TCR_Public/060720.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, July 20, 2006, Vol. 10, No. 171

                             Headlines

AAMES MORTGAGE: S&P Junks Rating on Series 2001-3 Class B Debts
ADELPHIA COMMS: BofA Wants Stay Lifted to File Financing Documents
ALLIANCE LAUNDRY: Inks Amendment to Credit Agreement
ALLIED HOLDINGS: Court Approves Amended Honda Motor Pact
ALLIED HOLDINGS: Sells Kentucky Property to Jack Cooper for $625K

ALLTEL GEORGIA: Spin-Off Prompts S&P to Slash Ratings
ALPHA-200: Judge Rhodes Dismisses Second Chapter 15 Petition
AFFINITY TECHNOLOGY: Amends Withrow & Terranova Agreement
AFFINITY TECHNOLOGY: Hires Morgan Keegan as Financial Advisor
AMERICHIP INT'L: May 31 Balance Sheet Upside-Down by $697,203

ANCHOR GLASS: Gets Arkema's Nod to Assume Certincoat Agreement
ANCHOR GLASS: Court Dismisses Adversary Proceeding Against OCI
APOGEE TECH: Posts $729,000 Net Loss in Quarter Ended March 31
APPLIEDTHEORY CORP: Bankruptcy Court Applied STN Factors Properly
ASARCO LLC: FFIC Wants to Participate in Asbestos Estimation Steps

ASARCO LLC: Wants Stay Lifted to Enter Into Tax Escrow Agreement
ASARCO LLC: Wants to Execute IRS Forms for Tax Refunds
ATLANTIC WINE: Meyler & Company Raises Going Concern Doubt
BLACK PRESS: Moody's Rates Proposed Sr. Sec. Bank Loan at Ba3
BMC INDUSTRIES: Court Approves Second Amended Disclosure Statement

BROWNWOOD FORD: Voluntary Chapter 11 Case Summary
CALPINE CORP: Wants Court To Approve Pacific Gas Settlement Pact
CARRAMERICA REALTY: Closes Merger With Blackstone Group Affiliate
CELLSTAR CORP: Earns $2.7 Million in Second Quarter 2006
COLLINS & AIKMAN: Court Approves Haley & Aldrich as Consultant

COLLINS & AIKMAN: Unit Wants $256,184 Claim Deemed Timely Filed
CONSOLIDATED COMMS: S&P Holds Upsized Facility's Rating at BB-
DAVIDSON DIVERSIFIED: Ernst & Young Expresses Going Concern Doubt
DAVIDSON DIVERSIFIED: Mar. 31 Balance Sheet Upside-Down by $8.1MM
DELPHI CORP: NuTech Wants to Continue Breach-Of-Contract Suit

DELPHI CORP: Pays $369,585 to Settle Omega Tool's Complaint
DELTA AIR: Wants Court Nod on $195 Million Merrill Lynch Financing
DELTA AIR: Wants to Repay $235 Million 9.5% Senior Secured Notes
EAGLEPICHER CORP: Moody's Junks Rating on $65 Million Senior Loan
EL POLLO: Extends Tender Offer Expiration to August 11

EMPRESAS CENTRAIS: Fitch Rates $100 Million Six-Year Notes at B
EVANS INDUSTRIES: Panel Hires Chiron as Financial Advisor
EVANS INDUSTRIES: Panel Wants Locke Liddell's Retention as Counsel
FALCON AIR: Court Appoints Kenneth A. Welt as Chapter 11 Trustee
FLOWSERVE CORP: Repays $25 Million of Debt in 2nd Quarter of 2006

FOAMEX INT'L: Panel Supports CEO Raymond Mabus' Salary Increase
FOAMEX INT'L: Panel Wants to Join Recruitment & Selection Process
FR X OHMSTEDE: Moody's Junks Rating on $65 Million Sr. Term Loan
GLOBAL DOCUGRAPHIX: Case Summary & 36 Largest Unsecured Creditors
GLOBAL HOME: Will Auction Off WearEver Business on August 7

GORDIAN RUNOFF: Chapter 15 Petition Hearing Slated for August 28
GRANITE BROADCASTING: Terminates Sale Agreements for TV Stations
GUITAR CENTER: Senior Notes Redemption Cues S&P's Positive Watch
H&E EQUIPMENT: Restates First Quarter 2006 Financial Results
INTERSTATE BAKERIES: Bankr. Court Okays Chubb Surety Bond Program

INTERSTATE BAKERIES: Can Sell Medford Property for $1.7 Million
INTERSTATE BAKERIES: Court Says Sara Lee's ERISA Action is Stayed
JOYCE NUNLEY: Case Summary & 14 Largest Unsecured Creditors
KAISER ALUMINUM: Court Okays Los Angeles Pension Plan Termination
KAISER ALUMINUM: Wants to Settle With 3 Products Coverage Insurers

KL INDUSTRIES: Hires CM&D Capital as Financial Advisor
LEVI STRAUSS: Board Designates John Anderson Next Pres. and CEO
LEVITZ HOME: Court Allows Assignment of Store No. 40401's Lease
LIVING HOPE: Voluntary Chapter 11 Case Summary
MAPCO EXPRESS: Buys 40 Stores from Fast Petroleum for $42 Million

MASTERCRAFT INTERIORS: Can Decide on Leases Until December 12
MERIDIAN AUTOMOTIVE: Court Adjourns Disclosure Hearing to July 21
MESABA AVIATION: Court Okays Monthly Report Submission Guidelines
MESABA AVIATION: UST's Motion to Revoke Paydown Procedures Denied
MUSICLAND HOLDING: Ct. Lifts Stay to Let Xerox to Set-Off Deposit

MUSICLAND HOLDING: Moves for Summary Judgment on Deluxe's Lien
MUSICLAND HOLDING: Wants to Walk Away from 65 Contracts & Leases
MXENERGY HOLDINGS: S&P Junks Rating on Proposed $200 Million Debt
MXENERGY HOLDINGS: Moody's Junks Rating on Planned $200 Mil. Offer
NADER MODANLO: Section 341(a) Meeting Continued to August 1

NBC/AUSTIN WINDRIDGE: Hires Fuqua & Keim as Bankruptcy Counsel
NBC/AUSTIN WINDRIDGE: Taps Capstone Real as Management Company
NORTHWEST AIRLINES: Employees Urge Congress to Pass Pension Law
NORTHWEST AIRLINES: S&P Affirms Default Corporate Credit Rating
NUTRAQUEST INC: Confirmation Hearing Scheduled for August 17

NUTRAQUEST INC: Wants Excl. Plan-Filing Period Extended to Oct. 9
OCA INC: Has Until August 14 to Remove State Court Civil Actions
ONEIDA LTD: Wants Reorganized Companies Incorporated in Delaware
ORIENTAL TRADING: Moody's Junks Rating on Proposed $180 Mil. Loan
ORIS AUTOMOTIVE: Wants Plan-Filing Period Stretched to Sept. 24

OWENS CORNING: Court Approves Proposed Plan Voting Procedures
PARMALAT GROUP: Wins Appeal Against Citigroup In New Jersey Court
PHIBRO ANIMAL: Plans Tender Offer of $240 Million Senior Notes
PHYSICIANS INTERINDEMNITY: Receiver Selling $7.9 Mil. of Judgments
PLIANT CORP: Completes Restructuring and Exits Chapter 11

PMA CAPITAL CORP: Low Leverage Prompts Moody's to Review Ratings
RENT-A-CENTER: Completes $725 Million Senior Debt Refinancing
RIEFLER CONCRETE: Files Schedules of Assets and Liabilities
RIVIERA TOOL: Files Third Quarter Financials for 2006 Fiscal Year
SAINT VINCENTS: Inks New Set-Off Deal with New York Health Dept.

SAINT VINCENTS: Inks Settlement Pacts with Curevax & Dr. Wallack
SEROLOGICALS CORP: Merger Prompts Moody's to Withdraw Ratings
SILICON GRAPHICS: Ad Hoc Committee Objects to FTI's Retention
SILICON GRAPHICS: Wants Employee Incentive Plan Implemented
ST. MARY'S: Moody's Downgrades Long-Term Rating to Ba3 from Ba1

TEKELEC: Posts $16.5 Million Net Loss in First Quarter of 2006
TFS ELECTRONIC: Asks Court to Approve Global Settlement Agreement
UNITED SURGICAL: Launches Tender Offer for Outstanding Sr. Notes
US ONCOLOGY: Completes $100 Mil. Incremental Term Loan Facility
VARIG S.A.: Brazilian Ct. Voids Creditor Votes Rejecting Volo Bid

VILLAGEEDOCS INC: Restates 2005 2nd Quarter Financial Statements
VISIPHOR CORP: Completes $1.6 Million Quorum Private Placement
WCA WASTE: Stockholders Approve $75 Mil. Equity Investment to Ares
WINDSTREAM CORPORATION: Fitch Rates $2.5 Billion Sr. Notes at BB+
WINN-DIXIE: Rejects Lifetime Hoan Prepetition Supply Agreement

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

                             *********

AAMES MORTGAGE: S&P Junks Rating on Series 2001-3 Class B Debts
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
B and M-2 from Aames Mortgage Trust 2001-3 to 'CCC' from 'BBB'
and to 'BB' from 'A', respectively.

Additionally, the rating on class M-2 is placed on CreditWatch
with negative implications.  At the same time, the ratings on the
other classes from this transaction are affirmed.

Credit support for the pool is derived from a combination of
subordination, excess interest, and overcollateralization.  The
lowered ratings are based on pool performance.  Realized losses
have consistently surpassed the excess interest spread over the
past year, which has reduced overcollateralization to $143,459, as
of the June 25 distribution date.  Cumulative losses represent
5.65% of the original pool balance.  Delinquencies of 90 days or
more (including foreclosures and REOs) represent 27.93% of the
current pool balance.

The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings.

Aames Capital Corp. either originated or acquired all of the
mortgage loans used as collateral in the pool in accordance with
its underwriting standards.  The underlying collateral for this
transaction is mostly fixed- and adjustable-rate, first-lien, 30-
year mortgages on single-family homes.
   
Rating Lowered:
     
                   Aames Mortgage Trust 2001-3

                 Series    Class    To     From
                 ------    -----    --     ----
                 2001-3      B      CCC    BBB
     
Rating Lowered and Put on Creditwatch Negative:
   
                   Aames Mortgage Trust 2001-3

             Series    Class        To         From
             ------    -----        --         ----
             2001-3     M-2    BB/Watch Neg.    A
    
Ratings Affirmed:
    
                   Aames Mortgage Trust 2001-3

                   Series     Class    Rating
                   ------     -----    ------
                   2001-3      A1       AAA
                   2001-3      M1       AA+


ADELPHIA COMMS: BofA Wants Stay Lifted to File Financing Documents
------------------------------------------------------------------
Pursuant to the Century Credit Agreement dated April 14, 2000,
Bank of America and the other members of the Century Facility
lending syndicate had claims and liens in the equity interests of
certain non-debtor entities owned directly or indirectly by the
Rigas family.

Borrowers under the Century Credit Agreement are:

   * Adelphia Cablevision Corp.,
   * Adelphia Cablevision of Boca Raton, LLC,
   * Adelphia Cablevision of Fontana, LLC,
   * Adelphia Cablevision of Inland Empire, LLC,
   * Adelphia Cablevision of Newport Beach, LLC (PDG: Ft. Myers
     Debtor Group),
   * Adelphia Cablevision of Orange County II, LLC,
   * Adelphia Cablevision of Orange County, LLC (PDG: Ft. Myers
     Debtor Group),
   * Adelphia Cablevision of San Bernardino, LLC,
   * Adelphia Cablevision of Seal Beach, LLC,
   * Adelphia Cablevision of West Palm Beach III, LLC,
   * Adelphia Cablevision of West Palm Beach IV, LLC,
   * Adelphia Cablevision of West Palm Beach V, LLC,
   * Adelphia Cleveland, LLC,
   * Adelphia Communications of California II, LLC,
   * Adelphia Communications of California, LLC,
   * Adelphia of the Midwest, Inc. ,
   * Adelphia Pinellas County, LLC (PDG: Ft. Myers Debtor Group) ,
   * Adelphia Prestige Cablevision, LLC,
   * Badger Holding Corporation,
   * Blacksburg/Salem Cablevision, Inc.,
   * Brazas Communications, Inc. ,
   * California Ad Sales, LLC (PDG: Ft. Myers Debtor Group),
   * Century Berkshire Cable Corp.,
   * Century Cable Holdings, LLC,
   * Century Colorado Springs Partnership,
   * Century Granite Cable Television Corp.,
   * Century Indiana Corp.,
   * Century Island Associates, Inc.,
   * Century Island Cable Television Corp.,
   * Century Mendocino Cable Television, Inc.,
   * Century Mountain Corp.,
   * Century New Mexico Cable Television Corp.,
   * Century Ohio Cable Television Corp.,
   * Century Southwest Colorado Cable Television Corp.,
   * Century Trinidad Cable Television Corp.,
   * Century Virginia Corp.,
   * Century Warrick Cable Corp.,
   * Century Wyoming Cable Television Corp.,
   * Clear Cablevision, Inc.,
   * CMA Cablevision Associates VII, L.P.,
   * CMA Cablevision Associates XI, Limited Partnership,
   * E. & E. Cable Service, Inc.,
   * Eastern Virginia Cablevision, L.P.,
   * Ft. Myers Cablevision, LLC (PDG: Ft. Myers Debtor Group),
   * Grafton Cable Company,
   * Harron Cablevision of New Hampshire, Inc.,
   * Huntington CATV, Inc.,
   * Louisa Cablevision, Inc.,
   * Manchester Cablevision, Inc.,
   * Martha's Vineyard Cablevision, L.P.,
   * Mickelson Media, Inc.,
   * Owensboro Indiana, L.P.,
   * Owensboro on the Air, Inc.,
   * Paragon Cable Television Inc.,
   * Paragon Cablevision Construction Corporation,
   * Paragon Cablevision Management Corporation,
   * S/T Cable Corporation,
   * Scranton Cablevision, Inc.,
   * Sentinel Communications of Muncie, Indiana, Inc.,
   * Southwest Colorado Cable, Inc.,
   * Star Cable Inc.,
   * Tele-Media Company of Tri-States L.P.,
   * The Westover T.V. Cable Co., Incorporated,
   * TMC Holdings Corporation,
   * Tri-States, L.L.C.,
   * Wellsville Cablevision, L.L.C.

Pursuant to the Court-approved global settlement among Adelphia
Communications Corporation and its debtor-affiliates, the
Securities and Exchange Commission, the Rigases, and the
Department of Justice, the Rigases agreed to forfeit certain
assets to the United States government, including the equity
interests in the Rigas-Managed Entities.

As part of the settlement, the Government then returned certain of
the forfeited assets to the Debtors, free and clear of all liens,
including the Century Lenders' liens.

However, to place the Century Lenders in the same position as
they were prior to the forfeiture of the Century RMEs, the
Government Settlement Order automatically granted the Century
Lenders claims and perfected liens in those assets to the same
extent and validity as were held prior to forfeiture.

On March 31, 2006, certain RMEs and certain newly formed entities
that hold the interests in certain forfeited entities filed their
own Chapter 11 petitions.  Although the Government Settlement
Order automatically granted the Century Lenders claims and
perfected liens in the equity interests of the Century RME
Debtors, in furtherance of the Government Settlement Order, Bank
of America has requested and the Debtors have agreed to make
perfection steps by:

    (i) exchanging the stock certificates of the Century RME
        Debtors; and

   (ii) allowing Bank of America to file new UCC financing
        statements for the Century RME Debtors.

Out of an abundance of caution, Bank of America asks the U.S.
Bankruptcy Court for the Southern District of New York to modify
the automatic stay in the Century Debtors' and Century RME
Debtors' Chapter 11 cases to allow it to perform the Perfection
Steps.

Judith Elkin, Esq., at Haynes and Boone, LLP, in New York,
relates that Bank of America has conferred with the Century
Debtors and the Century RME Debtors, and they do not oppose the
modification of the automatic stay.

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 Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-
10642).  Their cases are jointly adminsitered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue No. 139; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ALLIANCE LAUNDRY: Inks Amendment to Credit Agreement
----------------------------------------------------
Alliance Laundry Systems LLC disclosed that on July 14, 2006, it
entered into an amendment to its credit agreement, dated
Jan. 27, 2006, with Alliance Laundry Holdings LLC, ALH Finance
LLC, Lehman Commercial Paper Inc., as administrative agent and
lender, and several banks and other financials institutions.

The Amendment includes:

    (a) provision of an additional $60 million of term loans under
        the Credit Agreement term loan facility,

    (b) increase in the revolving credit commitments to
        $55 million from $50 million under the Credit Agreement
        revolving credit facility,

    (c) permitting the draw down of the $60 million additional
        term loan capacity;

    (d) modification of certain negative covenants in the Credit
        Agreement, including:

         * adjusting the calculation of the consolidated leverage
           ratio,

         * adjusting the calculation of the consolidated interest
           coverage ratio,

         * increasing the annual ordinary course capital
           expenditures permitted by Alliance Laundry and its
           subsidiaries to $13 million from $10 million, effective
           2007, and

         * increasing the maximum permitted debt Alliance
           Laundry's non-U.S. subsidiaries may incur without
           restriction to $5.0 million from $2.5 million;

    (e) revision of the procedure for term loan borrowing;

    (f) revision of the term loan repayment schedule to require
        repayment in 22 quarterly installments of $587,500
        commencing on September 30, 2006, and one installment of
        $222,075,000, or such lesser amount then outstanding, on
        Jan. 27, 2012; and

    (g) making conforming changes to the definitions contained
        therein.

The additional term loans was used to partially finance
acquisition of substantially all of Laundry System Group NV's
commercial laundry division operations pursuant to a share
purchase agreement, dated May 23, 2006

                     About Alliance Laundry

Headquartered in Ripon, Wisconsin, Alliance Laundry Systems LLC --
http://www.comlaundry.com/-- manufactures commercial laundry  
products and provider of services for laundromats, multi-housing
laundries and on-premise laundries.  Alliance offers a full line
of washers and dryers for light commercial and consumer use as
well as large frontloading washers, heavy-duty tumble dryers, and
finishing equipment for heavy commercial use.

                          *     *     *

As reported in the Troubled Company Reporter on June 22, 2006
Standard & Poor's Ratings Services affirmed its 'B' rating and its
recovery rating of '3' Alliance Laundry Systems LLC's senior
secured credit facilities following its proposed $65 million add-
on credit facilities.  The 'B' bank loan rating remains at the
same level as the corporate credit rating.


ALLIED HOLDINGS: Court Approves Amended Honda Motor Pact
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Allied Holdings, Inc., and its debtor-affiliates to
assume an Amended Agreement with American Honda Motor Co., Inc.,
effective as of May 19, 2006.

As reported in the Troubled Company Reporter on May 31, 2006, the
Debtors asked the Court for permission to assume the Amended
Agreement with American Honda.

Allied Systems, Ltd., and Honda entered into a motor
transportation contract in April 2002.  Pursuant to the Agreement,
Allied Systems provides delivery and transportation services to
Honda in return for which Honda makes payments in accordance with
agreed rate terms.

In January 2006, the parties amended the Agreement to reflect,
among others, modifications to rate terms, a fuel surcharge
provision, and an extension to the original term.

Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, noted that the Debtors have provided the terms of the
Agreement, as amended, to counsel for the Debtors' postpetition
lenders and counsel for the Official Committee of Unsecured
Creditors, subject to confidentiality agreements.  Upon request,
the Debtors will provide a copy of the Second Amendment to the
Court for in camera review.

Mr. Walker said the terms of the Amendment are fair and favorable
to the Debtors.  The Amended Agreement will be also be valuable to
the Debtors' ongoing business operations.

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)


ALLIED HOLDINGS: Sells Kentucky Property to Jack Cooper for $625K
-----------------------------------------------------------------
The U.S Bankruptcy Court for the Northern District of Georgia
approved the sale of Allied Holdings, Inc., and its debtor-
affiliates' real property, located in the city of Georgetown,
Commonwealth of Kentucky, to Jack Cooper Transport Company, Inc.,
for $625,000.  The Debtors did not receive an initial overbid from
a qualified bidder for the property.

The Court permits the Debtors to pay Haymaker Company, LLC, doing
business as Haymaker/Bean Commercial Real Estate, its commission
of 3% of the purchase price out of the deposit and sale proceeds
at closing.

Allied Systems is authorized to pay Scott County the 2005 Taxes
owed on the Property out of the sale proceeds at closing.

Allied Systems, Ltd., as landlord, executed a lease with Jack
Cooper, as tenant, for approximately 9.43 acres of industrial land
located at 239 Triport Road in the City of Georgetown, County of
Scott, Commonwealth of Kentucky.  The Lease commenced on April 1,
2006, and continues on a month-to-month basis thereafter, with
$5,625 in monthly rent due on the first day of each month.

The parties also entered into a purchase and sale agreement for
the Real Property, pursuant to which Jack Cooper will purchase the
Real Property for $625,000, subject to higher and better offers.

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)


ALLTEL GEORGIA: Spin-Off Prompts S&P to Slash Ratings
-----------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
ratings on ALLTEL Georgia Communications Corp. and Alltel
Communications Holdings of the Midwest Inc. (formerly Aliant
Communications), to 'BB+' from 'A-'.  The outlook is negative.

At the same time, the rating agency lowered to 'BBB' and 'BBB-',
respectively, the ratings of the unsecured debt of ALLTEL Georgia
and Alltel Communications Holdings of the Midwest from 'A-', and
removed all ratings from CreditWatch, where they had been placed
with negative implications on Dec. 9, 2005, following the
announcement of the planned spin-off by ALLTEL Corp. (A-/Stable/A-
2) of its wireline business through a merger with the operations
of independent local telephone company, Valor Communications Group
Inc., into a new entity Windstream Corp. (BB+/Negative/--).

Standard & Poor's also raised the rating on Valor's unsecured debt
to 'BBB-' from 'B', removed the rating from CreditWatch, and
withdrew the corporate credit rating.

"With the completion of the merger, Windstream has assumed a total
of $180 million of debt issued by these two former ALLTEL Corp.
entities," said Standard & Poor's credit analyst Catherine
Cosentino.

ALLTEL Georgia's debt is two notches above the corporate credit
rating on Windstream, reflecting the issue's superior position
in the capital structure and the substantial level of
overcollateralization.  Alltel Communications of the Midwest is
rated one notch above the Windstream corporate credit rating
since the collateral securing this debt is also pledged on an
equal and ratable basis to the Windstream senior secured credit
facility.


ALPHA-200: Judge Rhodes Dismisses Second Chapter 15 Petition
------------------------------------------------------------
Alpha-200 GmbH & Co. KG failed to gain recognition of its German
liquidation as a foreign main proceeding after the U.S. Bankruptcy
Court for the Eastern District of Michigan dismissed the second
Chapter 15 petition filed by Dr. Oliver Kirschnek, its foreign
representative.

Judge Steven Rhodes ruled that Dr. Kirschnek did not comply with
Section 1515 of the Bankruptcy Code, Terry Brennan at The Deal
reports.  Section 1515 requires Chapter 15 petitions to be filed
together with documents showing the existence of the foreign
proceeding as well as the appointment and authority of the foreign
representative.

M&C Corporation, a local manufacturer's representative and one of
Alpha's creditors, sought the dismissal of Alpha's Chapter 15
petition.  

In 1994, M&C won various arbitration awards against Alpha, then
operating as Erwin Behr GmbH & Co. KG, from the International
Court of Arbitrations.  M&C had taken legal action following
Alpha's alleged breach of their sales contract.  

The U.S. District Court for the Eastern District of Michigan,
Southern Division, confirmed the arbitration awards in August 1994
and March 1995.  At M&C's request, District Court Judge Paul V.
Gadola appointed Gerald W. Hepp as receiver for Alpha's assets.

M&C asked the Bankruptcy Court to dismiss Dr. Kirschnek's Chapter
15 petition citing:

       -- it "runs afoul" of Judge Gadola's receivership
          injunction enjoining all entities from disturbing the
          possession of the receiver and prosecuting any action
          that would affect Alphas' property;

       -- the petition is barred by Section 109(g) of the
          Bankruptcy code since the Court has dismissed Dr.
          Dr. Kirschnek's first Chapter 15 filing;

       -- the misdeed of Alpha's directors and officers render the
          petition a bad faith filing; and

       -- Dr. Kirschnek failed to timely file certain documents
          required under bankruptcy rules.

Dr. Kirschnek's counsel, Andrew J. Munro, Esq., at Munro and Zack,
PC, told the Bankruptcy Court that none of M&C's arguments held
any merit.  He claimed that M&C wanted to keep Alpha out of
Chapter 15 to gain sole control of the foreign debtor's U.S.
assets and avoid sharing these assets with other creditors.  

Headquartered in Wendlingen, Germany, Alpha-200 GmbH & Co. KG, aka
Erwin Behr GmbH & Co. KG, is an auto parts maker.  Alpha's foreign
representative, Dr. Oliver Kirschneck, filed a chapter 15 petition
on May 24, 2006 (Bankr. E.D. Mich. Case No. 06-46562).  Andrew J.
Munro, Esq., at Munro and Zack, PC, represents Dr. Kirschneck in
Alpha's ancillary proceedings.  When Dr. Kirschneck filed the
Chapter 15 petition, he estimated Alpha's assets at less than
$50,000 and debts at $1 million to $10 million.


AFFINITY TECHNOLOGY: Amends Withrow & Terranova Agreement
---------------------------------------------------------
Affinity Technology Group, Inc., its wholly-owned subsidiary
decisioning.com, Inc., and Withrow & Terranova, PLLC, entered into
an Amended and Restated Legal Representation Agreement on July 10,
2006, to acknowledge and consent to decisioning.com's engagement
of McBride Law, PC.

decisioning.com is party to a Legal Representation Agreement,
dated as of May 27, 2003, with Withrow & Terranova, in connection
with licensing and enforcing its patents.

Concurrently on July 10, 2006, Affinity, decisioning.com and
McBride entered into a separate Engagement Agreement, pursuant to
which Affinity and decisioning.com engaged the McBride Firm to
assist decisioning.com and Withrow & Terranova in connection with
the solicitation, negotiation and execution of patent agreements
and patent litigation.

Pursuant to the Amended Withrow & Terranova Agreement and the
McBride Engagement Agreement:

    -- decisioning.com will pay Withrow & Terranova a fee equal to
       19% of all amounts paid as damages, in settlement, or
       licensing by any parties against whom decisioning.com has
       commenced litigation, while McBride will be paid a fee
       equal to 6%.  Under the original Withrow & Terranova
       Agreement, decisioning.com was obligated to pay the entire
       25% to Withrow & Terranova;

    -- decisioning.com will also pay Withrow & Terranova 19% and
       and McBride 6%, of all other revenues received by
       decisioning.com pursuant to any patent agreements other
       than those entered into as a result of litigation, provided
       that such amounts will be reduced to:

                                 Percentage Fee
                                   Payable to    Percentage Fee     
      Cumulative                    Withrow &      Payable to
  Licensing Revenues                Terranova        McBride
  ------------------             --------------  --------------
  Less than $100 Million              19.0%            6.0%
  $100 Million to $200 Million        15.0%            6.0%
  $200 Million to $300 Million        11.0%            6.0%
  $300 Million to $400 Million         7.0%            6.0%
  $400 Million to $500 Million         4.5%            4.5%
  Above $500 Million                   2.5%            2.5%


    -- decisioning.com is obligated to pay the same percentage fee
       to Withrow & Terranova and McBride if Affinity sells one or
       more of its patents, directly or indirectly through the
       sale of Affinity or decisioning.com.  In such a
       transaction, the percentages applied to the Licensing
       Revenues will be applied to the sales price as if the sales
       price were Licensing Revenues.  Under the original Withrow
       & Terranova Agreement, decisioning.com was obligated to pay
       25% of all licensing revenues and the sale price for
       patents sold entirely Withrow & Terranova;

    -- decisioning.com will pay Withrow & Terranova and McBride
       50% of their billing rates for services rendered under the
       new agreements;

    -- Withrow & Terranova and McBride Firm not obligated to
       undertake more than seven patent lawsuits on behalf of
       decisioning.com at one time.  This number will be reduced
       to five if the engagement of either firm is terminated; and

    -- Affinity and decisioning.com are jointly and severally
       liable for all obligations under the new agreements.

A full-text copy of the Withrow & Terranova Legal Representation
Agreement is available for free at:

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

A full-text copy of the Amended and Restated Withrow & Terranova
Legal Representation Agreement is available for free at:

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

A full-text copy of the McBride Engagement Agreement is available
for free at http://ResearchArchives.com/t/s?dff


                    About Affinity Technology

Through its subsidiary, decisioning.com, Inc., Affinity Technology
Group, Inc. -- http://www.affi.net/-- owns a portfolio of patents  
that covers the automated processing and establishment of loans,
financial accounts and credit accounts through an applicant-
directed remote interface, such as a personal computer or terminal
touch screen.  Affinity's patent portfolio includes U. S. Patent
No. 5,870,721C1, No. 5,940,811, and No. 6,105,007.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 19, 2006,
Scott McElveen, L.L.P., expressed substantial doubt about Affinity
Technology Group, Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the year
ended Dec. 31, 2005.  The auditing firm pointed to the company's
recurring operating losses, accumulated deficit, and certain
convertible notes in default.

At Dec. 31 2005, Affinity Technology's stockholders' deficit
widened to $2,048,371, from a $1,513,523 stockholders' deficit at
Dec. 31, 2004.


AFFINITY TECHNOLOGY: Hires Morgan Keegan as Financial Advisor
-------------------------------------------------------------
Affinity Technology Group, Inc., entered into a letter agreement,
with Morgan Keegan & Company on July 10, 2006.

Morgan Keegan will act as Affinity's exclusive financial advisor
and is expected to assist the Company in:

    * strategic planning,

    * assessing capital markets relative to Affinity,

    * securing additional equity or debt capital and,

    * if requested by Affinity, assist in the analysis and
      consideration of the financial aspects of potential
      strategic transactions.

The Morgan Keegan Letter Agreement has an initial term of two
years, subject to automatic extension unless either party
determines otherwise.

Under the Morgan Keegan Letter Agreement:

    -- Affinity issued to Morgan Keegan, an advisory fee, a
       warrant with a five-year term to purchase 2,500,000 shares
       of Affinity's common stock for $0.50 per share.  Affinity
       will be required to register the shares of common stock
       covered by the warrant for resale under the Securities Act
       of 1933, as amended, if Affinity receives additional
       capital or patent licensing fees of $5 million;

    -- If Affinity sells debt or equity securities in an amount in
       excess of $5 million, Affinity will pay Morgan Keegan an
       additional cash placement fee equal to:

         * 5% of the amount of any equity financing,
         * 3% of the amount of any mezzanine financing, and
         * 1% of the amount of any senior debt financing,

       subject to certain exceptions.  However, Affinity will not
       be required to pay Morgan Keegan any additional cash
       placement fee on the sale of additional convertible notes;

    -- If Affinity decides to pursue the sale of the company,
       Morgan Keegan will represent Affinity, and Affinity will
       pay Morgan Keegan a transaction fee equal to 2% of the
       aggregate consideration received in the transaction;

    -- If Affinity decides to pursue an acquisition of another
       company, Morgan Keegan will represent Affinity in the
       transaction, and Affinity will pay Morgan Keegan a
       transaction fee equal to 2% of the aggregate consideration
       paid by Affinity; and

    -- Affinity will indemnify Morgan Keegan and its directors,
       officers, employees and agents for all losses, claims,
       damages, liabilities and expenses incurred in connection
       with its services to Affinity under the agreement, subject
       to certain exceptions.

A full-text copy of the Letter Agreement, dated July 10, 2006,
between Affinity Technology and Morgan Keegan is available for
free at http://ResearchArchives.com/t/s?e00

                     About Affinity Technology

Through its subsidiary, decisioning.com, Inc., Affinity Technology
Group, Inc. -- http://www.affi.net/-- owns a portfolio of patents  
that covers the automated processing and establishment of loans,
financial accounts and credit accounts through an applicant-
directed remote interface, such as a personal computer or terminal
touch screen.  Affinity's patent portfolio includes U. S. Patent
No. 5,870,721C1, No. 5,940,811, and No. 6,105,007.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 19, 2006,
Scott McElveen, L.L.P., expressed substantial doubt about Affinity
Technology Group, Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the year
ended Dec. 31, 2005.  The auditing firm pointed to the company's
recurring operating losses, accumulated deficit, and certain
convertible notes in default.

At Dec. 31 2005, Affinity Technology's stockholders' deficit
widened to $2,048,371, from a $1,513,523 stockholders' deficit at
Dec. 31, 2004.


AMERICHIP INT'L: May 31 Balance Sheet Upside-Down by $697,203
-------------------------------------------------------------
AmeriChip International Inc. delivered its second quarter
financial statements for the three months ended May 31, 2006, with
the Securities and Exchange Commission on July 17, 2006.

The Company reported a $2,226,553 net loss on $33,611 of sales for
the three months ended May 31, 2006, compared to a net loss of
$609,359 on $25,973 of sales for the same period in 2005.

At May 31, 2006, the Company's balance sheet showed $1,028,776 in
total assets, $1,722,566 in total liabilities, and $3,413 in
minority interest, resulting in a $697,203 stockholders' deficit.

The Company's May 31 balance sheet also showed strained liquidity
with $279,135 in total current assets available to pay $1,523,566
in total current liabilities coming due within the next 12 months.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?df3

                      Going Concern Doubt

Williams & Webster, P.S., in Spokane, Washington, raised
substantial doubt about AmeriChip International Inc.'s ability to
continue as a going concern after auditing the Company's financial
statements for the years ended Nov. 30, 2005, and 2004.  The
auditor pointed to the Company's significant operating losses.

                       About AmeriChip

Headquartered in Plymouth, Michigan, AmeriChip International Inc.
-- http://www.americhiplacc.com/-- holds a patented technology   
known as Laser Assisted Chip Control, the implementation of which
results in efficient chip control management in industrial metal
machining applications.  This technology provides substantial
savings in machining costs of certain automobile parts providing
much more competitive pricing and more aggressive sales approaches
within the industry.


ANCHOR GLASS: Gets Arkema's Nod to Assume Certincoat Agreement
--------------------------------------------------------------
Anchor Glass Container Corporation and Arkema, Inc., agreed that
Anchor Glass will assume the Certincoat System Agreement dated
Jan. 1, 2004, pursuant to Section 365 of the Bankruptcy Code.

The Honorable Alexander L. Paskay of the U.S. Bankruptcy Court for
the Middle District of Florida directs Anchor Glass to pay
$217,656, as cure amount, on or before Aug. 3, 2006.

Arkema had objected to any provision in Anchor Glass' plan that
calls for assumption of the Certincoat Contract.  Arkema asserted
that pursuant to the Pennsylvania law, Anchor Glass is prohibited
from assigning, and thus, assuming, the Certincoat Agreement dated
Jan. 1, 2004.  The Contract is a requirements contract and will
materially increase the risk and burdens for Arkema.

Arkema, Inc., has withdraw its objection to the confirmation of
Anchor Glass' Second Amended Plan of Reorganization.  The Court
confirmed Anchor Glass' Plan on April 18, 2006.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents Anchor Glass in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When Anchor Glass filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  The Court confirmed Anchor Glass' second
Amended Plan of Reorganization on April 18, 2006.  Anchor Glass
emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass
Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ANCHOR GLASS: Court Dismisses Adversary Proceeding Against OCI
--------------------------------------------------------------
The Honorable Alexander L. Paskay of the U.S. Bankruptcy Court for
the Middle District of Florida dismissed an Adversary Proceeding
filed by Anchor Glass Container Corporation against OCI Chemical
Corporation.

The Court found that Anchor Glass has taken no action for more
than six months in the adversary proceeding.  It appears that
Anchor Glass no longer desires to pursue the matter, the Court
said.

                           OCI Contract

Anchor Glass and OCI entered into an OCI Sales Agreement #145
dated June 7, 2004.  In the Agreement, OCI agreed to supply bulk
density soda to Anchor Glass for a three-year term.

OCI supplies approximately 65% of Anchor Glass' annual
requirements of soda ash, and is substantially the sole supplier
to six of Anchor Glass' eight manufacturing plants.

On Aug. 9, 2005, in an attempt to collect a prepetition claim
in violation of Section 362 of the Bankruptcy Code, OCI notified
the Anchor Glass that Anchor failed to make payments due under the
Agreement.  OCI asserts a balance due in excess of $1,800,000 as
of the Petition Date.  OCI also declined further performance under
the Agreement pursuant to paragraph 3 of the Terms and Conditions
to the Agreement.

In addition, OCI has demanded that, as a condition to resuming
new shipments of soda ash, Anchor must agree to the substantially
higher amount OCI asserts as its unpaid prepetition claim due
from Anchor, rather than the amount indicated by Anchor's records.  
OCI also demanded that Anchor must agree to pay a price of $105
per ton, rather than the $79.20 per ton established under the
terms of the Agreement, until Anchor has paid OCI's asserted
prepetition claim in full.

The Anchor Glass told the Court that OCI's actions constituted a
willful violation of the automatic stay and a breach of its
obligations under the Agreement, as affected by Section 365, which
implicitly obligates a non-debtor party to an executory contract
to continue performing its obligations, until Anchor exercises its
right to assume or reject the terms of the Agreement.

Anchor Glass had asked the Court for:

   (a) a Temporary Retraining Order against OCI, requiring OCI to
       (i) resume immediately the shipment of soda ash to Anchor,
       at the price per ton set by the terms of the Agreement,
       and (ii) make shipments by truck as well as railcar, to
       avoid any interruption in the steady supply of soda ash to
       Anchor's plants, until a regular supply is restored;

   (b) a Preliminary Injunction requiring OCI to continue
       shipping soda ash to Anchor under the terms of the
       Agreement until a final hearing on the merits;

   (c) a Permanent Injunction requiring OCI to continue shipping
       soda ash to Anchor under the terms of the Agreement until
       Anchor assumes or rejects the Agreement; and

   (d) any relief as may be appropriate, including judgment for
       all damages sustained by Anchor as a result of OCI's
       refusal to perform under the terms of the Agreement, and
       OCI's violation of the automatic stay, including the
       incremental expense of truck shipments.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents Anchor Glass in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When Anchor Glass filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  The Court confirmed Anchor Glass' second
Amended Plan of Reorganization on April 18, 2006.  Anchor Glass
emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


APOGEE TECH: Posts $729,000 Net Loss in Quarter Ended March 31
--------------------------------------------------------------
Apogee Technology, Inc. filed its first quarter financial
statements for the period ended March 31, 2006, with the
Securities and Exchange Commission.

The Company reported a $729,000 net loss on $985,398 of revenues
for the three months ended March 31, 2006.  This compares to a
$1,438,284 net loss on $1,114,740 of revenues for the three months
ended March 31, 2005.

At March 31, 2006, the Company's balance sheet showed $6,112,641
in total assets, $1,227,506 in total liabilities, and $4,855,135
in stockholders' equity.

A full-text copy of the Company's financial statement for the
quarterly period ended March 31, 2006, is available for free at:

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

                        Going Concern Doubt

Miller Wachman, LLP, expressed substantial doubt about Apogee
Technology, Inc.'s ability to continue as a going concern after
auditing the Company's financial statements for the years ended
Dec. 31, 2005 and 2004.  The auditing firm pointed to the
Company's recurring operating losses and negative cash flows from
operations.

                    About Apogee Technology

Headquartered in Norwood, Massachusetts, Apogee Technology
(AMEX: ATA) -- http://www.apogeemems.com/-- designs, develops and
markets proprietary sensor and medical device products using its
MEMS and nanotechnology for the automotive, industrial, consumer
and medical markets.  The Company operates a worldwide marketing
and sales organization and has offices in the U.S. and Japan.


APPLIEDTHEORY CORP: Bankruptcy Court Applied STN Factors Properly
-----------------------------------------------------------------
The Honorable Denise Cote of the U.S. District Court for the
Southern District of New York affirmed a ruling by the U.S.
Bankruptcy Court requiring the Official Committee of Unsecured
Creditors of AppliedTheory Corporation to obtain court approval
before it could bring an equitable subordination suit against the
Debtors' Lenders.

                       Authority Motion

On December 23, 2002, the Committee filed a motion seeking
authority to commence an adversary proceeding against The Palladin
Group, L.P., Elliot Associates, L.P., and other members of a
lending syndicate.  The Authority Motion contained a proposed
complaint asserting claims for voidable preference, fraudulent
conveyance, equitable subordination, and aiding and abetting
breach of fiduciary duty.  

In April 2004, the Committee renewed its Authority Motion and
submitted a proposed amended complaint, which included an
equitable subordination claim.  The bankruptcy court denied the
motion and the Committee did not appeal.

The chapter 11 trustee, appointed on August 6, 2003, reviewed the
potential claims against the Lenders at the behest of the
Committee and concluded that that there was an insufficient basis
to assert all but one of the claims identified by the Committee.  
Ultimately, a summary judgment was entered against the chapter
trustee on that claim.

On August 5, 2005, the Lenders filed a motion seeking an order
clarifying or limiting the scope of the Committee's authority to
engage in litigation against the Lenders.

On October 11, 2005, the bankruptcy court granted the Lenders'
request and held that the Trustee "would ordinarily" be the proper
party to bring the claim and that the Committee required court
approval before it could assert the claim.

The bankruptcy court declared that in this case, the Trustee "has
the sole and exclusive right to assert" the claim after finding
that the claim would:

    * be brought on behalf of all general unsecured creditors;

    * seek to redress injuries allegedly inflicted upon the
      Debtors and their creditors generally; and

    * not be directed toward any particularized injury suffered by
      any specific creditor, or any allegedly wrongful conduct by
      the Lenders directed to any specific creditor.

The Committee filed a timely Notice of Appeal of the Authority
Order on October 20, 2005.

                   District Court Decision

In her decision, Judge Cote says that the appeal raises the
question of whether a creditor's committee may bring an equitable
subordination claim without receiving court approval.  Judge Cote
says it may not and affirms the bankruptcy court's ruling.

                   Equitable Subordination

Judge Cote relates that equitable subordination is a judge-made
doctrine that predates Congress' revision of the Bankruptcy
Code.  United States v. Nolan, 517 U.S. 535, 538, 116 S.Ct. 1524,
134 L.Ed.2d 748 (1996).

The purpose of equitable subordination is to undo wrongdoing by an
individual creditor in the interest of the other creditors.  Given
equitable subordination's purpose, many courts have concluded that
where a trustee has been appointed, it is the proper party to
raise claims of equitable subordination.  See, e.g. In re KDI
Holdings, Inc., 277 B.R. 493, 507 (Bankr. S.D.N.Y. 1999)

Judge Cote says that courts that allowed creditors to bring claims
for equitable subordination, did so when an individual creditor
sought to bring the equitable claim for its own benefit.

                          STN Factors

Judge Cote relates that under the Bankruptcy Code, creditor's
committees are "qualified to initiate a suit" but that right is
contingent upon the committee obtaining "the approval of the
bankruptcy court."  In re STN Enters., 779 F.2d 901, 904 (2d Cir.
1985).

The right to bring suit may be exercised in a limited set of
situations, including when the trustee or "debtor in possession
unreasonably fails to bring suit" and "where the trustee or debtor
in possession consents."  In re Commodore Intern. Ltd., 262 F.3d
96, 100 (2d Cir. 2001)

Judge Cote says that in determining whether to allow a committee
to bring litigation, the bankruptcy court considers two factors:

    1) whether the claim is colorable and

    2) whether the claim is "likely to benefit the reorganization
       estate."

These two factors, Judge Cote declares, were introduced by the
Second Circuit in STN Enterprises, 779 F.2d at 901, and are
referred to as the STN factors.

Judge Cote finds that the bankruptcy court had already made
factual determinations and that these determinations were not
clearly erroneous and not even challenged on appeal.  In any
event, the Committee was required to obtain approval from the
bankruptcy court before bringing any litigation.  The bankruptcy
court, in addressing an application, must apply the STN Factors.

Thus, Judge Cote rules, the bankruptcy court did not err in
applying the STN Factors to the issue of the Committee's right to
bring an equitable subordination claim.

Judge Cote's decision is published at 2006 WL 1711766.

Mary Miras, Esq., at Duval & Stachenfeld LLP, and David Parker,
Esq., at Kleinberg, Kaplan, Wolff & Cohen P.C., represented
Palladain Overseas Fund, Ltd., Halifax Fund, L.P., Palladin
Partners I, L.P., Deam Convertible Arbitrage Fund, Ltd., Spectrum
Investment Partners, LP, Elliott International, L.P. and Elliott
Associates, L.P., in this proceeding.

                       About AppliedTheory

AppliedTheory Corporation provides internet service for business
and government, including direct internet connectivity, internet
integration, web hosting and management service. The Company
filed for chapter 11 protection on April 17, 2002 (Bankr. S.D.N.Y.
Case No. 02-11868).  Joshua Joseph Angel, Esq., and Leonard H.
Gerson, Esq., at Angel & Frankel, P.C., represent the Debtors in
their restructuring efforts.  Andrew I. Silfen, Esq., and Leah M.
Eisenberg, Esq., at Arent Fox PLLC, represent the Official
Committee of Unsecured Creditors.  When the Company filed
for protection from its creditors, it listed $81,866,000 in total
assets and $84,128,000 in total debts.


ASARCO LLC: FFIC Wants to Participate in Asbestos Estimation Steps
------------------------------------------------------------------
Fireman's Fund Insurance Company asks the U.S. Bankruptcy Court
for the Southern District of Texas to:

   (a) include in any case management order governing any
       estimation proceedings appropriate protective "insurance
       neutrality" terms to the effect that any estimation of the
       Asbestos Claims is not binding on FFIC for any insurance
       coverage; or

   (b) permit FFIC to fully and meaningfully participate in any
       estimation proceedings.

FFIC reserves its rights under its policies in the context of any
pending, or future, insurance coverage among ASARCO and the
Asbestos Debtors.

FFIC complains that the Agreement regarding the case management of
the estimation of the asbestos claims is unfair.

FFIC asserts that it has submitted several objections to the
Estimation Motion.  FFIC previously asked the Court to include
appropriate protective "insurance neutrality" terms in any case
management governing any estimation process.  FFIC also asked the
Court to permit it to participate in any estimation proceeding.

FFIC was not included in any negotiations between ASARCO LLC, the
Official Committee of Unsecured Creditors for the Asbestos
Subsidiary Debtors, and the Future Claims Representative, Anthony
S. Cox, Esq., at Hermes Sargent Bates, LLP, in Dallas, Texas,
tells the Court.

Mr. Cox argues that the Agreement expanded the scope for which
the results of the estimation proceeds will be used.  Because of
the expanded scope, Mr. Cox believes that the results of the
estimation proceedings will be used in connection with the
litigation commenced in May 2001 by ASARCO and the Asbestos
Debtors against FFIC captioned ASARCO LLC, et al. v. Allianz
International Insurance, Ltd., et al.

Mr. Cox says the Court should direct ASARCO to include the
appropriate protective "insurance neutrality" terms in any case
management order to streamline the proposed estimation process by
eliminating the need for FFIC's further participation and avoid
the fundamental unfairness of imposing a substantive result on a
litigant that otherwise has no opportunity to participate in the
outcome.

Mr. Cox argues that since FFIC was not included in the
negotiations for the Agreement, it is now a disadvantage for FFIC
to participate meaningfully in the estimation proceeding.  The
time for discovery set in the Agreement is unreasonably short,
Mr. Cox says, considering that other parties have accessed the
documentation that must be reviewed to prepare for the estimation
proceeding.

A compromise or a settlement under Rule 9019(a) of the Federal
Rules of Bankruptcy Procedure cannot be used to avoid the express
jurisdictional requirements of the Bankruptcy Rules.  Mr. Cox
emphasizes that the Agreement is neither a compromise nor a
settlement because nothing is settled.  Rather, Mr. Cox says, the
Agreement is an impermissible private re-writing of the
Bankruptcy Rules.

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

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

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


ASARCO LLC: Wants Stay Lifted to Enter Into Tax Escrow Agreement
----------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to lift the automatic stay, to
the extent necessary, to permit ASARCO, the U.S. government and
Wells Fargo Bank, National Association, as escrow agent to enter
into the Stipulation and the Escrow Agreement and the deposit of
the Tax Refund in the Escrow Account.

ASARCO LLC's predecessor filed consolidated tax returns as the
common parent of an affiliates group of corporations.  As a
result of the carryback of losses to certain of those
consolidated tax years, ASARCO expects to receive a refund from
the United States Department of the Treasury, Internal Revenue
Service of approximately $40,479,421, plus interest.

In February 2006, the U.S. government, on behalf of the
Environmental Protection Agency, the Department of Agriculture
and the Department of the Interior, filed a secured claim for
$130,741,077 as a result of a right of set-off against the Tax
Refund, plus any additional amounts subject to set-off.

ASARCO objects to the Claim on various grounds, including that
the Claim is not allowable under Section 502 of the Bankruptcy
Code and that the Tax Refund is not subject to setoff.

To resolve their dispute, the parties stipulate that the United
States, or ASARCO if it receives the Tax Refund, agrees to
transfer any tax overpayments plus any interest resulting from
the Tax Refund to an interest bearing escrow account, pending the
settlement of the allowance of the United States' Claim.

Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas,
notes that the transfer will not impair or waive any setoff
rights of the U.S. government, or any defenses or objections by
the Debtors.  Instead, the rights, defenses or objections will be
preserved as if the tax overpayments had not been transferred to
ASARCO, but instead are held by the U.S. government up until the
time the funds are actually distributed from the escrow account
to either the U.S. government or ASARCO.

Mr. Davis asserts that the Escrow Account provides adequate
protection of the U.S. government's asserted setoff rights.  To
implement the escrow provisions of the Stipulation, ASARCO, the
U.S. government and Wells Fargo Bank, National Association, as
escrow agent, entered into an Escrow Agreement.

A full-text copy of the Escrow Agreement is available for free at
http://ResearchArchives.com/t/s?de1

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

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

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


ASARCO LLC: Wants to Execute IRS Forms for Tax Refunds
------------------------------------------------------
ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to execute the
Internal Revenue Service forms.

On May 15, 2003, ASARCO Incorporated filed tax refund claims for
$70,160,199 with the Internal Revenue Service.  Pursuant to a
merger deal between ASARCO, Inc., and ASARCO LLC in February
2005, the Refund Claims is property of ASARCO LLC's bankruptcy
estate, James R. Prince, Esq., at Baker Botts LLP, in Dallas,
Texas, says.

The Refund Claims are based on the carry-back of specified
liability losses from:

   (a) tax years ending on Dec. 31, 1994, and 1995 to the tax
       year ending on Dec. 31, 1987;

   (b) tax year ending on Dec. 31, 1998, to the tax year
       ending on Dec. 31, 1988; and

   (c) tax year ending on Dec. 31, 1999, to the tax year
       ending on Dec. 31, 1989.

ASARCO particularly asserted that the environmental and workmen's
expenditures it incurred qualified as specified liability losses
under Section 172(f) of the Internal Revenue Code.

The IRS disputed ASARCO's assertions and maintained that the
environmental expenditures did not qualify as SLLs.  The IRS
required ASARCO to provide documents supporting its argument.

In the last quarter of 2005, the IRS agreed to use statistical
sampling to determine the portion of ASARCO's environmental
expenditures that would be classified as SLLs, Mr. Prince
relates.  Based on the statistical sampling, the IRS tentatively
agreed to allow $40,479,421 of the Refund Claims.

In May 2006, the Congressional Joint Committee on Taxation
approved the allowance of $40,479,421 of the Refund Claims.  The
IRS notified ASARCO of the allowance, and indicated that the
balance of the Refund Claim is disallowed.  Attached with the
IRS' notice are:

   (i) IRS Form 870 -- Offer of Waiver of Restrictions on
       Assessment and Collection of Deficiency in Tax and of
       Acceptance of Overassessment; and

  (ii) IRS Form 3363 -- Acceptance of Proposed Disallowance of
       Claim for Refund or Credit.

For the IRS to pay the allowed Refund Claims, ASARCO is required
to first execute the IRS Forms.  If ASARCO does not sign the IRS
Forms, the Refund Claims will be disputed and referred to the IRS
Appeals Division.  The IRS further warned ASARCO that no portion
of the Tax Refund would be paid until the dispute is resolved and
approved by the Joint Committee on Taxation.

Mr. Prince notes that if ASARCO signs the IRS Forms, ASARCO would
waive its right to have the IRS reconsider the Refund Claims as
part of the current administrative proceedings.  However, a
reconsideration of the disallowed Refund Claims would unlikely
result in a more favorable resolution of the Claims, Mr. Prince
says.

By signing the IRS forms, ASARCO would not in any way waive its
right to pursue litigation for any disallowed portion of the
Refund Claims either in the District Court or in the Claims
Court, Mr. Prince adds.

By executing the IRS forms, ASARCO will avoid additional expenses
with respect to the Tax Refund.  By separating the allowed amount
from the disputed amount, ASARCO narrows the focus of future
litigation, Mr. Prince points out.

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

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

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


ATLANTIC WINE: Meyler & Company Raises Going Concern Doubt
----------------------------------------------------------
Meyler & Company, LLC, in Middletown, New Jersey, raised
substantial doubt about Atlantic Wine Agencies, Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the years ended March 31,
2006, and 2005.  The auditor pointed to the Company's losses since
inception, and uncertainty to obtain additional capital and
operate successfully.

Atlantic Wine reported a net loss of $2,270,382 on $1,132,060 of
net sales for the year ended March 31, 2006, compared to a net
loss of $3,214,810 on $120,913 of net sales for the same period in
2005.

At March 31, 2006, the Company's balance sheet showed $3,865,952
in total assets, $1,905,355 in total current liabilities, and
$1,960,597 in total stockholders' equity.

                  Loan From Principal Stockholder

The principal stockholders advanced the Company on March 31, 2006,
$3,689,821 for working capital of which $2,429,958 has been
contributed to capital and $1,259,863 remains as a loan on that
date.  The loan is non-interest bearing and has no stated maturity
date.

                         Subsequent Events

The Company entered into an overdraft facility arrangement on June
6, 2006, with a South African bank for ZAR$1,000,000 or $162,200.
The loan is secured by the assets of the South African winery and
bears a rate of interest at South African Prime of 8%.

A full-text copy of the Company's annual report is available for
free at http://ResearchArchives.com/t/s?df6

Headquartered in London, Atlantic Wine Agencies, Inc. --  
http://www.atlanticwineagencies.com/-- is a public listed company   
supported by a small group of key investors who are passionate
wine enthusiasts.  The Company purchased Mount Rozier Estatem, a
world-class vineyard estate in Stellenbosch, South Africa, in
February 2004.  The group has two key business areas; a brand
building wine business and a leisure/lifestyle development
business.  Each is operated separately with management and
organizations within the group under the control of the main
board.


BLACK PRESS: Moody's Rates Proposed Sr. Sec. Bank Loan at Ba3
-------------------------------------------------------------
Moody's Investors Service assigned a Ba3 Corporate Family rating
to Black Press Ltd. and a Ba3 rating to its proposed new senior
secured credit facilities.  The outlook for the rating is stable.

The Ba3 Corporate Family rating primarily reflects Black Press's
significant consolidated leverage associated with its pending
acquisition of the Akron Beacon Journal; its successful track
record of acquiring and operating newspapers in smaller
communities, which are less exposed to competition and advertising
volatility than those in urban markets, coupled with Moody's
expectation that management will focus on reducing restricted
group leverage below 4 times over the next few years.

The rating also reflects the business risk inherent in a
smaller scale, pure play newspaper operation with no revenue
diversification outside of this challenging sector, as well as the
ongoing cash needs of its Hawaiian newspaper operation, which
Moody's expects will be funded from the excess cash flow of the
restricted group.

The rating outlook is stable based on Moody's assumption that
Black Press will likely realize operating efficiency improvements
at the Akron paper to bring its EBITDA margin up to Black Press's
own level, and that debt reduction will be modest as ongoing
investments will be made to support Black Press's Hawaiian
business.

Assignments:

   Issuer: Black Press Ltd

     * Corporate Family Rating, Assigned Ba3
     * Senior Secured Bank Credit Facility, Assigned Ba3

Black Press Ltd. is a newspaper company that owns and publishes
115 community newspapers in Western Canada as well as Washington,
Hawaii and Ohio in the United States.  The company is
headquartered in Victoria, British Columbia, Canada.


BMC INDUSTRIES: Court Approves Second Amended Disclosure Statement
------------------------------------------------------------------
The Honorable Robert J. Kressel of the U.S. Bankruptcy Court for
the District of Minnesota approved the Second Amended Disclosure
Statement explaining the Second Amended Plan of Reorganization
filed in the chapter 11 cases of BMC Industries Inc. and its
debtor-affiliates.

The Court determined that the Disclosure Statement contained
adequate information -- the right amount of the right kind of
information necessary for the creditors to make informed decisions
-- as required under Section 1125 of the Bankruptcy Code.

The Plan provides for the substantive consolidation of the
Debtors' estates.  All debtor-affiliates will be deemed merged
with BMC Industries, canceling intercompany claims.

Summarily, the Plan provides for:

   (1) the distribution in cash on the plan's effective date to
       the holders of:

       -- allowed administrative expense claims, aggregating
          $2,469,000, and

       -- allowed priority non-tax claims, totaling $4,500;

   (2) the distribution in cash, in equal annual installments of
       principal and interest, to holders of allowed priority tax
       claims, amounting to $166,000 beginning six months
       following full payment of a working capital adjustment and
       with the final installment payable no later than the fifth
       anniversary of the Effective Date;

   (3) the distribution on the Effective Date to the holders of
       allowed other secured claims, at the option of the
       liquidating trustee, either:

       (a) the proceeds of the sale or disposition of the
           collateral securing the allowed secured claim to the
           extent of the value of the holder's secured interest in
           the allowed secured claim, net of the costs of
           disposition of the collateral;

       (b) the collateral securing the allowed secured claim;

       (c) other treatment that leaves unaltered the legal,
           equitable, and contractual rights to which the holder
           of the allowed other secured claim is entitled; or

       (d) other distribution as necessary to satisfy the
           requirements of the Bankruptcy Code;

   (4) the creation of a Liquidating Trust for the benefit of
       general unsecured creditors of the Debtors and through
       the distribution on the Effective Date to the holders
       of allowed general unsecured claims amounting to
       $55.65 million and to the holders of allowed prepetition
       lender claims, totaling $70.6 million, of interests in the
       Liquidating Trust; and

   (5) cancellation of equity interests.

A hearing to consider confirmation of the plan will be held on
Aug. 9, 2006, 10:30 a.m. in Courtroom 8 West at U.S. Courthouse,
300 South Fourth Street, Minneapolis, Minn.

An objection to confirmation of the plan should be made by motion
under Local Rule 3020-1 and received on or before Aug. 4, 2006.

Ballots, in order to be counted, should be received on or before
Aug. 4, 2006.  The attorneys for the Debtors and the Official
Committee of Unsecured Creditors will jointly count the ballots
and file a report of the tabulation not later than Aug. 8, 2006,
under Local Rule 3020-2.

A full-text copy of the Second Amended Disclosure Statement is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060719033103

Headquartered in Ramsey, Minnesota, BMC Industries Inc. --
http://www.bmcind.com/-- is a multinational manufacturer and    
distributor of high-volume precision products in two business
segments, Optical Products and Buckbee Mears.  The Company, along
with its affiliates, filed for chapter 11 protection (Bankr. D.
Minn. Case No. 04-43515) on June 23, 2004.  Jeff J. Friedman,
Esq., at Katten Muchin Zavis Rosenman, and Clinton E. Cutler,
Esq., at Fredrikson & Byron, P.A., represent the Debtors in there
restructuring efforts.  Thomas J. Flynn, Esq., at Larkin, Hoffman,  
Daly & Lindgren, Ltd., represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
its creditors, it listed $105,253,000 in assets and $164,751,000
in liabilities.


BROWNWOOD FORD: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Brownwood Ford Lincoln Mercury LLC
        500 West Commerce
        Brownwood, Texas 76801
        Tel: (915) 643-1651
        Fax: (915) 643-3161

Bankruptcy Case No.: 06-32893

Type of Business: The Debtor operates an automotive dealership.

Chapter 11 Petition Date: July 19, 2006

Court: Northern District of Texas (Dallas)

Judge: Harlin DeWayne Hale

Debtor's Counsel: Joyce W. Lindauer, Esq.
                  8140 Walnut Hill Lane, Suite 301
                  Dallas, Texas 75231
                  Tel: (972) 503-4033
                  Fax: (972) 503-4034

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


CALPINE CORP: Wants Court To Approve Pacific Gas Settlement Pact
----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to approve their
Settlement Agreement with Pacific Gas & Electric Company.

Calpine Gilroy Cogen LP operates a 130-megawatts cogeneration
facility.  In 1983, Gilroy and Pacific Gas & Electric Company
entered into a Power Purchase Agreement.

In 1999, the parties executed an agreement for termination and
buy-out of standard offer.  The PPA was terminated in October
2002.

As consideration for the Termination Agreement, the parties
agreed that PG&E would make monthly termination payments of not
more than $20,700,000 per year for 14 years and 8 months
commencing on Feb. 28, 2000, with the last payment due on
Sept. 30, 2014.

Under the Termination Agreement, PG&E reserved and was granted
certain rights of set-off against the Termination Agreement
Payments.

In November 2003, Gilroy sold the receivable stream associated
with the Termination Agreement Payments.  The Termination
Agreement Payments Receivable was subject to those rights of set-
off reserved by PG&E under the Termination Agreement.

Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
relates that Calpine Corporation and Gilroy indemnified the
purchaser of the Termination Agreement Payments Receivable
against any set-offs PG&E may make against the Termination
Agreement Payments.  The Purchaser was also granted a security
interest in the Gilroy Facility, and was given the right to
foreclose on the Gilroy Facility if Calpine and Gilroy fail to
honor their guaranty obligations.

Mr. Cieri notes that for the passed years, PG&E, Gilroy and other
power generators have been involved in a dispute regarding
certain historical rates charged by Gilroy and other power
generators under certain types of contracts with PG&E.

The Termination Agreement provided that if Gilroy is found to
have any liability to PG&E under the Pricing Dispute, PG&E would
be authorized to offset Gilroy's liability against PG&E's
Termination Payments.

Using the methodology advocated by PG&E in the Pricing Dispute,
PG&E's asserted damages against Gilroy under the Pricing Dispute
could exceed $40,000,000, Mr. Cieri notes.

Calpine disputes liability and does not agree with PG&E's
calculations.  However, any finding of liability by Gilroy on
account of the Pricing Dispute could result in a dollar-for-
dollar reduction in the Termination Payments, and could trigger
dollar-for-dollar guaranty obligations on the part of Gilroy and
Calpine with respect to the Termination Agreement Payments
Receivable, Mr. Cieri pointed out.

Furthermore, Mr. Cieri said that because the purchaser of the
Termination Agreement Payments Receivable was granted a security
interest in the Gilroy Facility, any guaranty obligations could
constitute secured debt.

Thus, Calpine and Gilroy negotiated with PG&E in an attempt to
minimize Gilroy's secured debt exposure.

Accordingly, the parties agreed that:

   (a) Calpine's King City Plant, a non-debtor entity, will be
       the proxy for the Gilroy Plant;

   (b) Gilroy will pay PG&E, for the next 54 months, the amount
       equal to $0.975 per MWh of electricity delivered to PG&E
       from the King City Plant;

   (c) the settlement will be deemed null and void if no approval
       from the Court or the California Public Utilities Company
       is received before December 31, 2006, unless otherwise
       agreed by the parties; and

   (d) they will mutually release all claims and causes of action
       arising from the Settled Issues.

A full-text copy of the PG&E Settlement Agreement is available
for free at http://ResearchArchives.com/t/s?de2
  
                       About Calpine Corp.

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


CARRAMERICA REALTY: Closes Merger With Blackstone Group Affiliate
-----------------------------------------------------------------
CarrAmerica Realty Corporation completed the merger of CarrAmerica
with and into Nantucket Acquisition Inc., an affiliate of The
Blackstone Group, and the other transactions contemplated by the
Agreement and Plan of Merger, dated as of March 5, 2006, as
amended, by and among CarrAmerica, certain of its subsidiaries and
affiliates of The Blackstone Group.

                  Terms of the Merger Agreement

Under the terms of the merger agreement, holders of CarrAmerica's
common stock, other than CarrAmerica's subsidiaries and the
Blackstone affiliate with which CarrAmerica merged, will receive
$44.75 in cash, without interest, for each share of common stock
issued and outstanding immediately prior to the effective time of
the Merger.  Holders of CarrAmerica's 7.50% Series E cumulative
redeemable preferred stock will receive one share of 7.50% Series
E cumulative redeemable preferred stock of the surviving
corporation of the Merger on substantially the same terms as the
CarrAmerica Series E Preferred Stock, for each share of
CarrAmerica Series E Preferred Stock issued and outstanding
immediately prior to the effective time of the Merger.

As promptly as practicable, the surviving corporation will be
liquidated into Nantucket Parent LLC, an affiliate of The
Blackstone Group.  In the liquidation, shares of the New Series
E Preferred Stock will be canceled and the holders thereof will
receive a cash distribution from the surviving corporation of
$25 per share plus any accrued and unpaid dividends.  In addition,
in connection with the mergers of Carr Realty Holdings, L.P. and
CarrAmerica Realty, L.P., limited partners of those partnerships
will receive $44.75 in cash, without interest, for each unit of
partnership interest that they own in the partnerships, or in lieu
of such cash consideration, qualified limited partners that
properly elected to do so will receive newly issued 6% Class A
preferred units in the applicable surviving partnership on a one-
for-one basis.

                         Notes Tendered

In addition, as of 8:00 a.m., New York City time, on July 13,
2006, the expiration date of the tender offers of its subsidiary,
CarrAmerica Realty Operating Partnership, L.P., for

   * $122,242,000 aggregate principal amount of its 7.375% Senior
     Notes due 2007,

   * $0 aggregate principal amount of its 5.261% Senior Notes due
     2007,

   * $168,181,000 aggregate principal amount of its 5.25% Senior
     Notes due 2007,

   * $99,837,000 aggregate principal amount of its 6.875% Senior
     Notes due 2008,

   * $212,676,000 aggregate principal amount of its 3.625% Senior
     Notes due 2009,

   * $237,000,000 aggregate principal amount of its 5.500% Senior
     Notes due 2010,

   * $189,645,000 aggregate principal amount of its 5.125% Senior
     Notes due 2011 and

   * $353,441,000 aggregate principal amount of its 7.125% Senior
     Notes due 2012,

constituting approximately (i) 97.79% of the 7.375% Notes,
(ii) 99.84% of the 6.875% Notes, (iii) 86.39% of the 5.261% Notes,
5.25% Notes, 3.625% Notes and 7.125% Notes, which voted as a
single class, and (iv) 94.81% of the 5.500% Notes and 5.125%
Notes, which voted as a single class, had been tendered and not
withdrawn in the tender offers and consent solicitations.  All
Notes have been accepted for payment.

The Supplemental Indentures governing the 7.375% Notes and the
6.875% Notes, which were executed on June 23, 2006 in connection
with the receipt of the requisite consents from the holders of
more than a majority in aggregate principal amount of each of the
Operating Partnership's outstanding 7.375% Notes and 6.875% Notes
to the proposed amendments reflected therein, are now operative.

The Supplemental Indentures governing (i) the 5.261% Notes, 5.25%
Notes, 3.625% Notes and 7.125% Notes and (ii) the 5.500% Notes and
5.125% Notes, which were executed on June 30, 2006 in connection
with the receipt of the requisite consents from the holders of
more than a majority in aggregate principal amount of the
Operating Partnership's outstanding (i) 5.261% Notes, 5.25% Notes,
3.625% Notes and 7.125% Notes voting as a single class, and
(ii) 5.500% Notes and 5.125% Notes voting as a single class to the
proposed amendments reflected therein, are now operative.

Goldman, Sachs & Co. acted as financial advisor to CarrAmerica.
Citigroup, Bank of America and Deutsche Bank acted as financial
advisors to Blackstone.  Acquisition financing is being provided
to Blackstone by Deutsche Bank, Bank of America and Citigroup.  
Hogan & Hartson L.L.P. acted as legal advisor to CarrAmerica.  
Simpson Thacher & Bartlett LLP acted as legal advisor to
Blackstone.

                   About The Blackstone Group

The Blackstone Group -- http://www.blackstone.com/-- a global  
private investment and advisory firm with offices in New York,
Atlanta, Boston, Los Angeles, London, Hamburg, Mumbai and Paris,
was founded in 1985.  In addition to Real Estate, The Blackstone
Group's core businesses include Private Equity, Corporate Debt
Investing, Marketable Alternative Asset Management, Mergers and
Acquisitions Advisory, and Restructuring and Reorganization
Advisory.

                        About CarrAmerica

Headquartered in Washington D.C., CarrAmerica Realty Corporation
(NYSE: CRE) -- http://www.carramerica.com/-- owns, develops and  
operates office properties in 12 markets throughout the United
States.  Currently, CarrAmerica and its affiliates own, directly
or through joint ventures, interests in a portfolio of 287
operating office properties, totaling approximately 26.4 million
square feet.

                          *     *     *

As reported in the Troubled Company Reporter on July 18, 2006,
Moody's Investors Service lowered the senior unsecured ratings on
notes of CarrAmerica Realty Corporation and CarrAmerica Realty
Operating Partnership LP to Ba3 from Baa2.  The rating agency also
withdrew CarrAmerica's preferred stock rating.  CarrAmerica has
been acquired by affiliates of The Blackstone Group, an investment
and advisory firm.  This concluded Moody's review; the outlook is
stable.


CELLSTAR CORP: Earns $2.7 Million in Second Quarter 2006
--------------------------------------------------------
CellStar Corp. reported a consolidated net income of $2.7 million
for the quarter ended May 31, 2006, compared to a consolidated net
loss of $9.4 million in 2005.  For the second quarter of 2006, the
Company reported income from continuing operations of $2.1 million
compared to a loss of $1.8 million in the same period in 2005.  
The Company's revenues for the quarter decreased to $216.8 million
from $261.8 million in the same period last year.  

As of May 31, 2006, the Company reported year-to-date income from
continuing operations of $4.2 million compared to a loss of
$5.2 million in 2005.  Year-to-date through May 31, 2006, the
Company reported consolidated net income of $4.8 million compared
to a consolidated net loss of $13.8 million in 2005.  

The Company reported year-to-date revenues through May 31, 2006,
of $422.5 million compared to $488.8 million in 2005.  A revenue
increase in the North American Region of $17.8 million was offset
by a decline of $84.2 million in the Latin American Region.
Despite the loss of a portion of the North American Region's
insurance replacement business in April 2006, revenues increased
$17.8 million or 8.6% compared to year-to-date 2005.  The
increase was due primarily to the regional carrier business.  The
decline in revenues in the Latin American Region was primarily in
the Miami operations related to reduced handset sales to
Telefonica Moviles S.A., a carrier customer in Colombia.

Consolidated gross profit increased to $16.6 million in the second
quarter of 2006 compared to $13.8 million in 2005.  The increase
in gross profit was primarily in the North American Region and the
Mexico operations.  Gross profit as a percentage of revenues was
7.7% compared to 5.3% in the second quarter of 2005.

                    Consolidated Balance Sheet

Cash and cash equivalents decreased to $18.2 million, from $26.5
million at February 28, 2006.  The balance sheet changes led to a
cash generation from operating activities of $18.9 million in the
second quarter of 2006.  Cash was used to pay down the domestic
revolving credit facility.

As of May 31, 2006, the Company had borrowed $9.9 million under
its domestic revolving credit facility, a decrease of $27.1
million from $37.0 million at February 28, 2006.  At May 31, 2006,
the Company had additional borrowing availability under the credit
facility of $19.6 million.  At July 3, 2006, the Company had
borrowed $15.8 million and had additional borrowing availability
of $20.5 million under the Facility.

                       About CellStar Corp.

Coppell, Texas-based CellStar Corp. -- http://www.cellstar.com/--  
provides logistics and distribution services to the wireless
communications industry.  CellStar has operations in North America
and Latin America, and distributes handsets, related accessories
and other wireless products from manufacturers to a network of
wireless service providers, agents, MVNOs, insurance/warranty
providers and big box retailers.  CellStar specializes in
logistics solutions, repair and refurbishment services, and in
some of its markets, provides activation services.

                          *     *     *

CellStar Corp.'s 5% Convertible Subordinated Notes due 2002
carries Moody's Investors Service's Ca2 rating.


COLLINS & AIKMAN: Court Approves Haley & Aldrich as Consultant
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
authorized Collins & Aikman Corporation and its debtor-affiliates
to employ Haley & Aldrich Inc. as environmental consultant.

Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, told the Court that the Debtors have on-going
environmental liabilities and commitments to regulatory agencies.  
These commitments, Mr. Schrock explained, are required in response
to Court orders, existing permits and mandates by various
regulatory agencies, some of which include stipulated penalties
for not meeting prescribed deadlines.

The Debtors determined that they require the services of Haley &
Aldrich to provide environmental consulting support and continuity
to these projects.  Haley & Aldrich has provided environmental
consulting services to the Debtors throughout the bankruptcy
period as an Ordinary Course Professional and is approaching the
$450,000 cap on labor fees.

Haley & Aldrich is currently providing consulting services at
these locations:

   * Cardinal Landfill, Farmington, New Hampshire
   * Collins & Aikman Farmington Plant, Farmington, New Hampshire
   * Collins & Aikman TEG Facility, Dover, New Hampshire
   * Collins & Aikman ATC Facility, Dover, New Hampshire
   * Former Wicks Manufacturing Facility, Mancelona, Michigan
   * Former Bohn Heat Treatment Facility, Beardstown, Illinois

Haley & Aldrich is providing Collins & Aikman with a wide range
of services including:

   -- site and remedial investigations;

   -- feasibility studies;

   -- remediation strategy;

   -- remediation design;

   -- long-term groundwater monitoring;

   -- remediation systems operation and maintenance assistance;
      and

   -- regulatory support.

The Debtors will pay Haley & Aldrich pursuant to this fee
schedule:

   Classification                   Hourly Rate
   --------------                   -----------
   Principal                            $183
   Senior Associate                     $171
   Associate Consultant                 $161
   Senior Professional              $124 - $146
   Staff Professional                $99 - $114
   Professional                      $79 - $94
   Field/Lab Geol/Engr Tech          $67 - $80
   Senior Graphics/GIS/Data Mgt.         $99
   Graphics/GIS/Data Mgt.                $89
   Office Support                        $62

As of July 6, 2006, the Debtors have authorized $419,304 for
Haley & Aldrich's services.  The Debtors have also authorized
$319,000 in additional work and anticipate an additional $133,000,
not yet authorized, for environmental services through
January 2007.

Jeffrey Klaiber, senior vice president at Haley & Aldrich,
assured the Court that the 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.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit        
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Unit Wants $256,184 Claim Deemed Timely Filed
---------------------------------------------------------------
Collins & Aikman Floorcoverings, Inc., a former subsidiary of
Collins & Aikman Corporation, asks the U.S. Bankruptcy Court for
the Eastern District of Michigan to deem its claim timely filed.

The Debtors entered into an Acquisition Agreement dated
Dec. 9, 1996, whereby they spun off Floorcoverings into a separate
company.  On Feb. 6, 1997, Floorcoverings became a wholly separate
company from the Debtors.

In the tax issues portion of the Agreement, the Debtors warrant
that all appropriate taxes related to the divestiture of
Floorcoverings and the normal operations before the divestiture
have been properly paid or withheld.

Robert D. Gordon, Esq., at Clark Hill Plc, in Detroit, Michigan,
relates that on August 10, 2001, the Florida Department of
Revenue informed Floorcoverings that it owed $172,038 in unpaid
corporate income taxes to the state.  The matter was referred to
Eugene White, director of tax for Collins and Aikman Products Co.  
The Debtors indicated that they would step in and defend the
assessment on behalf of Floorcoverings.  However, Floorcoverings
did not receive any further notice of the proceedings.

Floorcoverings believed that the Debtors had resolved the Florida
Tax Claim prepetition.  Much to Floorcoverings' surprise,
however, on March 7, 2006, Floorcoverings received a Warrant for
the Collection of Delinquent Corporate Income Tax from the
Florida Revenue Department, demanding payment of the Florida Tax
Claim plus interest totaling $256,184.

Mr. Gordon points out that under the terms of the Agreement, the
Debtors would be obligated to indemnify Floorcoverings for the
cost of defending the Florida Tax Claim and the amount of any
taxes ultimately due.  Thus, Floorcoverings is entitled to assert
a claim against the Debtors in that amount.

Floorcoverings did not know it held a claim against the Debtors
until after the Jan. 11, 2006 Claims Bar Date.  Upon learning
of the tax due, Floorcoverings promptly filed a proof of claim in
the Debtors' Chapter 11 cases.

Floorcoverings asks the Court to deem its Claim timely filed.

Mr. Gordon asserts that Floorcoverings' failure to file a proof
of claim prior to the Claims Bar Date was the result of excusable
neglect.

The Debtors have only just begun the claims objection and
reconciliation process, Mr. Gordon notes.  He adds that the
amount of Floorcoverings' claim is small relative to the Debtors'
total unsecured debt.

"Deeming Floorcoverings' Proof of Claim timely filed will not
prejudice the Debtors, nor will it impact the administration of
these bankruptcy cases in any significant way," Mr. Gordon says.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit          
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


CONSOLIDATED COMMS: S&P Holds Upsized Facility's Rating at BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services took a rating action on
Consolidated Communications Inc.'s $500 million secured credit
facility.

The loan rating on the upsized facility remains at 'BB-' (at the
same level as the 'BB-' corporate credit rating on parent
Consolidated Communications Holdings Inc.); the recovery rating
was revised to '3', indicating the expectation for meaningful
recovery of principal in the event of a payment default, from '2'.

Consolidated Communications Acquisition Texas Inc. is co-borrower
on the loan, and the facility is guaranteed by the parent company.

"The rating action follows the company's plan to repurchase $56.7
million of common stock held by private equity sponsor, Providence
Equity, with cash and up to $45 million of additional term
borrowings under its existing secured credit facility," said
Standard & Poor's credit analyst Susan Madison.

Ratings List:

  Consolidated Communications Holdings Inc.:

    * Corporate credit rating -- BB-/Negative/--

Rating Revised:

  Consolidated Communications Inc.:
                                  
    * $500 million second credit facility to BB- from BB-
    * Recovery rating to 3 from 2


DAVIDSON DIVERSIFIED: Ernst & Young Expresses Going Concern Doubt
-----------------------------------------------------------------
Ernst & Young LLP, in Greenville, South Carolina, raised
substantial doubt about Davidson Diversified Real Estate III,
L.P.'s ability to continue as a going concern after auditing the
Partnership's consolidated financial statements for the year ended
Dec. 31, 2005.  The auditor pointed to the Partnership's recurring
operating losses and accumulated deficits.

The Partnership earned $5,502,720 in net income on $3,845,000 of
total revenues for the year ended Dec. 31, 2005.  However, the
Partnership reported that it had $2,188,000 in operating losses
mitigated by its earnings on the sale of its discontinued
operations, which totaled $7,652,990.

At Dec. 31, 2005, the Partnership's balance sheet showed
$14,087,000 in total assets and $21,852,000 in total liabilities,
resulting in a $7,765,000 stockholders' equity deficit.

             Demand Payment for Outstanding Advances

The Partnership reported that as of Dec. 31, 2005 it had
approximately $5,827,000 of advances due to an affiliate of the
managing general partner.  In a letter dated April 4, 2006, this
affiliate of the managing general partner demanded payment in full
of all outstanding advances owed by the Partnership to it, plus
related accrued interest.

The Partnership disclosed that it did not have sufficient assets
to repay the advances and related accrued interest.  In addition,
the Partnership does not believe that the proceeds from a
refinancing of the mortgage of the its sole investment property
would be sufficient to repay the existing first mortgage plus the
advances and related accrued interest due to an affiliate of the
managing general partner.

The Partnership says that if it defaults on its repayment of the
advances due to an affiliate of the managing general partner, the
Partnership will risk losing its sole investment property through
foreclosure.  The managing general partner is evaluating its
options relative to the payment demand by an affiliate of the
managing general partner.

A full-text copy of the Company's 2005 Annual Report is available
for free at http://researcharchives.com/t/s?de5

                   About Davidson Diversified

Based in Greenville, South Carolina, Davidson Diversified Real
Estate III, L.P. is a Delaware limited partnership organized in
July 1985.  The Company's primary business is to operate and hold
for investment existing income-producing residential real estate
properties.  The Company receives income from its property and is
responsible for operating expenses, capital improvements and debt
service payments under mortgage obligations secured by the
property.

The general partners of the Company are Davidson Diversified
Properties, Inc., the managing general partner, Freeman Equities,
Ltd., the associate general partner, and David W. Talley and James
T. Gunn, the individual general partners.


DAVIDSON DIVERSIFIED: Mar. 31 Balance Sheet Upside-Down by $8.1MM
------------------------------------------------------------------
Davidson Diversified Real Estate III, L.P., filed its first
quarter financial statements for the three months ended March 31,
2006, with the Securities and Exchange Commission.

The Company reported a $379,630 net loss on $1,044,000 of revenues
for the quarterly period ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $13,338,000
in total assets, $21,495,000 in total liabilities, and $8,157,000
in stockholders' deficit.

A full-text copy of the Company's financial statements for the
quarterly period ended March 31, 2006, are available for free at
http://researcharchives.com/t/s?de7

                   About Davidson Diversified

Based in Greenville, South Carolina, Davidson Diversified Real
Estate III, L.P. is a Delaware limited partnership organized in
July 1985.  The Company's primary business is to operate and hold
for investment existing income-producing residential real estate
properties.  The Company receives income from its property and is
responsible for operating expenses, capital improvements and debt
service payments under mortgage obligations secured by the
property.

The general partners of the Company are Davidson Diversified
Properties, Inc., the managing general partner, Freeman Equities,
Ltd., the associate general partner, and David W. Talley and James
T. Gunn, the individual general partners.


DELPHI CORP: NuTech Wants to Continue Breach-Of-Contract Suit
-------------------------------------------------------------
NuTech Plastics Engineering, Inc., asks the U.S. Bankruptcy Court
for the Southern District of New York to lift the automatic stay
to allow its prepetition breach-of-contract case against Delphi
Automotive Systems USA, LLC, and General Motors Corp. to proceed.
The action was filed in 2002 and was set to begin trial shortly
after the Debtors filed for Chapter 11 protection.

Steven A. Klenda, Esq., at Tisdale & Associates LLC, argues that
Delphi and GM breached a contract with NuTech by failing to
purchase parts as agreed.  Delphi and GM also failed to remove
equipment from NuTech necessary for to produce the parts, Mr.
Klenda adds.  NuTech had increased its manufacturing capability to
satisfy Delphi and GM's production demands.

Lifting the automatic stay to allow a breach-of-contract case
against a debtor to continue is appropriate where the case was on
the eve of trial when debtor filed its bankruptcy petition, Mr.
Klenda relates citing In re Burger Boys, 183 B.R. 682, 688
(S.D.N.Y. 1994) (affirming Bankruptcy Court decision to lift
stay).

In addition, Mr. Klenda points out that John Mailey, one of
NuTech's former owners and a likely witness, has medical problems
that are so serious that trial had to be adjourned once already
because he had suffered a stroke.

Mr. Klenda assures the Court that the Debtors will not be
distracted by a state-court suit in which discovery and all other
pretrial preparations were completed long ago.

"NuTech's Case is ready for trial, and has been for some time,"
Mr. Klenda maintains.  "This court should allow the trial to
proceed now."

At the very least, NuTech asks the Court to lift the automatic
stay to allow it to proceed against co-defendant, General Motors.

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


DELPHI CORP: Pays $369,585 to Settle Omega Tool's Complaint
-----------------------------------------------------------
In accordance with a settlement agreement, Delphi Corporation and
its debtor-affiliates paid Omega Tool Corporation $369,585 in
satisfaction of its lien claim.  Omega has dismissed its complaint
against the Debtor.

Before the Debtors' bankruptcy filing, Omega Tool Corp. built and
delivered to the Debtors various molds and tooling for use in the
Debtors' operations.  Omega Tool also delivered molds and tooling
to the Debtors after their bankruptcy filing.  The Debtors
purchased the Molds on credit.

Omega Tool filed financing statements perfecting statutory liens
on the Molds pursuant to Michigan law, MCL 445.619, 445.620 and
570.541, et. seq.  These statutory liens are fully valid, binding,
and enforceable against the Debtors and have priority over all
other liens, security interests and other interests in the Molds.

Omega Tool is in the process of building additional molds and
tooling for the Debtors, which have not yet been delivered for
final sale.  Omega Tool has retained ownership the Undelivered
Molds.  However, to the extent any other party claims to have
superior interest in the Undelivered Molds, Omega Tool asserted
that statutory and common law liens have attached to the
Undelivered Molds and are perfected pursuant to its possession of
the Undelivered Molds.

Once the Undelivered Molds are delivered to the Debtors or the
Debtors' designee, a statutory lien will attach to the Undelivered
Molds and, if Omega Tool properly files -- or has filed -- a
financing statement, the liens on the Undelivered Molds will be
perfected and will have priority over all other liens, security
interests and other interests in the Undelivered Molds.

Ryan Heilman, Esq., at Schafer and Weiner, PLLC, in Bloomfield
Hills, Minnesota, however, noted that the Final DIP Order
provides, among others, that JPMorgan Chase Bank, N.A., as agent
to the Prepetition Lenders, has first-priority liens and security
interests, in the Debtors' real and personal property.  The ruling
will be binding unless a party-in-interest has timely filed an
adversary proceeding challenging the validity and enforceability
of the Liens.

Against this backdrop, Omega Tool had asked the Court to:

    (i) determine that its claim against the Debtors is secured by
        the Molds and the Undelivered Molds;

   (ii) determine the amount of the secured portion of its claim;

  (iii) determine that Omega Tool is first in priority with
        respect to the Molds and the Undelivered Molds;

   (iv) order the Debtors to take all steps reasonably necessary
        to ensure adequate maintenance and insurance of the Molds,
        and keep Omega Tool informed of all information relevant
        to the Molds, including the anticipated expiration date of
        any relevant programs using the Molds; and

    (v) order the Debtors to make adequate protection payments
        sufficient to cover any diminution in the value of the
        Molds.

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


DELTA AIR: Wants Court Nod on $195 Million Merrill Lynch Financing
------------------------------------------------------------------
Delta Air Lines, Inc., asks the United States Bankruptcy Court for
the Southern District of New York to enter into the New Financing
with Merrill Lynch Pierce Fenner & Smith Incorporated and perform
its obligations under the Engagement Letter.

Merrill Lynch has agreed to arrange at least $195,000,000 in new
financing for Delta Air, pursuant to an engagement letter dated
July 6, 2006.

Delta intends to use the New Financing to repay 9.5% Senior
Secured Notes due 2008 that it issued pursuant to an Indenture
dated Nov. 24, 2004, with The Bank of New York Trust Company, N.A.

Delta has reached an agreement with Wells Fargo Bank Northwest,
N.A., successor indenture trustee, for the repayment of the Notes
and the granting of additional adequate protection with respect
to Wells Fargo's interest in 32 aircraft and related equipment
securing the Notes.

The New Financing will be secured by a first priority security
interest in the Aircraft Collateral, and granted superpriority
status under Sections 364(c)(1) and (2) of the Bankruptcy Code.

Pursuant to the Engagement Letter, Merrill Lynch would undertake
to arrange for a syndicate of investors to participate in the New
Financing, and will assist in the structuring and documenting of
the New Financing.

The New Financing is subject to these terms:

  (i) the principal amount does not exceed 100% of the principal
      amount of the Notes outstanding immediately prior to the
      refinancing, except by an amount equal to the interest
      expense, if any, on any scheduled payments deferred as a
      result of the refinancing that is not paid currently but is
      recapitalized as principal;

(ii) the final maturity date is later than the final maturity of
      the Notes;

(iii) the refinancing does not reduce the weighted average life
      to maturity of the Notes; and

(iv) the interest cost and other material economic terms of the
      refinancing are reflective of a competitive marketing
      process and the best available in the reasonable business
      judgment of Delta.

Delta will pay Merrill Lynch a Structuring Fee at the closing of
the New Financing.  The Debtors redacted information regarding
the Structuring Fee from the Engagement Letter filed with the
Court.

Delta also agrees, among other things:

   -- not to enter, for a period of time, into an alternative
      source of financing to effect the refinancing of the Notes
      and

   -- to reimburse Merrill Lynch for its actual and reasonable
      expenses incurred in connection with the New Financing,
      regardless of whether the New Financing is consummated; and

   -- to indemnify Merrill Lynch and certain related parties
      against any losses, claims or liabilities to which Merrill
      Lynch or the related parties may become subject as a result
      of the Engagement Letter and the contemplated transactions,
      subject to certain exceptions.


Delta also requests that, without the prior written consent of
Merrill Lynch and other New Lenders, neither the Aircraft
Collateral nor any of the New Lenders be subject to surcharge,
pursuant to Section 506(c) or otherwise, by Delta or any other
party-in-interest.

Steven R. Gross, Esq., at Debevoise & Plimpton LLP, in New York,
tells Judge Hardin that it is impossible to predict the exact
pricing and terms of the New Financing until it is structured and
the New Lenders are identified.

Merrill Lynch, according to Mr. Gross, could not reasonably be
expected to go forward with the process of arranging the New
Financing absent, at a minimum, an agreement giving it
exclusivity, reimbursement of expenses and an indemnity.

The Engagement Letter does not bind either Merrill Lynch or Delta
with regard to actually consummating the New Financing, Mr. Gross
notes.  

Entering into the Engagement Letter would not obligate Merrill
Lynch to consummate the New Financing, Mr. Gross relates.  
Moreover, apart from the reimbursement of reasonable expenses,
Delta would not be obligated to pay any fees to Merrill Lynch
unless and until Delta actually consummates the New Financing.

Delta also requests that the automatic stay provisions of Section
362 be vacated and modified to the extent necessary to:

   -- permit the New Lenders, upon the occurrence of an Event of
      Default, to exercise all rights and remedies provided for
      in any of the New Financing Documents, without requiring
      prior authorization of the Court; and

   -- exercise all rights and remedies provided for in any of the
      New Financing Documents, without requiring the Court's
      prior authorization.

Under the terms of their existing debtor-in-possession credit
agreements, the Debtors are not required to seek the DIP Lenders'
consent to implement the New Financing and the Engagement Letter.

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


DELTA AIR: Wants to Repay $235 Million 9.5% Senior Secured Notes
----------------------------------------------------------------
Delta Air Lines, Inc., and Wells Fargo Bank Northwest, N.A., ask
the U.S. Bankruptcy Court for the Southern District of new York to
approve their settlement and compromise providing for, among
others, the repayment of 9.5% Senior Secured Notes due 2008.

Wells Fargo is successor indenture trustee for the 9.5% Senior
Secured Notes issued by Delta pursuant to an Indenture dated
Nov. 24, 2004, between Delta and The Bank of New York Trust
Company, N.A.

The Notes are secured by, inter alia, 32 aircraft and related
equipment, including five MD-90 aircraft, along with related
contract rights, rights under insurance policies and other rights
related to the aircraft, as specified in an Aircraft Mortgage and
Security Agreement dated as of Nov. 24, 2004.

On March 27, 2006, the Court entered an order directing the
Debtors to pay $1,400,000 per month to Wells Fargo as adequate
protection of its interests in the Aircraft Collateral.  

As of July 7, 2006, Delta has made $6,000,000 in adequate
protection payments to Wells Fargo, according to Delta's
attorney, Steven R. Gross, Esq., at Debevoise & Plimpton LLP, in
New York.

On May 3, 2006, Wells Fargo filed a complaint against Delta
seeking a declaration with respect to its rights under Section
1110 of the Bankruptcy Code with respect to the MD-90 Aircraft.

Delta has engaged in discussions with Wells Fargo and certain
holders of the Notes regarding a proposed repayment of the Notes
as part of a compromise and settlement of all obligations and
claims of the parties in connection with the Complaint, the
Adequate Protection Order, the Notes, the Indenture, and the
Mortgage and Security Agreement.

Delta agrees to pay:

   -- $235,000,000 of the principal amount, together with all
      accrued and unpaid interest to the date of the repayment of
      the Notes; plus

   -- Wells Fargo's reasonable fees and expenses to the date of
      the repayment of the Notes in accordance with the terms of
      the Indenture; less

   -- all amounts held by Wells Fargo in reserve on the date of
      the repayment of the Notes pursuant to the Adequate
      Protection Order, which amounts will be applied against the
      obligations outstanding under the Notes.

Representing Wells Fargo, James E. Spiotto, Esq., at Chapman and
Cutler LLP, in Chicago, Illinois, says that under the terms of
the Indenture, the holders of at least a majority of the
outstanding principal amount of the Notes may direct and instruct
Trustee to enter into the settlement and compromise relating to
the Note Repayment.  The settlement, if approved by the Court as
fair and reasonable, would be binding on all holders of the
Notes.

Wells Fargo says that holders of the Notes representing at least
a majority of the outstanding principal amount of the Notes have
delivered an instruction, which:

   -- states that the Directing Holders have validly and
      irrevocably instructed Wells Fargo to enter into the Note
      Repayment; and

   -- is binding on any transferee of the Notes as long as a
      final Order approving the Note Repayment is entered on or
      before Aug. 30, 2006, and Delta deposits with Wells Fargo,
on or prior to Sept. 30, 2006, the Note Repayment Amount.

Wells Fargo will give notice of repayment under the terms of the
Indenture upon being advised by Delta that a funding source has
agreed to fund the Note Repayment, in sufficient time to provide
at least 30 days' notice prior to the date of the Note Repayment
to all holders of Notes of record.

                      Tolling Arrangement

Delta intends to use funds on hand and the proceeds of a new
financing to implement the Note Repayment.

Delta has engaged Merrill Lynch Pierce Fenner & Smith
Incorporated to arrange at least $195,000,000 in new financing.

To allow Delta to work on the New Financing, Delta and Wells
Fargo seek the Court's permission to enter into a tolling
arrangement with respect to the Complaint.

Until the earlier of September 30, 2006, and the date on which
the Debtor gives a notice to Wells Fargo that it will not
continue to pursue the New Financing, neither party will:

   a. except as necessary to effectuate or enforce the terms of
      the Joint Motion or the Adequate Protection Order:

      -- commence an adversary proceeding, action or lawsuit, or
         file any motion, or other dispute resolution proceeding
         against the other or against any holder of Notes with
         respect to the subject matter of the Complaint or the
         Adequate Protection Order;

      -- proactively take action against the other Party with
         respect to the Notes or the Collateral in these cases or
         any other proceeding except as permitted by the other
         Party;

   b. amend the Complaint or any existing pleadings with respect
      to the Complaint, except as required by the Court or
      another court of appropriate jurisdiction;

   c. serve any discovery on any of the other Parties with
      respect to the Complaint or subpoena any third parties for
      discovery with respect to the Complaint; and

   d. file motions or ask the Court to rule or set any hearing on
      the merits with respect to the Complaint or otherwise
      prosecute or defend the Complaint.

Delta will provide Wells Fargo and the Official Committee of
Unsecured Creditors with a report on the status of the Note
Repayment every 30 days, with the first report to be made as soon
as practicable after the Court approves the Joint Motion.

                  Additional Adequate Protection

Delta and Wells Fargo ask the Court to grant additional adequate
protection to Wells Fargo with respect to the MD-90 Aircraft.

Delta agrees to make three additional monthly payments, each for
$625,000.  The additional monthly payments will be applied and
held by Wells Fargo under the terms and conditions applicable to
the monthly payments in the Adequate Protection Order.

The first payment will be payable three business days after the
Court approves the Joint Motion, the second payment will be
payable on Aug. 20, 2006, and the third payment will be payable on
Sept. 20, 2006.

In the event that the Note Repayment does not occur, if, at any
time after the Termination Date, any MD-90 is abandoned,
surrendered or returned by Delta or repossessed, recovered or
foreclosed on by Wells Fargo, and Delta has not performed any
heavy maintenance visit with respect to that MD-90, Wells Fargo
will be granted an administrative claim in an amount equal to:

   -- $1,200,000, which represents the cost to Delta of a heavy
      maintenance visit, less

   -- $658, representing the daily HMV burn rate, multiplied by
      the number of days commencing from the date the HMV would
      have been performed on the MD-90 Aircraft and ending on the
      date of the return of the Aircraft.

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


EAGLEPICHER CORP: Moody's Junks Rating on $65 Million Senior Loan
-----------------------------------------------------------------
Moody's Investors Service assigned ratings of B3 to the first-lien
and Caa1 to the second-lien guaranteed senior secured credit
facilities of EaglePicher Corporation, which will finance the
company's emergence from Chapter 11 bankruptcy protection.   
First-time monitored rating coverage is being initiated for the
capital structure proposed for the reorganized company.

EaglePicher reported that the U.S. Bankruptcy Court for the
Southern District of Ohio has entered an order confirming the
joint plan of reorganization for the Company and its debtor
affiliates under Chapter 11 of the U.S. Bankruptcy Code.   
Effectiveness of the plan is conditioned on bankruptcy court
approval of settlement agreements entered into with the U.S.
Environmental Protection Agency and several states after a
mandatory period of public comment.  The Company expects that
the settlement agreements will receive the requisite approval
in time to complete the reorganization by July 31, 2006.

Moody's assigned these specific ratings:

   * B3 Corporate Family Rating;

   * B3 rating for the first-lien senior secured exit credit
     facility due December 2010, consisting of a

     (1) $70 million revolving credit facility;

     (2) $160 million term loan facility; and

     (3) Caa1 rating for the $65 million second-lien senior
         secured exit term loan due June 2011.

The rating outlook is stable.

The $50 million third-lien senior secured exit term loan due 2011
is not rated by Moody's.

According to the proposed Plan, EaglePicher's total outstanding
funded debt, including preferred stock, will be reduced to
$275 million from approximately $702 million of pre-petition debt
upon the emergence.  The $345 million of existing debtor-in-
possession credit facilities will be converted to the exit
facilities.  The exit facilities also will be used to make certain
payments satisfying claims allowed by the bankruptcy court, to pay
transaction fees and expenses, and to provide ongoing liquidity
for the company's working capital needs and other general
corporate purposes.

The ratings consider that despite the benefits of debt and cost
reduction achieved during bankruptcy EaglePicher's financial
metrics will remain at levels consistent with the B3 rating
following emergence.  Financial leverage measured as debt
will remain in excess of 6.5 times following reorganization, and
projected cash interest coverage will be approximately 1 times.   
EaglePicher's businesses, while diverse, will continue to be
exposed to ongoing challenging conditions in the automotive parts
supply sector.

The company's Hillsdale and Wolverine businesses, which serve the
automotive sector, are expected to contribute approximately 55% of
sales and 48% of adjusted EBITDA for pro forma fiscal year 2006.
Overall industry trends for automotive parts suppliers remain
under pressure, and with some revenue concentration with Big 3
OEMs, the company remains subject to potential volume changes from
its customers during the coming year.  The company's other major
businesses are its Filtration and Minerals segment, and the
Defense, Space and Power segment.

The FM segment should benefit from continuing worldwide demand for
filtration products and that the company is the second largest
participant in the diatomaceous earth filtration market.   The
Defense, Space and Power segment will reflect government spending
on batteries and power systems consistent with baseline military
operations and stable levels consistent with power requirements
for government space and satellite programs.

While EaglePicher's credit metrics benefit from the exiting of
unprofitable customer relationships, lease rejections, and
restructuring actions taken in Chapter 11, the company will be
challenged to grow its businesses sufficiently to offset customer
price down pressures in the automotive supplier industry,
continuing production pressure, and continuing raw material and
energy pricing pressures.

The stable outlook considers that EaglePicher's earnings and cash
flow generation should provide adequate coverage for the company's
reduced debt obligations post emergence from Chapter 11.  The
company will not face material scheduled principal amortization on
its debt until 2010.  Upon emergence, the company expects to have
approximately $41 million in liquidity through the combined
availability under the senior secured revolving credit and cash on
hand.  This liquidity profile should provide the company with
flexibility to address near term challenges.

Future events that could drive a lower rating outlook or rating
downgrade include: declining revenues and operating margins
resulting in continued negative free cash flow performance;
significantly higher raw material costs which are not passed
through in the form of surcharges to customers; the inability
to win profitable net new business and improved margins; or
liquidity declining to inadequate levels. Consideration for
lower ratings could arise if any combination of these factors were
to contribute to the deterioration of EBIT coverage below current
levels or leverage being maintained over 6 times.

Future events that could drive an improved rating outlook or
rating upgrade include: net new business wins in the automotive
businesses at sufficient margins to offset negotiated price
concessions on existing business; improved operating and free cash
flow performance; or significant debt reduction through free cash
flow or other sources. Consideration for an improved outlook or
rating upgrade could arise if any combination of these factors
were to reduce leverage consistently under 5 times or increase
EBIT coverage consistently above 1.5 times.

In assigning a B3 rating to the senior secured first lien
facilities, Moody's noted that these facilities represent the
largest portion of the company's debt structure.  Modest hard
asset coverage of the first lien facility, coupled with a moderate
amount of junior capital resulted in the assignment of the B3
rating.  With respect to the second lien facility, the Caa1 rating
represents its junior position in the capital structure relative
to the first lien facilities.

EaglePicher Corporation, currently headquartered in Inkster,
Michigan is a diversified manufacturer of advanced technology
and industrial products that are used in the automotive,
defense, aerospace, telecommunications, medical implant
devices, pharmaceutical services, nuclear energy and food
and beverage industries, in addition to other industrial
arenas.  Annual revenues approximate $600 million.


EL POLLO: Extends Tender Offer Expiration to August 11
------------------------------------------------------
El Pollo Loco Inc. and EPL Intermediate Inc. disclosed that, in
connection with the tender offer and consent solicitation by El
Pollo Loco for its 11-3/4% Senior Notes Due 2013 and by
Intermediate for its 14-1/2% Senior Discount Notes Due 2014, the
companies are further extending the expiration time of the Offer
to 5 p.m., New York City time, on Aug. 11, 2006.

As of June 26, 2006, El Pollo Loco had received tenders and
consents for $125,726,000 in aggregate principal amount of the
11-3/4% Notes, representing 100% of the outstanding 11-3/4%
Notes and Intermediate had received tenders and consents for
$39,342,000 in principal amount at maturity of the 14-1/2%
Notes, representing 100% of the outstanding 14-1/2% Notes.

The requisite consents to adopt the proposed amendments to the
indentures governing the Notes have been received, and
supplemental indentures to effect the proposed amendments
described in the Offer to Purchase and Consent Solicitations
Statement, dated May 15, 2006 have been executed.  However, the
amendments will not become operative until the Notes are
accepted for payment pursuant to the terms of the Offer.

The Offer is subject to the satisfaction of certain conditions,
including:

   -- consummation of the Common Stock Offering,
   
   -- El Pollo Loco entering into a new credit facility,

   -- a requisite consent condition,

   -- a minimum tender condition,

   -- condition that each of the Offers be consummated and
      that each of El Pollo Loco and Intermediate receives
      consents from a majority of holders of each of the
      11-3/4% Notes and the-14 1/2% Notes and

   -- other general conditions.

Except as described above, all other provisions of the Offer
with respect to the Notes are as presented in the Offer to
Purchase.  The company reserves the right to further amend or
extend the Offer in its sole discretion.

Requests for documents may be directed to the information agent
for the Offer at:

            Global Bondholder Services Corp.
            Tel: 866-937-2200

Additional information concerning the Offer may be obtained by
contacting the dealer manager and solicitation agent for the
Offer at:

           
            Merrill Lynch, Pierce, Fenner & Smith Inc.
            Tel: 212-449-4914 (collect)
                 888-ML4-TNDR (U.S. toll-free)

                    About El Pollo Loco
  
El Pollo Loco -- http://www.elpolloloco.com/-- pronounced
"L Po-yo Lo-co" and Spanish for "The Crazy Chicken," is the
United States' leading quick-service restaurant chain
specializing in flame-grilled chicken and Mexican-inspired
entrees.  Founded in Guasave, Mexico, in 1975, El Pollo Loco's
long-term success stems from the unique preparation of its
award-winning "pollo" -- fresh chicken marinated in a special
recipe of herbs, spices and citrus juices passed down from the
founding family.

                        *    *    *

As reported in the Troubled Company Reporter on May 23, 2006,
Standard & Poor's Ratings Services expects to raise its
corporate credit rating on El Pollo Loco Inc. to 'B+' from 'B'
upon the successful completion of the company's planned IPO.
S&P said the outlook is stable.  Standard & Poor's also assigned a
'B+' rating, same as the expected corporate credit rating, to the
company's planned $200 million senior secured bank loan.  A
recovery rating of '2' is also assigned to the loan, indicating
the expectation for substantial recovery of principal in the event
of a payment default.

Moody's Investors Service upgraded El Pollo Loco, Inc.'s
corporate family rating to B1 from B3 and assigned B1 ratings to
the company's proposed $200 million senior secured credit facility
following the company's proposed initial public offering of shares
of its common stock and planned refinancing of its existing debt.  
At the same time, the SGL-2 Speculative Grade Liquidity rating was
affirmed.  Moody's said the outlook remains stable.


EMPRESAS CENTRAIS: Fitch Rates $100 Million Six-Year Notes at B
---------------------------------------------------------------
Fitch Ratings assigned a 'B' rating to the $100 million six-year
notes units issued in February 2006 by Empresas Centrais Eletricas
de Mato Grosso and Centrais Eletricas do Para.  

The issuance has been assigned an 'RR4' Recovery Rating,
indicating an expected average recovery given a default and an
assumed jurisdictional 'RR4' cap on instrument ratings in Brazil.  
The issuance was split between notes to Cemat ($50 million) and
notes to Celpa ($50 million).

In addition, Fitch assigned Local and Foreign Currency Issuer
Default Ratings of 'B' and Brazilian national scale ratings of
'BBB(bra)' to Cemat, Celpa, and their holding company, Grupo Rede
Empresas de Energia Eletrica S.A.  All ratings have a Stable
Rating Outlook.

The proceeds were used to refinance existing debt and for working
capital and general corporate purposes.  The notes units'
underlying securities are separate, standalone indebtedness of
each entity; however, the senior notes are nondetachable and
contain cross-default provisions, essentially linking the
creditworthiness of the two issuers.  As a result, the ratings
reflect the combined credit quality of the two issuers.  

Fitch also considered the consolidated credit strength of Rede in
assigning the ratings given the importance of these two companies
to the group.

Celpa and Cemat represented a combined 67% of the consolidated
EBITDA of Rede in 2005; Rede owns eight distribution companies in
Brazil, which also contribute to consolidated credit quality.  The
ratings reflect the improvement in credit protection measures of
Cemat and Celpa, and on a consolidated basis, Rede.  These
measures should continue to strengthen over the next few years
supported by projected growth in operational results and cash flow
and a reduction of annual debt service with the notes issuance.

Still, Rede has relatively high leverage when compared to other
electricity companies in the Brazilian market.  Rede's companies
should also benefit from an improved regulatory environment in
Brazil and sufficient annual tariff adjustments.  The distributors
operate as natural monopolies in the regulated distribution market
with long-term contracts with generators companies.  The new model
for the sector allows for the pass-through of all noncontrollable
costs for distribution companies.  Although regulatory risks
remain an ongoing credit concern, the current electric energy
industry model is generally positive and should support growth and
stability in the sector.

The ratings are also supported by Rede and its subsidiary
companies' successful leverage reduction program.  From 2004
to 2006, sale of generation assets and higher operational cash
generation enabled Rede to reduce its leverage significantly.  
The ratings consider the improvement in Rede's liquidity with the
sale in June 2006 of BRL450 million in generation assets in
addition to an expected $250 million in loans from Inter-American
Development Bank.

The proceeds coming from the IDB loan to Celpa ($135 million) and
Cemat ($115 million), to be used for capital expenditures, are
expected to be utilized by the companies in 2006 (US$180 million)
and 2007.  There is also the planned public offering by Rede up to
September, which could further improve the credit quality of Rede
and its subsidiaries, as a large part of these resources may be
used for debt reduction.

The combined credit profiles of Rede, Cemat, Celpa, and other
distribution companies are supported by a broad, diversified and
stable customer base.  Average consumption growth in the
territories of the three operating companies has exceeded the
national average over the past five years.  Future improvement in
operating cash flow should also benefit from improving operating
efficiencies and a more favorable economic environment.

Rede's consolidated leverage, measured by adjusted gross debt-to-
EBITDA, of 3.8x at December 2005, is acceptable for the assigned
ratings.  Leverage at Celpa and Cemat was 4.2x and 2.0x,
respectively.

In 2005, Rede reported total consolidated debt of BRL3.1 billion.
The recent notes issuance, sale of assets, and the IDB loan should
lower refinancing risk and reduce interest expense, allowing the
group to lower its leverage through amortization of its short-term
debt, as well as by growing EBITDA and equity.  In addition, the
companies have mitigated currency risk associated with the new
issuance via a currency swap.

In May 2006, Rede completed a reorganization process of its
corporate structure, according to legal requirements in the New
Energy Model.  After the reorganization, the group holds eight
operational assets in the distribution segment and a small
portfolio in generation assets.  Combined, Rede is one of the
largest distribution groups in Brazil, serving approximately 3
million customers and distributing 12,613 GWh of electricity.


EVANS INDUSTRIES: Panel Hires Chiron as Financial Advisor
---------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Evans
Industries, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court
for the Eastern District of Louisiana for permission to employ
Chiron Financial Group, Inc., as its marketing and financial
advisor, nunc pro tunc to June 19, 2006.

Chiron Financial will provide:

   a) marketing and sales services:

         i) prepare marketing materials to facilitate the
            marketing and sale of the Debtor's assets;

        ii) identify a targeted list of prospective buyers, and
            send the offering memorandum to those parties.  The
            firm will then work with those parties to complete due
            diligence and facilitate bidding on the Debtor's
            assets;

       iii) manage and facilitate an auction process to maximize
            the value of the Debtor's assets; and

   b) financial advisory services:

        i) review and analyze the Debtor's financial and operating
           statements and establish a data room of materials for
           alternative buyers and lenders ot those buyers;

       ii) evaluate the Debtor's assets and liabilities;

      iii) review and analyze the Debtor's business and financial
           projections;

       iv) evaluate the Debtor's collateral securing all debt and
           latest merger agreement;

        v) assist in the determination of an appropriate capital
           structure for the Debtor;

       vi) determine a theoretical range of values for the Debtor
           on a going concern basis;

      vii) advise the Committee on tactics and strategies for
           negotiating with the Debtor and other purported
           stakeholders in order to secure a meaningful return to
           the unsecured creditors;

     viii) render financial advice to the Committee and
           participate in meetings or negotiations with the Debtor
           and other purported stakeholders in connection with any
           restructuring, modification, sale of assets or
           refinancing of the Debtor's existing debt obligations
           to ensure adequate representation of the unsecured
           constituency;

       ix) prepare, analyze and explain a plan of reorganization
           to the unsecured creditors, which is in the best
           interest of the general unsecured creditors of the
           estate;

        x) provide testimony, as necessary, in any proceeding
           before the Court; and

       xi) provide the Committee with other appropriate general
           restructuring advice.

Chiron Financial will:

   a) receive a $25,000 processing fee for the drafting and
      preparation of the marketing materials, and running and
      managing the contemplated auction process for the sale of
      the Debtor's assets;

   b) receive a success fee upon a successful sale of the Debtor's
      assets based upon an increase from the value of the current
      sale contemplated by the Debtor.  The success fee will be
      calculated as:

      -- 6% of the first $1 million of the success fee basis, plus

      -- 7% of the amount of the success fee basis exceeding
         $1 million up to $2 million of the success fee  basis (if
         any), plus

      -- 8% of the amount of the success fee basis exceeding
         $2 million up to $3 million of the success fee basis (if
         any), plus

      -- 8.5% of the amount of the success fee basis exceeding
         $3 million up to $4 million of the success fee basis (if
         any), plus

      -- 9.5% of the amount of the success fee basis exceeding
         $4 million up to $5 million of the success fee basis (if
         any), plus

      -- 10% of any amounts of the success fee basis exceeding
         $5 million;

   c) receive a $100,000 financial advisory fee;

   d) receive a placement fee if the firm places senior debt,
      subordinated debt or equity, calculated as:

      -- 1% of the aggregate commitment amount of any senior term
         or revolving debt financing, whether or not funded,
         payable in cash at the closing of any transaction; or

      -- 3% of the aggregate commitment amount of subordinated
         debt financing, whether or not funded,  payable in cash
         at the closing of any transaction; or

      -- 6% of the gross proceeds raised in any offering of equity
         securities in a private placement, payable in cash at the
         closing of each placement of securities;

   e) entitled to reimbursement of out-of-pocket expenses incurred
      in connection with the services to be provided;

Jay H. Krasoff, Esq., a Chiron Financial member, assures the Court
that his firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.

Headquartered in Harvey, Louisiana, Evans Industries, Inc. --
http://www.evansindustriesinc.com/-- manufactures and distributes   
steel drums.  The company filed for chapter 11 protection on Apr.
25, 2006 (Bankr. E.D. La. Case No. 06-10370).  Eric J. Derbes,
Esq., and Melanie M. Mulcahy, Esq., at The Derbes Law Firm, LLC,
represent the Debtor.  C. Davin Boldissar, Esq., at Locke Liddell
& Sapp, LLP, represents the Official Committee of Unsecured
Creditors.  When the Debtor filed for protection from its
creditors, it estimated assets between $500,000 and $1 million and
debts between $10 million and $50 million.


EVANS INDUSTRIES: Panel Wants Locke Liddell's Retention as Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Evans
Industries, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court
for the Eastern District of Louisiana for permission to retain
Locke Liddell & Sapp LLP as its counsel.

Locke Liddell will:

   a) assist and advise the Committee in its consultations with
      the Debtor and other committees relative to the overall
      administration of the estate;

   b) represent the Committee at hearings to be held before the
      Court and communicate with the Committee regarding matters
      heard and issues raised as well as decisions and
      considerations of the Court;

   c) assist and advise the Committee in its examination and
      analysis of the Debtor's conduct and financial affairs;

   d) review and analyze all applications, orders, operating
      reports, schedules and statement of affairs filed and to be
      filed with the Court by the Debtor or other interested
      parties; advise the Committee as to the necessity and
      propriety of the foregoing and their impact upon the rights
      of the lesser related claimants, and upon the case
      generally; and, after the consultation with and approval of
      the Committee or its designees, consenting to appropriate
      orders on its behalf;

   e) assist the Committee in preparing appropriate legal
      pleadings and proposed orders as may be required in support
      of positions taken by the Committee and preparing witness
      and reviewing relevant documents;

   f) coordinate the receipt and dissemination of information
      prepared by and received from other professionals retained
      by the Debtor, as well as information as may be received
      from independent professionals engaged by the Committee and
      other committees, as applicable;

   g) advise and assist the Committee in the negotiations with
      respect to any proposed plan or plans of reorganization; and

   h) assist and advise the Committee with regard to
      communications to the unsecured creditors regarding the
      Committee's efforts, progress and recommendation with
      respect to matters arising in the Debtor's case as well as
      any proposed plans of reorganization.

C. Davin Boldissar, Esq., a Locke Liddell associate, discloses
that the firm's professionals bill:

               Professional                    Hourly Rate
               ------------                    -----------
               Omer F. Kuebel, III, Esq.          $325
               Victoria M. de Lisle, Esq.         $325
               Philip G. Eisenberg, Esq.          $325
               C. David Boldissar, Esq.           $250
               Monique Lafontaine, Esq.           $250
               Demond Smith, Esq.                  $85
               Julie Burmaster, Esq.               $85

Mr. Boldissar assures the Court that the firm does not hold nor
represent any interest adverse to the Debtor or its estate.

Headquartered in Harvey, Louisiana, Evans Industries, Inc. --
http://www.evansindustriesinc.com/-- manufactures and distributes   
steel drums.  The company filed for chapter 11 protection on Apr.
25, 2006 (Bankr. E.D. La. Case No. 06-10370).  Eric J. Derbes,
Esq., and Melanie M. Mulcahy, Esq., at The Derbes Law Firm, LLC,
represent the Debtor.  C. Davin Boldissar, Esq., at Locke Liddell
& Sapp, LLP, represents the Official Committee of Unsecured
Creditors.  When the Debtor filed for protection from its
creditors, it estimated assets between $500,000 and $1 million and
debts between $10 million and $50 million.


FALCON AIR: Court Appoints Kenneth A. Welt as Chapter 11 Trustee
----------------------------------------------------------------
The Honorable A. Jay Cristol of the U.S. Bankruptcy Court Southern
District of Florida appointed Kenneth A. Welt as the chapter 11
trustee for the bankruptcy cases of Falcon Air Express, Inc., and
its debtor-affiliates.

Felicia S. Turner, the U.S. Trustee for Region 21, moved for the
appointment after consulting the Debtors and the Official
Committee of Unsecured Creditors.  Johanna P. Armengo, Esq., a
trial attorney at the U.S. Trustee's Office assured the Court that
Mr. Welt does not have any connections with the Debtors,
creditors, other parites-in-interest, professionals retained in
the Debtors' cases and persons employed under the U.S. Trustee
office.  

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.


FLOWSERVE CORP: Repays $25 Million of Debt in 2nd Quarter of 2006
-----------------------------------------------------------------
Flowserve Corp. has repaid $25 million of debt in the second
quarter of 2006, including a $20 million repayment on its
revolving credit facility, which reduced the revolver balance to
zero at the end of the quarter.

The Company also reported record second quarter bookings of
approximately $900 million for 2006.  Second quarter 2006 bookings
increased to approximately $900 million, which represents a second
quarter record.  Organic bookings for 2006 compare with second
quarter 2005 organic bookings of approximately $696 million, or
reported 2005 bookings of $723 million.  Organic bookings
increased about 29% in the second quarter of 2006 compared with
the organic bookings in the prior year period, or about 25% on the
reported basis.  Currency had a negligible impact on second
quarter 2006 bookings.

For the first six months of 2006, organic bookings increased to a
record level of approximately $1.82 billion.  It represents an
increase of 32% compared with organic bookings of $1.38 billion,
and an increase of 27 percent over reported bookings of $1.44
billion, in the prior year period.  

Organic bookings exclude divested operations, where applicable, in
relevant periods and the effect of currency in 2006 periods.

"Our pump business has been extremely robust and achieved the
highest quarterly bookings increase among our business segments,"
said Flowserve President and Chief Executive Officer Lewis M.
Kling.  "This bodes very well for the future, since project-
related purchases of valves typically lag those of pumps in our
customers' project investment cycle.  And, the increased pump
installed base provides us with greater aftermarket opportunities,
where our mechanical seal business has been particularly strong."

                       About Flowserve Corp

Headquartered in Irving, Texas, Flowserve Corp. (NYSE: FLS) --
http://www.flowserve.com/-- provides fluid motion and control  
products and services.  Operating in 56 countries, the company
produces engineered and industrial pumps, seals and valves as well
as a range of related flow management services.

                          *     *     *

As reported in the Troubled Company Reporter on July 5, 2006,
PricewaterhouseCoopers LLP in Dallas, Texas, said that Flowserve
has not maintained effective internal control over its financial
reporting as of Dec. 31, 2005.  The auditors found seven material
weaknesses in the Company's financial statements indicating, among
others, that the Company did not adequately document the criteria
for measuring hedge effectiveness at the inception of certain
derivative transactions, which primarily affects accounts
receivable, other expense, other comprehensive income and
accumulated other comprehensive income.

Flowserve Corp.'s corporate credit rating is rated 'BB-' by
Standard & Poor's Ratings Services while its short-term credit
rating stands at 'B-3'.  The Company's $1 billion credit facility
carries S&P's 'BB-' rating.

Moody's Investors Service's rated the Company's $1 billion senior
secured credit facilities at Ba3.  


FOAMEX INT'L: Panel Supports CEO Raymond Mabus' Salary Increase
---------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates proposed to
revise their executive compensation arrangements to, among other
things, increase the compensation of Raymond E. Mabus, Jr., from
$25,000 per month to $75,000 per month during his tenure as
interim president and chief executive officer.

The Official Committee of Unsecured Creditors does not object to
Mr. Mabus' salary increases.  However, the Committee is concerned
that the Debtors' request does not place any limit on the length
of time during which Mr. Mabus may serve as President and CEO, nor
does it limit the time frame during which the Debtors will be
authorized to pay Mr. Mabus the increased compensation.

The Creditors Committee wants to maintain the Debtors' focus on
the prompt recruitment and selection of a permanent President and
CEO.  Accordingly, the Committee asks the U.S. Bankruptcy Court
for the District of Delaware to allow the Debtors to pay the
increased compensation to Mr. Mabus only through and including
October 31, 2006, subject to their right to seek an extension of
the period within which payment of the increased compensation is
authorized.

Jeremy W. Ryan, Esq., at Saul Ewing LLP, in Wilmington, Delaware,
asserts that competent management with in-depth knowledge of a
company's business and industry is crucial to the long-term
success of any company.  While Mr. Mabus is an accomplished
individual and his public service record is exemplary, it is not
clear at this time that he has the necessary experience to serve
as the Debtors' President and CEO for an extended period of time.

The Creditors Committee is encouraged that the Debtors have
commenced their search for a permanent chief, but submits that the
Debtors will be forced to maintain their focus on finding that
replacement if they cannot leave Mr. Mabus in place as president
and CEO indefinitely.

The Creditors Committee believes that the limit it seeks gives the
Debtors sufficient time to search for and negotiate with a
permanent president and CEO.

                           About Foamex

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


FOAMEX INT'L: Panel Wants to Join Recruitment & Selection Process
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors does not object to
Foamex International Inc. and its debtor-affiliates' proposal to
employ SSI (U.S.) Inc., doing business as SpencerStuart, as their
executive search consultant.  However, the Committee wants to be
included in the recruitment and selection process for the Debtors'
permanent president and chief executive officer.

Jeremy W. Ryan, Esq., at Saul Ewing LLP, in Wilmington, Delaware,
explains that the Creditors Committee, in performing its fiduciary
duty to monitor the Debtors' ongoing restructuring efforts, seeks
a transparent process during the recruitment and selection of the
permanent president and CEO.

Accordingly, the Creditors Committee asks the U.S. Bankruptcy
Court for the District of Delaware to require the Debtors and
SpencerStuart to:

   (a) invite the  Committee to participate in periodic status
       calls, not less than every two weeks, regarding the
       progress of the search;

   (b) provide the  Committee with a full list of potential
       candidates before July 15, 2006, and a profile of each
       candidate interviewed;

   (c) consider any candidates the  Committee submits prior to
       July 31, 2006; and

   (d) grant the Committee's professionals access to the
       SpencerStuart consultants.

The Creditors Committee assures the Court that its professionals
will limit their interaction with SpencerStuart to necessary
matters regarding the progress of the executive search.

The Creditors Committee does not seek to take over the selection
process from the existing board, but only wants to work with the
Debtors to arrive at the optimal choice to set the strategic
course for the Debtors' business, Mr. Ryan says.

                           About Foamex

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


FR X OHMSTEDE: Moody's Junks Rating on $65 Million Sr. Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned first time ratings to
FR X Ohmstede Acquisitions Co. in connection with its pending
acquisition by an affiliate of First Reserve Corporation.  The
ratings are subject to confirmation of the final financing
documentation.

These first time ratings were assigned:

   * B2 for the corporate family rating;

   * B2 for the $30 million senior secured revolving credit
     facility, due 2011;

   * B2 for the $100 million senior first-lien secured term loan
     B, due 2013;

   * Caa1 for the $65 million senior second-lien secured term
     loan, due 2014.

The rating outlook is stable.

In June 2006, First Reserve entered into an agreement to purchase
Ohmstede from Tanglewood Investments, Inc.  The acquisition is
expected to be financed with approximately $195 million of new
senior secured credit facilities and cash equity investments from
First Reserve and senior management.

The ratings reflect:

   (1) the high levels of working capital investment required to
       finance the Company's rapid growth and its impact on
       Ohmstede's free cash flow generation,

   (2) the Company's small scale and limited end-market and
       customer diversification; and

   (3) the potential volatility in the Company's earnings and
       cash flow based on Moody's view that demand for the
       Company's products and services is generally tied to
       the level of Gulf Coast crude oil refinery capacity
       utilization rates, whose future level is unpredictable.

The primary factors supporting Ohmstede's ratings are:

   (1) Ohmstede's competitive position as a proven one-stop
       provider of manufactured product and specialty services
       with strategically located facilities that enable the
       Company to respond quickly and cost-effectively to their
       customers' needs;

   (2) the Company's track record in improving productivity and
       turnaround times through its recent capital investment
       program and other operating initiatives that reinforce its
       competitive position; and

   (3) the significant percentage of revenues generated from
       recurring maintenance and repair work in the more durable
       refinery turnaround segment.

The stable outlook reflects:

   (1) Moody's expectation of supportive oil prices and continued
       high utilization of Gulf Coast refining capacity over the
       next twelve to eighteen months resulting in stable demand
       for the Company's products and services,

   (2) the visibility offered by the Company's significant shop
       backlog and

   (3) Moody's expectation that aftermarket and service revenues
       targeting the more durable turnaround segment will
       continue to grow as a percentage of sales.

Ohmstede, headquartered in Beaumont, Texas, is a leading North
American provider of aftermarket shop repair, in-plant turnaround
and specialty services, as well as manufacturing of replacement
parts and new shell and tube heat exchangers.  Total revenues
for the twelve months ended June 30, 2006 were approximately
$182 million.


GLOBAL DOCUGRAPHIX: Case Summary & 36 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Global DocuGraphix, Inc.
        aka B-N-B Systems, Inc.
        aka Associated Business Products, Inc.
        aka Classic Business Forms & Envelopes Corp.
        aka ABP, Inc.
        aka Bank and Business Forms
        aka Print Resources Group
        2901 North Dallas Parkway, Suite 370
        Plano, Texas 75093

Bankruptcy Case No.: 06-32889

Debtor-affiliate filing separate chapter 11 petition:

      Entity                           Case No.
      ------                           --------
      Global DocuGraphix USA, Inc.     06-32888

Type of Business: The Debtor is a commercial printing company
                  offering products and solutions for printing,
                  advertising, marketing, office, and document
                  management.  See http://www.gdxinc.com/

Chapter 11 Petition Date: July 18, 2006

Court: Northern District of Texas (Dallas)

Judge: Barbara J. Houser

Debtors' Counsel: Holland N. O'Neil, Esq.
                  Richard McCoy Roberson, Esq.
                  Gardere, Wynne and Sewell LLP
                  1601 Elm Street, Suite 3000
                  Dallas, Texas 75201
                  Tel: (214) 999-4961
                  Fax: (214) 999-4667

Debtors' Financial Advisor: Corporate Revitalization Partners, LLC
                            13355 Noel Road, Suite 1825
                            Dallas, Texas 75240
                            Tel: (972) 702-7333
                            Fax: (972) 702-7334
                            http://www.crpllc.net/

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

A. Global DocuGraphix, Inc.'s 16 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Kimberly R. Montalvo             Seller Note           $1,128,599
410 Jaquin Court
Corrales, NM 87048

Kelly D. Matzenbacher            Seller Note           $1,128,599
5084 Dakota Run
Littleton, CO 80125

Thoma Cressey                    Management Fees         $975,500
233 South Wacker 92nd Floor
Chicago, IL 60606

Joseph A. Baden                  Sellers' Note           $525,690
5601 Bintliff, Suite 530
Houston, TX 77036

Rick L. King                     Sellers' Note           $112,038
27416 East Braodview Drive
Kiowa, CO 80117

BKD, LLP                         Accounting Services     $100,675

Moss Adams                       Tax Preparation          $32,321

Green Manning Bunch              Investment Banker        $21,848

Davis Graham & Stubbs            Legal Fees                $7,760

Deborah Stone                    Employee Expenses         $1,777

Ricoh Customer Finance           Equipment Lease           $1,354

Christopher Walden               Employee Expenses         $1,228

CT Corp.                         Corporate Representative    $549

Ricoh Business Systems           Trade                       $347

SBC/AT&T                         Trade                        $31

Ozarka                           Trade                        $25

B. Global DocuGraphix USA, Inc.'s 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
PrintXcel                        Trade                   $854,674
P.O. Box 536900
Atlanta, GA 30353-6900

Enterprise Group                 Trade                   $509,096
7591 Collections Center Drive
Chicago, IL 60693

Ennis, Inc.                      Trade                   $429,321
P.O. Box 971478
Dallas, TX 75397-1478

Printegra                        Trade                   $312,536
P.O. Box 930438
Atlanta, GA 31193

Datamax Pioneer                  Trade                   $254,450
7658 East 700th Avenue
Robinson, IL 62454

Diversified Labeling Solutions   Trade                   $207,180

Daniel Label Printing            Trade                   $192,775

S.P. Richards Co.                Trade                   $187,026

Central States Business Forms    Trade                   $184,882

Georgia National Forms           Trade                   $150,363

Wisco                            Trade                   $148,855

Print South Corporation          Trade                   $145,947

Digital Print                    Trade                   $138,298
Technologies, Inc.

Hospital Forms & Systems         Trade                   $133,021

Statement Rendering Service      Trade                   $110,729

Airline Graphics                 Trade                   $101,841

Ed Dugger                        Sellers' Note           $100,000

Label Art                        Trade                    $97,161

Wachovia Bank -                  Trade                    $85,021
Wise Business Forms

Tri-C Business Forms             Trade                    $84,992


GLOBAL HOME: Will Auction Off WearEver Business on August 7
-----------------------------------------------------------
Global Home Products, LLC, and its debtor-affiliates will be
conducting an auction of their WearEver cookware and bakeware
businesses on Aug. 7, 2006, at 10:00 a.m. (Eastern Time) at:

   Pachulski Stang Ziehl Young Jones & Wientraub LLP
   919 North Market Street, 17th Floor
   P.O. Box 8705
   Wilmington, DE 19801

The businesses to be sold are:

   * Mirro Acquisition Inc.,
   * Mirro Puerto Rico, Inc.,
   * Mirro Operating Company LLC, and
   * 690949 BC, Ltd.

Lifetime Brands, Inc., is the stalking horse bidder, offering to
pay $21 million for the assets.  Competing bids must be received
by Aug. 3, 2006, at 4:00 p.m. (Eastern Time) by:

   (a) Debtors' counsel:

       Laura Davis Jones
       Pachulski Stang Ziehl Young Jones & Wientraub LLP
       919 North Market Street, 17th Floor
       P.O. Box 8705
       Wilmington, DE 19801

   (b) Debtors

       Mark Eichhorn
       Interim Chief Executive Office
       Randal Rombeiro
       Chief Financial Officer
       Global Home Products, LLC
       550 Polaris Parkway, Suite 500
       Westerville, Ohio 43082

   (c) Debtors' investment bankers

       Adam L. Dunayer
       Houlihan Lokey Howard & Zukin Capital Inc.
       200 Crescent Court, Suite 1900
       Dallas, Texas 75201

The Court will hold a hearing on Aug. 8, 2006, to approve the
sale.

                        About Global Home

Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
--  sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry.  The company also designs and markets photo frames,
photo albums and related home decor products.  The company and
16 of its affiliates, including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340).  Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub LLP, represent the Debtors.  Bruce Buechler, Esq., at
Lowenstein Sandler, P.C., represents the Official Committee Of
Unsecured Creditors.  When the company filed for protection from
their creditors, they estimated assets between $50 million and
$100 million and estimated debts of more than $100 million.


GORDIAN RUNOFF: Chapter 15 Petition Hearing Slated for August 28
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will conduct a hearing to consider Gordian Runoff (UK) Ltd.'s
chapter 15 petition on Aug. 28, 2006, 10:00 a.m. EDT, at Courtroom
610 of the U.S. Bankruptcy Court in One Bowling Green, New York
City.

Any objections to the Petition must be received no later than
4 p.m. EDT on Aug. 22, 2006, by:

   a) The Clerk of Court
      U.S. Bankruptcy Court
      Southern District of New York
      Room 534, One Bowling Green
      New York, N.Y. 10004-1408

   b) Counsel for Petitioner
      Solinda A. Melnik, Esq.
      Edwards Angell Palmer & Dodge LLP
      Suite 1500
      919 North Market St.
      Wilmington, Delaware 19801,

Copies of documents filed with the Court regarding the Petition
may be obtained by:

   1) those with PACER account from the docket of the case
      accessible through the Court's Electronic Case Filing
      system via the Court's Web site at
      http://www.nysb.uscourts.gov;

   2) PDF download from the Scheme Web site at
      http://www.gordianuk.co.uk;or

   3) e-mail upon written request made to the Petitioner's U.S.
      counsel Selinda A. Melnik, Esq. at:

      Edwards Angell Palmer & Dodge LLP
      Suite 1500
      919 North Market St.
      Wilmington, Delaware 19801
      Fax: +1-302-777-7263
      http://www.eapdlaw.com/

Based in London, England, Gordian RunOff (UK) Ltd. fka GIO (UK)
Ltd. -- http://www.gordianuk.co.uk/-- is an underwriter and  
reinsurance company.  The Company, through its designated
petitioner Ian Clark of London, England, filed for a chapter 15
petition on July 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11563).
Selinda A. Melnik, Esq., at Edwards Angell Palmer & Dodge LLP
represents Mr. Clark.  When Mr. Clark filed the petition, he
estimated the Debtor's assets and debts between $10 million to $50
million.


GRANITE BROADCASTING: Terminates Sale Agreements for TV Stations
----------------------------------------------------------------
Granite Broadcasting Corporation decided to retain television
station WMYD (formerly WDWB), Channel 20, which in September 2006
will become an affiliate of My Network TV serving the Detroit,
Michigan television market.  The Company exercised its rights to
terminate the agreements to sell television stations WMYD and
KBWB, Channel 20 in San Francisco, California to affiliates of DS
Audible, LLC.  The Company had the right to terminate these
agreements, which were contingent on both sales occurring, if the
sales did not close by June 30, 2006.  The Company also reported
its intention to continue marketing its San Francisco station to
interested parties.

In addition, the Company reiterated its intention to close this
month on the previously announced purchase of WBNG, Channel 12,
the CBS-affiliated television station serving Binghamton and
Elmira, New York.  The Company will draw upon its new senior
credit facility, announced July 5, 2006, to fund the acquisition
of WBNG.

                   About Granite Broadcasting

Granite Broadcasting Corporation (OTC Bulletin Board: GBTVK) owns
and operates, or provides programming, sales and other services to
21 channels in the following 8 markets: San Francisco, California;
Detroit, Michigan; Buffalo, New York; Fresno, California;
Syracuse, New York; Fort Wayne, Indiana; Peoria, Illinois; and
Duluth, Minnesota-Superior, Wisconsin.  The Company's channel
group includes affiliates of NBC, CBS, ABC, CW and My Network TV,
and reaches approximately 6% of all U.S. television households.

                          *     *     *

As reported in the Troubled Company Reporter on June 8, 2006,
Moody's Investors Service downgraded Granite Broadcasting
Corporation's $400 million of 9.75% senior secured notes due 2010
to Caa1 from B3.  Additionally, Moody's affirmed the Company's
existing ratings, including its Caa2 corporate family rating.  The
outlook remains negative.


GUITAR CENTER: Senior Notes Redemption Cues S&P's Positive Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating on specialty music retailer Guitar Center Inc. on
CreditWatch with positive implications.

The action follows the Westlake Village, California-based
company's announcement that it has completed the redemption and
conversion of virtually all of its $100 million senior convertible
notes due 2013.

"This further improves already-strong credit measures for the
rating category, with lease-adjusted leverage at about 1.5x," said
Standard & Poor's credit analyst Robert Lichtenstein.

Standard & Poor's expects to meet with management to review Guitar
Center's growth plans as well as its financial policy.


H&E EQUIPMENT: Restates First Quarter 2006 Financial Results
------------------------------------------------------------
H&E Equipment Services, Inc. will restate its unaudited interim
financial statements for the quarterly period ended March 31,
2006, to reflect the reclassification of a one-time, nonrecurring
payment, made in connection with the Company's recently completed
initial public offering of common stock.

According to the Company, the payment that is the subject of the
correction is the $8 million payment that H&E made in connection
with the Company's initial public offering of its common stock in
February 2006 to terminate its management services agreement with
affiliates of two of its principal stockholders.

Management accounted for the payment as a direct cost of the
Company's initial public offering, and as such, the payment was
reflected as a charge to stockholders' equity in the Company's
unaudited interim financial statements for the three months ended
March 31, 2006.

Management has concluded, after further review and discussion with
its auditors, that the termination fee should not be accounted for
as a direct cost of the initial public offering and should instead
be reflected as an expense on the Company's consolidated income
statement for the three months ended March 31, 2006.

Total revenues and gross profit are not affected by the
correction.  However, the Company estimates that correcting the
one-time payment as a selling, general and administrative expense
on its unaudited interim consolidated income statement for the
three months ended March 31, 2006 will have these principal
effects:

   -- SG&A will increase from the previously reported $33 million
      to approximately $41 million;

   -- Net income will decrease from the previously reported
      $9.9 million to approximately $3.9 million;

   -- Earnings per common share will decrease from $0.29 per share
      to $0.12 per share; and

   -- EBITDA will decrease from $41.6 million to approximately
      $33.6 million.

The Company has discussed the accounting adjustment and related
restatement with the agent for the lenders under its revolving
credit facility, and its revolving credit facility lenders have
waived the non-compliance by the Company with, and the effects of
non-compliance under, various representations and non-financial
covenants affected by the accounting adjustments in connection
with the restatements.  Accordingly, the Company has full access
to its revolving credit facility.

The Company will include the full restated results for the three
months ended March 31, 2006 in an amendment on Form 10-Q/A to the
Company's previously filed Form 10-Q for the same period.  

                           About H&E

Based in Baton Rouge, Louisiana, H&E Equipment Services, Inc.,
(NASDAQ:HEES) -- http://www.he-equipment.com/-- is an integrated  
equipment services company with 47 full-service facilities
throughout the Intermountain, Southwest, Gulf Coast, West Coast
and Southeast regions of the United States.  The Company is
focused on heavy construction and industrial equipment and rents,
sells and provides parts and service support for four core
categories of specialized equipment: hi-lift or aerial platform
equipment; cranes; earthmoving equipment; and industrial lift
trucks.

                          *     *     *

H&E Equipment's corporate credit rating carries Standard & Poor's
Ratings Services' 'BB-' rating.


INTERSTATE BAKERIES: Bankr. Court Okays Chubb Surety Bond Program
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
approved Interstate Bakeries Corporation and its debtor-
affiliates' surety bond program and related blanket indemnity
agreement with Federal Insurance Company (Chubb) and its
subsidiaries.

The Bankruptcy Court also authorized:

   (a) Chubb to issue bonds on the Debtors' behalf under a
       $7,500,000 Surety Program, with those bonds to be supplied
       to various obliges, at their request, at the
       gross rates of:

       -- $5 per thousand dollars in face amount of the bond for
          supply bonds;

       -- $7.50 per thousand dollars in face amount of the bond
          for license and permit bonds; and

       -- $9 per thousand dollars in face amount of the bond for
          self-insurer's workers compensation bonds plus a $2,500
          structuring fee for Chubb's legal and other expenses;

   (b) them to execute and deliver an Indemnity Agreement to
       Chubb in the name of Interstate Brands Corporation;

   (c) them to obtain letters of credit as collateral from time
       to time in amounts sufficient to cover 100% of Chubb's
       outstanding exposure for the Surety Bonds; and

   (d) them to grant priority of payment to Chubb to any of their
       reimbursement obligation with respect to any of the Surety
       Bonds or under the Indemnity Agreement, if the letters of
       credit are inadequate.

A full-text copy of the Chubb Indemnity Agreement is available
for free at http://ResearchArchives.com/t/s?bd9

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTERSTATE BAKERIES: Can Sell Medford Property for $1.7 Million
---------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to sell their interest in a certain property located
at 48 Commercial Street, in Medford, Massachusetts, to Empire
Management Corporation for $1,700,000, subject to higher or better
bids.

As reported in the Troubled Company Reporter on June 23, 2006,
the Property is comprised of several parcels and includes about
1.53 acres of land with an approximately 30,672 square feet
building, Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, relates.

The Debtors are no longer using the Property in connection with
their business operations.

The Debtors have utilized the services of a joint venture
composed of Hilco Industrial, LLC, and Hilco Real Estate, LLC, to
assist them in the sale and marketing of the Property.

Empire Management has made a $170,000 deposit for the proposed
sale, which is being held by the escrow agent until all
conditions to closing are satisfied by the Debtors.

The Debtors have agreed to:

   -- provide bid protection to Empire Management in the form of
      a termination fee equal to $34,000 to induce Empire
      Management to makes the first qualified bid; and

   -- pay to Empire Management reasonable and documented expense
      reimbursement of up to $50,000.

The Court also authorized the Debtors to compromise and pay
certain tax claims.

In connection with the sale of the Property free and clear of all
liens other than permitted encumbrances, the Debtors propose to
pay to the City of Medford, Massachusetts, Office of Collector of
Taxes:

   -- $16,769 in principal for real and personal property taxes
      due for the 2004-2005 tax year;

   -- interest, accruing at a 6% annual rate, beginning on the
      date the interest began to accrue on the past due balance;
      and

   -- no penalties will be required with respect to any and all
      delinquent taxes with respect to the Property,

in full satisfaction of all real property taxes for the Property
for the tax year 2004-2005 and all prior tax years.

The Debtors and the Successful Bidder will prorate 2005-2006 real
and personal property taxes as of the Closing Date in accordance
with the terms of the successful sale agreement.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTERSTATE BAKERIES: Court Says Sara Lee's ERISA Action is Stayed
-----------------------------------------------------------------
The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for
the Western District of Missouri rules that Sara Lee's ERISA
Action is stayed on an interim basis until further order from the
Bankruptcy Court.  The stay will include, but not limited to,
extending:

   (a) the deadline for the ABA Plan and the Board of Trustees to
       answer, move or plead in response to the Complaint;

   (b) the deadline, if any, for the Debtors to intervene in the
       ERISA Action.

As reported in the Troubled Company Reporter on June 5, 2006, the
Debtors asked the Bankruptcy Court to:

    (a) enforce the automatic stay;

    (b) require Sara Lee Corporation to withdraw its Complaint and
        dismiss its Litigation against the American Bakers
        Association Retirement Plan and its Board of Trustees; and

    (c) declare the Sara Lee Litigation to be void, as being
        violative of the automatic stay.

                        Sara Lee's ERISA Action

Sara Lee Corporation, in its capacity as a functional fiduciary on
behalf of its employee-participants who are eligible for benefits
under the ABA Plan, brought an action against the ABA Plan and the
Board of Trustees of the ABA Plan under Section 502(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended, in
the United States District Court for the District of Columbia, on
May 3, 2006.

In the ERISA Action, Sara Lee sought a declaration that the ABA
Plan and the ABA Plan Trustees have violated the terms of the ABA
Plan by:

   (a) improperly using Sara Lee's contributions to the ABA Plan
       Trust to provide benefits for employee-participants of
       other Participating Employers with negative ABA Plan Trust
       balances; and

   (b) failing to enforce the ABA Plan in accordance with its
       terms.

The ERISA Action also sought to enjoin the ABA Plan Trustees from
further violation of the ABA Plan.

John W. McClelland, Esq., at Armstrong Teasdale LLP, in Kansas
City, notes the Debtors allege that the ERISA Action violates the
automatic stay to the extent that the outcome of the litigation
could have a potential, indirect effect upon claims and
liabilities that parties other than Sara Lee may assert against
their estate.

Mr. McClelland argues that the Debtors' argument suffers from a
number of legal and factual deficiencies.

The Debtors do not allege that the ABA Plan has violated the
automatic stay by asserting claims for their unfunded benefit
liabilities.  However, Mr. McClelland points out, the Debtors
allege that the ERISA Action violates the automatic stay because
the outcome of that litigation may prompt the ABA Plan to assert
the very claims it has already asserted.

Mr. McClelland contends that the ERISA Action does not violate
the automatic stay because it is not:

   -- an act to collect, assess, or recover a claim against the
      Debtors;

   -- an act to obtain possession of property of the Debtors'
      estate; and

   -- an action or proceeding against the Debtors.

Section 362 of the Bankruptcy Code gives rise to an automatic
stay only with respect to either (i) the debtor, or (ii) property
of the debtor's estate, Mr. McClelland reminds the Court.  It
does not stay an action against a non-debtor party or property of
a non-debtor party.

Mr. McClelland asserts that Sara Lee cannot be held in contempt
because the automatic stay does not extend to non-debtor parties.
Moreover, the stay is not extended beyond its statutory
limitations to automatically enjoin the ERISA Action.

The Debtors suggest that being "forced to participate in the Sara
Lee Litigation" and being exposed to "potentially significant,
duplicative proceedings and expenses, and possibly inconsistent
results" is the type of situation that the stay is intended to
remedy.

Courts have uniformly held that "mere litigation expense, even
substantial and unrecoupable cost, does not constitute
irreparable injury", according to Mr. McClelland.  Thus, the
Debtors cannot make any showing that would satisfy any elements
of Rule 65 of the Federal Rules of Civil Procedure.

                       Debtors Talk Back

Paul M. Hoffmann, Esq., at Stinson, Morrison, Hecker LLP, in
Kansas City, Missouri, disputes Sara Lee's contention that the
ERISA Action is merely an action seeking a declaration that the
Plan violated the terms of the ABA Plan and an enjoinment of the
ABA Plan Trustees from further violating the ABA Plan.

Mr. Hoffman notes that the ERISA Action also seeks:

   -- an injunction requiring the ABA Plan to collect payments
      from the Debtors and to deny benefits to the Debtors' Plan
      participants and their beneficiaries if the Debtors do not
      pay; and

   -- a determination of the Debtors' rights in certain assets.

Those actions are directly within the reach of the automatic
stay, Mr. Hoffman maintains.

Sara Lee does not explain why it is pursuing the ERISA Action
now, nor does it explain how it will be prejudiced by enforcement
of the automatic stay, Mr. Hoffman points out.

Contrary to Sara Lee's suggestion, there is nothing paradoxical
in the Debtors' actions, Mr. Hoffman says.  The fact that the ABA
Plan has filed a proof of claim for amounts it believes are owed
based on its belief that the Plan is an aggregate of single
employer plans is fully consistent with the automatic stay, Mr.
Hoffman maintains.

The ERISA Action is an independent violation of the automatic
stay under Section 362(a)(3) and the Court should grant the Stay
Motion on that ground alone, Mr. Hoffman contends.  In addition,
the Sara Lee Litigation also violates the automatic stay in that
it falls within the impermissible acts that Section 362(a)(6) was
meant to prevent.

                 About Interstate Bakeries

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000)


JOYCE NUNLEY: Case Summary & 14 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Joyce Nunley
        61 Moross
        Grosse Pointe, Michigan 48236

Bankruptcy Case No.: 06-49324

Type of Business: The Debtor previously filed for chapter 11
                  protection on January 16, 2001 (Bankr. E.D.
                  Mich. Case Nos. 01-40752 and 01-51968).

Chapter 11 Petition Date: July 18, 2006

Court: Eastern District of Michigan (Detroit)

Judge: Marci B. McIvor

Debtor's Counsel: Michael P. DiLaura, Esq.
                  Michael P. DiLaura & Associates, P.C.
                  105 Case Avenue
                  Mt. Clemens, Michigan 48043
                  Tel: (586) 468-5600
                  Fax: (586) 465-9113

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 14 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
E. Adelle Schwan & L. Keeler     223 Gratiot Boulevard    $53,023
c/o S. Douglas Touma             Marysville, MI 48040
316 McMorran Boulevard

L J Ross and Associate           Collection               $10,840
P.O. Box 1838
Ann Arbor, MI 48106

Internal Revenue Service                                  $11,286
Bankruptcy Section
Mail Code 15
P.O. Box 330500
Detroit, MI 48232-6500

United Collection Bureau         Collection                $6,789
5620 Southwyck Boulevard
Toledo, OH 43614

GMAC Mortgage Corp.              20601 Van Antwerp         $5,927
500 Enterprise Road
Horsham, PA 19044

City of Grosse Pointe Farms      61 Moross Road            $5,061
                                 Grosse Pointe Farms
                                 Michigan 48236

Fremont Investment & L           61 Moross Road            $4,270

City of Marysville               223 Gratiot Boulevard     $4,000
                                 Marysville, MI 48040

Christian Financial Cu           Secured Credit Card       $2,789

Fin Cr Network                   Ameritech                 $2,523

Asset Accept                     SBC Michigan              $2,368

City of Harper Woods             20601 Van Antwerp         $1,000
                                 Harper Woods, MI 48225

Allianceone                      Collection                  $900

J J Marshall & Associaties       Collection                  $620


KAISER ALUMINUM: Court Okays Los Angeles Pension Plan Termination
-----------------------------------------------------------------
Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware approved the termination of the Kaiser
Aluminum Los Angeles Extrusion Pension Plan, provided that:

   (a) actual termination will not be effectuated until and
       unless conditions described in the 2006 collective-
       bargaining agreement between Kaiser Aluminum & Chemical
       Corp. and the Teamster Local 986 Miscellaneous
       Warehouseman Drivers and Helpers of the International
       Brotherhood of Teamsters have occurred or taken place; and

   (b) the requirements set forth in the Court-approved
       Modification of Kaiser/Pension Benefit Guaranty Corp.
       Settlement are satisfied, including a judgment in favor of
       KACC in the PBGC Appeal.

Judge Fitzgerald also authorized KACC to participate in the
Teamsters' Pension Plan, in conformity with the CBA, upon
termination of the Los Angeles Plan.

As reported in the Troubled Company Reporter on June 6, 2006, KAAC
and the Teamster Local 986 Miscellaneous Warehouseman Drivers and
Helpers of the International Brotherhood of Teamsters entered into
a new three-year collective bargaining agreement.  The Unions were
covered under the Los Angeles Plan.

Paul N. Heath, Esq., at Richards, Layton & Finger, in Wilmington,
Delaware, told the U.S. Bankruptcy Court for the District of
Delaware that the new CBA included a letter agreement that relates
to the pending PBGC Appeal and the potential termination of the
Los Angeles Plan.

The Letter Agreement provided that in the event that:

    (i) KAAC prevails in the PBGC Appeal, the Los Angeles Plan
        will be terminated and replaced with KAAC's participation
        in the Teamsters' multi-employer pension trust, the
        Western Conference of Teamsters Trust; and

   (ii) PBGC prevails in its Appeal, KACC will continue to
        maintain the Los Angeles Plan through the three-year term
        of the new collective bargaining agreement.

Mr. Heath noted that KAAC's monthly contribution per employee to
the Teamsters Pension Plan would be up to $1 an hour for each hour
worked.  The Teamsters Pension Plan invested the funds received
from the employer participants and determines the pension benefits
that will be paid at retirement.  KACC's only liability in respect
of the Teamsters Pension Plan will be its monthly obligation to
pay the agreed contribution based on hours worked.

Mr. Heath said that KACC's participation in the Teamsters Pension
Plan was negotiated as part of the new CBA.  The Debtors believed
that participation in the Teamsters Pension Plan is both cost-
effective and warranted under Section 363(b).

                       About Kaiser Aluminum

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.  (Kaiser Bankruptcy News, Issue No. 101;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KAISER ALUMINUM: Wants to Settle With 3 Products Coverage Insurers
------------------------------------------------------------------
Kaiser Aluminum & Chemical Corporation asks the U.S. Bankruptcy
Court for the District of Delaware to:

   (i) approve its settlement agreements with Republic Indemnity
       Company, Transport Insurance Company, and Hudson Insurance
       Company; and

  (ii) authorize the sale of certain policies back to the
       corresponding issuers free and clear of liens, claims,
       encumbrances or other interests.

pursuant to Sections 105(a) and 363 of the Bankruptcy Code.

To obtain an adjudication of its rights for coverage under certain
insurance policies as to asbestos-related bodily injury
liabilities, Kaiser Aluminum & Chemical Corp. filed an action
against certain insurers before the Superior Court of California,
County of San Francisco.

Republic, Transport, and Hudson are three of the defendants in
KACC's Products Coverage Action.  They issued policies that
provide insurance coverage to KACC for these periods:

     Insurer                  Insurance Coverage
     -------                  ------------------
     Republic           April 1, 1984 to April 1, 1985
     Transport          April 1, 1984 to April 1, 1985
     Hudson             April 1, 1981 to April 1, 1984

KACC and the three insurers have engaged in separate negotiations
to resolve their disputes regarding the subject policies,
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates.

Under their respective Settlement Agreements with KACC,

   (a) Republic agrees to make a $1,500,000 settlement payment
       within 14 days after the Court grants final approval to
       the Settlement;

   (b) Transport will pay $1,000,000 as settlement amount no
       later than 30 days after execution of the Settlement
       Agreement; and

   (c) Hudson agrees to pay $500,000 before or on October 15
       each year from 2007 to 2012, for a total of $3,000,000 as
       settlement payment.

All three insurers will pay their Settlement Amounts to the U.S.
Bank National Association, as settlement account agent, unless the
Trigger Date has occurred, in which case, to Wells Fargo Bank,
N.A., as insurance escrow agent, for distribution to the Funding
Vehicle Trust.

The Trigger Date is the day that the last of these events has
occurred:

    -- the order approving the Settlement Agreement becomes a
       Final Order;

    -- the order confirming the Reorganizing Debtors' Plan
       becomes final; and

    -- the occurrence of the Plan Effective Date.

The Settlement Agreements also include these terms:

   (a) Republic, Transport and Hudson will receive all benefits
       of being designated as Settling Insurance Companies in the
       Plan of Reorganization, including the benefits of the
       Personal Injury Channeling Injunctions;

   (b) KACC releases all its rights with respect to the Subject
       Policies of the three insurers as well as its other rights
       under the three insurers' additional policies, and will
       dismiss Republic, Transport, and Hudson from the Products
       Coverage Action;

   (c) KACC will sell the Subject Policies back to their
       respective issuers, and the insurers will buy back the
       policies free and clear of all liens, claims, or
       interests, with the payment of the Settlement Amounts
       constituting the consideration for the buy-back;

   (d) If any claim is brought against Republic, Transport, or
       Hudson that is subject to a PI Channeling Injunction, the
       Funding Vehicle Trust will exercise all reasonable efforts
       to establish that the claim is enjoined as to the three
       insurers; and

   (e) Republic, Transport, and Hudson will not seek from any
       entity other than their reinsurers or retrocessionaires:

       * reimbursement of any payments that they are obligated
         to make under their Settlement Agreements;

       * any other payments they have made to or for the benefit
         of KACC or, upon its creation, the Funding Vehicle
         Trust, under the Subject Policies, whether by way of
         contribution, subrogation, indemnification or otherwise.

       In no event will the three insurers make any claim for or
       relating to the insurance, reinsurance or retrocession
       against any KACC Party.

The Settlement Agreements also contain certain rights to
adjustment of the Settlement Amount if Asbestos Legislation is
enacted into law before the earlier of the Trigger Date and
July 31, 2006.

                       About Kaiser Aluminum

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.  (Kaiser Bankruptcy News, Issue No. 101;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KL INDUSTRIES: Hires CM&D Capital as Financial Advisor
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, allowed KL Industries, Inc., to retain James S.
Mahoney and CM&D Capital Advisors LLC as its financial Advisors,
effective June 27, 2006.

CM&D will assist the Debtor in the sale of its business as a going
concern.  CM&D is expected to:

     a) assist the Debtor in analyzing and evaluating its
        business, operations and financial position;

     b) assist the Debtor in the preparation of an offering
        memorandum, relating to the proposed disposition of the
        Debtor, for distribution and presentation to potential
        purchasers;

     c) assist the Debtor in the preparation and implementation of
        a marketing plan with respect to the proposed disposition;

     d) assist the Debtor in the screening of interested potential
        purchasers;

     e) assist the Debtor in coordinating the materials and
        information to be made available to potential purchasers
        and with prospective purchaser due diligence
        investigations;

     f) assist the Debtor in evaluating proposals received from
        potential purchasers;

     g) counsel the Debtor as to strategy and tactics for
        negotiating with potential purchasers and, if requested by
        the Debtor, participate in negotiations relating to the
        proposed disposition; and

     h) advise the Debtor with respect to the form and structure
        of, and consideration to be received in the proposed
        disposition; and analyze potential capital structure
        scenarios related to possible recapitalization options and
        assist the Debtor in the raising of capital or debt
        restructuring.

CM&D's hourly billing rates range from $125 per hour for
paraprofessionals to $375 per hour for managing directors.

The Debtor agreed to provide CM&D a $40,000 retainer payable upon
commencement of the engagement.  The total hourly fee payable to
CM&D is capped at $120,000, including the retainer.  The first
monthly payment to CM&D for hourly charges is limited to $40,000
and the combined first and second monthly payments is limited at
$80,000.

CM&D is also eligible to receive a success fee upon the closing of
a sale of the Debtor's business.  The success fee is equal to 3%
of the purchase price up to $6 million and 5% on amounts over $6
million.

In the event of a recapitalization transaction, CM&D is entitled
to a $150,000 transaction fee.  Approximately $35,000 of aggregate
hourly fees will be credited against the transaction fee.  La
Salle Bank N.A., which holds a superpriority claim in the Debtor's
case, has allowed the Debtor to pay the transaction from the
proceeds of the disposition.   

James S. Mahoney assures the Court that his firm is disinterested
within the meaning of section of 101(14) of the Bankruptcy Code
and does not hold or represent any interest adverse to the Debtor
or its estate.

Headquartered in Addison, Illinois, KL Industries, Inc.,
manufactures springs, assemblies and other products for the
automotive and electronic markets.  The Company does business as
KL Spring & Stamping Division, KL Spring Division, KL Stamping
Division, KL Assembly Division and American Metal Forming
Division.  The Company filed for bankruptcy protection on May 2,
2006 (Bankr. N.D. Ill. Case No. 06-04882).  Peter J. Roberts,
Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin LLC represent the Debtor in its restructuring
efforts.  The Official Committee of Unsecured Creditors has
retained Winston & Strawn LLP, to represent it in the Debtor's
case.  When the Debtor filed for bankruptcy protection, it
reported assets totaling between $1 million and $10 million and
debts amounting between $10 million to $50 million.


LEVI STRAUSS: Board Designates John Anderson Next Pres. and CEO
---------------------------------------------------------------
Levi Strauss & Co's Board of Directors designated John Anderson,
the Company's chief operating officer, as its next president and
CEO when Phil Marineau retires on Nov. 26, 2006.

Mr. Anderson, a 27-year veteran of the company, was recommended to
be the next president and CEO by Mr. Marineau.

           Size Reduction of Board of Directors

The company also disclosed that five members of its 14-member
board of directors stepped down from the board as part of a
planned reduction in the size of the board.  The five directors
are:

    * Angela Glover Blackwell, a director since 1994;
    * Robert E. Friedman, a director since 1998;
    * James C. Gaither, a director since 1988;
    * Miriam L. Haas, a director since 2004; and
    * Walter J. Haas, a director since 1995.

The Company's nine-member board now includes:

    * Peter A. Georgescu, a director since 2000;
    * Peter E. Haas, Jr., a director since 1985;
    * Robert D. Haas, a director since 1984;
    * F. Warren Hellman, a director since 1985;
    * Patricia A. House, a director since 2003;
    * Leon J. Level, a director since 2005;
    * Philip A. Marineau, a director since 1999;
    * Patricia Salas Pineda, a director since 1991; and
    * T. Gary Rogers, a director since 1998.

The company expects John Anderson to replace Phil Marineau on the
board when he assumes the CEO role.

Levi Strauss & Co. is a branded apparel company, 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'.  In addition, Fitch
withdrew its 'BB-/RR1' ratings on Levi's $500 million senior
secured term loan.  The rating outlook is stable.

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.

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 Allows Assignment of Store No. 40401's Lease
---------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York authorized Levitz Home
Furnishings, Inc., and its debtor-affiliates to assume and assign
Store No. 40401 located in Concord, California, to PLVTZ, LLC.

Judge Lifland rules that:

    (a) PLVTZ will pay the $121,810 cure amount to Macy's West,
        Inc.;

    (b) The Debtors and PLVTZ will be responsible for performing
        all obligations arising out of the settlement of R&B
        Heritage Investors, L.P., and Marina Square Partners,
        L.P.'s objection, as memorialized in a letter agreement
        dated June 9, 2006, which obligations will be performed on
        behalf of the Master Landlords.  PLVTZ will be liable for
        those obligations, and will defend, indemnify and hold
        Macy's harmless from any and all claims and causes of
        action, including attorneys' fees in connection with the
        obligations memorialized in that Letter Agreement; and

    (c) Any objections to the assignment, including the Master
        Landlords' Objection and Macy's Objection, that have not
        been withdrawn, waived or settled, and all reservations of
        rights included in those objections or addressed by the
        ruling, are overruled.

PLVTZ, LLC, and the Pride Capital Group, doing-business-as 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 store leases.  The Debtors
sought authority from the Court to assume and assign these leases,
including:

    Store#   Address         Landlord                Cure Amount
    ------   -------         --------                -----------
     40401   Concord,        R&B Heritage Investors,    $120,131
             California      LP, and Marina Square
                             Partners, LP, c/o Reynolds
                             & Brown

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)


LIVING HOPE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Living Hope Southwest Medical Services, LLC
        801 Arkansas Boulevard
        Texarkana, Arkansas 71854
        Tel: (870) 774-4673

Bankruptcy Case No.: 06-71484

Type of Business: The Debtor provides medical services.

Chapter 11 Petition Date: July 18, 2006

Court: Western District of Arkansas (Texarkana)

Debtor's Counsel: Richard L. Ramsay, Esq.
                  Eichenbaum, Liles & Heister, P.A.
                  124 West Capitol, Suite 1400
                  Little Rock, Arkansas 72201-3736
                  Tel: (501) 376-4531
                  Fax: (501) 376-8433

Estimated Assets: Unknown

Estimated Debts:  $1 Million to $10 Million

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


MAPCO EXPRESS: Buys 40 Stores from Fast Petroleum for $42 Million
-----------------------------------------------------------------
MAPCO Express, Inc., a wholly owned subsidiary of Delek US
Holdings, Inc., completed the purchase of 40 retail fuel and
convenience stores from Fast Petroleum, Inc., for $42 million.  

The Company had an agreement with Fast Petroleum to purchase 43
retail and fuel convenience stores, which are located in northwest
Georgia and southeast Tennessee.  The Company is continuing to
work toward obtaining the third party consents necessary to
complete the purchase of the remaining three convenience stores.  
The 43 stores produced total sales of $111 million and sold 46
million gallons of fuel in the 12 months ended Dec. 31, 2005.

The purchase was financed with a combination of cash proceeds from
Delek's recently completed IPO and MAPCO's revolving credit
facility, which was increased from $70 million to $120 million.

"The successful purchase of these 40 convenience stores within 30
days of the signing of the definitive agreement reflects well on
our ability to implement our acquisition strategies and enhances
the reputation we have developed in our markets as a credible
acquiror," Uzi Yemin, President and Chief Executive Officer of
Delek US, said.

                       About MAPCO Express

Headquartered in Franklin, Tennessee, MAPCO Express, Inc.,
operates 349 convenience stores in Tennessee, Alabama, Virginia,
and adjoining states.  As a result of the pending transaction, the
company will acquire 40 additional locations around Chattanooga,
Tennessee.  The Israeli conglomerate Delek Group LTD ultimately
owns approximately 80% of the company's equity through Delek US
Holdings, Inc. (NYSE: DK).

                          *     *     *

As reported in the Troubled Company Reporter on July 19, 2006,
Moody's Investors Service rated the proposed $50 million add-on to
the secured revolving credit facility of MAPCO Express, Inc. at
B2, and affirmed the corporate family and existing bank loan
ratings at B2.  The rating outlook is stable.

As reported in the Troubled Company Reporter on July 18, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Franklin, Tennessee-based MAPCO Express Inc.

At the same time, Standard & Poor's affirmed the 'B+' senior
secured rating on the company's bank loan facility and recovery
rating of '2', reflecting its expectations of a substantial
recovery of principal in the event of a payment default.  "This
action follows the company's $50 million increase in its revolving
credit facility to $120 million," said Standard & Poor's credit
analyst Stella Kapur.  The outlook remains negative.


MASTERCRAFT INTERIORS: Can Decide on Leases Until December 12
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland gave
Mastercraft Interiors Ltd. and Kimels of Rockville Inc. until
December 12, 2006 to decide whether to assume or reject unexpired
leases.

As of May 15, 2006, the Debtors were parties to seven unexpired
leases of nonresidential real property.  The Debtors continue to
occupy five of those nonresidential properties:

   (1) Alexandria;
   (2) Annapolis;
   (3) Rockville;
   (4) Fair Oaks Mall; and
   (5) the Beltsville warehouse and offices.

The Debtors submit that the extension will ensure opportunity for
them to make prudent, appropriate decisions whether to assume or
reject the unexpired leases.

Since their bankruptcy filing, the Debtors have been reviewing and
analyzing their business operations, including reviewing their
unexpired leases and executory contracts to determine whether
those leases and contracts are beneficial to their businesses and
estates.

In addition, the Debtors' Court-approved going-out-of-business
sales are contemplated to continue until November 20, 2006.

Furthermore, the Debtors are also in the process of seeking to
assume and assign several of the nonresidential real property
leases, which is expected to take a few months.  The Debtors have
sought Court authority to enter into a Designation Rights
Agreement with a joint venture composed of Hilco Real Estate LLC
and Next Mid-Atlantic LLC to market and sell the leases.

Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd.
-- http://www.mastercraftinteriors.com/-- manufactures furniture  
and other home furnishings.  The Company and its subsidiary,
Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006,
(Bankr. D. Md. Case No. 06-12769).  Morton A. Faller, Esq.,
Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at
Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent
the Debtors in their restructuring efforts.  Bradford F.
Englander, Esq., at Linowes and Blocher LLP, represents the
Official Committee of Unsecured Creditors.  When the Debtors filed
for bankruptcy, Mastercraft Interiors reported assets amounting to
$10,600,288 and debts amounting to $25,485,847 while Kimels of
Rockville reported assets totaling $704,227 and debts amounting to
$10,341,704.


MERIDIAN AUTOMOTIVE: Court Adjourns Disclosure Hearing to July 21
-----------------------------------------------------------------
Judge Walrath of the U.S. Bankruptcy Court for the District of
Delaware adjourned the hearing to consider Meridian Automotive
Systems, Inc., and its debtor-affiliates' Disclosure Statement for
the Third Amended Joint Plan of Reorganization from July 17, 2006,
to July 21, 2006.

                     USW Withdraws Objection

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union
withdraws its objection to the Disclosure Statement explaining
the Debtors' First Amended Joint Plan of Reorganization.

Susan E. Kaufman, Esq., at Heiman, Gouge & Kaufman, LLP, in
Wilmington, Delaware, notes that appropriate language has been
inserted in the Disclosure Statement for the Third Amended Joint
Plan of Reorganization, which satisfies USW's objection.

As reported in the Troubled Company Reporter on June 29, 2006, the
Union objected to the Debtors' Disclosure Statement explaining
their First Amended Joint Plan of Reorganization.

As reported in the Troubled Company Reporter on July 6, 2006, the
Third Amended Plan, among others, adds another batch of defined
terms, amends the treatment of some classes of claims, revises the
Preferred Equity Offering and gives assurance on the continuance
of the Company's retiree benefits program.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,  
at Winston & Strawn LLP represents the Official Committee of  
Unsecured Creditors.  The Committee also hired Ian Connor  
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,  
to prosecute an adversary proceeding against Meridian's First Lien  
Lenders and Second Lien Lenders to invalidate their liens.  When  
the Debtors filed for protection from their creditors, they listed  
$530 million in total assets and approximately $815 million in  
total liabilities.  (Meridian Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MESABA AVIATION: Court Okays Monthly Report Submission Guidelines
-----------------------------------------------------------------
The Honorable Gregory F. Kishel of the U.S. Bankruptcy Court for
the District of Minnesota directs Mesaba Aviation, Inc., dba
Mesaba Airlines, to submit all subsequent monthly operating
reports to the U.S. Trustee no later than 25 days after the end of
the calendar month to be reported, pursuant to an agreement
between the Debtor and Habbo G. Fokkena, U.S. Trustee for
Region 12.

If the Debtor cannot meet the deadline, it will notify the U.S.
Trustee before the due date, and if a resolution cannot be
reached, the U.S. Trustee may seek whatever relief he deems
appropriate under the Bankruptcy Code.

As reported in the Troubled Company Reporter on July 10, 2006, the
Trustee asked Court to compel the Debtor to submit all delinquent
operating reports, and to timely submit all future operating
reports as is necessary.  The Trustee complained that the Debtor
failed to submit operating reports for April and May 2006.

                       About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


MESABA AVIATION: UST's Motion to Revoke Paydown Procedures Denied
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota denied
Habbo G. Fokkena's, the U.S. Trustee for Region 12, request to:

    (1) revoke the Rule 8(c) Procedure as to all professionals in
        the Debtor's case who were employed by Court approval;

    (2) direct all of the Debtor's professionals to file a motion
        with the Court for allowance of their fees and expenses,
        in accordance with Sections 330 and 331 of the Bankruptcy
        Code; and

    (3) prohibit the Debtor from paying an invoice of any
        professional employed by the estate without a Court order
        authorizing the payment.

Rule 8(c) of the Instructions for Filing a Chapter 11 Case for
the District of Minnesota provides that:

    "(c) Paydown Before Approval: All professionals who seek to
    take advantage of this procedure must include a request for
    such treatment in their retention application and provide
    evidence in their application of their agreement and ability
    to disgorge if the court so orders, as well as evidence that
    retention has been approved may be allowed to submit regular
    monthly bills to the Debtor and the Debtor may be authorized
    to pay up to 80% of  such fees and 100% of such costs, pending
    court approval of the fees.  The court will consider requests
    for early paydown at the time the retention is approved.
    Copies of all monthly bills shall be simultaneously sent to
    the Office of the United States Trustee.  The court may sua
    sponte or upon motion by any interest party revoke the right
    to this paydown procedure should circumstances in the case so
    warrant."

As reported in the Troubled Company Reporter on July 12, 2006, the
U.S. Trustee asserted that circumstances of the Debtor's Chapter
11 case justify the Court's revocation of the Rule 8(c) procedures
for paydown for all professionals employed by Court approval,
pursuant to Sections 327 and 328 of the Bankruptcy Code.

Sarah J. Wencil, trial attorney for the U.S. Trustee, recounts
that in the Debtor's renewed request to reject its collective
bargaining agreements, the Debtor stated that it is losing money
at the rate of approximately $2,000,000 to $3,000,000 per month,
and that the losses will result in the exhaustion of its cash by
the end of August 2006, unless it obtains DIP financing.

The Debtor further stated that its survival is contingent on the
Rejection Motion being granted.  In this case, Ms. Wencil says,
the Debtor is at risk of its work force striking or otherwise
leaving the Company.

As of June 15, 2006, the Debtor has failed to submit an
operating report to the U.S. Trustee for the months of April and
May 2006, Ms. Wencil tells the Court.  The U.S. Trustee and other
interested parties cannot verify the losses to the Debtor, nor
the rate of payments to professionals each month.

                       About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


MUSICLAND HOLDING: Ct. Lifts Stay to Let Xerox to Set-Off Deposit
-----------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York modified the automatic stay to allow
Xerox Capital Services, LLC, to apply the $200,000 security
deposit to its $1,023,805 claim.

Xerox will amend its claim to reflect application of the Security
Deposit and to turn over any surplus funds exceeding its allowed
claim.

The Court ruled that Xerox will not to file a motion to compel
acceptance or rejection of the Leases as long as Musicland Holding
Corp. and its debtor-affiliates do not become delinquent, for more
than 90 days, on their postpetition payments to Xerox.

As reported in the Troubled Company Reporter on July 3, 2006,
Xerox as servicing agent for Xerox Corporation, holds a $1,023,805
claim, pursuant to certain leases for goods and services it
executed with Musicland Holding on April 19, 2004.

On May 4, 2004, in connection with the execution of the Leases,
the Debtors provided Xerox with a $200,000 security deposit,
Chantel K. Adams, Esq., at Kizer, Hood & Morgan, L.L.P., in Baton
Rouge, Louisiana, told the Court.  The Leases provide that Xerox
can apply any of the deposit towards the obligations owed by
Debtors.

Xerox was owed a debt by the Debtors as evidenced by its proof of
claim, Ms. Adams stated.  Xerox also owed an obligation to the
Debtors in the form of the security deposit it is holding.

Ms. Adams asserted that the Debtors' debt and Xerox's obligation
to the Debtors are mutual obligations.  Thus, Xerox should be
allowed the right to set off the security deposit against its
claims for services and goods under non-bankruptcy law.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSICLAND HOLDING: Moves for Summary Judgment on Deluxe's Lien
--------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to grant
partial summary judgment in their favor, and deny Deluxe Media
Services, Inc.'s statutory lien claim.

As reported in the Troubled Company Reporter on April 19, 2006,
Deluxe provided warehousing and fulfillment services to the
Debtors pursuant to a Logistics Service Agreement by and between
Musicland Purchasing Corp. and Deluxe dated March 26, 2004.

On March 8, 2006, Deluxe asked the Court to compel the Debtors to
pay its alleged $4,142,931 prepetition lien.  Pursuant to the
LSA, Deluxe also asserted that it is also entitled to interest on
the Total Lien Amount at prime plus 4% per annum.

Subsequently, pursuant to Court-approved expedited procedures for
the rejection of executory contracts, the Debtors rejected the
LSA.

Jonathan P. Friedland, Esq., at Kirkland & Ellis LLP, in New
York, contends that Deluxe's claimed $4,142,931 statutory
warehouseman's lien is not restricted to the warehouse charges
applicable to the specific goods in its possession as of
January 22 or 26, 2006 -- the dates referred to in the Final DIP
Order for setting the value of Deluxe's contested lien.

According to Mr. Friedman, Deluxe is actually asserting a lien for
all of its unpaid prepetition charges as of September 1, 2005,
even if majority of the goods for which the charges were incurred
had left its warehouse by January 22, 2006.  "Since it is
undisputed that Deluxe failed to include a notice of a general
lien claim in any of the documents it contends constitute its
warehouse receipts, it is precluded from asserting such a general
lien."

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSICLAND HOLDING: Wants to Walk Away from 65 Contracts & Leases
----------------------------------------------------------------
For the period June 20, 2006 to July 6, 2006, Musicland Holding
Corp. and its debtor-affiliates seek the U.S. Bankruptcy Court for
the Southern District of New York's authority to reject 61
executory contracts and four unexpired leases pursuant to the
Court-approved Expedited Rejection Procedures.

As reported in the Troubled Company Reporter on June 6, 2006,
after the closing of the Trans World Entertainment Corporation
sale, the Debtors told the Court that it no longer requires many
of the properties, goods and services they obtained under various
executory contracts and unexpired leases to which they are party.  
Accordingly, pursuant to Sections 365 and 554 of the Bankruptcy
Code, the Debtors obtained the Court's approval of expedited
procedures for rejecting executory contracts and unexpired
personal and residential real property leases.

The Leases to be rejected are:
                                                 Proposed
      Shopping Center/Mall                    Rejection Date
      --------------------                    --------------
      10400 Yellow Circle Drive                    6/30/06
      Southlake Mall                               6/30/06
      Sandusky Mall                                6/30/06
      Kirkwood Mall                                6/30/06

The Contracts to be rejected are:
                                                      Rejection
Counter Party                Description                 Date
-------------                -----------              ---------
5280 Mobile, Inc.            License Agreement          6/21/06
IPSH!                        Promotional Agreement      6/21/06
Mix & Burn, Inc.             Confidentiality Pact       6/21/06
Xerox Corporation            Service Agreement          6/21/06
Xerox Corporation            Lease Agreement            6/21/06
Xerox Corporation            Sale Agreement             6/21/06
Xerox Corporation            Maintenance Agreement      6/21/06
Xerox Corporation            Pool Plan Agreement        6/21/06
ADS Alliance Data Sys.       Service Agreement          7/01/06
Frontnet Solutions LLC       Customer Agreement         7/01/06
Ameritas Life Insurance      Insurance Agreement        7/01/06
Applied Retail Solutions     License Agreement          7/01/06
Applied Retail Solutions     Service Agreement          7/01/06
Applied Retail Solutions     Service Agreement          7/01/06
AWS National Accounts        Service Agreement          7/01/06
B2 Direct Inc.               Supply Agreement           7/01/06
BCI Eclipse Co., LLC         Supply Agreement           7/01/06
Boost Mobile, LLC            Supply Agreement           7/01/06
Certergy Check Services      Warranty Agreement         7/01/06
Certegy Payment Recovery     Services Agreement         7/01/06
Connolly Consulting, Inc.    Services Agreement         7/01/06
Continental American Ins.    Insurance Agreement        7/01/06
Culligan                     Services Agreement         7/01/06
DNS Sales                    Sale Agreement             7/01/06
Duff & Phelps Securities     Letter agreement           7/01/06
Eagle Vision, Inc.           Distribution Agreement     7/01/06
Family Network Inc.          Participation Agreement    7/01/06
Goldhil Home Media           Consignment Agreement      7/01/06
H&R Block Digital            Distribution Agreement     7/01/06
Hartford Life & Accident     Service Agreement          7/01/06
HBO Properties               License Agreement          7/01/06
HBO Properties               Letter agreement           7/01/06
Interactive Comm.            Service Agreement          7/01/06
Klehr, Harrison, Harvey      Engagement letter          7/01/06
Lacek Group                  Marketing Agreement        7/01/06
Licensing Ventures, Inc.     Service & Supply Pact      7/01/06
Lifetime Fitness             Service Agreement          7/01/06
LP Innovations, Inc.         Service Agreement          7/01/06
Master Foods USA             Supply Agreement           7/01/06
Microsoft Corporation        Supply Agreement           7/01/06
Nielson Soundscan            Supply & Purchase Pact     7/01/06
Nielson Videoscan, Inc.      Supply & Purchase Pact     7/01/06
Norstan Communications       Service/Product Pact       7/01/06
Panasonic                    Dealer Agreement           7/01/06
Passport Unlimited, Inc.     Marketing Agreement        7/01/06
Pelican Accessories          Supply Agreement           7/01/06
Penthouse Media Group        License Agreement          7/01/06
Pokemon USA, Inc.            License Agreement          7/01/06
Retail Consulting Services   Service Agreement          7/01/06
Return, Inc.                 Service Agreement          7/01/06
Rhino Home Video             Supply Agreement           7/01/06
Safeco Life Insurance        Service Agreement          7/01/06
Samsung Electronics          Service & License Pact     7/01/06
Schindler Elevator Corp.     Maintenance Agreement      7/01/06
Security Integration, Inc.   License and Service Pact   7/01/06
Sony Pictures                Retail Agreement           7/01/06
Sony Pictures                Retail Agreement           7/01/06
Talx Corporation             Service Agreement          7/01/06
Vanguard Integrity           License Agreement          7/01/06
Virgin Mobile USA, LLC       Distribution Agreement     7/01/06
Yale Mechanical              Maintenance Agreement      7/01/06

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MXENERGY HOLDINGS: S&P Junks Rating on Proposed $200 Million Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to MxEnergy Holdings Inc. and its 'CCC+' rating to
MxEnergy's proposed $200 million senior unsecured debt offering.

The 'B' corporate rating reflects MxEnergy's position as one of
the largest players in retail gas marketing, with a track record
of consistent customer growth, competent management that is very
experienced in the industry, and risk management policies that,
while not systematized, are appropriate for the nature and scope
of MxEnergy's business.  The outlook is stable.

"The two-notch differential between the corporate credit rating,
which indicates the risk of default at MxEnergy, and the senior
unsecured debt reflects the poor prospects for recovery of the
unsecured debt upon default given that all of MxEnergy's assets,
including receivables, inventory, and customer contracts are
pledged under a revolving credit facility and a separate hedge
facility, both with Societe Generale," said Standard & Poor's
credit analyst Swami Venkataraman.

"There are significant weaknesses in internal controls, processes,
and documentation related both to financial accounting and risk
management.  Formal risk management systems at MxEnergy are still
in the early stages of development.  Currently, MxEnergy has a
simple spreadsheet-based system, with the top management deeply
involved in day-to-day risk management.  All developing companies
need to make this transition at some point in their life cycle.
However, at this time, the aforementioned weaknesses are an
important limiting factor on MxEnergy's credit," he added.

MxEnergy, founded in April 1999 and headquartered in Stamford,
Connecticut, is one of the largest retail gas marketers in the
country, serving more than 422,000 residential customer
equivalents across 11 eastern states and 26 utility territories.
MxEnergy will use the proceeds of the unsecured note offering to
acquire the assets of Shell Energy Services Co., the retail
marketing arm of Shell, which serves 351,000 RCEs in four utility
territories in Georgia and Ohio.


MXENERGY HOLDINGS: Moody's Junks Rating on Planned $200 Mil. Offer
------------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to MxEnergy
Holdings Inc., a retail energy marketing company engaged in the
marketing and sale of primarily natural gas to residential and
commercial customers in deregulated markets.  With a stable
outlook, Moody's assigned a B3 Corporate Family Rating to MxEnergy
and a Caa1 rating to its proposed offering of $200 million
floating rate senior notes due 2011.

Moody's also assigned a Speculative Grade Liquidity rating of SGL-
3 to MxEnergy.  Proceeds from the notes offering will be used
primarily to fund the acquisition of the retail energy marketing
business of Shell Energy Services Company, L.L.C. and to pay
transaction fees and expenses.

The B3 Corporate Family Rating reflects MxEnergy's complex
business model that requires a high degree of precision,
expertise, and strong control to execute effectively due to the
large number of accounts, high customer attrition, and the risks
associated with managing its fixed price exposure; its small size
and weak balance sheet in terms of asset coverage, particularly in
light of the competitive and confidence-sensitive nature of the
retail energy marketing business; the challenges associated with
integrating the SESCo acquisition; and the risks associated with
MxEnergy's material weaknesses in internal control over financial
reporting and over its operations.

Support for the rating comes from MxEnergy's progress in
establishing a meaningful base of customer accounts in a
competitive business; its ability to maintain relatively steady
margins over the last couple of years, although that has taken
place in a favorable market environment; its experienced
management team with expertise in energy marketing operations; and
the potential benefits associated with the SESCo acquisition
including a higher proportion of variable accounts, increased
geographic diversity, and the addition of billing systems,
processes, and experienced personnel.

The rating outlook is stable.  However, financial performance
below expectations resulting from losses due to under hedged
positions, an inability to maintain customer counts, or problems
in integrating the SESCo acquisition could pressure the ratings.   
An upgrade would require a furtherance of MxEnergy's track record,
successful integration of the SESCo acquisition, remediation of
material weaknesses in internal control over financial reporting
as well as the implementation of stronger operational controls and
systems, and ample asset coverage of senior indebtedness.

MxEnergy's business is working capital intensive. Pro forma for
the transaction as of March 31, 2006, MxEnergy had working capital
of approximately $164 million.  As of June 30, 2006, a seasonal
low in terms of receivables, working capital is expected to be
about $160 million on a pro forma basis, although cash balances
will have increased to approximately $70 million as a result of
the collection of receivables offset by a slight build in
inventories.

In terms of asset coverage, MxEnergy's debt is not covered by
its working capital which is expected to range $160-$180 million
throughout the year, which translates into poor recovery prospects
in the event of a default.  In evaluating MxEnergy's asset
coverage, Moody's excludes the value of customer accounts because
they are intangible and therefore do not have a readily available
market value.  In addition, they are pledged to the hedge
facility.

Pro forma for the SESCo acquisition, MxEnergy will have about
773,000 residential customer equivalents of which about 61% will
be under fixed price contracts with the remaining 39% under
variable price contracts.  Variable price contracts involve
relatively low risk as commodity prices are passed through to
customers.  Fixed price contracts, on the other hand, involve
significantly more risk as they require MxEnergy to enter into
hedges to offset estimated physical deliveries.

While MxEnergy uses its historical experience to estimate customer
attrition, renewals, new customers, and demand, these estimates
are inherently imprecise and therefore MxEnergy does not
necessarily have a "balanced book" in terms of fixed commitments
on both sides of its transactions. MxEnergy's contracts with its
residential customers are not rock-solid in that customers can get
out of their contracts with little consequence.  While MxEnergy
can charge a termination fee, these can be difficult to collect.

MxEnergy does purchase puts in order to protect against lower
volumes; however, it is not cost effective to purchase quantities
large enough to offer meaningful protection.  Moody's believes
that if we were to enter into a lower commodity price environment,
MxEnergy's fixed price contracts may become less competitive which
could trigger higher-than-expected attrition and could result in
greater difficulty in signing up new customers.

Over the last several years as natural gas prices have risen,
MxEnergy has been able to grow its customer count organically,
although it fell slightly in 2005 due to restrictions created by
new telemarketing regulations.  During the nine months ended March
31, 2006, however, MxEnergy has been successful in increasing its
number of RCEs to 422,000, up from 348,000 as of June 30, 2005.  

SESCo's customer count has fallen steadily over the last several
years. At closing, the SESCo acquisition is expected to bring
351,000 RCEs.  This is notably lower than SESCo's RCEs of
401,000 and 475,000 as of December 31, 2005 and 2004,
respectively, excluding "Percent of Income Payment Plan" customers
whose agreements expired earlier this year.

Pro forma for the SESCo acquisition, MxEnergy's adjusted EBITDA
was approximately $61 million for the nine months ended March 31,
2006 and is expected to range from $65 to $70 million for the year
ended June 30, 2006.  Adjusted EBITDA excludes unrealized gains
and losses from risk management activities which result from
marking the hedge book to market through earnings.  Excluding
these non-cash gains and losses from EBITDA is a reasonable
approach given that the value of the offsetting customer contracts
is not recognized in earnings.

However, Moody's notes that MxEnergy capitalizes customer
acquisition costs, which we believe is an unnecessarily aggressive
accounting policy.  A more conservative accounting treatment would
expense these costs as incurred because of the need to
continuously spend on marketing efforts in order to maintain
overall customer counts and because of the uncertainties around
estimating customer attrition.  

Expensing these costs as incurred reduces MxEnergy's
expected adjusted EBITDA of $65 to $70 million for the year ended
June 30, 2006 to $59-$64 million.  Relative to pro forma debt
of approximately $230 million as of June 30, 2006, Moody's
estimates that MxEnergy's debt-to-EBITDA less customer acquisition
costs is in the 3.6 to 3.9 times range.  Relative to pro forma
annual interest expense of about $30 million, Moody's estimates
that MxEnergy's EBITDA less customer acquisition
costs-to-interest is in the 2 to 2.1 times range.  These leverage
and coverage metrics are not out of ranges appropriate for
MxEnergy's B3 Corporate Family Rating.

The senior notes are notched down from the Corporate Family Rating
due to the size of MxEnergy's senior secured credit facility. Once
amended as expected, MxEnergy's credit facility will provide up to
$300 million of borrowing availability, subject to the size of the
borrowing base which is tied to working capital.  Cash borrowings
under the credit facility are not expected to exceed $100 million
even if the borrowing base grows to the entire $300 million
because of the substantial amount of letters of credit that
MxEnergy is required to post.   Should cash borrowings under the
credit facility exceed $100 million, a double-notch would be
considered.

The SGL-3 rating reflects adequate liquidity.  MxEnergy's
operating cash flow can vary significantly and can be negative
during certain interim periods due to seasonal and other changes
in working capital.  Sources of external financing appear to be
adequate and appropriately sized for MxEnergy's activities with
availability under its revolving credit facility expected to be
approximately $80 million at closing.  The credit agreement
contains several financial covenants including maintaining a
minimum levels of tangible net worth and working capital, interest
coverage of at least 2 times, and funded debt-to-EBITDA of no
greater than 4.25 times initially.

Based on current projections, Moody's expects that MxEnergy will
maintain compliance with its financial covenants over the next
12 months. MxEnergy also has $12 million available under a
subordinated line of credit with Sowood.  At closing, MxEnergy
is expected to have cash balances from $65 to $75 million, which
will decrease with the working capital build-up going into the
winter months.  However, liquidity should be maintained through
availability under the revolving credit facility.  Concurrent with
the acquisition of SESCo, MxEnergy is expected to enter into a new
hedge facility that provides it with greater flexibility.

Under the new hedge facility, MxEnergy will not be required to
post collateral for potential negative mark-to-market changes
in the value of its forward hedged positions beyond an initial
margin requirement of $25 million.  MxEnergy's back-door
liquidity, or the ability to sell assets to raise cash, is limited
due to the secured nature of its credit and hedge facilities.

MxEnergy Holdings Inc. is headquartered in Stamford, Connecticut.


NADER MODANLO: Section 341(a) Meeting Continued to August 1
-----------------------------------------------------------
The U.S. Trustee for Region 4 will continue the meeting of Nader
Modanlo's creditors to 1:00 p.m., on Aug. 1, 2006.  The meeting
will be held at 6305 Ivy Lane, Suites 620 to 621, in Greenbelt,
Maryland.  This is the continuance of the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

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 office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Nader Modanlo of Potomac, Maryland, is the President of Final
Analysis Communication Services, Inc.  Mr. Modanlo filed for
chapter 11 protection on July 22, 2005 (Bankr. D. Md. Case No.
05-26549).  Joel S. Aronson, Esq., at Ridberg Sherbill & Aronson
LLP, represents the Debtor.  When the Debtor filed for protection
from his creditors, he listed total assets of $776,237 and total
debts of $106,002,690.  Christopher B. Mead is the chapter 11
Trustee for the Debtor's estate.  Richard M. Goldberg, Esq., at
Shapiro Sher Guinot & Sandler, represent the chapter 11 trustee.


NBC/AUSTIN WINDRIDGE: Hires Fuqua & Keim as Bankruptcy Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
allowed NBC/Austin Windridge to employ Fuqua & Keim, LLP, as its
bankruptcy counsel.

As reported in the Troubled Company Reporter on May 29, 2006,
Fuqua & Keim will:

    (a) provide the Debtor legal advice with respect to its powers
        and duties as a debtor-in-possession in the continued
        operation of its business, and management of its property;

    (b) prepare all pleadings on behalf of the Debtor, as debtor-
        in-possession, as necessary;

    (c) negotiate and submit a potential plan of arrangement
        satisfactory to the Debtor, its estate, and the creditors
        at large; and

    (d) perform all other legal services for the Debtor as a
        debtor-in-possession which may become necessary in the
        Debtor's bankruptcy proceedings.

Richard L. Fuqua, Esq., an attorney at the Fuqua & Keim, will
serve as lead counsel for this engagement and bills $400 per hour.  
The Debtor disclosed that the firm's other professionals bill:

        Professional                         Hourly Rate
        ------------                         -----------
        Other Partners and Shareholders          $300
        Associates                           $120 - $175
        Law Clerks and Legal Assistants       $60 - $75

To the best of Debtor's knowledge, the firm represents no interest
adverse to the Debtor or its estate.

Headquartered in Houston, Texas, NBC/Austin Windridge, Ltd., and
its debtor-affiliate, NBC Las Brisas, Ltd., filed for chapter 11
protection on May 2, 2006 (Bankr. S.D. Tex. Case Nos. 06-31901 &
06-80154).  Richard L. Fuqua, II, Esq., at Fuqua & Keim, LLP,
represents the Debtors.  No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.


NBC/AUSTIN WINDRIDGE: Taps Capstone Real as Management Company
--------------------------------------------------------------
NBC/Austin Windridge, Ltd., and its debtor-affiliate, NBC Las
Brisas, Ltd., ask the U.S. Bankruptcy Court for the Southern
District of Texas in Houston for authority to retain Capstone Real
Estate Service, Inc., as their Management Company, pursuant to
Section 327 of the Bankruptcy Code.

The Debtors tell the Court that Capstone will assist them in the
preparation of accounting and management functions required under
their bankruptcy cases.  The Debtors say that Capstone represented
them prior to their bankruptcy filing and is therefore familiar
with their business.

The Debtors want to employ Capstone on the fee basis set out in
Schedule A of the Management Agreement currently in place between
them.  The Debtor did not submit a copy of the Management
Agreement to the Court.

To the best of Debtor's knowledge, Capstone holds no interest
adverse to its estate.

Headquartered in Houston, Texas, NBC/Austin Windridge, Ltd., and
its debtor-affiliate, NBC Las Brisas, Ltd., filed for chapter 11
protection on May 2, 2006 (Bankr. S.D. Tex. Case Nos. 06-31901 &
06-80154).  Richard L. Fuqua, II, Esq., at Fuqua & Keim, LLP,
represents the Debtors.  No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.


NORTHWEST AIRLINES: Employees Urge Congress to Pass Pension Law
---------------------------------------------------------------
Hundreds of Northwest Airlines employees from around the country
arrived in Washington, on July 18, 2006, to urge members of
Congress to quickly pass legislation that will save their pension
benefits.

The effort involves the participation of hundreds of employees
from throughout various functions of the company, including
pilots, flight attendants, ground employees, flight dispatchers,
meteorologists and management, most flying to Washington for the
day-long lobbying push.

"The pilots of Northwest Airlines view pension legislation as a
win, win, win for the taxpayer, employee and our employer," said
Capt. Dave Stevens, master executive council chairman of the
Northwest unit of the Air Line Pilots Association, who was among
pilots to land in Washington today to participate.  "This is not a
taxpayer bailout; rather it is Northwest's opportunity to live up
to its obligation over a longer period of time."

Many flew aboard two specially chartered flights, one from the
airline's WorldGateway at Detroit hub, the other from its
Minneapolis/St. Paul hub.  Northwest provided two aircraft,
including a 100-seat DC9-30 from Detroit, and a 124-seat Airbus
319 from the Twin Cities, as well as fuel, landing fees and other
related costs.  In addition, employees from Northwest's nearby
Baltimore reservations call center drove to Washington to be part
of the effort.

"Flight attendants have worked hard to bring forth fair pension
legislation and AFA-CWA is proud to stand with our co-workers and
make our voices heard," said Shane Larson, government affairs
director for the Association of Flight Attendants.  "For too long,
companies have been getting away with destroying the futures of
their employees in under-funded pension plans.  Now, for the first
time, we have an airline that wants to do the right thing and
fulfill its obligation.  Therefore it is up to us, the employees,
to unite together and make sure that this happens."

The employees divided into smaller groups and are meeting with
House and Senate delegations from states where Northwest is a
major provider of air service, such as Michigan, Minnesota,
Mississippi, Montana, South Dakota, Tennessee, Washington and
Wisconsin, among others.

"We are here today to urge Congress to swiftly pass legislation
that allows our membership to retain their hard-earned pension
benefits; while protecting the benefits of thousands of retirees,"
said Stephen Gordon, president of Local Lodge 141 and president-
elect of District 143 of the International Association of
Machinists and Aerospace Workers.  "It is imperative for Congress
to listen to its constituents and reach an amicable solution
during these turbulent times."

Securing passage of pension reform legislation that will allow the
airline to meet its obligations to employees and protect taxpayers
has been Northwest's number one legislative priority since the end
of 2004.

"Many of us know far too many airline employees who have seen
their pension plans terminated," said Perry Sprague, president of
Local 543 of the Transport Workers Union, who joined fellow TWU-
represented flight dispatchers in Tuesday's effort.  "We have seen
the kind of worry and hardship that this issue creates for
employees and their families.  We've worked with the company to
create a workable solution and now look to Congress to do its
part."

Northwest's pension plans were fully funded as recently as 2000.  
However, as a result of 1950s' era interest rates, major stock
market declines, and a recession, the company's pension plans are
now under-funded.  In addition, the law governing pension funding
requires highly accelerated "catch-up" payments when a plan is
under-funded.  These catch-up payments are particularly onerous in
the current environment as nearly all U.S. airlines struggle to
return to sustained profitability and cannot afford to make such
contributions.

"This is a very important issue for Northwest Airlines employees
and their families," said Rory O'Loughlin, chairman of Northwest
Airlines Meteorologists Association, who was in Washington.  "We
all have made difficult sacrifices as part of our participation in
Northwest's restructuring, including moving to a defined
contribution plan, but we need Congress' help to protect our
existing defined benefit plans."

Some of Northwest's largest competitors have terminated their
defined benefit contribution plans through the Chapter 11
bankruptcy process, turning responsibility for the plans over to
the Pension Benefit Guaranty Corporation, a governmental
corporation that partially insures failed pension plans.  The PBGC
has taken over the pension plans of a number of airlines,
including most recently United Airlines and US Airways.  Northwest
has said that without passage of this legislation, it will be
forced to terminate its plans.

"For nearly two years, Northwest has worked diligently with
members of Congress and other government officials to save these
hard-earned retirement benefits for our employees," said Doug
Steenland, president and chief executive officer of Northwest.  
"We believe that fully honoring these commitments is the right
thing to do for Northwest's 73,000 pension plan participants.  
Enacting this important legislation now will protect taxpayers
from having another large pension plan become the responsibility
of the PBGC."

                    About Northwest Airlines

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


NORTHWEST AIRLINES: S&P Affirms Default Corporate Credit Rating
---------------------------------------------------------------
Northwest Airlines Corp. unit Northwest Airlines Inc. reached a
tentative concessionary contract agreement with its flight
attendants' union.  Standard & Poor's Ratings Services affirmed
its 'D' corporate credit ratings on both entities, which are
determined by the companies' bankruptcy status.

"The agreement, which has to be ratified by union members (who
overwhelmingly rejected a previous contract offer), would complete
the airline's labor cost reductions and represent an important
step forward in its bankruptcy reorganization," said Standard &
Poor's credit analyst Philip Baggaley.

"Ratification of the contract, which management states will yield
annual savings of $195 million, would allow Northwest to implement
previously agreed concessionary contracts with its pilots, baggage
handlers, and airport service employees; conversely, a second
contract rejection by the flight attendants would likely result in
court-approved imposition of the concessionary contract and
carries some risk of a strike or other labor action in response,"
the credit analyst continued.

The 'D' corporate credit ratings on Northwest Airlines Corp. and
its subsidiary reflect the companies' Sept. 14, 2005, bankruptcy
filings.  Ratings on enhanced equipment trust certificates remain
on CreditWatch, excepting 'AAA' rated, insured EETCs.  Northwest
is seeking to reorganize in Chapter 11 proceedings, reducing
losses by shrinking capacity, securing labor cost reductions, and
reducing fixed financial obligations.  Northwest states that it
will seek to cut its costs by $2.2 billion annually, including
$1.35 billion of reduced labor costs (an approximate 35% reduction
in overall labor expenses, of which about $500 million had been
secured before bankruptcy).

The company had imposed a new contract on its mechanics workforce
(replacements for striking mechanics) prior to bankruptcy and has
since reached ratified or tentative concessionary contracts with
its other unionized employees.  The company is expected to seek
court approval to reject the flight attendant contract and impose
a new one, but resume negotiations in an effort to reach a
consensual agreement.  Northwest has said that it will not seek to
terminate its underfunded ($3.7 billion deficit, as of the end of
2005) defined-benefit pension plans, if proposed new pension
legislation that allows airlines to stretch out repayment of their
deficits is enacted.


NUTRAQUEST INC: Confirmation Hearing Scheduled for August 17
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey set
9:00 a.m. on Aug. 17, 2006, to consider confirmation of
Nutraquest, Inc.'s Second Modified Plan of Reorganization.

A copy of the solicitation materials relating to the Plan may be
obtained from the Debtor's counsel upon written request addressed
to:

               Sterns & Weinroth, P.C.
               Attn: Valerie A. Hamilton, Esq.
               50 West State Sreet, Suite 1400
               P.O. Box 1298
               Trenton, New Jersey 08607
               Fax: (609) 392-7956

Ballots to accept or reject the Plan must be received from holders
of impaired claims by the Court Clerk by 4:00 p.m. (Eastern Time)
on July 28, 2006.

Any objection to the Debtor's Plan must be in writing and received
no later than 4:00 p.m. (Eastern Time) on July 28, 2006, by the
Court Clerk.  Copies of the objection must be sent to:

   (a) the Debtor's counsel:

       Sterns & Weinroth, P.C.
       Attn: Valerie A. Hamilton, Esq.
       50 West State Sreet, Suite 1400
       P.O. Box 1298
       Trenton, New Jersey 08607
       Fax: (609) 392-7956

   (b) office of the U.S. Trustee

       One Newark Center
       Attn: Fran B. Steele, Esq.
       Newark, New Jersey 07102

   (c) counsel for the Official Committee of Unsecured Creditors

       Montgomery, McCracken, Walker & Rhoads LLP
       Attn: Natalie D. Ramsey, Esq.
       123 South Broad Street
       Philadelphia, Pennsylvania 19109

                    Overview of the Plan

Under the Plan, Administrative Expense Claims and Priority Tax
Claims will be paid in full.

Holders of General Unsecured Claims will receive their pro rata
share of the $50,000 fund.

Pursuant to the Ephedra PI Settlement Agreement, holders of
Ephedra Personal Injury Claims will be paid in full through:

    * payment of 90% of their claims in cash on the Effective
      Date, and

    * the balance, consisting of a portion of Phoenix
      Laboratories, Inc.'s share of the funding obligation, to be
      paid over an 18-month period pursuant to a secured,
      interest-bearing Note.

On the Effective Date, the Park Class Claim and all Individual
Park Class Member Claims will be automatically, and without
further act or deed, transferred to, vested in and assumed by the
Park Claims Resolution Facility, and the Park Settlement
Administrator shall have the sole authority to determine the
Allowed Amounts of the Claims.  Distributions to the Park Class
Representative and the holders of the Individual Park Class Member
Claims are limited to amounts allowed and paid from the Park
Claims Resolution Facility.

On the Effective Date, all Individual Markowitz Class Member
Claims based upon retail purchase of Xenadrine(R) RFA-1 will be
automatically, and without further act or deed, transferred to,
vested in and assumed by the Markowitz Xenadrine(R) RFA-1 Claims
Resolution Facility, and the Markowitz Settlement Administrator
shall have the sole authority to determine the Allowed Amounts of
such Claims.

All Individual Markowitz Class Member Claims based upon retail
purchase of Xenadrine(R) EFX will also be automatically, and
without further act or deed, transferred to, vested in and assumed
by the EFX Consumer Redress Fund.  The Federal Trade Commission,
or its designee, shall have the sole authority to determine the
Allowed Amounts of the Claims.

Robert Chinery, Jr., the sole equity owner of the Debtor, will
retain his Interests.

A full-text copy of the Debtor's Disclosure Statement explaining
its Second Modified Plan of Reorganization is available for a fee
at http://www.researcharchives.com/bin/download?id=060719033512

Headquartered in Manasquan, New Jersey, Nutraquest, Inc., is the
marketer of the ephedra-based weight loss supplement, Xenadrine
RFA-1.  The Company filed for chapter 11 protection on October 16,
2003 (Bankr. N.J. Case No. 03-44147).  Andrea Dobin, Esq., and
Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the
Debtor in its restructuring efforts.  Natalie D. Ramsey, Esq., at
Montgomery, McCracken, Walker & Rhoads LLP represents the Official
Committee of Unsecured Creditors.  When the Company filed for
protection from its creditors, it listed estimated assets of
$10 million to $50 million and estimated debts of $50 million to
$100 million.


NUTRAQUEST INC: Wants Excl. Plan-Filing Period Extended to Oct. 9
-----------------------------------------------------------------
Nutraquest, Inc., asks the U.S. Bankruptcy Court for the District
of New Jersey to further extend, until Oct. 9, 2006, the period
within which it has the exclusive right to file a chapter 11 plan.  
The Debtor also asks the Court to extend, until Dec. 8, 2006, its
exclusive period to solicit acceptances of its plan.

The Debtor tells the Court that it has been extremely diligent in
moving toward confirmation of its Plan especially in an
extraordinarily complex case involving very large claims of
varying types, hundreds of creditors, and both private and
governmental claimants.  The Debtor says it has put into place an
administrative framework to expedite the consideration and
confirmation of its Plan after applying for and obtaining the
withdrawal of reference of the entire proceeding to this Court.

The Debtor contends that the extension is necessary in order to
maintain the status quo so that the final pieces of its chapter 11
case may be put in place and a confirmed plan put into effect.

The Debtor says that although it has obtained approval of its
Disclosure Statement and served it and the Plan on all creditors,
there remain significant issues that need to be dealt with.  The
Debtor discloses that these still open issues include the Fee
Mediation and the Phoenix Note Mediation.  The Debtor argues that
it cannot confirm its Plan until all or most of these matters have
been resolved.

The Debtor assures the Court that the extension is not intended to
delay the bankruptcy proceedings or coerce its creditors to accede
to its will.

Headquartered in Manasquan, New Jersey, Nutraquest, Inc., is the
marketer of the ephedra-based weight loss supplement, Xenadrine
RFA-1.  The Company filed for chapter 11 protection on October 16,
2003 (Bankr. N.J. Case No. 03-44147).  Andrea Dobin, Esq., and
Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the
Debtor in its restructuring efforts.  Natalie D. Ramsey, Esq., at
Montgomery, McCracken, Walker & Rhoads LLP represents the Official
Committee of Unsecured Creditors.  When the Company filed for
protection from its creditors, it listed estimated assets of
$10 million to $50 million and estimated debts of $50 million to
$100 million.


OCA INC: Has Until August 14 to Remove State Court Civil Actions
----------------------------------------------------------------
The Honorable Jerry B. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana extended the period within which
OCA, Inc., and its debtor-affiliates can remove state court civil
actions either to the U.S. District Court for the Eastern District
of Louisiana or its Bankruptcy Court to Aug. 14, 2006.

Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick & Horn,
L.L.C., New Orleans, Louisiana told the Court that the additional
enlargement of time sought will afford the Debtors an opportunity
to make fully informed decisions concerning removal of any Civil
Action and will ensure that the Debtors do not forfeit valuable
rights under Section 1452 of the Judiciary Procedures Code.  The
rights of the Debtors' adversaries will not be prejudiced by the
extension.  Any party to a Civil Action that is removed may seek
to have it remanded to the applicable court on any equitable
ground.

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

The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179).  Three debtor-affiliates also filed for bankruptcy
protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503).  
William H. Patrick, III, Esq., at Heller Draper Hayden Patrick &
Horn, LLC, represents the Debtors.  Patrick S. Garrity, Esq., and
William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC
represent the Official Committee of Unsecured Creditors.  Carmen
H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham,
Esq., at Adams and Reese LLP represent the Official Committee of
Equity Security Holders.  When the Debtors filed for protection
from their creditors, they listed $545,220,000 in total assets and
$196,337,000 in total debts.


ONEIDA LTD: Wants Reorganized Companies Incorporated in Delaware
----------------------------------------------------------------
Oneida Ltd. and its debtor-affiliates want their reorganized
entities incorporated under the laws of Delaware rather than New
York, as provided in their First Amended Joint Prenegotiated Plan
of Reorganization filed with the Court on July 7, 2006.

The proposed prenegotiated plan of reorganization provides, among
other things, for the conversion of 100% of Oneida's Tranche B
loan, representing approximately $100 million, into 100% of the
equity of the newly reorganized company.

The Debtors will be substantially consolidated on the plan's
effective date, canceling all intercompany claims.  The plan also
includes a $170 million long-term credit facility that will
refinance Oneida's Tranche A debt and provide the company with
additional liquidity to continue to grow its business.  Oneida's
general unsecured creditors will not be impaired under the plan;
however, existing common and preferred stockholders will not
receive any distributions under the plan and their equity will be
cancelled on the effective date of the plan.

A full-text copy of the redlined Plan of Reorganization is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060719040309

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.


ORIENTAL TRADING: Moody's Junks Rating on Proposed $180 Mil. Loan
-----------------------------------------------------------------
Moody's Investors Service rated the proposed new first-lien bank
credit facility and second-lien term loan of Oriental Trading
Company, Inc. at B3 and Caa1, respectively.  Moody's also lowered
the corporate family rating to B3 and assigned a stable rating
outlook.  The rating action considers the proposed financing that
will be associated with the pending leveraged buyout of OTC by The
Carlyle Group and co-investors.  

The acquisition will be financed by the new 1st-lien and 2nd-lien
loans, non-rated holding company mezzanine debt, and cash equity.   
The downgrade is principally driven by the substantially increased
leverage and fixed charge burden that will result
from the transaction.

Ratings assigned are:

   * $50 million 1st-Lien Revolving Credit facility at B3,
   * $410 million 1st-Lien Term Loan at B3,
   * $180 million 2nd-Lien Loan at Caa1.

This rating is lowered:

   * Corporate family rating to B3 from B2.

The ratings on the existing $307 million 1st-lien bank loan and
$122 million 2nd-lien loan will be withdrawn upon completion of
the proposed transaction.

Oriental Trading Company's corporate family rating of B3 reflects
the impact of key quantitative and qualitative credit attributes.   
Weighing down the overall rating with low non-investment grade
scores are the company's higher leverage and modest fixed charge
coverage post-transaction, OTC's relatively small size in revenue
terms, and competition including from other catalogue marketers.   
Steady growth over time in sales and cash flow, coupled with
diversification of OTC's customer base and product offering and
the relative lack of cash flow seasonality, potentially benefit
the ratings.

Moody's believes that OTC's corporate family rating is solidly
positioned at the B3 level.  The stable outlook anticipates that
the company will steadily grow revenue and cash flow.  The outlook
also considers Moody's expectation that the company's
discretionary cash flow will be used for balance sheet
improvement.  However, given the large debt burden being placed on
the company and assuming good operating performance, Moody's does
not expect material debt reduction within the medium-term.

Moody's anticipates that the company will maintain solid liquidity
through moderating growth capital investment, if operating results
fall below plan.  Ratings could eventually move upward once
financial flexibility strengthens such that debt to EBITDA falls
below 6 times and Free Cash to Debt approaches 5% on a sustainable
basis.  Inability to grow revenue and operating profit, a
permanent decline in cash balances or revolving credit facility
availability resulting from negative free cash flow, or an
aggressive financial policy action would cause the ratings to be
lowered. Specifically, debt to EBITDA above 7 times, EBIT to
interest expense falling towards 1 time, or free cash flow to debt
below break-even would cause ratings to be lowered.

Oriental Trading Company, Inc., with headquarters in Omaha,
Nebraska, sells novelties, toys, and home decor items via
catalogue and over the Internet.  Revenue for the twelve months
ending April 1, 2006 was approximately $582 million.


ORIS AUTOMOTIVE: Wants Plan-Filing Period Stretched to Sept. 24
---------------------------------------------------------------
Oris Automotive Parts Alabama, Ltd., asks the U.S. Bankruptcy
Court for Northern District of Alabama, Southern Division, to
extend its exclusive period to file a Chapter 11 Reorganization
Plan to Sept. 24, 2006, and its period to solicit acceptances of
that Plan to Nov. 24, 2006.

Max A. Moseley, Esq., at Johnston Barton Proctor & Powell LLP,
tells the Court that the Debtor has not had sufficient time to
draft a Reorganization Plan because it has focused its attention n
effectuating and finalizing the sale of a substantial majority of
its assets.  The Court approved the sale of the assets to Flex-N-
Gate Corporation on June 20, 2006.

With the sale approval, Mr. Moseley says the Debtor will meet with
its consultants to prepare and submit a liquidating plan under
Chapter 11 of the Bankruptcy Code.

Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama,
Ltd. -- http://www.oris-gmbh.de/-- manufactures automotive parts.  
The company filed for chapter 11 protection on March 16, 2006
(Bankr. N.D. Ala. Case No. 06-00813).  Clark R. Hammond, Esq., at
Johnston, Barton, Proctor & Powell LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million to
$10 million and debts between $10 million to $50 million.


OWENS CORNING: Court Approves Proposed Plan Voting Procedures
-------------------------------------------------------------
The Honorable Judith K. Fitzgerald approves the Plan Voting
Procedures proposed by Owens Corning and its debtor-affiliates as
revised to reflect changes to the Fifth Amended Plan of
Reorganization and with the added modifications to address
revisions reflected in their Sixth Amended Plan.

The U.S. Bankruptcy Court for the District of Delaware finds the
Debtors' proposed notices as constituting sufficient notice to all
interested parties, and forms of ballots as adequately addressing
the particular need of their Chapter 11 cases.

A full-text copy of the Voting Procedures as further amended to
address changes reflected in the Sixth Amended Plan is available
for free at http://ResearchArchives.com/t/s?da2

The Court directs attorneys for an individual holder of a PI
Trust Claim, who is not authorized to vote on behalf of the
holder or who otherwise wishes to have the Voting Agent transmit
the Solicitation Packages to his or her clients directly, to
comply with the terms of the Notice to Asbestos Attorneys and the
appended Election Form, on or before July 3, 2006.

Claimants holding both Classes A7 and B8 claims do not hold
claims on account of the same underlying debt and will be
entitled to cast both Classes A7 and B8 Ballots subject to the
terms of the Voting Procedures, Judge Fitzgerald says.  Votes
submitted in relation to Class A7 will be tabulated provisionally
as votes in relation to Class I7.

Subject to the terms and conditions of the Voting Procedures:

   a. holders of 6-1/2% Monthly Income Preferred Securities will
      be the sole parties entitled to vote any Class A11 MIPS
      Claims and Interests; and

   b. the Special Voting Agent will tabulate each of the MIPS for
      which a ballot is cast as a Class A11 claim for $50 per
      MIPS, unless the Court orders otherwise.

Holders of OC Interests will be the sole parties entitled to vote
Class A12 OCD Interests in Owens Corning.

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


PARMALAT GROUP: Wins Appeal Against Citigroup In New Jersey Court
-----------------------------------------------------------------
The Appellate Division of the Superior Court of New Jersey allows
Parmalat Finanziara, S.p.A., to continue with its fraud lawsuit
against Citigroup, Inc., and certain affiliates.

In a decision dated July 14, 2006, the New Jersey Appellate
Division rejected an appeal filed by the Citigroup Entities to
dismiss a ruling from the New Jersey Law Division, which ruling
denied Citigroup's request to dismiss a complaint filed by Dr.
Enrico Bondi, extraordinary administrator of Parmalat.

In the complaint, Dr. Enrico Bondi alleged that Citigroup, Inc.
and Citibank, N.A., aided Parmalat's subsidiaries in their
fraudulent scheme.  Specifically, Dr. Bondi asserted that
Citigroup knowingly structured financing for Parmalat subsidiaries
to disguise debt and artificially increase cash flow.  

Eureka PLC, a United Kingdom-based public liability company, is
one of the corporations alleged to be affiliated with Citigroup
that have participated in the Parmalat scheme.

Dr. Bondi said Citigroup created Eureka as a special purpose
entity to assist in Parmalat's scheme.  Citigroup purportedly
provided credit lines and financial services to Eureka.  Eureka,
acting on Citigroup's behalf, bought and securitized receivables
of Farmland Dairies LLC, a holding company of Parmalat subsidiary
Parmalat USA Corporation.  

Dr. Bondi believes that Eureka's transactions with Farmland were
purportedly essential links in the global scheme.

In their dismissal motion, the Citigroup Defendants argued that
the New Jersey trial court lacks personal jurisdiction over
Eureka.

The Citigroup Defendants also relied on the forum non conveniens
doctrine.  They argued that New Jersey lacks interest in the
litigation, witnesses and documents are not located in New Jersey,
and application of Italian law will make it inconvenient to pursue
the case in the State.

Under the forum non conveniens doctrine, "a court may decline
jurisdiction whenever the ends of justice indicate a trial in
the forum selected by the plaintiff would be inappropriate," the
New Jersey Appellate Division notes, citing a court ruling in
D'Agostino v. Johnson & Johnson, Inc., 225 N.J. Super. 250, 259
(App. Div. 1988), aff'd, 115 N.J. 491 (1989) (D'Agostino I).

However, the New Jersey Appellate Division holds that the trial
court had established a prima facie case of specific jurisdiction
against Eureka.

The Appellate Court also finds that the Citigroup Defendants
failed to show that they will not have access to sources of proof,
or that witnesses will be unavailable so that it would be
unreasonable for the lawsuit to proceed in the State.  Hence, the
Appeals Court rules that the dismissal motion based on forum non
conveniens was properly denied.

The Appellate Division affirms, without prejudice, the Law
Division's decision not to dismiss the Bondi suit based on forum
non conveniens, allowing Citigroup to raise the issue again after
it:

   -- has made a good faith effort to obtain discovery necessary
      to defend the action; and

   -- can provide the court with a record showing that
      plaintiff's choice of forum is truly inappropriate.

                          About Parmalat

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 74; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PHIBRO ANIMAL: Plans Tender Offer of $240 Million Senior Notes
--------------------------------------------------------------
Phibro Animal Health Corporation reported the proposed private
offering of $240 million in aggregate principal amount of its
senior notes due 2013.  It is anticipated that the consummation of
the offering will occur on or about July 31, 2006 and the net
proceeds from the offering, together with available cash, will be
used to refinance all of the outstanding 13% Senior Secured Notes
due 2007 of PAHC and one of its subsidiaries, all of the
outstanding 9-7/8% Senior Subordinated Notes due 2008 of PAHC and
all of the outstanding 15% Senior Secured Notes due 2010 of PAHC
Holdings Corporation, to repay debt outstanding under the existing
domestic senior credit facility of PAHC and to pay related fees
and expenses.

The new notes will be senior unsecured obligations of PAHC, will
bear interest semi-annually and will be guaranteed by PAHC's
existing domestic subsidiaries and certain of its future domestic
subsidiaries.

Headquartered in Ridgefield Park, New Jersey, Phibro Animal Health
Corporation -- http://www.philipp-brothers.com/-- manufactures   
and markets a broad range of animal health and nutrition products,
specifically medicated feed additives and nutritional feed
additives, which it sells throughout the world predominantly to
the poultry, swine and cattle markets.  MFAs are used preventively
and therapeutically in animal feed to produce healthy animals.  
PAHC is also a specialty chemicals manufacturer and marketer.

At March 31, 2006, Phibro Animal Health Corporation's balance
sheet showed a $48,865,000 stockholders' deficit compared to a
$44,924,000 deficit at June 30, 2005.

                          *     *     *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service assigned a B3 rating to the proposed new
senior unsecured note offering of Phibro Animal Health
Corporation.  At the same time, Moody's affirmed the existing
ratings of Phibro, including the B2 corporate family rating.  
The rating outlook is stable.


PHYSICIANS INTERINDEMNITY: Receiver Selling $7.9 Mil. of Judgments
------------------------------------------------------------------
David A. Gill, Esq., in his capacity as the Receiver for
Physicians Interindemnity Cooperative Corporation, is selling a
portfolio of outstanding judgments, settlements and claims against
54 individual physicians totaling $7.9 million, of which Mr. Gill
believes as much as $1.6 million is recoverable.  

Subject to higher and better offers, Mr. Gill has agreed to sell
the portfolio for $435,501 under the terms of a Purchase and Sale
Agreement filed in the Los Angeles Superior Court.  The buyer's
identity was not available at press time.  

Subject to a confidentiality agreement, due diligence materials
can be obtained by contacting:

     Greg Suchniak
     Danning, Gill, Diamond & Kollitz, LLP
     2029 Century Park East, Third Floor
     Los Angeles, CA 90067
     Telephone (310) 277-0077

Mr. Gill will ask the Los Angeles Superior Court to approve the
sale to the highest and best bidder at a hearing on August 16,
2006.  

Physicians Interindemnity Cooperative Corporation (commonly known
as PICC) and Physicians Interindemnity Trust (commonly known as
PIT) were formed pursuant to section 1280.7 of the California
Insurance Code to provide member-physicians with protection from
medical malpractice claims.  The members paid initial
contributions and thereafter paid assessments, which were
deposited into a trust fund that was used to cover defense and
indemnity for medical malpractice lawsuits.

In September 1995, the PIT board of trustees approved a plan of
winding up and termination of PIT due to a determination that an
assessment of $32.5 million was necessary to replenish the trust
fund and to raise sufficient funds for defense and indemnity.  The
plan included a proposal that the members would obtain malpractice
insurance through a specified insurance company.  The plan was
approved and PIT ceased providing coverage to members for future
acts.

In March 1996, in an action brought in the Los Angeles Superior
Court by the Department of Corporations (Case No. BC145996),
PIT/PICC was ordered into receivership.

David A. Gill, Esq., at Danning, Gill, Diamond & Kollitz, LLP, was
appointed as the Receiver of PIT/PICC's assets.  The order
appointing Mr. Gill gave him the authority to enforce and collect
all debts of the trust and PICC, including assessments.  
Thereafter, Mr. Gill deemed that the trust fund had insufficient
funds to pay debts to defend against, and indemnify for,
malpractice claims.  Mr. Gill sent a letter to all members
demanding assessment payments.  Only 20% of the members responded.  
PIT members stopped receiving coverage for malpractice lawsuits.

In July 1997, Mr. Gill sued all members of PIT/PICC, seeking to
recover more than $51 million, including funds owed as unpaid
assessments levied by the trust's board of trustees, as well as
sums for "receiver's assessment."
  

PLIANT CORP: Completes Restructuring and Exits Chapter 11
---------------------------------------------------------
Pliant Corporation completed its financial restructuring and has
exited Chapter 11 Bankruptcy protection.  The company's financial
restructuring plan was confirmed by the U.S. Bankruptcy Court for
the District of Delaware on June 23, 2006, subject to several
closing conditions.  These conditions have all been satisfied,
including:

     -- Closing of a new $200 million senior secured revolving
        credit facility with Merrill Lynch Commercial Finance
        Corp.  This facility replaces Pliant's existing pre-
        petition revolver and debtor-in-possession credit
        facilities.

     -- Completion of a transaction to reincorporate the company
        in Delaware.

Pliant filed a voluntary petition for Chapter 11 protection on
Jan. 3, 2006 to implement a pre-negotiated restructuring of its
balance sheet.  The financial restructuring significantly
increases Pliant's free cash flow, reduces debt and interest
expense, and eliminates all existing mandatory redeemable
preferred equity through an exchange with holders of the company's
13% Senior Subordinated Notes, Series A and Series B Preferred
stock, and Common stock.  A key provision of Pliant's Plan of
Reorganization provides for payment of all outstanding pre-
petition trade vendor claims.

Additionally, the Company's 1st Lien and 2nd Lien Senior Secured
Notes have been reinstated in accordance with their terms, the
interest rate on the 1st Lien Senior Secured Notes has been
increased by 0.225% per annum, and holders of the 2nd Lien Senior
Secured notes will be entitled to receive payment of accrued but
unpaid interest through March 1, 2006 (including interest on
interest through July 25, 2006) and a cash consent fee.  The
record date for such payments to holders of 2nd Lien Senior
Secured notes is July 24, 2006.

Pliant will now continue its normal business outside the confines
of the U.S. Bankruptcy Code.  The company is able to commence
making payments and distributions to creditors with validated
claims under the terms of the confirmed Plan.

"Today marks a successful completion of an important process,"
Harold Bevis, President and CEO said.  "I am pleased we have now
accomplished our objective of improving Pliant's balance sheet and
cash flow, to enable us to continue executing our business plan
and investing in our business on a sustained basis.  From the
start, our goal has been to get in-and-out of Chapter 11 as
quickly as possible, to minimize the cost of the process and the
impact on our company.  I am proud to say that throughout the
process, Pliant was able to continue its operations on an
uninterrupted basis, and never needed to use the $70 million DIP
credit facility.  We are all excited about Pliant's future, and
look forward to continue providing our customers with value-added
products, superior service, and leading-edge innovation programs.  
Thank you to all of our loyal employees, vendors, and customers
for supporting the company during this time period.  We believe
Pliant's future has never been brighter."

As reported in the Troubled Company Reporter on June 22, 2006,
Pliant Vice President and General Counsel Stephen T. Auburn
disclosed that the Third Amended Plan includes a new class --
Class 11A, which consists of the Durham Subordinated Claims.  The
Claims are impaired.  The Durham Subordinated Claims are the
claims of the Durham Parties related to the Durham Put Shares to
the extent subordinated by the Bankruptcy Court pursuant to
Section 510(b) of the Bankruptcy Code.

The Durham Parties referred to Richard P. Durham and Durham
Capital, L.L.C.

The Durham Put Shares referred to the capital stock and warrants
of the Debtors that are subject to the alleged "put" right of the
Durham Parties.  As of the Petition Date, the Durham Put
Shares consisted of 18,200 shares of outstanding common stock,
1,232 shares of Series A Preferred Stock and 1,250 Warrants.

The Plan provided if and to the extent the Court determines that
Holders of Allowed Durham Subordinated Claims are entitled to
receive:

   (a) a portion of the New Equity Common Stock that is otherwise
       distributable to Holders of Outstanding Common Stock
       Interests; or

   (b) a portion of the Series A Common Stock and the Series
       A or Series AA Preferred Stock that is otherwise
       distributable to Holders of Series A Preferred Stock
       Interests;

then the Holders of Allowed Durham Subordinated Claims will
receive a payment in Cash equal to the value as of the Effective
Date, as agreed with the Debtors or determined by the Court, of
that Subordinated Claim Common Stock Allocation and that
Subordinated Claim Preferred Allocation; provided, however, that
the amount of the distribution will be reduced by the value, as
agreed with the Debtors or determined by the Court, of the New
Equity Common Stock, the Series A Common Stock and the Series A
or Series AA Preferred Stock that is distributed to Holders of
Allowed Durham Subordinated Claims on account of Durham Put
Shares.

For the avoidance of doubt, Class 11 includes the Durham Put
Shares that are Outstanding Common Stock Interests but does not
include Durham Subordinated Claims.

Mr. Auburn clarified that Class 9 includes the Durham Put Shares
that are Series A Preferred Stock Interests but does not include
Durham Subordinated Claims.

A full-text copy of Pliant's Third Amended Plan of Reorganization
is available for free at http://ResearchArchives.com/t/s?bda

                       About Pliant Corp.

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts.  The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel.   The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada.  Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors.  Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee.  As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts.


PMA CAPITAL CORP: Low Leverage Prompts Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed the ratings of PMA Capital
Corporation and the Ba1 insurance financial strength ratings
of the PMA Insurance Group companies, on review for possible
upgrade.  Moody's also affirmed the B1 IFS rating of PMA
Capital Insurance Company and changed the outlook to stable
from developing.  The review for possible upgrade was prompted
by PMACC's improved financial flexibility including its recent
reduction in financial leverage as well as improving business
fundamentals at PMAIG.

According to Moody's, the review for possible upgrade will focus
on PMAIG's prospective core earnings and fixed charge coverage
metrics, the company's reserve and capital adequacy profile as
well as holding company liquidity.  Moody's noted that the PMAIG
company pool has experienced moderate but consistent levels of
profitability in recent years, most recently driven by new
business production and renewal retention rates near historical
norms, as well as an emphasis on managed care initiatives and a
change in the geographic mix of business.  While PMAIG's business
has been reasonably profitable, Moody's believes the group may be
challenged by the intensifying competitive environment and by
secular trends in medical cost inflation.

Moody's changed the outlook on PMA Re to stable from developing
reflecting expectations that the company will continue to manage
an orderly runoff of its loss reserves and that adverse reserve
development will not exhaust the remaining limit on PMA Re's
adverse development cover.

The last rating action occurred on October 8, 2004, when Moody's
assigned a B3 rating to PMA Capital Corporation's senior secured
convertible debt, affirmed its long-term debt ratings, and placed
a developing outlook on the ratings.

These ratings have been placed on review for possible upgrade:

   PMA Capital Corporation

     * senior unsecured debt at B3
     * prospective senior unsecured debt at (P)B3
     * prospective subordinated debt at (P)Caa2
     * prospective preferred stock at (P)Caa3;

   PMA Capital Trust I

     * prospective preferred securities at (P)Caa2;

   PMA Capital Trust II

     * prospective preferred securities at (P)Caa2;

   Manufacturers Alliance Insurance Company

     * insurance financial strength at Ba1;

   Pennsylvania Manufacturers' Association Insurance Company
  
     * insurance financial strength at Ba1;

   Pennsylvania Manufacturers Indemnity Company

     * insurance financial strength at Ba1.

This insurance financial strength rating has been affirmed with a
stable outlook:

   PMA Capital Insurance Company

     * insurance financial strength at B1.

PMACC, headquartered in Philadelphia, Pennsylvania, is an
insurance holding company whose operating subsidiaries provide
specialty risk management products and services to its customers
in the United States.  As of March 31, 2006, shareholders' equity
was $400 million.


RENT-A-CENTER: Completes $725 Million Senior Debt Refinancing
-------------------------------------------------------------
Rent-A-Center, Inc., completed the refinancing of its senior
secured debt.  The new $725 million senior credit facility
consists of $325 million in term loans and a $400 million
revolving credit facility.  The Company drew down the $325 million
in term loans and $88 million of the revolving facility today and
utilized the proceeds to repay its existing senior term debt.

"We believe this enhanced revolving structure will provide us
financial flexibility by allowing us to scale our secured debt as
we continue to grow our core rent-to-own business and expand our
entry into the financial services business," commented Mr. Robert
D. Davis, the Company's Chief Financial Officer.  "Based upon our
present leverage ratio and current debt level, we expect an
approximate 50 basis point interest expense savings over the term
of the new credit facility," Mr. Davis stated.  In connection with
the closing of the refinancing, the Company will record a charge
in the third quarter of approximately $2.2 million relating to
unamortized costs under the Company's previous senior credit
facility.

Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq/NGS:RCII) --
http://www.rentacenter.com/-- operates the largest chain of   
consumer rent-to-own stores in the U.S. with 2,751 company
operated stores located in the U.S., Canada, and Puerto Rico.  The
company also franchises 297 rent-to-own stores that operate under
the "ColorTyme" and "Rent-A-Center" banners.  

                        *    *    *

As reported in the Troubled Company Reporter on June 29, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Rent-A-Center Inc.'s $725 million credit facility.  It also
assigned a recovery rating of '4' to the facility, indicating the
expectation for marginal recovery of principal in the event of a
payment default.  The loan comprised a $400 million revolving
credit facility due in 2011, a $200 million term loan A due in
2011, and a $125 million term loan B due in 2012.  The corporate
credit rating on Rent-A-Center Inc. is 'BB+' with a negative
outlook.  
      
As reported in the Troubled Company Reporter on June 23, 2006,
Moody's Investors Service assigned a Ba2 rating to the bank loan
of Rent-A-Center, Inc., and affirmed the Ba2 corporate family as
well as the senior subordinated note issue at Ba3.  The
continuation of the positive outlook reflected Moody's opinion
that ratings could be upgraded over the medium-term once the
company establishes a lengthier track record of sales improvement
and Moody's becomes more comfortable with the company's financial
policy.


RIEFLER CONCRETE: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Riefler Concrete Products, LLC, delivered to the U.S. Bankruptcy
Court for the Western District of New York its schedules of assets
and liabilities, disclosing:

     Name of Schedule                Assets         Liabilities
     ----------------                ------         -----------
  A. Real Property                 $591,442    
  B. Personal Property          $19,232,185
  C. Property Claimed
     as Exempt
  D. Creditors Holding
     Secured Claims                                 $11,523,948
  E. Creditors Holding
     Unsecured Priority Claims                         $194,957
  F. Creditors Holding                              
     Unsecured Nonpriority
     Claims                                         $11,101,620
                                -----------         -----------
     Total                      $19,823,627         $22,820,525

A copy of the 194-page document containing the schedules is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060719043745

Headquartered in Hamburg, New York, Riefler Concrete Products, LLC
-- http://www.riefler.com/-- manufactures and distributes  
licensed concrete masonry products, and offers concrete
construction and filling services.  The Company and its affiliate,
Riefler Real Estate Corp., filed for chapter 11 protection on
June 12, 2006 (Bankr. W.D. N.Y. Case No. 06-01574).  Bruce F.
Smith, Esq., at Jager Smith P.C., represent the Debtors in their
restructuring efforts.  When they filed for bankruptcy, the
Debtors reported assets and debts amounting between $10 million to
$50 million.


RIVIERA TOOL: Files Third Quarter Financials for 2006 Fiscal Year
-----------------------------------------------------------------
Riviera Tool Company filed its financial statements for the third
quarter ended May 31, 2006, with the Securities and Exchange
Commission on July 17, 2006.

The Company earned $18,391 of net income on $6,136,378 of sales
for the three months ended May 31, 2006, compared to a net loss of
$775,816 on $4,687,278 of sales for the same period in 2005.

At May 31, 2006, the Company's balance sheet showed $23,506,938
in total assets, $19,932,955 in total liabilities, and $3,573,983
in total stockholders' equity.

Full-text copies of the Company's third quarter financil statement
are available for free at http://ResearchArchives.com/t/s?dee

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Dec. 13, 2005,
Deloitte & Touche LLP expressed substantial doubt about Riviera
Tool Company's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal years
ended Aug. 31, 2005, and 2004.  The auditing firm pointed to the
Company's losses from operations, significant current debt, and
non-compliance with the terms of certain of its debt agreements.

Riviera Tool Co. -- http://www.rivieratool.com/-- designs,
develops and manufactures large-scale, custom metal stamping die
systems used in the high-speed production of sheet metal parts and
assemblies for the global automotive industry.  A majority of
Riviera's sales are to Mercedes Benz, BMW, Nissan,
DaimlerChrysler, General Motors Corp., Ford Motor Co. and their
Tier One suppliers.


SAINT VINCENTS: Inks New Set-Off Deal with New York Health Dept.
----------------------------------------------------------------
In April 2006, Saint Vincents Catholic Medical Centers of New York
and its debtor-affiliates and the New York City Department of
Health and Mental Hygiene filed a stipulation seeking to modify
the automatic stay to effectuate a setoff.  

The Original Stipulation does not reflect the agreement between
the Debtors and the DOHMH due to a computational error uncovered
only after the filing.  It was never approved by the U.S.
Bankruptcy Court for the Southern District of New York.

The Debtors and the DOHMH wish to replace the Original Stipulation
to incorporate several changes to their agreements, including:

    -- the Debtors owe the DOHMH $311,986 for Expense Overpayments
       incurred prior to the Petition Date;

    -- the DOHMH owes the Debtors $1,665,329 for Prepetition Grant
       Funds;

    -- the DOHMH already paid $196,959 to Saint Vincent Catholic
       Medical Centers in 2005, and the $1,110,447 due SVCMC for
       fiscal year 2005 and which will be paid to SVCMC pursuant
       to the Stipulation may still be subject to further audits
       to be conducted by the DOHMH; and

    -- the DOHMH owes SVCMC a $1,353,342 balance in Prepetition
       Grant Funds.

Thus, the parties stipulate that the Original Stipulation is
replaced and superseded in its entirety by the Revised
Stipulation.  The Original Stipulation will be of no further
force or effect.

Upon Court approval of the Revised Stipulation, the automatic
stay of will be modified solely to permit the DOHMH to effectuate
the Setoff and the proof of claim filed by the DOHMH on March 20,
2006, for the Prepetition Expense Overpayments will be deemed
withdrawn.

Furthermore, the Revised Stipulation contemplates that within 10
business days after its approval, the DOHMH will remit to the
Debtors the Remaining Prepetition Grant Money Obligations.

Any required adjustments based on Additional 2005 Audits will be
made against postpetition grant monies owed or that may become
owed to the Debtors and will not affect the terms of the Revised
Stipulation.

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)


SAINT VINCENTS: Inks Settlement Pacts with Curevax & Dr. Wallack
----------------------------------------------------------------
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 enter into separate
settlement agreements with Curevax, LLC, and Marc K. Wallack, M.D.

In 1999, Saint Vincent Catholic Medical Centers and Dr. Wallack
entered into an assignment agreement, pursuant to which Dr.
Wallack assigned to SVCMC all interest in certain technology
relating to a vaccine for the treatment of melanoma.  SVCMC and
Dr. Wallack agreed to an income-sharing arrangement governing all
income received from the Technology.  A patent application
covering the Technology was then filed.

In September 2000, SVCMC and Curevax entered into:

    (i) a License Agreement, under which SVCMC granted Curevax an
        exclusive, worldwide license to develop and sell products
        and processes related to the Patent Application.  In
        return, SVCMC was to receive payment of an initiation fee,
        royalties relating to sales and sublicensing or
        assignment, and milestone payments associated with the
        completion of various phases of the research; and

   (ii) a Clinical Trials Agreement, which provided that SVCMC
        would be engaged to study the safety and efficacy of the
        vaccine, with Curevax funding much of the research.

Since 2000, SVCMC has expended considerable resources in
connection with the Vaccine Research.  However, the research has
experienced numerous delays and no clinical trials have begun.

Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that SVCMC has decided to terminate involvement
with the Vaccine Research because:

    -- the project is expensive;

    -- the potential future economic value of SVCMC's rights
       flowing from royalty payments under the contract are
       speculative and difficult to quantify;

    -- the Vaccine Research presents SVCMC with significant
       administrative and personnel challenges as there are no
       investigators or ancillary staff available to run the
       necessary clinical trials; and

    -- the Joint Commission on Accreditation of Healthcare
       Organizations instructed SVCMC to increase storage space
       available to reduce overcrowding in some areas of its
       facilities.

As a result of negotiations between SVCMC, Curevax and Dr.
Wallack, several agreements were entered into to fully terminate
SVCMC's involvement in the Vaccine Research and its relationship
with Dr. Wallack.  In combination, the agreements effectively:

    * transfer the rights and equipment associated with the
      Vaccine Research to Curevax;

    * settle disputes over termination with Dr. Wallack consistent
      with SVCMC's general severance policies; and

    * result in the exchange of releases and waiver of claims
      against the estates.

                         Wallack Settlement

The Wallack Settlement, among other things, assigns all rights
and interests that Dr. Wallack may have retained under the
Assignment Agreement to SVCMC, and provides for the mutual
releases of all claims Dr. Wallack and SVCMC may have had against
each other under the Assignment Agreement, the License Agreement,
and the Clinical Trials Agreement.  Obtaining a release from Dr.
Wallack of any retained rights under the Assignment Agreement
arguably is a prerequisite to the ability to perform under the
Curevax Settlement.

A full-text copy of the Wallack Settlement is available for free
at http://researcharchives.com/t/s?de9

                    Wallack Separation Agreement

Dr. Wallack will receive a severance benefit totaling six months'
salary over the three-month period following the date a final,
non-appealable order approving the Wallack Separation Agreement
is received.  The severance benefit is subject to offset
provisions should Dr. Wallack's salary at Metropolitan Hospital be
raised or should he secure regular employment elsewhere during the
term of the severance payments.

The Wallack Separation Agreement includes standard releases of
SVCMC from any liability associated with Dr. Wallack's employment,
and provides that SVCMC will purchase tail insurance coverage
concerning future claims arising out of Dr. Wallack's employment
at SVCMC.

Because the Wallack Separation Agreement contains, among other
things, information relating to Dr. Wallack's current employment,
it is a confidential agreement.

                         Curevax Settlement

The Curevax Settlement provides both Curevax and SVCMC with
releases from all potential claims or liability associated with
the Clinical Trials Agreement, the License Agreement, or any other
agreement or transaction between the parties.  The Curevax
Settlement also assigns to Curevax all of SVCMC's right, title,
and interest in and to:

   -- the Patent Application, together with a related application
      made a year later, and all patents issued with respect to
      the applications;

   -- all trade secrets and confidential information related to
      the applications;

   -- all work papers, notebooks, and other materials embodying or
      practicing the Patent Applications, the Patents, or Related
      Technology;

   -- all of SVCMC's books and records relating to the Patent
      Applications, the Patents, the Related Technology and the
      Materials;

   -- all Study Data and unused Vaccine, materials and supplies in
      SVCMC's possession for the purposes of the Study; and

   -- certain equipment and other tangible assets listed under
      the Curevax Settlement.

A full-text copy of the Curevax Settlement is available for free
at http://researcharchives.com/t/s?de8

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 Prompts Moody's to Withdraw Ratings
-------------------------------------------------------------
Moody's Investors Service withdrew the existing ratings of
Serologicals Corporation, including the B1 Corporate Family
Rating, concluding a rating review for possible upgrade initiated
on April 27, 2006.  This rating action follows the acquisition of
Serologicals by Millipore Corporation, and Moody's understanding
that all of the rated debt obligations of Serologicals have been
paid.

Ratings withdrawn:

   * B1 Corporate Family Rating; Ba3 senior secured bank credit
     facilities

Moody's does not rate Serologicals' convertible debentures due
2033.


SILICON GRAPHICS: Ad Hoc Committee Objects to FTI's Retention
-------------------------------------------------------------
The Ad Hoc Committee of certain holders, for themselves and on
behalf of certain funds and managed accounts, of 6.50% Senior
Secured Convertible Notes, and certain members of the Ad Hoc
Committee as DIP Lenders, ask the U.S. Bankruptcy Southern Court
for the District of New York to deny the retention of FTI
Consulting, Inc., on the terms and conditions proposed by the
Official Committee of Unsecured Creditors.

Emmanuel C. Grillo, Esq., at Goodwin Procter LLP, in New York,
asserts that the financial terms of the proposed engagement would
result in a windfall to FTI at the expense of Silicon Graphics,
Inc., its debtor-affiliates and the holders of the Senior Secured
Notes.

Mr. Grillo points out that the Creditors' Committee is a party to
the Global Settlement Agreement dated June 23, 2006, and other
than monitoring the cases and complying with the terms of the
Agreement, the Creditors' Committee's work has been substantially
concluded in the Debtors' cases.

According to Mr. Grillo, the Retention of FTI fails to satisfy the
factors for assessing reasonableness under Section 328 (a) of the
Bankruptcy Code since:

    * the assignment is not overly complex or broad in scope;

    * the expected duration of the assignment is a relatively
      short four months;

    * the required resources should be minimal.

"As to some of the other factors including comparable compensation
and including the actual retention agreement, the Retention
Application provides little or no information for the Court to
make such a determination," Mr. Grillo asserts.

Mr. Grillo notes that on an average monthly basis, FTI's
compensation would be $58,747 greater than the average monthly
compensation of the Ad Hoc Committee's counsel, despite FTI's
lesser role and responsibilities.

In addition, FTI's proposed compensation of more than $1,000,000
for what amounted to just more than one month's work, is grossly
unreasonable and should not be countenanced by the Court, Mr.
Grillo says.

The Ad Hoc Committee proposes that a reasonable fee structure for
FTI under the circumstances would be for it to charge its
customary hourly rates as it has done in a number of recent cases
wherein it acted as advisor to the creditors' committee.

                        Debtors' Objections

The Debtors ask the Court to:

    -- deny the $500,000 Completion Fee in its entirety at this
       time; and

    -- direct the Creditors' Committee to amend and modify the
       Retention Agreement for FTI to be compensated based on its
       hourly rates.

L.P. Harrison 3rd, Esq., at Curtis, Mallet-Prevost, Colt & Mosle
LLP, in New York, contends that the Completion Fee carries all the
indicia of a traditional "success fee" and appears to be nothing
more than a disguised request for enhanced compensation.  No
exceptional circumstances or justification exists as to why
FTI's retention should include a success fee.

Specifically, Mr. Harrison argues that:

    (i) the scope and complexity of the assignment is not great;

   (ii) the time period for the completion of the work is short;

  (iii) there is no evidence of a need by FTI to employ highly
        specialized skills; and

   (iv) the resources needed to service the matter appear to be
        minimal.

Ms. Harrison further argues that the payment of a fixed allowance
on a monthly basis is inappropriate.  If the Court determines that
a monthly fixed allowance is appropriate, Ms. Harrison maintains
that the Retention Agreement should be modified to provide
sufficient information to determine the reasonableness of the
Monthly Advisory Fees.

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


SILICON GRAPHICS: Wants Employee Incentive Plan Implemented
-----------------------------------------------------------
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code,
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of New York's authority to:

    (i) implement an employee incentive plan to encourage the
        retention of and performance by certain essential, non-
        insider, employees;

   (ii) pay approximately $330,000 outstanding under various other
        employee bonus and compensation programs; and

  (iii) continue to honor and maintain the Other Bonus Programs.

                        Employee Incentive Plan

The Employee Incentive Plan pays employees based on whether they
are in one of three groups:

     (1) Managers/Directors -- 23 employees who hold leadership
         positions in the Debtors' sales, engineering, marketing,
         finance and human resource divisions, and are critical to
         the Debtors' ability to generate revenue, develop
         products, ensure compliance and maintain their workforce
         through the Chapter 11 cases and beyond.

     (2) Key Employees of Below-Director Status, excluding
         Engineers -- 19 employees in various functions,
         including, sales, product development, manufacturing,
         procurement, legal and training and development.

     (3) Engineers -- seven engineers who are critical to the
         Debtors' ability to design and develop products and
         support solutions.

The Key Employees are eligible to receive bonuses for their
continued commitment and service from Aug. 1, 2006, through
July 31, 2007.  Retention bonuses are payable in three
installments.  The total cost of the EIP for Key Employees in
Groups 1 to 3 is $2,460,427.

In addition to the retention bonuses for Groups 1 to 3, the EIP
provides for the creation of a discretionary bonus pool for
$539,573 from which individual bonus payments may be awarded in
the Debtors' sole discretion and after approval by the Chief
Executive Officer and the Compensation Committee of the Board of
Directors.

                        No. of     Bonus as % of
     Groups             Employees  Annual Salary  Cost of Bonus
     -------            ---------  -------------  -------------
     Group 1                 23          32%         $1,327,783
     Group 2                 19          32%            766,356
     Group 3                  7          35%            366,288
     Discretionary Pool     TBD          TBD            539,573
     ----------------------------------------------------------
     TOTAL                  TBD          TBD         $3,000,000
     ==========================================================

                       Other Bonus Programs

Prior to the Petition Date, the Debtors maintained discretionary
bonus and compensation programs:

    * Referral Program: If a referred employee is hired by the
      Debtors, the referring employee is entitled to receive a
      cash bonus of $2,000.  Only one Referral Bonus is pending
      payment.

    * Lead Program: The Debtors reward employees for providing
      their sales force with leads that develop into sales revenue
      for the Debtors.

    * Special Incentive Program: From time to time, the Debtors'
      sales force is eligible to participate in a promotional
      program or contest that provides for incentives, typically
      in the form of a non-cash prize or award.

    * Discretionary Bonus Program: The Debtors have awarded, but
      not paid, six discretionary bonuses totaling $55,000, of
      which $9,500 has been awarded to two vice presidents in
      their engineering department.  The Debtors also seek to pay
      $10,000, earned prepetition and inadvertently paid
      postpetition.

    * Retention Bonuses: The Debtors have awarded, but not paid,
      four retention payments for $18,200.  In addition, the
      Debtors seek to pay $5,000, earned prepetition and
      inadvertently paid postpetition.

    * Relocation Program: In limited circumstances, the Debtors
      reimburse newly hired employees for costs associated with
      relocating to their geographic location.  One employee's
      relocation expenses for $48,000 is pending payment.

    * Sign-On Bonus Program: Five employees were offered sign-on
      bonuses for $94,000, which bonuses have not yet been paid.
      Approximately $40,000 will be paid to one of the Debtors'
      senior vice presidents.  The Debtors also seek retroactive
      approval of two sign-on bonuses for $6,500, that were earned
      prepetition and inadvertently paid postpetition.

                     Implementation is Necessary

Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, asserts that the EIP should be approved because:

     (a) since the Petition Date, 83 employees have left Silicon
         Graphics, Inc., several of whom would have qualified as
         Key Employees under the EIP.  The EIP is necessary to
         demonstrate the Debtors' commitment to their Key
         Employees and to avoid further losses associated with
         attrition;

     (b) its implementation will foster employee morale and
         provide motivation to Key Employees to focus on and
         remain loyal to the Debtors;

     (c) it will help eliminate the substantial out-of-pocket
         costs that would result if the Debtors were required to
         replace the Key Employees, including, recruiter or
         headhunter fees and signing bonuses and moving expenses
         for replacement employees;

     (d) it will help the Debtors retain:

         * access to important institutional knowledge which would
           be difficult to replace through the outside job market,
           due to the Key Employees' specialized skills; and

         * key contacts with customers and vendors, including
           those with the federal government;

     (e) it will facilitate the Debtors' ability to continue to
         realize value from the significant time and resources
         they incurred in recruiting, training and retaining their
         Key Employees and help them retain the Key Employees; and

     (f) it will help the Debtors mitigate the domino effect of
         additional employee departures that can accompany the
         loss of a particular Key Employee.

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


ST. MARY'S: Moody's Downgrades Long-Term Rating to Ba3 from Ba1
---------------------------------------------------------------
Moody's Investors Service downgraded St. Mary's Hospital's
long-term rating to Ba3 from Ba1.  This action affects
approximately $32 million of outstanding Series E bonds issued
by the Connecticut Health & Educational Facility Authority.  
The outlook remains negative at the lower rating level and
reflects SMH's continued operating challenges and poor
liquidity position.

The Series E bonds are secured by an absolute and unconditional
general obligation of the Obligated Group and a pledge of Gross
Receipts and a first mortgage on the Mortgaged Premises.  The
Obligated Group consists of St. Mary's Hospital Corporation, a
190-staffed bed acute care hospital in Waterbury, Connecticut.  

Consolidated subsidiaries include:

    * the Franklin Medical Group employed physician practice that
      provides outpatient services;

    * Scovill Medical Group, which owns and operates physician
      practices in the area;

    * Naugatuck Valley Surgical Center, in which the Hospital has
      approximately 80% equity interest and provides outpatient
      surgical services; and

    * Southbury Diagnostic Imaging Center, in which the Hospital
      has a 60% equity interest and provides outpatient imaging
      services.

The hospital represents approximately 82% of consolidated
operating revenues.

Interest Rate Derivatives: None

Strengths

   -- market leader in Waterbury, Connecticut with recent market
      share gains attributed largely to service line expansion and
      recent physician recruits;

   -- continued growth in both inpatient and outpatient services;

   -- favorable rate increases from managed care providers,
      although SMH's reimbursement rates continue to lag state
      averages; and

   -- new state budget line-item includes provision for hospital
      hardships, which may benefit SMH directly.

Challenges

   -- Very poor operating results in fiscal year 2005, due in
      part to approximately $14 million unfavorable non-cash
      adjustments;

   -- Relatively weak demographics in Waterbury with Medicaid
      representing a high percentage of gross revenues;
  
   -- Despite recent capital investments, including emergency
      department upgrades, the SMH campus requires material
      renovations or a replacement facility;

   -- Major competitor of similar size holds the leading market
      position in the expanded service area, although SMH's
      market position has improved in 2006;

   -- sizable underfunded pension liability, although SMH froze
      the defined benefit plan in 2004 and, as a church plan, is
      not required to met ERISA funding requirements; and

   -- Very thin liquidity.

                       Recent Developments

The rating downgrade follows a review of SMH's audited FY 2005
financial statements and seven months interim FY 2006 financial
results. SMH endured very poor operating results in FY 2005,
recording a $19.4 million operating loss and negative operating
cash flow of $7.1 million, after reclassifying the portion of
investment income included in operating revenue.

A significant portion of the poor operating results in FY 2005
is attributed to approximately $14 million of one-time, non-cash
adjustments.  These include $8.1 million for prior year
contractual and bad debt adjustments, $2.6 million of other
accounts receivable adjustments, and $1.5 million adjustment for
third party reserves.  Other factors contributing to SMH's poor
performance in FY 2005 include start-up costs associated
with new and expanded programs, including a new cardiac surgery
joint venture with 268-staffed bed Waterbury Hospital, SMH's
primary competitor.  The new cardiac program commenced operations
in July 2005.

SMH's absolute liquidity position improved modestly in 2005 given
that much of the operating loss was due to non-cash adjustments as
well as realizing a $2 million gain on sale of assets.  At fiscal
year end 2005, SMH's unrestricted cash increased to
$12.7 million from $12.5 million at FYE 2004.  Due to a rising
expense base, however, cash on hand decreased slightly to a weak
25 days from 27 days.  

Cash-to-debt decreased somewhat to a thin 27% at FYE 2005 from 30%
at FYE 2004 due to the increase in debt in FY 2005 with the
addition of a $7.5 million capital lease.  We continue to have
material concerns regarding SMH's poor liquidity position,
particularly in light of the serious operating challenges facing
the system.

Poor operating results continue into 2006.  Through seven months
of FY 2006, SMH recorded an operating loss of $7.2 million and was
barely cash flow positive, recording operating cash flow of only
$85,000.  We expect on-going weak cash flow generation to continue
to pressure SMH's liquidity.

SMH continues to violate debt coverage covenants.  Accordingly,
SMH management is working with consultants to develop performance
improvement strategies.  Key improvement initiatives that have
been implemented, or are planned to be implemented, include:
favorable rate adjustments from managed care payors; reduction in
full-time equivalents; recent recruitment of surgeons for new and
expanded high-margin service lines such as the new open heart
program and neurosurgery are expected to generate volume and
revenue growth; a new hospitalist program is expected to help
control costs; and SMH management is considering numerous other
programmatic changes in order to reduce the loss from operations,
as all unprofitable service lines are being reviewed.

WH is SMH's only acute care competitor in the City of Waterbury.   
With 45% market share, SMH leads WH's 41% market share of
discharges from the City of Waterbury.  WH is the market share
leader in the broader total service area, however. We note that
SMH's TSA market share has increased in 2006, as recent SMH
physician recruits have generated volume gains.  No other acute
care hospital captures more than 6% of the TSA market share.   
There is only limited entrepreneurial physician activity in the
Waterbury area.

                             Outlook

The negative outlook reflects our ongoing concern that SMH will
continue to struggle with poor operating results in this
demographically challenged and competitive environment, leading to
continued pressure on the balance sheet, including potentially
declining liquidity against already weak debt measures.

What could change the rating -- UP

Material gain in total service area market share; improved and
consistent cash flow generation leading to liquidity growth and
stronger debt coverage ratios

What could change the rating -- DOWN

Continuation of poor operating margins, resulting in weakened
liquidity; increase in debt load either through direct or indirect
debt; loss of market share

                         Key Indicators

Assumptions & Adjustments:

Based on Saint Mary's Hospital, Inc. Consolidated Financial
Statements:

   -- First number reflects audited FY 2004 for the year ended
      Sept. 30, 2004;

   -- Second number reflects audited FY 2005 for the year ended
      Sept. 30, 2005; and

   -- Investment returns reclassified to non-operating revenue
      and smoothed at 6%.

Inpatient admissions: 12,097; 12,267

Total operating revenues: $178.2 million; $174.7 million

Moody's-adjusted net revenues available for debt service: $13.9
million; $-4 million

   * Total debt outstanding: $42.2 million; $47.5 million
   * Maximum annual debt service: $4.8 million; $6 million

MADS Coverage with reported investment income: 2.94 times; -0.55
times

Moody's-adjusted MADS Coverage with normalized investment income:
2.87 times; -0.66 times

   * Debt-to-cash flow: 3.71 times; -7.02 times
   * Days cash on hand: 27.0 days; 25.2 days
   * Cash-to-debt: 29.6%; 26.8%
   * Operating margin: 0.5%; -11.1%
   * Operating cash flow margin: 6.7%; -4.0%

Rated Debt

   * Connecticut Health and Educational Facilities Authority
     Series E bonds, rated Ba3


TEKELEC: Posts $16.5 Million Net Loss in First Quarter of 2006
--------------------------------------------------------------
For the quarter ended March 31, 2006, Tekelec reported revenue of
$107.5 million, down 23% compared to revenue of $138.9 million for
the first quarter of 2005.  

On a GAAP basis, the Company incurred a $16.5 million net loss for
the first quarter of 2006 compared to net income of $17.5 million
for the first quarter of 2005.  On a non-GAAP basis, the net loss
in the first quarter of 2006 was $9.8 million compared to net
income of $20.6 million for the first quarter of 2005.

For the first quarter of 2006, the Company had orders of $138.6
million, up 14% compared to $121.5 million for the first quarter
of 2005, and a book-to-bill ratio of 1.29.  Backlog as of
March 31, 2006 was $604.5 million, up 30% compared to backlog of
$463.5 million as of March 31, 2005 and up 5% compared to backlog
of $573.3 million as of Dec. 31, 2005.

At March 31, 2006, Tekelec's consolidated cash, cash equivalents
and investments totaled $245.3 million, up from $226.3 million at
Dec. 31, 2005, and compared to approximately $237 million at
June 30, 2006, excluding proceeds from the sale of IEX which
closed on July 6, 2006.  Deferred revenues were $305.3 million at
March 31, 2006, up from $232.0 million at December 31, 2005 and
$179.4 million at March 31, 2005.

The operating results for the first quarter of 2006 highlight the
variability and volatility of revenues the Company experienced as
a result of its change to the residual method of revenue
recognition reflected in the Company's 2005 consolidated financial
statements and its restated financial statements and data, which
were included in the Company's Annual Report on Form 10-K for the
year ended Dec. 31, 2005 filed with the Commission on May 30,
2006.

The application of the residual method of revenue recognition in
the first quarter of 2006 affected the timing of revenue
recognition for certain NSG customer shipments.  Although the
Company shipped substantially all deliverables under several large
orders in the first quarter of 2006, it deferred approximately
$21.9 million in revenue relating to the shipments because it did
not ship all the products included in the purchase orders.  The
Company expects to deliver the remaining products and related
software upgrades called for under the arrangements and record
most of the revenue in the second half of 2006, primarily in the
fourth quarter.  

The Company's operating results and gross margins for the first
quarter of 2006 were adversely impacted by various factors,
including lower revenues from the Company's higher margin NSG
products and a reduction in SSG gross margins due primarily to
pricing pressure in the Company's Alcatel channel and contract
mix.

With the filing of its financial reports for the first quarter of
2006 on Form 10-Q, the Company believes it has met all the
conditions set by a Nasdaq Listing Qualifications Panel for the
continued listing of the Company's Common Stock on the Nasdaq
Global Market.  The Company also expects to timely file its
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.

                          About Tekelec

Tekelec (NASDAQ: TKLC) -- http://www.tekelec.com/-- develops
signaling and switching telecommunications software, business
intelligence tools and value-added applications.  Tekelec's
software is deployed in wireline and wireless networks and contact
centers worldwide.  The Company's corporate headquarters are
located in Morrisville, N.C., with research and development
facilities and sales offices throughout the world.

                          *     *     *

As reported in the Troubled Company Reporter on July 10, 2006,
Tekelec received a notice of default on April 1, 2006 from holders
of more than 25% of the outstanding principal amount of the Notes
due to the Company's delayed filing of its Annual Report for the
year ended Dec. 31, 2005 with the Securities and Exchange
Commission.

On March 20, 2006, the Company received a notice from The Nasdaq
Stock Market indicating that the Company's common stock is subject
to potential delisting from the Nasdaq National Market as a result
of its failure to comply with Marketplace Rule 4310(c)(14).  The
listing standard requires the Company to timely file all reports
with the Securities and Exchange Commission, as required by the
Securities Exchange Act of 1934, as amended.


TFS ELECTRONIC: Asks Court to Approve Global Settlement Agreement
-----------------------------------------------------------------
TFS Electronic Manufacturing Services, Inc., Three-Five Systems,
Inc., and TFS-DI, Inc., ask the U.S. Bankruptcy Court for the
District of Arizona to approve the global settlement agreement by
and between the Debtor, Three-Five Systems, Inc., the Official
Committee of Unsecured Creditors and CGSNW-Willows, LLC.

Charles R. Sterbach, Esq., at Greenberg Traurig LLP, tells the
Court that the settlement agreement, dated June 5, 2006, resolves
claims between the Parties.

Under the settlement, the Parties agree that, subject to the
reservation of funds sufficient to pay the Debtors' allowed
administrative and allowed priority claims, $3.125 million of the
existing cash will be distributed, on a pro rata basis, to holders
of allowed general unsecured claims other than Three-Five Systems
on or before Sept. 30, 2006.

Willow's claims against the Debtor and Three-Five Systems will be
settled and allowed.

Mr. Sterbach notes that the balance of the existing cash will be
distributed to Three-Five Systems on account of the TFS claim.  
Three-Five System will have no administrative or priority claim in
the Debtor's chapter 11 case.

Mr. Sterbach adds that within twenty days after the Court approves
the settlement agreement, the Debtors will seek the Court's
approval of a plan and disclosure statement.

Headquartered in Redmond, Washington, TFS Electronic Manufacturing
Services, Inc., is an electronics manufacturing services facility
that specializes in New Product Introduction services, prototype
Development and low to medium-volume manufacturing.  The Company
filed for chapter 11 protection on August 19, 2005 (Bankr. D.
Ariz. Case No. 05-15403).  John R. Clemency, Esq., Keriann M.
Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg
Traurig LLP, represent the Debtor in its restructuring efforts.
Brian N. Spector, Esq., at Jennings Strouss & Salmon, PLC,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protections from its creditors, it estimated
assets between $1 million to $10 million and estimated debts
between $10 million to $50 million.


UNITED SURGICAL: Launches Tender Offer for Outstanding Sr. Notes
----------------------------------------------------------------
United Surgical Partners International, Inc., commenced a tender
offer and related consent solicitation for its outstanding senior
subordinated notes.  The purchase of the notes tendered in the
offer will be financed with the proceeds of a new $200 million
credit facility that USPI expects to enter into in July.  The
total cost of the tender offer is expected to be approximately
$160 million, assuming all notes are purchased in the offer.  The
balance of the proceeds from the new credit facility will be used
to repay existing debt under USPI's revolving credit facility.

USPI's subsidiary, United Surgical Partners Holdings, Inc.,
commenced a cash tender offer for any and all of Holdings'
outstanding 10% Senior Subordinated Notes due 2011 (CUSIP No.
91301M AB 2), as well as a related consent solicitation to effect
certain proposed amendments to such Notes and the indenture
pursuant to which the Notes were issued.

The consent solicitation will expire at 5:00 p.m., New York City
time, on Thursday, July 27, 2006, unless extended or earlier
terminated by Holdings.  Tendered Notes may not be withdrawn and
consents may not be revoked after the Consent Expiration Date. The
tender offer will expire at 12:00 midnight, New York City time, on
Thursday, Aug. 10, 2006, unless extended or earlier terminated by
Holdings.

Holders tendering their Notes are obligated to consent to certain
proposed amendments to the Notes and the Indenture that would
eliminate substantially all of the restrictive covenants contained
in the Indenture and the Notes, eliminate certain events of
default, modify the covenant regarding mergers, shorten the
minimum redemption notice period from 30 to five days, modify
provisions regarding defeasance to eliminate certain conditions
and modify or eliminate certain other provisions contained in the
Indenture and the Notes.  Holders may not tender their Notes
without also delivering consents and may not deliver consents
without also tendering their Notes.

The "Total Consideration" for each $1,000 principal amount of
Notes validly tendered and accepted for payment pursuant to the
tender offer shall be an amount in cash equal to the price,
calculated in accordance with standard market practice, based on
the assumptions that the Notes will be redeemed in full at $1,050
per $1,000 principal amount of Notes (the redemption price on
Dec. 15, 2006, the first date on which the Notes may be redeemed
at the option of Holdings), and that the yield to the earliest
redemption date is equal to the sum of (A) the yield to maturity
on the 2.875% U.S. Treasury Note due November 31, 2006, as
calculated by the Dealer Manager in accordance with standard
market practice, based on the bid side price for such U.S.
Treasury Note as of 11:00 a.m., New York City time, on the fourth
business day prior to the Offer Expiration Date plus (B) a fixed
spread of 0.50% (50 basis points).

The Total Consideration includes a consent payment of $30 for each
$1,000 principal amount of Notes for which consents to the
proposed amendments are delivered on or prior to the Consent
Expiration Date.  Holders of the Notes must validly tender and not
withdraw Notes on or prior to the Consent Expiration Date in order
to be eligible to receive the Total Consideration for such Notes
purchased in the tender offer.  Holders who validly tender their
Notes after the Consent Expiration Date and on or prior to the
Offer Expiration Date will be eligible to receive an amount, paid
in cash, equal to the Total Consideration less the Consent
Payment.  In each case, Holders whose Notes are accepted for
payment in the tender offer shall receive accrued and unpaid
interest in respect of purchased Notes from the last interest
payment date to, but not including, the applicable payment date
for Notes purchased in the tender offer.  The Company may accept
for payment Notes tendered on or prior to the Consent Expiration
Date at any time following the Consent Expiration Date.

The tender offer and the consent solicitation are made upon the
terms and conditions set forth in the Offer to Purchase and
Consent Solicitation Statement, dated July 14, 2006, and the
related Consent and Letter of Transmittal.  The tender offer and
the consent solicitation are subject to the satisfaction of
certain conditions, including, among other things, Holdings'
receipt of consents from holders of a majority of the outstanding
principal amount of the Notes and USPI entering into a $200
million credit facility to finance the purchase of the Notes.  
Further details about the terms and conditions of the tender offer
and the consent solicitation are set forth in the Offer to
Purchase.

Holdings has retained Bear, Stearns & Co. Inc. to act as the
Dealer Manager for the tender offer and the Solicitation Agent for
the consent solicitation and they can be contacted at (877) 696-
BEAR (toll-free).  The documents relating to the tender offer and
the consent solicitation will be distributed to all noteholders.  
Requests for documentation may be directed to the Information
Agent, which can be contacted at:

     D.F. King & Co., Inc.
     Telephone (212) 269-5550 (for banks and brokers only)
     Toll Free (800) 659-6590

Based in Dallas, Texas, United Surgical Partners International
Inc. (NASDAQ: USPI) -- http://www.unitedsurgical.com/-- owns  
interests or operates 104 surgical facilities.  Of the company's
101 U.S.-based surgery centers, 68 are jointly owned with not-for-
profit healthcare systems.  United Surgical also operates three
facilities in the United Kingdom.

                          *     *     *

As reported in the Troubled Company Reporter on April 19, 2006,
Standard & Poor's Ratings Services affirmed its ratings on
Dallas-based United Surgical Partners International Inc.,
including the 'BB-' corporate credit rating, and removed them
from CreditWatch, where they were placed with positive
implications on Oct. 28, 2005.  The outlook is stable.


US ONCOLOGY: Completes $100 Mil. Incremental Term Loan Facility  
---------------------------------------------------------------
US Oncology, Inc. successfully closed a new $100,000,000
incremental term loan under its existing senior secured credit
facility.  A portion of the net proceeds from the term loan were
used to repay existing loans under the Company's revolving credit
facility, and the remainder will be used for working capital and
general corporate purposes.

Terms and conditions of the new term loan are substantially
similar to the Company's existing term loan, including a variable
interest rate interest based on the London Interbank Offered Rate
and final maturity in August 2011. In connection with the new term
loan, the Company amended its existing senior secured credit
facility.

                      About US Oncology

Headquartered in Houston, Texas, US Oncology, Inc. --
http://www.usoncology.com/-- provides extensive services and  
support to its affiliated cancer care sites nationwide to help
them expand their offering of the most advanced treatments and
technologies, build integrated community-based cancer care
centers, improve their therapeutic drug management programs and
participate in many of the new cancer-related clinical research
studies.  The Company also provides a broad range of services to
pharmaceutical manufacturers, including product distribution and
informational services such as data reporting and analysis.

                          *     *     *

As reported in the Troubled Company Reporter on June 14, 2006,
Moody's Investors Service changed the ratings outlook to stable
from negative and assigned a Ba3 rating to US Oncology Inc.'s
proposed $100 million add-on term loan.  Concurrently, Moody's
raised the rating of the company's existing senior secured credit
facility and senior unsecured notes.  These actions are in
recognition of the improved stability of the company's operations
and substantial enterprise value.

Moody's assigned Ba3 rating to US Oncology, Inc.'s $100 term loan
add-on.  Moody's upgraded US Oncology's $160 million senior
secured revolving credit facility, to Ba3 from B1; $400 million
senior secured term loan, to Ba3 from B1; and $300 million senior
unsecured notes, to B1 from B2.  Moody's affirmed the B3 rating of
US Oncology's $275 million senior subordinated notes.

Standard & Poor's Ratings Services assigned its loan and recovery
ratings to Houston, Texas-based cancer care company US Oncology
Inc.'s $100 million secured term loan C.  The loan rating is 'B+'
with a recovery rating of '2', indicating the expectation for
substantial recovery of principal in the event of a payment
default.  Existing ratings on the company, including the 'B+'
corporate credit rating, were affirmed.  The rating outlook is
negative.


VARIG S.A.: Brazilian Ct. Voids Creditor Votes Rejecting Volo Bid
-----------------------------------------------------------------
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Brazil annulled on Tuesday, July 18, 2006, the votes cast by some
VARIG S.A. creditors to reject Volo do Brasil's $500,000,000 offer
for the airlines' assets.

The Brazilian Court also scheduled an auction for VARIG's
operating assets today, July 20, 2006.

As reported in the Troubled Company Reporter yesterday, leasing
companies and other key creditors threw out a bankruptcy plan to
sell the carrier's assets to Volo, saying the proposal was not
enough to pay VARIG's more than BRL7 billion -- $3 billion -- of
debt.

Representatives of VARIG workers and pensioners, and principal
government creditors have agreed to accept Volo's offer.

Volo and the airline's unions challenged the voting results and
asked the Brazilian Court for a recount.  According to Reuters,
Marcelo Bottini, VARIG's chief executive officer, complained that
creditors with "little financial stake" were given the same
voting power as larger creditors.  He noted that the larger
creditors voted for Volo's offer.

Bloomberg News reports that Judge Ayoub invalidated votes cast by
17 parties, including 16 entities affiliated with General Electric
Co.  Judge Ayoub said those votes don't count because the parties
sold their debt in June, Adriana Brasileiro at Bloomberg News
says.

"Without these votes, we have a very clear reflection of the wish
of creditors, which is for the company to be sold and to recover,"
Judge Ayoub told reporters at a news conference, Ms. Brasileiro
relates.

Volo initially offered to pay BRL277,000,000 -- $127,000,000 --
for VARIG's assets and invest up to $485,000,000 based on a
timetable contained in a business plan.

Volo revised its offer to give creditors an option to receive cash
instead of bonds, Bloomberg writer Romina Nicaretta says.  Volo
intends to satisfy a portion of VARIG's debt with BRL100,000,000
of 10-year bonds.

Volo, Ms. Nicaretta relates, agreed to improve its offer after
Deloitte Touche Tohmatsu, the Court-appointed judicial
administrator of VARIG, reported to the Brazilian Court earlier
this month that creditors would be better off if the airline is
liquidated.

Volo, which recently purchased VARIG's cargo unit, VARIG Logistica
S.A., is partially controlled by U.S. investment fund
MatlinPatterson Global Advisors.

Investnews (Brazil) reports that Cinzel Partners fund has created
a consortium of investors to come up with a $600,000,000 bid for
VARIG.  Roberto Lima Netto, former president of Brazilian steel
maker Companhia Siderurgica Nacional and representative of Cinzel,
told O Estado de Sao Paulo that the consortium intends to acquire
as much as 30% of VARIG's operations.  Cinzel will allow the
airline's employees to acquire the 20% while the remainder would
be sold in a public offering.

Volo has advanced more than $11,000,000 in deposits to VARIG to
keep it flying.

                          About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VILLAGEEDOCS INC: Restates 2005 2nd Quarter Financial Statements
----------------------------------------------------------------
VillageEDOCS, Inc., files its quarterly report on Form 10-QSB/A to
amend its second quarter financial statements for the three months
ended June 30, 2005, with the Securities and Exchange Commission
on July 17, 2006.

The amended quarterly report restates the Company's financial
statements and Management's Discussion and Analysis or Plan of
Operations to properly account for some of its convertible notes
payable during 2005.

Previously, the Company had not identified or separately valued
derivative instruments later determined to have been embedded
within certain of the notes.

The Company has restated its financial statements to:

   -- recognize the existence of derivatives,
   -- account for a derivative liability, and
   -- record the changes in fair value of the derivatives.

In addition, the quarterly report has been amended to reflect
changes in the accounting for certain transactions involving the
issuance of its common stock and common stock purchase warrants to
employees in connection with the acquisitions of Tailored Business
Systems, Inc., and Phoenix Forms Inc.

Accordingly, changes have been made to the applicable line items
associated with goodwill, convertible notes payable, derivative
liability, additional paid-in capital, accumulated deficit,
general and administrative expense, change in fair value of
derivative liability, interest expense, net loss and net loss per
common share.

                        Restated Financials

The Company reported a restated net loss of $6,460,895 on
$2,275,518 of net sales for the three months ended June 30, 2006,
compared to a $202,119 of net income on $1,330,346 of net sales
for the same period in 2004.

At June 30, 2005, the Company's balance sheet showed $8,614,019 in
total assets, $3,322,891 in total liabilities, and $5,291,128 in
total stockholders' equity.

Full-text copy of the Company's restated second quarter financials
are available for free at http://ResearchArchives.com/t/s?df0

                        Going Concern Doubt

As reported in the Troubled Company Reporter on June 14, 2006,
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about VillageEDOCS' ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005.  The auditor pointed to the
Company's recurring losses since inception and its working capital
deficit of $676,198.

VillageEDOCS, Inc. -- http://www.villageedocs.com/-- through its
MessageVision subsidiary, provides comprehensive business-to-
business information delivery services and products for
organizations with mission-critical needs, including major
corporations, government agencies and non-profit organizations.  
The Company's Tailored Business Systems subsidiary provides
accounting and billing solutions for county and local governments.  
Through its Resolutions subsidiary, it provides products for
document management, archiving, document imaging, imaging
software, document scanning, e-mail archiving, document imaging
software, electronic forms, and document archiving.


VISIPHOR CORP: Completes $1.6 Million Quorum Private Placement
--------------------------------------------------------------
Visiphor Corporation completed a private placement to Quorum
Secured Equity Trust of an 8% convertible secured debenture in the
principal amount of $1,600,000 maturing on Dec. 15, 2009,
convertible, subject to certain adjustments, at the price of $0.45
per common share, and of a performance warrant to purchase up to
2,350,000 common shares in the capital of the Corporation at a
price of CDN$0.30 per common share.

The Warrant is only exercisable in the event that the 30 day
weighted average trading price of the Corporation's common shares
has not exceeded $0.45 in at least one 30 day trading period on or
before July 14, 2008.  The Warrant is exercisable at any time
after July 13, 2008 and prior to 4:30 p.m. (Toronto time) on Dec.
15, 2009, provided that the above event has not occurred.  The
common shares underlying the Offering will have a four-month hold
period that expires on Nov. 13, 2006.  Under the terms of the
agreement Quorum will be appointing a nominee to the Visiphor
Board of Directors.

"This represents the balance of the financing sought in November
2005," said Roy Trivett, President and CEO of Visiphor.  "We are
very pleased that the conversion into equity is at the same price
as the units issued in the November financing."  The proceeds of
the Offering will be used to provide general working capital to
finance the expansion of the Company's business and to retire
$500,000 in demand loans that the Company currently has
outstanding.

In connection with the Offering, Mr. Roy Trivett and Mr. Keith
Kretschmer, directors and officers of the Corporation, have agreed
to postpone and subordinate outstanding bridge loans to the
Corporation in the amounts of $85,000 and $400,000, respectively,
in favour of Quorum.  As consideration, the Corporation will issue
a promissory note secured by a charge over the accounts receivable
of the Company to each of Mr. Trivett and Mr. Kretschmer and the
interest rate of such notes will be 12%.

                         About Visiphor

Based in Burnaby, British Columbia, Visiphor Corporation (OTCBB:
VISRF; TSX-V: VIS; DE: IGYA) -- http://www.imagistechnologies.com/
-- fka Imagis Technologies Inc, specializes in developing and
marketing software products that enable integrated access to
applications and databases.  The company also develops solutions
that automate law enforcement procedures and evidence handling.
These solutions often incorporate Visiphor's proprietary facial
recognition algorithms and tools.  Using industry standard "Web
Services", Visiphor delivers a secure and economical approach to
true, real-time application interoperability.  The corresponding
product suite is referred to as the Briyante Integration
Environment.

                      Going Concern Doubt

As reported in the Troubled Company Reporter on Nov. 24, 2005,
KPMG LLP expressed substantial doubt about Visiphor's ability to
continue as a going concern after it audited the Company's
financial statements for the years ended Dec. 31, 2004 and 2003.
The auditing firm pointed to the Company's recurring losses from
operations, deficiency in operating cash flow and deficiency in
working capital.


WCA WASTE: Stockholders Approve $75 Mil. Equity Investment to Ares
------------------------------------------------------------------
The stockholders of WCA Waste Corporation approved the issuance of
a $75 million convertible preferred equity investment to Ares
Corporate Opportunities Fund II, L.P.  The closing and funding of
the preferred stock issuance is expected before the end of July,
subject to customary closing conditions.

The issuance is part of a capital plan, pursuant to which the
Company has refinanced its senior indebtedness and has arranged
for additional capital to finance its acquisition and growth
plans.  Based on the terms of the previously disclosed new senior
notes and senior secured financings and the closing of the equity
investment, the Company's leverage ratios will be reduced and the
effective interest rates will be fixed.  In addition, the Company
expects that the terms of its new financing arrangements will
allow additional acquisitions that are financed pursuant to its
new revolving credit facility to be accretive assuming the
purchase price of future acquisitions is consistent with past
acquisitions.  It also expects that its effective cost of
borrowing will be reduced after the revolving facility is fully
funded.

                         About WCA Waste

Headquartered in Houston, Texas, WCA Waste Corporation
(Nasdaq:WCAA) -- http://www.wcawaste.com/--is an integrated  
company engaged in the transportation, processing, and disposal of
non-hazardous solid waste.  The Company's operations consist of
twenty landfills, twenty-one transfer stations/material recovery
facilities and twenty-four collection operations located
throughout Alabama, Arkansas, Colorado, Florida, Kansas, Missouri,
New Mexico, North Carolina, South Carolina, Tennessee and Texas.  
The Company's common stock is traded on the NASDAQ National Market
System under the symbol "WCAA."

                          *     *     *

As reported in the Troubled Company Reporter on June 22, 2006,
Moody's Investors Service assigned a B2 rating to the proposed
$150 million senior unsecured notes due 2014 of WCA Waste
Corporation and upgraded the Corporate Family Rating to B1 from
B2.  The outlook for the ratings is stable.  Concurrently, Moody's
affirmed the company's liquidity rating of SGL-2.

Standard & Poor's Ratings Services revised its outlook on WCA
Waste Systems Inc. to positive from stable and affirmed the
existing 'B' corporate credit rating.  S&P also assigned a 'B'
corporate credit rating and positive outlook to WCA Waste Corp.,
an indirect parent of WCA Waste Systems.

At the same time, based on preliminary terms and conditions,
Standard & Poor's assigned its 'B-' rating to WCA Waste Corp.'s
proposed $150 million of senior unsecured notes due 2014.  This
rating reflected the disadvantaged position of the senior
unsecured notes in the debt structure relative to a new $100
million revolving credit facility, which S&P expects will be
utilized in the near term to finance acquisitions.  Proceeds from
the senior unsecured notes will be used to refinance remaining
balances outstanding under the company's existing senior secured
credit facilities.  Upon completion of the proposed notes
offering, S&P will withdraw all of the ratings on the existing
senior secured credit facilities.


WINDSTREAM CORPORATION: Fitch Rates $2.5 Billion Sr. Notes at BB+
-----------------------------------------------------------------
Following the completion of the spin-off of Alltel Wireline from
Alltel Corporation and Alltel Wireline's merger with Valor
Communications Group, Inc., to form Windstream Corporation, Fitch
formally assigned ratings.

Fitch assigned a 'BBB-' rating to Windstream's credit facility, of
which approximately $2.4 billion is outstanding, and a 'BB+'
rating to its $2.546 billion of senior unsecured notes.

Fitch also formally assigned a 'BBB-' rating the existing $400
million in senior notes co-issued by Valor Telecommunications
Enterprises, LLC, and Valor Telecommunications Enterprises Finance
Corp. which were not previously rated by Fitch.

Windstream's issuer default rating is 'BB+' and the Rating Outlook
is Stable for all ratings.

These ratings are unchanged:

  Alltel Georgia Communications:

    -- IDR 'BB+'
    -- Notes 'BBB-'

  Alltel Communications Midwest (formerly Aliant):

    -- IDR 'BB+'
    -- Notes 'BB+'

The 'BBB-' ratings of Alltel New York and Alltel Pennsylvania are
being withdrawn as a result of their retirement due to the
transaction.

Windstream's 'BB+' IDR and Stable Rating Outlook incorporate
Fitch's expectations for Windstream to generate strong operating
cash flow, stable credit-protection metrics as well as have access
to ample liquidity.  Fitch's primary concern is the company's
dependence on voice service revenues in an environment of
increasing competition.  The company's financial performance is
expected to be relatively stable due to its primarily rural
operations.

Contributing to its strong operating cash flow are EBITDA margins
that Fitch believes will be in the upper end of a 45%-50% range.
Fitch forecasts Windstream's dividend payout ratio as a percentage
of its net free cash flow in the 70%-75% range.  Fitch expects the
company to maintain a stable leverage ratio, with debt-to-EBITDA
in the 3.2x-3.3x range over the next few years.

On a pro forma basis and including a projected $40 million in net
synergies, Windstream's gross debt-to-operating EBITDA was 3.2x in
2005.  Liquidity is supported by the company's $500 million
revolving credit facility, which will be in place until July 2011.
Debt maturities in the next several years, including the required
amortization of its credit facilities, are nominal.


WINN-DIXIE: Rejects Lifetime Hoan Prepetition Supply Agreement
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
consented to Winn-Dixie Stores, Inc., and its debtor-affiliates'
rejection of their prepetition supply agreement with Lifetime
Hoan, effective as of July 14, 2006.

As reported in the Troubled Company Reporter on July 6, 2006,
Winn-Dixie Stores, Inc., was obligated to purchase kitchen tools
and gadgets from Lifetime Hoan until the net volume purchased
reaches US$15,000,000, with the term of the agreement continuing
until the volume requirement is satisfied, pursuant to their
supply agreement dated Aug. 2, 2003.

The Debtors' reduced store count has operated to extend the term
of the Prepetition Supply Agreement, According to Cynthia C.
Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida.

Although the Debtors desire to continue their relationship with
Lifetime Hoan, the terms of their contract are no longer feasible,
Ms. Jackson told the Court.

The Debtors have determined that it is in their best interests
to reject the Prepetition Supply Agreement and continue their
relationship with Lifetime Hoan on more favorable terms under a
new ordinary course supply agreement.

The new supply agreement is set to take effect upon rejection of
the Prepetition Supply Agreement.

Lifetime Hoan has agreed that the Debtors may terminate the new
supply agreement without liability if their reorganization plan
is not confirmed or does not become effective.

Ms. Jackson said that by rejecting the Prepetition Supply
Agreement in favor of a new contract with Lifetime Hoan, the
Debtors will:

    (a) avoid the burdensome obligation of the US$15,000,000
        volume requirement as well as the risk of significant
        rejection damages claim if that requirement is not
        satisfied; and

    (b) be able to continue offering Lifetime Hoan's products to
        their customers on terms that better reflect the current
        and future needs of their operating stores.

                         Claims Resolution

Winn-Dixie Procurement, Inc., scheduled a claim in favor of
Lifetime Hoan for US$91,247.  Lifetime Hoan filed Claim No. 6177
against Winn-Dixie Stores for US$135,650.

Ms. Jackson told the Court that the parties have agreed to set
off their claims against each other, specifically:

    (a) the Scheduled Claim will be disallowed and expunged in
        its entirety; and

    (b) Claim No. 6177 will be set off against the Debtors'
        accrued prepetition credits for US$44,403, resulting in
        an allowed general unsecured claim for US$91,247.

In addition, Lifetime Hoan will waive any claim for rejection
damages and all other claims against the Debtors, except for the
agreed general unsecured claim and any unpaid postpetition
invoices.

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


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:

In re Julie H. Reeder
   Bankr. D. Ariz. Case No. 06-00150
      Chapter 11 Petition filed July 12, 2006
         See http://bankrupt.com/misc/azb06-00150.pdf

In re Hennig Broach & Tool Co., Inc.
   Bankr. N.D. Ill. Case No. 06-08236
      Chapter 11 Petition filed July 12, 2006
         See http://bankrupt.com/misc/ileb06-08236.pdf

In re Midwest Metallurgical Laboratories, Inc.
   Bankr. N.D. Ind. Case No. 06-11066
      Chapter 11 Petition filed July 12, 2006
         See http://bankrupt.com/misc/innb06-11066.pdf

In re Olde World Cheesecake Company, Inc.
   Bankr. M.D. Pa. Case No. 06-51104
      Chapter 11 Petition filed July 12, 2006
         See http://bankrupt.com/misc/pamb06-51104.pdf

In re Z's Restaurants, Inc.
   Bankr. D. Ariz. Case No. 06-02107
      Chapter 11 Petition filed July 12, 2006
         See http://bankrupt.com/misc/azb06-02107.pdf

In re B&S Commercial Properties, LCC
   Bankr. E.D. Va. Case No. 06-31726
      Chapter 11 Petition filed July 13, 2006
         See http://bankrupt.com/misc/vaeb06-31726.pdf

In re Hill Construction Company, Inc.
   Bankr. D. Md. Case No. 06-14111
      Chapter 11 Petition filed July 13, 2006
         See http://bankrupt.com/misc/mdb06-14111.pdf

In re P K Land Management LLC
   Bankr. E.D. Mich. Case No. 06-49100
      Chapter 11 Petition filed July 13, 2006
         See http://bankrupt.com/misc/mieb06-49100.pdf

In re Syed R. Jaffery
   Bankr. N.D. Ga. Case No. 06-68239
      Chapter 11 Petition filed July 13, 2006
         See http://bankrupt.com/misc/ganb06-68239.pdf

In re Trik Daddy's Custom Cycles, Inc.
   Bankr. M.D. Fla. Case No. 06-03490
      Chapter 11 Petition filed July 13, 2006
         See http://bankrupt.com/misc/famb06-03490.pdf

In re Bulldog Logistics, Inc.
   Bankr. W.D. Ark. Case No. 06-71455
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/arwb06-71455.pdf

In re Felipe Juarez
   Bankr. S.D. Tex. Case No. 06-20430
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/txsb06-20430.pdf

In re H.Y. Applied Inter Data Services, Inc.
   Bankr. E.D. N.Y. Case No. 06-71643
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/nyeb06-71643.pdf

In re J Inc.
   Bankr. M.D. Fla. Case No. 06-02087
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/famb06-02087.pdf

In re MAG Systems, Inc.
   Bankr. D. N.J. Case No. 06-16379
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/njb06-16379.pdf

In re Michael A. O'Hara
   Bankr. E.D. Ky. Case No. 06-20534
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/kyeb06-20534.pdf

In re Midnight Enterprises Inc.
   Bankr. N.D. N.Y. Case No. 06-11723
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/nynb06-11723.pdf

In re William D. Chambers, DDS PA
   Bankr. D. Kans. Case No. 06-11240
      Chapter 11 Petition filed July 14, 2006
         See http://bankrupt.com/misc/ksb06-11240.pdf

In re Charles F. Hennig
   Bankr. N.D. Ill. Case No. 06-08420
      Chapter 11 Petition filed July 16, 2006
         See http://bankrupt.com/misc/ilnb06-08420.pdf

In re Arthur J. McCreary, III
   Bankr. E.D. Mo. Case No. 06-43095
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/moeb06-43095.pdf

In re Charles Terry McCormack
   Bankr. M.D. Tenn. Case No. 06-03621
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/tnmb06-03621.pdf

In re Digido4u LLC
   Bankr. W.D. Wash. Case No. 06-12291
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/wawb06-12291.pdf

In re Hilton Cable Enterprises
   Bankr. E.D. Va. Case No. 06-10783
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/vaeb06-10783.pdf

In re LRD Investments, LLC
   Bankr. D. Alaska Case No. 06-00267
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/akb06-00267.pdf

In re N.E.W.D., LLC
   Bankr. D. Conn. Case No. 06-20633
      Chapter 11 Petition filed July 17, 2006
         See http://bankrupt.com/misc/ctb06-20633.pdf

In re Athens Restaurant Equipment Corp.
   Bankr. M.D. Fla. Case No. 06-03578
      Chapter 11 Petition filed July 18, 2006
         See http://bankrupt.com/misc/famb06-03578.pdf

In re Goyette Auto Service Center, Inc.
   Bankr. E.D. Mich. Case No. 06-31464
      Chapter 11 Petition filed July 18, 2006
         See http://bankrupt.com/misc/mieb06-31464.pdf

In re Thomas J. Palashewski
   Bankr. D. Minn. Case No. 06-31541
      Chapter 11 Petition filed July 18, 2006
         See http://bankrupt.com/misc/mnb06-31541.pdf

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
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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
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Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
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Monthly Operating Reports are summarized in every Saturday edition
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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.

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                    *** End of Transmission ***