TCR_Public/060714.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 14, 2006, Vol. 10, No. 166

                             Headlines

ADELPHIA COMMS: Gets FCC Nod on Asset Sale to Time Warner-Comcast
ADELPHIA COMMS: SPCP Group Wants Multi-Million Claim Allowed
AIRBASE SERVICES: Wants Edgar Wyngaarde Employment Pact Rejected
AIRBASE SERVICES: Ch. 11 Trustee Hires Lain Faulker as Accountant
AIR CANADA: Douglas Stanley Named as Mediator and Arbitrator

ALLIED HOLDINGS: More Trustees Dispute Insurance Pact Liabilities
AMC ENTERTAINMENT: High Leverage Prompts S&P's Negative Watch
AMERIQUEST MORTGAGE: S&P Cuts Ratings on Two Certificate Classes
AMES DEPARTMENT: Administrative Claimholders Demand Update
AMES DEPARTMENT: LFD Will Appeal Bankr. Court's Summary Judgment

AMHERST TECH: Birfam will Prepare Tax Returns for Ch. 7 Trustee
AMHERST TECH: Rule 2004 Test of Keeper of the Records of CSI OK'd
ARMSTRONG WORLD: Court Approves Travelers Settlement Agreement
ARMSTRONG WORLD: Bear Stearns Assigns $16M Claims to Fimat, et al.
AVITAR INC: March 31 Balance Sheet Upside-Down by $6.25 Million

BOWNE & CO: Chairman and CEO Philip Kucera Retiring in December
BROOK MAYS: First Act Gets $16.7 Million Settlement from Insurers
CABLEVISION SYSTEMS: Rainbow Unit Obtains $800MM Credit Facility
CALIFORNIA THEATRE: Case Summary & Seven Largest Unsec. Creditors
CALPINE CORP: Court Implores Calpine-Rosetta Resolution on Leases

CARDTRONICS INC: Financial Report Filing Cues S&P's Stable Outlook
CATHOLIC CHURCH: District Ct. Receives Appellants' Opening Briefs
CATHOLIC CHURCH: Court Rejects Robert Fleming's $4-Million Claim
COMM 2004-RS1: Fitch Affirms Low-B Ratings on $8.74 Million Notes
CONSUMERS ENERGY: Fitch Comments on Nuclear Plant Sale to Entergy

CSFB ABS: S&P Junks Rating on Series 2001-HE25 & 2002-HE4 Certs.
CSFB MORTGAGE: S&P's Rating on Class I-M-3 Certs. Tumbles to D
DANA CORP: Wants Court to Approve Burns, et al. Employment Pacts
DANA CORP: To Set Off $7 Mil. Against Bendix Spicer's Obligation
DATALOGIC INT'L: Selling Certain Assets to Huron for $700,000

DAVITA INC: Mark Harrison to Serve as CFO Effective September 1
DELPHI CORP: Incurs $2.4 Billion Net Loss in 2005
DELPHI CORP: Court Gives Final Nod on Jefferies as Panel's Advisor
DELTA AIR: Files Family-Care Savings Plan 2005 Annual Report
DELTA AIR: Gets Court Nod to Reject 14 Embraer Aircraft Leases

DELTA FUNDING: S&P's Rating on Class B Certificates Tumbles to D
DIGICEL LTD: Strong Market Position Cues Moody's to Hold B1 Rating
ELINEAR INC: Lopez Blevins Raises Going Concern Doubt
ELINEAR INC: Signs Letter of Intent to Acquire SweetWater
EOXAN LLC: Voluntary Chapter 11 Case Summary

EYE CARE: HVHC Merger Prompts S&P to Remove Developing Watch
FALCON AIR: Wants Crisis Management as Limited Financial Advisor
FALCON AIR: Wants Pierre Murphy as Special DOT Counsel
FAMILY RESORTS: Case Summary & Nine Largest Unsecured Creditors
GREAT PANTHER: Company Says It's Now in "Best Shape" Ever

GREENMAN TECH: Laurus Extends $16 Million Credit Facility
GSR DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
HEXION SPECIALTY: Exchanging $150MM of Notes for Registered Bonds
HVHC INC: S&P Rates Proposed $155 Mil. Senior Debt Facility at BB

INCO LTD: Expects to Receive CA$353MM from Common Shares Issue
INDIANTOWN COGEN: S&P Holds BB+ Rating on $630 Million Bonds
INEX PHARMACEUTICALS: Revises Tekmira Pharma Spin Out Plans
INTEGRATED HEALTH: Will Pay $6.9MM Quarterly Fees to U.S. Trustee
IPAYMENT INC: $75 Million Issuance Prompts S&P's Negative Watch

JACKSON COUNTY: S&P Says $19.736 Million Bonds Has Stable Outlook
JP MORGAN: Fitch Holds Low-B Ratings on $63.3 Million Class Certs.
KAISER ALUMINUM: Inks New Employment Pacts with CEO and CFO
KAISER ALUMINUM: Five Trusts Created Following Bankruptcy Exit
KB HOME: Moody's Affirms Ba2 Senior Subordinated Debt Rating

KOCH V HANKINS: Case Summary & Largest Unsecured Creditor
LAIDLAW INT'L: Tenders Offer for up to 15 Million Common Shares
LAND O'LAKES: Acquires 697,350 of Golden Oval's Class B Units
LEVI STRAUSS: May 28 Stockholders' Deficit Narrows to $1.1 Billion
LEVITZ HOME: Court OKs PLVTZ's Assumption of Lease 20309 & 30603

LEVITZ HOME: Withdraws Request for Arroyo Grande Lease Rejection
MAGMA CDO: Moody's Places Ba2 Rating for $14.5MM Notes on Watch
MERRILL LYNCH: Fitch Holds Low-B Ratings on $24.6 Mil. Securities
MORGAN STANLEY: S&P Puts Low-B Ratings on $24 Million Certificates
NATIONAL ENERGY: TGP Opposes Plea to Exclude 2003 Valuation Docs

NATIONAL ENERGY: Hoffman, et al. Want Compensation Claims Allowed
NAUTILUS RMBS: Fitch Rates $5 Million Class C Interest Notes at BB
NEW CENTURY: Credit Enhancement Prompts Moody's to Upgrade Ratings
NEWPARK RESOURCES: Restatements Cue S&P to Retain Negative Watch
NOMURA ASSET: Fitch Lifts Rating on $42.8 Mil. Class Certificates

NORTHWEST AIRLINES: Wants General Electric Agreement Approved
NORTHWEST AIRLINES: PBGC Objects to Sale of 10 Aircraft to Omni
OCCAM NETWORKS: June 25 Stockholders' Deficit Narrows to $17.3MM
NOVELIS INC: Extends Consent Request for Senior Notes to July 19
ONEIDA LTD: Board to Review Acquisition Proposal from Shareholders

ONEIDA: Equity Panel Members Can Trade Securities Under Protocol
OWENS CORNING: Court Approves Praxair Settlement Agreement
OWENS CORNING: District Court Won't Dismiss Northwest Suit
PHAR-MOR INC: Ct. Rules L/C Excess Proceeds Part of Bankr. Estate
PREMIUM PAPERS: Smart Papers Implements Employee Retention Plan

PROCARE AUTOMOTIVE: Has Until Oct. 2 to File Chapter 11 Plan
PULL'R HOLDINGS: First Meeting of Creditors Slated for July 18
PULL'R HOLDINGS: Hires Robinson Diamant as Bankruptcy Counsel
RAPID PAYROLL: Creditors Panel Taps Winthrop as Bankr. Counsel
REFCO INC: Official Committee Wants Seat in Fee Panel

REFCO INC: Meridian IT Wants Decision on Smartnet Maintenance Pact
REVLON CONSUMER: Wants Bank Credit Pact Raised by $75 Million
REVLON CONSUMER: Poor Performance Prompts S&P's Negative Outlook
ROEDIGER INC: Case Summary & 20 Largest Unsecured Creditors
SAINT VINCENTS: Modifies Terms of Sun Life Escrow Agreement

SAINT VINCENTS: Wants to Sell Two Lots in King and Queen Counties
SEROLOGICALS CORP: Merger Completion Cues S&P to Withdraw Ratings
SILICON GRAPHICS: Morgan Lewis Wants to Hire CRA as Consultants
SILICON GRAPHICS: Valuation Analysis Under First Amended Plan
STELLAR FUNDING: S&P Puts Class A-3 Notes on Positive Watch

STONY HILL: S&P Places BB-Rated Notes on Negative Watch
THERMADYNE HOLDINGS: Reports Unaudited and Restated Financials
TRANSAX INTERNATIONAL: Amends 2006 and 2005 Financial Statements
UNITED ENERGY: Court Approves Hoyer Hoyer as Bankruptcy Counsel
UNITED ENERGY: Files Schedules of Assets and Liabilities

U.S. CONCRETE: Completes Private Placement of 8-3/8% Senior Notes
U.S. CONCRETE: Completes $165 Million Alberta & Alliance Purchase
USG CORP: Extends Deadline to Exercise Stock Rights to July 27
USG CORP: Court Won't Stay McDowell's Action Against Contractor
U.S. TELEPACIFIC: Moody's Rates Proposed $205 Mil. Loan at B2

VENETO LLC: Case Summary & 20 Largest Unsecured Creditors
VERSO PAPER: S&P Rates $300 Million Senior Subor. Notes at B-
WCI COMMUNITIES: Order Declines Prompt S&P's Negative Outlook
WINN-DIXIE: Rejects Sanderson Farms Supply Pact Effective June 30
WORLDCOM INC: M. Jordan Wants Court to Allow His $8 Million Claim

WORLDCOM INC: Teleserve Wants $7 Mil. Claim Allowed as Class 6A
W.R. GRACE: Renews Fight with Asbestos Panels over Exclusivity
W.R. GRACE: Graham Objects to Asbestos PI Questionnaire
* Robert Gold Joins DLA Piper's New York Office as Partner
* Thacher Proffitt Names Two New Counsel in Mexico City Office

* BOOK REVIEW: Why Companies Fail: Strategies for Detecting,
               Avoiding, and Profiting from Bankruptcy

                             *********

ADELPHIA COMMS: Gets FCC Nod on Asset Sale to Time Warner-Comcast
-----------------------------------------------------------------
The Federal Communications Commission approved the sale of
substantially all of the cable systems and assets of Adelphia
Communications Corporation to Time Warner Inc. and Comcast
Corporation, the exchange of certain cable systems and assets
between affiliates or subsidiaries of Time Warner and Comcast, and
the redemption of Comcast's interests in Time Warner Cable and
Time Warner Entertainment Company.

As reported in the Troubled Company Reporter, the FCC held a
public meeting yesterday, to consider approval of Adelphia
Communication Corporation's sale of substantially all its assets
to Time Warner, Inc., and Comcast Corporation.

In reaching its decision, the FCC found that the transactions, as
conditioned, serve the public interest and comply with all
applicable statutes and Commission rules.  The Commission also
found that the potential public interest harms of the
transactions, as conditioned, are outweighed by the potential
public interest benefits.

With respect to benefits, the Commission determined that
subscribers would benefit from the resolution of the Adelphia
bankruptcy proceeding in the form of new investment and upgrades
to the network.  Additionally, the transactions would accelerate
deployment of Voice-Over-Internet Protocol and other advanced
video services, such as local Video on Demand programming, to
subscribers.

With respect to the potential harms, the Commission found that the
proposed transactions may increase the likelihood of harm in
markets in which Time Warner or Comcast has, or may in the future
have, an ownership interest in Regional Sports Networks.  The
Commission imposed remedial conditions, the same as those imposed
in the News Corp.-Hughes order to address its concerns.

The Commission adopted further conditions to ensure that the
transactions will not harm the supply of programming to
Multichannel Video Programming Distributors.  Specifically, the
Commission adopted a condition allowing unaffiliated RSNs unable
to reach a carriage agreement with Time Warner or Comcast to seek
commercial arbitration.  In addition, the Commission adopted a
condition allowing unaffiliated programmers unable to reach a
leased access agreement with Time Warner or Comcast to seek
commercial arbitration.

                  About Adelphia Communications

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television
company, serving customers in 30 states and Puerto Rico, and
offers analog and digital video services, high-speed Internet
access and other advanced services over its broadband networks.
The Company and its more than 200 affiliates filed for Chapter 11
protection in the Southern District of New York on June 25, 2002.
Those cases are jointly administered under case number 02-41729.
Willkie Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.


ADELPHIA COMMS: SPCP Group Wants Multi-Million Claim Allowed
------------------------------------------------------------
SPCP Group, L.L.C., asks the U.S. Bankruptcy Court for the
Southern District of New York to reconsider the disallowance of a
portion of Claim Nos. 4712 and 4714, which reduced the claims from
$43,946,110 to $28,302,507.

On November 4, 2003, Fox News Network, L.L.C., assigned
$27,825,531 of its claims to SPCP Group, L.L.C.  Fox initially had
claims totaling $45,171,054 against the ACOM Debtors.  The parties
agreed:

    -- to give each other notice if objections are filed against
       the Claims;

    -- that Fox had an obligation to respond to any objection to
       the Claims; and

    -- that SPCP had no obligation to defend any objection to the
       Claims.

In November 2005, Adelphia Communications Corporation and its
debtor-affiliates asked the Court to reduce and reclassify:

    -- Claim No. 4713 as an unsecured claim for $2,335,005, and
    -- Claim No. 4714 as an unsecured claim for $25,967,502.

According to Brian Jarmain, the SPCP employee assigned to monitor
the Claims, his failure to take action on the Debtors' objection
was not willful.  "I simply, albeit mistakenly, believed that the
Claims Objection did not apply to any portion of the Claims other
than the Allowed Amount.  Certainly, had I been aware that there
was an additional portion of the Claims that were retained by Fox
and subject to the Claims Objection, I would have contacted them
immediately upon its receipt."

In December 2005, the Court sustained ACOM's Claims Objection.

On April 28, 2006, Fox's counsel informed SPCP that the actual
amount of the Claims is $34,290,420 and not the allowed amount of
$28,428,357.  Fox alleged damages for $5,862,062, the difference
between the net claim and the allowed claim.

Eric Snyder, Esq., at Siller Wilk LLP, in New York, relates that
since April 28, 2006, the ACOM Debtors, Fox and SPCP have been
addressing the extent of the damages asserted by Fox and a
potential resolution.

Mr. Snyder relates that Fox has informed SPCP that it has no
objection to the Reconsideration Motion.

Mr. Snyder asserts that SPCP's failure to respond to the Claims
Objection was the result of excusable neglect because SPCP did
not willfully ignore the Claims Objection.

According to Mr. Snyder, SPCP has a legally supportable defense
to the Claims Objection.  The Court needs to look no further than
Fox's April 28th letter for proof that a meritorious defense to
the Claims Objection exists, Mr. Snyder says.

Mr. Snyder assures the Court that there will be no prejudice to
the ACOM Debtors or their creditors if the Reconsideration Motion
is granted.

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie Farr
& Gallagher represents the ACOM Debtors.  PricewaterhouseCoopers
serves as the Debtors' financial advisor.  Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.
(Adelphia Bankruptcy News, Issue No. 139; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


AIRBASE SERVICES: Wants Edgar Wyngaarde Employment Pact Rejected
----------------------------------------------------------------
Dennis Faulker, the Chapter 11 Trustee for Airbase Services, Inc.,
asks the Honorable D. Michael Lynn of the U.S. Bankruptcy Court
for the Northern District of Texas in Fort Worth for permission
to reject an employment agreement between the Debtor and Edgar
Wyngaarde, as of June 30, 2006.

The Debtor hired Mr. Wyngaarde on Oct. 25, 2005, as its U.S.
Controller.  Under the employment agreement, Mr. Wyngaarde is
entitled to an $8,000 monthly salary.

The Debtor has sold substantially all of its assets to Regent
Aerospace Corp.  Regent Aerospace has orally notified the Chapter
11 Trustee that it does not intend to employ Mr. Wyngaarde.

The Debtor says that it is current on its payments to Mr.
Wyngaarde.

Mark J. Petrocchi, Esq., at Goodrich Postnikoff Albertson &
Petrocchi, LLP, said that no hearing will be conducted on this
motion unless a written response is filed with the Clerk of the
Bankruptcy Court on or before July 24, 2006,.

Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintains and repairs a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provides maintenance and management services for the
airline industry.  Due to bankruptcies filed by several of its
airline customers, the Company filed for bankruptcy protection on
May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231).  The Court
approved the appointment of Dennis Faulkner as Chapter 11 Trustee
in the Debtor's chapter 11 case on May 3, 2006.  Mark J.
Petrocchi, Esq., at Goodrich Postnikoff Albertson & Petrocchi,
LLP, represents the Trustee.  No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case.  In its
schedules of assets and liabilities, the Debtor listed $12,628,078
in total assets and $28,311,883 in total liabilities.


AIRBASE SERVICES: Ch. 11 Trustee Hires Lain Faulker as Accountant
-----------------------------------------------------------------
The Honorable D. Michael Lynn of the U.S. Bankruptcy Court for the
Northern District of Texas in Fort Worth approved on a final basis
the retention of Lain, Faulker & Co., P.C., as accountant and
financial advisor to Dennis Faulker, the Chapter 11 Trustee for
Airbase Services, Inc.

As reported in the Troubled Company Reporter on May 24, 2006,
Lain Faulker will:

     a) assist the Chapter 11 Trustee in the analysis of the
        Debtor's financial position, assets, and liabilities;

     b) assist the Chapter 11 Trustee in the preparation of the
        Debtor's Schedules and Statement of Financial Affairs;

     c) assist the Chapter 11 Trustee in the examination of proofs
        of claim filed against the Debtor to determine whether any
        asserted claims are objectionable or otherwise improper;

     d) assist the Chapter 11 Trustee in the accounting of all
        receipts and disbursements from the estate and the
        preparation of all necessary reports in relation thereto;

     e) assist the Chapter 11 Trustee in the development of the
        Plan of Reorganization or Liquidation and in the
        preparation of an accompanying Disclosure Statement, any
        amendments to the Plan or Disclosure Statement, and any
        related agreements and documents;

     f) assist the Chapter Trustee in the preparation of a final
        report and final accounting of the administration of the
        estate;

     g) advise the Chapter 11 Trustee in connection with any
        potential sale of assets;

     h) assist the Chapter 11 Trustee in the analysis of tax and
        taxation issues and in the filing of any necessary
        information regarding taxes as is required by Section
        1106(a)(6) of the U.S. Bankruptcy Code;

     i) testify at hearings and trials as to one or more of the
        matters set forth above as determined to be necessary and
        appropriate; and

     j) perform all other accounting services and provide all
        other financial advice to the Chapter 11 Trustee in
        connection with this Chapter 11 case as may be required or
        necessary.

Mr. Faulker disclosed that the Firm's professionals bill:

           Professional                    Hourly Rate
           ------------                    -----------
           Shareholders                    $305 - $345
           Senior Accountants              $200 - $240
           Staff Accountants               $120 - $185
           Accounting Clerk                 $55 - $75

D. Keith Enger, an accountant and business advisor at Lain
Faulker, assured the Court that the firm does not hold or
represent any interest adverse to the Debtor's estate and is
disinterested as the term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintains and repairs a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provides maintenance and management services for the
airline industry.  Due to bankruptcies filed by several of its
airline customers, the Company filed for bankruptcy protection on
May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231).  The Court
approved the appointment of Dennis Faulkner as Chapter 11 Trustee
in the Debtor's chapter 11 case on May 3, 2006.  Mark J.
Petrocchi, Esq., at Goodrich Postnikoff Albertson & Petrocchi,
LLP, represents the Trustee.  No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case.  In its
schedules of assets and liabilities, the Debtor listed $12,628,078
in total assets and $28,311,883 in total liabilities.


AIR CANADA: Douglas Stanley Named as Mediator and Arbitrator
------------------------------------------------------------
Former New Brunswick Deputy Minister of Labour Douglas Stanley,
Q.C. has been selected to act as the mediator and arbitrator
between the Air Canada Pilots Association and Air Canada.

A timetable has been set for the talks, with the first meeting to
take place on August 21, 2006.  If Mr. Stanley is unable to
mediate a settlement, arbitration hearings will begin on September
18, 2006.

"We are pleased to have Mr. Stanley acting as the mediator and
arbitrator," says Capt. Kent Wilson, president of ACPA.  "His
track record is one of fairness and we know that our case will be
judged on its merits."

In addition to his role as deputy minister, Mr. Stanley also
chaired the Public Service Labour Relations Board of N.B. and the
Construction Industry Panel of the Industrial Relations Board of
N.B.  Mr. Stanley currently heads up the Workplace Health, Safety
and Compensation Commission of New Brunswick and has had a
mediation-arbitration practice in Ontario for several years.

"Our case will prove that the company has the financial ability to
begin to restore our wage rates to where they should be.  It's
also another way of acknowledging the sacrifices we made to help
Air Canada return from the brink of bankruptcy," Mr. Wilson adds.

The parties will submit proposals on the scope of the re-opener to
Mr. Stanley by August 16, 2006.  Once the parameters of the
process have been set at the August 21 meeting, Mr. Stanley will
attempt to mediate a settlement.  Failing that, a settlement will
be imposed on the association and the company following the
hearings starting on September 18.

The wage and pension re-opener process was established as an
opportunity for Air Canada employee groups to begin the process of
recouping concessions made during the Companies Creditors
Arrangement Act process.  The association and the company met only
three times before heading to arbitration.

Air Canada emerged from bankruptcy protection in Sept. 2004.
Since then, the company has posted consecutive quarterly profits
and 27 months of record load factors.

Air Canada Pilots Association is the largest professional pilot
group in Canada, representing 3,100 pilots who operate Air
Canada's mainline fleet.

                       About Air Canada

Air Canada -- http://www.aircanada.com/-- together with Air
Canada Jazz and other business units of parent company ACE
Aviation Holdings Inc., provides scheduled and charter air
transportation for passengers and cargo to more than 150
destinations, vacation packages to over 90 destinations, as well
as maintenance, ground handling and training services to other
airlines.

Canada's flag carrier is recognized as a leader in the global air
transportation market by pursuing a strategy based on value-added
customer service, technical excellence and passenger safety.

                          *     *     *

As reported in the Troubled Company Reporter on April 24, 2006,
Standard & Poor's Ratings Services raised the long-term corporate
credit rating on ACE Aviation Holdings Inc. to 'B+' from 'B',
while affirming the 'B' long-term corporate credit rating on its
wholly owned subsidiary, Air Canada.  The outlook on both entities
remains stable.


ALLIED HOLDINGS: More Trustees Dispute Insurance Pact Liabilities
-----------------------------------------------------------------
Trustees Cherry B. Rutland, Charles W. Burge, H. Anthony McCullar,
Linda B. Rutland, and Guy W. Rutland, III, ask the U.S. Bankruptcy
Court for the Northern District of Georgia to:

    * dismiss Allied Holdings, Inc., and its debtor-affiliates'
      complaint;

    * determine that Allied Holdings, Inc., is not entitled to its
      interest in the insurance policies; and

    * determine that they are entitled to recoup from the Debtors'
      interest in the insurance policies for damages suffered by
      their insurance trusts due to Allied's default.

The Trustees, excluding Mr. Rutland, further ask the Court to
drop one of the Defendants or sever the Debtors' claims into two
separate adversary proceedings.

Ms. Cherry Rutland and Messrs. Burge and McCullar are trustees of
the AR-JA-AR Trust and Ms. Linda Rutland and Mr. McCullar are
trustees of the GWR Insurance Trust.  Messrs. McCullar and Burge
are trustees of the RJR/CBR Insurance Trust.  Mr. McCullar is
also trustee of the GWR, III/LBR Insurance Trust.  Mr. Rutland is
trustee of the Guy IV Family Trust.

                        Debtors' Complaint

The Debtors had asked the Court to declare that:

    (1) these agreements terminated as of July 31, 2005:

        * BFW Split-Dollar Insurance Agreement,
        * Poole Split-Dollar Agreement,
        * RJR/CBR Split-Dollar Insurance Agreement,
        * GWR,III/LBR Split-Dollar Insurance Agreement,
        * AR-JA-AR Split-Dollar Insurance Agreement, and
        * AMP Split-Dollar Insurance Agreement.

    (2) they are presently entitled to receive their interest in
        the proceeds of these Policies calculated as of July 31,
        2005:

        * BFW Policies,
        * Poole Policies,
        * RJR/CBR Policies,
        * GWR,III/LBR Policies,
        * AR-JA-AR Policies, and
        * AMP Policies.

    (3) they are presently entitled to obtain loans or other
        withdrawals from the Policies to the extent of their
        interest in the Policies.

The Debtors further asked the Court to compel the Trustees to:

    -- surrender the Policies and turnover the Debtors' interest
       in the Policies; and

    -- repay all postpetition loans against the cash value of the
       Policies to the extent that the loans are greater than the
       equity cushion in cash value of the Policies.

Rebecca C. Poole and Donna D. Glenn, as trustees of the Poole
Split-Dollar Insurance Agreement, and Ms. Glenn as trustee of the
AMP Family Insurance Trust Agreement, had previously asked the
Court to dismiss the adversary proceeding commenced by the
Debtors.

                    New Trustee Responses

Representing the New Trustees, Gus H. Small, Esq., at Cohen
Pollock Merlin & Small, P.C., in Atlanta, Georgia, argues that:

    -- the Debtors' complaint fails to state a claim against the
       Trustees on which relief may be granted;

    -- the adversary proceeding is not a core proceeding pursuant
       to Section 157(b)(2) of the Judiciary Code;

    -- Allied breached the insurance agreements by failing to make
       the required premium payments;

    -- the Debtors are not entitled to receive reimbursement for
       the premiums Allied paid until within 30 days of the
       earlier to occur of the death of the insured or the
       surrender of the insurance policy, neither of which has
       occurred; and

    -- the Debtors are not entitled to "interest" and the net
       surrender value of the policies.

Furthermore, Mr. Small contends that, except for the action
against Mr. Rutland, the Debtors' complaint contains a mis-joinder
of parties because:

    (a) the claims asserted against the Trustees of the AR-JA-AR
        Trust do not arise out of the same transaction or
        occurrence as do the claims asserted against the Trustees
        of the GWR Insurance Trust; and

    (b) the claims asserted against the Trustees of the RJR/CBR
        Insurance Trust do not arise out of the same transaction
        or occurrence as do the claims asserted against the
        Trustee of the GWR, III/LBR Insurance Trust.

Mr. Small says because the Debtors breached the Insurance
Agreements by failing to make premium payments as required, the
Debtors damaged the Insurance Trusts -- in an amount which will
be proven at trial -- by reducing:

    (i) the earnings in the variable life policies;
   (ii) the cash values of the ordinary life policies; and
  (iii) the death benefits of all the policies.

                  Allied Replies to Counterclaims

Allied Holdings, Inc., asks the Court to dismiss the
counterclaims filed by:

    * Guy W. Rutland, III, as trustee of the Guy IV Family Trust;

    * Cherry B. Rutland, Charles W. Burge, and H. Anthony
      McCullar, as trustees of the GWR Insurance Trust; and

    * H. Anthony McCullar and Charles W. Burge, as trustees of the
      RJR/CBR Insurance Trust, and H. Anthony McCullar, as trustee
      of the GWR, III/LBR Insurance Trust.

Jeffrey W. Kelley, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, argues that the Trustees:

    -- failed to state claims in their counterclaim on which
       relief may be granted;

    -- mistakenly designated a defense as a counterclaim;

    -- seek relief that is barred due to their failure to file a
       proof of claim on or prior to the claims bar date;

    -- are barred from seeking their alleged remedy of recoupment
       because the requisite identity of transactions does not
       exist;

    -- are barred from asserting claims for damages to the extent
       they failed to mitigate their alleged damages;

    -- have defenses that are barred by force majeure; and

    -- are not entitled to recover any of the relief set forth in
       the ad damnum clause of their counterclaims.

Hence, the Debtors further ask the Court to enter a judgment in
their favor as to all counts in the Counterclaim.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


AMC ENTERTAINMENT: High Leverage Prompts S&P's Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on AMC
Entertainment Inc., including the 'B' corporate credit rating, on
CreditWatch with negative implications, based on the company's
high leverage and S&P's expectations that it will be difficult to
bring leverage down consistent with the timeline that S&P's rating
had originally anticipated.

The Kansas City, Missouri-headquartered movie chain, which is
analyzed on a consolidated basis with its parent company, Marquee
Holdings Inc. (B/Watch Neg/--), had $2.5 billion in debt and
nearly $3 billion in present value of operating lease obligations
as of March 30, 2006.

"The company will likely be unable to improve its credit profile
very meaningfully over the next year," said Standard & Poor's
credit analyst Tulip Lim.

Standard & Poor's expects to reevaluate business prospects and
potential moves that could bring leverage reduction back on track.
S&P believes that the downside rating potential is limited to one
notch.


AMERIQUEST MORTGAGE: S&P Cuts Ratings on Two Certificate Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of mortgage pass-through certificates from series 2002-3
and 2002-C issued by Ameriquest Mortgage Securities Inc.
Additionally, these ratings remain on CreditWatch with negative
implications, where they were placed May 9, 2006.  At the same
time, ratings on four classes from the two series are affirmed.

The downgrades and continued CreditWatch placements reflect the
adverse performance of the collateral pools backing these
transactions.  During the past 12 months, monthly net losses have
outpaced monthly excess interest by more than 100%, on average.
As a result, overcollateralization for each of these transactions
is below its target.  Furthermore, cash flow projections indicate
that monthly net losses will continue to exceed monthly excess
spread, thus, further eroding the o/c for each transaction.  As of
the June 2006 remittance period, total delinquencies were 28.64%
for series 2002-3 and 26.29% for series 2002-C.  Cumulative
realized losses were 2.15% for series 2002-3 and 1.73% for series
2002-C.  In addition, the transactions have paid down to about 10%
of their original pool balances.

Standard & Poor's will continue to closely monitor the performance
of these transactions with ratings on CreditWatch negative.  If
losses decline to a point where they no longer outpace excess
interest, and the level of overcollateralization has not been
further eroded, the ratings on these classes will be affirmed and
removed from CreditWatch negative.  Conversely, if losses continue
to outpace excess interest, further downgrades can be expected.

The affirmed ratings reflect adequate actual and projected credit
support percentages and the shifting interest structure of the
transactions.

Credit support is provided by subordination, o/c, and excess
spread.  The collateral consists of 30-year, adjustable-rate,
fully amortizing, subprime mortgage loans secured by first liens
on one- to four-family residential properties.

           Ratings Lowered and Remain Creditwatch Negative

               Ameriquest Mortgage Securities Inc.
               Mortgage pass-through certificates

                                      Rating
                                      ------
               Series   Class   To              From
               ------   -----   --              ----
               2002-3   M-4     B/Watch Neg     BB/Watch Neg
               2002-C   M-2     B/Watch Neg     BB/Watch Neg


                        Ratings Affirmed

               Ameriquest Mortgage Securities Inc.
               Mortgage pass-through certificates

              Series   Class                Rating
              ------   -----                ------
              2002-3   M-1                  AAA
              2002-3   M-2                  A+
              2002-3   M-3                  BBB
              2002-C   M-1                  BBB


AMES DEPARTMENT: Administrative Claimholders Demand Update
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
issued a notice in November 2003, offering to purchase
administrative expense claims, which also indicated a range of
projected final recovery rates for holders of administrative
claims.

In December 2004, the Debtors issued a letter to its executive
officers who did not sell their severance claims stating that
future severance distributions would be issued when the Company's
funds exceed $10,000,000.

Non-officer employees received 40%, and the officers received
25%, of their severance at the time they were released from
employment.  Officers received a subsequent payment equal to 15%
of total severance on February 3, 2005.

Catherine Berey, a holder of an administrative expense claim,
relates that since that time, there has been no communication
related to the status of the Debtors' bankruptcy case.

Accordingly, Ms. Berey and other holders of administrative
expense claims -- David Covitz and James Varholl -- seek
information from the Court regarding:

    * the current status of the Debtors' Chapter 11 case;

    * validity of the recovery rate of administrative claims
      projected in the November 2003 Court memo;

    * the projected time frame for interim and final severance
      distributions and likely recovery rate for any interim
      distributions; and

    * direction on the preferred method of communication for
      former employees to find out the status of the case in
      the future.

The administrative expense claimholders holders aver that the
request for information is reasonable and warranted given the
length of time that has passed since any communication has been
distributed.

Ames Department Stores filed for chapter 11 protection on
Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217).  Albert
Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP
and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection
from their creditors, they listed $1,901,573,000 in assets and
$1,558,410,000 in liabilities.  (AMES Bankruptcy News, Issue No.
81; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AMES DEPARTMENT: LFD Will Appeal Bankr. Court's Summary Judgment
----------------------------------------------------------------
LFD Operating, Inc., notifies the U.S. Bankruptcy Court for the
Southern District of New York that it will take an appeal to the
U.S. District Court for the Southern District of New York from
Judge Gonzales' Orders:

    -- granting summary judgment in favor of General Electric
       Capital Corporation, dismissing LFD's adversary proceeding
       with prejudice; and

    -- denying LFD's motion for abstention and to remand the
       action to the State Court.

LFD wants the District Court to review whether the Bankruptcy
Court erred when:

    (1) it denied LFD's motion to abstain and remand the
        proceeding to the State Court where it was originally
        filed; and

    (2) it granted GE Capital's Motion for Summary Judgment.

As reported in the Troubled Company Reporter on June 16, 2006,
Judge Gonzalez grants summary judgment in favor of GE Capital,
dismissing the three causes of action asserted by LFD,
particularly:

    (1) the cause of action for money "had and received";
    (2) the cause of action for "accounting"; and
    (3) the cause of action for "conversion".

LFD has conceded to the Court's summary judgment with respect the
accounting and conversion causes of action.

Ames Department Stores filed for chapter 11 protection on
Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217).  Albert
Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP
and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection
from their creditors, they listed $1,901,573,000 in assets and
$1,558,410,000 in liabilities.  (AMES Bankruptcy News, Issue No.
81; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AMHERST TECH: Birfam will Prepare Tax Returns for Ch. 7 Trustee
---------------------------------------------------------------
The Honorable Michael Deasy of the U.S. Bankruptcy Court for the
District of New Hampshire in Manchester authorized Olga L.
Bogdanov, the Chapter 7 Trustee appointed in the liquidation
proceedings of Amherst Technologies, LLC, and its debtor-
affiliates, to employ Birfam Two, LLC.

Birfam Two will prepare pre-conversion sales tax returns for the
Debtors' bankruptcy estates.

On Oct. 21, 2005, the Court converted the Debtors chapter 11 cases
into liquidation proceedings under chapter 7 of the Bankruptcy
Code.  Prior to the Conversion Date, the Debtors failed to file
sales tax returns in approximately 40 states for postpetition pre-
conversion sales.

The Chapter 7 Trustee believes that the Birfam's employment is in
the best interests of the bankruptcy estate because:

   (a) Birfam's principal has substantial experience in preparing
       sales tax returns for the Debtors; and

   (b) the Chapter 7 Trustee was advised by her accountants,
       Verdolino Lowey, P.C., that the cost will be greater if it
       will prepare the sales tax returns .

Gerald Birin, Birfam's principal, formerly served as the Executive
Chairman of the Debtors, and one of his duties was to oversee the
preparation of sales tax returns for the Debtors.

Birfam will be paid a $15,000 flat fee, payable upon the Chapter 7
Trustee's receipt and review of all prepared pre-conversion sales
tax returns for the Debtors.

Mr. Birin assures the Court that the Firm does not represent any
interest adverse to the Debtors' estates and is disinterested as
that term is defined in Sections 101(14) and 327(a) of the
Bankruptcy Code.

Headquartered in Merrimack, New Hampshire, Amherst Technologies,
LLC, offers enterprise class solutions including wired and
wireless networking, server and storage optimization
implementations, document management solutions, IT lifecycle
solutions, Microsoft solutions, physical security and surveillance
and complex configured systems.  The Company and its debtor-
affiliates filed for chapter 11 protection on July 20, 2005
(Bankr. D. N.H. Case No. 05-12831).  Daniel W. Sklar, Esq., and
Peter N. Tamposi, Esq., at Nixon Peabody LLP represented the
Debtors.  Douglas McGill, Esq., and Robert K. Malone, Esq., at
Drinker, Biddle & Reath, LLP, represented the Official Committee
of Unsecured Creditors.  When the Debtors filed for protection
from their creditors, they estimated assets and debts between $10
million to $50 million.  On Oct. 21, 2005, the Court converted the
Debtors chapter 11 cases into liquidation proceedings under
chapter 7 of the Bankruptcy Code.  Olga L. Bognadov, Esq., the
Chapter 7 Trustee, is represented by Robert A. White, Esq., at
Murtha Cullina LLP.


AMHERST TECH: Rule 2004 Test of Keeper of the Records of CSI OK'd
-----------------------------------------------------------------
The Honorable Michael Deasy of the U.S. Bankruptcy Court for the
District of New Hampshire in Manchester authorized Olga L.
Bogdanov, the Chapter 7 Trustee appointed in the liquidation
proceedings of Amherst Technologies, LLC, and its debtor-
affiliates, to examine the Keeper of the Records of Computer
Solutions International, pursuant to Rule 2004 of the Federal
Rules of Bankruptcy Procedure.

CSI provided installation and servicing of computer products for
Amherst's customers pursuant to an agreement dated July 9, 2004.
Under the agreement, Amherst was entitled to a rebate equal to 2%
of the net amounts billed to and paid by Amherst customers.

The Trustee requires the testimony under oath of the Keeper of the
Records of CSI to determine the exact amount due to the Debtors.

Headquartered in Merrimack, New Hampshire, Amherst Technologies,
LLC, offers enterprise class solutions including wired and
wireless networking, server and storage optimization
implementations, document management solutions, IT lifecycle
solutions, Microsoft solutions, physical security and surveillance
and complex configured systems.  The Company and its debtor-
affiliates filed for chapter 11 protection on July 20, 2005
(Bankr. D. N.H. Case No. 05-12831).  Daniel W. Sklar, Esq., and
Peter N. Tamposi, Esq., at Nixon Peabody LLP represented the
Debtors.  Douglas McGill, Esq., and Robert K. Malone, Esq., at
Drinker, Biddle & Reath, LLP, represented the Official Committee
of Unsecured Creditors.  When the Debtors filed for protection
from their creditors, they estimated assets and debts between $10
million to $50 million.  On Oct. 21, 2005, the Court converted the
Debtors chapter 11 cases into liquidation proceedings under
chapter 7 of the Bankruptcy Code.  Olga L. Bognadov, Esq., the
Chapter 7 Trustee, is represented by Robert A. White, Esq., at
Murtha Cullina LLP.


ARMSTRONG WORLD: Court Approves Travelers Settlement Agreement
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved a
settlement agreement among Armstrong World Industries, Inc., and
its debtor-affiliates and Travelers Casualty and Surety Company,
The Travelers Indemnity Company, and the Travelers Insurance
Company.

The Travelers entities issued primary and excess liability
policies, including primary comprehensive general liability
policies, to Armstrong World and Armstrong Contracting and
Supply Corporation from 1958 to 1969.

Armstrong Contracting was Armstrong's wholly owned subsidiary
formed in 1950s.  Armstrong Contracting later changed its name to
ACandS, after its employees purchased and took over management of
the company.

Pursuant to several agreements among parties in the 1980s:

     * Travelers agreed that the Shared Primary Travelers
       Policies provide indemnity limits aggregating $80,000,000,
       plus defense costs, for Asbestos Related Bodily Injury
       Claims that are not within the products or completed
       operations hazards; and

     * AWI and Travelers also agreed that the insurer's
       $80,000,000 indemnity payment is subject to certain annual
       payment caps.

Additionally, on May 28, 1998, AWI and Travelers executed an
Agreement of Compromise, Settlement and Release with respect to
AWI's claims for insurance coverage for Non-Products Claims.

Jason Madron, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that Travelers has been billed
$33,793,167 for indemnity payments, plus $850,810 for defense
costs, under the Shared Primary Travelers Policies with respect to
Non-Products Claims against AWI.  Travelers has paid $17,997,423
of the total billed amount and defense costs.

With respect to Non-Products Claims against ACandS that were
resolved through April 2001, Travelers has been billed $41,277,576
as indemnity payments, plus defense costs under the Shared Primary
Travelers Policies.  Travelers has paid both indemnity and defense
amounts.

                Interpleader Action and Other Disputes

On March 28, 2001, Travelers Casualty and Surety Company and the
Travelers Indemnity Company filed a complaint against both AWI and
ACandS for interpleader in AWI's Chapter 11 case, in connection
with several disputes among the parties concerning their rights
and obligations with respect to the Shared Primary Travelers
Policies and the related proceeds.

Among others, AWI and ACandS dispute:

   -- amounts previously billed to or paid by Travelers for Non-
      Products Claims under the Shared Primary Travelers
      Policies.

   -- their rights with respect to the remaining indemnity limits
      for Non-Products Claims under the Shared Primary Travelers
      Policies that have not yet been billed to or paid by
      Travelers.

Moreover, Travelers believes that, of the $16,646,554 in indemnity
costs billed by AWI to the Shared Primary Travelers Policies that
has not been paid by Travelers, $9,211,137 of indemnity costs and
$328,815 of related defense costs have been over-billed.

Travelers has not paid the remaining $7,435,417 in indemnity costs
billed by AWI to the Shared Primary Travelers Policies because of
the disputes between AWI and ACandS.

Mr. Madron notes that AWI has provided Travelers with a
calculation prepared by Peterson Consulting, dated Nov. 12, 2004,
which provides that, if the $9,211,137 in indemnity over-billings
was reallocated to AWI policies in accordance with the 1998
Agreement:

   (1) $1,404,186 would be reallocated to the Shared Primary
       Travelers Policies that have remaining unexhausted
       aggregate limits for Non-Products Claims;

   (2) $988,955 would be reallocated to other primary policies
       issued to AWI by Travelers that have unexhausted aggregate
       limits for Non-Products Claims; and

   (3) the remaining $6,817,997 would be reallocated to other
       AWI policies not issued by Travelers.

Mr. Madron notes that the Peterson Reallocation Calculation also
indicates that, if the $328,815 in over-billed defense costs was
reallocated to AWI policies in accordance with 1998 Agreement,
$85,429 would be reallocated to:

   -- the Shared Primary Travelers Policies that have remaining
      unexhausted aggregate limits for Non-Products Claims; or

   -- other primary policies issued to AWI by Travelers that
      have unexhausted aggregate limits for Non-Product Claims.

Mr. Madron says it would result to $243,386 in net-over billed
defense.

                     Travelers Settlement Agreement

To resolve their dispute, the Debtors ask Judge Fitzgerald to
approve a Stipulation of Settlement and Order they entered into
with ACandS, Inc., and the Travelers insurers.

A full-text copy of the Travelers Settlement Agreement dated
June 15, 2006, is available for free at:

               http://ResearchArchives.com/t/s?da0

The principal terms of the Travelers Settlement Agreement are:

   (a) The Interpleader Action will be dismissed with prejudice;

   (b) Travelers will pay AWI $9,505,172 as full and complete
       satisfaction of all claim and defense billings by AWI
       through and including November 2000;

   (c) The Travelers Settlement Payment will apply against the
       Annual Caps, and nothing in the Travelers Settlement
       Agreement is meant to increase, alter, or change
       application of the Annual Caps;

   (d) AWI and Travelers agree that:

       (1) all Annual Caps prior to the Effective Date are deemed
           exhausted; and

       (2) payment of the Travelers Settlement Payment will (i)
           exhaust the Annual Cap applicable to the Agreement
           Year in which it is paid and (ii) reduce the Annual
           Cap applicable to the immediately following Agreement
           Year by an amount which is the difference between the
           Travelers Settlement Payment and the amount applied
           to exhaust the Amoral Cap in the prior Agreement Year;

   (e) The remaining limits of liability for Non-Products Claims
       on the Shared Primary Travelers Policies equals
       $12,736,209.  The Remaining Non-Products Claims Limits
       will be reserved exclusively for AWI and made available
       to pay claims that may be billed by AWI or any trust
       created by any AWI plan of reorganization in accordance
       with the Shared Primary Travelers Policies, applicable
       settlement agreements, and judgments;

   (f) ACandS, including, any trust established pursuant to any
       plan of reorganization in ACandS' Chapter 11 case, will
       not be entitled to any portion of the Remaining Non-
       Products Claims Limits;

   (g) AWI agrees to pay ACandS $2,464,628 within three business
       days after receipt of the Travelers Settlement Payment;
       and

   (g) On the Effective Date, AWI, ACandS, and Travelers agree
       to release each other with respect to all claims arising
       out of or relating to the Shared Polices with respect to
       Asbestos Related Bodily Injury Claims.

                      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 Nos. 95 & 97;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ARMSTRONG WORLD: Bear Stearns Assigns $16M Claims to Fimat, et al.
------------------------------------------------------------------
Bear, Stearns & Co., Inc., notifies the U.S. Bankruptcy Court for
the District of Delaware that it has transferred portions of its
claims in Armstrong World Industries, Inc., and its debtor-
affiliates to:

     Transferee                       Claim No.      Claim Amount
     ----------                       ---------      ------------
     Fimat USA L.L.C.                   3069              $7,295
     Fimat USA L.L.C.                   3723           1,113,728
     Fimat USA L.L.C.                   4738              11,463
     King Street Capital, L.P.          2765KB         5,002,187
     King Street Capital, Ltd.          2765KB         9,926,214
     King Street Institutional, Ltd.    2765KB           703,433

                      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)


AVITAR INC: March 31 Balance Sheet Upside-Down by $6.25 Million
---------------------------------------------------------------
Avitar, Inc., reported a $1,034,986 net loss for the three months
ended March 31, 2006, compared to net loss of $286,175 for the
three months ended March 31, 2005.  For the six months ended March
31, 2006, the company had a net loss of $1,926,915 versus a net
loss of $1,629,065 for the corresponding period in fiscal 2005.

At March 31, 2006, the Company's balance sheet showed total assets
of $2,087,104, total liabilities of $5,417,362, $2,920,649 in
redeemable convertible and convertible preferred stock and a
stockholders' deficit of $6,250,907.

The Company's March 31 balance sheet also disclosed a working
capital deficit with $1,106,176 in total current assets and
$3,518,532 in total current liabilities.  The Company had an
accumulated deficit of $55,436,856 at March 31.

A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?d8c

                     Going Concern Doubt

BDO Seidman, LLP, expressed substantial doubt about Avitar, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended
Sept. 30, 2005.  The auditing firm pointed to the Company's
recurring losses from operations and working capital and
stockholder deficits as of Sept. 30, 2005.

                       About Avitar Inc

Avitar, Inc. -- http://www.avitarinc.com/-- develops,
manufactures and markets innovative and proprietary medical
products.  Their field includes the oral fluid diagnostic market,
the disease and clinical testing market, and customized
polyurethane applications used in the wound dressing industry.
Avitar manufactures ORALscreen(R), the world's first non-invasive,
rapid, onsite oral fluid test for drugs-of-abuse, as well as
HYDRASORB(R), an absorbent topical dressing for moderate to heavy
exudating wounds.  Avitar is also developing diagnostic strategies
for disease and clinical testing in the estimated $25 billion in-
vitro diagnostics market.  Conditions targeted include influenza,
diabetes, and pregnancy.


BOWNE & CO: Chairman and CEO Philip Kucera Retiring in December
---------------------------------------------------------------
Bowne & Co., Inc., disclosed that its Chairman and Chief Executive
Officer, Philip E. Kucera, intends to retire from the Company
effective December 31, 2006.  David J. Shea, the Company's current
President and Chief Operating Officer, will replace Mr. Kucera.

Mr. Kucera joined Bowne as Senior Vice President and General
Counsel in December 1998 and was appointed Chief Executive Officer
in May 2004 and Chairman in May 2005.  The Company disclosed that
he will continue to serve as a member of its Board of Directors.

"It's been a real pleasure working alongside Phil," said Mr. Shea.
"We will continue to implement our strategy of focusing on our
core businesses, and we're well-positioned to drive revenue and
earnings growth in each of our businesses.  It will be a privilege
to guide the company during these exciting times."

The Company said that Mr. Shea has held a number of leadership
positions at Bowne since joining the Company in 1998 and was named
its President and Chief Operating Officer in October 2004.

Based in New York City, Bowne & Co., Inc. (NYSE: BNE)  --
http://www.bowne.com/-- is a printing company which specializes
in financial documents such as prospectuses, annual and interim
reports, and other paperwork required by the SEC.  Bowne also
handles electronic filings via the SEC's EDGAR system and provides
electronic distribution and high-volume mailing services.  The
financial printing business accounts for the bulk of the company's
sales.  Bowne also offers marketing and business communications
services and litigation support software.

                          *   *   *

As reported in the Troubled Company Reporter on Feb. 8, 2006,
Moody's Investors Service affirmed the rating on Bowne & Co.,
Inc.'s $75 million Convertible Subordinated Debentures due 2033 at
B2 and affirmed Bowne's Corporate Family Ba3 rating.  Moody's
changed the outlook to positive from stable.


BROOK MAYS: First Act Gets $16.7 Million Settlement from Insurers
-----------------------------------------------------------------
First Act Inc. received $16.7 million from the insurers for Brook
Mays Music to settle a civil lawsuit filed in 2003 against the
Dallas, Texas musical instrument retailer and rental company.

A unanimous 2005 jury verdict issued in the U.S. District Court
for Massachusetts found Brook Mays liable for making false
advertising statements about First Act and that Brook Mays
interfered with First Act's contracts and business relationships.
The original jury award was for $20.7 million in damages.

First Act's Chairman of the Board, Bernard Chiu, approved the
settlement.

                         About First Act

Based in Boston, Massachusetts, First Act Inc., is a musical
products Company.  First Act's Studio for Artists designs and
builds custom guitars for professional musicians.  First Act's
Concert Series(TM) offers band students a comprehensive range of
instrument choices while First Act's line for teens and adults
includes a wide range of guitars, drums, hand percussion, and
accessories.  First Act's Discovery(TM) line of instruments gives
young children a musical head start.

                        About Brook Mays

Headquartered in Dallas, Texas, Brook Mays Music Company --
http://www.brookmays.com/-- is a full-line musical instrument
retailer in the U.S.  It offers a broad range of educational
services, complete instrument repair and overhaul facilities and
operates a rental program for musical instruments.  The Company
filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex.
Case No. 06-32816).  Marcus Alan Helt, Esq., and Michael S.
Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor.
The Recovery Group, Inc., serves as the Debtor's financial advisor
while Houlihan Lokey Howard and Zukin Capital, Inc., acts as
restructuring advisor.  The Debtor has selected Kurtzman Carson
Consultants LLC as its Notice, Claims and Balloting Agent.  When
it filed for bankruptcy, the Debtor estimated its assets at $10
million to $50 million and its debts at $50 million to $100
million.


CABLEVISION SYSTEMS: Rainbow Unit Obtains $800MM Credit Facility
----------------------------------------------------------------
Rainbow National Services LLC, an indirect wholly owned subsidiary
of Cablevision Systems Corporation and CSC Holdings, Inc., entered
into a Credit Agreement, providing for an $800 million senior
secured credit facility, on July 5, 2006.

The credit facility consists of a $500 million Term Loan A
Facility and a $300 million revolving credit facility.

The lenders are JPMorgan Chase Bank as Administrative Agent and
Letter of Credit Issuer, JP Morgan Securities and Banc of America
Securities as Joint Lead Arrangers and Book Runners, Bank of
America as Syndication Agent, and Credit Suisse, CitiCorp N.A. and
Wachovia Bank as Co-Documentation Agents.

As of July 5, 2006, the entire $500 million Term Loan A and $10
million under the revolving credit facility had been borrowed.
Rainbow National used the $510 million and approximately $88
million of additional available cash to repay all of its
outstanding borrowings under a previous credit facility and to pay
expenses incurred in connection with the Credit Agreement.

The interest rate under the Credit Agreement varies.  The Term
Loan A is to be repaid in quarterly installments until June 30,
2013.

Headquartered in Manhattan, Cablevision Systems Corp. (NYSE: CVC)
-- http://www.cablevision.com/-- provides cable TV service to
about 3 million customers in and around New York City.  The firm
has upgraded its network and services to include digital cable,
movies-on-demand, and VoIP telephony.  It also operates business
communications service provider Cablevision Lightpath and regional
sports channels.  Cablevision controls Madison Square Garden, the
New York Knicks and the New York Rangers, plus Radio City Music
Hall.  Cablevision pulled plans to spin off its cable network
unit, Rainbow Media Holdings, and instead closed that company's
money-losing satellite TV assets.  Chairman Charles Dolan and his
family control Cablevision.

At Mar. 31, 2006, Cablevision System Corp.'s balance sheet showed
a $2,517,442,000 stockholders' deficit compared to a
$2,468,766,000 deficit at Dec. 31, 2005.

                           *     *     *

As reported in the Troubled Company Reporter on July 4, 2006,
Dominion Bond Rating Service confirmed the ratings of Cablevision
Systems Corporation and its wholly owned financing subsidiary, CSC
Holdings, Inc. at B (low) and BB (low)/B (high), respectively.
All trends are Stable.

   * Bank Debt Confirmed BB (low)
   * Senior Notes and Debentures Confirmed B (high)
   * Senior Notes Confirmed B (low) Stb


CALIFORNIA THEATRE: Case Summary & Seven Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: California Theatre Investment Group, LLC
        428 "C" Street, Apartment 306
        San Diego, California 92101

Bankruptcy Case No.: 06-01793

Chapter 11 Petition Date: July 12, 2006

Court: Southern District of California (San Diego)

Judge: Louise DeCarl Adler

Debtor's Counsel: Alan Vanderhoff, Esq.
                  Vanderhoff Law Group
                  701 B Street, Suite 1000
                  San Diego, California 92101
                  Tel: (619) 299-2050
                  Fax: (619) 239-6554

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Seven Largest Unsecured Creditors:

   Entity                              Claim Amount
   ------                              ------------
   James Massery                           $290,000
   4351 Oxford
   La Mesa, CA 91941

   Sullivan Hill Lewin Rez & Engel         $218,860
   550 West C Street, Suite 1500
   San Diego, CA 92101

   Steve Laber                             $139,000
   101 La Cresta Trail
   El Cajon, CA 92019

   Robert DePhilippis                      $120,000
   518 Davidson Street
   Chula Vista, CA 91910

   Gaylin Leth                              $71,000
   Real Estate Inside Track
   2550 fifth Avenue, 7th Floor
   San Diego, 92102

   Franchise Tax Board                         $971

   Cushman & Wakefield                         $625


CALPINE CORP: Court Implores Calpine-Rosetta Resolution on Leases
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
at a hearing on July 12, 2006, in Calpine Corporation's bankruptcy
case took these steps:

   * In response to an objection filed by the Department of
     Justice and asserted by the California State Lands Commission
     that the Debtors' Motion to Assume Non-Residential Leases and
     Set Cure Amounts, did not allow adequate time for an
     appropriate response, the Debtors withdrew from the list of
     Oil and Gas Leases that were the subject of the Motion those
     leases issued by the United States (and managed by the
     Department of Interior) and the State of California (and
     managed by the California State Lands Commission).  The
     Debtors and Department of Justice agreed to an extension of
     the existing deadline to assume such Oil and Gas Leases under
     Section 365, to the extent the Oil and Gas Leases are leases
     subject to Section 365.  The effect of these actions is to
     render the objection of Rosetta Resources Inc. inapplicable
     at this time.

   * The Court also encouraged Calpine and Rosetta to arrive at a
     business solution to all  remaining issues including
     $68 million payable to Calpine for conveyance of the cured
     consent properties, Calpine's execution of various documents
     under its "further assurances" obligations as necessary to
     resolve any  outstanding issues applicable to certain other
     properties purchased by Rosetta, and final agreement
     regarding $12 million in other true-up obligations that may
     be payable to Calpine, as required by the July 2005 sale
     agreements pursuant to which Rosetta purchased the
     properties.

Although no specific ruling was issued addressing any of Rosetta's
rights or claims, Rosetta is nonetheless pleased with the Court's
actions and anticipates working with Calpine on a priority basis
toward resolution of unresolved conveyance of properties and post
closing adjustments under the Purchase and Sale Agreement.

                     About Rosetta Resources

Based in Houston, Texas, Rosetta Resources Inc. (NASDAQ: ROSE) --
http://www.rosettaresources.com/-- is an independent oil and gas
company engaged in acquisition, exploration, development and
production of oil and gas properties in North America.  The
Company's operations are concentrated in the Sacramento Basin of
California, South Texas, the Gulf of Mexico and the Rocky
Mountains. Rosetta is a Delaware corporation.

                       About Calpine Corp.

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


CARDTRONICS INC: Financial Report Filing Cues S&P's Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston,
Texas-based Cardtronics Inc. to stable from negative, following
the company's completion of financial reports as required by its
credit agreements.  The company is now in full compliance of all
terms and conditions of these agreements.  The corporate credit
rating is affirmed at 'B+', and the subordinated debt is affirmed
at 'B-'.

"The ratings reflect Cardtronics Inc.'s short operating history
and growth initiatives in a mature and consolidating industry;
high leverage; and aggressive capital spending," said Standard &
Poor's credit analyst Lucy Patricola.  These factors partly are
offset by its leading position in the U.S. as an independent ATM
provider, and its recurring revenue streams.

Cardtronics owns about 45% of its network of approximately 26,000
ATMs in the U.S., and provides services for the balance.
Cardtronics' ATMs are located in nonbanking sites, typically
convenience locations such as grocery stores, drugstores and
retailers, in the U.S. and the U.K. Contracts run for five to
seven years, providing stable and recurring revenue streams.
The company's top 15 customers account for 35% of revenues.  Total
lease adjusted debt is about $276 million as of March 31, 2006.


CATHOLIC CHURCH: District Ct. Receives Appellants' Opening Briefs
-----------------------------------------------------------------
The Archdiocese of Portland in Oregon, certain parishes and other
parties-in-interest took an appeal from Judge Elizabeth Perris
Perris' rulings relating to the property of the estate dispute to
the U.S. District Court for the District of Oregon.

The Appellants filed their opening briefs on June 20, 2006.  The
Tort Claimants Committee's response is due July 21, 2006.  The
Appellants' reply briefs are due August 21, 2006.  All parties ask
the District Court for oral arguments.

District Court Judge Michael W. Mosman received three opening
briefs from the Appellants:

   (1) Parish Class, Committee of Catholic Parishes, Parishioners
       and Interested Parties;

   (2) Friends of Regis High School, Regis High School
       Foundation, Central Catholic High School Alumni
       Association and Central Catholic High School Parents
       Association;

   (3) Marist High School Foundation, Marist High School Parents
       and Alumni Service Club; and

   (3) the Portland Archdiocese.

Marist High School's opening brief was submitted to the District
Court in the conventional, hard copy format.  It may be viewed in
the Clerk's Office where the file is maintained.

The Appellants ask Judge Mosman to reverse Judge Perris' rulings
and remand the matters to the U.S. Bankruptcy Court for the
District of Oregon for further proceedings.

                        Opening Briefs

A. Portland Archdiocese

After wrongly determining that parishes are mere branch offices of
the Archdiocese, the Bankruptcy Court ignored the law permitting a
charitable corporation trustee to hold property in trust for a
portion of its charitable mission, Howard M. Levine, Esq., at
Sussman Shank LLP, in Portland, Oregon, tells the District Court.

The Oregon statutes have, since 1872, protected the role of church
law for religious corporations, including the Archdiocese,
Mr. Levine relates.  Oregon religious corporation statutes and
Canon Law both indicate that the Archdiocese holds property in
trust for the Parishes.

Mr. Levine asserts that the Bankruptcy Court also either ignored
or misconstrued the statutes in constructing that Canon Law is
relevant only "internally" but not as to the Archdiocese's
"external" dealings.

The Archdiocese's Articles of Incorporation, the Oregon statutes
governing nonprofit religious corporations, and the hundreds of
pages of declarations submitted by the Parish Appellants leave no
doubt that the Archdiocese holds legal title to the "Test
Properties" in charitable trust, Mr. Levine reiterates.

Mr. Levine relates that the Bankruptcy Court struck as irrelevant
evidence certain text from Archbishop John G. Vlazny's
declaration, which establishes that the Archbishop's powers are
permanently defined and limited by Canon Law.  The Archbishop, as
the canonical steward for the Archdiocese and the Parishes, is
charged with ensuring that canonical norms are observed.  Canon
Law states that the Archbishop has no power to own the Parishes'
property.

Hence, Mr. Levine points out that the definition and limitation of
the Archbishop's power by Canon Law is relevant to determine
whether:

   * the church office holder who "becomes" a corporation sole
     has power to hold a fee simple interest in the Parishes'
     property; or

   * the Archdiocese, similar to the Archbishop's role as
     canonical steward, holds legal title to the property in
     charitable trust for the benefit of the Parishes.

Archbishop Vlazny's declaration, according to Mr. Levine, forms
the foundation for the Archdiocese's Canon Law and religious
freedom arguments.  It is critical to an understanding how Canon
Law permeates the religious, civil, operational and functional
aspects of the Archdiocese.  To have stricken it or disregarded it
as irrelevant is to treat the Archdiocese as just another debtor,
no different than a "tire dealership."

Mr. Levine asserts that the Bankruptcy Court committed legal
errors relating to the First Amendment doctrine of Church
autonomy in:

   (1) finding, contrary to law and evidence, that ownership of
       property by Catholic institutions is unrelated to Catholic
       doctrine;

   (2) refusing to consider Canon Law, despite analogous cases
       from the U.S. Supreme Court and other sources;

   (3) creating an "external dispute exception" to the First
       Amendment; and

   (4) exceeding its jurisdiction by effectively rearranging the
       polity of the Catholic Church in western Oregon.

Among other things, the Bankruptcy Court's application of
Sections 541 and 544(a)(3) of the Bankruptcy Code violates the
Religious Freedom Restoration Act, Mr. Levine says.  Judge Perris
erroneously believed that the RFRA does not apply to the
Bankruptcy Code provisions that incorporate state law.

The Bankruptcy Court's errors also infected its "substantial
burden" analysis, when it ruled that the Archdiocese and the
Parishes have not shown that applying Section 541(a) would
substantially burden their exercise of religion, Mr. Levine
asserts.

A full-text copy of Portland's Opening Brief is available for free
at http://researcharchives.com/t/s?dad

B. Parishioners Committee, et al.

The Bankruptcy Court concluded that Section 544(a)(3) of the
Bankruptcy Code operated to void the unrecorded religious trust
interests in the test properties.  The Bankruptcy Court declared
that the Test Properties were available to satisfy the claims of
creditors of the Archdiocese free and clear of the interest of any
third party, including those of the Parish Appellants.

Douglas R. Pahl, Esq., at Perkins Coie LLP, in Portland, Oregon,
attorney for the Parishioners Committee, et al., asserts that
Section 544(a)(3) voids parish interests only where a purchaser of
the properties would not be subject to inquiry or constructive
notice of other interests in the property under Oregon law.

However, a reasonable and prudent purchaser of the properties
would be on notice that other interests exist, and would be
required to inquire into the nature of those other interests, Mr.
Pahl contends.

Among other things, Mr. Pahl points out that by looking at the
deeds of the property, a reasonable and prudent purchaser would
inquire into the scope of the Archdiocese's authority.  That
purchaser would also be on notice of other possible interests
based on a review of Oregon's Corporation Code and the
Archdiocese's Articles of Incorporation.

The active use and maintenance of the properties by the Parish
Appellants would likewise prompt a reasonable purchaser to inquire
into the scope of a parish's interest in the property, Mr. Pahl
adds.  Public knowledge prior to the bankruptcy filing puts
purchasers on notice of the Parish Appellants' interests.

A full-text copy of the Parish Appellants' Brief is available for
free at http://researcharchives.com/t/s?dae

C. Regis High School

Brad T. Summers, Esq., at Ball Janik LLP, in Portland, Oregon,
relates that the Regis property is a 35-acre property with
buildings for classrooms, administrative offices, a library, a
gymnasium and activities center and other facilities associated
with the operation of a high school.

According to Mr. Summers, the men who formed Catholic Educational
Corporation acquired the Regis property for the express purpose of
founding a school.  After acquiring the Regis property and
transferring it to the Archdiocese, the Corporation was dissolved.

Mr. Summers tells Judge Mossman that the Archdiocese holds legal
title to the Regis property, but it does not hold equitable title.
The property is held in charitable trust for the benefit of
present and prospective students and parents of students who wish
to have their children attend a Catholic high school in the
Santiam area.

That equitable interest, Mr. Summers contends, is excluded from
property of the Archdiocese's estate under Section 541(d).

To the extent that the District Court finds that the Regis
property is not held in an express charitable trust, it is held in
a resulting trust, Mr. Summers argues.  A resulting trust occurs
whenever circumstances surrounding the disposition of property
raise an inference that the transferor did not intend that the
transferee would take a beneficial interest in the property,
Mr. Summers explains.

When the Catholic Educational Corporation transferred the Regis
property, it intended that the property must be used for a
Catholic high school, Mr. Summers reiterates.  That same evidence
also establishes the basis for a resulting trust.

The Bankruptcy Court held that the Archdiocese takes free of any
trust interest in the Regis property by operation of the Section
544(a)(3).

Section 544(a)(3) states that a trustee has the rights and powers
of, and may avoid any transfer of property of the debtor that is
voidable by, a bona fide purchaser of real property from the
debtor, against whom applicable law permits such a transfer to be
perfected.

State law defines the powers of a bona fide purchaser for purposes
of Section 544(a)(3).  Mr. Summers notes that under Oregon law, a
prospective purchaser takes subject to inquiry notice.

There is no question that a prospective purchaser who made inquiry
at the Petition Date would have learned of the trust interest in
the Regis property, Mr. Summers asserts.  Any purchaser who
inquired of the record titleholder would have learned from the
Archdiocese that the property was held in trust.

A full-text copy of the Regis Parties' Opening Brief is available
for free at http://researcharchives.com/t/s?daf

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


CATHOLIC CHURCH: Court Rejects Robert Fleming's $4-Million Claim
----------------------------------------------------------------
The Hon. Elizabeth Perris of the U.S. Bankruptcy Court for the
District of Oregon disallows Claim No. 186 asserted by Robert
Fleming.

As reported in the Troubled Company Reporter on June 28, 2006, the
Court ruled that Claim No. 189 amended and superseded Claim
No. 186.  Mr. Fleming sought payment of $4,000,000 for non-
economic damages and $50,000 for economic damages.

The Archdiocese of Portland in Oregon asked the Court to disallow
the Fleming claims:

   (a) because they are barred by the statute of limitations; and

   (b) under the doctrine of in pari delicto, as a result of Mr.
       Fleming's attempt to defraud the Court in preparation for
       his child abuse claim.

Tiffany A. Harris, Esq., at Schwabe, Williamson & Wyatt, P.C., in
Portland, Oregon, contends that Mr. Fleming knew or should have
known of the existence of his legal "injury" in 1998, when
Mr. Fleming told his psychologist, a Dr. Roundtree, about the
sexual abuse.  Hence, the Claims have expired a year before he
filed his lawsuit in 2002.

Ms. Harris also alleges that Mr. Fleming committed fraud by asking
Dr. Roundtree to "make an adjustment to the date" in his chart
notes in preparation for his lawsuit against the Archdiocese,
knowing that his claims are subject to a three-year statute of
limitations.

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


COMM 2004-RS1: Fitch Affirms Low-B Ratings on $8.74 Million Notes
-----------------------------------------------------------------
Fitch affirms 17 classes of the notes issued by COMM 2004-RS1,
Ltd.:

    --$220,482,888 class A Notes at 'AAA';
    --Interest only classes XP, IO-1, IO-2 at 'AAA';
    --$39,020,000 class B-1 Notes at 'AA';
    --$41,298,000 class B-2 Notes at 'AA';
    --$13,386,000 class C Notes at 'AA-';
    --$12,955,000 class D Notes at 'A';
    --$4,318,000 class E Notes at 'A-';
    --$3,023,000 class F Notes at 'BBB+';
    --$2,056,000 class G Notes at 'BBB-';
    --$2,176,000 class H Notes at 'BB+';
    --$725,000 class J Notes at 'BB';
    --$1,313,000 class K Notes at 'BB-';
    --$1,520,000 class L Notes at 'B+';
    --$622,000 class M Notes at 'B';
    --$2,384,528 class N Notes at 'B-'.

COMM 2004, which closed November 4, 2004, is supported by a static
pool of commercial mortgage-backed securities (24.7%), and Re-
REMIC (75.3%) securities.  Deutsche Bank selected the initial
collateral and serves as the collateral administrator.

Based on the stable performance of the underlying collateral,
Fitch affirms all rated liabilities issued by COMM 2004-RS1.
The weighted average rating factor has stayed the same at 2.46
('A-'/'BBB+').  There are no overcollateralization or interest
coverage tests performed on this portfolio as it is a straight
pass-through deal.  There are currently no defaulted assets in the
portfolio.

The ratings of the classes A, B-1, and B-2 notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.  The
ratings of the classes D, E, F, G, H, J, K, L, M, and N notes
address the likelihood that investors will receive ultimate and
compensating interest payments, as per the governing documents, as
well as the stated balance of principal by the legal final
maturity date.  The ratings of the classes XP and IO notes only
address the likelihood of receiving interest payments while
principal on the related certificates remains outstanding.

Fitch will continue to monitor and review this transaction for
future rating adjustments.


CONSUMERS ENERGY: Fitch Comments on Nuclear Plant Sale to Entergy
-----------------------------------------------------------------
Consumers Energy Co., on July 12, 2006, reached an agreement to
sell its 798-megawatt Palisades nuclear plant to Entergy Corp. for
$380 million.  This announcement is not anticipated to have an
immediate effect on Consumers' ratings or Stable Outlook.  The
Issuer Default Rating of Consumers is 'BB-'.

The $380 million purchase price represents $242 million for the
plant, $83 million in nuclear fuel and $55 million in related
assets.  Consumers plans to use the proceeds from the sale to
reduce debt and for other general corporate purposes.  However,
the final purchase price will be subject to several adjustments at
closing, primarily related to decommissioning funds.  The sale
transaction is subject to several approvals, including the Federal
Energy Regulatory Commission, the Nuclear Regulatory Commission,
the Michigan Public Service Commission, and other regulatory and
state agencies.  The transaction is targeted to close in the first
quarter of 2007.

Fitch notes that the sale is a positive development for Consumers,
which announced its intention to divest of the plant in late 2005.
The utility will no longer have the operating or financial risks
of owning a nuclear power plant, particularly since Palisades has
experienced performance difficulties in the past.  Additionally,
Consumers will continue to benefit from the low cost of the output
from Palisades through a 15-year purchase power agreement.  The
total price for energy and capacity is fixed according to a
schedule allowing for monthly and annual shaping.  The PPA is unit
contingent with guarantees for minimum capacity factor performance
levels during the peak summer months of July and August and
associated penalties capped at a pre-specified amount.  Entergy is
considering a modest uprate of the capacity of Palisades.  The PPA
does not cover output associated with uprates.

Consumers, the principle subsidiary of CMS Energy, is a
combination electric and natural gas utility that serves more than
three million electric and gas customers in Michigan.


CSFB ABS: S&P Junks Rating on Series 2001-HE25 & 2002-HE4 Certs.
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes from six series of mortgage pass-through certificates
issued by CSFB ABS Trust.  These ratings remain on CreditWatch
negative, where they were placed March 10, 2006.  Additionally,
the ratings on two classes from two CSFB ABS Trust series are
lowered an placed on CreditWatch with negative implications and
the ratings on two other classes are lowered to 'CCC' and removed
from CreditWatch negative.  In addition, ratings on two other
classes are placed on CreditWatch with negative implications.  The
ratings on the remaining 26 classes from the affected CSFB ABS
Trust series are affirmed.

The ratings on the 10 downgraded classes with ratings placed on
CreditWatch negative and the ratings on the two classes that are
placed on CreditWatch negative reflect the adverse performance of
the collateral pools backing these transactions.  During the past
12 months, monthly net losses have outpaced monthly excess
interest by more than 100%, on average.

As a result, overcollateralization for each of these transactions
is below its target.  Furthermore, cash flow projections indicate
that monthly net losses will continue to exceed monthly excess
spread, further eroding the o/c for each transaction.  As of the
June 2006 remittance period, total delinquencies ranged from
13.70% for series 2002-HE4 (fixed loan group) to 40.87% for series
2001-HE22.  Cumulative realized losses ranged from 2.03% for
series 2002-1 to 4.12% for series 2001-HE20.  In addition, the
transactions have paid down to below 15% of their original pool
balances.

Standard & Poor's will continue to closely monitor the performance
of the transactions with ratings on CreditWatch negative.  If
losses decline to a point where they no longer outpace excess
interest, and the level of o/c improves, the ratings on these
classes will be affirmed and removed from CreditWatch negative.
Conversely, if losses continue to outpace excess interest, further
downgrades can be expected.

The affirmed ratings reflect adequate actual and projected credit
support percentages and the shifting interest structure of the
transactions.

The collateral consists primarily of 30-year, fixed- and
adjustable-rate, subprime mortgage loans secured by first liens on
one- to four-family residential properties.

          Ratings Lowered and Placed on Creditwatch Negative

                           CSFB ABS Trust
                Mortgage pass-through certificates

                                         Rating
                                         ------
              Series     Class     To              From
              ------     -----     --              ----
              2001-HE25  M-2       A/Watch Neg     AA
              2001-HE22  M-2       A/Watch Neg     AA-

          Ratings Lowered and Remain on Creditwatch Negative

                           CSFB ABS Trust
                Mortgage pass-through certificates

                                        Rating
                                        ------
             Series     Class     To              From
             ------     -----     --              ----
             2001-HE16  B         BB/Watch Neg    BBB-/Watch Neg
             2001-HE20  B         B/Watch Neg     BB-/Watch Neg
             2001-HE22  B         B/Watch Neg     BB-/Watch Neg
             2001-HE25  B         CCC             BB-/Watch Neg
             2001-HE30  B-F       B/Watch Neg     BB/Watch Neg
             2002-HE4   B-F       CCC             BB/Watch Neg
             2002-HE11  B-1       BB/Watch Neg    BBB-/Watch Neg

                  CSFB Home Equity Asset Trust 2002-1
                 Home Equity Pass-Through Certificates
                            Series 2002-1

                                         Rating
                                         ------
              Series     Class     To              From
              ------     -----     --              ----
              2002-1     B-1       BB/Watch Neg    BBB-/Watch Neg

                Ratings Placed on Creditwatch Negative

                      CSFB ABS Trust Mortgage
                    Pass-Through Certificates

                                        Rating
                                        ------
              Series     Class     To              From
              ------     -----     --              ----
              2001-HE16  M-2       A/Watch Neg     A
              2002-HE4   M-F-2     A/Watch Neg     A

                          Ratings Affirmed

                      CSFB ABS Trust Mortgage
                     Pass-Through Certificates

            Series      Class                        Rating
            ------      -----                        ------
            2001-HE16   A                            AAA
            2001-HE16   M-1                          AA+
            2001-HE20   A-1, A-IO, M-1               AAA
            2001-HE20   M-2                          AA
            2001-HE22   A-1, A-IO, M-1               AAA
            2001-HE25   A-1, A-IO, M-1               AAA
            2001-HE30   A-F                          AAA
            2001-HE30   M-F-1                        AA+
            2001-HE30   M-F-2                        A+
            2002-HE4    A-F                          AAA
            2002-HE4    M-F-1                        AA+
            2002-HE11   A-2, A-3                     AAA
            2002-HE11   M-1                          AA+
            2002-HE11   M-2                          A+

                CSFB Home Equity Asset Trust 2002-1
               Home Equity Pass-Through Certificates
                          Series 2002-1

                   Class               Rating
                   -----               ------
                   A-2, A-3, A-4       AAA
                   M-1                 AA+
                   M-2                 A+


CSFB MORTGAGE: S&P's Rating on Class I-M-3 Certs. Tumbles to D
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
I-M-3 from loan group one from Credit Suisse First Boston Mortgage
Securities Corp.'s series 2002-22 to 'D' from 'B' and removed from
CreditWatch negative, where it was placed Jan. 12, 2006.  At the
same time ratings are affirmed on four other classes from this
transaction.

The rating on class I-M-3 is lowered to 'D' from 'B' because the
class incurred a $55,829 principal write-down during the May 2006
remittance period.  The principal write-down occurred because the
transaction has experienced more than $300,000 in losses,
completely eroding available overcollateralization.  Before May
2006, the last time this transaction incurred any losses was in
December of 2004.  As of the June 2006 distribution report, total
delinquencies for loan group one were approximately 22% and
realized losses were 0.93%.  Approximately 4.59% of the loan
group's principal balance remains.

The collateral for this transaction consists of 30-year, fixed- or
adjustable-rate, first- or second-lien mortgage loans secured by
one-to-four family residential properties.  Credit support is
provided by subordination.

            Rating Lowered and Off Creditwatch Negative

         Credit Suisse First Boston Mortgage Securities Corp.
                 Mortgage pass-through certificates
                    series 2002-22 loan group 1

                                    Rating
                                    ------
                       Class      To      From
                       -----      --      ----
                       I-M-3      D       B/Watch Neg

                           Ratings Affirmed

         Credit Suisse First Boston Mortgage Securities Corp.
                 Mortgage pass-through certificates
                    series 2002-22 loan group 1

                      Class              Rating
                      -----              ------
                      I-A-5, I-PP        AAA
                      I-M-1              AA
                      I-M-2              A+


DANA CORP: Wants Court to Approve Burns, et al. Employment Pacts
----------------------------------------------------------------
Dana Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of New York to:

   (a) enter into employment agreements with Michael J. Burns,
       Dana Corporation's president and chief executive officer,
       and five senior executives of Mr. Burns' core management
       team:

          1. Paul E. Miller,
          2. Thomas R. Stone,
          3. Nick L. Stanage,
          4. Michael L. DeBacker, and
          5. Ralf Goettel, and

   (b) assume certain change of control agreements with three of
       the Senior Executives, as amended.

The Debtors also ask the Court to determine that on a postpetition
basis, the term insider, as defined in Section 101(31) of the
Bankruptcy Code, only applies to:

   (i) their current employees, Mr. Burns and the Executives; and

  (ii) any person who serves as their director at the time of
       inquiry.

A. Michael J. Burns

   Effective as of March 1, 2004, Dana's Board of Directors named
   Mr. Burns as chief executive officer, a position in which he
   continues to serve.

   Mr. Burns earned a bachelor's degree in Mechanical Engineering
   from the General Motors Institute in 1975 and a master's
   degree in Business Administration from The Wharton School of
   the University of Pennsylvania in 1979.  He spent 34 years at
   General Motors, then later joined the GM Treasurer's Office in
   New York, eventually as the director of Overseas Financial
   Analysis.  Mr. Burns also served with Delphi Electronics.


   In 1998, Mr. Burns was named president of GM Europe with
   around $25,000,000,000 in sales.

B. Paul Miller

   Mr. Miller joined Dana as the vice president of Purchasing to:

   -- assist in centralizing the purchasing and facility
      review function across all Dana businesses on a worldwide
      basis in order to establish orderly supply chain management
      as well as contain or reduce the costs associated with
      Dana's revenues; and

   -- accelerate the change from a highly decentralized facility-
      based management structure to a centralized, cost effective
      yet product-focused operation.

   Mr. Miller also assumed responsibility for all supplier
   quality, real estate, physical plants globally and global
   logistics.  He is responsible for 75% of the Dana Companies'
   global expenditures.

   Mr. Miller, a graduate of Indiana University of Pennsylvania,
   has more than 25 years of combined experience at Delphi
   Corporation and GM.

C. Thomas R. Stone

   Mr. Stone joined Dana in June 2005 as president of Dana's
   Traction Group.  Mr. Stone assumed global responsibility for
   Dana's axle manufacturing and assembly operations.  He earned
   a Bachelor of Science degree in Science from Purdue
   University, a Master's Degree in Business Administration from
   Indiana University and completed the Harvard University
   Advanced Management Program.

D. Nick Stanage

   Mr. Stanage has been the president of Dana's Heavy Vehicle
   Products and a member of Dana's Executive Committee since
   December 2005.  He joined Dana in August 2005 as vice
   president and general manager of the Commercial Vehicle Group.
   He earned his undergraduate degree in Mechanical Engineering
   at Western Michigan University and his master's degree in
   Business Administration from the University of Notre Dame.  He
   is a graduate of the executive leadership program at the
   American Graduate School of International Management.

E. Michael L. DeBacker

   Mr. DeBacker has been a vice president of Dana since 1994 and
   the general counsel and secretary since 2000.  He is also
   Dana's chief compliance officer and manages Dana's Risk
   Management, Environmental Services, Government Affairs and
   Corporate Communications Departments.  Mr. DeBacker, who
   earned a bachelor's degree and Juris Doctor from Washburn
   University, is the longest serving of the senior executives
   and his historical knowledge of the company is vital to
   understanding the Debtors' historic business relationships as
   well as in assessing the thousands of issues and claims that
   will arise in their cases.  Importantly, Mr. DeBacker is
   responsible for addressing Dana's asbestos issues.

F. Ralf Goettel

   Mr. Goettel now leads two business lines on a worldwide basis,
   and also serves as the senior executive of all Dana's
   operations in Europe.  Mr. Goettel is a graduate of the
   Technical University of Aachen, Germany where he earned a
   degree in Mechanical Engineering with specialization in
   combustion engine development.

Corinne Ball, Esq., at Jones Day, in New York, relates that
during the Chapter 11 process, the management team will be called
upon to negotiate with bondholders, labor, retirees, vendors and
equity holders.

The Debtors and each of Mr. Burns and the Executives will enter
into postpetition employment agreements on these terms:

   (a) Term: Two years from the date the Court approves the
       Agreements.  The term is automatically renewable for
       successive six-month terms unless notice of intent not to
       renew is given by either party prior to any renewal term.

   (b) Compensation and Benefits:

                                                       Total
                           Annual                    Completion
         Executive      Base Salary     2006 Bonus     Bonus
         ---------      -----------     ----------   ----------
         M. Burns        $1,035,000     $2,070,000   $6,020,000
         P. Miller          375,000        450,000    1,120,000
         T. Stone           440,000        528,000      800,000
         M. DeBacker        405,000        486,000      800,000
         R. Goetel          385,000        385,000      800,000
         N. Stanage         336,000        336,000      800,000

       Mr. Burns and the Executives are eligible for an annual
       cash incentive bonus under the Dana Corporation Annual
       Incentive Plan.

       The Completion Bonus is payable in the event of a
       Successful Emergence.  It will be paid in two
       installments:

       -- 50%, within 30 days following a Successful Emergence,
          and

       -- 50%, within 30 days following the six-month anniversary
          of the Successful Emergence date provided that the
          senior executive remains employed by Dana on the six-
          month anniversary date or has been terminated without
          cause or resigned for good reason between the
          Successful Emergence date and the six-month anniversary
          date.

       Mr. Burns will be eligible to participate in Dana's
       defined contribution retirement plan and welfare benefit
       plans and to receive other fringe benefits at the same
       level as other officers of the company.  Each Executive
       will be entitled to participate in company-sponsored
       retirement savings plans at the same level as Dana's other
       senior officers, and in all Dana's employee benefit
       programs for its senior executives.

       Dana will assume the Change of Control Agreements, as
       amended, of Messrs. Burns, Miller and DeBacker, which
       provide for protection for a period of three years
       following a change of control that occurs in connection
       with a Successful Emergence.

   (c) Involuntary Termination of Employment Without Cause or
       Resignation for Good Reason:

       In a pre-successful emergence, Mr. Burns and each
       Executive will receive their base salary and Annual Bonus
       at target for the remainder of the contract term payable
       as a lump sum, a pro-rata portion of their Completion
       Bonus and continuation of benefits in accordance with the
       terms of the policies for other terminated employees.  Mr.
       Burns will also be entitled to receive a pro-rata portion
       of his Annual Bonus at target for the time worked during
       the applicable performance period and payable as a lump
       sum.

       In a post-successful emergence, Mr. Burns and each
       Executive will receive the base salary and Annual Bonus at
       target for the year in which the termination occurs
       multiplied by two and payable in a lump sum as well as any
       outstanding unpaid Completion Bonus.

       Mr. Burns will also receive a pro-rata portion of his
       Annual Bonus at target for the time worked during the
       applicable performance period and continuation of benefits
       in accordance with the terms of the applicable employee
       benefit plan, any previously deferred compensation,
       deferred supplemental retirement benefits, accrued
       vacation pay, continued medical, dental, disability and
       life insurance benefits for two years following the
       termination or the longer period as any plan, program,
       practice or policy may provide.  Each Executive will
       receive continued pension, health and welfare benefits for
       two years or until the Executive reaches age 65, whichever
       is sooner.

   (d) Death: The estate of Mr. Burns or the Executives will
       receive their base salary through the end of the month,
       the pro-rata portion of the Annual Bonus per the AIP
       terms, and the pro-rata portion of the Completion Bonus
       through the date of death.

   (e) Voluntary Termination Without Good Reason/Termination For
       Cause:

       Mr. Burns and each Executive will forfeit liquidated
       damages, severance, unpaid proceeds of the Completion
       Bonus and the Annual Bonus.  They may receive accrued but
       unpaid salary, vacation pay and vested benefits.

   (f) Non-Compete Clause:  Neither Mr. Burns nor any Executive
       will engage in Competition for the remainder of the term
       of the Agreements upon termination for any reason.
       Following a Successful Emergence, the non-compete clause
       applies for a two-year period upon a termination of their
       employment without cause or a resignation for good reason.

   (g) Indemnification: The Debtors will provide indemnification
       to Mr. Burns to the fullest extent permitted by law and
       the Debtors' articles of incorporation and bylaws.

A full-text copy of the Senior Executives' Employment Pacts is
available for free at http://researcharchives.com/t/s?d9d

                      About Dana Corporation

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005.  (Dana Corporation Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000).

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.


DANA CORP: To Set Off $7 Mil. Against Bendix Spicer's Obligation
----------------------------------------------------------------
Dana Corp. advises the U.S. Bankruptcy Court for the Southern
District of New York that it will set off $7,239,169 against
Bendix Spicer Foundation Brake LLC's obligation.

The set off is pursuant to Dana and its debtor-affiliates'
Set-off Procedures duly approved by the Court and subject to these
terms:

  (1) The Set-off Cap is reduced from $3,000,000 to $2,000,000;
      and

  (2) The Official Committee of Unsecured Creditors will have
      five days after receipt of notice to object to a proposed
      set-off between a Debtor and an Affiliate involving an
      aggregate amount exceeding $250,000.

Dana purchases parts from Bendix Spicer under existing commercial
agreements.  Corinne Ball, Esq., at Jones Day, in New York,
relates that as of the Petition Date, Dana owed Bendix Spicer
$7,239,169 on account of those purchases.

Bendix Spicer also purchases parts from Dana under existing
commercial agreements.  As of the Petition Date, Bendix Spicer
owed Dana $11,299,780, comprising of:

   -- $348,595 for goods the Dana sold to it; and

   -- $10,951,185 with respect to the service provided and
      amounts paid by Dana that are reimbursable by Bendix Spicer
      pursuant to certain agreements between the parties.

The Set-Off will result in a net creditor obligation of
$4,060,610 by Bendix Spicer to Dana.

Pursuant to the Set-Off, Bendix Spicer agrees that its claim will
be satisfied in full, and the Net Obligation will be satisfied to
Dana by netting amounts payable by Dana to Bendix Spicer
effective on the Court's approval of the Set-off Notice.

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker.  Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005.  (Dana Corporation Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000).

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.


DATALOGIC INT'L: Selling Certain Assets to Huron for $700,000
-------------------------------------------------------------
DataLogic International, Inc. and its wholly owned subsidiary IPN
Communications, Inc., has entered into a $700,000 Asset Purchase
Agreement with Huron Holdings, Inc.

The Company disclosed that pursuant to the Asset Purchase
Agreement, they will sell to Huron:

(a) approximately 700 units of its Panther Trak asset tracking
device and related inventory; and

(b) certain other assets related to DataLogic's small
fleet/sub-prime lending market operations, including its
BounceGPS trademark and existing customer relationships.

The Company will also license to Huron, on a non-exclusive basis,
certain of their asset tracking device and asset management
solution technologies.

The Company received from Huron $450,000 in cash and a $250,000
promissory note for the sale.  The promissory note has a term of
two years and bears interest at 9% per annum.  The Company further
said that Huron also assumed certain liabilities related to
DataLogic's small fleet/sub-prime lending market operations.  The
Company will receive a royalty stream equal to 2% of net revenue
from Huron's sales of asset tracking devices based on the licensed
technology and 5% of net revenue from Huron's sales of asset
management solutions based on the licensed technology.

                 Amendment to Term Note with Laurus

DataLogic also disclosed that on June 30, 2006 it entered into an
amendment to its secured term note with Laurus Master Fund, Ltd.
The amendment incorporates Laurus' consent to the transactions
contemplated by the Asset Purchase Agreement with Huron.  The
Company also agreed to prepay $225,000 of the outstanding
principal amount of the term note held by Laurus, pursuant to the
amendment.

DataLogic International, Inc. (OTCBB: DLGI) --
http://www.dlgi.com/-- is a technology and professional services
company providing a wide range of consulting services and
communication solutions like GPS based mobile asset tracking,
secured mobile communications and VoIP.  The Company also provides
Information Technology outsourcing and private label communication
solutions.  DataLogic's customers include U.S. and international
governmental agencies as well as a variety of international
commercial organizations.

                         Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about DataLogic International, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005.  The
auditing firm pointed to the Company's recurring losses and need
to establish profitable operations.


DAVITA INC: Mark Harrison to Serve as CFO Effective September 1
---------------------------------------------------------------
DaVita Inc. reported its entry into an employment agreement,
effective September 1, 2006, with Mark G. Harrison, who will serve
as the Company's Chief Financial Officer.

The Company will pay Mr. Harrison an annual base salary of
$500,000.  Mr. Harrison is entitled to a starting bonus in the
amount of $52,000 and is eligible to receive a performance bonus.
The Company will also pay Mr. Harrison an additional $75,000 per
year, less withholdings, for the first three years after he
relocates to California to assist him with the cost of housing in
California.  Mr. Harrison will, further, receive a grant of an
option to purchase 125,000 shares of the Company's common stock at
an exercise price equal to the closing price of the stock on such
date.  The option has a five-year term.  In addition, Mr. Harrison
will receive, on Sept. 1, 2006, 31,250 shares of restricted stock
units, which will vest over a five-year period, one-third vesting
on each of the third, fourth and fifth anniversary of the grant
date.

Headquartered in El Segundo, California, DaVita, Inc. (NYSE: DVA)
-- http://www.davita.com-- operates a chain of dialysis centers
in the US.  DaVita has more than 1,200 centers in nearly 40 states
and Washington, DC; the centers provide dialysis and related
services to patients suffering from chronic kidney failure.  The
firm also provides home-based dialysis and pre- and postoperative
kidney transplant care, as well as inpatient dialysis services in
some 795 hospitals.  Subsidiary DaVita Clinical Research conducts
clinical trials for devices and drugs in the renal-related field
for pharmaceutical and medical device firms.

                         *     *     *

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


DELPHI CORP: Incurs $2.4 Billion Net Loss in 2005
-------------------------------------------------
Delphi Corp. released its fourth quarter and calendar year 2005
financial results and filed its 2005 Annual Report on Form 10-K.

Fourth Quarter 2005 Financial Results:

     * Revenue of $6.8 billion, down from $7 billion in Q4 2004.

     * Non-GM revenue for the quarter was $3.7 billion, up 7%
       from $3.4 billion in Q4 2004 (up 9% excluding the effects
       of foreign exchange rates), representing 54 percent of Q4
       revenues.  Non-GM growth was again offset by a 14%
       year-over-year decline in GM revenues.

     * GAAP net loss of $828 million, compared to Q4 2004 net
       loss of $4.9 billion.  Included in the Q4 2005 net loss
       was $589 million of non-cash impairment charges related to
       long-lived assets, goodwill and intangible assets.

     * GAAP cash flow from operations was $763 million, up 9%
       from $698 million in Q4 2004.  Cash used in operations was
       positively impacted by prepetition supplier payments being
       stayed.

Calendar Year 2005 Financial Results:

     * Revenue of $26.9 billion, down from $28.6 billion in 2004.

     * Non-GM revenue of $14.1 billion, up 7% from $13.2 billion
       in CY 2004 (up 6% excluding the effects of foreign
       exchange rates).  For the year, 52% of revenues came from
       customers other than GM.  In 2005, GM revenues declined
       $2.6 billion or 17% year-over-year.

     * GAAP net loss for the year of $2.4 billion, compared to
       2004 CY net loss of $4.8 billion.  Included in the CY 2005
       net loss was $629 million of non-cash impairment charges
       related to long-lived assets, goodwill and intangible
       assets.  Delphi's net loss reflects revenue decreases and
       related pricing pressures stemming from a substantial
       reduction in GM's North American vehicle production,
       coupled with continued increased commodity costs.

     * GAAP cash flow from operations was $154 million, down from
       $1.5 billion in CY 2004.  The lower cash flow from
       operations resulted from the significantly increased
       losses from U.S. operations, excluding non-cash charges.

     * In 2005, Delphi contributed $635 million to its U.S.
       pension plans.  The company's 2005 return on pension fund
       investments was 13 percent, or $1.1 billion.  Delphi's
       U.S. under-funded pension plan status as of December 31,
       2005, was $4.1 billion as compared to $4.3 billion at
       December 31, 2004.

     * Delphi's year-end 2005 OPEB obligation was $9.6 billion,
       the same as at December 31, 2004, as increases in the OPEB
       liability resulting from lower interest rates and health
       care inflation were offset by reductions resulting from an
       amendment to the salaried OPEB plan to limit benefits
       payable to participants eligible for Medicare.

A full-text copy of Delphi's Form 10-K report filed with the
Securities and Exchange Commission is available for free at:

                http://researcharchives.com/t/s?da8

Based in Troy, Mich., Delphi Corp. -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELPHI CORP: Court Gives Final Nod on Jefferies as Panel's Advisor
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved, on a final basis, the request of Delphi Corporation and
its debtor-affiliates' Official Committee of Unsecured Creditors
to retain Jefferies & Company, Inc., as its investment banker and
financial advisor.

As reported in the Troubled Company Reporter on March 7, 2006,
Jefferies will:

   (a) provide a valuation of the Debtors' enterprise value, on a
       consolidated and division basis;

   (b) provide a pricing of any securities to be issued in the
       Restructuring, as well as evaluation of the terms of any
       securities;

   (c) evaluate any financing proposed as part of the
       Restructuring;

   (d) assist and advise the Committee in examining and analyzing
       any potential or proposed strategy for restructuring or
       adjusting the Debtors' outstanding indebtedness, labor
       costs or capital structure;

   (e) provide an analysis of restructuring proposals from
       various constituencies;

   (f) assist and advise the Committee in evaluating and
       analyzing the proposed implementation of a Restructuring;
       and

   (g) render other investment banking services as may from time
       to time be agreed.

The Committee has asked for, and Jefferies has agreed to,
additional conditions and procedures in connection with the
allowance and payment of compensation and the reimbursement of
expenses sought.  The Additional Procedures, which are
substantially the same as those negotiated with the U.S. Trustee
and recently approved by the court in PSINet Inc., et al., Case
No. 01-13213 (Bankr. S.D.N.Y. July 11, 2001), provide that:

   a. the fees and expenses will in all cases be subject to Court
      approval under Section 328(a) of the Bankruptcy Code, as
      incorporated in Section 330 of the Bankruptcy Code;

   b. all fees will be paid to Jefferies on an interim basis only
      in accordance with Court-established procedures for the
      compensation of professionals; and

   c. any fees or expenses paid to Jefferies but disapproved by
      the Court will be promptly returned by Jefferies to the
      Debtors' estates.

Jefferies' fees, as presented in the Committee's original
application, remain the same.

Based in Troy, Mich., Delphi Corp. -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELTA AIR: Files Family-Care Savings Plan 2005 Annual Report
------------------------------------------------------------
Delta Air Lines, Inc., has filed its 2005 annual report regarding
its Delta Family-Care Savings Plan on Form 11-K with the
Securities and Exchange Commission.

Esther L. Hammond, chair of the Administrative Committee of
Delta, says that Delta's bankruptcy proceedings will have a
minimal effect, if any, on the Plan.  Delta has continued to fund
the Plan and has obtained authorization from the Court to do so.

Substantially all Delta, Delta Technology, LLC, and Song, LLC,
personnel who are paid on the United States domestic payroll or
employed in the Commonwealth of Puerto Rico are eligible to
participate in the Plan.

The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended, and is intended to
qualify under Section 404(c) of ERISA.

Deloitte & Touche LLP audited the statements of net assets
available for benefits of the Plan as of December 31, 2005 and
2004, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2005.

A full-text copy of the Delta Family-Care Savings Plan's Annual
Report is available for free at:

            http://ResearchArchives.com/t/s?d89


                  DELTA FAMILY-CARE SAVINGS PLAN
           Statement of Net Assets Available for Benefits
                      As of December 31, 2005

                             ASSETS

Investment in Master Trust                       $3,799,476,000
Investments, at fair value                           $6,121,000
Participant Loans                                   $62,183,000
                                                ---------------
Total Investments                                 3,867,780,000

Receivables:
   Employee contributions                             8,148,000
   Participant contributions                            187,000
                                                ---------------
Total receivables                                     8,335,000
                                                ---------------
Total assets                                      3,876,115,000

             LIABILITIES

Employee Stock Ownership Plan (ESOP) Notes:
   Current                                           22,719,000
   Noncurrent                                       106,054,000
Interest payable                                      5,215,000
Other payables                                        2,933,000
                                                ---------------
Total assets available for benefits              $3,739,194,000
                                                ===============


                  DELTA FAMILY-CARE SAVINGS PLAN
     Statement of Changes in Net Assets Available for Benefits
               For the year ended December 31, 2005

Contributions:
   Participant                                     $214,163,000
   Employer                                          90,424,000

Investment Income:
   Investment income from Master Trust              (32,922,000)
   Net depreciation in investments' fair value      (94,604,000)
   Interest on participant loans                      5,874,000

Allocation of Shares, at fair value                          --

Benefits Paid to Participants                      (940,929,000)

Interfund Transfers                                          --

Administrative Expenses                              (2,442,000)

Interest Expense on ESOP Notes                       (6,506,000)
                                                ---------------
Net Decrease                                      ($766,942,000)

Net Assets Available for Benefits:
   Beginning of year                              4,506,136,000
                                                ---------------
   End of Year                                    3,739,194,000
                                                ===============

                     About Delta Air Lines

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


DELTA AIR: Gets Court Nod to Reject 14 Embraer Aircraft Leases
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Delta Air Lines, Inc., and its debtor-affiliates permission
to reject the leases of 14 Embraer EMB-120 aircraft and their
related engines, propellers, and other specified equipment,
effective as of June 28, 2006.

With respect to the aircraft bearing Tail Nos. N259CA, N257CA,
N267CA and N268CA, the Court directs the Debtors to:

  (1) deliver the aircraft with the engines attached to the
      airframes and their related records and equipment to, or
      otherwise make available for retrieval by, the applicable
      lessor or aircraft party by the Effective Date; and

  (2) continue to maintain, insure and pay the storage costs
      relating to the aircraft equipment for a period ending the
      earlier of:

       -- July 29, 2006; and

       -- the date that the lessor or other aircraft party takes
          possession of the aircraft equipment.

Judge Hardin directs the Debtors to deliver records and documents
relating to the 10 remaining aircraft, their engines, propellers
and other related equipment to the applicable Lessor on, or as
soon as reasonably practicable after, the Effective Date.

As reported in the Troubled Company Reporter on June 12, 2006,the
leases consist of:

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

     N241CA     BCC, as owner participant.

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

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

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

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

     N256CA     BCC, as owner participant.

     N266CA     National City Leasing Corporation, as owner
                participant.

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

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

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

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

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

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

                      About Delta Air

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


DELTA FUNDING: S&P's Rating on Class B Certificates Tumbles to D
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B certificates issued by Delta Funding Home Equity Loan Trust
1999-2 to 'D' from 'CCC'.  At the same time, ratings are affirmed
on the remaining classes from the same transaction.

The lowered rating reflects:

    -- The depletion of overcollateralization, resulting in a
       cumulative principal write-down of $503,524 to the class B
       certificates;

    -- Realized losses that consistently outpace excess interest
       cash flow;

    -- Serious delinquencies (90-plus days, foreclosure, and REO)
       that have averaged 22.07% in the past six months; and

    -- A loss trend that we expect will continue in the near term,
       which may cause additional principal write-downs to the
       class B certificates.

Standard & Poor's will continue to monitor the performance of the
transaction to ensure that the ratings assigned to the other
classes accurately reflect the risks associated with this
security.

The affirmations reflect sufficient levels of credit support to
maintain the current ratings, despite the high level of
delinquencies.  To date, cumulative realized losses, as a
percentage of original pool balance, total 4.86% ($20,430,786).

Now that overcollateralization has been depleted, credit support
for class B is provided by excess interest.  The other classes
receive credit support from excess interest and subordination.

The collateral for this transaction consists of fixed- and
adjustable-rate home equity first- and second-lien loans secured
by one- to four-family residential properties.

                             Rating Lowered

               Delta Funding Home Equity Loan Trust 1999-2
                         Asset-backed certificates

                                        Rating
                                        ------
                         Class       To         From
                         -----       --         ----
                         B           D          CCC

                             Ratings Affirmed

               Delta Funding Home Equity Loan Trust 1999-2
                         Asset-backed certificates

                              Class      Rating
                              -----      ------
                              A-1A       AAA
                              A-6F       AAA
                              A-7F       AAA
                              M-1        AA
                              M-2        A


DIGICEL LTD: Strong Market Position Cues Moody's to Hold B1 Rating
------------------------------------------------------------------
Moody's Investors Service assigned a B3 senior unsecured rating to
the $150 million add-on Notes offering of Digicel Limited and
affirmed Digicel's existing B3 senior unsecured and B1 Corporate
Family Ratings.  The outlook has been changed to stable from
positive.

The outlook change to stable reflects Moody's opinion that
Digicel's execution risks have increased following its plans to
raise EBITDA leverage by approximately three quarters of a turn
and consume a significant amount of cash over the next year in
pursuit of accelerating new market growth opportunities.  As a
result, Moody's believes the company's ratings are no longer
likely to move higher during this time period.

The B1 Corporate Family Rating reflects Digicel's strong market
position as the largest wireless telecommunications carrier in the
Caribbean as well as its successful track record at gaining
significant market share and producing solid operating results
relatively quickly after new markets are launched.  The rating
also incorporates an increase in restricted group EBITDA-based
leverage to just over 4 times and the fact that the incremental
debt proceeds are not being used within the restricted group.

Finally, although Moody's expects the company to consume a
significant amount of cash in fiscal 2007, we also expect
continued strong operating momentum, coupled with reduced capital
expenditure requirements in its mature markets.  This should
enable the company's restricted group to improve its free cash
flow to debt and debt to EBITDA to roughly 6% and 3.5 times
respectively by the end of fiscal 2008.

Outlook Actions:

Issuer: Digicel Limited

   * Outlook, Changed To Stable From Positive

Headquartered in Hamilton, Bermuda, Digicel is the largest
provider of wireless telecommunication services in the Caribbean
with approximately 1.9 million subscribers as at March 31, 2006.


ELINEAR INC: Lopez Blevins Raises Going Concern Doubt
-----------------------------------------------------
Lopez, Blevins, Bork & Associates, LLP, in Houston, Texas, raised
substantial doubt about eLinear, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditor pointed
to the Company's recurring operating losses and need to raise
additional financing in order to satisfy its vendors and other
creditors and execute its business plan.

The Company reported a $7,580,457 net loss on $29,750,817 of total
revenues for the year ended Dec. 31, 2005, compared to a
$3,847,346 net loss on $24,065,753 of total revenues for the same
period in 2004.

At Dec. 31, 2005, the Company's balance sheet showed $8,748,883 in
total assets, $11,172,999 in total liabilities, and $80,225 in
minority interest, resulting in a $2,504,341 stockholders'
deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $6,917,870 in total current assets available to pay
$9,687,910 in total current liabilities coming due within the next
12 months.

                          Laurus Notes

In February 2004, the Company obtained a secured revolving note
with Laurus Master Fund, Ltd.  Under the terms of the agreement,
the Company can borrow up to $5,000,000 at an annual interest rate
of prime plus 0.75% (with a minimum rate of 4.75%).  The agreement
contains a $3,000,000 line of credit revolver and a $2,000,000
term note.

In the event of default, Laurus may require the Company to pay the
principal balance and interest on the notes will automatically be
increased by 5%.

The company is potentially in technical default of the Laurus
notes, but is in negotiations with Laurus to resolve the potential
default without penalty to the Company.  No default has been
asserted by Laurus.

A full-text copy of the Company's annual report is available for
free at http://ResearchArchives.com/t/s?da7

Based in Houston, Texas, eLinear, Inc. (AMEX: ELU) --
http://www.elinear.com/-- is a communications, security and
compliance company providing integrated technology solutions
including information and physical security, IP Telephony and
network and storage solutions infrastructure.  The Company's
customers are Fortune 2000 and small to medium sized business
organizations.  As of Dec. 31, 2005, eLinear had four wholly owned
subsidiaries, NetView Technologies, Inc., NewBridge Technologies,
Inc., TanSeco Systems, Inc. and UTEK Corporation and a 51%
interest in eLinear Middle East FZ, LLC.


ELINEAR INC: Signs Letter of Intent to Acquire SweetWater
---------------------------------------------------------
eLinear, Inc., signed a Letter of Intent to acquire the operating
assets of SweetWater Security Systems, LLC.  eLinear will issue
25,000,000 shares of its common stock from authorized but unissued
shares for certain assets of SweetWater.

SweetWater's assets to be purchased includes certain accounts
receivable, equipment, inventory and up to $3 million in cash.

"The SweetWater acquisition is a big step forward in our efforts
to expand our offerings of advanced security design and
implementation," Tommy Allen, chief executive officer of eLinear,
stated.

"This acquisition is synergistic by bringing together eLinear's
expertise in cutting edge network design and SweetWater's success
in wireless security technology.  Our intent is to expand the
SweetWater technology into commercial applications with our large
and enterprise accounts."

"This acquisition is part of the new management team's goal to
accelerate our growth and to achieve profitability," Mike Hardy,
president and chief financial officer of eLinear, added.

"In addition to growing gross profit, cost cutting is ongoing at
every level.  These efforts should provide the combined companies
with the tools and vehicle to continue our growth with the goal of
delivering an enhanced value proposition to shareholders."

"We are excited to be able to grow our company by combining with a
leader that has a market-driven, entrepreneurial approach to the
technology services business," Donald Bresina, chief executive
officer of SweetWater Security Systems, stated.

"Combining our history of success in closing large high profile
engagements with eLinear's team of professionals in design and
installation should give us a distinct competitive advantage.
Operating as part of a public vehicle will enable us to gather the
resources to continue our growth rate."

The transaction will be subject to the signing of a definitive
agreement, satisfaction of standard closing conditions by both
parties, and approval by eLinear shareholders.  It is contemplated
that Don Bresina will be added to the eLinear Board of Directors
at closing.

                      SEC and AMEX Compliance

eLinear believes that it has addressed certain reporting issues
with the Securities and Exchange Commission and the American Stock
Exchange by filing required restatements of financial statements
previously filed for periods in calendar years 2004 and 2005 and
by filing its Form 10-QSB for the quarter ended Sept. 30, 2005,
and its Form 10-KSB for the year ended Dec. 31, 2005.  The company
expects to file its Form 10-QSB for March 31, 2006, soon in its
efforts to regain compliance with the timely reporting
requirements of the AMEX Company Guide.

                        About SweetWater

Based in Houston, Texas, SweetWater Security Systems, LLC,
provides complex wireless video security systems for Public
Housing Projects throughout the Southeastern United States.
SweetWater primarily operates in Louisiana, Mississippi, Alabama,
and Tennessee and has completed over $3 million in projects to
date.  Sweetwater has a substantial pipeline of future business
opportunities.

                          About eLinear

Based in Houston, Texas, eLinear, Inc. (AMEX: ELU) --
http://www.elinear.com/-- is a communications, security and
compliance company providing integrated technology solutions
including information and physical security, IP Telephony and
network and storage solutions infrastructure.  The Company's
customers are Fortune 2000 and small to medium sized business
organizations.  As of Dec. 31, 2005, eLinear had four wholly owned
subsidiaries, NetView Technologies, Inc., NewBridge Technologies,
Inc., TanSeco Systems, Inc. and UTEK Corporation and a 51%
interest in eLinear Middle East FZ, LLC.


EOXAN LLC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Eoxan, LLC
        938 Linden Avenue
        P.O. Box 1027 South
        San Francisco, California 94083-1027

Bankruptcy Case No.: 06-30576

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

Chapter 11 Petition Date: July 12, 2006

Court: Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtor's Counsel: Randall Crane, Esq.
                  180 Grand Avenue, Suite 1550
                  Oakland, California 94612
                  Tel: (510) 465-4606

Total Assets: $2,500,000

Total Debts:  $1,500,000

The Debtor does not have any creditors who are not insiders.


EYE CARE: HVHC Merger Prompts S&P to Remove Developing Watch
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B' corporate credit rating, on San Antonio, Texas-based Eye
Care Centers of America Inc.  All ratings are removed from
CreditWatch, where they were placed with developing implications
on May 3, 2006.  The outlook is positive.  The company's total
funded debt outstanding was $315 million as of April 1, 2006.

"The rating affirmation is based on our expectations that ECCA's
financial profile will remain largely unchanged following its
acquisition by HVHC," said Standard & Poor's credit analyst Ana
Lai.  HVHC Inc. (BB/Stable/--) is a wholly owned subsidiary of
Highmark Inc. (A/Stable/--), a provider of health care services in
Pennsylvania.  HVHC is a for-profit holding company that provides
vision services and sells related merchandise through its wholly
owned subsidiaries, primarily Davis Vision Inc. and Viva Optique
Inc.

ECCA entered into a merger agreement with HVHC in May 2006.  The
merger transaction, valued at $622.6 million, has been approved by
the board of directors of both companies and is expected to close
in the third quarter of 2006.  Although ECCA will become a
subsidiary of HVHC following the acquisition, each subsidiary will
have its own financing with no cross guarantees, and with
restrictions on dividends.  Both HVHC and ECCA debt are also
nonrecourse to the parent company Highmark.  In addition, S&P
believes that the degree of parent support will be limited despite
its acquisition by a subsidiary of a company with a stronger
credit profile.

The positive outlook reflects our expectation that potential
synergies under HVHC's ownership could lead to sales and earnings
growth over time.  Purchasing costs synergies and overhead expense
savings are expected to contribute to modest margin improvements.
In addition, ECCA could benefit from additional revenues from the
inflow of Davis managed care customers into ECCA stores.


FALCON AIR: Wants Crisis Management as Limited Financial Advisor
----------------------------------------------------------------
Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp. ask the
Honorable A. Jay Cristol of the U.S. Bankruptcy Court for the
Southern District of Florida in Miami for authority to employ Alan
L. Goldberg and the firm of Crisis Management, Inc., as their
limited financial advisors, nunc pro tunc to May 25, 2006.

Crisis Management will:

   (a) assist the Debtors in the preparation of their Schedules
       and Statements of Financial Affairs;

   (b) assist in the preparation of debtor-in-possession reports,
       and

   (c) assist in the expeditious settlement of claims.

Mr. Goldberg, the president of Crisis Management, disclosed that
the Firm's hourly rates range from $65 for paraprofessionals to
$250 for principals.

Mr. Goldberg assures the Court that Crisis Management, Inc., does
not hold nor represent interest adverse to the Debtors, their
Estates, or their creditors in the matters upon which the Firm is
to be employed.

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


FALCON AIR: Wants Pierre Murphy as Special DOT Counsel
------------------------------------------------------
Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp. ask the
Honorable A. Jay Cristol of the U.S. Bankruptcy Court for the
Southern District of Florida in Miami for authority to employ
Pierre E. Murphy, Esq., and the Law Offices of Pierre E. Murphy,
as their special counsel, nunc pro tunc to May 10, 2006.

Mr. Murphy and the Firm will provide legal services in connection
with issues relating to the Department of Transportation.

The Debtors want Mr. Murphy and the Firm to continue their
services as the Debtors' special DOT counsel.  The Debtors say
that duplication of effort and delay would result if their
bankruptcy counsel, Berger Singerman, P.A., will take over matters
that Murphy's firm previously handled.

Mr. Murphy bills at $375 per hour.

Mr. Murphy assures the Court that he and his firm do not hold or
represent interest adverse to the Debtors, their Estates, or their
creditors in the matters upon which they will be engaged, and they
are disinterested as required by Section 327(e) of the Bankruptcy
Code.

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


FAMILY RESORTS: Case Summary & Nine Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Family Resorts and Marina, Inc.
        dba South Beach Resort
        fka Lindy's Beach Resort
        8620 East Bayshore Road
        Marblehead, Ohio 43440

Bankruptcy Case No.: 06-31720

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                                    Case No.
      ------                                    --------
      Frontwaters Restaurant and Brewing Co.    06-31721

Type of Business: The Debtors operate a restaurant and serve fine
                  wine and liquor.

Chapter 11 Petition Date: July 12, 2006

Court: Northern District of Ohio (Toledo)

Judge: Richard L. Speer

Debtors' Counsel: Scott H. Scharf, Esq.
                  Margulies & Levinson, LLP
                  30100 Chagrin Boulevard, Suite 250
                  Cleveland, Ohio 44124
                  Tel: (216) 514-2225
                  Fax: (216) 514-3142

                                   Total Assets   Total Debts
                                   ------------   -----------
      Family Resorts and               $142,500    $3,977,169
      Marina, Inc.

      Frontwaters Restaurant and       $258,500    $2,649,526
      Brewing Co.

A. Family Resorts and Marina, Inc.'s Six Largest Unsecured
   Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
The Croghan Colonial Bank        Real Property -       $2,300,000
323 Croghan Street               Loan #1
Fremont, OH 43420
                                 Real Property -         $100,100
                                 Loan #2

                                 Real Property -         $315,000
                                 Loan #3

First National Bank of           Real Property and     $1,200,000
Bellevue
120 North Street
Bellevue, OH 44811

Huntington National Bank         Settlement Agreement     $34,000
120 Madison Avenue
Port Clinton, OH 43452

National City Bank               Goods Purchased          $21,493

Chase                            Goods Purchased           $4,076

Treasurer of Ottawa County       Real Property            Unknown

B. Frontwaters Restaurant and Brewing Co.'s Three Largest
   Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
The Croghan Colonial Bank        Blanket Lien            $315,000
323 Croghan Street
Fremont, OH 43420
Mark R. Tantari, Esq.
Tel: (419) 321-6444

Huntington National Bank         Settlement Agreement     $34,000
120 Madison Avenue
Port Clinton, OH 43452

Toledo Elevator and Machine Co.  Services                    $526
221 North Detroit Avenue
Toledo, OH 43607


GREAT PANTHER: Company Says It's Now in "Best Shape" Ever
---------------------------------------------------------
In a Memo dated July 13, 2006, Kaare Foy, Executive Chairman and
Chief Financial Officer for Great Panther Resources Limited, says
the Company "has never been in a better financial condition in its
26 year history, than it is now."

As reported in yesterday's edition of the Troubled Company
Reporter, KPMG LLP raised substantial doubt about Great Panther's
ability to continue as a going concern after completing its review
of the company's financial statements for the year ending Dec. 31,
2005.  Subsequent to that date, the Company raised gross cash
proceeds of approximately $5,600,000 from the exercise of warrants
and options, closed a $2.02 million convertible loan private
placement and also raised gross cash proceeds of $15,000,000
through a private placement transaction.

"Having just closed a $10 million dollar underwritten placement
which was over-subscribed by an additional $5 million, Great
Panther has never been in a more sound and liquid financial
condition," Mr. Foy says.

Mr. Foy provides these additional facts about how well the company
is doing in his July 13 Memo:

  A. Producing Properties

     * The Company has 100% ownership of the Santa Fe
       Silver-Gold Mines in Guanajuato Mexico, with no
       NSR. Property includes the Valenciana Mine, once
       described at the "richest silver mine in the
       world", a 1,200 tonne per day mill on site,
       increasing production having recommenced during
       June 2006 following refurbishing of the plant.

     * Great Panther also has 100% ownership of the high
       grade Topia Silver Mine in Durango, Mexico, with
       no NSR, past production of over 15 million ounces
       of silver and a 200 tonne per day mill on site,
       where mining recommenced in September 2005, and
       production recommenced during November 2005.

  B. Exploration Properties

     * Virimoa Project, Mexico: Option to acquire 100%
       of the 148-hectare Virimoa Gold Property near
       the Topia Silver Mine.

     * San Antonio Gold Project, Mexico: Option to
       acquire 100%, over 10,000 hectares, high grade
       veins and lower grade zone with bulk tonnage
       potential.

     * Km 66 Project: Signed Letter of Intent for an
       option to acquire a 100% interest in the Km 66
       Project in eastern Durango State, Mexico,
       consisting of 17 concessions comprising 3,508
       hectares and which hosts significant
       silver-lead-zinc-gold mineralization with
       excellent potential for a large bulk tonnage
       deposit.

  C. Debt:

     * Other than a Cdn. $2,020,000 convertible debenture
       which matures in 2010, the Company has no debt,
       no lines of credit, does not hedge its production
       at this time, and its minimal payables are current
       or better.

  D. Cash on Hand is in excess of $14 million.

  E. Market

     * There is currently a world-wide bull market for
       the Company's main products of silver and gold,
       as well as its copper, lead and zinc by-products.

A full-text copy of the Company's latest annual report is
available for free at http://ResearchArchives.com/t/s?d96

Great Panther Resources Limited, through its acquisition of the
Topia and Guanajuato Mines in Mexico, has transformed itself from
a company that was exclusively focused on mineral exploration to a
company involved in the mining of precious and base metals.


GREENMAN TECH: Laurus Extends $16 Million Credit Facility
---------------------------------------------------------
GreenMan Technologies, Inc. and its subsidiaries GreenMan
Technologies of Iowa, Inc. and GreenMan Technologies of Minnesota,
Inc. entered into a $16 million credit facility with Laurus Master
Fund, Ltd., on June 30, 2006.

The credit facility consists of a $5 million non-convertible
secured revolving note and an $11 million secured non-convertible
term note.  The credit facility will not convertible into shares
of GreenMan's capital stock.

The Revolving Note has a term of three years with an interest rate
on any outstanding amounts at the prime rate published in The Wall
Street Journal plus 2.00%, minimum of 8%.

The Term Loan has a maturity date of June 30, 2009 and bears
interest at the prime rate published in The Wall Street Journal
plus 2.00% with a minimum rate of 8%.  Interest on the loan is
payable monthly commencing August 1, 2006.  Principal will be
amortized over the term of the loan, commencing on July 2, 2007.

The Minimum monthly principal payments will be:

                 Period                    Minimum Payment
                 ------                    ---------------
     Jul 2, 2007 through June 2008            $150,000
     July 2008 through June 2009              $400,000

The balance of the principal shall be payable on the maturity
date.  GreenMan and Laurus Fund also agreed to an excess cash flow
repayment of up to a maximum of 25% of the Debtors' net operating
cash at the end of each fiscal year ended Sept. 30.

The Debtor also issued to Laurus Funds a warrant to purchase up to
3,586,429 aggregate shares of its common stock at $0.01 per share
exercise price.  Laurus Funds agreed that it will not be permitted
to sell any Common Stock, acquired upon exercise of the warrant,
in excess of 10% of the aggregate numbers of shares of the common
stock traded on such trading day.

The Debtor limits the amount of common stock that Laurus Funds may
hold at no more than 4.99% of its outstanding capital stock.

The Debtor's obligations under the Credit Facility are secured by
a first priority security interest in all assets of the Companies,
including pledges of the capital stock of GreenMan Technologies of
Minnesota, Inc. and GreenMan Technologies of Iowa, Inc.

Headquartered in Lynnfield, Massachusetts, GreenMan Technologies,
Inc., markets scrap granular tires in the United States.   The
company's products are used as a tire-derived fuel used by pulp
and paper producers.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on June 6, 2006, Wolf
& Company, PC, in Boston, Massachusetts, raised substantial
doubt about GreenMan Technologies Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Sept. 30, 2005.  The auditor pointed
to the Company's losses from operations and working capital
deficiency of $8,667,886 at September 30, 2005.


GSR DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: GSR Development, LLC
        5708 Manatee Avenue West
        Bradenton, Florida 34209

Bankruptcy Case No.: 06-03489

Type of Business: The Debtor is a real estate developer.
                  See http://www.gsrdevelopment.com/

Chapter 11 Petition Date: July 13, 2006

Court: Middle District of Florida (Tampa)

Debtor's Counsel: Richard C. Prosser, Esq.
                  Stichter, Riedel, Blain & Prosser P.A.
                  110 East Madison Street, Suite 200
                  Tampa, Florida 33602
                  Tel: (813) 229-0144
                  Fax: (813) 229-1811

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Kent Davis                                               $600,000
519 58th Street
Holmes Beach, FL

Patricia Hart                                            $535,500
315 North Causeway, A301
New Smyrna Beach, FL 32169

Melvin and Carol Yudofsky                                $441,667
516 Key Royale Drive
Bradenton Beach, FL 34217

Fred & Phyllis Fechner                                   $250,000
4707 4th Avenue Drive East
Bradenton, FL 34208

Manatee County Tax                 2005 Real Estate      $198,768
Collector                          Taxes
P.O. Box 25300
Bradenton, FL 34206

Dale George                                              $119,900

ASD, Inc.                                                $111,668

Bruce Perez                                               $98,555

Delta Engineering and                                     $84,000
Inspection, Inc.

Banks Engineering, Inc.                                   $74,621

Carlton Fields                                            $66,658

Sherry Gray                                               $62,618

Merritt Fineout                                           $46,686

M.T. & Dorothy Owens                                      $45,967

Karen Day                                                 $45,000

Deborah & Patrick Dorsey                                  $38,000

Amerson Landscape, Inc.                                   $31,200

Cynthia Graeff                                            $27,500

Christian Huth                                            $25,364

Gold Bank Visa                                            $23,407


HEXION SPECIALTY: Exchanging $150MM of Notes for Registered Bonds
-----------------------------------------------------------------
Hexion Specialty Chemicals Inc. is offering to exchange up to
$150,000,000 aggregate principal amount of its registered Second-
Priority Senior Secured Floating Rate Notes Due 2010, issued on
May 20, 2005, for new notes with the same terms but are freely
tradable.  The Company has not yet set a date for the expiration
of the offer.

The terms of the exchange notes are identical to the terms of the
old notes in all material respects, except for the elimination of
some transfer restrictions, registration rights and additional
interest provisions relating to the old notes.

The Company agreed to file a registration statement relating to an
offer to exchange the old notes for exchange notes under a
registration rights agreement with the initial purchasers of the
old notes.  The Company was also required to consummate the
exchange offer on or before March 16, 2006.  Because the exchange
offer was not consummated on March 16, the Company incurred
additional interest expense in the aggregate amount of
approximately $350,000.

Hexion will not receive any cash proceeds from the issuance of the
exchange notes.  Net proceeds of the offering of the old notes
amounted to $141 million.  The proceeds from the old notes were
used to repay amounts outstanding under the Company's bridge loan
facility.

A full-text copy of the Registration Statement is available for
free at http://researcharchives.com/t/s?da3

                      About Hexion Specialty

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://hexionchem.com/-- makes thermosetting resins (or
thermosets).  Thermosets add a desired quality (heat resistance,
gloss, adhesion) to a number of different paints and adhesives.
Hexion also makes formaldehyde and other forest product resins,
epoxy resins, and raw materials for coatings and inks.  The
Company has 86 manufacturing and distribution facilities in 18
countries.

                          *     *     *

As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating and
its recovery rating of '3' to Hexion Specialty's $1.675 billion
senior secured term loan and synthetic letter of credit
facilities.

The rating on the existing $225 million revolving credit facility
was lowered to 'B+' with a recovery rating of '3', from 'BB-' with
a recovery rating of '1', to reflect the similar security package
as the new term loan and synthetic letter of credit facility.

The ratings on the existing senior second secured notes were
raised to 'B', with a recovery rating of '3', from 'B-' with a
recovery rating of '5'.  The ratings on the senior second secured
notes reflect the amount of priority claims of the revolving
facility and the first-lien term loan lenders.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on Hexion and revised the outlook to stable from
negative.


HVHC INC: S&P Rates Proposed $155 Mil. Senior Debt Facility at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' counterparty
credit rating to HVHC Inc.  The outlook is stable.

At the same time, Standard & Poor's assigned its 'BB' bank loan
rating and '3' recovery rating to HVHC's proposed $155.0 million
senior secured credit facility due in 2013 and $25 million
revolving credit facility due in 2011.  The '3' recovery rating
indicates the expectation for a meaningful (50%-80%) recovery of
principal in the event of a payment default.  The bank loan
ratings are based on preliminary documentation.

"The counterparty credit rating on HVHC Inc. reflects that HVHC
operates in an increasingly competitive and promotional optical
retail industry, maintains average balance sheet quality
(moderately high debt leverage and high level of goodwill and
intangibles), and is exposed to integration risks associated with
its proposed Eye Care Centers of America Inc. (B/Positive/--)
acquisition," explained Standard & Poor's credit analyst James
Sung.  Offsetting these negatives are its adequate competitive
position, favorable industry fundamentals and demographic trends,
and good earnings profile.

HVHC, a wholly owned subsidiary of Highmark Inc. (A/Stable/--), is
a for-profit holding company that provides vision services and
sells related merchandise through its wholly owned subsidiaries,
primarily Davis Vision Inc. and Viva Optique Inc.

Standard & Poor's considers HVHC's group status within the
Highmark Inc. organization to not be strategically important;
however, given Highmark's ability to contribute capital to HVHC,
and the enhanced competitive position of combined Highmark and
HVHC/ECCA operations, HVHC receives one rating notch of support
because of its group status.  Highmark's capital support of HVHC,
however, is limited, as Pennsylvania insurance regulations limit
its investment in noninsurance subsidiaries, such as HVHC, to 10%
of total admitted statutory assets as of the prior year end.  As
of year-end 2005, Highmark had net admitted statutory assets of
$4.7 billion.

HVHC will use the proceeds from the senior secured credit
facilities primarily to finance its proposed acquisition of ECCA.
HVHC entered into a merger agreement with ECCA in May 2006.  The
merger transaction has been approved by the board of directors of
both companies and is expected to close in the third quarter of
2006.  Although ECCA will become a subsidiary of HVHC following
the completion of the acquisition, each subsidiary will have its
own financing with no cross guarantees, and with restrictions on
dividends.  Both HVHC and ECCA debt are also nonrecourse to the
parent company Highmark.

HVHC will be acquiring ECCA for $305.0 million plus the assumption
of debt in a transaction valued at $622.6 million.  HVHC is
financing the transaction via:

    * $225.0 million in cash contributed by Highmark Inc.,

    * $9.5 million in HVHC cash, and

    * the $180 million in new senior secured facilities ($155
      million, seven-year term loan B; undrawn $25 million, five-
      year revolver).

This financing will also be used to retire $75 million in an
existing HVHC credit facility. ECCA's capital structure will
remain the same.  The selling parties are Moulin Holdings, Golden
Gate Capital, and members of ECCA management.

HVHC is expected to grow revenues by about 13%-14% in 2006,
excluding ECCA results, or by 54% in 2006, including ECCA results.
Vision managed care membership growth is expected to benefit from
Davis Vision's recent letter of intent to agree to offer vision
benefits to members of a large Blue Cross Blue Shield Plan.  In
addition, Davis Vision is expected to enter into a contract with
the Blue Cross Blue Shield Assoc. to function as the exclusive
vendor on behalf of the BCBSA and the Blue Cross Blue Shield Plans
for the new Federal Employee Program vision benefits contract.
The contract is subject to negotiation and completion of a
definitive agreement.  The total estimated members associated with
the awarding of both contracts is about 1.3 million for 2007.

On a consolidated basis, HVHC is expected to generate EBITDA of
$83 million in 2006 and $140 million in 2007, with EBITDA margins
of about 12% and 14%, respectively.  Debt/EBITDA, including ECCA,
is expected to increase to 5.4x in 2006, but improve to 2.8x in
2007.  EBITDA interest coverage, including ECCA, is expected to be
about 3.3x-3.4x for 2006 and 2007.  Standard & Poor's will conduct
surveillance on HVHC's financials, inclusive and exclusive of
ECCA.  Significant improvement in debt leverage and coverage
ratios, and the realization of vertical integration synergies
associated with a successful integration of HVHC and ECCA
operations, would likely have positive outlook implications for
both HVHC and ECCA's credit ratings.


INCO LTD: Expects to Receive CA$353MM from Common Shares Issue
--------------------------------------------------------------
Inco Limited filed a registration statement on Form F-10 with the
Securities and Exchange Commission registering the distribution of
up to 5,872,324 Common Shares of the Company issuable upon the
exercise of Inco Common Share purchase warrants.

Each warrant entitles the holder to purchase one Common Share of
the Company at an exercise price of CA$30, or a U.S. dollar
equivalent, until 5:00 p.m., Toronto time, on Aug. 21, 2006.

The issue of the Underlying Common Shares will result in cash
proceeds to the Company equal to the amount of the Exercise Price
for each Underlying Common Share issued.  Assuming no adjustment
is made to the Exercise Price and all of the Warrants are
exercised prior to their August 21, 2006 expiry date, the total
proceeds to the Company would be CA$353,197,350, or $316,500,145
based on the June 29, 2006 Bank of Canada noon exchange rate of
CA$1 = $0.8961.

The proceeds of the distribution will be used for general
corporate purposes, including ongoing expenditures for the
Company's development projects.

A full-text copy of the registration statement is available for
free at http://researcharchives.com/t/s?da6

                            About Inco

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

                          *     *     *

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


INDIANTOWN COGEN: S&P Holds BB+ Rating on $630 Million Bonds
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' rating on
Indiantown Cogeneration Funding Corp.'s (Indiantown Cogen)
$505 million first mortgage bonds due 2020 ($375.4 million
outstanding) and $125 million tax-exempt bonds due 2025, and
revised the outlook to negative from stable.

Indiantown Cogen is a 330 MW pulverized-coal-fired cogeneration
facility in Martin County, Florida, that has a purchase-power
agreement with Florida Power & Light Co. for the entire electric
capacity and energy output of the project.

"The outlook revision reflects our increasing concerns over the
project's continuing mismatch between its energy payments received
from FP&L and its actual coal costs, which leads to low debt
service coverage ratios," said Standard & Poor's credit analyst
Elif Acar.

The dispute over how to resolve the mismatch is in litigation with
FP&L, and prospects for a timely resolution are uncertain.  The
DSCRs are not expected to show significant improvement in 2006.

Margins are at further risk due to the price reopening mechanism
in the project's coal supply agreement in December 2007.  The
mechanism exposes the project to market coal price negotiations
with no guarantee of a matching increase in its energy payment
index.  Also, prices under current agreements are below current
market.

The rating on Indiantown Cogen further reflects these risks:

    * Out-of-market PPA with FP&L;

    * Capacity payments at $276 per kilowatt-year are high in
      relation to current market prices, providing FP&L with
      incentive to frustrate the contract;

    * Higher fuel and fuel-related expenses compared with levels
      before 2001; and

    * Higher-than-originally-projected operating and maintenance
      costs.

Indiantown Cogen's O&M costs have increased since initial
projections, partly due to higher expenses for parts and labor,
contributing to lower-than-originally-projected DSCRs.

These factors support the credit rating:

    * The dispatch factor has increased steadily and has been
      above 85% for the past few years, partially due to growth in
      the Florida service territory for the past four years.
      Therefore, FP&L's all-in costs have decreased to a range of
      7.5 cents to 8.2 cents per kilowatt-hour.

    * There is a cost sharing mechanism in the PPA, whereby the
      excess of actual energy costs over energy payments are
      shared 60/40 with FP&L (40% being FP&L's share) up to 10% of
      the total energy payment amount.

    * In the event the actual energy cost and the total of the
      monthly energy payments for an agreement year differ by more
      than 4%, then the PPA provides that FP&L and Indiantown
      Cogen will annually adjust the unit energy payment cost to
      better reflect actual energy cost.

However, FP&L and Indiantown Cogen are in dispute over how to
apply this mechanism.  It has been demonstrated that timely
resolution of this matter is difficult for Indiantown because the
PPA is silent as to what happens if the two parties cannot agree.

The low coverage ratios; continuing mismatch between energy
revenues and fuel costs; and uncertainty regarding fuel costs
after 2007 have led to a negative outlook.  If the project is not
able to resolve the energy revenue/coal cost mismatch adjustment
issue with FP&L in a timely manner, margins will be at risk,
especially after the fixed-coal-price period is over, and ratings
may be lowered.

The outlook would be revised to stable if an agreement is reached
that provides for stable margins for the foreseeable future.


INEX PHARMACEUTICALS: Revises Tekmira Pharma Spin Out Plans
-----------------------------------------------------------
Inex Pharmaceuticals Corporation will revise its Plan of
Arrangement for spinning out Tekmira Pharmaceuticals Corporation
in order to further increase the value of the spinout for INEX
shareholders and to fulfill a commitment made under a debt
purchase and settlement agreement with the previous holders of
certain convertible promissory notes.

Timothy M. Ruane, President and Chief Executive Officer of INEX,
said INEX common shareholders would own 100% of Tekmira under the
new reorganization and Tekmira would own 100% of INEX's
technology, cash, products and partnership alliances.

"Our shareholders will benefit from owning 100% of Tekmira and
will still have an equity position in INEX," Ruane said.  "Tekmira
will be debt free and have a diversified product portfolio
including the significant partnerships with Hana Biosciences, Inc.
and Alnylam Pharmaceuticals, Inc.  We believe this provides much
greater value to our shareholders than our previous Tekmira spin-
out plans."

Under the previous plan of arrangement that was approved 98.3% by
a shareholder vote January 26, 2006, INEX's Targeted Immunotherapy
technology platform and associated products and some cash were to
be transferred to Tekmira and 69% of Tekmira shares were to be
distributed to INEX common shareholders.

Highlights of the revised Plan of Arrangement:

    - All of the pharmaceutical assets from INEX's two technology
      platforms, Targeted Chemotherapy and Targeted Immunotherapy,
      would be transferred to Tekmira;

    - All of INEX's cash would be transferred to Tekmira;

    - INEX's pharmaceutical partnerships with Hana Biosciences,
      Inc. and Alnylam Pharmaceuticals, Inc. would be transferred
      to Tekmira;

    - 100% of Tekmira shares would be distributed to INEX common
      shareholders; and

    - INEX's current management team and employees will join
      Tekmira and assume the same positions they occupy in INEX.

Completion of this revised plan would allow INEX, having no
pharmaceutical assets, to complete a financing with an investor
group led by Sheldon Reid, a co-founder of Energy Capitol
Resources Ltd.  The Investor Group will invest up to $5.6 million
in INEX by way of convertible debentures.  Upon conversion of the
debenture following the completion of the reorganization, the
Investor Group will hold 100% of non-voting shares in INEX and 80%
of the total number of shares outstanding.  Therefore, current
INEX common shareholders will own 20% of the equity of INEX after
the spin-out of Tekmira.  The Investor Group plans to raise
additional capital and acquire a new business for INEX.

The money received by INEX as part of the corporate reorganization
will be paid to the previous holders of INEX's convertible debt as
per the note purchase and settlement agreement announced June 20,
2006.

The conditions to closing the reorganization and the spin-out of
Tekmira include the completion of due diligence by the Investor
Group, the transfer of all assets and liabilities to Tekmira, and
approvals from shareholders, the Toronto Stock Exchange and the
Supreme Court of British Columbia.  INEX anticipates mailing an
information circular to shareholders in August 2006 and intends to
complete a shareholder meeting in September 2006.

                          About Inex

Based in Vancouver, Canada, Inex Pharmaceuticals Corporation
(TSX: IEX) -- http://www.inexpharma.com/-- is a biopharmaceutical
company developing and commercializing proprietary drugs and drug
delivery systems to improve the treatment of cancer.

At Dec. 31, 2005, the Company's balance sheet showed a CDN$21.4
million total shareholders' deficiency, compared to CDN$12.6
deficiency at Dec. 31, 2004.


INTEGRATED HEALTH: Will Pay $6.9MM Quarterly Fees to U.S. Trustee
-----------------------------------------------------------------
Pursuant to an agreed order presented by the U.S. Trustee and IHS
Liquidating LLC, the U.S. Bankruptcy Court for the District of
Delaware orders that:

  (1) the U.S. Trustee's request, with respect to IHS Liquidating
      and Integrated Health Services, Inc., is withdrawn with
      prejudice; and

  (2) IHS Liquidating to pay $6,900,000 of accrued Quarterly Fees
      to the U.S. Trustee.

As reported in the Troubled Company Reporter on Nov 10, 2005,
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, asked the
U.S. Bankruptcy Court for the District of Delaware to:

   (a) compel the Debtors to properly report disbursements in
       accordance with Section 1930(a)(6) and prevailing and
       controlling case law;

   (b) direct the Debtors to provide the internal expense
       allocation information they promised to maintain, and
       which they are required to provide to the U.S. Trustee, so
       that the U.S. Trustee can determine the actual expenses
       paid on each Debtor's behalf by IHS; and

   (c) direct the Debtors to pay additional quarterly fees
       consistent with the Debtors' actual disbursements and
       Section 1930(a)(6).

Pursuant to Section 1930(a)(6) of the Judiciary Procedures Code,
each of Integrated Health Services, Inc., and its debtor-
affiliates are required to pay the United States Trustee a
quarterly fee for each quarter for the duration of their Chapter
11 cases.

The quarterly fees are calculated upon "disbursements," and range
from a minimum of $250, when disbursements total less than
$15,000, to a maximum of $10,000, when disbursements total
$5,000,000 or more.

Ms. Stapleton explained that "disbursements" for purposes of
calculating the IHS Debtors' quarterly fees include, among other
things, all payments of the expenses of operating the IHS Debtors'
businesses.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000)


IPAYMENT INC: $75 Million Issuance Prompts S&P's Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Nashville, Tennessee-based iPayment, Inc. to negative from stable,
following the issuance of a $75 million fixed return instrument at
iPayment Investors, LP, a holding company two levels up from the
borrower.  The corporate credit rating is affirmed at 'B' and all
other ratings are affirmed.  The proceeds from the offering will
be used to fund a special dividend to the equity owners of
iPayment Investors.

iPayment is a processor of credit-card transactions for small
businesses.  The company's present portfolio consists of about
140,000 merchants, generating about $25 billion of sales volume
and revenue to iPayment of $702 million.

"The ratings reflect the company's narrow product portfolio, short
operating history at its current level, significant reliance on
outsourcing for key functions, and high leverage," said Standard &
Poor's credit analyst Lucy Patricola.  These factors partly are
offset by its niche market position in the very large and
competitive credit card processing industry and expected moderate
cash flow.

iPayment is a very small participant in its industry, representing
approximately 2% of existing merchant locations and processing 1%
of volume.  The company has grown rapidly through acquisition to
its current portfolio of 140,000 merchants, nearly doubling in
volume processed every year for the last three years.  The company
experiences about a 15% annual attrition rate -- measured by
volume -- because of business failure, merchant displacement from
a competitor, or termination, requiring constant replenishment of
the base.  While new account activations are substantial industry-
wide, iPayment needs to secure a larger percentage of these new
accounts, compared with one year ago, in order to maintain its
current position.  Additionally, the quality of the new accounts
must be maintained in order to sustain the company's low merchant-
loss history.


JACKSON COUNTY: S&P Says $19.736 Million Bonds Has Stable Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook to
stable from positive on Jackson County Memorial Hospital
Authority, Oklahoma's $19.735 million series 1994 bonds, issued
for Jackson County Memorial Hospital.

In addition, Standard & Poor's affirmed its 'BB' rating on
Jackson's series 1994 bonds.  The revised outlook is based on
volume declines and weaker financial results.

S&P says that For purposes of this analysis, JCMH Health Care
Corp.'s financial information, balance sheet and operations, has
been included, as JCMH Health Care Corp.'s and JCMH's operations
are intertwined and the hospital has access to JCMH Health Care
Corp.'s unrestricted funds.

"JCMH saw incremental improvements in both financial performance
and balance sheet growth in fiscal 2005," Standard & Poor's credit
analyst Kevin Holloran said.  "However, volume declines in fiscal
2005, which have continued into fiscal 2006, and weaker financial
results for the first nine months of fiscal 2006 are, on balance,
more stable than positive, and resulted in the return to a stable
outlook at the existing 'BB' rating level."

"We expect JCMH to show more modest operating and excess margins
in fiscal 2006 due to discernible volume reductions and the
expectation of additional capital spending for construction of a
cancer center on the Jackson campus," he added.

Factors supporting the long-term rating include strengthened
operational liquidity, improved operating and excess income levels
in fiscal 2005, and dominant market position, capturing more than
70% of the market, despite recent declines in patient activity.

JCMH is a 101-staffed-bed hospital, serving Jackson County (the
primary service area, with a population of about 27,000), as well
as four surrounding counties.


JP MORGAN: Fitch Holds Low-B Ratings on $63.3 Million Class Certs.
------------------------------------------------------------------
Fitch Ratings affirms these JP Morgan Chase commercial mortgage
pass-through certificates, series 2005-LDP2:

    -- $85.3 million class A-1 at 'AAA';
    -- $552.5 million class A-1A at 'AAA';
    -- $257.1 million class A-2 at 'AAA';
    -- $367.4 million class A-3 at 'AAA';
    -- $122.7 million class A-3A at 'AAA';
    -- $561.3 million class A-4 at 'AAA'
    -- $123.4 million class A-SB at 'AAA';
    -- $247.9 million class A-M at 'AAA';
    -- $216 million class A-MFL at 'AAA';
    -- $8.5 million class A-J at 'AAA';
    -- Interest-only class X-1 at 'AAA';
    -- Interest-only class X-2 at 'AAA';
    -- $18.6 million class B at 'AA+';
    -- $41 million class C at 'AA';
    -- $26.1 million class D at 'AA-';
    -- $26.1 million class E at 'A+';
    -- $29.8 million class F at 'A';
    -- $26.1 million class G at 'A-';
    -- $44.7 million class H at 'BBB+';
    -- $29.8 million class J at 'BBB';
    -- $37.2 million class K at 'BBB-';
    -- $11.2 million class L at 'BB+';
    -- $14.9 million class M at 'BB';
    -- $11.2 million class N at 'BB-';
    -- $7.4 million class O at 'B+';
    -- $7.4 million class P at 'B';
    -- $11.2 million class Q at 'B-'.

Fitch does not rate the $37.2 million class NR.

The affirmations reflect stable performance and minimal paydown
since issuance.  As of the June 2006 reporting period, the
transaction has paid down 0.5% to $2.96 billion from $2.98
billion.

Currently there are three specially serviced loans (1.2%).
The largest specially serviced loan (0.7%) is secured by an office
property in Farmington Hills, MI and is current.  The loan
transferred to special servicing in May 2006 due to imminent
default.  The property's single tenant declared bankruptcy and
subsequently vacated the property after rejecting its lease.
The special servicer is assessing its options with regard to
workout strategies.  Fitch projects losses upon liquidation, which
will be absorbed by the NR class.

The second largest specially serviced loan (0.4%) is
collateralized by a multifamily property in Indianapolis, Indiana
and is current.  The loan transferred to special servicing in
April 2006 due to non-monetary default.  The partners of the
borrowing entity are in dispute, which is interfering with
property management.  The special servicer is attempting to
mediate and resolve the conflict between the partners.

Fitch is closely monitoring the performance of the third largest
loan (3%), which is secured by a regional mall in New Orleans,
Louisiana.  The property suffered damage due to Hurricane Katrina
and post-Katrina civil disturbances.  The borrower anticipates
that repairs to the property should be completed by November 2006.
Many of the in-line stores have already re-opened.  The borrower
has received insurance reimbursements for property damage and
business interruption, which are being held in escrow by the
servicer.

The fourth largest loan (3%) is an office property in Bronx, New
York, which is still in the process of stabilization.  Due to the
property still being in lease-up phase at origination, the
borrower posted a $23 million earn-out reserve and a $5.5 million
free rent tenant improvement/leasing commissions (TI/LC) reserve
at securitization.  The TI/LC reserve has been gradually drawn
down, and the earn-out reserve is scheduled to be released when
the property passes certain minimum performance criteria.
Year-end 2005 occupancy has increased to 84% from 59% at
origination.

There is one investment-grade credit-assessed loan in the pool,
the Russ Building (2%).  It is secured by a 509,368-square foot
office building located in the Financial District submarket of San
Francisco, California.  The Fitch YE 2005 stressed debt service
coverage ratio increased to 1.30 times (x) from 1.27x at issuance.
YE 2005 occupancy remained unchanged from issuance at 87%.
The Fitch stressed DSCR for the loan is calculated based on a
Fitch adjusted net cash flow and a stressed debt service based on
the current loan balance and a hypothetical mortgage constant.


KAISER ALUMINUM: Inks New Employment Pacts with CEO and CFO
-----------------------------------------------------------
Kaiser Aluminum Corp, on July 6, 2006, entered into new Employment
Agreements with Jack A. Hockema, its President, Chief Executive
Officer and also a member of its Board of Directors, and Joseph P.
Bellino, its Executive Vice President and Chief Financial Officer.

           Employment Agreement with Jack A. Hockema

The Company and Jack A. Hockema, on July 6, 2006, entered into an
employment agreement, pursuant to which Mr. Hockema will continue
his duties as President and Chief Executive Officer of the Company
and certain its subsidiaries.

The Company will pay Mr. Hockema an initial base salary of
$730,000 and an annual short-term incentive target equal to 68.5%
of his base salary.  The CEO will also receive an initial long-
term incentive grant of 185,000 restricted shares of Common Stock
on July 6, 2006 and starting in 2007, annual equity awards with an
economic value of 165% of his base salary.  The grants will
provide for full vesting at retirement.  Mr. Hockema is also
entitled to severance and change-in-control benefits.  The initial
term of the CEO's Employment Agreement is 5 years and will be
automatically renewed and extended for one-year periods.  Mr.
Hockema will also participate in the various retirement and
benefit plans for salaried employees.

          Employment Agreement with Joseph P. Bellino

The Company and Joseph P. Bellino, on July 6, 2006, entered into
an employment agreement, pursuant to which Mr. Bellino will
continue his duties as Executive Vice President and Chief
Financial Officer of the Company and certain of its subsidiaries.

The Company will pay Mr. Bellino an initial base salary of
$350,000 and have an annual short-term incentive target equal to
50% of his base salary.  For 2006, Mr. Bellino's short-term
incentive award will not be prorated.  The employment agreement
also provides the CFO an initial long-term incentive grant of
15,000 restricted shares of Common Stock on July 6, 2006 and
starting in 2007, annual equity awards with an economic value of
$450,000.  Mr. Bellino will also be entitled to severance and
change-in-control benefits.  The initial term of the Bellino
Employment Agreement is through May 15, 2009 and will be
automatically renewed and extended for one-year periods.  Mr.
Bellino will also participate in the various retirement and
benefit plans for salaried employees and be reimbursed for the
cost of relocation and certain temporary living expenses.

                Indemnification Agreements

The Company, as contemplated by its reorganization plan, entered
into indemnification agreements with each of its directors and
executive officers on July 6, 2006.  The provisions obligate the
Company to:

(a) indemnify, defend and hold harmless the director or
    officer to the fullest extent permitted or required by
    Delaware law, except that, subject to certain exceptions,
    the director or officer will be indemnified with respect
    to a claim initiated by such director or officer against
    the Company or any other director or officer of the
    Company only if the Company has joined in or consented to
    the initiation of such claim;

(b) advance prior to the final disposition of any
    indemnifiable claim any and all expenses relating to,
    arising out of or resulting from any indemnifiable claim
    paid or incurred by the director or officer or which the
    director or officer determines is reasonably likely to be
    paid or incurred by him or her; and

(c) utilize commercially reasonable efforts to cause to be
    maintained in effect policies of directors' and officers'
    liability insurance providing coverage that is at least
    substantially comparable in scope and amount to that
    provided by the Company's policies of directors' and
    officers' liability insurance at the time the parties
    enter into such indemnification agreement.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No.
02-10429), and has sold off a number of its commodity businesses
during course of its cases.  Corinne Ball, Esq., at Jones Day,
represents the Debtors in their restructuring efforts. Lazard
Freres & Co. serves as the Debtors' financial advisor.  Lisa G.
Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim,
Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P.
Bowden, Esq., at Ashby & Geddes represent the Debtors' Official
Committee of Unsecured Creditors.  The Debtors' Chapter 11 Plan
became effective on July 6, 2006.  On June 30, 2004, the Debtors
listed US$1.619 billion in assets and US$3.396 billion in debts.


KAISER ALUMINUM: Five Trusts Created Following Bankruptcy Exit
--------------------------------------------------------------
The joint Plan of Reorganization of Kaiser Aluminum Corporation,
Kaiser Aluminum & Chemical Corporation and their affiliates,
became effective on July 6, 2006 and was substantially
consummated.  The Company emerged from chapter 11 with the
consummation of the Plan.  On the Plan's effective date these
trusts were created:

   (a) Asbestos PI Trust - to assume the liabilities of KACC
       and its affiliates for all asbestos personal injury
       claims and to process and pay such claims;

   (b) Silica PI trust - to assume the liabilities of KACC and its
       affiliates for all silica personal injury claims and
       to process and pay such claims;

   (c) CTPV PI Trust - to assume the liabilities of KACC and
       its affiliates for all coal tar patch volatiles personal
       injury claims and to process and pay such claims;

   (d) a trust to assume the liabilities of KACC and its
       affiliates for all noise-induced hearing loss personal
       injury claims and to process and pay such claims; and

   (e) Funding Vehicle Trust - to handle insurance coverage
       litigation and settlements and to provide funding to the
       PI Trusts.

After creating the Trusts, the Company and its affiliates
transferred the following assets to the Funding Vehicle Trust, the
Asbestos PI Trust and the Silica PI Trust:

(1) $13 million in cash less amounts advanced prior to the
effective date and the Personal Injury insurance assets were
transferred to the Funding Vehicle Trust.

     (2)  94% of the capital stock of a corporation that produces
          modest rental income, was transferred to the Asbestos PI
          Trust; and

     (3)  the remaining 6% of the capital stock of such
          corporation was transferred to the Silica PI Trust.

On the Effective Date, the Asbestos PI Trust received 70.5% and
the Silica PI Trust received 4.5% of a prepetition claim of Kaiser
Finance Corporation, a former subsidiary of KACC, which has been
dissolved, against KACC in the amount of $1.106 billion.

As of the Effective Date, injunctions had been entered prohibiting
any person from pursuing any Channeled Personal Injury Claims
against the Company or any of its affiliates.

Pursuant to the Plan, the Company cancelled, without
consideration, all common stock issued and outstanding immediately
prior to the Effective Date and issued 20.0 million shares of
Common Stock, on the Effective Date, for distribution to holders
of claims against the Company and its debtor affiliates.

After the Company gave effect to sale transactions effected prior
to the Effective Date, a trust that provides benefits for eligible
retirees of KACC received 8,809,900, or 44.0%, of the shares of
Common Stock issued pursuant to the Plan.  No other person or
entity is expected to receive more than 5% of the shares of Common
Stock issued pursuant to the Plan.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.
The Debtors' Chapter 11 Plan became effective on July 6, 2006.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.


KB HOME: Moody's Affirms Ba2 Senior Subordinated Debt Rating
------------------------------------------------------------
Moody's Investors Service affirmed all of the ratings of KB Home,
including its Corporate Family Rating of Ba1, senior debt rating
of Ba1, and senior subordinated debt rating of Ba2.  The rating
outlook is revised to stable, from positive.

The outlook revision reflects Moody's expectation that KB Home
will not reduce debt leverage to investment grade levels in the
near-to-intermediate future and that other concerns, principally
share repurchases, remain a higher priority for the company at the
current time.

The rating affirmations incorporate the company's leading share
position in many of the markets that it serves, successful track
record both in de novo expansions and in integrating numerous
acquisitions, and its long and successful history through various
housing cycles.  However, the ratings also consider the financial
and integration risks that accompany an aggressive expansion
strategy, the still-sizable concentration of land inventory values
and profits in California, the growing proportion of profits
coming out of one market-Las Vegas, and the historically large
share repurchase program.

The current housing slowdown, during which Moody's expects
earnings-based metrics to weaken, calls into question management's
commitment to attaining and maintaining an investment grade
balance sheet.  Management has responded effectively to the
slowdown thus far.  That is, the company is buying far less land
than earlier projected, slowing down community openings,
attempting to cut costs in numerous other ways, and should soon
begin to generate appreciable free cash flow.

It is the use of this free cash flow that presents the problem.
Rather than delevering, KB Home is using the bulk of the free cash
flow to repurchase shares.  Four million have been repurchased
thus far this fiscal year, with authorization of up to an
additional six million shares still remaining.

Moody's places a great deal of emphasis on balance sheet strength
in the homebuilding industry, in large part for these reasons:

   1) Homebuilders view themselves as growth companies, although
      still subject to cycles. Given their enormous working
      capital requirements, homebuilding companies constantly
      need expansion capital, which means big balance sheets.
      For every $1 of equity capital removed through share
      repurchases, however, homebuilders are in effect removing
      $2 of growth capital, given average debt levels of about
      50%.

   2) Simply put, an investment grade company, or one aspiring to
      become investment grade, cannot engage in actions that
      decapitalize its balance sheet.  To do so means the company
      is deliberately rendering itself less able to endure a
      shock to its balance sheet, which an investment grade
      company must be able to withstand without unduly impairing
      its credit profile.

   3) Moody's has been expecting a slowdown in the housing
      industry for some time and recognizes that performance
      metrics, i.e., earnings-based ratios such as margins,
      interest coverage, and returns, will inevitably deteriorate
      from their recent peaks.  So long as they don't decline to
      levels far below what current ratings imply and don't stay
      at substandard levels for too long, Moody's is comfortable
      that most homebuilders' ratings will remain intact.  It is
      the behavior-based metric, i.e., debt, that is most within
      management's control and most illustrative of the
      importance that management places on its current ratings or
      desired ratings.  Engaging in sizable share repurchases at
      the expense of strengthening the balance sheet during a
      downturn would seem to indicate that management does not
      believe that current ratings, and most certainly not higher
      ratings, are important to their business model.

Going forward, consideration for further improvement in KB Home's
ratings will depend largely on management's capital structure
discipline.  Moody's would view positively a permanent reduction
in reported debt to the 40% - 45% level and to adjusted debt to
between 45% - 50%. Factors that could stress the ratings and
outlook going forward include a sizable increase in the size and
pace of share repurchases, a large impairment charge, and a major
acquisition involving large amounts of issued or assumed debt that
would cause reported debt leverage to exceed 55%.

Founded in 1957 and headquartered in Los Angeles, California, KB
Home is one of America's largest homebuilders, with domestic
operating divisions in the following regions and states: West
Coast -- California; Southwest -- Arizona, Nevada and New Mexico;
Central -- Colorado, Illinois, Indiana and Texas; and Southeast --
Florida, Georgia, North Carolina and South Carolina.  Kaufman &
Broad S.A., the company's 49%-owned subsidiary, is one of the
largest homebuilders in France. KB Home's fiscal 2005 revenues and
net income were $9.4 billion and $842 million, respectively.


KOCH V HANKINS: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------
Debtor: Koch v Hankins Judgment Creditor Trust
        c/o 1226 Tarapin Lane
        Lincoln, California 95648

Bankruptcy Case No.: 06-02112

Chapter 11 Petition Date: July 12, 2006

Court: District of Arizona (Phoenix)

Debtor's Counsel: Randy Nussbaum, Esq.
                  Jaburg & Wilk, P.C.
                  14500 North Northsight Boulevard, Suite 116
                  Scottsdale, Arizona 85260
                  Tel: (480) 609-0011
                  Fax: (480) 609-0016

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Edward J. Hankins et al        Claim for attorneys'    $3,000,000
c/o Gary Garfinkle, Esq.       Fees in Alameda County
1205 Via Gabarda               Superior Court Case
Lafayette, CA 94549            Nos. 137685-6 and
Tel: (925) 932-3737            140136-9


LAIDLAW INT'L: Tenders Offer for up to 15 Million Common Shares
----------------------------------------------------------------
Laidlaw International, Inc., disclosed on July 10, 2006, that it
commenced a modified Dutch Auction tender offer for up to
15,000,000 shares of its common stock and will make open market
stock repurchases after the tender, with proceeds from a new $500
million term debt facility.

The tender offer gives shareholders the opportunity to tender some
or all of their shares at a price not less than $25.50 per share
or more than $28.50 per share.  The tender offer will expire on
August 7, 2006.

"We set out to achieve a more balanced debt to equity ratio with
our balance sheet," said Kevin Benson, President and Chief
Executive Officer of Laidlaw International, Inc.  "After a
thorough review, we concluded that a leverage ratio of
approximately 1.7x EBITDA is appropriate for Laidlaw and is
consistent with our overall operating philosophies.  The new debt
will enable us to execute a sizable stock repurchase plan and
return capital to our shareholders."

The dealer managers for the offer are Morgan Stanley & Co. Inc.
and UBS Securities LLC.  Questions concerning the tender offer may
be directed to Morgan Stanley & Co. Inc. at (866) 818-4954 and UBS
Securities LLC at (212) 821-2100.

D. F. King & Co., Inc. is the information agent for the tender
offer and any questions concerning the tender offer or requests
for copies of the Offer to Purchase, Letter of Transmittal and
related documents should be directed to D. F. King & Co., Inc. by
calling (212) 269-5550 or (800) 290-6427.

Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc. (NYSE:LI) -- http://www.laidlaw.com/-
- is North America's #1 bus operator.  Laidlaw's school buses
transport more than 2 million students daily, and its Transit and
Tour Services division provides daily city transportation through
more than 200 contracts in the US and Canada.  Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099).  Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors.  Laidlaw International emerged from bankruptcy on
June 23, 2003.

                         *     *     *

As reported in the Troubled Company Reporter on July 11, 2006,
Moody's Investors Service affirms ratings of Laidlaw International
Inc., -- Corporate Family at Ba2 -- following the company's
announcement of a $500 million debt-financed share repurchase
program.  In a related action, Moody's assigned a Ba2 rating to a
new senior secured term loan.  The rating outlook is stable.


LAND O'LAKES: Acquires 697,350 of Golden Oval's Class B Units
-------------------------------------------------------------
Land O'Lakes, Inc., acquired 697,350 Class B Units of Golden Oval
Eggs, LLC, in connection with the May 2006 sale of the liquid egg
processing assets of the Egg Products Division of MoArk LLC to
Golden Oval.  MoArk, LLC, is a wholly owned subsidiary of Land
O'Lakes.

Land O'Lakes, Inc. acquired the Class B Units for investment
purposes.  The Class B Units constitute 100% of Golden Oval's
Class B Units issued and outstanding as of June 30, 2006.  The
Certificate of Designation relating to the Class B Units provides
that each Class B Unit is convertible at any time into one Class A
Unit at the election of the holder.  Therefore, as of June 30,
2006, Land O'Lakes is the beneficial owner of 12.9% of Golden
Oval's Class A Units, based upon 4,702,677 Class A Units
outstanding as of April 14, 2006.

Part of the purchase price for MoArk assets sold to Golden Oval
was paid in the form of a Subordinated Promissory Note dated June
30, 2006, in the original principal amount of $17,000,000.  In
connection with the asset sale transaction, Golden Oval also
issued to Land O'Lakes a Class B Purchase Warrant for the purchase
of Class B Units equal to 10% of all of Golden Oval's issued and
outstanding units.

The Warrant will only become exercisable in the event any amounts
remain due and owing to the holder of the Subordinated Note as of
July 1, 2009.  The Warrant will expire on July 1, 2011 and has an
exercise price of $0.01 per Class B Unit.  If the Subordinate Note
has been paid in full at any time prior to July 1, 2009, the
Warrant will be void ab initio.

Land O'Lakes, Inc. has sole voting and dispositive power with
respect to the Class B Units.

Headquartered in Arden Hills, Minnesota, Land O'Lakes, Inc. --
http://www.landolakesinc.com/-- is a national farmer-owned food
and agricultural cooperative with annual sales of more than
$7 billion.  Land O'Lakes does business in all fifty states and
more than fifty countries.  It is a leading marketer of a full
line of dairy-based consumer, foodservice and food ingredient
products across the United States; serves its international
customers with a variety of food and animal feed ingredients; and
provides farmers and ranchers with an extensive line of
agricultural supplies (feed, seed, crop nutrients and crop
protection products) and services.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 21, 2005,
Moody's Investors Service upgraded Land O'Lakes, Inc.'s long-term
ratings (corporate family rating to B1 from B2) with a positive
rating outlook and affirmed the cooperative's SGL-2 speculative
grade liquidity rating.

Ratings upgraded are:

  Land O'Lakes, Inc.:

     * $200 million senior secured revolving credit facility
       to Ba3 from B1

     * $175 million 9.0% senior secured 2nd lien notes to B1
       from B2

     * $350 million 8.75% senior unsecured notes to B2 from B3

     * Corporate family rating to B1 from B2

  Land O'Lakes Capital Trust I:

     * $191 million 7.45% capital securities to B3 from Caa1

Ratings affirmed are:

  Land O'Lakes, Inc.:

     * Speculative grade liquidity rating at SGL-2.


LEVI STRAUSS: May 28 Stockholders' Deficit Narrows to $1.1 Billion
------------------------------------------------------------------
Levi Strauss & Co. delivered its second quarter financial
statements for the three months ended May 28, 2006, to the
Securities and Exchange Commission on July 11, 2006.

Net revenues for the second quarter were $953 million compared to
$962 million for the same quarter in 2005, approximately a 1%
decrease on a reported basis and flat on a constant-currency
basis.  Net revenue reflects lower European and U.S. Levi Strauss
Signature(R) brand sales, largely offset by increased U.S.
Dockers(R) and U.S. Levi's(R) sales and continuing growth in the
Asia Pacific business.

Net income for the second quarter increased 50% to $40 million
compared to net income of $27 million in the same quarter of 2005.
The improvement was primarily due to a $32 million discrete income
tax benefit recognized during the second quarter of 2006, a
$10 million decrease in loss on early extinguishments of debt
during the 2006 period and lower interest expense, partially
offset by lower operating income.

"We made good progress during the quarter," Phil Marineau, chief
executive officer said.

"Revenues stabilized and our net income improved.  Looking at the
business regionally, I'm particularly pleased with the growth in
our U.S. business.  We continue to transform our European
business, and I'm optimistic that the region's revenue trends will
improve during the balance of the year.  And the Asia Pacific
business continued its strong revenue and profit performance."

                    Second-Quarter 2006 Results

   -- Gross profit decreased 4% to $438 million compared to
      $455 million in the second quarter of 2005.  Gross margin
      was 46.0% of revenues for the second quarter of 2006
      compared to 47.4% of revenues in the same period last year.
      The reduced gross margin in the 2006 period was primarily
      due to Europe and the U.S. Levi's(R) and Dockers(R) brands
      as a result of changes in sales mix, increased investment in
      products and higher sales allowances to support customers'
      marketing efforts, partially offset by an improvement in the
      margin for the U.S. Levi Strauss Signature(R) brand;

   -- Selling, general and administrative expenses increased 3% or
      $9 million to $317 million in the second quarter of 2006
      from $308 million in same period of 2005.  Higher SG&A
      expenses in the 2006 period were primarily attributable to
      higher selling expense associated with new company-operated
      Levi's(R) Stores in Europe and the United States, the impact
      of reversing a litigation reserve in the second quarter of
      2005, and additional long-term incentive compensation
      expense during the 2006 period.  These increases were
      partially offset by lower advertising and promotion expenses
      and lower distribution costs;

   -- Operating income for the quarter decreased $30 million to
      $115 million compared to $145 million in the second quarter
      of 2005.  The decrease was primarily driven by lower
      operating income in Europe due to lower net sales and higher
      SG&A, partially offset by increased operating income in the
      U.S. Levi Strauss Signature(R), Asia Pacific and
      Mexico/Canada businesses.

   -- Interest expense for the second quarter of 2006 decreased
      7% to $62 million compared to $66 million in the prior year
      period.  The decrease was primarily attributable to lower
      interest rates and lower average debt balances during the
      2006 quarter; and

   -- Income tax for the quarter was a $17 million benefit
      compared to a $9 million expense in the 2005 period.  The
      income tax benefit in the 2006 period is primarily
      attributable to the recognition of a $32 million discrete
      tax benefit arising from a change in subsidiary structure.
      The company expects the estimated annual effective income
      tax rate for Fiscal Year 2006 to be 42% compared to an
      actual annual rate of 45% in 2005.

"I'm encouraged by our growth in North America and Asia and our
progress in Europe," Hans Ploos van Amstel, chief financial
officer, said.

"We continue to deliver strong margins while investing in our
business.  This, together with our working capital improvement,
continues to yield strong free cash flow, which remains our key
focus."

                              Deficit

At May 28, 2006, the Company's balance sheet showed $2,824,919,000
in total assets and $3,946,639,000 in total liabilities, resulting
in a $1,121,720,000 stockholders' deficit.

The Company also had a $106,436,000 accumulated deficit at May 28,
2006.

Full-text copies of the Company's second quarter financials for
2006 are available for free at http://ResearchArchives.com/t/s?d9f

Levi Strauss & Co. is one of the world's leading branded apparel
companies, with sales in more than 110 countries.  Levi Strauss
designs and markets jeans and jeans-related pants, casual and
dress pants, tops, jackets and related accessories for men, women
and children under its Levi's(R), Dockers(R) and Levi Strauss
Signature(R) brands. Levi Strauss also licenses its trademarks in
various countries throughout the world for accessories, pants,
tops, footwear, home and other products.

                           *     *     *

As reported in the Troubled Company Reporter on March 10, 2006,
Fitch affirmed the ratings on Levi Strauss & Co.'s Issuer Default
Rating at 'B-'; $650 million asset-based loan at 'BB-/RR1'; and
$1.8 billion unsecured notes at 'B/RR3'.  Fitch also expects to
rate Levi's new senior unsecured notes at 'B/RR3'.  In addition,
Fitch withdrew its 'BB-/RR1' ratings on Levi's $500 million senior
secured term loan.  The rating outlook is stable.

As reported in the Troubled Company Reporter on March 10, 2006,
Moody's Investors Service upgraded Levi Strauss & Co.'s corporate
family rating to B2 from Caa1; senior secured debt rating to B1
from B3; and senior unsecured debt rating to B3 from Caa2.
Moody's said the outlook is stable.

As reported in the Troubled Company Reporter on March 10, 2006,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Levi Strauss & Co.'s $470 million senior notes due 2016 and euro-
denominated 8.625% senior notes due 2013.  At the same time, S&P
affirmed its ratings on the Company's long-term corporate credit
rating at 'B-'.  S&P said the outlook is stable.


LEVITZ HOME: Court OKs PLVTZ's Assumption of Lease 20309 & 30603
----------------------------------------------------------------
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 with respect Store No. 20309
located in Eatontown, New Jersey, and Store No. 30603 located in
Silverdale, Washington.

Judge Lifland rules that with regards:

    (a) Store No. 20309, PLVTZ, LLC will:

        -- be liable for the $37,913 cure amount;

        -- pay or otherwise satisfy a mechanics' lien for $27,310,
           as well as all accrued interest and penalties of the
           lien against the Premises, and PLVTZ will later
           use its best efforts to release the Mechanics Lien;

        -- notify Gage II Family Limited Partnership if there
           should be any subcontractor, mechanic, materialman,
           vendor, provider, or contractor providing any services
           or any work, labor or services or materials in
           connection with the Premises; and

        -- provide Gage II with monthly gross sales reports in
           accordance with the terms of the Lease.  Gage II waives
           any prior noncompliance by the Debtors or PLVTZ with
           any Lease provisions requiring monthly gross sales
           reports; and

    (b) Store No. 30603, PLVTZ will be liable for the $15,753 cure
        amount.

PLVTZ will 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.

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


LEVITZ HOME: Withdraws Request for Arroyo Grande Lease Rejection
----------------------------------------------------------------
Nicholas M. Miller, Esq., at Jones Day, in New York, notifies the
U.S. Bankruptcy Court for the Southern District of New York that
Levitz Home Furnishings, Inc., and its debtor-affiliates will
reject the lease for Store No. 30205 located in Arroyo Grande,
California, effective as of August 21, 2006.  The Debtors will
abandon their interest in any personal property located at the
premises.

Waddell Family Trust is the landlord for Store No. 30205.

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


MAGMA CDO: Moody's Places Ba2 Rating for $14.5MM Notes on Watch
---------------------------------------------------------------
Moody's Investors Service placed these notes issued by Magma CDO
Ltd. on watch for possible downgrade:

   * $4,000,000 Class B-1 Subordinate Fixed Rate Notes Due 2012

     Prior Rating: Baa2
     Current Rating: Baa2

   * $20,000,000 Class B-2 Subordinate Floating Rate Notes Due
     2012

     Prior Rating: Baa2
     Current Rating: Baa2

   * $14,500,000 Class C Second Subordinate Fixed Rate Notes Due
     2012

     Prior Rating: Ba2
     Current Rating: Ba2

According to Moody's, the rating actions are the results of
deterioration in the credit quality of the transaction's
underlying collateral pool, as well as the occurrence of asset
defaults and par loss.


MERRILL LYNCH: Fitch Holds Low-B Ratings on $24.6 Mil. Securities
-----------------------------------------------------------------
Fitch Ratings affirms these Merrill Lynch Mortgage Trust
commercial mortgage securities 2004-MKB1:

    -- $34.9 million class A-1 at 'AAA';
    -- $379.8 million class A-2 at 'AAA';
    -- $65 million class A-3 at 'AAA';
    -- $169.7 million class A-4 at 'AAA';
    -- $155.8 million class A-1A at 'AAA';
    -- Interest only (IO) class XC at 'AAA';
    -- Interest only (IO) class XP at 'AAA';
    -- $26.9 million class B at 'AA';
    -- $11.0 million class C at 'AA-';
    -- $25.7 million class D at 'A';
    -- $11.0 million class E at 'A-';
    -- $13.5 million class F at 'BBB+';
    -- $12.2 million class G at 'BBB';
    -- $11.0 million class H at 'BBB-';
    -- $3.7 million class J at 'BB+';
    -- $4.9 million class K at 'BB';
    -- $4.9 million class L at 'BB-';
    -- $4.9 million class M at 'B+';
    -- $2.5 million class N at 'B';
    -- $3.7 million class P at 'B-'.

Fitch does not rate the $13.5 million class Q.

The affirmations are the result of stable performance and minimal
paydown since issuance.  As of the June 2006 distribution date,
the pool's aggregate principal balance has decreased 2.6% to
$954.6 million from $979.9 million at issuance.

There is currently one specially serviced loan (2.9%).  The loan
is secured by a 410-unit multifamily property in State College,
Pennsylvania and is current.  The loan transferred to special
servicing in December 2005 due to imminent default.  The loan is
in the process of being assumed with the sale contingent upon the
proposed buyer funding a nine month debt service reserve and 125%
of the costs of immediate repair.  The loan is expected to return
to the master servicer following the assumption.

Fitch maintains investment grade credit assessments on the Great
Mall of the Bay Area (15.8%) and Galileo Pool #2 (5.7%).  The
Fitch stressed debt service coverage ratio (DSCR) is calculated
based on a Fitch adjusted net cash flow and a stressed debt
service based on the current loan balance and a hypothetical
mortgage constant.

The Great Mall of the Bay Area secured by a 1.3 million square
foot (sf) retail mall located in Milpitas, California.  The whole
loan is divided into an A-note and B-note, of which the A-note was
contributed to this transaction.  The year-end 2005 Fitch stressed
DSCR declined to 1.28 times (x) compared with 1.38x at issuance
due to increased vacancy costs in 2005.  However, mall occupancy
has improved to 88.2% as of March 2006 compared with 81% at
issuance.

Galileo Pool #2 is comprised of 13 retail centers, located in
eight states.  Since issuance, one property has been released and
replaced with the expansion of another property.  The YE 2005
Fitch stressed DSCR is 1.88x.  The weighted average YE 2005
occupancy is 96.8%.


MORGAN STANLEY: S&P Puts Low-B Ratings on $24 Million Certificates
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Morgan Stanley Capital I Trust 2006-TOP23's
$1.6 billion commercial mortgage pass-through certificates series
2006-TOP23.

The preliminary ratings are based on information as of July 12,
2006.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans.  Class A-1, A-2, A-3, A-
AB, A-4, A-M, and A-J are currently being offered publicly.
Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage of 1.68x, a beginning
LTV of 88.9%, and an ending LTV of 80.7%.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/

The presale can also be found on Standard & Poor's Web site at
http://www.standardandpoors.com/Select Credit Ratings, and then
find the article under Presale Credit Reports.


                  Preliminary Ratings Assigned

             Morgan Stanley Capital I Trust 2006-TOP23

                                  Preliminary   Recommended credit
     Class          Rating           amount         support(%)
     -----          ------        -----------   ------------------
     A-1            AAA           $94,221,000         27.000
     A-2            AAA          $151,830,000         27.000
     A-3            AAA           $43,600,000         27.000
     A-AB           AAA           $76,320,000         27.000
     A-4            AAA          $812,132,000         27.000
     A-M            AAA          $161,384,000         17.000
     A-J            AAA          $112,969,000         10.000
     B              AA            $32,276,000          8.000
     C              AA-           $16,139,000          7.000
     D              A             $26,225,000          5.375
     E              A-            $14,121,000          4.500
     F              BBB+          $12,104,000          3.750
     G              BBB           $14,121,000          2.875
     H              BBB-          $10,086,000          2.250
     J              BB+            $4,035,000          2.000
     K              BB             $4,034,000          1.750
     L              BB-            $6,052,000          1.375
     M              B+             $4,035,000          1.125
     N              B              $2,017,000          1.000
     O              B-             $4,035,000          0.750
     P              NR            $12,104,192            N/A
     X*             AAA        $1,613,840,192            N/A

   * Interest-only class with a notional amount.
   N/A -- Not applicable.


NATIONAL ENERGY: TGP Opposes Plea to Exclude 2003 Valuation Docs
----------------------------------------------------------------
Tennessee Gas Pipeline, Co., opposes USGen New England, Inc.'s
request to exclude the testimony and exhibits relating to USGen's
determination to reject its gas transportation agreements with
TGP.

TGP's damages constitute the difference between USGen's payment
obligations and the market value of that capacity at the time of
breach, Kenneth W. Irvin, Esq., at McDermott, Will & Emery LLP,
in Washington, D.C, notes, citing Miga v. Jensen, 96 S.W.3d 207,
214 (Tex. 2002).

USGen elected to reject the Gas Transportation Agreements based,
in part, on the analysis conducted by its expert, David O'Keefe,
and other USGen employees and consultants about the value of the
Contracts.

USGen determined that its payment obligations exceeded the market
value of the Contracts by over $30,000,000 and that there are
cheaper alternatives for obtaining gas in the Northeast,
Mr. Irvin notes.  He asserts that USGen's analysis:

   -- is probative of TGP's rejection damages; and

   -- disproves USGen's claim that the rejected capacity will be
      completely resold through the full term of the Contracts.

TGP also disputes USGen's contention that the USGen valuation
analysis is irrelevant because they solely apply to the value of
the capacity in the hands of USGen.  If the rejected capacity had
no value to USGen because the payment obligations exceeded market
value and cheaper alternatives existed, then other shippers will
not have any interest in the capacity, Mr. Irvin contends.

Mr. O'Keefe has recently stated in an affidavit that the USGen
valuations were purely intrinsic and included no element of
extrinsic value.  Mr. O'Keefe's statement, however, contradicts
his deposition testimony that USGen's valuation model looked at
intrinsic value and any extrinsic or option value, Mr. Irvin
points out.

Even if the USGen rejection analysis considered only intrinsic
value, Mr. O'Keefe's deposition testimony is relevant to the
value of the rejected capacity at the time of breach, Mr. Irvin
asserts.  He notes that USGen has admitted that it measured
intrinsic value based on the price at which gas will likely be
purchased and sold at different points and the variable costs of
transporting the gas between the points, which is the basis
differential between USGen's delivery point in Wright, New York,
and its receipt point in Mendon, Massachusetts.

TGP also asks the U.S. Bankruptcy Court for the Middle District of
Maryland to prohibit Mr. O'Keefe from testifying on matters which
USGen invoked privilege and refused discovery.

                         USGen Reacts

Gordon A. Coffee, Esq., at Winston & Strawn LLP in Washington,
D.C., argues that Miga v. Jensen has no application in the
dispute because every decision relied upon the ruling involved
the breach of an agreement to deliver goods on a certain date.

The Miga ruling has nothing to do with the rejection claim
dispute because it involves the extent to which TGP has mitigated
its damages to date, and the extent to which it is likely to
continue its successful mitigation through the remainder of the
Contracts' term, Mr. Coffee asserts.

USGen clarifies that Mr. O'Keefe, in his deposition, noted that
the valuation models he employed in 2003 contain formulas
designed to capture extrinsic values.  But in performing
valuations of the Contracts, USGen set the extrinsic value at
zero because it believed there was no extrinsic value that it
could monetize.

During Mr. O'Keefe's deposition, TGP asked questions about
activities he undertook while at USGen, including analyses he
prepared of USGen's contracts with TGP prior to USGen's rejection
of the Gas Transportation Agreements in September 2003.  USGen
argues that the pre-rejection analyses are irrelevant of whether
TGP was able to resell the USGen turnback capacity after
September 2003.  Nevertheless, USGen still allowed Mr. O'Keefe to
answer all questions during the deposition posed by TGP's counsel
regarding the analyses.

USGen notes that it did not proffer Mr. O'Keefe as an expert or
witness under Rule 30(b)(6) of the Federal Rules of Civil
Procedure, but it was TGP that chose to depose Mr. O'Keefe as a
fact witness.  USGen objects to TGP's suggestion that it
improperly asserted privilege during Mr. O'Keefe's deposition.

USGen insists that it will not put Mr. O'Keefe on the stand at
trial to testify about the analyses he conducted at the behest of
USGen's counsel.  As witness for USGen, Mr. O'Keefe will testify:

  (1) about his recent monitoring of TGP's electronic bulletin
      board and TGP's open seasons as well as knowledge of other
      gas pipelines;

  (2) in contrasting TGP's posting practices with other pipelines
      he has reviewed and about long-term contracts in existence
      on pipelines upstream of Wright, New York, which is the
      receipt point for the USGen contracts with TGP; and

  (3) regarding statements of TGP about market conditions
      in New England and New York and projected sales.

USGen reiterates that Mr. O'Keefe's testimony is both relevant
and probative and the Court should deny TGP's request to limit
his testimony.

         TGP Northeast Expansion Relevant, says USGen

TGP's objection to several USGen exhibits that relate to TGP's
New England Pipeline Expansion Project is moot and without merit,
Mr. Coffee asserts.

Mr. Coffee notes that the parties agreed at the June 15, 2006
pretrial that relevance objections are preserved for the trial.

TGP has recently completed plans to expand the capacity of its
New England Pipeline, including the Pipeline on which USGen
purchased capacity.  TGP has firm contracts for that expanded
capacity for many years into the future, in excess of 100,000
decatherms per day.

TGP had the ability to include existing units of capacity in the
New England expansion project, Mr. Coffee asserts.  Had it rolled
some or all of the USGen turnback capacity into its New England
expansion project, that capacity would today be under contract
for many years at rates in excess of the payments called for
under USGen's contracts with TGP.  Consequently, TGP's damages,
as a matter of law, would be reduced to little or nothing,
Mr. Coffee contends.

TPG objected to the inclusion of the New England Expansion
exhibits on grounds that USGen's expert, Thomas Norris, failed to
assign a specific dollar value to the mitigation that TGP could
have achieved had it reserved USGen's capacity for the expansion.

Regardless of whether Mr. Norris intends to assign a specific
dollar value to arguably inadequate mitigation efforts, the
adequacy of TGP's efforts to mitigate damages is relevant to the
fact that Mr. Norris' calculation of the actual mitigation is
conservative, Mr. Coffee asserts.

Mr. Norris' difficulty in putting an exact dollar figure on the
amount of additional capacity that TGP could have sold by
discounting does not undermine the relevance of his testimony,
Mr. Coffee maintains.

USGen intends to use several e-mail exchanges between TGP and its
customers and press releases containing statements attributed to
TGP officials.  TGP contends that the e-mail exchanges and the
press releases are inadmissible on grounds that they are hearsay.

USGen, however, insists that the e-mail exchanges between TGP and
its customers reflecting their demand for capacity on TGP's New
England Pipeline are admissible because they show the customers'
state of mind.  Statements by TGP officials regarding likely
future demand growth in the Northeast are significant admissions
if true, and are relevant to TGP's state of mind whether true or
not, Mr. Coffee argues.

USGen also intends to use as exhibits pipeline companies'
Internet postings printouts, which, according to TGP, are
irrelevant and contains hearsay.  The fact that pipeline
companies do postings of available gas transportation capacity
is relevant to TGP's opportunity to mitigate its damages for the
future years of the USGen contracts, Mr. Coffee asserts.

TGP also objects to USGen's designations from the depositions of
TGP witnesses on the grounds of relevancy and admissibility.
Some of the transcript segments of the depositions discuss TGP's
practice of discounting other portions of its network and not
discounting the New England portions that encompass the USGen
capacity.

USGen asserts that TGP's refusal to discount the USGen capacity
is relevant because it emphasizes the existence and extent of
demand for the capacity and also the conservatism of Mr. Norris's
analysis of TGP's mitigation.  Moreover, the Northeast expansion
project is directly relevant to the likelihood of future sales by
TGP, as it demonstrates that demand for capacity on TGP's New
England pipeline substantially exceeds supply.

Accordingly, USGen asks the Court to deny TGP's Exclusion Request
in its entirety.

                    TGP Replaces Dr. Lukens

TGP informs the Court that Dr. Jay Lukens, its expert in
connection with the computation of TGP's rejection damage claims,
has recently been diagnosed with a serious illness.

The illness makes it impossible for Dr. Lukens to testify at a
trial or in a de bene esse deposition, Mr. Irvin relates.

Accordingly, TGP asks the Court for leave substitute Greg W.
Hopper for Dr. Lukens as its damages expert for the trial of
USGen's objection to TGP's rejection damage claim.

Mr. Irvin relates that TGP will be unfairly prejudiced if it is
not allowed to substitute Dr. Lukens with Mr. Hopper, who is an
expert with technical and specialized experience and knowledge of
the pipeline industry and natural gas markets.

The Court, according to Mr. Irvin, can also rely on Mr. Hopper's
opinion, which is based on his Masters of Business Administration
training and his experience with the natural gas markets, as well
as relevant facts and data to assist it in determining facts in
issue.

TGP assures the Court that Mr. Hopper, a colleague of Dr. Lukens
with Lukens Energy Group, will not be advancing new evidence or
theories.  In accord with Dr. Lukens' reports and deposition
testimony, Mr. Hopper will offer his opinion of the total amount
of TGP's damages before mitigation and the amount by which the
figure should be reduced to account for appropriate mitigation
credits.  Mr. Hopper will also offer his opinion as to the proper
discount rate to apply in the Court's determination of the net
present value of TGP's damages.

Because Mr. Hopper will not be advancing new evidence or
theories, TGP believes that USGen will suffer no prejudice by his
substitution for Dr. Lukens.

USGen consents to TGP's request provided that Mr. Hopper will
not be allowed to testify to opinions, or grounds for opinions,
that differ from the opinions and grounds already put forward by
Dr. Lukens in his reports and deposition testimony.

                 Parties' Joint Status Report

At pretrial conference held on June 15, 2006, the Court requested
the parties to attempt to resolve all outstanding issues relating
to their objections to exhibits and deposition designations.  The
parties have agreed, among others, that:

    -- all foundation objections will be resolved at the trial;

    -- TGP withdraws its hearsay objections with respect to its
       employee e-mails where the employee is acting within the
       scope of the employee's duties;

    -- based on a preliminary review of USGen's proposed
       replacement exhibits, TGP withdraws its objections
       concerning the completeness of the exhibits; and

    -- USGen will stipulate that Mr. Norris' report does not
       reflect USGen's position with respect to mitigation.

                        *     *     *

Judge Mannes denies USGen's request that the July 17, 2006 trial
be continued or stayed until October 15, 2006.

The trial regarding USGen's objection to TGP's rejection damage
claims will commence on July 17, as scheduled.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 62; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NATIONAL ENERGY: Hoffman, et al. Want Compensation Claims Allowed
-----------------------------------------------------------------
Adam Mirick, Adam Hoffman and Beniot Vallieres ask the U.S.
Bankruptcy Court for the Middle District of Maryland to
enter a summary judgment in their favor in connection with

NEGT Energy Trading Holdings Corporation and National Energy & Gas
Transmission, Inc.'s requests to reduce their claims.

In March 2002, Messrs. Mirick, Hoffman and Vallieres were awarded
supplemental compensation for their performance for the prior
year.  Pursuant to an agreement, payment for the wages was
deferred until October 2003.  The Claimants were terminated from
their employment with the Debtors in March 2003.

Because by October 2003 the Debtors had declared bankruptcy, the
Debtors argue that they did not improperly withhold the
Claimants' wages under the Maryland Wage Payment and Collection
Law.

Neil L. Henrichsen, Esq., at Henrichsen Siegel, P.L.L.C., in
Washington, D.C., argues that the Agreement only applied if the
Claimants were still employed and not if they were terminated.

The Debtors also assert that, so long as there is a "bona fide
dispute" as to when the wages should have been paid, an employer
does not violate the MWPCL.

The "bona fide dispute" question under the MWPCL concerns
"whether there is a legitimate dispute over the validity of the
claim or the amount that is owing," Mr. Henrichsen notes, citing
Medex, 372 Md. at 43, 811 A.2d at 306.  The facts concerning the
Debtors' obligation to pay the 2001 wages earned by Claimants are
not in dispute, he asserts.

Under MWPCL, wages are to be paid promptly after they are earned
and that an employer does not have unilateral authority to defer
payment, Mr. Henrichsen notes, citing Medex v. McCabe, 372 Md.
28, 42, 811 A.2d 297, 306 (2002), and Rogers v. Savings First
Mortgage, LLC, 362 F.Supp.2d 624, 642-43 (D. Md. 2005).

The Claimants also dispute the Debtors' allegations that they
cannot recover statutory damages under the MWPCL because this is
a bankruptcy case.  There is no federal bankruptcy law preemption
that prohibits an award of statutory damages under the MWPCL,
Mr. Henrichsen contends.

The Debtors argue that bankruptcy courts are prohibited from
making punitive damage awards.  Under the MWPCL, an employee may
recover withheld wages and an additional "amount not exceeding 3
times the wage" if the employer's withholding was "not as a
result of a bona fide dispute."

At the outset, the Debtors' argument is flawed because statutory
damages under the MWPCL are not necessarily punitive,
Mr. Henrichsen contends.  The Debtors failed to cite Judge Mannes'
conclusion that "claims made under the MWPCL are not necessarily
punitive damages claims."

The Maryland Legislature recognized that recovery of only unpaid
wages under the MWPCL "may not begin to compensate for those
consequential losses" of the employee.  "The additional amount,
though at least partially punitive in nature, may also have a
compensatory element to it, especially in a wage-withholding
case," the Court of Appeals of Maryland held in Admiral Mortgage,
357 Md. at 549, 745 A.2d at 1034.

Because the Claimants like other MWPCL plaintiffs would have
difficulty proving their consequential losses with certainty, an
award of statutory damages is both compensatory and available,
Mr. Henrichsen maintains.

The Debtors' argument is also flawed because, contrary to their
assertion, the law does not prohibit bankruptcy courts from
awarding punitive damages, Mr. Henrichsen points out.  In In re
A.H. Robins Co., 89 B.R. 555, 559 (E.D.Va. 1988), the court
stressed that the Bankruptcy Code does not prohibit punitive
damages claims.

Because they have not been paid several hundreds of thousands of
dollars that they earned and have been owed since 2001, the
Claimants believe an award of statutory damages under the MWPCL
would be largely compensatory.

Nonetheless, the Claimants are entitled to seek and the U.S.
Bankruptcy Court for the Middle District of Maryland has authority
to award MWPCL statutory damages even if some portion of the award
is also punitive, Mr. Henrichsen maintains.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 62; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NAUTILUS RMBS: Fitch Rates $5 Million Class C Interest Notes at BB
------------------------------------------------------------------
Fitch Ratings assigns these ratings to Nautilus RMBS CDO III, Ltd.
and Nautilus RMBS CDO III, LLC.:

    -- $260,000,000 class A-1S floating-rate notes due June 2046
       'AAA';

    -- $46,000,000 class A-1J floating-rate notes due June 2046
       'AAA';

    -- $34,000,000 class A-2 floating-rate notes due June 2046
       'AA';

    -- $4,000,000 class A-3F fixed-rate deferrable interest notes
       due June 2046 'A';

    -- $14,500,000 class A-3V floating-rate deferrable interest
       notes due June 2046 'A'

    -- $16,500,000 class B floating-rate deferrable interest notes
       due June 2046 'BBB';

    -- $5,000,000 class C floating-rate deferrable interest notes
       due June 2046 'BB'.

Nautilus III is a cash flow collateralized debt obligation managed
by RCG Helm, LLC.

The ratings of the class A-1S notes, A-1J notes, and A-2 notes
address the likelihood that investors will receive full and timely
payments of interest, as per the governing documents, as well as
the aggregate outstanding amount of principal by the stated
maturity date.  The ratings of the class A-3F notes, A-3V notes, B
notes, and C notes address the likelihood that investors will
receive ultimate interest payments, as per the governing
documents, as well as the aggregate outstanding amount of
principal by the stated maturity date.

The ratings are based upon the credit quality of the underlying
assets, 100% of which will be purchased by the transaction's
close, in addition to credit enhancement provided by support from
subordinated notes, excess spread and protections incorporated in
the structure.

Proceeds from the issuance will be invested in a static portfolio
of residential mortgage-backed securities, consisting primarily of
prime RMBS.  The collateral supporting the structure will have a
Fitch weighted average rating factor of 3.63 ('BBB/BBB+').  The
collateral manager may sell defaulted, credit-risk, credit
improved, and equity securities at any time.

RCG Helm LLC will select and monitor the assets in the Nautilus
III portfolio.  RCG is a wholly owned subsidiary of Ramius Capital
Group, LLC, a privately owned investment management firm.  Both
RCG and Ramius are Securities and Exchange Commission-registered
investment advisors.  Ramius, headquartered in New York, was
founded in 1994 and currently maintains offices in London, Vienna,
Munich, Hong Kong and Tokyo.  The company's investment clients
include U.S. and international institutions and private investors.
Ramius, through several subsidiaries manages absolute-return
portfolios totaling $7.4 billion.  These portfolios include $2.9
billion in multi-strategy funds, $1.1 billion in single-strategy
funds, and $3.3 billion in multi-manager funds.  Assets under
management include $264 million in firm capital.

Nautilus RMBS CDO III, Ltd. is a Cayman Islands exempted company.
Nautilus RMBS CDO III LLC is a Delaware limited liability company.


NEW CENTURY: Credit Enhancement Prompts Moody's to Upgrade Ratings
------------------------------------------------------------------
Moody's Investors Service upgraded twenty-eight certificates from
thirteen deals originated by New Century Mortgage Corporation.
The transactions, issued in 2003, are backed by first lien
adjustable- and fixed-rate subprime mortgage loans.  The upgrades
are based on the level of credit enhancement provided by the
excess spread, overcollateralization, and the subordinate classes.
The projected pipeline losses are not expected to significantly
affect the credit support for these certificates.   The seasoning
of the loans and lower pool factors reduce loss volatility.

The most subordinate classes from six transactions originated by
New Century Mortgage Corporation have been downgraded based on
existing credit enhancement levels being low given the current
projected losses on the underlying pools.  The pools have taken
losses and pipeline loss could cause erosion of the
overcollateralization.

Additionally, Moody's confirmed the ratings on three certificates
that had been previously placed under review for possible
downgrade.

Moody's complete rating actions:

Upgrades:

Issuer: Asset Backed Securities Corporation

   * Series 2003-HE1; Class M1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-HE1; Class M2, current rating A2, upgraded to
     Aa3

   * Series 2003-HE2; Class M1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-HE2; Class M2, current rating A2, upgraded to
     Aa3

Issuer: ABSC Home Equity Loan Trust

   * Series 2003-HE3; Class M1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-HE3; Class M2, current rating A2, upgraded to
     Aa3

Issuer: GSAMP 2003-NC1 Trust

   * Class M-1, current rating Aa2, upgraded to Aaa
   * Class M-2, current rating A2, upgraded to Aa2
   * Class B-1, current rating Baa2, upgraded to A2

Issuer: Morgan Stanley Dean Witter Capital I Inc.

   * Series 2003-NC1; Class M-1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-NC1; Class M-2, current rating A2, upgraded to
     Aa3

   * Series 2003-NC2; Class M-1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-NC2; Class M-2, current rating A2, upgraded to
     Aa2

   * Series 2003-NC3; Class M-1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-NC3; Class M-2, current rating A2, upgraded to
     Aa3

Issuer: Morgan Stanley Capital I Inc.

   * Series 2003-NC4; Class M-1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-NC4; Class M-2, current rating A2, upgraded to
     Aa2

   * Series 2003-NC4; Class M-3, current rating A3, upgraded to
     A1

Issuer: Morgan Stanley ABS Capital I Inc.

   * Series 2003-NC5; Class M-1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-NC5; Class M-2, current rating A2, upgraded to
     Aa3

   * Series 2003-NC6; Class M-1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-NC6; Class M-2, current rating A2, upgraded to
     Aa3

Issuer: New Century Home Equity Loan Trust

   * Series 2003-1; Class M-1, current rating Aa2, upgraded to
     Aaa

   * Series 2003-1; Class M-2, current rating A2, upgraded to Aa2

   * Series 2003-2; Class M-1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-2; Class M-2, current rating A2, upgraded to Aa3

   * Series 2003-3; Class M-1, current rating Aa2, upgraded to
     Aa1

   * Series 2003-3; Class M-2, current rating A2, upgraded to Aa3

Downgrades:

Issuer: Asset Backed Securities Corporation

   * Series 2002-HE2; Class B, current rating Baa2, downgraded to
     B2

   * Series 2003-HE1; Class M4, current rating Baa3, downgraded
     to B2

Issuer: Morgan Stanley Dean Witter Capital I Inc

   * Series 2001-NC3; Class B-1, current rating Baa3, downgraded
     to Ba1

   * Series 2002-NC1; Class B-1, current rating Baa2, downgraded
     to Ba1

   * Series 2002-NC2; Class B-1, current rating Baa2, downgraded
     to Ba1

   * Series 2002-HE1; Class B-2, current rating Baa3, downgraded
     to Ba1

Confirmed:

Issuer: ABSC Home Equity Loan Trust

   * Series 2003-HE3; Class M3, confirmed at A3

Issuer: New Century Home Equity Loan Trust

   * Series 2003-1; Class M-3, confirmed at Baa2
   * Series 2003-3; Class M-3, confirmed at A3


NEWPARK RESOURCES: Restatements Cue S&P to Retain Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' corporate
credit rating on oilfield services company Newpark Resources Inc.
remains on CreditWatch with negative implications following the
company's announcement that it will restate the financial filings
for the previous five years and further delay filing statements
for the first quarter of 2006.

"Newpark's ability to file these statements is crucial to
maintaining the current ratings," said Standard & Poor's credit
analyst Ben Tsocanos.  "Conversely, findings of material or
widespread accounting problems, extended delays in the process, or
deterioration in relations with its credit counterparties would
almost certainly lead to a downgrade," said Mr. Tsocanos.

The rating on Newpark was placed on CreditWatch on April 17, 2006,
after the company announced that it had put its CFO and certain
other personnel on administrative leave pending an internal
examination of accounting irregularities.

The investigation determined that a subsidiary of Newpark had made
improper payments to a supplier and that Newpark failed to account
for related transactions appropriately.  The company expects to
make the necessary accounting adjustments in restated financial
filings.  Following the completion of the investigation,
management terminated the employment of the CFO and former CEO.

Standard & Poor's expects to revisit the CreditWatch listing
following the filing of restated financial statements, or by the
end of September in the event that filing is delayed.

The CreditWatch listing for Newpark reflects the likelihood that
ratings will be either affirmed or lowered in the near term.


NOMURA ASSET: Fitch Lifts Rating on $42.8 Mil. Class Certificates
-----------------------------------------------------------------
Fitch Ratings upgrades these class of Nomura Asset Securitization
Corp.'s commercial mortgage pass-through certificates, series
1995-MD III:

    -- $42.8 million class B-1 to 'AAA' from 'BB'.

In addition, Fitch affirms rating on:

    -- Interest-only class A-3CS at 'AAA';
    -- $564,106 class A-4 at 'AAA'.

Fitch does not rate classes B-2, B-3, B-4A, B-4B, and B-4C.

The upgrade is due primarily to the final resolution of the Grand
Cayman loan, in which losses were passed through to the trust with
the July 2006 remittance report.  The workout of the loan resulted
in paydown of $24.7 million to class A-4 and a loss of $5.5
million that was absorbed by classes B-3, B-4A, B-4B and B-4C.

Of the remaining three loans in the transaction, two of them, the
Hagan B loan (40.5%) and the One Bayfront Plaza loan (31.2%), have
been fully defeased.  The sole remaining non-defeased loan, the
Larkin Portfolio (28.3%) remains at the special servicer.  The
loan is secured by four full-service hotels in Colorado, Texas and
Montana, which are real estate owned.  At this time, Fitch expects
that the loan will be resolved with no losses to the trust.
However, in the event that the loan were to sustain losses, there
is sufficient credit enhancement to protect the Fitch rated
classes.


NORTHWEST AIRLINES: Wants General Electric Agreement Approved
-------------------------------------------------------------
Northwest Airlines, Inc., seeks the U.S. Bankruptcy Court for the
Southern District of New York's permission to enter into, and
perform under, the Letter of Agreement with General Electric
Capital Corporation pursuant to Sections 105(a) and 363(b) of the
Bankruptcy Code.

Prior to filing for bankruptcy, Northwest Airlines leased an
aircraft bearing Tail No. N665US pursuant to a Lease Agreement
[NW 1989 E] dated September 8, 1989, with The First National Bank
of Boston, as owner trustee and as lessor.

U.S. Bank National Association is successor-in-interest to The
First National Bank of Boston.  General Electric Capital
Corporation is the owner participant holding the beneficial
interest in the aircraft.

On November 14, 2005, Northwest Airlines and The Bank of New
York, as mortgagee, entered into a Restructuring Of Leveraged
Lease For Aircraft N665US & Summary of Terms and Conditions,
which sets forth an agreement in principle for a restructuring of
the agreements relating to the aircraft.

Among other things, the Term Sheet, which was approved by the
Court on December 15, 2005, provides that:

   -- rent will be reduced;

   -- the term of the existing lease will be modified to coincide
      with scheduled heavy airframe maintenance; and

   -- maintenance requirements, return conditions, and
      self-insurance provisions will be revised favorably for the
      Debtor.

The Debtor and General Electric are parties to a Tax Indemnity
Agreement [NW 1989 E] dated September 8, 1989, pursuant to which
the Debtor agreed to indemnify General Electric, as the
aircraft's owner participant, for certain tax events.

Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, relates that, as part of the restructuring contemplated
by the Term Sheet, General Electric's interest in the trust
estate, excluding the Tax Indemnity Agreement and the other
reserved rights, must be transferred to BNY so that it can cause
the aircraft to be leased to the Debtor on the terms described in
the Term Sheet.  The transfer may be accomplished either through
foreclosure by BNY, or through an assignment and assumption from
General Electric to BNY.

Seabury Group / Seabury Transportation Advisors LLC's senior vice
president, Gregory S. Ethier, asserts that an assignment from
General Electric to BNY would be more beneficial to the Debtor
than a foreclosure, as foreclosure would impose certain temporary
operational constraints upon the Debtor that would result in lost
revenue.

According to Mr. Ethier, the Aircraft, a Boeing 747-400, is
currently in continuous use by Northwest Airlines on its overseas
routes.  Its foreclosure would require the Debtor to temporarily
cease international flying of the aircraft while title to the
aircraft is transferred.

In certain circumstances, the Debtor could also be required to
fly the aircraft to a foreign jurisdiction at the time of
foreclosure through a non-revenue generating flight in order to
reduce potential tax consequences of the foreclosure, Mr. Ethier
relates.

Accordingly, Northwest Airlines has requested that General
Electric assign its interests in the trust that holds title to
the aircraft to the Mortgagee in lieu of foreclosure, which
assignment would not require that the title to the aircraft be
changed.

However, Mr. Ethier continues, under the Tax Indemnity Agreement,
a foreclosure of General Electric's interests by BNY may be more
beneficial to General Electric than an assignment of its
interests.

Accordingly, to induce General Electric to assign its interests
in the trust that holds title to the aircraft to BNY in lieu of
foreclosure, the Debtor proposes to enter into a Letter Agreement
with GE.  The LOA provides that:

   -- for all purposes of the Tax Indemnity Agreement, the
      transfer from General Electric to BNY will be deemed to
      constitute a foreclosure;

   -- in respect of the transfer to BNY, General Electric will
      have whatever damages and claims against the Debtor under
      the Tax Indemnity Agreement that General Electric would
      have had, had the transfer in fact constituted a
      foreclosure.

                 About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 30; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NORTHWEST AIRLINES: PBGC Objects to Sale of 10 Aircraft to Omni
---------------------------------------------------------------
Northwest Airlines, Inc., asked the U.S. Bankruptcy Court for the
Southern District of New York to authorize its sale of six
McDonnell Douglas DC-10-30 aircraft to Omni Air International,
Inc., and file the Sale Agreement under seal.

Prior to filing for bankruptcy, Northwest Airlines was indebted to
its pension plans in the aggregate principal amount of
$370,936,877, plus all accrued but unpaid interest and fees,
expenses, charges and other obligations.  When it filed for
bankruptcy, Northwest ceased making payments with respect to the
secured pension obligations.

The Pension Benefit Guaranty Corporation received a first
priority lien on the Aircraft constituting the PBGC First Lien
Collateral in relation to Northwest's application to the Internal
Revenue Service for waivers of its minimum funding obligations
for its pension plans.  The PBGC properly perfected that lien and
its other liens granted.

In a Court-approved stipulation, Northwest Airlines agreed to
make certain interest payments with respect to the secured
pension obligations and reimburse certain related fees and costs
incurred by the PBGC.  However, more than $370,000,000 principal
balance and other amounts owed by Northwest remain outstanding.
Moreover, the stipulation has expired by its terms.

The PBGC and Northwest have engaged in discussions and, the PBGC
believes, have reached an agreement in principle to extend and
modify the First Stipulation.

Philip D. Anker, Esq., in Washington, D.C., notes that the
Debtor's proposed order provides that the proceeds of the sale of
the PBGC First Lien Collateral will be deposited "into an escrow
account" to be governed by a second stipulation granting adequate
protection to the PBGC under their payment agreement dated
July 25, 2003, and certain related security agreements.

Mr. Anker notes that there is still no Second Stipulation in
effect.

Accordingly, the PBGC objects to the Debtors' request unless
Northwest's proposed order is modified to provide that PBGC's
first priority lien will attach to the Sale Proceeds, with the
same validity, priority, force, and effect as it currently has on
the PBGC First Lien Collateral.

                 About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 30; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


OCCAM NETWORKS: June 25 Stockholders' Deficit Narrows to $17.3MM
----------------------------------------------------------------
Occam Networks Inc. reported results for the second quarter of
2006, which ended June 25, 2006.  The company reported quarterly
revenue of $16.2 million, posting its third consecutive quarter of
operating profits and its eighth consecutive new revenue record.
Second quarter 2006 revenues represented an increase of 14% over
the first quarter of 2006, and an 86% increase over the same
second quarter of 2005.

"We had an outstanding quarter -- we significantly expanded our
customer base to more than 170 customers and again we increased
quarterly operating profits," Bob Howard-Anderson, president and
chief executive officer of Occam Networks, said.

"We continue to strengthen and grow the company in a focused and
strategic manner as we aim to remain profitable while we expand
our business.  We've strengthened our board and added several
exciting new products to our product line and our efforts are
paying off with industry recognition for our products and the
leadership role we play in the industry."

During the second quarter of 2006, Occam appointed Brian Strom,
former president and chief executive officer of SureWest
Communications, to its Board of Directors.

Other highlights of the quarter included:

   -- Launched the BLC 6314 10 GigE Transport and Optical Line
      Termination Blade, which adds dual 10 Gigabit Optical
      Ethernet and multiple 1 Gigabit Ethernet interfaces to the
      Occam BLC 6000 System;

   -- Launched the ONT 2300 Series of optical network terminals.
      These ONTs are designed to deliver superior Triple Play
      services and to provide Telcos with multiple service models
      for active fiber deployments that meet the requirements of
      any type of FTTP installation from brownfield to Greenfield;
      and

   -- Broadband Trends reported that the company was second in
      terms of percentage increase in its worldwide DSL port
      shipments in the first quarter of 2006.

                            Financials

The Company earned $358,000 of net income for the second quarter
ended June 25, 2006, compared to a $2,570,000 net loss for the
same period in 2005.

At June 25, 2006, the Company's balance sheet showed $32,642,000
in total assets, $13,644,000 in total liabilities, and $36,390,000
in redeemable preferred stock, resulting in a $17,392,000
stockholders' deficit.

The Company also had a $108,373,000 accumulated deficit at
June 25, 2006.

Based in Santa Barbara, Calif., Occam Networks Inc. (OTCBB:OCNW)
-- http://www.occamnetworks.com/-- develops and markets
innovative Broadband Loop Carrier networking equipment that enable
telephone companies to deliver voice, data and video services.
Based on Ethernet and Internet Protocol technologies, Occam's
equipment allows telecommunications service providers to
profitably deliver traditional phone services, as well as advanced
voice-over-IP, residential and business broadband, and digital
television services through a single, all-packet access network.


NOVELIS INC: Extends Consent Request for Senior Notes to July 19
----------------------------------------------------------------
Novelis Inc. is extending the expiration date in connection with
its previously announced consent solicitation relating to its 7-
1/4% Senior Notes due 2015 (CUSIP Nos. 67000XAA4, C6780CAA1 and
67000XAB2) in order to allow holders additional time to deliver
their consents.

The consent solicitation, which was scheduled to expire at 5:00
p.m., New York City time, on Wednesday, July 12, 2006, will now
expire at 5:00 p.m., New York City time, on Wednesday, July 19,
2006, unless extended to a later time or date.

Novelis is soliciting consents to proposed amendments to the
indenture pursuant to which the Notes were issued that would give
Novelis until December 31, 2006, to become current in its
reporting obligations and a waiver of any and all defaults caused
by its not timely filing certain reports with the Securities and
Exchange Commission.

Upon the terms and subject to the conditions of the consent
solicitation, holders of record as of 5:00 p.m., New York City
time, on June 21, 2006, who validly deliver and do not revoke
their consents prior to the Expiration Date, will receive an
initial consent fee for each $1,000 in principal amount of Notes
with respect to which consents are received equal to the product
of $15.00 multiplied by a fraction, the numerator of which is the
aggregate principal amount of Notes outstanding on the Expiration
Date and the denominator of which is the aggregate principal
amount of Notes as to which Novelis received and accepted
consents.

If Novelis has not filed its Annual Report on Form 10-K for the
year ended December 31, 2005, with the SEC by 5:30 p.m., New York
City time, on September 30, 2006, Novelis will pay to these
holders an additional $5.00 for each $1,000.00 in principal amount
of Notes as to which Novelis has received and accepted consents.
These consent fees are collectively referred to as the "Consent
Fees."

The effectiveness of the proposed amendments and waiver and the
payment of the Consent Fees are subject to the receipt of valid
consents that are not revoked in respect of at least a majority of
the aggregate principal amount outstanding of the Notes.  Holders
of the Notes may revoke their consents at any time before the
proposed amendments and waiver become effective, but upon receipt
by Novelis of the consents of a majority of holders of the Notes
the waiver will become effective, a supplemental indenture setting
forth the amendments will be executed and consents may no longer
be revoked unless Novelis fails to pay holders the Consent Fees.

Citigroup Corporate and Investment Banking is serving as the
solicitation agent for the consent solicitation.  Questions
regarding the consent solicitation may be directed to Citigroup
Corporate and Investment Banking at (800) 558-3745 (toll-free) or
(212) 723-6106.  The information agent for the consent
solicitation is Global Bondholder Services Corporation. Requests
for copies of the Consent Solicitation Statement and related
documents may be directed to Global Bondholder Services
Corporation at (866) 794-2200 (toll- free) or (212) 430-3774.

                          About Novelis

Based in Atlanta, Georgia, Novelis Inc. (NYSE: NVL) (TSX: NVL)
-- http://www.novelis.com/-- provides customers with a regional
supply of technologically sophisticated rolled aluminum products
throughout Asia, Europe, North America, and South America.  The
company operates in 11 countries and has approximately 13,000
employees.  Through its advanced production capabilities, the
company supplies aluminum sheet and foil to the automotive and
transportation, beverage and food packaging, construction and
industrial, and printing markets.

                           *     *     *

As reported in the Troubled Company Reporter on May 18, 2006,
Moody's Investors Service placed the ratings of Novelis Inc., and
its subsidiary, Novelis Corporation, under review for possible
downgrade.  In a related rating action, Moody's changed Novelis
Inc's speculative grade liquidity rating to SGL-3 from SGL-2.

Novelis Corporation's Ba2 senior secured bank credit facility
rating was placed on review for possible downgrade.

Novelis Inc.'s Ba3 corporate family rating; Ba2 senior secured
bank credit facility and B1 senior unsecured regular
bond/debenture were placed on review for possible downgrade.


ONEIDA LTD: Board to Review Acquisition Proposal from Shareholders
------------------------------------------------------------------
Oneida Ltd. received an unsolicited proposal from DE Shaw Laminar
Portfolios, L.L.C. and Xerion Capital Partners, both current
Oneida shareholders, to acquire the company.  Oneida's Board of
Directors will consult with its legal and financial advisors and
carefully review the proposal; however, a definitive agreement has
not been reached at this time and no assurance can be given that
such an agreement will take place.

"It is gratifying to see that Oneida's business plan has drawn
interest from two substantial current shareholders," said Oneida
Chairman Christopher H. Smith.  "The Board noted that the proposal
expressed support for Oneida's plan of reorganization and its
current management team.  We will give the proposal thorough and
fair consideration."

Oneida expects to continue its confirmation hearing in U.S.
Bankruptcy Court for the Southern District of New York as planned.
The company remains on track to complete its confirmation hearing
process shortly and, depending on the outcome of its review of the
acquisition proposal, hopes to be in a position to emerge from
bankruptcy in the near future.

                          About Oneida

Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) --
http://www.oneida.com/-- manufactures stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and supplies dinnerware to the foodservice industry.
Oneida also supplies a variety of crystal, glassware and metal
serveware for the tabletop industries.  The Company and its 8
debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496).  Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors.  Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor.  Scott L.
Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represent the Official Committee
of Unsecured Creditors.  Robert J. Stark, Esq., at Brown Rudnick
Berlack Israels LLP represents the Official Committee of Equity
Security Holders.  When the Debtors filed for protection from
their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts.  On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement.


ONEIDA: Equity Panel Members Can Trade Securities Under Protocol
----------------------------------------------------------------
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York approved the proposed
information blocking procedures and permitted trading of Oneida
Ltd.'s securities.

The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Oneida and its debtor-affiliates proposed the
procedures, seeking the Court's determination that those Equity
Committee members, acting in any capacity and engaged in the
trading of securities for others or for its own account as a
regular part of their business will not violate their fiduciary
duties as Equity Committee members by trading in the Debtors' debt
or equity securities or other claims or interests during the
pendency of the Debtors' cases, provided that any Securities
Trading Committee Member carrying out those trades establishes,
effectively implements and strictly adheres to the information
blocking policies and procedures.

Robert J. Stark, Esq., at, Brown Rudnick Berlack Israels LLP, in
Manhattan told the Court that a "Screening Wall" refers to a
procedure established by an institution to isolate its trading
activities from its activities as a member of the Equity
Committee.  A Screening Wall includes, among other things,
features as the employment of different personnel to perform each
function, physical separation of the office and file space,
procedures for locking Committee-related files, separate telephone
and facsimile lines for each function, and special procedures for
the delivery and posting of telephone messages.  Those procedures
prevent the Securities Trading Committee Member's trading
personnel from use or misuse of non-public information obtained by
Securities Trading Committee Member's personnel engaged in
Committee-related activities and also precludes Committee
Personnel from receiving inappropriate information regarding the
Securities Trading Committee Member's trading in Securities in
advance of those trades.

Although members of the Equity Committee owe fiduciary duties to
the Debtors' equity holders, the Securities Trading Committee
Members also have fiduciary duties to maximize returns to their
clients through trading in the Debtors' Securities.  Thus, if a
Securities Trading Committee Member is barred from trading the
Debtors' Securities during the pendency of these Chapter 11 Cases
because of its duties to other equity holders, it may risk the
loss of a beneficial investment opportunity for its clients and
therefore may breach the fiduciary duty to those clients.

Alternatively, if a Securities Trading Committee Member resigns
from the Equity Committee, its interests may be compromised by
virtue of taking a less active role in the reorganization process.
Securities Trading Committee Members should not be forced to
choose between serving on the Equity Committee and risking the
loss of beneficial investment opportunities or foregoing service
on the Equity Committee and possibly compromising its
responsibilities by taking a less active role in the
reorganization process.

A full-text copy of the equity trading procedures is available for
free at http://ResearchArchives.com/t/s?d9b

Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry.  Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries.  The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496).  Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors.  Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor.  Scott L.
Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represent the Official Committee
of Unsecured Creditors.  Robert J. Stark, Esq., at Brown Rudnick
Berlack Israels LLP represents the Official Committee of Equity
Security Holders.  When the Debtors filed for protection from
their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts.  On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement.


OWENS CORNING: Court Approves Praxair Settlement Agreement
----------------------------------------------------------
Owens Corning and its debtor-affiliates obtained the U.S.
Bankruptcy Court for the District of Delaware's approval for a
settlement agreement related to compromise of property damage
claims asserted by Praxair, Inc., against the Debtors.

Praxair filed two Property Damage Claims against the Debtors:

   -- Claim No. 7860 against Owens Corning, Inc., for $200,000;
      and

   -- Claim No. 7856 against Fibreboard Corporation for $75,000.

The Debtors objected to the Praxair Claims.

To resolve the Claims without further litigation, Praxair and the
Debtors entered into the Settlement Agreement.  The parties agree
that:

   a. Claim No. 7860 will be allowed as a general unsecured non-
      priority claim for $5,000, which amount will be paid as a
      convenience class claim;

   b. Claim No. 7856 will be allowed as a general unsecured non-
      priority claim for $5,000, which amount will be paid in
      full by Fibreboard's property damage insurers on the
      Initial Distribution Date; and

   c. Praxair will release Owens Corning and Fibreboard from any
      liability associated with the Claims.

AIG Member Companies, Fibreboard's property damage insurer,
accepts the terms of the Settlement.

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


OWENS CORNING: District Court Won't Dismiss Northwest Suit
----------------------------------------------------------
The U.S. District Court for the District of Oregon denies Owens
Corning's request to dismiss a complaint filed by Northwest
Environmental Defense Center, Oregon Center for Environmental
Health, and Sierra Club against the Debtor.

In the complaint, Northwest, et al., asked the District Court for
declaratory and injunctive relief, civil penalties, plus their
costs and attorney's fees.

Northwest, et al., alleged that Owens Corning is constructing a
polystyrene foam insulation manufacturing facility in Gresham,
Oregon, without obtaining a required preconstruction permit in
violation of Section 165(a) of the Clean Air Act.  Furthermore,
they asserted that Owens Corning's construction is violating
provisions of the Oregon State Implementation Plan that require
any facility that will emit more than 100 tons per year of a
regulated air pollutant to obtain an Air Contaminant Discharge
Permit prior to construction.

After commencement of the District Court Action, the Plaintiffs
entered into a stipulation with the Debtor.  Northwest, et al.,
agreed not to seek a preliminary injunction and Owens Corning
agreed to halt construction pending issuance of a state Air
Contaminant Discharge Permit for the facility.

However, the parties still disputed whether:

   -- construction was undertaken without one or more required
      permits;

   -- Owens Corning's facility is subject to those permit
      requirements; and

   -- civil penalties should be imposed, and, if so, the amount
      and disposition of those penalties.

Owens Corning argued that Northwest, et al., lack standing.  In
the alternative, the Debtor sought to strike those portions of
the complaint that sought more than one day's civil penalties.

Owens Corning also sought dismissal of Northwest, et al.'s First
Claim on the ground that they can state a claim, if any, only
under state rather than federal law.

"The present case is easily distinguishable," U.S. Magistrate
Judge John Jelderks declares.  "Plaintiffs have identified
concrete injuries flowing from the challenged conduct, and
explained how they would benefit from a favorable decision."

The District Court rejects the Debtor's lack of standing
contention because, among others, the challenged conduct is the
commencement of construction without the required permit, while
the ultimate harm can result only from operation of the plant
once construction is completed.

Hence, the District Court rules that Northwest, et al., have
standing to prosecute the claims set forth in the Complaint.

Moreover, the District Court declares that, if the Debtor
unlawfully constructed the facility without first obtaining a
required preconstruction permit, then its liability for civil
penalties is not capped at "one day."

The District Court finds it unclear why the Debtor sought
dismissal of the First Claim on the ground that state substantive
law, rather than federal, is controlling once a State
Implementation Plan has been enacted.

Accordingly, the District Court denies the request for now, with
leave to revisit the issue if events warrant.  Judge Jelderks
declined to decide on "this question in a vacuum," with no facts
or context, and no reason to believe that the determination will
materially affect the rights of the parties.

Federal law sets a floor, that is, the minimum requirements that
must be met, Judge Jelderks says.  A State may voluntarily impose
substantive requirements that are more restrictive than what
federal law would require, but not less restrictive, Judge
Jelderks explains, citing F. Grad, 1 TREATISE ON ENVIRONMENTAL
LAW at 2-112.31 (1999).

The District Court finds it difficult to see how Owens Corning
will derive any benefit from insisting that the court apply State
standards that, by definition, must be at least as restrictive as
the federal standards.  Northwest, et al., already have a
parallel claim invoking the state standards, Judge Jelderks
points out.

A full-text copy of the 33-page District Court opinion is
available for free at http://ResearchArchives.com/t/s?da1

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


PHAR-MOR INC: Ct. Rules L/C Excess Proceeds Part of Bankr. Estate
-----------------------------------------------------------------
Phar-Mor, Inc., commenced an adversary proceeding against Florida
Self-Insurers Guaranty Association, Inc., seeking to obtain an
accounting and to compel turnover of certain excess proceeds of an
$880,000 letter of credit.

Florida Self-Insurers moved to dismiss Phar-Mor's motion, arguing:

     a) the Bankruptcy Court lacks subject matter jurisdiction
        pursuant to Section 541 of the Bankruptcy Code; and

     b) Phar-Mor failed to state a claim upon which relief
        can be granted.

In a decision published at 2005 WL 4132536, the Honorable Kay J.
Woods of the U.S. Bankruptcy Court for the Northern District of
Ohio ruled against Florida Self-Insurers and affirmed that excess
proceeds of the letter of credit were part of the bankruptcy
estate.

            Workers' Compensation Obligations

Phar-Mor operated a chain of discount drugstores in various
states.  From March 1986 to March 1996, Phar-Mor was self-insured
for workers' compensation exposure in Florida.  As a self-insured
employer, Phar-Mor was required to post a letter of credit to
assure performance of its insurance obligations.  Because of this
requirement, Phar-Mor obtained, for the benefit of Florida Self-
Insurers, an $880,000 letter of credit from Fleet National Bank.

AIG Insurance served as the administrator and excess insurance
carrier for Phar-Mor's workers' compensation claims in Florida.
After Phar-Mor's bankruptcy filing, AIG failed to pay one of Phar-
Mor's workers' compensation claims because of an error.  Florida
Self-Insurers assumed payment of that compensation claim by
drawing down the entire amount of the $880,000 letter of credit.

Phar-Mor subsequently discontinued payment of workers'
compensation claims in Florida.  There are currently eight
unresolved compensation claims against Phar-Mor that fall within
its self-insured retention obligation.  Florida Self-Insurers is
holding on to the excess proceeds of the letter of credit to
ensure full payment of these pending claims.

Phar-Mor wants to recover the excess proceeds of the letter of
credit and has presented an actuarial report estimating the
maximum recovery due on the unresolved claims at $322,000.

                         Court Ruling

In its motion to dismiss, Florida Self-Insurers argued that the
letter of credit was not property of the bankruptcy estate.  Judge
Woods agreed with Florida Self-Insurers' contention.  However, she
emphasized that in Phar-Mor's adversary proceeding, the Court is
not dealing with a letter of credit but rather with the proceeds
of the letter of credit.

Judge Woods said Florida Self-Insurers is only entitled to obtain
sufficient proceeds from the letter of credit to satisfy Phar-
Mor's obligations.  Consequently, any excess amount from the
letter of credit belongs to Phar-Mor and is property of the
estate.  Because excess proceeds from a letter of credit are
property of the estate, Judge Woods concluded that the Court has
jurisdiction over Phar-Mor's complaint.

The Court also disagreed with Florida Self-Insurers' allegation
that Phar-Mor failed to state a cognizable claim in its complaint
regarding the excess proceeds.  In fact, Judge Woods pointed out
that Florida Self-Insurers admits to holding only a possessory
right to the excess proceeds and not an ownership right.
According to Judge Woods, this admission demonstrates Florida
Self-Insurers' agreement to return any excess proceeds to Phar-
Mor.  Judge Woods adds that Phar-Mor's allegations, stated in its
complaint, are sufficient to state claim for an accounting and
turnover of any excess proceeds.

                         About Phar-Mor

Phar-Mor, Inc., operated a chain of discount retail drugstores.
Phar-Mor and its eight operating subsidiaries sought protection
from their creditors under Chapter 11 of the Bankruptcy Code on
Sept. 24, 2001 (Bankr. S.D. Ohio Case Nos.: 01-44007 through 01-
44015) The Court entered an order confirming the Debtors' First
Amended Joint Plan of Liquidation on March 13, 2003.  Michael
Gallo, Esq., at Nadler, Nadler and Burdman, represents Phar-Mor.


PREMIUM PAPERS: Smart Papers Implements Employee Retention Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed
Smart Papers LLC, a Premium Papers Holdco, LLC debtor-affiliate to
adopt and implement an incentive and retention plan for some of
Smart Papers' employees.

The Retention/Incentive Plan provides that eligible employees will
receive a lump sum payment payable in two equal installments.
Half of the lump sum payment has already been distributed.  The
remaining half will be paid 15 days after the sale closes.  If an
eligible employee resigns, he or she will not get the incentive.
The Debtors estimate that the Plan will cost around $109,000.

Since the Debtors filed for bankruptcy, they have worked towards
stabilizing their business, maintaining good relationships with
their vendors and customers and preparing for a potential sale or
all or substantially all of their assets.  In addition, Smart
Papers is in the process of negotiating with potential buyers to
maximize the value of their estates.

As is typical with most chapter 11 debtors, the bankruptcy process
has proven to be a stressful time for the Debtors' employees.  The
uncertainty surrounding the Debtors' cases, the closing of a
certain facility and the substantial reduction in workforce has
given rise to very real and personal concerns on the part of the
Debtors' employees regarding their financial well-being and the
stability of their employment.  As the sale process continues,
Smart Papers' employees will naturally become more anxious about
their employment status.  To address those concerns, the Debtors
wanted to implement initiatives to ensure that certain employees
who have been determined to be crucial to the Smart Papers'
remaining operations and sale efforts will remain employed with
Smart Papers over the critical coming months, to preserve and
enhance the value of Smart Papers' estate and to ensure that Smart
Papers' business remains operational.

Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, --
http://www.smartpapers.com/-- is an independent manufacturer and
marketer of a wide variety of premium coated and uncoated printing
papers, such as Kromekote, Knightkote, and Carnival.   The Company
and its debtor-affiliates, SMART Papers LLC and PF Papers LLC,
filed for chapter 11 protection on March 21, 2006 (Bankr.
D. Del.Case No. 06-10269).  Ian S. Fredericks, Esq., at Young,
Conaway, Stargatt & Taylor, LLP, represents the Debtors.  When the
Debtors filed for protection from their creditors, they listed
unknown estimated assets and $10 million to $50 million estimated
debts.


PROCARE AUTOMOTIVE: Has Until Oct. 2 to File Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
extended, until Oct. 2, 2006, the period within which ProCare
Automotive Service Solutions, LLC, has the exclusive right to file
a chapter 11 plan.  The Court also extended the Debtor's period to
solicit acceptances of that plan to Sept. 5, 2006.

The Debtor had devoted a significant amount of its time towards
the closing of the sale of substantially all of its assets to
Monro Muffler Brake, Inc.  With the closure of the sale on April
29, 2006, the Debtor says it can now focus on the process of
winding up its affairs, which includes the filing of a plan of
liquidation.

Based in Independence, Ohio, ProCare Automotive Service Solutions,
LLC -- http://www.procareauto.com/-- offers maintenance and
repair services to all makes and models of foreign, domestic,
light truck, and commercial-fleet vehicles.  ProCare operates 82
retail locations in eight metropolitan areas throughout three
states.  The Debtor filed for chapter 11 protection on March 5,
2006 (Bankr. N.D. Ohio Case No. 06-10605).  Alan R. Lepene, Esq.,
Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson
Hine LLP, represent the Debtor.  Scott N. Opincar, Esq., at
McDonald Hopkins Co., LPA, represents the Official Committee of
Unsecured Creditors.  Joseph M. Geraghty at Conway MacKenzie &
Dunleavy gives financial advisory services to the Committee.  When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


PULL'R HOLDINGS: First Meeting of Creditors Slated for July 18
--------------------------------------------------------------
The U.S. Trustee for Region 16 set the meeting of Pull'R Holdings
LLC's creditors at 10:00 a.m., on July 18, 2006, at Room 2610, 725
S. Figueroa St., in Los Angeles, California.  This is the first
meeting of creditors required in all bankruptcy cases under
Section 341(a) of the Bankruptcy Code.

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

Headquartered in Santa Fe Springs, California, Pull'R Holdings LLC
-- http://www.pullr.com/-- sell contractors' equipment and tools.
They are known for brands such as Bucket Boss, Dead On Tools, and
the Maasdam Pow'R-Pull line.  The Company and its affiliate,
Maasdam Pow'r Pull Inc., filed for bankruptcy protection on April
27, 2006 (Bankr. C.D. Calif. Case No. 06-11669).  Lawrence
Diamant, Esq., at Robinson, Diamant & Wolkowitz, APC, represent
the Debtors in their restructuring efforts.  An Official Committee
of Unsecured Creditors has not yet been appointed.  When the
Debtors filed for bankruptcy, they reported $1 million to $10
million in total assets and $10 million to $50 million in total
debts.


PULL'R HOLDINGS: Hires Robinson Diamant as Bankruptcy Counsel
-------------------------------------------------------------
The Hon. Richard M. Neiter of the U.S. Bankruptcy Court for the
Central District of California gave Pull'R Holdings LLC permission
to employ Robinson, Diamant & Wolkowitz, as its bankruptcy
counsel.

As reported in the Troubled Company Reporter on May 29, 2006,
Robinson Diamant is expected to:

    a. provide the Debtor with legal advice and guidance with
       respect to its powers, duties, rights and obligations as a
       debtor-in-possession;

    b. assist in the preparation of a plan of reorganization, a
       disclosure statement for that plan, and all legal documents
       necessary; and

    c. perform additional legal services as required in the
       Debtor's chapter 11 case.

Philip A. Gasteier, Esq., a member at Robinson Diamant, told the
Court that he bills $495 per hour for his services.  Mr. Gasteier
disclosed that the Firm's attorneys and paralegals bill:

       Professional                      Hourly Rate
       ------------                      -----------
       Lawrence A. Diamant, Esq.             $535
       Edward M. Wolkowitz, Esq.             $520
       Irving M. Gross, Esq.                 $495
       Douglas D. Kappler, Esq.              $475
       Sandford L. Frey, Esq.                $490
       Timothy J. Yoo, Esq.                  $445
       Robyn B. Sokol, Esq.                  $430
       Jeremy W. faith Esq.                  $340
       Carmela Maria Z. Tan, Esq.            $280
       Todd A. Frealy, Esq.                  $280
       Melanie C. Scott, Esq.                $185
       Yves Derac                            $175
       Myrna R. Richardson                   $175
       Ann Sokolowski                        $175

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

Headquartered in Santa Fe Springs, California, Pull'R Holdings LLC
-- http://www.pullr.com/-- sell contractors' equipment and
tools.  They are known for brands such as Bucket Boss, Dead On
Tools, and the Maasdam Pow'R-Pull line.   The Company and its
affiliate, Maasdam Pow'r Pull Inc., filed for bankruptcy
protection on April 27, 2006 (Bankr. C.D. Calif. Case No.
06-11669). Lawrence Diamant, Esq., at Robinson, Diamant &
Wolkowitz, APC, represent the Debtors in their restructuring
efforts.  An Official Committee of Unsecured Creditors has not yet
been appointed.  When the Debtors filed for bankruptcy, they
reported $1 million to $10 million in total assets and $10 million
to $50 million in total debts.


RAPID PAYROLL: Creditors Panel Taps Winthrop as Bankr. Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Rapid Payroll,
Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the
Central District of California for authority to retain Winthrop
Couchot Professional Corp. as its counsel, nunc pro tunc to
May 22, 2006.

Winthrop Couchot will:

   a) provide legal advice with respect to the Committee's
      duties, responsibilities and powers in the bankruptcy
      proceeding;

   b) assist the Committee in investigating the acts, conduct,
      assets, liabilities and financial condition of the Debtor
      and its insiders and affiliates;

   c) provide the Committee with legal advice and representation
      with respect to the negotiations, confirmation and
      implementation of a chapter 11 plan;

   d) provide the Committee with legal advice with respect to the
      distributions of the Debtor's assets, the prosecution of
      claims against various third parties, and any other matters
      relevant to the Debtor's case, or the formulation of a plan
      of reorganization in the bankruptcy proceedings;

   e) provide the Committee with legal advice and representation,
      if appropriate, with respect to the appointment of a
      trustee or examiner; and

   f) provide the Committee with legal advice and representation
      in any other legal proceeding, whether adversary or
      otherwise, involving the interests represented by the
      Committee.

Winthrop Couchot shareholder Marc J. Winthrop, Esq., says he bills
$565 per hour for his services, while the Firm's other
professionals involved in the Debtor's case and their hourly rates
are:

     Professional                    Hourly Rate
     ------------                    -----------
     Robert E. Opera                     $550
     Sean A. O'Keefe                     $550
     Paul J. Couchot                     $525
     Richard H, Golubow                  $395
     Peter W. Lianides                   $395
     Garrick A. Hollander                $375
     William J. Wall                     $295
     Legal Assistants:
       P.J. Marksbury                    $190
       Joan Ann Murphy                   $190
     Legal Assistant Associates       $80 - $150

Mr. Winthorp assures the Court that the Firm does not hold any
interest adverse to the Debtor and is "disinterested" as that term
is defined in Sec. 101(14) of the Bankruptcy Code.

Headquartered in Orange, California, Rapid Payroll Inc. fka Olsen
Computer Systems, was in the business of licensing payroll
processing software called Rapidpay and providing maintenance,
support and updates for the software to its licensees.  The
Company was later acquired in November 1996 by Paychex, Inc.
Rapid Payroll filed for chapter 11 protection on May 4, 2006
(Bankr. C.D. Calif. Case No. 06-10631).  The firm of Robinson,
Diamant & Wolkowitz, APC serves as the Debtor's counsel.  On
June 28, 2006, the Court authorized the Debtor to hire the firm of
Irell & Manella LLP as its special litigation counsel through and
including August 31, 2006.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million and
$10 million and estimated debts between $10 million and
$50 million.


REFCO INC: Official Committee Wants Seat in Fee Panel
-----------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Refco,
Inc., and its debtor-affiliates chapter 11 cases, supports the fee
containment goals the Fee Protocol seeks to promote.  However, the
Committee cannot support approval of the Fee Protocol in its
current form for three reasons:

   (i) It places disproportionate voting power with respect to
       the fee review process in the hands of fee earners, not
       creditors;

  (ii) The Committee, and not the Fee Protocol, should decide
       which of the Committee's members should serve on the Fee
       Committee; and

(iii) The Debtors' contentions notwithstanding, the Fee
       Committee should have standing to appear and object at fee
       application hearings.

The Committee suggests that the Debtors amend the Fee Protocol by
providing that:

   1.  at least two of the five voting seats on the Fee Committee
       -- and thus appropriate voting power with respect to
       important Fee Committee decisions -- will be granted to
       the Creditors Committee members;

   2.  the Creditors Committee alone will decide which of its
       members occupy seats on the Fee Committee; and

   3.  the Fee Committee will have the power to speak with the
       single voice, greater efficiency, and enhanced authority
       that standing to appear at fee hearings confers.

The Creditors Committee can only support approval of the Fee
Protocol to the extent it is amended to address the concerns
raised, Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy
LLP, in New York, tells the Honorable Robert Drain of the United
States Bankruptcy Court for the Southern District of New York.

VR Global Partners, L.P.; Paton Holdings Ltd.; VR Capital Group
Ltd.; and VR Argentina Recovery Fund, Ltd.; and Premier Bank
International N.V. support the Creditors Committee's arguments.

VR Global is co-chairperson of the Creditors Committee.  Premier
Bank is a Committee member.

                       About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

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


REFCO INC: Meridian IT Wants Decision on Smartnet Maintenance Pact
------------------------------------------------------------------
Meridian IT Solutions asks the U.S. Bankruptcy Court for the
Southern District of New York to compel and Refco Inc. and its
debtor-affiliates to assume or reject the Smartnet Maintenance
Contract, pursuant to Section 365(d)(2) of the Bankruptcy Code.

In the alternative, pursuant to Section 362(d), Meridian wants
the automatic stay lifted so it may terminate the agreement and
instruct its vendor to cease providing services to the Debtors.
Meridian also asks the Court to require the Debtors to provide
adequate protection of its property interests in the contract by
requiring payments pursuant to Sections 363(e) and 361.

Meridian IT and the Debtors are parties to a Smartnet Maintenance
Contract -- a one-year, prepaid contract.  Meridian, through its
third-party vendor, performs ongoing repair and maintenance for
various of the Debtors' IT equipment.

The parties renewed the Maintenance Contract on Sept. 16, 2005.

The Debtors' purchase order called for a total cost of $328,325.
In reliance upon the purchase order, Meridian pre-paid its vendor
the entire sum of its contract, Michael T. Conway, Esq., at
Lazare Potter Giacovas & Kranjac LLP, in New York, relates.

When Refco filed for bankruptcy, Meridian received from the
Debtors a check for $304,447, representing payment in full of the
revised contract price.  However, the Debtors stopped payment on
the check the next day.

As a consequence, Mr. Conway says, Meridian's vendor has been
paid in full for the one-year maintenance agreement and has been
performing critical maintenance services for the Debtors.
However, Meridian has never been paid for those services.

Mr. Conway notes that the Debtors have made no current payments
to Meridian since the Petition Date, despite Meridian's many
requests.

The Debtors have yet to assume or reject the Maintenance
Contract.  They have taken no steps to do so.

Mr. Conway also argues that Meridian is entitled to an
administrative claim under Section 503(b)(1)(A) in the full
contractual amount for all postpetition services provided
pursuant to the contract.

                        About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

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


REVLON CONSUMER: Wants Bank Credit Pact Raised by $75 Million
-------------------------------------------------------------
Revlon, Inc. disclosed that its wholly-owned operating subsidiary,
Revlon Consumer Products Corporation, is seeking an amendment to
its bank credit agreement, dated July 9, 2004, that would increase
the existing $700 million term loan facility under the Credit
Agreement by $75 million.  The Company intends to use the net
proceeds from the term loan add-on for general corporate purposes.

While not required, the amendment would also reset the existing
senior secured leverage ratio covenant (the ratio of RCPC's Senior
Secured Debt to EBITDA, as each such term is defined in the Credit
Agreement) at 5.5 to 1 through June 30, 2007, stepping down to 5.0
to 1 for the remaining term of the Credit Agreement.  The
amendment would also enable RCPC to exclude from the definition of
EBITDA under the Credit Agreement up to $25 million of
restructuring charges and charges for certain product returns or
product discontinuances.  The Credit Agreement's existing asset-
based multi-currency facility would remain unchanged.

As previously announced, Revlon currently intends to conduct a
further $75 million equity issuance in late 2006 or early 2007,
the net proceeds of which would be used to reduce RCPC's
indebtedness.  Also as previously announced, the backstop
obligations of MacAndrews & Forbes, Revlon's principal
shareholder, will remain in effect to ensure that Revlon issues an
additional $75 million of equity by March 31, 2007, and the
existing $87 million line of credit from MacAndrews & Forbes will
remain available to RCPC through the completion of the $75 million
equity issuance.

The proposed credit agreement amendment is expected to be
consummated in late July 2006, subject to market and other
customary conditions, including receipt of consents from the
appropriate lenders.

                           About Revlon

Revlon , Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a
worldwide cosmetics, skin care, fragrance, and personal care
products company.  The Company's vision is to deliver the promise
of beauty through creating and developing the most consumer
preferred brands.  The Company's brands include Revlon(R),
Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and
Mitchum(R).


REVLON CONSUMER: Poor Performance Prompts S&P's Negative Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on New
York-based Revlon Consumer Products Corp. to negative from stable,
following its proposed $75 million add-on term loan, and affirmed
its 'B-' rating and its recovery rating of '2' on Revlon's
existing senior secured term loan facilities that will now total
$775 million.  The 'B-' bank loan rating remains at the same level
as the corporate credit rating; this and the '2' recovery rating
indicate that the secured lenders can expect substantial (80%-
100%) recovery of principal in the event of default.  Net proceeds
from the $75 million add-on term loan will be used for general
corporate purposes.  The bank loan rating and accompanying
analysis are based on preliminary documentation and are subject to
review once final documentation has been received.

Existing ratings on the company, including its 'B-' corporate
credit rating, have been affirmed.  About $1.4 billion pro forma
total debt will be outstanding at closing.

"The outlook revision reflects our increased concerns about weak
operating performance forecasted in 2006, notable challenges with
the launch of Vital Radiance, underperformance of the Almay and
Revlon brands, and the additional debt from the proposed
transaction," said Standard & Poor's credit analyst Patrick
Jeffrey.  These events have led to greater uncertainty regarding
the company's ability to improve performance and reduce leverage.

The ratings on Revlon reflect its participation in the highly
competitive mass-market cosmetics industry, high leverage, and
inconsistent operating performance.  These risks are somewhat
mitigated by the company's leading position in the sector and
improved liquidity.  Revlon faces two significantly larger and
financially stronger competitors with leading market positions:

    * L'Oreal S.A. (A-1+) with its Maybelline brand, and

    * Procter & Gamble Co. (AA-/Negative/A-1+) with its Cover Girl
      and Max Factor brands.


ROEDIGER INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Roediger, Inc.
        fka Roediger Pittsburgh, Inc.
        P.O. Box 1436
        Washington, Pennsylvania 15301

Bankruptcy Case No.: 06-10734

Chapter 11 Petition Date: July 11, 2006

Court: District of Delaware (Delaware)

Judge: Brendan Linehan Shannon

Debtor's Counsel: Francis A. Monaco Jr., Esq.
                  Monzack and Monaco, P.A.
                  1201 Orange Street, Suite 400
                  Wilmington, Delaware 19801
                  Tel: (302) 656-8162
                  Fax: (302) 656-2769

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Graphic Equipment Corp.            Trade Debt            $524,041
55 Wester Avenue
Metuchen, NJ 08840

Whittaker Builders, Inc.           Trade Debt            $310,475
355A Mid Rivers Mall Drive
St. Peters, MO 63376

Allegheny Valley Bank              Judgment              $272,485
5137 Butler Street
Pittsburgh, PA 15201

SBC Capital Services               Trade Debt            $245,000
Aka Ameritech Credit Corp.
13160 Collections Center Drive
Chicago, IL 60693

Roediger Vakuum-Und Haustechnick   Trade Debt            $209,510
c/o James J. Dries
130 East Randolph Drive
Chicago, IL 60601

Joseph T. Ryerson & Sons Inc.      Trade Debt            $139,478

Kappe Associates                   Trade Debt            $138,953

Allison Park Industrial Complex    Trade Debt             $87,785

Ritter Industries, inc.            Trade Debt             $82,460

Templeton & Associates             Trade Debt             $77,702

Goble Sampson                      Trade Debt             $61,918

CID Associates, Inc.               Trade Debt             $52,935

Technical Systems, Inc.            Trade Debt             $47,420

Madison Filter                     Trade Debt             $41,959

Wilkinson Industrial Coatings      Trade Debt             $32,562

UGI Energy Services, Inc.          Trade Debt             $32,095

Spraying Systems Inc.              Trade Debt             $28,291

RTS Plastics Inc.                  Trade Debt             $27,807

Arthur Bloom & Associates          Trade Debt             $26,916

Motion Industries, Inc.            Trade Debt             $26,664


SAINT VINCENTS: Modifies Terms of Sun Life Escrow Agreement
-----------------------------------------------------------
St. Vincents Catholic Medical Centers of New York and Sun Life
Assurance Company of Canada have agreed to modify and supplement
the terms of their Escrow Agreement to provide for the release and
payment of certain account funds.

On February 11, 2005, Sun Life made a $30,000,000 loan to SVMC
evidenced by certain notes and secured by a Mortgage and Security
Agreement, covering real property owned by SVCMC located at 275
North Street in Harrison, New York.

As additional security, SVCMC also entered into an escrow
agreement with Sun Life and Northmarq Capital, Inc., as escrow
agent, pursuant to which the Debtor delivered $1,000,000 to
Northmarq for deposit into an escrow account.

Under the terms of the Escrow Agreement, the Account was funded
to assure the performance of, and payment for, certain
environmental Remediation Work to the Mortgaged Property.

The Escrow Agreement provided that so long as SVCMC is not in
default under the Escrow Agreement, the Mortgage, the Notes or
any of the Loan Documents, the funds in the Account could be
released under the performance criteria and the time periods
established.

SVCMC is in default under the Agreement, the Mortgage, the Notes
and the Loan Documents.

The parties stipulate and agree that:

    (1) Prior to the release of any funds from the Account, SVCMC
        will provide Sun Life with:

           (a) evidence that the amounts to be released from the
               Account represent out-of-pocket expenses that are
               reasonable, necessary, and actually incurred to
               perform the Remediation Work; and

           (b) lien waivers from the providers of the Remediation
               Work.

    (2) Funds will be disbursed from the Account, in this manner:

           (a) Fifty percent of the Remediation Work will be
               deemed completed by SVCMC, and the Escrow Agent
               will release up to $450,000 from the Account to
               SVCMC, at that time SVCMC has provided Sun Life
               with evidence reasonably satisfactory to Sun Life
               that the 10,000-gallon USTs and all contaminated
               soil associated with those USTs have been excavated
               and removed from the Mortgaged Property.

           (b) One hundred percent of the Remediation Work will be
               deemed completed by SVCMC, and the Escrow Agent
               will release up to $450,000 from the Account to
               SVCMC, at the time SVCMC has provided Sun Life with
               evidence reasonably satisfactory to Sun Life that
               the installation of appropriate replacement fuel
               storage tanks for those 10,000-gallon USTs has been
               completed.

           (c) The conditions to release up to $100,000 remaining
               in the Account to SVCMC will be deemed to be
               satisfied when Sun Life receives a letter from the
               New York State Department of Environmental
               Conservation indicating that no further work is
               necessary at the Mortgaged Property.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 28
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SAINT VINCENTS: Wants to Sell Two Lots in King and Queen Counties
-----------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York to sell two nonresidential
real properties, free and clear of any liens, claims and
encumbrances, and subject to higher or better bids:

    -- a vacant lot located at 177 Buffalo Avenue, Brooklyn, New
       York 11213, designated as Block 1363, Lot 6 on Kings County
       tax maps, to Farmer Property Corp.; and

    -- a parcel of nonresidential real property located at 160-24
       79th Avenue, Flushing, New York 11366, and designated as
       Block 6831, Lot 112 on Queens County tax maps, to World
       Homes Group Inc.

                           Sale of Lot 6

The Debtors negotiated a contract for sale of substantially all
the real property associated with the closed St. Mary's Hospital
Complex.  Lot 6 was not included in the sale.  The Debtors seek
to sell Lot 6 separately.

The Debtors' broker, Massey Knakal Realty Services, Inc.,
contacted more than 500 local developers it believed might be
interested in Lot 6 and followed up with potential buyers.

Ten offers were received from various developers, the highest of
which was $195,000 that included a 5% deposit.  Massey Knakal
indicated that the deposit was low for the type of property being
sold, and as a result raised questions about the ability of the
bidder to close on the transaction.

At Massey Knakal's advice, the Debtors determined that the
$190,000 offer by Farmer Property, which included a 10% deposit,
was the best offer.  Saint Vincent Catholic Medical Centers then
negotiated a contract of sale.

Pursuant to the Contract of Sale, Farmer Property will buy and
the Debtors will sell Lot 6 for $190,000, free and clear of all
liens, claims and encumbrances.  The purchase price will be paid
by bank or certified check, or by wire transfer.  Farmer Property
paid $19,000 upon signing of the Contract of Sale.  The purchaser
will pay the remaining $171,000 at the closing of the sale.

                           Sale of Lot 112

Lot 112, which is approximately 3,720 square feet, formerly
served as a small parking lot for visitors to the podiatry clinic
at the former St. Joseph's Hospital.  SVCMC closed the hospital
and sold substantially all of the related assets prior to the
Petition Date.

Lot 112 was not sold when St. Joseph's Hospital was closed.

In November 2005, the Debtors initiated efforts to sell Lot 112.

Massey Knakal contacted more than 3,000 local property owners,
reached out to more than 350 local developers, and posted Lot 112
on its Web site.

The broker received more than 30 offers to purchase Lot 112.

After extensive good faith, arm's-length negotiations, the
Debtors have agreed to sell, and World Homes has agreed to
purchase, the Property for $407,000 -- nearly $100,000 more than
the amount Massey Knakal specified in its promotional material as
the initial asking price.

The parties entered into a Contract of Sale, pursuant to which
they agreed that the purchase price will be paid by World Homes
in this manner:

    (i) $20,350, upon signing of the Contract of Sale;

   (ii) $20,350, within five days after World Homes' receipt of
        written notice that the Debtors have obtained all of the
        Required Approvals; and

  (iii) $366,300, at Closing.

                     Sales are Warranted

The effectiveness of the Contracts of Sale are subject to all
required approvals from the Roman Catholic Church, SVCMC's Board
of Directors, the Court, and the government, if any.

Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, asserts that the Debtors' request should be granted because
the proposed sales will bring in cash to their estates while
allowing them to dispose of properties for which they have no
use.

The Debtors believe that both Contracts of Sale are the best
possible offer for the properties, and that a public auction
process would entail delay and attendant expense with no real
likelihood of additional benefit to their estates.  The cost of
an auction under the circumstances is not justified in light of
the purchase price, Mr. Troop adds.

According to Mr. Troop, General Electric Capital Corporation,
which lien attaches to substantially all of the Debtors'
property, holds the only lien on the Properties.  SVCMC has
received consent from GE Capital to sell the Properties free and
clear of its lien.

Mr. Troop relates that GE Capital has also agreed to allow SVCMC
to retain the proceeds of the sale, and to reduce the amount
available to SVCMC under the term loan portion of the Debtors'
DIP financing.  Consistent with the DIP Order, the agreement with
GE Capital regarding the use of the proceeds from the sale of the
Property has been provided to the Creditors' Committee for
review.  Counsel to the Creditors' Committee has requested that
the agreement provide that SVCMC have the option either to retain
the proceeds as described, or to pay down the term loan.  SVCMC
is pursuing this request with GE Capital, Mr. Troop says.

The Debtors further ask the Court to determine that Farmer
Property and World Homes are entitled to the protections of a
good faith purchaser under Section 363(m) of the Bankruptcy Code.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 29
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SEROLOGICALS CORP: Merger Completion Cues S&P to Withdraw Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
Serologicals Corp., including the 'B+' corporate credit rating, as
the acquisition of the company by Millipore Corp. has been
completed.

Ratings List
                             To    From
Serologicals Corp.
  Corporate credit rating    NR    B+/Watch Pos/--
  Subordinated debt          NR    B-/Watch Pos
  Shelf debt
    Senior unsecured         NR    B+/Watch Pos (prelim)
    Preferred stock          NR    B-/Watch Pos (prelim)


SILICON GRAPHICS: Morgan Lewis Wants to Hire CRA as Consultants
---------------------------------------------------------------
Because of the nature of their operations and contemplated
reorganization, Silicon Graphics, Inc., and its debtor-affiliates
acknowledge that it is essential for Morgan, Lewis & Bockius LLP,
their special intellectual counsel, to employ consultants.

Pursuant to Section 328(a) of the Bankruptcy Code, the Debtors ask
the U.S. Bankruptcy Court for the Southern District of New York to
approve Morgan Lewis' retention of CRA International, Inc., as
consultants, nunc pro tunc to the Petition Date.

Barry Weinert, Esq., vice president, secretary and general counsel
of Silicon Graphics, Inc., explains that CRA's selection is based
on the Company's expertise and extensive knowledge in the field of
intellectual property valuation.  CRA also performed patent
valuation work for the Debtors prior to the Petition Date.  CRA is
intimately familiar with the Debtors' portfolio and can complete
its valuation quickly and efficiently, Mr. Weinert adds.

As consultants for Morgan Lewis', CRA will provide analysis,
advice, and an expert report, if necessary, with respect to the
valuation of certain patents held by the Debtors.  To the extent
litigation arises with respect to patent issues, CRA will analyze
and respond to testimony proffered and provide deposition or
expert testimony.

In exchange for its services, CRA will be paid based on its
customary hourly rates:

          Presidents and Vice Presidents    $400 to $815
          Principals                        $360 to $580
          Associate Principals              $300 to $460
          Senior Associates                 $250 to $400
          Consulting Associates             $225 to $310
          Associates                        $185 to $275
          Analysts                          $170 to $200
          Other Support                     $105

The Debtors, and not Morgan Lewis, will be responsible for the
payment of the fees and reimbursement of the expenses of CRA,
which will not exceed $750,000.

Prior to the Petition Date, CRA received from the Debtors a
general retainer of $25,000, of which the balance remains
$25,000.

Jonathan D. Yellin, general counsel and vice president of the
firm, assures the Court that his firm is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy
Code, as modified by Section 1107(b) of the Bankruptcy Code.  CRA
has no connection with the Debtors, their creditors, or other
parties-in-interest, and does not hold or represent any interest
adverse to the Debtors' estates, Mr. Yellin says.

                      About Silicon Graphics

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: Valuation Analysis Under First Amended Plan
-------------------------------------------------------------
At Silicon Graphics, Inc., and its debtor-affiliates' request,
Bear, Stearns & Co., Inc., prepared a valuation analysis of the
Debtors' businesses based on the Debtors' projected financial
results and market conditions as of June 30, 2006.

In preparing the valuation analysis, Bear Stearns:

    -- reviewed several of the Debtors' internal financial and
       operating data, and operating and financial forecasts,
       including the Projections;

    -- discussed with some of the Debtors' senior executives:

       * the Debtors' current operations and prospects; and
       * key assumptions related to the Projections;

    -- prepared discounted cash flow analyses based on the
       Projections, utilizing various discount rates and terminal
       value multiples; and

    -- considered:

       * the prevailing trading multiples of certain publicly
         traded companies in businesses reasonably comparable to
         the Debtors' operating businesses;

       * the transaction multiples of acquisitions involving
         companies in businesses reasonably comparable to the
         Debtors' operating businesses;

       * the indications of interest received from various third
         parties regarding a transaction with the Debtors;

       * the results of estimates of value for certain non-core
         assets, including non-core intellectual property and
         certain litigation claims, prepared by the Debtors'
         management and CRA International; and

       * the other analyses as Bear Stearns deemed necessary under
         the circumstances.

Based on its analyses, Bear Stearns estimates the Debtors' total
enterprise value to range from $210,000,000 to $275,000,000, with
a mid-point value of $242,500,000.

To calculate the implied reorganized equity value of the
Reorganized Debtors, Bear Stearns reduced the mid-point TEV
estimate by the pro forma net debt levels as of September 30,
2006, and the value of the Dynamic Random Access Memory Claims.

                                  Mid-point Reorganization Value
                                  ------------------------------
Reorganization Value                                $242,500,000
Less: Net Debt and
       Estimated Value of DRAM Claims                 63,400,000
                                                    ------------
New Preferred and Common
Equity Value                                        $179,100,000
                                                    ============

                      About Silicon Graphics

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)


STELLAR FUNDING: S&P Puts Class A-3 Notes on Positive Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on the class
A-3 notes issued by Stellar Funding Ltd., a high-yield arbitrage
CBO transaction managed by Guggenheim Investment Management LLC,
on CreditWatch with positive implications.

The CreditWatch placement reflects factors that have positively
affected the credit enhancement available to support the notes
since the ratings were previously lowered on Oct. 9, 2002.  These
factors include paydowns of approximately $34.396 million to the
class A-3 notes since the October 2002 downgrade.

Standard & Poor's will review the results of current cash flow
runs generated for Stellar Funding Ltd. to determine the level of
future defaults the rated tranches can withstand under various
stressed default timing and interest rate scenarios, while still
paying all of the interest and principal due on the notes.  The
results of these cash flow runs will be compared to the projected
default performance of the performing assets in the collateral
pool to determine whether the ratings currently assigned to the
notes remain consistent with the credit enhancement available.

               Rating Placed on Creditwatch Positive

                       Stellar Funding Ltd.

                                  Rating
                                  ------
                   Class    To                From
                   -----    --                ----
                   A-3      CCC-/Watch Pos    CCC-

                     Other Outstanding Rating

                       Stellar Funding Ltd.

                        Class       Rating
                        -----       ------
                        A-4         CC

Transaction Information
Issuer:              Stellar Funding Ltd.
Co-issuer:           Stellar Funding CBO Corp.
Current manager:     Guggenheim Investment Management LLC
Underwriter:         Credit Suisse First Boston Corp.
Trustee:             JPMorgan Chase Bank N.A.
Transaction type:    High-yield arbitrage CBO

Tranche                   Initial  Last      Current
Information               Report   Downgrade Action
Date (MM/YYYY)            05/1999  10/2002   07/2006
Cl A-3 note rtg.          AAA      CCC-      CCC-/Watch Pos
Cl A-3 note bal. (mil. $) 207      172       137
Cl A-4 note rtg.          A        CC        CC
Cl A-4 note bal. (mil. $) 48       48        48


STONY HILL: S&P Places BB-Rated Notes on Negative Watch
-------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on nine U.S.
synthetic CDO tranches on CreditWatch with negative implications.
At the same time, the rating on one tranche is affirmed and
removed from CreditWatch negative.  Stony Hill CDO SPC's Series
2005-1 SEG Notes currently carries S&P's BB rating.

The ratings placed on CreditWatch negative reflect negative rating
migration in their respective portfolios.

The tranches with ratings placed on CreditWatch negative had SROCs
(synthetic rated overcollateralization ratios) that fell below
100% during the month-end run.  The tranches with ratings that
were removed from Credit Watch Negative had ratings that were
above 100% during the month-end run.

                          Ratings List

                       Greystone CDO SPC
                         Series 2006-2

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     A             AA/Watch Neg      AA                99.88

                    Mistletoe ORSO Trust 3

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     5 Cr Link     A/Watch Neg       A                 99.14

                  Momentum CDO (Europe) Ltd.
                        Series 2005-9

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Notes         A-/Watch Neg      A-                99.70

                 Morgan Stanley ACES SPC
                      Series 2006-7

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     IA            AA+/Watch Neg     AA+               99.97

                 Morgan Stanley ACES SPC
                      Series 2005-16

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Ser2005       A-                A-/Watch Neg      100.01

           REPACS Trust Series 2006 Mount Ventoux

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Debt Units    AAA/Watch Neg     AAA               99.58

      STEERS Credit Linked Trust Minoa Tranche Series 2006-1

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Trust Cert    AA+/Watch Neg     AA+               99.72

                       Stony Hill CDO SPC
                       Series 2005-1 SEG

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Notes         BB/Watch Neg      BB                99.68

                       Toronto-Dominion Bank
          CAD 63,866,000 portfolio credit-linked notes

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     A             BBB-/Watch Neg    BBB-              99.51

                       Tribune Ltd.
                        Series 26

                         Rating
                         ------
     Class         To                From             SROC(%)
     -----         --                ----             -------
     Aspen-B2      AA/Watch Neg      AA                99.75


THERMADYNE HOLDINGS: Reports Unaudited and Restated Financials
--------------------------------------------------------------
Thermadyne Holdings Corp. reported its unaudited results for the:

   -- first quarter ended March 31, 2006,

   -- fourth quarter ended Dec. 31, 2005,

   -- restated unaudited results for previously reported 2005
      quarters,

   -- restated unaudited results for the twelve months ended
      Dec. 31, 2004,

   -- restated unaudited results for previously reported 2004
      quarters, and

   -- restated unaudited results for the seven months ended
      Dec. 31, 2003.

The Company does not expect any material changes from these
unaudited results when it files its audited results with the
Securities and Exchange Commission.  These filings are expected to
be made in the near future.

                            Highlights

   -- Net sales growth trend continued in comparison to prior-year
      periods:

      * 5.7% in fourth-quarter 2005,
      * 7.1% for the year 2005, and
      * accelerating to 11.3% in the first-quarter 2006;

   -- Operating EBITDA of $13.0 million for the first-quarter 2006
      was unchanged from the restated 2005 comparable-period and
      Operating EBITDA was $34.2 million in 2005 versus a restated
      $41.8 million in 2004;

   -- Significant cost savings and other operational improvements
      reduced the impact of sharply higher materials costs.  Price
      increases, purposely delayed by the Company until it
      resolved on-time delivery problems in 2005, are being
      implemented to help reestablish gross profit levels; and

   -- Four non-core divestitures generated proceeds of
      $28.8 million, primarily used to fund working capital needs
      for the Company's growing operations and increase liquidity.

                            Restatement

The Company restated previously reported results for the first
three quarters of 2005 and each quarter of 2004 and restated the
seven months ended Dec. 31, 2003.  The previously issued financial
statements have been corrected for adjustments in accounting for
income taxes, foreign currency translation and the accounting of
certain foreign business units.  The financial statement
presentations have also been reclassified to separate the assets
and the liabilities and the results of operations of the
discontinued operations.

                  Financial and Operating Review
                      for First-Quarter 2006

Net sales in the first quarter of 2006 rose to $122.9 million, an
increase of 11.3% from the same quarter of 2005.

"The double-digit sales increase was driven by new product
introductions, market share gains, price increases and solid
growth in all geographic regions, particularly the key U.S.
independent industrial channel and Latin America.  We are pleased
with the excellent demand for our higher margin gas equipment, arc
accessories and plasma lines, reversing some of the weakness we
experienced in these lines in 2005," Paul D. Melnuk, the Company's
chairman and chief executive officer, commented.

Year-to-year inflation was led by increases in copper and brass of
55% and 60%, respectively.  These are key raw material inputs used
in many of the Company's products.  Margins were also impacted by
the incremental production and handling costs in the TexMex
operations related to achieving on-time delivery performance
expectations of our customers.

The Company expects operational gains will offset further
commodity cost increases experienced in the second-quarter 2006,
and product price increases to be instituted by the Company in
August are targeted to regain lost gross profit.

The year-to-year quarterly increase in gross profit was offset by
a $1.0 million increase in selling, general and administrative
costs due primarily to higher professional fees associated with
Sarbanes-Oxley compliance and related control deficiency
remediation efforts.  Interest costs increased $1.1 million
primarily related to higher interest rates, and income tax
expenses increased by $1.8 million.  As a result, the Company
reported a $1.1 million loss from continuing operations for the
first-quarter 2006 and a $600,000 loss from discontinued
operations.  This compares with income of $1.5 million from
continuing operations and $600,000 income from discontinued
operations in the restated comparable prior-year period.

For the first quarter of 2006, the Company recognized a net loss
including discontinued operations of $1.7 million versus restated
net income of $2.0 million in the first-quarter 2005 period.
Operating EBITDA from continuing operations (a non-GAAP measure
described below) was $13.0 million in the first quarters of 2006
and 2005.

                         Outlook for 2006

"Although sharply higher material cost inflation has limited our
bottom-line progress, we have a good start in 2006 with an 11%
sales gain in the first quarter and continuing top line strength
in the second quarter," Mr. Melnuk commented.

"We expect 2006 to show strong net sales growth, productivity
gains, consistent on-time delivery at or near our 95% target and
strengthening Operating EBITDA.  Materials cost inflation, led by
unprecedented increases in commodity prices experienced through
much of the first half together with the additional professional
fees incurred in connection with Sarbanes-Oxley compliance,
related control deficiency remediation efforts and delayed
financial filings have presented additional challenges for the
year.

"However, we have been able to execute initiatives that largely
offset these higher costs such that we believe we will report an
increase in Operating EBITDA this year.  Further, we have
announced a price increase effective Aug. 1, 2006, that should
compensate for the higher costs," he added.

"Beyond this, we continue to aggressively work a host of
initiatives to increase sales and expand market share, improve
customer service and reduce costs. Considerable progress has
already been made and will continue in advancing our product and
brand strategies, improving on-time delivery performance,
expanding our low-cost country sourcing initiatives and increasing
productivity," he said.

"Needing to keep inventories at high levels to help address our
on-time delivery problems of 2005, we purposely waited to target
working capital improvements. We now have a dedicated team under
the direction of a senior executive that is focused on a
comprehensive effort to improve inventory turns on a sustainable
basis. We expect this effort will begin to show meaningful results
in the second half of 2006," he concluded.

             Financial and Operating Overview of 2005

Net sales in the fourth quarter of 2005 rose to $114.0 million, an
increase of 5.7% from the same quarter of 2004 continuing the
pattern of year-over-year quarterly sales growth in 2005.

Gross profit was $29.5 million, or 25.8% of sales, in the fourth
quarter of 2005 as compared with $28.9 million, or 26.8% of sales,
in the prior-year restated fourth-quarter period.  The 2005
fourth-quarter gross margin was reduced by material cost inflation
of $8.5 million, which the Company had decided to absorb until it
improved its production and delivery performance.

For the fourth quarter of 2005, the Company incurred a total net
loss of $23.5 million including the loss from discontinued
operations of $13.4 million as compared to the restated total net
loss in 2004 of $10 million including a loss from discontinued
operations of $200,000.  Operating EBITDA was $1.6 million in the
fourth quarter of 2005 and $5.3 million in the fourth quarter of
2004 as restated.

Net sales for 2005 increased 7.1% over the restated prior year
despite the adverse impact delivery issues had on customer service
levels reflecting strong underlying end user demand, accelerating
new product introductions and price increases at the start of the
year.

"Without the results of our improvement initiatives, gross margins
would have been materially lower given the inflation levels," Mr.
Melnuk said.

"However, margins could have been even better had we not
experienced increased costs from expediting production to catch up
on late deliveries nor purposely postponed price increases that
would have offset some of the inflation until the end of the year
when the disruption from delivery problems was solved," Mr. Melnuk
continued.

"While the financial results lagged our goals in 2005, we made
substantial strides toward improving our long-term competitive
position and profitability.  During the year, we began
implementing a strategy to better position our products in the
market, based on three distinct product market segments.  This
strategy should give us broader market coverage and enhance
customer service.

"We also made significant investments in new product development
that better position us for continued new product sales growth in
2006 and beyond.  We have launched initiatives that have reduced
costs to date and that we believe will significantly reduce costs
over time, improving profitability and working capital efficiency
in future periods.  This includes the commencement of
manufacturing in China through a joint venture and establishing a
global sourcing and engineering base in Asia."

                        Non-Core Businesses

The Company divested two non-core businesses in December 2005 and
another in March 2006 generating proceeds of $21.3 million.  The
Company utilized $4 million of these proceeds to acquire the
minority interest in its South African non-core businesses and the
remainder has been used to repay outstanding balances of the
working capital facility.  The 2005 consolidated financial results
present these three divested operations (Genset, Soltec and Plant
Hire) as discontinued operations.

In April 2006, the Company sold TecMo, a small Italian subsidiary,
for approximately $7.5 million.  The proceeds were also used to
repay outstanding balances of the working capital facility in the
second quarter of 2006.  TecMo was treated as a discontinued
operation in the first-quarter 2006 and the prior year financial
statements are also reclassified accordingly.

"We have made excellent progress on our non-core business
evaluation process, completing four sales to date generating
proceeds of almost $29 million, which were used primarily to fund
working capital needs for the Company's growing operations and
increase liquidity. We are actively evaluating the remaining South
African businesses and expect any additional divestitures to be
completed in the third quarter enabling us to reduce debt and
sharpen the focus on our core business lines," Mr. Melnuk stated.

                      Cash Flow and Liquidity

As of Dec. 31, 2005, the Company had reduced its net indebtedness
by $11.4 million from the restated amounts as of Sept. 30, 2005.
This was primarily the result of the sale of the Genset business
unit, which provided an aggregate $12.3 million of cash and
assumption of liabilities by the buyer.  At Dec. 31, 2005, the
Company had combined cash and availability under its Working
Capital Facility of $28.5 million.

As of March 31, 2006, net indebtedness had increased $10.5 million
to $258 million as compared to the Dec. 31, 2005, level.  This
increase along with the $9.0 million of proceeds from the disposal
of Soltec and Plant Hire funded working capital needs arising from
increased levels of accounts receivables, seasonal payment
obligations of interest and certain vendor payables and to
purchase minority interest in the Company's South African business
unit for $4.0 million.  As of March 31, 2006, the Company had
combined cash and availability under its Working Capital Facility
of $28.0 million.

As of June 30, 2006, the Company had combined cash and
availability under its revolver of $38.0 million with the increase
from prior periods attributable in part to the April 2006 sale of
TecMo for approximately $7.5 million.

                Strengthened Operations Management

Recently, two outstanding and experienced individuals have joined
Thermadyne's manufacturing group to further accelerate progress in
enhancing operational performance.

Matthew J. Blake joined in April as the general manager of the
Denton and Roanoke, Texas plants.  Mr. Blake's background includes
successful manufacturing turnarounds at Newell Rubbermaid and
management experience with General Electric Company.  He holds a
B.S. in Mechanical Engineering, an M.S. in Engineering Global
Operations Management and an M.B.A.  Prior to his corporate
management experience, Mr. Blake served six years as a U.S. Navy
officer.

In June, L.E. (Larry) Rybicki joined as Senior Vice President,
Manufacturing Americas with overall responsibility for
manufacturing operations in Brazil, Kentucky, Mexico and Texas.
Just prior to joining Thermadyne, Mr. Rybicki worked for
Thermadyne on a contract basis and was integral to the turnaround
in the TexMex delivery performance.  Previous employment includes
20 years with General Electric Company and 11 years with Emerson
Electric.  He comes to the Company as a seasoned manufacturing
executive having held several diverse management positions as well
as responsibility for the construction and start-up of
manufacturing plants in the U.S., Mexico, Puerto Rico and Brazil.
He holds a B.S. in Civil Engineering and a M.S. in Industrial
Engineering.

             Consent of Extension to Complete Filings

The Company does not expect any material changes from these
unaudited results when it files its audited results with the SEC.
However, because some uncertainties remain in completing the audit
and the SEC reports for 2005 and the quarter ending March 31,
2006, the Company will commence discussions with the lenders and
bondholders to obtain consent for a further extension of time to
complete the filings.

The Company also seeks consents for extension of time to submit
audited financial statements to the Securities and Exchange
Commission beyond July 19, 2006.

Based in St. Louis, Missouri, Thermadyne Holdings Corporation
(Pink Sheets: THMD) -- http://www.Thermadyne.com/-- is a global
marketer of cutting and welding products and accessories under a
variety of brand names including Victor(R), Tweco(R), Arcair(R),
Thermal Dynamics(R), Thermal Arc(R), Stoody(R), and Cigweld(R).

                         *     *     *

As reported in the Troubled Company Reporter on March 21, 2006,
Moody's Investors Service placed Thermadyne Holdings Corporation's
Caa1 rating on $175 million 9.25% senior subordinated notes, due
2014, rated; and B2 Corporate Family Rating on review for possible
downgrade.

As reported in the Troubled Company Reporter on April 27, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Thermadyne Holdings Corp. to 'B-' from 'B+', and
subordinated debt rating to 'CCC' from 'B-'.  S&P assigned a
negative outlook at that time.


TRANSAX INTERNATIONAL: Amends 2006 and 2005 Financial Statements
----------------------------------------------------------------
Transax International Limited filed with the Securities and
Exchange Commission on July 10, 2006, its amended financial
statements for:

   -- the second quarter ended June 30, 2005;
   -- the third quarter ended Sept. 30, 2005;
   -- the year ended Dec. 31, 2005; and
   -- the first quarter ended March 31, 2006.

The Company's Statement of Operations showed:

                               For the period ended
                  ----------------------------------------------
                    Quarter      Quarter     Year       Quarter
                    06/30/05    09/30/05   12/31/05     03/31/06
                  ----------  ----------  ---------  -----------
Revenue             $861,023    $948,993 $3,380,150     $981,058

Net (Loss)        ($167,042)  ($317,780) ($764,484)   ($691,704)

The Company's Balance Sheet showed:

                               For the period ended
                  ----------------------------------------------
                    Quarter     Quarter      Year       Quarter
                    06/30/05    09/30/05   12/31/05     03/31/06
                  ----------  ----------  ----------  ----------
Current Assets      $534,525    $535,898    $494,224    $691,719

Total Assets      $1,771,040  $1,753,792  $1,693,656  $1,855,377

Current
Liabilities       $2,333,245  $2,547,470  $2,563,200  $3,350,909

Total
Liabilities       $3,289,652  $3,355,092  $3,321,296  $4,249,692

Total
Stockholders'
Equity            $1,518,612  $1,601,300  $1,627,640  $2,394,315

                        Going Concern Doubt

Moore Stephens, P.C., in New York, raised substantial doubt about
Transax International Limited's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditor pointed
to the Company's losses, and working capital and stockholders'
deficiencies.

Based in Miami, Florida, Transax International Limited (OTCBB:
TNSX) -- http://www.transax.com/-- provides hospitals, physicians
and health insurance companies using health information management
systems to manage coding, compliance, abstracting and recording of
management processes.  The Company's subsidiaries, TDS
Telecommunication Data Systems LTDA provides services in Brazil;
Transax Australia Pty Ltd. provides those services in Australia;
and Medlink Technologies, Inc., initiates research and
development.


UNITED ENERGY: Court Approves Hoyer Hoyer as Bankruptcy Counsel
---------------------------------------------------------------
United Energy Coal, Inc., obtained authority from the U.S.
Bankruptcy Court for the Northern District of West Virginia to
employ Hoyer, Hoyer & Smith, PPLC, as its bankruptcy counsel.

Hoyer Hoyer is expected to:

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

    b. prepare on behalf of the Debtor, as debtor-in-possession,
       all necessary motions, applications, answers, orders,
       reports and other legal papers; and

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

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

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

       Paralegals                            $75

The Debtor discloses that it has paid the firm a $75,000 retainer.

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

The firm's attorneys can be reached at:

       Hoyer, Hoyer & Smith, PPLC
       22 Capitol Street
       Charleston, West Virginia 25301
       Tel: 304-344-9821
       Fax: 304-344-9519
       http://www.hhsmlaw.com/

Headquartered in Oakland, Maryland, United Energy Coal, Inc.,
filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. W.Va.
Case No. 06-00453).  David A. Hoyer, Esq., at Hoyer, Hoyer &
Smith, PLLC, represents the Debtor.  When the Debtor filed for
protection from its creditors, it listed total assets of
$103,575,293 and total debts of total debts of $94,016,306.


UNITED ENERGY: Files Schedules of Assets and Liabilities
--------------------------------------------------------
United Energy Coal, Inc., delivered to the U.S. Bankruptcy Court
for the Northern District of West Virginia its schedules of assets
and liabilities, disclosing:

     Name of Schedule                Assets         Liabilities
     ----------------                ------         -----------
  A. Real Property                 $618,970
  B. Personal Property         $103,057,286
  C. Property Claimed
     as Exempt
  D. Creditors Holding
     Secured Claims                                  $1,550,915
  E. Creditors Holding
     Unsecured Priority Claims                          $79,592
  F. Creditors Holding                              $93,524,617
     Unsecured Nonpriority
     Claims
                                -----------         -----------
     Total                     $103,676,256         $95,155,124

Headquartered in Oakland, Maryland, United Energy Coal, Inc.,
filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. W.Va.
Case No. 06-00453).  David A. Hoyer, Esq., at Hoyer, Hoyer &
Smith, PLLC, represents the Debtor.  When the Debtor filed for
protection from its creditors, it listed total assets of
$103,575,293 and total debts of total debts of $94,016,306.


U.S. CONCRETE: Completes Private Placement of 8-3/8% Senior Notes
-----------------------------------------------------------------
U.S. Concrete Inc. completed the private placement of $85 million
aggregate principal amount of its 8-3/8% Senior Subordinated Notes
due 2014 on July 5, 2006.

Citigroup Global Markets Inc., Banc of America Securities LLC,
Capital One Southcoast, Inc. and Comerica Securities, Inc, are the
initial purchasers.  The notes were priced at 98.26% of their
principal amount and were issued under the First Supplemental
Indenture dated as of July 5, 2006 with Wells Fargo Bank, National
Association, as trustee.

On June 29, 2006, U.S. Concrete entered into an amendment to its
Credit Agreement with Citicorp North America Inc., as
administrative agent, Bank of America, N.A., as syndication agent,
JPMorgan Chase Bank, as documentation agent, and the lenders and
issuers.  The credit agreement amendment was to enable U.S.
Concrete to make the $33 million loan to Atlas Investments
relative to its acquisition of Alberta Investments and Alliance
Haulers.

On June 30, 2006, U.S. Concrete entered into an Amended and
Restated Credit Agreement with Citicorp North America Inc., as
administrative agent, Bank of America, N.A., as syndication agent,
JPMorgan Chase Bank, as documentation agent, and the lenders and
issuers.  The Amendments will:

     (a) decrease the interest rate margins applicable to loans
         and commissions payable on letters of credit issued under
         the agreement by 25 basis points;

     (b) increase the maximum permitted leverage ratio applicable
         to the incurrence of additional subordinated
         indebtedness;

     (c) extend the scheduled termination date of the revolving
         credit commitments to March 2011 from March 2009;

     (d) release the real estate mortgages that secure the
         obligations under the agreement;

     (e) include a consent to the Alberta acquisition and the
         financing of that acquisition; and

     (f) decrease the commitment fee applicable to the unused
         portion of the facility by 12.5 basis points, to an
         annual rate of 0.25% of the average daily unused
         commitments.

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: Completes $165 Million Alberta & Alliance Purchase
-----------------------------------------------------------------
U.S. Concrete, Inc. completed its acquisition of all the
outstanding equity interests in Alberta Investments, Inc. and
Alliance Haulers on July 5, 2006.  The purchase price for the
acquisition was $165 million.

The Stock Purchase Agreement by and among U.S. Concrete, Alberta
Investments, Inc., Alliance Haulers, Inc., Atlas Concrete Inc. and
Wild Rose Holdings, Ltd. was dated as of June 27, 2006,

Under a related Promissory Note, dated July 3, 2006, U.S. Concrete
made a loan of $33 million to Atlas Investments, Inc., a wholly
owned subsidiary of Alberta Investments, to enable Alberta
Investments to make a $33 million distribution to its parent
entity.

U.S. Concrete also entered into a Pledge and Security Agreement
with Atlas Concrete, Wild Rose and Alberta Investments, which
agreed to pledge all of their capital stock in entities involved
in the acquisition transaction as security for the loan.  At the
closing of the acquisition, an amount equal to the loan was offset
against the purchase price U.S. Concrete paid, and the pledgors'
obligations under the Pledge and Security Agreement were
terminated.

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.


USG CORP: Extends Deadline to Exercise Stock Rights to July 27
--------------------------------------------------------------
In a further amendment to its registration statement covering
certain rights and shares of common stock, USG Corporation
discloses in a regulatory filing with the Securities and Exchange
Commission that the exercise of rights expires at 5:00 p.m., on
July 27, 2006, unless the exercise period is extended by the
Company.

USG Chairman and Chief Executive Officer William C. Foote states
that shareholders who do not exercise or sell their rights before
the expiration of the Rights Offering will lose any value
represented by their rights.

As previously reported, USG has scheduled June 30, 2006, as the
record date for the Rights Offering.  The Company intended to
distribute at no charge to stockholders one transferable right
for each share of common stock held on the record date.

A full-text copy of USG's Fourth Amended Registration Statement
is available at no charge at http://ResearchArchives.com/t/s?da4

A full-text copy of a Final Prospectus dated June 30, 2006,
supplementing the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?da5

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  The
Debtors emerged from bankruptcy protection on June 20, 2006. (USG
Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


USG CORP: Court Won't Stay McDowell's Action Against Contractor
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware denied the
request of USG Corporation and its debtor-affiliates for
preliminary injunction to stay an action filed by McDowell Welding
and Pipefitting, Inc., against United States Gypsum's general
contractor, BE&K Construction Co., Inc., in Oregon State Circuit
Court.

The Debtors filed an initial complaint against McDowell in August
2002 seeking to extend the automatic stay to enjoin prosecution
of the Oregon Action against BE&K for duration of the stay in
effect on U.S. Gypsum's behalf.

The Debtors asserted that an injunction is necessary to ensure
that the purposes of automatic stay imposed by Section 362 of the
Bankruptcy Code will not be frustrated by either:

   (i) subjecting U.S. Gypsum to the risk of collateral estoppel
       and to a potential diminution of its assets because of
       contractual reimbursement obligations and potential
       obligation to indemnify and defend BE&K based on agency
       allegations; or

  (ii) permitting a lawsuit, which involves claims that
       effectively force U.S. Gypsum to participate as the real
       party-in-interest, to proceed notwithstanding the
       automatic stay in effect as to U.S. Gypsum.

McDowell opposed the Debtors' preliminary injunction request,
arguing that there is no legitimate basis, procedural or
substantive, to extend the automatic stay to shield BE&K from its
independent liability to McDowell.

The Bankruptcy Court denied the Debtors' preliminary injunction
request.

Subsequently, the Debtors dismissed the action voluntarily and
without prejudice pursuant to Rule 7041(a)(1) of the Federal
Rules of Bankruptcy Procedure.

Two months later, the Debtors went back to the Bankruptcy Court
to again seek preliminary injunction against McDowell.

The Bankruptcy Court, however, did not find any merit in the
Debtors' "renewed" preliminary injunction request.  The Court
held that the Debtors failed to cite adequate grounds to support
the Renewed Motion.

The Court deferred further consideration of the dispute.  The
Debtors and McDowell have stipulated to take no further action
against each other or BE&K in the pending Oregon Action, other
than in connection with:

   (a) outstanding written discovery propounded by McDowell to
       BE&K and any related responses or requests;

   (b) any reciprocal written discovery to be propounded by
       BE&K to McDowell; or

   (c) any pleading which may be filed by BE&K in response to
       the Second Complaint filed in the Oregon Action.

The stipulation does not waive -- and expressly reserves -- all
of the rights, claims and defenses of the Debtors, McDowell and
BE&K in connection with the Preliminary Injunction Motion and the
Oregon Action.

As previously reported, the Debtors emerged from bankruptcy on
June 20, 2006, following the confirmation and effectiveness of
their First Amended Plan of Reorganization.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  The
Debtors emerged from bankruptcy protection on June 20, 2006. (USG
Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


U.S. TELEPACIFIC: Moody's Rates Proposed $205 Mil. Loan at B2
-------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating
and a B2 rating for the proposed $30 million senior secured
revolving credit facility and for the proposed $175 million first
lien term loan facility at US TelePacific Corp.

In addition, the company is seeking to raise $100 million in a 2nd
lien term loan, which Moody's has not rated.  The ratings outlook
is stable.  The bank facilities, along with $10 million in
additional equity, will be used to fund the acquisition of Mpower
Holding Corp. to create the largest competitive local exchange
carrier in California and Nevada.

Moody's assigned these ratings:

Issuer: US TelePacific Corp.

   * Corporate Family Rating -- Assigned B3
   * Senior Secured Revolving Credit Facility -- Assigned B2
   * 1st Lien Term Loan -- Assigned B2

Outlook is Stable

The B3 corporate family rating reflects TelePacific's financial
risk, lack of free cash flow generation, challenging competitive
position as a CLEC, the complexity of integrating the Mpower
acquisition, and the potential for further acquisitions, which may
postpone debt reduction.  The ratings benefit from the company's
emerging operating scale in California and Nevada and the expected
EBITDA growth driven by merger synergies.

The company's leverage is expected to be about 6 times 2006 EBITDA
at closing, and is high relative to the CLECs that Moody's rates.
In addition, the company does not expect to commence generating
free cash flow until 2007.  However, consistent with
telecommunications industry trends, TelePacific has reached the
inflection point in its operations where the existing customer
base is covering the high fixed costs, and the incremental revenue
is accretive to EBITDA at levels slightly below the company's 60%
gross margin.

The combination of TelePacific and Mpower is continuing the
consolidation trend in the telecommunications industry that is
gradually easing the overcapacity that was built up over the last
decade.  The combined entity is expected to benefit from a
geographic concentration in a heavily populated region that has a
higher growth rate of businesses than the national average.

Moody's expects TelePacific to drive cost synergies by headcount
reduction, optimizing the combined transport and colocation
facilities, and to drive revenue and cash flow growth by expanding
customer penetration in its existing markets without significant
additional capital.

The stable rating outlook considers that the company's growth
plans and the reasonable likelihood of achieving merger synergies
will drive free cash flow generation and deleveraging over the
rating horizon.

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

TelePacific, headquartered in Los Angeles, California, is a CLEC
serving over 800,000 access line equivalents, pro forma the
acquisition of Mpower, of Pittsford, New York.


VENETO LLC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Veneto LLC
        fka L'Veneto LLC
        70600 Country Club Drive
        Rancho Mirage, California 92270

Bankruptcy Case No.: 06-11744

Chapter 11 Petition Date: July 12, 2006

Court: Central District Of California (Riverside)

Judge: Meredith A. Jury

Debtor's Counsel: Jack F. Fitzmaurice, Esq.
                  Fitzmaurice, Demergian & Palaganas
                  550 West "C" Street, Suite 1880
                  San Diego, California 92101
                  Tel: (619) 239-3015

Total Assets: $23,499,000

Total Debts:  $11,443,889

Debtor's 20 Largest Unsecured Creditors:

   Entity
   ------
   Breeze Air Conditioning, Inc.
   75145 St. Charles Place
   Palm Desert, CA 92260

   Classplan Premium Financing, Inc.
   P.O. Box 5146
   Chino, CA 91708

   Custom System Technologies
   79469 Country Club Drive, Suite A
   Bermuda Dunes, CA 82201-1206

   Desert Protection
   1508 South Palm Canyon Drive
   Palm Springs, CA 92264

   Essco Wholesale Electric
   72232 Corporate Way
   Thousand Palms, CA 92276

   First Insurance Funding Corporation
   8075 Innovation Way
   Chicago, IL 60682-0080

   Gabriel G. Calimlim
   82076 Sundown Court
   Indio, CA 92201

   Goeffrey L. Mehl
   74372 Fairway Drive
   Palm Desert, CA 92260

   JB Finish, Inc.
   82750 Atlantic Avenue
   Indio, CA 92203

   Jimmy Snedaker
   67575 North Natoma Drive
   Cathedral City, CA 92234

   Karlen Equipment
   19881 Brookhurst Boulevard, Suite C-265
   Huntington Beach, CA 92646

   Mobile Modular
   P.O. Box 45043
   San Francisco, CA 94145-0043

   Narkweather Architects
   Charles Martin
   73733 Highway 111
   Palm Desert, CA 92260

   Paul Allen Smith
   74372 Fairway Drive
   Palm Desert, CA 92660

   Reyes Construction
   P.O. Box 1011
   Rancho Mirage, CA 92270

   Scott Smith
   74372 Fairway Drive
   Palm Desert, CA 92260

   Shasta Fire Protection, Inc.
   3584 La Compana Way
   Palm Springs, CA 92262

   Southwest Plumbing
   P.O. Box 2006
   Thousand Palms, CA 92276-2006

   The Gas Company
   P.O. Box 2007
   Monterey Park, CA 91756-0001

   York Painting
   79-691 Half Moon Bay
   Indio, CA 92201


VERSO PAPER: S&P Rates $300 Million Senior Subor. Notes at B-
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Verso Paper Holdings LLC, a Memphis, Tennessee-
based paper producer.  The outlook is stable.

At the same time, based on preliminary terms and conditions,
Standard & Poor's assigned its 'BB' senior secured bank loan
rating and '1' recovery rating to Verso's $485 million senior
secured first-lien credit facilities.  These ratings reflect an
expectation of full recovery of principal in the event of a
payment default.

S&P also assigned a 'B+' senior secured debt rating and a recovery
rating of '2' on Verso's $600 million senior secured second-lien
notes due 2014 and a 'B-' on Verso's $300 million senior
subordinated notes due 2016, both to be issued under Rule 144a
with registration rights.  The recovery rating indicates the
likelihood of substantial (80%-100%) recovery of principal in the
event of a payment default.

Proceeds from the term loan and the notes and $290 million of
equity will be used to finance the $1.4 billion acquisition by
private equity firm Apollo Management LP of the coated and
supercalendered paper businesses of International Paper Co.
(BBB/Negative/A-3).  Upon conclusion of this transaction, debt,
including capitalized operating leases, at Verso will be
$1.2 billion, with pro forma debt to projected 2006 adjusted
EBITDA of more than 5.4x.

"Reasonable near-term prospects for coated-paper markets should
allow Verso to generate free cash flow. However, the company's
capital structure will continue to be very aggressive because of
its heavy debt burden, and limited organic growth opportunities
exist in North America's highly cyclical and competitive coated-
paper industry," said Standard & Poor's credit analyst John
Kennedy.

"We could revise the outlook to negative if there is no
significant progress on debt reduction, if there is a loss in
market share, or if raw material price increases result in a
meaningful deterioration in Verso's credit measures or liquidity,"
Mr. Kennedy said.  "We could revise the outlook to positive if
Verso's capital structure becomes significantly less aggressive."


WCI COMMUNITIES: Order Declines Prompt S&P's Negative Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on WCI Communities Inc. and revised its outlook to
negative from stable.  Ratings are also affirmed on $650 million
of subordinated notes.

"The outlook revision follows several months of sharp order
declines ensuing from a sharp increase in competing inventory in
coastal Florida housing markets and more circumspect retirement
and affluent homebuyers," said credit analyst James Fielding.
"These conditions show no sign of abating in the near term and
will negatively affect profitability and coverage measures over
the next several quarters.  WCI has also accelerated a share
repurchase program that has the potential to modestly increase its
above average debt levels."  Mr. Fielding added that at this time,
however, the rating remains supported by $1.2 billion of contracts
receivable and historically low cancellation rates, as well as by
an improved liquidity position that will benefit from positive
free operating cash flow and a larger unsecured credit facility.

The negative outlook reflects the substantially more competitive
environment in which WCI is operating, which is expected to reduce
net income over the next several quarters.  The rating would be
lowered if the dislocation in Florida's luxury housing segment
were materially deeper than anticipated or if leverage levels rise
as a consequence of aggressive share repurchases.  Conversely, if
debt levels are reduced and construction activity is scaled
appropriately relative to market conditions, the outlook would
return to stable.


WINN-DIXIE: Rejects Sanderson Farms Supply Pact Effective June 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Winn-Dixie Stores, Inc., and its debtor-affiliates to
reject the Prepetition Supply Agreement between Winn-Dixie
Procurement, Inc., and Sanderson Farms Inc., effective as of
June 30, 2006.

The Bankruptcy Court also approved:

    (i) Sanderson Farms' set-off of its prepetition general
        unsecured claim against the Debtors' accrued prepetition
        credits, both of which arise from the Prepetition Supply
        Agreement; and

   (ii) the resolution of Sanderson Farms' claims, including the
        waiver of all claims for rejection damages and all other
        claims, except for an agreed reclamation claim and any
        unpaid postpetition invoices.

As reported in the Troubled Company Reporter on June 26, 2006,
pursuant to a supply agreement dated July 1, 2003, between
Winn-Dixie Procurement, Inc., and Sanderson Farms Inc., the
Debtors have for several years purchased chicken and chicken-
related products from Sanderson Farms.

James H. Post, Esq., at Smith Hulsey & Busey, in Jacksonville,
Florida, related that, although the Debtors want to continue their
relationship with Sanderson Farms, 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 purchase 550,000,000 pounds of chicken, with the term
of the agreement continuing until that requirement is satisfied.
Thus, the reduced store count has operated to extend the term of
the Prepetition Supply Agreement," Mr. Post noted.

Moreover, Mr. Post continues, the Prepetition Supply Agreement
contains a liquidated damages clause in the event it terminates
before the required purchases are made.

The Debtors have decided to reject the Prepetition Supply
Agreement and to provide for a continuing relationship with
Sanderson Farms on more favorable terms under a new ordinary
course supply agreement.  Sanderson Farms has agreed to this
approach, Mr. Post relates, with the understanding that:

    (a) its reclamation claim, as previously agreed between the
        parties, will be for $529,509;

    (b) a portion of its prepetition general unsecured claim will
        be set off against prepetition credits accrued by the
        Debtors, and the balance of its general unsecured claim
        will be waived; and

    (c) any claims for rejection damages and all other claims
        -- except for the agreed reclamation claim and any unpaid
        postpetition invoices -- it has or may have had against
        the Debtors will be waived.

Mr. Post added that Sanderson Farms has agreed that the new supply
agreement, which will take effect upon the rejection of the
Prepetition Supply Agreement, may be terminated by the Debtors
without liability in the event their Chapter 11 plan of
reorganization is not confirmed or does not become effective.

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: M. Jordan Wants Court to Allow His $8 Million Claim
-----------------------------------------------------------------
On July 10, 1995, Michael Jordan and WorldCom, Inc., and its
debtor-affiliates entered into an endorsement agreement, which
provided the Debtors a 10-year license to use Mr. Jordan's name,
likeness and endorsement to advertise their telecommunications
products and services.

The Debtors rejected the Endorsement Agreement in July 2003,
Jason M. Torf, Esq., at Schiff Hardin LLP, in Chicago, Illinois,
relates.

On August 14, 2003, Mr. Jordan filed Claim No. 36077 for
$8,000,000.  The Claim seeks payment of:

   (1) the $2,000,000 annual compensation payment that was due on
       June 30, 2002; and

   (2) the three $2,000,000 annual payments that were due on
       June 30 of 2003, 2004 and 2005, which, according to Mr.
       Torf, became liquidated after the Debtors' rejection of
       the Agreement.

Subsequently, the Debtors objected to Mr. Jordan's Claim,
asserting that:

   (1) the Agreement is an "employment contract" within the
       meaning of Section 502(b)(7) of the Bankruptcy Code.  As a
       result, the amount of Mr. Jordan's Claim is capped by the
       Bankruptcy Code; and

   (2) Mr. Jordan had an obligation to mitigate his damages and
       he failed to do so.

Mr. Torf asserts that the Agreement is not an "employment
contract" within the meaning of Section 502(b)(7) because Mr.
Jordan:

   -- ran his own business that was under his control;

   -- never had an office at the Debtors' location;

   -- was not eligible for benefit programs that were offered to
      the Debtors' principals;

   -- never had any amounts deducted from his consulting fees
      for taxes, insurance premiums or pension contributions;
      and

   -- was responsible for paying taxes on all amounts he received
      from the Debtors.

The Endorsement Agreement specifically provides that "[Mr.]
Jordan shall be treated as an independent contractor under the
terms of this Agreement, and, accordingly, there shall be no
withholding for tax purposes from any payment made by WorldCom to
Jordan under the terms of this Agreement," Mr. Torf emphasizes.

Mr. Torf argues that the Debtors' mitigation objection should be
overruled and dismissed for three independent reasons:

   (1) The Debtors' breach of the Agreement did not make Mr.
       Jordan available to pursue other endorsement
       opportunities;

   (2) There is no evidence that Mr. Jordan could have entered
       into a substantially similar endorsement agreement after
       the Debtors' breach; and

   (3) Mr. Jordan acted reasonably when he decided not to pursue
       other endorsements after the Debtors' breach.

Accordingly, Mr. Jordan asks the U.S. Bankruptcy Court for the
District of New York to enter a summary judgment in his favor and
allow Claim No. 36077 in full.  Mr. Jordan also asks the Court to
overrule and dismiss the Debtors' objection to his Claim.

                         About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged
from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy
News, Issue No. 121; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


WORLDCOM INC: Teleserve Wants $7 Mil. Claim Allowed as Class 6A
---------------------------------------------------------------
On May 1, 2006, the U.S. Bankruptcy Court for the District of New
York allowed Teleserve Systems, Inc.'s Claim No. 9449 for
$7,366,101:

   (1) subject to WorldCom, Inc., and its debtor-affiliates'
       right to object to Teleserve's designation of the Allowed
       Claim as a Class 6A MCI Pre-merger Claim; and

   (2) payable after a determination by the Court or by
       stipulation between the parties of the proper
       classification of the Claim under the Debtor's confirmed
       Plan of Reorganization.

Lee E. Woodard, Esq., at Harris Beach, PLLC, in Syracuse, New
York, informs the Court that Teleserve timely submitted a written
application for a Class 6A classification, replete with
documentary evidence.  "Teleserve clearly stated in its 6A
Application that it relied on the separate credit of the
Debtors."

However, as of July 5, 2006, the Debtors have yet to act on its
6A Application, Mr. Woodward tells Judge Gonzalez.

Accordingly, Teleserve asks the Court to:

   (a) allow its Claim a Class 6A classification;

   (b) direct the Debtors to pay Teleserve's costs, expenses and
       attorneys' fees; and

   (c) direct the Debtors to pay the interest on its Claim.

Mr. Woodard asserts that the Debtors are well aware that
Teleserve meets the 6A Classification requirements.  Teleserve's
breach of contract claims against the Debtors have been litigated
since August 1995.

Mr. Woodard contends that Teleserve has absolute right to receive
Class 6A status based on five simple, incontrovertible facts:

   (1) In July 1993, Teleserve became a marketing agent for the
       Debtors;

   (2) In August 1995, Teleserve declared the Debtors in breach
       of their marketing agreements;

   (3) In September 1995, Teleserve attempted to arbitrate its
       breach of contract claims against the Debtors;

   (4) In October 1995, Teleserve commenced a lawsuit against the
       Debtors to obtain a judicially selected arbitration forum
       that could hear and determine its breach of contract
       claims against the Debtors; and

   (5) In February 1996, the Debtors terminated Teleserve's
       marketing agreements and put Teleserve out of business.

                         About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged
from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy
News, Issue No. 121; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


W.R. GRACE: Renews Fight with Asbestos Panels over Exclusivity
--------------------------------------------------------------
At the June 19, 2006 omnibus hearing, W.R. Grace & Co., and its
debtor-affiliates informed the U.S. Bankruptcy Court for the
District of Delaware that there no longer appeared "to be any
foothold for moving forward with any further [mediation]
discussions."

Despite that impasse, the Official Committee of Asbestos Personal
Injury Claimants, the Official Committee of Asbestos Property
Damage Claimants, and David T. Austern, the legal representative
for future asbestos claimants in the Debtors' Chapter 11 cases,
advised the Bankruptcy Court that the mediation was a partial
success as it resulted in:

   -- an agreement between the Asbestos Constituents for
      allocation of distributions between personal injury and
      property damage claimants; and

   -- an agreement within the PD Committee concerning allocation
      of distributions under a plan between traditional property
      damage claimants and Zonolite Attic Insulation claimants.

On the PI Committee's behalf, Marla Eskin, Esq., at Campbell &
Levine, LLC, in Wilmington, Delaware, tells Judge Fitzgerald that
the Debtors have failed to establish that "cause" exists to
extend the exclusive periods to file and solicit acceptances of a
plan of reorganization pursuant to Section 1121(d) of the
Bankruptcy Code, considering that:

   (i) there has been no good faith progress toward filing a
       confirmable plan, and the Debtors' plan is patently
       unconfirmable; and

  (ii) termination of the Exclusive Periods will not cause
       material harm to the Debtors or their businesses.

According to Ms. Eskin, there does not appear to be any
significant dispute that the net distributable value of the
Debtors' estate will be approximately $2,900,000,000.

"Thus, if the [Bankruptcy] Court determines that asbestos
liabilities alone exceed $2.9 billion, the debtors are hopelessly
insolvent and, under the absolute priority rule, equity would be
eliminated and unsecured creditors would share ratably without
any entitlement to postpetition interest," Ms. Eskin says.

While they are prepared to proceed with the estimation process
until 2007, the Asbestos Constituents believe there is a better
and more efficient way to bring the Debtors' cases to a
conclusion, or at least increase the likelihood of an earlier
conclusion.

Ms. Eskin notes that this would require that the case management
orders governing the estimation of the Debtors' personal injury
and property damage liabilities be amended so that the Bankruptcy
Court would first address the estimation of cancer claimants
only.

The Asbestos Constituents ascertain that a Cancers-Only
Estimation could be concluded by December 2006 or January 2007,
as opposed to an estimation of all asbestos claims, which is not
likely to be completed until, at the earliest, of mid-2007.

"A Cancers-Only Estimation would be a significantly shorter
process because there are fewer claims, medical diagnoses are
based [on] pathology, and there would be no diversion as a result
of 'suspect' B-readers and other questions raised by the debtors
relating to non-malignant claims," Ms. Eskin tells Judge
Fitzgerald.

Furthermore, Ms. Eskin asserts that the lengthy list of experts
designated by the Debtors would be significantly reduced, which
would shorten not only the discovery process, but also the
Cancers-Only Estimation hearing itself by reducing the number of
testifying experts.

Ms. Eskin explains that the most significant benefit of a Cancers-
Only Estimation is that if the estimate of the value of cancer
claims exceeds the Debtors' "solvency number," then the Asbestos
Constituents are prepared to agree to a pro rata allocation of
assets with the commercial creditors based on the Cancers-Only
Estimation results, without expending additional time and
resources valuing non-malignant PI claims, traditional PD claims,
and ZAI claims.

If it turns out that the Cancers-Only Estimation results do not
exceed the Debtors' "solvency number," no harm has been done, and
the parties can proceed with the rest of the estimations, which
the Asbestos Constituents are currently scheduled to do under the
existing case management orders, Ms. Eskin points out.

Accordingly, the Asbestos Constituents ask Judge Fitzgerald to
permit their Cancers-Only Estimation proposal to proceed first
and terminate the Debtors' Exclusive Periods.

                 Grace Wants Plan Filing Delayed
                    Until Estimation Wraps Up

There is no alternative to litigating disputed issues of
liability, James E. O'Neill, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub LLP, in Wilmington, Delaware, argues.

Mr. O'Neill avers that opening the Debtors' cases up to competing
plans will serve no useful purpose and will delay progress toward
resolution of the Debtors' cases.  It may also serve to
perpetuate an agreement among the asbestos committees that is
wholly against public policy, violates the Bankruptcy Code, and
would make any plan unconfirmable.

Accordingly, the Debtors ask Judge Fitzgerald to extend their
exclusive filing period through and including the conclusion of
the estimation hearings and their exclusive solicitation period
through and including an additional 60 days thereafter.

              Debtors Update Court on Claims Process

Mr. O'Neill relates that since the Petition Date, the Debtors
have sought a merits-based adjudication of their asbestos
liabilities.  While various reassignments of the Debtors' Chapter
11 cases deferred for several years the task of coming to grips
with the asbestos liabilities, the District Court did recognize
its duty to address the merits of that underlying liability.

As a result of a bar date process of certain asbestos property
damage claims, Mr. O'Neill says, the Debtors have been able to
reduce between July 2005 and July 2006 the pending PD claims from
4,003 to 901, which include:

   -- 501 traditional U.S. claims;

   -- 291 Canadian PD claims, all filed by Speights & Runyan;
      and

   -- 109 "Category 2" claims for property damage allegedly
      resulting from the Debtors' mining, milling or processing
      operations.

Section 502 of the Bankruptcy Code calls for a streamlined
process to ascertain claim values.  Based on the Debtors' work to
date, Mr. O'Neill attests that the Bankruptcy Court is now in the
position to address the core liability issues posed by the
remaining claims, including statutes of limitations, product
identification, and proof of hazard.  He notes that testing the
PD claims has led to an 80% reduction to date.  Completing the
merits-based process will further reduce the scope of claims that
have demonstrable value.

                   Asbestos Claimants' Approach

According to Mr. O'Neill, two competing approaches to the
estimation of the Debtors' asbestos personal injury claims have
been presented to the Bankruptcy Court on numerous occasions.

Mr. O'Neill relates that the Debtors propose estimation of their
actual legal liability for PI claims.  On the other hand, the
asbestos claimants propose an estimation based solely on past
settlement history.

Mr. O'Neill states that Grace's proposal alone adheres to the
basic rules of evidence and procedure incorporated in the
Bankruptcy Code.

Mr. O'Neill tells Judge Fitzgerald that the Asbestos Claimants
Approach, which estimates future claims but ignores real
liabilities, consists of four steps:

   A. Step 1: The Analysis begins with historical settlement
      rates and substitutes settlement for legal liability.

      Dr. Mark Peterson, the asbestos claimants' expert, accepts
      at face value the Debtors' historical settlement rates and
      values as basis for his estimates.  Thus, Mr. O'Neill
      says, Dr. Peterson's approach does not depend on whether
      the claimants actually had exposure, whether that exposure
      was sufficient to cause disease, or whether they had a
      real disease.

   B. Steps 2-3: The analysis assumes that past settlement
      rates actually reflect disease rates and will continue to
      do so in the future.

      Dr. Peterson assumes that the historical rations between
      settled claims against W.R. Grace and Co. and the
      nationwide malignant disease trend will continue into the
      future.  However, Dr. Peterson conceded that non-
      epidemiological factors play a big role in the decision to
      file a claim against a company.

   C. Step 4: Estimate of Grace's future claims.

      Mr. O'Neill says that Dr. Peterson mechanically takes
      historical rations between the number of settled claims
      against Grace and the number of nationwide malignant
      diseases, and applies those ratios to the future.

Mr. O'Neill points out the alleged fatal flaws of the Asbestos
Claimants Approach:

   (1) Settlement is substituted for liability.

   (2) There is not even an effort to demonstrate actual
       liability.

   (3) At the same time, settlement trends are assumed to follow
       disease trends, with the effect that claims against a
       company are assumed to stretch out for decades.

   (4) The disease trend that constitutes the backbone of the
       estimates relates to malignant disease, yet it is assumed
       with no support to govern non-malignant disease as well.

                Grace's Actual Liability Approach

Mr. O'Neill tells Judge Fitzgerald that Grace's Approach seeks
to:

   (i) estimate the number of claims pending against Grace as
       of the Petition Date that contain sufficient exposure,
       causation, and medical evidence to establish that there
       is legal liability; and

  (ii) use its estimate of the number of valid pending claims
       to show how, even if disease-based extrapolation is used,
       the future values fall far short of those advocated by
       the claimants.

Mr. O'Neill contends that estimating the validity of Grace's
pending claims is overwhelmingly likely to substantially reduce
the scope of Grace's estimated liability for PI claims.

Mr. O'Neill explains that out of Grace's pending claims, 30%
allege a non-malignant disease, 4% allege a non-malignant
disease, and Grace cannot determine the alleged disease for 66%
of the claims.

Grace's preliminary analysis indicates that less than 20% of the
non-malignant claims allege a valid disease and less than 25% of
the unknown claims will be able to allege a valid disease.

In addition, based on Grace's preliminary analysis:

   -- less than 10% of the non-malignant claims will be able to
      allege real disease and Grace exposure sufficient to cause
      disease;

   -- less than 15% of the unknown claims will be able to allege
      real disease and Grace exposure sufficient to cause
      disease; and

   -- approximately 50% of the malignant claims will be unable
      to allege Grace exposure sufficient to cause disease.

With respect to its actual liability for ZAI claims, Grace
believes that it has proven that the disturbing ZAI does not pose
an unreasonable risk.  If any ZAI Claims survive the science
trial process, the Debtors are prepared to have those claims
estimated.

Therefore, the Debtors ask the Bankruptcy Court to promptly rule
on the science issues so that, if necessary, a ZAI estimation can
proceed in conjunction with the traditional PD and PI estimation
processes.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


W.R. GRACE: Graham Objects to Asbestos PI Questionnaire
-------------------------------------------------------
William M. Graham, Esq., at Wallace & Graham P.A., in Salisbury,
North Carolina, representing numerous claimants in the chapter 11
cases of W.R. Grace & Co. and its debtor-affiliates, complains
that the W. R. Grace Asbestos Personal Injury Questionnaire
requires production of information that is overly broad, unduly
burdensome and costly.  The burden and expense associated with
responding to the Questionnaire greatly outweighs any potential
benefit of the information sought to Grace.

"The Questionnaire purports to require the production of very
detailed biographical information, comprehensive medical records,
work history records, litigation records and exposure documents
on behalf of over 2,200 clients," Mr. Graham says.

Mr. Graham notes that the Questionnaire would require that the
information and supporting documents be produced within 90 days.
The production of the required information would necessitate the
review of possibly 100,000 or more documents from thousands of
sources in a very short time frame.

Without waiving that objection, Mr. Graham relates, the PI
claimants will provide Grace appropriate identification
information, asbestos-related medical diagnosis, and a complete
work history or, in the alternative, a signed release authorizing
Grace to obtain a copy of claimants' social security records.

Mr. Graham argues that the Questionnaire seeks information that
can be derived by Grace from a review of the documents submitted
pursuant to the Questionnaire.  He adds that the Questionnaire is
oppressive and seeks information not calculated to reasonable
lead to discoverable evidence.

Furthermore, Mr. Graham objects to the Questionnaire because:

   -- it requires claimants to provide privileged information
      that is attorney-work product, or any information related
      to settlement negotiations or otherwise attorney-client
      privilege; and

   -- it requires information that can be obtained by Grace
      with substantially the same burden as it would be for
      claimants to provide the information.

Walters & Kraus, LLP, representing various PI claimants, supports
Mr. Graham's request.

Walters & Kraus maintains that since state law governs creditors'
claims, the information that would not be discoverable under
state law is likewise not discoverable in Grace's proceeding.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


* Robert Gold Joins DLA Piper's New York Office as Partner
----------------------------------------------------------
DLA Piper Rudnick Gray Cary US LLP reported that Robert Gold,
Esq., has joined the firm's Litigation practice group as a partner
in the New York office.  Gold was previously Of Counsel at
Sullivan & Worcester.

Over the course of his 35-year legal career, Mr. Gold has handled
litigation in civil and criminal cases, as well as international
litigation and arbitration.  He has particular experience in white
collar defense.  He has also advised several multi-billion dollar
financial institutions in crisis management and turnarounds.

Mr. Gold began his career as a litigation attorney at Shea & Gould
in 1971.  From 1973 to 1977, he served as an Assistant U.S.
Attorney in the criminal division of the U.S. Attorney's Office
for the Southern District of New York in the Official Corruption
Unit and in the Securities Fraud Unit.  He also lectured in the
Attorney General's Advocacy Institute from 1975 to 1976.

Mr. Gold re-entered private practice in 1978, eventually returning
to Shea & Gould in 1980 before forming Gold & Wachtel, where he
served as co-managing partner.

From 1998 to 2000, he worked with Louis Ranieri, chief executive
officer of Ranieri & Company, assisting in crisis management and
turnarounds.

In 2001, he joined Alco Capital Partners and Abacus Advisors, as a
principal, working on crisis management, liquidations and
turnarounds.  He later served as managing general partner for
various bankruptcy investment partnerships.

"Bob is a seasoned trial lawyer who has benefited from a dynamic
mix of litigation experience, both in the public sector and in
private practice," said Joseph Finnerty III, partner and chair of
the New York litigation practice group.  "We are pleased that he
has joined the firm and we anticipate that he will contribute
significantly to our corporate governance, commercial and white
collar criminal defense practices."

Gold earned both a J.D. and an M.B.A. from Cornell University in
1971.  He received a B.A. from Columbia University in 1967.

            About DLA Piper Rudnick Gray Cary

DLA Piper Rudnick Gray Cary US LLP -- http://www.dlapiper.com/--  
has 3,100 lawyers and 59 offices in 22 countries throughout the
U.S., U.K., continental Europe, Middle East and Asia.  It has
leading practices in commercial, corporate and finance, human
resources, litigation, real estate, regulatory and legislative,
and technology, media and communications.

DLA Piper's Litigation practice has more than 600 litigation
lawyers in the U.S. and 1,200 lawyers worldwide.  DLA's trial and
dispute resolution experience covers patent, class action,
securities, antitrust, product liability, tax, government, real
estate, and other areas of litigation.


* Thacher Proffitt Names Two New Counsel in Mexico City Office
--------------------------------------------------------------
Thacher Proffitt & Wood LLP, a 158-year- old law firm, reported
that two new Counsel in the Firm -- Derek Woodhouse, Esq., has
been promoted to Counsel effective April 26, 2006, and J. Anthony
Girolami, Esq., joins the Firm as Counsel, effective June 19,
2006.  Both Derek and Anthony are members of the Structured
Finance Practice Group and reside in Thacher Proffitt's Mexico
City office, Thacher Proffitt & Wood S.C.

"We want to congratulate both Derek on his promotion and Anthony
on joining the Firm," said Boris Otto, Mexico City's Office
Managing Partner.  "Derek is an experienced advisor of public-
private partnerships, and will bring a sophisticated UK approach
to Mexico's nascent PPS (projects for the provisions of services)
programs.  Anthony has considerable experience in the areas of
infrastructure development and cross-border financings throughout
Latin America. Both will add tremendously to our depth in
structured finance in Latin America."

Recently, Thacher Proffitt significantly broadened the scope of
its Mexico City office by almost doubling its number of attorneys
-- a group that includes Luis Enrique Graham, a prominent Latin
American attorney -- in the areas of litigation, arbitration,
bankruptcy and infrastructure.

Derek Woodhouse has extensive experience advising public and
private entities on energy and infrastructure projects in
countries all over the world.  He also advised the Mexican
President's office and Ministry of Finance and Public Credit on
the adoption of a new finance initiative which would allow private
participation in the infrastructure projects traditionally
reserved only for the public sector.  In addition, he counseled
the Communications and Transport Ministry on the design and
implementation of the first road project under this program.

Derek's background includes working in Mexico's federal government
for over seven years in the energy sector, as well as in private
practice in London for five years on both energy and
infrastructure projects.  In addition, he has worked extensively
on public-private partnerships throughout Latin American and
Europe.

Derek received his JD equivalent at Escuela Libre de Derecho in
1996.  He also received an international diploma from Harvard
Institute for International Development in 1999, and completed a
legal program at the International Law Institute, George
Washington University, in 1997.

Anthony Girolami represents clients in transactions involving the
development, construction and financing of large scale
infrastructure projects throughout Latin America, as well as
lenders and borrowers in cross-border syndicated credit
facilities.  He has advised financial institutions, infrastructure
developers and energy companies with the formation of joint
ventures, project financings, engineering, procurement and
construction contracts and restructurings.

Before joining Thacher Proffitt, Anthony was with Shearman &
Sterling, LLP, practicing in the Project Development and Finance
Group in New York and Sao Paulo, Brazil.  He also served as the
Director of International Legal Affairs at Grupo ICA, S.A. de
C.V., Mexico's largest infrastructure development company.

Anthony received his JD from the University of San Diego School of
Law, and his BA from the University of San Diego, magna cum laude.
He is admitted to the California bar and the Orden dos Advogados
in Brazil as a foreign legal consultant.

               About Thacher Proffitt & Wood LLP

A law firm that focuses on the capital markets and financial
services industries, Thacher Proffitt & Wood LLP --
http://www.tpw.com/-- advises domestic and global clients in a
wide range of areas, including corporate and financial
institutions law, securities, structured finance, investment
funds, swaps and derivatives, cross-border transactions, real
estate, commercial lending, insurance, admiralty and ship finance,
litigation and dispute resolution, technology and intellectual
property, executive compensation and employee benefits, taxation,
trusts and estates, bankruptcy, reorganizations and
restructurings.  The Firm has approximately 300 lawyers with five
offices located in New York City; Washington, DC; White Plains,
New York; Summit, New Jersey; and Mexico City, Mexico.


* BOOK REVIEW: Why Companies Fail: Strategies for Detecting,
               Avoiding, and Profiting from Bankruptcy
------------------------------------------------------------
Author:     Harlan D. Platt
Publisher:  Beard Books
Paperback:  147 Pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1893122050/internetbankrupt


Wondering what financial decisions could plummet your company's
bottom line into the red?  This revealing book is a
straightforward presentation of the causes of business failure and
the strategies for steering a troubled company away from the
threat of bankruptcy and liquidation.

Why Companies Fail identifies five major financial traps that can
lead to failure, and each trap is illustrated with actual cases of
well-known companies.

Distressed companies are offered hope with examples of asset,
liability, and corporate maneuvers that can help guide failing
businesses to firmer ground.

                             *********

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 ***