TCR_Public/060707.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Friday, July 7, 2006, Vol. 10, No. 160

                             Headlines

ADB SYSTEMS: Completes Sale of Norwegian Biz Unit for $2.8 Mil.
APHTON CORP: Court Approves Eckert Seamans as Bankruptcy Counsel
APHTON CORP: Defers Salary of Three Employees Pending Sale Closing
APHTON CORPORATION: Asset Sale Hearing Slated for July 14
AQUACELL TECHNOLOGIES: Posts $1.8 Mil. Net Loss in Third Quarter

ARMSTRONG WORLD: Committee Files Post-Trial Brief v. Confirmation
ARMSTRONG WORLD: Asbestos Entities Slam Brickman's Testimony Anew
ASARCO LLC: Wants Spieth Bell as Special Labor Counsel
ASARCO LLC: Wants RECON Real Estate as Broker for 3 El Paso Land
BAREFOOT RESORT: Delivers Second Amended Plan of Reorganization

BAYOU GROUP: Files 25 Lawsuits Against Former Investors
BROOKLYN HOSPITAL: Court Approves Ernst & Young as Accountants
CALPINE CORP: Wants to Sell Fox Energy Plant for $16.2 Million
CALPINE CORP: Wants Lien Investigation Deadline Extended
CALPINE CORP: Wants 3 Executive VPs' Employment Agreement Okayed

CATHOLIC CHURCH: Portland Wants Continued Use of Funds
CENTRAL AMERICAN: Paritz & Co. Replaces Killman Murrell as Auditor
CHOICE ONE: Completes Merger with Conversent Comms & CTC Comms
CLICKABLE ENT: Simontacchi & Co. Raises Going Concern Doubt
CLINICAL DATA: Deloitte & Touche Raises Going Concern Doubt

CLINICAL DATA: Announces $17 Million Private Placement
COLLINS & AIKMAN: May Get $5 Mil. From Settlement with Insurers
COLLINS & AIKMAN: SEC Has Until July 31 to File Proofs of Claim
COLLINS & AIKMAN: Moves to Reject Manchester and Farmville Leases
CONSUMERS ENERGY: Settles Two Class Action Lawsuits

CONVERSENT COMMS: Completes Merger with Choice One & CTC Comms
CRESCENT JEWELERS: Has Until August 15 to Decide on Leases
CSK AUTO: Receives $221 Mil. of Tenders from Holders of 7% Notes
D&I INVESTMENTS: Case Summary & Four Largest Unsecured Creditors
DANA CORP: Rejects 22 Executory Contracts and Unexpired Leases

DANA CORP: Employing 31 Additional OCPs and Service Providers
DANA CORP: Files 2005 Employee Incentive & Savings Plan Report
DELTA MUTUAL: March 31 Balance Sheet Upside-Down by $1.2 Million
DIAGNOSTIC IMAGING: Moody's Holds B2 Rating on $140MM of Sr. Loans
DREWCAT CAPITAL: S&P Rates $50 Million Senior Notes at BB-

E.A. VINER INT'L: Moody's Rates $125 Mil. Sr. Sec. Facility at B1
ENDEVCO INC: March 31 Balance Sheet Upside Down by $1.9 Million
ENRON CORP: Court Approves Five Settlement Agreements
ENTERGY NEW ORLEANS: Agrees to Alteration of FTI's Payment Terms
ENTERGY NEW ORLEANS: Hibernia Nat'l Wants Secured Claim Allowed

FLYI INC: Wants 62 Late-Filed Claims Disallowed
FOAMEX INTERNATIONAL: Plan Filing Period Extended to Sept. 14
FOAMEX INT'L: Inks Stipulation to Set Off Guilford Mills Debts
GENERAL MOTORS: Board Braces for Dissent on Renault-Nissan Deal
GENESCO INC: Board Approves $20 Million Common Stock Repurchase

GREAT COMMISSION: Committee Wants to Hire Blank Rome as Counsel
GULF COAST: Gets Court Approval to Hire Hughes & Luce as Counsel
GULF COAST: Hires David Hull as Chief Restructuring Officer
HOME ECHO: Voluntary Chapter 11 Case Summary
IMAGE INNOVATIONS: Case Summary & 22 Largest Unsecured Creditors

INTEGRATED ELECTRICAL: Amends 2006 First Quarter Report
INT'L THOROUGHBRED: Posts $3.9MM Net Loss in 2006 Fiscal 1st Qtr.
KAISER ALUMINUM: Emerges from Chapter 11 Protection in Delaware
LEVITZ HOME: Court Approves More Lease Assignments to PLVTZ
LEVITZ HOME: Can Proceed with Robbinsville Lease Rejection

LOCAL TELECOM: Posts $786,715 Net Loss in 2006 Fiscal 1st Qtr.
LONDON FOG: Panel Has Until July 25 to Question Sub. Lenders' Lien
MERIDIAN AUTOMOTIVE: Panel Wants Deposition from Credit Suisse
MESABA AVIATION: Incurs $45.6 Million Net Loss in Fourth Quarter
MESABA AVIATION: Walks Away from Northwest Aircraft Leases

MESABA AVIATION: Reports May 2006 Traffic Results
MIRANT CORP: Bankrupt Units Have Until Aug. 7 to File Ch. 11 Plan
MIRANT CORP: Mirant NY-Gen Wants DIP Facility Raised to $9.5 Mil.
NEPTUNE INDUSTRIES: Expects $2 Mil. Offering Completed in 30 Days
NORTEL NETWORKS: Completes $2 Billion Senior Notes Offering

NORTHPOINT COMMS: Court Closes Case After Distribution of Funds
NORTHWESTERN CORP: Inks Electric Supply Pact with PPL Montana
OPAL CONCEPTS: Wants to Pay U.S. Trustee from Trust Funds
OWENS CORNING: Court OKs Plan Support Agreement Despite Objections
OWENS CORNING: Court Approves J.P. Morgan Equity Commitment Accord

PCS EDVENTURES!.COM: HJ & Associates Raises Going Concern Doubt
RADAMES SANTIAGO: Case Summary & 21 Largest Unsecured Creditors
RECORP GROUP: Voluntary Chapter 11 Case Summary
REFCO INC: Chapter 11 Trustee Wants Capstone as Financial Advisor
REFCO INC: Refco Group Inks Settlement With West and Contractors

RICHARD SHIELDS: Case Summary & 20 Largest Unsecured Creditors
SILICON GRAPHICS: Wants Solicitation & Tabulation Protocol Okayed
SILICON GRAPHICS: Court Fixes August 4 as General Bar Date
SILICON GRAPHICS: Inks Financing Agreement with Lenders
SIVAULT SYSTEMS: Names Richard Moore as New President and CEO

SOLUTIA INC: Gets Court Nod to Amend & Assume Linde Gas Contracts
SOLUTIA INC: Can Amend and Assume Saint Gobain Agreement
SOLUTIA INC: Gets Court Nod to Amend & Assume Ammonia Supply Pact
SOUTHAVEN POWER: Gets Court Nod to Amend DIP Credit Agreement
SOUTHAVEN POWER: Court Extends Plan-Filing Period to Jan. 15, 2007

STRATUS SERVICES: Completes Activities for Staffing Unit Sale
TENET HEALTHCARE: Gets $340 Million from Katrina Insurers
U.S. CONCRETE: Buying Two Companies for $165 Million
U.S. CONCRETE: Initiates Private Offer for $75 Mil. Senior Notes
U.S. ENERGY: Posts $2 Million Net Loss in Quarter Ended March 31

VALASSIS COMMS: To Acquire ADVO Inc. for $1.3 Billion
VARIG S.A.: Preliminary Injunction in Effect Until July 21
VARIG S.A.: Brazilian Court Sets New Auction Date for Assets
VESTA INSURANCE: Moody's Junks Rating on Senior Debt
WERNER LADDER: Gets Court Nod to Pay Priority Vendor Claims

WERNER LADDER: Gets Court Nod to Pay Critical Vendor Claims
WERNER LADDER: Wants to Employ Ordinary Course Professionals
WINN-DIXIE: Court Okays Rejection of Libman Company Supply Pact
WINN-DIXIE: Wants to Reject Two Grocery Stores Leases
WORLDCOM INC: Trustee Will Accept Bids in Columbus Lumber Interest

WORLD HEALTH: Wants Chapter 11 Cases Converted to Chapter 7
WORLD HEALTH: Panel Poses Limited Objection to Ch. 7 Conversion
ZOOMERS HOLDING: Court Denies Request for DIP Financing

* Buchanan & Klett Rooney Team-Up Creates Powerhouse Bankr. Group

* BOOK REVIEW: Shark Tank: Greed, Politics, and the Collapse of
               Finley Kumble, One of America's Largest Law Firms

                             *********

ADB SYSTEMS: Completes Sale of Norwegian Biz Unit for $2.8 Mil.
---------------------------------------------------------------
Northcore Technologies Inc., formerly ADB Systems International
Ltd., successfully completed the sale of its Norwegian business
unit for $2.8 million in cash and debt settlement as well as a
four-year revenue share agreement.

The transaction was approved by shareholders at the company's
annual general meeting.  At the meeting, shareholders also voted
to change the company's name to Northcore Technologies.

The company will continue to trade under the symbols ADY on the
TSX and ADBYF on the over-the-counter market until further notice.  
New trading symbols are expected to be introduced within two weeks
pending regulatory approvals and process.

                        About ADB Systems

Headquartered in Ontario, Canada, ADB Systems International Ltd.
(TSX: ADY; OTCBB: ADBYF) -- http://www.adbsys.com/-- delivers  
asset lifecycle management solutions that help organizations
source, manage and sell assets for maximum value.  ADB works with
a growing number of customers and partners in a variety of sectors
including oil and gas, government, healthcare, manufacturing and
financial services.

Through its wholly owned subsidiary, ADB Systems USA, Inc., ADB
owns a 50% interest in GE Asset Manager, a joint business
venture with GE.  ADB has offices in Toronto (Canada), Stavanger
(Norway), Tampa (U.S.), Dublin (Ireland), and London (U.K.).

At Dec. 31, 2005, the Company's balance sheet showed a
stockholders' deficit of CDN$2,710,000, compared to a
CDN$1,009,000 deficit at Dec. 31, 2004.


APHTON CORP: Court Approves Eckert Seamans as Bankruptcy Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed
Aphton Corporation to employ Eckert Seamans Cherin & Mellot, LLC,
as its bankruptcy counsel.

Eckert Seamans will:

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

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

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

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

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

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

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

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

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

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

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

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

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

The Firm's attorneys can be reached at:

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

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

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


APHTON CORP: Defers Salary of Three Employees Pending Sale Closing
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed
Aphton Corporation to defer payment of salaries for some of its
employees and to grant incentives once the Debtor succeeds in
selling substantially all of its assets.  

The Debtor is currently trying to sell its assets.  The Court will
consider approving a sale on July 14, 2006.  The Debtor and the
Official Committee of Unsecured Creditors said that the Debtor's
employees need to support the due diligence process and to market
the assets.  They say the Debtor's remaining employees have the
necessary skill and experience to implement the sale procedures
approved by the Court.  

The Debtor and the Committee propose to pay Patrick Mooney,
Chairman of the Debtor's Board of Directors, $66,666 in deferred
salary and incentive bonus once a sale closes.  John McCafferty,
the Debtor's corporate counsel, will get $30,000 in deferred
salary and incentive bonus.  Steve Goth will get $5,750 in
deferred salary and incentive bonus.

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

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


APHTON CORPORATION: Asset Sale Hearing Slated for July 14
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
conduct a hearing regarding the sale of substantially all of
Aphton Corp.'s assets at 11:00 a.m., Eastern Time, on
July 14, 2006.

Objections to the Asset Sale must be filed with the Clerk of the
Bankruptcy Court by 4:00 p.m., Eastern Time, on July 12, 2006.  
The Objections must also be served upon:

   a) the Debtor's counsel:  

      Ronald S. Gellert, Esq.
      Eckert Seamans Cherin & Mcllott, LLC
      Suite 1360, 300 Delaware Ave.
      Wilmington, DE 19081

   b) the Committee's counsel:

      William J. Burnett, Esq.
      Flaster/Greenberg, P.C.
      Suite 1001
      913 Market Street
      Wilmington, Delaware 19801

   c) the Office of the United States Trustee:
      
      Margaret Harrison, Esq.
      J. Caleb Boggs Federal Building
      844 King Street, Lockbox 2313
      Wilmington, Delaware, 19801

The Debtor obtained Court-approval on the bidding procedures for
the auction of its assets.  The initial bid deadline was set on
June 15, 2006.  Pursuant to the court-approved procedures, bidders
are required to make a minimum initial bid deposit of $500,000.  A
stalking-horse bidder is entitled to a break-up fee equal to 3% of
its qualified bid if another bidder wins at the auction.  

Subject to final determination, the Court authorized the Debtor to
exercise its discretion, after consultation with the Official
Committee of Unsecured Creditors, to:

   a) determine, which of qualified bids submitted for the
      auction is the highest or otherwise best offer; and

   b) properly reject bids that are:

      -- inadequate or insufficient;

      -- not in conformity with the requirements of the
         Bankruptcy Code, or the terms and conditions of the
         Sale; or

      -- contrary to the best interest of the Debtor, its estate
         and creditors.

The Debtor has listed 28 potential purchasers.  No stalking-horse
bidder has been identified.  

The auction was scheduled on June 21, 2006, at the Offices of
Eckert Seamans Cherin & Mellott, LLC, in Philadephia.  No updates
are available to date regarding the Auction Sale.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation
-- http://www.aphton.com/-- is a clinical stage biopharmaceutical  
company focused on developing targeted immunotherapies for cancer.  
Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.
Del. Case No. 06-10510).  Michael G. Busenkell, Esq., at Eckert
Seamans Cherin & Mellot, LLC, represents the Debtor in its
restructuring efforts.  William J. Burnett, Esq., at Flaster
Greenberg, represents the Official Committee of Unsecured
Creditors.  Aphton estimated its assets and debts at $1 million to
$10 million when it filed for protection from its creditors.

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


AQUACELL TECHNOLOGIES: Posts $1.8 Mil. Net Loss in Third Quarter
----------------------------------------------------------------
AquaCell Technologies, Inc., incurred a net loss of $1,824,000 on
revenues of $27,000 for its third fiscal quarter ended March 31,
2006.

At March 31, 2006, the Company's balance sheet showed $1,847,000
in total assets and $2,071,000 in total liabilities, resulting in
a $224,000 in stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $562,000 in total current assets available to pay
$1,620,000 in total current liabilities coming due within the next
12 months.

Full-text copies of the Company's financial statements are
available for free at http://ResearchArchives.com/t/s?d20

                       Going Concern Doubt

Wolinetz, Lafazan & Company, P.C., in Rockville Centre, New York,
raised substantial doubt about AquaCell Technologies' ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended June 30,
2005.  The auditing firm pointed to the Company's significant
operating losses for the years ended June 30, 2005, and 2004 as
well as its working capital and stockholders' deficiency at June
30, 2005.

Headquartered in Rancho Cucamonga, California, AquaCell
Technologies, Inc. (OTCBB: AQUA) -- http://www.aquacell.com/--  
has two operating subsidiaries, AquaCell Media, Inc., which
operates in the out-of-home advertising segment of the advertising
industry, and Aquacell Water Inc. (formerly Water Science  
Technologies, Inc.), which is engaged in the manufacture and sale
of products for water filtration and purification, addressing
various water treatment applications for municipal, industrial,
commercial, and institutional purposes.


ARMSTRONG WORLD: Committee Files Post-Trial Brief v. Confirmation
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors filed its post-trial
briefs, proposed findings of fact and conclusions of law against
confirmation of Armstrong World Technologies, Inc., and its
debtor-affiliates' plan of reorganization.  

The Plan Supporters' evidence presented at the Confirmation
hearing establishes that the Debtors' Chapter 11 plan
discriminates against the Class 6 Commercial Creditors, who will
receive a 59.9% recovery under the Plan, in favor of the Class 7
asbestos personal injury claimants, who will receive a 91.3%
recovery under the Plan, Jeffrey Waxman, Esq., at Cozen O'Connor,
in Wilmington, Delaware, asserts.

The 31.8% disparity in treatment is both unfair and without
justification under the Bankruptcy Code, Mr. Waxman contends.

AWI, Mr. Waxman argues, must prove the absence of unfair
discrimination by a preponderance of the evidence or by clear and
convincing evidence.

The Plan Supporters' experts, Drs. Mark Peterson and Thomas
Florence, simply roll forward the fraud-ridden history of the
1990s to produce inflated estimates for the future, Mr. Waxman
tells Judge Robreno.  "They jack up the already inflated
historical numbers to produce exaggerated projections of future
liability."

Dr. Peterson's and Dr. Florence's estimates incorporate and
perpetuate payment of numerous illegitimate claims, or legitimate
claims at inflated values, Mr. Waxman adds.  Hence, Mr. Waxman
says the District Court should not accept the Plan Supporters'
estimate.  The District Court should instead adopt Dr. Chambers'
$1,960,000,000 for AWI's present and future asbestos liability.

By any standard, a 31.8% difference in the treatment of two
co-equal classes is unfair, Mr. Waxman contends.  "Armstrong's
justification for the unfair discrimination amounts to invoking as
a defense for discriminatory class treatment the split of Class 7
consideration between the present and future claimants under the
Trust Distribution Procedures -- a private arrangement struck by
representatives of present and future asbestos claimants, subject
to modification without any court involvement, and trumpeting the
benefits of a section 524(g) injunction."

Because of the unfair treatment of the Class 6 Commercial
Creditors, Armstrong's Plan violates Section 1129(b)(1) of the
Bankruptcy Code.  The Creditors Committee, therefore, asks Judge
Robreno to deny confirmation of the Debtors' Plan.

Moreover, the Creditors Committee wants the District Court to rule
that the most reasonable of the estimates offered by the experts
in the proceeding with respect to AWI's pending and future
asbestos liability is Dr. Chamber's $1,960,000,000 estimate.  
Among other things, the Creditors Committee wants the District
Court to find that:

   * AWI's limited asbestos-related activities supports the
     medical conclusion that the Debtors' asbestos liability
     should be decreasing;

   * AWI's liability will decline in the future because asbestos-
     related disease itself is declining;

   * as a member of the Center for Claims Resolution, AWI was
     overnamed as a defendant and likely paid numerous meritless
     claims in the 1990s; and

   * abusive practices and lax evidentiary standards in the
     asbestos litigation environment of the 1990s places
     additional pressures on AWI to settle meritless claims.

A full-text copy of the Creditors Committee's Post-Trial Brief is
available for free at http://ResearchArchives.com/t/s?d2c

A full-text copy of the Creditors Committee's proposed Findings
of Fact and Conclusions of Law is available for free at
http://ResearchArchives.com/t/s?d2e

                      About Armstrong World

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior floor coverings and ceiling
systems, around the world.

The Company and its debtor-affiliates filed for chapter 11
protection on December 6, 2000 (Bankr. Del. Case No. 00-04469).
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors in their restructuring efforts.  The Debtors
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.

Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice.  The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.

When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities.  (Armstrong Bankruptcy News, Issue No. 95; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ARMSTRONG WORLD: Asbestos Entities Slam Brickman's Testimony Anew
-----------------------------------------------------------------
The Official Committee of Asbestos Claimants and Dean M. Trafelet,
the legal representative for future asbestos personal injury
claimants of Armstrong World Industries, Inc., and its debtor-
affiliates, ask the U.S. District Court for the District of
Delaware to disregard Professor Lester Brickman's testimony
because it did not meet the Daubert standard for reliability.

As previously reported, Judge Robreno denied the Asbestos
Committee and the Futures Representative's initial request to
exclude Prof. Brickman's testimony.  Prof. Brickman was permitted
to testify at the Confirmation Hearing.  The District Court,
however, stated that the Plan Supporters' Daubert objections could
be renewed and argued as part of the post-trial briefing.

In the case of Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579
(1993), the District Court acts as a "gatekeeper" to exclude
expert testimony that does not satisfy the test for admissibility
under Rule 702 of the Federal Rules of Evidence, Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, in New York, pointed out.  
That gate-keeping function applies to all expert testimony, not
just scientific testimony.

In Armstrong's case, Prof. Brickman's testimony fails the
"relevance" and "reliability" aspects of Daubert and must be
excluded, Mr. Inselbuch asserted.

The purpose of the Confirmation Hearing was for the District Court
to hear, among other things, testimony regarding the parties'
estimates of the number and value of Armstrong's present and
future Asbestos Personal Injury Claims.  Prof. Brickman, who was
qualified as an expert on the history of asbestos litigation and
who is not an estimation expert, had very little to say about
Armstrong's asbestos liabilities because he has no specific
knowledge about Armstrong.

Mr. Inselbuch noted that Prof. Brickman admitted he:

   -- had neither spoken with anyone representing Armstrong
      regarding its specific experience in the tort system nor
      any representative from the Center for Claims Resolution
      concerning the Debtors' experience in the tort system;

   -- had never spoken to any individual Armstrong claimant; and

   -- did not make any study of Armstrong's litigation strategies
      or of its verdicts, settlements or defense costs, including
      both during the period prior to Armstrong joining the ACF
      and CCR, as well as during Armstrong's experience in the
      ACF or CCR.

As a result, many of Prof. Brickman's principal opinions about
Armstrong are not based on any knowledge about Armstrong but
rather on inadmissible speculation, Mr. Inselbuch pointed out.  

Prof. Brickman is not a reliable source of expert information
about Armstrong's asbestos litigation history because he lacks
knowledge about Armstrong.  The issue of relevance or "fit"
depends upon "a connection between the expert opinion offered and
the particular disputed factual issues in the case."

Prof. Brickman made no showing in his trial testimony that the
generalities discussed in his report are applicable to the facts
regarding Armstrong, and his principal conclusions regarding
Armstrong have no foundation whatsoever, Mr. Inselbuch asserted.  
His testimony therefore does not "fit" to the facts of the case
and should be excluded.

                    Creditors Committee Objects

The ACC and the Futures Representative's "renewed motion" to
exclude Prof. Brickman is identical to their prior motion and
should be denied, Jeffrey Waxman, Esq., at Cozen O'Connor, in
Wilmington, Delaware, asserted.  The ACC and the Futures
Representative offer neither new arguments nor evidentiary issues
in support of their request.

The U.S. Court of Appeals for the Third Circuit has clarified in
Habecker v. Copperloy Corp., 893 F.2d 49, 51 (3d Cir. 1990), that
expert testimony is liberally admissible under Rule 702 of the
Federal Rules of Evidence, Mr. Waxman pointed out.  The Third
Circuit also ruled that courts have "considerable leeway" in
making the determination of admissibility.

Mr. Waxman argued that Prof. Brickman's opinion testimony
satisfies the threshold for admissibility.  In addition, Prof.
Brickman's opinions are reliable.  Prof. Brickman's report and
testimony are based on a discernable and appropriate methodology
that meets the measure for reliability standard in his
professional field.

Certain Armstrong and CCR representatives may have disagreed with
some of Prof. Brickman's opinions but that does not lead to the
conclusion that his opinions are unreliable and, therefore, in
admissible under Daubert, Mr. Waxman said.

Moreover, Prof. Brickman's opinions "fit the facts of this case,"
Mr. Waxman asserted.  Prof. Brickman's report and testimony
demonstrates that his opinions are, in fact, based on specific
knowledge of Armstrong and its claiming experience.  

                  Court Affirms Previous Denial

Judge Robreno denies the Asbestos Committee and the Futures
Representative's request to exclude Prof. Brickman's expert
testimony.

The District Court finds Professor Brickman as a qualified expert,
under Rule 702, by virtue of his skill, education and experience.

Judge Robreno finds Prof. Brickman's report reliable because he
"relies on sources and data, which are recently relied by experts
in his field and others have relied upon his opinion."

The District Court says Prof. Brickman's testimony fits well with
the facts of the case and in the posture where the case is now.

                       About Armstrong World

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior floor coverings and ceiling
systems, around the world.

The Company and its debtor-affiliates filed for chapter 11
protection on December 6, 2000 (Bankr. Del. Case No. 00-04469).
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors in their restructuring efforts.  The Debtors
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.

Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice.  The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.

When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities.  (Armstrong Bankruptcy News, Issue No. 95; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ASARCO LLC: Wants Spieth Bell as Special Labor Counsel
------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to employ Spieth,
Bell, McCurdy & Newell Co., LPA, as special counsel to address
labor-related matters.

ASARCO has selected Spieth Bell as its special counsel because of
the firm's extensive experience, expertise and recognized
national reputation in handling complex labor negotiations in
which labor unions are actively involved, James R. Prince, Esq.,
at Baker Botts LLP, in Dallas, Texas, relates.

                          Labor Matters

In July 2005, ASARCO LLC's unionized workers, represented by the
United Steelworkers of America, and 1,500 other employees went on
strike.  As a result, ASARCO's non-striking employees operated
the mines on a limited basis.

In November 2005, after prolonged negotiations and multiple court
hearings, ASARCO and Union representatives reached an agreement
that settled the strike.  The Interim Labor Agreement generally
extended the existing labor agreements until December 31, 2006.

Although the Interim Labor Agreement does not expire until the
end of 2006, ASARCO and the Union representatives believe that
labor negotiations can be protracted and complex and agree that
labor negotiations should start as soon as possible.

Due to Spieth Bell's familiarity with the USW and its past
experience negotiation with the USW on behalf of large companies
in the context of other bankruptcy proceedings, ASARCO believes
that Spieth Bell is uniquely qualified to assist it in upcoming
Union negotiations.

Spieth Bell will carefully coordinate its efforts with ASARCO's
bankruptcy counsel and general labor counsel, Quarles & Brady
Streich Lang, L.L.P, so as to prevent any duplication of effort
to the fullest extent possible, Stanley Dan Pace, Esq., a partner
at Spieth Bell, assures the Court.

Mr. Pace informs the Court that he will be performing most of the
work for ASARCO.  ASARCO will pay $345 per hour for Mr. Pace's
services.  ASARCO will pay $280 to $325 per hour for every other
additional attorney who may provide services on its behalf.  Mr.
Pace and the other attorneys will be reimbursed of all necessary
out-of-pocket expenses that they incur while providing services
to ASARCO.

Spieth Bell does not hold any interests adverse to ASARCO and its
estates, and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code, Mr. Pace maintains.

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


ASARCO LLC: Wants RECON Real Estate as Broker for 3 El Paso Land
----------------------------------------------------------------
ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to employ RECON Real
Estate Consultants, Inc., as its broker, for the sale of three
tracts of land located in El Paso County, Texas:

   1. Tract 1, John Barker Survey #10, containing approximately
      125.956 acres;

   2. Crazy Cat 1 and 2, containing approximately 42 acres; and

   3. a portion of Tract 2A, John Barker Survey #10, containing
      approximately 246.97 acres and located just South of
      Executive Center Drive and East of Interstate 10.

As payment for its marketing services to ASARCO, RECON will
receive a commission equal to 4.5% of the gross sales price of
the Property.

Matt M. Blaugrund, vice president of RECON Real Estate
Consultants, assures the Court that his firm does not hold
interests adverse to ASARCO and its estate, and is a
"disinterested person" 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. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


BAREFOOT RESORT: Delivers Second Amended Plan of Reorganization
---------------------------------------------------------------
Barefoot Resort Yacht Club Villas, LLC, delivered its second
amended plan of reorganization to the U.S. Bankruptcy Court for
the District of New Jersey.

Under the Second Amended Plan, the allowed general unsecured
claims of Dargan Construction, Sally Stowe Interiors, Drake
Development Company USA, Inc., W. Russell Drake, Grand Strand
Disposal, Horry Electric Cooperative, Jenkins Hancock and Sides,
Lewis & Babcock, Robert Young, P.A., Rogers Townsend Thomas, SW
Associates, and any other allowed general unsecured claim will
share pro rata in the funds that remain after payment of the Class
1, Class 2, and Class 3 allowed claims.

In addition, the Debtor rejects its Contract of Sale with Premier
Holdings of South Carolina, LLC.  The Debtor, Premier SC, and
Coastal Federal entered into a Tri-Party Agreement, dated Jan. 9,
2004, which provides certain rights to Coastal Federal vis-a-vis
the Contract of Sale.

Prior to the second plan amendment, the Court approved the
Debtor's Disclosure Statement explaining its Original Plan of
Reorganization.  The Court determined that the Disclosure
Statement contains adequate information -- the right amount of the
right kind -- for creditors to make informed decisions when the
Debtor asks them to vote to accept the Plan.  The Debtor did not
submit an amended Disclosure Statement for its second amended
plan.  

The Debtor said that its plan is a liquidating plan and allows for
the payment of all creditors in full.  Upon confirmation, the
Debtor expects that all condominium sales will have closed.

                          Original Plan

As reported in the Troubled Company Reporter on May 26, 2006, the
National Bank of South Carolina holds a $48 million claim against
the Debtor.  Its claim is secured by a first mortgage on the
Debtor's condominium assets.  Under the Original Plan, as the sale
of each condominium unit closes, the net proceeds will be used to
pay the principal and interest, including postpetition interest,
owed on the NBSC Loan.

The Coastal Federal Bank holds a secured claim of $540,000.  The
Debtor told the Court that Coastal Federal has agreed to
subordinate its mortgage to the liens securing the NBSC loan.  
Coastal Federal's claim will be paid in full after payment of the
principal and interest of the NBSC Loan and before payment of
NBSC's remaining claims.

Dargan Construction's unsecured claim will be paid in full.  
However, the plan explained, "if the NBSC loan is insufficient to
pay Dargan's claim in full, then Dargan's allowed claim will be
paid within 30 days after the Court enters an order confirming the
Debtor's plan but prior to any subsequent class."

The Debtor further told the Court that Drake Development Company
USA, Inc., is the sole member of the Debtor.  The Debtor says that
for each condominium unit sold, Drake Development is owed a
commission pursuant to the Contract of Sale.  Upon closing of the
sale of all 145 units, Drake Development's fees will total
$3,849,562.  The Debtor says that Drake will be paid in full
within 30 days after the Court enters an order confirming its
Plan.

Sally Stowe Interiors' $1,413,855 unsecured claim will be paid in
full.

These General Unsecured Creditors will be paid in full according
to the Original Plan:

    (1) Grand Strand Disposal;
    (2) Horry Electric Cooperative;
    (3) Jenkins Hancock and Sides;
    (4) Lewis & Babcock;
    (5) Robert Young, P.A.;
    (6) Rogers Townsend Thomas; and
    (7) SW Associates,

The Debtor obtained additional equity financing from W. Russell
Drake in the amount of $1,040,000.  Pursuant to the Contract of
Sale, the cost and interest associated with this loan will be
repaid before the distribution of net cash flow, as defined in the
Contract of Sale.  The Debtor said that W. Russell Drake's claim
will be paid in full.

                   Premier Holdings' Claim

The Debtor disclosed that under the Contract of Sale, the
Debtor will enter into a contingent interest note giving Premier
Holdings of South Carolina, LLC, a 50% interest in the proceeds of
the sale remaining after payment of all costs associated with the
cost of the phase, including, but not limited to, taxes,
construction loan cost and interest, equity loan cost and
interest, closing cost and attorney fees, real estate commissions,
construction, architectural and engineering fees and cost and
discounts or incentives.

The Debtor also disclosed that the note is subject to offsets
owed by Premier to the Debtor due to its filing of the lis pendens
which caused damages to the Debtor.  The Debtor projected total
costs to be $1 million.  The Debtor stated that, in the
alternative, if the Court determines or the parties agree there
will be no offsets against the note, the 50% payment to Premier
will be used to pay Premier's mortgage debt to Coastal Federal.
The Debtor will hold in escrow $200,000 of the proceeds of the
sale for three years in the event of any claims that may arise
against the Debtor.  The Debtor noted that if there are no claims
against the Debtor after the third year or no offset was done,
$100,000 of the escrowed amount will be paid to Premier.

Headquartered in Columbia, South Carolina, Barefoot Resort Yacht
Club Villas, LLC -- http://www.drakedevelopment.com/-- operates a  
resort located in North Myrtle Beach, South Carolina.  Drake
Development Company USA owns Barefoot Resort.  The Debtor filed
for chapter 11 protection on Feb. 21, 2006 (Bankr. D. S.C. Case
No. 06-00640).  William McCarthy, Jr., Esq., and Daniel J.
Reynolds, Jr., Esq., at Robinson, Barton, McCarthy, Calloway &
Johnson, P.A., represent the Debtor.  No Official Committee of
Unsecured Creditors has been appointed in the Debtor's case.  When
the Debtor filed for protection from its creditors, it listed
$69,003,578 in assets and $60,980,655 in debts.


BAYOU GROUP: Files 25 Lawsuits Against Former Investors
-------------------------------------------------------
The Bayou Group of Hedge Funds filed another 25 lawsuits against
former investors who received alleged investment returns from the
failed hedge funds.  The lawsuits seek to recover the entirety of
the distributions made by the failed hedge funds, including
principal and fictitious profits.  The lawsuits were commenced in
connection with the Bayou Group of Hedge Funds' pending Chapter 11
cases.  

Jeff J. Marwil, a partner at Jenner & Block LLP and the sole
Managing Member of the Chapter 11 debtors, said "the intent and
purpose of the lawsuits and these Chapter 11 cases is to make fair
and equitable distributions to all creditors, and to undo the
circumstances where certain investors received a return of
principal and fictitious profits, while other investors lost
everything.  Equality of distribution is the goal."

In a related matter, the Hon. Adlai Hardin of the U.S. Bankruptcy
Court for the Southern District of New York, who presides over
Bayou's Chapter 11 cases, denied a request of the U.S. Trustee for
the appointment of a Chapter 11 Trustee, finding that pursuant to
a "lawful, proper and enforceable" order of the District Court Mr.
Marwil has full and sole corporate authority to manage the affairs
of the Bayou debtors.  

Bayou bankruptcy counsel H. Jeffrey Schwartz, a partner in the
Dechert LLP international law firm, resident in New York,
commented that in denying the Trustee motion, the Court's reliance
on the Federal District Court Order appointing Mr. Marwil as
Bayou's independent fiduciary was "appropriate, and is supported
by fact and law."

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


BROOKLYN HOSPITAL: Court Approves Ernst & Young as Accountants
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
allowed The Brooklyn Hospital Center and Caledonian Health Center,
Inc., to retain Ernst & Young, LLP, as their accountants and
auditors.

Ernst & Young will:

   a) perform agreed-upon procedures services under the
      attestation standards of the American Institute of Certified
      Public Accountants, related to certain portions of the
      Annual Report of Hospitals and Hospital Healthcare
      Complexes, which procedures have been agreed to by the
      Debtors' Board of Trustees and the New York State Department
      of Health, solely to assist the specified parties in
      evaluating the Debtors' compliance with the New York State
      Department of Health, Commissioner of Health's
      Administrative Rules and Regulations, Part 86-1.6(a) for the
      year ended Dec. 31, 2005;

   b) perform agreed-upon procedures services under the
      attestation standards of the AICPA, which procedures have
      been agreed to by the Debtors' Board of Trustees and the
      Department, solely to assist the specified parties in
      evaluating the Debtors' compliance with subdivisions (9) and
      (12) of section 2807-k of New York State Public Health Law
      for the year ended Dec. 31, 2005;

   c) audit and report on the consolidated financial statements of
      the Debtor for the year ended Dec. 31, 2005;

   d) provide tax compliance service to the Debtors, including the
      review of Form 990, Return of Organization Exempt From
      Income Tax and New York State tax returns, for the year
      ended Dec. 31, 2005; and

   e) perform accounting and auditing services for the Debtor,
      including auditing and reporting on the special-purpose
      financial statements of the Debtors for the year ended
      Dec. 31, 2004.

The firm's professionals bill:

        Designation               Hourly Rate
        -----------               -----------
        Partners and Principals   $456 - $498
        Senior Managers           $414 - $450
        Managers                  $300 - $354
        Seniors                   $219 - $282
        Staff                     $144 - $174

The Debtors assure the Court that Ernst & Young does not hold or
represent any interest adverse to the Debtors or to their estates.

Headquartered in Brooklyn, New York, The Brooklyn Hospital Center
-- http://www.tbh.org/-- provides a variety of inpatient and   
outpatient services and education programs to improve the well
being of its community.  The Debtor, together with Caledonian
Health Center, Inc., filed for chapter 11 protection on Sept. 30,
2005 (Bankr. E.D.N.Y. Case No. 05-26990).  Lawrence M. Handelsman,
Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP
represent the Debtors in their restructuring efforts.  Glenn B.
Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.,
represents the Official Committee of Unsecured Creditors.  Mark
Dominick Alvarez at Alvarez & Marsal, LLC, serves as the
Committee's financial advisor.  When the Debtors filed for
protection from their creditors, they listed $233,000,000 in
assets and $337,000,000 in debts.


CALPINE CORP: Wants to Sell Fox Energy Plant for $16.2 Million
--------------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to take
all actions necessary to effectuate the sale of the Fox power
plant for $16.25 million.

On Nov. 19, 2004, Fox Energy Company LLC and Fox Energy OP, LP,
leased Fox Energy Center, a 490-megawatt, natural gas-fired
power plant in Kaukauna, Outgamie County, Wisconsin to Calpine
Fox LLC.

Fox Energy Company and Fox Energy OP are affiliates of GE Energy
Financial Services.  GE Energy is the existing equity-owner of
the Fox power plant.

CPN Fox is a non-debtor, indirect wholly owned subsidiary of
Calpine Corporation.

The Debtors have determined that CPN Fox is not eligible to
receive proceeds from their DIP facility and other funding
because the Fox power plant cannot maximize nor sustain its
overall enterprise value.

Bennett L. Spiegel, Esq., at Kirkland & Ellis LLP, in New York,
notes that CPN Fox defaulted in its March 2006 rent payment for
the Fox power plant.  CPN Fox anticipates that it also cannot pay
its June 2006 rent.

Thus, CPN Fox and the Debtors negotiated for the sale of CPN
Fox's leasehold interest in the Fox power plant back to Fox
Energy Company and Fox Energy OP.

On May 24, 2006, the Debtors, CPN Fox, Fox Energy Company and Fox
Energy OP entered into a Letter of Intent, which provides that:

    1. CPN Fox will sell the Fox Assets to Fox Energy Company and
       Fox Energy OP for $16.25 million, subject to post-closing
       adjustments:

          * $13.5 million will be paid on closing date,

          * $1 million will be paid 82 days after the closing
            date,

          * $500,000 will be paid 120 days after closing date, and

          * $1.25 million will be paid after occurrence of certain
            conditions delineated in the LOI;

    2. CPN Fox will surrender the Fox Plant to Fox Energy;

    3. Fox Energy's assignment to CPN Fox of certain interests
       will be terminated and those interests will revert
       automatically to Fox Energy;

    4. CPN Fox and Debtors Calpine Operating Services Company,
       Inc., and Calpine Construction Management Company, Inc.,
       will terminate certain contracts and assume and assign
       certain sub-contracts relating to the Fox plant.  Among the
       contracts that will be terminated are:

          * the Lease,
          * the Memorandum of Lease,
          * the Site Lease,
          * the Memorandum of Site Lease,
          * the Assignment and Assumption Agreement,
          * the Project Management Agreement,
          * the Security Agreement,
          * the Pledge Agreement,
          * the Participation Agreement,
          * the Tax Indemnity Agreement,
          * the Calpine TIA Guaranty,
          * the Depositary Agreement,
          * the Tolling Guaranty and Reimbursement Agreement,
          * the Guaranty Note,
          * the Precautionary Pledge Agreement, and
          * the OP Guaranty;

    5. CPN Fox and the Debtors will mutually release all
       liabilities arising under the terminated agreements;

    6. CPN Fox and the Purchasers will execute a transition
       services agreement; and

    7. All parties and their affiliates will mutually release all
       claims and liabilities related to Fox.

A full-text copy of the Letter of Intent is available for free
at http://ResearchArchives.com/t/s?d31

Mr. Bennett asserts that the sale proceeds is enough to fully
satisfy CPN Fox's liabilities.  The remainder of the proceeds can
be applied to the Debtors' DIP Facility.

To preserve the value of the Fox Assets, Mr. Bennett argues that
it is critical that the Debtors close the sale as soon as
possible.

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


CALPINE CORP: Wants Lien Investigation Deadline Extended
--------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend, until
October 31, 2006, its deadline to further investigate the validity
of the First and Second Lien Debt liens and challenge any default
interest or "makewhole" demands made by the First and Second Lien
Noteholders.

The Debtors and the Official Committee of Unsecured Creditors have
until July 30, 2006, to assert any claims related to the Debtors'
obligations to the First and Second Lien Noteholders.  Any claims
not asserted by that date will be waived, Richard M. Cieri, Esq.,
at Kirkland & Ellis LLP, in New York, relates.

Mr. Cieri tells the Court that the Debtors need more time to
investigate the validity of the Liens since they are preoccupied
in the restructuring processes of more than 270 Debtors.

The June 21, 2006, Order extending the time for the Debtors and
the Committee to respond to Law Debenture Trust Company of New
York's First Amended Complaint requires equivalent extension of
time for the Debtors and the Committee to be able to assert any
claims against the First Lien Noteholders' makewhole premium
demand.

Mr. Cieri discloses that the Unofficial Committee for the Second
Lien Noteholders has agreed to the extension of the Investigation
Date, provided that there is a "carve-out" for any claims arising
from the Debtors' default or repayment before the Second Lien
Debt's maturity date.

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


CALPINE CORP: Wants 3 Executive VPs' Employment Agreement Okayed
----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the Hon. Burton R.
Lifland of the U.S. Bankruptcy Court for the Southern District of
New York to approve the Employment Agreements with three executive
vice presidents:

    1. Robert E. Fishman, executive vice president for Power
       Operations;

    2. Thomas N. May, executive vice president and president for
       Calpine Merchant Services Company, Inc.; and

    3. Gregory L. Doody, executive vice president, general counsel
       and secretary.

In connection with their restructuring process, the Debtors need
talented and experienced executives who can manage their
operations and compliment their current management team.
Accordingly, the Debtors entered into employment agreements with
the three executive vice presidents

                      Fishman EVP Agreement

Mr. Fishman will manage the Debtors' 27,000-megawatt portfolio of
natural gas-fired and geothermal facilities.  He will be
responsible for the production and execution of business plans,
strategies, and goals for Power Operations.  He will also oversee
all daily power plant operations, major maintenance and capital
project planning, asset management and project development.

The salient terms of the Fishman EVP Agreement are:

    (a) The EVP Agreement will end on June 13, 2007.  After
        termination, Mr. Fishman's employment will be
        automatically renewed for an additional 12 months;

    (b) Mr. Fishman will receive:

          (i) $500,000 annual base salary, subject to the Chief
              Executive Officer and the Board of Directors'
              review;

         (ii) annual cash performance bonus of at least 90% of the
              base salary; and

        (iii) a guaranteed minimum success fee, and a one-time
              success fee on the effective date of a plan of
              reorganization;

    (c) Mr. Fishman is eligible to participate in the Debtors'
        benefit plans and programs available for senior
        executives; and

    (d) Mr. Fishman is restricted to be in any way connected to
        certain energy companies during his tenure and 12 months
        after his termination.

A full-text copy of the Fishman EVP Agreement is available for
free at http://ResearchArchives.com/t/s?d3e

                         May EVP Agreement

Mr. May will oversee Calpine Merchant, one of the energy
commodity trading arms of the Calpine enterprise.

The salient terms of the May EVP Agreement are:

    (a) The EVP Agreement will end on May 30, 2007.  After
        termination, Mr. Fishman's employment will be
        automatically renewed for an additional 12 months;

    (b) Mr. May will receive:

          (i) $500,000 annual base salary, subject to the CEO and
              the Board's review;

         (ii) a $500,000 one-time payment, after approval of his
              Employment Agreement;

        (iii) $500,000 annual bonus in 2007; and

         (iv) a guaranteed minimum success fee and a one-time
              success fee on the effective date of a plan;

    (c) Mr. May is eligible to participate in the Debtors' benefit
        plans and programs for senior executives;

    (d) If Mr. May resigns without good reason, he will pay back
        to the Debtors a pro rata portion of his signing bonus;

    (e) Mr. May will be reimbursed of all reasonable commuting
        expenses from his residence in Princeton, New Jersey, and
        housing and living expenses for six months commencing on
        May 30, 2006; and

    (f) Mr. May is restricted to be in any way connected to
        certain energy companies during his tenure and 12 months
        after his termination.

A full-text copy of the May EVP Agreement is available for free
at http://ResearchArchives.com/t/s?d3f

                        Doody EVP Agreement

Mr. Doody will manage all of the Debtors' legal matters,
especially the legal aspects of the Debtors' restructuring
process.

The salient terms of the Doody EVP Agreement are:

    (a) The EVP Agreement will end on July 17, 2007.  After
        termination, Mr. Fishman's employment will be
        automatically renewed for an additional 12 months;

    (b) Mr. Doody will receive:

           (i) $500,000 annual base salary, subject to the CEO and
               Board's review;

          (ii) a $500,000 one-time payment after approval of his
               Employment Agreement;

         (iii) $450,000 annual bonus in 2007; and

          (iv) a guaranteed success fee and a one-time success
               fee payment on the effective date of the Debtors'
               plan;

    (c) Mr. May is eligible to participate in the Debtors' benefit
        plans and programs for senior executives;

    (d) If Mr. May resigns without good reason, he will pay back
        to the Debtors a pro rata portion of his signing bonus;

    (e) Mr. May will be reimbursed of all reasonable commuting
        expenses from his residence in Princeton, New Jersey and
        housing and living expenses for six months commencing
        July 17, 2006; and

    (f) Mr. May is restricted to be in any way connected to
        certain energy companies during his tenure and 12 months
        after his termination.

A full-text copy of the Doody EVP Agreement is available for free
at http://ResearchArchives.com/t/s?d34

Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York,
asserts that Messrs. Fishman, May and Doody are well qualified
for their appointed positions.  The executives have had
significant experience in the fields that they will be working
on.

The EVP Agreements are structured to reward value creation, Mr.
Cantor says.  The EVP Agreements provide that a portion of
Messrs. Fishman, May and Doody's potential compensation will be
received only after the Debtors' successful emergence from
bankruptcy.

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


CATHOLIC CHURCH: Portland Wants Continued Use of Funds
------------------------------------------------------
The Archdiocese of Portland in Oregon maintains funds and
investments for itself, and as a fiduciary trustee or custodian
for various parishes, schools, charitable trusts and other
entities.  The funds and investments are held in accounts located
at Key Bank and Union Bank of California.

The Official Committee of Tort Claimants appointed in the
Archdiocese's Chapter 11 case asserts that the parishes and
schools have no legal existence separate from the Archdiocese and
are analogous to divisions of a corporation.  

The Tort Committee also contends that, among others, the
Archdiocese's bankruptcy estate includes the parishes and schools,
and the Accounts, including the Archdiocesan Loan and Investment
Program, the Catholic Education Endowment Fund, and the parish and
school bank accounts.  

The U.S. Bankruptcy Court for the District of Oregon has ruled on
the issue, but the ruling is pending on appeal with the U.S.
District Court for the District of Oregon.  

The Archdiocese uses a procedure that allows it, the parishes, and
the schools to continue to utilize the funds and investments in
the Accounts without the necessity of the Bankruptcy Court's or
the District Court's determination of the disputed legal issues at
this time and without waiver of any rights by the parties to
pursue determination of those issues in the future.

The Archdiocese requires the continued use of what it deems to be
its own funds in the Accounts for its ordinary day-to-day
operations.  The parishes and schools require the use of funds in
the Accounts for their day-to-day operations.  In addition, the
funds in the ALIP are used to fund certain building projects at
parishes and schools and other expenditures.  

The Archdiocese asserts that the use of the funds is within the
ordinary course of its financial affairs, the parishes and the
schools.  The funds are necessary for the continuance of their
existing religious, pastoral and educational ministries.

The Archdiocese has prepared:

   * a budget, which provides for the estimated cash to be used
     for day-to-day operations for the period from July 1, 2006,
     through December 31, 2006; and

   * lists of anticipated expenditures from the ALIP and the CEEF
     for the period from July 1, 2006, through December 31, 2006.

The Accounts are replenished as funds are received by the
Archdiocese from parishes and schools.  The parishes typically pay
8% of the amounts collected from their non-designated offertory to
the Archdiocese on a monthly basis.  These funds are used by the
Archdiocese to defray day-to-day operating expenses and for its
programs and ministries.

Most of the parishes place all their other funds in excess of the
amounts they anticipate will be needed for three months' operating
expenses in the ALIP.

Without the use of the funds in the Accounts, the Archdiocese, the
parishes and the schools may have insufficient funds to meet their
anticipated expenses and to complete ongoing or needed building
projects, and to carry out their ministries.

To allow the Archdiocese, the parishes and the schools to continue
to operate in the ordinary course, and to provide adequate
oversight over the use and administration of the funds and
investments in the Accounts, the Tort Committee agrees that
Portland may continue to utilize the funds and investments in the
Accounts and in accordance with the Operating Budget, the ALIP
Budget, and the CEEF Budget.

The Archdiocese agrees to provide the Tort Committee with advance
notice and an opportunity for a hearing before it will make any
expenditure in excess of the budget, or outside of the ordinary
course of business.

A full-text copy of the parties' Stipulation and the Archdiocese's
proposed budget is available for free at:

                http://researcharchives.com/t/s?d37

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


CENTRAL AMERICAN: Paritz & Co. Replaces Killman Murrell as Auditor
------------------------------------------------------------------
The Board of Directors of Central American Equities Corp.
dismissed Killman, Murrell & Company, P.C., as the Company's
principal independent accountant on June 26, 2006.

Paritz & Company, P.A., replaces Killman Murrell as the Company's
principal independent accountant and will audit the Company's
financial statements for the fiscal year ended June 30, 2006.

The Company says that it did not have any disagreement with
Killman Murrell prior to the firm's dismissal.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 4, 2006,
Killman, Murrell raised substantial doubt about Central American
Equities Corp.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005.  The auditor pointed to the company's
sales growth uncertainty and inability to raise sufficient
capital.

                     About Central American

Central American Equity Corp. provides an integrated eco-vacation
experience in Costa Rica, and owns and operates hotels and real
property in that place.

At March 31, 2006, the Company's balance sheet showed $5,447,653
in total assets, $674,289 in total liabilities, and $4,773,364 in
stockholders' equity.


CHOICE ONE: Completes Merger with Conversent Comms & CTC Comms
--------------------------------------------------------------
Choice One Communications, CTC Communications and Conversent
Communications have completed their merger.  The merged
organization will be called "One Communications" as of July 24 and
will serve businesses in sixteen states within the Northeast, Mid-
Atlantic and upper Midwest regions.  With revenues of over $800
million, One Communications is the largest privately held
competitive local exchange carrier in the United States.

"This transaction transforms three telecommunications companies
that were strong in their own right into a single broadband IP-
based telecommunications powerhouse," said Thomas J. Casey, CEO of
One Communications.  "We will offer a unique combination of
advanced telecommunications solutions and exceptional customer
service.  Businesses throughout our target markets will benefit
from a new competitor that is large enough to make substantial
investments in enhanced services while being nimble and focused
enough to serve every customer with exceptional support provided
by accessible and friendly experts."

The One Communications network spans from Maine to West Virginia
and the eastern seaboard to Wisconsin.  The company will maintain
substantial operations centers in Rochester, New York; Waltham,
Massachusetts; Marlborough, Massachusetts and Charleston, West
Virginia.  In addition, One Communications will maintain dozens of
regional offices in local business communities to serve small and
medium sized business customers.

Financing for the transaction includes a $75 million additional
equity investment by both Columbia Ventures Corporation (the sole
shareholder of CTC Communications), and Choice One shareholders
(backstopped by Camulos Capital LP and Varde Investment Partners
LP), and a $590 million credit facility arranged by Goldman Sachs
Credit Partners LP.  The credit facility includes $30 million in
revolving credit, a $435 million first lien term loan, and a $125
million second lien term loan.  Proceeds from the debt and equity
offerings enabled the company to refinance existing debt, purchase
100% of the outstanding shares of Conversent and fund transaction
and merger integration costs and provide additional working
capital.

The Choice One Board was advised by The Blackstone Group L.P.'s
Corporate Advisory Services team, Akin Gump Strauss Hauer & Feld
LLP, and Mintz Levin Cohn Ferris Glovsky & Popeo P.C.  Choice
One's largest shareholder is an advisee of Camulos Capital LP.  
The CTC Board was advised by Columbia Ventures Corporation and
Kelley Drye & Warren LLP.  The Conversent Board was advised by
Miller Buckfire and Co., LLC and Edwards, Angell Palmer and Dodge,
LLP.

As reported in the Troubled Company Reporter on March 30, 2006,
Choice One and CTC disclosed their intent to purchase Conversent
Communications including FiberNet, Conversent's provider of
communications services in West Virginia.

                     About CTC Communications

CTC Communications -- http://www.ctcnet.com/-- is a leading
integrated communications carrier providing business customers
from Maine to Maryland with a full range of converged voice, data
and Internet services, dynamically allocated on a next-generation,
all-IP packet-based network.  The company serves small, medium and
larger business customers.  CTC's Cisco-powered IP+ATM packet
network runs over a fully managed and CTC-owned fiber optic
network.  CTC has provided cost-effective communication solutions
since 1981 and is today part of Columbia Ventures Corporation's
worldwide family of businesses.  In 2005, CTC acquired Lightship
Telecom and Connecticut Broadband.

               About Conversent Communications, Inc.

Conversent Communications, Inc. was formed through the April
2005 merger of its subsidiaries, Conversent Holdings, Inc. --
http://www.conversent.com/-- headquartered in Marlborough,
Massachusetts, and FiberNet -- http://www.wvfibernet.net/--
headquartered in Charleston, West Virginia.  CHI was cofounded
by cable entrepreneur Robert Fanch and Robert Shanahan in 1998.
FN was founded in 1997 by Fanch and other investors.  CCI serves
clients from West Virginia to Maine with innovative and flexible
communication solutions backed by a reliable network and a
dedicated customer support staff.  CCI has been recognized by
small, mid-sized, and enterprise business customers as a preferred
provider for all their communication needs.

                  About Choice One Communications

Choice One Communications -- http://www.choiceonecom.com/-- is a
leading provider of voice and data services, including local and
long distance phone service, high-speed Internet, T1 access, and
web hosting, design and development services in the Northeast and
Midwest.  The company's expansive network footprint, including 490
collocation facilities, reduces its dependency on local exchange
carriers, enabling it to be highly responsive to clients needs.

                           *     *     *

As reported in the Troubled Company Reporter on June 9, 2006,
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Rochester, New York- and Boston-based Choice
One Communications Inc.  The outlook is stable.

As reported in the Troubled Company Reporter on June 8, 2006,
Moody's Investors Service assigned a B1 corporate family rating, a
Ba3 rating for the proposed $30 million senior secured revolving
credit facility and for the proposed $400 million first lien term
loan facility, and a B2 rating for the $160 million second lien
term loan facility at Choice One Communications, Inc.  The outlook
is stable.


CLICKABLE ENT: Simontacchi & Co. Raises Going Concern Doubt
-----------------------------------------------------------
Simontacchi & Company, LLP, expressed substantial doubt about
Clickable Enterprises, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal year ended March 31, 2006.  The auditing firm pointed to
the Company's $2,223,302 net loss and $697,503 negative cash flow
from operations for the year ended March 31, 2006 as well as the
Company's $336,532 stockholders' deficiency at March 31, 2006.

The Company generated $5,052,237 of total sales revenue for the
year ended March 31, 2006, compared to $2,442,466 for the year
ended March 31, 2005.  The increase of $2,609,771, or 106.8%, can
be attributed principally to a sharp increase in the average
selling price per gallon of heating oil to $2.25 from $1.58, or
42.3%, caused by worldwide market conditions, and an increase in
gallons sold of 45.3%.  

The increase in gallons sold is attributable to a larger customer
base that increased principally through acquisition of three
heating oil distributors' businesses, and, to a lesser extent
marketing activities, partially offset by fewer degree days in the
current period due to warmer weather conditions in January-March
2006 compared to the same period in 2005.

A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?d1c

Clickable Enterprises, Inc. -- http://www.clickableoil.com/--
through its wholly owned subsidiary ClickableOil, provides a low
cost and efficient means of servicing the heating oil market
utilizing the Internet.  ClickableOil is one of the first
internet-based heating oil companies, replacing the traditional
fuel oil administrative functions and expenses with a Web-based
infrastructure.  ClickableOil streamlines the process of heating
oil ordering and delivering by providing a more accessible point
of contact for the customer.  CKEI subcontracts with local
delivery companies to deliver the heating oil and services to its
customers.


CLINICAL DATA: Deloitte & Touche Raises Going Concern Doubt
-----------------------------------------------------------
Deloitte & Touche LLP expressed substantial doubt about Clinical
Data, Inc.'s ability to continue as a going concern after auditing
the Company's financial statements for the fiscal years ended
March 31, 2006 and 2005.  The auditing firm pointed to the
Company's accumulated deficit, negative cash flows from operations
and the expectation that the Company will continue to incur losses
in the future.

Clinical Data incurred a $50.9 million net loss for the year ended
March 31, 2006, compared to $3.3 million of net income earned in
the prior year.  Total revenue for the year ended
March 31, 2006, increased 22% to $68.8 million as compared to
$56.4 million in fiscal 2005.  The increase was primarily due to
the inclusion of operating results for Genaissance
Pharmaceuticals, Inc., and Icoria, Inc., from the dates of their
acquisition.  Genaissance was acquired in October 2005 and Icoria
was acquired in December 2005.

At March 31, 2006, the Company's balance sheet showed
$108.2 million in total assets and $48.3 million in total
liabilities, resulting in a stockholders' equity of $59.7 million.

A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?d21

Clinical Data, Inc. (NASDAQ: CLDA) -- http://www.clda.com/-- is a  
worldwide leader in providing comprehensive molecular and
pharmacogenomics services as well as genetic tests to improve
patient care.  The Company, founded in 1972, is organized under
three worldwide divisions segmented by service offerings and
varying client constituents: PGxHealth(TM); Cogenics(TM); and
Vital Diagnostics(TM).  Clinical Data currently employs a staff of
over 430.  The Company is headquartered in Newton, Massachusetts
with operations in Texas, Connecticut, RTP - North Carolina, Rhode
Island, and California as well as internationally in the UK,
France, the Netherlands, Italy and Australia.


CLINICAL DATA: Announces $17 Million Private Placement
------------------------------------------------------
Clinical Data, Inc., has entered into definitive agreements with
certain institutional and other accredited investors with respect
to the private placement of 1,039,783 shares of newly issued
common stock, and warrants to purchase 519,889 shares of common
stock, for a total purchase price of approximately $17 million.

"This transaction enhances Clinical Data's capacity to deliver
shareholder value," company president and chief executive officer
Drew Fromkin said.

"We believe the additional capital will strengthen our ability to
advance our key initiatives: commercializing molecular diagnostics
designed to improve patient outcomes; continuing the Phase III
clinical development of Vilazodone, the Company's novel dual-
mechanism antidepressant, while moving to spin off Vilazodone into
Precigen Therapeutics; and enhancing our genetic services and
analysis business while continuing to position the Vital
Diagnostics division as a leader in its space."

Gross proceeds from this financing will be used for general
working capital purposes, executing the Company's previously
announced restructuring activities, and launching its proprietary
clozapine-induced agranulocytosis and warfarin response tests.

Management also anticipates pursuing new product initiatives
through the development and in-licensing of clinically relevant
biomarkers in several therapeutic classes.

Clinical Data, Inc. -- http://www.clda.com/-- is a worldwide  
leader in providing comprehensive molecular and pharmacogenomics
services as well as genetic tests to improve patient care.  The
Company, founded in 1972, is organized under three worldwide
divisions segmented by service offerings and varying client
constituents: PGxHealth(TM); Cogenics(TM); and Vital
Diagnostics(TM).  Clinical Data currently employs a staff of over
430.  The Company is headquartered in Newton, Massachusetts with
operations in Texas, Connecticut, RTP - North Carolina, Rhode
Island, and California as well as internationally in the UK,
France, the Netherlands, Italy and Australia.


COLLINS & AIKMAN: May Get $5 Mil. From Settlement with Insurers
---------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Michigan to
approve a settlement agreement with their insurers, OneBeacon
Insurance Company and National Indemnity Company.

As part of their prepetition acquisition of the Consumer &
Industrial Products Group, the Debtors inherited certain
environmental liabilities.  The Debtors incurred expenses to
defend claims for damages brought by federal and state
environmental regulatory agencies and remediate the environment.

After paying the Environmental Claims, the Debtors sought
reimbursement from their insurers.  In particular, the Debtors
believed that they are entitled to reimbursement from OneBeacon
and National Indemnity for at least a portion of the payments.

The Insurers argued that the Environmental Claims did not arise
during the insurance coverage period.  They asserted that the
Debtors' other insurers should contribute to any reimbursement of
payments made on account of the Environmental Claims.

The Debtors and the Insurers conducted discussions to attempt to
resolve the dispute.  However, in April 2003, after three years
of unsuccessful negotiations, the Debtors commenced an action
against the Insurers in the United States District Court for the
Western District of North Carolina.

In February 2006, the Debtors and the Insurers resumed settlement
discussions.  After extensive arm's-length negotiations, the
parties reached a settlement.

Under the Settlement, the Debtors will:

   (a) receive $5,500,000 from the Insurers;

   (b) dismiss with prejudice the Coverage Action;

   (c) release the Insurers from all obligations in connection
       with the Environmental Claims; and

   (d) indemnify and hold the Insurers harmless from certain
       claims made against them arising from the Environmental
       Claims; provided that, the indemnification will not exceed
       the $5,500,000 settlement payment.

"If the parties did not agree to the Settlement Agreement, the
Debtors and the Insurance Defendants would continue to be
embroiled in litigation over the Coverage Action," Marc J.
Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
contends.  "The expenses incurred in this litigation would be an
additional burden to the estates and their creditors."

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


COLLINS & AIKMAN: SEC Has Until July 31 to File Proofs of Claim
---------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates and the
Securities and Exchange Commission agree, with the consent of the
U.S. Bankruptcy Court for the Eastern District of Michigan, to
further extend the SEC's deadline to file proofs of claim to
July 31, 2006.

As reported in the Troubled Company Reporter on March 21, 2006,
the SEC is currently conducting an investigation of controls over
financial reporting and review of certain accounting issues of the
Debtors.  The SEC sought documents and information relating to the
company's financial statements for the fiscal years 2000-2005, as
well as documents and information pertaining to accounts
receivable, customer and/or supplier rebates and other matters.

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


COLLINS & AIKMAN: Moves to Reject Manchester and Farmville Leases
-----------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Michigan for
permission to reject their leases on properties located at
Manchester, Michigan and Farmville, North Carolina.

The Debtors entered into an amended lease agreement with Fabric
(DE) GP on June 27, 2002, which amends the parties' original Lease
Agreement, dated September 28, 2001.  The Master Lease relates to
six demised premises in six different locales.

Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, relates that the Manchester and Farmville leases among
the demised premises included in the Master Lease.  

The Manchester Premises operated as a stand-alone plastics plant
dedicated to the Debtors' General Motors instrument and door panel
program, up until the plant's closure in February 2006.  The
Farmville Premises continues to operate as a stand-alone plant in
the Debtors' Fabrics business unit dedicated to the Debtors'
production of automotive and non-automotive knit products.  Due to
the unprofitability of the Debtors' Fabrics business, the Debtors
anticipate that the Farmville plant will be closed in the Fall of
2006.

The Debtors are currently paying rent for the Manchester and
Farmville Premises.  Because the continued rent payment provides
no benefit to the estates, the Debtors ask the Court to find that
the Master Lease severable as to those premises.

Mr. Carmel points out that the Master Lease is severable as to
the Manchester and Farmville Premises because of the differing
nature and purpose of the agreements, the separate and distinct
consideration for the agreements, and the non-interrelatedness of
the obligations of the parties to the document.

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)


CONSUMERS ENERGY: Settles Two Class Action Lawsuits
---------------------------------------------------
The Honorable George Caram Steeh of the U.S. District Court for
the Eastern District of Michigan entered an Order and Final
Judgment on June 27, 2006, approving an agreement to settle two
consolidated lawsuits filed in 2002 as putative class actions on
behalf of participants and beneficiaries of CMS Energy's
Employees' Savings Plan who participated in the Plan between
August 3, 2000 and December 27, 2004.

CMS Energy, Consumers, CMS Marketing, Services and Trading
Company, nka now known as CMS Energy Resource Management Company,
and certain officers and directors were defendants in the
lawsuits.

A full-text copy of Judge Steeh's order is available for free
at http://researcharchives.com/t/s?d32

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

                           *     *     *

As reported in the Troubled Company Reporter on April 4, 2006,
Fitch assigned a rating of 'BB+' to Consumers Energy Company's
$300 million 364-day revolving credit facility.  Fitch said the
rating outlook is stable.


CONVERSENT COMMS: Completes Merger with Choice One & CTC Comms
--------------------------------------------------------------
Choice One Communications, CTC Communications and Conversent
Communications have completed their merger.  The merged
organization will be called "One Communications" as of July 24 and
will serve businesses in sixteen states within the Northeast, Mid-
Atlantic and upper Midwest regions. With revenues of over $800
million, One Communications is the largest privately held
competitive local exchange carrier in the United States.

"This transaction transforms three telecommunications companies
that were strong in their own right into a single broadband IP-
based telecommunications powerhouse," said Thomas J. Casey, CEO of
One Communications.  "We will offer a unique combination of
advanced telecommunications solutions and exceptional customer
service.  Businesses throughout our target markets will benefit
from a new competitor that is large enough to make substantial
investments in enhanced services while being nimble and focused
enough to serve every customer with exceptional support provided
by accessible and friendly experts."

The One Communications network spans from Maine to West Virginia
and the eastern seaboard to Wisconsin.  The company will maintain
substantial operations centers in Rochester, New York; Waltham,
Massachusetts; Marlborough, Massachusetts and Charleston, West
Virginia.  In addition, One Communications will maintain dozens of
regional offices in local business communities to serve small and
medium sized business customers.

Financing for the transaction includes a $75 million additional
equity investment by both Columbia Ventures Corporation (the sole
shareholder of CTC Communications), and Choice One shareholders
(backstopped by Camulos Capital LP and Varde Investment Partners
LP), and a $590 million credit facility arranged by Goldman Sachs
Credit Partners LP.  The credit facility includes $30 million in
revolving credit, a $435 million first lien term loan, and a $125
million second lien term loan.  Proceeds from the debt and equity
offerings enabled the company to refinance existing debt, purchase
100% of the outstanding shares of Conversent and fund transaction
and merger integration costs and provide additional working
capital.

The Choice One Board was advised by The Blackstone Group L.P.'s
Corporate Advisory Services team, Akin Gump Strauss Hauer & Feld
LLP, and Mintz Levin Cohn Ferris Glovsky & Popeo P.C.  Choice
One's largest shareholder is an advisee of Camulos Capital LP.  
The CTC Board was advised by Columbia Ventures Corporation and
Kelley Drye & Warren LLP.  The Conversent Board was advised by
Miller Buckfire and Co., LLC and Edwards, Angell Palmer and Dodge,
LLP.

As reported in the Troubled Company Reporter on March 30, 2006,
Choice One and CTC disclosed their intent to purchase Conversent
Communications including FiberNet, Conversent's provider of
communications services in West Virginia.

                  About Choice One Communications

Choice One Communications -- http://www.choiceonecom.com/-- is a
leading provider of voice and data services, including local and
long distance phone service, high-speed Internet, T1 access, and
web hosting, design and development services in the Northeast and
Midwest.  The company's expansive network footprint, including 490
collocation facilities, reduces its dependency on local exchange
carriers, enabling it to be highly responsive to clients needs.

                     About CTC Communications

CTC Communications -- http://www.ctcnet.com/-- is a leading
integrated communications carrier providing business customers
from Maine to Maryland with a full range of converged voice, data
and Internet services, dynamically allocated on a next-generation,
all-IP packet-based network.  The company serves small, medium and
larger business customers.  CTC's Cisco-powered IP+ATM packet
network runs over a fully managed and CTC-owned fiber optic
network.  CTC has provided cost-effective communication solutions
since 1981 and is today part of Columbia Ventures Corporation's
worldwide family of businesses.  In 2005, CTC acquired Lightship
Telecom and Connecticut Broadband.

               About Conversent Communications, Inc.

Conversent Communications, Inc. was formed through the April
2005 merger of its subsidiaries, Conversent Holdings, Inc. --
http://www.conversent.com/-- headquartered in Marlborough,
Massachusetts, and FiberNet -- http://www.wvfibernet.net/--
headquartered in Charleston, West Virginia.  CHI was cofounded
by cable entrepreneur Robert Fanch and Robert Shanahan in 1998.
FN was founded in 1997 by Fanch and other investors.  CCI serves
clients from West Virginia to Maine with innovative and flexible
communication solutions backed by a reliable network and a
dedicated customer support staff.  CCI has been recognized by
small, mid-sized, and enterprise business customers as a preferred
provider for all their communication needs.

                           *     *     *

As reported in the Troubled Company Reporter on June 13, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and senior secured debt ratings on Marlborough,
Massachusetts-based competitive local exchange carrier Conversent
Communications Inc., and removed them from CreditWatch.  The
outlook is stable.


CRESCENT JEWELERS: Has Until August 15 to Decide on Leases
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
gave Crescent Jewelers until Aug. 15, 2006, to decide whether to
assume, assume and assign, or reject non-residential real property
leases.

According to the Debtor, the leases of approximately 97 of its
current 103 stores are subject to assumption or rejection.  The
Debtors said that the store leases provide for the payment of
lease rentals plus real estate taxes, insurance, common area
maintenance fees, mall association dues, or contingent rentals
based on the store's gross sales.

The Debtor explained that without the benefit of the leases,
it would:

    * be incapable of conducting its retail business,

    * lose the value of the goodwill that it has developed in the
      retail market, and

    * lose any equity in the leases and its valuable leasehold
      improvements on the leased premises.

The Debtor cited four reasons why the extension is warranted:

    1. the Debtor's chapter 11 case is large and complex and
       there is large number of leases involved;

    2. the leases are among the primary assets of the Debtor;

    3. the Debtor will satisfy its postpetition rental
       obligations; and

    4. the Lessors will not be prejudiced by the extension.

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


CSK AUTO: Receives $221 Mil. of Tenders from Holders of 7% Notes
----------------------------------------------------------------
A total of $221 million in aggregate principal amount of 7% Notes
(representing 98% of the outstanding principal amount) had been
tendered by noteholders as of 5:00 p.m., New York City time, on
Friday, June 30, 2006, which was the early settlement deadline for
the cash tender offer and consent solicitation of CSK Auto, Inc.,
with respect to its outstanding $225 million aggregate principal
amount of 7% Notes.

Payment of the tender consideration for the 7% Notes validly
tendered and not withdrawn at or prior to the Early Settlement
Deadline is expected to be made promptly.

The requisite consents to adopt the proposed amendments to the
indenture governing the 7% Notes have been received and a
supplemental indenture containing such amendments has been
executed by Auto, the guarantors party thereto and the trustee
under the indenture.

The tender offer is scheduled to expire at 5:00 p.m., New York
City time, on July 18, 2006, unless extended or earlier
terminated.  Payments of the tender consideration for 7% Notes
validly tendered and not withdrawn after the Early Settlement
Deadline and at or prior to the Expiration Time will be made
promptly after the Expiration Time.

The Altman Group, Inc. is Information Agent and Depositary for the
tender offer.  Questions and requests for documents related to the
tender offer may be directed to The Altman Group, Inc. at (201)
806-7300.

                      Term Credit Agreement

As reported in the Troubled Company Reporter on June 28, 2006, CSK
Auto Corporation reported that its wholly owned subsidiary CSK
Auto, Inc., entered into a Term Credit Agreement relating to a
senior secured credit facility of $450,000,000,
with:

   * the Lenders party,

   * JPMorgan Chase Bank, N.A., as Administrative Agent, and

   * Lehman Commercial Paper Inc. and Wachovia Bank, National
     Association, as Co-Syndication Agents.

The loans under the Credit Agreement can be made on up to five
occasions until Dec. 16, 2006.  The proceeds of the Term Loans may
be used solely:

   (i) to refinance or repurchase some or all of CSK Auto Inc.'s
       7% Senior Subordinated Notes due 2014, 3-3/8% Senior
       Exchangeable Notes due 2025, and 4 5/8% Senior Exchangeable
       Notes due 2025, and

  (ii) provided that some or all of the Existing Notes have been
       refinanced or repurchased with the proceeds of Term Loans,
       to pay consent fees to holders of Existing Notes not so
       refinanced or repurchased and related transaction fees and
       expenses.
                 
                          About CSK Auto

Headquartered in Phoenix, Arizona, CSK Auto Corporation (NYSE:
CAO) -- http://www.cskauto.com/-- is the parent company of CSK  
Auto, Inc., a specialty retailer in the automotive aftermarket.  
As of Jan. 29, 2006, the Company operated 1,273 stores in 22
states under the brand names Checker Auto Parts, Schuck's Auto
Supply, Kragen Auto Parts and Murray's Discount Auto Parts.

                           *     *     *

As reported in the Troubled Company Reporter on June 5, 2006,
Moody's Investors Service downgraded all long-term ratings of CSK
Auto, Inc., and lowered the company's speculative grade rating to
SGL-4 from SGL-2.

Ratings downgraded and left on review for further possible
downgrade include corporate family rating to B1 from Ba3;
$100 million senior unsecured convertible notes due 2025 to B1
from Ba3; $125 million senior unsecured notes due 2025 to B1 from
Ba3, and $225 million senior subordinated notes due 2014 to B3
from B2.


D&I INVESTMENTS: Case Summary & Four Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: D&I Investments LLC
        26738 Oakmont Drive
        Sun City, California 92586

Bankruptcy Case No.: 06-11696

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: July 5, 2006

Court: Central District Of California (Riverside)

Judge: David N. Naugle

Debtor's Counsel: Vincent Renda, Esq.
                  Steinberg Fineo Berger Fischoff P.C.
                  40 Crossways Park Drive
                  Woodbury, New York 11797
                  Tel: (516) 747-1136
                  Fax: (516) 747-0382

Total Assets: $1,600,000

Total Debts:    $884,658

Debtor's Four Largest Unsecured Creditors:

      Entity                           Claim Amount
      ------                           ------------
   Kenstar Corp. Pension Plan               $25,000
   Federal Home Loans
   P.O. Box 421217
   San Diego, CA 92590

   Fraco Enterprises, Inc.                   $7,100
   Maria Fraser PE
   12139 Mount Vernon Avenue, Suite 210
   Grand Terrace, CA 92324

   CLE Engineering, Inc.                     $4,000
   41601 Data Street
   Murrieta, CA 92562

   Metro Housing Redevelopment Inc.          $5,000
   15697 Ladera Vista Drive
   Chino Hills, CA 91709


DANA CORP: Rejects 22 Executory Contracts and Unexpired Leases
--------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York authorized Dana Corporation and
its debtor-affiliates to reject these executory contracts and
unexpired leases of certain equipment and related service
agreements effective as of June 30, 2006:

   Contracting Party                      Description
   -----------------                      -----------
   Banc of America Leasing and Capital    Equipment Lease
   CCA Financial, LLC                     Equipment Lease
   CCA Financial, LLC                     Equipment Lease
   CCA Financial, LLC                     Equipment Lease
   CCA Financial, LLC                     Equipment Lease
   CCA Financial, LLC                     Equipment Lease
   CIT Technology Financing Services      Lease Agreement
   De Lage Landen Financial Services      Equipment Lease
   Entergy Systems and Service, Inc.      Service Agreement
   General Electric Capital Corp.         Equipment Lease
   General Electric Capital Corp.         Equipment Lease
   General Electric Capital Corp.         Equipment Lease
   General Electric Capital Corp.         Equipment Lease
   Pitney Bowes Credit Corporation        Equipment Lease
   Pitney Bowes Inc.                      Equipment Service
   Richard J. Miller, Esq.                Vehicle Lease
   Sleight Business Machines, Inc.        Maintenance Agreements
   Xerox Corporation                      Equipment Agreement
   Xerox Corporation                      Equipment Agreement
   Xerox Corporation                      Equipment Agreement
   Xerox Corporation                      Equipment Agreement
   Xerox Corporation                      Equipment Agreement

The Debtors have determined that the Contracts and Leases are no
longer necessary to their ongoing business operations or
restructuring efforts.

The Debtors assured the Court that they have surrendered, or will
surrender by June 30, 2006, possession of any property leased
under the Contracts and Leases to the Contracting Party.

                          Siemens Lease

Siemens Financial Services, Inc. is the successor lessor under
Equipment Schedule No. 1 to Master Lease No. 2641, both dated as
of Aug. 1, 2003, between Fleet Capital Leasing Healthcare Finance
and the Debtors.

Siemens asserted that the information provided regarding the Lease
is incorrect and misleading.  Siemens wants the description of the
Lease clarified.

According to Siemens, under the terms of the Lease, unless the
Debtors exercise the Return Option, the term of the Lease
commenced on Aug. 1, 2003, and continues for 84 months,
expiring on Aug. 1, 2010.

The Return Option provides that if the Debtors are not in default
of their obligations under the Lease, they have the option to
return all of the Equipment under the Lease to Siemens, together
with a payment of a Return Option Price as specified in the
Lease.

Siemens emphasized that the Return Option under the Lease
can only be exercised if the Debtors are not in default of their
obligations under the Lease.  Therefore, by their Rejection
Motion, the Debtors would be in default of their obligations
under the Lease.  As a result, the term of the Lease would expire
on Aug. 1, 2010.

Siemens asked the Court to require the Debtors to amend their
Schedule to reflect that the Siemens Lease expires as of August 1,
2010.

The Debtors have withdrawn their request with respect to the
Siemens Lease.

The Debtors reserve their right to assume, assume and assign and
reject the Siemens Lease and Siemens reserves its right to object
to any proposed assumption, assumption and assignment or
rejection.

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005.  (Dana Corporation Bankruptcy News, Issue Nos. 12 and
13; Bankruptcy Creditors' Service, Inc., 215/945-7000).


DANA CORP: Employing 31 Additional OCPs and Service Providers
-------------------------------------------------------------
Dana Corp. and its debtor-affiliates advised U.S. Bankruptcy Court
for the Southern District of New York that they will employ 31
more professionals in the ordinary course of business.

As reported in the Troubled Company Reporter on Mar. 23, 2006, the
Debtors obtained authority from the Court to employ and pay
Ordinary Course Professionals and Service Providers, without the
submission of separate retention applications and the issuance of
separate retention orders.  

The 31 additional ordinary course professionals are:

   Professional                        Type of Services
   ------------                        ----------------
   AWA Patent AB                       Legal

   Bustamante & Bustamante             Legal
   Patentes y Marcas Cia Ltda.

   CCPIT Patent & Trademark Law Ofc    Legal

   Evert & Weathersby                  Legal

   Forrester Ketley & Co.              Legal

   Forrester & Boehmert                Legal

   Looney & Grossman LLP               Legal

   ONDA Techno Int'l Patent Atty.      Legal

   Rubin & Levin, P.C.                 Legal

   Sedin SA                            Legal

   Tyler Cooper & Alcorn, LLP          Legal

   William Vaughan Company             Regulatory Compliance
                                       Auditing

   KPMG LLP and these affiliates:

   * Sibille Sociedad Civil            Tax Advisory
   * Australia Pty Limited             Tax Advisory
   * Alpen-Treuhand GmbH               Tax Advisory
   * Tax and Legal Advisers CVBA       Tax Advisory
   * Assessores Tributarios Ltd.       Tax Advisory
   * Huazhen                           Tax Advisory
   * Deutsche Treuhand-Gesellschaft    Tax Advisory
   * Tanacsado Kft.                    Tax Advisory
   * BSR & Co.                         Tax Advisory
   * Kstudio Associato                 Tax Advisory
   * Tax Corporation                   Tax Advisory
   * Cardenas Dosal S.C.               Tax Advisory
   * Slovensko spol s.r.o.             Tax Advisory
   * Abogados S.L.                     Tax Advisory
   * Fides                             Tax Advisory
   * Certified Public Accountants      Tax Advisory
   * Phoomchai Tax & Legal Ltd.        Tax Advisory
   * Calcaraz Cabrera Vazquez          Tax Advisory

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  The
Debtors' consolidated balance sheet at March 31, 2006, showed a
$456,000,000 total shareholder' equity
resulting from total assets of $7,788,000,000 and total
liabilities of $7,332,000,000.  When the Debtors filed for
protection from their creditors, they listed $7.9 billion in
assets and $6.8 billion in liabilities as of Sept. 30, 2005.  
(Dana Corporation Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


DANA CORP: Files 2005 Employee Incentive & Savings Plan Report
--------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Dana Corporation disclosed financial reports related
to the Company's Employee Incentive and Savings Investment Plan.

The Dana Investment Plan is a contributory defined contribution
employee benefit plan, which is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.

                         Dana Corporation
            Statement of Net Assets Available For Benefits
                      As of December 31, 2005

Assets
    Investments, at fair value                       $40,982,000
    Investments in Master Trust                       17,478,000
                                                ----------------
       Total Investments                             $58,460,000

Employee contributions receivable                         78,000
Employer contributions receivable                          8,000
                                                ----------------
Net assets available for benefits                    $58,546,000
                                                ================

                         Dana Corporation
                 Statement of Changes in Net Assets
                       Available for Benefits
                      As of December 31, 2005

Investment income
    Interest in earnings from Master Trust               $96,000
    Dividend income                                    2,295,000
    Net appreciation (depreciation) of investment     (2,470,000)
    Interest on employee loans                            53,000
                                                ----------------
       Total investment income                          ($26,000)

Contributions
    Employee Contributions                            $1,228,000
    Employer Contributions                               205,000
                                                ----------------
       Total contributions                            $1,433,000

Deductions
    Benefit payments                                ($11,679,000)
    Administrative expenses                               (5,000)
                                                ----------------
       Total deductions                             ($11,684,000)

Net transfers out                                    (55,728,000)
Net increase (decrease)                              (66,005,000)
                                                ----------------
Net assets available for benefits
    At the beginning of the year                    $124,551,000
    At the end of the year                           $58,546,000
                                                ================

A full-text copy of the Dana Investment Plan 2005
financial report on Form 11-K is available for free at
http://researcharchives.com/t/s?d30

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  The
Debtors' consolidated balance sheet at March 31, 2006, showed a
$456,000,000 total shareholder' equity
resulting from total assets of $7,788,000,000 and total
liabilities of $7,332,000,000.  When the Debtors filed for
protection from their creditors, they listed $7.9 billion in
assets and $6.8 billion in liabilities as of Sept. 30, 2005.  
(Dana Corporation Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


DELTA MUTUAL: March 31 Balance Sheet Upside-Down by $1.2 Million
----------------------------------------------------------------
Delta Mutual, Inc., reported an $802,700 net loss on $160,722 of
revenues for the three months ended March 31, 2006, compared to a
$534,620 net loss with no revenue for the three months ended March
31, 2005.

At March 31, 2006, the Company's balance sheet showed $1,176,571
in total assets and $2,018,111 in total liabilities, resulting in
a $1,211,634 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $585,303 in total current assets available to pay
$2,018,111 in total current liabilities coming due within the next
12 months.

Full-text copies of the Company's financial statements are
available for free at http://ResearchArchives.com/t/s?d1d

Delta Mutual, Inc. (OTCBB: DLTM) specializes in energy recovery
and construction services through environmentally friendly
technologies that recover energy sources from soil, water and
other waste streams.  Delta Mutual and its subsidiaries provide
environmental and construction technologies and services to
certain geographic reporting segments in the Far East, the Middle
East, the United States and Puerto Rico.  


DIAGNOSTIC IMAGING: Moody's Holds B2 Rating on $140MM of Sr. Loans
------------------------------------------------------------------
Moody's Investors Service confirmed Diagnostic Imaging, Inc.'s
credit ratings, concluding a rating review initiated on February
16, 2006.  Following this rating action, the outlook is negative.

Ratings confirmed:

   * $25 million, senior secured revolver due 2010, at B2
   * $115 million, senior secured term loan B due 2012, at B2
   * Corporate Family Rating, at B2
   * The ratings outlook is negative.

Confirmation of DIG's Corporate Family rating at the B2 level
reflects Moody's belief that the company will experience
relatively modest reductions in revenues and cash flows as a
result of forthcoming changes in Medicare reimbursements for its
diagnostic imaging services.

The impact of the changes will be manageable because only
approximately 12% of DIG's payor mix is sourced from Medicare
reimbursements.  The negative outlook reflects the fact that the
company's growth plans have exceeded Moody's expectations at the
time of the original assignment of the ratings and, as a result,
the company has not begun to reduce debt in accordance with
Moody's expectations.

Other factors that affect the ratings negatively include the
company's small size, its regional presence and the lack of
diversification of its operations.

Moody's anticipates that the implementation of the Medicare cuts
will only moderately affect the company.  The reason for this is
that the component of Medicare reimbursements as a percent of
total sales is low at 12%, a level that is roughly half the
average for the largest independent diagnostic imaging companies.

In addition, the company's MRI scans represent only 31% of
revenues, a level that is less than half that for the major
players in the industry, which average 60% to 75% of total sales.  
The contiguous body part cuts will negatively affect the company's
operational results only negligibly during 2006 and beyond because
the company performs only a small number of such scans.

Moody's estimates that the technical component of the DRA changes
will result in a reduction of DIG's sales and cash flow by $7
million in 2007. This figure represents 4% of estimated net
sales for 2006.  Adjusted free cash flow to adjusted debt is
nevertheless estimated to be a negative value for 2006 due to the
company's aggressive capital buildout well in excess of Moody's
expectations a year ago.  This metric is expected to improve in
excess of 5% during 2007, a level that is more consistent with a
B1 rating, provided that capital expenditures are ramped back to
more normalized levels.

Other factors that affect the ratings negatively include:

    1) the company's small size;

    2) the regional presence and lack of diversification of its
       operations;

    3) the high degree of involvement in the operations by some
       of the founding members of management;
   
    4) concerns related to the scalability of the business model;
       and

    5) succession planning.

The diversity of revenue mix resulting from its largely multi-
modality focus and the company's early adoption of emerging
technologies in the diagnostic space offset somewhat the negative
effects of the aforementioned factors.

The negative outlook reflects the fact that the company's growth
plans have exceeded Moody's expectations at the time of the
original assignment of the ratings.

It is Moody's belief that the company's access to its senior
secured revolving credit facility may be lessened as a consequence
of the company's aggressive acquisition and expansion plans.  The
magnitude of cushion under the company's financial covenant
structure is also expected to be stressed by the company's
aggressive growth posture.

Further downward rating pressure could develop if there is a
decline in the company's ratio of adjusted free cash flow to debt
below roughly 3% on a sustained basis or if the ratio of adjusted
total debt to EBITDA increases above 5.5 times.

Upward rating pressure could materialize if the ratio of adjusted
free cash flow to debt improves to a level of 8% to 10% or if the
DRA changes are in some way modified or repealed.

For additional information please refer to Moody's Credit Opinion
on DIG published on Moodys.com.

Headquartered in Hicksville, New York, Diagnostic Imaging Group
provides certain equipment and administrative services on an
exclusive basis pursuant to a 40-year management services
agreement to Doshi Diagnostic Imaging Services, P.C., a New York
based provider of diagnostic imaging services, including MRI, CT
scans, mammography and nuclear medicine, through a network of 38,
mostly multi-modality centers in the New York metropolitan area,
Florida and New Jersey.


DREWCAT CAPITAL: S&P Rates $50 Million Senior Notes at BB-
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior debt
rating to DREWCAT Capital Ltd.'s $50 million principal at-risk
variable-rate notes, which are due Dec. 28, 2006.

The proceeds from the issuance of the notes will provide Dominion
Resources Inc. (BBB/Stable/A-2) with a source of parametric
coverage for hurricanes in three hurricane calculation locations
on a per-occurrence basis over a six-month period.

DREWCAT is an exempted company incorporated under the laws of the
Cayman Islands, the sole business of which will consist of the
issuance of the notes, entering into the transaction agreements,
and the performance of activities related thereto.  After issuing
the notes, DREWCAT invested the proceeds in high-quality permitted
investments within a collateral account.  DREWCAT will swap the
total return of the asset portfolio with Lehman Brothers Special
Financing Inc., which has been guaranteed by Lehman Brothers
Holdings Inc. (A+/Stable/A-1) in exchange for quarterly LIBOR-
based payments.

As part of the transaction, DREWCAT also entered into a
counterparty contract with Dominion.  Under this agreement,
Dominion will make quarterly payments to DREWCAT of 20.60%
multiplied by the principal amount on an actual/360 basis.  This
payment -- along with the proceeds received under the total return
swap -- will be used to make the scheduled interest payments to
the noteholders.  DREWCAT's obligations under the counterparty
contract will require it to make payments for any hurricane event
meeting certain established criteria with respect to wind speed
and location, up to $50 million.

This structure essentially provides Dominion resources with
insurance coverage for certain of its energy assets located in
Gulf of Mexico off the coast of Louisiana.  If a hurricane with a
maximum sustained wind speed in excess of the threshold amount
were to pass through any of these locations, then the noteholders
would be at risk for a loss of principal.  The rating on the notes
reflects the probability of attachment for the three hurricane
calculation locations based on EQECAT Inc.'s near-term analysis.

If a storm has been declared a hurricane by the National Hurricane
Center/Tropical Prediction Center, Dominion will notify EQE who
will prepare an event report based on the best track data for the
hurricane event as well as reported maximum sustained wind speeds.
If EQE determines that a covered event has occurred, it would
notify the relevant parties that DREWCAT will be required to make
a payment to Dominion for the resulting calculated loss.


E.A. VINER INT'L: Moody's Rates $125 Mil. Sr. Sec. Facility at B1
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the seven-year
$125 million senior secured bank facility for E.A. Viner
International, Inc., a wholly-owned subsidiary of Oppenheimer
Holdings Inc., that will also guarantee the bank facility.  The
rating outlook is stable.

E.A Viner is refinancing $160.8 million of convertible debentures
with the $125 million senior secured facility, as well as $30-35
million of a subordinated convertible placement to employees, and
the remainder in cash.  E.A Viner is the U.S. holding company for
Oppenheimer's operating subsidiaries.

Oppenheimer is a recognized retail brokerage brand name with a
footprint of 82 offices and 1700 brokers and a small asset
management business.  The brokerage force has above average
experience and has enjoyed relatively low turnover.  The firm's
trading activities are low risk and the firm has good expense
flexibility and reasonable liquidity.

Oppenheimer's pre-tax margins lag behind industry leaders that
enjoy greater scale and wider product sets.  Also the firm's
narrow business mix leaves Oppenheimer more exposed to the cycle
of retail investor activity and sentiment than more diversified
firms.

As Oppenheimer expanded, the firm experienced several regulatory
problems, which raises Moody's concerns about the firm's overall
control environment.  The presence or absence of new regulatory
issues will be an important rating driver in the future, Moody's
said.

Factors that could change the rating up include:

   1) resolution of existing regulatory issues, and strengthening
      the risk governance infrastructure
   
   2) sustainable improvement of the pretax margin percentage
      into the mid-teens combined with reduced leverage.

Factors that could change the rating down include:

   1) significant new regulatory issues

   2) elevated turnover amongst most productive brokers that
      results in franchise erosion

   3) no improvement in leverage.

Moody's assigned these new ratings:

Oppenheimer Holdings Inc.:

   * Foreign Currency Corporate Family Rating -- B1 with a Stable
     Outlook

E.A. Viner International Inc.:

   * $125 million seven year Bank Facility -- B1 with a Stable
     Outlook

Oppenheimer Holdings Inc is a Canadian holding company that
operates a regulated U.S. broker-dealer and reported net income of
$17.2 million in the first quarter of 2006.


ENDEVCO INC: March 31 Balance Sheet Upside Down by $1.9 Million
---------------------------------------------------------------
EnDevCo Inc. reported a $2,383 net loss on $491,405 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $5,545,549
in total assets, $2,157,833 of minority interest and $5,295,235 in
total liabilities resulting in a $1,907,519 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $465,132 in total current assets available to pay
$3,432,011 in total current liabilities coming due within the next
12 months.

A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?d28

                        Going Concern Doubt

Killman, Murrell & Company, P.C, in Odessa, Texas, raised
substantial doubt about EnDevCo Inc.'s  Inability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005.  The
auditor pointed to the Company's losses from operations and
limited capital resources.

                           About EnDevCo

EnDevCo Inc. (OTCBB: ENDE.OB) -- http://www.endevcoinc.com/-- is  
a dynamic and growing energy company establishing an identity that
is consistent with its business development activities.  The
Company participates in three sectors the energy industry: 1) oil
and gas exploration and production, 2) development of new
technologies which increase oil and gas production, using that
technology to gain leverage in the purchase of domestic natural
gas production, and 3) merchant power and integrated industrial
site development.  EnDevCo is pursuing oil and gas exploration and
production opportunities in both domestic and international
venues.


ENRON CORP: Court Approves Five Settlement Agreements
-----------------------------------------------------
Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy
Procedure, Reorganized Enron Corporation and its debtor-affiliates
obtained the U.S. Bankruptcy Court for the Southern District of
New York's approval on five settlement agreements between:

   (i) Enron Energy Services, Inc., and Barnabas Building
       Properties LLC;

  (ii) Enron Capital & Trade Resources International Corp., on
       one hand, and Lunds Energikoncernen AB and Lunds Energi
       Forsaljning AB, on the other;

(iii) EESI and S&Z Tool & Die Co., Inc.;

  (iv) EESI and Enron Energy Services Operations, Inc., on one
       hand, and 21 entities, including Promus Hotels, Inc.,
       Doubletree Hotel at Hazard Center Drive San Diego,
       California, and Felcor Suites, Ltd., on the other; and

   (v) ECTRIC and Sorum kommune.

Before the Petition Date, the parties entered into contracts
relating to the Debtors' sale of power and other services, Evan
R. Fleck, Esq., at Cadwalader, Wickersham & Taft LLP, in New
York, relates.

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

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

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

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

The parties also agree that:

    -- Adversary Proceeding No. 05-01485 commenced by EESI and
       ESOI against Promus Hotels will be dismissed;

    -- Claim No. 14836 filed by Felcor Suites against EESI for
       $5,319, and Claim No. 14831 filed by Doubletree Hotel
       against EESOI for $3,777 will be allowed; and

    -- ECTRIC will withdraw all claims against Lunds in Case Nos.
       T-586-05 and T-587-05 pending before the Lund District
       Court (Sw. Lunds tingsratt); and

    -- ECTRIC will withdraw Case No. 05-149081TV1-NERO pending
       against Sorum before the Nedre Romerike District Court, in
       Norway.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply.  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 175; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
  

ENTERGY NEW ORLEANS: Agrees to Alteration of FTI's Payment Terms
----------------------------------------------------------------
Entergy New Orleans, Inc., consents to the Official Committee of
Unsecured Creditors' request to modify the terms of FTI
Consulting, Inc.'s compensation and retention.

As reported in the Troubled Company Reporter on June 21, 2006, the
Committee sought the U.S. Bankruptcy Court for the Eastern
District of Louisiana to modify the firm's compensation to allow
the fee caps from January 2006 through July 2006 to be cumulative.

The Court's order approving the Committee's continued retention of
FTI provides that the firm's compensation is capped at $100,000
for the month of January 2006 and at $75,000 for all subsequent
months, plus reimbursement of actual and necessary expenses.

The Committee relates that the fees incurred by FTI for 2006 have
been:

        Month           Fee Cap       Fees Incurred
        -----           -------       -------------
        January        $100,000            $15,050
        February         75,000             50,923
        March            75,000             83,734
        April            75,000            126,487

Although FTI was authorized to receive up to $325,000 for the
months of January through April, FTI billed only $276,194, Carey
L. Menasco, Esq., at Liskow & Lewis, APLC, in New Orleans,
Louisiana, pointed out.

ENOI, however, objects to the Creditors Committee's allegation
that the Debtor or its affiliate has delayed production of
documents or has not engaged in substantive discussions on a plan
of reorganization.

Carey L. Menasco, Esq., at Liskow & Lewis, APLC, in New Orleans,
Louisiana, tells Judge Brown that the Entergy Companies have been
in constant contact with the Creditors Committee, its attorneys
and financial consultants throughout the duration of the Chapter
11 case.

Ms. Menasco also clarifies that the Debtor's responses to
discovery requests from FTI or any of the Creditors Committee's
advisors are not delayed, considering the complexity of the
subject matter.

According to Ms. Menasco, the Creditors Committee's advisors have
received bi-weekly, informal briefings from the Debtor's senior
financial officers and the Committee was asked several times
earlier in the year to discuss refining its discovery requests to
fit its needs.  The Committee has redefined its discovery requests
and, in cooperation with the Debtor's counsel, streamlined the
task.  "Indeed, all requested materials were provided within the
time frame suggested by the Committee," Ms. Menasco says.

The Entergy Companies have not hesitated to reach out to the
Creditors Committee to suggest that informal suggestions might
expedite the process more sensibly than formal, written discovery
requests, Ms. Menasco relates.  She adds that, although the
Committee's inquiries have been satisfied, the Committee may
contact the Debtor if further information is required.

Ms. Menasco also explains that substantive discussions have taken
place with the bondholders and the Creditors Committee given the
uncertainties on the various issues that the Debtor must deal with
in formulating the best Chapter 11 plan that addresses the
concerns of both creditors and interest holders.

The Debtor's resolution of its application for Community
Development Block Grant funds is the indispensable condition of a
feasible plan that could satisfy all the creditors and interest
holders in its bankruptcy case, Ms. Menasco notes.  She says that
the approval process for the CDBG funds is in the hands of the
State of Louisiana and the United States, not the Debtor.

While the Debtor has kept the creditors, interest holders and
Court informed of the progress of the approval process for the
CDBG funds, predictions about the time and outcome of the process
are not easy given the situation in New Orleans after hurricane
Katrina, Ms. Menasco avers.

Additionally, the Debtor has explored an alternative plan process
in the event that it is unsuccessful in obtaining CDBG funds and
creditors have been advised of the alternative.  The clarity of
success for the CDBG fund application is required before
meaningful discussions about plan distributions can be conducted,
Ms. Menasco relates.

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


ENTERGY NEW ORLEANS: Hibernia Nat'l Wants Secured Claim Allowed
---------------------------------------------------------------
Capital One, National Association, formerly known as Hibernia
National Bank, asks the U.S. Bankruptcy Court for the Eastern
District of Louisiana to declare, under Section 541 of the
Bankruptcy Code and other applicable law, that the funds sent by
Entergy Services, Inc., or Entergy Corp. to the Debtor's account
were earmarked to only cover the negative balance in the account
and do not constitute property of the estate.

Alternatively, if the Court decides that ESI or Entergy Corp.
decided to transfer ownership of the funds to the Debtor, Hibernia
asks the Honorable Jerry A. Brown to declare that it has no
liability for ESI's or Entergy Corporation's decision in this
regard.

Hibernia also asks Judge Brown to:

    -- allow its secured claim in the Debtor's Chapter 11 case;

    -- declare that it is an oversecured creditor; and

    -- recognize its security rights in the Debtor's accounts
       receivable and any other assets of the Debtor as well as
       its set-off rights to any funds owned by the Debtor.

Hibernia and Entergy New Orleans, Inc., entered into a loan
agreement effective as of July 6, 2004, which was amended in July
2005.

The Debtor also executed a promissory note dated July 6, 2005, for
$15,000,000, plus interest, fees and other amounts in favor of
Hibernia.

In a security agreement executed on July 20, 2005, ENOI granted
Hibernia a security interest in, among other things, accounts
receivable from the Debtor's retail electric and natural gas
utility customers.  Hibernia filed a Uniform Commercial Code-1
Financing Statement covering the assets over which it had a
security interest.

ESI and Entergy Corp. signed an agreement with Hibernia in
November 2000 granting Hibernia the right of set off in the event
of any overdrafts in any account of Entergy Corp. or a subsidiary
account maintained with Hibernia.

Brent C. Wyatt, Esq., at Lemle & Kelleher, L.L.P., in New Orleans,
Louisiana, relates that the bank accounts with Hibernia are
governed by certain terms and conditions stated in the rules
governing accounts.  The rules also grant security interests and
rights to set-off to Hibernia and specifically provide for
additional rights in favor of Hibernia.

Hibernia's claims in the Debtor's Chapter 11 case are secured by
assets and property owned by the Debtor and set-off rights to
funds owned by the Debtor, whose value exceed the amount of
Hibernia's claims, Mr. Wyatt relates.

On Sept. 21, 2005, Hibernia debited the Debtor's Remittance
Processing Center account for a $15,057,050 loan, resulting in a
$13,623,873 negative account balance.  Hibernia decided to reverse
the debit to the RPC account and informed the Entergy Entities on
September 22, 2005.

In response to the negative balance in the RPC account, ESI sent
$13,548,000 on September 22, 2005, to the Debtor's General Fund
account to cover the negative balance, resulting in the GF account
containing $13,604,271.

The Court's interim order approving the DIP Financing provided
that $15,057,050, the last amount on the Debtor's books as a total
payoff of Hibernia be set aside in the RPC account and frozen
pending a determination of the issues.  All parties reserved all
of their rights.

ESI and Entergy Corp. have recently stated to Hibernia that it is
responsible and liable to them for ESI's sending money to cover
the negative balance in the RPC account despite Hibernia's prior
notice that the debit that caused the negative balance was
reversed.

Until ESI and Entergy Corp. recently stated that ESI sent the
funds only to cover the negative balance in the RPC account,
Hibernia had assumed that ESI had decided for other reasons to
transfer ownership of the funds to the Debtor, Mr. Wyatt tells the
Court.

If ESI or Entergy Corp. did not decide to transfer ownership of
the funds, the funds are not property of the estate but are still
subject to any and all rights that Hibernia may have to them.
"[Hibernia] cannot transfer ownership of funds from ESI or
Entergy Corporation to the Debtor; only ESI or Entergy
Corporation can do so," Mr. Wyatt notes.

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


FLYI INC: Wants 62 Late-Filed Claims Disallowed
-----------------------------------------------
FLYi, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for District of Delaware to disallow Late-Filed Claims.

The Debtors identified 62 claims, which were filed after the Bar
Date.

M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, tells the Court that the Claimants were
served a copy of the Bar Date Notice and therefore had adequate
notice of the bar dates.

Among the Late-Filed Claims are:

   Claimant                              Claim No.  Claim Amount
   --------                              ---------  ------------
   ACTS Limited Partnership                5074        $392,362
   Coffield, John A.                       5054          49,365
   Coffield, John A.                       5072          49,365
   Crespo, Michael                         5266         300,000
   CSC                                     4538          25,254
   Eaddy, Willie                           5180          10,965
   Eaddy, Willie B.                        5055          10,965
   Greater Rochester Int'l Airport         5412          33,546
   Infinity Broadcasting Corp.             5283          12,015
   Kramer, Jason                           5133          14,000
   Kramer, Jason                           5168          14,000
   Race, William                           5181          45,570
   Race, William                           5271          45,570
   Ransone, Tammy R.                       5131          24,170
   Ransone, Tammy R.                       5166          24,170
   Summit Security Services Inc.           5264          11,757
   Vargas, Saul                            5317          15,558
   Womble, Jeronda                         5290         180,000
   Woods III, George                       5477          15,250

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


FOAMEX INTERNATIONAL: Plan Filing Period Extended to Sept. 14
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware further
extended Foamex International Inc. and its debtor-affiliates'
exclusive periods to:

    (i) file a Chapter 11 plan through September 14, 2006; and
   (ii) solicit acceptances of the plan through November 13, 2006.

As reported in the Troubled Company Reporter on June 6, 2006,
Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP,
in Wilmington, Delaware, said that a further extension of the
exclusive periods will allow the Debtors to:

    (a) explore various financing alternatives to fund a plan of
        reorganization;

    (b) formulate a revised plan and negotiate its terms with key
        creditor and shareholder constituents; and

    (c) prepare and file a revised plan and disclosure statement
        and seek their approval.

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


FOAMEX INT'L: Inks Stipulation to Set Off Guilford Mills Debts
--------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to approve a
stipulation with Guilford Mills, Inc.

The parties stipulate that:

   (a) the automatic stay under Section 362 of the Bankruptcy
       Code will be modified to permit the set-off of mutual
       prepetition debts and the payment of the Guilford Mills
       Obsolescence Claim;

   (b) pursuant to the set-off, Guilford Mills will pay Foamex
       $242,467 in cash within five business days after the Court
       approves the parties' stipulation; and

   (c) if the Debtors receive any payment from the original
       equipment manufacturers on account of the Guilford Mills
       Obsolescence Claim, they will transmit the funds
       within three business days after receipt.

As of the Debtors' bankruptcy filing, Guilford Mills, Inc., owed
Foamex L.P. $417,467 for prepetition services.  Foamex also owed
Guilford Mills $183,495 for fabric provided to Foamex prepetition
and $175,000 for certain prepetition obligations pursuant to the
parties' supply agreement.

Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, tells the Court that Foamex inadvertently
paid Guilford Mills $183,495 postpetition.  Foamex's Prepetition
Obligation is reduced to $175,000.

In addition, Foamex owed Guilford Mills $74,711 for certain
obsolete fabric that Guilford Mills produced to meet the
production requirements of certain original equipment
manufacturers supplied by Foamex.

Since the Petition Date, a portion of the Guilford Mills
Obsolescence Claim has been paid by the original equipment
manufacturers.  The remaining amount totals $23,610.

The Debtors and Guilford Mills have negotiated to settle and
resolve all prepetition claims between them, Mr. Barry relates.

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


GENERAL MOTORS: Board Braces for Dissent on Renault-Nissan Deal
---------------------------------------------------------------
General Motors Corp.'s scheduled meeting today on the proposed
alliance with the French-Japanese company, Renault-Nissan, will
likely meet potential objections, The Wall Street Journal reports.  

Renault-Nissan is a collaboration between Nissan Motor Co., Ltd.,
and Renault S.A.   As reported in the Troubled Company Reporter
yesterday, a GM shareholder Kirk Kerkorian broached the idea of
pulling in GM into the two-way tie-up.  Mr. Kerkorian owns 9.9%
equity stake in GM through his investment firm Tracinda
Corporation.  

The US$3-billion proposed alliance is seen as a hostile move by
some of GM's management even after Renault-Nissan's president and
chief executive officer Carlos Ghosn publicly declared that the
ball is in GM's hands.  Though Mr. Ghosn received a go signal from
Renault-Nissan's board to negotiate a deal, Mr. Ghosn said GM has
to initiate the three-way alliance.

General Motors Corp. -- http://www.gm.com/-- the world's largest  
automaker, has been the global industry sales leader for 75 years.
Founded in 1908, GM today employs about 327,000 people around the
world.  With global headquarters in Detroit, GM manufactures its
cars and trucks in 33 countries including Mexico.  In 2005, 9.17
million GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall.  GM operates one
of the world's leading finance companies, GMAC Financial Services,
which offers automotive, residential and commercial financing and
insurance.  GM's OnStar subsidiary is the industry leader in
vehicle safety, security and information services.

                           *     *     *

As reported in the Troubled Company Reporter on June 30, 2006,
Standard & Poor's Ratings Services held all its ratings on General
Motors Corp. -- including the 'B' corporate credit rating and the
'B+' bank loan rating, but excluding the '1' recovery rating -- on
CreditWatch with negative implications, where they were placed
March 29, 2006.

As reported in the Troubled Company Reporter on June 22, 2006,
Fitch assigned a rating of 'BB' and a Recovery Rating (RR) of
'RR1' to General Motor's (GM) new $4.48 billion senior secured
bank facility.  The 'RR1' (recovery of 90%-100%) is based on the
collateral package and other protections that are expected to
provide full recovery in the event of a bankruptcy filing.


GENESCO INC: Board Approves $20 Million Common Stock Repurchase
---------------------------------------------------------------
Genesco Inc.'s board of directors has authorized the Company to
use of up to $20 million of cash to repurchase shares of the
Company's common stock.  The purchases may be made from time to
time on the open market or in privately negotiated transactions,
depending on market conditions and other factors.

                          About Genesco

Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- sells footwear, headwear and   
accessories in more than 1,750 retail stores in the United States
and Canada, principally under the names Journeys, Journeys Kidz,
Johnston & Murphy, Underground Station, Hat World, Lids, Hat Zone,
Cap Factory, Head Quarters and Cap Connection, and on internet
websites http://www.journeys.com/http://www.journeyskidz.com/
http://www.undergroundstation.com/http://www.johnstonmurphy.com/
http://www.lids.com/http://www.hatworld.com/and
http://www.lidscyo.com/

The Company also sells footwear at wholesale under its Johnston &
Murphy brand and under the licensed Dockers and Perry Ellis
brands.  

                           *     *     *

As reported in the Troubled Company Reporter on Mar. 17, 2006,
Standard & Poor's Ratings Services revised Genesco Inc.'s outlook
to positive from stable.  S&P also raised Genesco's senior secured
credit facility to 'BB' from 'BB-' and to '1' from '2'.  S&P also
affirmed the company's other ratings, including its 'BB-'
corporate credit rating.


GREAT COMMISSION: Committee Wants to Hire Blank Rome as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases of The Great Commission Care Communities, Inc.,
dba The Woods at Cedar Run, wants to hire Blank Rome LLP as its
counsel, nunc pro tunc to June 7, 2006.

The Committee tells the U.S. Bankruptcy Court for the Middle
District of Pennsylvania that Blank Rome has broad-base experience
and a national reputation in bankruptcy and reorganization
proceedings.  Through Blank Rome, it will have the benefit of that
knowledge and experience, as well as the ability to call on other
lawyers within the firm with expertise in other specialized areas
of law as may be needed.

Blank Rome will represent the Committee and perform services in
connection with carrying out its fiduciary duties and
responsibilities under the Bankruptcy Code.   

Michael B. Schaedle, Esq., a partner at the firm, discloses that
he will primarily represent the Committee, charging $405 per hour.  
David W. Carickhoff, Esq., will be helping Mr. Schaedle, charging
$320 per hour.  

Mr. Schaedle further discloses his firm's standard hourly rates:

         Designation                        Hourly Rate
         -----------                        -----------
         Partners                           $300 to $675
         Associates                         $195 to $400
         Paralegals                         $105 to $250

Mr. Schaedle assures the Court that his firm and its professionals
do not hold any material interest adverse to the Debtor's estate
and are disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Camp Hill, Pennsylvania, The Great Commission
Care Communities, Inc., dba The Woods at Cedar Run --
http://www.woodsatcedarrun.com/-- is a non-profit retirement    
community providing independent housing and assisted living
services.  The company filed for chapter 11 protection on May 10,
2006 (Bankr. M.D. Penn. Case No. 06-00914).  Robert E. Chernicoff,
Esq., at Cunningham and Chernicoff, P.C., represents the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.


GULF COAST: Gets Court Approval to Hire Hughes & Luce as Counsel
----------------------------------------------------------------
Gulf Coast Holdings, Inc., dba Unidynamics, Inc., obtained
permission from the U.S. Bankruptcy Court for the Northern
District of Texas to employ Hughes & Luce LLP as its bankruptcy
counsel, nunc pro tunc to April 26, 2006.  

H&L is a Texas limited liability partnership specializing in
bankruptcy, insolvency, corporate reorganization, and debtor-
creditor laws.

The Debtor told the Court that H&L attained a familiarity with its
case prepetition, hence, H&L's retention would avoid unnecessary
duplication of effort and expense.  

H&L's services will include:

   a. the preparation, filing and prosecution of the Debtor's
      bankruptcy petition, schedules, statements of financial
      affairs, and various motions essential to or required in
      the bankruptcy case;

   b. the preparation, filing and defense of objections to
      various motions, claims and actions by creditors and
      parties-in-interest;

   c. negotiation with various creditors, including any creditors
      committees, and the preparation of related agreements;

   d. negotiations with potential plan proponents and/or
      purchasers of the Debtor's assets, and the preparation of
      related agreements;

   e. matters regarding the restructuring of the Debtor's debts
      and equity structure; and

   f. all other necessary legal services in connection with the
      Debtor's chapter 11 case.

Jeffrey R. Fine, Esq., a partner at the firm, charges $450 per
hour for his services.  Other individuals representing the Debtor
and their negotiated hourly rates as of Oct. 1, 2005, are:

         Professional                   Hourly Rate
         ------------                   -----------
         Daniel I. Morenoff                $250
         Jay L. Krystinik                  $210
         David A. Alexander                $190
         Trish Brim (Paralegal)            $170

On April 11, 2006, H&L received a $5,000 retainer from the Debtor
to be held in H&L's client trust account.  On April 27, 2006, the
Debtor provided H&L an additional $90,000 to be held as a retainer
in H&L's client trust account.  Prepetition, the Debtor authorized
H&L to draw on the account for all amounts owing to H&L for work
performed prepetition; the amounts aggregated to $27,587.65, as
well as Chapter 11 filing fees of $1,039.  H&L continues to hold
the remaining $66,373.35 of the Debtor's funds as a retainer.  H&L
has been fully paid for its prepetition services or has waived
such fees and holds no remaining claim against the Debtor.

Mr. Fine disclosed that the only creditor or vendor of the Debtor
with which H&L has a relationship is Lockheed Martin Corporation.  
The Debtor has a contract with Marinette Marine Corporation, a
Lockheed subsidiary.  H&L has been employed by a different
Lockheed aerospace subsidiary in labor matters unrelated to the
Debtor's bankruptcy.  H&L does not believe that representation in
matters unrelated to the Debtor's case poses any potential
conflict.  Mr. Fine contended that his Firm and its professionals
do not hold material interest adverse to the Debtor's interest and
are disinterested as the term is defined in Section 101(14) of the
Bankruptcy Code.

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


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

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

As CRO, Mr. Hull will:

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

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

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

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

The Debtor told the Court that Mr. Hull's services are necessary
to enable the Debtor to maintain management continuity and to
execute its duties as debtor-in-possession.  The Debtor assured
the Court that Mr. Hull is a "disinterested person" as that term
is defined in Sec. 101(14) of the Bankruptcy Code.

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


HOME ECHO: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Home Echo Club, Inc.
        aka Echo Manner Extended Care Center
        102701 Blacklick Eastern Road Northwest
        Pickerington, Ohio 43147

Bankruptcy Case No.: 06-53329

Type of Business: The Debtor filed for chapter 11
                  protection on Nov. 14, 2005
                  (Bankr. S.D. Ohio  Case No. 05-78386).

Chapter 11 Petition Date: July 5, 2006

Court: Southern District of Ohio (Columbus)

Debtor's Counsel: Grady L. Pettigrew, Jr., Esq.
                  Cox Stein & Pettigrew Co. LPA
                  115 West Main, Suite 400
                  Columbus, Ohio 43215-5099
                  Tel: (614) 224-1113
                  Fax: (614) 228-0701

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


IMAGE INNOVATIONS: Case Summary & 22 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Image Innovations Holdings, Inc.
        fdba Busanda Explorations, Inc.
        6093 Main Street
        P.O. Box 157
        Tannersville, New York 12485

Bankruptcy Case No.: 06-11540

Debtor's subsidiaries filing separate chapter 11 petitions:

      Entity                             Case No.
      ------                             --------
      Image Innovations, Inc.            06-11541

      Imaging Innovations Sports and     06-11542
         Entertainment Inc.

      Image Innovations Sports and       06-11543
         Entertainment Inc.

Type of Business: Image Innovations Holdings, Inc.
                  (OTC BB:IMGV.OB) markets low-cost electronic
                  devices with sports logos.  According to Michael
                  Preston, the sole officer and director of Image
                  Innovations, the Debtor is no longer operating.

                  Image Innovations Sports & Entertainment Inc.
                  sells celebrity artwork and collectibles through
                  a targeted, and is becoming a recognized leader
                  in the fast growing, multi-billion dollar
                  industries of artwork collectibles.

                  Image Innovations Inc. is in the business of
                  adding value to a wide variety of relatively
                  low-cost, but desirable electronic products, by
                  endorsing them with the brand logos of sports
                  teams, leagues and other recognized trademarks.

                  Imaging Innovations Sports and Entertainment
                  Inc. was incorporated to acquire a warehouse and
                  storage facility in Tannersville, New York,
                  located near the Debtors' existing facility in
                  Tannersville.

Chapter 11 Petition Date: July 6, 2006

Court: Southern District of New York (Manhattan)

Debtors' Counsel: Sydney G. Platzer, Esq.
                  Platzer, Swergold, Karlin, Levine,
                  Goldberg & Jaslow, LLP
                  1065 Avenue of the Americas, 18th Floor
                  New York, New York 10018
                  Tel: (212) 593-3000
                  Fax: (212) 593-0353

Debtors' Total Assets and Liabilities as of July 5, 2006:

                                   Total Assets   Total Debts
                                   ------------   -----------
   Image Innovations                    $70,529    $3,997,092
   Holdings, Inc.

   Image Innovations, Inc.                   $1    $2,169,910

   Imaging Innovations Sports and      $273,180      $304,046
   Entertainment Inc.

   Image Innovations Sports &          $273,180      $304,046
   Entertainment Inc.

A. Image Innovations Holdings, Inc. did not file a list of its 20
   largest unsecured creditors.

B. Image Innovations, Inc.'s 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Marquis & Aurbach                Legal Services           $80,000
10001 Park Run Drive
Las Vegas, NV 89145

S.R. Mickelberg Co.              Settlement agreement     $30,000
The Plaza                        for alleged trademark
1250 Greenwood Avenue            infringement
Jenkintown, PA 19046

CTC Logistics (USD)                                       $22,367
140-10451 Shellbridge Way
Richmond, British Columbia
V6X 2W8 Canada

NFL                                                       $21,761
280 Park Avenue
New York, NY 10017

Maple Leaf Property-Landlord                              $10,093
Suite 615-100 Park Royal
West Vancouver, British Columbia
V7T 1A2 Canada

Norman Jensen Inc.               Goods Sold                $9,114

Riddell                                                    $6,649

Federal Express                                            $4,843

Star Orient Trading                                        $3,643

CBV Collections                                            $3,226

CTC Logistics Canada Inc.                                  $2,893

Van Auken Express Inc.                                     $2,040

VIP Travel Ltd.                                            $1,852

Kunick Associates                Commission                $1,456

Ricoh Image Communication                                  $1,277

Rubin Associates                 Commission                $1,278

Grainger                                                     $900

Pezzella & Associates            Commission                  $822

International Market Access                                  $794

DHL Custom Brokers                                           $771

C. Imaging Innovations Sports and Entertainment, Inc. and Image
   Innovations Sports & Entertainment, Inc.'s Two Largest
   Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Green County Treasurer           Real Estate Tax          $12,816
P.O. Box 909
Tannersville, NY 12485

Village of Tannersville          Village and Water         $4,005
One Park Lane                    Relevey
Tannersville, NY


INTEGRATED ELECTRICAL: Amends 2006 First Quarter Report
-------------------------------------------------------
Integrated Electrical Services, Inc, amended its quarterly report
for the three months ended March 31, 2006, originally filed on May
10, 2006, to correct a misstatement of insurance expense for the
three months and six months ended March 31, 2006, as well as
Amendment No. 1 to its December 31, 2005 Form 10-Q.

The misstatement of insurance expense understated cost of services
on the Consolidated Statements of Operations by $1.2 million and
$1.6 million for the three and six months ended March 31, 2006,
respectively.  On the Consolidated Statements of Operations, net
loss from continuing operations and net loss increased by these
amounts for the three and six months ended March 31, 2006.

Accounts payable and accrued expenses on the Consolidated Balance
Sheet at March 31, 2006, were understated by $1.6 million.  There
was no effect on net cash flows from operating, investing or
financing activities.

A full-text copy of the amended quarterly report is available for
free at http://researcharchives.com/t/s?d22

Headquartered in Houston, Texas, Integrated Electrical Services,
Inc. (NASDAQ: IESC) -- http://www.ielectric.com/-- and --
http://www.ies-co.com/-- is an electrical and communications  
service provider with national roll-out capabilities across the
U.S.  Integrated Electrical Services offers seamless solutions and
project delivery of electrical and low-voltage services, including
communications, network, and security solutions.

The Company provides everything from system design, installation,
and testing to long-term service and maintenance on a wide array
of projects.  With approximately 140 locations nationwide, the
Company is prepared to seamlessly manage and deliver all your
electrical, security, and communication requirements.  The Debtor
and 132 of its affiliates filed for chapter 11 protection on Feb.
14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602).  Daniel C.
Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins,
L.L.P., represent the Debtors in their restructuring efforts.
Marcia L. Goldstein, Esq., and Alfredo R. Perez, Esq., at Weil,
Gotshal & Manges LLP, represent the Official Committee of
Unsecured Creditors.  As of Dec. 31, 2005, Integrated Electrical
reported assets totaling $400,827,000 and debts totaling
$385,540,000.

The Court confirmed the Debtors' Modified Second Amended Joint
Plan of Reorganization on Apr. 26, 2006.  That plan became
effective on May 12, 2006.


INT'L THOROUGHBRED: Posts $3.9MM Net Loss in 2006 Fiscal 1st Qtr.
-----------------------------------------------------------------
International Thoroughbred Breeders, Inc., reported a $3,946,299
net loss on $9,393,596 of revenues for the three months ended
March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $75,375,275
in total assets, $1,541,473 deferred income and $51,017,415 in
total liabilities resulting in $22,816,387 stockholders' equity.

The Company's cash flow and working capital declined during the
three months ended March 31, 2006, due to:

   (1) operating losses suffered by the Big Easy commercial
       vessel from January 1st to January 31st due to her limited
       sailing schedule in which scheduled cruises were cancelled
       due to Coast Guard restrictions, mechanical problems, high
       seas, or scheduling conflicts with the Palm Beach Princess
       vessel.

   (2) costs to carry the Big Easy after the vessel was taken out
       of service on Feb. 1, 2006,

   (3) costs to carry the Royal Star vessel; and

   (4) expenses paid for costs of the Holding Company and other
       developmental costs of $692,000.

As of May 22, 2006, the Company is in default on the forbearance
agreement entered with PDS effective March 22, 2006.  It is
negotiating with its lender to waive or extend the terms of the
agreement.  

The Company says its has no present commitments for funds to meet
its working capital deficiency, debt service needs and operating
losses.

A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?d26

                        Going Concern Doubt

Stockton Bates, LLP, in Philadelphia, Pennsylvania, raised
substantial doubt about International Thoroughbred's ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005.  The auditor pointed to the Company's recurring losses from
operations and violation of its loan covenants with its major
lender.

                 About International Thoroughbred

International Thoroughbred Breeders, Inc., owns and operates
racetracks in New Jersey.  


KAISER ALUMINUM: Emerges from Chapter 11 Protection in Delaware
---------------------------------------------------------------
Kaiser Aluminum Corporation's Plan of Reorganization became
effective on July 6, 2006, and the company emerged from Chapter
11.

"Today is a great day for Kaiser Aluminum," said Jack Hockema,
Chairman, President and CEO of Kaiser Aluminum.  "I would like to
express my gratitude to every one of our stakeholders --
customers, suppliers, employees and other partners -- who stood by
us over the past four-plus years of challenging times.

"The new Kaiser Aluminum emerges with fabricated aluminum products
as the core business and is a vastly different company from the
one that filed for reorganization in early 2002.  Non-strategic
commodity businesses were divested, and we have addressed all of
the material debt, legacy and asbestos-related liabilities that
confronted the company prior to bankruptcy.  It is particularly
gratifying that we were able to develop a consensual plan that was
overwhelmingly accepted by our constituents.

"We are very excited about the future for Kaiser Aluminum.  Our
financial and competitive strength positions us to grow and
withstand the inevitable ebb and flow of business cycles.  We will
continue organic growth with emphasis on plate products, forgings
and custom extrusions.  Our current $75 million expansion
initiative at the Spokane, Washington rolling mill is the
cornerstone of this strategy.  In addition, we have an excellent
platform for external growth, and will consider acquisitions that
are complementary to our current business structure with an
emphasis on value creation for our shareholders.

"We remain intensely focused on providing Best In Class
performance for our customers.  We will continue to produce a
broad array of fabricated aluminum products for customers that
require highly engineered applications while deploying lean
enterprise principles to be a low cost producer.

"While our markets are cyclic, they are growing.  The global
market for aerospace and high-strength products is now
exceptionally strong, and our customers forecast additional usage
of aluminum plate over the next several years.  As energy prices
rise, demand for more fuel-efficient vehicles will provide
opportunities to grow our current business in the automotive
industry.  Looking out beyond the current business cycle where the
industry is experiencing historically high pricing, we anticipate
our sales growth and cost reduction initiatives to cushion the
impact of prices returning to more normal levels," concluded
Hockema.

Kaiser Aluminum began the distribution of shares of common stock
on July 6, 2006.  Shares will commence trading today, July 7, on
NASDAQ under the ticker symbol KALU.

                   About Kaiser Aluminum Corp.

Based in Foothill Ranch, California, Kaiser Aluminum Corporation
(NASDAQ: KALU) -- 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. D. Del. Case No. 02-10429), and sold off a number
of its commodity businesses during course of its cases.  Corinne
Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts.  On June 30, 2004, the Debtors listed
$1.619 billion in assets and $3.396 billion in debts.


LEVITZ HOME: Court Approves More Lease Assignments to PLVTZ
-----------------------------------------------------------
PLVTZ, LLC, and Pride Capital Group, dba Great American Group, as
purchasers of substantially all of Levitz Home Furnishings, Inc.,
and its debtor-affiliates' assets, provided the Debtors with
Lease Assumption Notices for 31 store leases, as reported in the
Troubled Company Reporter on May 18, 2006.

The Debtors sought authority from the U.S. Bankruptcy Court for
the Southern District of New York to assume and assign these
leases to PLVTZ and pay the cure amounts:

     Store#   Address         Landlord                Cure Amount
     ------   -------         --------                -----------
      10204   New York,       125th Street Gateway        $50,653
              New York        Ventures LLC

      20106   Bridgewater,    Jerome & Joan Leflien &     $19,004
              New Jersey      Joseph & Joan Leflein

      20309   Eatontown,      Gage II Family Limited      $19,528
              New Jersey      Partnership

      30502   Irvine,         Spectrum V Management            $0
              California      (Klaff Realty, L.P. as
                              paying agent), and SJRD
                              - Spectrum V Partners

      30203   Los Angeles,    Walter N. Marks (Klaff           $0
              California      Realty, L.P. as paying
                              agent), and Helms Hall
                              of Fame

      20505   Yonkers,        Acklinis Original          $127,958
              New York        Building, L.L.C.

      30205   Arroyo Grande,  Waddell Family Trust        $20,650
              California

      40203   San Carlos,     Brittan Corners             $99,230
              California      Shopping Center, LLC,
                              101 San Carlos
                              Partners, c/o Davila
                              Group, Inc.

      40304   Pleasanton,     Excel Realty Trust, and     $55,977
              California      New Plan Excel Realty
                              Trust, Inc.

      40404   Rohnert Park,   Commercial Realty          $107,966
              California      Group, Inc.

      40504   Phoenix,        Red Mountain West          $105,038
              Arizona         Properties, Inc., and
                              RMRGJFL Portfolio, LLC,
                              c/o Red Mountain West
                              Properties, Inc.

      10202   New York,       Consolidated Edison of           $0
              New York        New York, Inc.

      10402   Mohegan Lake,   Galileo Cortlandt LLC,      $61,842
              New York        ERT Australian
                              Management, LP.

      10702   Jersey City,    Inland Mid-Atlantic              $0
              New Jersey      Management #150 Inland
                              Southeast Jersey City,
                              LLC, c/o Inland
                              Mid-Atlantic Management
                              Corp.,

      10801   Brick,          Inland Mid-Atlantic         $40,860
              New Jersey      Management #152 Inland
                              Southeast Jersey City,
                              LLC, c/o Inland
                              Mid-Atlantic Management
                              Corp.,

      20202   Garden City,    Feinco, LLC, c/o Buy       $128,100
              New Jersey      Buy Baby

      20203   Nesconset,      KIMCO Realty                     $0
              New York        Corporation, and
                              PL Smithtown, LLC, c/o
                              Kimco Realty Corp.

      20506   Staten Island,  MRP Family Holdings,             $0
              New York        LLC

      30103   Victorville,    Carol H. Rodman,            $15,486
              California      Trustee, and Hillary S.
                              Gilson

      30503   Corona,         KIMCO Realty Corp.         $107,840
              California

      30603   Silverdale,     Silverdale Ridgetop,         $9,753
              Washington      LLC, and SRW
                              Properties, LLC

      30604   Tacoma,         Krausz Enterprises,         $48,307
              Washington      Krausz FT One, LP, c/o
                              The Krausz Companies

      30605   Tukwila,        Klaff Realty, L.P.,        $130,167
              Washington      Levitz Tukwila, LLC,
                              c/o Klaff Realty LP

      30702   Portland,       Sears, Roebuck &            $26,371
              Oregon          Company

      40302   Fresno,         Lowenberg Corporation       $36,549
              California

      40305   Stockton,       Krausz Enterprises,         $40,190
              California      Krausz FT One, LP, c/o
                              The Krausz Companies

      40403   Pinole,         Krausz Enterprises,         $12,934
              California      Krausz FT One, LP, c/o
                              The Krausz Companies

      40501   Glendale,       KIMCO Realty                     $0
              Arizona         Corporation, and PL
                              Smithtown, LLC, c/o
                              Kimco Realty Corp.

      40503   North Phoenix,  Louise Partners, c/o        $50,322
              Arizona         Richard E. Caruso, Inc.

      40601   Henderson,      KIMCO Realty                $59,624
              Nevada          Corporation, and PL
                              Smithtown, LLC, c/o
                              Kimco Realty Corp.

      71201   Clackamas,      Clackamas Commerce          $16,925
              Oregon          Center

The Court grants the Debtors' request as it relates to the lease
for Store No. 10720.

Judge Lifland also allows the cure amounts for:

             Store No.       Proper Cure Amount
             ---------       ------------------
              10801                $51,302
              10402                $79,396
              40304                 $5,000
              20106                $27,375
              20202               $225,052
              10204                $64,045

With respect to Store No. 20202, the Purchasers agree to take
responsibility and provide timely payment for all amounts due, if
any, to Racanelli Construction Company, Inc., or its affiliates,
agents or subcontractors, whether contracted for or performed
pre- or post-assignment.

With respect to Store No. 10204, the cure amount already includes
payment for a $3,579 mechanics' lien.  Within September 2006,
PLVTZ will either:

    (i) at its own expense, replace the facade signage on the
        Premises if permitted to do so by the city of New York; or

   (ii) if the Signage replacement is not approved by New York,
        reimburse $12,000 to 125th Street Gateway Ventures LLC,
        for the costs of repairing the fa?ade.

If PLVTZ receives approval from New York to replace the Signage,
PLVTZ will timely submit the proposed new facade signage to 125th
Street for review and approval, which approval will not be
unreasonably withheld.

Judge Lifland also previously granted the Debtors' request as it
relates to the leases for Store Nos. 30103, 30203, 20505, 40404,
40504, 10202, 30503, 30604, 30605, 30702, 40302, 40305, 40403,
40501, 40503, 40601 and 71201.

Judge Lifland fixed the cure amount for Store No. 40504 at
$115,825 and for Store No. 20203 at $49,890.

The Court approved the assumption and assignment of Store No.
20506, to the extent that, among other things:

        * The proper cure amount is $11,501;

        * MRP Family Holdings, LLC, will not be affected or
          otherwise bound in the event the Purchasers file a
          petition for bankruptcy under any section of the
          Bankruptcy Code;

        * The Purchasers agree to take responsibility and provide
          timely payment for all amounts due, if any, to
          Racanelli, or its affiliates, agents or subcontractors,
          or to any other mechanic, materialman, vendor,
          provider, or contractor for any services rendered or
          materials furnished in connection with the premises
          under the Lease, whether contracted for or performed
          pre-assignment or post-assignment; and

        * Nothing will be construed as a waiver of, prejudice to,
          or otherwise limit the rights of Racanelli or MRP under
          the Lease, if any, to pursue state court remedies
          against the Purchasers or any other person or entity to
          seek payment for amounts due to Racanelli for services
          rendered in the Premises.

                            Objections

(A) Gage II

Gage II Family Limited Partnership informs Judge Lifland that it
recently received adequate assurance information projecting
PLVTZ, LLC's financial position in 2007.

Gage II complains that the information does not sufficiently
demonstrate PLVTZ's financial health as required by Section 325
(b)(1) of the Bankruptcy Code.

To compensate for the deficiency, Gage II says PLVTZ must provide
a three-month security deposit or letter of credit, and PLVTZ
must agree to post a bond for any improvement to be done at the
premises costing $10,000 or more annually.

Moreover, Gage II amends its asserted cure amount from $49,149 to
$50,223.  The revised cure amount does not include interest
continuing to accrue after June 16, 2006.

(B) Sanderson-J.

With respect the lease for Store No. 30502, Sanderson-J. Ray-
Spectrum V Partners submits that the Debtors or PLVTZ must
provide adequate assurance and agreement regarding:

    (a) PLVTZ's ability to cure all monetary defaults, including
        the $183,662 cure amount currently liquidated, due and
        owing.  Spectrum anticipates that other charges including
        common area maintenance charges will be liquidated
        shortly;

    (b) adequate assurance of future performance, including
        financial and other information sufficient to demonstrate
        PLVTZ's ability to perform all Lease obligations when they
        become due; and

    (c) PLVTZ's compliance with all the terms of the Lease,
        including the "use clause".  PLVTZ's proposed "retail" use
        is overly broad.

Robert J. Feinstein, Esq., at Pachulski, Stang, Ziehl, Young
Jones & Weintraub P.C., in New York, asserts that there is no
evidence in the Debtors' request that the Debtors or PLVTZ can
satisfy any of the stated requirements.

Accordingly, Sanderson-J asks the Court to deny the Debtors'
request in its entirety as it relates to Store No. 30502, or in
the alternative, adjourn the hearing on the request to a later
date to allow Sanderson-J to conclude its discovery.

(C) Brittan Corners

Brittan Corners Shopping Center, LLC, and Levitz Furniture
Corporation of the Pacific, Inc., were parties to a lease located
in San Carlos, California, dated November 2, 1983.

The San Carlos Property is part of a multi-tenant retail shopping
center.  The Lease pertains to Levitz's Store No. 40203.

David Duperrault, Esq., at Silicon Valley Law Group, in San Jose,
California, relates that pursuant to a written guaranty, Levitz
Furniture Corporation guaranteed the obligations of Levitz
Pacific under the Lease.

In February 2001, Levitz Pacific purportedly subleased the San
Carlos Property to Levitz Furniture, LLC.  Neither Levitz Pacific
nor Levitz LLC obtained the Brittan's consent to the Sublease, or
even disclosed the fact of the purported Sublease, Mr. Duperrault
tells the Court.

In March 2002, Levitz Pacific was merged into Levitz Corporation.

According to Mr. Duperrault, Brittan does not know the current
status of the Sublease -- whether it has been assumed, or whether
the Debtors propose to assume and assign it.  Mr. Duperrault says
the Debtors' sought the Court's permission to assume and assign
Store No. 40203.  However, the request did not address the
Sublease.

Brittan points out that the Debtors have not cured the monetary
and non-monetary defaults under the San Carlos Lease.  The
Debtors have also failed to provide adequate assurance of future
performance in the shopping center lease.

Mr. Duperrault asserts that although the Debtors have indicated a
willingness to cure the monetary defaults under Store No. 40203,
there is a dispute about the cure amount because the Debtors have
not confirmed that the amount will be fully paid in cash as a
condition of assumption.

Mr. Duperrault further notes that:

    * The Debtors failed to correct violations of health and
      safety codes that were first identified by the Fire Marshal
      in 2003;

    * The pro forma financial projections provided by the Debtors
      may not be accurate or complete because the projections
      failed to prove that PLVTZ is financially and operationally
      as strong as the original lessee and its guarantor; and

    * The Debtors have not shown that the proposed assignment is
      subject to all provisions of the original lease, including
      use restrictions.

Therefore, the Debtors may not assume or assign Store No. 40203
to PLVTZ, Brittan tells Judge Lifland.

(D) Jerome & Joan Leflien, et al.

Six landlords ask the Court to condition the Debtors' proposed
assumption and assignment to PLVTZ, LLC, of their Leases upon
payment of the proper cure amounts that are due and owing.

The objecting parties are:

                                          Debtors'    Landlords'
                                          Asserted      Asserted
Store No.   Objecting Party           Cure Amount   Cure Amount
---------   ---------------           -----------   -----------
    20106    Jerome & Joan Leflien         $19,004       $40,800

    20309    Gage II Family Limited        $19,528       $49,149
             Partnership

    10702    Inland Southeast Brick,            $0             -
    10801    L.L.C., and Inland            $40,860       $51,302
             Southeast Jersey City,
             L.L.C.

    30603    Silverdale Ridgetop,           $9,753       $32,382
             LLC, and SRW
             Properties, LLC

    10204    125th Street Gateway          $50,653       $76,984
             Ventures LLC

Inland Southeast does not object to the proposed cure amount for
Store No. 10702.  However, as part of their cure obligations, the
Debtors must be required to pay additional amounts, including
amounts that may become due under their leases in the future
based on reconciliation or adjustments, to the extent they are
liabilities retained by the Debtors in accordance with the Sale
Order.  Accordingly, Inland Southeast asks the Court to require
the Debtors to escrow or reserve sufficient funds to pay the
Debtors' portion of year-end reconciliations under the Leases.

The Landlords assert outstanding defaults with respect to their
Leases, consisting of:

    * real estate taxes;
    * rent and additional rent;
    * unsatisfied mechanic's liens;
    * base rent; and
    * common area maintenance charges.

Most amounts do not include interest continuing to accrue after
June 1, 2006, and hence, the Landlords reserve their right to
amend, supplement or modify their asserted Cure Amounts for any
reason, including attorneys' fees.

Moreover, some of the Landlords ask the Court not to permit the
Debtors to assign their Leases to PLVTZ, unless PLVTZ agrees and
is required to comply with all of the terms of their Leases,
including maintenance obligations.

Some of the Landlords assert that they did not receive
documentation providing information for adequate assurance.
Accordingly, the Landlords further ask the Court that they be
provided the information demonstrating PLVTZ's financial health
and experience managing the property to be assigned.

(E) Racanelli

Racanelli Construction Company, Inc., was retained by the Debtors
to provide extensive general contracting services to a number of
the Debtors' store locations in New York, New Jersey, and
Connecticut.

Racanelli asserts it is owed not less than $27,310 for Store No.
20309.  Racanelli disputes the Debtors' proposed cure amount for
Store Nos. 20202 and 20506.

Racanelli objects to the proposed assumption and assignment
of the Store Leases to the extent that it does not contemplate a
cure that satisfies the amount due and owing in connection with
the Leases.  

Accordingly, Racanelli asks the Court to condition the approval
of the Debtors' request upon payment of the proper amounts due,
or otherwise resolve Racanelli's liens and claims.

(F) Pergament Mall

Debtor Levitz Furniture, LLC, is the tenant of a nonresidential
real property located in Staten Island, New York.  A lease
agreement between MRP Family Holdings, LLC, as the original
landlord, and Levitz Furniture, as tenant, memorialized the lease
of the Property.  In March 2004, an amendment to the Staten Lease
was entered into between MRP and Levitz Furniture.

Pergament is the successor-in-interest to MRP with respect to
Store No. 20506.

Pergament asks the Court to deny the Debtors' request with
respect to Store No. 20506 until these issues are resolved:

   (a) The proper and outstanding cure obligation for Store No.
       20506 is $1,1501, in view of the utility charges for the
       Property during the period June 7, 2005, to December 7,
       2005;

   (b) There are open issues that remain unresolved despite a
       negotiation with Levitz Furniture for the form of the
       order to authorize the assumption and assignment of Store
       No. 20506.  The open unresolved issues are:
       
        * Pergament requires that all pre-assumption or
          assignment defaults must be cured by payment, in cash
          and in full, prior to consummation of the assignment;

        * Pergament wants clarification that any order approving
          the Debtors' request does not prejudice Pergament's
          rights and entitlements as landlord with respect to the
          enforcement of any post-assignment obligations of the
          assignee-tenant; and

        * Pergament wants clarification that any order approving
          the Debtors' request is binding upon any subsequent
          bankruptcy trustee in the Chapter 11 cases or in
          Chapter 7 cases for any of the Debtors;

   (c) Pergament has not yet consented to the assignment of Store
       No. 20506 to PVLTZ, and the three parties, including
       PLVTZ, have not reached an agreement yet on the terms of
       the assignment agreement and consent.

Pergament also asks the Court to condition the assignment of
Store No. 20506 until Racanelli's objection is resolved.  
Pergament submits that, to the extent that Levitz Furniture or
PLVTZ fails to satisfy the obligations to Racanelli in full or
before the consummation of the proposed assignment, Pergament and
its property could be exposed to the assertion of mechanic's or
materialman's liens under non-bankruptcy law.

Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of  
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States.  The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189).  David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.  Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005.  (Levitz Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LEVITZ HOME: Can Proceed with Robbinsville Lease Rejection
----------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York authorized Levitz Home
Furnishings, Inc., and its debtor-affiliates to reject their lease
for a warehouse located in Robbinsville, New Jersey, with Matrix
Realty, Inc.  The lease rejection is effective on the later of May
26, 2006, or the date on which the new lease between Matrix and
PLVTZ takes effect.  

Upon PLVTZ's provision of a $1,500,000 letter of credit and
$1,875,0000 cash to Matrix, $3,350,000 in cash, which is
equivalent to the amount of the Robbinsville L/C, will be
delivered to Matrix's counsel.  The Counsel will hold the proceeds
in an interest bearing account until the Court issues a final
ruling directing the distribution of the funds.

Resurgence Asset Management, L.L.C., releases Matrix and the
Debtors from any claims related to, or are connected with the L/C
Proceeds, provided that any of those claims will attach and may be
asserted against the Escrowed Funds.

As reported in the Troubled Company Reporter on June 12, 2006,
Debtor Seaman Furniture Company, Inc., leased the Robbinsville
warehouse from Matrix Realty.

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

Since April 2006, PLVTZ, LLC, and Matrix have been negotiating
regarding the possible assumption and assignment or rejection of
the Robbinsville Lease.  On May 18, 2006, the PLVTZ provided a
notice of its election not to assume the Robbinsville Lease.

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

M.D. Sass Corporate Resurgence Partners III, L.P., and its
affiliate, Resurgence Asset, had asserted their right to receive
the balance of the proceeds remaining after the payment of the
proper amount of Matrix Realty's claim against the Robbinsville
L/C.

The Resurgence Entities claimed they caused Fleet National Bank to
issue that $3,350,000 L/C, which is provided to Matrix as security
for payment of rent and other charges.

Since it is the Resurgence Entities -- and not Debtor Seaman
Furniture Company, Inc. -- that provided Matrix with the
Robbinsville L/C, any L/C Proceeds remaining after payment of
Matrix's claims belongs to Resurgence.  They insisted the L/C
Proceeds are not property of the Debtors' estates.

Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of  
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States.  The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189).  David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.  Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005.  (Levitz Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LOCAL TELECOM: Posts $786,715 Net Loss in 2006 Fiscal 1st Qtr.
--------------------------------------------------------------
Local Telecom Systems, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on June 22, 2006.

The Company reported a $786,715 net loss on $1,312,005 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $4,976,338
in total assets and $6,585,128 in total liabilities, resulting in
a $1,608,790 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $524,919 in total current assets available to pay
$2,734,640 in total current liabilities coming due within the next
12 months.

A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?d2a

                        Going Concern Doubt

Killman, Murrell & Co., P.C., in Odessa, Texas, raised substantial
doubt about Local Telecom Systems' ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditor pointed
to the Company's losses from operations and limited capital
resources.

                        About Local Telecom

Headquartered in Fort Worth, Texas, Local Telecom Systems, Inc.,
provided local and long distance telecom service on a prepaid
basis.  The Company's local services included a bare bones product  
providing unlimited local dial tone and 911 emergency access.  On
June 30, 2004, the Company closed its operations in its principal
business of providing local phone service to individuals.  The
Company is now engaged in the mortgage loan business.


LONDON FOG: Panel Has Until July 25 to Question Sub. Lenders' Lien
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases of London Fog Group, Inc., and its debtor-
affiliates has until July 25, 2006, to question the lien held by
lenders under the Debtors' junior secured financing agreement.  
The Debtors owed the subordinated lenders approximately
$39,500,000 when they filed for bankruptcy.  

The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada in Reno approved the stipulation on the
extension between the Committee and DDJ Capital Management, LLC,
as the agent for the financing agreement.

By allowing the Debtors to use the cash collateral securing
repayment of their debts to the subordinated lenders, the Court
granted the subordinated lenders an allowed superpriority
administrative claim under Sections 364(c)(1) and 507(b),
subordinate to the claim of Wachovia Bank National Association,
the debtor-in-possession lender.  

Headquartered in Seattle, Washington, London Fog Group, Inc. --
http://londonfog.com/-- designs and retails the latest styles in
jackets and other professional apparel.  The company and six of
its affiliates filed for chapter 11 protection on March 20, 2006
(Bankr. D. Nev. Case No. 06-50146).  Stephen R. Harris, Esq., at
Belding, Harris & Petroni, Ltd., represents the Debtors in their
restructuring efforts.  Avalon Group, Ltd., serves as the Debtors'
financial advisor.  When the Debtors filed for protection from
their creditors, they estimated assets and debts between
$50 million to $100 million.


MERIDIAN AUTOMOTIVE: Panel Wants Deposition from Credit Suisse
------------------------------------------------------------
The Official Committee of Unsecured Creditors asks the U.S.
Bankruptcy Court for the District of Delaware to:

   (a) grant summary judgment in its favor; or

   (b) in the alternative, direct Credit Suisse, Cayman Islands
       Branch, the First Lien Agent, to appear for its deposition
       to permit the Committee to develop the record prior to the
       ruling on its request.

Don A. Beskrone, Esq., at Ashby & Geddes, P.A., in Wilmington,
Delaware, argues that Credit Suisse, Cayman Islands Branch, as
First Lien Administrative Agent and First Lien Collateral Agent,
of a U.C.C. financing statement, has presented no admissible
evidence sufficient to establish a dispute of material fact with
regard to Section 547(b)(5) of the Bankruptcy Code.  Statements
of counsel are not evidence, Mr. Beskrone maintains.

The First Lien Agent's reliance on its domestic UCC filings is
insufficient to render that its security interests perfected in
the applicable foreign jurisdictions, Mr. Beskrone contends.

As a hypothetical lien creditor under Section 544 of the
Bankruptcy Code, the Official Committee of Unsecured Creditors
maintains that it holds a security interest properly perfected in
each of the foreign jurisdictions and is thus entitled to avoid
the First Lien Agent's unperfected security interests in the
assets.

The First Lien Agent has not offered any evidence of any actions
it has taken in Brazil or Mexico with respect to its purportedly
perfected security interests and has failed to appear at its
deposition to respond to questions on that issue, Mr. Beskrone
asserts.

Mr. Beskrone also points out that the First Lien Agent concedes
that it does not hold valid, perfected and enforceable security
interests in the Vehicles and liens on the Real Property.  Thus,
summary judgment in favor of the Committee on those liens is
appropriate.

Moreover, the First Lien Agent's intentional refusal to appear
for the Committee's deposition is a direct violation of its
discovery obligations and justifies the imposition of sanctions
pursuant to Rule 7037(b) of the Federal Rule of Bankruptcy
Procedures, Mr. Beskrone argues.

"The Committee is unaware of any provision of the Federal Rules
of Civil Procedure, Federal Rules of Bankruptcy Procedure or the
Local Rules that relieve a deponent from appearing at a properly
noticed deposition because the deponent believes it is
unnecessary," Mr. Beskrone says.

Mr. Beskrone maintains that First American Title Insurance
Company:

   -- acted as agent for the First Lien Agent with respect to the
      UCC-3 Financing Statement; and

   -- filed the First Lien Termination Statement with implied
      actual authority granted by the First Lien Agent.

Thus, the filing of the First Lien Termination Statement
terminated the First Lien Agent's security interest in Meridian
Automotive Systems-Composites Operations, Inc.'s assets, Mr.
Beskrone emphasizes.

As reported in the Troubled Company Reporter on June 21, 2006, the
escrow officer at First American Title Insurance Company, the
Debtors' closing agent, assigned to the closing on the sale of the
Debtors' Centralia Facility, mistakenly checked the termination
box on the financing statement amendment.  Credit Suisse had no
connection to the sale other than to release its perfected
security interest in the assets being sold.

As reported in the Troubled Company Reporter on June 13, 2006, the
Panel contends that the filing by Credit Suisse of a U.C.C.
financing statement creating a lien on substantially all the
assets of Meridian Automotive Systems-Composites Operations, Inc.,
five days prior to bankruptcy filing is avoidable as a
preferential transfer.

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. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MESABA AVIATION: Incurs $45.6 Million Net Loss in Fourth Quarter
----------------------------------------------------------------
MAIR Holdings, Inc. (NASDAQ:MAIR) incurred a net loss of $54.1
million for the fiscal 2006 fourth quarter ended March 31, 2006
compared to a net loss of $1.7 million during the same period in
2004.

The Company's $54.1 million net loss in the fourth quarter of
fiscal 2006 was primarily the result of a $45.6 million net loss
at the Company's subsidiary, Mesaba Aviation, Inc. Mesaba's losses
were driven by:

   -- $20.2 million of reorganization items, mostly due to
      additional unsecured creditors' claims filed in the quarter;

   -- $19.6 million in income tax expense due to recording a full
      valuation allowance on Mesaba's net deferred tax assets; and

   -- $6.2 million in operating losses as Mesaba reduced its
      flying by 12 fewer Avros and 11 fewer Saabs in the fourth
      quarter year-over-year.

The Company also recorded an $8.9 million impairment charge in the
fourth quarter to write off its remaining equity investment in
Mesaba.

For the fiscal year ended March 31, 2006, the Company reported a
net loss of $82.8 million, compared to net income of $7.4 million
in fiscal 2005.

"Fiscal 2006 financial results were very disappointing," said Paul
F. Foley, MAIR's president and chief executive officer.  
"Northwest Airlines' decision to withhold approximately $30
million in regularly scheduled payments to Mesaba, its bankruptcy
filing in September 2005, and its subsequent decision to reduce
Mesaba's fleet by more than 50% led to Mesaba's own bankruptcy in
October 2005 and to the Company incurring substantial financial
losses in fiscal 2006.  In fiscal 2007, we will explore growth
opportunities, including acquisitions to diversify both within and
outside the airline industry."

The Company's $82.8 million net loss in fiscal 2006 was primarily
the result of a $70.7 million net loss at Mesaba.  Mesaba's losses
were due to the $45.6 million fourth fiscal quarter loss described
above and a $29.1 million reserve for the unsecured prepetition
receivables due from Northwest to Mesaba for services provided by
Mesaba prior to the date on which Northwest filed its bankruptcy
petition (net of certain offsetting liabilities). In addition, the
Company recorded the following charges in fiscal 2006:

   -- a $4.8 million charge for MAIR's guaranty related to the
      Cincinnati hangar that Mesaba vacated in October 2005;

   -- an $8.9 million charge to write off MAIR's remaining equity
      investment in Mesaba; and

   -- a $2.5 million goodwill impairment charge associated with
      Big Sky Transportation Co., the Company's subsidiary.

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a  
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.


MESABA AVIATION: Walks Away from Northwest Aircraft Leases
----------------------------------------------------------
The U.S. bankruptcy Court for the District of Minnesota gave
Mesaba Aviation, Inc., dba Mesaba Airlines, authority to walk away
from the leases applicable to the Grounded Aircraft effective as
of June 8, 2006.

The Debtor and Northwest Airlines, Inc., are parties to an
Airline Services Agreement dated August 29, 2005, under which the
Debtor operates a fleet of commercial aircraft leased or
subleased from Northwest.  Under the ASA, Northwest schedules
flights for Debtor's aircraft.

Shortly after Mesaba filed for bankruptcy, Northwest unilaterally,
and in breach of the ASA, took 12 British Aerospace Avro 146-RJ85A
Aircraft -- the Grounded Aircraft -- out of the Debtor's flight
schedule, Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath &
Nauman, in Minneapolis, Minnesota, relates.

Consequently, the Debtor was forced to prepare the Grounded
Aircraft for long-term storage, and to arrange for storage in
Arizona while Northwest considered its options related to the
Grounded Aircraft.

Northwest rejected the leases and subleases related to Debtor's
use and possession of the Grounded Aircraft on May 12, 2006.
Northwest also abandoned the Grounded Aircraft.  Notwithstanding
its rejection and abandonment of the Grounded Aircraft, Northwest
agreed to maintain, store and insure the Grounded Aircraft until
the earlier of June 11, 2006, or the time at which the head
lessor or first priority secured lender took possession of the
Grounded Aircraft.

On June 7, 2006, U.S. Bank, N.A., notified the Debtor that the
Bank had placed insurance coverage on the Grounded Aircraft.
U.S. Bank made arrangements to take possession of the Grounded
Aircraft.

The day after U.S. Bank gave its notice, the Debtor:

    -- rejected the leases applicable to the Grounded Aircraft by
       notice to Northwest;

    -- terminated its storage contract with regard to the Grounded
       Aircraft;

    -- transferred possession of the Grounded Aircraft to
       Northwest;

    -- cancelled its insurance related to the Grounded Aircraft;
       and

    -- removed the Grounded Aircraft from its op specs.

Northwest's rejection of the leases or subleases applicable to
the Debtor's possession and use of the Grounded Aircraft
constitutes a material breach of the Leases, Mr. Tansey tells the
Court.  "Northwest's rejection of the Leases relieves the Debtor
from any and all liabilities or obligations pursuant to the terms
of the Leases," he adds.

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


MESABA AVIATION: Reports May 2006 Traffic Results
-------------------------------------------------
Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings, Inc.
(NASDAQ:MAIR), reported capacity and traffic for May.  Mesaba
Aviation flew 174.6 million available seat miles (ASMs) in May,
which was down 33.8% year over year.  Mesaba Aviation carried
393,104 passengers in the month, which was down 21.0% year over
year generating 127.5 million revenue passenger miles (RPMs).  
Passenger load factor, representing capacity filled, increased 6.2
points year over year to 73.0%.

Separately, Mesaba Aviation disclosed its operating performance
for the month of May:

                          Mesaba Airlines
                     May Operating Performance

                                  2006         2005     Change
                                  ----         ----     ------
Completion Factor                99.2%        98.8%    (0.4 pts.)
Arrivals within 14 minutes       87.3%        88.5%     1.2 pts.

                             Mesaba Airlines
                            May Traffic Results

                                  2006         2005     Change
                                  ----         ----     ------
ASMs (000)                     174,568      263,649    (33.8%)
RPMs (000)                     127,470      176,177    (27.6%)
Load Factor                      73.0%        66.8%      6.2 pts.
Passengers                     393,104      497,301    (21.0%)

May and Fiscal Year to Date (2 Months)
--------------------------------------

                               FY 2007      FY 2006     Change
                               -------      -------     ------
ASMs (000)                     356,882      517,160    (31.0%)
RPMs (000)                     257,309      337,461    (23.8%)
Load Factor                      72.1%        65.3%      6.8 pts.
Passengers                     763,564      971,755    (21.4%)

Calendar Year to Date (5 Months)
-------------------------------

                               CY 2006      CY 2005     Change
                               -------      -------     ------
ASMs (000)                     915,771    1,273,840    (28.1%)
RPMs (000)                     628,439      812,882    (22.7%)
Load Factor                      68.6%        63.8%      4.8 pts.
Passengers                   1,845,190    2,305,265    (20.0%)

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


MIRANT CORP: Bankrupt Units Have Until Aug. 7 to File Ch. 11 Plan
-----------------------------------------------------------------
The Honorable Michael D. Lynn of the U.S. Bankruptcy Court for
the Northern District of Texas fixes the exclusive period within
which these excluded Mirant Corporation debtor-affiliates can
adopt or abandon their plan of reorganization or to file a plan
of reorganization until Aug. 7, 2006:

    (a) the New York Debtors -- Mirant Bowline, LLC; Mirant
        Lovett, LLC; and Mirant New York, Inc.;

    (b) Mirant NY-Gen, LLC; and

    (c) Hudson Valley Gas Corporation.

As previously reported, the Bankruptcy Court confirmed the Plan
of Reorganization with respect to all of the Debtors, except the
Excluded Debtors.

The Excluded Debtors' exclusive period to solicit acceptances of
the Plan or another plan is also extended until Oct. 6, 2006.

Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth,
Texas, noted that the Confirmation Order did not disturb the
exclusive solicitation period of the Excluded Debtors.

The Bankruptcy Court adjourned the confirmation hearing on the
Plan with respect to the Excluded Debtors until further Court
notice or order.

Out of an abundance of caution, the Excluded Debtors sought the
ability to continue the pre-confirmation process under the terms
of the Plan and the Confirmation Order.

Mr. Prostok told Judge Lynn that the New York Debtors are
working tirelessly to resolve all outstanding issues with the New
York Taxing Authorities.

The New York Debtors are, or were, petitioners in 41 proceedings
challenging the assessed value of certain generating plants
determined by their local taxing authorities.  The New York
Taxing Authorities are the:

    1. town of Haverstraw;
    2. Haverstraw Assessor;
    3. Haverstraw Board Assessment;
    4. town of Stony Point;
    5. the Haverstraw-Stony Point Central School District; and
    6. the county of Rockland.

Mr. Prostok recounted that the Confirmation Order also provides
that the Confirmation Hearing was adjourned as to Hudson Valley
and Mirant NY-Gen.

Mr. Prostok related that Mirant NY-Gen is in the process of
working with federal, state and local agencies in connection with
remediation work being done at one of its facilities.

"Preserving the exclusivity period . . . will permit the Excluded
Debtors to keep their efforts on track with continued
negotiations.  Denying the requested extension and opening up the
cases of the Excluded Debtors to competing plans would
destabilize the process, risk unnecessary litigation, and delay
the timely emergence of the Excluded Debtors from Chapter 11,"
Mr. Prostok said.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts.  (Mirant Bankruptcy News,
Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable.  That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.


MIRANT CORP: Mirant NY-Gen Wants DIP Facility Raised to $9.5 Mil.
-----------------------------------------------------------------
Mirant NY-Gen, LLC, a Mirant Corporation debtor affiliate, has
discovered that its $4,500,000 existing DIP Facility is not enough
to finance the final remediation plan approved by the Federal
Energy Regulatory Commission.  The Final Remediation Plan provides
for the remediation of Mirant NY-Gen's Swinging Bridge
hydroelectric facility.

Accordingly, Mirant NY-Gen asks Judge Michael D. Lynn of the U.S.
Bankruptcy Court for the Northern District of Texas to permit it
to amend its DIP Facility.

The First Amendment provides that:

    (1) the amount of the commitment of the DIP Facility will be
        increased by $5,000,000 -- from $4,500,000 to $9,500,000;
        and

    (2) the original revolving credit facility will be changed to
        a term loan or term loans not to exceed $9,500,000 which,
        once repaid or prepaid, may not be reborrowed.

Mirant NY-Gen also seeks Judge Lynn's permission to execute the
First Amendment to the DIP Facility Agreement and all other
related documents.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts.  (Mirant Bankruptcy News,
Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable.  That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.


NEPTUNE INDUSTRIES: Expects $2 Mil. Offering Completed in 30 Days
-----------------------------------------------------------------
Neptune Industries, Inc., met the initial minimum investment
amount in its Convertible Debenture offering, currently being
offered through Dawson James Securities, Inc.  The remainder of
the $2,000,000 offering is anticipated to be completed over the
next 30 days.

"We are very encouraged that Dawson James was able to raise the
initial funds to open the escrow so quickly," Ernest Papadoyianis,
President, of Neptune stated.  "We have been assured that the
balance of the offering should be placed over the next 30 days.  
Proceeds from this offering will be immediately utilized in
bringing the S.A.F.E.(TM) technology to a market-ready status;
expanding our existing operations to double our fish production;
and utilizing the completed S.A.F.E.(TM) System to develop the
first of six quarry aqua-farms in South Florida.  Once the
S.A.F.E.(TM) System has been fully tested and implemented, we
intend to produce fish that are able to meet any organic
production requirements that are established for the seafood
industry, and in an environmentally friendly process."

                     About Neptune Industries

Headquartered in Boca Raton, Florida, Neptune Industries Inc.
(OTCBB: NPDI) -- http://www.neptuneindustries.net/-- is a public  
corporation that engages in commercial fish farming and related
production and distribution activities in the seafood and
aquaculture industries.

                        Going Concern Doubt

Dohan and Company CPAs, PA, expressed substantial doubt about
Neptune Industries' ability to continue as a going concern after
it audited the Company's financial statements for the year ended
June 30, 2005.  The auditing firm pointed to the Company's
recurring losses from operations and deficiencies in working
capital.


NORTEL NETWORKS: Completes $2 Billion Senior Notes Offering
-----------------------------------------------------------
Nortel Networks Corporation closes the offering of $2 billion
aggregate principal amount of senior notes by its principal direct
operating subsidiary, Nortel Networks Limited, to qualified
institutional buyers pursuant to Rule 144A under the U.S.
Securities Act of 1933, as amended, and to persons outside of the
United States pursuant to Regulation S under the Securities Act.

As reported in the Troubled Company Reporter on July 3, 2006, the
Notes issued by NNL consist of $450 million of Senior Notes due
2016, $550 million of Senior Notes due 2013 and $1 billion of
Floating Rate Senior Notes due 2011 and are fully and
unconditionally guaranteed by the Company and initially guaranteed
by the Company's indirect subsidiary, Nortel Networks Inc.

The 2016 Fixed Rate Notes will pay interest semi-annually at a
rate per annum of 10.75%, the 2013 Fixed Rate Notes will pay
interest semi-annually at a rate per annum of 10.125%, and the
Floating Rate Notes will pay interest quarterly at a rate per
annum, reset quarterly, equal to three-month LIBOR plus 4.25%.

NNL expects that the net proceeds from the sale of the Notes will
be approximately $1,956 million, after deducting commissions
payable to the initial purchasers and other offering expenses.  
NNL has used $1.3 billion of these net proceeds to prepay the
$1.3 billion one-year credit facility that NNI entered into in
February 2006, and expects to use 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 US$575 million (plus accrued interest of
$5 million) deposited into escrow on June 1, 2006, pursuant to the
proposed class action settlement first announced on Feb. 8, 2006.

                      About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- 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.

                           *     *     *

As reported in the Troubled Company Reporter on June 20, 2006,
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.

Standard & Poor's also 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.


NORTHPOINT COMMS: Court Closes Case After Distribution of Funds
---------------------------------------------------------------
The Honorable Thomas E. Carlson of the U.S. Bankruptcy Court for
the Northern District of California issued a final decree closing
Northpoint Communications Group, Inc.'s chapter 7 liquidation
proceedings.

Michael M. Ozawa, the Debtor's chapter 7 trustee, disclosed that
all of the Debtor's assets and funds which came under his control
have all been disbursed and accounted for in accordance with the
law.  

Mr. Ozawa received $86,058,564 and held for the Debtor's estate.  
He spent $1,345,484 for his administrative fees and expenses.  
Around $84,713,080 was used to pay general unsecured creditors
holding $421,400,000 in claims.  

Northpoint Communications Group, Inc., was based in San Francisco,
California and provided dedicated Internet access service via DSL
technology.  The Company filed for bankruptcy on January 16, 2001
(Bankr. N.D. Calif. Case NO. 01-30127).  The Court converted the
Debtor's chapter 11 case to a chapter 7 liquidation proceeding on
June 12, 2001, and appointed Michael M. Ozawa as chapter 7
trustee.  Sidney P. Levinson, Esq., Hennigan, Bennett and Dorman
represented the chapter 7 trustee.

This report concludes the TCR's coverage of Northpoint
Communications Group, Inc., unless and until circumstances change
that warrant reporting in the TCR.


NORTHWESTERN CORP: Inks Electric Supply Pact with PPL Montana
-------------------------------------------------------------
NorthWestern Corporation, dba NorthWestern Energy, signed a seven-
year power purchase agreement with PPL Montana.  The Agreement,
which takes effect after NorthWestern's current contract with
PPLMT expires next year, provides NorthWestern's Montana default
supply customers with a source of reliable electricity supply
beginning July 1, 2007, at a significant discount to current
market prices.

The Agreement calls for NorthWestern to initially purchase 325
megawatts to meet more than one-third of its near-term electricity
supply requirements.  The megawatt hours purchased decline over
the seven-year period, allowing NorthWestern to methodically
transition its electricity supply mix to more diverse resources.  
Over the life of the agreement, NorthWestern will purchase
13.7 million megawatt hours at a cost of approximately
$675 million.  This procurement strategy provides NorthWestern
with flexibility to pursue other long-term electricity supply
options and is consistent with NorthWestern's 2005 Electricity
Default Supply Resource Plan that was filed with the Montana
Public Service Commission in December.

"Electric supply continues to be one of the most significant and
challenging issues we face at NorthWestern today," Mike Hanson,
President and CEO, said.  

"There is probably no single item that receives as much time and
attention.  This Agreement with PPLMT represents months of
negotiations and is a testament to the quality of our team in
Montana.  They have worked hard to find a solution that provides
reliable electric supply at reasonable prices while allowing us
the flexibility to pursue the more permanent and longer-term
electric supply options we feel are in the best interest of our
customers."

The Agreement is intended to limit customers' exposure to market
volatility by providing supply at a fixed price throughout the
life of the contract.  The fixed-price cost per kilowatt-hour
gradually increases over the span of the Agreement at a rate that
is less than recent inflation rates.  While the cost of
electricity will gradually increase by a fixed amount over time,
the volumes purchased will also decline by a fixed amount.  This
will enable NorthWestern to make future electricity purchases at
regular intervals to maintain a diversified portfolio that takes
advantage of, among other things, potential new generation sources
and demand side management activities.

"This Agreement addresses concerns regarding the evolution of the
default supply procurement strategy," Dave Gates, Vice President -
Wholesale Operations, said.  "Our customers have an assured source
of electricity supply beginning next July that is structured in a
manner that enables us to continue with our long-term planning
strategy emphasizing price stability and supplier diversity.  
Obviously, the default supply obligation has changed significantly
since it was first implemented almost 10 years ago.  This
Agreement reflects the reality of today's situation and provides
the necessary flexibility that we need to provide the best
possible portfolio of resources to provide reliable and reasonably
priced electricity for our customers for many years to come."

As a result of this new power supply agreement, typical
residential electric bills are expected to increase by
approximately 7% beginning July 1, 2007.  NorthWestern's billing
statements provide customers with detailed costs for the various
components that comprise their total billed amount.  This change
affects the energy supply portion of their bill, which is a "pass-
through" cost, meaning that NorthWestern does not make a profit on
the sale of energy supply to the customer.

Later this year, NorthWestern will conduct its auction process to
purchase additional electricity supply.

                     About NorthWestern Energy

Headquartered in Sioux Falls, South Dakota, NorthWestern Energy
(NASDAQ:NWEC) -- http://www.northwesternenergy.com/-- provides   
electricity and natural gas in the Upper Midwest and Northwest,
serving approximately 628,500 customers in Montana, South Dakota
and Nebraska.

                           *     *     *

As reported in the Troubled Company Reporter on May 1, 2006,
Moody's Investors Service affirmed the ratings of NorthWestern
Corporation.  The rating outlook for Northwestern remains
positive.  The action follows the announcement that Northwestern
had entered into a purchase and sale agreement with Babcock &
Brown Infrastructure, for BBI's purchase of all of the shares of
NOR.  Moody's also affirmed NOR's other ratings, including its
senior secured debt of Ba1, senior unsecured debt of Ba2 and its
SGL-2 liquidity rating.


OPAL CONCEPTS: Wants to Pay U.S. Trustee from Trust Funds
---------------------------------------------------------
Howard M. Ehrenberg, the responsible person appointed in the
chapter 11 cases of Opal Concepts, Inc., and its debtor-
affiliates, and the Joint Committee of Creditors ask the U.S.
Bankruptcy Court for the Central District of California for
permission to use certain settlement funds to pay the U.S. Trustee
quarterly fees.

After the sale of substantially all of the Debtors' assets, the
estates' remaining assets are claims that the Committee is
pursuing against some of the Debtors' former directors and
officers and the Debtors' former outside accounting and auditing
firm.  The Debtors' remaining prepetition liabilities total
$27 million.  Despite of the Debtors' lack of business operations,
the U.S. Trustee continues to charge quarterly fees.  The Debtors
currently owe the U.S. Trustee $18,250.  

The Debtor wants to use funds from the trust account of Winthrop
Couchet, the Creditors Committee's former counsel.  The trust
account, which has a $264,058 balance, was created by the
Committee to hold proceeds from the sale of some claims to Cheveux
Acquisition, LLC.   

Opal Concepts, Inc., used to manage Fantastic Sams, one of the
largest franchised hair salon chains in the country with
approximately 1,300 salons operating under its name.  The Company
and its affiliates filed for bankruptcy on July 16, 2002 (Bankr.
C.D. Calif. Case No. 02-15441).  Michael A. Morris, Esq., of Los
Angeles, Calif., represent the Debtors in their restructuring
efforts.  Ames Davis, Esq., of Nashville, Tenn., and Derek W
Edwards, Esq., at Waller Lansden Dortch & Davis, represent the
Joint Committee of Creditors.  The Debtors no longer have business
operations after selling substantially all of their assets.  
Howard M. Ehrenberg is the Debtors' sole employee and responsible
person handling the Debtors' estates.


OWENS CORNING: Court OKs Plan Support Agreement Despite Objections
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the plan support agreement entered into by Owens Corning and its
debtor-affiliates with their key creditor groups despite the
U.S. Trustee's objection that the agreement is an improper
solicitation.

Parties to the agreement include the Official Committee of
Asbestos Claimants, the Official Committee of Unsecured Creditors,
the Legal Representative for Future Claimants, the Official
Representatives of Bondholders and Trade Creditors, the Ad Hoc
Bondholders Committee, and the Ad Hoc Equity Holders Committee.

Kelly Beaudin Stapleton, the United States Trustee for Region 3,
said that the Plan Support Agreement is a lock-up agreement
to secure the votes to the Debtors' Sixth Amended Plan of
Reorganization of the registered holders holding a majority in
aggregate principal amount of prepetition bonds issued by Owens
Corning.

Century Indemnity Company, Central National Insurance Company of
Omaha, Cravens Dargan & Company, Pacific Coast and Pacific
Employers Insurance Company also objected to the agreement.  They
have filed an appeal from the District Court's order estimating
the Debtors' asbestos liabilities.

Judge Fitzgerald overruled the objections.  She made it clear that
the order is binding on all creditors and parties-in-interest.  
However, the rights of CIC, CNIC and PEIC with respect to the
appeal before the Third Circuit Court of Appeals, to object to the
approval of any disclosure statement or confirmation of any plan
of reorganization filed in the Debtors' Chapter 11 cases are
expressly reserved.

Pursuant to the Plan Support Agreement, the Plan Proponents agree
to file a Sixth Amended Joint Plan of Reorganization for the
Debtors, related Disclosure Statement and other related plan
documents.  

As an initial and critical step towards transforming the platform
of the Fifth Amended Plan into, what is anticipated to be, a
consensual Sixth Amended Plan on an expedited basis, and their
ultimate emergence from Chapter 11, the Debtors seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
execute and implement the terms of the Plan Support Agreement.

The salient terms of the Plan Support Agreement are:

A. Treatment of the Key Creditor Constituencies under the    
   Settlement Term Sheet

   The Debtors have agreed to modify their Plan with respect to
   the treatment of these claims:

   a. Owens Coming & Fibreboard Asbestos Personal Injury Claims

      On the Effective Date, the Debtors will pay the Asbestos
      Personal Injury Trust a total of:

      * $2,872,000,00 in cash; and

      * a contingent payment which, subject to certain conditions
        precedent, will consist of $1,390,000,000 plus interest
        in cash and 28,600,000 shares of common stock, par value
        $0.10 per share, of Reorganized Owens Coming -- New OCD
        Common Stock.

      Owens Corning has entered into a backstop agreement with
      J.P. Morgan Securities, Inc., and a syndicate of investors
      consisting of D.E. Shaw Laminar Portfolios, L.L.C.,
      Plainfield Special Situations Master Fund Limited or their
      affiliates, and certain other bondholders, in connection
      with a proposed equity rights offering.

      Pursuant to the Plan Support Agreement, the Asbestos PI
      Trust will grant the Backstop Providers options to purchase
      the 28,600,000 shares at an exercise price of $37.50 per
      share.  The options will expire 12 months after the date
      the Trust receives the shares.

      The Backstop Providers will grant the Asbestos PI Trust
      options to sell to them 28,600,000 shares in the aggregate
      at a $25 per share exercise price.  The options will expire
      three months after the date the Trust receives the shares.

   b. Owens Corning Bank Debt Holders Claims

      The Banks will receive the treatment afforded to them under
      the Fifth Amended Plan.

   c. Owens Corning Bondholders Claims

      In full satisfaction of their claims, the Bondholders will
      receive 26,600,000 shares of New OCD Common Stock on the
      Effective Date and, if exercised, their pro rata share of
      72,900,000 shares of New OCD Common Stock at $30 per share
      pursuant to the Rights Offering.

   d. Owens Corning General Unsecured Claims

      In full satisfaction of their claims, the senior and junior
      unsecured creditors in Classes A6-A and A6-B will receive
      $248,500,000 in cash on the Effective Date and, if
      exercised, their pro rata share of 72,900,000 shares of New
      OCD Common Stock at $30 per share pursuant to the Rights
      Offering.

   e. Owens Corning Subordinated Claims

      Holders of the subordinated claims against Owens Corning in
      Class A11 will receive warrants -- with customary market
      protections, exercisable within seven years of the
      Effective Date -- to obtain 10% of the fully diluted New
      OCD Common Stock at a strike price of $43 per share.  Upon
      the occurrence of certain events, holders of certain
      subordinated claims against Owens Corning in Class A11 will
      have the right to exchange the warrants for 5.5% of the
      fully diluted New OCD Common Stock.  If the holders of
      certain subordinated claims against Owens Corning in Class
      A11 vote to reject the Plan, they will get the
      corresponding cramdown treatment provided in the Fifth
      Amended Plan.

   f. OCD Interests

      Holders of Interests in Owens Corning in Class A12 will
      receive warrants -- with customary market protections,
      exercisable within seven years of the Effective Date -- to
      obtain 5% of the fully diluted New OCD Common Stock at a
      strike price of $45.25 per share.  Upon the occurrence of
      certain events, holders of Interests in Owens Corning in
      Class A12 will have the right to exchange the warrants for
      14.75% of the fully diluted New OCD Common Stock.  If the
      holders of Interests in Owens Corning in Class A12 vote to
      reject the Plan, they will get the corresponding cramdown
      treatment set forth in the Fifth Amended Plan.

B. Support of the Plan Proposal

   Each of the Holders agrees:

   a. to vote to accept the Sixth Amended Plan;

   b. to recommend and support confirmation of the Sixth
      Amended Plan and to approve any other action or document
      necessary to implement the terms of the Plan Support
      Agreement;

   c. to permit disclosure in the Amended Disclosure Statement
      and any filings with the Securities and Exchange Commission
      regarding the execution and contents of the Plan Support
      Agreement;

   d. not to object or commence any proceedings to oppose the
      Sixth Amended Plan, Amended Disclosure Statement or
      Plan Support Agreement;

   e. not to support, solicit or participate in the formulation
      of any other plan of reorganization, restructuring or
      settlement with respect to the Debtors; and

   f. not to take any other action that is materially
      inconsistent with or would materially delay the
      confirmation of the Sixth Amended Plan, Amended Disclosure
      Statement or Plan Support Agreement.

C. Conditions

   The Holders' undertakings are subject to certain conditions,
   including:

   a. each of the Sixth Amended Plan, Amended Disclosure
      Statement and all of the documents relating to the Rights
      Offering will be reasonably satisfactory to the Holders;

   b. the material terms of the Plan Documents will be
      substantially identical to the terms set forth in the Plan
      Support Agreement;

   c. the Court's approval of the Amended Disclosure Statement;

   d. there is no material modification of the Plan Documents
      and no material breach of the Plan Support Agreement; and

   e. each of the Holders agrees, subject to certain exceptions,
      not to transfer or otherwise dispose of its Holdings
      unless, among others, the transferee agrees in writing to
      be bound by all of the terms of the Plan Support Agreement.

D. Termination

   The Plan Proponents and the Holders have the right to
   terminate the Plan Support Agreement where there has been a
   material breach of the agreement, any Holder fails to satisfy
   a material term or condition of the agreement, or the Plan
   Effective Date does not occur by October 30, 2006, or at a
   later date as the Plan Proponents will agree.

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--    
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.  
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).   
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 134; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


OWENS CORNING: Court Approves J.P. Morgan Equity Commitment Accord
------------------------------------------------------------------
The Honorable Judith K. Fitzgerald allowed Owens Corning and its
debtor-affiliates to enter into an Equity Commitment Agreement,
dated May 10, 2006, with J.P. Morgan Securities Inc, despite the
U.S. Trustee's objection over the fees involved.

Kelly Beaudin Stapleton, the United States Trustee for Region 3,
questioned, among others, the reasonableness of the $100 million
Backstop Fee.  

Owens Corning is now authorized to pay J.P. Morgan the Backstop
Fee and the Termination Fee, if applicable, as provided in the
Equity Agreement, as well as any Extension Fee in exchange for an
increase in length of the Backstop Commitment.

The Court directs J.P. Morgan to submit all Transaction Expenses,
to be paid to the U.S. Trustee with reasonable supporting detail.  
The U.S. Trustee and the Debtors have 30 calendar days to object
to the Transaction Expenses.

If all required documents under the Equity Agreement are timely
filed, the approval of the Agreement will have full force and
effect commencing on July 10, 2006, and the Debtors will pay the
Backstop Fee no later than that date.

As reported in the Troubled Company Reporter on May 29, 2006, the
Equity Commitment Agreement is an integral part of the settlement
term sheet among the Debtors, the Asbestos Claimants Committee,
the Future Claimants Representative, the bondholders and trade
creditors, the Ad Hoc Bondholders' Committee and the Ad Hoc Equity
Holders Committee, with respect to a consensual plan of
reorganization, Norman L. Pernick, Esq., at Saul Ewing LLP, in
Wilmington, Delaware, said.

The Settlement Term Sheet provides holders of Bondholder Claims in
Classes A5, A6-A and A6-B of the Fifth Amended Plan, the right to
purchase 72,900,000 shares in reorganized Owens Corning at $30 per
share.

Under the Equity Commitment Agreement, J.P. Morgan will backstop
the rights offering.

The Debtors contend that the Equity Committee Agreement is
indispensable to their prompt and successful reorganization and
the implementation of their Sixth Amended Plan.

The salient terms of the Equity Commitment Agreement are:

   Investor                J.P. Morgan Securities Inc.

   Backstop Commitment     To purchase, for $30 per share, any of
                           the 72,900,000 shares of New Common
                           Stock not purchased pursuant to the
                           Rights Offering.

   Rights Terms            Each Eligible Holder will have until
                           the 20th calendar day after
                           distribution of the ballots for voting
                           on the Sixth Amended Plan to purchase
                           up to its pro rata share of 72,900,000
                           shares.  Owens Corning will deliver,
                           reasonably in advance of the Effective
                           Date of the Sixth Amended Plan, a
                           Purchase Notice indicating the number
                           of the shares not purchased by the
                           Eligible Holders pursuant to the
                           Rights Offering.  J.P. Morgan will
                           purchase a number of shares of New
                           Common Stock equal to the number of
                           shares set forth on the Purchase
                           Notice.

   Conditions to
   Backstop Commitment     The Equity Commitment Agreement is
                           conditioned on, among others:

                           (1) J.P. Morgan will have approved
                               the Sixth Amended Plan and
                               Confirmation Order to the extent
                               they are consistent in all
                               material respects with the
                               Settlement Term Sheet and the
                               Equity Commitment Agreement;

                           (2) Owens Corning will not have
                               publicly supported or entered into
                               a competing transaction;

                           (3) the Confirmation Order will have
                               been entered;

                           (4) the Debtors' shelf registration
                               statement becoming effective by
                               the Agreement Effective Date;

                           (5) fees and other amounts payable
                               under the Equity Commitment
                               Agreement will have been paid;

                           (6) New Common Stock will be exchange-
                               listed;

                           (7) J.P. Morgan will have received an
                               opinion of Owens' counsel relating
                               to the Registration Statement and
                               Prospectus; and

                           (8) Owens Corning will file with the
                               Bankruptcy Court definitive Put
                               Agreements and Call Agreements
                               reasonably satisfactory to J.P.
                               Morgan.

   Termination Right
   of Investor             J.P. Morgan will terminate its
                           commitment to backstop the rights
                           offering:

                           (1) on or after June 30, 2006, if the
                               the Court has not approved the
                               Agreement;

                           (2) on or after October 31, 2006, with
                               the opportunity to extend the
                               deadline to December 15, 2006,
                               upon Owens Corning's satisfaction
                               of certain conditions and payment
                               of a $30,000,000 Extension Fee;

                           (3) Owens Corning's failure to satisfy
                               conditions precedent set forth in
                               the Equity Commitment Agreement or
                               pay the Extension Fee, if any,
                               when due; and

                           (4) Owens Corning publicly supports
                               or enters into a Competing
                               Transaction.

   Termination Right
   of Debtor               Prior to Court approval, Owens Corning
                           notifies J.P. Morgan that it has no
                           intent to proceed with the deal.
                           Owens Corning, however, will pay a
                           $20,000,000.

   Backstop Commitment
   Fee                     $100,000,000, plus Transaction
                           Expenses.

   OC Representations      Limited representations similar to,
                           but in many respects diluted from,
                           those given in an underwriting
                           agreement for a public offering of
                           stock.

   OC Covenants            Owens Corning covenants with J.P.
                           Morgan to:

                           (1) file Court papers seeking approval
                               of, and use reasonable best
                               efforts to support, the Equity
                               Commitment Agreement and entry of
                               the Agreement Order;

                           (2) file the Sixth Amended Plan
                               consistent with the Settlement
                               Term Sheet;

                           (3) make necessary filings pursuant to
                               the Hart-Scott-Rodino Antitrust
                               Improvements Act of 1976;

                           (4) prepare and file a shelf
                               registration statement;

                           (5) create a clear market for 180 days
                               after the Closing Date; and

                           (6) file forms of the Put Agreements,
                               the Call Agreements and the
                               Registration Rights Agreement.

   Indemnification         The Debtors will indemnify and hold
                           harmless J.P. Morgan, the ultimate
                           stock purchasers, and certain
                           affiliates with respect to claims,
                           liabilities and expenses related to
                           transactions contemplated in the
                           Equity Commitment Agreement absent a
                           judicial determination of bad faith,
                           gross negligence or willful
                           misconduct.

A full-text copy of the Equity Commitment Agreement is available
for free at http://ResearchArchives.com/t/s?9ff

The Equity Commitment Agreement is a commitment of enormous
magnitude, in size, duration and complexity, Mr. Pernick asserts.
The Debtors anticipate that the 72,900,00 shares covered in the
Agreement will constitute approximately 55% of the fully diluted
equity of reorganized Owens Corning.

In the event that none of the eligible creditors were to purchase
the shares offered, J.P. Morgan will purchase all shares and pay
Owens Corning $2,187,000,000 in cash to fund the Sixth Amended
Plan.

                       Syndication Agreement

The Court also approved a syndication agreement between J.P.
Morgan and some investor parties including D. E. Shaw Laminar
Portfolios, L.L.C. and Plainfield Special Situations Master Fund
Limited.

The Investor Parties were members of the Ad Hoc Bondholders'
Committee and heavily involved in the negotiation of the
Settlement Term Sheet.  The Debtors believe that majority of the
Investor Parties are creditors in Class A5 as of May 10, 2006, and
some of them hold other positions within the Debtors' capital
structure.

The Syndication Agreement sets forth the terms and conditions
by which the Investor Parties have committed to purchase from
J.P. Morgan any unsubscribed shared of reorganized Owens Corning
that it purchased under the Equity Commitment Agreement.

In obligating itself under the Commitment Agreement, J.P. Morgan
relies on the Investor Parties' obligations, representations and
warranties as provided in the Syndication Agreement.  Therefore,
the execution and delivery of the Syndication Agreement is a
condition precedent to J.P. Morgan 's obligations under the
Equity Commitment Agreement.

Specifically, the Syndication Agreement provides that to the
extent J.P. Morgan will purchase the unsubscribed shares under
the Commitment Agreement, it will sell to each Investor Party,
for $30 per share, the party's pro rata share of the aggregate
amount of the unsubscribed shares.   Pro Rata Share will mean,
for each Investor Party, the fraction equal to:

   * the investor's purchase commitment specified in writing by
     J.P. Morgan; divided by

   * $2,187,000,000, with appropriate rounding.

For the Investor Parties' commitment, J.P. Morgan will share with
them a material portion of the Backstop Fee.

J.P. Morgan's delivery of purchased shares to each Investor Party
will be effected through the facilities of Depository Trust
Company.

J.P. Morgan contends that some provisions of the Syndication
Agreement addressing fee sharing, as well as references to the
identity of some of the Investor Parties and the magnitude of
their commitments, are commercial, sensitive and proprietary
information.  Therefore, the Debtors seek the Court's permission
to file under seal the unredacted version of the Syndication
Agreement.

A full-text copy of a redacted version of the Syndication
Agreement is available for free at:

               http://ResearchArchives.com/t/s?a00

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--    
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.  
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).   
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 134; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PCS EDVENTURES!.COM: HJ & Associates Raises Going Concern Doubt
---------------------------------------------------------------
HJ & Associates, LLC, expressed substantial doubt about PCS
Edventures!.com, Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
years ended March 31, 2006 and 2005.  The auditing firm pointed to
the Company's recurring losses from operations and working capital
deficit.

For the fiscal year ended March 31, 2006, the Company reported a
net loss of $1,204,504, a 28% increase from the $938,632 net loss
incurred in the prior year.

Revenues for the twelve-month period ended March 31, 2006,
increased to $2,602,039 or 77.2% as compared to $1,468,671 for the
twelve-month period ended March 31, 2005.  This increase is due to
increased sales and marketing efforts throughout the country, as
well as increased international sales.  

At March 31, 2006, the Company's balance sheet showed total assets
of $1,755,851 and total liabilities of 1,253,018.  The Company's
balance sheet also showed a working capital deficit of $154,843 at
March 31, 2006.  The working capital deficit for the fiscal year
ended March 31, 2005 was $756,669.

A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?d1f

PCS Edventures!.com, Inc. -- http://www.edventures.com/-- is the  
recognized leader in design, development and delivery of hands-on,
project based learning labs to the K-14 market worldwide.  It has
sold and installed more than 2,750 hands-on, Engineering, Robotics
& Science labs at public and private schools, pre-schools, Boys &
Girls Clubs, YMCAs, and other after-school programs in all 50
states in the U.S., as well as sites in 15 countries
internationally.  The Labs are supported by Edventures! OnLine,
which is an Internet-based and accessed program available in
multiple languages, through its curriculum, communication,
assessment capabilities, and online community features.


RADAMES SANTIAGO: Case Summary & 21 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Radames R. Santiago, Inc.
        dba Farmacia Santa Teresita
        Calle San Lorenzo, Suite 51
        San Lorenzo, Puerto Rico 00754
        Tel: (787) 736-3221

Bankruptcy Case No.: 06-02190

Chapter 11 Petition Date: July 5, 2006

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Jose Raul Cancio-Bigas, Esq.
                  134 Mayaguez Street
                  Hato Rey, Puerto Rico 00917
                  Tel: (787) 763-1940
                  Fax: (787) 758-9238

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

Estimated Debts:  $1 Million to $10 Million

Debtor's 21 Largest Unsecured Creditors:

   Entity                         Nature of Claim    Claim Amount
   ------                         ---------------    ------------
Borshow Hospital and              Supplies               $614,852
Medical Supplies, Inc.
P.O. Box 36211
San Juan, PR 00936
Attn: Pedro Parrilla
Tel: (787) 625-4100

Banco Popular PR                  Loan                    $65,000
Special Loan Department
P.O. Box 362708
San Juan, PR 00963-2708
Attn: Migdalia Guasp
Tel: (787) 765-9800

Farmacia Aliadas                  Supplies                $13,144
P.O. Box 9660
Caguas, PR 00726
Attn: Roberto Peirats
Tel: (787) 746-8878

Medi-Data Corporation             Supplies                 $5,137

Xerox Capital Services            Services                 $3,738

Hallmark PR, Inc.                 Supplies                 $2,618

GlaxoSmithKline                   Supplies                 $2,325

Price and Novelties, Inc.         Supplies                 $1,339

Ferrero Caribe                    Supplies                 $1,302

F. Pont Flores                    Supplies                 $1,031

Wella PR                          Supplies                 $1,020

ADT Security Systems              Services                   $927

Avent Naturally America Inc.      Supplies                   $687

Agencia de Publicaciones          Services                   $576

Wyeth Consumer                    Supplies                   $539

M&J, Inc.                         Supplies                   $413

Almacenes Pemar                   Supplies                   $322

Energizar PR, Inc.                Supplies                   $319

Per-se Technologies               Supplies                   $202

JS Paloch Co. Inc.                Supplies                   $170

Cesar Castillo, Inc.              Supplies                    $30


RECORP GROUP: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Recorp Group Inc.
        920 Rockmore
        Georgetown, Texas 78628

Bankruptcy Case No.: 06-33031

Chapter 11 Petition Date: July 3, 2006

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: Matt Freeman, Esq.
                  Matt Freeman & Association L.P.
                  230 Westcott, Suite 202
                  Houston, Texas 77007
                  Tel: (713) 255-7400

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

The Debtor has no unsecured creditors who are not insiders.


REFCO INC: Chapter 11 Trustee Wants Capstone as Financial Advisor
-----------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 Trustee of the estate of Refco
Capital Markets, Ltd., seeks the U.S. Bankruptcy Court for the
Southern District of New York's authority to employ Capstone
Advisory Group, LLC, as his special financial advisor with respect
to intercreditor and intercompany interests, nunc pro tunc to
June 2, 2006.

There are significant intercreditor and other issues, including
intercompany claims, which are unique to RCM and with respect to
which RCM's interests are, or may be, in direct conflict with the
interests of the other Chapter 11 Debtors' estates and
stakeholders, Timothy B. DeSieno, Esq., at Bingham McCutchen LLP,
in New York, explains.

Capstone will:

   a.  assist the Trustee with analysis of RCM's books and
       records relating to intercompany transactions,
       intercompany accounting and related accounts of
       RCM;

   b.  advise the Trustee regarding any proposed transactions
       affecting the RCM estate or the resolution of the RCM
       case;

   c.  advise the Trustee regarding negotiations with
       stakeholders;

   d.  assist the Trustee and his counsel in negotiating and
       effecting a comprehensive resolution of the RCM
       bankruptcy;

   e.  perform other necessary financial advisory services for
       the Trustee in connection with the Chapter 11 case; and

   f.  provide valuation work and expert testimony as
       determined by the Trustee to be necessary.

Capstone will be paid based on the actual hours worked charged at
its standard hourly rates and reimbursed for its out-of-pocket
expenses.  The firm's current rates are:

     Position              Hourly Rate
     --------              -----------
     Executive Director    $530 - $575
     Staff                 $250 - $450
     Support Staff          $75 - $175

Capstone professionals who will have primary responsibility for
representing the Trustee are:

     Professional          Position at Capstone
     ------------          --------------------
     David Galfus          Member and Executive Director
     Robert Manzo          Executive Director
     Jack Surdoval         Managing Director

Other Capstone professionals may assist in the representation as
needed.

Mr. Galfus attests that Capstone (i) is not a creditor, an equity
security holder or an insider of RCM, or any other Chapter 11
Debtor; (ii) is not and was not within two years before the
Petition Date, a director, officer or employee of RCM or any
other Chapter 11 Debtor; and (iii) does not hold or represent any
interest that is materially adverse to the interest of the RCM
estate or of any class of creditors or equity security holders.

Capstone's professionals have played significant roles in many of
the largest and most complex cases under the Bankruptcy Code,
including the chapter 11 cases of Adelphia Communications
Corporation, Ames Department Stores, Inc., Enron Corp., Federal
Mogul, Inc., Mirant Energy, Inc., Owens Corning, Inc., Vencor,
Inc., and W.R. Grace.

                         About Refco Inc.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

Refco Capital Markets Ltd. is Refco's operating subsidiary based
in Bermuda.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000).


REFCO INC: Refco Group Inks Settlement With West and Contractors
----------------------------------------------------------------
Refco Group Ltd., LLC, Albert Togut, the Chapter 7 Trustee
appointed to oversee the liquidation of Refco, LLC's estate, West
Loop Associates LLC and the Contractors, Alps Construction, Inc.,
KCE Ltd. and Griswold, Heckel & Kelly Associates, Inc., have
reached a comprehensive settlement to resolve West Loop's request,
the Mechanic's Liens and the Claims.

In a stipulation approved by the Hon. Robert Drain of the United
States Bankruptcy Court for the Southern District of New York,
each of the Contractors agree to:

   (i) reduce by 5% the outstanding principal amount of each of
       its Claim  pertaining to the Properties;

  (ii) waive all attorney's fees and accrual of any interest to
       which each Contractor may be entitled;

(iii) take the necessary steps to discharge and release the
       Mechanic's Liens so that the threatened default against
       West Loop may be averted;

  (iv) release Refco LLC from any further claims relating to the
       Contracts, the Mechanic's Liens, and their Claims;

   (v) withdraw their Claims against Refco LLC; and

  (vi) file no additional proofs of claim against Refco LLC.

Refco Group will pay the Contractors $747,579 in the aggregate in
full satisfaction of the Mechanic's Liens, the Claims, and any
other amounts due in connection with the Contracts.

                   West Loop's Motion to Compel

West Loop had asked the Court to compel Refco Group to comply with
its postpetition lease obligations.

Refco Group leases seven floors of an 18-story office building
owned by West Loop in the central business district of Chicago,
Illinois.  Refco, LLC, occupied some or all of the leased
premises.

Refco Group continues to occupy the Premises pursuant to a March
2006 Stipulated Order among Debtors, West Loop and Man Financial,
Inc.  The Stipulated Order contemplates rejection of the Lease
effective August 15, 2006.

Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman LLP, in
Los Angeles, California, contends that until the effective
rejection date, RGL is required "to timely perform all
obligations under the Lease to the extent required by Section
365(d)(3) of the Bankruptcy Code.  Among those obligations, Mr.
Levinson said, is a Lease covenant to either discharge or bond
any mechanic's liens filed against the Property as a result of
work performed or alleged to have been performed on the Premises.

Mr. Levinson noted that Refco LLC has entered into a series of
agreements with Alps Construction, Inc., KCE Ltd. and Griswold,
Heckel & Kelly Associates, Inc., for the construction work to be
performed at the leased Premises.  The Contractors have sought
relief from the bankruptcy stay to commence a foreclosure action
in Illinois against RGL, Refco LLC, and West Loop.

The Contractors assert that Refco LLC or RGL failed to pay for
the work, leaving a balance in excess of $700,000, including
amounts owed for work that was not completed until nearly one
month after RGL's bankruptcy filing.  The Contractors have filed
mechanic's liens of more than $700,000 against the Property.

Although the Bankruptcy Court denied the Contractors' request,
the ruling did not fully resolve the problems West Loop faced.

Mr. Levinson relates that by letter dated April 19, 2006, West
Loop's mortgage lender, Greenwich Capital Financial Products,
Inc., issued a notice of default to West Loop based on the
existence of the Mechanic's Liens.  The notice of default
provides that, unless the Mechanic's Liens are discharged or
bonded, West Loop will be held in default under its purchase
money loan agreement dated October 7, 2005.

Unless the Court compels RGL to discharge or bond the Mechanic's
Liens, West Loop and, by consequence, RGL's estate will suffer
substantial damages that could and should otherwise be avoided if
RGL complies with its lease obligations, Mr. Levinson told Judge
Drain.

                      RGL Costs Reimbursement

Mr. Togut, informed the Court that he reviewed West Loop's request
and RGL's contracts with Alps, KCE and GHK.  Mr. Togut believed
that the Contractors' Claims and Mechanic's Liens are legitimate
obligations and that Refco LLC is responsible for payment of the
Claims.  Thus Mr. Togut asks the Court for permission to reimburse
$747,579 to RGL for the payment of the Claims, pointing out that
Refco LLC was the contracting party and the beneficiary of the
Contractors' services.

                          About Refco Inc.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

Refco Capital Markets Ltd. is Refco's operating subsidiary based
in Bermuda.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000).


RICHARD SHIELDS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Richard J. Shields
        dba Shields Trucking
        1055 Ohio Street
        Gridley, California 95948

Bankruptcy Case No.: 06-22377

Type of Business: The Debtor filed for chapter 11
                  protection on May 11, 2006 (Bankr.
                  E.D. Calif. Case No. 06-21524).

Chapter 11 Petition Date: July 5, 2006

Court: Eastern District of California (Sacramento)

Judge: Christopher M. Klein

Debtor's Counsel: Charles L. Rathbun, Esq.
                  2445 Oro Dam Boulevard, Suite 4
                  Oroville, California 95966
                  Tel: (530) 532-1492

Total Assets: $3,658,398

Total Debts:  $3,120,195

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Neal McLean                      Loan                  $357,000
c/o Russell Longaway, Esq.
369 Pine Street, Suite 818
San Francisco, CA 94104

Lakeview Petroleum               Fuel                   $73,092
P.O. Box 510
Marysville, CA 95901

99 Travel Center, LLC            Gas                    $70,000
c/o Al J. Carrion, Esq.
1528 Starr Drive, Suite B
Yuba City, CA 95993

Butte County Tax Collector       Property Taxes         $44,605
25 County Center Drive
Oroville, CA 95965

Dennis Diver                     Accountant             $40,291
1638 Huntoon Street
Oroville, CA 95965

Carson Oil                       Fuel                   $35,000

Harris Sanford & Hamman          Attorneys Fees         $29,286

State Fund                       Worker's               $25,375
                                 Compensation Insurance

First Insurance Funding          Insurance              $20,126

Gildermeister Enterprises        Trucking               $20,000

Shifflett Brothers               Truck Repair           $18,227

Sacramento Truck Center          Truck Parts            $16,580

Gridley Utilities                Utility Bills          $16,123

Whitchurch & Son                 Hauling                $15,869

Star Insurance                   Insurance              $14,723

Butte Auto Parts                 Truck Parts            $12,069

Aldridge Keylock                 Fuel                   $10,703

Max's Diesel Repair              Truck Repair            $9,372

Les Schwab                       Truck Tires             $8,503

Franchise Tax Board              2001 State              $8,494
                                 Income Taxes


SILICON GRAPHICS: Wants Solicitation & Tabulation Protocol Okayed
-----------------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to:

    (a) fix:

        * July 7, 2006, as the record date solely with respect to
          holders of Silicon Graphics Inc.'s 6.125% Convertible
          Subordinated Debentures due 2011 -- the Cray Voting
          Record Date;

        * July 27, 2006, as the record date with respect to all
          other creditors that are entitled to vote --  the
          General Voting Record Date;

        * Aug. 3, 2006, as the deadline for mailing solicitation
          packages and confirmation hearing notices;

        * Aug. 31, 2006, as the deadline for filing objections
          to confirmation or proposed modifications to the
          Debtors' First Amended Joint Plan of Reorganization;

        * Sept. 14, 2006, as the confirmation hearing date;
          and

        * September 11, 2006, as the deadline for the Debtors to
          file and serve replies to Confirmation Objections;

    (b) approve:

        -- notice and objection procedures in respect of
           confirmation of the Plan;

        -- Solicitation Packages and the procedures for their
           distribution;

        -- the forms of ballots and the establishment of
           procedures for voting on the Plan;

        -- the forms of notices to non-voting classes under the
           Plan; and

        -- the Subscription Forms for purposes of the Rights
           Offering.

In addition, the Debtors ask the Court to establish the General
Voting Record Date as the date for determining which creditors
and equity interest holders in non-voting classes are entitled to
receive an appropriate "Notice of Non-Voting Status".

                           Record Dates

Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New
York, tells the Court that the Cray Voting Record Date is
appropriate because it coincides with the record date applicable
to the holders of Cray Notes for purposes of determining which of
the holders are entitled to participate in the Rights Offering.

Similarly, Mr. Waisman says, the General Voting Record Date is
appropriate as it (i) coincides with the record date applicable
to the holders of the Secured Notes for purposes of determining
which of the holders are entitled to participate in the Rights
Offering, and (ii) facilitates the determination of which
creditors are entitled to vote on the Plan or, in the case of
non-voting classes of creditors and equity interest holders, to
receive the Notice of Non-Voting Status.

The nominees and registered holders of the Debtors' equity
interests need advance notice to enable those responsible for
assembling ownership lists of the public equity securities to
compile a list of holders as of a certain date because accurate
lists often cannot be prepared retroactively as to ownership on a
prior date, Mr. Waisman explains.

                     Solicitation Procedures

The Debtors relate that Solicitation Packages distributed to:

    (a) Creditors holding claims in Classes 5, 6 and 7 will
        contain a copy of the Disclosure Statement Order, a notice
        of the Confirmation Hearing, the appropriate form of
        ballot to accept or reject the Debtors' Joint Plan of
        Reorganization with instructions and a return envelope,
        the Disclosure Statement with the Plan, and other
        materials as the Court may direct; and

    (b) Holders of claims and interests in the Unimpaired Classes
        or Non-Voting Impaired Classes will contain a copy of the
        Confirmation Hearing Notice and a Notice of Non-Voting
        Status.

The Debtors will distribute the Disclosure Statement Order, the
Confirmation Hearing Notice, the Disclosure Statement with the
Plan, and other materials as the Court may direct to:

    (1) the U.S. Trustee,

    (2) counsel for the:

        -- Official Committee of Unsecured Creditors,
        -- Wells Fargo Foothill, Inc. and Ableco Finance LLC,
        -- Ad Hoc Committee of Secured Noteholders,
        -- U.S. Bank National Association,
        -- JPMorgan Chase Bank, and
        -- Morgan Stanley Senior Funding, Inc.,

    (3) the Securities and Exchange Commission,

    (4) the District Director of the Internal Revenue Service for
        the Southern District of New York, and

    (5) all parties entitled to notice.

Holders of the 6.50% Secured Notes, 11.75% Secured Notes, and the
6.125% Convertible Subordinated Debentures due 2011 as of the
applicable Voting Record Dates will also receive a Subscription
Form for purposes of the Rights Offering.

The Debtors will not send Solicitation Packages to creditors with
claims that have been paid in full unless the creditor would be
entitled to receive a Solicitation Package for any reason other
than by virtue of the paid claim.

According to Mr. Waisman, the Debtors anticipate that some
Notices may be returned as undeliverable by the United States
Postal Service.  To avoid the costs, the Debtors seek the Court's
approval to excuse them from mailing Solicitation Packages unless
they are provided with accurate addresses before the Solicitation
Date.

The Debtors ask the Court to determine that they are not required
to distribute copies of the Plan or Disclosure Statement to any
party to an executory contract who holds a claim that is not
allowed, filed, or scheduled, or who holds a claim listed in the
Schedules as contingent, unliquidated or disputed, unless the
party makes a specific request in writing.

                   Confirmation Hearing Notice

The Debtors propose that by August 3, 2006, all parties that are
provided Solicitation Packages, will also be provided a notice
setting forth:

    * the Voting Deadline;
    * the deadline to file Confirmation Objections; and
    * the time, date, and place for the Confirmation Hearing.

In addition to mailing, the Debtors will publish the Confirmation
Hearing Notice once in the national edition of The New York Times
on a date not less than 25 days prior to the Confirmation
Objection Deadline.

Objections to confirmation of the Plan or proposed modifications
to the Plan must:

    (i) be in writing;

   (ii) state the name and address of the objecting party and the
        amount and nature of its claim or interest;

  (iii) detail the basis and nature of any objection or proposed
        modification; and

   (iv) be filed, together with proof of service, with the Court,
        and be served so that they are actually received no later
        than Aug. 31, 2006, by the Clerk of the Court and the
        attorneys for the:

           * Debtors,
           * U.S. Trustee,
           * Creditors' Committee, and
           * Ad Hoc Committee.

          Notice of Non-Voting Status - Impaired Classes

The Debtors will send a Notice of Non-Voting Status - Impaired
Classes to the holders of the Debtors' publicly traded stock as
reflected in the records maintained by the Debtors' transfer
agents as of the close of business on the General Voting Record
Date.

The Debtors recognize that the records maintained by the transfer
agents or trustees reflect the brokers, dealers, commercial
banks, trust companies, or other nominees -- the Non-Voting
Nominees -- through which the beneficial owners hold the Non-
Voting Securities.

Accordingly, the Debtors ask the Court to authorize:

    (i) them to provide the Non-Voting Nominees with sufficient
        copies of the Notice of Non-Voting Status - Impaired
        Classes to forward to the beneficial stockholders; and

   (ii) the Non-Voting Nominees to forward the Notice of Non-
        Voting Status - Impaired Classes or copies of the notices
        to the beneficial stockholders within five days of the
        Non-Voting Nominee's receipt of the Notices.

The Debtors seek the Court's authority to reimburse the Non-
Voting Nominees for their reasonable and customary expenses
incurred.

                         Voting Deadline

To be counted as a vote to accept or reject the Plan, each Ballot
must be properly executed, completed, and delivered to the voting
agent or the Voting Nominee, as appropriate, (i) by first-class
mail, in the return envelope provided with each Ballot, (ii) by
overnight courier, or (iii) by hand delivery, so that it is
actually received no later than 4:00 p.m., prevailing Eastern
Time, on Sept. 6, 2006.

                      Tabulation Procedures

Among other things, the Debtors propose that each claim within a
class of claims entitled to vote to accept or reject the Plan be
temporarily allowed in an amount equal to the amount of the claim
as set forth in the Schedules.  Creditors seeking to challenge
the allowance of their claims for voting purposes, must serve on
the Debtors, the Creditors' Committee, the Ad Hoc Committee, and
file with the Court a motion pursuant to Rule 3018(a) of the
Federal Rules of Bankruptcy Procedure, temporarily allowing the
claim in a different amount for purposes of voting to accept or
reject the Plan, on or before the 10th day after the later of:

    (i) service of the Confirmation Hearing Notice; and

   (ii) service of notice of an objection or request for
        estimation, if any, as to the claim.

Moreover, the Debtors request that whenever a creditor casts more
than one Ballot voting the same claim before the Voting Deadline,
the last Ballot received before the Voting Deadline will be
deemed to reflect the voter's intent.  That Ballot will supersede
any prior Ballots.  Creditors also must vote all of their claims
within a particular class under the Plan either to accept or
reject the Plan and may not split their vote.  A Ballot that
partially rejects and partially accepts the Plan will not be
counted.

A full-text copy of the Debtors' proposed Tabulation Procedures
is available for free at http://ResearchArchives.com/t/s?d56

          Subscription Forms for the Rights Offering

Pursuant to the Plan, holders of:

    -- Secured Note Claims, as of the General Record Date, have
       the right to subscribe for their pro rata share of
       6,800,000 shares of new common stock; and

    -- Cray Unsecured Debenture Claims, as of the Cray Voting
       Record Date, may exercise Subscription Rights for their pro
       rata share of 700,000 shares of new common stock.

On Aug. 1, 2006, the Debtors will mail subscription forms to
each holder of a Secured Note Claim and Cray Unsecured Debenture
Claim together with instructions for the completion, execution,
and delivery of the Subscription Form, as well as instructions
for the payment of the applicable purchase price for the new
common stock that the holder may be entitled to acquire.

Not later than 10 business days following the Voting Deadline --
which is also the final date by which a holder of a Secured Note
Claim and Cray Unsecured Debenture Claim may elect to subscribe
to the Rights Offering -- the Debtors will deliver to each holder
that has sought to exercise its Subscription Rights, a written
statement specifying the number of shares of new common stock
that it validly and effectively acquired.

To exercise the Subscription Rights, each holder of a Secured
Note Claim and Cray Unsecured Debenture Claim must:

    (i) return a duly completed Subscription Form to Financial
        Balloting Group LLC, as subscription agent for the Rights
        Offering or, in the case of Secured Notes or Cray Notes
        held through a bank or brokerage firm, arrange for the
        firm to effect their subscription through the Depository
        Trust Company, so that the form or DTC instruction is
        actually received by FBG on or before the Subscription
        Expiration Date; and

   (ii) pay or arrange for payment to FBG on or before the
        Subscription Expiration Date, or by DTC to FBG, the
        holder's purchase price in accordance with the wire
        instructions or by certified bank or cashier's check
        delivered to FBG along with the Subscription Form.

Mr. Waisman says that if FBG does not receive a duly completed
Subscription Form or equivalent instructions from DTC and
immediately available funds equal to the holder's Subscription
Purchase Price or payment by DTC on or prior to the Subscription
Expiration Date, the holder will be deemed to have relinquished
and waived its right to participate in the Rights Offering.

Each holder of an Secured Note Claim and Cray Unsecured Debenture
Claim intending to participate in the Rights Offering must
affirmatively elect to exercise its Subscription Right on or
prior to the Subscription Expiration Date.

The Debtors also seek the Court's authority to adopt any
additional procedures consistent with the provisions of the
Rights Offering, Mr. Waisman adds.

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


SILICON GRAPHICS: Court Fixes August 4 as General Bar Date
----------------------------------------------------------
At Silicon Graphics, Inc., and its debtor-affiliates' request,
Judge Lifland of the U.S. Bankruptcy Court for the Southern
District of New York:

    (i) fixes August 4, 2006, at 5:00 p.m. (prevailing Eastern
        Time) as the bar date by which persons or entities may
        file proofs of claim based on prepetition claims against
        any of the Debtors; and

   (ii) fixes November 4, 2006, at 5:00 p.m. (prevailing Eastern
        Time) as the bar date for governmental units to file
        proofs of claims against any of the Debtors;

  (iii) approves the Debtors' Proof of Claim form;

   (iv) approves the form and manner of notice of the Bar
        Date; and

    (v) approves the notice and publication procedure.

Each person or entity that asserts a prepetition claim against the
Debtors must file an original, written proof of the claim that
conforms to the Proof of Claim Form or Official Form No. 10 so as
to be received on or before the applicable Bar Date by Bankruptcy
Services, LLC, either by:

    -- overnight or hand delivery to:

          United States Bankruptcy Court
          SGI Claims
          One Bowling Green,
          New York, New York 10004-1408

    -- mailing the original Proof of Claim to:

          United States Bankruptcy Court
          SGI Claims
          P.O. Box 180,
          Church Street Station,
          New York, New York, 10008-0180

Any person or entity that holds a claim that arises from the
rejection of an executory contract or an unexpired lease must file
a proof of claim based on the rejection by the later of the
applicable bar date or the 30th day after the effective date of
that rejection.

The proposed Proof of Claim Form, based on the Official Form 10,
is tailored to the Debtors' Chapter 11 cases.

Any holder of a claim against the Debtors who is required, but
fails, to file a proof of the claim on or before the applicable
Bar date will be forever barred, estopped and enjoined from
asserting the claim, Judge Lifland says.  The Debtors and their
property will be forever discharged from any indebtedness with
respect the claim.  Moreover, the holder will not be permitted to
vote to accept or reject any plan of reorganization in the
Debtors' Chapter 11 cases, participate in any distribution on
account of the claim, or receive further notices regarding the
claim.

Copies of the Proof of Claim Forms will be served on each party
who receives a copy of the Bar Date notice, including:

    * the U.S. Trustee;

    * counsel to:

      -- the Official Committee of Unsecured Creditors;
      -- Wells Fargo Foothill, Inc., and Ableco Finance LLC;
      -- the ad hoc committee of the Debtors' senior noteholders;
      -- U.S. Bank, N.A.;
      -- JPMorgan Chase Bank; and
      -- Morgan Stanley Senior Funding, Inc.;

    * all known holders of claims listed on the Debtors' Schedules
      of Statements and Liabilities at the stated addresses;

    * all parties known to the Debtors as having potential claims
      against their estate;

    * all counterparties to the Debtors' executory contracts and
      unexpired leases;

    * all parties to litigation with the Debtors;

    * the District Director of Internal Revenue of the Southern
      District of New York;

    * the Securities and Exchange Commission; and

    * all parties to whom the Debtors are required to give notice.

Judge Lifland directs the Debtors to publish notice of the Bar
Dates in The New York Times (National Edition), on or before
July 10, 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Inks Financing Agreement with Lenders
-------------------------------------------------------
Following the U.S. Bankruptcy Court for the Southern District of
New York's approval of the $130,000,000 financing facility,
Silicon Graphics, Inc., and its debtor-affiliates entered into the
Postpetition Loan and Security Agreement on June 28, 2006, with:

    * Quadrangle Master Funding, Ltd., Watershed Technology
      Holdings, LLC, and Encore Funding, LP -- the Lenders;

    * Morgan Stanley Senior Funding, Inc., as administrative
      agent, sole lead arranger and sole bookrunner, and

    * Wells Fargo Foothill, Inc., as collateral agent, revolving
      agent and syndication agent.

Barry Weinert, Esq., vice president and general counsel of
Silicon Graphics, Inc., disclosed in a regulatory filing with the
Securities and Exchange Commission that the $130,000,000 financing
facility consists of a $100,000,000 term loan and a $30,000,000
revolving line of credit comprising two types of advances, as
secured by some assets of the Debtors.

The interest rate under:

    -- the Term Loan is the per annum rate equal to the sum of the
       rate of interest announced, from time to time, within Wells
       Fargo Bank, N.A., at its principal office in San Francisco
       as its prime rate plus 700 basis points;

    -- the Revolver A Advances is the per annum rate equal to, at
       the Debtors' election,

        (i) the Base Rate plus 75 basis points; or
       (ii) the rate based on the applicable rate on the London
            interbank market plus 300 basis points; and

    -- the Revolver B Advances is the per annum rate equal to, at
       the Debtors' election,

        (i) the Base Rate plus 325 basis points; or
       (ii) the LIBOR Rate plus 525 basis points.

As prepayment on the outstanding obligations under the Financing
Agreement, in any fiscal year in which any sale or disposition by
the Debtors of property or assets exceeds:

    (a) $500,000, the Debtors are required to pay 100% of the net
         proceeds to the Lender; and

    (b) $250,000, the Debtors are required to pay 100% of the
        excess to the Lender.

Furthermore, the Financing Agreement terminates -- and all
outstanding borrowed amounts under the Financing Agreement become
due -- on the earliest to occur of the date:

    (i) a confirmed plan of reorganization becomes effective;

   (ii) on which an event of default occurs and is continuing;

  (iii) of any decision by the board of directors of any Debtor to
        proceed with the sale or liquidation without the consent
        of all of the Lenders;

   (iv) November 10, 2006; or

    (v) the Borrowers pay all of the required Lenders in full and
        terminate the term loan, unless terminated earlier,
        pursuant to the Financing Agreement.

A full-text copy of the Postpetition Loan and Security Agreement
is available for free at http://researcharchives.com/t/s?d13

                          Payoff Letters

Pursuant to the Final DIP Order, the Debtors filed with the
Court:

    (i) a Payoff Letter dated June 21, 2006, between Silicon
        Graphics, Inc., and Quadrangle Master Funding, Ltd.,
        Watershed Technology Holdings, LLC, and Encore Funding,
        LP -- the DIP Lenders; and

   (ii) a Payoff Letter dated June 26, 2006, between Silicon
        Graphics, Inc., and Wells Fargo Foothill, Inc.

In the Payoff Letter with the DIP Lenders, the Debtors expressed
their desire to repay the total unpaid balance of all amounts owed
to the DIP Lenders with respect to the Postpetition Loan and
Security Agreement and related documents.

The Payoff Letter provides that if paid by the close of business
on June 21, 2006, the amount necessary to payoff all principal,
interest, expenses, fees and other charges as of that time is
$28,231,250.  For each day after June 21 that the charges are not
paid, the Unpaid Balance will be increased by $11,666 -- the Per
Diem Charge.

The payments will be made via wire transfer of federal funds to
the accounts listed on Schedule D-2 to the DIP Loan Agreement in
amounts equal to each DIP Lender's pro rata share of the Term
Loan Commitment.

The DIP Lenders agree that upon their receipt of the total amount
of the Unpaid Balance and Per Diem Charge, all liabilities will be
satisfied and the Financing Documents will automatically
terminate.  The DIP Lenders will then cancel and release all
encumbrances that they may have against the assets of the
Debtors.

A full-text copy of the Payoff Letter with the DIP Lenders is
available for free at http://researcharchives.com/t/s?d14

Among other things, the Payoff Letter with Wells Fargo confirm
that all prepetition obligations, other than those that survive
termination of the Prepetition Credit Agreement, will be
terminated and satisfied in full, upon:

    * Wells Fargo Foothill's receipt of:

         (i) a wire transfer of $58,774,298 -- the Payoff Amount;

        (ii) a copy of the Final DIP Order; and

       (iii) a fully executed counterpart of the letter agreement
             signed by the Debtors, the DIP Administrative Agent,
             and Ableco Finance, LLC; and

    * Issuing Lender's receipt of $4,813,093 to fund the L/C
      Prepaid Account as provided in the DIP Loan Agreement.

Issuing Lender refers to Wells Fargo or any other Lender that, in
its sole discretion, agrees to become an Issuing Lender for the
purpose of issuing L/Cs or L/C Undertakings.

Wire Transfers of the Payoff Amount and the L/C Prepaid Account
Amount were due June 28, 2006.

A full-text copy of the Payoff Letter with Wells Fargo Foothill is
available for free at http://researcharchives.com/t/s?d15

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


SIVAULT SYSTEMS: Names Richard Moore as New President and CEO
-------------------------------------------------------------
SiVault Systems Inc. named Richard "Dick" Moore as its new chief
executive officer and President on July 3, 2006.

Prior to joining SiVault Systems Inc. Dick had spent 4 years as
President and Chief Operating Officer of Financial Fusion Inc., a
software development company whose primary market was the top 100
Banks in the World.  Financial Fusion provided sophisticated end
user applications, which included a Retail Banking Suite as well
as a fully integrated Corporate Banking solution.  During his
tenure at Financial Fusion the company was recognized as best in
class and acquired a number of prestigious customers such as Bank
of America, Bank of China and Citizens Bank to name a few.

Before Financial Fusion, Dick was Senior Vice president of Cygent
Systems and later become CEO.  Cygent provided web-enabled
applications designed for the telecommunications sector. Prior to
Cygent, Dick was the Senior Vice President of Pyramid Systems a
high end Unix manufacturer.  Prior to Pyramid Systems Dick started
his career with the Burroughs Corporation as an entry-level sales
person progressing over 17 years in a variety of sales management
positions.  Dick graduated from Syracuse University in 1974.

"Dick is an unbelievably strong operations guy, who we are
fortunate to bring in at this stage in the restructuring of the
company" Wayne Taylor, SiVault Systems Chief Financial Officer
said.  Mr. Moore stated, "I am very pleased to be involved with
SiVault during this transition. I believe my background and
experience along with my competitive intensity will assist in
reshaping SiVault into a growth company delivering shareholder
value."

                      About SiVault Systems

SiVault Systems, Inc., fka Security Biometrics, Inc. --
http://www.sivault.com/-- provides products and services for the    
secure authentication, processing, storage and retrieval of
signature-based medical, financial and retail electronic
transactions and documents.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 1, 2006,
Miller, Ellin & Company, LLP, in New York, raised substantial
doubt about SiVault Systems, Inc., fka Security Biometrics, Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
June 30, 2004, and 2005.  The auditor pointed to the company's
significant operating losses since inception and working capital
deficiency.


SOLUTIA INC: Gets Court Nod to Amend & Assume Linde Gas Contracts
-----------------------------------------------------------------
Solutia Inc. and its debtors-affiliates obtained permission from
the U.S. Bankruptcy Court for the Southern District of New York to
enter into an Assumption Agreement, assume the Linde Gas
Contracts, and disallow and expunge Claim No. 416.

As reported in the Troubled Company Reporter on June 26, 2006,
Solutia Inc. has two contracts related to operations of its
facility in Decatur, Alabama, with Linde Gas LLC:

   (i) a Hydrogen Supply Agreement dated Aug. 28, 1997, between
       Solutia, as assignee of Monsanto Company, and Linde Gas,
       as successor to Lagus Corporation; and

  (ii) a Carbon Dioxide Sales Agreement dated August 6, 2003,
       between Solutia and Linde Gas, as successor to Linde Gas,
       Inc.

Solutia purchases hydrogen to produce hexamethylenediamine, which
it needs to manufacture nylon, and sells the carbon dioxide
produced during the HMD production.

Linde Gas built a $20,000,000 hydrogen production facility at
Solutia's Decatur Facility and operates it pursuant to a lease
and operating agreement with Solutia.

Because, Linde Gas provides hydrogen at cost, Solutia pays for
the hydrogen below the market prices charged by other hydrogen
producers, Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in
New York, told the Court.

Under the CO2 Sales Agreement, Solutia sells the carbon dioxide
produced during the HMD production to Linde Gas.  Solutia could
not sell the carbon dioxide to other parties without incurring
significant costs associated with liquifying and transporting the
gas, Mr. Henes related.

Linde Gas filed Claim No. 416, dated June 30, 2004, against
Solutia asserting a general unsecured claim for $238,315 for
amounts allegedly owed by Solutia under the Hydrogen Supply
Agreement prior to the bankruptcy filing.

In addition, various disputes arising out of performance,
payment, applicable covenants and other obligations under the
Linde Gas Contracts exist between the two parties.

                       Assumption Agreement

Recognizing the importance of their relationship, Solutia and
Linde Gas entered into negotiations to resolve their disputes,
including the Claim, and any applicable cure amounts associated
with the assumption of the Linde Gas Contracts.

In February 2006, the parties entered into an Assumption
Amendment and Waiver Agreement, pursuant to which the Hydrogen
Supply Agreement will be amended to, among other things:

   (i) grant Linde Gas a right to extend the term of the
       Supply Agreement for another four years upon at least 24
       months written notice to Solutia; and

  (ii) clarify that Solutia's option to purchase the Linde
       Hydrogen Facility is only triggered in circumstances where
       Linde Gas fails to perform its obligations under the
       Supply Agreement.

The parties also agree that:

    -- the Linde Gas Contracts, as amended, will be assumed;

    -- Claim No. 416 will be disallowed and expunged in its
       entirety; and

    -- Linde Gas will waive any applicable claims for cure costs
       resulting from the assumption of the Linde Gas Contracts.

Mr. Henes tells the Court that:

   (a) the Hydrogen Supply Agreement is the most cost-effective
       method through which Solutia can fill its hydrogen
       requirements for its Decatur Facility at below market
       prices;

   (b) the assumption of the CO2 Agreement will ensure that
       Solutia continues to receive substantial revenue; and

   (c) the Assumption Agreement will enable Solutia to preserve
       liquidity and consensually resolve the various outstanding
       disputes and claims relating to the Linde Gas Contracts.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


SOLUTIA INC: Can Amend and Assume Saint Gobain Agreement
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Solutia Inc. and its debtor-affiliates' request to amend
its agreement, dated Jan. 1, 2003, with Saint Gobain Glass France
SA.

Pursuant to the Agreement, Solutia was granted rights with respect
to Saint Gobain-owned patents related to acoustic interlayers and
glazings.

At the time the parties entered into the Agreement, Saint Gobain
was in the process of negotiating licenses for the Patents with
various customers that manufactured acoustic glazing products for
automotive applications.

Under the Agreement, Solutia was authorized to manufacture and
sell acoustic interlayers to the customers.  Saint Gobain waived
its rights to allege or assert patent infringement against Solutia
relating to these products.

In exchange for its freedom of operation under the Patents,
Solutia was required to make royalty payments to Saint Gobain.
The royalty payments were to be calculated based on the production
and sale of certain laminated glass glazing products by the
customers, which utilized Solutia's acoustic interlayer in a
manner within the scope of the Patents.

A dispute arose when Saint Gobain began invoicing Solutia in
November 2004 for royalty payments that Solutia refused to pay
because it contends that no glazing product produced and sold by
the customers falls within the scope of the Patents, Jonathan S.
Henes, Esq., at Kirkland & Ellis LLP, in New York, relates.

Saint Gobain, according to Mr. Henes, threatened to sue Solutia
to collect royalty payments alleged to be due both before and
after Solutia's bankruptcy filing.

Prior to Dec. 17, 2003, Saint Gobain has invoiced Solutia for
$140,321, including the $60,443 asserted in Saint Gobain's Claim
No. 5636, for payments allegedly owed by Solutia under the
original Agreement.  Solutia disputed the claim in its entirety.

                      Amendment Agreement

To resolve their disputes, Solutia and Saint Gobain entered into
settlement negotiations that led to their First Amendment and
Settlement and Release Agreement.

The parties agree to replace the complex, formula-based royalty
provisions with a lump sum royalty amount payable in annual
installments.  Solutia will make make:

   (a) three equal payments on or before:

       * five days following approval of the Amended Agreement;
       * Dec. 31, 2006;
       * Dec. 31, 2007; and

   (b) one final payment of a lesser amount to be made on or
       before Dec. 31, 2008.

The Debtors redacted the Lump Sum Royalty Amount and other
confidential items from the Amendment Agreement filed with the
Court.

In addition, the Amendment Agreement:

    -- provides for fully paid-up rights under the Patents that
       are perpetual and irrevocable and extend for the full term
       of the Agreement; and

    -- amends other terms relating to Saint Gobain's offering,
       negotiation, and granting of licenses to any customers to
       whom Solutia intends to sell acoustic interlayers and who
       are not currently party to the license agreement.

Mr. Henes asserts that the fixed total payment schedule under the
Amendment Agreement provides Solutia these benefits:

   (1) It resolves the current dispute over the Claim and the  
       Disputed Amount allegedly due under the Agreement;

   (2) It eliminates the need for costly litigation with a major
       customer regarding any current and future royalty disputes
       under the Agreement;

   (3) The Amendment Agreement enables Solutia to maintain a
       continued profitable relationship with Saint Gobain;

   (4) Solutia's profitability will be enhanced since its costs
       under the Agreement will remain stable; and

   (5) Saint Gobain will waive any cure amounts in connection
       with the assumption of the Agreement, aside from the
       Amendment Payments.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


SOLUTIA INC: Gets Court Nod to Amend & Assume Ammonia Supply Pact
-----------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
enter into a Claim Agreement that amends and assumes the Ammonia
Supply Agreement.

As reported in the Troubled Company Reporter on June 23, 2006, as
part of the examination and analysis of their prepetition
contracts, the Debtors reviewed an ammonia sales and exchange
agreement dated March 30, 1998, between Solutia Inc. and El Paso
Merchant Energy-Petroleum Company, formerly known as Coastal
Refining & Marketing, Inc.

Solutia buys ammonia for its facility in Chocolate Bayou, Texas,
which produces acrylonitrile needed in the manufacture of nylon.  
The facility has no ammonia storage on site and no cost-effective
alternatives for delivery other than through El Paso's pipeline
system, Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New
York, relates.

Under the Ammonia Supply Agreement, Solutia is obligated to buy
the first 10,000 tons of ammonia required for use by the
Chocolate Bayou facility each month from El Paso.

The pricing for the first 5,000 tons is based on a set formula
and the pricing for the next 5,000 tons is calculated by
discounting the market price for ammonia.  In the event less than
10,000 tons of ammonia are required for that month, Solutia is
not obligated to pay for any shortfall.

If the Chocolate Bayou facility requires more than 10,000 tons of
ammonia in a given month, Solutia may purchase it from a third
party producer located in Freeport, Texas.  El Paso is required
to transport the purchased ammonia via its pipeline connected to
the third party's terminal.

El Paso's delivery fee, which is substantially below market
rates, will not increase for the term of the Ammonia Supply
Agreement.  Thus, the Agreement is favorable to Solutia both with
respect to the supply component and the delivery component,
Mr. Henes points out.

El Paso asserts unsecured Claim No. 1264 for $3,630,261 on
account of outstanding invoices allegedly due prepetition from
Solutia under the Ammonia Supply Agreement.

On the other hand, Solutia asserts a claim against El Paso for
certain damages relating to a 27-day ammonia pipeline outage that
caused a shutdown of one unit at the Chocolate Bayou facility
during September and October 2004.

On Dec. 12, 2005, Solutia filed Adversary Proceeding No.
05-0334 against El Paso for the avoidance and recovery of
preferential transfers totaling $6,778,396.

                          Claim Agreement

On Dec. 1, 2005, El Paso completed the sale of certain assets,
including the ammonia pipeline system and the Ammonia Supply
Agreement, to Buckeye Gulf Coast Pipe Lines, L.P.

In connection with the sale of the pipeline assets, El Paso
requested that Solutia not only assume the Ammonia Supply
Agreement but also consent to the sale of the Agreement to
Buckeye.

The request led to extensive negotiations, the result of which
was the resolution of El Paso's Claim and Solutia's Outage Claim,
and Solutia's agreement to assume the Ammonia Supply Agreement.

Pursuant to the Claim Agreement:

   (a) El Paso's Claim No. 1264 will be reduced and allowed as a
       general unsecured claim for $2,600,000;

   (b) the Outage Claim and all related claims, including any
       claim for cure amounts that El Paso may have with respect
       to the assumption of the Ammonia Supply Agreement, will be
       released;

   (c) Solutia will withdraw the Preference Action; and

   (d) Solutia will consent to El Paso's assignment of the
       Ammonia Supply Agreement to Buckeye.

El Paso will waive any claim for outstanding prepetition amounts
due under the Ammonia Supply Agreement in exchange for the
allowance of Claim No. 1264.

Mr. Henes asserts that entry into the Claim Agreement is in the
estate's best interest because:

   (1) it provides a favorable resolution of the outstanding
       claims between the parties;

   (2) it secures a critical source of ammonia supply and
       transportation at below market prices;

   (3) it will conserve cash for Solutia's estate since El Paso
       agreed to reduce the amount of its Claim and waive its
       right to a cure payment; and

   (4) Solutia will avoid the cost and expense associated with
       litigating its disputes with El Paso while preserving the
       value of the Ammonia Supply Agreement.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


SOUTHAVEN POWER: Gets Court Nod to Amend DIP Credit Agreement
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina authorized Southaven Power, LLC, to amend its DIP Credit
Agreement with Calyon New York Branch.

                      Existing DIP Financing

On June 9, 2005, the Court approved the Debtor's DIP Credit
Agreement with Calyon, acting as Administrative Agent.  The DIP
credit agreement authorized the Debtor to secure up to $25 million
in loans from Calyon.

As security for the repayment of the loans, the Debtor granted the
DIP Agent and the DIP Lenders liens and claims for substantially
all of its assets.

The DIP Credit Agreement expired on June 30, 2006.

                        DIP Amendment No. 2

Under the DIP Credit Agreement, the amendment will:

   1) extend the maturity date of the agreement from June 30, 2006
      to Sept. 30, 2007;

   2) eliminate the existing $15 million sublimit applicable to
      working capital loans; and

   3) require the Debtor to pay an amendment fee of $375,000.

The Debtor believes that the DIP Amendment is in the best interest
of its estate and its creditors, and will preserve the value for
all stakeholders in this chapter 11 case.

Headquartered in Charlotte, North Carolina, Southaven Power, LLC,
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi.  The Company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power, L.P.  To date, no
official committee of unsecured creditors has been appointed in
the Debtor's case.  Erie Power Technologies, Inc. and Centro Inc.,
have expressed interest in serving on an official committee.  
No other creditors have indicated their interest or willingness,
and the U.S. Bankruptcy Administrator for the Western District of
North Carolina won't appoint a two-member committee.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of more than $100 million.


SOUTHAVEN POWER: Court Extends Plan-Filing Period to Jan. 15, 2007
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina extended Southaven Power, LLC's exclusive period to file
a chapter 11 plan until Jan. 15, 2007.  The Court also extended
the Debtor's exclusive period to solicit acceptances of that plan
until March 12, 2007.

As reported in the Troubled Company Reporter on Nov. 30, 2005, the
most important asset in the Debtor's estate is the ongoing
arbitration against PG&E Energy Trading-Power, L.P., nka NEGT
Energy Trading - Power, L.P.  The arbitration relates to a
Dependable Capacity and Conversion Services Agreement dated
June 1, 2000, with ET Power.  ET Power's obligations under the
Agreement were partially guaranteed by its parent, PG&E National
Energy Group, nka National Energy & Gas Transmission, Inc.

ET Power filed a lawsuit asserting an $8 million breach of
contract claim against the Debtor.  In turn, the Debtor asserted a
$500 million rejection damage claim against ET Power and a
$176.2 million claim against NEGT, as guarantor.  The litigation
was subject to an arbitration proceeding scheduled for Oct. 17 to
Oct. 28, 2005.

The Debtor explained that although the arbitration proceeding took
place on schedule, it was not concluded.  The hearings were
scheduled to resume on Feb. 6 to Feb. 24, 2006.  The Debtor said
the arbitration may not be concluded until the end of May 2006.

The Debtor disclosed that until the arbitration proceeding is
resolved, it has no way to determine the value of its assets and
thus cannot determine which creditors are entitled to share.  The
Debtor said that it is impossible to file a plan of reorganization
until the arbitration proceeding is resolved.

Headquartered in Charlotte, North Carolina, Southaven Power, LLC,
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi.  The Company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power, L.P.  To date, no
official committee of unsecured creditors has been appointed in
the Debtor's case.  Erie Power Technologies, Inc. and Centro Inc.,
have expressed interest in serving on an official committee.  
No other creditors have indicated their interest or willingness,
and the U.S. Bankruptcy Administrator for the Western District of
North Carolina won't appoint a two-member committee.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of more than $100 million.


STRATUS SERVICES: Completes Activities for Staffing Unit Sale
-------------------------------------------------------------
Stratus Services Group, Inc., the SMARTSolutions(R) Company, has
completed the trailing activities associated with the sale of the
assets of its commercial staffing units.  The Company spent
considerable time, money and effort in the collection of the
receivables for its senior lender, which has now been paid in
full.  Through the first four months of the year, the Company
spent a substantial amount of its time and resources on the proper
disposition of its assets to make the transition as smooth as
possible.

Joseph J. Raymond, Chairman and CEO, commented: "The work and
strain on our limited resources associated with the disposition of
the assets and old banking relationships is substantially behind
us.  The Company will continue dealing with the old creditor
issues, but as for the operation our turnaround is in full effect.
We have been spending considerable time towards growing our new
business model.  The Company believes that the higher margins
associated with the IT business, which is not as sensitive to
workers' compensation risks, is a great platform for it to rebuild
in the staffing industry, and we will continue to keep the
shareholders apprised of our progress."

Headquartered in Manalapan, New Jersey, Stratus Services Group
Inc. (OTCBB: SSVG.OB) -- http://www.stratusservices.com/--   
provides a wide range of staffing and productivity consulting
services nationally through a network of offices located
throughout the United States.  At March 31, 2006, the Company had
a stockholders' deficiency of $8,321,043.

                        Going Concern Doubt

E. Randall Gruber, CPA, PC, expressed substantial doubt about
Stratus Services' ability to continue as a going concern after it
audited the Company's financial statements for the year ended
Sept. 30, 2005.  The auditing firm pointed to the Company's
recurring losses from operations, and working capital deficit.


TENET HEALTHCARE: Gets $340 Million from Katrina Insurers
---------------------------------------------------------
Tenet Healthcare Corporation reached agreement with its 2005-2006
property insurers to settle all claims related to physical damage
and business interruption sustained by Tenet as a result of
Hurricane Katrina.  The insurers will pay Tenet a total of
$340 million, all of which has been received by the company as of
July 6, 2006.

On Aug. 29, 2005, when Hurricane Katrina made landfall, Tenet
operated five hospitals in the New Orleans market and one in
Biloxi, Mississipi, as well as five Diagnostic Imaging Services
outpatient radiology centers and other support property in New
Orleans.  All the facilities sustained significant storm damage.  
At Memorial Medical Center and Lindy Boggs Medical Center, the
damage was so extensive that those two hospitals have not been
able to reopen.

Tenet said that resolution of its claims avoided a potential
dispute, which could have taken months or years to resolve.  The
settlement is one of the first major commercial property insurance
settlements resulting from Hurricane Katrina damage.

"Instead of engaging in a protracted resolution process with our
insurers, we sat down with them and worked out a collaborative and
equitable settlement that permits us to move forward after the
devastation of Katrina," said Trevor Fetter, Tenet's president and
chief executive officer.  "By settling this matter quickly, we
have avoided the disagreements and differences over interpretation
that can occur in insurance claims of this magnitude and
complexity.  As provided in our contracts, this also gives us the
flexibility to apply these funds to meet the company's overall
capital needs."

The settlement is being paid by various interested insurers who
underwrote Tenet's property insurance in 2005-2006.  The company
said $240 million of the settlement will be recorded in the second
quarter ended June 30.  The other $100 million was recorded in
previous quarters.

Before Katrina hit, Tenet's operating hospitals in Louisiana and
Mississippi were:

    * Kenner Regional Medical Center, 203 beds -- Kenner,
      Louisiana

    * Lindy Boggs Medical Center, 187 beds -- New Orleans

    * Meadowcrest Hospital, 207 beds - Gretna, Louisiana

    * Memorial Medical Center, 317 beds - New Orleans

    * NorthShore Regional Medical Center, 165 beds -- Slidell,
      Louisiana

    * Gulf Coast Medical Center, 189 beds -- Biloxi, Mississippi  
      (On May 31, Tenet completed the sale of this hospital to
      Health Management Associates Inc.)

On June 29, the company reported its intention to divest Kenner,
Lindy Boggs, Meadowcrest and Memorial by mid-2007.

                           About Tenet

Based in Dallas, Texas Tenet Healthcare Corporation (NYSE: THC) --
http://www.tenethealth.com/-- through its subsidiaries, owns and     
operates acute care hospitals and related health care services.  
Tenet's hospitals aim to provide the best possible care to every
patient who comes through their doors, with a clear focus on
quality and service.

                          *     *     *

As reported in the Troubled Company Reporter on July 4, 2006,
In light of the announcement of the settlement of investigations
being conducted by the Department of Justice and a number of State
Attorneys into Medicare outlier payments, Fitch Ratings affirmed
'B-' issuer default rating and 'B-/RR4' senior unsecured debt
recovery rating for Tenet Healthcare Corp., with a Negative Rating
Outlook.


U.S. CONCRETE: Buying Two Companies for $165 Million
----------------------------------------------------
U.S. Concrete, Inc., has signed a stock purchase agreement to
acquire all of the outstanding capital stock of Alberta
Investments, Inc., and Alliance Haulers, Inc., for $165 million,
subject to specified adjustments.  The closing of the acquisition
is subject to customary conditions.  U.S. Concrete expects to
complete the acquisition in early July 2006.

Alberta Investments owns two subsidiaries through which it
conducts the substantial majority of its operations: Redi-Mix,
L.P. and Ingram Enterprises, L.P.  Redi-Mix operates 13 ready-
mixed concrete plants in the Dallas/Fort Worth Metroplex and in
areas north of the Metroplex.  Ingram Enterprises operates
17 ready-mixed concrete plants and three sand and gravel plants in
West Texas.  Redi-Mix and Ingram operate a combined fleet of
approximately 310 mixer trucks and produced approximately
2.4 million cubic yards of ready-mixed concrete and 1.2 million
tons of aggregates in 2005.

Alliance Haulers provides cement and aggregates hauling services
with a fleet of approximately 260 hauling trucks owned by Redi-Mix
and third-party haulers.  For the twelve months ended March 31,
2006, Alberta Investments and Alliance Haulers generated revenues
of approximately $181 million.

"The acquisition of Alberta Investments and Alliance Haulers would
represent a significant expansion of our overall business and
particularly of our operations in the Dallas/Fort Worth Metroplex,
one of the leading markets in the U.S.," Eugene P. Martineau,
president and chief executive officer of U.S. Concrete, stated.

"The acquisition would also provide us with a strong position in
the West Texas ready-mixed concrete market and includes a
complement of aggregates operations with substantial reserves.  In
addition to acquiring an excellent base of additional assets, we
are excited about the outstanding management team associated with
these assets, which we believe will add value to U.S. Concrete."

In connection with the transaction, U.S. Concrete intends to enter
into an amendment and restatement of its senior secured credit
facility.

U.S. Concrete Inc. (NASDAQ: RMIX) -- http://www.us-concrete.com/
-- provides ready-mixed concrete and related concrete products and
services to the construction industry in several major markets in
the United States.  The Company has 106 fixed and seven portable
ready-mixed concrete plants, 10 pre-cast concrete plants, three
concrete block plants and three aggregates quarries. During 2005,
these facilities produced approximately 6.6 million cubic yards of
ready-mixed concrete, 5.3 million eight-inch equivalent block
units and 1.9 million tons of aggregates.

                           *     *     *

As reported in the Troubled Company Reporter on June 20, 2006,
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.


U.S. CONCRETE: Initiates Private Offer for $75 Mil. Senior Notes
---------------------------------------------------------------
U.S. Concrete, Inc. has commenced a private placement of
$75 million of its 8-3/8% senior subordinated notes due 2014.  The
notes are expected to be eligible for resale under Rule 144A.  The
private placement, which is subject to market and other
conditions, will be made within the United States only to
qualified institutional buyers and outside the United States only
to non-U.S. investors under Regulation S of the Securities Act of
1933.

U.S. Concrete intends to use the net proceeds from the offering to
fund a portion of the purchase price of its pending acquisition of
Alberta Investments, Inc. and Alliance Haulers, Inc.  The note
offering is conditioned on the closing of that acquisition.

U.S. Concrete Inc. (NASDAQ: RMIX) -- http://www.us-concrete.com/
-- provides ready-mixed concrete and related concrete products and
services to the construction industry in several major markets in
the United States.  The Company has 106 fixed and seven portable
ready-mixed concrete plants, 10 pre-cast concrete plants, three
concrete block plants and three aggregates quarries. During 2005,
these facilities produced approximately 6.6 million cubic yards of
ready-mixed concrete, 5.3 million eight-inch equivalent block
units and 1.9 million tons of aggregates.

                           *     *     *

As reported in the Troubled Company Reporter on June 20, 2006,
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.


U.S. ENERGY: Posts $2 Million Net Loss in Quarter Ended March 31
----------------------------------------------------------------
U.S. Energy Initiatives Corporation reported a $2,031,118 net loss
on $168,100 of revenues for the period ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $3,479,087
in total assets and $5,253,177 in total liabilities, resulting in
a $1,774,090 shareholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $2,002,657 in total current assets available to pay
$5,253,177 in total current liabilities coming due within the next
12 months.

Full-text copies of the Company's financial statements are
available for free at http://ResearchArchives.com/t/s?d1b

U.S. Energy Initiatives Corporation fka Hybrid Fuel Systems, Inc.
(OTCBB: HYFS) manufactures and markets retrofit systems for the
conversion of gasoline and diesel engines, stationary or
vehicular, to non-petroleum based fuels like compressed natural
gas and liquefied natural gas.  The Company holds a worldwide
exclusive license to commercialize the technology embodied in five
issued and one pending US patent.  The Company currently offers
HFS dual-fuel conversion system designed to convert medium and
heavy-duty mobile diesel engines to operate in a natural
gas/diesel dual-fuel mode.


VALASSIS COMMS: To Acquire ADVO Inc. for $1.3 Billion
-----------------------------------------------------
Valassis Communications, Inc., entered into a definitive merger
agreement with ADVO Inc., under which it will acquire all of the
outstanding common shares of ADVO stock for $37 per share in cash
in a merger.  The fully financed transaction is valued at
$1.3 billion (on a diluted basis), including $125 million in
existing ADVO debt which Valassis expects to refinance.

This acquisition will create the nation's largest integrated media
services provider.  The combination will feature the most
comprehensive product and customer offering in the industry
serving 20,000 advertisers worldwide, including 94 of the top 100
advertisers in the United States.  The combined company will be
positioned to capture growth across the expanded product and
service portfolio, delivering customized, targeted solutions on a
national, regional, zip code, sub-zip code and household basis.  
ADVO's shared mail distribution business penetrates up to 114
million households, or 90% of U.S. homes, adding substantially to
Valassis' weekly newspaper distribution of over 60 million
households.  The combined company will have 7,900 employees with
operations in nine countries.

"Together, Valassis and ADVO will be well positioned for growth as
a more diversified company with complementary capabilities,
product offerings and clients," said Alan F. Schultz, Valassis
Chairman, President and CEO.  "We will have an unsurpassed ability
to deliver value and savings to consumers where, when and how they
want -- and to do so with advanced analytics and targeting
capabilities that maximize advertisers' return on investment.  
This combination is a first in the media services industry and
uniquely positions us to capture growth by anticipating the needs
of the marketplace and evolving to meet them."

"Advertisers' needs are becoming increasingly sophisticated and
require solutions that are both scalable and customized," S. Scott
Harding, ADVO Chief Executive Officer, added.  "Our new company
will deliver on these requirements with an unrivaled portfolio of
products, leadership across multiple media platforms, proven
targeting expertise and unmatched reach.  In today's media world,
that is an undeniably attractive combination."

"We are very pleased to welcome ADVO into the Valassis family,"
Mr. Schultz continued.  "This is an exciting opportunity for
employees, clients and shareholders."

                      Transaction Overview

Valassis expects the transaction to be accretive in 2007 on a cash
EPS basis, excluding estimated amortization of intangibles arising
from purchase accounting.  Annual cost synergies of approximately
$40 million are anticipated to be achieved beginning in 2007.  The
combined company expects revenue of approximately $2.65 billion in
calendar year 2007.  EBITDA in 2007 for the combined company is
anticipated to be between $305 million and $315 million.

The combined company will be headquartered in Livonia, Michigan,
and maintain a substantial presence in Windsor, Connecticut.  Mr.
Schultz will remain Chairman, President and Chief Executive
Officer and Mr. Robert L. Recchia will remain Chief Financial
Officer.  Mr. Harding will serve as a consultant to the combined
company.  The Valassis Board of Directors will remain intact.

The merger agreement, which has been approved by the Boards of
Directors of both companies, remains subject to the approval of
ADVO shareholders, regulatory approvals and other customary
conditions.  The transaction is expected to close in three to four
months.

Valassis' financial advisors are Bear, Stearns&Co. Inc., who also
provided committed financing for the transaction, with McDermott
Will&Emery LLP as legal counsel.  ADVO's financial advisors are
Citigroup Global Markets, Inc. with Wachtell, Lipton, Rosen&Katz
and Kirkpatrick&Lockhart Nicholson Graham LLP as legal counsel.

                         About ADVO Inc.

Headquartered in Windsor, Connecticut, ADVO, Inc., a direct mail
media company, engages in soliciting and processing printed
advertising from retailers, manufacturers, and service companies
in the United States and Canada.  It offers direct mail marketing
products and services, such as shared mail, which provides the
addresses of the households receiving the mail packages; and
sorts, processes, and transports the advertising material for
ultimate delivery primarily through the United States Postal
Service.

                         About Valassis

Headquartered in Livonia, Michigan, Valassis Communications Inc.
-- http://www.valassis.com/-- offers a wide range of marketing  
services to consumer packaged goods manufacturers, retailers,
technology companies and other customers with operations in the
United States, Europe, Mexico and Canada.

                          *     *     *

As reported in the Troubled Company Reporter on June 29, 2006,
Standard & Poor's Ratings Services lowered its ratings on
Livonia, Michigan-headquartered marketing services provider
Valassis Communications Inc. to 'BB+' from 'BBB-', and placed
them on CreditWatch with negative implications.


VARIG S.A.: Preliminary Injunction in Effect Until July 21
----------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York has extended the preliminary
injunction for VARIG S.A. and its debtor-affiliates until July 21,
2006, Executive Travel Associates reports.  

The U.S. Court directed Eduardo Zerwes, the court-appointed
Foreign Representative for the Debtors to submit a revised
proposed order detailing the airline's plans as it seeks another
buyer, ETA says.

Mr. Zerwes had presented another reason for the U.S. Court to
extend the preliminary injunction for a short period of time.

Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
in New York, tells Judge Drain that VARIG Logistica S.A., the
former cargo and logistics affiliate of the Foreign Debtors that
was sold to Volo Logistics Brasil, an entity partially controlled
by MatlinPatterson Global Advisors LLP, made a proposal to
acquire VARIG's assets on June 23, 2006.  The VarigLog Proposal
has not yet been accepted by the Commercial Bankruptcy and
Reorganization Court in Rio de Janeiro, Brazil.

The VarigLog Proposal provides for the infusion of up to
$20,000,000 in emergency funds and up to $485,000,000 in
additional funding based on a timetable contained in a business
plan.  The Proposal contemplates the transfer of 30 leased
aircraft.

VarigLog's representatives also are in discussions with various
VARIG lessors to accomplish a consensual transfer of the Foreign
Debtors' rights under the relevant lease agreements, as well as
their consent to permit the Foreign Debtors to continue to
operate, or otherwise retain, aircraft pending completion of the
sale to VarigLog or other successful bidder under the terms of
the VarigLog Proposal.

The existence of the VarigLog Proposal does not affect the
Foreign Debtors' voluntary implementation of the Contingency
Return Plan with respect to any aircraft leased under operating
leases where the lessor has made a formal demand for the return
of aircraft, Mr. Antonoff clarifies.  To preserve the Foreign
Debtors' going concern value during the pendency of the VarigLog
Proposal, Mr. Antonoff says the Foreign Debtors have requested
VarigLog to promptly identify which aircraft it seeks to retain
in the VARIG fleet and to obtain consent from the lessors to
retain those aircraft.

However, the Foreign Debtors will continue to implement the
Contingency Return Plan with respect to aircraft under operating
leases whose return has been formally demanded, Mr. Antonoff
assures the Court.

Furthermore, to the extent that aircraft are now grounded and in
the custody of VARIG Engineering and Maintenance, the Foreign
Debtors have notified and instructed VEM not to remove or permit
the removal of parts other than for the purpose of returning
parts to their proper airframe and normal maintenance.

A full-text copy of the certified English translation
of the VarigLog Proposal is available for free at
http://ResearchArchives.com/t/s?d36

            Trustees Plea for Court to Protect Lessors

U.S. Bank National Association, Wells Fargo Bank Northwest, N.A.,
and Wells Fargo Bank Northwest, N.A., as aircraft trustees,
insist that the Preliminary Injunction should be allowed to
expire so they may take actions necessary to protect their
interests in the Aircraft and seek immediate implementation of
the Contingency Plan at least as to their Aircraft.

"It is time for [the U.S.] Court to protect the U.S. aircraft
lessors," Ann Acker, Esq., at Chapman and Cutler LLP, in Chicago,
Illinois, says.

If there is something to save with VARIG -- a deal to be made --
it should be left to the aircraft lessors and the economics of
the market, Ms. Acker asserts.

Ms. Acker reminds Judge Drain that VARIG had promised the U.S.
Court, and the aircraft lessors, that if the $75,000,000 was not
deposited by NVP on June 23, 2006, VARIG would "continue,
essentially, the  implementation of the contingency return plan
by grounding the remaining aircraft that are operating and
performing its other obligations under the contingency return
plan."

Ms. Acker also points out that the Court conditioned continuation
of the Preliminary Injunction and non-implementation of the
Contingency Return Plan on (i) VARIG allowing the lessors access
to their aircraft so that the lessors could provide their own
security; and (ii) VARIG's assembling and preparing the steps
necessary to return not only grounded aircraft, but other
aircraft as well.

The $75,000,000 was not deposited, however, the Contingency Plan
has not been implemented.

The Foreign Debtors owe more than $8,618,477 in basic and
supplemental rent for the leased U.S. Bank and Wells Fargo
Aircraft through June 23, 2006, not including the Lessors' fees
and expenses Lessors.

The U.S. Bank Aircraft have been grounded since March 2006, or
earlier, and no payments have been made on either Aircraft for
March, April, May or June 2006.

                   Aircraft SPC Snubs Volo Offer

The Court should give little, if any, weight to Volo's bid,
Michael Luskin, Esq., at Luskin, Stern & Eisler LLP, in New York,
argues on Aircraft SPC-6, Inc.'s behalf.

Mr. Luskin points out that MatlinPatterson and Volo have had two
opportunities to purchase VARIG, first, in the "Plan A" sale
presented by the Foreign Representatives at the April 27, 2006
hearing and again at the auction held June 8, 2006.  According to
Mr. Luskin, Volo has yet to demonstrate a commitment to curing
postpetition payment and maintenance defaults.  MatlinPatterson's
"Plan A" offer centered on a fleet cherry-picked from the best
aircraft VARIG had to offer without consideration for the wishes
of the Lessors.

Aircraft SPC-6 leases one Boeing 737-4YO aircraft to VARIG
together with two CFM International, Inc. CFM56-3C1, pursuant to
a four- year lease dated as of April 2, 2004.  VARIG owes
Aircraft SPC-6 $364,375 in postpetition rent, maintenance
reserves and other payments.  The debt increases by $125,000 per
month, according to Mr. Luskin.

"Unless MatlinPatterson and Volo present credible evidence of
sincerity to move expeditiously and in a manner which does not
prejudice any lessor, neither VARIG, the foreign representative
nor the Court should delay the Contingency Return Plan based on
Volo's reported interest," Mr. Luskin contends.

"The Court must require the Foreign Representatives to face
reality and begin returning aircraft to the Lessors.  Each
hearing before the Court has resulted in the Court's granting the
foreign representatives' request for extended relief - a few days
or a few weeks, depending on the hearing. As the Lessors have
time and again predicted, all of VARIG's expected breaks have
resulted in disappointment."

Mr. Luskin also points out that VARIG's fuel crisis has
escalated.  The airline has operated on credit to Petrobas for
jet fuel for some time, and that Petrobas will cut VARIG's credit
at any day, if it has not done so already.  It would be imprudent
to convert the preliminary injunction to a permanent injunction
at this time, Mr. Luskin says.

No Lessor should be forced to deal with any buyer of VARIG which
does not demonstrate a commitment to the Lessors, Mr. Luskin
tells Judge Drain.

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


VARIG S.A.: Brazilian Court Sets New Auction Date for Assets
------------------------------------------------------------
VARIG, S.A., is back on the auction block after Judge Luiz Roberto
Ayoub of the 8th District Bankruptcy Court in Rio de Janeiro,
Brazil, scheduled a new auction of its assets.

According to published reports, the auction will take place after
a meeting of VARIG's creditors on July 10, 2006, to consider Volo
Logistics Brasil's $500,000,000 offer.

The auction will be held on July 12, 2006, The Associated Press
says.  Macauhub.com reports that the airline will be auctioned off
on July 11.

Volo acquired VARIG's cargo transport unit, Varig Logistica S.A.
in January 2006.  Volo have been extending help to keep VARIG
running.  As previously reported, Volo gave VARIG more than
$3,000,000 on June 26, 2006, so the airline could pay its bills
and avert a shutdown.

Volo made another deposit on July 4, 2006, to guarantee VARIG's
cash flow for another 24 hours, according to Investnews (Brazil).  
The amount was not disclosed.  Since June 28, Volo had already
deposited $4.8 million, Investnews says.

Macauhub.com says the funds will be returned, together with a 10%
premium, if Volo lose out in the auction.

                     Cinzel Will Bid for VARIG

The Cinzel Partners fund has created a consortium of investors to
come up with a $600,000,000 bid for VARIG, Investnews reports.

O Estado de Sao Paulo says the Cinzel consortium will submit its
proposal to Judge Ayoub before the July 10 creditors meeting.

Roberto Lima Netto, former president of Brazilian steel maker
Companhia Siderurgica Nacional and representative of Cinzel, told
Estado that the consortium intends to acquire as much as 30% of
VARIG's operations.  According to Estado, Cinzel will allow the
airline's employees to acquire the 20% while the remainder would
be sold in a public offering.

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


VESTA INSURANCE: Moody's Junks Rating on Senior Debt
----------------------------------------------------
Moody's Investors Service lowered the senior debt rating of Vesta
Insurance Group to C from B3 and the trust preferred rating of
Vesta Capital Trust I to C from Caa2.  This rating action follows
the company's announcement on July 3, 2006 that six of its
insurance subsidiaries had been placed into court-ordered
rehabilitation in Texas and that the company's two other insurance
subsidiaries have consented to entry of similar orders in other
regulatory jurisdictions.

The company believes that the placement of its subsidiaries into
rehabilitation constitutes a default under the terms of its long
term debt securities.  The outlook on the ratings is stable.

Moody's said that Vesta's ability to service and repay its holding
company debt obligations appears to be severely strained due to:

    1) the likely acceleration of the remaining approximately
       $70 million of debt securities outstanding given the
       technical default status,

    2) inability of Vesta Fire Insurance Corporation to provide
       statutory dividend capacity given its large negative
       unassigned surplus position, and

    3) potential adverse impact on cash flow from management
       companies due to possible regulator cancellation or
       modification of service agreements between the operating
       subsidiaries and the management companies.

Moody's also noted that the placement of the company's operating
subsidiaries into regulatory rehabilitation, coupled with delays
in filing of 2005 financials, will likely place substantial strain
on the company's business and its continuing efforts to implement
strategic options.

Further, the likely adverse impact on the company's business
prospects is a potential source of adverse selection within
Vesta's hurricane-exposed residential portfolio of business.  
In 2005, the company incurred significant storm losses of $91
million and $36 million, gross and net, respectively.

Commenting on the potential loss given default for the senior debt
and capital securities, Moody's said that there is much
uncertainty and limited information about the value of the
insurance subsidiaries to the holding company given they are now
under regulatory supervision and about the assets currently at the
holding company given the company hasn't filed GAAP financial
statements with the SEC for 2005.

The last rating action occurred on August 12, 2005, when Moody's
downgraded the ratings of Vesta Insurance Group and Vesta Capital
Trust I and changed the outlook to negative.

Vesta Insurance Group writes homeowners primarily in Florida,
Texas, the Northeast, and Hawaii, and automobile insurance
primarily in West Virginia and Pennsylvania.  For the quarter
ended March 31, 2006, Vesta Fire Insurance Corporation reported
net premiums earned of $30.1 million and net income of
$3.3 million.  As of March 31, 2006, statutory surplus for
Vesta Fire Insurance Corporation was $83 million.


WERNER LADDER: Gets Court Nod to Pay Priority Vendor Claims
-----------------------------------------------------------
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates obtained permission from the U.S. Bankruptcy
Court for the District of Delaware to pay, in the ordinary course
of business, the prepetition claims of suppliers and vendors
entitled to administrative priority under Sections 503(b)(9) and
507(a)(2) of the Bankruptcy Code.  The Court orders the Debtors to
pay the critical vendors' claims, which should not exceed
$2,000,000 in the aggregate.

In the ordinary course of the Debtors' businesses, numerous
priority suppliers and vendors provide the Debtors with goods
that are essential to their sustained operations.  If the
suppliers and vendors are not paid in the ordinary course on
account of their claims, the suppliers and vendors may
discontinue their supply of goods to the Debtors after the
Petition Date.  Any delay or disruption in the flow of goods to
the Debtors could result in an immediate shutdown of their
businesses.

Larry V. Friend, vice president, chief financial officer and
treasurer of Werner Holding Co., Inc., relates that the Debtors
will condition the payment of priority vendor claims on the
agreement of individual vendors to continue supplying goods to
the Debtors on the customary trade terms that the vendors
provided to the Debtors on a historical basis prior to the
Petition Date.

The Debtors will pay the priority vendors under the terms of a
proposed trade agreement to be approved by the Court and sent to
each vendor for execution.

The Debtors propose that each trade agreement will include:

   (1) The amount of the relevant priority vendor's estimated
       priority claims; that amount will be used only for
       determining the vendor's claim under the Court's order and
       will not be deemed an allowed claim by the Court, and the
       rights of all interested persons objecting to the claim
       will be fully preserved until further Court order;

   (2) The customary trade terms applicable to the priority
       vendor, or other terms as the vendor and the Debtors may
       agree on, and the vendor's agreement to provide goods or
       services to the Debtors pursuant to the terms for a period
       of at least 18 months from the date of the trade agreement;

   (3) The priority vendor's agreement not to file or assert any
       lien or reclamation claim against the Debtors and their
       estates, regardless of the statute or other legal authority
       upon which the lien or reclamation claim may be asserted,
       related in any way to any remaining prepetition amounts
       allegedly owed to the vendor by the Debtors arising from
       agreements or other arrangements entered prior to the
       Petition Date, and to the extent the vendor has already
       obtained or asserted the lien or reclamation claim, the
       vendor will take the necessary actions to remove the lien
       or withdraw the reclamation claim;

   (4) The priority vendor's acknowledgement that it has reviewed
       the terms and provisions of the proposed Court order; and

   (5) the priority vendor's agreement that it will not separately
       seek payment for reclamation claims outside the terms of
       the proposed Court order unless the vendor's participation
       in the program to pay vendor claims pursuant to the order
       is terminated.

The Debtors also propose that any trade agreement terminated as a
result of the vendor's refusal to comply with the agreement's
terms may be reinstated if:

   (1) the underlying default under the trade agreement is fully
       cured by the vendor not more than five days following the
       Debtors' notification to the vendor of the default; and

   (2) the Debtors reach a favorable alternative agreement with
       the priority vendor.

The Debtors also seek the Court's authority to pay the priority
vendor claims even if they are not reasonably able to achieve a
trade agreement with the relevant vendor if the Debtors determine
that failure to pay the claims will result in irreparable harm to
their business operations.

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  Kara Hammond
Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq.,
Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors'
counsel.  The firm of Willkie Farr & Gallagher LLP represents the
Debtors as its co-counsel.  The Debtors have retained Rothschild
Inc. as their financial advisor and investment banker.  At March
31, 2006, the Debtors reported total assets of $201,042,000 and
total debts of $473,447,000.  (Werner Ladder Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WERNER LADDER: Gets Court Nod to Pay Critical Vendor Claims
-----------------------------------------------------------
The U.S. Bankruptcy Court of the District of Delaware authorized
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates to pay, in the ordinary course of business, up
to $6,800,000 to the Critical Vendors.

To maintain the high quality standards of climbing products that
the Debtors manufacture, they rely on a number of discrete
critical vendors who provide them with critical goods and
services, including whole goods, components, raw materials and
mechanical and administrative services.  The Debtors also rely
heavily on foreign vendors that supply goods and services that
are crucial to their ongoing operations.

The critical vendors are the only source of certain goods for the
Debtors' products and the goods cannot be immediately replicated
with goods from other suppliers or vendors.  If the Debtors don't
pay their critical vendors, the vendors could refuse to provide
goods or services to the Debtors that would have immediate and
adverse affect to the Debtors' businesses.

The Debtors have 44 Critical Vendors out of a total vendor
population of between 1,000 and 5,000.

Larry V. Friend, vice president, chief financial officer and
treasurer of Werner Holding Co., Inc., relates that the Debtors
propose to condition the payment of critical vendor claims on the
agreement of individual vendors to continue supplying goods to
the Debtors on the customary trade terms that the vendors
provided to the Debtors on a historical basis prior to the
Petition Date.

The Debtors will pay the critical vendors under the terms of a
proposed trade agreement to be approved by the Court and sent to
each vendor for execution.

The Debtors propose that each trade agreement will include:

   (1) The amount of the relevant critical vendor's estimated
       critical claims; that amount will be used only for
       determining the vendor's claim under the Court's order and
       will not be deemed an allowed claim by the Court and the
       rights of all interested persons objecting to the claim
       will be fully preserved until further Court order;

   (2) The customary trade terms applicable to the critical
       vendor, or other terms as the vendor and the Debtors may
       agree on, and the vendor's agreement to provide goods or
       services to the Debtors pursuant to the terms for a period
       of at least 18 months from the date of the trade agreement;

   (3) The critical vendor's agreement not to file or assert any
       lien or reclamation claim against the Debtors and their
       estates, regardless of the statute or other legal authority
       upon which the lien or reclamation claim may be asserted,
       related in any way to any remaining prepetition amounts
       allegedly owed to the vendor by the Debtors arising from
       agreements or other arrangements entered prior to the
       Petition Date, and to the extent the vendor has already
       obtained or asserted the lien or reclamation claim, the
       vendor will take the necessary actions to remove the lien
       or withdraw the reclamation claim;

   (4) The critical vendor's acknowledgement that it has reviewed
       the terms and provisions of the proposed Court order; and

   (5) The critical vendor's agreement that it will not separately
       seek payment for reclamation claims outside the terms of
       the proposed Court order unless the vendor's participation
       in the program to pay vendor claims pursuant to the order
       is terminated.

The Debtors also propose that any trade agreement terminated as a
result of the vendor's refusal to comply with the agreement's
terms may be reinstated if:

   (1) the underlying default under the trade agreement is fully
       cured by the vendor not more than five days following the
       Debtors' notification to the vendor of the default; and

   (2) the Debtors reach a favorable alternative agreement with
       the critical vendor.

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  Kara Hammond
Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq.,
Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors'
counsel.  The firm of Willkie Farr & Gallagher LLP represents the
Debtors as its co-counsel.  The Debtors have retained Rothschild
Inc. as their financial advisor and investment banker.  At March
31, 2006, the Debtors reported total assets of $201,042,000 and
total debts of $473,447,000.  (Werner Ladder Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WERNER LADDER: Wants to Employ Ordinary Course Professionals
------------------------------------------------------------
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates ask authority from the U.S. Bankruptcy Court for
the District of Delaware to retain the Ordinary Course
Professionals in the ordinary course of business without
submitting separate retention applications and the issuance of
orders approving the retention of each individual professional.

Prior to June 12, 2006, the Petition Date, the Debtors retained a
number of professionals who provided services that are important
to their day-to-day operations.  The Ordinary Course Professionals
provide services to the Debtors with regards to product liability
litigation, contract disputes, labor issues, employee benefits
and maintenance of intellectual property rights.

Retention of the Ordinary Course Professionals is essential to
avoid any disruption in the Debtors' day-to-day business
operations, Robert S. Brady, Esq., at Young, Conaway, Stargatt &
Taylor, LLP, in Wilmington, Delaware, tells the Court.

Since the amount of fees to be paid to the Ordinary Course
Professionals is relatively small, retention of the Professionals
will allow the Debtors to avoid any additional fees that would be
incurred by the Professionals in connection with preparing and
prosecuting numerous interim fee applications.

The Debtors assure the Court that:

  (1) each Ordinary Course Professional will have a $40,000
      monthly fee cap and all Ordinary Course Professionals will
      have a $150,000 total monthly fee cap;

  (2) none of the Ordinary Course Professionals represents any
      interest adverse to the Debtors or their estates; and

  (3) each Ordinary Course Professional will be required to file
      an affidavit of disinterestedness and copies of the
      affidavit will be served to the Debtors, the United States
      Trustee, the counsel to the agent for the Debtors'
      prepetition and postpetition secured lenders, and the
      Unsecured Creditors Committee's counsel.

The Ordinary Course Professionals to be retained by the Debtors
are:

   Professionals Providing Product Liability Advice
   ------------------------------------------------
   Arnett, Draper and Hagood              
   Barr, Murman Tonelli Slother & Sleet, P.A.      
   Barrett, Lazar & Lincoln, LLC
   Beason Willingham LLP
   Brown & James, P.C
   Butt, Thornton & Baehr, P.C.
   Campbell, Campbell, Edwards & Conroy
   Christian & Small, LLP
   Deutsch, Kerrigan & Stiles, LLP
   Dickie, McCamey & Chilcote, P.C.
   Ewbank & Byrom, P.C.
   Foliart, Huff, Ottaway & Bottom
   Gieger, Laborde & Laperouse, LLC
   Hall, Rodgers, Gaylord, Millikan & Croom, PLLC
   Hardin, Jesson & Terry, PLC
   Hoover Hull LLP
   Howd & Ludorf, LLC
   Koeller, Nebeker, Carlson & Haluck, LLP         
   Lathrop & Gage L.C.
   Law Offices of David W. Kloss
   Law Offices of Robert Buckley
   Lee, Smart, Cook, Martin & Patterson, P.S., Inc.
   Lemons, Grundy & Eisenberg, P.C.
   Locke, Liddell & Sapp, LLP
   Mansour, Gavin, Gerlack & Manes Co., L.P.A.
   Melito & Adolfsen P.C.
   Murphy and O'Connor
   Nelson Mullins Riley & Scarborough, LLP         
   Shaw, Terhar & LaMontagne LLP
   Stephenson & Dickinson
   Swift, Currie, McGhee & Hiers, LLP
   Vogel, Weir, Hunke & McCormick, Ltd.
   Watkins & Eager PLLC
   Wyatt, Tarrant & Combs, LLP

   Professionals Providing Various Services:
   -----------------------------------------

   Firm                                   Services
   ----                                   --------
   Ladas & Parry LLP                      Intellectual Property

   Schwartz, Ansel                        Intellectual Property

   Baker & McKenzie                       Intellectual Property,
                                          International and
                                          Commercial Tax

   Barr & Shaffer                         Workers' Compensation

   Cohen & Grigsby P.C.                   Corporate, Labor, Real
                                          Estate and Litigation

   Dryden, Margoles, Schimaneek & Wertz   Labor, Litigation and
                                          Product Liability

   Gibson, Dunn & Cruteher LLP            Corporate

   Howrey LLP                             CPSC, Administrative
                                          and Government

   Jones & Ayers, LLC                     Labor and Litigation,
                                          Workers' Compensation

   McDermott, Will & Emery LLP            Intellectual Property
                                          and Antitrust

   Schnader, Harrison, Segal & Lewis LLP  Labor and Litigation

   The Benefits Department                Benefits

   Tribler Orpett & Meyer, P.C.           Labor, Litigation and
                                          Product Liability

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  Kara Hammond
Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq.,
Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors'
counsel.  The firm of Willkie Farr & Gallagher LLP represents the
Debtors as its co-counsel.  The Debtors have retained Rothschild
Inc. as their financial advisor and investment banker.  At March
31, 2006, the Debtors reported total assets of $201,042,000 and
total debts of $473,447,000.  (Werner Ladder Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WINN-DIXIE: Court Okays Rejection of Libman Company Supply Pact
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Winn-Dixie Stores, Inc., and its debtor-affiliates to
reject, effective as of June 30, 2006, its supply agreement dated
as of Dec. 5, 2002, with The Libman Company.

The Bankruptcy Court also approved the resolution of Libman's
claims, including Libman's waiver of all claims for damages
arising from the rejection of the Prepetition Supply Agreement and
all other claims -- except for a scheduled unsecured claim for
$100,722 and any unpaid postpetition invoices -- it has or may
have had against the Debtors.

As reported in the Troubled Company Reporter on June 26, 2006,
the Debtors have for several years purchased cleaning tools --
stickgoods and smallwares -- from Libman.  Although the Debtors
want to continue their relationship with Libman, the terms of the
Prepetition Supply Agreement are no longer feasible, due, in part,
to the reduction in the Debtors' store count.  In particular, the
Prepetition Supply Agreement requires the Debtors to offer
Libman's products in 950 stores and obligates the Debtors to
purchase at least 35% of its cleaning products from Libman until
net sales reached $4,500,000.

The Debtors want to continue their relationship with Libman on
more favorable terms under a new ordinary course agreement.
Libman has agreed to this approach, with a specific waiver of all
claims -- except for a scheduled unsecured claim for $100,722 and
any unpaid postpetition invoices -- it has or may have had against
the Debtors, including claims for rejection damages.  In addition,
Libman has agreed that the new agreement, which will take effect
upon the rejection of the Prepetition Supply Agreement, may be
terminated by the Debtors without liability in the event the
Debtors' Chapter 11 plan of reorganization is not confirmed or
does not become effective.

"By rejecting the Prepetition Supply Agreement in favor of a new
agreement with Libman, the Debtors will avoid the burdensome
obligation of the $4,500,000 volume requirement as well as the
incurrence of a significant rejection damage claim, and will be
able to continue offering Libman's products to their customers on
terms that better reflect the current and future needs of their
operating stores," Cynthia C. Jackson, Esq., at Smith Hulsey &
Busey, in Jacksonville, Florida, said.

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


WINN-DIXIE: Wants to Reject Two Grocery Stores Leases
-----------------------------------------------------
Pursuant to Rule 3002(c)(4) of the Federal Rules of Bankruptcy
Procedure and Section 365(a) of the Bankruptcy Code, Winn-Dixie
Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Middle District of Florida to:

    (i) approve the rejection of two non-residential real property
        leases; and

   (ii) establish the deadline for the landlords to file rejection
        damage claims to 30 days after entry of an order approving
        the rejection.

In November 1997, Winn-Dixie Raleigh, Inc., and Gem Cedar, LLC,
entered into a lease for Store No. 997.  Under the terms of the
lease, Winn-Dixie pays the Gem Cedar $503,782 annual rent.

Winn-Dixie subleased the premises to Cornerstone Christian Church
in August 2002.  Under the Sublease, Cornerstone agreed to pay
Winn-Dixie monthly rent at graduated rates between $8,298 and
$23,744.

According to Cynthia C. Jackson, Esq., at Smith Hulsey & Busey,
in Jacksonville, Florida, Cornerstone was in substantial default
under the Sublease and has stopped paying any rent since the
Debtors' bankruptcy filing.

Cornerstone failed to cure the default and Winn-Dixie terminated
the Sublease effective March 14, 2006.  As of the termination
date, Cornerstone owes Winn-Dixie nearly $405,780 in back rent.

Ms. Jackson relates that the Store 997 Lease is no longer within
the continuing footprint of the Debtors.  By rejecting the Lease,
the Debtors will save nearly $500,000 a year and terminate
liability for administrative rental expenses.

In addition, Winn-Dixie Louisiana, Inc., a predecessor in
interest to Winn-Dixie Montgomery, Inc., and James S. Henderson
and Maybeline S. Henderson are parties to a lease dated Nov. 11,
1970.

The Lease relates to Store No. 1361 located in Greenwood,
Mississippi.  Before the Debtors filed for bankruptcy, the Lease
was assigned to WV, Inc.  The document evidencing the WV
Assignment Agreement did not release Winn-Dixie from its
obligations under the Lease if WV defaults, Ms. Jackson discloses.

On May 24, 2006, the Hendersons notified the Debtors of WV's
default and informed them that WV had vacated the premises.  The
Hendersons also alleged that Winn-Dixie remains liable to them
under the Lease.

Ms. Jackson asserts that the Store 1361 Lease or any related
documents, including a separate guarantee, provide no tangible
benefit to the Debtors' estates or creditors.  By rejecting the
Lease, the Debtors will ensure that:

    (a) any continuing obligations allegedly arising under the
        Lease or the related documents will cease and be treated
        as prepetition obligations; and

    (b) rejection damage claims filed by the Landlord will be
        addressed through the claims reconciliation process.

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


WORLDCOM INC: Trustee Will Accept Bids in Columbus Lumber Interest
------------------------------------------------------------------
Development Specialists, Inc., as Trustee, pursuant to a Trust
that was created under a settlement agreement In re: WorldCom,
Inc., Securities Litigation 02-Civ. 3288 (S.D.N.Y.), will accept
bids to purchase membership interests in Columbus Lumber, LLC, on
July 17, 2006, 2:00 p.m., at the offices of:

         Burr & Forman, LLP
         401 East Capitol Street, Suite 100
         Jackson, MS 39201

Columbus Lumber's primary business contains a southern yellow pine
sawmill operation including a log yard, wet yard, sawmill
equipment, planer mill, material handling equipment, kilns, a wood
treating facility, rolling rock, sheds and buildings all situated
on approx. 91 acres of property.  Assets also include inventory of
timber tracts, logs, lumber and accounts receivable.

The Trustee has received a qualified bid of $17.7 million, less
certain long-term debts of approximately $3.1 million as of
Dec. 31, 2005, for a net bid of $14.6 million.  Any competing bids
must be at least $18.5 million, less that debt, or net of
$15.4 million, in cash, and include terms that are equal to or
better than the terms within the initial bid.

Bidders must make an initial deposit of $1,543,000 to be
considered as a qualified bidder, and must post a cashier's check
or wire transfer with the Trustee five days prior to the sale.

Parties interested in receiving a bid package, conducting due
diligence or viewing the property and submitting offer for the
property must contact the Trustee's counsel, Burr & Forman LLP,
and the Trustee's representatives:

         Development Specialists, Inc.
         Attn: Brian C. Weepie
         70 West Madison Street, Suite 2300
         Chicago, IL 60602
         Tel: (312) 263-4141
         Fax: (312) 263-1180

              -- and --

         Development Specialists, Inc.
         Attn: Joseph J.Luzinski
         200 South Biscayne Boulevard, Suite 1818
         Miami, FL 33131
         Tel: (305) 374-2717
         Fax: (305) 374-2717

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global    
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.  
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged
from U.S. Chapter 11 protection as MCI, Inc.


WORLD HEALTH: Wants Chapter 11 Cases Converted to Chapter 7
-----------------------------------------------------------
World Health Alternatives, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to convert
their chapter 11 cases to chapter 7 liquidation proceedings.

The Debtors explain that engaging in a plan process will
unnecessarily deplete the Debtors' limited assets and will not
result in any economic benefit for the estates.  Instead, the
Debtors believe that the interests of the estates are best served
by the conversion of these chapter 11 cases to chapter 7
proceedings so that the Debtors' remaining assets can be
effectively liquidated and distributed to stakeholders.

As reported in the Troubled Company Reporter on May 3, 2006, the
Debtors completed the sale of all their assets to Jackson
Healthcare Staffing, LLC, an affiliate of Jackson Healthcare
Solutions, LLC, for a purchase price of approximately $43 million
in cash plus the assumption of certain liabilities, including
liabilities to retained employees and staffing professionals.

The purchase price was sufficient to pay in full the secured debts
owed to CapitalSource Finance, LLC, and generated an additional
$1.35 million in sale proceeds, which are being held in escrow by
the Debtors.  They believe that the escrow fund is sufficient to
cover all postpetition professional fees incurred on or prior to
the closing of the sale of the Debtors' assets.

In addition, the Debtors have causes of action against third
parties under their directors and officers insurance policies,
with an approximate $5-million face value, that should be pursued
for the benefits of the estates.

Headquartered in Pittsburgh, Pennsylvania, World Health
Alternatives, Inc. -- http://www.whstaff.com/-- is a premier       
human resource firm offering specialized healthcare personnel for
staffing and consulting needs in the healthcare industry.  The
company and six of its affiliates filed for chapter 11 protection
on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168).  
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams
LLP, represents the Debtors in their restructuring efforts.  
Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.


WORLD HEALTH: Panel Poses Limited Objection to Ch. 7 Conversion
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in World
Health Alternatives, Inc., and its debtor-affiliates' chapter 11
cases, objects to:

   a) the request of the U.S. Trustee for directing the
      appointment a chapter 11 Trustee or, alternatively,
      converting the Debtors' cases to chapter 7 liquidation
      proceedings; and

   b) the Debtors' motion to convert their cases to proceedings
      under chapter 7 of the Bankruptcy Code.

               Letter Agreement and Approval Motion

On April 21, 2006, the Debtors, along with the Committee and
CapitalSource Finance, LLC, entered into a Letter Agreement giving
the Committee the right to pursue certain claims, causes of action
and recoveries on behalf of the Debtors' estates.

The Letter Agreement also provided for CapitalSource's payment of
a $1.6 million, carved out from its lien, for the Debtors' general
unsecured creditors.

                        Limited Objection

Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, tells the U.S. Bankruptcy Court for the District of Delaware
that while the Committee would have preferred the cases to remain
in chapter 11 so that it could have pursued the estate Causes of
Action, as contemplated by the Letter Agreement, the Committee
recognizes the Debtors' right to convert the cases under Section
1112(a) of the Bankruptcy Code.

Accordingly, the Committee limits its objection to a request that
the Court delay converting the cases to chapter 7 until after the
Debtors' request to approve the Letter Agreement with
CapitalSource has been decided and effectuated.

If the Approval Motion is granted, Ms. Morgan says, the Committee
submits that the effective date of conversion be delayed until
after the Collateral Carve-Out is paid.

Headquartered in Pittsburgh, Pennsylvania, World Health
Alternatives, Inc. -- http://www.whstaff.com/-- is a premier       
human resource firm offering specialized healthcare personnel for
staffing and consulting needs in the healthcare industry.  The
company and six of its affiliates filed for chapter 11 protection
on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168).  
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams
LLP, represents the Debtors in their restructuring efforts.  
Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.


ZOOMERS HOLDING: Court Denies Request for DIP Financing
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denied Zoomers Holding Company, LLC's request to obtain debtor-in-
possession financing from D'Alessandro Equity Funding, Inc.
The Court did not state reasons behind its decision to deny the
Debtor's request.

As reported in the Troubled Company Reporter on May 31, 2006,
D'Alessandro agreed to lend the Debtor up to $3,500,000.  The
Debtor will pay the loan by executing a promissory note on a
24-month term and accruing interest on unpaid note balance at the
annual rate of 12.49%.  The Note would be secured by a first lien
against all of the Debtor's real property.

The loan will be guaranteed by the Debtor's manager, Ronald
Heromin, and will prime existing first lien holder, Florida
Community Bank.

The Debtor told the Court that it failed to obtain better
financing terms from other sources.

The Debtor said it will use the loan, among others, to:

   -- payoff all construction liens on its property and its
      outstanding construction indebtedness;

   -- provide additional funds to complete the construction of
      its family amusement park in Southwest Florida;

   -- provide working capital for approximately six months to
      be able to commence operations at the Park and develop an
      operational record;

   -- pay officers' compensation; and

   -- pay for the administrative costs of its chapter 11 case.

Headquartered in Osprey, Florida, Zoomers Holding Company, LLC,
filed for chapter 11 protection on Apr. 28, 2006 (Bankr. M.D. Fla.
Case No. 06-02008).  Richard Johnston, Jr., Esq., at Kiesel Hughes
& Johnston, represents the Debtor.  No Official Committee of
Unsecured Creditors has been appointed in this.  When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $10 million and $50 million.


* Buchanan & Klett Rooney Team-Up Creates Powerhouse Bankr. Group
-----------------------------------------------------------------
The combination of Buchanan Ingersoll P.C. with Klett Rooney has
resulted in a new powerhouse bankruptcy and creditor's rights
group of over 36 attorneys along the East Coast.  Buchanan
Ingersoll is one of the largest full service law firms in the
country and Klett Rooney is a 130-attorney firm with offices that
mirror much of Buchanan's existing footprint in cities that
include Philadelphia, Harrisburg, Pittsburgh and Wilmington,
Delaware.  In total, approximately 250 Klett Rooney attorneys,
government affairs professionals and staff members will join
Buchanan.       

The new group includes nationally known leaders such as William
Schorling and Louis DeLucia, as well as Wall Street "go to"
attorneys like Bill O'Connor and Terri Currier.  

Most law firms seek out local counsel with respect to big
bankruptcy cases filed in Manhattan and Wilmington, Delaware.  The
firm will have the unique ability to act as true New York and
Delaware firms in both jurisdictions, allowing their clients
better access to those courts on a more efficient basis.    

Bill O'Connor, together with his colleague, Susan Persichilli, has
represented many major investment banks in matters such as Global
Crossing and World Com.  

Louis DeLucia is responsible for the pre-packaged plan in the
Ranch One bankruptcy and represented bondholder's committee in
Conseco, the largest Chapter 11 bankruptcy filed to date.  

Bill Schorling, a dean of the national bankruptcy bar, is known
for his intellectual creativity in cases such as In Re Matlack and
Printing Arts.  Terri Currier, a leader of the Delaware bankruptcy
bar, is considered a "lawyer's lawyer" whose counsel is sought by
other bankruptcy lawyers from across the country.  She is well
known for her current representation of the equity committee in
the pending W.R. Grace Chapter 11 bankruptcy.                

This union between Buchanan Ingersoll P.C. and Klett Rooney
forming Buchanan Ingersoll & Rooney, will likely boost the firm to
become one of the 80 largest law firms in the United States, with
combined gross revenues of $265 million and a head count of more
than 550 attorneys and government relations professionals across
the country.


* BOOK REVIEW: Shark Tank: Greed, Politics, and the Collapse of
               Finley Kumble, One of America's Largest Law Firms
----------------------------------------------------------------
Author:     Kim Isaac Eisler
Publisher:  Beard Books
Paperback:  256 Pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587982382/internetbankrupt


Affirming that facts can be more engaging than fiction, this book
portrays the spellbinding story of the rise and fall of the law
firm Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson &
Casey.  

Formed in the late '70s with the belief that a corporate client
would need only one law firm if it had branches in other cities,
it became the largest law firm in the nation.  

Gobbling up small law firms and stealing lawyers and clients from
rivals, it began the era of the megafirm as it grew to 250
partners, 450 associates and attorneys of counsel, and 1,000
support people.

This is the inside account of the clash of personalities, the
ruthlessness, the double-crossing, and the strategies which
eventually led to the firm shooting itself in the foot and its
ultimate demise.

This book is must reading for every attorney, as well as for those
interested in how the legal profession has been transformed from
its provincial early days to today's supersized, dominant law
firms.

                             *********

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, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***