent
London Market Companies assert that the Tort Committee's Amended
Disclosure Statement is misleading, incomplete and inadequate.

The Tort Committee's Amended Plan intends to assign certain
insurance rights to the Trust, but the Amended Disclosure
Statement fails to disclose that the assignment may reduce or void
insurance coverage due to "no-assignment-without-consent-of-
insurer" clauses in various insurance policies.

The Amended Disclosure Statement does not disclose the existence
of the consent clauses, nor does it say that insurers have not
consented to the assignment, Russel W. Roten, Esq., at Duane
Morris LLP, in Los Angeles, California.

The Amended Disclosure Statement fails to disclose the dispute
between the Archdiocese and its insurers regarding availability of
insurance coverage to pay the sex abuse tort claims, Mr. Roten
points out.  

The Tort Committee, Mr. Roten adds, did not describe the nature of
the disputed issues that may significantly reduce the availability
of insurance.  These issues are under litigation but the Tort
Committee fails to disclose the risks associated with those
actions.

The Amended Disclosure Statement, according to Mr. Roten, fails to
state whether any "Insurance Action Recoveries" or "In-Place
Insurance Coverage," on which the Tort Committee purports to rely
for funding, actually exists.  The Tort Committee does not reveal
the risks or intent of the "insurance neutrality" language under
its Amended Plan.

The London Insurers, as parties-in-interest, are entitled to know
how the Tort Committee's Amended Plan intends to affect their
contractual insurance rights, Mr. Roten says.  The Tort
Committee, among other things, fails to adequately describe the
nature of the insurance interests purportedly assigned to the
Trust.

Moreover, the Amended Disclosure Statement contains no evaluation
of estimate of the present and future sex abuse tort claims to be
paid by the Trust, or the projected costs of administering the
Trust, Mr. Roten notes.  

The lack of information and the incomplete and "confusing"
disclosure of insurance funding leave creditors unable to evaluate
reasonably the likelihood of receiving payment on their claims,
Mr. Roten says.

The Tort Committee's Amended Plan has no liquidation analysis
showing that creditors would receive as much or more under the
Plan as they would if the Archdiocese were liquidated under
Chapter 7, Mr. Roten points out.

Furthermore, Mr. Roten contends that the Tort Committee's Amended
Plan is unconfirmable because the Plan, among others:

  -- does not discharge the Archdiocese or cap its liability;
  -- deprives insurers of their contractual rights; and
  -- improperly assigns insurance rights.

Hence, the London Insurers ask Judge Perris to deny approval of
the Tort Committee's Amended Disclosure Statement.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers.  David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case.  In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.  (Catholic Church Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CENTURY ALUMINUM: Posts $141.5 Mil. Net Loss for 1st Quarter 2006
-----------------------------------------------------------------
For the quarter ended March 31, 2006, Century Aluminum Company
reported a $141,571,000 net loss out of $346,946,000 in net sales.

Century Aluminum's balance sheet at March 31, 2006 showed total
assets of $1,883,066,000, total liabilities of $1,815,392,000 and
shareholders' equity of $67,674,000.  The Company's balance sheet
also showed $345,530,000 in total current assets and $524,698,000
in total current liabilities.     

A full-text copy of Century Aluminum's quarterly report is
available for free at http://researcharchives.com/t/s?b2d

Headquartered in Monterey, California, Century Aluminum Company
-- http://www.centuryca.com/-- owns primary aluminum capacity in  
the United States and Iceland, as well as an ownership stake in
alumina and bauxite assets in the United States and Jamaica.

                          *     *     *

Moody's assigned Century Aluminum Company's senior secured debt
and long-term corporate family ratings at B1.  The ratings were
placed on April 22, 2003 with a positive outlook.

Standard & Poor's placed the Company's long-term local and foreign
issuer credit ratings at BB- with a stable outlook on March 13,
2001.


CHARLES RIVER: Prices $300 Million Convertible Senior Notes Offer
-----------------------------------------------------------------
Charles River Laboratories International, Inc., disclosed the
pricing of $300 million principal amount of Convertible Senior
Notes due 2013 in an offering to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended.

The notes will pay interest semiannually at a rate of 2.250% per
annum.  In certain circumstances, the notes may be convertible
into cash up to the principal amount and any conversion value
above the principal amount may be convertible, at the option of
Charles River, into cash, shares of Charles River common stock or
a combination of cash and Charles River common stock, based on a
conversion rate of 20.434 shares of common stock per $1,000
principal amount of the Notes (which is equal to a conversion
price of approximately $48.94 per share, representing a 22.5%
conversion premium based on the closing price of $39.95 per share
on June 6, 2006).

Charles River estimates that the net proceeds from this offering
will be approximately $293 million, after deducting estimated
discounts, commissions and expenses.  In addition, Charles River
has granted the initial purchasers an option to purchase up to $50
million principal amount of additional notes to cover over-
allotments.

Charles River intends to use a portion of the net proceeds of this
offering to repurchase approximately $150 million of its common
stock in negotiated transactions from purchasers of the notes
concurrently with the offering.  If the initial purchasers
exercise their option to purchase additional notes, Charles River
may use a portion of the net proceeds from the sale of the
additional notes to repurchase additional shares of its common
stock.

In addition, Charles River intends to use a portion of the net
proceeds of the offering to pay the net cost of the convertible
note hedge and warrant transactions that it expects to enter into
concurrently with the offering.  If the initial purchasers
exercise their option to purchase additional notes, Charles River
expects to use a portion of the net proceeds from the sale of the
additional notes to enter into additional convertible note hedge
transactions.  Charles river may also enter into additional
warrant transactions.

Charles River intends to use the remainder of the net proceeds
from this offering for general corporate purposes, including
repurchasing shares of Charles River common stock in the open
market from time to time, which may be made pursuant to an
accelerated share repurchase program.

In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, Charles River has
been advised that the option counterparties or their respective
affiliates expect to enter into various derivative transactions
with respect to Charles River's common stock and purchase Charles
River's common stock in secondary market transactions prior to or
concurrently with pricing of the notes, and may enter into various
derivative transactions with respect to Charles River's common
stock and purchase or sell Charles River's common stock in
secondary market transactions following pricing of the notes.

Charles River Laboratories International, Inc. (NYSE: CRL) sells
pathogen-free, fertilized chicken eggs to poultry vaccine makers.  
It also offers contract staffing, preclinical drug candidate
testing, and other drug development services.  It also markets
research models -- rats and mice bred for preclinical experiments,
including transgenic "knock out" mice -- to the pharmaceutical and
biotech industries.  It sells its products in more than 50
countries to drug and biotech companies, hospitals, and government
entities.

                            *   *   *

As reported in the Troubled Company Reporter on March 1, 2006,
Moody's Investors Service assigned Ba1 ratings to new credit
facilities of subsidiaries of Charles River Laboratories
International, Inc., which are guaranteed by Charles River.
Moody's also affirmed Charles River's Ba1 Corporate Family Rating,
the Ba1 rating on its existing credit facilities, and the
Speculative Grade Liquidity Rating of SGL-1.  The rating outlook
for the company is stable.


CHESAPEAKE ENERGY: Moody's Reviews Sr. Unsecured Note's Ba2 Rating
------------------------------------------------------------------
Moody's Investors Service placed Chesapeake Energy's Ba2 corporate
family, Ba2 senior unsecured note, Baa3 hedging facility, and
other ratings on review for possible downgrade.  This accompanies
CHK's second large leveraged acquisition this year in which it
again will pay an historic premium for potentially economic future
drilling locations and acreage but negligible proven developed
reserves, production, or cash flow.

This follows an exceptionally active and leveraging 2005 and
occurs when first-half 2006 capital spending, dividends, and
other outlays appear likely to exceed first-half cash flow by
over $600 million.

The review outcome could be favorably affected by a material
offering of common stock and if the convertible preferred element
of the funding is mandatorily convertible.  The review will note
final acquisition funding, organic trends, and nature and funding
of future acquisitions.  At the review's conclusion, the corporate
family and note ratings could be confirmed, confirmed with a
negative outlook, or downgraded by one notch.  Alternatively, the
corporate family rating could be confirmed but the notes notched
down one rating level.

With aggressive acquisitions, creative use of the leverage
flexibility provided by its Ba rating range, and the largest
drilling program in the U.S., CHK has grown rapidly into a very
large diversified domestic natural gas producer.  It perceived and
seized the moment to acquire, largely with debt and convertible
preferred stock, very major acreage positions in many of the
leading emerging unconventional plays.  However, CHK's pro-forma
leverage is now far beyond norms for its ratings and by far the
highest on PD reserves compared to B1, Ba3, Ba2, Ba1, and
investment grade peers and near-peers.  A heavy capital spending
budget implies that debt will not decline this year.  Moody's also
anticipates that CHK will remain acquisitive.

In its Feb. 1, 2006 release, Moody's noted that CHK's outlook and
possibly ratings could be hurt if it conducted further leveraging
acquisitions before reducing leverage.  It entered 2006 with high
leverage relative to its rating and developed reserve base,
tempered by its large scale, diversification, and supportive
prices and timely hedging.  Pro-forma leverage is now at
uncomfortable levels for the business and the ratings and
notwithstanding an astute hedging program, CHK's and the sectors'
full-cycle cost structures are greatly elevated.  While its robust
hedge portfolio mitigates price risk, currently comparatively weak
wellhead natural gas prices would become a factor if prices do not
recover before its robust hedge portfolio begins to roll off.

Moody's believes more acquisition risk should be borne by common
equity funding given the inherent risks of such an aggressive
acquisition program, the current nonproductive nature of a high
proportion of acquired acreage, and the potential rewards to
equity should CHK be successful.  CHK posits that its timely
hedging, the reduced drilling and capital concentration risk per
wellbore in unconventional plays, the nature of the geology, and
its skillsets support its higher leverage.  CHK also notes that it
has succeeded in periodically converting convertibles to common
equity, although this has occurred during an already long up-
cycle.  Furthermore, any realistic combination of price or sector
market weakness, and/or underperformance by CHK, can derail or
delay adequate conversion of preferred shares to reduce leverage.

Additionally, while the risks of unconventional plays are
qualitatively different from conventional plays, the composite
operational and play economic risks remain large and are amplified
by having to pay very large lump sums up front simply to enter the
play.  These price sensitive, emerging, subtle, and often complex
plays face very heavy capital spending and proportionately high
levels of drilling, hydraulic fracturing, reservoir quality,
drainage area, and continuity risks as the operator works across
the areal extent of the play.

They can face surface infrastructure bottlenecks and associated
capital costs.  First year well decline rates are also very steep.
Moody's believes that leveraged acquisitions of such a profile,
let alone several proportionately large leveraged acquisitions of
such profile, up the ante on the risks and the sustained high
economic success rates needed to support the acquisition price.

The Barnett Shale and other acquisitions occur in extremely
competitive acquisition markets.  In our view, the astute sellers
of Barnett and other properties ensure that winning bidders will
have paid aggressively relative to embedded risks, returns, and
the major post-acquisition capital requirements of those
properties.

CHK's acquisitions include:

   (1) $845 million for mostly prospective acreage in the Fort
       Worth Basin Barnett Shale held as joint working interests
       by Four Sevens Oil Company and Sinclair Oil Company,

   (2) $87 million for additional Barnett Shale Johnson and
       Tarrant prospective acreage from other sellers, and

   (3) a third acquisition of 150,000 acres centered on the
       evolving West Texas Barnett and Woodford Shale plays.

The two Barnett acquisitions net to a notably very high $186,000
per unit of daily production, over $40/boe of proven reserves
all-in for proven reserve development capital, and $121/boe of
PD reserves.

CHK's acquisitions and capital spending have boosted pro-forma
leverage on PD reserves by 23% and 11% over year-end 2005 and
March 31, 2006 levels, respectively, to the $10/PD boe range in
spite of preliminarily granting 50% hybrid equity basket credit to
convertible preferreds likely to fund half of the acquisitions and
other costs.  Even if CHK funded such acquisitions 50% with common
equity, the low PD reserve portions of some acquisitions would
still boost leverage on PD reserves.

Pro-forma for pending acquisitions, expected mid-2006 organic
reserve additions, and assuming moderating cash-on-cash returns,
Moody's exploration and production rating methodology would map
CHK to the Ba3 range or possibly the Ba2 range.  However, in
resolving the review quantitative and qualitative factors, the
final acquisition funding package, and the sector outlook at the
time would drive the outcome.


CHICAGO HUDSON: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Chicago Hudson, LLC, delivered to the U.S. Bankruptcy Court for
the Northern District of Illinois its schedules of assets and
liabilities, disclosing:

     Name of Schedule                Assets         Liabilities
     ----------------                ------         -----------
  A. Real Property               $12,300,000
  B. Personal Property           
  C. Property Claimed
     as Exempt
  D. Creditors Holding
     Secured Claims                                 $11,961,644
  E. Creditors Holding
     Unsecured Priority Claims                          $55,493
  F. Creditors Holding                               $3,017,202
     Unsecured Nonpriority
     Claims
                                 -----------        -----------
     Total                       $12,300,000        $15,034,339


Headquartered in Chicago, Illinois, Chicago Hudson, LLC, filed for
chapter 11 protection on May 16, 2006 (Bankr. N.D. Ill. Case No.
06-05596).  Richard S. Lauter, Esq., at Levenfeld Pearlstein, LLC,
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.


CHICAGO HUDSON: Hires Levenfield Pearlstein as Bankruptcy Counsel
-----------------------------------------------------------------
Chicago Hudson, LLC, obtained authority from the U.S. Bankruptcy
Court for the Northern District of Illinois to employ Levenfeld
Pearlstein, LLC, as its bankruptcy counsel.

Levenfeld Pearlstein is expected to:

    a. advise the Debtor with respect to its powers and duties as
       debtor-in-possession in the continued management and
       operation of its business and properties;

    b. attend meetings and negotiate with representative of
       creditors, the U.S. Trustee, and other parties-in-interest;

    c. take all necessary actions to protect and preserve the
       Debtor's estate, including, prosecuting actions on the
       Debtor's behalf, defending any action commenced against the
       Debtor, participate in negotiation concerning all
       litigation in which the Debtor is involved, and objection
       to claims filed against the estate;

    d. prepare all motions, application, answers, orders, reports,
       and papers necessary to the administration of the estate on
       behalf of the Debtor;

    e. advise the Debtor in connection with any potential sale of
       assets;

    f. appear before any court to protect the interests of the
       Debtor's estate'

    g. handle matters regarding taxes;

    h. negotiate and prepare, on the Debtor's behalf, a disclosure
       statement, a plan of reorganization, and all related
       agreements or documents, and take any necessary action on
       behalf of the Debtor to obtain confirmation of a plan; and

    i. perform all other necessary legal services and provide all
       other necessary legal advice to the Debtor in connection
       with its chapter 11 case.

Richard S. Lauter, Esq., a partner at Levenfeld Pearlstein, tells
the Court that the Firm's professionals bill:

      Professional                   Hourly Rate
      ------------                   -----------
      Partners                       $395 - $410
      Associates                        $275
      Paraprofessional               $100 - $165

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

Mr. Lauter can be reached at:

         Richard S. Lauter, Esq.
         Levenfeld Pearlstein, LLC
         2 North LaSalle Street, Suite 1300
         Chicago, Illinois 60602
         Tel: (312) 346-8380
         Fax: (312) 346-8434
         http://www.lplegal.com/

Headquartered in Chicago, Illinois, Chicago Hudson, LLC, filed for
chapter 11 protection on May 16, 2006 (Bankr. N.D. Ill. Case No.
06-05596).  Richard S. Lauter, Esq., at Levenfeld Pearlstein, LLC,
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.


COOPER COMPANIES: S&P Affirms BB Rating & Revises Outlook to Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Cooper Companies Inc. to negative from stable.  All ratings on the
company, including the 'BB' corporate credit rating, were
affirmed.

"The outlook change reflects Cooper's challenge to introduce new
products on an expedited schedule, while simultaneously
integrating an acquisition, in the face of a highly competitive
marketplace," explained Standard & Poor's credit analyst Cheryl
Richer.

Lackluster second-quarter 2006 results (fiscal year-end October)
-- with the company exhibiting only 1% revenue growth over the
comparable 2005 quarter -- reflected capacity constraints that
contributed to a 29% sales decline in Japan.  Although constraints
were subsequently alleviated, Cooper has again revised its 2006
earnings guidance downward.

The rating on Cooper Companies Inc. reflects the company's single
product line focus and its No. 3 position (18% global market
share) in the $4 billion soft contact lens industry relative to
two large competitors with materially greater resources.  Cooper
is exposed to technology changes, as well as the risks inherent in
integrating the company's largest-ever acquisition (Ocular
Sciences Inc.) in January 2005.  

Cooper benefits from favorable industry demographics; high-single-
digit sales growth is driven by:

   * a growing teen population (the primary users);

   * increased incidence of myopia; and

   * continued improvement in soft contact lens visual acuity,
     comfort, and care.


CRESCENT JEWELERS: Court Approves $35MM CIT Group Exit Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
allowed Crescent Jewelers, Inc., authority to enter into an exit
financing commitment letter agreement with The CIT Group/Business
Credit, Inc., and pay required fees under the agreement.

The CIT Group, the Debtor's postpetition lender, committed to
underwrite a $35 million senior credit facility for the Debtor.  
As a condition, CIT Group required the Debtor to pay:

    * a $150,00 commitment fee;

    * a $100,000 deposit to cover documentation and due diligence
      costs; and

    * other reimbursable costs and expenses CIT Group may incur in
      connection with the exit financing.

The Debtor told the Court that its plan of reorganization and
continued operation requires that it enter into a $35 million exit
facility to replace its existing postpetition credit facility.

As reported in the Troubled Company Reporter on Sept. 14, 2004,
Debtor entered into a long term debtor-in-possession financing
arrangement with its existing lender group, Bank of America, NA
and CIT Group/ Business Credit, Inc, which will provide up to
$45 million in a revolving credit facility.  The proceeds will be
used to fund operations and for general working capital purposes.  
In connection with the DIP Facility, CIT provided Crescent with a
non-binding exit financing commitment.

A full-text copy of the CIT Group's Commitment Letter is available
for a fee at:

   http://www.researcharchives.com/bin/download?id=060609215931

                    About Crescent Jewelers

Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- sells jewelry and operates over  
160 stores in six western states.  The Company filed for chapter
11 protection on August 11, 2004 (Bankr. N.D. Cal. Case No. 04-
44416).  Lee R. Bogdanoff, Esq. at Klee, Tuchin, Bogdanoff and
Stern represents the Debtor in its chapter 11 case.  John D.
Fiero, Esq., Kenneth H. Brown, Esq., and Tobias
S. Keller, Esq., at Pachulski, Stang, Ziehl, Young and Jones
represent the Official Committee of Unsecured Creditors.  In its
April 2006 Monthly Operating Report, the Debtor reported
$77,372,000 in total assets and $134,972,000 in total debts.


CRESCENT JEWELERS: Files 2nd Amended Chapter 11 Plan in N.D Calif.
------------------------------------------------------------------
Crescent Jewelers submitted to the U.S. Bankruptcy Court for the
Northern District of California its Second Amended Plan of
Reorganization.

The Debtor tells the Court that on the effective date, Harbinger
Capital Partners Master Fund I, Ltd., will cause the Plan
Investors to deposit the General Unsecured Distribution Amount in
the Plan Trustee Funding Account.  The distributions to holders of
general unsecured claims to be made by the Plan Trustee in cash
under the Plan, other than distributions under the Plan of the
Estate Litigation Proceeds and the Post-Effective Date Fund
Excess, will be satisfied from the Plan Trustee Funding Account.  
Reorganized Crescent will make all other distributions.

                    Treatment of Claims

Under the second amended plan, administrative claims and secured
tax claims will be paid in full.

Priority Tax Claims will be paid in full in five annual
installments.

Priority Claims, Other Than Priority Tax Claims, will be paid in
full, in cash, without interest.

The Debtor tells the Court that Residual Consignment Inventory
Claims consist of Memo Merchandise that remains unsold and in
Crescent's actual possession on the effective date.  Holders of
these claims will receive, at Reorganized Crescent's option:

    * return of the inventory, or
    * payment in full and in cash of their allowed claims.

Holders of Other Secured Claims, at Reorganized Crescent's option,
will:

    a. receive payment of their claim in cash;

    b. have the collateral securing the claim abandoned; or

    c. have their legal, equitable, and contractual rights
       reinstated.  

General Unsecured Claimholders will receive, on the distribution
date, their pro rate share of the General Unsecured Distribution
Amount.  In addition, holders of general unsecured claims will be
entitled to their pro rata share, if any, of the Estate Litigation
Proceeds and Post-Effective Date Fund Excess. 18

Holders of Harbinger Capital's Acquired Claim and Friedman's
Inc.'s Claims Interests, will receive shares of the New Common
Stock and will also be entitled to a share, if any, of the Estate
Litigation Proceeds.

Holders of Crescent Jewelers Inc.'s Stock Claims, Preferred Stock
Claims and Claims Subordinated Under Section 510 of the Bankruptcy
Code, will not receive anything under the second amended plan.

Existing Crescent Jewelers Inc.'s Stocks and Subordinated
Interests will be cancelled and holders of these interests will
receive nothing under the second amended plan.

A full-text copy of the Debtor's Second Amended Plan of
Reorganization is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060609215701

                    About Crescent Jewelers

Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- sells jewelry and operates over  
160 stores in six western states.  The Company filed for chapter
11 protection on August 11, 2004 (Bankr. N.D. Cal. Case No. 04-
44416).  Lee R. Bogdanoff, Esq. at Klee, Tuchin, Bogdanoff and
Stern represents the Debtor in its chapter 11 case.  John D.
Fiero, Esq., Kenneth H. Brown, Esq., and Tobias
S. Keller, Esq., at Pachulski, Stang, Ziehl, Young and Jones
represent the Official Committee of Unsecured Creditors.  In its
April 2006 Monthly Operating Report, the Debtor reported
$77,372,000 in total assets and $134,972,000 in total debts.


CRESCENT JEWELERS: Exclusivity Termination Hearing Set for July 15
------------------------------------------------------------------
The Honorable Edward D. Jellen of the U.S. Bankruptcy Court for
the Northern District of California will continue, to June 15,
2006, the hearing on a request to terminate Crescent Jewelers,
Inc.'s exclusive periods.

Harbinger Capital Partners Master Fund I, Ltd., is seeking to end
the Debtor's exclusive period to file and to solicit acceptances
of a plan in the hopes of being able to file its own competing
plan.

                Harbinger's Interest in Crescent  

On Aug. 28, 2002, Crescent issued to Friedman's, Inc., $35 million
of subordinated debt and $50 million of Series A Preferred Stock.
Additionally, Friedman's contends it has other claims against the
Debtor, both fixed and contingent, and that it owns significant
amounts of the Debtor's common stock.  In the aggregate,
Friedman's asserts Claims and Interests in excess of $100 million.

Friedman's was previously a debtor in its own chapter 11 case
filed with the U.S. Bankruptcy Court for the Southern District of
Georgia.  The Georgia Bankruptcy Court, on Sept. 22, 2005, allowed
Crescent to prosecute litigation against Friedman's in the
California Court to reduce or eliminate Friedman's claims and
interests, and to the extent any claims or interests survive, to
equitably subordinate those claims and interests as appropriate.

Harbinger Capital acquired 100% of the equity in reorganized
Friedman's pursuant to a plan confirmed by the Georgia Bankruptcy
Court.  The Debtor and the Official Committee of Unsecured
Creditors have undertaken an investigation of the circumstances
associated with Friedman's control over Crescent before Crescent
filed for bankruptcy.

                The Need for Exclusivity Termination

Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman,
LLP, in Manhattan, argued that the Debtor and the Official
Committee of Unsecured Creditors are using exclusivity to hold
Harbinger hostage and prevent it from submitting an alternative
plan..  The Debtor filed a Second Amended Plan of Reorganization
on June 7, 2006.  During the July 15 hearing, the Court is
expected to scrutinize the newly filed amended Plan and determine
if Harbinger's allegations still hold water.  

According to Mr. Glenn, terminating the exclusivity would avoid
the cost of multiple solicitations and allow creditors to have a
meaningful choice in the plan process.  By contrast, he says,
continuing exclusivity will prejudice Harbinger because it may
never have another opportunity to file and confirm a plan.  He
further alleges that the Debtor and the Committee seek to extract
plan concessions from Harbinger through continued exclusivity.  In
doing so, they are seeking to deny creditors the right to choose
between competing plans.  

Mr. Glenn pointed out that no party could dispute that the
Debtor's financial condition has deteriorated during the Debtor's
bankruptcy case, and no party can guarantee a turnaround.  If the
trend of deterioration continues, there may be no business to
reorganized once the Debtor's efforts to confirm its Plan fails.  

There is still uncertainty about the amended plan, Mr. Glenn
alleges.  He says the Plan still permits the Debtor to pursue a
Section 363 sale, an auction for 100% of the reorganized equity of
Crescent and a stand-alone plan that converts all unsecured claims
into the reorganized equity.  


Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- sells jewelry and operates over  
160 stores in six western states.  The Company filed for chapter
11 protection on August 11, 2004 (Bankr. N.D. Cal. Case No. 04-
44416).  Lee R. Bogdanoff, Esq. at Klee, Tuchin, Bogdanoff and
Stern represents the Debtor in its chapter 11 case.  John D.
Fiero, Esq., Kenneth H. Brown, Esq., and Tobias S. Keller, Esq.,
at Pachulski, Stang, Ziehl, Young and Jones represent the Official
Committee of Unsecured Creditors.  In its April 2006 Monthly
Operating Report, the Debtor reported $77,372,000 in total assets
and $134,972,000 in total debts.


DANA CORP: Judge Lifland Denies American Axle's Lift Stay Motion
-----------------------------------------------------------------
For reasons stated in open court, the Honorable Burton R. Lifland
of the U.S. Bankruptcy Court for the Southern District of New York
denied American Axle & Manufacturing, Inc.'s request to lift the
automatic stay in Dana Corporation and its debtor-affiliates'
chapter 11 cases to permit the reexamination of the patents-in-
suit.  The Court further ruled that the balance of motion is
granted.  The Court's Order did not provide further details.

As reported in the Troubled Company Reporter on May 24, 2006,
American Axle wanted the automatic stay lifted to allow it to:

   -- continue asserting counterclaims in a patent infringement
      lawsuit that Dana Corporation is pursuing against American
      Axle in the U.S. District Court for the Eastern District of
      Michigan; and

   -- request for a reexamination of patents issued by the United
      States Patent and Trademark Office.

Fredric Sosnick, Esq., at Shearman & Sterling LLP, in New York,
explained that neither action could give rise to a monetary claim
against Dana or any of the other Debtors.

In mid-1997, the PTO issued two patents to Dana:

     Patent No.    Title
     ----------    -----
     5,637,042     Drive Line Assembly With Reducing Tube Yoke

     5,643,093     Aluminum Driveshaft Having Reduced Diameter
                   End Portion

Since the start of the Patent Litigation on Oct. 16, 1998, the
District Court twice has entered summary judgment in favor of
American Axle:

   -- the first time on the basis that the Patents are invalid;
      and

   -- the second, on a finding of non-infringement.

Both of the summary judgment orders subsequently were vacated and
remanded on appeal.

On Jan. 10, 2006, following the second remand, and less than
two months before the Debtors' bankruptcy filing, the District
Court entered an order scheduling the trial for July 11, 2006.  As
of April 6, 2006, fact discovery in connection with the Patent
Litigation is closed and supplemental expert discovery is
underway.

According to Mr. Sosnick, Dana indicated in a letter to the
District Court that despite the commencement of the Debtors'
Chapter 11 cases, it wishes to proceed to trial on the Patent
Litigation and, therefore, would support a lifting of the
automatic stay to allow American Axle to continue asserting the
Counterclaims.

Dana has proceeded with discovery in connection with the Patent
Litigation.  On March 22, 2006, Dana sought to expand the scope of
the lawsuit by serving a supplemental interrogatory response,
which asserted, for the first time, that another one of American
Axle's product lines infringes the Patents.  Despite its decision
to resume the prosecution of the Patent Litigation and also to
expand the scope of its allegations, Dana has declined to support
the lifting of the stay to allow American Axle to submit the
Reexamination Request to the PTO, Mr. Sosnick argued.

Mr. Sosnick told the Court that certain of the Counterclaims seek
declaratory relief that the Patents were not validly issued by the
PTO.  Therefore, if American Axle were to prevail on those
Counterclaims, there would be no patent rights for Dana to assert
against American Axle in the Patent Litigation.

A reexamination of the Patents would lead to the same result if
the PTO were to declare that the Patents had been issued
improperly, Mr. Sosnick clarified.  In that sense, the
Reexamination Request seeks, through the administrative channel,
the same ultimate relief as the invalidity Counterclaims seek.

Allowing American Axle to retain the flexibility to challenge the
validity of the Patents before the PTO would help ensure that
there is a complete resolution of the disputes raised in the
Patent Litigation, Mr. Sosnick said.

American Axle asserted that, if Dana chooses to proceed with the
prosecution of the Patent Litigation including the newly asserted
infringement allegations, it should not be permitted to hide
behind the automatic stay as a means to prevent American Axle from
fully defending itself.

                      About Dana Corporation

Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/--  
designs and manufactures products for every major vehicle producer
in the world, and supplies drivetrain, chassis, structural, and
engine technologies to those companies.  Dana employs 46,000
people in 28 countries.  Dana is focused on being an essential
partner to automotive, commercial, and off-highway vehicle
customers, which collectively produce more than 60 million
vehicles annually.  The company and its affiliates filed for
chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No.
06-10354).  Corinne Ball, Esq., and Richard H. Engman, Esq., at
Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B.
Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of
Sept. 30, 2005.  (Dana Corporation Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


DANA CORP: Court Defers Ruling on AREH's Claims Trading Request
---------------------------------------------------------------
For reasons stated in open court, the Honorable Burton R. Lifland
of the U.S. Bankruptcy Court for the Southern District of New York
denied American Real Estate Holdings Ltd.'s request to
to find that the automatic stay under Section 362(a)(3) of the
Bankruptcy Code does not apply to claims trading.  

Judge Lifland, according to Bloomberg News, said that a ruling on
the request at this time would be premature.  Judge Lifland will
consider the issue at a hearing set on June 28, 2006, Bloomberg
said.

As reported in the Troubled Company Reporter on May 11, 2006,
the Bankruptcy Court gave its interim order on the Debtors'
request to establish notice and hearing procedures to limit claims
and equity trading.  The Bankruptcy Court ruled among others that
no party may use any acquisitions of Debtors' securities that
close after April 4, 2006, as evidence, basis for standing, claims
of prejudice or any other consideration in opposing or otherwise
in connection with disputing or litigating the relief sought in
the Debtors' Trading Procedures Motion.

As reported in the Troubled Company Reporter on May 16, 2006,
AREH moved to appeal the Bankruptcy Court's decision continuing
the hearing on the Debtors' trading procedures motion to June 28,
to the U.S. District Court for the Southern District of New York.

AREH along with other objectors challenged the Bankruptcy Court's
authority to approve the Trading Procedures.  They argued that the
Debtors' request should be properly filed in an adversary
proceeding because, among others,

   (i) Section 362 of the Bankruptcy Code does not provide the
       Court the authority to enter the Trading Procedures Order
       because claims trading does not violate the automatic
       stay; and

  (ii) The Trading Procedures Order is an injunction.

In its appeal, American Real Estate asked the District Court to
find:

    1. whether the Bankruptcy Court erred in entering the Trading
       Order, which finally determined that any claims trading
       restrictions imposed after a future hearing will have
       retroactive effect, denied standing to contest the
       restrictions to parties who might, by acquiring claims
       against the Debtors, be most aggrieved by the restrictions
       and thereby deprived AREH and other claimholders of
       procedural due process;

    2. whether the Bankruptcy Court erred in entering the Trading
       Order because the order, in effect, constituted a ruling
       that the automatic stay under Section 362(a)(3) supplied
       sufficient statutory authority to interfere with third
       party transactions involving claims against the Debtors;
       and

    3. whether the Bankruptcy Court erred in interfering with
       third party transactions involving claims against the
       Debtors by the Trading Order without requiring the Debtors
       to establish the elements necessary to support injunctive
       relief.

AREH is one of the broker-dealers and market makers who declared
claimholder status with anticipated claim in excess of
$100,000,000 against the Debtors.

                      About Dana Corporation

Based 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).


DELPHI CORP: Negotiating with UAW Over Possible Buy-Outs
--------------------------------------------------------
Delphi Corp. is negotiating with its workers under the United Auto
Workers Union for possible lump-sum buyouts, Reuters reports.

The talks halted Court hearings over Delphi's move to reject its
collective bargaining agreements with its unions.  Delphi sought
had moved to reject the CBA's and to modify obligations to provide
insurance benefits for its hourly retirees.  To restructure its
U.S. operations, Delphi is planning to cut 4/5 of its 33,100 U.S.
hourly workers, close 21 of its 29 U.S. union plants and slash
wages and benefits for workers who stay.

UAW is ready to wage a strike against the auto parts maker if the
CBA's are rejected.  The union has received overwhelming
authorization from its members to call a strike.   A strike would
be a blow both to Delphi and General Motors Corporation, Delphi's
former parent company and one of its largest customer.

Delphi's proposed buy-out may resemble GM's buy-out program.  GM
is offering $35,000 for workers with at least a 30-year tenure to
retire and begin a $36,000-a-year pension.  Workers not eligible
to retire can opt for a buyout of as much as $140,000 and give up
their health care benefits in the process.

Delphi is also working to secure a deal wherein GM would defray
some of Delphi's labor costs.  Delphi is seeking to cut wages from
$27 an hour to $16.50.  Without GM's support wages would fall to
$12.50 an hour.  While Delphi is asking for GM's help with its
union problems, it is also seeking to dissolve over 5,000 supply
contracts with GM.  

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


DELPHI CORP: ThyssenKrupp Wants to Exercise Set-Off Rights
----------------------------------------------------------
The TK Budd Companies ask U.S. Bankruptcy Court for the Southern
District of New York to lift the automatic stay so they can
exercise certain set-off rights with Delphi Corporation and its
debtor-affiliates.

ThyssenKrupp Budd Systems, LLC, purchased certain goods from
Delphi prior to their bankruptcy filing.  ThyssenKrupp Systems is
indebted to Delphi for $351,296 for the prepetition goods.

Delphi is indebted to ThyssenKrupp Waupaca, Inc., and ThyssenKrupp
Stahl Company, affiliates of ThyssenKrupp Systems, for goods
purchased prepetition.

Delphi owes ThyssenKrupp Waupaca $114,353 and ThyssenKrupp Stahl
$92,740.  Collectively, Delphi's indebtedness to Waupaca/Stahl
total $207,092.

Greta A. McMorris, Esq., at Stinson Morrison Hecker LLP, in
Kansas City, Missouri, relates that pursuant to ThyssenKrupp
Systems' Purchase Orders, it may set off sums owed by Delphi with
any sums payable by ThyssenKrupp Systems or its affiliated
companies to Delphi.

This triangular set-off is permitted pursuant to an agreement of
the parties, Ms. McMorris says.  Thus, Systems has a valid right
of set-off for $207,092.

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


DELTA AIR: Recalls Pilots to Support Revenue Recovery Initiatives
-----------------------------------------------------------------
Delta is recalling between 60 and 70 furloughed pilots this summer
as the airline restructures its network to improve revenue and
better meet customers' domestic and international travel needs.

"We're pleased that Delta's network and revenue improvement
initiatives are affording us the opportunity to bring furloughed
pilots back to Delta," Gary Beck, senior vice president -- Flight
Operations, said.  "Recalling these pilots will help us meet new
schedule demands and add flexibility to ensure a smooth, reliable,
on-time operation, something we know our customers value."

The recalled pilots will begin training in late June and will
return to line flying for Delta in late summer.

With the June schedule, Delta and the Delta Connection carriers
will serve more domestic destinations than any U.S. carrier and on
June 29 will become the only U.S. airline to serve all 50 states
with the introduction of new nonstop ASA service between Atlanta
and Wilmington, Delaware.

                         About Delta Air

Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. --
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: Wants Court Nod on California Counties Agreement
-----------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to approve
their settlement agreement with certain airlines, and various
counties and assessors of the State of California, pursuant to
Rule 9019(a) of the Federal Rules of Bankruptcy Procedure.

The Settlement Agreement replaces an earlier agreement between the
parties that expired in 2004, Jared R. Winnick, Esq., at Davis
Polk & Wardwell, in New York, relates.

The prior agreements between the parties contained ambiguities
that led to disputes regarding aircraft values and obsolescence.
The Airlines had filed claims for tax refunds and applications for
changed assessments with the Counties, which they, in general,
denied.

The Settlement Agreement prescribes the methodology for
calculating aircraft values and measuring economic obsolescence
and terminates the Airlines' previous claims for refunds and
applications for changed assessment.  The agreement will apply
prospectively, as well as retroactively, to tax years 2002, 2003
and 2004.

As a result of the Settlement Agreement, Delta Air Lines, Inc.,
and Comair, Inc., will receive refunds and credits totaling
approximately $2,500,000 over the next five years.

The Settlement Agreement clearly favors the interests of the
Debtors' creditors because it results in a significant amount of
money accruing to the Debtors' estates and will eliminate the
costs and risks of a protracted litigation, Mr. Winnick tells the
Court.

The counties and their assessors that entered into the Settlement
Agreement are Alameda, Fresno, Kern, Humboldt, Los Angeles,
Monterey, Orange, Riverside, Sacramento, San Diego, San Joaquin,
San Mateo, Santa Barbara, Santa Clara, San Luis Obispo, Shasta,
Solano, Butte, Del Norte, Imperial, Stanislaus, Tulare and
Ventura.

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


DELTA AIR: Wants to Walk Away from 14 Embraer Aircraft Leases
-------------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York for
authority to reject leases to 14 Embraer EMB-120 aircraft and
their related engines, propellers, and other specified equipment:

    Tail No.                Aircraft Parties
    --------                ----------------
     N205CA     Boeing Capital Corporation, as owner participant.

     N241CA     BCC, as owner participant.

     N243CA     BCC, as owner participant; and Orix Orion
                Corporation, as head lessor.

     N244CA     BCC, as lessor; and Orix Orion, as head
                lessor.

     N254CA     Boeing Capital, lessor; and SBL Management
                Company, Limited, head lessor.

     N255CA     BCC, as owner participant; and SBL Management,
                as head lessor.

     N256CA     BCC, as owner participant.

     N266CA     National City Leasing Corporation, as owner
                participant.

     N258CA     Key Equipment Finance, as owner participant;
                Wilmington Trust Company, as indenture trustee;
                Wells Fargo Bank Northwest, National Association
                Corporate Trust Services, as owner trustee; NMB
                Lease N.V., ING Bank N.V. Dublin Branch, and ING
                Lease Nederland B.V., as lenders.

     N264CA     NCLC, as owner participant; Wilmington Trust,
                as indenture trustee; Wells Fargo, as owner
                trustee; NMB Lease N.V., ING Bank, and ING Lease,
                as lenders.

     N267CA     NCLC, as owner participant; Wilmington Trust,
                as indenture trustee; Wells Fargo, as owner
                trustee; NMB Lease N.V., ING Bank, and ING Lease,
                as lenders.

     N268CA     NCLC, as owner participant; Wilmington Trust, as
                indenture trustee; Wells Fargo, as owner trustee;
                NMB Lease, ING Bank, and ING Lease, as
                lenders.

     N257CA     UnionBanCal Leasing Corporation, as owner
                participant; Wilmington Trust, as indenture
                trustee; Wells Fargo, as owner trustee/voting
                trustee; NMB Lease, ING Bank, and ING
                Lease, as lenders.

     N259CA     UnionBanCal, as owner participant; Wilmington
                Trust, as indenture trustee; Wells Fargo, as
                owner trustee/voting trustee; NMB Lease, ING
                Bank, and ING Lease, as lenders.

The Debtors will walk away from the Leases effective June 4, 2006.

The Debtors inform the Court that they have not operated the
Aircraft for more than four years and no longer employ aircraft of
the same manufacture and model type in their fleet.  Thus, the
Debtors seek to eliminate the costs associated with retaining the
Aircraft.

Richard F. Hahn, Esq., at Debevoise & Plimpton LLP, in New York,
contends that approval of the Debtors' request will:

    -- allow for immediate rejection of the Leases and eliminate
       unnecessary obligations;

    -- establish an orderly, efficient process for the surrender
       and return of the Excess Leased Equipment and related
       documentation; and
2
    -- preserve the uninterrupted operation of the their airline
       business.

The Debtors propose that any claims arising out of any rejection
effected must be timely filed in accordance with any order
pursuant to Rule 3003(c) of the Federal Rules of Bankruptcy
Procedure establishing a deadline by which prepetition general
unsecured claims must be filed on or before the later of:

    -- the Bar Date, or
    -- 30 days after the Effective Date.

Any claim not timely filed will be deemed irrevocably barred.

The Debtors also ask the Court to approve these procedures:

    a. As soon as reasonably practicable after the Effective
       Date, the Debtors will deliver the Aircraft's records and
       documents to the applicable lessor;

    b. They will continue to maintain, insure and pay for storage
       costs, if any, relating to the Excess Leased Equipment for
       a period ending on the earlier of:

       -- 15 days after the Court approves the request; and
2
       -- the date on which a Lessor or other Aircraft Party
          takes possession of the Aircraft; and

    c. They may file a motion to compel removal of the Aircraft
       or payment for storage and other attendant costs,
       including, without limitation all legal fees, in the event
       that within 15 days after the Court's approval of their
       request, a Lessor does not:

       -- remove the Excess Leased Equipment; or   

       -- contract with a third party for storage of the Excess
          Leased Equipment.

The Debtors believe that the proposed procedures will satisfy the
"surrender and return" requirements of Section 1110(c).

                        About Delta Air

B2ased in Atlanta, Ga., Delta Air Lines -- http://www.delta.com/
--2 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
fin2ancial 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. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


ENRON CORP: Gets Court Nod to Modify Liquidation Incentive Pool
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Enron Corporation and its debtor-affiliates to modify
the Liquidation Incentive Plan II.

Judge Gonzalez rules that no payments provided under LIP II will
be made to any participant who does not execute an agreement
representing that he or she has not sold the Reorganized Debtors'
shares in violation of the insider trading rules provided under
Section 10(b)-5 of the Securities Exchange Act of 1934 and
agreeing to disgorge any amounts paid under LIP II should the
representation later be proved false.

The Court also states that no person named as a defendant in the
pending consolidated actions of Newby, et al. v. Enron Corp., et
al. and The Regents of the University of California, et al. v.
Lay, et al. Civil Action No. H-01-3624 (S.D. Tex.), will be
permitted to participate in the KERP or LIP II.  In addition,
no person identified as a wrongful actor in the "Report of
Investigation by the Special Investigative Committee of the Board
of Directors of Enron Corp." dated Feb. 1, 2002, will be
permitted to participate in the LIP II.
2
LIP II participants will continue to be required to disgorge all
payments made under the LIP II and any preference waiver provided
will be void to the extent that any participant is later adjudged
by a court of competent jurisdiction to have engaged in acts of
dishonesty or other willful misconduct detrimental to the
interests of the Reorganized Debtors.

                   Liquidation Incentive Plan II

Structurally, LIP II is identical to the Court-approved LIP.  

L2IP under the Key Employee Retention Program I was designed to
recognize:

    -- the high level of expertise and skill required to liquidate
       the Reorganized Debtors' trading assets and certain non-
       core businesses; and

    -- the need to correlate incentive payments to performance in
       this area.

The LIP functioned in a manner intended to compensate selected
employees possessing the required skill and expertise necessary to
assist in the liquidation process and generated payments based on
cash collected from the liquidation of certain of the Reorganized
Debtors' assets.
2
An employee selected for participation in the LIP was permitted to
share, at a level determined in the discretion of Management, in a
pool funded by the cash collected from the liquidation the Assets.
As approved by the Court, the pool funded under the LIP is
calculated in this manner:

LIP II will define collection milestones based on each
$500 million in proceeds collected from the liquidation of Assets.  
Upon the completion of each Milestone, the collection of proceeds
will generate a bonus pool equal to 1.5% of each Milestone
achieved.  However, under LIP II, Milestones will continue until
the earliest of the date on which:

2   (a) all Assets have been sold or liquidated;

    (b) the Reorganized Debtors determine not to sell the
        remaining Assets; or

    (c) $90 million in bonus pool funds have been generated under
        the LIP and LIP II, in the aggregate.

LIP II will continue to provide a payment structure of 50% as soon
as practicable after the achievement of a Milestone and 50%
payable as soon as practicable after the earlier of:

    -- six months after the Milestone is achieved;

    -- the date on which no further Milestones may be achieved; or

    -- the death, disability or involuntary termination without
       cause of the participant's employment.

Management will continue to retain the discretion to treat an LIP
II participant as being eligible to receive an award under LIP II
based on the achievement of a particular Milestone.  In addition,
Management will have the ability, in its sole discretion, to
create intermediate Milestones (e.g., at an amount below the
incremental $500 million) and designate an additional bonus pool,
if Management determines that the action is warranted.  Neither
KERP II nor KERP III sought the modification of the LIP.

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


ENRON CORP: Green Market Says Unit Breached Purchase Pact
---------------------------------------------------------
Pursuant to a Purchase Agreement, effective Jan. 12, 2006, Enron
North America Corp., agreed to sell to Green Market Investments
LLC its emission reduction credits for $1,500,010.

Green Market is engaged in buying, trading and selling ERCs.  
Lou Pai, a former executive of Enron Corp., and certain trusts
established by Mr. Pai, are the ultimate beneficial owners of
Green Market.

David M. LeMay, Esq., at Chadbourne & Parke LLP, in New York,
tells the Court that ENA has breached the Purchase Agreement.

He recounts that in the last quarter of 2005, Element Markets LLC
engaged in negotiations with ENA on behalf of Green Market
regarding the possible purchase of ENA's ERC Assets.  Element
Markets is an environmental commodities broker in which Mr. Pai
holds an interest.

ENA then determined to sell the ERCs through an open and
competitive auction process.  On Jan. 6, 2006, the ERCs auction
protocol was promulgated by ENA.  

The Auction Protocol provided that:

  (1) each bidder was entitled to submit one bid in writing by an
      authorized representative of the bidder, and that after ENA
      notified the winning bidder and received a purchase and
      sale agreement executed by the winning bidder, ENA would
      execute the purchase agreement and fax a copy of the
      executed agreement to the winning bidder;

  (2) after the winning bidder is declared, ENA will contact the
      applicable Air Quality District and request the District to
      transfer the ERC certificates from ENA's name to the
      winning bidder's name; and

  (3) ENA would not discuss the purchase of the ERC Assets with
      the other bidder after the auction date.

According to Mr. LeMay, the Auction Protocol did not prohibit or
restrict against a bidder having an affiliation with a former
employee or executive of the Reorganized Debtors or their
predecessor entities and did not require any disclosure as to the
identity of the principal investors, executives or employees or
any of the potential bidders.

On Jan. 12, 2006, the auction took place with two competing
bidders:

   -- Element Markets, representing Green Market, and
   
   -- Cantor Fitzgerald Brokerage L.P., representing
      Grey K Holdings I, LLC.

Element Markets emerged as the winning bidder with its $1,500,010
offer.  

Pursuant to their Purchase Agreement, Green Market and ENA agreed
that the sale would close on February 28, 2006.  On Jan. 17, Green
Market paid a $10,000 deposit to ENA pursuant to the Agreement.

On March 7, 2006, Brian S. Rosen, Esq., at Weil, Gotshal & Manges
LLP, in New York, counsel to ENA, wrote a letter to Green Market
advising that ENA would not consummate the sale transactions, and
enclosed a check representing the return of Green Market's
deposit that the Debtor had previously accepted.

On March 7, Enron Corp. and ENA sought the Court's approval to
sell the ERC Assets to Grey K, the losing bidder at the auction.  

ENA acknowledged that it had previously entered into the Purchase
Agreement with Green Market, but alleges that Green Market's
affiliation with Mr. Pai, a former Enron executive, raised issues
regarding potential conflicts of interest.

Green Market objected to the ERC Assets sale to Grey K.

Mr. LeMay notes that ENA admitted in its sale motion that Grey K
was provided an opportunity to resubmit a higher bid than the
winning bid of Green Market, in flagrant and willful disregard of
the provisions of the Auction Protocol and the Purchase
Agreement.

Accordingly, Green Market asks the Court to:

  (1) compel ENA to perform and execute the Purchase Agreement;
      or

  (2) in the alternative, award it damages as a result of
      ENA's failure and refusal to perform the Purchase
      Agreement, including its lost profits, in an amount to be
      determined at the trial; and

  (3) award it prejudgment interest as allowed by law.

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


FALCON AIR: Wants to Borrow Up to $1 Million from Jetglobal
-----------------------------------------------------------
Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp., ask
the U.S. Bankruptcy Court for the District of Florida for
permission to borrow up to $1 million from Jetglobal, LLC.

The Debtors will use the proceeds of the debtor-in-possession
facility to fund working capital in their business and to
potentially fund a plan of reorganization.  

The DIP Loan is payable in 12 months and earns 12% interest per
annum.  The DIP Lender has the option to convert its claim against
the Debtors to 70% of the capital stock of the reorganized
Debtors.  The Debtors will grant the DIP Lender superpriority
administrative claim over their assets.

Headquartered in Miami, Florida, Falcon Air Express, Inc. --
http://www.falconairexpress.net/-- is a small and low-cost  
airline company that provides charter service and renders foreign
and U.S. carriers sub-services on schedules routes.  The Debtor
and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter
11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877
& 06-11878).  Brian G. Rich, Esq., at Berger Singerman, P.A.,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.


FEDERAL-MOGUL: Panel Wants Jefferies Fin'l Advisory Work Modified
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases of Federal-Mogul Corporation and its debtor-
affiliates seeks the U.S. Bankruptcy Court for the District of
Delaware's permission to modify and supplement the terms of
Jefferies & Company, Inc.'s retention.

The Court had previously authorized the Creditors Committee to
retain Jefferies as its financial advisor pursuant to the terms of
an engagement letter, which letter has been amended from time to
time with the Court's approval.

In March 2005, the Creditors Committee sought and obtained the
Court's authority to expand the firm's retention to include work
on the potential sale of the Debtors' Zanxx division pursuant to
terms of a supplemental engagement letter.

The Committee wants to continue to retain Jefferies pursuant to a
modified form of the Zanxx Engagement Letter.

According to Charlene D. Davis, Esq., at The Bayard Firm, in
Wilmington, Delaware, the Modified Zanxx Engagement Letter alters
the Zanxx Engagement Letter in two ways:

   1. It modifies Jefferies' scope of work.  The modified
      services will relate to the potential sales of these
      additional assets, operations and businesses --
      Divestitures:

         * Araras Precision Machining Operations
         * Diadema
         * Federal-Mogul Windsor Machining Operations
         * Sintered Products
         * Wagner Lighting Products

   2. It will alter the terms of the firm's compensation:

         * the aggregate fees owed to it will be fixed at an
           amount less than the total potential fees under the
           Zanxx Engagement Letter; and

         * a portion of fees will be earned and paid on a monthly
           basis rather than on the occurrence of a sale.

The Debtors agree with the expanded scope, Ms. Davis tells the
Court.

The Debtors and the Committee believe that a sale of the
Divestitures should be actively explored and pursued since they
no longer fit in the Debtors' core strategic product groups and
their value is best maximized via a sale to third parties who
would view the business as core and strategic.  With the stand-
alone nature and low degree of integration with the Debtors'
other businesses, the Divestitures can be sold with minimal
disruption and impact on the Debtors' reorganization, Ms. Davis
adds.

In connection with the revised engagement, Jefferies will:

   -- provide a thorough analysis of the Debtors' proposed
      marketing materials and market positioning of the
      Divestitures;

   -- conduct a detailed review of the buyers' list; and

   -- identify and research additional potential buyers.

For the additional services, Jefferies will be entitled to:

   (a) a monthly fee equal to $150,000 per month for four
       months.  The first Monthly Fee was be payable on May 1,
       2006.  Subsequent Monthly Fees will be payable on the
       first day of each subsequent month.

   (b) a $175,000 fee due and payable on the earlier of a closing
       of a sale or the effective date of the Debtors' plan of
       reorganization or liquidation.

   (c) reimbursement of its expenses incurred in connection with
       a sale.

   (d) receive, if Jefferies' services are terminated for any
       reason, all the agreed fees and reimbursement that had
       accrued up to and including the effective date of the
       termination.  If Jefferies' services are terminated by the
       Committee -- or by Jefferies, for cause -- and the Debtors
       complete a transaction similar to a sale contemplated
       within a year of the termination, then the Debtors will
       pay Jefferies, concurrently with the closing of the sale,
       in cash the agreed fees and reimbursement.

The proposed modification will be in addition to all fees and
other consideration already paid under the original Zanxx
Engagement Letter, and those set forth in the Amended Engagement
Letter.  Ms. Davis notes that the supplemental fee structure will
not alter the obligation to provide to the firm all fees, expense
reimbursements or other consideration which may accrue under the
Amended Engagement Letter.

The Committee believes that the terms of the Modified Zanxx
Engagement Letter are reasonable and appropriate.  Furthermore,
Ms. Davis points out, Jefferies' fees for the proposed services
are comparable or lower than those charged by firms with similar
experience and expertise for the services.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion.  The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $10.15 billion
in assets and $8.86 billion in liabilities.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors.  (Federal-Mogul Bankruptcy News,
Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000)


FOAMEX INTERNATIONAL: Par IV Capital Discloses 7.22% Stake
----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Par IV Capital Management LLC and Robert B. Burke
disclose that they are deemed to beneficially own 1,769,500 shares
of Foamex International, Inc.'s common stock.

Par IV Capital and Mr. Burke's equity stake represents 7.22% of
the 24,509,728 shares of Foamex International's common stock
issued and outstanding as of March 17, 2006.

In the same filing, Paloma International L.P. and S. Donald
Sussman disclose that they are deemed to beneficially own 884,750
shares of Foamex International's common stock -- 3.61% of the
total issued and outstanding shares as of March 17, 2006.

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


FOAMEX INTERNATIONAL: Wants PwC to Work on IP License Deal
----------------------------------------------------------
Foamex International Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to amend the
Retention Order so that they may further utilize
PricewaterhouseCoopers LLP's services in relation to an IP
Agreement.  As reported in the Troubled Company Reporter on Nov.
11, 2005, the Debtors sought the Court's authority to employ PwC
as their tax advisor.

The Debtors are parties to an intellectual property license
agreement with an undisclosed licensee.  The IP Agreement
authorizes the Licensee to make use of certain of the Debtors'
patents.

PwC will review, investigate and examine the Licensee's business
records and accounting records supporting the calculations due
under the IP Agreement.  Upon completion of its review, PwC will
provide the Debtors with a written report of its findings.

The Debtors will pay PwC $250 per hour per professional, and
reimburse all actual and necessary expenses incurred by PwC in
connection with its review and analysis of the IP Agreement.

Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor
LLP, in Wilmington, Delaware, tells the Court that it is necessary
to review the IP Agreement to determine whether the compensation
that the Debtors are currently receiving from the Licensee is
appropriate.

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


FORD MOTOR: Fitch Downgrades Issuer Default Rating to B+ from BB
----------------------------------------------------------------
Fitch downgraded long-term ratings for both Ford Motor Company and
Ford Motor Credit Company with a Negative Rating Outlook, and
assigned these Recovery Ratings:

  Ford:

    -- Issuer Default Rating to 'B+' from 'BB'
    -- Senior unsecured to 'BB-/RR3' from 'BB'

  FMCC:

    -- Issuer Default Rating to 'B+' from 'BB'

Fitch also affirms FMCC's senior unsecured debt at 'BB/RR2'.

Ford's newly assigned 'RR3' rating indicates average recovery
prospects of 50-70% in the event that further deterioration in
operating results eventually results in a filing for bankruptcy.  
FMCC's new 'RR2' rating indicates superior recovery prospects of
70-90%.

The downgrade and Negative Outlook reflect Fitch's expectation of
persistent revenue deterioration through at least 2006 due to:

   * continued market share losses;
   * deteriorating mix;
   * price competition;
   * a lack of key product introductions; and
   * a lack of tangible progress in reducing its cost structure.

Despite an aggressive spending plan in 2006 to reduce its fixed
cost structure, persistently high commodity prices, and financial
and operational stresses at Ford's supply base are likely to more
than offset any progress in 2006, and Fitch expects that Ford will
see little relief in either cost category over the near term.  The
unfavorable trend of revenues and key cost factors is expected to
result in accelerated negative cash flows through 2006 and into
2007.

Ford will be challenged to reverse negative cash flows given a
relatively sparse product pipeline over the next several years.  
Ford has taken a number of steps to address its fixed cost
structure through employee buyouts (at Ford and at the reacquired
Visteon assets), the recent health care agreement with the UAW and
certain plant closures, although cash savings are likely to be
insufficient to reverse negative cash flows prior to the 2007 UAW
contract re-opening.

Ford's latest restructuring program extends through the 2012, with
the bulk of facility closures not commencing until after 2007,
limiting Ford's ability to achieve near-term cost reductions.  The
success of the restructuring program will, to a large degree,
depend on the success of the OEM's ability to negotiate further
benefit reductions and operational flexibility in the 2007
contract.  Ford's U.S. supplier base remains fragile throughout
the supply chain, which could result in higher direct costs,
manufacturing inefficiencies or production interruptions at Ford.

Although Ford has benefited from an improved passenger car
portfolio and the strong market position of its core F-Series
products, this has been insufficient to outpace the decline in
midsize and large SUV sales, including the Explorer, which have
historically been strong profit contributors.  Ford also faces
intensifying competition in the large pickup market from a
refreshed GM lineup and the opening of a new Toyota plant later
this year.

Ford Credit, a strong provider of dividends over the past several
years, is expected to demonstrate significantly reduced
profitability and dividends going forward, resulting from:

   * a smaller portfolio;
   * a reduced benefit from lower loss accruals; and
   * higher interest rates.

Fitch also recognizes that Ford has shown improvement and
profitability in its operations outside the United States,
including Europe, its Premium Automotive Group (P.A.G.), Latin
America, and in its Mazda holdings.  Although Jaguar operations
remain a significant drain on P.A.G., the turnaround in the
consolidated group over the past several years has been a positive
to this point.

Ford's 'RR3' Recovery Rating is based on an analysis of a
potentially restructured Ford.  Fitch's restructuring analysis
incorporates a Chapter 11 filing of North American operations and
would result in significant claims from working capital
liabilities (trade creditors, dealers, fleet customers, etc.) in
addition to unsecured debtholders.  Fitch also factored in
liabilities related to on and off-balance sheet liabilities that
could augment claims.  Fitch did not factor in claims related to
potential termination or alteration of legacy OPEB and pension
costs.

In the event of a filing, Fitch anticipates that Ford would not
attempt to terminate its pension plans.  Changes to OPEB
liabilities, as with the recent agreement between Ford and the
UAW, would have to be negotiated as part of a new labor agreement
in the event of a Chapter 11 filing, without resulting in claims
against the estate.  The restructured enterprise value includes
reduced production volumes and sufficient cost reductions to
achieve a 3% operating margin in North America, plus asset values
associated with international operations and its 100% ownership of
Ford Credit.

Liquidity remains adequate to finance restructuring requirements
and negative cash flows through the reopening of the UAW contract.
Cash and short-term VEBA at March 31, 2006, totaled $23.7 billion,
supplemented by long-term VEBA ($6.5 billion at yearend 2005) that
could be utilized to fund health care expenditures over the near
term.  Over the past several years, with the assistance of
dividends from Ford Credit and the sale of Hertz, Ford has been
able to maintain a strong level of liquidity, and has modestly
reduced debt.

Debt maturities remain very extended.  Legacy liabilities are
expected to decline in 2006 (although an accounting change will
bring certain liabilities back on the balance sheet) due to Ford's
recent health care agreement with the UAW and a re-measurement of
health care and pension liabilities due to higher interest rates.
However, potential pension legislation could accelerate funding
requirements.

FMCC's IDR remains linked to those of Ford due to the close
business relationship between them.  Fitch expects FMCC's earnings
and dividends to decline noticeably in 2006 primarily due to lower
receivables outstanding and margins.  

FMCC has benefited from lower provision expense, as the quality of
its receivables pool has increased, the pace of these improvements
is expected to slow going forward.  Fitch believes that FMCC
maintains a good degree of liquidity relative to its rating.  
Supporting this is FMCC's ability to sell or securitize a broad
spectrum of assets such as retail finance, lease, and wholesale
loans.

Moreover, FMCC continues to hold high cash balances and its assets
mature faster than its debt.  The 'RR2' Recovery Rating indicates
superior recovery prospects on unsecured debt resulting from solid
unencumbered asset protection, although discounted to account for
stressed performance and/or disposition.

Fitch downgraded these ratings with a Negative Rating Outlook:

Ford Motor Co.:

    -- Issuer Default Rating to 'B+' from 'BB'
    -- Senior debt to 'BB-/RR3' from 'BB'

  Ford Motor Credit Co.:

    -- Issuer Default Rating to 'B+' from 'BB'

  FCE Bank Plc:

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Capital B.V.:

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Credit Canada Ltd.:

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Motor Capital Trust II:

    -- Preferred stock to 'B-/RR6' from 'B+'

  Ford Holdings, Inc.:

    -- Issuer Default Rating to 'B+' from 'BB'
    -- Senior debt to 'BB-/RR3' from 'BB'

  Ford Motor Co. of Australia:

    -- Issuer Default Rating to 'B+' from 'BB'
    -- Senior debt to 'BB-/RR3' from 'BB'

  Ford Credit Australia Ltd.:

    -- Issuer Default Rating to 'B+' from 'BB'

  PRIMUS Financial Services (Japan):

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Credit de Mexico, S.A. de C.V.:

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Motor Credit Co. of New Zealand:

    -- Issuer Default Rating to 'B+' from 'BB'

  Ford Credit Co S.A. de CV:

    -- Issuer Default Rating to 'B+' from 'BB'

Fitch took these rating actions:

  Ford Motor Co.:

    -- Short-term Issuer Default Rating , rated 'B', is withdrawn

  Ford Motor Credit Co.:

    -- Short-term Issuer Default Rating affirmed at 'B'
    -- Commercial paper affirmed at 'B'
    -- Senior debt affirmed at 'BB/RR2'

  FCE Bank Plc:

    -- Senior Unsecured affirmed at 'BB/RR2'.
    -- Short-term Issuer Default Rating affirmed at 'B'
    -- Commercial Paper affirmed at 'B'
    -- Short-term Deposits affirmed at 'B'

  Ford Capital B.V.:

    -- Senior Unsecured affirmed at 'BB/RR2'

  Ford Credit Canada:

    -- Short-term Issuer Default Rating affirmed at 'B'
    -- Commercial Paper affirmed at 'B'
    -- Senior Unsecured affirmed at 'BB/RR2'

  Ford Credit Australia Ltd.:

    -- Senior Unsecured affirmed at 'BB/RR2'
    -- Short-Term IDR affirmed at 'B'
    -- Commercial Paper affirmed at 'B'

  PRIMUS Financial Services (Japan):

    -- Senior Unsecured affirmed at 'BB/RR2'
    -- Short-term IDR affirmed at 'B'

  Ford Motor Credit Co. of New Zealand:

    -- Senior Unsecured affirmed at 'BB/RR2'
    -- Short-Term IDR affirmed at 'B'
    -- Commercial Paper affirmed at 'B'

  Ford Credit Co. S.A. de C.V.:

    -- Senior Unsecured affirmed at 'BB/RR2'

Fitch's Recovery Ratings, introduced in 2005, are a relative
indicator of creditor recovery on a given obligation in the event
of a default.


GLOBAL REALTY: Posts $808,979 Net Loss in 2006 First Quarter
------------------------------------------------------------
Global Realty Development Corp. filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 24, 2006.

The Company reported an $808,979 net loss on $444,123 of revenues
for the three months ended March 31, 2006, compared to a $240,477
net loss on $6,489 of revenues for the three months ended March
31, 2005.

At March 31, 2006, the Company's balance sheet showed $52,867,837
in total assets, $45,084,582 in total liabilities, and $45,084,582
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?b18

                        Going Concern Doubt

Meyler & Company, LLC, in Middletown, New Jersey, raised
substantial doubt about Global Realty Development Corp.'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 losses for
the years 2005 and 2004.

Global Realty Development Corp. operates through four wholly owned
Australian subsidiaries: Australian Agriculture and Property
Management Limited; No. 2 Holdings Pty. Ltd., Victorian Land
Holdings Pty. Ltd.; and Ausland Properties, Ltd.  The Company
develops properties located primarily in Australia for commercial
and residential use.


GULF COAST: Recruits David Hull as Chief Restructuring Officer
--------------------------------------------------------------
Gulf Coast Holdings, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Texas for authority to retain David Hull as
its chief restructuring officer.

The Debtor wants to enter into postpetition agreement with CRP
Services, LLC, which will allow Mr. Hull to serve the Debtor.  
Pursuant to the agreement, the Debtor paid CRP Services a $26,000
prepetition retainer.  As stated in the Cash Collateral Budget,
the Debtor will pay Mr. Hull's fees directly to CRP Services.  Mr.
Hull is entitled to receive up to $13,000 per week.

Mr. Hull will:

   a) make decisions with respect to all aspects of the management
      and operations of the Debtor's business, subject to
      appropriate governance by the Board of Directors, the
      Debtor's shareholder and in accordance with the Plan, the
      Debtor's Bylaws, and applicable law;

   b) analyze and prepare business plans and forecasts for the
      Client; and

   c) provide testimony in court on behalf of the Client, if
      necessary.

The Debtor discloses that Mr. Hull will be paid $200 per hour for
his services.

The Debtor believes that Mr. Hull's services are necessary to
enable the Debtor to maintain management continuity and to execute
its duties as debtor-in-possession.

The Debtor assures the Court that Mr. Hull is "disinterested" as
defined in Sec. 101(14) of the Bankruptcy Code.

Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., field
for bankruptcy protection on April 28, 2006 (Bankr. N.D. Tex. Case
No. 06-31695).  Daniel I. Morenoff, Esq., and Jeffrey R. Fine,
Esq., at Hughes & Luce, LLP, represent the Debtor in its
restructuring efforts.  In its schedules filed with the Court, the
Debtor reported assets amounting to $18,258,575 and debts totaling
$19,553,664.


HIGH VOLTAGE: Plan Confirmation Hearing Set for June 27
-------------------------------------------------------
The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the
District of Massachusetts, Eastern Division, will consider
confirmation of High Voltage Engineering Corporation and its
debtor-affiliates' First Amended Plan of Liquidation at 11:00
a.m., on June 27, 2006, at 1101 Thomas P. O'Neill, Jr. Federal
Building, 10 Causeway Street in Boston Massachusetts.

Ballots accepting or rejecting the Plan must be received by
Choate, Hall & Stewart LLP by 4:30 p.m. on June 19, 2006 at:
     
       Choate, Hall & Stewart LLP
       Attn: Lisa Herrington, Esq.
       Two International Place
       Boston, Massachusetts 02110

Objections to confirmation of the Plan are also due by 4:30 p.m.
on June 19.  Plan objections must be filed with the Court and
served to:

       Choate, Hall & Stewart LLP
       Attn: Lisa Herrington, Esq.
       Two International Place
       Boston, Massachusetts 02110

       Office of the U.S. Trustee
       Attn: Paula Bachtell
       10 Causeway Street
       Room 1184
       Boston, Massachusetts 02222     

       Anderson, Kill & Olick PC
       Attn: Michael J. Venditto, Esq.
       1251 Avenue of the Americas
       New York City 10020            

       Lowenstein Sandler PC
       Attn: Ira M. Levee, Esq.  
             Sharon M. Levine, Esq.
       65 Livingston Avenue
       Roseland, New Jersey 07068

                         Plan Overview

As reported in the Troubled Company Reporter on May 24, 2006, the
Debtors filed a liquidating plan on May 17, 2006.  Pursuant to the
Plan, the Debtors assets will be substantively consolidated into a
single estate.  The Plan provides for the payment of all allowed
claims against the Debtors in full, including interest, and the
distribution of surplus funds to the equity holders on account of
their equity interests.

Stephen S. Gray, the chapter 11 trustee appointed in the Debtors'
bankruptcy cases, has sold the Debtors' businesses and liquidated
substantially all of their assets. The Debtors have no other known
assets of any material value, other than potential causes of
action and other miscellaneous assets, including:

   -- insurance refunds,

   -- some share of ReVera Incorporated's stock owned by the
      Debtors,

   -- cash collateral securing the letter of credit issued by
     Citizens Bank of Massachusetts; and  

   -- receivable from the sale of ASIRobicon S.p.A., an affiliate.

Proceeds realized on the sale of the ReVera Stock and net
recoveries, if any, on Causes of Action and miscellaneous assets
may increase the total value of the Debtors' assets available for
distribution to Equity Holders.  

Based on the Debtors' records, the Chapter 11 Trustee estimates
that remaining Allowed Claims against the Debtors ultimately will
total approximately $46.8 million, including estimated interest to
be paid on account of certain Claims.  

The Chapter 11 Trustee currently has on hand approximately $114
million in cash.  Certain amounts of this cash will be reserved as
disputed claims reserve, the post-confirmation administrative
reserve and the trust administrative reserve.  As the amount of
proceeds on hand exceeds the Disclosure Statement Estimated Claims
Amount, the Trustee expects that there will be sufficient funds
remaining for distribution to Equity Holders, which amount may be
increased if there are recoveries on the Debtors' unliquidated
assets, including Causes of Action.

A full-text copy of the Amended Disclosure Statement explaining
the Debtors' plan is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060523224131

                        About High Voltage

Based in Wakefield, Mass., High Voltage Engineering Corporation --
http://www.asirobicon.com/-- owns and operates a group of three  
industrial and technology based manufacturing and services
businesses.  HVE's businesses focus on designing and manufacturing
high quality applications and engineered products, which are
designed to address specific customer needs.  The Debtor filed its
first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No.
04-11586).  Its Third Amended Joint Chapter 11 Plan of
Reorganization was confirmed on July 21, 2004, allowing the
Company to emerge on Aug. 10, 2004.

High Voltage and its debtor-affiliates filed their second chapter
11 petition on Feb. 8, 2005 (Bankr. Mass. Case No. 05-10787).  S.
Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and
Douglas B. Rosner, Esq., at Goulston & Storrs, represent the
Debtors.  In the Company's second bankruptcy filing, it listed
$457,970,00 in total assets and $360,124,000 in total debts.
Stephen S. Gray was appointed chapter 11 Trustee in February 2005.
John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate,
Hall & Stewart LLP represent the chapter 11 Trustee.  Ira M.
Levee, Esq., at Lowenstein Sandler PC and Steven B. Levine, Esq.,
at Brown Rudnick Berlack Israels LLP represent the Official
Committee of Unsecured Creditors.


IMAGE TEK: Case Summary & 17 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Image Tek, Inc.
        1404 Washington
        Waco, Texas 76701

Bankruptcy Case No.: 06-60418

Debtor-affiliate filing separate chapter 11 petition:

      Entity                      Case No.
      ------                       --------
      eDoc Technologies, Inc.      06-60419

Type of Business: The Debtors offer computer and software
                  Maintenance services.  Michelle Haas is the
                  president and director of both Debtors.

Chapter 11 Petition Date: June 7, 2006

Court: Western District of Texas (Waco)

Judge: Larry E. Kelly

Debtors' Counsel: John A. Montez, Esq.
                  Montez, Williams & Baird, P.C.
                  3809 West Waco Drive
                  Waco, Texas 76710
                  Tel: (254) 759-8600
                  Fax: (254) 759-8700

Debtors' Consolidated Assets and Liabilities:

   Total Assets: $0

   Total Debts:  $1,884,292

Debtor's Consolidated List of their 17 Largest Unsecured
Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Apollo Software Estate           Purchase of         $1,800,000
1601 Rio Grande Suite 345        Software Business
Austin, TX 78701

Josephine L. Benavidez           Personal Loans         $56,524
528 Stefka
Robinson, TX 76706

Internal Revenue Service         Taxes - eDoc Tech.     $56,000
Special Procedures Staff
Stop 5022AUS
300 East 8th Street
Austin, TX 78701

Sears-Citi Sears                 Credit Card            $27,231
Zwicker & Associates
800 Federal Street
Andover, MA 01810

Internal Revenue Service         941 Taxes              $14,493

Lance Farris                     Wages                   $7,115

Capital One                      Credit Card             $2,500

HSBC Bank                        Personal Loan           $1,160

U.S. Attorney's Office           Notice                      $0

U.S. Attorney General/IRS        Notice                      $0

Marsha G. Milligan               Notice Only                 $0

James Studensky                  Notice Only                 $0

J. Scott Rose                    Notice Only                 $0

Internal Revenue Service         Notice Only                 $0

C. Daniel Roberts                Attorney for                $0
                                 Marsha Milligan

Boyce Reid Brown                 Attorney -                  $0
                                 M.L. Skip Fulkerson

Adam G. Price                    Notice Only                 $0


INTERNATIONAL RECTIFIER: Fitch Rates Planned $650 Mil. Notes at B+
------------------------------------------------------------------
Fitch assigned a 'B+' rating to International Rectifier Corp.'s
proposed $650 million convertible subordinated notes due 2013.  
This rating incorporates the potential exercise of a $100 million
over-allotment option by the initial purchasers of the notes.  
IRF's Issuer Default Rating is 'BB-' and Fitch currently rates the
bank credit facility at 'BB'.  The Rating Outlook remains
Positive.

While the proposed offering will result in total debt increasing
to more than $1 billion, the ratings and Positive Outlook
incorporate Fitch's expectations that IRF will use the net
proceeds to redeem the existing $550 million convertible
subordinated notes, as well as fund redemption premiums, issuance-
related transaction costs, and net costs associated with
convertible note hedge and warrant transactions.

The ratings and Outlook continue to reflect IRF's:

   * consistently positive (albeit modest) annual free cash flow;

   * leading positions in several power management markets;

   * strong and focused intellectual property portfolio;

   * diversified end-market exposure; and

   * relatively conservative financial strategy, including a solid
     liquidity position.

The Outlook also reflects Fitch's expectations that IRF's richer
sales mix, anticipated divestiture of its nonaligned products
segment (anticipated to be completed by mid-2006) and positive
longer term power management growth trends will translate into
more consistent operating and financial performance for IRF.

Ratings concerns center on IRF's:

   * significant ongoing capital expenditures and investments in
     research and development, representing approximately 20%-25%
     of revenues;

   * comparatively high debt levels (even prior to this issuance);

   * the small size relative to major competitors (several of
     which are large integrated semiconductor providers); and

   * exposure to the cyclical demand patterns and volatile cash
     flows associated with the semiconductor industry.


INTERPUBLIC GROUP: Prices Capital Markets Transaction
-----------------------------------------------------
The Interpublic Group reported that it has priced a transaction
that accesses the capital markets to provide it with a new source
of committed stand-by liquidity and a new letter of credit
facility.  The transaction is expected to close on June 13, 2006.

"We are pleased by the strong demand for this transaction, which
reflects confidence in Interpublic and allowed us to upsize the
facility from the initial $526 million to $750 million," said
Michael I. Roth, Interpublic Chairman and CEO.  "As we have
indicated previously, our management team is committed to a
conservative and proactive approach to financial management as we
proceed with our turnaround.  Our new stand-by credit facility
will provide significantly greater flexibility and extended
maturity compared to the one we are replacing, which remains
undrawn. What is more, the structure of the new facility also
minimizes potential share dilution. This innovative transaction is
particularly well-suited to our needs at this point in our
turnaround."

                        Sale of Units by ELF

A special-purpose entity called ELF Special Financing Ltd. has
agreed with a group of initial purchasers to sell units consisting
of notes linked to the credit of Interpublic and warrants to
purchase common stock of Interpublic.  There will be two series of
warrants, capped and uncapped, as described below, and two series
of notes.  The Series A Units will consist of capped warrants and
floating rate notes bearing interest at LIBOR plus 1.35%.  The
Series B Units will consist of uncapped warrants and floating rate
notes bearing interest at LIBOR plus 0.35%.  In addition, ELF will
sell capped warrants and junior floating rate notes to an
affiliate of one of the initial purchasers.  ELF will purchase AAA
rated liquid assets with the proceeds of sale of the notes and
units, and it will hold the liquid assets pending any request for
borrowing from Interpublic under the credit facility described
below.

                       Stand-by Credit Facility

At closing, Interpublic will enter into a $750 million revolving
stand-by credit facility with ELF, under which ELF will be
obligated to make cash advances to Interpublic and to issue
letters of credit for the account of Interpublic at Interpublic's
request.  Interpublic will pay interest on any outstanding loans
under the credit agreement at an annual rate equal to 3-month
LIBOR plus 0.78% per annum (the "Applicable Margin").  Interpublic
will also pay commitment fees on the undrawn amount under the
credit agreement at an annual rate equal to the Applicable Margin,
plus an additional facility fee equal to 0.15%.  The credit
facility will expire on June 15, 2009.  The transaction will not
increase the consolidated indebtedness of Interpublic unless and
until it borrows under the Credit Agreement or incurs a letter of
credit reimbursement obligation.

Upon or promptly following the closing of the transaction,
Interpublic intends to terminate its existing three-year revolving
stand-by credit facility, under which there are currently no
outstanding advances.  The letters of credit issued under the
existing three-year revolving credit facility will become letters
of credit issued under a new letter of credit facility that is
ultimately supported by letters of credit under the new credit
facility.

                             Warrants

Each warrant will entitle the holder to receive, following
expiration of the warrant on June 15, 2009, an amount in cash,
shares of Interpublic common stock, or a combination of cash and
shares, at Interpublic's option.  The amount will be based,
subject to customary adjustments, on the difference between the
market price of one share of Interpublic common stock (over 30
trading days following expiration) and the stated exercise price
of the warrant.  Interpublic will issue (a) 38,826,875 uncapped
warrants, with an exercise price of $11.91 per warrant, and (b)
29,072,092 capped warrants, with an exercise price of $9.89 per
warrant and the amount deliverable upon exercise capped so a
holder will not benefit from appreciation of Interpublic common
stock above $12.36 per share.  The exercise prices represent a
premium of 32.5% (in the case of the uncapped warrants) and 10%
(in the case of the capped warrants) over the closing price of
Interpublic shares on June 6, 2006.

                              Hedging

Interpublic has entered into hedging transactions with dealers
affiliated with certain of the initial purchasers of the units.
These transactions are intended to reduce the potential dilution
or cash cost of the uncapped warrants upon maturity.  The effect
of these transactions, from Interpublic's perspective, is to
increase the effective exercise price of the uncapped warrants to
$14.38 per share, representing a premium of approximately 60% over
the closing price on June 6, 2006.  The aggregate purchase price
of these call options will be approximately $29 million.

The dealers party to the hedging transactions have advised
Interpublic that they may purchase and sell Interpublic shares in
secondary market transactions and may enter into or unwind over-
the-counter derivative transactions on Interpublic's common stock.

The expenses of Interpublic in connection with this offering will
include underwriting commissions, legal and accounting fees,
printing costs and other fees or expenses of approximately
$25 million.  In addition, Interpublic will pay a fee to one of
the initial purchasers for its services as structuring agent for
the offering.

                          About Interpublic

Interpublic Group of Companies Inc. (NYSE:IPG) --
http://www.interpublic.com/-- is one of the world's leading  
organizations of advertising agencies and marketing-services
companies.  Major global brands include Draft, Foote Cone &
Belding Worldwide, FutureBrand, GolinHarris International,
Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global,
McCann Erickson, Octagon, Universal McCann and Weber Shandwick.  
Leading domestic brands include Campbell-Ewald, Deutsch and Hill
Holliday.

                         *     *     *

As reported in the Troubled Company Reporter on April 11, 2006,
Moody's Investors Service downgraded The Interpublic Group of
Companies, Inc.'s corporate family and senior unsecured long term
debt ratings to Ba3 from Ba1.  The outlook remains negative.  

As reported in the Troubled Company Reporter on March 31, 2006,
Fitch Ratings downgraded Interpublic Group's ratings.  Affected
ratings include:   

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

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

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

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

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

The Rating Outlook is Negative.

As reported in the Troubled Company Reporter on March 24, 2006,
Standard & Poor's Ratings Services lowered its ratings on The
Interpublic Group of Cos. Inc., including lowering the long-term
corporate credit rating to 'B' from 'B+'.  The short-term credit
rating was lowered to 'B-3' from 'B-2'.  All ratings were placed
on CreditWatch with negative implications.


INTERPUBLIC GROUP: Posts $170 Mil. Net Loss in 2006 First Quarter
-----------------------------------------------------------------
For the quarter ended March 31, 2006, The Interpublic Group of
Companies, Inc. reported a $170.2 million net loss on $1,327
million of revenue.    

Interpublic Group's balance sheet at March 31, 2006 showed
$10,992.4 million in total assets, $9,201.8 million in total
liabilities and stockholders' equity of $1,790.6 million.

The Company's balance sheet at March 31 also showed total current
assets of $6,557.9 million and total current liabilities of
$6,051.2 million.

A full-text copy of Interpublic Group's quarterly report is
available for free at http://researcharchives.com/t/s?b22

Based in New York City, Interpublic Group of Companies Inc. --
http://www.interpublic.com/-- is an organization of advertising  
agencies and marketing-services companies.  Its major global
brands include Draft, Foote Cone & Belding Worldwide, FutureBrand,
GolinHarris International, Initiative, Jack Morton Worldwide, Lowe
Worldwide, MAGNA Global, McCann Erickson, Octagon, Universal
McCann and Weber Shandwick.  Domestic brands include Campbell-
Ewald, Deutsch and Hill Holliday.

                          *     *     *

As reported in the Troubled Company Reporter on April 11, 2006,
Moody's Investors Service downgraded The Interpublic Group of
Companies, Inc.'s corporate family and senior unsecured long term
debt ratings to Ba3 from Ba1.  The outlook remains negative.  

As reported in the Troubled Company Reporter on March 31, 2006,
Fitch Ratings downgraded Interpublic Group's ratings.  Affected
ratings include:   

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

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

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

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

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

The Rating Outlook is Negative.

As reported in the Troubled Company Reporter on March 24, 2006,
Standard & Poor's Ratings Services lowered its ratings on The
Interpublic Group of Cos. Inc., including lowering the long-term
corporate credit rating to 'B' from 'B+'.  The short-term credit
rating was lowered to 'B-3' from 'B-2'.  All ratings were placed
on CreditWatch with negative implications.


JDA SOFTWARE: Moody's Puts B1 Rating on Proposed $50 Million Loan
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating
and B1 ratings to JDA Software Group's proposed $50 million
six-year first lien senior secured Revolver and $175 million
first lien Term Loan B.

Moody's also assigned a SGL-1 speculative grade liquidity rating,
reflecting very good liquidity.  Proceeds from the credit facility
and an unrated $50 million convertible preferred stock issue and
approximately $250 million of cash will be used to finance JDA's
acquisition of Manugistics Group Inc. and provide working capital
for the combined company.  The outlook is stable.

These ratings were assigned:

   * Corporate family rating -- B1

   * $50 million first lien senior secured revolving credit
     facility -- B1

   * $175 million first lien senior secured term loan -- B1

   * Outlook is stable

The B1 corporate family ratings are constrained by:

   i) the significant restructuring and integration risk
      associated with the acquisition of Manugistics;

  ii) long term deterioration of Manugistics' business;

iii) flat to declining revenues at JDA;

  iv) uncertainty over timing of recovery in the retail software
      market and

   v) the ongoing threat from large well capitalized competitors.

The ratings also acknowledge the long track record and strong
market position of JDA within the retail industry, modest leverage
at the combined companies and management's experience integrating
acquisitions.

The stable outlook reflects Moody's expectation that over the near
term JDA's core business will remain stable and the Company will
substantially be able to realize the planned cost savings at the
combined companies.

JDA is a provider of software solutions tailored to the retail
industry and their suppliers.  The Company is headquartered in
Scottsdale, Arizona.


KAISER ALUMINUM: Inks 2nd Amendment to Replacement DIP Financing
----------------------------------------------------------------
The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware permits Kaiser Aluminum Corporation and its
debtor-affiliates to enter into a second amendment to postpetition
credit agreement and pay certain related fees.  The Replacement
Financing Facility remains in full force and effect and
enforceable in all respects, except to the extent modified.

Among others, the Second Amendment extends the maturity Date of
the Replacement Financing Facility to Aug. 31, 2006.

The Court authorizes the Reorganizing Debtors to file the fee
letters under seal.  Judge Fitzgerald will conduct an in camera
hearing on the Financing Motion if the contents of the Fee
Letters will be discussed.

As reported in the Troubled Company Reporter on Jan. 18, 2006, the
Debtors have engaged in discussions with JPMorgan Chase Bank,
National Association, JPMorgan Securities, Inc., and CIT
Group/Business Credit, Inc. -- their primary DIP lenders -- for an
extension of the $200,000,000 replacement DIP financing.

The Debtors and the Lenders agreed to enter into a first amendment
to the Replacement Financing Facility.

                       About Kaiser Aluminum

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


KEM RALPH: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Kem L. Ralph
        1068 Bride Road
        Covington, Tennessee 38019

Bankruptcy Case No.: 06-24163

Chapter 11 Petition Date: June 8, 2006

Court: Western District of Tennessee (Memphis)

Debtor's Counsel: David J. Cocke, Esq.
                  The Bogatin Law Firm, PLC
                  1661 International Place Drive, Suite 300
                  Memphis, Tennessee 38120
                  Tel: (901) 767-1234

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 11 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Scruggs Farm Lawn and            Trade Debt          $1,350,000
Garden, LLC
3575 Tom Watson Drive
Saltillo, MS 38866

U.S. Clerk of Court              Restitution           $135,000
168 North Main Street
Room 235
Memphis, TN 38103

John Deere Credit                Trade Debt             $59,000
P.O. Box 650215
Dallas, TX 75265-0215

Richard Kelley dba               Trade Debt             $56,000
Burlison Gin, Inc.

James Robinson, Esq.             Professional Fees      $50,000

Two-Way Gin Co.                  Trade Debt             $15,000

Lou Leonatti, Esq.               Professional Fees       $8,500

Glankler Brown, PLC              Professional Fees       $5,200

Monsanto Company                 Judgment                $3,000

James E. Wood                    Trade Debt              $2,000

Josh Ralph                       Labor                   $2,000


KRATON POLYMERS: Moody's Places B1 Rating on $75MM Debt Facility
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to KRATON Polymers
LLC's proposed amended senior secured $75 million revolving credit
facility that matures in 2011.  KRATON's corporate family rating
of B1 and all its existing ratings were affirmed.  The amendment
increases the revolving commitments under the revolving credit
facility to $75 million from $60 million.

The rating assigned to the revolving credit facility prior to the
amendment will be withdrawn upon the effectiveness of the amended
revolving credit facility.  KRATON's rating outlook remains
stable.  Polymer Holdings LLC is the parent holding company of
KRATON.

The B1 corporate family rating reflects management's demonstrated
ability to generate growth in revenues and improved cash flow.  
Moody's believes that new management has been effective in 2005 in
a number of initiatives including improving product prices,
reducing inventory, cutting costs and improving operations.  The
improvement in these areas resulted in materially improved 2005
credit metrics and the prospect of continued improvement in the
coming years.

The notching of KRATON's senior secured credit facility at the
level of the corporate family rating reflects the significant
portion of secured debt in the capital structure and Moody's
belief that in a distressed situation, the collateral may not
cover amounts outstanding under the credit facilities as a portion
of the company's assets reside outside of North America.

Moody's previous rating action on KRATON was on April 24, 2006,
when a B1 corporate family rating was assigned, a B1 rating was
assigned to KRATON's guaranteed senior secured term loan due 2013,
and its guaranteed senior subordinated notes were upgraded to B3
from Caa1.

Moody's also withdrawn the ratings at PHL and KRATON as indicated
in its press release dated April 24, 2006.

Ratings Assigned:

   KRATON Polymers LLC

     * Guaranteed senior secured revolver, $75 million due 2011
       -- B1

Ratings Withdrawn:

   KRATON Polymers LLC

     * The B1 rating for the guaranteed senior secured term loan,
       $263 million due 2010.

   Polymer Holdings LLC.

     * The B2 Corporate Family Rating

     * The Caa2 for the Senior Discount Notes due 2014

Polymer Holdings LLC, headquartered in Houston, Texas, is a
leading global producer of styrenic block copolymers, or SBCs,
which are synthetic elastomers used in industrial and consumer
applications to impart favorable product characteristics such as
flexibility, resilience, strength, durability and processability.
The company generated revenues of $976 million for the year ended
Dec. 31, 2005.


L-3 COMMUNICATIONS: Appoints Michael T. Strianese as Interim CEO
----------------------------------------------------------------
Michael T. Strianese, L-3 Communications Corporation's chief
financial officer, has been named the Company's interim chief
executive officer, effective immediately.  Mr. Strianese succeeds
Frank C. Lanza, who died on June 6.

Mr. Strianese has been intimately involved with the company since
its formation in 1997 and will continue in his position as chief
financial officer.  Mr. Strianese became chief financial officer
of L-3 on March 11, 2005.  Prior to that, Mr. Strianese served in
various capacities at L-3, including his position as Senior Vice
President - Finance.

The Board also appointed Robert B. Millard as non-executive
chairman.  Mr. Millard has been an L-3 Director since the
company's formation in April 1997.  He is a Managing Director of
Lehman Brothers Inc. and head of Lehman Brothers' Global Trading
Strategies.

The Company's Board of Directors has formed an executive committee
consisting of three independent board members -- Thomas A.
Corcoran, Robert B. Millard and Peter A. Cohen.  In addition,
these three directors will serve as members of a search committee
formed to conduct a search for the selection of a permanent chief
executive officer to succeed Mr. Lanza.  Mr. Corcoran will serve
as the chairman of this committee and General (Retired) Robert W.
RisCassi, vice president of L-3, will act as an advisor to this
committee.

"Frank Lanza and his executive management have created what has
become an enduring national asset, valued by its defense and
homeland security customers both in the U.S. and abroad," Mr.
Millard said.  "Since the formation of the company, Mike Strianese
has worked side by side with Frank and L-3's chief operating
officers in successfully executing L-3's strategy."

"The L-3 Board is confident that Mike Strianese will continue to
carry on the extraordinary legacy that Frank Lanza has created,"
continued Mr. Millard.  "His leadership during this time and
through the completion of the search will ensure a seamless
transition and a continued focus on the strategy that Frank Lanza
created and that L-3's management and employees carry out every
day."

"I am fortunate that L-3 has a deep and talented executive
management team, including eleven COOs, and I look forward to
continuing to work closely with them to advance the strategy and
success of L-3," Mr. Strianese said.

                            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.


LARRY'S MARKETS: Wants to Use Sterling's Cash Collateral
--------------------------------------------------------
Larry's Markets Inc. asks the U.S. Bankruptcy Court for the
Western District of Washington to use cash collateral securing
repayment of its debt to Sterling Savings Bank.   

When the Debtor filed for bankruptcy protection, it owed Sterling
Savings $11,627,215.61.  Sterling Savings holds liens on the
Debtor's assets on account of this debt.  The Debtor says it needs
access to the proceeds from the sales of inventory and accounts
receivable to minimize disruption to and avoid termination of its
operations.

The Debtor will grant Sterling Savings, as prepetition secured
lender, replacement lien to the same extent, validity and priority
as the prepetition lien.

The Debtor further asks the Court for permission to borrow
$480,000 from Sterling Savings.  This debtor-in-possession loan
earns interest at the WSJ prime rate plus 4.5%.  The Debtor will
grant Sterling Savings, as postpetition lender, superpriority
status on claims under the DIP loan.  

Headquartered in Kirklan, Washington, Larry's Markets, Inc. --
http://www.larrysmarkets.com/-- operates several supermarkets and   
department stores in the U.S. Northwest.  The company filed for
chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case No.
06-11378).  Armand J. Kornfeld, Esq., at Bush Strout & Kornfeld,
represents the Debtor.  The Official Committee of Unsecured
Creditors has selected Marc L. Barreca, Esq., and Michael J.
Gearin, Esq., at Preston Gates & Ellis LLP, to represent it in the
Debtor's case.  When the Debtor filed for protection from its
creditors, it listed total assets of $12,574,695 and total debts
of $21,489,800.


LEVITZ HOME: Court Grants Extension to Lease Decision Period
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extends Levitz Home Furnishings, Inc., and its debtor-affiliates'
Lease Decision Period with respect to Store Nos. 10205, 30501,
40201, 40301, 10401, 10504, 20509 and 30305.  There is no ruling
yet on the Woodbury Lease.

Judge Lifland also extends the Lease Decision Period with respect
to a lease for Store No. 20301 located in Eatontown, New Jersey,
to August 31, 2006.  Cherry Hill Self Storage, LLC, is the
landlord for Store No. 20301.

Following an oral request by the Debtors to extend the deadlines
for assumption or rejection of a lease for a warehouse located in
Mira Loma, California, the Court extends the Lease Decision
Deadline for the Mira Loma Lease through, and including, June 8,
2006.

The Section 365(d)(4) Deadline is extended for any Lease that is
subject to a Lease Assumption Notice or Motion to Assume filed or
served on or before the May 31, 2006 Designation Deadline through
and including the date an order approving the assumption or
requiring the Debtors to reject the Lease becomes final and
non-appealable.

                        Crossways Objection

Lake Park 300 Crossways Park Drive LLC, and CLK-HP 300 Crossways
Park Drive LLC, lease to Levitz Furniture, LLC, approximately
45,000 square feet of a 100,000-square foot nonresidential
property located in Woodbury, New York, that serves as the
Debtors' corporate headquarters.  Two other tenants occupy the
rest of the Premises.

Robert N. Michaelson, Esq., at Kirkpatrick & Lockhart Nicholson
Graham LLP, in New York, reminded the Court that in the Debtors
and PLVTZ, LLC's request to extend the lease decision period, the
parties' requested extension for the Woodbury Lease is 210 days
while the requested extension for the other eight leases is
between 60 and 90 days.

Mr. Michaelson asserted there was no compelling explanation why an
additional 120 days is needed to decide for the Woodbury Lease.  

Mr. Michaelson said that, if a prolonged extension is granted,
Crossways will be left with continuing uncertainty about whether
it will have an ongoing tenant or vacant space for which it must
procure a new tenant -- a process Crossways cannot even begin
unless and until a formal notice of rejection is provided.

Additionally, until the issue is resolved, Crossways' ongoing
efforts to secure favorable refinancing for the Premises will
suffer since a partially vacant property is less attractive to
prospective lenders.

Crossways asked the Court to deny a 120-day extension and
suggested a shorter extension period.

                         About Levitz Home

Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of  
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States.  The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189).  David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.  Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005.  (Levitz Bankruptcy News, Issue No. 14 Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LEVITZ HOME: Moves to Reject Robbinsville Lease
-----------------------------------------------
Prior to filing for bankruptcy, Debtor Seaman Furniture Company,
Inc., leased a warehouse located in Robbinsville, New Jersey, from
Matrix Realty, Inc.

Seaman Furniture provided Matrix with a $3,350,000 letter of
credit as security for payment of rent and other charges.  As
result of various defaults under the Lease, Matrix has drawn down
on the Robbinsville L/C and is presently holding the proceeds of
the Robbinsville L/C.

Since April 2006, PLVTZ, LLC, and Matrix have been negotiating
regarding the possible assumption and assignment or rejection of
the Robbinsville Lease.  Recently, the parties reached an
agreement regarding that Lease.  

On May 18, 2006, the PLVTZ provided a notice of its election not
to assume the Robbinsville Lease.

Richard H. Engman, Esq., at Jones Day, in New York, notes that
Matrix consents to the proposed rejection of the Robbinsville
Lease.  

Mr. Engman says PLVTZ and Matrix will enter into a new lease for
the warehouse property and Matrix will provide PLVTZ with a
waiver needed under PLVTZ's new credit facility.

Specifically, under the agreement among the Debtors, PLVTZ and
Matrix, upon rejection of the Robbinsville Lease, Matrix will
remit $1,500,000 from the L/C Proceeds to PLVTZ and retain the
approximately $1,850,000 balance:

   1.  in full satisfaction and settlement of any rejection
       damage and administrative claims Matrix has with respect
       to the Robbinsville Lease with the Debtors; and

   2.  as payment for entering into the New Lease with PLTVZ and
       providing the Waiver.

Because the L/C Proceeds are used mostly, if not entirely, for
PLVTZ's benefit, PLVTZ will reduce its outstanding $18,000,000
claim by the full amount of the L/C Proceeds -- $3,350,000.  With
respect to the New Lease, PLVTZ is obligated to provide Matrix
with a $1,500,000 L/C.

Against this backdrop, the Debtors and PLVTZ ask the Court to
authorize:

   (a) the rejection of the Robbinsville Lease effective as of
       May 26, 2006, or the date on which the New Lease becomes
       effective, whichever date is later;

   (b) the payment of $1,500,000 of the L/C Proceeds to PLVTZ
       for use as consideration for the New Lease; and

   (c) Matrix to apply the remaining $1,850,000 balance of the
       L/C Proceeds in full and complete satisfaction of any and
       all:

        -- rejection damages,

        -- administrative expense claims, and

        -- claims that Matrix may hold against the Debtors in
           connection with the Lease.

Mr. Engman points out that the Debtors, PLVTZ and Matrix have
agreed that the Robbinsville Lease will be rejected so as to
allow entry into the New Lease between PLVTZ and Matrix.  More
importantly, rejection of the Robbinsville Lease and entry into
the New Lease works to provide a $3,350,000 partial satisfaction
of PLVTZ's $18,000,000 DIP claim against the Debtors.

Therefore, Mr. Engman says, rejection of the Robbinsville Lease
results in a clear benefit to the Debtors' estates.

Mr. Engman informs the Court that Resurgence Asset Management
informally objected to the Rejection Motion.  Resurgence argued
that, among other things, it is entitled to any L/C Proceeds in
excess of amounts owed to Matrix for defaults and damages.

As previously reported, Resurgence Asset Management LLC and its
affiliates managed funds and accounts that own more than 85% of
the common stock, and all of the preferred stock, of Levitz Home
Furnishings, Inc.

In the event that the Rejection Motion, including application of
the L/C Proceeds as consideration for a new lease and in
satisfaction of Matrix's rejection damages and other claims, is
not granted, the Debtors and PLVTZ ask the Court, with the
consent of Matrix, to authorize:

   (i) the assumption and assignment of the Robbinsville Lease to
       PLVTZ;

  (ii) the return of the Excess L/C Proceeds to Seaman Furniture
       as lessee upon assumption and assignment of the
       Robbinsville Lease or during its Termination Date;

(iii) the turnover of any Excess L/C Proceeds received by Seaman
       Furniture, as lessee, to PLVTZ; and

  (iv) PLVTZ to use the Excess L/C Proceeds as, among other
       things, consideration to secure Matrix's consent to the
       assignment and as a security deposit with respect to it.

                         About Levitz Home

Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of  
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States.  The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189).  David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.  Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005.  (Levitz Bankruptcy News, Issue No. 14 Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LEXINGTON HEALTHCARE: Sansone Hired as Trustee's Tax Consultant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed
Alfred Thomas Giuliano, the Chapter 7 Trustee appointed in
Healthcare Group, Inc., and Lexington Highgreen Holding, Inc.'s
cases, to retain Joseph C. Sansone Co. as his real estate tax
consultant.  

The Trustee needs Sansone to monitor his pursuit of tax appeals
and the status of all settlement agreements.  The Trustee will
also provide property tax consulting services

The Trustee and Sansone agreed that the firm will charge fees
based on the amount of taxes refunded to the Debtors, as opposed
to how much the amount of an assessed value is reduced.
Accordingly, the Trustee seeks the Court's approval to retain
Sansone for a fee limited to 50% of the real estate funds for the
first two years.

Sansone agreed to waive its unsecured claim against the Debtors
and to withdraw its proof of claim amounting $99,918 based upon an
arbitration award issued by the American Arbitration Association.

The Trustee believes that Sansone and its employees hold no
interest adverse to the Debtors' estate and are "disinterested
persons" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Lexington Healthcare Group, Inc., and its wholly owned subsidiary,
Lexington Highgreen Holding, Inc., filed voluntary chapter 11
petitions on April 2, 2003 (Bankr. D. Del. Case No. 03-11007).
Frederick B. Rosner, Esq., at Jaspen Schlesinger Hoffman LLP,
represents the Debtors.  The Debtors estimated they had $1 to $10
million in assets at the time of the chapter 11 filing and $10 to
$50 million in liabilities.  The Debtors managed their business
affairs as debtors in possession until May 19, 2004, when the
cases were converted to chapter 7 liquidation proceedings.  Alfred
T. Guiliano was appointed as the chapter 7 trustee on May 20,
2004.


LIBERTAS FUNDING: Moody's Puts Ba1 Rating on $9MM Class G Notes
---------------------------------------------------------------
Moody's Investors Service assigned ratings to eight classes of
notes issued by Libertas Preferred Funding I, Ltd.

Moody's Ratings:


   (1) Aaa to the U.S.$420,000,000 Class A-1 First Priority
       Senior Secured Floating Rate Delayed Draw Notes Due       
       December 2043;

   (2) Aaa to the $66,000,000 Class A-2 Second Priority
       Senior Secured Floating Rate Notes Due December 2043;

   (3) Aa2 to the $32,400,000 Class B Third Priority Senior
       Secured Floating Rate Notes Due December 2043;

   (4) Aa3 to the $5,400,000 Class C Fourth Priority Senior
       Secured Floating Rate Notes Due December 2043;

   (5) A2 to the $24,000,000 Class D Fifth Priority Mezzanine
       Secured Deferrable Floating Rate Notes Due December 2043;

   (6) Baa2 to the $13,800,000 Class E Sixth Priority
       Mezzanine Secured Deferrable Floating Rate Notes Due
       December 2043;

   (7) Baa3 to the $12,000,000 Class F Seventh Priority
       Mezzanine Secured Deferrable Floating Rate Notes Due
       December 2043; and

   (8) Ba1 to the $9,000,000 Class G Eighth Priority
       Mezzanine Secured Deferrable Floating Rate Notes Due
       December 2043.

The collateral manager is Strategos Capital Management LLC.


LIBERTY DIVERSIFIED: Chisholm Bierwolf Raises Going Concern Doubt
-----------------------------------------------------------------
Chisholm Bierwolf & Nilson, LLC, expressed substantial doubt about
Liberty Diversified Holdings, Inc., fka eWorldMedia, Inc.'s
ability to continue as a going concern after it audited the
Company's financials statements for the years ended Dec. 31, 2005
and 2004.  The auditing firm pointed to the Company's working
capital deficit and recurring operating losses.

Liberty incurred a consolidated net loss for the fiscal year ended
Dec. 31, 2005 of $3,936,993, compared with a net loss of
$2,992,972 for the fiscal year ended Dec. 31, 2004.  Management
attributes the significant increase on the issuance of preferred
stock for services, commissions and consulting fees.  The Company
generated consolidated gross revenues of $484,177 during the
twelve months ended Dec. 31, 2005 compared with gross revenues of
$1,313,608 in the previous fiscal year ended Dec. 31, 2004.

At Dec. 31, 2005, the Company had $10,527,668 in total assets,
$4,100,386 in total liabilities, and $6,427,282 of stockholders'
deficit.  The Company's balance sheet showed strained liquidity at
Dec. 31, 2005, with $1,357,451 in total current assets available
to pay $4,100,386 in current debts.

A full-text copy of the Company's 2005 annual report is available
for free at http://researcharchives.com/t/s?b3a

Based in Newport Beach, California, Liberty Diversified Holdings,
Inc., fka eWorldMedia Holdings, Inc., provides eShopping,
eCommerce, and online communications products to consumers and
business users throughout the U.S. and abroad.  eWorldMedia also
markets additional Internet-based communication, marketing and
advertising solutions to retail merchants, service-oriented
professionals and entrepreneurs, as well as cutting-edge tools and
turnkey systems that allow individuals to build small office
and/or home-based businesses over the Internet.


LLOYD MITCHELL: Case Summary & 15 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Lloyd E. Mitchell, Inc.
        Attn: Barry G. Isaac
        Gross Mendelsohn
        36 South Charles Street, 18th Floor
        Baltimore, Maryland 21201

Bankruptcy Case No.: 06-13250

Chapter 11 Petition Date: June 6, 2006

Court: District of Maryland (Baltimore)

Judge: Nancy V. Alquist

Debtor's Counsel: Mark J. Friedman, Esq.
                  DLA Piper Rudnick Gray Cary US LLP
                  6225 Smith Avenue
                  Baltimore, Maryland 21209-3600
                  Tel: (410) 580-3000

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 15 Largest Unsecured Creditors:

   Entity
   ------
Maryland Casualty Company
c/o Goodell, DeVries, Leech & Dann, LLP
Attn: E. Charles Dann, Jr., Esq.
One South Street, 20th Floor
Baltimore, MD 21201

Law Offices of Peter T. Nicholl, P.C.
Suite 1700, Charles Center South
36 South Charles Street
Baltimore, MD 21201

Law Offices of Peter Angelos, P.C.
One Charles Center, 100 North Charles Street
Baltimore, MD 21201-3812

Ashcraft & Gerel
Suite 1212, 10 East Baltimore Street
Baltimore, MD 21202

Paul A. Weykamp, Esq.
Suite 300, 110 St. Paul Street
Baltimore, MD 21202

Goodman, Meagher & Enoch, LLP
7th Floor, 111 North Charles Street
Baltimore, MD 21201

Parker, Dumler & Kiely, LLP
Suite 2200, 36 South Charles Street
Baltimore, MD 21201

Verderaime & DuBois, P.A.
1231 North Calvert Street
Baltimore, MD 21202
(6 cases)

Goldman & Skeen, P.A.
4th Floor, 11 East Lexington Street
Baltimore, MD 21202

James J. Fabian, Esq.
Suite 100, 326 St. Paul Street
Baltimore, MD 21202

Clifford W. Cunniff, Esq.
Suite 612, 207 East Redwood Street
Baltimore, MD 21202-3320

Edward David Hoskins, Esquire
Suite 425, 711 West 40th Street
Baltimore, MD 21211

Stephen J. Nolan, Chartered
Suite 2200 Court Towers
201 West Pennsylvania Avenue
Baltimore, MD 21204

Gary W. Kendall, Esq.
Michie, Hamlett, Lowry, Rasmussen, et al.
Suite 300, 500 Court Square
P.O. Box 298
Charlottesville, VA 22902-0298

Law Office of Peter T. Enslein, P.C.
1738 Wisconsin Avenue, Northwest
Washington, D.C. 20007-2313


LOPERS/NOYACK PATH: Selling Luxury Home Unit on Friday
------------------------------------------------------
Lopers/Noyack Path, LLC, is selling, free an clear of liens, a
luxury single-family home located at 112 Lopers Path, in
Bridgehampton, New York (Section 036.00, Block 1.00, Lot No.
016.007).   

The auction for the asset is scheduled at 10:00 a.m. on Friday,
June 19, 2006, at the U.S Bankruptcy Court for the Southern
District of New York, Room No. 617, One Bowling Green, New York
City.   

Interested bidders must out-bid an existing Proposed Purchaser,
which had submitted a $3.5 million offer for the assets.  The
Debtor will only accept bids of $3.7 million or higher.

Additional information on the auction and the Bid Procedures are
available from:            

       Leo Fox, Esq.
       630 Third Avenue, New York City 10017
       Phone: (212) 867-9595
       Fax: (212) 949-1857

Based in New York City, Lopers/Noyack Path, LLC, acquires and
develops real property in 112 Loper's Path, Bridgehampton located
in Long Island, New York.  Abraham Weiss and Weiss & Company, owed
more than $1.1 million, filed an involuntary chapter 11 petition
against Lopers/Noyack Path, LLC, on June 29, 2005 (Bankr. S.D.N.Y.
Case No. 05-14784).  The Bankruptcy Court entered an Order for
Relief on Sept. 13, 2005.  Mr. Weiss is represented by Leo Fox,
Esq., in Manhattan, and has taken control of the Debtor.  Mr.
Weiss filed a Chapter 11 Plan of Liquidation on Jan. 18, 2006.  
Creditors voted to accept that Plan, and the Bankruptcy Court
entered an order confirming the Plan on Feb. 28, 2006.  Mr. Weiss
is liquidating the Debtor's assets pursuant to the terms of the
Confirmed Plan.


LORBER INDUSTRIES: Taps Steven Scandura as Collection Counsel
-------------------------------------------------------------
Lorber Industries of California asks the U.S. Bankruptcy Court for
the Central District of California in Los Angeles for permission
to employ The Law Offices of Steven P. Scandura as its special
counsel.

Steven Scandura will assist the Debtor with the collection of
outstanding accounts receivable prior to filing of the suit and,
if litigation becomes necessary, will file and prosecute
litigation.

The Debtor seeks Steven Scandura's services to collect accounts
receivable from:

   -- Sweet for Two for $35,000;
   -- Anchor Expectations for $50,000;
   -- LTA for $16,000;
   -- Over the Border for $20,000; and
   -- Nixon for $105,000

The Debtor will pay the Firm a contingency fee of 30% of any
settlement or recovery that is obtained prior to the filing of a
lawsuit or demand for binding arbitration in the matter, or 35% of
any settlement or recovery that is obtained after a lawsuit is
filed.

The Debtor believes that Steven Scandura does not hold or
represent any interest adverse to its estate.

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.


MANHATTAN INVESTMENT: Bear Stearns Suit Returns to Bankruptcy Ct.
-----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
ruled that the law of the case doctrine bars the District Court
from again entertaining a motion to withdraw the reference to two
counts of a lawsuit filed against Bear, Stearns Securities Corp.
by Helen Gredd, the Chapter 11 Trustee for the Manhattan
Investment Fund.  

The Honorable Naomi Reice Buchwald says that the U.S. Bankruptcy
Court for the Southern District of New York is the right forum to
handle the lawsuit.  Judge Buchwald's Memorandum and Order, dated
May 31, 2006, is published at 2006 WL 1491375.

This is the fourth opinion the District Court has issued in this
case.  See Bear, Stearns Sec. Corp. v. Gredd, 01 Civ. 4379(NRB),
2001 WL 840187 (S.D.N.Y. July 25, 2001) (granting first motion to
withdraw reference for Counts II and III of the complaint); Bear,
Stearns Sec. Corp. v. Gredd, 275 B.R. 190 (S.D.N.Y. 2002)
(granting defendant's motion to dismiss Counts II and III); and In
re Manhattan Investment Fund Ltd., 288 B.R. 52 (denying
defendant's motion for interlocutory appeal of Bankruptcy Court
decision denying motion to dismiss Counts I and IV).  

The Bankruptcy Court has also issued an opinion in this matter,
denying Bear Stearns' motion to dismiss Counts I and IV, which are
the counts Bear Stearns wanted to have adjudicated in the District
Court.  See In re Manhattan Investment Fund Ltd., 310 B.R. 500
(Bankr. S.D.N.Y. 2002).  Moreover, several other Southern District
Judges have issued a total of twelve opinions and orders in civil
and criminal cases arising out of the same underlying facts.  

The Chapter 11 Trustee's $1.9 billion lawsuit against Bear Stearns
arises out of a Ponzi scheme engineered by Michael Berger, the
Fund's manager, who sought to cover losses from ill-advised short
sales of technology stocks with deposits made by new investors.  
The results were disastrous; the Fund hemorrhaged hundreds of
millions of dollars and Mr. Berger was criminally prosecuted,
pleading guilty to securities fraud.  The instant matter involves
the Fund trustee's efforts to avoid certain transfers she alleges
to be fraudulent.  

As previously reported in the Troubled Company Reporter, Ms.
Gredd's lawsuit (Adv. Pro. No. 01-02606) includes many of the same
allegations made by investors who unsuccessfully sued the firm to
recoup more than $400 million in losses.  Ms. Gredd contends that
fund manager Michael Berger's January confession to investors that
he had misrepresented returns "came as no surprise" to Bear
Stearns, the fund's clearing broker.  Ms. Gredd further contends
that Bear Stearns allowed the fraud to continue while it profited,
only reporting Mr. Berger's misdeeds to the Securities and
Exchange Commission when the firm's own money was at risk.  

According to the suit, Bear Stearns senior managing director
Fredrik Schilling acknowledged that Berger might have been
operating a fraud, but regarded the fund as a "client from
heaven."  In 1999, Manhattan Investment Fund made more than $177
million in margin payments to Bear Stearns, and Bear Stearns in
turn financed more than $2.2 billion in short sales for the fund,
the trustee says.

Manhattan Investment Fund Ltd. sought chapter 11 protection on
March 7, 2000 (Bankr. S.D.N.Y. Case No. 00-10922), estimating
between $10 million and $50 million in assets and more than $100
million in liabilities.


MAXXAM INC: March 31 Balance Sheet Upside-Down By $671.3 Million
----------------------------------------------------------------
Maxxam Inc. filed its financial report for the quarter ended March
31, 2006 to the Securities and Exchange Commission.

Maxxam's balance sheet at March 31, 2006 showed a $671.3 million
total stockholders' deficit resulting from $1,013.1 million in
total assets and $1,684.4 million in total liabilities.

The Company's balance sheet also showed total current assets of
$284.6 million and total current liabilities of $200.2 million.

For the three months ended March 31, 2006, the Company incurred a
net loss of $10.2 million from net sales of $80.2 million.

A full-text copy of Maxxam's quarterly report is available for
free at http://researcharchives.com/t/s?b23

Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM)
operates businesses ranging from aluminum and timber products to
real estate and horse racing.  MAXXAM's top revenue source is
Kaiser Aluminum, which has been in Chapter 11 bankruptcy since
2002.  MAXXAM's timber subsidiary, Pacific Lumber, owns about
205,000 acres of old-growth redwood and Douglas fir timberlands in
Humboldt County, California.  MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, Texas, and Puerto Rico.  The Company also owns the Sam
Houston Race Park, a horseracing track near Houston.  Chairman and
CEO Charles Hurwitz controls 77% of MAXXAM.


MERIDIAN AUTOMOTIVE: Wants Until Nov. 1 to File Notices of Removal
------------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to further
extend the period within which they may file notices of removal of
prepetition civil actions to Nov. 1, 2006.

According to Robert S. Brady, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, an extension will give the
Debtors more time to make fully informed decisions concerning
removal of each pending prepetition civil action and will assure
that the Debtors do not forfeit their rights under Section 1452
of the Judiciary and Judicial Procedures Code.

Mr. Brady tells the Court that the rights of the Debtors'
adversaries will not be prejudiced by an extension because any
party to a prepetition action that is removed may seek to have it
remanded to the state court pursuant to Section 1452(b).

The Debtors further ask the Court to approve their request
without prejudice to:

    (a) any position they may take regarding whether Section 362
        of the Bankruptcy Code applies to stay any civil action
        pending against them; and

    (b) their right to seek further extensions.

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).


MILLIPORE CORP: S&P Assigns BB- Rating to $550 Million Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
unsecured debt rating to Millipore Corp.'s $550 million 3.75%
convertible senior notes due June 1, 2026.  Proceeds from this
issue will provide a portion of the funding needed to complete
the pending $1.4 billion acquisition of research laboratory
reagent supplier Serologicals Corp. (B+/Watch Pos/--).

"These unsecured notes are rated two notches lower than the 'BB+'
corporate credit rating on Millipore due to the sizable amount of
borrowings with security provisions in the company's capital
structure," explained Standard & Poor's credit analyst David Lugg.

In default, both a EUR430 million revolving credit facility and an
existing $100 million 7.5% senior notes issue would be secured by
a majority of assets of the combined company.  Standard & Poor's
estimates that more than 45% of tangible assets of the combined
company would be encumbered by the security provisions of the
existing secured borrowings, well above the 30% threshold for a
two-notch issue rating differential from the corporate credit
rating.

An additional planned $350 million of senior notes, which are
anticipated to have equivalent security provisions as the existing
notes, will not further disadvantage the unsecured noteholders.

The corporate credit rating on Millipore is 'BB+' and the rating
outlook is stable.  The rating reflects:

   * the significantly expanded debt burden incurred to fund the
     $1.4 billion cash acquisition of Serologicals;

   * the uncertain integration success; and

   * over the longer term, the potential for additional debt-
     financed acquisitions.

Pro forma for the Serologicals acquisition, credit measures
sharply weaken, with total debt to EBITDA rising to more than 5x
from just less than 3x, and funds from operations to total debt
falling to about 15% from greater than 30% at Dec. 31, 2005.

Given Millipore's solid business position and sustainable cash
generation, these measures could steadily improve over the next
two years.  However, this potential improvement could be deferred
if expected operating improvements are slow to materialize or
additional debt-financed acquisitions are undertaken.

Ratings List:

  * Corporate credit rating: BB+/Stable/--

Rating Assigned:

  * $550M 3.75% convertible senior notes due June 1, 2026: BB-


MIRANT CORP: Plans to Pay $4 Million More to Seven Firms
--------------------------------------------------------
Mirant Corporation and its debtor-affiliates, the Official
Committee of Unsecured Creditors of Mirant Corporation, et al.,
and the Official Committee of Unsecured Creditors of Mirant
Americas Generation ask Judge Lynn of the U.S. Bankruptcy Court
for the Northern District of Texas to approve fee enhancements for
certain core counsel.

Representing the Debtors, Robin Phelan, Esq., at Haynes and Boone
LLP, in Dallas, Texas, notes that the Core Counsel are:

     (i) the firms that join and support the Motion Seeking
         Approval of Fee Enhancements:

         * White & Case LLP;
         * Haynes and Boone, LLP;
         * Shearman & Sterling, LLP;
         * Andrews & Kurth, LLP;
         * Cadwalader, Wickersham & Taft LLP; and
         * Cox & Smith; and

    (ii) Brown Rudnick Berlack Israels LLP and Hohmann, Taube &
         Summers, L.L.P.

Cadwalader Wickersham and Cox & Smith will withdraw their
application for fee enhancement, Mr. Phelan relates.

Mr. Phelan tells the Court that because of the "extraordinary and
outstanding" result in the Debtors' Chapter 11 cases, Mirant
Corporation is prepared to pool $4,000,000 for the counsel fee
enhancements, which will be divided among the Core Counsel.

Mr. Phelan asserts that it was the Core Counsel that negotiated
the agreements among the constituencies that underlie the
ultimate formulation and implementation of the Debtors' Plan.

According to Mr. Phelan, the $4,000,000 pool will be distributed
pro rata based on the Core Counsel's fees incurred in the case,
or utilizing other equitable distribution, as the Court deems
proper.

The Debtors and the two Committees will not agree to pay more
than $4,000,000 for fee enhancements to Core Counsel.

The Debtors and the two Committees disagree with the Official
Committee of Equity Holders that the results achieved for equity
holders were due to the services rendered solely by its counsel,
Mr. Phelan notes.

The result for the equity holders was based on a combination of a
number of factors, including the efforts of Core Counsel, Mirant
personnel, and the Court and its staff, Mr. Phelan points out.
"It is simply not possible to identify one group of professionals
that should receive the credit for the recoveries in [the
Debtors'] cases."

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is a competitive energy company that   
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  Shearman & Sterling LLP
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts.  (Mirant
Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service,
Inc., 215/945-7000)

                         *     *     *

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


MIRANT CORP: Settles Southern Maryland Electric FFC Pact Dispute
----------------------------------------------------------------
In the 1980s, Southern Maryland Electric Cooperative, Inc., and
Potomac Electric Power Cooperative planned to construct a
77-megawatt combustion turbine generating station in Prince
George's County, Maryland.  The Facility Site was owned by PEPCO.

To put up the Facility, PEPCO and SMECO entered into several
agreements, including a Facility and Capacity Credit Agreement and
a Site Lease Agreement.

The Site Lease and the FCC Agreement have not been amended or
terminated and remains in full force and effect.

                            The APSA

On June 7, 2000, PEPCO and Old Mirant entered into an Asset
Purchase and Sale Agreement for Generating Plants and Related
Assets, by which Old Mirant -- MC 2005, LLC, formerly known as
Mirant Corporation -- and certain affiliates purchased PEPCO's
electric generation facilities.

Consequently, Old Mirant assigned its rights under the APSA with
respect to the FCC Agreement to Mirant Peaker, LLC, and with
respect to the Site Lease to Mirant Chalk Point, LLC.

PEPCO assigned its rights under the FCC Agreement to Mirant
Peaker and its rights under the Site Lease to Mirant Chalk Point.
SMECO consented to PEPCO's assignment of the SMECO Agreements.

                            The Dispute

Mirant Peaker, Mirant Chalk Point, and Old Mirant commenced an
adversary proceeding against SMECO and PEPCO in the Bankruptcy
Court on March 15, 2004.

The Mirant Parties asked the Bankruptcy Court to declare that:

     (i) the FCC Agreement constitutes an unexpired lease of
         non-residential real property within the meaning of
         Section 365 of the Bankruptcy Code; and

    (ii) if Mirant Peaker, as successor to PEPCO, were to reject
         the FCC Agreement, with approval of the Court, or if the
         FCC Agreement is deemed rejected under Section 365(d)(4),
         any of SMECO's claim arising from the rejection would be
         limited by the provisions of Section 502(b)(6) of the
         Bankruptcy Code.

The Bankruptcy Court ruled that the FCC Agreement is a lease of
real property for purposes of Section 502(b)(6) of the Bankruptcy
Code.

SMECO and PEPCO took an appeal from the SMECO Order to the
District Court.

The Debtors also asked the Bankruptcy Court for permission to
reject the SMECO Agreements and to disgorge certain postpetition
payments made to SMECO.

In December 2005, the Debtors filed another adversary action with
the Bankruptcy Court against PEPCO and SMECO seeking a ruling
that Mirant's postpetition payments with SMECO constitute
improper payments, hence, are avoidable.

PEPCO and SMECO objected to the Motion to Reject and the December
2005 Complaint, which are all currently stayed.

                     The Settlement Agreement

To resolve all matters, the New Mirant Entities ask the Court to
approve a settlement agreement entered into between Southern
Maryland Electric Cooperative, Inc., and the Mirant Settling
Parties:

    * Mirant Corporation;
    * MC 2005, LLC;
    * Mirant Mid-Atlantic, LLC;
    * Mirant Potomac River, LLC;
    * Mirant Chalk Point, LLC;
    * Mirant Piney Point, LLC;
    * Mirant MD Ash Management, LLC; and
    * the MC Plan Trust.

The salient terms of the Settlement Agreement are:

    (a) Mirant Chalk Point will assume and agree to cure all
        defaults under the SMECO Agreements, other than defaults
        that constitute Released Claims Against Mirant; and agree
        to discharge and otherwise perform when due, without
        recourse to SMECO or PEPCO, all obligations and
        liabilities due to or for the benefit of SMECO;

    (b) Only Mirant Chalk Point will have obligations to SMECO
        under the SMECO Agreements.  The other Mirant Settling
        Parties will have no liability to SMECO with respect to
        the SMECO Agreements or any related obligations; and

    (c) On the effective date of the Settlement Agreement, SMECO
        and the Mirant Settling Parties will dismiss with
        prejudice all pending appeals, adversary actions or other
        contested matters relating to any claim, demand, action or
        cause of action released pursuant to the Settlement
        Agreement.

A full-text copy of the Settlement Agreement between Mirant and
SMECO is available for free at http://ResearchArchives.com/t/s?b09

Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
notes that on May 30, 2006, PEPCO and the Mirant Setting Parties
entered into a separate Settlement Agreement and Release relating
to certain disputes between them, including disputes relating to
the SMECO Agreements.

Mr. Peck says approval of the Settlement Agreement with SMECO is
a condition to the effectiveness of the PEPCO Settlement
Agreement.  SMECO's Settlement Agreement is part of the overall
resolution of the PEPCO disputes.

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is a competitive energy company that   
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  Shearman & Sterling LLP
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts.  (Mirant
Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service,
Inc., 215/945-7000)

                         *     *     *

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


MMI PRODUCT: Moody's Withdraws Junk Rating on $200MM Sr. Sub Notes
------------------------------------------------------------------
Moody's Investors Service withdrawn the ratings of MMI Products,
Inc. to reflect the termination of MMI's revolving credit facility
and of MMI Holding's PIK notes due to the acquisition of MMI by
Oldcastle.  The company has also called its subordinated notes for
redemption.  This action concludes the review started on Dec. 22,
2005.  For further information, please refer to Moody's Guidelines
for the Withdrawal of Ratings on moodys.com.

These ratings have been withdrawn:

   * $11.3 million Senior Subnotes due 2007, previously rated
     Caa2;

   * $188.7 million 11.25% Senior Subnotes due 2007, previously
     rated Caa2;

   * Corporate Family Rating, previously rated B3.

Headquartered in Houston and dating back to 1953, MMI Products,
Inc. is a manufacturer and distributor of products for the
construction industry.  The manufactured products include chain
link fence, steel grid mesh used as structural support for
concrete construction, and supports and other accessories for
steel reinforcing bars used in concrete construction, all of which
are produced from steel rod.  The major customers include
contractors, dealers, distributors, manufacturers, and fabricators
throughout the continental United States.  Net revenues for FYE
2005 were approximately $721 million.


MUSICLAND HOLDING: Committee Has Until July 3 to File Claims
------------------------------------------------------------
Musicland Holding Corp., its debtor-affiliates, the Official
Committee of Unsecured Creditors and the Secured Trade Creditors
stipulate that the Creditors Committee's time to file any claim
against the Secured Trade Creditors under the DIP Order is further
extended until July 3, 2006.

The Creditors Committee reserves the right to seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission for examination of the Secured Trade Creditors,
provided that the Informal Committee of Secured Trade Vendors'
rights to object to the examination of its members are reserved.

The Court approves the parties' Stipulation.

Headquartered in New York City, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL CENTURY: Trust Wants LTC Entities Compelled to Pay $1MM
----------------------------------------------------------------
The VI/XII Collateral Trust and FTI Consulting, Inc., ask the
Ohio Bankruptcy Court to compel Long Term Care Management, Inc.,
Quality Long Term Care Management, Inc., and Quality Long Term
Care, Inc., to pay approximately $1,130,000 currently owed on NPF
XII, Inc.'s allowed claims in the LTC Entities' Chapter 11 plan
of reorganization.

                  LTC's Nevada Bankruptcy Cases

As previously reported, the LTC Entities filed jointly
administered Chapter 11 cases in the U.S. Bankruptcy Court for
the District of Nevada in 2001.  NPF XII was a creditor of the
LTC Entities, and participated in the LTC Bankruptcy.  The VI/XII
Collateral Trust succeeded to the interests of NPF XII.

In October 2002, the Nevada Bankruptcy Court confirmed the LTC
Entities' Joint Plan of Reorganization.

The LTC Entities and NPF XII's settlement over NPF XII's claim
and NPF XII's asserted lien on the LTC Entities' accounts -- the
Settlement Obligation -- were incorporated into the LTC Plan.

                   Nevada Adversary Proceeding

In November 2004, the LTC Entities filed an adversary proceeding
against NPF XII and National Century Finance Enterprises, Inc.,
in the Nevada Bankruptcy Court, notwithstanding:

   -- the provisions of the LTC Plan, which releases any claims
      or defenses against NPF XII's allowed claims; and

   -- their knowledge of the confirmation order issued by the
      U.S. Bankruptcy Court for the Southern District of Ohio in
      NCFE's Chapter 11 cases.

The LTC Entities filed the complaint more than two years after
the LTC Plan was confirmed and after the LTC case was closed.

In response, the VI/XII Collateral Trust sought enforcement of
the Confirmation Order issued by the Ohio Bankruptcy Court, and
requested sanctions for the LTC's improper filing of the Nevada
Adversary Proceeding.

In June 2005, the Ohio Bankruptcy Court entered the Enforcement
Order holding that the LTC Entities violated the NCFE Plan and
Confirmation Order by filing the Adversary Proceeding.  The Ohio
Bankruptcy Court also sanctioned the LTC Entities for violating
the stay and injunction provisions of the NCFE Confirmation Order
and the NCFE Plan.

                            Appeals

The LTC Entities took an appeal from the Ohio Bankruptcy Court's
Order on June 10, 2005.  For eight months following the entry of
the Enforcement Order, the LTC Entities neither dismissed the
Nevada Adversary Proceeding as the Enforcement Order required,
nor sought a stay of that order.

Matthew A. Kairis, Esq., at Jones Day, in Columbus, Ohio, relates
that the LTC Entities did not seek a stay:

   (1) as it prepared its notice of appeal;

   (2) when the Nevada Bankruptcy Court entered an order to show
       cause why the Nevada Adversary Proceeding should not be
       dismissed in accordance with the Enforcement Order;

   (3) as the parties briefed the appeal to the Bankruptcy
       Appellate Panel for the Sixth Circuit;

   (4) as the LTC Entities negotiated with the VI/XII Collateral
       Trust to resolve the amount of its attorney's fees
       sanction;

   (5) as the LTC Entities filed a second appeal following the
       entry of an agreed order on the amount of the sanctions;

   (6) as the second appeal was dismissed;

   (7) as oral argument for the first appeal was scheduled; and

   (8) as the argument date drew near.

Mr. Kairis says the LTC Entities sought a stay from the BAP --
even though Rule 8005 of the Federal Rules of Bankruptcy
Procedure plainly directs that the request be filed in the first
instance with the Ohio Bankruptcy Court -- after the Nevada
Bankruptcy Court orally ordered the LTC Entities at a show cause
hearing held on January 11, 2006, to either dismiss the Nevada
Adversary Proceeding or seek a stay from the appropriate Court.

At no time has the LTC Entities obtained a stay of the Ohio
Bankruptcy Court's Enforcement Order.  Nor has the LTC Entities
ever dismissed the Nevada Adversary Proceeding or made any
payment to the VI/XII Collateral Trust as the Settlement
Obligation requires.

On March 14, 2006, the BAP affirmed the Enforcement Order's
injunction prohibiting the LTC Entities from pursuing the Nevada
Adversary Proceeding.

On April 13, 2006, the LTC Entities filed a further appeal to the
Sixth Circuit but again did not seek a stay of either the
Enforcement Order or the BAP's Order.

The VI/XII Collateral Trust filed a cross-appeal on the contempt
issue.

The VI/XII Collateral Trust and FTI also ask the Ohio Bankruptcy
Court to:

   (1) compel payment of damages for the LTC Entities' breach of
       the LTC Plan by failing to make certain payments; and

   (2) impose sanctions for the LTC Entities' contempt of the
       NCFE Confirmation Order and the Enforcement Order.

             LTC Entities Want Complaint Dismissed

"The only "wrongdoings" alleged by [the VI/XII Collateral Trust
and FTI] relate to alleged breaches of the [LTC] Plan," Adam J.
Biehl, Esq., at Bailey Cavalieri LLC, in Columbus, Ohio, tells
Judge Calhoun.

Mr. Biehl asserts that the VI/XII Collateral Trust and FTI's
allegations show that the adversary proceeding is nothing more
than a state law collection and breach of contract action.

The LTC Entities remind Judge Calhoun that the Ohio Bankruptcy
Court's post-confirmation jurisdiction is limited to matters
requiring the interpretation and enforcement of the NCFE Plan or
"core" proceedings.  

However, the Complaint raises neither, Mr. Biehl points out.  

Since the Ohio Bankruptcy Court does not have subject matter
jurisdiction over the VI/XII Collateral Trust and FTI's adversary
proceeding, the LTC Entities believe that the complaint must be
dismissed.

                     Trust and FTI Object

The VI/XII Collateral Trust and FTI argue that the LTC Entities'
request to dismiss the adversary proceeding attempts to
accomplish what three different courts have declared the LTC
Entities may not do -- pursue an end-run on the Ohio Bankruptcy
Court's jurisdiction with a blatant attack on an asset of the
NCFE Debtors' estates.

Matthew A. Kairis, Esq., at Jones Day, in Columbus, Ohio, relates
that the Ohio Bankruptcy Court, the U.S. District Court for the
District of Nevada, and most recently, the Bankruptcy Appellate
Panel for the Sixth Circuit, have already expressly or implicitly
held that the LTC Entities cannot avoid the Ohio Bankruptcy Court
by running to Nevada to pirate the property of NCFE Debtors'
estates.

The LTC Entities' argument that the Ohio Bankruptcy Court lacks
subject matter jurisdiction to compel the turnover of property
that Ohio Bankruptcy Court has already determined to constitute
an asset of the NCFE Debtors is untenable, Mr. Kairis argues.

The VI/XII Collateral Trust asks the Ohio Bankruptcy Court to
deny the LTC Entities' request to dismiss the adversary
proceeding, because:

    * The turnover claim asserted is a core matter pursuant to
      Section 157 of the Judiciary Procedures Code;

    * The Ohio Bankruptcy Court has jurisdiction under the broad
      jurisdiction retained in the NCFE Plan and its Confirmation
      Order, and "related to" jurisdiction as interpreted by the
      Sixth Circuit; and

    * The Ohio Bankruptcy Court has independent subject matter
      jurisdiction over the VI/XII Collateral Trust's contempt
      cause of action based on LTC Entities' continued refusal to
      dismiss the Nevada Adversary Proceeding as well as LTC
      Entities' continued failure to make the payments owed to
      the NCFE Debtors' estates.

                      LTC Entities Talk Back

The LTC Entities remind Judge Calhoun that a bankruptcy court's
jurisdiction is established by Section 1334 of the Judiciary
Procedures Code, which provides that a bankruptcy court has
jurisdiction over actual bankruptcy cases themselves and civil
proceedings arising under the Bankruptcy Code, or arising in or
related to the bankruptcy cases.  Civil proceedings "arising
under" the Bankruptcy Code and "arising in" cases under the
Bankruptcy Code are equated to core proceedings, which may be
heard and determined by bankruptcy judges, Mr. Biehl explains.

However, civil proceedings that are "related to" cases under the
Bankruptcy Code are common law actions that are merely
peripherally related to the adjudication of bankruptcy under
federal law, for which bankruptcy judges may make proposed
findings of fact and conclusion of law but may not make a final
determination.

Mr. Biehl notes that while a bankruptcy court's "related to"
jurisdiction prior to confirmation is extremely broad, after
confirmation of a Chapter 11 plan it is much more limited.  
Specifically, the bankruptcy court has "related to" jurisdiction
only over matters that have a "close nexus" to the plan, meaning
those matters pertaining to the interpretation, implementation or
execution of the plan.

According to Mr. Biehl, the VI/XII Collateral Trust and FTI's
argument that the adversary proceeding satisfies the "close
nexus" test since it involves an asset of the former bankruptcy
estate fails because the NCFE Plan transferred the assets of the
NCFE Debtors to various trusts.

While the VI/XII Collateral Trust and FTI's causes of action in
the Complaint may have once been property of the NCFE Debtors'
estates, that fact does not support post-confirmation
jurisdiction in the Ohio Bankruptcy Court, Mr. Biehl maintains.

Based in Dublin, Ohio, National Century Financial Enterprises,
Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust,  
the Litigation Trust, the VI/XII Collateral Trust, and the
Unencumbered Assets Trust, is in the midst of liquidating estate
assets.  The Company filed for Chapter 11 protection on Nov. 18,
2002 (Bankr. S.D. Ohio Case No. 02-65235).  The Court confirmed
the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004.  
Paul E. Harner, Esq., at Jones Day, represents the Debtors.
(National Century Bankruptcy News, Issue No. 62; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


NATIONAL MENTOR: S&P Junks Proposed $215MM Sr. Sub. Notes' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on special-
needs human services provider National Mentor Inc.  The corporate
credit rating was lowered to 'B' from 'B+'.

All ratings were removed from CreditWatch, where they were placed
with negative implications March 30, 2006, following the
announcement that management, in partnership with Vestar Capital
Partners, will acquire the company.  The rating outlook is stable.

At the same time, Standard & Poor's assigned its loan and recovery
ratings to National Mentor's proposed $425 million secured bank
financing, consisting of:

   * a $125 million senior secured revolving credit facility
     due 2012; and

   * a $300 million senior secured term loan B due 2013.

This secured debt is rated 'B' (at the same level as the corporate
credit rating on National Mentor) with a recovery rating of '2',
indicating the expectation for substantial recovery of principal
in the event of a payment default.

In addition, a rating of 'B' was assigned to National Mentor's
$20 million synthetic letter of credit facility due 2013 and a
'CCC+' rating was assigned to the company's proposed $215 million
senior subordinated notes due 2014.

The debt is being used, along with management and sponsor equity,
to finance the purchase of National Mentor by Vestar Capital
Partners from Madison Dearborn Partners LLC for a purchase price
of $742 million.  Existing debt is being refinanced, and the
revolver is expected to remain undrawn at closing.

After Standard & Poor's analytical adjustments, National Mentor
will find itself levered around 6x after the Vestar transaction.  
While the company has a history of generating positive cash flow,
the leveraged structure does leave it vulnerable in the event of
an operating shortfall.

"The ratings on Boston, Massachusetts-based National Mentor
reflect the company's exposure to reimbursement risk and high
leverage," said Standard & Poor's credit analyst Alain Pelanne.
"These factors are partially offset by the company's No. 2
position (by revenues) in the fragmented special-needs human
services market, its largely variable cost structure, and its
national footprint."


NAVARRE CORP: S&P Withdraws BB- Ratings at Company's Request
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB-' corporate
credit and senior secured ratings on Navarre Corporation at the
company's request.


NEFF RENTAL: Moody's Rates Second Lien Sr. Secured Notes at Caa1
----------------------------------------------------------------
Moody's Investors Service changed the rating outlook of Neff
Rental, LLC to positive from stable -- Corporate Family Rating at
B3; second lien senior secured notes at Caa1; and Speculative
Grade Liquidity Rating at SGL-3.

The change in outlook reflects the company's recent report of its
proposed initial public offering.  The transaction could raise up
to about $345 million, and would also enhance the company's
liquidity, and help improve credit metrics.  Proceeds will be used
to reduce existing outstandings under the company's senior secured
bank facility, redeem all of the company's $80 million of senior
subordinated notes, and pay associated fees and expenses.

The shares offered under the IPO will represent a partial
monetization of Odyssey Investment Partners, LLC's investment in
Neff. Notwithstanding the sale of these shares, Odyssey will
remain the majority owner of the company.

The B3 Corporate Family Rating reflects Moody's belief that Neff
faces important operational and financial challenges.  These
challenges include:

   1) the ongoing cyclicality of the equipment rental sector;

   2) the need to fund the expansion of its rental fleet; and,

   3) weak credit metrics for LTM March 2006 including
      Debt/EBITDA of 4.2 times , EBIT/Interest Expense of 1.2
      times and Retained Cash Flow/Debt of 14% and Free Cash
      Flow/Debt of negative 15.5%.

All results are adjusted per Moody's FM methodology.  Despite
these operational and financial challenges, Moody's believes that
Neff has some significant strengths:

   1) participation by the company in the robust non-residential
      construction market; and

   2) the broad diversification of the company's geographic
      footprint and customer base.

The positive outlook incorporates a number of key expectations:

   1) Neff will strengthen its debt protection measures as the US
      construction market continues to grow;

   2) the company will not, during the intermediate term, make
      any significant acquisitions;

   3) there will be no material distributions to shareholders;
      and,

   4) excess cash from the IPO would be used for debt repayment.

Moody's believes that Neff's asset based borrowing facility
provides adequate liquidity to support growth and seasonal working
capital needs.  Moody's also believes that Neff should be able to
capitalize on the growth in the non-residential construction
market, which is the main driver for the equipment rental
industry.  These positive market fundamentals should enable Neff
to generate stronger utilization rates, operating margins, and
cash generation.  Hence, Neff's credit metrics are expected to
show steady improvement during the next eighteen months.

The SGL-3 Rating reflects Moody's belief that the company will
maintain an adequate liquidity profile over the next 12-month
period.  The SGL rating anticipates that availability under the
company's $225 million first lien senior secured credit facility
should be sufficient to fund the company's seasonal capital
spending and other operational needs over the next 12 months.

Availability under the first lien senior secured credit facility
was $73.5 million as of March 31, 2006.  The SGL rating is
constrained, however, by the significant level of negative free
cash flow and substantially all of Neff's assets are encumbered to
secure its bank borrowings.

The key factor that could contribute to an improvement in Neff's
ratings is the degree to which the company will embrace a
financial strategy that enables it to sustain the improvement in
credit metrics that will likely result from the IPO and from
stronger market fundamentals.

Developments which might result in pressure on the company's
ratings include any material distributions to shareholders,
softening of demand in construction and industrial end-markets, or
an increase in leverage due to overly aggressive increase in
capital expenditures or working capital or acquisitions.

Neff, headquartered in Miami, Florida, is a regional equipment
rental company in the Southeast and Mid-Atlantic regions.


NELLSON NUTRACEUTICAL: Valuation Hearing Starts on September 13
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
conduct an evidentiary hearing concerning the enterprise valuation
of Nellson Nutraceutical, Inc., and its debtor-affiliates'
business on Sept. 13, 2006, to Sept. 22, 2006.

The Debtors asked the Court to determine their enterprise value
and the value of secured claims asserted by their prepetition
lenders.  The Court, however, will not entertain discussions about
disputed claims as this point in time, Judge Christopher S.
Sontchi's order clarified.  

Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl Young Jones
& Weintraub LLP, told the Court that the fundamental question in
the Debtors' cases is their ownership and capital structure.  
There is an enormous divergence of opinion on the issue.  The
first step in effectuating a successful reorganization is a
valuation of the Debtors' enterprise value, Ms. Werkheiser
contended.  

During the pendency of the Debtors' cases, an "Ad Hoc Committee
of First Lien Lenders" has regularly appeared.  It is the
Debtors' understanding that the First Lien Lenders hold around 34%
(about $86 million) of their first priority debt.  The First Lien
Lenders asserted that UBS AG, Stamford Branch, as agent for both
the first lien debt and second lien debt, has a conflict of
interest in its simultaneous roles as agent for both branches of
prepetition debt.  

According to Ms. Werkheiser, despite meaningful settlement
negotiations with UBS, it has become increasingly apparent that
divergent opinions exist even within various factions of the
prepetition lenders.  The Debtors, UBS, the Official Committee of
Unsecured Creditors and the First Lien Lenders all plan to submit
valuations for the Court's considerations.  

Parties-in-interest planning to participate in the valuation
hearings should notify the Court of their intent on or before
June 15, 2006.  

The Court directs the Debtors to provide each of the interested
parties with all non-privileged documents relating to the Debtors'
financial condition after fiscal year end 2003 including the
Debtors' business plan.  

Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulates, makes and sells bars and powders for the
nutrition supplement industry.  The Debtors filed for chapter 11
protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072).  
Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M.
Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.
represent the Debtors in their restructuring efforts.  Lawyers at
Young, Conaway, Stargatt & Taylor, LLP, represent an informal
committee of which General Electric Capital Corporation and
Barclays Bank PLC are members.  In its Schedules of Assets and
Liabilities filed with the Court, Nellson Nutraceutical reports
$312,334,898 in total assets and $345,227,725 in total liabilities
when it filed for bankruptcy.


NORTHEAST BIOFUELS: S&P Rates Proposed $140 Million Facility at B+
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Northeast Biofuels LLC's proposed $140 million senior secured
first-lien credit facility due May 2013.

The outlook is stable.  New York-based Northeast Biofuels proposes
to build and operate a 100 million gallons per year ethanol
facility in Fulton, New York.

"The project will be vulnerable to potentially adverse industry
events, such as excess supply or waning of governmental support,
which could negatively affect the rating," said Standard & Poor's
credit analyst Daniel Welt.

Standard & Poor's also said that over the longer term, favorable
demand developments, such as wide commercial availability of an
85% Ethanol/15% gasoline fuel blend, increased mandated demand,
regular availability of ethanol hedges, or unexpectedly high
principal amortization could have a positive effect on the rating.


NORTHWEST AIRLINES: Equipment Workers Ratify Labor Agreement
------------------------------------------------------------
Northwest Airlines Corporation's International Association of
Machinists and Aerospace Workers-represented equipment service and
stock clerk employees ratified a new contract.  Sixty-two percent
of the ground employees' voting ratified the agreement.

"We recognize and appreciate the significant financial sacrifices
that our IAM employees and their families have made and are
continuing to make to help Northwest restructure successfully,"
Doug Steenland, Northwest Airlines president and chief executive
officer, said.

"In light of these sacrifices, we are pleased that this agreement
provides opportunities for IAM employees to share in Northwest's
success going forward," he added.

In March, IAM-represented customer service, reservations and
office employees ratified a new contract.  The ratified IAM
agreements include $190 million in labor cost savings toward
the airline's requirement to reduce its annual labor costs by
$1.4 billion.

To date, in addition to the IAM, Northwest has reached ratified
agreements on permanent wage and benefit reduction agreements with
the Air Line Pilots Association, Aircraft Technical Support
Association, the Transport Workers Union of America, and the
Northwest Airlines Meteorologists Association.  Two rounds of
salaried and management employee pay and benefit cuts have also
been implemented and the needed aircraft maintenance employee
labor cost savings has been achieved.

Northwest asked the U.S. Bankruptcy Court for the Southern
District of New York to rule on the company's Section 1113(c)
motion to reject the existing flight attendant labor agreement and
permit Northwest to impose new contract terms after that group
rejected its tentative agreement with the airline.

Since beginning its restructuring process in September of last
year, Northwest has remained focused on its plan to realize
$2.5 billion in annual business improvements in order to return
the company to profitability on a sustained basis.  The
restructuring plan continues to be centered on three goals:

   * resizing and optimization of the airline's fleet to better
     serve Northwest's markets;

   * realizing competitive labor and non-labor costs; and

   * restructuring and recapitalization of the airline's balance
     sheet.

                    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.


NORTEL NETWORKS: S&P Keeps B Corp. Credit Rating on Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services kept its ratings on Nortel
Networks Limited, including its 'B-' long-term corporate credit
rating, on CreditWatch with negative implications, where they were
placed March 10, 2006.

The ratings were placed on CreditWatch initially due to NNL's
restatement activities announced in first-quarter 2006 and the
associated delay in filing its 2005 annual financial statements,
and the subsequent delay in filing its first-quarter 2006 interim
financial statements.

On June 5, 2006, NNL and its parent, Nortel Networks Corporation
(NNC; collectively Nortel), filed first-quarter 2006 interim
financial statements.  Nortel is now in compliance with all of its
filing requirements and has obtained all relevant waivers with
respect to past breaches of covenants under its various financing
facilities.

"We had previously stated that we would likely affirm the 'B-'
rating on the company with a positive outlook should Nortel
complete its first-quarter 2006 filings as expected, and if there
were no further negative consequences," said Standard & Poor's
credit analyst Joe Morin.  

"But first-quarter 2006 operating results were somewhat weaker
than expected due to competitive pricing pressures and an
unfavorable revenue mix, which resulted in a 4 percentage point
drop in gross margins as compared with first-quarter 2005," Mr.
Morin added.

In addition, SG&A expenses are not being reduced as quickly as had
been previously expected, which, combined with lower gross
margins, continue to dampen overall profitability.

Standard & Poor's expects an improvement in operating results for
the remainder of 2006, supported by modest top line growth.  
Nevertheless, the rating agency believes Nortel will be challenged
to improve profitability in a meaningful way and, as a result,
expect free operating cash flow (after capital expenditures) to
remain negative for 2006.

The ratings, therefore, will remain on CreditWatch pending a
review, which is expected to be completed within two weeks.  
Standard & Poor's review will focus primarily on:

   * the near-to-medium term prospects for a return to operating
     profitability; and

   * near-to-medium term liquidity.  

At that time, Standard & Poor's expects to affirm the 'B-' rating
with an outlook of either stable or positive.


OWENS CORNING: Credit Suisse Files Report on Professional Advisors
------------------------------------------------------------------
Credit Suisse, Cayman Branch, the agent for the bank lenders under
a credit agreement dated June 26, 1997, with Owens Corning,
delivered to the Court a statement regarding the involvement of
the Banks' professional advisors in the Debtors' cases and the
basis upon which the professionals were compensated.

The Banks' advisors are Capstone Advisory Group, LLC, which
provide financial advisory services, and Weil, Gotshal & Manges
LLP and Kramer Levin Naftalis & Frankel LLP, which provide legal
services.  As previously reported, the advisors are paid pursuant
to a Standstill and Waiver Agreement approved by the Court in
2001.

Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges, LLP, in
New York, relates that the Banks' advisors continue to play a
unique and valuable role in the Debtors' cases.

(A) Substantive Consolidation

Mr. Bienenstock reports that the bondholders have actively
cooperated with the asbestos claimants and the Debtors in seeking
to eliminate the Banks' guarantees through substantive
consolidation of the Debtors.  The Bondholders and the legal
representative for future asbestos claimants filed petitions for
writs of certiorari asking the U.S. Supreme Court to review the
decision of the Third Circuit Court of Appeals, which held that
substantive consolidation is not appropriate in the Debtors'
cases.

The Banks' advisors participated in the appellate process to
ensure that the Third Circuit's decision is affirmed in all
respects.  In March 2006, the Banks filed their brief in
opposition to the petitions for writs of certiorari.

The U.S. Supreme Court upheld the Third Circuit's ruling on
substantive consolidation and denied the petitions for writs of
certiorari on May 1, 2006.

(B) Asbestos Claims Estimation

The Banks' advisors continue to play the lead role in the Third
Circuit appeal of Judge Fullam's estimation of asbestos claims in
the Debtors' cases.  The Third Circuit is expected to hear oral
arguments in May or June.

(C) Plan Confirmation Process

The Banks' advisors also continue to represent the Banks'
interests in connection with confirmation of the Debtors' fifth
amended plan of reorganization.  The Banks have asked the
Bankruptcy Court to determine that their claims are unimpaired by
the Proposed Plan.

(D) Fraudulent Conveyance Action

Mr. Bienenstock reports that the Bondholders have recently sought
to intervene in and prosecute a fraudulent conveyance action
seeking to avoid the Banks' subsidiary guarantees.  Additionally,
the Bondholders have commenced an action seeking, inter alia, to
pierce the corporate veil of Owens Corning and its subsidiaries
and to equitably subordinate the Banks' claims.

The Banks have instructed their legal advisors to vigorously
oppose the actions.  Mr. Bienenstock says all fees and expenses
incurred with regard to the actions are covered under the
Standstill Agreement and therefore subject to reimbursement in
full by the Debtors.

According to Mr. Bienenstock, the Banks' advisors have (i) sought
dismissal of the equitable subordination actions and (ii)
objected to the Bondholders' request for standing to pursue the
fraudulent conveyance claims.

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--  
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.  
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).   
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 130; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


OWENS CORNING: Gets Court Approval to Pay Shumaker Fixed Fee
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes
Owens Corning and its debtor-affiliates to employ Shumaker on a
fixed fee basis for certain legal services.  The Court directs
Shumaker to submit monthly statements itemizing the hours spent on
the Fixed Fee Legal Services and describing the services provided.

After the Court authorized the Debtors' employment of Shumaker,
Loop & Kendrick, LLP, as their special reorganization co-counsel,
the firm provided the Debtors with legal services for which it
has sought compensation on an hourly basis, John W. Christy, the
Debtors vice president and general counsel, relates.

Earlier this year, the Debtors sought Shumaker's assistance with
certain overflow commercial legal services from Owens Corning's
Division Counsel on a fixed fee basis.  The Fixed Fee Legal
Services are in addition to the legal services that the firm
currently provides the Debtors on an hourly basis.

The scope of the Fixed Fee Legal Services include the
negotiation, preparation or review and communication associated
with various types of routine Division contracts for overflow
matters referred by a Division Counsel, including:

   -- supply agreements (Owens Coming seller);
   -- supply agreements (Owens Corning buyer);
   -- third-party manufacturing agreements;
   -- tolling agreements;
   -- joint venture agreements;
   -- product development agreements;
   -- routine licensing agreements;
   -- sourcing and procurement agreements;
   -- energy agreements;
   -- metals leasing and forward contracts;
   -- letters of intent, term sheets and other planning matters;
   -- alliance agreements;
   -- engineering contracts;
   -- warehousing and logistics contracts;
   -- software licensing agreements;
   -- minor outsourcing agreements;
   -- consulting and confidentiality agreements;
   -- antitrust advice incidental to the foregoing;
   -- distributorship and sales agent agreements;
   -- intracompany agreements;
   -- miscellaneous commercial agreements and equipment leases;
   -- assistance with Divisional emergencies; and
   -- status reporting in connection with those services.

Shumaker proposed to perform the Fixed Fee Legal Services during
the fiscal year at a $200,000 flat fee, payable in quarterly
increments of $50,000, billed at the commencement of each quarter
starting April 1, 2006.

The Fixed Fee Legal Services, Mr. Christy said, are ordinary
course of business overflow work from each Division Counsel at
Owens Corning.  The Debtors believed that these services are
largely consistent with the scope of work performed by Shumaker
partner Regina M. Joseph during the previous 15 months.  Ms.
Joseph's current hourly rate is $260.

The Debtors expect that the fixed fee will result in a lower cost
for the services than had been provided in the past.

                      U.S. Trustee Responds

While a general description of the services to be performed is
provided in the Application, it is impossible to determine at
this juncture whether the amount to be paid is reasonable, Kelly
Beaudin Stapleton, the United States Trustee for Region 3, said.

The U.S. Trustee contended that any fees billed pursuant to the
Application should be subject to a reasonableness review standard
under Section 330 of the Bankruptcy Code and not be "pre-
approved" as reasonable, as a result of the approval of the
Application.

The U.S. Trustee further suggested that Shumaker be required to
file fee applications itemizing its time by appropriate
increments and describing in sufficient detail the services it
performs -- similar to those filed by any other law firm retained
on an hourly basis.

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--  
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.  
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).   
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 130; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


PEAK ENTI: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Peak Enti, LLC
        8040 East Gary Road
        Scottsdale, Arizona 85260

Bankruptcy Case No.: 06-01702

Chapter 11 Petition Date: June 8, 2006

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtor's Counsel: Alan A. Meda, Esq.
                  Stinson Morrison Hecker LLP
                  1850 North Central Avenue, Suite 2100
                  Phoenix, Arizona 85004
                  Tel: (602) 279-1600
                  Fax: (602) 240-6925

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

Debtor's 4 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Hebert Schenk P.C.               Attorney's Fees        Unknown
4742 North 24th Street
Suite 100
Phoenix, AZ 85016-4859

Lunds, Danis, WSL, et. Al.       Lawsuit                Unknown
c/o Martin R. Galbut, Esq.
2425 East Camelback Road
Suite 1020
Phoenix, AZ 85016-4216

Peter S. Davis                   Lawsuit                Unknown
Simon Consulting LLC
3200 North Central Avenue
Suite 850
Phoenix, AZ 85012

Simpsons; Simpson Trust          Lawsuit                Unknown
Bryans
c/o Brian Cabianca, Esq.
40 North Central Avenue
Suite 2700
Phoenix, AZ 85004-4440


PERSISTENCE CAPITAL: Ch. 11 Trustee Hires Hahn Fife as Accountants
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
in San Fernando allowed David Hahn, the Chapter 11 Trustee
appointed in Persistence Capital, LLC's case, to employ Hahn Fife
& Company, LLP, as his accountants.

Hahn Fife is expected to:

   a) prepare and file state and federal tax returns;

   b) provide forensic accounting services; and

   c) review financial documents as well as prepare bankruptcy
      estate accounting necessary to the preparation of tax
      returns.

Donald T. Fife, Esq., a Hahn Fife partner, discloses that the
Firm's professionals bill:

        Professional                      Hourly Rate
        ------------                      -----------
        David L. Hahn                        $305
        Donald T. Fife                       $305
        Managers                          $175 - $220
        Senior Accountants                $125 - $175
        Staff Accountants                 $100 - $125
        Administrative                        $80

Mr. Fife assures the Court that his Firm does not hold or
represent any interest adverse to the Trustee, the Debtor or its
estate.

Headquartered in Westlake Village, California, Persistence Capital
LLC -- http://persistencecapitalllc.com/--  filed a voluntary  
chapter 11 petition on Sept. 13, 2005 (Bankr. C.D. Calif. Case No.
05-16450).  Lawrence R. Young, Esq., in Downey, California,
represents the Debtor in its restructuring proceedings.  When the
Debtor filed for protection from its creditors, it listed
$85,000,000 in total assets and $28,602,241 in total debts.


PLIANT: Wells Fargo Says Plan Violates 2nd Lien Notes Indenture
---------------------------------------------------------------
In February 2006, Well Fargo Bank, N.A., succeeded Wilmington
Trust Company in its capacity as indenture trustee and became the
Second Lien Indenture Trustee under the Second Lien Notes
Indenture issued by Pliant Corporation and its debtor-affiliates.

"Despite the contentions of the Debtors, these bankruptcy cases
would not be doomed by denial or delay of confirmation of the
Plan [of Reorganization]," Howard A. Cohen, Esq., at Drinker
Biddle & Reath LLP, in Wilmington, Delaware, asserts.

"Rather, denial or delay of confirmation would permit the parties
an opportunity to preserve the full value of the Debtors and
avoid a further financial restructuring or subsequent bankruptcy
proceeding through either the confirmation of a permissible plan
or a plan that restructures the Debtors' capital structure, truly
right sizes the Debtors' balance sheet, ensures solvency and
improves liquidity."

Mr. Cohen tells Judge Walrath that one of the most obvious
defects of the Plan is that it improperly classifies the Class 5
Second Lien Note Claims as unimpaired and thus does not comply
with Sections 1129(a)(1) and (8) of the Bankruptcy Code.

Although the Plan asserts that the Claims of the Second Lien
Noteholders are unimpaired, and classifies them as such, those
claims are clearly impaired as the treatment provided under the
Plan does not "leave[] unaltered the legal, equitable, and
contractual rights" to which the Second Lien Notes Indenture are
entitled, Mr. Cohen maintains.

Moreover, the Plan proposes to issue Tack-On Notes -- additional
First Lien Notes -- to Holders of Class 7 Old Note Claims
pursuant to the First Lien Notes Indenture, which makes the Tack-
On Notes secured instruments.  Consequently, the Plan, if
confirmed, would effectuate a mechanism whereby a portion of the
Old Note Claim would be transformed from unsecured debt into
secured debt.  Mr. Cohen points out that not only would it be
secured debt, but it would be senior to that of the Second Lien
Noteholders -- to whom the Old Noteholders are contractually
subordinated.

The Debtors also seek to provide Old Noteholders with a
"Bondholder Additional Consideration," which is an amount in cash
equal to 1% of the principal amount of Old Notes held by a holder
of an Old Note Claim.  The Debtors define the Bondholder
Additional Consideration as "not a payment in respect of such
principal amount of Old Notes but instead shall be a payment on
account of the acceptance of the Plan by Class 7," Mr. Cohen
notes.

There is no basis under the Bankruptcy Code to provide a
constituency with any sort of payment or distribution other than
on account of a claim, Mr. Cohen contends.

Thus, Wells Fargo asserts that the Plan should not be confirmed
because:

    (a) it seeks to impermissibly alter the contractual rights
        between non-debtor third parties, in violation of Section
        510 of the Bankruptcy Code;

    (b) it violates the Second Lien Note Indenture and Old Notes
        Indenture by the issuance of the Tack-on Notes; or the
        alternative, New Subordinated Notes, Bondholder Additional
        Consideration and payment of the Consenting Noteholders'
        Professional Fees, in violation of Sections 510 and
        1129(a)(1) and contrary to the X-Clause Provision
        contained in the Second Lien Notes Indenture; and

    (c) the payment of the Bondholder Additional Consideration
        violates Sections 1123(a)(3) and (6), 1129(a)(1) and
        1129(b)(2)(B).

Wells Fargo asks the Court to:

    (a) deny confirmation of the Plan; or

    (b) in the alternative, withhold the confirmation of the Plan
        until the issues it raised have been addressed
        satisfactorily or the Plan is amended consistent with its
        Objection and the Bankruptcy Code.

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts.  The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel.   The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada.  Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors.  Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee.  As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts.  (Pliant Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


POKAGON GAMING: Moody's Rates $305 Million Senior Notes at B3
-------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the Pokagon
Gaming Authority's $305 million senior notes due 2014.  Net
proceeds from the offering, together with $75 million of FF&E
financing and subordinated Lakes Gaming debt, will be used to fund
the costs associated with construction of the Four Winds Casino
and Resort, a $459.9 million casino development project.
A B3 corporate family rating and stable ratings outlook were also
assigned.

The ratings consider the start-up and highly leveraged nature of
the Authority's casino project.  Debt/EBITDA is expected to reach
8 times during the initial ramp-up period.  Although Lakes Gaming,
the independent and experienced casino development and management
company, will be responsible for the development, opening, and
ongoing operation of Four Winds Casino and Resort, the Authority
has no previous casino development or operating experience.

Other risks include significant competition from neighboring
casinos in northern Indiana, and to a lesser extent, riverboat
casinos in Illinois, as well as risks common to Native American
gaming financings including the likely difficulty senior unsecured
bondholders would face in recovering their investment in a
liquidation scenario.  Currently, there is uncertainty regarding
whether an Indian Tribe can be a debtor under U.S. bankruptcy law,
and whether a creditor would be protected under that same law.

Positive ratings consideration is given to the established nature
of the casino development's primary and secondary market areas
which are characterized by favorable demographics and a
significant amount of gaming customers.  The ratings also take
into account the secured nature of the revenues, waterfall payment
structure and fully funded interest reserve.  The similarity
between the Authority's corporate family rating and senior note
rating considers that on a fully drawn basis, allowable senior
secured debt including a $75 million furniture, fixture and
equipment facility as well as a $10 million secured bank credit
facility, would only represent about 22% of total debt.

The stable outlook considers that despite the significant size of
the casino development and high peak leverage, the project has a
good risk and reward profile given the established nature and
favorable demand characteristics of the primary and secondary
market area.  The stable outlook also assumes that the project
will be constructed on time and on budget.

However, material delays, construction difficulties, and/or slower
than expected ramp-up could result in a downgrade.  To the extent
the project is completed as planned and performs at a level that
exceeds current expectations, ratings could improve.  The outlook
also considers the litigation challenging the validity of certain
Michigan tribal-state gaming compacts.  While attempts at
invalidating the compacts have been unsuccessful, any adverse
ruling in the future could result in a downgrade.

The Pokagon Gaming Authority is a wholly owned unincorporated
instrumentality of the Pokagon Band of Potawatomi Indians, a
federally-recognized Indian tribe located in New Buffalo,
Michigan.  The Authority was formed in May 2006 to develop and
operate all gaming and related businesses of the Tribe, including
the Four Winds Casino and Resort.


PREMIUM ESCROW: Trust's Negligence Suit v. Doctors is Dismissed
---------------------------------------------------------------
Premium Escrow Services, Inc., which marketed interests in life
insurance policies formerly owned by terminally ill patients to
investors, sought Chapter 11 protection on Dec. 9, 2002 (Bankr. D.
Colo. Case No. 02-02358), after its parent company, Beneficial
Financial Services, Inc., which would bid for the right to receive
the death benefits of a viator's policy, sought chapter 11
protection on November 20, 2002.  Beneficial landed in bankruptcy
because too many viators lived too long for Beneficial to make any
money off of its purchased interests for the benefit of Premium
Escrow's investors.  

Separate plans of reorganization for Beneficial and Premium Escrow
were confirmed by the Bankruptcy Court on August 12, 2003.  
Premium Escrow's plan called for the creation of a new corporation
-- Premium of America, LLC -- that would administer the remaining
viaticated insurance policies.

Premium of America, LLC, sued William C. Sanchez, M.D., and
William C. Sanchez, M.D., P.C. (Adv. Pro. No. 04-10455) for
negligence and misrepresentation arising from opinions that the
doctors gave regarding viators' life expectancies.  

The Doctors moved to dismiss Premium's lawsuit on jurisdictional
grounds.  The Doctors assert that the court lacks subject matter
jurisdiction over the Investor-Related Claims, and that, to the
extent jurisdiction exists, it is the product of collusive efforts
by Premium Escrow and its investors in contravention of 28 U.S.C.
Sec. 1359.  In addition, the Doctors urged the court to rule that
its jurisdiction over the adversary proceeding is "non-core"
within the meaning of 28 U.S.C. Sec. 157.  

The Honorable S. Martin Teel, Jr., in a Decision published at 2006
WL 1462591, agrees with the Doctors that it lacks subject matter
jurisdiction over the Investor-Related Claims, and further agrees
that its jurisdiction in the adversary proceeding is non-core.  
Although the entity was a "representative of the estate" within
the meaning of Sec. 1123 of the Bankruptcy Code, Judge Teel says
the claims belong to the debtor's creditors, not to the debtor or
its estate.  Thus, they could not have been "retained" by the plan
because they were never a part of the estate in the first
instance.


PUREBEAUTY INC: Sells All Assets to Cameron Capital for $9 Mil.
---------------------------------------------------------------
The Honorable Kathleen Thompson of the U.S. Bankruptcy Court for
the Central District of California approves the sale of
substantially of the assets of PureBeauty, Inc., and Pure Salons,
Inc., to Cameron Capital Corporation for $9 million.  

Cameron Capital will also pay $125,000 to satisfy cure claims on
executory contracts the Debtors will assume and assign to Cameron
Capital.  Cameron Capital also offered $147,000 for employees and
executives to continue working for the Debtors up until the
closing of the sale.

The Debtors will use the proceeds of the sale to satisfy the
secured claims of Webster Business Credit Corporation and Heritage
Fund III Investment Corporation.

PureBeauty, Inc. -- http://www.purebeauty.com/-- operates     
48 retail stores and salons offering professional hair care and
skincare services, featuring a leading assortment of professional
and prestige personal care products.  PureBeauty also operates six
"brand" stores, providing customers with a variety of aspirational
products and services.  PureBeauty Inc. and Pure Salons, Inc., an
affiliate, filed for chapter 11 protection on April 18, 2006
(Bankr. C.D. Calif. Case No. 06-10545).  Stacia A. Neeley, Esq.,
at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtors in
their restructuring efforts.  The Debtors' Official Committee of
Unsecured Creditors selected Eric E. Sagerman, Esq., and David J.
Richardson, Esq., at Winston & Strawn, LLP, as its counsel.  When
the Debtors filed for protection from their creditors, they
estimated assets between $10 million and $50 million and debts
between $50 million and $100 million.


REGAL CINEMAS: S&P Affirms BB- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Rating Services affirmed its ratings on Regal
Cinemas Corp., including the 'BB-' corporate credit rating,
following the company's announcement that it will be increasing
its senior secured credit facility by $100 million to fund the
conversion of its holding company notes.

Standard & Poor's also affirmed the 'BB-' corporate credit rating
on parent Regal Entertainment Group.  The outlook is negative.

The rating on Regal Cinemas' amended $1.8 billion bank loan
facility is affirmed at 'BB-', the same as the corporate credit
rating, with a '4' recovery rating indicating expectations for a
marginal (25%-50%) recovery of principal in a payment default
scenario.

Pro forma for the transaction, the Knoxville, Tennessee-based
movie exhibitor and its parent company Regal Entertainment Group,
with which it is analyzed on a consolidated basis, will have $4.2
billion in debt, including capitalized operating leases.

"The ratings on Regal Entertainment Group and Regal Cinemas
reflect the mature and highly competitive nature of the U.S. movie
exhibition industry, the company's exposure to the fluctuating
popularity of Hollywood films, relatively high leverage, and
aggressive financial policies," said Standard & Poor's credit
analyst Tulip Lim.

These concerns are only partially mitigated by the company's
geographically diverse and high-quality U.S. theater circuit, good
profit margins, and still-meaningful discretionary cash flow, even
with box office weakness and ongoing competition from alternative
forms of entertainment.

Regal is the largest motion picture exhibitor in the U.S., with
6,415 screens in 546 theaters in 40 states.  The company's theater
circuit is reasonably new and well-positioned, has a high
percentage of screens with stadium seating, theaters with more
than 10 screens, and venues that have full access to Hollywood
films.


RELIABILITY INC: Auditor Raises Going Concern Doubt Over Losses
---------------------------------------------------------------
Reliability Inc.'s auditor, Fitts, Roberts & Co., P.C., expressed
substantial doubt about the Company's ability to continue as a
going concern after auditing the Company's financial statements
for the year ending December 31, 2005.

The auditor pointed to the company's recurring losses from
operations and negative cash flows from operating activities.  

The Company's incurred a $3,484,000 net loss on $2,900,000 of
revenues for the year ending December 31, 2005.  In 2004, the
Company posted a $4,913,000 net loss.  The Company used up
$2,511,000 in cash for its operations.

As of December 31, 2005, the Company's balance sheet showed
$5,594,000 in assets and $3,177,000 in liabilities.

A full-text copy of the regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?ad6

Reliability Incorporated has principally been engaged in the
design, manufacture, market and support of high performance
equipment used to test and condition integrated circuits.
Reliability and its subsidiary also design, manufacture and market
a line of DC-DC power converters and operate a service facility in
Singapore that conditions and tests integrated circuits as a
service for others.


RENATA RESORT: Wants Court to Okay John Venn as Bankruptcy Counsel
------------------------------------------------------------------
Renata Resort, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Florida for permission to employ John E.
Venn, P.A., as its bankruptcy counsel.

John Venn will:

    a. investigate, analyze, and take appropriate action, if
       required, relative to assets of the Estate and relative to
       any preference or improper disposal of assets;

    b. prepare the schedules and statement of financial affairs;

    c. prepare the Chapter 11 Plan and Disclosure Statement;

    d. attend the First Meeting of Creditors;

    e. attend the hearing on the disclosure statement;

    f. attend the confirmation hearing; and

    g. take any and all other necessary action incidental to the
       proper preservation of this Estate and representation of
       the Debtor in adversary proceedings and other contested
       matters.

The Debtor tells the Court that attorneys of the firm bill $250
per hour while legal assistants bill $90 per hour.  The Debtor
discloses that John E. Venn, Jr., Esq., has been paid a $25,000
nonrefundable retainer for this engagement.

To the best of the Debtor's knowledge, the firm represents no
interest adverse to the Debtor or its estate.

Headquartered in Panama City, Florida, Renata Resort, LLC, fdba
Sunset Pier Resort, LLC, operates a hotel and resort.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. Fla.
Case No. 06-50114).  John E. Venn, Jr., Esq., at John E. Venn,
Jr., P.A., represents the Debtor in its restrucutring efforts.  No
Official Committee of Unsecured Creditors has been appointed in
the Debtor's case.  When the Debtor filed for protection from its
creditors, it listed total assets of $19,947,271 and total debts
of $8,524,196.


RH DONNELLEY: Posts $71.7 Mil. Net Loss for Quarter Ended Mar. 31
-----------------------------------------------------------------
For the quarter ended March 31, 2006, R.H. Donnelley Corporation
reported a $71,718,000 net loss out of $320,479,000 in net
revenues.     

R.H. Donnelley's balance sheet at March 31, 2006 showed
$16,538,822,000 in total assets, $14,521,356,000 in total
liabilities, and total shareholders' equity of $2,017,466,000.
   
The Company's balance sheet also showed total current assets of
$1,818,941,000 and total current liabilities of $1,795,949,000.  


A full-text copy of R.H. Donnelley's quarterly report is available
for free at http://researcharchives.com/t/s?b03

Headquartered in Cary, North Carolina, R.H. Donnelley --
http://www.rhd.com/-- is a Yellow Pages and online local  
commercial search company.  The Company has more than 600
directories, online city guides, and search websites with a
circulation of approximately 80 million.  The Company's
directories are marketed under three brands: AT&T Yellow Pages fka
SBC Yellow Pages in Illinois and Northwest Indiana; Dex(R) Yellow
Pages and Sprint Yellow Pages(R).  R.H. Donnelley's business now
includes the Best Red Yellow Pages(R) brand at bestredyp.com(R),
in AT&T Yellow Pages markets at CHICAGOLANDYP.com and local search
services through DexOnline(R) at DexOnline.com(R).

                          *     *     *

R.H. Donnelley Corp.'s senior unsecured debt carries Moody's and
Fitch's junk ratings.  Moody's also placed the Company's long-term
corporate family rating at B1.

Standard & Poor's assigned the Company's long-term local and
foreign issuer credit ratings at BB-.  The ratings were placed on
Jan. 31, 2006 with a stable outlook.


ROBOTIC VISION: Fee Applications Mutate into Adversary Proceedings
------------------------------------------------------------------
Following conversion of Robotic Vision Systems, Inc., and Auto
Image ID, Inc.'s chapter 11 cases to chapter 7 liquidation
proceedings, the Chapter 11 Professionals representing the
Debtors:

   Debtors' Professional                  Role
   ---------------------                  ----
   Dreier LLP                             Lead Counsel
   Sheehan Phinney Bass + Green, P.A.     Local Counsel
   Marotta, Gund, Budd & Dzera, LLC       Crisis Manager
   Houlihan Lokey Howard & Zukin          Financial Advisor

and the Official Committee of Unsecured Creditors:

   Committee's Professional               Role
   ------------------------               ----
   Murtha Cullina LLP                     Counsel
   Mesirow Financial Consulting LLC      Financial Advisor

filed applications seeking final approval of chapter 11 fees and
expenses.  

The United States Trustee filed objections to the fee applications
filed by Dreier, Sheehan, MGBD, Murtha Cullina, and Mesirow,
complaining about duplicate entries, excessive hourly rates and
billing, inappropriate expenses, and failure to provide
documentation.  The U.S. Trustee also argues that many of the fees
are difficult to justify based on the results achieved in these
cases.  In addition, given the estates' apparent administrative
insolvency, the U.S. Trustee suggests it is premature to make any
rulings until all chapter 7 and 11 administrative expenses are
known.  

Pat V. Costa, a creditor, also filed objections to the
applications.  Mr. Costa objects to the fee applications to the
extent they seek any award of compensation through the application
of so-called "carve-outs" under the various cash collateral
orders.  In his objection to Dreier's fees, Mr. Costa alleges that
Dreier's services harmed the estates, that Dreier committed
malpractice and fraud, and that certain activities were not
beneficial to the estate.  In his objection to MGBD's fees, Mr.
Costa alleges that MGBD also committed malpractice and fraud and
that it failed to disclose material conflicts of interest.  In his
objection to Murtha Cullina's fees, Mr. Costa alleges that Murtha
Cullina's services did not confer any benefit on the Debtors'
estates or creditors.

The Chapter 7 Trustee did not file any objections to the fee
applications.  Instead, he filed a response and recommendation
with respect to the fee applications of Murtha Cullina and Mesirow
and motions to approve settlement agreements with Dreier and MGBD.  
The recommendations, if followed, and the settlements, if
approved, would result in a reduction of fees.

In a Memorandum Opinion dated May 26, 2006, and published at 2006
WL 1523104, the Honorable J. Michael Deasy wrestled with the
question if whether the malpractice claims can be dealt with in
the context of an objection to a fee application or whether a
formal adversary proceeding is required.  

"The resolution of the malpractice and fraud claims raised by
Costa require the Court to provide all parties with procedural and
substantive due process of law," Judge Deasy writes.  To make sure
everybody is afforded due process and to avoid giving birth to any
res judicata problems Judge Deasy says an adversary proceeding is
the appropriate vehicle by which to resolve both the malpractice
claims and the objections to the Chapter 11 Professional's fee
applications.

Headquartered in Nashua, New Hampshire, Robotic Vision Systems,
Inc., nka Acuity Cimatrix, Inc. -- http://www.rvsi.com/--  
designed, manufactured and marketed machine vision, automatic
identification and related products for the semiconductor capital
equipment, electronics, automotive, aerospace, pharmaceutical and
other industries.  The Company, together with its Auto Image ID,
Inc., debtor-affiliate, filed for chapter 11 protection on Nov.
19, 2004 (Bankr. D. N.H. Case No. 04-14151).  Bruce A. Harwood,
Esq., at Sheehan, Phinney, Bass + Green represented the Debtors in
their chapter 11 proceeding.  When the Debtors filed for chapter
11 protection, they listed $43,046,000 in total assets and
$51,338,000 in total debts.  The Court converted the Debtors'
chapter 11 cases to a chapter 7 liquidation proceeding on Oct. 12,
2005, and appointed Steven M. Notinger to serve as the Chapter 7
Trustee.  James W. Donchess, Esq., at Donchess & Notinger P.C.,
represents the Chapter 7 Trustee.


ROTEC INDUSTRIES: Organization Meeting Scheduled this Wednesday
---------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Rotec
Industries, Inc.'s creditors at 10:00 a.m., on June 14, 2006, at
J. Caleb Boggs Federal Building, 844 King Street, Room 5209 in
Wilmington, Delaware.

The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' bankruptcy
cases.  This is not the meeting of creditors pursuant to Section
341 of the Bankruptcy Code.  However, a Debtor's representative
will attend and provide background information regarding the
cases.

Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. --
http://www.rotec-usa.com/-- is an industry leader in concrete  
products and concrete placing technology & solutions.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del.
Case No. 06-10542).  Edward J. Kosmowski, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, 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.


SAINT VINCENTS: Amended NYSNA Labor Deal Gets Court's Nod
---------------------------------------------------------
Pursuant to Sections 105(a) and 363 of the Bankruptcy Code, the
U.S. Bankruptcy Court for the Southern District of New York
approves the proposed Memorandum of Agreement between Saint
Vincents Catholic Medical Centers of New York, its debtor-
affiliates and the New York State Nurses Association.

The Court rules that the assumption of the CBA, as agreed by the
parties, will not constitute an assumption of the Unpaid
Obligations due with respect to the New York State Nurses
Association Pension Fund and the New York State Nurses Association
Benefit Fund under the CBA pursuant to Section 365(a) or 1113(a)
of the Bankruptcy Code or a postpetition agreement assuring or
providing for payment of any Unpaid Obligations, other than in
accordance with a confirmed plan of reorganization.

Judge Hardin clarifies that his Order or the assumption of the CBA
will not be construed to require the current payment of the Unpaid
Obligations due with respect to the Pension Fund and the Benefit
Fund.

As reported in the Troubled Company Reporter on April 19, 2006,
NYSNA and the Debtors were parties to a collective bargaining
agreement from Feb. 16, 2002, through Feb. 15, 2005.  The Debtors
decided to renew and extend its relationship with the Employees
pursuant to MOA, as amended on March 9, 2006.  The Amended MOA
will be effective retroactive to Feb. 16, 2005, and will continue
in full force and effect through Feb. 15, 2008.

The modified terms of the Amended MOA include:

   Salary:        * Upon approval from the U.S. Bankruptcy Court
                    for the Southern District of New York, all
                    titles will receive an increase in base
                    compensation of 1% retroactive to the employee
                    ratification date of Jan. 17, 2006.

                  * Effective Sept. 15, 2006, all titles will
                    receive an increase in base compensation of
                    2%.

                  * Effective Feb. 15, 2007, all titles will
                    receive an increase in base compensation of
                    3%.

   Staffing:      The MOA confirms improved staffing guidelines
                  and mediation and other procedures in the event
                  of a disagreement over staffing.

   Seniority:     The MOA clarifies previous CBA language
                  regarding the functionality of the seniority
                  system and establishes an improved process for
                  disputes.

   Floating:      The MOA improves upon CBA language by
                  establishing guidelines for floating nurses and
                  establishes, effective Jan. 1, 2007, a float
                  maximum of 12 occurrences per nurse per year.

   Overtime:      Prior to assigning overtime, SVCMC must seek
                  qualified employees from the float pool, nurses
                  from a placement agency, volunteers within SVM
                  and from an established volunteer overtime list
                  of full-time, part-time, and per diem
                  employees.

                  If no qualified Employee is available, then
                  overtime will be assigned to the Employee at
                  the top of the unit's overtime list which will
                  have been established in inverse order of
                  seniority.

   Holidays:      The MOA clarifies that the law of the State of
                  New York will determine the day on which each
                  legal holiday falls, but that New Year's Day,
                  Independence Day, and Christmas Day will be
                  considered premium pay holidays on the day of
                  the week that the holiday actually falls for
                  those Employees who work on those days.

   Sick Leave:    Effective Feb. 1, 2007, all Employees will
                  be paid their regular rate of pay for all of
                  their accrued but unused sick days during the
                  prior 12-month period at the rate of one paid
                  day for every two unused sick days.  Employees
                  have the option of banking all or some of their
                  accrued, unused sick days, up to a maximum
                  number of days they can contractually accrue.

   Bereavement    An Employee with 30 days of employed service
   Leave:         may be paid regular pay for three working day's
                  absence in the event of the death of a
                  significant other.

   NYSNA          SVCMC will contribute to the Benefit Fund for
   Benefit        Plan 971A, for each regular full-time and
   Fund:          regular part-time Employee continuously
                  employed in any bargaining unit positions on or
                  prior to June 4, 1981, amounts effective for
                  the period:

                     Period                             Amount
                     ------                             ------
                     07/05/05 through 02/15/06         $10,085
                     02/16/06 through 02/15/07          11,140     
                     02/16/07 through 02/15/08          12,570

   Retiree        SVCMC currently provides cash reimbursements of
   Health         up to $2,500 per annum for the purchase of
   Benefits:      health insurance coverage by a Registered Nurse
                  who Retires from SVM subsequent to December 31,
                  2004, and who was continuously employed as a
                  Registered Nurse at SVM for at least 20 years
                  and who has attained age 60 at the time of
                  retirement.

                  Effective Dec. 1, 2007, the potential cash
                  reimbursement available will be increased to
                  $3,000 per annum.

Based in New York City, 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)


SAINT VINCENTS: Bids for St. Mary's Hospital Due on June 30
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates' proposed Bidding Procedures for the sale of
the St. Mary's Hospital Complex.  The deadline to submit bids for
St. Mary's is June 30, 2006.

If the Debtors receive qualified bids other than the proposal
submitted by NAL of N.Y. Corp., the stalking horse bidder, an
auction will be held at 10:00 a.m. New York Time, on July 11,
2006.  

The Court will conduct a Sale Hearing at 11:00 a.m., on July 18,
2006 at Room 520 of the Bankruptcy Court, 300 Quarropas St., in
White Plains, New York.

Objections to the proposed sale must be filed with the Court no
later than 12:00 p.m. on July 15, 2006.  Objections must be served
to:

       The U.S Trustee for the Southern District of New York
       Attn: Tracy H. Davis, Esq.
       33 Whitehall Street, 21st Floor
       New York City 10004

       Debtors' Attorneys:

       Weil Gotshal & Manges LLP
       Attn: George A Davis., Esq.
       767 Fifth Avenue
       New York City 10153

       Attorneys for SVCMC:

       Donovan & Giannuzzi, LLP
       Attn: Nicholas T. Donovan, Esq.
       261 Madison Avenue, 22nd Floor
       New York City 10016

       Attorneys for the Statutory Committee
       of Unsecured Creditors:

       Alston & Bird LP
       Attn: Martin G. Bunin, Esq.
       Craig E. Freeman, Esq.
       90 Park Avenue
       New York City 10016

       Attorneys for the Purchaser:

       Morris E. Berenbaum, Esq.
       1205 47th Street
       Brooklyn, New York 11219-2502

A full-text copy of the Bidding Procedures is available for free
at http://researcharchives.com/t/s?b38

As reported in the Troubled Company Reporter on May 24, 2006, the
Debtors and NAL entered into a Contract of Sale dated May 15,
2006, pursuant to which, NAL is the "stalking horse" for the sale
of St. Mary's, for a purchase price of $17,000,000 in cash.

Pursuant to the Purchase Agreement, NAL will pay:

    -- $500,000 upon execution of the Purchase Agreement;

    -- an additional $1,200,000 within seven business days upon
       its receipt of all the Required Approvals; and

    -- the remaining $15,300,000 at the closing of title to the
       St. Mary's Premises, subject to adjustments.

The Purchase Agreement provides for the allocation of transfer
taxes in varying proportions between the parties.

Based in New York City, 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)


SEPRACOR INC: Mar. 31 Balance Sheet Upside-Down by $127.6 Million
-----------------------------------------------------------------
Sepracor Inc.'s balance sheet at March 31, 2006 showed a
stockholders' deficit of $127,653,000, resulting from
$1,283,787,000 in total assets and $1,411,440,000 in total
liabilities.

The Company's balance sheet also showed $1,031,768,000 in total
current assets and $249,456,000 total current liabilities.

For the three months ended March 31, 2006, the Company reported
a $10,259,000 net income on $285,678,000 of total revenues.

A full-text copy of Sepracor's quarterly report is available for
free at http://researcharchives.com/t/s?b24

Headquartered in Marlborough, Massachusetts, Sepracor Inc.
-- http://www.sepracor.com/-- is a research-based pharmaceutical  
company specializing in the treatment and prevention of human
diseases.  Sepracor's drug development program has yielded a
portfolio of pharmaceutical products and candidates with a focus
on respiratory and central nervous system disorders.

                          *     *     *

Sepracor's long-term local and foreign issuer credits carry
Standard & Poor's B+ rating.  The ratings were placed on Feb. 13,
2006 with a positive outlook.


SILICON GRAPHICS: Can Give Adequate Assurance to Utilities
----------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York, on a final basis to:

     (a) determine that their Utility Providers have been provided
         with adequate assurance of payment within the meaning of
         Section 366;

     (b) approve their proposed Adequate Assurance and Adequate
         Assurance Procedures where Utility Providers may seek
         additional or different adequate assurance;

     (c) prohibit the Utility Providers from altering, refusing or
         discontinuing services on account of prepetition amounts
         outstanding or on account of any perceived inadequacy of
         the Debtors' proposed adequate assurance;

     (d) establish procedures for the Utility Providers to opt out
         of the proposed Adequate Assurance Procedures; and

     (e) determine that they are not required to provide any
         additional adequate assurance beyond what they proposed.

The Utility Companies are prohibited from discontinuing, altering,
or refusing service on account of any unpaid prepetition charges,
or requiring additional adequate assurance of payment other than
the Adequate Assurance Deposit, Judge Gropper rules.

                   Adequate Assurance Procedures

As reported in the Troubled Company Reporter on May 25, 2006, the
Debtors propose to provide a deposit equal to two weeks of utility
service to any Utility Provider who seeks a deposit in writing
provided that the requesting Utility Provider (i) does not
already hold a deposit equal to or greater than two weeks of
utility services, and (ii) is not currently paid in advance for
its services.

As a condition of requesting and accepting an Adequate Assurance
Deposit, the requesting Utility Provider will be deemed to have
stipulated that the Deposit comprises adequate assurance of future
payment within the meaning of Section 366, and will be considered
to have waived any right to seek additional adequate assurance
during the course of the Chapter 11 cases.

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)


SILICON GRAPHICS: Gets Court Nod to Hire Weil Gotshal as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Silicon Graphics, Inc., and its debtor-affiliates to
employ Weil, Gotshal & Manges LLP as their bankruptcy counsel.

As reported in the Troubled Company Reporter on May 15, 2006, Weil
Gotshal is expected to:

    (a) take all necessary actions to protect and preserve the
        estates of the Debtors, including the prosecution of
        actions on the Debtors' behalf, the defense of any actions
        commenced against the Debtors, the negotiation of disputes
        in which the Debtors are involved, and the preparation of
        objections to claims filed against the Debtors' estates;

    (b) prepare on behalf of the Debtors, as debtors in
        possession, all necessary motions, applications, answers,
        orders, reports, and other papers in connection with the
        administration of the Debtors' estates;

    (c) negotiate and prepare on behalf of the Debtors a plan of
        reorganization and all related documents; and

    (d) perform all other necessary legal services in connection
        with the prosecution of the Debtors' chapter 11 cases.

The firm's hourly rates are:

                 Professionals             Hourly Rate
                 -------------             -----------
                 Members and Counsel       $575 - $810
                 Associates                $275 - $520
                 Paraprofessionals          $70 - $275

Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York,
assured the Court that Weil Gotshal is "disinterested" as that
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any party-in-interest other than the Debtors in
their chapter 11 cases.

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)


SIRIUS SATELLITE: Will Make Cutting-Edge Satellite for Loral
------------------------------------------------------------
SIRIUS Satellite Radio entered into an agreement with Space
Systems/Loral, a subsidiary of Loral Space & Communications, for
the design and construction of a new satellite that will be one of
the most advanced and powerful communications satellites ever
built.

Construction of the satellite is expected to be completed in the
fourth quarter of 2008.  SIRIUS plans to launch the satellite on a
Proton rocket under a contract between SIRIUS and International
Launch Services.  The satellite will be launched into a
geostationary orbit to complement SIRIUS' existing three
satellites, which were also manufactured by Space Systems/Loral
and operate in a highly elliptical geosynchronous orbit.  This
unique hybrid constellation will provide unparalleled redundancy,
enhanced coverage and exceptional performance.

"This investment in next generation space technology will improve
SIRIUS' already exceptional service experience," said Mel
Karmazin, CEO of SIRIUS.  "Not only will this satellite support
our other three satellites currently in orbit, but it will also
improve reception for all SIRIUS subscribers whether they are in
their car, office, home or jogging in the park."

The aggregate cost of designing, building, launching and insuring
the launch of the satellite will be approximately $260 million.  
As part of its commitment to SIRIUS, Loral has agreed to provide a
$100 million vendor financing facility.  SIRIUS has no current
plans to draw under the vendor financing facility.

SIRIUS continues to expect that its first quarter of positive free
cash flow, after capital expenditures, could be reached as early
as the fourth quarter of 2006, and that the company will be free
cash flow positive, after capital expenditures, for the full-year
2007.  The payments associated with the purchase and launch of
this satellite were anticipated in SIRIUS' guidance concerning
free cash flow positive.

                        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.

                     About Sirius Satellite

Headquartered in New York City, Sirius Satellite Radio Inc. --
http://www.sirius.com/-- is the leading provider of sports radio   
programming, broadcasting play-by-play action of more than 350 pro
and college teams.  SIRIUS features news, talk and play-by-play
action from the NFL, NBA, NHL, Barclays English Premier League
soccer, the Wimbledon Championships and more than 125 colleges,
plus live coverage of several of the year's top thoroughbred horse
races.  SIRIUS is the only radio outlet to provide listeners with
every NFL game, and airs over 1000 NBA games per season, plus up
to 40 NHL games per week.  SIRIUS also features programming from
ESPN Radio and ESPNews.

Sirius Satellite Radio Inc.'s 2-1/2% Convertible Notes due 2009
carry Standard & Poor's CCC rating.


SMARTVIDEO TECHNOLOGIES: Sherb & Co. Expresses Going Concern Doubt
------------------------------------------------------------------
Smartvideo Technologies, Inc.'s auditor, Sherb & Co., LLP,
expressed substantial doubt about the Company's ability to
continue as a going concern pointing to the Company's recurring
losses from operations, cash burn, working capital deficit,
stockholders' deficit and accumulated deficit.  

The auditor's statement is included in the Company's 2005 annual
report in Form 10-K filed with the Securities and Exchange
Commission.  

The Company reported a $19,740,274 net loss from operations on
$197,257 of net revenues for the year ending December 31, 2005.  
The Company incurred a $3,859,141 net loss in 2003 and $6,792,930
net loss in 2004.

The Company used up $5,351,783 of cash in its 2005 operations.

As of December 31, 2005, the Company had $8,201,091 in current
assets to pay off $10,854,713 in current liabilities.  The Company
reported assets amounting to $11,920,674 and debts totaling
$14,241,289 at December 31, 2005.  The Company's equity deficit
widened to $2,320,615 at December 31, 2005, from a $1,065,215
deficit at December 31, 2004.  The Company's accumulated deficit
amounted to $39,953,756 as of December 31, 2005.

A full-text copy of the regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?8fb

SmartVideo Technologies, Inc., is a provider of video content
distribution services and technology.


SOS REALTY: Court Approves Duane Morris as Bankruptcy Counsel
-------------------------------------------------------------
SOS Realty LLC obtained authority from the U.S. Bankruptcy Court
for the District of Massachusetts to employ Duane Morris LLP, as
its bankruptcy counsel, nunc pro tunc to May 11, 2006.

Duane Morris is expected to:

    a. advise the Debtor of its rights, powers, and duties as
       debtor and debtor-in-possession;

    b. take all necessary action to protect and preserve the
       estate of the Debtor, including the prosecution of actions
       on the Debtor's behalf, the defense of actions commenced
       against the Debtor, the negotiation of disputes in which
       the Debtor is involved, and the preparation of objections
       to claims filed against the estate;

    c. prepare on behalf of the Debtor all necessary motions,
       applications, answers, orders, reports, and papers in
       connection with the administration of the Debtor's estate;

    d. present on behalf of the Debtor sale or refinancing motions
       and all related transactions and any related revisions,
       amendments, etc.; and

    e. perform all other necessary legal services in connection
       with the Debtor's chapter 11 case.

Paul D. Moore, Esq., a partner at Duane Morris, tells the Court
that he will bill $575 per hour for this engagement.  Mr. Moore
discloses that an associate of the firm, Jennifer L. Hertz, Esq.,
will also be providing services and bills $360 per hour.  Karen E.
Gotkin, a paralegal, bills $210 per hour.

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

Headquartered in West Roxbury, Massachusetts, SOS Realty LLC, owns
a condominium development known as the "Washington Grove
Condominiums."  The company filed for chapter 11 protection on
May 11, 2006 (Bankr. D. Mass. Case No. 06-11381).  Jennifer L.
Hertz, Esq., at Duane Morris LLP, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets between $10 million and $50
million and debts between $1 million and $10 million.


SOURCECORP INC: S&P Rates Proposed $125 Million Term Loan at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Dallas, Texas-based SOURCECORP Inc.  The outlook
is negative.

At the same time, Standard & Poor's rated SOURCECORP's proposed
$275 million first-lien senior secured bank facility 'B+' (the
same as the corporate credit rating) with a recovery rating of
'2', indicating the expectation for substantial (80%-100%)
recovery of principal in the event of payment default.

In addition, the company's proposed $125 million second lien
term loan was rated 'B-' (two notched below the corporate credit
rating) with a recovery rating of '5', indicating expectations for
negligible (0-25%) recovery of principal in the event of payment
default.  These ratings are based on preliminary offering
statements and are subject to review upon final documentation.

"Proceeds from the proposed credit facilities, along with equity
invested by Apollo Management, LP will be used to finance the
proposed purchase of SOURCECORP," said Standard & Poor's credit
analyst Martha Toll-Reed.

Total consideration for the transaction will be about $479 million
and includes the repayment of SOURCECORP's existing debt, as well
as related fees and expenses.  The purchase will be conducted
through the newly formed entity CorpSource Holdings, LLC.

The ratings reflect SOURCECORP's:

   * leveraged financial profile;

   * niche position in the large, fragmented, business process
     outsourcing market; and

   * lack of sustained EBITDA growth.

These factors are partly offset by:

   * a material level of recurring revenues;

   * significant barriers to entry and customer switching costs;
     and

   * a diverse customer base.


TOWN SPORTS: S&P Revises B Rating's Watch Implication to Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on Town Sports International Holdings Inc. and
operating subsidiary Town Sports International Inc. to positive
from developing.  Both companies have a corporate credit rating of
'B'.

Town Sports is a fitness club owner and operator.

Standard & Poor's originally placed the ratings on CreditWatch
with developing implications on July 1, 2005, after Town Sports
disclosed that it was exploring strategic alternatives, which
include a possible sale of the company or IPO.  

With the announcement that its IPO of 7.65 million shares of
common stock has been priced at $13 per share, it is clear that a
sale of the company is no longer under consideration.

"Assuming Town Sports follows through with its plan to use the
entire IPO proceeds and a substantial amount of cash to reduce
debt, the ratings could be raised by one notch," said Standard &
Poor's credit analyst Andy Liu.


TRENWICK AMERICA: Entry of Final Decree Indefinitely Delayed
------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved Trenwick America Corporation, nka
Trenwick America LLC's request to indefinitely delay the entry of
a final decree closing its chapter 11 case.

The Bankruptcy Court confirmed the Debtor's Second Amended Plan of
Reorganization on Oct. 27, 2004, and that Plan took effect on
Aug. 15, 2005.

As reported in the Troubled Company Reporter on Dec. 19, 2005, the
Reorganized Debtor said that the extension is necessary in order
to avoid the premature closure of its bankruptcy case and to
ensure that creditor recoveries will be maximized.  The estate's
rights and obligations with respect to various post-confirmation
matters remains with the Reorganized Debtor pursuant to the
confirmed plan.

Based in Stamford, Connecticut, Trenwick America Corporation is a
holding company for operating insurance companies in the United
States.  The Company filed for chapter 11 protection on Aug. 20,
2003 (Bankr. Del. Case No. 03-12635).  Christopher S. Sontchi,
Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, and
Benjamin Hoch, Esq., Irena Goldstein, Esq., Carey D. Schreiber,
Esq., at Dewey Ballantine LLP represent the Debtors in their
restructuring efforts.  As of June 30, 2003, the Debtor listed
approximate assets of $400,000,000 and debts of $293,000,000.  The
Court confirmed the Debtor's Second Amended Plan of Reorganization
on Oct. 27, 2004, and the Plan became effective as of Aug. 15,
2005.

On Aug. 20, 2003, Trenwick Group, Ltd., and LaSalle Re Holdings
Limited also filed insolvency proceedings in the Supreme Court of
Bermuda.  On Aug. 22, 2003, the Bermuda Court granted an order
appointing Michael Morrison and John Wardrop, partners of KPMG in
Bermuda and KPMG LLP in the United Kingdom, respectfully, as Joint
Provisional Liquidators in respect of TGL and LaSalle.

The Bermuda Court granted the JPLs the power to oversee the
continuation and reorganization of these companies' businesses
under the control of their boards of directors and under the
supervision of the U.S. Bankruptcy Court and the Bermuda Court.


TRIPLE A POULTRY: Taps Porter & Hodges as Bankruptcy Counsel
------------------------------------------------------------
Triple A Poultry, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Texas for permission to employ Porter &
Hedges, LLP, as its bankruptcy counsel.

Porter & Hedges will:

    (a) provide legal advice with respect to the Debtor's rights
        and duties as debtor-in-possession and continued business
        operations;

    (b) assist, advise and represent the Debtor in analyzing its
        capital structure, the extent and validity of liens, cash
        collateral stipulations and contested matters;

    (c) assist, advise and represent the Debtor in potential
        postpetition financing transactions and cash collateral
        issues;

    (d) assist, advise and represent the Debtor in connection with
        its disputes with the Internal Revenue Service;

    (e) assist, advise and represent the Debtor in the formulation
        of a disclosure statement and plan of reorganization and
        to assist the Debtor in obtaining confirmation and
        consummation of a plan of reorganization;

    (f) assist, advise and represent the Debtor in any manner
        relevant to preserving and protecting the Debtor's estate;

    (g) investigate and prosecute preferences, fraudulent
        transfers and other actions arising under the Debtor's
        bankruptcy avoiding powers;

    (h) prepare on behalf of the Debtor all necessary
        applications, motions, answers, orders, reports, and other
        legal papers;

    (i) appear in Court and to protect the interests of the Debtor
        before the Court;

    (j) assist the Debtor in administrative matters;

    (k) perform all other legal services for the Debtor which may
        be necessary and proper in these proceedings;

    (l) assist, advise and represent the Debtor in any litigation
        matter;

    (m) assist and advise the Debtor in general corporate and
        other matters; and

    (n) provide other legal advice and services, as requested by
        the Debtor, from time to time.

John F. Higgins, Esq., a partner at Porter & Hodges, tells the
Court that the Firm's professionals bill:

         Professional                           Hourly Rate
         ------------                           -----------
         Partners                               $275 - $600
         Of Counsel                             $275 - $375
         Associates/Staff Attorneys             $180 - $325
         Legal Assistants/Law Clerks            $140 - $150

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

Mr. Higgins can be reached at:

         John F. Higgins, Esq.
         Porter & Hedges, LLP
         1000 Main Street, 36th Floor
         Houston, Texas 77002
         Tel:  (713) 226-6000
         Fax:  (713) 228-1331
         http://www.porterhedges.com/

Headquartered in Houston, Texas, Triple A Poultry sells meat and
poultry products.  The company filed for chapter 11 protection on
May 19, 2006 (Bankr. S.D. Tex. Case No. 06-32119).  John Matthew
Vaughn, Esq., at Porter & Hedges, LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million and $10
million and debts between $10 million and $50 million.


TRIPLE A POULTRY: Wants Until June 20 to File Schedules
-------------------------------------------------------
Triple A Poultry, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Texas to extend, until June 20, 2006, the
deadline to file its schedules of assets and liabilities and
statement of financial affairs.

The Debtor tells the Court that given the urgency with which it
filed for bankruptcy and the more critical and weighty matters
that the Debtor's limited staff of accounting and legal personnel
had to address in the early days of its case, it is not in a
position to complete the schedules and statements by the original
deadline.  The Debtor assures the Court that it will complete the
schedules and statements as quickly as possible under the
circumstances.

The Debtor contends that the substantial size, scope and
complexity of its case and the volume of material that must be
compiled and reviewed by the Debtor's limited staff to complete
the schedules and statements, provide ample "cause" justifying, if
not compelling, the requested extension.

Headquartered in Houston, Texas, Triple A Poultry sells meat and
poultry products.  The company filed for chapter 11 protection on
May 19, 2006 (Bankr. S.D. Tex. Case No. 06-32119).  John Matthew
Vaughn, Esq., at Porter & Hedges, LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million and $10
million and debts between $10 million and $50 million.


UNISYS CORP: Fitch Rates New $275 Million Bank Facility at BB+
--------------------------------------------------------------
Fitch Ratings assigned a 'BB+' rating to Unisys Corporation's new
$275 million secured bank facility.  The issuer default rating and
senior unsecured debt ratings are affirmed at 'BB-'.  The Rating
Outlook is Negative.  Fitch's action affects approximately $1.4
billion of debt, including the $275 million bank facility.

The $275 million secured credit facility expiring May 31, 2009,
replaces a $500 million unsecured credit facility, which expired
on May 31, 2006.  The credit agreement includes a material adverse
change clause and maintenance of several financial covenants,
including:

   -- interest coverage,
   -- leverage,
   -- asset coverage, and
   -- minimum amount of liquidity.

Other covenants include limitations on liens, mergers, asset
sales, dividends and the incurrence of debt.  The facility is
secured by all of the company's assets, excluding:

   -- accounts receivable sold via Unisys' $300 million U.S. trade     
      accounts receivable facility;

   -- U.S. real estate; and

   -- stock or indebtedness of the company's U.S. operating
      subsidiaries.

The exclusion of U.S. real estate and indebtedness of the
company's U.S. operating subsidiaries from the collateral package
avoids triggering the restriction on liens covenant contained in
the unsecured debt indenture, which would require Unisys to
equally and ratably secure the existing outstanding senior debt
securities.  U.S. real estate (Principal Property) as defined in
the unsecured debt indenture includes any real property, building,
structure or other facility owned by Unisys that is located in the
U.S. and is materially important to the company.

Despite the decline in the size of the new credit facility
relative to the former facility, Fitch believes the company
continues to have adequate liquidity to satisfy operating
requirements and cash severance obligations and debt maturities of
$158 million and $58 million, respectively, in 2006, given the
company's cash balance of $980 million as of March 31, 2006.

Unisys sold non-core assets in the first quarter of 2006
generating $381 million of proceeds and Fitch expects the company
will potentially generate incremental liquidity through additional
sales of non-core assets that in aggregate account for
approximately $500 million in revenue annually.

However, the company has yet to quantify the expected proceeds or
timing of these non-core asset sales.  Furthermore, the company's
near-term debt maturity schedule is manageable with no long-term
debt maturing in 2007 and only $200 million due in 2008.

Unisys ratings and Negative Rating Outlook reflect the company's:

   * weak earnings;

   * significant new restructuring initiatives;

   * inability to meet financial expectations; and

   * continued declines in credit protection measures and
     financial performance.

Fitch believes execution and operating risks have increased due to
Unisys' announcement of a new restructuring program funded by
asset sales and a 10% reduction in the company's workforce,
resulting in total cash restructuring payments of $250 million-
$300 million over the next five quarters.

Unisys' financial performance has been impacted by protracted
difficulties with two significant transformational business
process outsourcing contracts and continued weakness in the
technology hardware segment.

Although Unisys reached a definitive agreement effective Jan. 1,
2006 to restructure one of the problem contracts, its Intelligent
Processing Services Limited check-processing outsourcing joint
venture in the U.K., Fitch expects services margins to remain weak
in the near term as Unisys works to resolve a second problem
contract.

In addition, utilization rates in project-based businesses, such
as consulting and systems integration, remain pressured by excess
resource capacity.  Fitch also believes Unisys will continue to be
challenged by its technology segment, which suffers from
persistent weakness in higher-margin ClearPath system sales
relative to ES7000 servers.


USG CORP: Court Disallows Tenn. Finance Dept.'s $11-Mil. Claim
--------------------------------------------------------------
At the request of USG Corporation and its debtor-affiliates, the
U.S. Bankruptcy Court for the District of Delaware disallows a
$11,052,113 claim filed by the Tennessee Department of Finance &
Administration -- Capital Projects Division.

The Tennessee Finance Department filed Claim No. 5322, asserting
that 276 of its buildings have or had asbestos-containing
materials manufactured by the Debtors.

The Debtors argue that the Tennessee Finance Department failed to
provide any evidence that the Debtors' asbestos-containing
products are or ever were installed in the buildings subject to
the claim.

The Debtors note that the Department has admitted that it "is
unable to specifically document that the Debtors manufactured or
sold products containing asbestos that are or were present" in
the buildings.

In lieu of the product identification evidence, the Department
indicated in its claim for that it filed the claim for damages
under various other theories of alternative liability, including
but not limited to, a market share theory similar to that used in
In re John-Manville, U.S.B.C., S.D.N.Y., No. 82-11656.

Tennessee courts have not adopted the market share theory of
liability, the Debtors remind Judge Fitzgerald, citing Barnes v.
Kerr Corp., 418 F.3d 583, 589 (6th Cir. 2005).  Moreover, the
Tennessee Court of Appeals in Davis v. Yearwood, 612 S.W.2d 917,
919-20 (Tenn. App. 1980), rejected a "doctrine allowing recovery
against a whole industry or arbitrarily selected parts thereof
because the particular culprit cannot be identified."

                          About USG Corp.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 110; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


USG CORP: Illinois Wants to Pursue Tort Suit Against U.S. Gypsum
----------------------------------------------------------------
The state of Illinois asks the U.S. Bankruptcy Court for the
District of Delaware to lift the automatic stay in the chapter 11
cases of USG Corporation and its debtor-affiliates so it may
pursue its tort-based claims against United States Gypsum Company
in state court.

Illinois filed a lawsuit in February 1998 against U.S. Gypsum,
among other defendants, before the Circuit Court of the Seventh
Judicial Circuit, Sangamon County, Illinois, for asbestos
property damage to the state's buildings.  The case is styled
People of the State of Illinois, et al., v. United States Gypsum
Company, et al., Case No. 98-L-61.

U.S. Gypsum actively participated in the State Court Action for
more than three years, during which extensive discovery was
undertaken and completed by both sides.  Numerous boxes of
supporting documentation were provided by Illinois to U.S. Gypsum
and discovery requests were responded to by both sides.

Marilyn A. Kueper, chief of the asbestos litigation bureau and
assistant attorney general, tells Judge Fitzgerald that Illinois
continues to be more than willing to participate in good faith
efforts to settle the claims with the Debtors.  If, however, no
settlement can be reached, the Illinois claims should be returned
to the state court for resolution.

"The State Court Action has progressed to the point where it
should be favored as the appropriate forum for resolution of the
Illinois claims against the Debtors," Ms. Kueper says.  Moreover,
trying the State Court Action to completion will not harm the
Debtors since they have been represented in the State Court
Action by local counsel in Illinois, Ms. Kueper adds.

                          About USG Corp.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 111; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


W.R. GRACE: Fights U.S. Gov't Over Doctor's Medical Records
-----------------------------------------------------------
On June 30, 2005, claimants allegedly injured by exposure to
tremolite asbestos from the Debtors' operations near Libby,
Montana, filed an opposition to the Debtors' request for approval
of a personal injury case management order and questionnaire.  

The Libby Claimants allege that they constitute a unique class of
asbestos personal injury claimants.

In addition, the Libby Claimants allege that they are entitled to
distinct treatment during the estimation proceeding compared to
other asbestos PI claimants.  The Libby Claimants insist that
their claims should not be subjected to the medical criteria
proposed by the Debtors in their plan of reorganization.

Those assertions have emerged as critical issues in both the
estimation litigation and with respect to settlement
negotiations.

W.R. Grace & Co. clarifies that it does not dispute that some
individuals in Libby, Montana, have contracted asbestos-related
diseases like mesothelioma and asbestosis as a result of their
exposure to asbestos from the Libby vermiculite mine.  Grace also
does not dispute that asbestos exposure from the mine may have
contributed to the development of lung cancer in some individuals
in Libby.

However, Grace disputes the allegations of the Libby Claimants
that:

   -- it violated any laws in connection with its operation of
      the Libby mine;

   -- they have a "unique" asbestos disease; and

   -- they should not be subjected to the same medical and
      diagnostic criteria as other asbestos PI Claimants.

            Grace Seeks Access to Facts Relevant to
             Estimation of Libby Claimants' Claims

In support of their contentions, the Libby Claimants cite the
affidavits of Dr. Alan Whitehouse, a physician who asserts to
have diagnosed hundreds of Libby residents with "Libby Tremolite
Disease."

As the treating and diagnosing physician, Dr. Whitehouse
possesses key facts relating to the Libby Claimants' allegations.
Dr. Whitehouse has also been named as the "expert" for the Libby
Claimants in the Bankruptcy Court's estimation proceeding.

The Debtors believe that Dr. Whitehouse has in his possession the
very documents that will either support or debunk the notion that
there is a unique "Libby Tremolite Disease."

Against this backdrop, the Debtors seek access to the key factual
information in the custody and control of Dr. Whitehouse, for use
in the bankruptcy PI estimation proceeding.

The Debtors have sought and gained access to some of those
materials in connection with a criminal proceeding in Montana,
where Dr. Whitehouse has been named as a witness to the case.

However, in United States v. W.R. Grace & Co., CR-05-07 (D.
Montana, Nov. 23, 2005), Judge Donald Molloy of the U.S. District
Court for the District of Montana has issued a protective order
prohibiting the use of some of Dr. Whitehouse's records in any
other proceeding.  Judge Molloy, nevertheless, did not purport to
limit Grace's ability of to seek discovery of the same files in
another proceeding where appropriate.

Because the same issues are now relevant in the PI estimation,
the Debtors further ask Judge Fitzgerald for a protective order
governing the review and use of the documents that is consistent
with the Protective Order issued by Judge Molloy.

The Debtors offer these facts demonstrating the importance of the
requested discovery:

   (1) Dr. Whitehouse's allegation that asbestos from the Libby
       vermiculite mine causes a "unique" disease called "Libby
       Tremolite Disease" is a new allegation that had not been
       fully litigated prior to the Petition Date.  Indeed, the
       "study" of Libby residents that Dr. Whitehouse authored,
       and on which the Libby Claimants base their allegations,
       was not published until 2004.  As part of the criminal
       proceeding, the U.S. government has represented that it
       will provide Grace access to all of Dr. Whitehouse's
       patient files.

   (2) In reviewing Dr. Whitehouse's patient files in connection
       with its investigation of the environmental risks
       associated with exposure to asbestos in Libby, Montana,
       the Agency for Toxic Substances and Disease Registry of
       the U.S. Department of Health and Human Services found
       that 27% of the cases which Dr. Whitehouse had diagnosed
       with asbestos disease did not show any evidence of an
       asbestos-related disease.

   (3) Many of Dr. Whitehouse's assertions offered in support
       of the existence of that unique "Libby Tremolite Disease"
       are contrary to established medical and scientific
       literature and knowledge about the development of       
       asbestos-related disease as well as diseases caused by
       smoking.

            Dr. Franzblau's Review on Whitehouse Study

Dr. Al Franzblau, an occupational medicine doctor with experience
in the diagnosis of asbestos-related disease, has reviewed Dr.
Whitehouse's assertions in a Whitehouse Progression Study, which
is based on the medical records of 123 patients.

Dr. Franzblau notes that among the controversial assertions by
Dr. Whitehouse is his claim that the Whitehouse Progression Study
is representative of all of his "Libby Tremolite Disease"
patients and the population of Libby as a whole.  

Dr. Franzblau argues that it was nothing more than a "sweeping
generalization" that is not supported by the data presented in
the Whitehouse Progression Study.  There are no data or
comparisons provided about "age, gender, occupation, smoking
history, medical history, or other pertinent factors" for the 123
patients, the 491 total patients referenced in the Whitehouse
Progression Study, or the Libby residents as a whole.  Dr.
Franzblau says that only by reviewing the medical records for the
123 patients in the study group and comparing them to the medical
records for all 491 of Dr. Whitehouse's "Libby Tremolite Disease"
patients could one ascertain whether his Dr. Whitehouse's
generalization is scientifically supportable.

With respect to Dr. Whitehouse's allegation that there is an
"obstructive component" associated with "Libby Tremolite
Disease," Dr. Franzblau points out that the medical and
scientific literature clearly demonstrates that pulmonary disease
caused by asbestos exposure is primarily a restrictive disease
and that cigarette smoking -- not asbestos exposure -- is the
primary cause of obstructive pulmonary disease.  In his published
study, Dr. Whitehouse fails to report the data that would
demonstrate whether or not the patient has COPD, a disease caused
by smoking and not asbestos.

Furthermore, Dr. Whitehouse acknowledges that the 123 patients
had significant pulmonary disease previously diagnosed by doctors
who had prescribed bronchodilators.  Dr. Whitehouse glosses over
that fact, but the "entire study is confounded and flawed since
those other diseases were not considered in the statistical
analyses, and much or all of the observed excess decline in
pulmonary function may be attributable to non-asbestos pulmonary
disease, such as smoking," Dr. Franzblau explains.

Moreover, Dr. Whitehouse contends that "diffusion capacity" is a
"particularly important indicator" of the "severity of
restrictive disease in Libby Tremolite disease patients."  Dr.
Franzblau, however, disagrees that smoking is a primary cause of
a decrement in diffusion capacity.  Consistently, Dr. Whitehouse
ignores established science, medical literature, and clinical
practice and simply asserts, without data or evidence, that Libby
asbestos caused that common smoking-related condition in his
Libby patients, Dr. Franzblau says.

According to Dr. Franzblau, Dr. Whitehouse's selective reporting
of data based on a cohort with a heavy smoking history casts
doubt on his assertion that he has discovered a unique highly
progressive asbestos-related disease.

However, Dr. Franzblau's ability to critique the Whitehouse
Progression Study, and evaluate the Libby Claimants' contention
that they have a unique asbestos disease is limited without an
opportunity to review the medical documents that underlie the
Study.  The true extent and nature of asbestos-related disease
caused by exposure to asbestos from the Libby mine has important
implications for the estimation of Grace's asbestos PI liability.

          U.S. Government Wants Debtors' Request Denied

The United States Government asks the Bankruptcy Court to deny
the Debtors' request for factual discovery from Dr. Alan C.
Whitehouse and for a protective order governing the review of
documents that is consistent with the protective order issued by
Judge Molloy of the U.S. District Court in the District of
Montana, in "United States v. W.R. Grace, et al., CR 05-07."

In the alternative, the U.S. Government asks Judge Fitzgerald to
allow discovery only after completion of trial in the Montana
criminal case presently set to begin September 11, 2006.

Ellen W. Slights, assistant U.S. attorney, tells Judge Fitzgerald
that a review of the Montana District Court's Protective Order
reveals that Judge Molloy only ordered "disclosure of private
medical records of testifying victim or witnesses."

Ms. Slights points out that the remainder of the Protective Order
concerns medical records contained in a study conducted by the
Agency for Toxic Substances and Disease Registry of the U.S.
Department of Health and Human Services, of which Dr. Whitehouse
took no part.  The Montana District Court ordered the ATSDR
records redacted before disclosure to remove all identifying
information.

Ms. Slights also clarifies that the U.S. Government could not
have "agreed" to facilitate the criminal defendants' review or
provide the voluminous private medical records, because the
possession of and access to those records lies solely within the
control of Dr. Whitehouse and the Center for Asbestos Related
Diseases clinic in Libby, Montana.

Moreover, Ms. Slights notes that under the Montana state law,
authorities made it clear that if debtors want to review and copy
private medical records at issue, those records must be redacted
as required by the Montana District Court's order concerning
medical records.

Ms. Slights asserts that the patients in Dr. Whitehouse's files
deserve all the privacy protections accorded by the Montana
District Court to all non-testifying victims in the criminal
case.  "The Debtors' needs can be well served without infringing
on those patients' privacy rights by having their experts review
only redacted copies of private medical records," she says.

Furthermore, Ms. Slights relate that the Debtors have sought to
depose Dr. Whitehouse to obtain discovery of matters concerning
the criminal case, which the Montana Court denied.  The U.S.
Government is concerned that the Debtors are attempting to obtain
discovery in the context of their Chapter 11 cases that they
cannot obtain in the criminal case.

            Debtors Respond to U.S. Government's Claims

James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, tells the Bankruptcy
Court that the U.S. government failed to provide any
justification for shielding the Libby Claimants from their civil
discovery obligations because of the existence of a criminal
proceeding currently pending against W.R. Grace & Co. in the U.S.
District Court for the District of Montana.

Mr. O'Neill asserts that District Court Judge Donald Molloy's
decision concerning the deposition of Dr. Alan Whitehouse in the
Criminal Proceeding is based on the application of Rule 15(a) of
the Federal Rules of Criminal Procedure, which is inapplicable to
the Debtors' case.  Mr. O'Neill maintains that there is no
indication that Judge Molloy intended to restrict Grace's right
to obtain relevant discovery.

Mr. O'Neill further points out that the Bankruptcy Court
specifically authorized discovery from doctors as part of a
questionnaire discovery process.  The Libby Claimants are active
parties-in-interest in the Debtors' cases and, therefore, are not
entitled to the same privacy protections granted in the Criminal
Proceeding.

Mr. O'Neill insists that the discovery of doctors conducted by
the Debtors and the Official Committee of Asbestos Personal
Injury Committee in the PI claims estimation is no different and
quite clearly appropriate given the Libby Claimants' contentions.

        Debtors Want Libby Claimants' Objection Overruled

"[I]f the Libby Claimants continue to refuse to produce discovery
in a manner that provides the parties an effective means of
testing their contentions, then they should be estopped from
further pursuing their request for distinct treatment in this
bankruptcy," Mr. O'Neill asserts.

Mr. O'Neill notes that the Libby claimants do not appear to
dispute that Grace is entitled to discovery.  Rather, the Libby
Claimants seem to dispute the scope of the discovery and the
manner in which the documents should be produced.

Mr. O'Neill argues that the Libby Claimants' allegation of
an "end run around" Judge Molloy's order is "baseless," since
it misstates Grace's intention to obtain discovery from
Dr. Whitehouse in an open and transparent process.

Given the fact that Dr. Whitehouse resides in Spokane,
Washington, Grace asserts that it is entitled under Rule 45 of
the Federal Rules of Criminal Procedure to serve a subpoena on
Dr. Whitehouse arising out of the Eastern District of Washington
without obtaining authorizations from the Bankruptcy Court or
Judge Molloy.  However, Grace sought for approval from the
Bankruptcy Court and intends to issue the subpoena out of the
District of Montana, thus, giving both the Bankruptcy Court and
Judge Molloy an opportunity to determine the appropriateness and
proper scope of the discovery.

In addition, Mr. O'Neill contends that Grace's proposed discovery
is reasonable in scope and seeks relevant information.

With respect to obligations of the Libby Claimants and Dr.
Whitehouse to produce discovery concerning certain groups of
documents, Grace maintains that:

   (1) The medical records for 700 claimants should be produced
       and not redacted.

   (2) The medical records for 800 non-claimants should be
       produced, but may be redacted to prevent disclosure of
       personal identifying information.

   (3) Medical files relating to the Whitehouse Progression
       Study should be produced and redacted only if the
       individuals involved are non-claimants.

In a case in which Dr. Whitehouse is neither a criminal defendant
nor a civil litigant, Mr. O'Neill insists that there is no
authority to stay the civil proceeding because of the pendency of
parallel criminal proceedings.  If there is, he says, that right
would belong to Grace itself.

           Libby Claimants File Judge Molloy's Order

In accordance with Rule 7.1.2(c) of the Local Rules of the
District of Delaware, the Libby Claimants filed with the
Bankruptcy Court a copy of Judge Molloy's order issued April 6,
2006, denying the Debtors' request for access to unredacted
medical records compiled by Dr. Whitehouse.

Pursuant to the Order, Judge Molloy ruled that the Debtors have
not advanced a compelling reason to allow unfettered access to
the medical files of non-testifying patients.

Judge Molloy declared that "the privacy interest the patient hold
with respect to medical records is not trifling, and cannot be
cast aside in favor of concerns over convenience, particularly
when [these] concerns are based on the [Debtors'] unfounded
conjuncture regarding the amount of time needed to redact the
records."

Judge Molloy further ruled that the content and custody of Dr.
Whitehouse's patient files will be governed by the protective
order the District Court issued with respect to ATSDR Study
Records.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


W.R. GRACE: Settles Wauconda Environmental Dispute for $1.25 Mil.
-----------------------------------------------------------------
Before W.R. Grace & Co. and its debtor-affiliates filed for
bankruptcy, their former Dearborn manufacturing facility in Lake
Zurich, Illinois, disposed of industrial wastes, including
chromate wastes in a landfill located in Wauconda, Illinois.

The landfill was a sand and gravel pit before 1941, but was
operated as a landfill until 1978.

The United States Environmental Protection Agency listed the
Wauconda Sand & Gravel Site on the National Priorities List in
1983.  Since then, the site has undergone substantial
investigation and remediation pursuant to various orders issued
by the EPA to a number of Potentially Responsible Parties.

The responding PRPs formed a group to undertake those activities.
W.R. Grace & Co. and W.R. Grace & Co. Conn. were original members
of the group and actively participated and funded site actions.

Cap and monitoring wells were installed at the Wauconda Site
landfill.  Operation and maintenance of the landfill remedy is
ongoing, James E. O'Neill, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C., in Wilmington, Delaware, tells the
Bankruptcy Court.

However, following its Petition Date, Grace ceased to fund work
at the Wauconda Site.  Nine PRPs at the Wauconda Site filed
bankruptcy claims in amounts reflecting the various Wauconda Site
operation and maintenance costs.

Mr. O'Neill states that two additional PRPs -- BFI Waste Systems
of North America, Inc., and Illinois Bronze Paint Co. -- assert
that absent an agreement, they would be entitled to file proofs
of claim in connection with the Wauconda Site.

Mr. O'Neill relates that in the Fall of 2003, the Lake County
Health Department identified vinyl chloride in residential wells
east of the Wauconda Site, including three that exceeded the
Maximum Contaminant Level of two parts per billion.

In early 2004, the EPA alleged that the site was the source of
that contamination and asked the Claimants and the Additional
PRPs -- otherwise known as the Wauconda Task Group -- to conduct
additional investigations and provide bottled water to the
occupants of certain affected residences as short-term measures.

Furthermore, the EPA indicated permanent municipal water supplies
would be a necessary component of a long-term solution.

Mr. O'Neill notes that subsequent investigations by the Wauconda
Task Group and LCHD demonstrated that vinyl chloride was detected
in wells throughout the subdivisions east and south of the
Wauconda Site.

On September 27, 2004, the EPA issued a Unilateral Administrative
Order to a group of respondents relative to field investigation
and feasibility studies to characterize and identify the
appropriate remedy for groundwater containing vinyl chloride.

The United States, on the EPA's behalf, filed a supplemental
proof of claim -- Claim No. 15506, appended to Claim No. 9634 --
against Grace for response costs associated with the Wauconda
Site.

Subsequently, the EPA and the U.S. Department of Justice have
agreed to enter into a settlement agreement with Grace, which
provided that Claim No. 15506 will be deemed withdrawn with
prejudice.

In addition, Grace's liability will be resolved, with no
additional payment by the Debtors, subject to public comment,
Court approval, and payment of the settlement amount by Grace to
the Wauconda Task Group.

The DOJ has filed a separate Notice of Lodging of the settlement
agreement with the Bankruptcy Court.

The Wauconda Task Group estimates that the costs to comply with
the UAO alone is $2,700,000, including one year of the EPA
oversight and PRP administrative costs, but no actual remedial
activities.  The amount did not include cost estimates for
installation of a public water supply for area residents.

In negotiations with the EPA to refine the scope of the ordered
work, the Claimants and the EPA agreed to the immediate
installation of a public water supply system at a cost estimated
in the range of $5,400,000 to $6,200,000 in lieu of other
activities described in the UAO.

According to Mr. O'Neill, the plan and schedule were contingent
on a low interest loan by the Illinois EPA to the Village of
Wauconda, an intergovernmental agreement being finalized by Lake
County and the Village of Wauconda, and ordinances requiring well
scaling and residential hookups.

Construction of the water supply system was initiated in November
2005, with an expected completion date of August 2006.

In October 2005, the Wauconda Task Group commenced talks with
Grace to determine whether a mutually agreeable settlement could
be reached to resolve all liabilities at the Wauconda Site
without protracted litigation.

Following arm's-length negotiations, Grace, the Claimants and the
Additional PRPs agree that:

   (a) Grace will pay $1,250,000 to resolve all of the
       Claimants' proofs of claim with respect to environmental
       conditions at the Wauconda Site; and

   (b) the Wauconda Task Group will be precluded from seeking
       other relief against Grace in connection with the
       Wauconda Site.

The Claimants will not be entitled to prepetition or postpetition
interest in any amount.

Accordingly, the Debtors ask Judge Fitzgerald to approve the
Agreement pursuant to Sections 105 and 363 of the Bankruptcy
Code.

Mr. O'Neill contends that if the Agreement is approved, the
Debtors will:

   (a) avoid protracted and expensive litigation;

   (b) cost-effectively resolve a considerable environmental
       liability; and

   (c) be protected against any future claims by the Wauconda
       Task Group members with respect to the Wauconda Site.

Mr. O'Neill insists that should the Debtors not resolve those
claims at this time, they would bear the risks inherent in
environmental remediation, namely, cost overruns associated with
unknowns, changes in regulations, and significant transaction
costs.

                         About W.R. Grace

Based in Columbia, Md., W.R. Grace & Co. -- http://www.grace.com/
-- supplies catalysts and silica products, especially construction
chemicals and building materials, and container products globally.  
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).  
James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
P.C., represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


W.S. LEE: Wants to Reject Government Supply Contract
----------------------------------------------------
W.S. Lee & Sons, Inc., and its wholly owned subsidiary, Lee
Systems Solutions, LLC, asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for permission to reject an
executory contract with the Commonwealth of Pennsylvania
Department of General Services.

The Debtors supply perishable and non-perishable food items to
various agencies of the commonwealth pursuant to the contract.  
The Debtors and the commonwealth failed to reach mutually
agreeable terms relative to the assumption of the Contract because
W.S. Lee was unwilling to assume the Contract without the
commonwealth's agreement on various requested concessions and
changes.  

The Debtors subsequently decided to reject the contract pursuant
to the terms and conditions of a settlement and release agreement.  

The salient terms of the release agreement include:

    a) the Commonwealth's consent not to assert claims for setoff,  
       recoupment or damages against the Debtors;

    b) the Debtors consent allowing the Commonwealth to procure
       directly from Liberty Foods, Inc., products that the
       Debtors would be bound to procure under the contract;  
  
    c) the adjustment of certain inventories, currently held by
       the Debtor and earmarked for the benefit of various
       corrections facilities, to reflect deliveries made to the
       facilities or additional purchases required to fill any
       order placed between the date of the settlement agreement
       and April 28, 2006;

    d) both parties' commitment to look for other agencies under
       the commonwealth who will purchase useable inventories at a
       certain date at the price indicated in the contract; and

    e) the commonwealth's consent to pay amounts due to the
       Debtors when it filed for bankruptcy and amounts due as a   
       result of postpetition supplying and delivery of goods.

Headquartered in Altoona, Pennsylvania, W.S. Lee & Sons, Inc.,
distributes food and related products to restaurants, delis,
schools, hospitals and other institutions in the mid-Atlantic
region of the United States utilizing a fleet of multi-temperature
tractors and trailers.  The Company and its wholly owned
subsidiary, Lee Systems Solutions, LLC, filed voluntary petitions
for reorganization under Chapter 11 of the U.S. Bankruptcy Code on
March 14, 2006 (Bankr. W.D. Pa. Case No. 06-70148).  James R.
Walsh, Esq., at Spence Custer Saylor Wolfe & Rose LLC, represents
the Debtors in their restructuring efforts.  Phoenix Management
Services, Inc. serves as the Debtors' financial advisor.  The
Official Committee of Unsecured Creditors is represented by Robert
S. Bernstein, Esq., at Bernstein Law Firm, P.C., in Pittsburgh,
Pennsylvania.  When the Debtors filed for protection from their
creditors, they listed less than $50,000 in total assets and $1
million to $10 million in debts.


WAMU MORTGAGE: Moody's Puts Low-B Rating on 2 Certificate Classes
-----------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by WaMu Mortgage Pass-Through Certificates,
Series 2006-AR5, and ratings ranging from Aa1 to Ba2 to the
subordinate certificates in the deal.

The securitization is backed by Washington Mutual Bank originated
adjustable-rate mortgage loans with a negative amortization
option.  The ratings are based primarily on the credit quality of
the loans, and on the protection from subordination.  Moody's
expects collateral losses to range from 0.85% to 0.95%.

Washington Mutual Bank will service the loans.

The complete rating actions:

    WaMu Mortgage Pass-Through Certificates, Series 2006-AR5

     * Cl. A-1A, Assigned Aaa
     * Cl. A-1A2A, Assigned Aaa
     * Cl. A-1A2B, Assigned Aaa
     * Cl. A-1B1, Assigned Aaa
     * Cl. A-1B2, Assigned Aaa
     * Cl. A-1B3, Assigned Aaa
     * Cl. X, Assigned Aaa
     * Cl. R, Assigned Aaa
     * Cl. B-1, Assigned Aa1
     * Cl. B-2, Assigned Aa1
     * Cl. B-3, Assigned Aa1
     * Cl. B-4, Assigned Aa2
     * Cl. B-5, Assigned Aa3
     * Cl. B-6, Assigned A1
     * Cl. B-7, Assigned A2
     * Cl. B-8, Assigned A2
     * Cl. B-9, Assigned Baa1
     * Cl. B-10, Assigned Baa2
     * Cl. B-11, Assigned Ba1
     * Cl. B-12, Assigned Ba2


WESTERN APARTMENT: Hires Smaha & Daley as Bankruptcy Counsel
------------------------------------------------------------
Western Apartment Supply & Maintenance Company obtained authority
from the U.S. Bankruptcy Court for the Southern District of
California to employ Smaha & Daley as its bankruptcy counsel.

Smaha & Daley is expected to advise the Debtor with respect to its
financial affairs and the status of its bankruptcy case.  The firm
will also render services necessary for the proper administration
of the Debtor's estate, including the formulation of a plan of
reorganization.

John L. Smaha, Esq., a principal at Smaha & Daley, tells the Court
that he will bill $325 per hour for this engagement while other
attorneys and clerks of the firm bill between $75 and $250 per
hour.  Mr. Smaha discloses that the firm has already received an
$11,000 retainer from the Debtor.

Mr. Smaha assures the Court that his firm does not represent any
interest adverse to the Debtor or its estate.

Mr. Smaha can be reached at:

         John L. Smaha, Esq.
         Smaha & Daley
         7860 Mission Center Court, Suite 100
         San Diego, California 92108
         Tel: (619) 688-1557
         http://www.smaha-daley.com/

Headquartered in San Diego, California, Western Apartment Supply &
Maintenance filed for chapter 11 protection on Apr. 18, 2006
(Bankr. S.D. Calif. Case No. 06-00821).  John L. Smaha, Esq., at
Smaha and Daley, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed total assets of $18,045,054 and total debts of
$18,131,069.


WESTERN APARTMENT: U.S. Trustee Unable to Appoint Official Panel
----------------------------------------------------------------
Steven Jay Katzman, the U.S. Trustee for Region 15, reports to the
U.S. Bankruptcy Court for the Southern District of California that
he is unable to appoint an Official Unsecured Creditors Committee
of Western Apartment Supply & Maintenance Company's chapter 11
proceeding pursuant to Section 1102 of the Bankruptcy Code.

Mr. Katzman tells the Court that despite his efforts, there was an
insufficient number of creditors willing to serve as Committee
members.

Headquartered in San Diego, California, Western Apartment Supply &
Maintenance filed for chapter 11 protection on Apr. 18, 2006
(Bankr. S.D. Calif. Case No. 06-00821).  John L. Smaha, Esq., at
Smaha and Daley, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed total assets of $18,045,054 and total debts of
$18,131,069.


WESTERN IOWA: Court Orders Murphy Tractor to Turnover Sold Assets
-----------------------------------------------------------------
The Hon. Timothy J. Mahoney of the U.S. Bankruptcy Court for the
District of Nebraska ordered Murphy Tractor & Equipment Company,
holding certain of Western Iowa Limestone, Inc.'s assets, to
turnover those assets to Natural Materials, LLC.

As reported in the Troubled Company Reporter on Feb. 22, 2006, the
Court authorized the Debtor to sell substantially all of its
assets, free and clear of all liens, claims, encumbrances and
interests, to Natural Materials.  Among the assets purchased are a
John Deere 400D haul truck and an engine of a 1999 Komatsu D65
PX-12 Dozer.

As of the date of closing of the sale, Murphy had possession of
the truck and the dozer's engine for the purpose of conducting
repairs at the Debtor's request.

Murphy refused to turnover the dozer engine and truck to Natural
Materials and claims a mechanics lien on both pieces of equipment.

The Debtor asserted that if Murphy has a valid lien or interest in
the equipment, Murphy should bring a claim against the proceeds of
the sale and not against the equipment and Natural Materials.

Headquartered in Harlan, Iowa, Western Iowa Limestone, Inc., is a
construction company and a producer of limestone.  The Company
filed for chapter 11 protection on Dec. 12, 2005 (Bankr. D. Neb.
Case No. 05-85930).  Richard D. Myers, Esq., and Alan E. Pedersen,
Esq., McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O., represent
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$1 million to $10 million and estimated debts of $10 million to
$50 million.


WINDSWEPT ENVIRONMENTAL: Files 2006 Third Quarter Financials
------------------------------------------------------------
Windswept Environmental Group, Inc., delivered its financial
results for the quarter ended March 28, 2006, to the Securities
and Exchange Commission on May 24, 2006.

Windswept earned $758,566 of net income on $7,213,546 of revenues
for the quarter ended March 28, 2006, as compared to $109,259 of
net income on $4,801,832 of revenues for the quarter ended
March 29, 2005.

At March 28, 2006, the Company's balance sheet showed $21,730,180
in total assets, $9,668,649 in total liabilities, $1,300,000 in
redeemable preferred stock, and $10,761,531 in stockholders'
equity.

Management said the Company has encountered difficulty with cash
collections and slow cash flow due primarily to three factors:

   1. customers refusing to pay prior to receiving insurance
      reimbursements;

   2. customers' facility managers needing to wait for insurance
      adjustors to approve work before the remission of payment;
      and

   3. certain customers refusing to pay in connection with
      disputed change orders.

Full-text copies of the Company's financial statements for
the quarter ended March 28, 2006, are available for free at
http://ResearchArchives.com/t/s?b1f

                        Going Concern Doubt

Massella & Associates, CPA, PLLC, in Syosset, New York, raised
substantial doubt about Windswept Environmental Group, Inc.'s
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
June 28, 2005.  The auditor pointed to the Company's recurring
losses from operations, difficulty in generating sufficient cash
flow, and working capital and stockholders' deficiencies.

Based in Bay Shore, New York, Windswept Environmental Group, Inc.,
through its wholly owned subsidiary, Trade-Winds Environmental
Restoration, Inc. -- http://www.tradewindsenvironmental.com/--  
provides a full array of emergency response, remediation, disaster
restoration and commercial drying services to a broad range of
clients.  The Company specializes in hazardous materials
remediation, microbial remediation, testing, toxicology, training,
wetlands restoration, wildlife and natural resources
rehabilitation, asbestos and lead abatement, technical advisory
services, restoration and site renovation services.


WINN-DIXIE: Bid for Louiseville Warehouse Must Be Submitted Today
-----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to authorize
Winn-Dixie Logistics, Inc., to sell a warehouse facility located
in Louisville, Kentucky, together with all attached improvements,
to Seay Properties, LLC, or to a party submitting a higher or
better offer, free and clear of liens, claims, and interests.

Before filing for bankruptcy, the Debtors operated the Warehouse
Facility to supply their Kentucky grocery stores.  Since then,
the Debtors have exited the Kentucky market and no longer need
the Louisville Warehouse Facility, D. J. Baker, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in New York, tells the Court.

DJM Asset Management, Inc., assisted the Debtors in marketing the
Louisville Warehouse Facility.  The Debtors received three
offers, including Seay Properties' offer for $3,750,000, which is
the highest or otherwise best offer.

                    Facility Purchase Agreement

On April 13, 2006, WD Logistics and Seay Properties entered into
a Facility Purchase Agreement, as amended.

Seay Properties has deposited $125,000 in escrow.

Pursuant to the Court-approved bidding procedures, the initial
minimum overbid must be at least $3,862,500.

If WD Logistics refuses to close the transaction, and Seay
Properties otherwise is ready, willing, and able to close, then
Seay Properties will be entitled to recover from WD Logistics all
of its actual documented out-of-pocket expenses, up to a maximum
amount of $50,000.

In the event it is not the successful bidder, Seay Properties
will be entitled to a termination fee of up to $100,000 for its
actual and reasonable costs and expenses incurred.

The Debtors will be responsible for paying Seay Properties'
Broker 3% of the Purchase Price, only if the transaction is
consummated at the date and time of Closing.

             Solicitation of Higher and Better Offers

Any person or entity interested in submitting a higher and better
bid for the Assets must submit a bid so that it is received on or
before June 12, 2006, by:

           James Avallone at DJM
           445 Broadhollow Road, Suite 417
           Melville, NY 11747

All bids must comply with the Court-approved bidding procedures.

To qualify as a competing bid, the offer must net the Debtors'
estates at least $3,862,500 and be accompanied by a certified
check made out to Smith, Gambrell & Russell, LLP, as Escrow
Agent, in an amount equal to 10% of the competing bid.

If the Debtors receive a higher or better offer for the Assets,
they will conduct an auction at 10:00 a.m. Prevailing Eastern
Time, on Wednesday, June 14, 2006.

                Kentucky Taxing Authorities Object

Susan F. Stivers, Esq., tells the Court that the Kentucky Taxing
Authorities have statutory liens on both the real and personal
property of the Debtors for delinquent property taxes for the
2005 tax year.  These liens cannot be defeated by gift, devise,
sale, alienation, or any means and attaches to all property owned
or subsequently acquired by the Debtors.

According to Ms. Stivers, the taxes due for 2005 are not listed
in the Permitted Encumbrances.

The Taxing Authorities object to the sale to the extent the
Debtors are attempting to defeat payment of delinquent ad valorem
taxes.  Ms. Stivers notes that the Facility Purchase Agreement
provides for payment of all 2005 and prior taxes before the
closing.  Therefore, the Debtors should be required to pay their
delinquent taxes prior to closing the sale of the warehouse
facility.

The Taxing Authorities also cannot determine, from the Debtors'
description, which parcels of land are being sold.

Ms. Stivers asserts that the Taxing Authorities are not waiving
any defenses they may have, including sovereign immunity.

The Taxing Authorities ask the Court to:

    (a) require the Debtors to pay their delinquent real and
        personal property tax liabilities prior to closing the
        sale of the Louisville warehouse facility or not approve
        the sale of the facility;

    (b) require the Debtors to advise the Taxing Authorities
        concerning the description of the property to be sold; and

    (c) grant them their costs and fees incurred in the defense of
        the Debtors' sale motion.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Miami Outparcels Bids Must Be Submitted Today
---------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to sell Winn-Dixie Stores, Inc.'s fee simple title interest in the
Miami Outparcels and all related appurtenances, rights, easements,
rights-of-way, tenements and hereditaments, free and clear of
liens, claims and interests, and subject to higher or better
offers.

The Debtors lease Store No. 388 located in a shopping center at
18300 SW 137th Avenue in Miami, Florida.  The Debtors also own
three pieces of real property adjacent to the Store.

The Debtors have no development plans for the Miami Outparcels
and selling the Miami Outparcels will generate cash for their
estates, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York, tells the Court.

Mr. Baker relates that through the marketing assistance of DJM
Asset Management, Inc., the Debtors have received five offers for
the Miami Outparcels, including Universal Holding Company's offer
for $1,400,000, which is the highest and best offer.

According to Mr. Baker, any sale of the Miami Outparcels,
including the proposed sale to Universal Holding, will include
exclusive use restrictions to assure that no entity may develop
the outparcels in a way that competes with Store No. 388.

                        Purchase Agreement

On March 23, 2006, the Debtors and Universal Holding entered into
a Real Estate Purchase Agreement, which terms include:

    (a) Universal Holding has deposited an initial earnest money
        deposit of $50,000 and a second deposit of $100,000 with
        the escrow agent.  At Closing, the combined deposits will
        be credited against the Purchase Price and the unpaid
        balance of the Purchase Price will be due and payable in
        cash;

    (b) Neither Universal Holding, nor its tenants, subtenants,
        licensees, or successors and assigns, will engage directly
        or indirectly, in any of these uses within the Property:

        -- supermarket, grocery, bakery or delicatessen;

        -- sale of meat, seafood, vegetables/fruit/produce, dairy
           products or frozen foods for off-premises consumption;

        -- sale of pet products, paper products and cleaning
           products;

        -- pharmacy or prescription drug concession;

        -- sale of beer and wine for off-premises consumption;

        -- sale of liquor and spirits for off-premises
           consumption;

        -- photo lab or film development business;

        -- discount general stores, dollar stores, dime stores,
           thrift shops, and consignment shops; or

        -- convenience stores, whether stand-alone or adjunct to
           a gas station or restaurant use;

    (c) Pursuant to the Court-approved bidding procedures, the
        initial minimum overbid must be at least $1,428,000;

    (d) If Universal Holding is not the Successful Bidder and it
        has not breached the Purchase Agreement, it will be
        entitled to a $42,000 Break-up Fee; and

    (e) If WD Stores refuses to close the transaction, and
        Universal Holding otherwise is ready, willing, and able to
        close, then Universal Holding will be entitled to recover
        from WD Stores all of its actual documented out-of-pocket
        expenses, including, but not limited to, reasonable
        attorneys' fees and costs, up to $15,000.

                          Bid Solicitation

Any person or entity interested in submitting a higher and better
bid for the Assets must submit the bid not later than 12:00 p.m.
Prevailing Eastern Time on June 12, 2006, to be received by:

           James Avallone at DJM
           445 Broadhollow Road, Suite 417
           Melville, NY 11747

If the Debtors receive a higher or better offer for the Assets,
they will hold an auction on Wednesday, June 14, 2006, at 10:00
a.m. Prevailing Eastern Time.

With the exception of the Permitted Encumbrances, there are no
interests in or claims against the Assets other than the interest
of Wachovia Bank, National Association, as Administrative Agent
and Collateral Agent.  The interest of the DIP Lender will be
satisfied because the Debtors will cause the proceeds from the
sale to be paid in accordance with the terms of the Final DIP
Order, Mr. Baker assures the Court.

                        Miami-Dade Objects

The Miami-Dade County Tax Collector asserts that its liens for ad
valorem real estate taxes for the year 2006 and subsequent years
are included as permitted encumbrances in accordance with the
Real Estate Purchase Agreement.

Brian T. FitzGerald, Esq., counsel for the Tax Collector, notes
that although not stated in the Debtors' request, the 2005 ad
valorem real estate taxes for the Miami Outparcels are due and
have not yet been paid, and the Miami-Dade County Tax Collector's
liens for the 2005 taxes constitute a claim and interest in the
Miami Property.

Mr. FitzGerald asserts that the total amount of outstanding,
delinquent 2005 ad valorem real estate taxes, if paid in June
2006 is $25,166.

Mr. FitzGerald further asserts that the full amount should be
paid in accordance with state law and customary business
practice, and the Miami-Dade County Tax Collector's liens for the
2005 ad valorem taxes will attach to the proceeds of any sale.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Stockbridge Property Bids Due Today
-----------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Court Bankruptcy Court for the Middle District of
Florida to sell Winn-Dixie Raleigh, Inc.'s fee simple title
interest in the Stockbridge Property and all related
appurtenances, rights, easements, rights-of-way, tenements and
hereditaments, free and clear of liens, claims and interests, to
BH Properties, LLC, or to a party submitting a higher or better
offer.

Before filing for bankruptcy, the Debtors developed Store No. 2701
on owned property located in Stockbridge, Georgia.  The Debtors
closed the Store on Aug. 28, 2005, and have exited this market
area.

D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, asserts that the sale of the Stockbridge Property
will save the estates at least $56,435 per year in administrative
expenses.

With the exception of the Permitted Encumbrances, there are no
interests in or claims against the Assets other than the interest
of Wachovia Bank, National Association, as Administrative Agent
and Collateral Agent, Mr. Baker tells the Court.

According to Mr. Baker, the interest of the DIP Lender will be
satisfied because the Debtors will pay the sale proceeds, to the
extent required, in accordance with the terms of the Final DIP
Order.

Through DJM Asset Management, Inc.'s marketing assistance, the
Debtors have received three offers for the Stockbridge Property,
including BH Properties' offer for $2,000,000, which is the
highest and best offer.

                  Real Estate Purchase Agreement

On April 18, 2006, WD Raleigh and BH Properties entered into a
Real Estate Purchase Agreement.

BH Properties has deposited an initial earnest money deposit of
$50,000 and a second deposit of $160,000 with the escrow agent.
At Closing, the combined deposits will be credited against the
Purchase Price and the unpaid balance of the Purchase Price will
be due and payable in cash.

Pursuant to the Court-approved bidding procedures, the initial
minimum overbid at any auction must be at least $2,060,000.

If BH Properties is not the Successful Bidder and it has not
breached the Purchase Agreement, it will be entitled to a $40,000
Break-up Fee.

             Solicitation of Higher and Better Offers

Any person or entity interested in submitting a higher and better
bid for the Assets must submit its bid no later than 12:00 p.m.
Prevailing Eastern Time on June 12, 2006, to:

           James Avallone at DJM
           445 Broadhollow Road, Suite 417
           Melville, NY 11747

All bids must comply with the Court-approved bidding procedures.

If the Debtors receive a higher or better offer for the Assets,
they will conduct an auction that will take place at 10:00 a.m.
Prevailing Eastern Time on Wednesday, June 14, 2006.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WORLDCOM INC: Contends Whittaker is a General Unsecured Creditor
----------------------------------------------------------------
Judith Whittaker, in her capacity as WorldCom, Inc. and its
debtor-affiliates' former director, participated in the MCI
Communications Corporation Board of Directors Deferred
Compensation Plan.

As of June 30, 2002, Ms. Whittaker has a balance of $345,183 in
her deferred compensation account and pursuant to a deferral
agreement she executed in 1994, was not entitled to any
distributions from the Debtors until 2003.

Ms. Whittaker filed Claim No. 3785 for $345,183, in wages, salary
and compensation and did not assert on the proof of claim form
any entitlement to secured or priority status.

Pursuant to a stipulation approved by the U.S. Bankruptcy Court
for the District of New York, the Debtors agreed to allow Ms.
Whittaker a Class 6 general unsecured claim for $345,183 and paid
that claim in accordance with the Plan of Reorganization, without
prejudice to the parties' arguments as to the status of the
deferred compensation account.  Thus, the Debtors have satisfied
their obligation under the Compensation Plan by paying Claim
No. 3785.

The only remaining question is whether the deferred compensation
account should be treated as a funded account that is Ms.
Whittaker's property or whether it should be treated as an
unsecured promise to pay by the Debtors, according to Mr.
Strochak.  "The Deferred Compensation Plan document unambiguously
answers that question," , Adam P. Strochak, Esq., at Weil, Gotshal
& Manges LLP, in Washington, D.C., says.  

The Compensation Plan provides that the Debtors' obligations will
be an unfounded and unsecured promise to pay, Mr. Strochak notes.  
Moreover, any assets, which the Debtors set aside to help cover
their financial liabilities, will remain as general assets of the
Debtors, subject to the claims of their creditors.

Ms. Whittaker does not dispute the plain language of the
Compensation Plan or its effect, Mr. Strochak notes.  Instead,
she contends that an e-mail dated November 20, 2001, from a
representative of Putnam Investments, the administrator of the
Compensation Plan, terminated her deferral agreement and effected
a distribution of all her deferred compensation so that she
became the owner of a funded account.

That interpretation is inconsistent with the facts and the law,
Mr. Strochak argues.  The record demonstrates that Ms. Whittaker
took no steps to effectuate any distribution of the deferred
compensation account prior to the Petition Date.

Mr. Strochak points out that it was only after the Debtor's
bankruptcy filing that Ms. Whittaker sought a distribution and by
that time, it was too late.  "Paying Ms. Whittaker in full for the
value of her deferred compensation account improperly would
elevate her claim over those of thousands of general unsecured
creditors who received far less."

Mr. Strochak argues that:

   (1) pursuant to the Deferred Compensation Plan, Ms.
       Whittaker's rights are as a general unsecured creditor;

   (2) even if the November 20, 2001 e-mail is deemed effective
       by the Court, the transaction is voidable under Section
       548 of the Bankruptcy Code as a fraudulent transfer; and

   (3) Ms. Whittaker's contention under Section 1114 of the
       Bankruptcy Code fails because the deferred compensation
       does not fall within the definition of "retiree benefits"
       as provided for in Section 1114(a).

                         About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global   
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.  
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged
from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


WORLDCOM INC: Court Disallows Beepwear's Claim Against SkyTel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New York expunged
Beepwear Paging Products, LLC's claim against Debtor SkyTel
Corporation.

The Court's order dates back to Beepwear's filing of claims
in WorldCom, Inc., and its debtor-affiliates' chapter 11 cases
seeking rejection damages based on a joint marketing agreement it
entered with SkyTel in 1997.  

Under the Joint Marketing Agreement, Beepwear and SkyTel were to
jointly market and promote SkyTel's one-way wireless messaging
services to end users of pager watches developed and distributed
by Beepwear.  Beepwear and SkyTel then amended the JMA in 1999 and
2000.

Following the JMA amendment, Beepwear and SkyTel disputed over
their obligations under the Amended JMA.  To settle their dispute,
the parties entered into a Settlement Agreement, Release and
Covenant Not To Sue, on Dec. 20, 2001.

The Debtors opposed Beepwear's claim contending that Beepwear did
not explain its position with respect to the plain language of the
Settlement Agreement, including, but not limited to the language:

   (a) releasing SkyTel and Beepwear from obligations under the     
       JMA; and

   (b) superseding all prior agreements between SkyTel and
       Beepwear, including the JMA.

Beepwear responded that the Settlement Agreement contains
"boilerplate language" that should not be given effect because
that language will somehow nullify well-established principles of
accord and satisfaction.

Beepwear also argued that it never elected to seek damages against
SkyTel for breach of Settlement Agreement, and is
therefore, permitted to pursue remedies against SkyTel for breach
of the JMA.

                         About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global   
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.  
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged
from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


* BOND PRICING: For the week of June 5 - June 9, 2006
-----------------------------------------------------

Issuer                               Coupon   Maturity   Price
------                               ------   --------   -----
ABC Rail Product                     10.500%  01/15/04     0
ABC Rail Product                     10.500%  12/31/04     0
Adelphia Comm.                        3.250%  05/01/21     1
Adelphia Comm.                        6.000%  02/15/06     1
Adelphia Comm.                        7.500%  01/15/04    48
Adelphia Comm.                        7.750%  01/15/09    50
Adelphia Comm.                        7.875%  05/01/09    49
Adelphia Comm.                        8.125%  07/15/03    50
Adelphia Comm.                        8.375%  02/01/08    49
Adelphia Comm.                        9.250%  10/01/02    49
Adelphia Comm.                        9.375%  11/15/09    46
Adelphia Comm.                        9.500%  02/15/04    50
Adelphia Comm.                        9.875%  03/01/05    46
Adelphia Comm.                        9.875%  03/01/07    50
Adelphia Comm.                       10.250%  06/15/11    52
Adelphia Comm.                       10.250%  11/01/06    48
Adelphia Comm.                       10.500%  07/15/04    48
Adelphia Comm.                       10.875%  10/01/10    50
Aetna Industries                     11.875%  10/01/06     8
Allegiance Tel.                      11.750%  02/15/08    44
Allegiance Tel.                      12.875%  05/15/08    32
Amer & Forgn Pwr                      5.000%  03/01/30    66
Amer Color Graph                     10.000%  06/15/10    71
Amer Plumbing                        11.625%  10/15/08    18
Antigenics                            5.250%  02/01/25    58
Anvil Knitwear                       10.875%  03/15/07    58
Arvin Capital I                       9.500%  02/01/27    70
At Home Corp.                         0.525%  12/28/18     2
At Home Corp.                         4.750%  12/15/06     4
Atlantic Coast                        6.000%  02/15/34    21
Atlas Air Inc                         8.010%  01/02/10    75
Atlas Air Inc                         9.702%  01/02/08    74
Autocam Corp.                        10.875%  06/15/14    61
Aviation Sales                        8.125%  02/15/08    44
Banctec Inc                           7.500%  06/01/08    75
Bank New England                      8.750%  04/01/99     6
Big V Supermarkets                   11.000%  02/15/04     0
Builders Transpt                      6.500%  05/01/11     1
Burlington North                      3.200%  01/01/45    54
CCH II/CCH II CP                     10.250%  01/15/10    67
Charter Comm Hld                     10.000%  05/15/11    61
Charter Comm Hld                     11.125%  01/15/11    64
Chic East Ill RR                      5.000%  01/01/54    61
CIH                                   9.920%  04/01/14    60
CIH                                  10.000%  05/15/14    60
CIH                                  11.125%  01/15/14    64
CMI Industries                        9.500%  10/01/03     0
Collins & Aikman                     10.750%  12/31/11    44
Color Tile Inc                       10.750%  12/15/01     1
Comcast Corp.                         2.000%  10/15/29    41
CPNL-Dflt12/05                        4.000%  12/26/06    27
CPNL-Dflt12/05                        4.750%  11/15/23    50
CPNL-Dflt12/05                        6.000%  09/30/14    41
CPNL-Dflt12/05                        7.625%  04/15/06    56
CPNL-Dflt12/05                        7.750%  04/15/09    71
CPNL-Dflt12/05                        7.750%  06/01/15    30
CPNL-Dflt12/05                        7.875%  04/01/08    72
CPNL-Dflt12/05                        8.500%  02/15/11    51
CPNL-Dflt12/05                        8.625%  08/15/10    51
CPNL-Dflt12/05                        8.750%  07/15/07    72
CPNL-Dflt12/05                       10.500%  05/15/06    56
Cray Research                         6.125%  02/01/11    10
Curagen Corp.                         4.000%  02/15/11    73
Curative Health                      10.750%  05/01/11    58
Dal-Dflt09/05                         9.000%  05/15/16    27
Delco Remy Intl                       9.375%  04/15/12    57
Delco Remy Intl                      11.000%  05/01/09    59
Delphi Trust II                       6.197%  11/15/33    71
Delta Air Lines                       2.875%  02/18/24    26
Delta Air Lines                       7.700%  12/15/05    27
Delta Air Lines                       7.900%  12/15/09    27
Delta Air Lines                       8.000%  06/03/23    27
Delta Air Lines                       8.187%  10/11/17    36
Delta Air Lines                       8.270%  09/23/07    75
Delta Air Lines                       8.300%  12/15/29    27
Delta Air Lines                       8.540%  01/02/07    70
Delta Air Lines                       8.540%  01/02/07    71
Delta Air Lines                       8.950%  01/12/12    66
Delta Air Lines                       9.200%  09/23/14    68
Delta Air Lines                       9.250%  03/15/22    27
Delta Air Lines                       9.320%  01/02/09    73
Delta Air Lines                       9.375%  09/11/07    73
Delta Air Lines                       9.480%  06/05/06    58
Delta Air Lines                       9.590%  01/12/17    67
Delta Air Lines                       9.750%  05/15/21    27
Delta Air Lines                       9.875%  04/30/08    68
Delta Air Lines                       9.950%  06/01/06    70
Delta Air Lines                       9.950%  06/01/06    70
Delta Air Lines                      10.000%  06/01/07    66
Delta Air Lines                      10.000%  06/01/08    66
Delta Air Lines                      10.000%  06/01/09    66
Delta Air Lines                      10.000%  06/01/10    66
Delta Air Lines                      10.000%  06/01/10    67
Delta Air Lines                      10.000%  06/01/11    51
Delta Air Lines                      10.000%  06/01/12    63
Delta Air Lines                      10.000%  08/15/08    28
Delta Air Lines                      10.060%  01/02/16    74
Delta Air Lines                      10.125%  05/15/10    27
Delta Air Lines                      10.375%  02/01/11    28
Delta Air Lines                      10.375%  12/15/22    27
Delta Air Lines                      10.500%  04/30/16    69
Deutsche Bank NY                      8.500%  11/15/16    65
Diva Systems                         12.625%  03/01/08     1
Dov Pharmaceutic                      2.500%  01/15/25    60
Dura Operating                        9.000%  05/01/09    58
Dura Operating                        9.000%  05/01/09    59
DVI Inc                               9.875%  02/01/04    13
Eagle-Picher Inc                      9.750%  09/01/13    66
Emergent Group                       10.750%  09/15/04     0
Encysive Pharmacy                     2.500%  03/15/12    73
Epix Medical Inc.                     3.000%  06/15/24    67
Exodus Comm. Inc.                    11.625%  07/15/10     0
Falcon Products                      11.375%  06/15/09     3
Federal-Mogul Co.                     7.375%  01/15/06    63
Federal-Mogul Co.                     7.500%  01/15/09    62
Federal-Mogul Co.                     8.160%  03/06/03    55
Federal-Mogul Co.                     8.250%  03/03/05    63
Federal-Mogul Co.                     8.330%  11/15/01    47
Federal-Mogul Co.                     8.370%  11/15/01    57
Federal-Mogul Co.                     8.370%  11/15/01    58
Federal-Mogul Co.                     8.800%  04/15/07    58
Finova Group                          7.500%  11/15/09    32
Ford Motor Co                         6.500%  08/01/18    68
Ford Motor Co                         6.625%  02/15/28    67
Ford Motor Co                         7.125%  11/15/25    69
Ford Motor Co                         7.400%  11/01/46    68
Ford Motor Co                         7.500%  08/01/26    69
Ford Motor Co                         7.700%  05/15/97    69
Ford Motor Co                         7.750%  06/15/43    69
Ford Motor Cred                       5.650%  01/21/14    73
Ford Motor Cred                       5.700%  01/20/12    75
Ford Motor Cred                       5.750%  01/21/14    75
Ford Motor Cred                       5.750%  02/20/14    74
Ford Motor Cred                       5.750%  02/20/14    74
Ford Motor Cred                       5.900%  02/20/14    75
Ford Motor Cred                       6.000%  01/20/15    73
Ford Motor Cred                       6.000%  02/20/15    71
Ford Motor Cred                       6.000%  03/20/14    74
Ford Motor Cred                       6.000%  03/20/14    75
Ford Motor Cred                       6.000%  11/20/14    73
Ford Motor Cred                       6.000%  11/20/14    73
Ford Motor Cred                       6.000%  11/20/14    74
Ford Motor Cred                       6.050%  02/20/15    74
Ford Motor Cred                       6.050%  04/21/14    75
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.050%  12/22/14    75
Ford Motor Cred                       6.100%  02/20/15    74
Ford Motor Cred                       6.150%  01/20/15    74
Ford Motor Cred                       6.150%  12/22/14    75
Ford Motor Cred                       6.200%  03/20/15    74
Ford Motor Cred                       6.250%  01/20/15    75
Ford Motor Cred                       6.250%  03/20/15    75
Ford Motor Cred                       6.500%  12/20/13    75
Gateway Inc.                          2.000%  12/31/11    74
GB Property Fndg                     11.000%  09/29/05    62
General Motors                        7.400%  09/01/25    71
General Motors                        8.100%  06/15/24    72
Glenoit Corp                         11.000%  04/15/07     0
Global Health SC                     11.000%  05/01/08     2
GMAC                                  4.100%  01/15/09    75
GMAC                                  5.900%  02/15/19    75
GMAC                                  6.000%  09/15/19    75
GMAC                                  6.050%  08/15/19    75
GMAC                                  6.500%  02/15/20    74
Golden Books Pub                     10.750%  12/31/04     0
Graftech Intl                         1.625%  01/15/24    75
GST Network Fndg                     10.500%  05/01/08     0
Gulf States Stl                      13.500%  04/15/03     0
HNG Internorth                        9.625%  03/15/06    33
Imperial Credit                       9.875%  01/15/07     0
Incyte Corp.                          3.500%  02/15/11    75
Inland Fiber                          9.625%  11/15/07    62
Insight Health                        9.875%  11/01/11    45
Iridium LLC/CAP                      10.875%  07/15/05    30
Iridium LLC/CAP                      11.250%  07/15/05    31
Iridium LLC/CAP                      13.000%  07/15/05    31
Iridium LLC/CAP                      14.000%  07/15/05    32
Isolagen Inc.                         3.500%  11/01/24    59
Isolagen Inc.                         3.500%  11/01/24    60
JL French Auto                       11.500%  06/01/09     0
Kaiser Aluminum & Chem.               9.875%  02/15/02    54
Kaiser Aluminum & Chem.              10.875%  10/15/06    55
Kaiser Aluminum & Chem.              10.875%  10/15/06    58
Kaiser Aluminum & Chem.              12.750%  02/01/03    12
Kellstrom Inds                        5.500%  06/15/03     0
Kellstrom Inds                        5.750%  10/15/02     0
Kevco Inc                            10.375%  12/01/07     0
Kmart Corp.                           8.990%  07/05/10     7
Kmart Corp.                           9.780%  01/05/20    10
Kmart Funding                         8.800%  07/01/10    75
Kmart Funding                         9.440%  07/01/18    43
Lehman Bros Hldg                     10.000%  10/30/13    73
Lehman Bros Hldg                     11.000%  10/25/17    75
Liberty Media                         3.750%  02/15/30    59
Liberty Media                         4.000%  11/15/29    64
Lifecare Holding                      9.250%  08/15/13    72
Macsaver Financl                      7.400%  02/15/02     2
Macsaver Financl                      7.600%  08/01/07     3
Merisant Co                           9.500%  07/15/13    68
Metamor WorldWide                     2.940%  08/15/04     1
Missouri Pac RR                       5.000%  01/01/45    73
MSX Int'l Inc.                       11.375%  01/15/08    66
Muzak LLC                             9.875%  03/15/09    59
New Orl Grt N RR                      5.000%  07/01/32    67
Northern Pacific RY                   3.000%  01/01/47    54
Northern Pacific RY                   3.000%  01/01/47    54
Northwest Airlines                    6.625%  05/15/23    49
Northwest Airlines                    7.248%  01/02/12    40
Northwest Airlines                    7.625%  11/15/23    49
Northwest Airlines                    7.875%  03/15/08    49
Northwest Airlines                    8.130%  02/01/14    74
Northwest Airlines                    8.700%  03/15/07    50
Northwest Airlines                    8.875%  06/01/06    49
Northwest Airlines                    9.179%  04/01/10    25
Northwest Airlines                    9.875%  03/15/07    52
Northwest Airlines                   10.000%  02/01/09    49
Northwest Stl&Wir                     9.500%  06/15/01     0
NTK Holdings Inc                     10.750%  03/01/14    74
Nutritional Src.                     10.125%  08/01/09    65
Oakwood Homes                         8.125%  03/01/09    10
Oscient Pharm                         3.500%  04/15/11    70
Osu-Dflt10/05                        13.375%  10/15/09     0
O'Sullivan Ind                       10.630%  10/01/08    59
Outboard Marine                       7.000%  07/01/02     0
Outboard Marine                      10.750%  06/01/08     9
Overstock.com                         3.750%  12/01/11    69
Overstock.com                         3.750%  12/01/11    69
PCA LLC/PCA Fin                      11.875%  08/01/09    22
Pegasus Satellite                     9.625%  10/15/49    10
Pegasus Satellite                    12.375%  08/01/06     9
Pegasus Satellite                    12.500%  08/01/07    10
Phar-Mor Inc                         11.720%  09/11/02     1
Piedmont Aviat                        9.900%  11/08/06     0
Pixelworks Inc.                       1.750%  05/15/24    74
Pliant-DFLT/06                       13.000%  06/01/10    42
Pliant-DFLT/06                       13.000%  06/01/10    47
Polaroid Corp.                        6.750%  01/15/02     0
Polaroid Corp.                        7.250%  01/15/07     0
Primedex Health                      11.500%  06/30/08    64
Primus Telecom                        3.750%  09/15/10    49
Primus Telecom                        8.000%  01/15/14    70
Radnor Holdings                      11.000%  03/15/10    64
Read-Rite Corp.                       6.500%  09/01/04     9
Reliance Group Holdings               9.000%  11/15/00    20
Reliance Group Holdings               9.750%  11/15/03     1
RJ Tower Corp.                       12.000%  06/01/13    75
Silicon Graphics                      6.500%  06/01/09    71
Solectron Corp.                       0.500%  02/15/34    70
Startec Global                       12.000%  05/15/08     0
Tekni-Plex Inc.                      12.750%  06/15/10    74
Tom's Foods Inc                      10.500%  11/01/04     9
Toys R Us                             7.375%  10/15/18    74
Transtexas Gas                       15.000%  03/15/05     0
Tribune Co                            2.000%  05/15/29    70
Triton Pcs Inc.                       8.750%  11/15/11    74
Triton Pcs Inc.                       9.375%  02/01/11    74
UHS-Call06/06                         0.426%  06/23/20    58
United Air Lines                      7.270%  01/30/13    45
United Air Lines                      7.870%  01/30/19    47
United Air Lines                      9.020%  04/19/12    55
United Air Lines                      9.350%  04/07/16    29
United Air Lines                      9.560%  10/19/18    58
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49    11
US Air Inc.                          10.610%  06/27/07     0
US Air Inc.                          10.680%  06/27/08     2
US Air Inc.                          10.700%  01/01/49    20
US Air Inc.                          10.850%  01/01/49    48
US Air Inc.                          11.200%  03/19/05     0
Werner Holdings                      10.000%  11/15/07    32
Winsloew Furniture                   12.750%  08/15/07    20
Winstar Comm                         14.000%  10/15/05     0
Winstar Comm Inc                     10.000%  03/15/08     0
World Access Inc.                     4.500%  10/01/02     4
World Access Inc.                    13.250%  01/15/08     4

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Shimero Jainga, Joel Anthony G.
Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A.
Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M.
Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***