TCR_Public/060620.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, June 20, 2006, Vol. 10, No. 145

                             Headlines

AGRICORE UNITED: Debt-to-Equity Move Prompts S&P's Stable Outlook
ALPINE AIR: April 30 Working Capital Deficit Tops $833,212
AMERICA CAPITAL: Case Summary & 26 Largest Unsecured Creditors
ANCHOR GLASS: Can Pay Exit Financing Loan Fees Required Under Plan
ANCHOR GLASS: Court Overrules Objection to Warehouse Liens Claims

ASARCO LLC: Gets Court Nod to Enter Into Two Settlement Agreements
ASARCO LLC: Encycle Trustee Wants Gayle Doraine as Accountant
ASPEN TECH: Receives Wells Notice Concerning Restated Financials
BACHRACH CLOTHING: Court Okays Shaw Gussis as Bankruptcy Counsel
BACHRACH CLOTHING: U.S. Trustee Appoints Seven-Member Committee

BARNETT MARINE: Suit Against Chiron Sent Back to State Court
BAYOU STEEL: Wants Entry of Final Decree Closing Chapter 11 Cases
BOMBARDIER RECREATIONAL: Extends Senior Notes Offering to June 23
BUCHOCH INC: Chapter 7 Trustee to Auction Market Lease on July 13
C2 GLOBAL: C2 Communications Sues Seven Telecom Companies

CANYON SYSTEMS: Ponzi Scheme Payments Constructively Fraudulent
CARMIKE CINEMAS: Default Cues Repayment of $150 Mil. Senior Notes
CATHOLIC CHURCH: Insurers Balk at Portland's 2nd Amended Plan
CATHOLIC CHURCH: Portland Objects to Panel's Disclosure Statement
CERVUS FINANCIAL: Obtains Approval and Vesting Order Under CCAA

CHAPIN REVENUE: Judge Paskay Okays Plan Based on Balloon Payment
CHAPMAN LUMBER: Bank's Fraudulent Conveyance Complaint Dismissed
COLETO CREEK: S&P Rates $1.16 Billion Loans at B+
COLLINS & AIKMAN: May Consider Third Avenue as Asset Buyer
COLLINS & AIKMAN: Fails to File First Quarter 10-Q on Time

COMVERSE TECH: Receives Additional Nasdaq Delisting Notice
CONTINENTAL AIRLINES: Issues $320 Million Equipment Notes
CORPORATE AND LEISURE: Voluntary Chapter 11 Case Summary
D&G INVESTMENTS: Judge Paskay Denies Plan Based on Balloon Payment
DANA CORP: Paying $70,000 Annual Retainer Fees to Directors

DAVITA INC: Withdraws Proposed Amendment to Sr. Debt Facilities
DELPHI CORP: Wants to Set Up Claims Settlement Procedures
DNSBG LLC: Case Summary & Two Largest Unsecured Creditors
ELWOOD ENERGY: S&P Places $402 Million Bonds' B+ Rating on Watch
ENERGY PARTNERS: Wants to Acquire Stone Energy for $2.2 Billion

ENTERGY NEW ORLEANS: Wants to Assume Amended Bridgeline Contract
ENTERGY NEW ORLEANS: Taps Claro Group as Insurance Consultant
FLINTKOTE CO: Courts Says Hopkins Suit Will Stay in California
FLOWSERVE CORP: Begins $14 Mil. Pump Facility Construction in July
FOAMEX INTERNATIONAL: Earns $17.05 Million on First Quarter 2006

GEO GROUP: Repays $74.6 Million of Senior Secured Credit Facility
HEMOSOL CORP: ProMetic License Issue Hearing Scheduled on July 13
HOLLINGER INC: Reports $42.6 Million Cash On Hand as of June 9
HOWARD CADEL: Case Summary & 4 Largest Unsecured Creditors
HOWARD DELIVERY: High Court Says Workers Claims Have No Priority

INFORMATION ARCHITECTS: Acquires ClearCast Communications
INTEGRATED HEALTH: Court Allows Hamilton Trust's $1.4 Mil. Claim
INTEGRATED HEALTH: Court Extends Claim Objection Period to Sept. 1
INTERPOOL INC: Reduced Leverage Prompts Moody's to Lift Ratings
J. CREW: Redeems 13-1/8% Senior Discount Debentures in Full

KAISER ALUMINUM: Class Fund & Escrow Report 1st Qtr. Fin'l Results
KATSUMI IIDA: Chapter 15 Petition Summary
KMART CORP: Permits Lora Parker to Pursue Personal Injury Claim
KMART CORP: Court Allows Michael McEvily to Continue Civil Action
KOOSHAREM CORP: S&P Rates $300 Million Facilities at B-

LEAR CORP: Tender Offer for Zero-Coupon Convertible Notes Expire
LEVEL 3: S&P Rates Amended & Restated $730 Million Facility at B-
LIBBEY INC: To Use Offering Proceeds to Close Vitro Acquisition
LILAC SUNRISE: Case Summary & 18 Largest Unsecured Creditors
LOVESAC CORP: Gets $990,000 DIP Financing Commitment from Lenders

MARSH SUPERMARKETS: Files Complaint to Resolve MSH Merger Issue
MEDIANEWS GROUP: Moody's Rates Proposed $300 Mil. Loan at Ba3
MERIDIAN AUTOMOTIVE: UST Reacts to BDO Seidman's Retention Pact
MERIDIAN AUTOMOTIVE: UST Wants Hilco Appraisal's Retention Denied
MILLENNIUM CHEMICALS: S&P Downgrades Corporate Credit Rating to B+

MIRANT CORP: Sets Talks with Shareholders in New York & Boston
MODAVOX INC: Epstein Weber Raises Going Concern Doubt
MULTI MEDIA: Sherb and Company Raises Going Concern Doubt
NAVISITE INC: Posts $3.4 Mil. Net Loss in 2006 3rd Fiscal Quarter
NORTEL NETWORKS: Unit Launches $2 Bil. Senior Notes Offering

NORTEL NETWORKS: Moody's Rates Proposed $2 Billion Sr. Notes at B3
NORTEL NETWORKS: S&P Rates Proposed $2 Billion Notes at B-
NYLIM STRATFORD: Moody's Junks Rating on $32 Million Notes
OAKWOOD HOMES: 3rd Circuit Says Double Discounting Was Wrong
OCA INC: U.S. Trustee Appoints Five-Member Equity Committee

OCA INC: Equity Panel Wants Bell Boyd as Lead Bankruptcy Counsel
OVERSEAS SHIPHOLDING: Board Okays $300 Million Share Repurchase
OXFORD IND: Debt Reduction Cues Moody's to Upgrade Ratings
PETROHAWK ENERGY: Moody's Rates Proposed $650 Million Notes at B3
PHILLIPS-VAN HEUSEN: Earns $45.5 Mil. in 2006 First Fiscal Quarter

PIER 1: Posts $22.7 Million Net Loss For First Quarter 2006
PINNACLE FOODS: Appoints Jeffrey Ansell as CEO Effective July 5
RAEBECK CONSTRUCTION: Selling Construction Equipment on June 29
REYNOLDS & REYNOLDS: Moody's Holds Ba1 Rating on $230 Mil. Notes
ROTECH HEALTHCARE: Barry Stewart Resigns as CFO and Treasurer

SHANNON INT'L: March 31 Working Capital Deficit Tops $2.4 Million
SILICON GRAPHICS: Wants Until June 30 to File Disclosure Statement
SILICON GRAPHICS: Asks Court to Decide Classification of Claims
SOUTHWEST FLORIDA: Dead Debtor's Trustee Can't Decide on Leases
ST. MARYS CEMENT: Good Performance Prompts S&P's Positive Watch

STANDARD STEEL: Moody's Junks Rating on $25 Mil. Credit Facility
STONE ENERGY: Receives $51-Per-Share Offer from Energy Partners
SYLVAN GOLF: Keen Realty to Auction Penn. Property on Thursday
TEREX CORP: Moody's Rates Proposed Senior Credit Facility at Ba3
TEXAS PETROCHEMICALS: Amends Huntsman Acquisition Deal

THERMA WAVE: PricewaterhouseCoopers Raises Going Concern Doubt
TIDEL TECH: Amends Terms of Electronic Cash Security Segment Sale
TORO ABS: Moody's Rates $4 Million Class F Notes at Ba1
TRINITY HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
U.S. CONCRETE: S&P Affirms B+ Rating & Revises Outlook to Positive

VARIG S.A.: N.Y. Supreme Court Directs Return of Aircraft
VARIG S.A.: Judge Ayoub Defers Ruling on $446 Million NVP Bid
VOLT INFORMATION: Earns $9.1 Million in 2006 Second Fiscal Quarter
W.R. GRACE: Consolidates National Union's Multi-Million Claims
W.R. GRACE: Can Contribute to Chicago Employees' Pension Plan

WATTSHEALTH FOUNDATION: Selling Business Lines and Other Assets
WINDSWEPT ENVIRONMENTAL: Inks Fee Waiver Pact with Laurus Master
WINN-DIXIE: Court Approves Reddick & Stokes Settlement Agreement
WINN-DIXIE: Wants to End Store No. 276 Lease with Carlos Salmon
ZILOG INC: Sloppy Employee Communications Revive Employee Claims

* Large Companies with Insolvent Balance Sheets

                             *********

AGRICORE UNITED: Debt-to-Equity Move Prompts S&P's Stable Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'BB' long-term corporate credit rating, on Agricore United.

At the same time, Standard & Poor's revised the outlook on the
company to stable from negative.

"The outlook revision reflects the expected conversion of the
company's convertible debentures into equity by the end of
calendar year 2006, and a significant improvement in grain
handling EBITDA expected in the current fiscal year, in light of
an above-average grain harvest in calendar 2005," said Standard &
Poor's credit analyst Don Povilaitis.

"Furthermore, there are preliminary indications of an average-to-
above-average production in 2006, which could result in continued
EBITDA improvement in fiscal 2007, matching that of fiscal 2006,
especially given current favorable soil moisture levels in western
Canada," Mr. Povilaitis added.

The cumulative effect of these factors will be a strengthening of
Agricore's credit profile starting in third-quarter fiscal 2006
(ending July 31, 2006) and continuing into fiscal 2007.

Standard & Poor's ratings on Agricore reflect the company's weak
credit protection metrics and the volatility associated with an
agribusiness segment that is very much reliant on favorable
weather conditions.  These factors are partially offset by
Agricore's leading western Canadian grain handling market share
and strengthening credit protection measures that are expected to
improve significantly in fiscal 2006 and 2007.

Agricore is the largest agribusiness in Canada, with a leading 34%
market share of 2005 grain shipments.  The company is also the No.
1 retailer of farm supplies in western Canada, with about 200
locations.  Other divisions include livestock services and
financial services, which support the core agribusiness operation.
Archer Daniels Midland Co. (A/Stable/A-1) is Agricore's largest
shareholder, with about a 23.4% interest.

Agricore United was formed as a result of the November 2001 merger
between United Grain Growers Ltd. and Agricore Cooperative Ltd.,
both of which are based in Winnipeg, Manitoba.

The stable outlook is predicated on a strong grain handling
contribution in the third quarter (ending July 31, 2006),
continued prudent financial policy, and the company proceeding
with its convertible debenture issue conversion into equity later
this calendar year.  The outlook could be changed to positive if
material improvement in credit ratios continues, as Agricore is
in the best financial position it has been in several years to
benefit from another normal-to-above-normal harvest in fiscal
2007.  The outlook could be revised to negative if the harvest in
the fall of 2006 proves disappointing and credit metrics
deteriorate.


ALPINE AIR: April 30 Working Capital Deficit Tops $833,212
----------------------------------------------------------
Alpine Air Express, Inc., filed its second fiscal quarter
financial statements on Form 10-Q for the three months ended
April 30, 2006, with the Securities and Exchange Commission on
June 14, 2006.

The Company earned $450,596 of net income on $3,748,611 of total
operating revenues for the three months ended April 30, 2006.

At April 30, 2006, the Company's balance sheet showed $22,864,031
in total assets, $11,941,515 in total liabilities, and $10,922,516
in total stockholders' equity.

The Company's April 30 balance sheet also showed strained
liquidity with $4,655,249 in total current assets available to pay
$5,488,461 in total current liabilities coming due within the next
12 months.

                           Going Concern

The Company experienced a significant loss from operations during
the years ended Oct. 31, 2005, and 2004, which resulted in part
from a receivable related to the leasing of aircraft that became
uncollectible, the operations of Alpine Air, Chile, and the
decreased volume in the USPS contracts, both in Hawaii and on the
mainland US.

The Company also has current liabilities in excess of current
assets.  While these losses and working capital deficiency raise
concern about the ability of the Company to continue as a going
concern, management has developed and implemented plans to
alleviate losses and the working capital deficiency.

These plans include obtaining new USPS contracts in Hawaii
(effective Dec. 5, 2005, and Jan. 28, 2006), the redeployment of
aircraft to reduce the Company's costs of chartering aircraft, the
discontinuation of the operations of Alpine Air Chile S.A.,
significant reductions in administrative costs, and the
postponement of payments on the related party notes payable and
the dividends on preferred stock.

Full-text copies of the Company's second fiscal quarter financial
statements on Form 10-Q for the three months ended April 30, 2006,
are available for free at http://ResearchArchives.com/t/s?ba9

Alpine Air Express, Inc., through its wholly owned subsidiary,
Alpine Aviation, Inc., provides air cargo transportation services
in the United States in Hawaii, Montana, Texas, and North and
South Dakota.  The Company also operated a limited passenger
service in Chile until 2005.  At the end of April 2004, the
Company began operating in Hawaii after being awarded by the U.S.
Postal Service with a contract.  While the USPS is the Company's
primary customer, Alpine Air has begun offering package delivery
services for local businesses between the islands in Hawaii.


AMERICA CAPITAL: Case Summary & 26 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: America Capital Corporation
        fka Viking Lithographers, Inc.
        fka Pan American Envelope Co., Inc.
        701 Brickell Avenue, Suite 2500
        Miami, Florida 33131

Bankruptcy Case No.: 06-12645

Debtor-affiliate filing separate chapter 11 petition:

      Entity                                Case No.
      ------                                --------
      TransCapital Financial Corporation    06-12644

Type of Business: The Debtors are savings and
                  loan holding companies.

Chapter 11 Petition Date: June 19, 2006

Court: Southern District of Florida (Miami)

Judge: A. Jay Cristol

Debtors' Counsel: Mindy A. Mora, Esq.
                  Bilzin Sumberg Baena Price & Axelrod LLP
                  200 South Biscayne Boulevard, Suite 2500
                  Miami, Florida 33131
                  Tel: (305) 350-2414
                  Fax: (305) 351-2242

                        -- and --

                  Paul J. Battista, Esq.
                  Genovese Joblove & Battista, P.A.
                  100 Southeast 2 Street, Suite 4400
                  Miami, Florida 33131
                  Tel: (305) 349-2300
                  Fax: (305) 349-2310

                             Total Assets     Total Debts
                             ------------     -----------
   America Capital            $52,005,000    $207,170,268
   Corporation

   TransCapital Financial    $109,309,000     $36,094,038
   Corporation

A. America Capital Corporation's 14 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Roger M. Miller, Trustee       Litigation Advance        $500,000
c/o American Financial        (2004)
Group, Inc.
1 East 4th Street
Cincinnati, OH 45202

Myron Filarski                 Indemnification           $310,210
9734 Shenandoah Drive          (1997)
Brecksville, OH 44141

William Woolridge              Indemnification           $144,918
c/o Georgetown Road            (1997)
Hudson, OH 44236

Sally Gries                    Indemnification (1997)    $144,918

John McCarthy                  Indemnification (1997)    $144,918

Estate of Harold Brown         Indemnification (1997)    $115,824
                               Guarantor Note (1992)

Robert Turchin                 Guarantor Note (1992)      $96,112

Adler Mescon                   Guarantor Note (1992)      $76,889

Georgia Albright and           Indemnification (1997)     $72,459
Northern Trust Bank of
Florida, N.A., Co-Trustees
c/o Oscar A. Hunsicker, Esq.

Estate of Robert Sanders       Indemnification (1997)     $61,801
                               Guarantor Note (1992)

Frank Tobin                    Guarantor Note (1992)      $57,667

Cornerstone Research           Litigation Expense         $30,654
                               (2005)

Christopher James              Litigation Expense         $10,218
                               (2005)

Adorno & Yoss                  Legal Services (2004)      Unknown

B. TransCapital Financial Corporation's 12 Largest Unsecured
   Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Riddle Settlement, Trustee     Settlement (1997)         $900,000
c/o John Manos, Esq.
Manos, Pappas and
Stefanski Co., LPA
45 West Avenue
Cleveland, OH 44115

Reliance Insurance             Litigation Advances       $735,000
77 Water Street                (1997)
New York, NY 10005

Roger M. Miller, Trustee       Litigation Advances       $500,000
c/o American Financial         (2004)
Group, Inc.
1 East 4th Street
Cincinnati, OH 45202

                               Legal Services (2004)      Unknown

OYBS, LLC                      Litigation Advance        $500,000
c/o Kenneth Marlin             (2004)
11921 South Dixie Highway
Suite 202
Miami, FL 33156

Cooper & Kirk                  Litigation Expense        $117,264
                               (2005)

                               Legal Services (1997)      Unknown

Cornerstone Research           Litigation Expense         $30,654
                               (2005)

Christopher James              Litigation Expense         $10,217

Jeanee LaMarca                 Settlement (1997)           $8,500

Schantz, Schatzman,            Legal Services (2004)      Unknown
Aaronson & Perlman, P.A.

Klugler, Peretz, Kaplan and    Legal Services             Unknown
Berlin, P.L.                   (2005-2006)

Adorno & Yoss                  Legal Services             Unknown
                               (2004)

Roberto Duenas                 Guarantee                  Unknown


ANCHOR GLASS: Can Pay Exit Financing Loan Fees Required Under Plan
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District or Florida
authorizes Anchor Glass Corporation to pay the proposed lender
customer fees and expenses in connection with the loans the Debtor
seeks pursuant to its Plan of Reorganization.

As reported in the Troubled Company Reporter on April 11, 2006,
the Debtor is required to obtain a revolving credit facility of
$65,000,000, and a term loan of $135,000,000 as a condition to its
Plan of Reorganization becoming effective.

Each potential lender for the exit financing indicated that to
finalize the financing, it will need to conduct certain due
diligence for which the lender charges loan fees. The Loan Fees
are not ordinary course expenses but the Loan Fees will need to be
paid before the Plan becomes effective.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  (Anchor Glass Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Court Overrules Objection to Warehouse Liens Claims
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
overrules Anchor Glass Container Corporation's objection to three
warehouse lien claims, without prejudice to the Debtors' right to
seek to avoid the lien in an adversary proceeding, and without
prejudice to the rights of the Alpha Resolution Trust:

   Claimant                             Claim No. Claim Amount
   --------                             --------  ------------
   H & O Distribution, Inc.                676        40,257
   Madison Warehouse Corp.                1151         8,725
   Midwest Warehouse                      1181        31,202

Four claimants did not file responses to the Debtor's objections
to their claims, nor did they appear at the Court hearing:

   Claimant                             Claim No. Claim Amount
   --------                             --------  ------------
   Spartan Warehouse and Distribution      378       $25,983
   Spartan Warehouse and Distribution      537        10,762
   National Distribution Centers LP        902        77,162
   New Star Warehouse                      938        21,980
   Regency Warehousing & Distribution     1179         3,742

Accordingly, the Court sustains the Debtor's objections to Claim
Nos. 378, 537, 902, 938 and 1179 by default.  To the extent each
of the five Claims assert a secured claim, the Claims are
disallowed.  However, each of the five Claims is allowed as an
unsecured claim.

The Court clarifies that the allowance of the four Claims as
unsecured claims are without prejudice to the Alpha Resolution
Trust's rights.

          National Distribution Seeks Reconsideration

In order to avoid a lien under Section 545 of the Bankruptcy
Code, Rule 7001 of the Federal Rules of Bankruptcy Procedure
requires Anchor Glass Container Corporation to file an adversary
proceeding.

The Debtor cannot avoid National Distribution Centers, LP's lien
by merely filing an objection to its proof of claim, Andrew T.
Jenkins, Esq., at Bush Ross PA, in Tampa, Florida, argues.

Mr. Jenkins adds that even if the Debtor could use its objection
to avoid a lien, National Distribution's lien is not avoidable
under the Bankruptcy Code because it does not secure a "rent"
obligation.

Thus, National Distribution asks the Court to reconsider its
order sustaining the Debtor's objection to Claim No. 902, without
prejudice to the Debtor's right to file an adversary proceeding.

                       About Anchor Glass

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  (Anchor Glass Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASARCO LLC: Gets Court Nod to Enter Into Two Settlement Agreements
------------------------------------------------------------------
ASARCO LLC obtained authority from the U.S. Bankruptcy Court for
the Southern District of Texas in Corpus Christi to enter into the
ASARCO and Tohono O'odham Settlement Agreements.

As reported in the Troubled Company Reporter on June 1, 2006,
ASARCO LLC is a defendant in United States v. Tucson (U.S.
District Court, District of Arizona, No. CV-75-039 TUC FRZ) and
Alvarez v. Tucson (U.S. District Court, District of Arizona, No.
CV 93-0039 TUC FRZ), in which it is claimed that ASARCO
contaminated groundwater through operation of its mines on the
San Xavier District of the Nation.

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

A. The ASARCO Agreement

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

    The key provisions of the Agreement are:

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

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

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

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

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

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

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

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

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

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

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

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

B. The Tohono O'odham Settlement Agreement

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

    The key provisions of the Agreement relevant to ASARCO are:

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

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

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

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

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

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ASARCO LLC: Encycle Trustee Wants Gayle Doraine as Accountant
-------------------------------------------------------------
Mike Boudloche, the Chapter 7 Trustee of Encycle/Texas, Inc.,
asks the U.S. Bankruptcy Court for the Southern District of Texas
in Corpus Christi for authority to employ Gayle L. Doraine, CPA,
PC, as his accountant.

Mr. Boudloche says that in order to perform his services as the
chapter 7 trustee, he requires the services of a certified public
accountant to:

   (a) prepare federal tax returns;
   (b) negotiate with the Internal Revenue Service; and
   (c) account services for the estate.

ASARCO LLC and its debtor-affiliates will pay the Doraine firm its
standard hourly rates:

         Professional               Hourly Rates
         ------------               ------------
         Partner/Shareholder            $175
         Senior Accountant              $150
         Staff Accountant               $125
         Bookkeeper/Clerk                $75

Ms. Doraine, owner of the firm, assures the Court that the firm
does not hold nor represent any interest adverse to the Debtors'
estate.  Ms. Doraine asserts that the firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ASPEN TECH: Receives Wells Notice Concerning Restated Financials
----------------------------------------------------------------
Aspen Technology, Inc. (NASDAQ: AZPN) has received a "Wells
Notice" letter from the staff of the United States Securities and
Exchange Commission of possible civil enforcement action regarding
the Company's originally filed financial statements for fiscal
years 2000-2004, which the Company restated in March 2005.

The letter concerns historical financial statements which were
superseded by the Company's restated fiscal year 2000-2004
financial statements that the Company filed more than a year ago
in March 2005 following a review initiated by the audit committee
of the board of directors.

A "Wells Notice" letter invites the recipient to address why a
civil enforcement action is unnecessary or inappropriate.  There
can be no assurance that the SEC will not bring a civil
enforcement proceeding against the Company.

The Company will endeavor to resolve any issues without SEC action
given that the Company:

   -- self-initiated its restatement review in October 2004, as
      publicly disclosed at that time,

   -- promptly and timely filed restated financial statements in
      accordance with NASDAQ and SEC rules,

   -- has cooperated fully with regulatory inquiry, and,

   -- in March 2006, settled the shareholder class action
      litigation concerning the same matters, providing a fund of
      $5.6 million to settle participating shareholder claims for
      all shareholders who purchased Aspen Technology shares
      between Oct. 29, 1999, and March 15, 2005, inclusive.

Based in Cambridge, Massachusetts, Aspen Technology, Inc. --
http://www.aspentech.com/-- provides software and professional
services that help process companies improve efficiency and
profitability by enabling them to model, manage and control their
operations.  The new generation of integrated aspenONE(TM)
solutions are aligned with the key industry business processes,
providing manufacturers the capabilities they need to optimize
operational performance, make real-time decisions and synchronize
the plant and supply chain.  Over 1,500 leading companies already
rely on AspenTech's software, including Bayer, BASF, BP,
ChevronTexaco, DuPont, ExxonMobil, Fluor, GlaxoSmithKline, Sanofi-
Aventis, Shell, and Total.

At March 31, 2006, Aspen Technology Inc.'s stockholders' deficit
narrowed to $38,264,000 from a $49,085,000 deficit at June 30,
2005.

                          *     *     *

As reported in the Troubled Company Reporter on Apr. 5, 2005,
Standard & Poor's Ratings Services removed its ratings on
Cambridge, Ma.-based Aspen Technology Inc. from CreditWatch, where
they were placed with negative implications on Nov. 1, 2004, and
affirmed its 'B' corporate credit and 'CCC+' subordinated debt
ratings.


BACHRACH CLOTHING: Court Okays Shaw Gussis as Bankruptcy Counsel
----------------------------------------------------------------
Bachrach Clothing, Inc., obtained authority from the United States
Bankruptcy Court for the Northern District of Illinois to employ
Shaw Gussis Fishman Glantz Wolfston & Towbin LLC, as its
bankruptcy counsel.

Shaw Gussis is expected to:

    a. give the Debtor legal advice with respect to its rights,
       powers and duties as a debtor-in-possession in connection
       with administration of its estate, operation of its
       business and management of its properties;

    b. advise the Debtor with respect to asset disposition,
       including sales, abandonments, and assumptions or
       rejections of executory contracts and unexpired leases, and
       take action as may be necessary to effectuate those
       dispositions;

    c. assist the Debtors in the negotiation, formulation and
       drafting of a chapter 11 plan;

    d. take action as may be necessary with respect to claims that
       may be asserted against the Debtor and property of its
       estate;

    e. prepare applications, motions, complaints, orders, and
       other legal documents as may be necessary in connection
       with the appropriate administration of the Debtor's case;

    f. represent the Debtor with respect to inquiries and
       negotiations concerning creditors of its estate and
       property of its estate;

    g. initiate, defend or otherwise participate on behalf of the
       Debtor in all proceedings before the bankruptcy court of
       any other court of competent jurisdiction; and

    h. perform any and all other legal services on behalf of the
       Debtor that may be required to aid in the proper
       administration of its estate.

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

       Professional               Hourly Rate
       ------------               -----------
       Members                    $385 - $525
       Associates                 $220 - $325
       Paralegals and
       Project Assistants          $60 - $170

Robert M. Fishman, Esq., a member of Shaw Gussis, 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, Bachrach Clothing, Inc. --
http://www.bachrach.com/-- manufactures and retails formal men's
wear and accessories.  The company filed for chapter 11 protection
on June 6, 2006 (Bankr. N.D. Ill. Case No. 06-06525).  Robert M.
Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it disclosed
estimated assets and debts between $10 million and $50 million.


BACHRACH CLOTHING: U.S. Trustee Appoints Seven-Member Committee
---------------------------------------------------------------
The U.S. Trustee for Region 11 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Bachrach
Clothing, Inc.'s chapter 11 case:

    1. 57th & 5th , Inc.
       730 5th Avenue, Suite 503
       New York, New York 10019

       Representative: Alisa Rothstein

    2. Neema Clothing Ltd.
       73 Gould Street #75B
       Bayonne, New Jersey 07002

       Representative: Neil Goldberg

    3. Kellwood Distribution Division
       600 Kellwood Parkway, Suite 200
       Chesterfield, Missouri 63017

       Representative: Jan McBroom

    4. Maconde Confec?oes II - Com,rcio e Ind£stria, S.A.
       Rua 5 de Outubro, 2148
       4481-951 Vila do Conde
       Portugal

       Representative: Mitchell A. Hirsh
                       RSM McGladrey
                       One South Wacker
                       Chicago, Illinois 60606

    5. Simon Property Group, LP
       115 West Washington Street
       Indianapolis, Indiana 46204

       Representative: Ronald M. Tucker

    6. General Growth Properties, Inc.
       110 North Wacker Drive
       Chicago, Illinois 60606

       Representative: Samuel B. Garber

    7. Store Kraft
       500 Irving Street
       Beatrice, Nevade 68310

       Representative: Gary L. Schacht

Documents filed with the Court did not indicate whom the Committee
has selected as their 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 Chicago, Illinois, Bachrach Clothing, Inc. --
http://www.bachrach.com/-- manufactures and retails formal men's
wear and accessories.  The company filed for chapter 11 protection
on June 6, 2006 (Bankr. N.D. Ill. Case No. 06-06525).  Robert M.
Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it disclosed
estimated assets and debts between $10 million and $50 million.


BARNETT MARINE: Suit Against Chiron Sent Back to State Court
------------------------------------------------------------
The Honorable Sim Lake of the U.S. District Court for the Southern
District of Texas declined the invitation to accept the transfer
of a post-confirmation state court lawsuit filed by Bankruptcy
Trading & Investments, L.L.C., against Chiron Financial Group,
Inc., hired by the Official Committee of Unsecured Creditors in
Barnett Marine, Inc.'s chapter 11 case.

Judge Lake's Memorandum Opinion, dated June 7, 2006, is published
at 2006 WL 1554769.

Bankruptcy Trading & Investments, L.L.C., sued Chiron Financial
Group, Inc., for breach of fiduciary duty and professional
malpractice in the 269th District Court of Harris County, Texas.
Chiron removed the lawsuit to federal court pursuant to 28 U.S.C.
Sec. 1334 and 28 U.S.C. Sec. 1452.  BTI wants the lawsuit remanded
to the Harris County District Court.  Judge Lake will grant BTI's
wish.

In April 2003, Chiron was retained by the Official Committee of
Unsecured Creditors in the Chapter 11 bankruptcy of Barnett
Marine, Inc.  Chiron is a financial advisory firm and was engaged
to provide financial advisory services for the Official Committee
in connection with Barnett Marine's indebtedness restructuring and
the development of a Chapter 11 plan of reorganization.  Chiron
represented the Official Committee from April of 2003 until
November of 2003.

In late October of 2003 Chiron began working with BTI and its
representatives regarding a plan to take control of Barnett
Marine.  BTI was a start-up bankruptcy investing firm whose two
principals, Kirk Kennedy and Charles Carr, were attorneys at
Jackson Walker L.L.P.  Jay Krasoff, a senior managing director of
Chiron, approached BTI about assigning to BTI Chiron's claims for
professional fees earned as an advisor to the Official Committee.
This would give BTI creditor standing in the Barnett Marine
bankruptcy case.  Chiron and BTI reached an agreement and Chiron
assigned its right to professional fees to BTI.  In exchange BTI
allowed Chiron a portion of the "equity upside" if BTI's
bankruptcy plan was confirmed.  Under the agreement Chiron would
provide the financial advisory services and expertise necessary
for BTI to confirm its plan.  BTI's two attorney principals would
provide legal services.  The goal of the parties was to take
control of Barnett Marine.

On November 3, 2003, Chiron resigned from representing the
Official Committee and began openly representing BTI and the Ad
Hoc Committee of Creditors of Barnett Marine as financial
advisors.  From November 3, 2003, through April 1, 2004, Chiron
provided financial services, and BTI's principals, through Jackson
Walker, provided legal services.  BTI and Chiron were not
successful in taking control of Barnett Marine, however, and on or
about April 1, 2004, Chiron and BTI met to discuss the future of
their agreement.  At that meeting Charles Carr announced that he
was terminating the agreement and withdrawing his capital from
BTI.  Without Mr. Carr's capital the parties did not have
sufficient capital to confirm and fund a plan of reorganization
for Barnett Marine, as originally proposed.

On April 7, 2004, a Settlement Term Sheet was entered into by
Chiron, BTI, Barnett Marine, and various other interested parties.
The Settlement Term Sheet resolved objections to Barnett Marine's
Plan and set out rights and obligations among the parties relative
to Barnett Marine's bankruptcy.  The Bankruptcy Court incorporated
the Settlement Term Sheet into the Debtor's Fourth Amended and
Restated Plan of Reorganization as an Immaterial Modification.
Barnett Marine's Plan was confirmed on April 16, 2004.

On January 18, 2006, BTI filed suit against Chiron in Texas state
court.  BTI alleges that Chiron breached its fiduciary duty and
committed professional malpractice by initiating, without BTI's
knowledge or consent, secret settlement negotiations with Barnett
Marine on the eve of the confirmation hearing scheduled for
April 7, 2004.

Chiron argues that BTI's suit is a challenge to the validity and
extent of the Settlement Term Sheet, and the suit threatens to
involve the Debtor and third parties in protracted litigation.
According to Chiron, the Settlement Term Sheet entered into by
Chiron, BTI, the Debtor, and other interested parties "resolved
and settled through compromise the objections to the Debtor's Plan
and settled through compromise several distinct disputes as among
the parties thereto, including without limitation the claims and
defenses between BTI and Chiron arising out of the Joint Venture."
To bolster its argument that BTI's state law claims implicate the
Settlement Term Sheet, Chiron asserts that the Barnett Marine
bankruptcy is ongoing and that BTI has submitted several post-
confirmation motions to the Bankruptcy Court.  The docket sheet in
the Barnett Marine bankruptcy reveals that although the Barnett
Marine Plan has been confirmed, litigation in the case has
continued and BTI has been an active participant in that
litigation.  BTI has filed various motions with the bankruptcy
court seeking payment of claims and attorneys' fees.  The
Bankruptcy Court even granted in part and denied in part one of
BTI's motions on March 16, 2006.  On March 27, 2006, BTI filed a
motion to reconsider, which the Bankruptcy Court denied on May 23,
2006.  BTI is appealing two orders of the Bankruptcy Court.

Judge Lake says nothing in the relevant pleadings or the
Settlement Term Sheet makes reference to any potential state law
causes of action between BTI and Chiron.  Nor does Chiron cite the
court to any pleadings or orders in the Barnett Marine bankruptcy
that contain such a reference.  Although Chiron has demonstrated
that litigation continues in the Barnett Marine bankruptcy, it has
not explained how the litigation in this case would affect the
post-confirmation litigation.  Judge Lake concludes that the
federal court does not have jurisdiction.

Barnett Marine sought chapter 11 protection in 2003 (Bankr. E.D.
La. Case no. 03-10308).  The Bankruptcy Court entered an order
confirming the Debtor's Chapter 11 Reorganization Plan on
April 16, 2004.


BAYOU STEEL: Wants Entry of Final Decree Closing Chapter 11 Cases
-----------------------------------------------------------------
Bayou Steel Corporation, River Road Realty Corporation, and Bayou
Steel Corporation (Tennessee) filed their Post-Confirmation Report
and ask the U.S. Bankruptcy Court for the Northern District of
Texas in Dallas to enter a final decree closing their chapter 11
cases.

The Bankruptcy Court confirmed the Debtors' Second Amended Joint
Plan of Reorganization on Feb. 6, 2004, and that Plan became
effective on Feb. 27, 2004.  Pursuant to the Plan, RRC and BSC-T
were consolidated and merged into BSC.  On the Effective Date, BSC
was the surviving and only corporation.

Since the Effective Date, all property proposed under the Plan to
be transferred has been transferred to the parties entitled to
receive those property, and all payments to holders of allowed
claims have been made as required under the Plan.

Pursuant to the Plan, Reorganized BSC (as defined in the Plan) has
since the Effective Date owned the Debtors' assets and has
operated the Debtors' business.  All classes of creditors for each
of the Debtors have received the distributions provided for in the
Plan and all administrative claims, including any Allowed Fee
Claims, as defined in the Plan, have been paid.  All motions,
contested matters, and adversary proceedings in these cases have
been fully and finally resolved.

Reorganized BSC has paid all the fees of the U.S. Trustee through
the end of the second quarter of 2006 and no amounts are due the
Clerk of the Court for filing fees or noticing.

Patrick J. Neligan, Jr., at Neligan Foley LLP has recently
contacted the U.S. Trustee's office and has verified that
Reorganized BSC has paid all quarterly fees through the second
quarter of 2006.  To the extent that any additional fees for the
third quarter become due and owing to the Office of the United
States Trustee, Reorganized BSC will make that payment.

                      About Bayou Steel

Bayou Steel Corporation -- http://www.bayousteel.com/--  
manufacturers light structural and merchant bar products in
LaPlace, Louisiana and Harriman, Tennessee.  The Company also
operates three stocking locations along the inland waterway system
near Pittsburgh, Chicago, and Tulsa.

Bayou and its affiliates filed for Chapter 11 protection on
Jan. 22, 2003 (Bankr. N.D. Tex. 03-30816).  Patrick J. Neligan,
Jr., Esq., at Neligan, Tarpley, Andrews & Foley, LLP, represented
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$176,113,143 in total assets and $163,402,260 in total debts.

The Bankruptcy Court confirmed on Feb. 6, 2004, the Debtors'
Second Amended Joint Plan of Reorganization and that Plan became
effective on Feb. 27, 2004.

                          *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,
Moody's Investors Service assigned a B2 corporate family
(previously called senior implied) rating to Bayou Steel
Corporation, and placed a B3 rating on Bayou's $50 million
senior secured term loan B due April 4, 2012, arranged by Credit
Suisse and sponsored by Black Diamond.


BOMBARDIER RECREATIONAL: Extends Senior Notes Offering to June 23
-----------------------------------------------------------------
Bombardier Recreational Products Inc. is extending the tender
offer expiration date for its cash tender offer relating to its
8-3/8% Senior Subordinated Notes due 2013 (CUSIP No. 09776LAC0).
The tender offer, which was scheduled to expire at midnight, New
York City time, on Friday, June 16, 2006, will be extended to
midnight, New York City time, on Friday, June 23, 2006, unless
further extended by the Company.

To date, holders of all $200 million of the outstanding principal
amount of the Notes have tendered their outstanding Notes and
delivered related consents pursuant to the tender offer and
consent solicitation described in the Offer to Purchase and
Consent Solicitation Statement dated May 19, 2006.  The last day
that holders of the Notes could have withdrawn tendered Notes and
revoked delivered consents was Friday, June 2, 2006, at 5 p.m.,
New York City time.  As a result, tendered Notes and delivered
consents may no longer be withdrawn or revoked.  BRP has entered
into a supplemental indenture relating to the proposed amendments
that have been approved as part of the consent solicitation.

Subject to satisfaction of the closing conditions described in
the Offer to Purchase, the Company expects the settlement date for
the tender offer will be Monday, June 26, 2006.  Based on the
tender offer yield of 5.404% determined June 2, 2006, and assuming
a June 26, 2006 settlement date, the total consideration to be
received by the holders of the Notes will be $1,104.46 per $1,000
principal amount of the tendered Notes, plus accrued and unpaid
interest on the tendered Notes up to, but not including, the
settlement date.  If the settlement date changes in the future,
BRP expects it will further adjust the total consideration by
calculating such amount as of such new settlement date, but still
using the same tender offer yield it announced on June 2, 2006.

As noted, the tender offer is subject to the terms and conditions
set forth in the Offer to Purchase, including the execution of a
new senior secured credit facility.  If any of the conditions to
the tender offer are not satisfied, BRP is not obligated to accept
for payment or for purchase any tendered Notes, and it may also
delay the acceptance for payment and may even terminate the tender
offer.

Merrill Lynch & Co. is acting as the sole Dealer Manager and
Solicitation Agent for the tender offer and the consent
solicitation.  The Information Agent is Global Bondholder Services
Corporation.  Requests for documentation should be directed to:

     Global Bondholder Services Corporation
     Telephone (212) 430-3774 (banks and brokerage firms)
     Toll-free (866) 470-4300

Questions regarding the tender offer and consent solicitation
should be directed to:

     Merrill Lynch & Co.
     Telephone (212) 449-4914
     Toll-Free (888) ML4-TNDR

Headquartered in Quebec, Canada, Bombardier Recreational Products
Inc. -- http://www.brp.com/-- a privately-held company, is a
world leader in the design, development, manufacturing,
distribution and marketing of motorised recreational vehicles.
The Company's portfolio of brands and products includes: Ski-
Doo(R) and Lynx(TM) snowmobiles, Sea-Doo(R) watercraft and sport
boats, Johnson(R) and Evinrude(R) outboard engines, direct
injection technologies such as Evinrude E-TEC(R), Can-Am(TM) all-
terrain vehicles, Rotax(R) engines and karts.

                          *     *     *

As reported in the Troubled Company Reporter on May 30, 2006,
Standard & Poor's Ratings Services lowered its ratings on
recreational products manufacturer Bombardier Recreational
Products Inc., including its long-term corporate credit rating,
to 'B+' from 'BB-'.  The outlook is negative.

In addition, Standard & Poor's assigned its 'BB' bank loan rating,
with a recovery rating of '1', to the Valcourt, Quebec-based
company's proposed C$250 million revolving credit facility,
indicating that the asset values provide lenders with the
expectation of a high recovery of principal in a payment
default scenario.

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


BUCHOCH INC: Chapter 7 Trustee to Auction Market Lease on July 13
-----------------------------------------------------------------
Alan Nisselson, the chapter 7 Trustee overseeing the liquidation
of Buchoch, Inc., will sell the Debtor's two market lease
agreements between Clemons Properties Partners, L.P., and the
Debtor as assignee:

    i) ground floor corner store retail premises and basement
       space located at 708 Third Avenue (corner of 43rd Street),
       New York, New York; and

   ii) office space located on the third floor of 708 Third
       Avenue, New York, New York;

Assets sold at the auction will be conducted on July 13, 2006,
1:00 p.m., at:

           The Offices of the Trustee's Counsel
           Brauner Baron Rosenzweig & Klein, LLP
           61 Broadway, 18th Floor
           New York, New York 10006

Interested buyers may contact:

           David R. Maltz, Auctioneer
           Richard B. Maltz, Licensed Real Estate Broker
           Tel: (516) 349-7022
           Fax: (516) 349-0105

All buyers are required to make a $100,000 deposit in the form of
check to Mr. Nisselson and provide the Trustee adequate assurance
that the prospective bidder can perform all obligations under the
lease agreements.

Copies of the Sale Terms, Lease Agreements and modifications are
available at the Auctioneer's website:

                   http://www.maltzauctions.com/

Objections to the proposed sale must be filed no later than July
10, 2006, by 5:00 p.m., with:

        The Clerk of the U.S. Bankruptcy Court
        Southern District of New York
        One Bowling Green
        New York, NY 10004-1408

Objecting Parties must also serve a copy of any objection upon:

        a) Alan Nisselson, Trustee
           Brauner Baron Rosenzweig & Klein, LLP
           61 Broadway, 18th Floor
           New York, New York 10006

        b) the Office of the U.S. Trustee
           Attn: Diana Adams, Esq.;
           Southern District of New York
           33 Whitehall Street, 21st Floor
           New York, New York 10004

        c) the Auctioneer

        d) Counsel to the Debtor
           Roger Bennett Radol, Esq.,
           Klein & Radol, LLC
           15 Engle Street
           Englewood, New Jersey 07631.

Buchoch, Inc., filed for chapter 7 liquidation on April 25, 2006
(Bankr. S.D.N.Y. Case No. 06-10873).  Roger Bennett Radol, Esq.,
at Klein & Radol, LLC, represents the Debtor.  Alan Nisselson,
Esq., at Brauner, Baron Rosenzweig & Klein, LLP, serves as the
chapter 7 Trustee for the Debtor's estate.


C2 GLOBAL: C2 Communications Sues Seven Telecom Companies
---------------------------------------------------------
C2 Communications Technologies Inc., a subsidiary of C2 Global
Technologies Inc. (OTC-BB: COBT.OB) has filed a patent
infringement lawsuit against AT&T, Inc., Verizon Communications,
Inc., Qwest Communications International, Inc., Bellsouth
Corporation, Sprint Nextel Corporation, Global Crossing Limited,
and Level 3 Communications, Inc.

The complaint was filed in the Marshall Division of the United
States District Court for the Eastern District of Texas and
alleges that the defendants' services and systems utilizing Voice
over Internet Protocol infringe C2's U.S. Patent No. 6,243,373,
entitled "Method and Apparatus for Implementing a Computer
Network/Internet Telephone System".

C2 is represented in this litigation by Susman Godfrey, LLP and
Monts & Ware, LLP.

C2 Global Technologies Inc. is a subsidiary of Counsel Corporation
(TSX:CXS).

                  About C2 Global Technologies

C2 Global Technologies Inc. -- http://www.c-2technologies.com/
-- is focused on licensing its patents, which include two
foundational patents in Voice over Internet Protocol technology.
C2 plans to realize value from its intellectual property by
offering licenses to service providers, equipment companies and
end-users that are deploying VoIP networks for phone-to-phone
communications.

C2 Global's stockholders' deficit at March 31, 2006 narrowed to
$76,556,000 from $77,942,000 in December 31, 2005.

                          *     *     *

                        Going Concern Doubt

On March 27, 2006, BDO Seidman, LLP and PricewaterhouseCoopers,
LLP, expressed substantial doubt about C2 Global Technologies Inc.
and subsidiaries' ability to continue as a going concern after
auditing the Company's financial statements for the year years
ended Dec. 31, 2005 and 2004.  The auditing firms point to the
Company's recurring losses, negative cash flows from operations
and net capital deficiency.


CANYON SYSTEMS: Ponzi Scheme Payments Constructively Fraudulent
---------------------------------------------------------------
John Paul Rieser, the Chapter 7 Trustee overseeing the liquidation
of Canyon Systems Corp., obtained a ruling on summary judgment
from the Honorable John E. Hoffman, Jr., of the United States
Bankruptcy Court for the Southern District of Ohio, that payments
to investors in gold coin sales programs conducted as Ponzi
schemes were constructively fraudulent as to estate creditors and
may be avoided.

Judge Hoffman concluded that the Chapter 7 Trustee is entitled to
judgment as a matter of law.  Judge Hoffman's Memorandum Opinion,
published at 2006 WL 1540834, finds and concludes:

    (1) the Debtor was continuously insolvent from its inception
        in May 1996 through the date it filed for bankruptcy;

    (2) the Debtor was engaged in a Ponzi scheme from May 1996
        through the date it filed for bankruptcy;

    (3) the Trustee may avoid all transfers of false profits,
        commissions and overrides from Canyon to the recipients
        of those transfers made within the year prior to the
        bankruptcy filing pursuant to 11 U.S.C. Sec. 548(a)(1);

    (4) the Trustee may avoid all transfers of false profits,
        commissions and overrides from Canyon to the recipients
        of those payments made from the inception of Canyon's
        operations in May 1996 through the date the company
        filed for bankruptcy pursuant to 11 U.S.C. Sec. 544(b)(1)
        and Ohio Revised Code Secs. 1336.04 and 1336.05; and

    (5) the good faith defense to a fraudulent transfer claim
        set forth in 11 U.S.C. Sec. 548(c) is not available to
        the target defendants.

Canyon Systems Corp. filed a voluntary Chapter 11 petition on July
7, 1997 (Bankr. S.D. Ohio Case No. 97-33774), following the
collapse of its gold coin sales programs.  These programs promised
participants profits of at least 35% in excess of what they had
deposited no more than 18 months earlier from purchasing and
selling gold bullion coins.  Less than a month after the Chapter
11 case was filed, and after the United States Trustee had moved
to convert the case to a Chapter 7 liquidation proceeding, or in
the alternative to appoint a Chapter 11 trustee, Canyon agreed to
convert to Chapter 7. John Paul Rieser, Esq., was appointed
Chapter 7 Trustee.  Mr. Reiser serves as his own counsel, assisted
by Patricia Jean Friesinger, Esq., at Rieser & Associates LLC in
Dayton, Ohio.

On July 6, 1999, Mr. Rieser filed in excess of 400 adversary
proceedings to recover money from individuals and companies who
had bought or sold gold coins through one of Canyon's programs.
The complaints contain multiple federal and state law causes of
action, but the gravamen of each is that prepetition transfers of
cash and gold coins made to participants in Canyon's gold coin
sales programs -- which the Trustee alleges constituted a Ponzi
scheme -- are subject to avoidance and recovery.  On March 29,
2000, Judge William A. Clark, the judge originally assigned to the
Canyon case, entered an order reassigning the case and all related
adversary proceedings to Judge Hoffman.


CARMIKE CINEMAS: Default Cues Repayment of $150 Mil. Senior Notes
-----------------------------------------------------------------
Carmike Cinemas, Inc. (NASDAQ: CKEC) disclosed in a Form 8-K
filing with the U.S. Securities and Exchange Commission that it
was repaying all of the $150 million in aggregate principal amount
of its 7.5% Senior Subordinated Notes due 2014 (CUSIP No.
143436AG8) on June 6, 2006.

On April 3, 2006, the trustee for the Notes provided notice to
Carmike that a default had occurred under the indenture governing
the Notes due to Carmike's failure to file its Annual Report on
Form 10-K for the year ended Dec. 31, 2005, in a timely manner and
comply with Section 4.03 of the indenture requiring Carmike to
file certain reports with the Securities and Exchange Commission
and to furnish them to the holders of the Notes.  The trustee's
notice triggered a 60-day cure period for the default.

Carmike did not file the Form 10-K on or before June 2, 2006, and
did not receive the requisite consents to obtain a waiver of the
default under the Notes.  Consequently, the default was not cured
during the 60-day cure period and therefore constitutes an event
of default under the indenture, which entitles the trustee under
the Notes and/or the holders of at least 25% in aggregate
principal amount of the outstanding Notes to declare all of the
Notes immediately due and payable.  On June 2, 2006, Carmike
received notice from the holders of over 25% in aggregate
principal amount of the Notes that such holders have accelerated
the Notes.  As a consequence, on June 4, 2006, $150 million in
aggregate principal amount of the Notes (representing all of the
outstanding Notes) became immediately due and payable.

As of June 20, 2006, SEC filings do not show any updates regarding
the Company's repayment of their 7.5% Senior Subordinated Notes
due 2014.

     Amendment to Credit Agreement to Use Existing Term Loan

On June 5, 2006, Carmike entered into a fourth amendment, dated as
of June 2, 2006, to its existing senior secured credit facility
which permits a portion of the existing delayed-draw term loan
commitment to be used to repay the Notes upon an acceleration
resulting from Carmike's failure to deliver its Form 10-K as
required by the indenture.  Carmike expects to repay the Notes and
all accrued and unpaid interest thereon utilizing its existing
delayed-draw term loan commitment.  Following repayment, the Notes
will no longer be outstanding and the indenture will cease to be
in effect.

The fourth amendment:

   -- extends the date by which Carmike must submit to the lenders
      audited financial statements for the fiscal year ended
      Dec. 31, 2005, and unaudited financial statements for the
      fiscal quarter ended March 31, 2006, to July 27, 2006;

   -- permits the existing undrawn $185 million delayed-draw term
      loan commitment to be used, on or before June 16, 2006, to
      repay or repurchase the Notes and to pay related fees and
      expenses.  The portion of the delayed-draw term loan
      commitment which is not used to repay or repurchase the
      Notes will be canceled;

   -- changes the pricing on Carmike's outstanding revolving and
      term loans to a margin above LIBOR or base rate, as the case
      may be, based on Carmike's credit ratings in effect from
      time to time, with the margin ranging from 2.5% to 3.5%
      for loans based on LIBOR, and 1.5% to 2.5% for loans based
      on base rate.  The applicable margins in effect on the date
      of the fourth amendment are 3.25% for loans based on LIBOR
      and 2.25% for loans based on base rate.  Immediately prior
      to the fourth amendment, the applicable margins for
      revolving loans were 2.25% (LIBOR loans) and 1.25% (base
      rate loans) and for term loans were 2.50% (LIBOR loans) and
      1.50% (base rate loans), respectively;

   -- imposes a 1% prepayment fee for optional and most mandatory
      prepayments of term loans occurring prior to the first
      anniversary of the fourth amendment, with exceptions for
      prepayments resulting from certain change of control
      transactions and the issuance by Carmike of subordinated
      debt up to $150 million; and

   -- reduces the maximum consolidated leverage ratio of Carmike
      for the period from Dec. 31, 2005, through March 31, 2006,
      from 5 to 1, to 4.35 to 1.

The fourth amendment also provides that until Carmike has
delivered and filed its audited annual financial statements for
the period ended Dec. 31, 2005, and unaudited quarterly financial
statements for the quarter ended March 31, 2006, and related
reports on Forms 10-K and 10-Q with the Securities and Exchange
Commission, the maximum principal amount of indebtedness that
Carmike may incur under its $50 million revolving credit facility
is $10 million.  No borrowings are currently outstanding under the
revolving credit facility.

The fourth amendment also provides for a waiver of certain
defaults under the credit agreement, including any default
resulting from the acceleration of the Notes.  Carmike has paid
amendment fees to those lenders approving the fourth amendment in
the aggregate amount of approximately $1 million.

                       Lease Review Update

Carmike has substantially completed the review of its capital and
operating leases and is continuing to quantify the impact of this
review on Carmike's previously issued financial statements for the
years ended Dec. 31, 2003, and Dec. 31, 2004, and the quarters
ended March 31, 2005, June 30, 2005, and Sept. 30, 2005.  The
review by PricewaterhouseCoopers LLP, Carmike's independent
registered public accounting firm, is on going.  Carmike intends
to file its Annual Report on Form 10-K for the fiscal year ended
Dec. 31, 2005, promptly upon completion, followed by the filing of
its Quarterly Report on Form 10-Q for the quarter ended March 31,
2006.  As reported in the Troubled Company Reporter on June 2,
2006, Carmike will restate the previously issued financial
statements for the years ended Dec. 31, 2003, and Dec. 31, 2004,
and the quarters ended March 31, 2005, June 30, 2005, and
Sept. 30, 2005.

Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. (NASDAQ:
CKEC) -- http://www.carmike.com/-- is a premiere motion picture
exhibitor in the United States with 301 theatres and 2,475 screens
in 37 states, as of Dec. 31, 2005.  Carmike's focus for its
theatre locations is small to mid-sized communities with
populations of fewer than 100,000.

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service placed the ratings for Carmike Cinemas,
Inc. on review for downgrade based on concerns over the company's
weak financial reporting and the potential for holders of
Carmike's $150 million of senior subordinated notes to accelerate
repayment of the obligation if the company does not file its Form
10k on or before June 2.

Carmike Cinemas, Inc. ratings placed on review for possible
downgrade include B2 corporate family rating; B1 senior secured
bank credit facility; and Caa1 senior subordinated bonds rating.
The Company's outlook was changed to rating under review from
negative.


CATHOLIC CHURCH: Insurers Balk at Portland's 2nd Amended Plan
-------------------------------------------------------------
ACE Property and Casualty Insurance Company, General Insurance Co.
of America, St. Paul Fire and Marine Insurance Co., and St. Paul
Mercury Insurance Company object to the Archdiocese of Portland in
Oregon's second modified Disclosure Statement and Plan of
Reorganization on the grounds that the Plan's "neutrality
language" is overbroad.

Joseph A. Field, Esq., at Field & Jerger, LLP, in Portland,
Oregon, compared the Archdiocese's "insurance neutrality"
provision with that in Combustion Engineering, Inc.'s plan of
reorganization, in In re Combustion Engineering, Inc., 391 F.3d
190, 217 (3rd Cir. 2004).

Combustion's Plan, Mr. Field notes, provides a language that
preserves the rights of insurance companies.  The preservation
language was divided into two parts:

   (1) "super-preemptory" language, which provided that nothing
       in the Plan would "operate to, or have the effect of,
       impairing the insurers' legal, equitable or contractual
       rights. . . ."; and

   (2) a general "neutrality" provision, which preserved the
       rights of both insurers and the debtor to "assert" all
       "claims, defenses, rights or causes of action" under the
       policies, and which recognized that nothing in the Plan or
       Confirmation Order would constitute a waiver of those
       rights, claims or defenses.

In contrast, the Archdiocese's general "neutrality" language
preserves Portland's rights to "assert" claims, and did not rule
on the validity of the claims to be asserted, Mr. Field points
out.

According to Mr. Field, the proposed neutrality language in
Portland's Plan effectively collapses the "super-preemptory" and
general "neutrality" language in Combustion's case into a single
"insurance neutrality" provision.  However, the Plan provision
also affords protection to certain entities associated with
Portland, which protections are equivalent of Combustion
Engineering's "super-preemptory" protections for insurers.

As a result, the Plan provides that the Portland-related entities'
-- as opposed to just the insurance companies -- claims, rights
and defenses in the pending adversary proceeding Portland
commenced against the Insurers -- Coverage Action -- or elsewhere
will not be "affected" or "impaired" by the Plan terms.

In other words, the proposed neutrality language provides that
Portland's assignments of the Policies or the Policy rights
through the Plan will not impair its rights to coverage, Mr.
Field points out.

Mr. Field further argues that the neutrality language in the
Archdiocese's Plan directly impairs the rights of the insurance
companies by taking away their defenses to coverage, which are
based on Plan provisions.  "It would have the effect of declaring
that such Plan provision is not an impairment of the Insurance
Companies' rights," Mr. Field says.

The Disclosure Statement should disclose the fact that the Plan
has a material risk of not being confirmed for this reason, Mr.
Field adds.

Mr. Field also contends that the Archdiocese intends to use its
Plan to effect a declaration of its rights to make an assignment
of the insurance policies or its rights under those policies
without the insurers' consent.

To that extent, Mr. Field asserts that the Archdiocese's Modified
Plan should disclose that:

   (a) that finding would necessarily involve a declaration of
       the rights and obligations under the policies; and

   (b) an action to determine the rights of the parties under an
       insurance contract is a non-core proceeding over which the
       Bankruptcy Court lacks jurisdiction to enter a final
       order.

An adversary proceeding or other coverage litigation is the proper
place for the determination of the rights of the insurance
companies and the Archdiocese's entities under the insurance
policies, Mr. Field tells Judge Perris.

To the extent that the Archdiocese does not seek to have the issue
of assignability determined in the Coverage Action, a separate
adversary proceeding under Rule 7001 of the Federal Rules of
Bankruptcy Procedure or other action is appropriate, Mr. Field
contends.

It is not appropriate to determine the parties' rights regarding
the assignment of policies by simply inserting insurance related
findings into the Archdiocese's Plan or other Plan document, Mr.
Field adds.

Against this backdrop, the ACE Insurers ask Judge Perris to deny
approval of the Archdiocese's Disclosure Statement, to the extent
that it:

   (a) does not contain adequate description of the implication
       of the Plan's "insurance neutrality" language;

   (b) does not adequately disclose certain jurisdictional
       defects in the Plan;

   (c) lacks adequate information regarding material aspects of
       the Plan; and

   (d) fails to disclose material risks associated with the Plan.

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


CATHOLIC CHURCH: Portland Objects to Panel's Disclosure Statement
-----------------------------------------------------------------
Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland,
Oregon, asserts that the Tort Claimants Committee's first amended
Plan of Reorganization is unconfirmable because it is not:

   -- proposed in good faith and not in accordance with Section
      1129(a) of the Bankruptcy Code; and

   -- feasible pursuant to Section 1129(a)(11).

The Tort Committee's Amended Plan is structured solely on the
premise that the Archdiocese of Portland in Oregon owns sufficient
unrestricted, unencumbered, non-trust property of a value, which
if liquidated, would be sufficient to pay all claims in full
regardless of their amount, Mr. Stilley notes.

That premise of "solvency," Mr. Stilley contends, is fatally
flawed, mathematically impossible to calculate at this time, and
is not explored or explained in any factual respect in the Tort
Committee's Amended Disclosure Statement.

                           Feasibility

The Tort Committee's Amended Plan purports to provide a claims
payment trust with $35,000,000 in initial deposit and trust deeds
covering over $400,000,000 in real property, Mr. Stilley notes.
However, the Tort Committee's Amended Disclosure Statement does
not explain where the $35,000,000 will come from.

The Tort Committee's Amended Disclosure Statement does not contain
any information about the critical funding issue, Mr. Stilley
points out.  Because the availability of the funds remains in
dispute and will not be determined until the litigation on
Perpetual Endowment Fund is finally concluded, the Tort Committee
cannot be certain that the funds will be available to help fund
the trust under its Plan.

Moreover, until the litigation regarding the parish and school
real property is finally concluded, the Tort Committee will be
unable to require that trust deeds be placed on the property, Mr.
Stilley adds.

Even assuming that the property becomes available, Mr. Stilley
asserts that the Tort Committee's promise to treat all claims,
except punitive damage claims, as unimpaired and immediately
payable on allowance is not feasible.

Until all non-punitive damage claims, including the future claims,
have been finally resolved, or at least estimated, and Judge
Perris determines that sufficient unrestricted, unencumbered
property is available to pay those claims in full, the Tort
Committee's Amended Plan cannot be confirmed or deliver on the
promises it purports to offer creditors, Mr. Stilley points out.

Although the Tort Committee has subordinated punitive damage
claims and payment of the claims will be deferred until 2022, the
Tort Committee's Amended Plan still provides that the claims will
be paid in full, either from the trust, or directly by the
Reorganized Archdiocese, Mr. Stilley notes.

As with the compensatory claims, Mr. Stilley adds, there is no
provision for pro rata distributions to guard against a race for
collection and the possibility of inequitable treatment should
there be insufficient funds to pay all punitive damage claims in
full.

                       Forced Liquidation

The Tort Committee's Amended Plan is nothing but a forced
liquidation of not only the Archdiocese's unencumbered,
unrestricted assets, but also all property that the Archdiocese
asserts is held in trust or restricted in its use, Mr. Stilley
contends.  Forced liquidations are not the goal of any Chapter 11
reorganization, Mr. Stilley asserts.

Mr. Stilley also argues that the Tort Committee's statement that
"no churches or schools will have to be sold" has no basis in fact
until the claims are liquidated, or at least estimated, and
sufficient non-church or non-school property has been finally
determined to be available to pay the claims.

The creditors and the public should not be misled into believing
that adequate liquidity and financial resources exist to pay the
claims regardless of their amount, Mr. Stilley points out.

                         No Fresh Start

The Tort Committee, according to Mr. Stilley, proposes to deny the
Archdiocese a discharge even after all property of the estate, or
its value, has been paid to claimants.  The Tort Committee wants
the Archdiocese to remain responsible for payment of any remaining
unpaid claims and any new claim.

Rather than require the Archdiocese to pay claims up to the value
of its assets, the Tort Committee seeks to destroy the
Archdiocese's ongoing mission if it cannot raise additional funds
to pay all claims in full, Mr. Stilley points out.  "This is
wholly contrary to the principles of Chapter 11."

For these reasons, the Archdiocese asks the U.S. Bankruptcy Court
for the District of Oregon to disapprove the Tort Committee's
Disclosure Statement because it is materially false and misleading
and does not contain adequate information as required by Section
1125.  Additionally, the Tort Committee's Plan is unconfirmable as
a matter of law.

The Archdiocese also asks the Court to delete certain false and
misleading statements in the Tort Committee's Amended Disclosure
Statement.

        Oregon Catholic Press Opposes Disclosure Statement

Jennifer Palmquist, Esq., at Northwest Law Firm, in Portland,
Oregon, notes that the Tort Claimants Committee's first amended
Disclosure Statement implies that:

   -- the Oregon Catholic Press has funds belonging or owing to
      the Archdiocese of Portland in Oregon; or

   -- the Archdiocese has an interest in payments, contribution
      or distribution from Oregon Catholic Press.

Neither of these statements is true, Ms. Palmquist asserts.

Ms. Palmquist relates that the Oregon Catholic Press has been an
Oregon religious nonprofit corporation since 1928.  It is
organized under O.R.S. Chapter 65 and had been granted Section
503(c)(3) status under the Internal Revenue Code.

Although the Oregon Catholic Press made contributions to the
Archdiocese, Ms. Palmquist points out that the contributions are
allowed under O.R.S. 65.077(13), which provides that a nonprofit
corporation has power to make charitable donations.

The Oregon Catholic Press, therefore, asks the U.S. Bankruptcy
Court for the District Court of Oregon to deny the approval of the
Tort Committee's Amended Disclosure Statement on the grounds that
it is inaccurate and misleading.

The Oregon Catholic Press also objects to the Tort Committee's
Disclosure Statement because it does not provide information about
assets available to fund its Plan.

Ms. Palmquist recounts that the Oregon Catholic Press has
previously raised the same objection and Albert N. Kennedy, Esq.,
at Tonkon Torp, LLP, in Portland, Oregon, the Tort Committee's
attorney, agreed to delete the objectionable language.

         Tort Panel Responds to Archdiocese's Objections

Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland,
Oregon, points out that the Archdiocese never explains how the
Tort Committee's Plan will cause a wholesale closure of churches
and schools, while Portland's Plan will not require the closure of
churches and schools.

Mr. Kennedy contends that the impact of the Tort Committee's Plan
on the Archdiocese is not materially different from the impact of
Portland's Plan.  Portland's Plan purports to pay all claims in
full, while the Tort Committee's Plan provides that all claims
will be paid in full.

Portland's Plan is conditioned on the estimation of the liability
to tort claimant, Mr. Kennedy notes.  If the U.S. District Court
for the District of Oregon estimates Portland's liability, and if
the estimation is actually sufficient to pay all claims in full,
then Portland's liability under its Plan will be no different than
its liability under the Tort Committee's Plan.

"The fact that there should be no meaningful difference between
the impact on [the Archdiocese] of either Plan begs the question
of what is the real difference between the two plans," Mr.
Kennedy points out.

The only answer can be that the Archdiocese believes that jury
trials are likely to result in significantly higher liability than
its proposed estimation methodology, Mr. Kennedy contends.  The
corollary must be that the Archdiocese does not believe that its
proposed estimation methodology will be sufficient to fund its
liabilities to claimants if claimants are allowed to exercise
their constitutional rights to a jury trial.

Moreover, the Archdiocese's estimation proposal shifts risk to
creditors without risk to itself, Mr. Kennedy asserts.  He points
out that the Archdiocese has reserved its right to withdraw its
Plan if it doesn't like the estimation.  If the estimation is too
high, Portland can simply withdraw its plan and continue to pursue
litigation on all fronts while using continued delay as leverage.

At this juncture, the Tort Committee asks Judge Perris to deny the
approval of the Archdiocese's 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. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CERVUS FINANCIAL: Obtains Approval and Vesting Order Under CCAA
---------------------------------------------------------------
Cervus Financial Group Inc. (TSX: CFG) obtained an Approval and
Vesting Order from the Superior Court of Justice (Ontario) under
the Companies Creditor Arrangement Act on June 15, 2006.

The Company filed for protection under the CCAA on June 8, 2006
and entered into an agreement with a wholly-owned subsidiary of
Macquarie Bank Limited whereby Macquarie Bank will acquire the
business of Cervus.  Macquarie established a first priority
$4 million debtor-in-possession operating facility with the
operating subsidiary of the Company, Cervus Financial Corp.

A $5 million letter of credit was previously provided by Macquarie
to the Company's bank to support its warehouse credit facility and
other banking arrangements.

The Agreement provides for the transfer of certain assets from the
Company to its wholly-owned subsidiary, Cervus Financial Corp.,
and then the sale of all of the shares of Cervus Financial Corp.
to Macquarie Bank for aggregate cash consideration of $12,500,000,
subject to certain purchase price adjustments including a
reduction for all amounts owing under the DIP Financing on the
closing date.  Both the Company and Macquarie intend to complete
the sale as soon as practicable after all conditions have been
satisfied.

A full-text copy of the Approval and Vesting Order is available
for free at: http://ResearchArchives.com/t/s?baa

After the completion of the transaction, the Company intends to
change its name to "CFG Holdings Inc."  The shares of the Company
have been suspended for trading by the Toronto Stock Exchange
indefinitely because the Company does not meet its continued
listing requirements.  After payment of known unsecured creditor
claims against the Company (creditor claims against Cervus
Financial Corp. continuing uncompromised), the estimated
distribution to shareholders is between $0.00 and $0.10 per share.
However, this amount may vary significantly due to the use of the
proposed operating facility, delays in completing the transaction,
resolution of creditors' claims and the fees and costs of
completing the proposed sale to Macquarie Bank and the completion
of the CCAA process.

                      About Macquarie Bank

Macquarie Bank is a diversified international financial services
organization, listed on the Australian Stock Exchange (ASX: MBL)
and headquartered in Sydney, Australia.  Macquarie Bank's market
capitalization is approximately $A15 billion, with total assets
under management of $A140 billion (at March 31, 2006).  Macquarie
Bank is rated P1/A2 by Moody's Investors Services and A1/A by
Standard & Poor's and employs almost 8,300 people in 26 countries.

                          About Cervus

Headquartered in Toronto, Ontario, Cervus Financial Group Inc. is
a Canadian financial services company created as an industry
initiative with leading mortgage broker companies and fixed income
investment banks to become a high-yield residential mortgage
producer.  Cervus is focused on funding and servicing insurable
conventional and high ratio insured residential mortgages
originated through mortgage brokers.  Cervus is currently licensed
under Ontario, Quebec, British Columbia and Alberta mortgage
broker/lender legislation and is seeking similar regulatory
approvals in other Canadian Provinces as required.  With
additional sales offices in Vancouver, Calgary and in Montreal,
Cervus Financial Group Inc. conducts all lending operations
through its wholly-owned subsidiary, Cervus Financial Corp.


CHAPIN REVENUE: Judge Paskay Okays Plan Based on Balloon Payment
----------------------------------------------------------------
The Honorable Alexander L. Paskay entered an order confirming the
chapter 11 plan proposed by Chapin Revenue Cycle Management, LLC,
that proposes to repay its secured creditor small monthly payments
and a balloon payment 18 months after the plan's effective date
after a promised refinancing transaction.  Judge Paskay says the
Plan is feasible and passes muster under 11 U.S.C. Sec.
1129(a)(11).

Chapin Revenue Cycle Management, LLC, is in the business of
providing auditing and collection services to hospitals and
insurance companies for managed care receivables on a contingency
fee basis.  The Debtor began operating in January, 2003. The
Debtor's initial capital requirements were met by loans from two
sources: individuals (friends and family), including Keith
Henthorne, the current President, Chief Executive Officer, and
majority shareholder of the Debtor, and Katherine Seletos, a
former officer, director, and member of the Debtor; and a line of
credit taken out from AmSouth Bank.  In 2004, Ms. Seletos left the
Debtor and initiated litigation over her loans to the Debtor and
money alleged to be owed to her by the Debtor under an employment
agreement.  In this same time period, AmSouth began litigation
over the line of credit.  AmSouth sued not only the Debtor, but
also the principals of the Debtor who had given personal
guarantees under the line of credit, including Mr. Henthorne and
Ms. Seletos.

D.K. Smith Holdings Corporation subsequently acquired AmSouth's
interest in the note and security agreement.  As successor to
AmSouth's fully matured claim, D.K. Smith filed a secured claim in
the amount of $539,850.26.  The Plan classifies the D.K. Smith
claim in Class One.  The Plan provides for D.K. Smith to retain
its lien and receive payment in full by monthly payments of
principal and interest at the contract rate, calculated on a ten
year amortization basis, for sixty months, with a balloon payment
due within thirty days following the sixtieth month.  The Plan
also provided for a temporary injunction in favor of the
Guarantors.  The First Modification to Debtor's Amended Plan of
Reorganization, filed January 23, 2006, extended D.K. Smith's lien
to the Debtor's goods, furniture, fixtures, equipment. The First
Modification also shortened the payment schedule, providing for
the balloon payment after thirty-six months, and provided for a
Note and Security Agreement to replace the original AmSouth loan
documents.  The Second Modification to Debtor's Amended Plan of
Reorganization, filed January 25, 2006, enhanced the Debtor's
reporting requirements and default events under the loan documents
provided for by the First Modification, and limited the outside
duration of the Guarantors Temporary Injunction to one year.  The
Third Modification to Debtor's Amended Plan of Reorganization,
filed on Feb. 13, 2006, shortened the balloon payment to the
eighteenth month, restricted payments to Mr. Henthorne under the
Plan, and eliminated the Temporary Injunction.

A court may not confirm a Chapter 11 plan of reorganization unless
the plan meets certain requirements. 11 U.S.C. Sec.   1129(a).
One of these requirements is feasibility of the Plan, namely that
"[c]onfirmation of the plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of
the debtor or any successor to the debtor under the plan. . . ."
Sec. 1129(a)(11).  The proponent of the Plan must show that the
Plan "offers at least a reasonable prospect of success and . . .
is workable."  In re Landmark at Plaza Park, Ltd., 7 B.R. 653
(Bankr. D. N.J. 1980); In re Hass, 162 F.3d 1087, 1090 (11th Cir.
1998).  A showing of a reasonable assurance of success, not a
guarantee of success, is required.  See In re New Midland Plaza
Assocs., 247 B.R. 877, 885 (Bankr. S.D. Fla. 2000); In re
Patrician St. Joseph Partners L.P., 169 B.R. 669, 674 (D. Ariz.
1994) ("The mere potential for failure of the plan is insufficient
to disprove feasibility.").

In considering feasibility, a court looks at the earning power of
the business; its capital structure; the economic conditions of
the business; the continuation of present management; and the
efficiency of management in control of the business after
confirmation. In re Immenhausen Corp., 172 B.R. 343, 348 (Bankr.
M.D. Fla. 1994).  Plans that involve "pipe dreams" or "visionary
schemes" are not confirmable.  In re Sovereign Oil Co., 128 B.R.
585, 587 (Bankr. M.D. Fla. 1991).

Judge Paskay is satisfied that the projections in the Pro Forma
Statements of Operations provided by the Debtor are realistic and,
considering the earning power and the economic conditions of the
Debtor's business, warrant the conclusion that the Plan is not a
"pipe dream."  The updated Pro Forma projects net operating income
of $328,641 in the year 2006, $382,582 in 2007, and $573,918 in
2008.  After projected payments under the Plan, this would result
in net income of $42,772 in the year 2006, $147,713 in 2007, and
$339,049 in 2008.

The Debtor has realized a significant savings in its previous
expenses due to the rejection of its pre-petition lease for office
space.  The updated pro forma provides for a $300,000 reserve for
the landlord, Teachers Insurance & Annuity Association of America,
damage claim.  The proof of claim actually filed was for
$157,692.20.  The amount the Debtor will have to pay to the
landlord as liquidated damages is actually overstated in the
updated Pro Forma, giving a further cushion to the Debtor in its
operating income projections.

The original Plan provided that Mr. Henthorne would not have to
repay $86,000 to the estate, would be a paid employee of the
Debtor after reorganization, and would receive distributions under
the Plan.  The updated Pro Forma also does not reflect the changes
made to the Plan by the Third Modification.  Under the Third
Modification, Mr. Henthorne will repay the approximately $86,000
bonus payment made to him by the Debtor, and the Debtor will not
pay any salary to Mr. Henthorne nor make any distributions on
behalf of Mr. Henthorne's Class Two claims until D.K. Smith's
claim is paid in full.  These changes will result in a savings of
$22,100 per month.

The Debtor's previous experiences seem to indicate that the
projected revenues will be difficult to reach.  However, these
experiences reflect start-up expenses incurred by the Debtor when
it began operations in 2003.  Moreover, the current projections
paint a different picture.  The Debtor's summary of cash
collateral reflects $234,721 in cash on hand and $381,894 in
accounts receivable as of December 31, 2005, a 28% increase, or
$133,089, in cash and accounts receivable post-petition.

Mr. Henthorne testified as to the basis of the Pro Forma
statements, and that the Debtor has several new clients and new
projects from existing clients.  Although Mr. Henthorne testified
that he does outside consulting work in addition to his management
responsibilities with the Debtor, he also testified that he works
full-time for the Debtor and is capable of managing the
reorganization.  There was also expert testimony that the Debtor
would have no difficulty obtaining financing, so that making the
balloon payment on time would not be a problem.  Finally, Rene
Zarate, the Debtor's accountant, testified that, in his opinion,
based on the revenues the Debtor expects to generate from new and
current clients, the Plan is feasible.  Accordingly, Judge paskay
is satisfied that the Plan has a reasonable prospect of success
and is workable, and is confirmed.

Chapin Revenue Cycle Management, LLC, filed for chapter 11
protection in 2005 (Bankr. M.D. Fla. Case No. 05-13469-ALP).


CHAPMAN LUMBER: Bank's Fraudulent Conveyance Complaint Dismissed
----------------------------------------------------------------
Quad City Bank is owed more than $2.7 million on account of loans
made to Chapman Lumber Co. secured by liens on the company's real
estate, equipment, inventory, vehicles, and other assets.

On March 9, 2006, the Bank commenced an adversary proceeding
against Keith Chapman and Iowa Lumber and Dimension, LLC.  The
Complaint contains multiple counts for Fraudulent Transfers,
Preferential Transfers, Conversion, Misrepresentation, Breach of
Fiduciary Duty, Inequitable Conduct, Personal Guaranty, Pierce the
Corporate Veil, Negligence, Conversion, and Unjust Enrichment.
Mr. Chapman was an officer of the Debtor corporation and also
controlled Iowa Lumber and Dimension, LLC.  The essence of the
complaint is that the Bank alleges that Mr. Chapman transferred
collateral securing the bank's loans to himself or his
corporation.  Additional counts in the Complaint allege that Mr.
Chapman further injured the Bank's rights through wrongdoing as an
officer of the Debtor corporation.

The Defendants assert that the Complaints erroneously state the
Chapter 7 Trustee assigned the estate's claims to the Bank. At the
time the Complaints were filed, the Trustee made no such
assignment.  The Defendants assert only the Chapter 7 Trustee can
assert fraudulent and preferential transfer claims on behalf of
the bankruptcy estate and the Complaints should be dismissed for
want of jurisdiction.

The Honorable Paul J. Kilburg, in an Order published 2006 WL
1620221, says the Defendants are correct.  The Bank did not have
standing to pursue preference and fraudulent transfer avoidance
claims.  Even assuming that it might have been appropriate to
grant the creditor derivative standing to pursue such claims, the
creditor, prior to commencing an avoidance proceeding, had to
first obtain the bankruptcy court's permission to prosecute such
claims in the trustee's stead.

Mr. Chapman told the Bankruptcy Court in his Motion to Dismiss
that Iowa Lumber and Dimension is an LLC created postpetition and
has no relationship to Chapman Lumber.  Judge Kilburg's decision
doesn't address the merits of that argument.

Chapman Lumber Co. Inc. -- http://www.chapmanlumber.net/-- and
-- http://www.chapmanlumber.net/-- sought chapter 11 protection
on February 8, 2005 (Bankr. D. Iowa Case No. 05-00408) and is
represented by Joseph A. Peiffer, Esq., at Day Rettig Peiffer,
P.C.


COLETO CREEK: S&P Rates $1.16 Billion Loans at B+
-------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating
to Coleto Creek Power L.P.'s:

  -- $935 million first-lien term loan B due 2013;
  -- $170 million synthetic LOC facility maturing 2013; and
  -- $60 million working capital revolver maturing 2011.

The outlook is stable.  Standard & Poor's also assigned its '2'
recovery rating to the facilities, indicating substantial (80% to
100%) recovery of principal if a default occurs.

Coleto Power is a wholly owned partnership subsidiary of American
National Power Inc., which in turn is 100% owned by International
Power PLC (IP; BB-/Stable/--).  The synthetic LOC facility will
provide the project with a six-month debt-service reserve and
support collateral requirements under certain power-purchase
agreements, while the revolver is available for general corporate
purposes.

"All three facilities are secured by the first-perfected security
interest in all the assets of, and equity, in Coleto Power, but
are nonrecourse to ANP and IP.  These ratings are subject to the
receipt of final project documentation under substantially
identical terms," said Standard & Poor's credit analyst Swami
Venkataraman.

Coleto Power will use the loans' proceeds to purchase the 632 MW
coal-fired Coleto Creek plant located in the Electric Reliability
Council of Texas region from Coleto Creek WLE L.P., a 50/50
partnership of Sempra Energy (BBB+/Stable/A-2) and The Carlyle
Riverstone Group, for a total of $1.14 billion.  The plant will be
Coleto Power's sole asset and cash from the plant will support
debt service on all borrowings.

The 'B+' rating reflects these risks:

  -- A very high debt burden of $1,479 per kilowatt at closing.

  -- Substantial refinancing risk when the term loans mature in
     June 2013.  Upon maturity, between $379 and $773 million of
     debt may have to be refinanced depending on power market
     prices, or about $599 to $1,224 per kW.

  -- Exposure to merchant risk could result in insufficient cash
     flows to fund capital expenditures, especially in 2008 and
     2010; or create refinancing risks if market conditions are
     unfavorable at the 2013 maturity.

  -- Ongoing exposure to Powder River Basin coal and emissions
     price volatility in the project's cost structure.

  -- Exposure to a potential short position created by the
     modified J. Aron & Co. PPA that is "unit-firm."

These risks are tempered by these strengths:

  -- The plant's market position in ERCOT is favorable because
     generation resources consist of mostly gas/oil-fired capacity
     and natural gas is the marginal fuel virtually all the time.
     This provides for strong operating margins for a coal-fired
     unit such as Coleto Creek.

  -- The plant's output is 90% contracted through June 2008 and at
     least 25% through December 2010.  In addition, starting in
     July 2009, a gas spread option agreement limits Coleto's
     exposure to gas prices below $6.75 per million BTU on about
     300 MW of capacity through the loan's maturity in June 2013,
     as long as gas prices remain above $4 per mmBTU.

  -- The 100% sweep of surplus cash flows is a significant credit
     strength.

  -- A $40 million capital expenditure reserve funds the
     pollution-control equipment ("baghouse") construction.  Loan
     covenants also require the reserve to hold monies to fund
     capital spending for the next 24 months.

  -- The plant's operating record is strong, with the five-year
     average availability at 91.4% and heat rate at 10,034 BTUs
     per kilowatt-hour.

  -- Lenders' collateral package is strong and includes a first-
     priority pledge of the asset and ownership interests in the
     plant.


COLLINS & AIKMAN: May Consider Third Avenue as Asset Buyer
----------------------------------------------------------
Collins & Aikman Corp. may select Third Avenue Management, LLC, to
acquire its assets and recapitalize the business, Bloomberg News
says, citing a report by Automotive News.

Third Avenue, who holds $250.8 million in senior notes from
Collins & Aikman, proposes to convert that debt into equity,
Automotive News said.

The Debtors have been pursuing a dual-track process of undergoing
a merger and acquisition process for their businesses while
developing a viable and consensual stand-alone plan of
reorganization.  As previously reported, the Debtors have been in
contact with several parties to sponsor a stand-alone plan, and
the Debtors' discussions with those parties have been very
promising.  In addition, the Debtors have received several
favorable indications of interests from potential purchasers in
the merger and acquisition process.

In March 2006, International Automotive Components Group, a joint
venture among WL Ross & Co. LLC, Franklin Mutual Advisers, LLC,
and Lear Corporation, completed the acquisition of certain United
Kingdom, German, Dutch, Belgian, Spanish and Swedish businesses
of Collins & Aikman Europe.  IAC was also expected to close on
additional businesses in the United Kingdom, Czech Republic and
Slovakia.  The purchase price, which was subject to certain final
adjustments, involved cash well in excess of $100,000,000 and
assumption by IAC of certain liabilities and commitments of C&A
Europe.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Fails to File First Quarter 10-Q on Time
----------------------------------------------------------
Stacy Fox, executive vice president, chief administrative officer
and general counsel for Collins & Aikman Corp., disclosed in a
regulatory filing with the Securities and Exchange Commission
that the company is unable to file on time its Form 10-Q with
financial statements for the fiscal quarter ended March 31, 2006,
and Form 10-K with financial statements for the year ended
December 31, 2005.

Ms. Fox explained that the company's independent auditors, KPMG
LLP, are unable to complete their audit of the 2004 and 2005
financial statements and review of subsequent interim financial
statements because:

   (i) of the ongoing independent investigation of controls over
       financial reporting and review of certain accounting
       issues that are expected to require a restatement of
       certain previously reported periods; and

  (ii) the company filed for Chapter 11 bankruptcy.

Collins & Aikman also has not filed its Form 10-Q for the fiscal
quarters ended March 31, 2005, June 30, 2005, and September 30,
2005, and Form 10-K for the fiscal year ended December 31, 2004.

Collins & Aikman anticipates changes in its results of operations
based on the impact of the accounting issues, Ms. Fox said.  In
addition, and in light of its bankruptcy filing, the company also
anticipates that there will be a significant change in the
results of operations from the corresponding period for the prior
year, but is unable to currently assess the amount of the change
as a result of the ongoing restructuring process, according to
Ms. Fox.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


COMVERSE TECH: Receives Additional Nasdaq Delisting Notice
----------------------------------------------------------
Comverse Technology, Inc. (NASDAQ: CMVT) received an additional
Staff Determination Letter from The NASDAQ Stock Market indicating
that the delay in the filing of the Form 10-Q could serve as an
additional basis for the delisting of the company's securities
from NASDAQ, under NASDAQ Marketplace Rule 4310(c)(14).  The
NASDAQ Listing Qualification Panel will consider this matter in
rendering a determination regarding the company's continued
listing.

The Company disclosed that due to the delay in the filing its
Annual Report on Form 10-K for the fiscal year ended Jan. 31,
2006, it had received a Staff Determination Letter from The NASDAQ
Stock Market indicating that the company's securities were subject
to delisting based upon the delinquent Form 10-K, unless the
company requested a hearing before the NASDAQ Panel.

The company requested a hearing and presented its plan to regain
compliance with NASDAQ's filing requirement at an in-person
hearing before the NASDAQ Panel on May 25, 2006.  The NASDAQ Panel
has not yet issued a decision as a result of that hearing.

The company intends to submit to the NASDAQ Panel, within the
permissible timeframe, its plan to file the Form 10-Q for the
quarterly period ended April 30, 2006.  However, there can be no
assurance that the NASDAQ Panel will grant the company's request
for continued listing on NASDAQ.

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

                          *     *     *

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

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


CONTINENTAL AIRLINES: Issues $320 Million Equipment Notes
---------------------------------------------------------
Continental Airlines, Inc. and Wilmington Trust Company, as
Mortgagee, entered into a trust indenture and mortgage on
June 9, 2006.  Under the Indenture, Continental Airlines issued
equipment notes in the aggregate principal amount of $320,000,000.

The Equipment Notes were issued in two series: $190,000,000
principal amount of Series G, bearing interest at the rate of USD
3-Month LIBOR+0.35%, and $130,000,000 principal amount of Series
B, bearing interest at the rate of USD 3-Month LIBOR+3.125%.

The interest on the Equipment Notes of both series is payable
quarterly on each March 2, June 2, September 2 and December 2,
beginning on Sept. 2, 2006.

The entire principal amount of the Equipment Notes is due on
June 2, 2013.  Maturity of the Equipment Notes may be accelerated
upon the occurrence of certain Events of Default, including
failure by Continental Airlines to make payments under the
Indenture when due, to comply with certain covenants or to add
collateral or redeem Equipment Notes if certain ratios of the
value of the collateral securing the Equipment Notes to the
outstanding principal amount thereof are not satisfied, as well as
certain bankruptcy events involving Continental Airlines.  The
Equipment Notes are secured under the Indenture by a lien on
certain aircraft spare parts owned by Continental Airlines.

The Equipment Notes were purchased by Wilmington Trust Company, as
pass through trustee under certain pass through trusts newly
formed by Continental Airlines, using the proceeds from the sale
of Pass Through Certificates, Series 2006-1G, and Pass Through
Certificates, Series 2006-1B.  The Certificates were registered
for offer and sale pursuant to the Securities Act of 1933, as
amended, under Continental Airlines' automatic shelf registration
statement on Form S-3.

A more detailed description of the agreements and instruments
entered into by Continental Airlines with respect to the
Certificates is available for free at:

               http://researcharchives.com/t/s?ba4

The proceeds from the sale of the Equipment Notes were used by
Continental Airlines, in part, to redeem on June 9, 2006,
Continental Airlines' outstanding Floating Rate Secured Notes Due
2007 and Floating Rate Secured Subordinated Notes Due 2007 at the
aggregate redemption price of $292,673,230, comprised of
principal, accrued interest and, in the case of such Subordinated
Notes, a premium of $970,000.

As a result of the redemption, on June 9, 2006, the Amended and
Restated Indenture, dated as of May 9, 2003, among Continental
Airlines, Wilmington Trust Company, as Trustee, Morgan Stanley
Capital Services Inc., as Liquidity Provider, and MBIA Insurance
Corporation, as Policy Provider, the Spare Parts Security
Agreement, dated as of Dec. 6, 2002, between Wilmington Trust
Company, as Security Agent, and Continental Airlines, and certain
related agreements were terminated.  The collateral that secured
the redeemed notes was released from the lien under the Spare
Parts Security Agreement and used to secure the newly-issued
Equipment Notes.

Continental Airlines (NYSE: CAL) -- http://continental.com/--  
serves 128 domestic and 111 international destinations and nearly
200 additional points via codeshare partner airlines.  With 42,000
mainline employees, the airline has hubs serving New York,
Houston, Cleveland and Guam, and carries approximately 51 million
passengers per year.

                          *     *     *

As reported in the Troubled Company Reporter on May 29, 2006,
Standard & Poor's Ratings Services assigned its 'AAA' preliminary
rating to Continental Airlines Inc.'s (B/Negative/B-3) $190
million Class G pass-through certificates, and its 'B+'
preliminary rating to the $130 million Class B pass-through
certificates.

As reported in the Troubled Company Reporter on May 26, 2006,
Moody's Investors Service assigned a rating of Aaa to the Class G
Certificates and a B1 rating to the Class B Certificates of
Continental Airlines, Inc.'s 2006-1 Pass Through Trusts Pass
Through Certificates, Series 2006-1.


CORPORATE AND LEISURE: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Corporate and Leisure Event Productions, Inc.
        911 West Grant Road
        Tucson, Arizona 85705

Bankruptcy Case No.: 06-01797

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                         Case No.
      ------                         --------
      BF Consulting, LLC             06-01792
      Old Pueblo Sounds, LLC         06-01793
      Hawthorne Development, LLC     06-01794
      City Limits, Inc.              06-01795

Type of Business: Bradley J. Nozicka is the president
                  and member of each of the Debtors.

Chapter 11 Petition Date: June 16, 2006

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtors' Counsel: Michael W. Carmel, Esq.
                  Michael W. Carmel, Ltd.
                  80 East Columbus Avenue
                  Phoenix, Arizona 85012-4965
                  Tel: (602) 264-4965
                  Fax: (602) 277-0144

Debtors' Consolidated Assets and Liabilities:

      Estimated Assets: $10 Million to $50 Million

      Estimated Debts:  $10 Million to $50 Million

The Debtors did not file a list of their 20 largest unsecured
creditors.


D&G INVESTMENTS: Judge Paskay Denies Plan Based on Balloon Payment
------------------------------------------------------------------
The Honorable Alexander L. Paskay refused to confirm a chapter 11
plan proposed by D & G Investments of West Florida, Inc.,
held that proposed to repay its secured creditor small monthly
payments and a balloon payment 24 months after the plan's
effective date after a promised refinancing transaction.  Judge
Paskay says the Plan is not feasible and doesn't pass muster under
11 U.S.C. Sec. 1129(a)(11).

On June 1, 2004, D & G Investments of West Florida, Inc., and J.C.
Benefield entered into an Agreement for Warranty Deed to acquire
726 acres of vacant, undeveloped real property located at 7301
Highway 39 in Plant City, Florida, for $5,000,000 -- $500,000
down, $1,000,000 to be paid within one year, and the $3,500,000
balance due on June 4, 2006.

The Property, which the Debtor purchased, contained significant
amounts of sand and dirt from other mining and excavation sites.
Mr. Benefield, as the prior owner, sold the sand and dirt.  When
the Debtor took possession of the Property in June 2004, the
Debtor began removing and selling stockpiled sand and dirt.  The
dirt and sand revenues weren't sufficient to pay the debt and a
hoped-for refinancing never occurred.  On July 7, 2005, Mr.
Benefield's attorney sent a letter to the Debtor accelerating the
loan and unpaid interest at the maximum rate, thus, taking the
necessary steps to foreclose on the Property under the Agreement.
The Debtor, on July 20, 2005, filed its voluntary Petition for
Relief under Chapter 11.

On November 23, 2005, in his capacity as mortgagee, Mr. Benefield
filed his secured claim in the amount of $4,980,959.00.

The Debtor's chapter 11 Plan classifies Mr. Benefield's claim in
Class Three as a secured claim.  The Plan provides that the claim
will be paid in equal monthly payments of principal and interest
with interest at 8% with a twenty year amortization and a balloon
24 months from the Plan's effective date.  In addition, Mr.
Benefield will retain his lien until the Note is paid in full.  As
written, the Plan also provides that the Debtor will pay all real
estate taxes and will maintain liability insurance on the Property
with Mr. Benefield as a loss payee.  Furthermore, although not
part of the Plan as filed, it is agreed that Anthony Amico (one of
the Debtor's 50% shareholders) will guarantee the Plan payments to
Mr. Benefield in the event the Debtor is unable to generate
sufficient funds from the sale of sand and dirt to make the
payments.

For a court to confirm a Chapter 11 plan of reorganization, the
plan must meet the requirements of 11 U.S.C. Sec, 1129(a). A
debtor must prove each element of Section 1129 by clear and
convincing evidence in order to have the plan confirmed.  In re
New Midland Plaza Assocs., 247 B.R. 877, 883 (Bankr. S.D. Fla.
2000).  To establish feasibility the court must find that
"[c]onfirmation of the plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of
the debtor or any successor to the debtor under the plan. . . ."
Section 1129(a)(11).  The proponent of the Plan must show that the
Plan "offers at least a reasonable prospect of success and . . .
is workable."  In re Landmark at Plaza Park, Ltd., 7 B.R. 653
(Bankr. D. N.J. 1980); In re Hass, 162 F.3d 1087, 1090 (11th Cir.
1998).  Feasibility is not a guarantee of success but it does
require a reasonable assurance of success.  See Midland 247 B.R.
at 885; In re Patrician St. Joseph Partners L.P., 169 B.R. 669,
674 (D. Ariz. 1994) ("The mere potential for failure of the plan
is insufficient to disprove feasibility.").

A determination of feasibility must be "firmly rooted in
predictions based on objective fact."  In re Clarkson, 767 F.2d
417, 420 (8th Cir. 1985).  Plans that involve "pipe dreams" or
"visionary schemes" are not confirmable.  In re Sovereign Oil Co.,
128 B.R. 585, 587 (Bankr. M.D. Fla. 1991).  Specifically, a court
looks at: the earning power of the business, its capital
structure, the economic conditions of the business, the
continuation of present management, and the efficiency of
management in control of the business after confirmation.  In re
Immenhausen Corp., 172 B.R. 343, 348 (Bankr. M.D. Fla. 1994).

The Pro Forma Statements of Operations filed by the Debtor in
support of the Plan are based on the past performance and reflect
the income generated from the sale of sand and dirt located on the
Property.  There is evidence in this record that this activity is
not approved by the County.  In fact, the Debtor received several
warnings that the operation violates the current regulations of
the County considering the use of the subject property.  It is
also true however, that the County has not commenced any action to
stop the Debtor's operation thus far.  The operation is currently
ongoing.  Be that as it may, it is clear that the Debtor's
ultimate Plan of reorganization is not based on the continuation
of its current operation of selling sand and dirt, ad infinitum,
but based on the expectation that during the projected two-year
life of the Plan the Debtor is to (1) obtain the required
refinancing to satisfy the allowed secured claim of Mr. Benefield
in full and (2) through the infusion of sufficient new funds
necessary for the development of the projected future intended use
of the land.

Judge Paskay is satisfied that, based on the financial capability
of the Debtor to achieve its ultimate goal, that is, to pay off
the debt owed to Mr. Benefield at the end of the two years and to
develop the land and construct ranch style houses, is less than
realistic and would not support the conclusion that the Plan, as
submitted, is feasible for the following reasons:

   -- Robert Gordon -- the Debtor's President and other 50%
      shareholder -- did not invest any funds nor did he
      contribute to the capital of the Debtor because he had none
      to invest, and there is nothing in the record to show that
      he does have or will have the wherewithal to fund the
      consummation of the Plan if the Plan is confirmed.

   -- the Debtor has no plans at this time to obtain the necessary
      financing for this Project and has no financial commitments
      to achieve its long range plans.

   -- the Property is currently undeveloped and, thus far, no
      application for rezoning has been filed with the County.

   -- with the exception of engaging the services of Water
      Resource Associates of Tampa for the study and potential
      development of the land, nothing has been done to implement
      changes for the projected future use of the land.

Judge Paskay says he no difficulty accepting the proof that Mr.
Amico is more than able to meet the monthly installment payments.
According to his testimony under oath coupled with his unaudited
final statement presented to this Court, his current net worth is
$48,836,348.  Furthermore, Mr. Amico owns various businesses which
include but are not limited to, a small Visa and Mastercard bank,
a record company, a marina, a restaurant and various other pieces
of property which have been developed or are in the process of
being developed. In addition to his financial ability, Mr. Amico
has been in the business of developing land, both residential and
commercial, for many years.

However, Judge Paskay says, there is nothing in the record that
warrants the finding and the conclusion that Mr. Amico agreed to
guarantee not only the installment payments but also the final
balloon payment which becomes due two years after the confirmation
of the Plan.  Judge Paskay says the only way the Court could find
that the current Plan would be feasible would be if the Plan is
amended to provide that Mr. Amico agrees to be bound by the
Amended Plan and will guarantee not only the installment payments
during the Plan period, but also the final balloon payment due to
Mr. Benefield at the end of the period.

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


DANA CORP: Paying $70,000 Annual Retainer Fees to Directors
-----------------------------------------------------------
In May 2006, Dana Corporation's board of directors had authorized
a change in the annual retainer paid to non-management directors
for service on the Board to $115,000, subject to the approval of
the U.S. Bankruptcy Court for the Southern District of New York,
which has jurisdiction of Dana's bankruptcy case under Chapter 11
of the United States Bankruptcy Code.

The proposed increase was designed to replace the annual crediting
of units valued at $75,000 to the non-management directors' stock
accounts under the Dana Corporation Director Deferred Fee Plan.

The Bankruptcy Court entered an order on June 8, 2006, authorizing
increased annual retainers for Dana's non-management directors,
subject to certain modifications to Dana's proposal.

Pursuant to the authorization from the Bankruptcy Court, on
June 9, 2006, the Board authorized the payment to Dana's non-
management directors of retainer fees of $70,000 per annum as
their compensation for service on the Board, which amounts will be
paid quarterly in arrears in cash commencing on June 30, 2006.

The Board further authorized the payment to Dana's non-management
directors of additional fees of $45,000 per annum as "completion
compensation," which amounts will be paid in a lump sum in cash
upon the earlier of (i) the date of Dana's emergence from
protection under Chapter 11 of the Bankruptcy Code or (ii) the
date of the occurrence of other circumstances specified for the
payment of "completion" fees to the Debtors' financial
professionals retained in the Bankruptcy Cases pursuant to Section
328(a) of the Bankruptcy Code, subject to the right of the United
States Trustee, the Unsecured Creditors' Committee and any other
statutory committees that may be appointed in the Bankruptcy Cases
to object to the reasonableness of such amounts. These amounts
will be payable to any non-management directors who have resigned
and to any successor non-management directors as and when Dana's
other non-management directors serving through the Payment Date
are compensated, on a pro rata basis.

                     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 March 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.


DAVITA INC: Withdraws Proposed Amendment to Sr. Debt Facilities
---------------------------------------------------------------
DaVita Inc., reported that due to current market conditions it has
decided not to pursue the proposed amendment and restatement to
its existing Senior Secured Credit Facilities.

As reported in the Troubled Company Reporter on May 22, 2006,
DaVita sought to amend and restate its existing Senior Secured
Credit Facilities primarily to reduce the margin over LIBOR that
the Company pays as interest under the existing Term Loan A and
Term Loan B.  The outstanding balances on the Senior Secured Term
Loan A and Senior Secured Term Loan B are approximately $279
million and $2,400 million, respectively.

Headquartered in El Segundo, California, DaVita (NYSE: DVA) is a
leading provider of dialysis services for patients suffering from
chronic kidney failure.  The Company provides services at kidney
dialysis centers and home peritoneal dialysis programs
domestically in 41 states, as well as Washington, D.C.  As of
March 31, 2006, DaVita operated or managed over 1,200 outpatient
facilities serving approximately 98,000 patients

                         *     *     *

The Company's 6-5/8% Senior Notes due Mar. 15, 2013 carries
Standard & Poor's Ratings Services' B rating.


DELPHI CORP: Wants to Set Up Claims Settlement Procedures
---------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask authority from
the United States Bankruptcy Court for the Southern District of
New York to resolve certain classes of controversy that are
outside their ordinary course of business without further hearing
and notice.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, tells the Court that disputes
regularly arise between the Debtors and other parties, including:

  -- disputes regarding claims of governmental agencies on
     environmental, health, safety, and other regulations;

  -- disputes regarding terms and conditions of a contract; and

  -- disputes regarding accounts receivable and payable
     between the Debtors and businesses with which they interact.

Given the large number of disputes the Debtors anticipate
resolving during the course of their Chapter 11 cases, the costs
associated with an individualized approach to obtaining Court
approval of those settlements would not be economical, Mr. Butler
says.

The Debtors believe that the Settlement Procedures will benefit
their estates, creditors, and other parties-in-interest by
streamlining the process.

The Court has already authorized the Debtors to settle disputes
regarding reclamation claims and certain set-off claims, which
have saved them considerable time and resources.

Mr. Butler clarifies that the Settlement Procedures would not
apply to settlements that:

   (a) resolve any controversy arising or that arose in the
       ordinary course of business as the Debtors are already
       permitted to settle these claims in any event under
       Section 363(c) of the Bankruptcy Code;

   (b) are already authorized under another order entered by the
       Court; or

   (c) compromise or settle a dispute that arose outside the
       ordinary course of business where the final amount of the
       compromise or settlement is greater than $20,000,000 for
       general unsecured prepetition controversies or $10,000,000
       for prepetition secured, prepetition priority, or
       postpetition controversies.

                     Classes of Controversies

The Debtors want to resolve controversies without further Court
approval provided that the final settlement amount is at most
$20,000,000 for general unsecured prepetition controversies and
$10,000,000 for prepetition secured, prepetition priority, and
postpetition controversies.  The Debtors expect that the
controversies would include:

   (a) disputes regarding any obligations owed by third parties
       to the Debtors, or other claims of the Debtors against
       third parties;

   (b) disputes with regulatory or other governmental or quasi-
       governmental agencies; and

   (c) other claims or controversies which, in the Debtors'
       business judgment, affect the ability of the Debtors to
       operate, manage, or otherwise conduct their businesses.

Negotiations would be primarily handled by the employees and
agents of the Debtors who would normally handle these matters.
However, the Debtors will maintain internal approval procedures
to monitor the dispute resolution process and to provide notice
to specified parties-in-interest.

The settlement process would be subject to these simple
parameters:

   (1) For disputes related to general unsecured prepetition
       claims with settlement amounts of $1,000,000 or less, the
       settlement would be consummated without the need for
       further Court approval or notice;

   (2) For disputes related to general unsecured prepetition
       claims with settlement amounts greater than $1,000,000 but
       less than or equal to $20,000,000, the Debtors would
       provide the terms of the settlement to parties-in-
       interest;

   (3) For disputes related to prepetition secure or priority
       claims, administrative expense priority claims or other
       postpetition claims with a settlement amount of $500,000
       or less, the settlement would be consummated without
       further Court approval or notice;

   (4) For disputes related to prepetition secure or priority
       claims, administrative expense priority claims or other
       postpetition claims with a settlement amount of greater
       than $500,000 but less than $10,000,000, the Debtors would
       serve the proposed settlement to notice parties;

   (5) Notice Parties would have 10 business days following
       initial receipt of the Settlement Notice to object to or
       request additional time to evaluate the settlement.  If
       the Debtors' counsel received no prompt response, they
       would be authorized to consummate the settlement; and

   (6) Notice Parties would meet and confer in an attempt to
       negotiate a consensual resolution of any timely filed
       objection.  If either party decides that Court
       intervention was necessary, then the Debtors would not be
       authorized to consummate the settlement without further
       Court order.

Mr. Butler relates that the Debtors will provide periodic summary
reporting to counsel for the Official Committee of Unsecured
Creditors of all settlements consummated.

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


DNSBG LLC: Case Summary & Two Largest Unsecured Creditors
---------------------------------------------------------
Debtor: DNSBG, LLC
        255 Beacon Street, No. 22
        Boston, Massachusetts 02116

Bankruptcy Case No.: 06-11878

Debtor-affiliate filing separate chapter 11 petition:

      Entity              Case No.
      ------              --------
      David N. Gilo       06-11877

Type of Business: The Debtor is a real estate developer.
                  David N. Gilo is a member and  the
                  manager of the Debtor.

Chapter 11 Petition Date: June 16, 2006

Court: District of Massachusetts (Boston)

Judge: Joan N. Feeney

Debtor's Counsel: Adam J. Ruttenberg, Esq.
                  Looney & Grossman, LLP
                  101 Arch Street
                  Boston, Massachusetts 02110
                  Tel: (617) 951-2800
                  Fax: (617) 951-2819

Total Assets: $1,250,479

Total Debts:  $2,735,603

Debtor's Two Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
CIT Lending Service              Bank Loan           $1,450,603
One CIT Drive
Livingston, NJ 07039

Pinehills, LLC                   Services               $35,000
P.O. Box 1570
Roswell, GA 30077


ELWOOD ENERGY: S&P Places $402 Million Bonds' B+ Rating on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' rating on
Elwood Energy LLC's $402 million ($335 million outstanding),
8.159% senior secured bonds due 2026 on CreditWatch with positive
implications.

"The CreditWatch listing follows an announcement by Aquila Inc.
(B-/Watch Pos/A-3), one of the project's power offtakers, that it
will pay Constellation Energy Commodities Group Inc., a subsidiary
of Constellation Energy Group Inc. (BBB+/Watch Dev/A-2), $218
million to assume its obligations under a power sales agreement
(PSA) with the project," said Standard & Poor's credit analyst
Chinelo Chidozie.  "This assignment, when concluded, significantly
reduces credit risk, but should not affect the cash flow
generation in the project," she continued.

Following the PSA assignment, Constellation will become the
offtaker for about 626 MW of Elwood's 1,409 MW capacity until
2017.  The balance of the project's capacity is under a PSA with
Exelon Generation Company LLC (BBB+/Watch Neg/A-2), until 2012.

Elwood is an equal partnership between wholly owned subsidiaries
of Peoples Energy Resources Co. LLC (unrated), a wholly owned
subsidiary of Peoples Energy Corp. (A-/Negative/A-2), and Dominion
Energy Inc., a wholly owned subsidiary of Dominion Resources Inc.
(BBB/Stable/A-2).

The CreditWatch listing will be resolved when the Aquila PSA
assignment closes and the review is complete.


ENERGY PARTNERS: Wants to Acquire Stone Energy for $2.2 Billion
---------------------------------------------------------------
Energy Partners, Ltd. (NYSE:EPL) delivered a definitive merger
agreement to the Board of Directors of Stone Energy Corporation
(NYSE:SGY).  The proposed transaction is valued at $2.2 billion,
which values Stone's equity at approximately $1.4 billion and
includes approximately $800 million of Stone debt.  Under the
terms of the agreement, EPL has offered to acquire all of the
outstanding shares of Stone for $51 in cash or stock at the
election of the holder, subject to a collar and other limitations.
The offer expired on June 18, 2006.

The financial terms of EPL's definitive merger agreement reflect
factors including additional Stone debt related to an acquisition
contemplated by Stone in the Gulf of Mexico, as well as the
vesting of approximately 361,000 restricted Stone shares that will
result from the merger with EPL.  EPL expects the proposed
transaction to be immediately accretive to EPL's cash flow per
share and to deliver substantial annual cost savings.  EPL
anticipates that the combined company will generate significant
cash flow and will have the ability to substantially reduce debt.
The transaction is not subject to any financing contingency.  EPL
received a commitment letter from Bank of America, N.A. and
affiliates for the financing of the transaction.

"After conducting a thorough due diligence process, we continue to
be excited about the combination of our two companies," Richard A.
Bachmann, EPL's Chairman and CEO, commented.  "Given our highly
complementary fit, the financial benefits of our offer remain
compelling for Stone shareholders.  By joining together to create
a premier E&P company, we will be well positioned to generate
considerable upside value for shareholders of both companies.  We
now look forward to the Stone Board's determination that our offer
is superior to the existing agreement with Plains Exploration and
Production Company."

Under the terms of EPL's revised offer, each share of Stone common
stock will be converted into the right to receive, at the election
of the holder:

   (i) $51 in cash, or

  (ii) EPL shares equivalent to the ratio determined by dividing
       $51 by the market price of EPL shares (based on a 20-day
       trading average prior to the third trading day preceding
       the closing), provided that the exchange ratio will not be
       greater than 2.525 or less than 2.106 EPL shares per Stone
       share.

The election of cash or stock will be subject to a limit on total
cash consideration of approximately $723 million (which includes
$15.5 million attributable to stock options) and a limit on the
total number of EPL shares issued of approximately 35 million.
Assuming that shareholders receive a combination of half cash and
half stock, the current value of the total consideration would be
$49.10 per share based upon EPL's closing stock price of $18.69 on
June 15, 2006.  This represents a premium of approximately 13%
over the current value of the Plains Exploration and Production
Company's (NYSE:PXP) offer for Stone based upon the Plains closing
stock price of $34.74 on June 15, 2006.

                          About Stone

Stone Energy (NYSE: SGY) -- http://www.stoneenergy.com/-- is an
independent oil and gas company headquartered in Lafayette,
Louisiana, and is engaged in the acquisition and subsequent
exploration, development, operation and production of oil and gas
properties located in the conventional shelf of the Gulf of
Mexico, deep shelf of the GOM, deep water of the GOM, Rocky
Mountain Basins and the Wiliston Basin.

                            About EPL

Headquartered in New Orleans, Louisiana Energy Partners Ltd. --
http://www.eplweb.com/-- is an independent oil and natural gas
exploration and production company.  Founded in 1998, the
Company's operations are focused along the U. S. Gulf Coast, both
onshore in south Louisiana and offshore in the Gulf of Mexico.

                          *     *     *

As reported in the Troubled Company Reporter on May 26, 2006,
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating on independent exploration and production company
Energy Partners Ltd. on CreditWatch with negative implications.

At the same time, Standard & Poor's revised the CreditWatch
implications for its 'B+' rating on Stone Energy Corp. to
developing from positive.


ENTERGY NEW ORLEANS: Wants to Assume Amended Bridgeline Contract
----------------------------------------------------------------
Pursuant to Section 365(a) of the Bankruptcy Code, Entergy New
Orleans Inc. asks the U.S. Bankruptcy Court for the Eastern
District of Louisiana's authorization to assume Bridgeline
Holdings, L.P.'s Amended Storage Agreement.

On July 1, 2001, Entergy New Orleans, Inc., and Bridgeline signed
a Gas Storage Services Agreement, which expires June 30, 2006.

As of the Petition Date, ENOI owes Bridgeline $386,575 for
approximately 868,915 MMBTUs of natural gas stored in Bridgeline's
facilities.

Bridgeline asserted a warehouseman's lien against the storage gas.
ENOI disputed Bridgeline's lien entitlement.

In a Court-approved stipulation, the parties eventually agreed to
defer resolution of the lien dispute and to permit ENOI to remove
and use the stored gas from storage.

As part of the Stipulation, the Debtor agreed to either retain
50,000 MCF of stored gas in storage or maintain $500,000 in a
segregated bank account until the dispute over Bridgeline's lien
was resolved or the parties reached a different agreement.  ENOI
had maintained the 50,000 MCF balance, as of May 31, 2006.

The Storage Agreement subjects ENOI to certain penalties, charges
and losses of rights and grants Bridgeline certain rights and
remedies if ENOI has any stores gas remaining in storage when the
Agreement expires.

Because of the impending termination of the Storage Agreement and
ENOI's regulatory requirement to store gas, ENOI issued a request
for proposal for Bridgeline's provision of natural storage
services after June 30, 2006.  ENOI concluded that the most
economical course of action was to amend the existing Agreement
and assume the Agreement as amended, relates Nan Roberts Eitel,
Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
LLP, in Washington, DC.

On May 31, 2006, ENOI and Bridgeline orally agreed to amend and
extend the Storage Agreement and prepared a term sheet to which
the parties have agreed but not yet executed.

Under the Term Sheet, ENOI will execute an amended Storage
Agreement and assume the amended Agreement.  The Agreement will be
extended for three years and its provisions for storage, injection
and withdrawal quantities and pricing will be revised.  ENOI will
also obtain a secondary delivery point for its stored gas.

ENOI is in default to Bridgeline by $386,575 under the Storage
Agreement.  Bridgeline also asserts entitlement to interest and
attorneys' fees of more than $15,000.

Under the Term Sheet, Bridgeline will accept $401,575 as total
cure amount, including $15,000 in defaults for interest and
attorneys' fees, from ENOI to be paid in equal installments over
six months, starting in July 2006.

The parties also agree to modify the Stipulation to permit ENOI to
withdraw below the 50,000 MCF of stored gas in increments as the
Cure Amount is paid.

In reliance of the Term Sheet, ENOI has begun injecting additional
gas into storage as of June 1, 2006.  The Term Sheet, however,
provides ENOI 30 days to withdraw the June Gas without the
penalties under the Storage Agreement if the assumption of the
Agreement, as amended, is not approved by the Court or is not
consummated for any other reason.

The Amended Storage Agreement's non-approval will return the
parties to the status quo that existed as of May 31, 2006,
necessitating the importance of ENOI assuming the Agreement, as
amended, before its expiration on June 30, 2006, Ms. Eitel
asserts.

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000.  (Entergy New
Orleans Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ENTERGY NEW ORLEANS: Taps Claro Group as Insurance Consultant
-------------------------------------------------------------
Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana's authority to employ The Claro
Group LLC as its insurance consulting services provider, pursuant
to Section 327 of the Bankruptcy Code.

Elizabeth J. Futrell, Esq., at Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P., in New Orleans, Louisiana, tells Judge
Brown that Claro is a highly experience insurance firm that
operates on an international level through offices in Houston,
Texas, Chicago, Illinois, and Los Angeles, California.  Claro has
helped its clients achieve recoveries in excess of $4,000,000,000,
nearly $2,000,000,000 of which involves settlements relating to
asbestos claims.

Claro agrees to provide ENOI consulting services related to
insurance coverage claims for potential asbestos and other alleged
tort exposures that occurred during the construction of two ENOI-
owned powerhouses during portions of the 1960s and 1970s.

Prior to the Debtor filing for bankruptcy, American Motorists
Insurance Company issued certain insurance policies in the name of
Ebasco Services, Inc., in connection with EBASCO's construction of
various powerhouses.  Two of the powerhouses, known as Michoud
Units 1 and 3, are currently owned by ENOI.

The AMICO Policy lists ENOI and certain of its affiliates under
the caption "Name of Clients-Construction."  Under the listing,
ENOI takes the position that it has coverage under the Policy for
asbestos and other alleged tort exposures that occurred during
EBASCO's construction of ENOI's powerhouses.

AMICO is part of the Kemper Insurance Companies, which ceased
issuing new policies in 2003 and is an organization in run off.
Because Kemper is in run off, any settlement of insurance coverage
claims between ENOI and AMICO would require the approval of the
Insurance Division of the Illinois State Department of Financial
and Professional Regulation, Ms. Futrell relates.

Pursuant to a retention agreement, Claro will:

   (1) participate in settlement negotiations and communications
       with AMICO and in discussions with the Illinois Insurance
       Division to achieve final settlement with AMICO;

   (2) participate in detailed settlement negotiations with AMICO
       regarding proposed settlement terms and provide basis for
       allocating any negotiated settlement with AMICO among ENOI
       and its affiliates with rights to the AMICO Policy;

   (3) continue to assist in discussing settlement negotiations
       with ENOI and connection with its bankruptcy case until
       execution of settlement documents;

   (4) meet with creditors on an as needed basis to review
       information regarding any proposed settlement with AMICO;
       and

   (5) assist ENOI in obtaining Court approval of any proposed
       settlement.

Claro will be paid a contingent fee equal to 17% of all monies
that ENOI receives in settlement from AMICO after obtaining Court
approval of any settlement.

George G. Hansen and John R. Cadarette, Jr., shareholders and
managing directors of Claro, will be primarily responsible for
handling the firm's retention by the Debtor.

Messrs. Hansen and Cadarette, and other professionals of Claro,
left LECG, LLC, to form Claro, effective September 9, 2005.  In
early 2005, LECG began providing consulting services to ENOI
related to coverage for potential asbestos or tort exposure claims
that occurred during the ENOI Powerhouses' construction.

Mr. Hansen assures the Court that the Claro does not represent any
interest adverse to the Debtor and its estate.  Claro is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code, and as modified by Section 1107(b).

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000.  (Entergy New
Orleans Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FLINTKOTE CO: Courts Says Hopkins Suit Will Stay in California
--------------------------------------------------------------
As reported in the Troubled Company Reporter, The Flintkote
Company filed for chapter 11 protection on April 30, 2004.
Flintkote's bankruptcy case is currently proceeding in the United
States Bankruptcy Court for the District of Delaware before the
Honorable Judith K. Fitzgerald.  During the course of Flintkote's
bankruptcy proceedings, the Bankruptcy Court appointed an Official
Asbestos Claimants' Committee and a Future Claims Representative.

Nearly two years later, Flintkote, together with the ACC, the FCR,
and Marlene Hopkins, Michelle Hopkins and Michael Hopkins (heirs
of Norman Hopkins, Jr. who died of mesothelioma), filed a
complaint in the Superior Court of California against Imperial
Tobacco Canada Limited, Plant Insulation Company, Uniroyal
Holding, Inc., Sullivan & Cromwell LLP and Does 1 through 100.
Through the California Action, Flintkote and the other plaintiffs
seek to demonstrate that ITCAN has alter-ego liability for any
obligations of Flintkote to asbestos claimants, on the grounds
that ITCAN, as the former parent of Flintkote, stripped Flintkote
of $525,000,000, leaving Flintkote unable to pay billions of
dollars owed to asbestos claimants.

The Complaint in the California Action alleges 16 causes of action
based on state law theories of recovery.  The first seven claims
alleged in the Complaint are asbestos wrongful death claims based
on negligence, products liability, loss of consortium, and
contractor liability, asserted by the Hopkins Family against
Plant, Uniroyal and ITCAN as the alter-ego of Flintkote.  These
claims are based on the death of Norman Hopkins, Jr., on September
27, 2005, due to mesothelioma allegedly contracted by exposure to
asbestos-containing products manufactured and/or sold by Plant,
Uniroyal and Flintkote.  Of the remaining nine claims, seven are
asserted by Flintkote, in its own right or through the assertion
of the rights of other creditors, against ITCAN for a declaration
of alter-ego liability, receiving illegal dividends, recovery of
fraudulent transfers, breach of fiduciary duty, constructive
trust, restitution, and declaratory relief.  One claim is also
asserted by Flintkote against Sullivan & Cromwell for breach of
duty and negligence as a result of the law firm's representation
of Flintkote in the late 1980s.

Shortly after the filing of the California State Action, the
Bankruptcy Court approved Flintkote's retention of San Francisco
area counsel to litigate the state action, and a joint prosecution
agreement by which the state action would be prosecuted by
Flintkote and the legal representative of future and current
asbestos claimants for the benefit of Flintkote.

On May 5, 2006, ITCAN removed the California Action to the United
States District Court for the Northern District of California, and
filed a motion to stay and transfer the action to this Court.  In
response, Flintkote and the other plaintiffs have filed a motion
to remand the case from the California District Court back to the
California Superior Court.

Simultaneously with its filings in the California District Court,
ITCAN also filed an Emergency Petition for transfer pursuant to 28
U.S.C. Sec. 157(b)(5) in the Bankruptcy Court.

ITCAN wants the California Action transferred to the Bankruptcy
Court in Delaware.  ITCAN contends that Delaware is the
appropriate venue for the California Action, because the
California Action is an integral part of Flintkote's bankruptcy
proceedings and its reorganization plans.  Specifically, ITCAN
contends that Flintkote ultimately intends to transfer the
California Action to an asbestos personal injury trust created
under Section 524(g) of the Bankruptcy Code pursuant to a
confirmed plan of reorganization.  ITCAN points out that the
creation of such a trust and any possible settlement of the
California Action will both require the approval of the Bankruptcy
Court, and therefore, resolution of the entire action in this
Court would promote judicial economy and prevent the waste of both
the parties' and the respective courts' resources.  ITCAN also
contends that the substantive claims of the California Action are
better suited for resolution in Delaware, because (1) they are
interwoven with the dividend recovery claims which impact
Flintkote's bankruptcy estate, and (2) they seek to disregard the
corporate form of Flintkote, which is a Delaware corporation.

Flintkote contends that a transfer of the California Action to
Delaware contravenes the purpose of Section 157(b)(5), which is to
assist a debtor in managing and centralizing personal injury tort
claims brought against the debtor.  Because Flintkote is the
debtor in this case, Flintkote contends that its choice of forum
should be respected, and Section 157(b)(5), which is supposed to
favor the debtor, should not be used against it to effectuate a
transfer which it opposes.  Flintkote also contends that
California is the appropriate forum to try the California Action,
because the California Action (1) advances state law claims, (2)
is brought by California citizens and a corporation headquartered
in California against two corporations headquartered in
California, and (3) the Bankruptcy Court has taken a number of
measures aimed at allowing the case to proceed in California,
specifically, authorizing Flintkote's retention of a California
law firm and authorizing the ACC and FCR to appear in the
California Action.  In the alternative, Flintkote contends that
the Court should exercise its discretion and abstain from the
transfer decision.  Flintkote contends that abstention is the
threshold analysis in a Section 157(b)(5) transfer motion, and
that if abstention is appropriate, the Court will not need to make
the other venue determinations required by Section 157(b)(5).

In a decision published at 2006 WL 1627854, the Honorable Joseph
J. Farnan, Jr., of the U.S. District Court for the District of
Delaware, rules that the Courts in Delaware will exercise their
discretion to abstain from exercising jurisdiction over the
California Action and deny ITCAN's Emergency Petition For An Order
Of Transfer Pursuant To 28 U.S.C. Sec. 157(b)(5).  Judge Farnan
says abstention is warranted because the action would not likely
have a sufficient impact on the bankruptcy case to justify the
district court's retention of jurisdiction over the action, and
state-law issues predominated over the bankruptcy issues.

Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials.  The Company and its affiliate,
Flintkote Mines Limited, filed for chapter 11 protection on
April 30, 2004 (Bankr. Del. Case No. 04-11300).  James E. O'Neill,
Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represent
the Debtors in their restructuring efforts.  When the Debtor filed
for protection from its creditors, it estimated assets and debts
of more than $100 million.


FLOWSERVE CORP: Begins $14 Mil. Pump Facility Construction in July
------------------------------------------------------------------
Al Rushaid Group and Flowserve Corp. ratified an agreement to
build the largest original equipment manufacturer pump repair,
manufacturing and training facility in the Middle East.

Construction of the 20,500 square meter (220,660 square feet)
complex to be located at the Al Rushaid Oil Field Center in
Dhahran, Saudi Arabia, will commence in July 2006.  It is expected
to be fully operational in October 2007.

The Al Rushaid/Flowserve pump facility will be comprised of two
units: a 17,500 square meter (188,370 square feet) pump repair,
manufacturing and test facility (Quick Response Center) and a
3,000 square meter (32,290 square feet) hydraulics training
center.  Total cost of this joint project will be approximately
U.S. $14 million.  It will employ more than 100 people and be
fully compliant with Saudisation requirements promulgated by the
Kingdom of Saudi Arabia.

Designed specifically to support Aramco, Sabic, SEC, SWCC and
other major industries within Saudi Arabia and the surrounding
Arabian Gulf Countries, the Al Rushaid/Flowserve complex will have
the capability to address the service and repair needs of all pump
products regardless of original manufacture.  Among its
capabilities will be pump manufacturing, pump set packaging, parts
manufacturing, a full range of pump improvement engineering and
engineered services.  Field service along with installation and
commissioning will also be provided.

A key component of the facility will be the region's largest, most
capable hydraulics test bed.  Certified testing to API and
international standards will be available for both horizontal and
vertical pumps (including high-pressure applications) to more than
5,965 kW (8,000 hp).  This will cover approximately 90 percent of
the region's installed base.  The test bed will allow end users to
verify equipment performance or diagnose and correct problems.
Upgrades to existing pumps can also be recommended to improve
efficiency and reliability.

Another unique feature of the Al Rushaid/Flowserve development
will be the Middle East's first hydraulics training center.  This
3,000 square meter (32,290 square feet) unit will have state-of-
the-art classrooms along with static and dynamic laboratories.
Courses of study will be comprehensive, covering basic hydraulics
theory through advanced maintenance and repair and technical
services.  The training center is being fully funded by the Al
Rushaid Group and will be a duplicate of the Flowserve Learning
Center located in Dallas, Texas, USA.

Sheikh Abdullah Al Rushaid, Chairman, Al Rushaid Group, stated,
"This joint venture will bring both extraordinary capabilities and
benefits to our customers in the petroleum-related industries, the
chemical processing and power generation sectors.  To have this
extent of pump service and repair, testing and training is truly
an essential component in the growth of our most important
industries."  Sheikh Al Rushaid added that technical training for
the Saudi youth is a social and national obligation to which Al
Rushaid Group is committed.

Lewis Kling, President and Chief Executive Officer, Flowserve
Corporation, explained that, "This new complex provides us with a
solid foundation to serve and support our customers in the Middle
East.  We strongly feel this facility will enable customers to
more sharply focus on their core production activities while
outsourcing pump maintenance.  The Arabian Gulf Region is a
critically important geographical market for Flowserve as
evidenced by this commitment and we are most pleased to partner
with Al Rushaid Group to make this a reality."

                      About Al Rushaid Group

The Al Rushaid Group of Companies -- http://www.al-rushaid.com/--  
is an international organization which offers and provides a
diverse range of engineering and contracting services, facilities,
and products, including but not limited to oil and gas,
petrochemical, chemical processing and power generation
industries.  These services include design, engineering,
construction and procurement as well as project management and
maintenance for entire plant operations, storage tanks, and high
quality prestigious buildings and environment services, and
development of ports and terminals.

                       About Flowserve Corp

Flowserve Corp. (NYSE:FLS) -- http://www.flowserve.com/-- is one
of the world's leading providers of fluid motion and control
products and services.  Operating in 56 countries, the company
produces engineered and industrial pumps, seals and valves as well
as a range of related flow management services.

                         *     *     *

On March 17, 2000, Standard & Poor's rated Flowserve's long term
foreign issuer credit and long term local issuer credit at BB-.

In addition, Standard & Poor's placed B-3 ratings to the Company's
ST foreign and local issuer credits on April 19, 2005.


FOAMEX INTERNATIONAL: Earns $17.05 Million on First Quarter 2006
----------------------------------------------------------------
Foamex International Inc. filed its Form 10-Q for the quarter
ended April 2, 2006, with the U.S. Securities and Exchange
Commission.

The company said that it had $17,050,000 in net income during the
quarter as compared to $10,854,000 in losses during the same
period in 2005.

According to Robert S. Graham, Jr., the company's principal
financial officer, the company is in compliance with the EBITDA,
cumulative cash flow and capital expenditure covenants in its DIP
Facilities for the six months ended April 2, 2006.

Foamex expects to contribute approximately $16,000,000 to its
pension plans in 2006, with $2,100,000 contributed during the
quarter.

As of April 2, 2006, Foamex had accrued approximately $800,000 for
litigation and other legal matters.  In addition, company accrued
approximately $2,100,000 for environmental matters, including
$1,900,000 related to remediating and monitoring soil and
groundwater contamination and $200,000 related to sites where it
has been designated as a Potentially Responsible Party by the U.S.
Environmental Protection Agency or a state authority, and other
matters.

A full text-copy of Foamex's Quarterly Report is available for
free at http://researcharchives.com/t/s?ba5

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


GEO GROUP: Repays $74.6 Million of Senior Secured Credit Facility
-----------------------------------------------------------------
The GEO Group, Inc. (NYSE: GGI) used the aggregate net proceeds
of approximately $100 million from the recent follow-on offering
of 3,000,000 shares of its common stock to repay $74.6 million in
debt outstanding under the term loan portion of its senior secured
credit facility.

As reported in the Troubled Company Reporter on June 16, 2006, GEO
may also use proceeds from the offering, along with existing cash,
to finance the planned expansion of GEO's Val Verde Correctional
Facility in Del Rio, Texas.  GEO plans to use any remaining
proceeds from the offering for general corporate purposes, which
may include working capital, capital expenditures and potential
acquisitions of complementary businesses and other assets.  In
addition, GEO may use up to $5 million of the proceeds of the
offering to purchase from certain directors, executive officers
and employees stock options that are currently outstanding and
exercisable.

"The successful completion of the follow-on offering of 3 million
shares of our common stock along with the repayment of our term
loan debt have recapitalized GEO and have strengthened our ability
to capitalize on new growth opportunities," George C. Zoley,
Chairman of the Board and Chief Executive Officer of GEO, said.
"We believe that we are well positioned to pursue organic growth
in our three business units of U.S. Corrections, International
Corrections, and Residential Treatment Services through our
subsidiary GEO Care.  In addition, we will continue to evaluate
potential acquisition opportunities in our core businesses as well
as in other related government services."

                       About The GEO Group

Headquartered in Boca Raton, Florida, The GEO Group, Inc. --
http://www.thegeogroupinc.com/-- is a world leader in the
delivery of correctional, detention, and residential treatment
services to federal, state, and local government agencies around
the globe.  The Company offers a turnkey approach that includes
design, construction, financing, and operations.  The Company
represents government clients in the United States, Australia,
South Africa, Canada, and the United Kingdom.  GEO's worldwide
operations include 62 correctional and residential treatment
facilities with a total design capacity of approximately 51,000
beds, inclusive of facilities under management, facilities for
which GEO has received contract awards but which have not yet
opened, and inactive facilities.

The Geo Group, Inc.'s 8-1/4% Senior Notes due 2013 carry Moody's
Investors Service's and Standard & Poor's single-B rating.


HEMOSOL CORP: ProMetic License Issue Hearing Scheduled on July 13
-----------------------------------------------------------------
The Superior Court of Justice of Ontario ordered a hearing to held
on July 13, 2006, to determine certain issues relating to the
license agreement between Hemosol LP, an affiliate of Hemosol
Corp. (TSX: HML) and ProMetic Bioscience Ltd.

PricewaterhouseCoopers Inc. in its capacity as interim receiver of
the assets, property and undertaking of Hemosol and the Plan
Sponsor, whose conditional agreement to fund payments to
unaffected and affected creditors of Hemosol was approved by the
Court, will be asking the Court to determine whether Prometic has
been engaged in activities that are in breach of the License
Agreement and in contempt of the Court-ordered stay of proceedings
against Hemosol.  Further, ProMetic will be asking the Court to
determine whether the stay of proceedings against Hemosol can be
lifted to allow ProMetic to terminate the License Agreement, and,
if answered in the affirmative, whether there is any basis upon
which the License Agreement can be terminated by ProMetic.  The
Receiver and the Plan Sponsor do not believe that ProMetic has
such a right under the License Agreement or by virtue of the stay
of proceedings.

The Court granted the Plan Sponsor status on some of the issues to
be determined by the Court on July 13, 2006.  The Plan Sponsor is
currently funding the Companies' Creditors Arrangement Act
proceedings of Hemosol, and its Sponsorship Agreement is
conditional on, amongst other things, the Plan Sponsor entering
into satisfactory arrangements with ProMetic for the exclusive
utilization of all ProMetic intellectual property, processes and
know-how licensed to Hemosol LP.

The Sponsorship Agreement is also conditional upon obtaining the
approval of Hemosol's creditors and the Court on a proposed CCAA
plan of compromise, and possibly a plan of arrangement under the
Business Corporations Act (Ontario), which, if implemented, will
result in a substantial dilution of the equity of Hemosol held by
the shareholders existing at the time of implementation.

                          About Hemosol

Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/
-- is an integrated biopharmaceutical developer and manufacturer
of biologics, particularly blood-related protein based
therapeutics.  Information on Hemosol's restructuring is available
at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html

Hemosol Corp and Hemosol LP filed a Notice of Intention to Make a
Proposal Pursuant to section 50.4 (1) of the Bankruptcy and
Insolvency Act on Nov. 24, 2005.  The Company had defaulted in the
payment of interest under its $20 million credit facility.
Hemosol said that it would require additional capital to continue
as a going concern and is in discussions with its secured
creditors with respect to its current financial position.  On Dec.
5, 2005, PricewaterhouseCoopers Inc. was appointed interim
receiver of the Companies.


HOLLINGER INC: Reports $42.6 Million Cash On Hand as of June 9
--------------------------------------------------------------
Hollinger Inc. and its subsidiaries -- other than Hollinger
International and its subsidiaries -- had approximately
$42.6 million of cash or cash equivalents on hand, including
restricted cash, as of the close of business June 9, 2006.

At that date, Hollinger owned, directly or indirectly, 782,923
shares of Class A Common Stock and 14,990,000 shares of Class B
Common Stock of Hollinger International.  Based on the June 9,
2006 closing price of the shares of Class A Common Stock of
Hollinger International on the New York Stock Exchange of $7.19,
the market value of Hollinger's direct and indirect holdings in
Hollinger International was $113.4 million.  All of Hollinger's
direct and indirect interest in the shares of Class A Common Stock
of Hollinger International is being held in escrow in support of
future retractions of its Series II Preference Shares.  All of
Hollinger's direct and indirect interest in the shares of Class B
Common Stock of Hollinger International is pledged as security in
connection with the senior notesand the second senior notes.

In addition to the cash or cash equivalents on hand, Hollinger
previously deposited approximately C$8.7 million in trust with the
law firm of Aird & Berlis LLP, as trustee, in support of
Hollinger's indemnification obligations to six former independent
directors and two current officers.  In addition, C$750,000 has
been deposited in escrow with the law firm of Davies Ward Phillips
& Vineberg LLP in support of the obligations of a certain
Hollinger subsidiary.

As of June 9, 2006, there was approximately $107.8 million
aggregate collateral securing the $78 million principal amount of
the Senior Notes and the $15 million principal amount of the
Second Senior Notes outstanding.

                         Company Events

On June 7, 2006, the Company appointed Patrick Hodgson as a member
of the Audit Committee to fill the vacancy created by the
resignation of Joseph Wright.

On June 13, 2006 at the Annual General Meeting of Hollinger
International Inc., Stanley Beck and Randall Benson were re-
elected as directors of Hollinger International.  Also at the AGM,
the shareholders of Hollinger International voted in favor of a
resolution to change the name of Hollinger International to Sun-
Times Media Group Inc.  The name change will be effective in July
2006.

                   Delinquent Financial Statements

Hollinger Inc. has been unable to file its annual financial
statements, Management's Discussion & Analysis and Annual
Information Form for the years ended Dec. 31, 2003, 2004 and 2005
on a timely basis as required by Canadian securities legislation.
In addition, Hollinger has not filed its interim financial
statements for the fiscal quarters ended March 31, June 30 and
September 30 in each of its 2004 and 2005 fiscal years.

The Company says that its Audit Committee is working with the
auditors, and discussing with regulators, various alternatives to
return its financial reporting requirements to current status.

           Ravelston Receivership and CCAA Proceedings

On April 20, 2005, the Court issued two orders by which The
Ravelston Corporation Limited and Ravelston Management Inc. were:

   (i) placed in receivership pursuant to the Bankruptcy &
       Insolvency Act (Canada) and the Courts of Justice Act
       (Ontario); and

  (ii) granted protection pursuant to the Companies' Creditors
       Arrangement Act (Canada).

Pursuant thereto, RSM Richter Inc. was appointed receiver and
manager of all of the property, assets and undertakings of
Ravelston and RMI.  Ravelston holds 16.5% of the outstanding
Retractable Common Shares of Hollinger.  On May 18, 2005, the
Court further ordered that the Receivership Order and the CCAA
Order be extended to include Argus Corporation Limited and its
five subsidiary companies, which collectively own, directly or
indirectly, 61.8% of the outstanding Retractable Common Shares and
4% of the Series II Preference Shares of Hollinger.  On June 12,
2006, the Court appointed Richter as receiver and manager and
interim receiver of all the property, assets and undertaking of
Argent News Inc., a wholly owned subsidiary of Ravelston.  The
Ravelston Entities own, in aggregate, 78% of the outstanding
Retractable Common Shares and 4% of the Series II Preference
Shares of Hollinger.  The Court has extended the stay of
proceedings against the Ravelston Entities to Sept. 29, 2006.

As reported in the Troubled Company Reporter on Apr. 25, 2005,
Hollinger is in default under the terms of the indentures
governing Hollinger's US$78 million principal amount of 11.875%
Senior Secured Notes due 2011 and US$15 million 11.875% Second
Priority Secured Notes due 2011 due to Ontario Superior Court of
Justice's appointment of RSM Richter as receiver of all of the
Ravelston Entities' assets (except for certain shares held
directly or indirectly by them, including shares of Hollinger Inc.
and RMI).

                        About Hollinger Inc.

Hollinger Inc.'s -- http://www.hollingerinc.com/-- principal
asset is its 66.8% voting and 17.4% equity interest in Hollinger
International, a newspaper publisher with assets, which include
the Chicago Sun-Times and a large number of community newspapers
in the Chicago area.  Hollinger also owns a portfolio of
commercial real estate in Canada.

                          Litigation Risks

Hollinger, Inc., faces various court cases and investigations:

   (1) a consolidated class action complaint filed in Chicago,
       Illinois;

   (2) a class action lawsuit that was filed in the Saskatchewan
       Court of Queen's Bench on September 7, 2004;

   (3) a US$425,000,000 fraud and damage suit filed in the State
       of Illinois by International;

   (4) a lawsuit seeking enforcement of a November 15, 2003,
       restructuring proposal to uphold a Shareholders' Rights
       Plan, a declaration that corporate by-laws were invalid and
       to prevent the closing of a certain transaction;

   (5) a lawsuit filed by International seeking injunctive relief
       for the return of documents of which it claims ownership;

   (6) a US$5,000,000 damage action commenced by a lessor of an
       aircraft lease, in which Hollinger was the guarantor;

   (7) an action commenced by the United States Securities and
       Exchange Commission on November 15, 2004, seeking
       injunctive, monetary and other equitable relief; and

   (8) investigation by the enforcement division of the OSC.


HOWARD CADEL: Case Summary & 4 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Howard M. Cadel
        12417 Bacall Lane
        Potomac, Maryland 20854

Bankruptcy Case No.: 06-13501

Type of Business: The Debtor previously filed for chapter 11
                  protection on May 16, 2005 (Bankr. D. Md.
                  Case No. 05-21471).

Chapter 11 Petition Date: June 16, 2006

Court: District of Maryland (Greenbelt)

Judge: Thomas J. Catliota

Debtor's Counsel: Steven Marc Assaraf, Esq.
                  Law Offices of Richard B. Rosenblatt, P.C.
                  30 Courthouse Square, Suite 302
                  Rockville, Maryland 20850
                  Tel: (301) 838-0098
                  Fax: (301) 838-3498

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 4 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service                               $873,000
Special Procedures Branch
31 Hopkins Plaza, Room 1140
Baltimore, MD 21201-2881

New York State Department                              $217,000
of Taxation and Finance
W.A. Harrimam State Campus
Albany, NY 12227

Comptroller of the Treasury                             $16,000
Compliance Division
301 West Preston Street
Baltimore, MD 21201

U.S. Bank                        2003 GMC Envoy          $4,000
Bankruptcy Department
P.O. Box 5229
Cincinnati, OH 45201


HOWARD DELIVERY: High Court Says Workers Claims Have No Priority
----------------------------------------------------------------
The United States Supreme Court handed down a decision last week
holding that Zurich American Insurance Co.'s claims for unpaid
workers' compensation premiums owed by Howard Delivery Service,
Inc., fall outside the priority accorded under Section 507(a)(5)
for claims on account of unpaid contributions to an employee
benefit plan.

The High Court's decision is published at 2006 WL 1639224 and a
copy of the Slip Opinion is available at no charge at
http://researcharchives.com/t/s?bab

Howard Delivery, the owner and operator of a freight trucking
business, sought Chapter 11 protection and Zurich, its workers'
compensation carrier, filed an unsecured claim seeking priority
status for some $400,000 in unpaid workers' compensation premiums.
The insurer asserted that these unpaid premiums constituted
"[c]ontributions to an employee benefit plan" and so were entitled
to priority status under the Bankruptcy Code.  The bankruptcy
court denied priority status to the insurer's claim, and the
district court affirmed.  The Court of Appeals reversed.
Certiorari was granted to resolve a split among the circuits.

The Bankruptcy Code accords priorities, among unsecured creditors'
claims, for unpaid "wages, salaries, or commissions," 11 U.S.C.
Sec. 507(a)(4)(A), and for unpaid contributions to "an employee
benefit plan ... arising from services rendered," Sec. 507(a)(5).
Section 507(a)(5) was enacted to capture fringe benefits-portions
of employee compensation for services rendered that are not
covered by Sec. 507(a)(4), Justice Ginsburg explained, writing for
the Court.  Congress tightened the linkage of (a)(4) and (a)(5) by
imposing a combined cap on the two priorities, currently set at
$10,000 per employee.

Noting that Congress did not define the key terms in Sec.
507(a)(5), Howard Delivery urged the Court to borrow the
definition of "employee benefit plan" contained in the Employee
Retirement Income Security Act.  Justice Ginsburg declined to do
so.  While the ERISA definition of "employee welfare benefit plan"
is susceptible of a construction that would include workers'
compensation plans, there is nothing in Sec. 507(a)(5) that
directs use of the ERISA definition, and the Court declined to
write such directions into the text.

"This case turns ... not on a definition borrowed from a statute
designed without bankruptcy in mind, but on the essential
character of workers' compensation regimes," the Court stated.
Workers' compensation does not compensate employees for work
performed but, instead, for on-the-job injuries incurred.
Furthermore, "[u]nlike pension provisions or group life, health,
and disability insurance plans-negotiated or granted as pay
supplements or substitutes-workers' compensation prescriptions
have a dominant employer-oriented thrust: They modify, or
substitute for, the common-law tort liability to which employers
were exposed for work-related accidents."  The Court also
distinguished workers' compensation arrangements from fringe
benefit plans by noting the non-elective nature of the former.
"States overwhelmingly prescribe and regulate insurance coverage
for on-the-job accidents, while commonly leave pension, health,
and life insurance plans to private ordering."

The Court rejected Howard Delivery's argument that according
Zurich's claim Sec. 507(a)(5) priority would give workers'
compensation carriers an incentive to continue coverage of a
failing business, thus promoting the debtor's rehabilitation.
"Rather than speculating on how workers' compensation insurers
might react were they to be granted an (a)(5) priority, we are
guided in reaching our decision by the equal distribution
objective underlying the Bankruptcy Code, and the corollary
principle that provisions allowing preferences must be tightly
construed," the Court explained.  It was far from clear that an
employer's liability to provide workers' compensation coverage fit
the Sec. 507(a)(5) category "contributions to an employee benefit
plan . . . arising from services rendered," and any doubt was best
resolved in accordance with the Code's equal distribution aim.  In
sum, while the question was close, "[the Court] conclude[d] that
premiums paid for workers' compensation insurance are more
appropriately bracketed with premiums paid for other liability
insurance, e.g., motor vehicle, fire, or theft insurance, than
with contributions made to secure employee retirement, health, and
disability benefits."

In a dissenting opinion, Justice Kennedy, joined by Justices
Souter and Alito, reasoned that because workers' compensation
plans clearly provide benefits to employees, they qualify as
"employee benefit plans." Although the majority held that workers'
compensation is not an "employee benefit plan" largely because it
also benefits employers,  Justice Kennedy found no support for
this rationale in the text or purpose of the Code. "Since the goal
of the priority is to protect the benefits of employees, there is
little reason to suppose that employees should lose that
protection based on the additional fact that employers may gain
something as well," Justice Kennedy wrote.  He noted, too, that
health benefits, which the majority recognized as covered by Sec.
507(a)(5), also benefit employers by way of tax breaks, good will,
a healthy workforce, and the leverage to pay lower wages.

Thursday's decision from the U.S. Supreme Court reversed and
remands the decision from the U.S. Court of Appeals for the Fourth
Circuit reported at 403 F.3d 228.

Howard Delivery Service, Inc., sought chapter 11 protection on
Jan. 30, 2002 (Bankr. N.D. W.Va. Case No. 02-30289).  The
Bankruptcy Court confirmed a chapter 11 plan in that case on
March 7, 2003.


INFORMATION ARCHITECTS: Acquires ClearCast Communications
---------------------------------------------------------
Information Architects disclosed that it has acquired ClearCast
Communications Inc.  The Company says that the acquisition of
ClearCast is an excellent complement to its existing capabilities
and products.

The day-to-day operations of ClearCast Communications include
broadcasting, communications and e-commerce.  The technology
empowered by ClearCast will allow Information Architects to
immediately gain market share in broadcasting, strengthen other
areas of operations and introduce new areas for expansion.

The ClearCast portfolio of products and services delivers value
through: Voice-Over-Internet-Service for business and residential
users, IPTV, original broadcast content and print assets.
ClearCast has a dedicated group working with philanthropic
ventures that benefit causes such as wildlife conservation, cancer
research and other charitable organizations.

"The acquisition of ClearCast by Information Architects is a
watershed moment because it provides a mechanism to allow
ClearCast to integrate and capitalize on an expanding viewer base
with IA's other synergistic departments," states Chris Cornilles,
President of ClearCast Communications.

"ClearCast completes a value proposition that IA has been working
on to achieve and maintain a competitive advantage in the
marketplace by providing a cast of products that continues to
drive value to our business partners and consumer base.  We are
excited to bring ClearCast's IPTV portal of channels to IA and its
other business verticals," added Todd K. Morgan, CEO of
Information Architects.

                  About Information Architects

Headquartered in Ft. Lauderdale, Florida, Information Architects
Corporation (OTCBB: IACH) -- http://www.ia.com/-- provides
employment screening and background investigations software
application.

At March 31, 2006, the Company's balance sheet showed $1,767,509
in total assets and $5,454,923 in total liabilities, resulting in
a $3,687,414 stockholders' deficit.

                            *   *   *

                       Gong Concern Doubt

As reported in the Troubled Company Reporter on May 12, 2006,
Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt
about Information Architects Corporation's ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the years ended Dec. 31, 2005, and 2004.
The auditor pointed to the Company's recurring losses from
operations and stockholders' deficiencies.


INTEGRATED HEALTH: Court Allows Hamilton Trust's $1.4 Mil. Claim
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Integrated Health Services, Inc., and its affiliates' stipulation
with Kenneth Milton Hamilton Trust, LLC.

As reported in the Troubled Company Reporter on May 17, 2006, the
parties agree that:

   (1) Claim No. 13712 will be allowed as a general unsecured
       claim for $1,400,000;

   (2) the stipulation does not resolve the prepetition rent
       claim, which is an additional allowed claim in full force
       and effect and unaffected by the stipulation; and

   (3) they will mutually release each other from all claims or
       causes of action related to the lease agreement.

The Trust asserts amounts owed by the IHS Debtors under a
prepetition lease agreement between them.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTEGRATED HEALTH: Court Extends Claim Objection Period to Sept. 1
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended to
Sept. 1, 2006, the deadline within which IHS Liquidating, LLC, as
successor to Integrated Health Services, Inc., and certain of its
direct and indirect subsidiaries, can object to proofs of claim
filed in the IHS Debtors' Chapter 11 cases, without prejudice to
its right to seek additional extensions.

As reported in the Troubled Company Reporter on May 16, 2006,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, related that, most recently, IHS Liquidating
has been reviewing and analyzing all claims that were designated
by the IHS Debtors as "unresolved" but had not been made to
subject to an objection as of the Effective Date.  These efforts
resulted in IHS Liquidating's filing of the 41st Omnibus Claims
Objection and a motion to approve various tax claim settlements.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTERPOOL INC: Reduced Leverage Prompts Moody's to Lift Ratings
---------------------------------------------------------------
Moody's Investors Service upgraded Interpool Inc.'s Corporate
Family Rating to B1 from B2 and the rating on the company's senior
unsecured notes to B2 from B3.  Additionally, the rating on the
capital trust securities issued by Interpool Capital Trust was
upgraded to Caa1 from Caa2.  This rating action results from the
company's improved leverage profile and expected improved
stability in financial performance, and it concludes Moody's
ratings review which began on March 20, 2006.  The outlook for the
ratings is stable.

Moody's said the upgrade of the Corporate Family Rating reflects
Interpool's reduced leverage following the sale of a portion of
its operating lease fleet to a third party with the proceeds used
to repay debt.  Moody's expects that Interpool will manage its
leverage at lower levels going forward.  Moody's noted that
Interpool has ample cash from its recent repatriation transaction
which should moderate its usage of debt to grow its investment in
its chassis and container businesses.

Moody's upgrade also recognizes Interpool's relatively stable
operating earnings through the economic cycle due to its focus on
long-term leases. Although Interpool has had volatile bottom-line
results due to various gains and charges, revenues in both the
container and chassis business have grown at a steady rate, while
total operating expense as a percentage of total revenue has
remained stable.

This performance has been reflected in the company's high
utilization and robust average lease rates.  The current softness
in container lease rates, due in-part to excess supply, should be
balanced by continued strength in the chassis business.
Interpool's revenue diversification is a ratings strength when
compared to similarly rated lessors that are predominantly
monoline in nature.

The rating agency also recognizes that there have been some
improvements in Interpool's internal control structure.  Although
material weaknesses remained in 2005, progress has been made by
investing in technology and increasing the accounting staff to
address the outstanding areas of concern.  It is Moody's
expectation that there will be further improvement in this area,
and such improvement would be a prerequisite to Moody's
considering any further upgrades to the rating.

Interpool's ratings are constrained by the firms governance and
controls, relatively high leverage, concentrated exposure to
industries that are cyclical in nature, and heavy competition in
the container leasing market.  The recent container operating
lease sale improved leverage levels and also reduced the total
company risk in the event of an economic downturn.

Finally, during its review, Moody's performed an analysis of
Interpool's corporate governance.  Moody's found Interpool's
governance structure akin to a private company due to the large
insider ownership base.  The following issues are of concern in
regards to the balance of interests between bondholders and
shareholders: the company has historically been involved in a
number of related party transactions, the percentage of
independent directors is below the average of Moody's analyzed
companies, and the structure of CEO compensation tends to favor
short-term benefits, rather than long-term growth.

Moody's does acknowledge the audit committee's diligence in
overseeing the internal control improvements as a positive.  As
mentioned in previous credit opinions, Interpool's corporate
governance is a key driver for the rating.

Ratings could go up if Interpool demonstrates ongoing sustainable
improvement in leverage metrics.  Continued operating earnings
stability coupled with a reduction in one-time charges would also
place positive pressure on the rating, though corporate governance
remains a rating constraint.

Ratings could go down if there is a material change in the capital
structure resulting in increased leverage.  Moody's expects total
debt to equity to remain below 3.5 times.  An increase in leverage
or decrease in equity resulting in a higher D/E ratio could put
pressure on the rating.  Also, sustaining adequate interest
coverage is imperative for the B1 CFR. A drop in EBIT to interest
expense below 1.5 times could also place stress on the rating.
Finally, a transaction to purchase a controlling interest in CAI
could be viewed negatively for the rating.

These ratings were upgraded:

Interpool, Inc.

   * Corporate Family to B1 from B2
   * Senior Unsecured Notes to B2 from B3

Interpool Capital Trust

   * Capital Trust Securities to Caa1 from Caa2

Interpool, Inc., headquartered in Princeton, New Jersey, reported
approximately $2.2 billion in total assets as of March 31, 2006.


J. CREW: Redeems 13-1/8% Senior Discount Debentures in Full
-----------------------------------------------------------
J. Crew Group, Inc., redeemed in full on June 14, 2006, its
outstanding 13-1/8% Senior Discount Debentures due 2008 issued
under the Indenture dated as of Oct. 17, 1997, as amended by the
First Supplemental Indenture dated as of May 6, 2003, between the
Company and U.S. Bank National Association, as trustee.

The redemption price was equal to equal to 100% of the outstanding
aggregate principal amount of the Senior Discount Debentures,
together with accrued and unpaid interest to the Redemption Date.

Based in New York, J. Crew Group, Inc. -- http://www.jcrew.com/--  
is a multi-channel apparel retailer that operates 159 retail
stores, 44 factory outlet stores, and a catalogue business.

As of Jan. 28, 2006, the Company's balance sheet showed total
assets of $337.3 million and total debts of $925.2 million
resulting in $587.8 million deficit.

                          *     *     *

As reported in the Troubled Company Reporter on April 26, 2006,
Standard & Poor's Ratings Services assigned its 'B' rating and '3'
recovery rating to J. Crew Operating Corp.'s $285 million term
loan and listed that rating on CreditWatch with positive
implications.


KAISER ALUMINUM: Class Fund & Escrow Report 1st Qtr. Fin'l Results
------------------------------------------------------------------
Kaiser Aluminum & Chemical Corporation's Tort Claims Settlement
Fund reports $2,536,972 in total investments and $8,848 in accrued
income for the quarter ending March 31, 2006.

For the period January 1,2006 through March 31, 2006, cash
disbursements total $33,629.  The Tort Claims Settlement Fund has
$71,666 in cash as of March 31.

Kaiser's Asbestos Claims Settlement Escrow reports $15,587,758 in
total investments and $54,222 in accrued income for the quarter
ending March 31, 2006.

For the first quarter, cash disbursements total $3,473,608.  As of
March 31, the Asbestos Claims Settlement Escrow has $531,001 in
cash.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on Feb.
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. Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.
On June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 98;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KATSUMI IIDA: Chapter 15 Petition Summary
-----------------------------------------
Petitioner: Junichi Kitahara, Esq.
            Abe, Ikubo & Katayama Law Offices
            Fukuoka Building, 9th Floor
            8-7 Yaesu 2-Chome
            Cho-ku, Tokyo 104-0028
            Japan

Debtor: Katsumi Iida
        Shibaura-Residence 502, 3-16-8 Shibaura
        Minato-ku, Tokyo 108-0023
        Japan

Case No.: 06-00376

Type of Business: Katsumi Iida is the owner of 100% stock of Total
                  Organic Recycling Systems, Inc., Clio Hawaii,
                  Inc., Kahuwai Bay Yacht Club, Inc., Kahala Royal
                  Corp., KHOMC Corp., and Kalalani KVR, Inc.  As
                  of the petition date, the Debtor's business
                  assets and real estate are located in Hawaii.

Chapter 15 Petition Date: June 13, 2006

Court: District of Hawaii (Honolulu)

Judge: Robert J. Faris

Petitioner's Counsel: Ira D. Kharasch, Esq.
                      Pachulski Stang Ziehl Young Jones
                      Weintraub, LLP
                      10100 Santa Monica Boulevard, 11th Floor
                      Los Angeles, California 90067-4100
                      Tel: (310) 277-6910

                            -- and --

                      Kenneth H. Brown, Esq.
                      Pachulski Stang Ziehl Young Jones
                      Weintraub, LLP
                      150 California Street, 15th Floor
                      San Francisco, California 94111-4500
                      Tel: (415) 263-7000
                      Fax: (415) 263-7010

                            -- and --

                      Jerrold K. Guben, Esq.
                      Reinwald O'Connor & Playdon LLP
                      733 Bishop Street, 24th Floor
                      Honolulu, Hawaii 96813
                      Tel: (808) 524-8350
                      Fax: (808) 531-8628

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  More than $100 Million


KMART CORP: Permits Lora Parker to Pursue Personal Injury Claim
---------------------------------------------------------------
Lora Parker sustained physical injuries at Kmart Store No. 3722
located in Burlington, Washington, on December 22, 2002.

Since Ms. Parker has already has complied with -- and exhausted
-- personal injury settlement procedures, Ms. Parker and Kmart
agree that the automatic stay and the injunction provision of
Kmart's confirmed Plan of Reorganization are lifted to permit Ms.
Parker to establish and liquidate her personal injury claim, and
to proceed to a final judgment or settlement.

The U.S. Bankruptcy Court for the Northern District of Illinois
has signed the agreed order.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 112; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KMART CORP: Court Allows Michael McEvily to Continue Civil Action
-----------------------------------------------------------------
The United States Bankruptcy Court for the Northern District of
Illinois modified the stay and the plan injunction to the extent
necessary to allow Michael McEvily's litigation pending in the
Circuit County of Fairfax, State of Virginia, to proceed and
continue to final judgment or settlement.

In October 2005, Mr. McEvily asked the Court to lift the stay to
allow him to pursue a civil action for damages against, among
others, Kmart Corporation.

The Action sought in excess of $50,000 on account of injuries he
sustained on June 6, 1999, by "a brutal and vicious beating by
Kmart's employees in the parking lot of one of its stores and a
continuation of mistreatment when he was dragged back into the
store and kept in custody."

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 112; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KOOSHAREM CORP: S&P Rates $300 Million Facilities at B-
-------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B-' corporate
credit rating and stable outlook to staffing agency Koosharem
Corp.

At the same time, Standard & Poor's assigned a bank loan rating of
'B-' and a recovery rating of '3' to Koosharem's $300 million bank
loan facilities, indicating an expectation of meaningful (50%-80%)
recovery of principal in a default scenario.  The facilities
consist of an $85 million revolving credit facility due 2011 and a
$215 million term loan B due 2012.

Proceeds will be used to fund the acquisition of competitor
RemedyTemp Inc.  Pro forma total debt is $238.7 million.

"The ratings reflect significant integration risk associated with
acquiring underperforming RemedyTemp, and Koosharem's small
earnings base, high leverage, and limited geographic diversity,"
said Standard & Poor's credit analyst Tulip Lim.  "Also, the
company has a niche position in the highly competitive and
cyclical temporary staffing industry."

Partially offsetting these concerns are:

   * Koosharem's potential to achieve cost-saving synergies
     through the acquisition;

   * its possible receipt of additional liquidity from its
     workers' compensation insurance carrier loosening the
     company's collateral commitments; and

   * its position in California, the largest staffing market in
     the U.S.


LEAR CORP: Tender Offer for Zero-Coupon Convertible Notes Expire
----------------------------------------------------------------
Lear Corporation (NYSE: LEA) reported the expiration and final
results of its cash tender offer and consent solicitation with
respect to its outstanding Zero-Coupon Convertible Senior Notes
due 2022.  The tender offer expired at midnight (Eastern time) on
June 13, 2006.

As of June 14, 2006, Lear accepted for payment and paid for notes
from holders of 91% of the outstanding notes pursuant to Lear's
Offer to Purchase dated May 16, 2006, as amended, and the related
Consent and Letter of Transmittal.  In exchange for each $1,000
principal amount at maturity of notes validly tendered and
accepted for payment, holders of the notes received $475 in cash.
Lear paid the aggregate purchase price of $276.8 million for the
tendered notes with funds on deposit in a cash collateral account
created in connection with its primary credit facility.  As a
result of receiving consents from holders of more than a majority
in aggregate principal amount at maturity of the notes, Lear
executed a supplemental indenture relating to the indenture
governing the notes.  The supplemental indenture eliminated the
covenants and related provisions in the indenture that restricted
Lear's ability to incur liens and enter into sale lease back
transactions.

                         About Lear Corp

Headquartered in Southfield, Michigan, Lear Corporation
(NYSE: LEA) -- http://www.lear.com/-- is one of the world's
largest suppliers of automotive interior systems and components.
Lear provides complete seat systems, electronic products and
electrical distribution systems and other interior products.  With
annual net sales of $17.1 billion, Lear ranks #127 among the
Fortune 500.  The Company's world-class products are designed,
engineered and manufactured by a diverse team of 115,000 employees
at 282 locations in 34 countries.

                          *     *     *

As reported in the Troubled Company Reporter on April 21, 2006,
Standard & Poor's affirmed the 'B+' rating on the $1 billion
first-lien term loan.  Standard & Poor's corporate credit rating
on Lear Corp. is B+/Negative/B-2.  The speculative-grade rating
reflects the company's depressed operating performance caused by
severe industry pressures.


LEVEL 3: S&P Rates Amended & Restated $730 Million Facility at B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating and
'1' recovery rating to Level 3 Financing Inc.'s amended and
restated $730 million secured nonamortizing first-lien term loan
credit facility maturing 2011.

"The 'B-' rating is one notch higher than the corporate credit
rating and the '1' recovery rating indicates that lenders can
expect full recovery of principal in the event of a payment
default or bankruptcy," said Standard & Poor's recovery analyst
Thomas Mowat.

The borrower under the credit facility is Level 3 Financing, a
wholly owned subsidiary of Broomfield, Colorado-based Level 3
Communications Inc.  The 'CCC+' bank loan rating and '3' recovery
rating on the existing loan will be withdrawn upon closing.

The expected recovery is higher than that assigned to the existing
bank loan because Standard & Poor's is evaluating the new loan
recovery using an enterprise value approach, rather than the
liquidation scenario used on the existing loan.  Improving
industry conditions, including consolidation that has eliminated
some financially weak competitors, suggest a stronger likelihood
that borrower could be successfully reorganized following a
potential bankruptcy.

Ratings List:

  Level 3 Communications Inc.:

    * Corporate credit rating -- CCC+/Stable/B-3

New Ratings:

  Level 3 Financing Inc.:

    * $730 million term loan -- B- (Recovery rating: 1)


LIBBEY INC: To Use Offering Proceeds to Close Vitro Acquisition
---------------------------------------------------------------
Libbey Inc. (NYSE: LBY) reported that its wholly owned subsidiary
Libbey Glass Inc. and its subsidiaries closed a private offering
of $306 million aggregate principal amount of floating rate senior
secured notes due 2011 and a private offering of units consisting
of $102 million aggregate principal amount 16% senior subordinated
secured pay-in-kind notes due 2011 and detachable warrants to
purchase a number of shares equal to an aggregate of three percent
of Libbey's currently outstanding common stock, on a fully diluted
basis, at an exercise price of $11.248 per share.  Concurrently,
Libbey Glass entered into a new $150 million senior secured credit
facility.

Libbey used proceeds from these financings to close the
acquisition from Vitro, S.A. de C.V. of its 51% equity interest in
Libbey's Mexican joint venture, bringing Libbey's ownership of
Crisa to 100%, and to repay substantially all of Libbey's existing
indebtedness, to repay existing indebtedness of Crisa and to pay
related fees, expenses and redemption premiums.

                        About Libbey Inc.

Based in Toledo, Ohio, Libbey Inc. -- http://www.libbey.com/--  
operates glass tableware manufacturing plants in the United States
in Louisiana and Ohio, as well as in Mexico, Portugal and the
Netherlands.  Its Crisa subsidiary, located in Monterrey, Mexico,
is the leading producer of glass tableware in Mexico and
Latin America.  Its Royal Leerdam subsidiary, located in Leerdam,
Netherlands, is among the world leaders in producing and selling
glass stemware to retail, foodservice and industrial clients. Its
Crisal subsidiary, located in Portugal, provides an expanded
presence in Europe.  Its Syracuse China subsidiary designs,
manufactures and distributes an extensive line of high- quality
ceramic dinnerware, principally for foodservice establishments in
the United States.  Its World Tableware subsidiary imports and
sells a full-line of metal flatware and hollowware and an
assortment of ceramic dinnerware and other tabletop items
principally for foodservice establishments in the United States.
Its Traex subsidiary, located in Wisconsin, designs, manufactures
and distributes an extensive line of plastic items for the
foodservice industry.  In 2005, Libbey Inc.'s net sales totaled
$568.1 million.

                            *    *    *

As reported in the Troubled Company Reporter on May 18, 2006,
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Libbey Inc.

At the same time, Standard & Poor's assigned its 'B' senior
unsecured debt rating to the company's proposed $400 million of
senior unsecured notes due 2014, which will be issued by the
company's wholly owned subsidiary Libbey Glass Inc. and guaranteed
on a senior basis by Libbey Inc.

Standard & Poor's said the outlook is stable


LILAC SUNRISE: Case Summary & 18 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Lilac Sunrise Disposal Inc.
        P.O. Box 226
        Baileyville, Maine 04694

Bankruptcy Case No.: 06-10200

Type of Business: The Debtor operates a recycling center
                  and offers trash disposal services.

Chapter 11 Petition Date: June 16, 2006

Court: District of Maine (Bangor)

Debtor's Counsel: Daniel L. Lacasse, Esq.
                  27 Washington Street
                  Calais, Maine 04619
                  Tel: (207) 454-7543
                  Fax: (207) 454-2111

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 18 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Internal Revenue Service         Taxes - Lilac Waste     $425,219
68 Sewall Avenue
Augusta, ME 04330

South West Solid                 Tipping Fees            $153,910
Waste Commission
P.O. Box 243
St. Stephen, NB.

McNeilus                         Equipment Lease          $36,000
P.O. Box 70
Dodge Center, MN 55927

Irving Oil                       Trade Creditor           $34,044

Maine Revenue Service            Taxes - Lilac Waste      $31,071

MBNA (Textron)                   Credit Card              $24,025

Chase MasterCard                 Credit Card Debt         $16,013

Pleasant River Transfer          Trade Creditor           $15,445

Down East Community              Workers Compensation     $12,001

Calais Regional Hospital         Workers Compensation     $11,564

Bangor Truck and Trailer         Mechanics Bill/          $11,539
                                 Truck Services

State of Maine                   Workers Compensation      $7,000

IFTA                             Audit                     $5,618

MEMIC                            Employee Claim            $4,441

Elan                             Visa Account              $4,342

Donahues Auto Supply             Trade Creditor            $4,165

AMGO Inc.                        Finance Insurance         $3,495

Bank One                         Credit Card Debt          $2,700


LOVESAC CORP: Gets $990,000 DIP Financing Commitment from Lenders
-----------------------------------------------------------------
The LoveSac Corporation and its debtor-affiliates obtained a
$990,000 DIP financing commitment from Walnut Investment Partners,
L.P., Walnut Private Equity Fund, L.P., Brand Equity Ventures II,
L.P., Hauser 41, LLC, Millevere Holdings, and Transcap.

The DIP Facility will be extended under two loans, a revolving
line of credit or a Series A Loan and a letter of credit, which
will be solely provided by Transcap.

The Series A Revolving Loan amounts to $500,000 with an interest
rate of 2.5% per month maturing on July 31, 2006.

The Letter of Credit is a $490,000 loan, to be issued in favor of
the Debtors' inventory suppliers, which letter of credit may be
drawn upon by the suppliers upon shipment of goods to the Debtors.
The Transcap Loan has an interest rate of 2.75% per month on the
outstanding balance and will mature 45 days from issuance.

The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware for authority to enter into the DIP Financing Agreements,
and to obtain up to $650,000 of the DIP Facility on an interim
basis.

The Debtors, with the consent of the Official Committee of
Unsecured Creditors and their investors will be selling
substantially all of their assets to confirm their joint plan.

The Debtors filed their Joint Liquidating Plan with the Court on
June 6, 2006 and a disclosure statement explaining that Plan on
June 9.  The Debtors anticipate emerging from chapter 11 by
July 31, 2006.

The Debtors tell the Court that they do not have sufficient cash
flow necessary to fund their operations and satisfy their
administrative expenses until the anticipated confirmation date of
the Plan.

Primarily, the Debtors need the additional cash to fund an
inventory purchase in connection with Costco's order, which is
scheduled for delivery next month.  Under the terms of the order,
the Debtors will generate positive cash flow from the sale, but
the order will not be paid for by Costco until after the Debtors
are required to pay for the goods needed to fill the order.

As adequate protection, the Debtors will give the Lenders' claims
superpriority administrative claim status.

                    G&G Cash Collateral Denied

The Court denied the Debtors' request to use cash collateral
securing their obligations to G&G, LLC.

The Court ruled that G&G did not maintain a perfected lien in the
Debtors' inventory by not filing a financing statement with the
Delaware Secretary of State after Debtor The LoveSac Corporation
in Delaware merged with The LoveSac Corporation in Utah in
February 2005.

The Court further ruled that the scope of G&G's cash collateral is
limited solely to the cash proceeds of property that the Debtors
owned as of the 2005 Merger.

The Debtors had access to a $2,800,000 loan facility from G&G
prior to their bankruptcy filing.  The Debtor owed $2.2 million on
account of the G&G loan as of Jan. 30, 2006.

The Court however allowed the Debtors to use cash collateral
securing repayment of their debts to lenders other than G&G,
including REM, LLC's cash collateral.  As adequate protection for
the use of the cash collateral, the Debtors grant REM replacement
liens on postpetition assets, to the same extent and priority as
they held in prepetition assets, for any diminution caused by the
use of the cash collateral.

The Debtors will use all desegregated cash collateral according to
this budget http://researcharchives.com/t/s?a5e

Headquartered in Salt Lake City, Utah, The LoveSac Corporation --
http://www.lovesac.com/-- operates and franchises retail stores
selling beanbags furniture.  The LoveSac Corp. and three
affiliates filed for chapter 11 protection on Jan. 30, 2006
(Bankr. D. Del. Case No. 06-10080).  Anthony M. Saccullo, Esq.,
and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey
Coston, Esq., at Squire, Sanders & Dempsey LLP represent the
Debtors in their restructuring efforts.  Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers represents the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.


MARSH SUPERMARKETS: Files Complaint to Resolve MSH Merger Issue
---------------------------------------------------------------
Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) filed a
complaint in the Hamilton Superior Court, Hamilton County,
Indiana, naming MSH Supermarkets Holding Corp., MS Operations,
Inc., a subsidiary of MSH Supermarkets, Cardinal Paragon, Inc. and
Drawbridge Special Opportunities Advisors LLC as defendants.

The complaint asks for a declaratory judgment clarifying the
Company's rights and responsibilities under the merger agreement
with MSH Supermarkets entered into on May 2, 2006.  Specifically,
Marsh has asked for a determination of whether the provisions of
the merger agreement requiring Marsh not to waive or fail to
enforce the standstill provisions in the confidentiality
agreement, executed by Cardinal prevent Marsh from negotiating
with Cardinal and Drawbridge or whether the merger agreement
permits Marsh to consider the unsolicited communication from
Cardinal and Drawbridge regarding a competing transaction if the
Marsh board of directors determines that it is reasonably likely
to be a "Superior Proposal."

The Company also requested an injunction that, depending upon how
the Court resolves the declaratory issue, either

   (a) compels Cardinal and Drawbridge to withdraw their
       indications of interest and prohibits them from violating
       the terms of the confidentiality agreement entered into by
       Cardinal, or

   (b) prohibits MSH Supermarkets from terminating the merger
       agreement based on Marsh's taking any actions the Court
       declares Marsh may take.

Finally, the Company requested that, regardless of what other
relief the Court may order, the Court

   (a) declare that Marsh's filing of the lawsuit and requesting a
       judicial resolution of the controversy is not a breach of
       the merger agreement, and

   (b) an injunction prohibiting MSH Supermarkets from taking any
       action to terminate the merger agreement on that basis.

The Company also filed preliminary proxy materials with respect to
the MSH Supermarkets merger.  The Board of Directors has not taken
any action at this time to change its recommendation of the merger
with MSH Supermarkets.

                    About Marsh Supermarkets

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

                          *     *     *

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


MEDIANEWS GROUP: Moody's Rates Proposed $300 Mil. Loan at Ba3
-------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to MediaNews
Group, Inc.'s $896 million senior secured credit facilities and
confirmed all other ratings.  Details of the rating action:

Ratings assigned:

   * Existing $350 million senior secured revolving credit
     facility -- Ba3

   * Existing $100 million senior secured term loan A
     facility -- Ba3

   * Existing $146.2 million senior secured term loan B
     facility -- Ba3

   * Proposed $300 million senior secured term loan C
     facility -- Ba3

Ratings confirmed:

   * $149 million of 6.375% Senior Subordinated Notes
     due 2014 -- B2

   * $300 million of 6.875% Senior Subordinated Notes due
     2013 -- B2

   * Corporate Family rating -- Ba3

   * The rating outlook is stable.

This concludes the review for possible downgrade which was
initiated on April 27, 2006 after the company's announcement that
it had concluded a definitive agreement, in association with The
Hearst Corporation and the California Newspaper Partnership, to
acquire four newspapers from The McClatchy Company in a
transaction valued at approximately $1 billion..

MediaNews plans to fund its proposed acquisition of the San Jose
Mercury News, The Monterey County Herald, the Contra Costa Times
and the Saint Paul Press with the proposed $300 million senior
secured term loan C plus $70 million in borrowings under its
existing $350 million revolving credit with the balance coming
from co-investor funding.

As a result, the ratings confirmation is largely based upon
management's use of a significant amount of co-investor equity to
fund the proposed acquisitions which results in a de-minimus
increase in financial leverage.  Management considers that
acquisition-related synergies and new business initiatives will
result in a substantial improvement in free cash flow generation,
the proceeds of which will permit deleveraging to below 5.0 times
debt to EBITDA by the end of June 2007.

The assigned ratings, which are based upon management-prepared
financial information for the acquired properties, assume that the
proposed acquisition and equity contribution agreements are
successfully concluded as currently contemplated.

The ratings reflect MediaNews's high pro-forma financial leverage;
management's acquisitiveness, and the company's vulnerability to
print advertising spending and gradual circulation count slippage.
The ratings are supported by MediaNews's scale and geographic
scope; the leading and largely defensible market position enjoyed
by most of its newspaper titles; and the company's business
strategy of sharing economic and financial risks in most of its
markets, either through joint operating agreements, or
partnerships.

The stable outlook incorporates MediaNews's positive cash
generation, the predictability of its top line, and its historic
ability to reduce leverage.

MediaNews provides supplemental financial information based upon
its proportionate newspaper ownership, which Moody's uses in its
own analysis as a more meaningful gauge of the company's financial
performance.

The senior secured credit facilities are rated at parity with the
Corporate Family rating in recognition of the preponderance of
senior secured debt within MediaNews's capital structure and the
support provided by approximately $445 million in subordinated
debt and $290 million of incremental equity.  The subordinated
notes are rated two notches below the Corporate Family rating in
recognition of their ranking below approximately $805 million in
senior secured priority claims.

Headquartered in Denver, Colorado, MediaNews is one of the largest
independently-owned US newspaper publishing companies.
The company reported sales of $779 million for fiscal 2005.


MERIDIAN AUTOMOTIVE: UST Reacts to BDO Seidman's Retention Pact
---------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
opposes Meridian Automotive Systems, Inc., and its debtor-
affiliates' supplemental application to employ BDO Seidman, LLP,
to the extent that the Engagement Letter entitled "Dispute
Resolution Procedure" references a facilitated negotiation process
that the parties intend to be bound by "should such procedures be
authorized by the Bankruptcy Court."

The U.S. Trustee does not object to that term provided that the
procedures apply to non-core matters only.

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. 30;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


MERIDIAN AUTOMOTIVE: UST Wants Hilco Appraisal's Retention Denied
-----------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
asks the U.S. Bankruptcy Court for the District of Delaware to
deny Meridian Automotive Systems, Inc., and its debtor-affiliates'
request to employ Hilco Appraisal Services, LLC, or strike the
term from the Engagement Letter.

The U.S. Trustee notes that the Engagement Letter providing for
the employment of Hilco Appraisal as the Debtors' appraisers,
contains a limitation of liability term.

The U.S. Trustee contends that the limitation of liability term
is:

   (i) inappropriate in light of Hilco's role in the Debtors'
       Chapter 11 cases; and

  (ii) inconsistent with general notions of bankruptcy
       professionalism.

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. 30;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


MILLENNIUM CHEMICALS: S&P Downgrades Corporate Credit Rating to B+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Millennium Chemicals Inc. and its affiliate, Millennium America
Inc. and removed the ratings from CreditWatch, where they had been
placed with negative implications on Feb. 23, 2006.

Standard & Poor's lowered the corporate credit rating on
Millennium Chemicals to 'B+' from 'BB-'.  The senior secured debt
was lowered to 'BB-' from 'BB'.  The outlook is negative.

The CreditWatch listing followed a jury verdict in Rhode Island
that found Millennium Holdings LLC, an indirect subsidiary of
Millennium Chemicals Inc., and two other defendants, liable for
creating a public nuisance by making lead-based paints decades
ago.

"Today's rating actions recognize the potential for Millennium
Holdings to face meaningful remediation obligations to abate lead
paint in the State of Rhode Island, and some potential for
additional lead litigation in other states," said Standard &
Poor's credit analyst Kyle Loughlin.

"However, we also note that any obligations related to the Rhode
Island remediation process are not likely to result in direct
financial pressure on the rated entities, Millennium Chemicals
Inc. or Millennium America Inc.  We believe that any financial
obligations will be contained at the named legal entity and
defendant in the Rhode Island case, Millennium Holdings."

Still, Millennium Chemicals' financial profile remains subpar
relative to the previous ratings and our expectation of financial
support for Millennium by its stronger parent, Lyondell Chemical
Co., may be challenged by the recent adverse developments in Rhode
Island and the potential for additional lead-related lawsuits in
other jurisdictions.

Specifically, Standard & Poor's remains somewhat concerned that
Millennium Chemicals could voluntarily support the potential
lead obligations, including bonding requirements, of Millennium
Holdings thereby adding some incremental financial pressure to its
already stretched financial profile.  Standard & Poor's also notes
that future lead-related litigation is highly uncertain and more
litigation following the Rhode Island verdict could dampen
Lyondell's willingness to support its investment in the Millennium
companies.

The 'BB-' corporate credit ratings and other long-term ratings on
Millennium's parent, Lyondell Chemical Co. and its affiliate
Equistar Chemicals L.P. remain on CreditWatch with positive
implications where they were placed on April 10, 2006.  That
CreditWatch placement followed the announcement that Lyondell and
CITGO Petroleum Corp., partners in Lyondell-Citgo Refining L.P.,
have signed a letter of intent to explore the sale of LCR's
Houston, Texas-based refinery.

The CreditWatch positive indicates that the long-term corporate
credit and issue ratings could be raised following the successful
completion of the transaction, if management uses the majority of
proceeds to accelerate its plans to reduce debt.  The resolution
of the CreditWatch on Lyondell and Equistar will also include a
reassessment of Lyondell's financial and operational objectives
following the LCR transaction and a review of the company's
financial prospects over the business cycle.

The ratings on Millennium Chemicals reflect:

   * the company's weak business position as a producer of
     commodity chemicals;

   * its 29.5% ownership in Equistar Chemicals L.P.;

   * the risks associated with a highly leveraged capital
     structure and lead paint litigation; and

   * operating results that vary widely over the course of the
     business cycle.

These risks are mitigated somewhat by financial policies that
emphasize debt reduction as business conditions improve and the
preservation of sufficient liquidity at all points in the business
cycle.

Millennium is a $2 billion diversified commodity chemical company.
The majority of sales, approximately 70%, are generated from the
company's position as the second-largest producer of titanium
dioxide, a white pigment used in paper, plastics, and coatings,
but Millennium also has a position in the global acetyls market,
and a niche terpene-based flavors and fragrance chemicals
business.  In addition, Millennium owns a 29.5% stake in Equistar
Chemicals L.P., a $12 billion petrochemical producer.  Standard &
Poor's considers the Equistar investment to be a key attribute in
support of Millennium's business and financial risk profile.


MIRANT CORP: Sets Talks with Shareholders in New York & Boston
--------------------------------------------------------------
Mirant Corporation (NYSE: MIR) reported a continuation of
communications with shareholders including one-on-one meetings to
be held in New York on Wednesday, June 21, 2006, and Thursday,
June 22, 2006, and in Boston on Friday, June 23, 2006, and will
include as many large shareholders as possible.

"The discussions we have had with shareholders over the past
several weeks have been beneficial and played a role in the
decision to withdraw our NRG acquisition proposal," Mirant
Chairman and Chief Executive Officer Edward R. Muller said.  "The
NRG proposal was unique in its value creation for shareholders;
however, our analysis of other company acquisitions shows that
they would not create value and, as a result, are not being
considered.

"We reiterate that progress continues in the efforts to
recapitalize our business in the Philippines.  We expect to close
the transaction in July.

"We always value communication with our shareholders and look
forward to a productive dialogue in the coming weeks and months
regarding the creation of shareholder value."

                       About Mirant Corp.

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.

                         *     *     *

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.


MODAVOX INC: Epstein Weber Raises Going Concern Doubt
-----------------------------------------------------
Epstein Weber & Conover, P.L.C., in Scottsdale, Arizona, raised
substantial doubt about Modavox, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Feb. 28, 2006.  The auditor pointed
to the Company's recurring losses from operations, and working
capital deficit.

The Company reported a $2,436,284 net loss on $966,599 of total
revenues for the year ended Feb. 28, 2006.

At Feb. 28, 2006, the Company's balance sheet showed $3,678,051 in
total assets and $2,308,870 in total liabilities, and $1,369,181
in stockholders' equity.

The Company's Feb. 28 balance sheet showed strained liquidity with
$509,917 in total current assets available to pay $2,308,870 in
total current liabilities coming due within the next 12 months.

A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?ba0

                        About Modavox Inc

Modavox, Inc. -- http://www.modavox.com/-- produces and
distributes online audio and video streaming media content,
offering innovative, effective and comprehensive online marketing
tools for reaching targeted niche communities worldwide.  Through
Modavox Central(TM), Modavox takes the search out of search,
delivering content straight to computer desktops and portable
devices.  Through StreamSafe(TM), Webcast Wizard(TM), Stream
Syndicate(TM) and AudioEye(TM), Modavox offers managed access to
secure Internet streaming media; facilitates enterprise
collaboration for online meeting, event management, enterprise
communications and distance learning; offers digital rights
management to syndicate audio and video content to Internet-
enabled devices; and provides Internet accessibility for the
handicapped.


MULTI MEDIA: Sherb and Company Raises Going Concern Doubt
---------------------------------------------------------
Sherb & Co, LLP, in New York, New York, raised substantial doubt
about Multi-Media Tutorial Services, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended Feb. 28, 2006.  The
auditor pointed to the Company's incurred accumulated deficit and
net losses, and working capital deficiency.

The Company reported a $1,508,073 net loss on $678,824 of total
revenues for the year ended Feb. 28, 2006.

At Feb. 28, 2006, the Company's balance sheet showed $221,290 in
total assets and $6,121,505 in total liabilities, resulting in a
$5,900,215 stockholders' deficit.

The Company's Feb. 28 balance sheet also showed strained liquidity
with $144,121 in total current assets available to pay $6,121,505
in total current liabilities coming due within the next 12 months.

A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?b9e

                        About Multi-Media

Multi-Media Tutorial Services, Inc. produces, acquires and
telemarkets a variety of products to educational institutions and
consumers using direct marketing through television, radio and
print advertising.  The company's principal product to date has
been proprietary tutorial education programs on videotape for use
by adults and children in homes, workplaces, schools, libraries
and other locales.


NAVISITE INC: Posts $3.4 Mil. Net Loss in 2006 3rd Fiscal Quarter
-----------------------------------------------------------------
NaviSite, Inc., filed its third fiscal quarter financial
statements for the three months ended April 30, 2006, with the
Securities and Exchange Commission on June 14, 2006.

The Company reported a $3,448,000 net loss on $27,850,000 of
revenues for the three months ended April 29, 2006, compared to a
$3,033,000 net loss on $26,762,000 of revenues for the third
quarter ended April 30, 2005.

At April 30, 2006, the Company's balance sheet showed $102,008,000
in total assets and $102,789,000 in total liabilities, resulting
in a $781,000 stockholders' deficit.

The Company's April 30 balance sheet also showed strained
liquidity with $22,433,000 in total current assets available to
pay $33,733,000 in total current liabilities coming due within the
next 12 months.

Full-text copies of the Company's financial statements for the
three months ended April 30, 2006, are available for free at
http://ResearchArchives.com/t/s?b9a

                        Going Concern Doubt

Auditors working for KPMG LLP in Boston, Massachusetts raised
substantial doubt about NaviSite, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the years ended July 31, 2005, and 2004.  The
auditors pointed to the Company's recurring operating losses since
inception and accumulated deficiency.

NaviSite, Inc. (NASDAQ: NAVI) -- http://www.navisite.com/--  
provides IT hosting, outsourcing and professional services for
mid- to large-sized organizations.  Over 900 companies across a
variety of industries tapped NaviSite to build, implement and
manage their systems and applications.  NaviSite has 14 data
centers and eight major office locations across the United States,
United Kingdom and India.


NORTEL NETWORKS: Unit Launches $2 Bil. Senior Notes Offering
------------------------------------------------------------
Nortel Networks Corporation's (NYSE/TSX: NT) principal direct
operating subsidiary, Nortel Networks Limited, commenced a
proposed $2 billion offering of senior unsecured notes in the
United States to qualified institutional buyers pursuant to Rule
144A under the U.S. Securities Act of 1933, as amended, to persons
outside of the United States under Regulation S under the
Securities Act, and to accredited investors in Canada pursuant to
applicable private placement exemptions, subject to market and
other conditions.  The Notes to be issued by NNL would be fully
and unconditionally guaranteed by the Company and initially
guaranteed by the Company's indirect subsidiary, Nortel Networks
Inc.

NNL plans to use $1.3 billion of the net proceeds to repay the
$1.3 billion one-year credit facility that NNI entered into in
February 2006, and the remainder for general corporate purposes,
including to replenish recent cash outflows of $150 million for
the repayment at maturity of the outstanding aggregate principal
amount of the 7.40% Notes due June 15, 2006 issued by the
Company's indirect finance subsidiary, Nortel Networks Capital
Corporation, and fully and unconditionally guaranteed by NNL, and
$575 million (plus accrued interest of $5 million) deposited into
escrow on June 1, 2006 pursuant to the proposed class action
settlement on Feb. 8, 2006.

The Notes and related guarantees have not been registered under
the Securities Act or the securities laws of any other
jurisdiction and may not be offered or sold in the United States
or to or for the benefit of U.S. persons unless so registered
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act
and applicable securities laws in other jurisdictions.

                      About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation --
http://www.nortel.com/-- is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information.  Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries.


NORTEL NETWORKS: Moody's Rates Proposed $2 Billion Sr. Notes at B3
------------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
of Nortel; assigned a B3 rating to the proposed $2 billion senior
note issue; downgraded the $200 million 6.875% Senior Notes due
2023 and revised the outlook to stable from negative.

The proposed senior note issue will be used to refinance the
existing $1.3 billion interim facility, replenish cash after the
recent repayment of the $150 million 7.40% senior note issue due
June 2006 and funding of the $575 cash litigation settlement and
for general corporate purposes.  The outlook revision reflects the
expectation of the replacement of a short term credit facility
with more permanent financing, the progress in settling the
shareholder litigation and progress towards bolstering internal
controls.

In addition, Moody's has upgraded the speculative grade liquidity
rating to SGL-2 from SGL-3.  Upon closing of the proposed senior
note issue, the ratings on the interim facility and the 2006 notes
will be withdrawn.

The B3 corporate family rating reflects the significant challenges
still ahead to restore revenue and profitability growth in the
intensely competitive and consolidating telecommunications
equipment market.  The ratings also reflect the weak overall
credit metrics and difficulty in getting internal operations in
order.

The ratings also consider the company's significant market share
and long term relationships within the enterprise, wireless and
wireline businesses.  The company continues to spend heavily on
next generation wireless and wireline technologies as spending on
research and development continues to be amongst the highest of
its peers at approximately 17%.

While material weaknesses will not likely be fully resolved until
the end of 2007, we note continued progress in addressing internal
controls issues and management's focus on improving systems,
running the business professionally and instituting sound
corporate governance practices.  The implementation of a new SAP
financial system, a massive undertaking in its own right, should
provide a stronger framework for managing the company and
potentially contribute to overall reduced expenses at the company.

The outlook revision also reflects a stabilizing management team.
After years of disruptive turnover, the company appears to have a
team that is able to develop a turnaround plan and see it through.
While management has outlined plans to improve operating
profitability by an aggregate $1.5 billion over three years and
has targeted an increase in operating margins to double digit
levels, any further outlook revision or ratings improvement will
require a more developed plan and evidence of operating
improvement.  Moody's notes that the outlook change incorporates
the expectation of the completion of the proposed transaction. If
the company is unable to complete the refinancing, the outlook
will be revisited and likely revised back to negative.

Following the repayment of the partially secured $1.3 billion
interim facility, the security on the 2023 notes and the EDC
facility will fall away resulting in a substantially unsecured
capital structure.  The elimination of security on the 2023 notes
does however take away its effective seniority in relation to the
other unsecured debt which results in its rating returning to the
previous B3 level, in line with the other unsecured debt at the
company.  The 2023 notes were upgraded from B3 to B2 in February
2006 when they were granted security along with the then new
$1.3 billion interim facility.

The company is expected to have approximately $2.6 billion of
unrestricted cash and debt of $4.4 billion pro-forma of this
transaction. The upgrade in the speculative grade liquidity rating
to SGL-2 reflects the replacement of approximately
$1.45 billion of debt maturing within one year with a longer term
offering. The SGL-2 rating also reflects the large cash balance
the company maintains which is more than adequate to meet the
company's short to mid term needs despite expectations of
continued negative free cash flow.  The SGL-2 is contingent upon
the completion of the proposed refinancing.

This rating was assigned:

Nortel Networks Limited

   * Proposed $2.0 billion senior unsecured notes -- B3

This rating was upgraded:

Nortel Networks Limited

   * Speculative Grade Liquidity rating - SGL-2

This rating was downgraded:

Nortel Networks Limited

   * 6.875% Senior notes -- to B3 from B2

These ratings were affirmed:

Nortel Networks Inc.

   * Senior Secured Interim Credit Facility -- B2
   * Senior Unsecured Interim Credit Facility -- B3

Nortel Networks Corporation

   * 4.25% Senior Unsecured Convertible notes -- B3

Nortel Networks Limited

   * Corporate Family Rating -- B3
   * Preferred Stock -- Caa3

Nortel Networks Capital Corporation

   * 7.875% Senior Unsecured -- B3

The outlook is stable

Nortel Networks Corporation is a global telecommunications
networking solutions provider headquartered in Brampton, Ontario,
Canada.


NORTEL NETWORKS: S&P Rates Proposed $2 Billion Notes at B-
----------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on
Brampton, Ontario-based Nortel Networks Limited from CreditWatch
with negative implications, where they were placed March 10, 2006,
following a ratings review.

At the same time, Standard & Poor's affirmed its 'B-' long-term
and 'B-2' short-term corporate credit ratings on the company, and
assigned its 'B-' senior unsecured debt rating to the company's
proposed $2 billion notes.  The outlook is stable.

"The ratings affirmation and stable outlook on NNL reflect
expectations that the company will successfully raise $2 billion
in new debt," said Standard & Poor's credit analyst Joe Morin.

"Proceeds from the new debt issues will be used to refinance the
company's $1.3 billion interim credit facility maturing in
February 2007 and for general corporate purposes," Mr. Morin
added.

The incremental $0.7 billion raised will largely offset the $575
million in cash recently placed in escrow as part of a litigation
settlement, and a $150 million June 2006 debt maturity.  NNL's
intention is to raise $2.0 billion in new debt through the
issuance of five-year floating rate notes, seven-year fixed rate
notes, and 10-year fixed rate notes, with the final amounts of
each tranche to be determined.

The ratings on NNL are based on the consolidation with its parent,
Nortel Networks Corporation.  The ratings reflect:

   * a weak but stable spending environment for telecom equipment
     and services globally;

   * a highly competitive industry;

   * the company's high debt level;

   * weak credit protection measures; and

   * profitability that is lagging its global peers.

These factors are only partially mitigated by the company's
liquidity position, which, pro forma for the refinancing, should
provide adequate financial flexibility in the medium term.  The
recent settlement agreement with respect to a substantial amount
of litigation outstanding against the company removes a
significant credit overhang.  Finally, Nortel management is
addressing the remaining weaknesses in internal controls and
Standard & Poor's believes these issues will be resolved over
time.

The stable outlook reflects expectations for successful completion
of the proposed refinancing and modest improvements in Nortel's
operating performance, including modest growth in revenues and
EBITDA, and improvements in cash flow.  On successful placement of
the $2 billion in new debt, Nortel will have adequate financial
flexibility at the current rating level.  If Nortel is not
successful in its efforts to raise new debt financing in the near
term the outlook could be revised to negative and the short-term
rating on the company could be lowered to 'B-3'.

In addition, should Nortel's profitability remain negative, and
free operating cash flow not improve to at least breakeven in the
medium term, the outlook could be revised to negative.

Should Nortel demonstrate more substantial improvements in
performance, and credit measures strengthen as a result, the
outlook could be revised to positive or the rating could be
raised.


NYLIM STRATFORD: Moody's Junks Rating on $32 Million Notes
----------------------------------------------------------
Moody's Investors Service downgraded this note issued by NYLIM
Stratford CDO 2001-1, Ltd.:

   * $32,000,000 Class C Fixed Rate Notes Due 2036
     Prior Rating: B1
     Current Rating: Caa2

According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, par loss, as well as the failure
to meet all coverage tests.


OAKWOOD HOMES: 3rd Circuit Says Double Discounting Was Wrong
------------------------------------------------------------
The United States Court of Appeals for the Third Circuit says
Judge Walsh and Judge Farnan goofed when they computed the amounts
due to Jefferson-Pilot Life Insurance Company, Jefferson-Pilot
Financial Insurance, Tyndall Partners, LP, Tyndall Institutional
Partners, LP, JP Morgan Chase Bank, and other holders of Class B-2
Certificates issued by some Real Estate Mortgage Investment
Conduits trusts related to Oakwood Homes Corporation.

In an Opinion published at 2006 WL 1579875, the Third Circuit says
the Bankruptcy Court erred by "double discounting" when it
discounted the principal component of the claims against the
Chapter 11 debtor to present value after also having disallowed
the post-petition interest portion of the claims.  The Bankruptcy
Court could have either disallowed post-petition interest or
discounted the entire claim to present value but 11 U.S.C. Sec.
502(b) doesn't permit both.

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


OCA INC: U.S. Trustee Appoints Five-Member Equity Committee
-----------------------------------------------------------
The United States Trustee for Region 5 appointed five creditors to
serve on an Official Committee of Equity Security Holders of Oca,
Inc., and its debtor-affiliates' chapter 11 cases:

   1. NightWatch Capital Management
      Attn: Paul Burgon
      3311 North University Avenue, Suite 200
      Provo, UT 84604

   2. Kanagawa Holdings LLC
      Attn: David Shuldiner
      80 West 12th Street
      New York, NY 10011

   3. Xerion Capital Partners LLC
      Attn: Daniel J. Arbess
      450 Park Avenue, 27th Floor
      New York, NY 10022

   4. Adrian J. Costanza, DDS
      48 Newhall Street
      Revere, MA 02151

   5. Charles Stewart, P.A.
      7900 Morning Lane
      Fort Worth, TX 76123

Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/
-- provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well
as capital and proprietary information systems to approximately
200 orthodontic and dental practices representing approximately
almost 400 offices.  The Debtor's client practices provide
treatment to patients throughout the United States and in Japan,
Mexico, Spain, Brazil and Puerto Rico.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179).  William H. Patrick, III, Esq., at Heller Draper
Hayden Patrick & Horn, LLC, represents the Debtors.  Patrick S.
Garrity, Esq., and William E. Steffes, Esq., at Steffes
Vingiello & McKenzie LLC represent the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed US$545,220,000 in total assets and
US$196,337,000 in total debts.


OCA INC: Equity Panel Wants Bell Boyd as Lead Bankruptcy Counsel
----------------------------------------------------------------
The Official Committee of Equity Security Holders of OCA, Inc.,
and its debtor-affiliates asks the Honorable Jerry A. Brown of the
U.S. Bankruptcy Court for the Eastern District of Louisiana in New
Orleans for permission to retain Bell Boyd & Lloyd LLC as its lead
bankruptcy counsel.

Bell Boyd will:

   (a) represent the Equity Committee in any proceedings and
       hearings related to the Debtors' chapter 11 cases,
       including without limitation representing the interests of
       equity holders in connection with the Debtors' proposed
       Plan and Disclosure Statement on file with the Bankruptcy
       Court;

   (b) attend meetings and negotiate with representatives of the
       Debtors, the Official Committee of Unsecured Creditors, and
       other parties-in-interest in the Debtors' bankruptcy cases;

   (c) negotiate with the Debtors and the Creditors' Committee and
       other creditor constituencies, and otherwise represent the
       interests of  equity holders in the Debtors' cases
       regarding a plan of reorganization;

   (d) advise the Equity Committee of its powers and duties;

   (e) advise the Equity Committee regarding matters of bankruptcy
       law;

   (f) provide assistance, advice, and representation concerning
       the condirmation of, or objection to, any proposed plan;

   (g) prosecute and defend litigation matters and other matters
       that might arise in the Debtors' bankrutpcy cases;

   (h) provide counsel and representation with respect to
       assumption or rejection of executory contracts and leases,
       sales of assets, and other bankruptcy-related matters
       arising in the Debtors' bankruptcy cases;

   (i) render advice with respect to other legal issues relating
       to the  Debtors' bankrutpcy cases, including, but not
       limited to, securities, corporate finance, tax, and
       commercial issues;

   (j) prepare, on behalf of the Equity Committee, any necessary
       adversary complaints, motions, applications, orders, and
       other legal papers relating to the Debtors' bankruptcy
       cases; and

   (k) perform other legal services as may be necessary and
       appropriate for the efficient and economical administration
       of the Debtors' bankruptcy cases and the representation of
       the equity holders' interests.

Carmen H. Lonstein, Esq., a partner at Bell Boyd & Lloyd LLC,
discloses that the Firm's professionals bill:

   Designation                   Hourly Rate
   -----------                   -----------
   Partners                      $330 - $690
   Associates                    $215 - $300
   Paralegals                    $140 - $215
   Project Assistants             $45 -  $85

   Professional                  Hourly Rate
   ------------                  -----------
   Carmen H. Lonstein, Esq.          $450
   Steven A. Domanowski, Esq.        $300
   Adam R. Schaeffer, Esq.           $270

Ms. Lonstein assures the Court that Bell Boyd & Lloyd LLC does not
represent or hold any interest adverse to the Equity Committee and
the Debtors, and is disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.

Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/
-- provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well
as capital and proprietary information systems to approximately
200 orthodontic and dental practices representing approximately
almost 400 offices.  The Debtor's client practices provide
treatment to patients throughout the United States and in Japan,
Mexico, Spain, Brazil and Puerto Rico.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179).  William H. Patrick, III, Esq., at Heller Draper
Hayden Patrick & Horn, LLC, represents the Debtors.  Patrick S.
Garrity, Esq., and William E. Steffes, Esq., at Steffes
Vingiello & McKenzie LLC represent the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed US$545,220,000 in total assets and
US$196,337,000 in total debts.


OVERSEAS SHIPHOLDING: Board Okays $300 Million Share Repurchase
---------------------------------------------------------------
Overseas Shipholding Group, Inc.'s (NYSE: OSG) Board of Directors
has authorized a share repurchase program of $300 million.  If the
repurchase program were to be completed at an average price of
$51.00, the Company would purchase approximately 5.88 million
shares, or nearly 15% of the total shares outstanding.

"[This] announcement demonstrates our confidence in OSG and its
future, and represents a meaningful step in our ongoing commitment
to further enhance value for shareholders," said Morten Arntzen,
OSG's President and CEO.  "It also reflects our strong belief that
the Company's current share price does not adequately reflect the
fundamental value of the firm as measured by our substantial
locked-in levels of earnings as well as future earnings prospects
of our business.  Our actions over the last two and one-half years
have resulted in market-leading positions in each of the major
segments in which we operate and is something shareholders can
continue to expect going forward."  Arntzen continued, "We will
continue to build on a foundation of superior commercial and
technical expertise which is the strength of OSG's brand and
optimize the ownership profile and trading strategies of our fleet
based on market conditions.  This repurchase allows us to maintain
financial flexibility while optimizing the capital structure of
the Company."

The specific timing and amount of share repurchases will vary
based on market conditions, securities law limitations and other
factors.  The repurchases will be made using OSG's cash resources,
and the program may be suspended or discontinued at any time
without prior notice.  As of March 31, 2006, OSG had $197.4
million in cash and cash equivalents.  The Company generated
$452.0 million cash flow from operations on Time Charter
Equivalent Revenues of $961.7 million in fiscal 2005, the most
recent year for which financial results have been reported. The
Company also has a $1.8 billion seven-year revolving credit
agreement, which brings OSG's total liquidity as of June 1, 2006
to more than $2.0 billion.

                            About OSG

Overseas Shipholding Group, Inc. (NYSE: OSG) --
http://www.osg.com/-- is a publicly traded tanker company with an
owned, operated and newbuild fleet of 113 vessels, aggregating
12.7 million dwt and 865,000 cbm.  The Company provides energy
transportation services for crude oil and petroleum products in
the U.S. and International Flag markets.  OSG has offices in New
York, Athens, London, Newcastle and Singapore.

                          *    *    *

As reported in the Troubled Company Reporter on Feb. 15, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB+' corporate credit rating, on Overseas Shipholding and
removed all ratings from CreditWatch, where they were placed on
Dec. 14, 2004.  S&P's CreditWatch placement followed the Company's
announcement that it would acquire Stelmar Shipping Ltd.  Overseas
Shipholding completed its $1.3 billion acquisition of Stelmar on
Jan. 20, 2005.  S&P said the outlook is stable.

As reported in the Troubled Company Reporter on Feb. 10, 2005,
Moody's Investors Service confirmed Overseas Shipholding's senior
unsecured and senior implied ratings at Ba1.  Moody's also changed
the rating outlook to negative from stable.  This completed
Moody's ratings review opened on Dec. 13, 2004, following the
announcement by the company of its acquisition of Stelmar Shipping
(not rated) for $1.36 billion.


OXFORD IND: Debt Reduction Cues Moody's to Upgrade Ratings
----------------------------------------------------------
Moody's Investors Service raised Oxford Industries' corporate
family rating to Ba3 from B1 and the senior unsecured debt rating
to B1 from B2 following the sale of its women's private label
business to Li & Fung Group, a Hong Kong based trading company for
approximately $65 million dollars.  This upgrade concludes the
Rating Review commenced on May 2, 2006.  The rating action stems
from the debt reduction and margin improvement that is expected to
result from the transaction, in conjunction with the performance
of Oxford's other operating units. The outlook is stable.

The ratings upgrade reflects Oxford's well known and expanding
portfolio of owned and licensed brands, its growth in "lifestyle"
brands as well as the performance of the private label menswear
business.  Oxford's remaining private label businesses are
substantial and enable the company to be a major supplier of
tailored clothing to Land's End and J.C. Penney.

The company has expanded its retail footprint to support the
growth of its owned brands which introduces additional operational
complexity to the company's credit profile.  Revenues are expected
to be well diversified across the remaining business although
Tommy Bahama and Ben Sherman will account for a disproportionate
share of operating income due to their higher price points and
retail distribution models.

The ratings also incorporate the expectation the Oxford's credit
metrics will continue to strengthen.  As a result of the sale,
Moody's expects the as-reported operating margin to improve and
remain above 9.5% by the end of fiscal 2007,  compared to 8.5% for
the March 3, 2006 LTM period. Interest coverage, as measured by
reported EBIT/interest expense is expected to improve from 4.1
times to near 5.0 times in the year following the transaction
while debt/EBITDA falls from 2.2 times to less than 1.75 times
despite the lost sales from the divested business unit.

Oxford's ratings are constrained by the volatility inherent in the
apparel industry which will become a more significant factor as
the company focuses on its more fashionable brands and the
expectation that opportunities for revenue growth are muted as
increased unit sales are offset by the industry's deflationary
pricing trends.  Following the sale of the womenswear business,
Moody's believes that the Tommy Bahama and Ben Sherman brands will
account for the significant majority of EBITDA The likelihood of
additional acquisitions that could relever the company is also
incorporated in the Ba3 corporate family rating.

The stable outlook reflects Moody's expectation that additional
margin expansion opportunities are limited, the modest organic
revenue growth expectations, and the volatility inherent in the
company's higher fashion brands.

A ratings upgrade or change in outlook to positive, while not
likely, could occur if Oxford is able to expand its reported
operating margin above 12%, improve its reported interest coverage
above 5.5 times, for a sustained period, or further diversify its
product offering without diluting its profitability or
significantly increasing leverage.  A ratings downgrade or change
in outlook to negative may transpire if Oxford engages in a
leveraged transaction the raises reported debt/EBITDA above 2.25
times or if reported free cash flow/debt fell below 10%, for a
sustained period.

The senior unsecured debt rating of B1 is one notch below the
corporate family rating on account of the existence of
approximately $300 million in senior secured revolving credit
facilities that subordinate the senior secured noteholders.  The
sale of the womenswear business is expected to reduce revolver
borrowings and increase availability.  While Oxford is dependent
on its credit facilities to finance the seasonal fluctuations in
inventory Moody's believes that facilities are sufficient in size
to provide the company with ample operating liquidity.

Oxford Industries, based in Atlanta, Georgia designs and markets
men's and women's apparel under its owned brands, which include
Ben Sherman, Tommy Bahama, Arnold Brant and Oxford Golf, licensed
brands including Orvis Signature and Nautica, and supplies a
variety of private label apparel brands in multiple channels.  LTM
March 3, 2006 revenues were $1.4 billion.


PETROHAWK ENERGY: Moody's Rates Proposed $650 Million Notes at B3
-----------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating
from B3 to B2, assigned a B3 rating to the company's proposed $650
million senior notes offering, upgraded the rating for the
existing senior notes ratings for Petrohawk Energy Corporation
from Caa1 to B3.  Moody's also affirmed the SGL-3 rating for
Petrohawk, confirmed the KCS B2 Corporate Family Rating, and the
B3 rating on the existing $275 million of senior notes for KCS
Energy that will remain in place and will be assumed by Petrohawk.

Proceeds from the new senior notes, along with borrowings under
the revolving credit facility will be used to fund the tender of
the existing Petrohawk notes and the $450 million cash portion of
the KCS merger consideration.  Petrohawk will also be issuing
approximately $1.1 billion in equity to KCS shareholders.  Upon
closing of the transaction, Moody's will withdraw the ratings for
KCS Energy.

The outlook is stable.  However, it could face downward pressure
if Petrohawk does not reduce the very high pro forma leverage on
the proven developed reserves to within the $8.00/boe range over
the next twelve months.  The outlook could also be pressured if
the company completes additional debt funded acquisitions before
getting the current leverage profile in-line with the B2 rating;
if sequential quarterly production trends appear to stall; or if
the cost synergies are not realized as the current pro forma
leveraged full cycle costs are viewed by Moody's to remain
unsupportive long-term.

Conversely, the outlook and ratings could face upward movement if
the company exceeds Moody's debt reduction targets while still
demonstrating positive organic quarterly production trends and is
clearly reducing the total costs to within targeted ranges which
should then provide added capital for growth and internal reserve
replacement.

The ratings upgrade reflects the enhanced scale and
diversification of the combined company, which places it in the
upper end of the B2 range and appears to provide sufficient
drilling opportunities to maintain current production volumes and
support organic growth over the near term; the significant amount
of cost synergy opportunities and critical mass the company should
have within its core areas as both companies operated in many of
the same geological formations; KCS's solid operating track record
of volume and reserve growth with a competitive cost structure and
the opportunity to apply its technical knowledge to Petrohawk
properties given that KCS is already quite familiar with many of
Petrohawk's existing properties; Petrohawk's track record of
acquiring and building a portfolio of solid E&P assets and while
utilizing a fair amount of leverage, has issued enough common
equity to maintain a reasonable capital structure; and the
durability of the combined company which should appear to have
sufficient operating momentum in the event that management delays
its exit strategy.

The ratings remain restrained by the very high pro forma leverage
on the PD reserve base at acquisition which Moody's estimates is
approximately $12.63/boe and is among the highest for all
exploration and production companies rated by Moody's; our
expectation that while leverage on the PD reserves should be
reduced, it will remain towards the high end for the ratings given
management's willingness to use a higher degree of leverage; the
potential for additional asset portfolio changes as management
continues to maximize its value for a future exit which keeps
event risk elevated; the need to see significant improvement in
the currently high cost structure which Moody's views to be
unsustainable during periods of lower commodity prices; and the
recent moderation of natural gas prices which if sustained, could
curtail or slow down the expected pace of debt reduction.

Affirmation of the SGL-3 rating reflects the supportive cashflow
outlook over the next twelve months which combined with the
expected availability of the revolving credit facility should
adequately cover of the company's planned capital spending plans,
interest expense and working capital needs.  The SGL-3 rating also
reflects the company's room under the credit facility's
maintenance covenants which should ensure accessibility to the
revolver over the next four to six quarters.  The SGL-3 is
restrained by the high proportion of pro forma usage under the
revolver which will be about $425 million out of a $650 million
initial borrowing base; and the exposure of the borrowing

Petrohawk Energy, Corporation, headquartered in Houston, Texas, is
engaged in the exploration and production of natural gas and oil,
primarily in North Louisiana, East Texas, South Texas, and West
Texas.


PHILLIPS-VAN HEUSEN: Earns $45.5 Mil. in 2006 First Fiscal Quarter
------------------------------------------------------------------
Phillips-Van Heusen Corporation filed its first fiscal quarter
financial statements ended April 30, 2006, with the Securities and
Exchange Commission on June 8, 2006.

The Company reported $45,515,000 of net income on $454,188,000 of
net sales for the three months ended April 30, 2006, compared to
$19,699,000 of net income on $423,115,000 of net sales for the
first quarter ended May 1, 2005.

At April 30, 2006, the Company's balance sheet showed
$1,803,872,000 in total assets, $1,139,343,000 in total
liabilities, and $664,529,000 in total stockholders' equity.

                             Dividends

The preferred stock dividends totaled $3.2 million for the first
quarter of 2006 based on the Company's liquidation preference of
Series B convertible preferred stock on April 30, 2006.

Subsequent to the end of the first quarter of 2006, the holders of
the Company's Series B convertible preferred stock converted all
of their remaining outstanding shares to 11.6 million shares of
Phillips-Van Heusen's common stock.

In connection with the conversion, Phillips-Van Heusen made an
inducement payment to the preferred stockholders of $0.88 for each
share of common stock received upon conversion, or an aggregate of
$10.2 million, and incurred certain costs, totaling $1.2 million,
in connection with the offering.

The inducement payment was based on the present value of the
preferred dividends that would have been obligated to pay the
holders through the earliest date on which it is estimated that
the Company would have had the right to convert the Series B
convertible preferred stock, net of the present value of the
dividends payable over the same period on the shares of common
stock into which the Series B convertible preferred stock was
convertible.

Under accounting principles generally accepted in the United
States, the aggregate $11.4 million inducement payment and
offering costs will be treated similar to a preferred stock
dividend in the second quarter of 2006.

Phillips-Van Heusen's common stock currently pays an annual
dividend of $0.15 per share.  The common stock cash dividends in
2006 are expected to approximate $7.8 million to $8.0 million.

Full-text copies of Phillips-Van Heusen's first fiscal quarter
financial statements ended April 30, 2006, are available for free
at http://ResearchArchives.com/t/s?ba3

Phillips-Van Heusen Corporation -- http://www.pvh.com/-- is one
of the world's largest apparel companies.  It owns and markets the
Calvin Klein brand worldwide.  It is the world's largest shirt
company and markets a variety of goods under its own brands: Van
Heusen, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co.,
Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG
Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors,
Chaps and Donald J. Trump Signature.

                           *     *     *

Phillips-Van Heusen's 7-3/4% Debentures due 2023 carry Moody's
Investors Service's Ba3 rating and Standard and Poor's BB+ rating.


PIER 1: Posts $22.7 Million Net Loss For First Quarter 2006
-----------------------------------------------------------
Pier 1 Imports, Inc. (NYSE:PIR) reported a $22,765,000 net loss
from continuing operations for the first quarter ended May 27,
2006.  The Company reported a net loss of $23,172,000 for the
first quarter, which included an after-tax loss from discontinued
operations of $407,000.  Total sales declined 3.6% for the first
fiscal quarter to $376,092,000, from $390,314,000 in the year-ago
quarter, and comparable store sales declined 6.6%.  The results of
The Pier Retail Group Limited, the Company's subsidiary based in
the United Kingdom, have been classified as discontinued
operations for all periods presented in the Company's consolidated
financial statements; this subsidiary was sold on March 20, 2006.

Fiscal 2007 first quarter results are based on:

    --  Merchandise margins improved to 53.8% from 53.2% in the
        year-ago quarter.

    --  Store occupancy costs increased $5.1 million and de-
        leveraged to 20.0% of sales in the first quarter versus
        17.9% for the year-ago quarter.

    --  Selling, general and administrative costs were 39.2% of
        sales compared to 35.9% of sales in the first quarter
        last year.  Payroll costs de-leveraged during the quarter
        versus last year, and marketing costs were 8.0% of sales,
        which was even with the year-ago period.  Other SG&A
        costs in the first quarter included $2.0 million of non-
        cash impairment charges recognized on store assets.

Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "In mid-March, we launched our brand repositioning
campaign featuring Pier 1's unique Modern Craftsman merchandise,
which included new advertising and new in-store visuals intended
to mirror Pier 1's catalogs.  During the first quarter, customer
traffic remained weak.  We recognize that it will take time to
attract new customers and inform our existing customers of the
significant changes in our merchandise assortment."

"As of May 27, 2006, inventories were $357 million, down 12.5%
from the year-ago period. Cash at the end of the first quarter was
$235 million.  We are carefully managing the balance sheet in
order to maintain flexibility and liquidity to operate the
business efficiently, while working to increase sales with the
appropriate inventory levels in stores."

"Pier 1's Summer Sale and Clearance event begins in late June and
is primarily supported by TV ads and in-store promotions. We will
launch our newest merchandise collection called 'Loft 21' in mid-
July.  It features lifestyle furniture and accessories exclusively
available at Pier 1.  To support this merchandise introduction, we
plan to distribute 9 million copies of our latest catalog.  We
continue to see better merchandise margins this quarter compared
to last year, but expect June comp store sales to be in the
negative low- to mid-teens range compared to last year, when sales
were driven by heavier promotions."

The Company will hold its annual shareholders' meeting at 10:00
a.m. Central Time on June 22, 2006, in the Trinity Room of the
Fort Worth Club, Fort Worth, Texas.

Pier 1 Imports, Inc. -- -- http://www.pier1.com/-- is a specialty
retailer of imported decorative home furnishings and gifts with
Pier 1 Imports(R) stores in 49 states, Puerto Rico, Canada, and
Mexico and Pier 1 kids(R) stores in the United States.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services' 'B' corporate credit and 'B-'
unsecured debt ratings on Fort Worth, Texas-based Pier 1 Imports
Inc. remained on CreditWatch with negative implications.


PINNACLE FOODS: Appoints Jeffrey Ansell as CEO Effective July 5
---------------------------------------------------------------
Pinnacle Foods Group Inc.'s Board of Directors appointed Jeffrey
P. Ansell as Chief Executive Officer, effective July 5, 2006,
replacing C. Dean Metropoulos, who would be stepping down as CEO
in the near future but will remain with the Company as Chairman.

"We have been fortunate during this CEO search to meet with a
number of outstanding candidates," C. Dean Metropoulos, who led
the search for a new CEO said.  "At the conclusion of the search
it was clear that Mr. Ansell was the right candidate for Pinnacle
based on the accomplishments in his career and his personal
leadership skills."

Mr. Ansell, 47, brings with him 25 years of experience in consumer
products management.  As a Procter & Gamble Corporate Officer, he
was most recently President of The Iams Company, where he had been
chosen to lead P&G's entry into the pet nutrition business,
following P&G's acquisition of The Iams Company in 1999.  Under
his leadership, sales increased nearly $1 billion dollars and the
Iams brand in North America grew from the No. 5 pet food brand to
No. 1.  The acquisition of The Iams Company is broadly regarded as
one of P&G's most successful acquisitions.  Prior to Iams, Mr.
Ansell had various executive management roles within P&G,
including General Manager of the North American and European Baby
Care businesses (Pampers(R) and Luvs(R) diapers) for which he
spent several years in Europe as well as senior marketing
leadership positions working on brands such as Pringles(R), Sunny
Delight(R) and Folgers(R).

"I'm very excited to join Pinnacle, and the collection of fine
brands it has assembled the past few years," Jeffrey Ansell,
incoming CEO, said.  "Dean Metropoulos, along with J. P. Morgan
Partners and J. W. Childs have an enviable track record of
success.  I look forward to building on my experiences at a world-
class institution like P&G, and to working closely with the strong
team at Pinnacle to take the business to the next level."

"We are very pleased to have Jeff take over at Pinnacle at this
time" said C. Dean Metropoulos.  "Pinnacle has undergone a
tremendous restructuring and transformation over the past two
years and we feel very confident in the company's ability to grow
as we move forward.  Jeff certainly brings the skills,
intelligence and integrity that we were looking for in a CEO to
optimize the growth potential of Pinnacle's iconic brands"

Pinnacle Foods Group Inc. -- http://www.pinnaclefoodscorp.com/--
with corporate offices in Mountain Lakes and Cherry Hill, New
Jersey is a leading producer, marketer and distributor of
high-quality branded food products in the frozen foods and dry
foods segments.  The dry foods segment consists primarily of
Duncan Hines(R) baking mixes and frostings; Vlasic(R) pickles,
peppers and relish; Armour(R) canned meats; Open Pit(R) barbeque
sauce and Mrs. Butterworth's(R) and Log Cabin(R) syrups and
pancake mixes.  The frozen foods segment consists primarily of
Aunt Jemima(R) frozen breakfasts; Swanson(R) and Hungry Man(R)
frozen dinners and entrees; Van de Kamp's(R) and Mrs. Paul's(R)
frozen seafood; Celeste(R) pizza; and Lender's(R) bagels.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 17, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating and a
recovery rating of '2' to Pinnacle Foods Group Inc.'s (formerly
Pinnacle Foods Holding Corporation) proposed $143 million senior
secured term loan B add-on, indicating the expectation of
substantial recovery of principal (80%-100%) in a payment default
or bankruptcy scenario.

At the same time, Standard & Poor's affirmed its ratings,
including its 'B+' corporate credit rating, on the company.  The
outlook is negative.  Mountain Lakes, New Jersey-based pickle
frozen food producer will have about $1.06 billion in lease-
adjusted total debt outstanding at closing.


RAEBECK CONSTRUCTION: Selling Construction Equipment on June 29
---------------------------------------------------------------
Raebeck Construction Corp. will be selling its heavy construction
and paving equipment on June 29, 2006, 11:00 a.m., at Commissary
Road, JFK Airport in Queens, New York.

Objections to the sale are due on June 16, 2006.  A sale objection
hearing will be held today, June 20, 2006, 10:00 a.m. at the U.S.
Bankruptcy Court for the Eastern District of New York in Brooklyn.

For more information regarding the Sale, contact David R. Maltz &
Co. Inc., the Debtor's auctioneer, liquidator, and appraiser, at
(516) 349-7022 and through http://www.MaltzAuctions.com/

Based in Staten Island, New York, Raebeck Construction Corp. is a
contractor.  Raebeck filed for chapter 11 protection on Sept. 7,
2005 (Bankr. E.D. N.Y. Case No. 05-24652).  Avrum J Rosen in
Huntington, New York represented the Debtor.  The case was
converted to a chapter 7 liquidation proceeding on May 3, 2006.
Alan Nisselson serves as the Debtor's trustee.  The Trustee is
represented by Brauner Baron Rosenweig & Klein, LLP.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $1 million to $10 million.


REYNOLDS & REYNOLDS: Moody's Holds Ba1 Rating on $230 Mil. Notes
----------------------------------------------------------------
Moody's Investors Service confirmed The Reynolds & Reynolds
Company's senior unsecured ratings at Ba1 and assigned a positive
rating outlook.  This concludes a review for possible downgrade
initiated in March 2006 when the company faced challenges to file
timely financial reports.

The Ba1 rating confirmation reflects the company's completed
accounting review, reestablishment of current filing of its 10-K
and subsequent 10-Q's, and correction to prior period reporting
errors without material misstatement or restatement.  The Ba1
rating confirmation also reflects continuing challenges the
company faces to revive organic sales and market share growth.

The positive rating outlook reflects efforts the company has made
to remediate material weaknesses for financial reporting and to
stem organic revenue declines through redirected investment in
U.S. and international products.  In addition, the positive
outlook for the $100 million notes due December 2006 reflects
their in-substance defeasance.  After 90 days, the $100 million
notes rating is expected to be upgraded to A3.

With approximately $966 million TTM March 2006 revenues, Reynolds
& Reynolds shares a market leadership position in automotive
dealership management systems.  While financial leverage and
returns in isolation suggest a high Baa rating, the company's
declining revenue and relative size offset those positive
attributes and drive the overall Ba1 rating.  Moody's considers
the company's competitive position, financial leverage, cash flow,
returns, and liquidity in its assessment of the rating.

These ratings were confirmed at Ba1:

   * $100 Million Senior Unsecured Notes due December 2006
   * $130 million Senior Unsecured Medium Term Note Program

Corporate Family Rating of Ba1

The Reynolds and Reynolds Company, headquartered in Dayton, Ohio,
is an automotive dealership computer services and forms management
company.


ROTECH HEALTHCARE: Barry Stewart Resigns as CFO and Treasurer
-------------------------------------------------------------
Barry E. Stewart resigned as Rotech Healthcare Inc.'s chief
financial officer and treasurer effective May 31, 2006, the
company disclosed in a Form 8-K filed with the U.S. Securities and
Exchange Commission.

Mr. Stewart, 51, transferred to Lafayette, Louisiana-based LHC
Group, Inc., where he has been appointed CFO and senior vice
president.

Rotech plans to initiate a search for Mr. Stewart's replacement
and intends to appoint a successor as soon as practicable.

The letter agreement dated August 10, 2004, between Rotech and
Mr. Stewart was terminated effective May 31, 2006.  The parties'
obligations concerning confidentiality, non-solicitation, non-
competition and non-interference survive termination.

LHC Group provides post-acute healthcare services primarily in
rural markets in the southern United States.  LHC Group provides
home-based services through its home nursing agencies and hospices
and facility-based services through its long-term acute care
hospitals and rehabilitation facilities.

                      About Rotech Healthcare

Rotech Healthcare, Inc., (NASDAQ:ROHI) is a provider of home
respiratory care and durable medical equipment and services to
patients with breathing disorders such as chronic obstructive
pulmonary diseases.  The Company provides its equipment and
services in 48 states through approximately 485 operating centers,
located principally in non-urban markets.  The Company's local
operating centers ensure that patients receive individualized
care, while its nationwide coverage allows the Company to benefit
from significant operating efficiencies.

                         *     *     *

As reported in the Troubled Company Reporter on May 29, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Rotech Healthcare to 'B-' from 'B+'.  The outlook is
negative.


SHANNON INT'L: March 31 Working Capital Deficit Tops $2.4 Million
-----------------------------------------------------------------
Shannon International Inc. filed its third fiscal quarter
financial statements for the three months ended March 31, 2006,
with the Securities and Exchange Commission on June 14, 2006.

The Company reported a $562,261 net loss on $268,303 of sales for
the three months ended March 31, 2006, compared to a $562,261 net
loss on $218,565 of sales for the first quarter ending March 31,
2005.

At March 31, 2006, the Company's balance sheet showed $12,063,774
in total assets, $7,118,141 in total liabilities, $1,615,784 in
minority interest, and $13,329,849 in stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $245,985 in total current assets available to pay
$2,650,984 in total current liabilities coming due within the next
12 months.

Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?b99

                        Going Concern Doubt

Miller and McCollom in Wheat Ridge, Colorado, raised substantial
doubt about Shannon International Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the years ended June 30, 2005, and 2004.  The
auditor pointed to the Company's operating losses since inception
and insufficient working capital.

Shannon International Inc. acquires, develops and produces natural
gas and coalbed methane properties.  Currently, the Company has an
interest in non-producing properties in the province of Prince
Edward Island, Canada.


SILICON GRAPHICS: Wants Until June 30 to File Disclosure Statement
------------------------------------------------------------------
Pursuant to Rule 3016(b) of the Federal Rules of Bankruptcy
Procedure, a disclosure statement under Section 1125 of the
Bankruptcy Code must be filed with the plan or within a time fixed
by the U.S. Bankruptcy Court for the Southern District of New
York.

Silicon Graphics, Inc., and its debtor-affiliates delivered to the
Court their Chapter 11 Plan on June 15, 2006.

However, the Debtors have not yet finished finalizing their
Disclosure Statement.

Thus, the Debtors ask the Court to extend their deadline to file a
proposed disclosure statement with respect to their joint plan of
reorganization through and including June 30, 2006.

Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York,
informs the Court that in light of the complexity of their
businesses and the voluminous amount of intellectual property
involved, the Debtors require two additional weeks to finalize and
file their Proposed Disclosure Statement.

The parties to the DIP Loan Agreement and the Restructuring
Agreement have agreed to extend the date to file the Proposed
Disclosure Statement to June 30, 2006.

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


SILICON GRAPHICS: Asks Court to Decide Classification of Claims
---------------------------------------------------------------
In accordance with Section 1122 of the Bankruptcy Code, Silicon
Graphics, Inc. and its debtor-affiliates' Joint Plan of
Reorganization classifies claims against and equity interests in
the Debtors.

The Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York to determine that their classification of:

   (i) Class 5 Secured Note Claims,

  (ii) Class 6 General Unsecured Silicon Graphics Claims, and

(iii) Class 11 Subordinated Debenture Claims,

is proper under the Plan.

The Debtors further ask the Court to determine that the
Subordinated Debenture Claims are contractually subordinate to the
Secured Note Claims.

According to Stephen A. Youngman, Esq., at Weil, Gotshal & Manges
LLP, in New York, in December 2003, Silicon Graphics exchanged
98% of its 5.25% Senior Convertible Notes, due September 1, 2004
for:

    * $224,000,000 of newly issued Senior Secured Convertible
      Notes bearing interest at the rate of 6.50% per annum; and

    * $2,400,000 of newly issued Senior Secured Notes bearing
      interest at the rate of 11.75% interest per annum, both of
      which are due June 1, 2009.

On September 1, 2004, the Debtors paid the remaining 2% of the
2004 Senior Convertible Notes that were not tendered for exchange.

U.S. Bank National Association is the indenture trustee pursuant
to the indentures for each of the Senior Secured Notes.

Mr. Youngman discloses that the Debtors' obligations under the
Senior Secured Notes are secured by second priority liens on
substantially all of the assets of Silicon Graphics.  Class 5
consists of claims arising under the indentures for each of the
Senior Secured Notes.

Class 6 is the class of general unsecured claims, including trade
claims, against Silicon Graphics, according to Mr. Youngman.

In February 1986, Cray Research, Inc., issued Convertible
Subordinated Debentures due February 1, 2011 for $115,000,000
bearing interest at the rate of 6.125% per annum.  JPMorgan Chase
Bank is the indenture trustee pursuant to the indenture for the
Subordinated Debentures.

Subordinated Debenture Indenture, Cray and each holder of a
Subordinated Debenture covenanted that the Subordinated
Debentures are subordinate in right of payment to the prior
payment in full of all Senior Indebtedness, Mr. Youngman says.

In 1996, Acquisition Corporation acquired Cray Research.  Silicon
Graphics, Cray and Chemical Bank entered into the First
Supplemental Indenture, so that Silicon Graphics' assumption of
liability became subject to the "due and punctual performance of
all the covenants and conditions of the Indenture to be performed
by [Cray], with the same effect as if it had been named in the
Indenture as a party thereto."

Mr. Youngman informs the Court that the U.S. Trustee has advised
the Debtors that Silicon Graphics' assumption of obligations
arising under the Subordinated Debenture Indenture created an
obligation that ranks pari passu with all other senior debt
obligations of Silicon Graphics.

In addition, counsel for an ad hoc committee of holders of
Subordinated Debentures asserted at the hearing of first day
pleadings that the Subordinated Debentures are not subordinated to
the claims of the Senior Secured Notes because the Senior Secured
Notes are allegedly subordinated to the liens and claims arising
under the Debtors' prepetition credit agreement.

Although the Debtors believe that the U.S. Trustee's and the Ad
Hoc Subordinated Debenture Committee's arguments are without merit
and contrary to the terms of the applicable indentures, a prompt
determination of the propriety of the Debtors' classification of
Class 5, 6 and 11 claims is desirable to either:

    -- confirm the Plan's classification with respect to the
       claims and streamline the issues to be heard at the
       confirmation hearing; or

    -- if the Court concludes that the classification does not
       satisfy the requirements of the Bankruptcy Code, provide
       sufficient time for the Debtors to modify them under the
       Plan prior to the solicitation of votes.

Mr. Youngman explains that the separate classification of the
Subordinated Debenture Claims, Secured Note Claims and General
Unsecured Silicon Graphics Claims is appropriate because the
claims are inherently different.

The Secured Note Claims are partially secured in assets of
Silicon Graphics while the Subordinated Debenture Claims are not
only unsecured claims, but are also subordinate in right of
payment to the prior payment in full of all Senior Indebtedness,
Mr. Youngman says.

Mr. Youngman asserts that the Debtors' separate classification of
the Subordinated Debenture Claims from the General Unsecured
Silicon Graphics Claims and Senior Note Claims gives effect to the
subordination provision in the Subordinated Debenture Indenture
and is permissible under Section 1122(a).

Moreover, Mr. Youngman tells the Court that the resolution of the
classifications will simplify negotiation and prosecution of the
Plan among key constituents.

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


SOUTHWEST FLORIDA: Dead Debtor's Trustee Can't Decide on Leases
---------------------------------------------------------------
Louis X. Amato, the Chapter 11 Trustee for Southwest Florida Heart
Group, P.A., filed a motion to assume its non-residential real
property lease with Heart Group Realty, LLP, with the intention of
assigning it to a third party to which the trustee proposed to
sell leased property.  Ordinarily, the Honorable Alexander L.
Paskay says in an Order published at 2006 WL 1555539, the
disposition of this kind of motion would not present any special
problems.  However, due to the interconnection of the parties
involved and the unique issues raised by the chapter 11 trustee's
motion, the resolution of the dispute between the parties is
complex.

                     The Lease Agreement

Southwest Florida Heart Group, P.A., was formed by a group of
physicians who established a medical practice providing cardiac
care services.  The Debtor maintained three operations; one in
Naples, Florida; one in Bonita Springs, Florida; and one at 8540
College Parkway in Fort Myers, Florida.  The Fort Myers Facility
is a four-story medical office building and is owned by Heart
Group Realty, LLP.  Heart Group Realty was originally formed as a
Florida General Partnership on April 23, 1993, by Drs. Richard A.
Chazal, James A. Conrad, Michael D. Danzig, M. Eric Burton, David
Axline, William M. Miles, Herman L. Spilker, Lawrence A. Kline,
Brian Hanlon, Carlos Santos Ocampo, Steven Lee, and Michael
Corbellini.  On or about January 1, 1997, Realty, as landlord of
the Fort Myers Facility, entered into a Lease Agreement, and a
later signed Lease Agreement Addendum, with the Debtor.  The
effective date of the Lease was January 1, 1997, and the property
was leased for a ten-year period.  The Lease Agreement Addendum
later extended the term until 2017.  Pursuant to Paragraph 3 of
the Lease, the annual rent was $807,360.00, plus Florida sales
tax.  The Lease further provided for an increase of the base rent
by the greater of 5% or the applicable Consumer Price Index.

It is without dispute that the principals of the landlord Realty
were also principals of the Debtor, all of whom were practicing
physicians with the group under the aegis of Southwest Florida
Heart Group, P.A.  An apparent dissension between the shareholders
led to the decision to terminate the business operation of the
Debtor.  Several of the physicians left the State of Florida and
several formed their own groups and currently occupy the
facilities used by the Debtor in Naples and in Bonita Springs.
None of these operations are involved in the current controversy.
However, this is not the case with the Fort Myers Facility.

                    Eve of Bankruptcy Sublease

On August 25, 2005, or a few days before the Debtor filed its
Petition for Relief under Chapter 11 on August 29, 2005, the
Debtor and The Heart Group entered into a sublease.  The
principals of The Heart Group at the time of the Sublease were
Drs. Burton, Danzig, Chazal, and Corbellini.  The fact of the
matter is, that Sublease was signed by Dr. Burton as president of
the Debtor/Sublessor, and by Dr. Burton as president of The Heart
Group/Sublessee.  Pursuant to the terms of the Sublease, The Heart
Group subleased the first floor of the Fort Myers Facility.  The
Sublease required a monthly rent payment to be paid to the Debtor,
fixed at 25% of the rent the Debtor was obligated to pay to Realty
under the Lease.  The Sublease commenced on September 1, 2005.  It
did not specify a fixed termination date, but provides that the
sublease includes and is subject to the terms of the Debtor's
lease with Realty.  The Sublease further provides that the
Sublease may be terminated upon (1) written notice of the sale of
the premises by Realty; (2) written requirement of Realty to the
Debtor to terminate the Sublease; or (3) such other event, which
under the terms of the Lease will result in the termination of
that Lease.  Notably, the Sublease may also be terminated at any
time by either party upon a sixty (60) day written notice to the
other party.

                       No Sublease Payments

It is without dispute that The Heart Group did occupy and is
currently still occupying the first floor of the Fort Myers
Facility and has not paid the Debtor the rent fixed by the
Sublease, which became due for the months of September, October,
November, and December of 2005.  It was not until January 28, 2006
that The Heart Group made a payment to the Trustee in the amount
of $70,000.  It is further without dispute that, at the time the
Debtor ceased its operations on August 31, 2005, the Debtor had on
the subleased first floor a large amount of medical equipment.
Although the Trustee, shortly after his appointment on November
21, 2005, made several requests of The Heart Group to designate
which of the equipment and fixtures described above it desired to
purchase, it was not until mid-January of 2006 that The Heart
Group provided the list to the Trustee.

                   Motion to Ratify the Sublease

On August 29, 2005, the Debtor filed a Petition for Relief under
Chapter 11. On August 31, 2005, the Debtor-in-Possession sought
the approval of the Sublease of the Fort Myers Facility.  On
September 13, 2005, Steven R. West, a creditor, filed an Objection
to the Approval of the Sublease.  On November 8, 2005, this Court
entered an Order and deferred ruling on the Motion for Approval of
the Sublease.

                        Chapter 11 Trustee

On November 21, 2005, this Court entered an Order Approving
Appointment of Trustee, and appointed Louis X. Amato as the
Chapter 11 Trustee.  In due course, the Trustee reviewed the
situation and, on December 7, 2005, commenced an adversary
proceeding naming as defendants The Heart Group, PL; Heart Group
Realty, LLP; Collier Heart Group, PLLC; Richard A. Chazal, Erick
M. Burton; and Michael D. Danzig. (Adv.Pro. No. 05-910).  In his
lawsuit, the Trustee asserts numerous causes of action, including
trespass, fraudulent transfers, and breach of fiduciary duty, and
seeks injunctive and other equitable relief, as well as money
damages.

                    Request to Assume the Lease

On December 29, 2005, the Trustee filed a Motion to Assume to
assume the Lease.  On January 11, 2006, Realty filed a Response to
Motion to Assume Lease and Lease Agreement Addendum.  At this
point Judge Paskay says, it should be noted that earlier, on
November 15, 2005, Realty filed an Application for Payment of
Administrative Expenses.  On December 6, 2005, the Trustee filed a
Response and Objection to Heart Group Realty LLP for Payment of
Administrative Expenses.  It is without dispute that neither the
Debtor-in-possession nor the Trustee has paid any money to Realty
so far.

The hearing on the Motion to Assume was set for January 19, 2006.
On January 18, 2006, the Trustee commenced a second adversary
proceeding naming the Debtor, The Heart Group, and Realty as
defendants. (Adv.Pro. No. 06-031).  In this second lawsuit, the
Trustee asserts a substantive consolidation action and seeks a
declaration that the assets of The Heart Group and Realty are the
assets of the Debtor.

In the interim, Realty entered into a contract to sell the Fort
Myers Facility.  It appears that if the sale, which is scheduled
to close on February 8, 2006, is consummated, the Lease will be
cancelled.  It should be evident from the foregoing, if this
occurs, that the Trustee's Motion to Assume is rendered moot since
no valid lease will remain in existence that could be assumed.

To further complicate the matter, a few days before the scheduled
final evidentiary hearing on the Motion to Assume, the Trustee
announced that it had an Agreement for the sale of the Fort Myers
Facility.  The Agreement identifies the sellers as the Heart Group
Realty, LLP, Louis X. Amato, as Trustee, and identifies College
Riverwalk, LLC, as the purchaser.  Notwithstanding the recitation
in this Agreement and notwithstanding that Realty is identified as
a seller, Realty never agreed to be a party to the Agreement, and
never agreed to sell the Fort Myers Facility to College Riverwalk
LLC.  Thus, the statement in Paragraph 1 of the Agreement, that
the seller (i.e., Realty) agrees to sell and the buyer agrees to
purchase is untrue.  Realizing the impossible posture of the
Trustee to bring the Agreement to fruition and effectuate the sale
to College Riverwalk absent Realty's consent, the Trustee, by a
Motion to Sell Property filed on February 2, 2006, seeks to sell
the property free and clear of Realty's interest pursuant to
Section 363(f) of the Bankruptcy Code.

The immediate matter under consideration is the Trustee's Motion
to Assume. Section 365(b)(1) dictates the conditions a debtor must
comply with in order to assume an unexpired lease after a default,
and provides:

   (b)(1) If there has been a default in an executory contract or
          unexpired lease of the debtor, the trustee may not
          assume such contract or lease unless, at the time of
          assumption of such contract or lease, the trustee:

          (A) cures, or provides adequate assurance that the
              trustee will promptly cure such default . . . ;

          (B) compensates, or provides adequate assurance that the
              trustee will promptly compensate, a party other than
              the debtor to such contract or lease, for any actual
              pecuniary loss to such party resulting from such
              default; and

          (C) provides adequate assurance of future performance
              under such contract or lease.

The Trustee is capable of meeting the first two requirements.  The
record reveals that the Trustee has more than $1 million in cash
and will be able to pay Realty whatever amount this Court
ultimately determines is the total amount required to cure the
default.  Also, there is nothing in this record that shows what
actual pecuniary loses were suffered by Realty as a result of the
default.

It is equally clear that the Debtor will not be able to provide
adequate assurance of future performance.  The Debtor is
economically defunct and does not operate now and does not intend
to operate in the future and will not generate the income
necessary to perform if the Trustee is permitted to assume the
Lease.  However, the Trustee does not contend that it can assure
future performance and indeed does not intend to perform under the
Lease in the future.  The Trustee instead intends to assign its
leasehold interest in the Fort Myers Facility in conjunction with
a sale to College Riverwalk, pursuant to Section 363(f), free and
clear of Realty's interest.  Under the Trustee's plan, College
Riverwalk, as the assignee of the lease and purchaser under a
Section 363 sale, will become the landlord and the owner, which
interests would merge. The Lease would cease to exist, mooting the
requirement of adequate assurance of future performance.

Section 363(f) permits the Trustee to sell property free and clear
of any interest of such property of an entity other than the
estate under five conditions:

     (1) applicable nonbankruptcy law permits sale of such
         property free and clear of such interest;

     (2) such entity consents;

     (3) such interest is a lien and the price at which such
         property is to be sold is greater than the aggregate
         value of all liens on such property;

     (4) such interest is in bona fide dispute; or

     (5) such entity could be compelled, in a legal or equitable
         proceeding to accept a money satisfaction of such
         interest.

The Trustee claims he can sell the Fort Myers Facility free and
clear of Realty's interest, as one of the above provisions is
satisfied. Judge Paskay says he's not willing to accept this
proposition for the two reasons:

     (x) the Trustee's attempt to sell pursuant to Section 363(f)
          cannot succeed for the simple reason that the Trustee
          is unable to meet any of the conditions set forth in
          the section; and

     (y) the Trustee's claimed interest in the property is merely
         its interest in the Lease with Realty and certain rights
         arising from the Adversary Proceedings previously filed.

The Trustee cannot satisfy any of the conditions of Section
363(f). Realty does not consent to the sale, and it holds an
ownership interest, not a lien on the property. Also, Realty
cannot be compelled to accept money for its interest in the
property, and the Trustee has not pointed to a provision of
applicable nonbankruptcy law that would allow this Court to sell
the property free and clear of Realty's interest.

Finally, Judge Paskay says, while Realty's interest is partially
the subject of the pending Adversary Proceedings initiated by the
Trustee, such claims do not establish a bona fide dispute as to
Realty's ownership interest, and are insufficient as a basis to
sell the property free and clear of the interest.

Further, Judge Paskay says, it is self-evident that the Trustee
can only sell property of the estate. See Connolly v. Nuthatch
Assocs. (In re Manning), 831 F.2d 205, 207 (10th Cir. 1987).
While a leasehold interest is property of the estate, the
leasehold interest is not an ownership interest, and does not
qualify the Fort Myers Facility as property of the estate. Even
when combined with the claims asserted in the Adversary
Proceedings, the validity of which is yet to be determined, the
Debtor's interest does not form the basis upon which this Court
can authorize a Section 363(f) sale free and clear of Realty's
ownership interest.  As this Court is satisfied that a leasehold
interest and any potential rights arising from the Adversary
Proceedings are insufficient to support a Section 363(f) sale, and
the Trustee has not satisfied any of the conditions of Section
363(f), the Trustee cannot assure future performance, and
therefore cannot assume the Lease.

Reporting assets and liabilities of less than $10 million,
Southwest Florida Heart Group, P.A., sought chapter 11 protection
on August 29, 2005 (Bankr. M.D. Fla. Case No. 05-17167).  Jeffrey
W. Leasure, Esq., in Fort Myers, Fla., represents the Debtor.  On
Nov. 21, 2005, Louis X. Amato was appointed as a Chapter 11
Trustee in the Debtor's case.


ST. MARYS CEMENT: Good Performance Prompts S&P's Positive Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' long-term
corporate credit and senior secured bank facility ratings on
cement producer St. Marys Cement Inc. on CreditWatch with positive
implications.  The CreditWatch placement recognizes the improved
financial performance of the company, and Standard & Poor's
expectation that St. Marys Cement will formally merge with the
other North American cement operations of parent company
Votorantim Participacoes S.A. (BBB-/Stable/--) in the near term.

The other North American operations include St. Barbara's
Cement and the joint venture interests in Florida.  Standard &
Poor's expects to resolve the CreditWatch within the next month.

The current ratings on Toronto-based St. Marys Cement reflect its
narrow geographic focus and its position as a midsize North
American cement producer competing against much larger,
diversified competitors.  These risks are partially offset by the
company's strong competitive position in cement production and
distribution in the Great Lakes region.  The potential combination
of Votorantim's assets in Florida would help address the limited
operational and geographic diversity of the current business
profile.

"Standard & Poor's does impute some credit support from
Votorantim, as the parent company has provided additional equity
to support strategic and operating needs in the past," said
Standard & Poor's credit analyst Dan Parker.  "The ratings on St.
Marys, however, will not necessarily move in lockstep with those
on Votorantim, as there are no formal guarantees of support," Mr.
Parker added.

St. Marys does not publicly disclose its financial statements.
Profitability and cash flow have been good for the ratings
category in the past two years, due to strong demand and improved
pricing for cement.  The outlook for cement continues to be
strong, although residential construction in the U.S. has started
to slow down.


STANDARD STEEL: Moody's Junks Rating on $25 Mil. Credit Facility
----------------------------------------------------------------
Moody's Investors Service assigned new ratings to the debt
proposed to be issued by Standard Steel, LLC -- Senior Secured
Facilities at B2; Second Lien Senior Secured Facility at Caa1.
The Corporate Family Rating is B2, and the rating outlook is
stable.

The ratings consider the important benefit to Standard Steel of
the predictability in revenue provided by the conservative
contracting strategy, whereby the company has effectively sold
forward 100% of its manufacturing capacity through 2008.

The ratings also consider the favorable market dynamics:

   1) the duopoly structure for suppliers of rail car wheels and
      axles, and:

   2) the current excess demand for both rail car wheels and
      axles, which Moody's believes will continue over the
      intermediate term due to the high backlog of rail car
      deliveries, and higher aftermarket repairs given the
      increasing utilization of the existing railcar fleet.

The high cost of new manufacturing facilities limits new
entrants.  The ratings are balanced by Standard Steel's small
size, its exposure to the cyclical demand for rail car parts,
which itself is tied to the health of the current cyclically high
rail car production, the modest liquidity Standard Steel will
maintain post-closing and the concentration of revenues with
relatively few customers.

The stable outlook reflects Moody's belief that Standard Steel's
strategy of selling forward the majority of its capacity and its
plan to reduce exposure to rail car builders in favor of serving
the aftermarket will result in stable operating results and
predictable cash flows.  Moody's expectation of continuing excess
demand for wheels and axles over the intermediate term also
supports the stable outlook.

The guaranteed first lien senior secured facilities include: a
$100 million term loan due 2012, a $20 million delayed draw term
loan due 2012 and a $20 million revolver due 2011.  The facilities
were raised to finance the acquisition of the company by Trimaran
Capital Partners.  The delayed draw term loan may be used only to
fund the planned expansion of Standard Steel's manufacturing
facility in Burnham, Pennsylvania, which the company expects to
complete during 2007.

Total debt at closing, will be approximately $147 million, with
debt to EBITDA estimated at 5.4 times, and EBIT to Interest at
approximately 2 times.  Moody's expects that leverage will decline
to approximately 5.1 times and coverage will be approximately 2
times by Fiscal, 2007, after the final draws of the delayed-draw
term loan.

The ratings could be downgraded if Standard Steel was to sustain
Debt to EBITDA above 6 times, or if EBIT to Interest was sustained
below 1.2 times. Downward rating pressure could also result from a
significant disruptive interruption at the company's sole
manufacturing facility located in Burnham, PA, or if the
competitive dynamics of the market for rail wheels and axles
changes significantly due to the entry of one or more domestic or
foreign competitors.

While there is little upward pressure over the near term, ratings
or the outlook could be upgraded with sustained Debt to EBITDA
below 4 times and EBIT to Interest above 2.5 times.  The
successful execution of the planned expansion of manufacturing
capacity and achieving the expected benefits of stability of cash
flows of the company's contracting strategy would also provide
additional upwards pressure on the ratings.

Assignments:

Issuer: Standard Steel, LLC

   * Corporate Family Rating, Assigned B2

   * $140 million First Lien Senior Secured Bank Credit Facility,
     Assigned B2

   * $25 million Second Lien Senior Secured Bank Credit Facility,
     Assigned Caa1

Standard Steel, LLC, based in Burnham, PA, manufactures forged
wheels and axles used in freight and passenger rail cars and
locomotives.


STONE ENERGY: Receives $51-Per-Share Offer from Energy Partners
---------------------------------------------------------------
Stone Energy Corporation received a definitive offer from Energy
Partner, Ltd. for the acquisition of Stone on terms and conditions
contained in a proposed agreement and plan of merger.  Stone's
Board of Directors is reviewing the offer and will make a
determination whether the offer is a "Target Superior Proposal" as
defined in the existing merger agreement with Plains Exploration &
Production Company.

The proposed transaction is valued at $2.2 billion, which values
Stone's equity at approximately $1.4 billion and includes
approximately $800 million of Stone debt.  Under the terms of the
agreement, EPL has offered to acquire all of the outstanding
shares of Stone for $51 in cash or stock at the election of the
holder, subject to a collar and other limitations.  The offer
expired on June 18, 2006.

The financial terms of EPL's definitive merger agreement reflect
factors including additional Stone debt related to an acquisition
contemplated by Stone in the Gulf of Mexico, as well as the
vesting of approximately 361,000 restricted Stone shares that will
result from the merger with EPL.  EPL expects the proposed
transaction to be immediately accretive to EPL's cash flow per
share and to deliver substantial annual cost savings.  EPL
anticipates that the combined company will generate significant
cash flow and will have the ability to substantially reduce debt.
The transaction is not subject to any financing contingency.  EPL
received a commitment letter from Bank of America, N.A. and
affiliates for the financing of the transaction.

"After conducting a thorough due diligence process, we continue to
be excited about the combination of our two companies," Richard A.
Bachmann, EPL's Chairman and CEO, commented.  "Given our highly
complementary fit, the financial benefits of our offer remain
compelling for Stone shareholders.  By joining together to create
a premier E&P company, we will be well positioned to generate
considerable upside value for shareholders of both companies.  We
now look forward to the Stone Board's determination that our offer
is superior to the existing agreement with Plains Exploration and
Production Company."

Under the terms of EPL's revised offer, each share of Stone common
stock will be converted into the right to receive, at the election
of the holder:

   (i) $51 in cash, or

  (ii) EPL shares equivalent to the ratio determined by dividing
       $51 by the market price of EPL shares (based on a 20-day
       trading average prior to the third trading day preceding
       the closing), provided that the exchange ratio will not be
       greater than 2.525 or less than 2.106 EPL shares per Stone
       share.

The election of cash or stock will be subject to a limit on total
cash consideration of approximately $723 million (which includes
$15.5 million attributable to stock options) and a limit on the
total number of EPL shares issued of approximately 35 million.
Assuming that shareholders receive a combination of half cash and
half stock, the current value of the total consideration would be
$49.10 per share based upon EPL's closing stock price of $18.69 on
June 15, 2006.  This represents a premium of approximately 13%
over the current value of the Plains Exploration and Production
Company's (NYSE:PXP) offer for Stone based upon the Plains closing
stock price of $34.74 on June 15, 2006.

                            About EPL

Headquartered in New Orleans, Louisiana Energy Partners Ltd. --
http://www.eplweb.com/-- is an independent oil and natural gas
exploration and production company.  Founded in 1998, the
Company's operations are focused along the U. S. Gulf Coast, both
onshore in south Louisiana and offshore in the Gulf of Mexico.

                          About Stone

Headquartered in Lafayette, Louisiana, Stone Energy (NYSE: SGY) --
http://www.stoneenergy.com/-- is an independent oil and gas
company and is engaged in the acquisition and subsequent
exploration, development, operation and production of oil and gas
properties located in the conventional shelf of the Gulf of
Mexico, deep shelf of the GOM, deep water of the GOM, Rocky
Mountain Basins and the Wiliston Basin.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 23, 2006,
Moody's Investors Service lowered the Corporate Family Rating for
Stone Energy Corp., to B2 from B1 and the ratings on the senior
subordinated notes to Caa1 from B3.  The ratings are under review
for further possible downgrade.  Moody's also affirmed Stone's
SGL-3 rating.


SYLVAN GOLF: Keen Realty to Auction Penn. Property on Thursday
--------------------------------------------------------------
Keen Realty, LLC, will auction Sylvan Golf Centers, Inc.'s
properties to the public on June 22, 2006.

The 14.8-acre property is located at 1208 Swamp Road in
Fountainville, Pennsylvania and includes:

   a) 2 miniature golf courses (36 holes);

   b) driving range with 38 practice stations, 20 covered;

   c) pro shop and snack bar located in lower level of 4,044 sq.
      ft. office/retail building;

   d) 7-room office space located at the upper level of retail
      building; and

   e) existing rental stream from office.

For additional information regarding the auction, Keen Realty, can
be contacted at:

   Keen Realty, LLC
   60 Cutter Mill Road, Suite 214
   Great Neck, New York 11021
   Tel: (516) 482-2700
   Fax: (516) 482-5764
   http://www.keenconsultants.com/

Headquartered in Fountainville, Pennsylvania, Sylvan Golf Centers,
Inc., operates a golf course and driving range.  The Company filed
for chapter 11 protection Feb. 4, 2005 (Bankr. E.D. Pa. Case No.
05-11436).  Edmond M. George, Esq., at Obermayer Rebmann Maxwell &
Hippel, LLP, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, its
estimated assets and debt of $1 million to $10 million.


TEREX CORP: Moody's Rates Proposed Senior Credit Facility at Ba3
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Terex
Corporation -- Corporate Family Rating to Ba3 from B2; senior
secured to Ba3 from B2; senior subordinate to B2 from Caa1; and,
speculative grade liquidity rating to SGL-2 from SGL-3.  The
rating agency also assigned a Ba3 rating to the company's proposed
senior credit facility.  The rating outlook is Stable.

Moody's said that Terex's Ba3 corporate family rating reflects the
company's leading competitive position in the global construction
equipment markets and is benefiting from a favorable outlook for
revenue growth as demand for such equipment is experiencing a
strong cyclical recovery.  Moody's expects that demand within
Terex's end markets will remain robust through the balance of 2006
and into 2007 and that the company's operating performance and
financial profile will continue to strengthen.

Improved financial results reflect the success of Terex's cost
reduction initiatives, the replacement and expansion of rental
fleets resulting from the robust non-residential construction
market, and increased world wide demand for construction
equipment.  Credit metrics have improved to 3.7 times interest
coverage and leverage of 3.2 times through LTM March 2006.  These
strengths, however, are balanced against the ongoing cyclicality
of Terex's end markets.

The rating upgrade also recognizes that Terex has resolved its
internal accounting investigation and brought all financial
statement filings current, reducing a significant risk that has
affected the credit during the last two years.  Nevertheless, the
company continues to address material weaknesses in its accounting
controls that were identified as part of the investigation and
remains subject to an SEC investigation related to its financial
restatement.

The Corporate Family Rating is constrained by the potential for
Terex to pursue further growth initiatives which could require
incremental capital investments.  The company's current strong
liquidity profile, with balance sheet cash of about $300 million
at closing of the company's proposed senior secured credit
facility should enable it to fund modest growth without incurring
significant additional financial leverage.  Consequently, even in
consideration of a modest cyclical downturn in business trends,
Moody's anticipates that Terex will maintain appropriate financial
metrics for the Ba3 rating.

The stable outlook reflects Moody's expectations that Terex's debt
protection measures should be supportive of the Ba3 rating over
the next twelve to eighteen months.  Terex should be able to
weather future cyclical downturns much better than in the past due
to its broad product offerings, an improving balance sheet, and a
commitment to maintain ample liquidity.

The Ba3 rating on the existing first-lien senior secured credit
facility and the proposed $900 million first-lien senior credit
facility reflect the priority of claim within the company's
capital structure.  The rating of the existing senior secured
credit facility will be withdrawn once the proposed $900 million
credit facility has closed.

The SGL-2 Speculative Grade Liquidity Rating anticipates that the
company will maintain a good liquidity profile over the next
12-month period.  Terex is no longer in violation with its bank
covenants for financial reporting delays; hence, the company is
not susceptible to debt acceleration risk.  Moody's expectation is
that Terex's solid operating cash flow generation combined with
about $500 million available under its proposed committed
revolving credit facility and about $300 million in cash at
closing should be sufficient to fund the company's normal
operating requirements, capital spending and projected debt
repayments over the next 12 months.

Terex Corporation, headquartered in Westport, Connecticut, is a
diversified global manufacturer of construction, infrastructure
and surface mining equipment.


TEXAS PETROCHEMICALS: Amends Huntsman Acquisition Deal
------------------------------------------------------
Texas Petrochemicals LP (OTC: TXPI.PK) entered into an amendment
restructuring its acquisition of the assets of Huntsman
Corporation's U.S. butadiene business.

                     Terms of the Amendment

The Company will pay $197.5 million for the assets at closing,
subject to customary adjustments.  An additional payment of
$70 million will be made upon the satisfaction of certain
milestones related to the resumption of crude C4 supply from
Huntsman's light olefins unit located in Port Arthur, Texas.  The
transaction will be funded through a Term B secured financing,
combined with a stand-by letter of credit facility supporting the
potential $70 million obligation.

The transaction is expected to close by the end of June 2006.

A full-text copy of the amended transaction is available for free
at http://ResearchArchives.com/t/s?ba8

                   About Texas Petrochemicals

Headquartered in Houston, Texas, Texas Petrochemicals LP --
http://www.txpetrochem.com/-- is a premier chemical company with
more than $1 billion in annual sales.  The Company provides
quality C4 chemical products and services to both local and global
industry companies.  The Company has manufacturing facilities in
the industrial corridor adjacent to the Houston Ship Channel and
operates product terminals in Baytown, Texas and Lake Charles,
Louisiana.

                          *     *     *

As reported in the Troubled Company Reporter on June 16, 2006,
Moody's Investors Service affirmed Texas Petrochemicals LP's Ba3
corporate family rating and Ba3 rating on its $280 million seven
year senior secured term loan facilities.  The debt financing will
fund TPC upcoming purchase of Huntsman's U.S. butadiene and MTBE
business.  TPC is also establishing a $115 million five-year
senior secured revolving credit facility, which is not rated.

Moody's rated TPC for the first time following its emergence from
bankruptcy, in April 2006.  The current rating action on the
$280 million seven year senior secured term loan facilities
incorporates changes made to TPC's financing as a result of
renegotiated acquisition terms for the Huntsman assets.  The
outlook remains stable.


THERMA WAVE: PricewaterhouseCoopers Raises Going Concern Doubt
--------------------------------------------------------------
PricewaterhouseCoopers, LLP, in San Jose, California, raised
substantial doubt about Therma-Wave, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended April 2, 2006.  The
auditor pointed to the Company's recurring net losses and
negative cash flows from operations.

The Company reported a $8,749,000 net loss on $66,286,000 of total
revenues for the year ended March 31, 2005.

At March 31, 2005, the Company's balance sheet showed $59,378,000
in total assets and $34,390,000 in total liabilities, resulting in
a $18,048,000  stockholders' equity.

A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?b9c

                        About Therma-Wave

Since 1982, Therma-Wave, Inc. -- http://www.thermawave.com/-- has
been revolutionizing process control metrology systems
through innovative proprietary products and technologies.  The
company is a worldwide leader in the development, manufacture,
marketing and service of process control metrology systems used
in the manufacture of semiconductors.  Therma-Wave currently
offers leading-edge products to the semiconductor manufacturing
industry for the measurement of transparent and semi-transparent
thin films; for the measurement of critical dimensions and
profile of IC features; for the monitoring of ion implantation;
and for the integration of metrology into semiconductor
processing systems.


TIDEL TECH: Amends Terms of Electronic Cash Security Segment Sale
-----------------------------------------------------------------
Tidel Technologies, Inc., and its subsidiary, Tidel Engineering,
LP, entered into an amended and restated asset purchase agreement,
dated as of June 9, 2006, with Sentinel Operating, LP, for the
sale of substantially all of the assets of their electronic cash
security business, consisting of:

     a) timed access cash controllers;

     b) the Sentinel products;

     c) the servicing, maintenance and repair of the timed access
        cash controllers or Sentinel products; and

     d) all other assets and business operations associated with
        the business.

The Asset Purchase Agreement amends and restates the asset
purchase agreement originally entered into as of January 12, 2006.

The Asset Purchase Agreement provides for the sale of Tidel's cash
security business to Buyer for a cash purchase price of
$15,500,000, less $100,000 as consideration for the Buyer assuming
certain potential liability in connection with ongoing litigation,
and less a working capital deficit adjustment of $1,629,968,
resulting in a net purchase price of $13,770,032.  In addition,
the purchase price is subject to a cash adjustment of $2,458,718
payable to the Company by the Buyer on closing.

Pursuant to the Agreement Regarding the NCR Transaction and Other
Asset Sales, dated November 26, 2004, between the Company and
Laurus Master Fund Ltd., the Company agreed to pay to Laurus a
portion of the excess net proceeds from the Cash Security Business
Sale.

On June 9, 2006, the Company and Laurus entered into an agreement
which, among other things, provides for the payment of a sale fee
of $8,508,963 to Laurus in full satisfaction of all amounts
payable to Laurus under the Sale Agreement, including fees payable
in respect of the sale of our ATM business division and the Cash
Security Business Sale.

The Laurus Termination Agreement further provides that, upon
payment of the Sale Fee and performance by the Company of its
obligations under the Stock Redemption Agreement:

     -- all warrants to purchase common stock of the Company held
        by Laurus will terminate and be of no further force or
        effect; and

     -- thereafter, neither the Company nor any of its
        subsidiaries will have any further obligation to Laurus.

Further, each of the Company and Laurus have granted each other
and their respective affiliates and subsidiaries reciprocal
releases from and against any claims and causes of action that may
exist.

Tidel and Laurus initially entered a Stock Redemption Agreement on
January 12, 2006. Pursuant to the terms of the Stock Redemption
Agreement the Company agreed to repurchase from Laurus, upon the
closing of the Cash Security Business Sale, all shares of its
common stock held by Laurus.  Laurus, in turn, agreed:

     a) to the cancellation as of the closing date of the Cash
       Security Business Sale of warrants it holds to purchase
       4,750,000 shares of the Company's common stock at an
       exercise price of $.30 per share; and

    b) not to exercise such warrants prior to the earlier to occur
       of March 31, 2006 and the date on which the Asset Purchase
       Agreement is terminated.

Pursuant to an Amendment to the Stock Redemption Agreement entered
into as of February 28, 2006, Laurus agreed to extend the Outside
Date from March 31, 2006 to May 31, 2006.  On June 9, 2006, the
Company and Laurus entered into a Second Amendment to Stock
Redemption Agreement, pursuant to which Laurus has agreed to
further extend the Outside Date to Sept. 30, 2006. The Second
Amendment to Stock Redemption Agreement is effective as of April
21, 2006.

Headquarted in Carrollton, Texas, Tidel Technologies, Inc. (Other
OTC: ATMS.PK) -- http://www.tidel.com/-- manufacturers cash
security equipment designed for specialty retail marketers.

                            *   *   *

                          Going Concern

Hein & Associates LLP expressed substantial doubt about Tidel
Technologies, Inc.'s ability to continue as a going concern after
it audited the Company's financial statements for the fiscal years
ended Sept. 30, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses from operations and accumulated deficit
as of Sept. 30, 2005.


TORO ABS: Moody's Rates $4 Million Class F Notes at Ba1
-------------------------------------------------------
Moody's Investors Service assigned the following ratings to Notes
issued by Toro ABS CDO II, Ltd. and Toro ABS CDO II, LLC:

   * Aaa to the $885,000,000 Class A-1 First Priority Senior
     Secured Floating Rate Delayed Draw Notes Due June 2043;

   * Aaa to the $56,000,000 Class A-2 Second Priority Senior
     Secured Floating Rate Notes Due June 2043;

   * Aa2 to the $24,000,000 Class B Third Priority Senior
     Secured Floating Rate Notes Due June 2043;

   * Aa3 to the $7,000,000 Class C Fourth Priority Senior
     Secured Floating Rate Notes Due June 2043;

   * A2 to the $9,000,000 Class D Fifth Priority Mezzanine
     Secured Deferrable Floating Rate Notes Due June 2043;

   * Baa2 to the $10,500,000 Class E Sixth Priority Mezzanine
     Secured Deferrable Floating Rate Notes Due June 2043;

   * Ba1 to the $4,000,000 Class F Seventh Priority Mezzanine
     Deferrable Floating Rate Notes Due June 2043.

According to Moody's, the ratings on the Notes address the
ultimate cash receipt of all required interest and principal
payments, as provided by the Notes' governing documents, and are
based on the expected loss posed to Noteholders, relative to the
promise of receiving the present value of such payments.

The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting of structured finance
securities due to defaults, the safety of the transaction's legal
structure and the characteristics of the underlying assets.

Merrill Lynch Investment Managers, L.P. will serve as Collateral
Manager for this transaction.


TRINITY HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Trinity Holdings, Inc.
        5050 West Brown Deer Road
        Milwaukee, Wisconsin 53223

Bankruptcy Case No.: 06-23272

Debtor-affiliate filing separate chapter 11 petition:

      Entity                           Case No.
      ------                           --------
      Trinity Resource Corporation     06-23273

Type of Business: Trinity Holdings is the sole shareholder of TRC
                  Holdings, Inc., which filed for chapter 11
                  protection on April 18, 2006 (Bankr. E.D. Wis.
                  Case No. 06-21855).

Chapter 11 Petition Date: June 19, 2006

Court: Eastern District of Wisconsin (Milwaukee)

Judge: James E. Shapiro

Debtors' Counsel: Patrick B. Howell, Esq.
                  Whyte Hirschboeck Dudek S.C.
                  555 East Wells Street, Suite 1900
                  Milwaukee, Wisconsin 53202
                  Tel: (414) 273-2100
                  Fax: (414) 223-5000

Debtors' Consolidated Assets and Liabilities:

      Estimated Assets: $1 Million to $10 Million

      Estimated Debts:  $10 Million to $50 Million

Debtors' Consolidated List of their 20 Largest Unsecured
Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
EMC Insurance Companies          Premiums due on       $216,508
P.O. Box 327                     Workers Comp.
Brookfield, WI 53008             Insurance

Illinois Department of Revenue   Taxes                  $91,000
James R. Thompson Center
Concourse Level
Chicago, IL 60601-3274

State of Illinois                Taxes                  $80,000
Department of
Employment Security
Central Region Revenue
850 East Madison Street
2nd Floor
Springfield, IL 62702

O'Neil Cannon                    Legal Services         $18,519
Hallman DeJong, Esq.

California EDD                   Taxes                  $16,000

McCollum Realty Ltd.             Rent                   $13,873

California Division of           Taxes                  $13,000
Workers Compensation

Steven J. Wolf, CPA              Accounting Services    $11,471

Journal/Sentinel                 Advertising Services    $9,296

Beck Chaet and                   Legal Services          $7,153
Bamberger S.C.

Robert Holton                    Rent                    $7,000

Marlin Printing and Graphics     Trade Services          $5,551

Citicapital                      Lease Payments          $5,212

Occupational Health Centers      Trade Services          $5,184

Choice One Communications        Telephone Services      $4,428

Village of Brown Deer Treasurer  2006 Property Taxes     $3,837

Airport Industrial Complex       Rent                    $3,636

Ken E. Wisniewski                Accrued Vacation Pay    $3,480

Kathleen E. Cleary               Accrued Vacation Pay    $3,231

The David Group                  Trade Services          $2,991


U.S. CONCRETE: S&P Affirms B+ Rating & Revises Outlook to Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston,
Texas-based U.S. Concrete Inc. to positive from stable and
affirmed its 'B+' corporate credit rating.

"The outlook revision reflects the expected improvement in U.S.
Concrete's geographic diversity because of the pending acquisition
of unrated Alberta Investments Inc., a Texas ready-mixed producer,
and Alliance Haulers Inc., Alberta's transportation affiliate,"
said Standard & Poor's credit analyst Lisa Wright.  "We expect
that this acquisition will improve earnings stability by reducing
U.S. Concrete's exposure to northern California and will allow
U.S. Concrete to reduce debt."

U.S. Concrete has operations in California, New Jersey, Texas, and
Michigan.  The addition of Alberta Investments will reduce U.S.
Concrete's exposure to California, which represented about 40% of
sales in 2005.  In addition to regional economic downturns, its
performance is vulnerable to poor weather conditions, which delay
construction and result in lower sales volume.

Ms. Wright said, "We could raise the ratings one notch if the
company continues to expand its revenue and earnings base and
strengthen its geographic diversity.  We could revise the outlook
to stable if U.S. Concrete pursues substantial debt-financed
acquisitions or if the company experiences a period of depressed
regional economic conditions that meaningfully weakens volumes and
margins."


VARIG S.A.: N.Y. Supreme Court Directs Return of Aircraft
---------------------------------------------------------
The Supreme Court of the State of New York, County of New York,
directed VARIG, S.A., on June 12, 2006, to cease all commercial
operation of:

   -- two Boeing 777-200 aircraft;
   -- a GE engine;
   -- three MD-11 aircraft; and
   -- two MD-11 ER aircraft

The New York Supreme Court also ordered VARIG to turn over the
Aircraft to Boeing Aircraft Holding Company; Kuta-One Aircraft
Corp., Ltd.; Dillon, Inc.; MDFC-Carson Company; McDonnell Douglas
Indonesia Leasing, Inc. and Akash, Inc.

Boeing Aircraft, et al., asked the New York Supreme Court for a
temporary restraining order and preliminary injunction to
prohibit VARIG from operating the aircraft and compel VARIG to
return the aircraft.

The New York Supreme Court granted Boeing, et al.'s request after
hearing the arguments from both sides.

The NY Supreme Court makes it clear that the aircraft should be
delivered to Boeing, et al., in airworthy status, and any of the
aircraft outside of Brazil will be delivered directly to the
United States without transiting through Brazil.

Pursuant to the NY Supreme Court ruling, Boeing et al., posted a
$2,000,000 bond for the damages VARIG may sustain by reason of
the injunction.

                            About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VARIG S.A.: Judge Ayoub Defers Ruling on $446 Million NVP Bid
-------------------------------------------------------------
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Rio de Janeiro, Brazil, postponed a ruling on a $446 million bid
submitted by NV Participacoes for VARIG, S.A.'s assets after
receiving last minute offers.

NV Participacoes emerged as the lone bidder at the June 8, 2006
auction.  NVP, a company formed by VARIG pilots and flight
attendants, offered to acquire VARIG's entire air transportation
operations.

According to papers filed with the U.S. Bankruptcy Court for the
Southern District of New York, NVP's $446-million bid is comprised
of:

   * approximately $126 million cash;

   * debentures totaling around $220 million; and

   * the conversion of approximately $100 million of labor
     claims.

Bloomberg News reports that NVP offered $449 million.

As widely reported, the Brazilian Court received a late offer
from Fundo de Investimento Multilong Corporation.

Bloomberg, citing Agencia Estado, relates that Multilong, a Sao
Paulo-based investment fund, presented an $800-million bid for
VARIG's domestic and international operations.

Multilong fund will seek to finance the purchase by issuing
debentures in a restructured VARIG and obtaining loans from Banco
Nacional de Desenvolvimento Economico e Social, a national
development bank run by the Brazilian government.

Syn Logistica and Fontidec have also submitted offers for VARIG,
Bloomberg says, citing Judge Ayoub's spokesperson as its source.

Furthermore, Portugal's TAP SA is reportedly joining forces with
Air Canada and Brookfield Asset Management Inc. to bid for the
bankrupt airline.  According to Bloomberg, TAP will only make a
formal offer after Judge Ayoub rejects NVP's bid and calls for a
new auction.

                          June 8 Auction

Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
in New York, relates that the June 8 auction was conducted in two
stages and provided two options.  The first stage of the auction
included a minimum bid requirement and the second stage had no
minimum bid.  Both stages provided bidders with the option to bid
on either:

   -- the entire air transportation operations with the proceeds
      of the sale to be paid towards the airline's ongoing
      operations and toward the payments required under the
      Consolidated Recovery Plan; or

   -- the  domestic and regional operations with the proceeds of
      the sale to be applied to the then outstanding postpetition
      debts and the remainder to be injected into VARIG's
      international operations and to make the payments required
      under the Recovery Plan.

Since NVP's bid did not reach the $860 million minimum bid
requirement, a second auction commenced immediately.  With no
other bids for VARIG's entire air operation, the auction
concluded with NVP as the successful bidder, subject to the
Brazilian Court's approval.

                NVP Bid Gets Conditional Approval

On June 9, 2006, the Brazilian Court approved the NVP bid subject
to the requirement that:

   a. NVP immediately provide proof of its ability to fund the
      $75 million require deposit to VARIG; and

   b. NVP change the $220 million debenture feature of its bid to
      either cash or the assumption of an equal amount in
      postpetition debt with proof of its ability to fund the
      postpetition debt.

Bloomberg says the Brazilian Court will look into NVP's offer
next week.

                            About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VOLT INFORMATION: Earns $9.1 Million in 2006 Second Fiscal Quarter
------------------------------------------------------------------
Volt Information Sciences, Inc. (NYSE: VOL) reported its financial
results for the second quarter and six months ended April 30,
2006.

               Second Quarter - Fiscal 2006 Results

The Company reported net income of $9.1 million for the second
fiscal quarter of 2006 ended April 30, 2006, compared to
$4.5 million in the second fiscal quarter for 2005.  Net sales for
the second quarter of 2006 increased by 9% to $593.8 million,
compared to $546.0 million in last year's comparable quarter.

Income before minority interest and income taxes increased by
$6.3 million, or 68%, compared to the 2005 comparable quarter.
The minority interest was repurchased from Nortel Networks, Inc.
on Dec. 29, 2005.

                 Six Months - Fiscal 2006 Results

For the first six months of fiscal 2006, the Company reported net
income of $8.7 million compared to $3.7 million last year.  Net
sales for the 2006 six-month period increased by 10% to $1.1
billion compared to $1.0 billion last year.  Income before
minority interest and income taxes was $15.9 million in the six
months ended April 30, 2006 compared to $9.4 million in the
comparable fiscal 2005 period.

"We are pleased that our initiatives in Staffing Services are
producing their desired results," Steven A. Shaw, president and
chief executive officer of Volt, commented on the results for the
second quarter

"Strong demand and margin improvement in our Technical Placement
and Administrative and Industrial divisions, along with growth in
our higher margin Permanent Placement and Recruitment Process
Outsource offerings are the primary drivers for the Company's
improved performance.

"Margin growth combined with aggressive cost controls associated
with workers' compensation and unemployment insurance has had a
positive effect.  These improved results were achieved in spite of
higher SOX compliance costs and a one time charge for death
benefits related to the passing of two senior corporate
executives."

                        Staffing Services

Net sales for this segment increased by 11% to $502.3 million
compared to the second fiscal quarter for 2005 while operating
profit doubled to $14.5 million from $7.3 million.  The increase
in the operating profit was the result of increased revenue in
both the Technical and Administrative divisions, for both
permanent placement and traditional staffing, and a reduction in
workers' compensation expense, which more than offset lower
profitability of the VMC Consulting division.

                         Computer Systems

The segment reported an operating profit of $9.8 million on net
sales of $52.1 million in the second quarter of fiscal 2006
compared to an operating profit of $9.0 million on net sales of
$42.9 million in the comparable prior year period.  The quarter
includes $4.9 million of new business revenue as a result of the
Company's Dec. 30, 2005 acquisition of Varetis Solutions GmbH.

                       Telephone Directory

Net sales for this segment approximated $17 million while
operating profit increased to $4.0 million in the fiscal 2006
second quarter from $2.5 million in the comparable prior year
period.  The increase in operating profit was the result of
increased sales in the segment's community telephone directory
division and the timing of the distribution of higher margin
directories.

                   Telecommunications Services

Net sales in this segment decreased in the second quarter of
fiscal 2006 to $27.3 million from $37.9 million and the segment
reported a $40,000 operating loss compared to an operating profit
of $200,000 in the comparable prior year period.  The results of
the quarter were negatively impacted by reduced sales and lower
gross margins in the Construction and Engineering division.

                    General Corporate Expenses

General corporate expenses increased by $1.7 million, or 19%, due
to a one-time accrual of $1.2 million for death benefits related
to two senior corporate executives, increased salaries,
professional fees and costs related to compliance with the
Sarbanes-Oxley Act.

                            Liquidity

Cash and cash equivalents, excluding restricted cash, was
$44.8 million at the end of the quarter.  At April 30, 2006, the
Company had sold a participating interest in accounts receivable
of $140.0 million under its securitization program and had the
ability to finance an additional $60.0 million under the facility.

In addition, the Company may borrow under a secured $40.0 million
revolving credit facility.  At April 30, 2006, the Company had
borrowed EUR6 million ($7.6 million) under the facility.

Full-text copies of the Companies financial statements for the
second quarter ended April 30, 2006, are available for free at
http://ResearchArchives.com/t/s?ba7

Volt Information Sciences, Inc. -- http://www.volt.com/-- is a
national provider of Staffing Services and Telecommunications and
Information Solutions with a Fortune 100 customer base.  Operating
through a network of over 300 Volt Services Group branch offices,
the Staffing Services segment fulfills IT and other technical,
commercial and industrial placement requirements of its customers,
on both a temporary and permanent basis.  The Telecommunications
and Information Solutions businesses, which include the
Telecommunications Services, Computer Systems and Telephone
Directory segments, provide complete telephone directory
production and directory publishing; a full spectrum of
telecommunications construction, installation and engineering
services; and advanced information and operator services systems
for telephone companies.

                           *     *     *

Volt Information Sciences, Inc., carries Fitch Ratings' BB- long-
term issuer default rating.


W.R. GRACE: Consolidates National Union's Multi-Million Claims
--------------------------------------------------------------
Before W.R. Grace & Co. and its debtor-affiliates filed for
bankruptcy, Bank of America, N.A., issued three standby letters of
credit for the account of W.R. Grace & Co.- Conn. as collateral
for certain insurance transactions and surety bonds issued in the
Debtors' favor:

     L/C No.     Face Amount    Issuance Date    Expiry Date
     -------     -----------    -------------    -----------
     7404289     $10,439,830      10/17/00         10/17/05
     7404163       6,000,000      09/15/00         09/15/05
     7403968       2,190,000      07/30/00         07/31/06

National Union Fire Insurance Company of Pittsburgh,
Pennsylvania, as beneficiary under L/C No. 7404289, drew down
$9,729,720 from the First L/C in June 2002.  National Union, as
beneficiary under L/C No. 7403968, drew down $250,000 from the
Second L/C in February 2003.

In October 2002, the Court authorized BofA to set off $200,000 in
a depository account against the amounts due to BofA as a result
of National Union's draw on the First L/C.

National Union filed Claim Nos. 9553 and 9554 against W.R. Grace
& Co. and Grace-Conn.  The National Union Claims each assert a
claim secured by the First L/C and the Second L/C, aggregating
$46,971,764, plus unliquidated amounts.  In addition, National
Union filed Claim Nos. 13925 to 13930 against Grace and five
other Debtors, asserting claims secured by the Second L/C for
$75,623, plus unliquidated amounts.

The Debtors' Amended Joint Plan of Reorganization contemplates
the consolidation of the Debtors' estates for plan purposes.
Upon confirmation of the Plan, every claim filed against any of
the Debtors will be deemed filed against the deemed consolidated
Debtors and will be deemed one claim against and obligation of
the deemed consolidated Debtors.

In a stipulation approved by the Court, the Debtors and National
Union agree that:

   1.  Claim No. 9553 will remain as the sole National Union's
       Insurer Claim against the Debtors' estate;

   2.  Claim Nos. 9554 and 13926 through 13930 are disallowed;

   3.  To the extent the Plan or any other plan of reorganization
       confirmed in the Debtors' cases do not provide for
       substantive consolidation, the disallowed claims will be
       reinstated; and

   4.  The Debtors reserve the right to object to National
       Union's Claims.

Certain of the Debtors, National Union and various other insurers
executed settlement agreements in November 1995 and November
2000.  The AIG Insurers, pursuant to the pacts, may be recalled
upon to make certain payments to the Debtors.

The National Union Claims assert that the AIG Insurers have
certain rights of set-off to retain payments due under the
Settlement Agreements to the extent of the Debtors' obligations.

To the extent the AIG Insurers make any payment from time-to-time
under the Settlement Agreements, or under any other pre-existing
prepetition obligation to the Debtors, and to the extent the AIG
Insurers have a right to set-off, the Stipulation will substitute
as an administrative priority claim equal in value to the right
of set-off.

                         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: Can Contribute to Chicago Employees' Pension Plan
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave W.R.
Grace & Co. and its debtor-affiliates permission to contribute to
the pension plan of employees hire in the Debtors' manufacturing
facility located at 6050 W. 51st Street, in Chicago, Illinois, one
of the Debtors' largest "Darex" plants.

Darex produces metal can sealants, "soda-sorb" and other products.
Darex is part of the Debtors' Grace Performance Chemicals
business.  At Chicago 51st Street, the Debtors employ
approximately 150 hourly and salaried employees.  The steelworkers
union represents 68 of the employees.

The Debtors agreed to amend the Union Pension Plan to increase
monthly pension benefits by $10 over four years, provided that the
Debtors could secure the requisite approval from the Court.

          Union Pension Plan and the Pension Amendments

The trust funding the Retirement Plan of W.R. Grace & Co.-Conn.
Chemical Group (Chicago Dewey & Almy Plant) is a defined-benefit
pension plan, which satisfies the qualification requirements under
Section 401(a) of the Internal Revenue Code.  The "plan year"
applicable to the Plan is a calendar year.  The Pension Plan is
funded with employer contributions that are in the trust that is
tax-exempt.

In addition, the Pension Plan does not require employee
contributions.  As of January 1, 2006, the fair market value of
the assets held in trust to provide Pension Plan benefits
aggregated $2,800,000.

The Pension Plan is a so-called "flat- dollar unit benefit plan,"
which provides a specific dollar amount for each year of service,
commencing at age 65, that is paid in the form of an annuity over
the life of the retired employee.

The most significant aspect of the Pension Amendments is that the
monthly pension benefit for any Union Employee who retires on or
after February 1, 2006, would be increased from $35 per year of
service to this applicable amount:

         Retirement Date              Monthly Pension
         ---------------              ---------------
            2/1/2006                        $36
            2/1/2007                         39
            2/1/2008                         42
            2/1/2009                         45

Aside from the Pension Amendments, the only other material cost
to the Debtors as a result of the 2006 Union Agreement is a
moderate wage increase of 3% per year.

                        Funded Exception

Section 401(a)(33) of the IRC generally prohibits the adoption of
any amendment to enhance benefits under a defined benefit pension
plan during the period that the employer sponsoring that plan is
a Chapter 11 debtor, unless one of the exceptions provided by
that statute is satisfied.

The exception that is most relevant to the circumstances regarding
the Union Pension Plan is specified in subpart (B)(i) of Section
401(a)(33), which provides that certain amendments may be adopted
where "the plan, were such amendment to take effect, would have a
funded current liability percentage of 100% or more."

                 $904,815 Required Contribution

To implement the Pension Amendments, the Debtors propose to make
a one-time, lump sum contribution of $904,815 -- but in no event
more than $1,300,000 -- to the Union Pension Plan, or $1,228,542
if the Pension Funding Equity Act is not extended by no later
than September 15, 2006.

In that case, the Required Contribution would be deemed to have
been made on December 31, 2005, to calculate the "funded current
liability percentage" for the 2005 plan year.

The Debtors also seek to effectuate the Pension Amendments in
accordance with their obligations under the 2006 Union Agreement.

The Pension Amendments would be adopted effective on or after
January 1, 2006, to which the Funded Exception would be
satisfied.

                         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.  


WATTSHEALTH FOUNDATION: Selling Business Lines and Other Assets
---------------------------------------------------------------
WATTSHealth Foundation, Inc., dba UHP Healthcare, will be selling
its lines of business and other assets to the successful bidder.

The deadline for submission of overbids on the Assets was May 23,
2006.  No competing bids were received.

The Debtor has tendered proposed findings of fact, conclusions of
law and a sale order to the U.S. Bankruptcy Court for the Central
District of California.

A hearing regarding the sale was held June 7, 2006, at Court Room
No. 1345, Roybal Federal Building, in Los Angeles, California.

No updates on the Sale Hearing were presented in court documents.

Headquartered in Inglewood, California, WATTSHealth Foundation,
Inc., dba UHP Healthcare, provides comprehensive medical and
dental services for Commercial, Medi-Cal and Medicare members in
the Greater Southern California area.  The Company filed for
chapter 11 protection on May 31, 2005 (Bankr. C.D. Calif. Case No.
05-22627). Gary E. Klausner, Esq., at Stutman Treister & Glatt
represents the Debtor in its restructuring efforts.  Richard K.
Diamond, Esq., at Danning, Gill, Diamond & Kollitz, LLP,
represents the Official Committee of Unsecured Creditors, and
Ronald F. Greenspan and Matthew Pakkala at FTI Consulting, Inc.,
serve as the Committee's financial advisors.  When the Debtor
filed for protection from its creditors, it estimated
assets and debts of $50 million to $100 million.


WINDSWEPT ENVIRONMENTAL: Inks Fee Waiver Pact with Laurus Master
----------------------------------------------------------------
Windswept Environmental Group, Inc., entered into an Amendment and
Fee Waiver Agreement with Laurus Master Fund, Ltd., On June 12,
2006.

Pursuant to the Agreement Laurus agreed to further amend the terms
of the registration rights agreement between Windswept and Laurus
dated as of June 30, 2005.

The terms of the Registration Rights Agreement, as amended
pursuant to an amendment and fee waiver agreement dated May 11,
2006, require Windswept to file a registration statement and have
it declared effective by the Securities and Exchange Commission
by June 15, 2006 covering a portion of the shares of common stock
underlying each of:

     -- The amended and restated secured convertible term note,
        dated October 6,  2005, issued by Windswept to Laurus in
        the original aggregate principal amount of $7,350,000
        (currently $5,971,875), maturing on June 30, 2008;

     -- The option issued by Windswept to Laurus on June 30, 2005,
        originally to purchase 30,395,179 shares of Windswept's
        common stock; and

     -- The warrant issued by Windswept to Laurus on June 30, 2005
        to purchase 13,750,000 shares of Windswept's common stock;

Pursuant to the Amendment and Fee Waiver Agreement, Windswept and
Laurus agreed to extend the deadline by which the Initial
Registration Statement must be declared effective by the SEC from
June 15, 2006 to June 30, 2006.

The Registration Rights Agreement and the May Amendment provided
that, beginning June 16, 2006, Windswept would be required to pay
to Laurus these fees in the event that the registration statement
is not effective by June 15, 2006:

     -- 1.5% of the principal outstanding on the Note, for the
        first thirty days, prorated for partial periods; and

     -- 2.0% of the principal outstanding on the Note, for each
        subsequent thirty-day period, prorated for partial
        periods.

As of June 12, 2006, the Company is current in its payment
obligations  to Laurus.

Pursuant to the Amendment and Fee Waiver Agreement, the date by
which any Fees may accrue and become payable has been postponed
until July 1, 2006 with respect to the Initial Registration
Statement.

A full-text copy of the Amendment and Fee Waiver Agreement is
available for free at http://researcharchives.com/t/s?b97

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.

                            *   *   *

                       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.


WINN-DIXIE: Court Approves Reddick & Stokes Settlement Agreement
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approves a Settlement Agreement between Winn-Dixie Stores, Inc.,
and its debtor-affiliates, David A. Reddick and James A.
Stokes.

Claim Nos. 9333 and 9335 are each allowed as unsecured non-
priority claims for $307,500 against the Debtors.  No further
distribution or payment will be made by the Debtors on these
Claims.

The Court disallows the balance of the Claims.

                          Background

On Aug. 19, 2002, Mr. Reddick and Mr. Stokes filed a lawsuit
against the Debtors in which judgments were entered in favor of
the Claimants aggregating US$700,000.

An additional US$440,170 judgment was entered against the
Debtors for attorneys' fees and costs.

The Debtors appealed the judgments and obtained a stay of
execution pending appeal by posting a US$1,299,793 supersedeas
bond, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York, tells the Court.

Mr. Baker explains that the Supersedeas Bond is secured by a
line of credit agreement between the Debtors and Wachovia Bank,
National Association.  The line of credit agreement is, in turn,
secured by receivables and other collateral, which constitutes
property of the Debtors' estates.

When the Debtors filed for bankruptcy, prosecution of the
appeals was stayed.  The appeals are still pending, Mr. Baker
says.

In the Debtors' chapter 11 cases, the Claimants filed Claim Nos.
9333 and 9335, and their attorneys filed Claim No. 9334, based
on the Judgments.

On Aug. 26, 2005, the parties agreed to participate in a
postpetition mediation of their dispute.  The mediation resulted
in a partial settlement by which the Debtors agreed to pay a
compromised amount on Claim Nos. 9333 and 9335 in return for a
full satisfaction of the Claimants' Judgments and a dismissal of
the related appeal.

As a result, secured claims totaling US$700,000, plus interest,
will be released for cash payments totaling US$615,000.

The salient terms of the Settlement Agreement are:

    (1) Consideration to be provided to the Claimants by the
        Debtors:

        -- US$16,600 to be paid to the Claimants and their
           attorneys, T. A. Delegal, III, Esq., and Delegal Law
           Offices, P.A.;

        -- US$94,200 less normal withholding tax and FICA
           deductions, to each of the Claimants and Delegal Law
           Offices, P.A.;

        -- US$205,000 will be paid to purchase an annuity
           providing periodic payments to each of the Claimants;

        -- dismissal of the Merits Appeals; and

        -- a general release of all claims the Debtors may have
           had against the Claimants save those related to the
           Fee Appeals with respect to any alleged acts
           occurring before the Effective Date of the Settlement
           Agreement; and

    (2) Consideration to be provided to the Debtors by the
        Claimants:

        -- dismissal of the Lawsuit and Merit Appeals with
           prejudice;

        -- withdrawal of all proofs of claim filed by the
           Claimants in connection with the Lawsuit, Merit
           Appeals and Fee Appeals, and waiver of the right to
           receive any distribution in the Chapter 11 cases;

        -- partial release of any claims the Claimants may have
           against the Supersedeas Bond, resulting in a
           US$700,000 reduction in the amount of the bond; and

        -- general releases of all claims the Claimants may have
           had against the Debtors and their agents other than
           in connection with the Fees Judgment and Fee Appeals.

Mr. Baker notes that the Settlement Agreement will:

    (a) compromise a significant secured liability at a discount
        and without the expense and uncertainty inherent in
        protracted litigation; and

    (b) allow the Debtors to reduce the amount of Supersedeas
        Bond, thereby providing them access to US$700,000 on the
        line of credit currently securing the Supersedeas Bond.

Mr. Baker clarifies that the Settlement Agreement does not
resolve the Debtors' objection to Claim No. 9334 or the issues
on appeal relating to the Fees Judgment, which appeal will
continue to be prosecuted.

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: Wants to End Store No. 276 Lease with Carlos Salmon
---------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to approve an
Agreement with Carlos Salmon Realty, Inc., and Staples Office
Superstore East.

Winn Dixie Stores, Inc., and Carlos Salmon Realty, Inc., are
parties to the lease of Store No. 276 located in Miami, Florida.

Before filing for bankruptcy, WD Stores vacated Store No. 276 and
relocated its grocery store operations to an adjacent property
-- Store No. 251.

WD Stores remains liable under the Lease.  Thus, it is still
paying an annual rent of $58,564 for Store No. 276 to Carlos
Salmon Realty, D. J. Baker, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in New York, tells the Court.

On Feb. 16, 2006, Carlos Salmon Realty, WD Stores, and Staples
Office Superstore East entered into a Termination of Lease,
Surrender of Premises and Reciprocal Easement, pursuant to
which:

    (a) Carlos Salmon Realty and WD Stores will terminate the
        Lease;

    (b) WD Stores will surrender Store No. 276 to Carlos Salmon
        Realty;

    (c) Carlos Salmon Realty will enter into a new lease for Store
        No. 276 with Staples;

    (d) WD Stores and Staples will provide reciprocal parking
        easements on the shared parking area between Store No. 276
        and Store No. 251; and

    (e) WD Stores and Staples will not transfer or assign their
        leases of the Stores to any third party who will operate
        the stores under a competing use.

In consideration for the Agreement, Staples will pay Carlos
Salmon Realty the 2005 prepetition balance of WD Stores' tax
obligations -- $13,928 -- for Store No. 276, and will pay WD
Stores a $1,317,819 termination fee.

                          Newport Objects

The Morris Tract Corp., The Williston Highlands Development
Corp., and The Morris Tract Corp., doing business as Newport
Partners, doing business as Partnership/Newport Motel, own the
property located at 3275 Coral Way in Miami, Florida, where Store
No. 251 is situated.

Peter D. Russin, Esq., at Meland, Russin & Budwick, P.A., Miami,
Florida, asserts that the Debtors' request attempts to abridge
the rights of Newport.

According to Mr. Russin, Newport has not received a copy of the
Lease Termination, Surrender of Premises and Reciprocal Easement
Agreement.  Thus, he says, it is impossible for Newport to
complete an appropriate analysis.

Mr. Russin reminds the Court that the Debtors commenced an
adversary proceeding against Newport relative to Store 251, and
Newport has filed its counterclaim.  If Newport is successful in
the Adversary Proceeding, the Debtors will not have a lease to
assume.

Newport objects to WD Stores providing reciprocal parking
easements on a shared parking area between the Leased Premises
and Store 251, because:

    (a) Newport contends that there is no lease for Store 251 with
        WD Stores.  Thus, WD Stores has no parking easement and
        cannot grant reciprocal parking easements to Staples; and

    (b) Newport is not a party to the Agreement, thus the Court
        should not enter an order impacting its rights.

Newport also objects to WD Stores' ability to restrict the use of
an adjacent property when WD Stores' legal right to occupy Store
251 does not exist.

Accordingly, Newport asks the Court continue the hearing on the
Debtors' request, until:

    (i) the Agreement is provided and Newport has sufficient time
        to review it; and

   (ii) the Court determines whether WD Stores has a lease to
        Store 251 to assume.

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)


ZILOG INC: Sloppy Employee Communications Revive Employee Claims
----------------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit reversed
an order from the U.S. Bankruptcy Court for the Northern District
of California granting summary judgment that dismissed three
women's sex discrimination claims against ZiLOG, Inc.  The Appeals
Court says the company's in-house general counsel's sloppy e-mail
messages with the women misled them about what they needed to do
to file claims in ZiLOG's bankruptcy proceeding.  As a result, the
9th Circuit concludes, the women's failure to timely file claims
was the result of excusable neglect and the women will be
permitted to pursue their claims against ZiLOG's estate.

A copy of the Slip Opinion is available at:

                http://researcharchives.com/t/s?b9b

In June 2001, ZiLOG decided to close its plant in Idaho.  ZiLOG
offered retention bonuses to employees who stayed until the
December 2001 closing date.  The three women say ZiLOG paid those
retention bonuses to men working at the plant, but not women.
They sued.  On procedural grounds, the Honorable Marilyn Morgan
barred the women from pursuing their claims in ZiLOG's bankruptcy.
U.S. District Judge Jeremy Fogel upheld Judge Morgan's rulings on
appeal.  The Ninth Circuit says the bankruptcy court abused its
discretion and the district court erred in upholding summary
judgment.  The Ninth Circuit points to e-mail correspondence from
ZiLOG's in-house counsel that told the women, in short, that the
bankruptcy proceeding didn't affect employees, only holders of the
company's publicly traded debt and equity securities.

Headquartered in San Jose, California, ZiLOG, Inc. designs,
manufactures and markets semiconductors for the communications and
embedded control markets, providing leading connectivity, and
consumer and industrial control solutions. ZiLOG filed a
prepackaged chapter 11 proceeding on March __, 2002 (Bankr. N.D.
Calif. Case Nos. 02-51143 and 02-51144) and is represented by
Richard Levin, Esq., Peter W. Clapp, Esq., and Stephen J. Lubben,
Esq., at Skadden, Arps, Slate, Meagher & Flom LLP.  On April 30,
2002, the Bankruptcy Court confirmed the Debtors' Joint
Reorganization Plan, dated as of January 22, 2002, as amended.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
                                Total
                                Shareholders  Total     Working
                                Equity        Assets    Capital
Company                 Ticker  ($MM)          ($MM)     ($MM)
-------                 ------  ------------  -------  --------
Abraxas Petro           ABP         (22)         125       (6)
AFC Enterprises         AFCE        (44)         176       31
Adventrx Pharma         ANX         (26)          23      (27)
Alaska Comm Sys         ALSK        (29)         550       12
Alliance Imaging        AIQ         (29)         683       19
AMR Corp.               AMR      (1,272)      29,918   (1,924)
Atherogenics Inc.       AGIX       (114)         227      182
Bally Total Fitn        BFT      (1,463)         486     (442)
Biomarin Pharmac        BMRN         46          488     (322)
Blount International    BLT        (134)         462      129
CableVision System      CVC      (2,468)      12,832    2,643
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL     (1,069)       1,409       32
Cenveo Inc              CVO         (56)       1,045      157
Choice Hotels           CHH        (148)         274      (68)
Cincinnati Bell         CBB        (727)       1,888       33
Clorox Co.              CLX        (427)       3,622     (258)
Columbia Laborat        CBRX         11           43       24
Compass Minerals        CMP         (59)         702      171
Crown Holdings I        CCK          46        6,885      171
Crown Media HL          CRWN       (165)       1,229       93
Deluxe Corp             DLX         (71)       1,394     (264)
Denny's Corporation     DENN       (261)         505      (75)
Domino's Pizza          DPZ        (632)         387      (10)
Echostar Comm           DISH       (690)       8,935    1,438
Emeritus Corp.          ESC        (105)         725      (19)
Emisphere Tech          EMIS        (26)          13      (11)
Empire Resorts I        NYNY        (28)          57       (5)
Encysive Pharm          ENCY        (38)         119       82
Foster Wheeler          FWLT       (239)       2,032      (52)
Gencorp Inc.            GY          (84)       1,002       (3)
Graftech International  GTI        (175)         919      286
H&E Equipment           HEES        204          667       13
Hollinger Int'l         HLR        (198)       1,038     (271)
I2 Technologies         ITWO        (65)         195      (20)
ICOS Corp               ICOS        (51)         248      121
IMAX Corp               IMAX        (25)         238       33
Incyte Corp.            INCY        (38)         399      189
Indevus Pharma          IDEV       (134)          86       50
Investools Inc.         IEDU        (33)          87      (54)
Koppers Holdings        KOP        (100)         556      150
Kulicke & Soffa         KLIC         46          399      204
Labopharm Inc.          DDS          (8)          46        9
Level 3 Comm. Inc.      LVLT       (546)       8,284      713
Ligand Pharm            LGND       (212)         289     (144)
Linn Energy LLC         LINE        (45)         280      (51)
Lodgenet Entertainment  LNET        (70)         261        7
Maxxam Inc.             MXM        (661)       1,048      101
Maytag Corp.            MYG        (187)       2,954      150
McDermott Int'l         MDR         (50)       3,160      277
McMoran Exploration     MMR         (38)         411       (1)
Movie Gallery           MOVI       (171)       1,248     (843)
NPS Pharm Inc.          NPSP       (129)         287      212
New River Pharma        NRPH          3           96       82
Omnova Solutions        OMN         (15)         360       65
ON Semiconductor        ONNN       (224)       1,211      251
Qwest Communication     Q        (3,060)      21,126     (923)
Revlon Inc.             REV      (1,042)       1,085       37
Riviera Holdings        RIV         (30)         219        7
Rural/Metro Corp.       RURL        (93)         302       50
Rural Cellular          RCCC       (500)       1,427      144
Sepracor Inc.           SEPR       (128)       1,284      906
St. John Knits Inc.     SJKI        (52)         213       80
Sun Healthcare          SUNH         (1)         531      (46)
Tivo Inc.               TIVO        (33)         143       19
USG Corp.               USG        (496)       6,522    1,956
Unigene Labs Inc.       UGNE         (7)          21       (2)
Vertrue Inc.            VTRU        (24)         466      (78)
Weight Watchers         WTW         (42)         856      (69)
Worldspace Inc.         WRSP     (1,516)         682      197
WR Grace & Co.          GRA        (548)       3,506      881

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Shimero Jainga, Joel Anthony G.
Lopez, Robert Max Quiblat, 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 ***