TCR_Public/060802.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Wednesday, August 2, 2006, Vol. 10, No. 182

                             Headlines

ADELPHIA COMMS: Closes Asset Sale to Time Warner Cable and Comcast
ADELPHIA COMMS: Time Warner to File for IPO of Cable TV Unit
ADELPHIA COMMS: Fee Panel Seeks Protective Order v. Boies Schiller
AGRICORE UNITED: Moody's Rates CDN$525 Million Senior Loan at Ba2
AIRBASE SERVICES: Wants to Assume and Assign Residential Lease

ALLIED PROPERTIES: Case Summary & Two Largest Creditors
AMES DEPARTMENT: Wants Atwell Curtis to Collect Judgment Payments
AMES DEPARTMENT: Can Assume & Assign Store No. 52 to Wal-Mart
APHTON CORP: Sells Late-Stage Cancer Drug to Receptor BioLogix
ARIZONA PUBLIC: S&P Puts BB+ Rating on Parent Sr. Unsecured Issues

AU HOLDING: Moody's Rates New Sr. Secured Credit Facility at Ba3
AVISTAR COMMS: Posts $3.7 Mil. Net Loss in Quarter Ended June 30
AVISTA CORPORATION: Fitch Affirms Preferred Stock's BB Rating
BERRY-HILL GALLERIES: Borrows $18MM from American Cap to Pay ACG
BLAST ENERGY SERVICES: To Resolve SEC Claim Investigations

BROOK MAYS: Panel Wants Ch. 11 Case Converted to Ch. 7 Liquidation
CADMUS COMMS: Inks Asian Joint Venture Pact with Periscope Inc.
CALPINE CORP: Appoints Brown & Kinneman as Executive Officers
CALPINE CORP: CCFC Seeks Waiver Consents from Senior Noteholders
CARGO CONNECTION: Reports Increased Sales at New York JFK Terminal

COLLECTIBLE CONCEPTS: Equity Deficit Widens to $22.67M at May 31
COMPLETE RETREATS: Wants to Pay $140,000 of Foreign Vendor Claims
COMPLETE RETREATS: Can Pay Wages and Benefits to 170 Employees
CRDENTIA CORPORATION: Intends to Merge With Caregiver Services
CST INDUSTRIES: S&P Puts B Rating on Proposed $120 Mil. Facilities

CYBERCARE INC: Fla. Bankr. Court Approves Disclosure Statement
DANA CORP: Can Assume Supply Pacts with U.S. Mfg. and Nationwide
DANA CORP: Ryder Wants Truck Lease Pact with Debtor to Continue
DEATH ROW: U.S. Trustee Appoints R. Todd Neilson as Ch. 11 Trustee
DELTA AIR: Can Amend Merrill Lynch Letter of Credit Facility

DELTA AIR: Court Gives Nod on Panasonic Avionics Master Agreement
DOLLAR FINANCIAL: S&P Affirms B+ Rating & Revises Outlook to Pos.
EASTMAN KODAK: 2006 Second Quarter Loss Widens to $282 Million
ENTERGY NEW: Court Okays City Council's Move to Quash Deposition
FAIRFAX FINANCIAL: Moody's Holds Sr. Unsec. Debt's Rating at Ba3

FLYI INC: Wants to Sell Dulles Hangar Lease for $7.6 Million
FLYI INC: Wants Court to Approve Incentive Program for Employees
FOAMEX INTERNATIONAL: Gets OK to Raise Salaries of Four Executives
FOAMEX INTERNATIONAL: Wants to Assume Lyondell Chemical Contract
GENERAL MOTORS: Revising Second Qtr. Financials Due to GMAC Sale

GENESIS WORLDWIDE: Wants Until Apr. 30, 2007 to File Chap. 11 Plan
GLENBOROUGH REALTY: 2nd Qtr. Net Income More Than Doubles to $28MM
GREAT ATLANTIC: Posts $6 Million Net Loss in Quarter Ended June 17
GREAT COMMISSION: Panel Hires Parente Randolph as Fin'l Advisor
GREY GOLF: Moody's Lifts Rating on $150 Million Sr. Notes to B1

HERCULES INC: Posts $52.3 Mil. Net Loss in Second Quarter of 2006
HUTCHINSON TECHNOLOGY: Earns $5.8MM in Fiscal 2006 Third Quarter
HYNIX SEMICONDUCTOR: Rambus Accepts US$133-Mil Damages Payment
INNOVATIVE COMM: Case Summary & 24 Largest Unsecured Creditors
INTERSTATE BAKERIES: Wants to Sell Matteson Property for $1.3 Mil.

INTERSTATE BAKERIES: Wants to Sell New Bedford Property For $1.2MM
INTERVISUAL BOOKS: Educational Dev't Cancels DIP Financing Deal
K2 INC: 2006 2nd Quarter Net Income Almost Doubles to $2.143 Mil.
KCH SERVICES: Dist. Ct. Upholds Nordam Group's $391,149 Claim
LEVITZ HOME: Wohl/Anaheim Opposes Store No. 30401 Lease Assumption

LIGHTPOINTE COMM: Case Summary & 20 Largest Unsecured Creditors
LUCENT TECHONOLOGIES: Posts $79 Mil. Third Quarter 2006 Net Income
MASSEY ENERGY: S&P Lowers Corporate Credit Rating to B+ from BB-
MATHON FUND: Hires Francomano & Karpoook as Special Counsel
MATHON FUND: Turns to Robert C. Hubbard for Accounting Services

MESABA AVIATION: Inks $24 Million DIP Financing Pact with Marathon
MESABA AVIATION: Unions Appeal Bankr. Court's Section 1113 Ruling
METAL STORM: Ernst & Young Raises Going Concern Doubt
METALFORMING TECHNOLOGIES: Selling Burton Property for $830,000
METHANEX CORP: Earns CDN$82.1 Million in 2006 Second Quarter

MIRANT CORP: Inks San Francisco Power Contract With Pacific Gas
MOHEGAN TRIBAL: Posts $4.4 Mil. Quarter Ended June 30 Net Income
NELLSON NUTRACEUTICAL: UBS Can Get Docs to Conduct Own Valuation
NEWFIELD EXPLORATION: June 30 Working Capital Deficit Tops $7 Mil.
NORTHWEST AIRLINES: AFA-CWA Rejects Second Tentative Agreement

NORTHWEST AIRLINES: Disappointed Over AFA Contract Vote
NORTHWEST AIRLINES: Bargaining Talk with AMFA Set for August 15
NORTHWEST AIRLINES: Wants $1.375 Billion Citigroup DIP Pact Okayed
NUR MACROPRINTERS: Balance Sheet Upside-Down by $22MM at March 31
OGLEBAY NORTON: Completes $230 Mil. Refinancing With J.P. Morgan

ON SEMICONDUCTOR: Earns $67.5 Mil. for the Second Quarter of 2006
ORBITAL SCIENCES: Strong Cash Flow Cues Moody's to Lift Ratings
OREGON STEEL: Notes Redemption Prompts Moody's to Withdraw Ratings
PACIFIC GAS: Inks San Francisco Power Contract With Mirant Corp.
PANTRY INC: Amends Contract with BP Products North America

PELTS & SKINS: Case Summary & 35 Largest Unsecured Creditors
PERKINELMER INC: Acquires Macri Tech. and NTD Labs for $56.65 Mil.
PEACEFUL MANAGEMENT: Selling Parking Garage Lease for $314,000
PHIBRO ANIMAL: S&P Puts Junk Rating on $80 Million Sr. Sub. Notes
PLATFORM LEARNING: Gets Court's Final Okay to Use Cash Collateral

PROVIDENTIAL HOLDINGS: Buying Western Medical Assets for $5.65MM
QUAKER FABRIC: Incurs $12.1 Mil. Net Loss in Quarter Ended July 1
REFCO INC: U.S. Trustee Reconstitutes Official Creditors Committee
REFCO INC: Chapter 11 Trustee hires Capstone as Financial Advisor
RESORT FOODS: Case Summary & Two Largest Unsecured Creditors

RIVERSTONE NETWORKS: Disclosure Statement Hearing Set for Aug. 9
ROTEC INDUSTRIES: Panel Taps NachmanHaysBrownstein as Fin'l Expert
ROTEC INDUSTRIES: Files Schedules of Assets and Liabilities
SAINT VINCENTS: Sells St. Mary's to Backer Group for $21.2 Million
SANDISK CORP: Posts $96 Million Second Quarter 2006 Net Income

SCOTTISH RE: Profit Warning Prompts Moody's to Downgrade Rating
SILICON GRAPHICS: Winston & Strawn Hired as Committee's Counsel
SILICON GRAPHICS: Gets Final OK to Maintain Existing Bank Accounts
SONICBLUE INC: Lease Rejection Proof of Claims Due on September 12
ST. JOSEPH: Ch. 7 Trustee Can't Recover Fees from Ch. 11 Lawyers

THORNBURG MORTGAGE: Earns $68.5 Million in Quarter Ended June 30
TRAFFIC.COM INC: Posts $4.7 Mil. Net Loss in 2006 Second Quarter
UAL CORP: Returns to Profitability With $119 Million in 2nd Qtr.
UNICO INC: Derivative Loss Miscalculations Prompt Restatements
USG CORP: Administrative Claims Bar Date Slated for August 21

VARIG S.A: Brazilian Labor Court Freezes $75 Mil. Volo Funds
VCA ANTECH: Earns $29.6 Million in Quarter Ended June 30, 2006
WEB STAR: Case Summary & 20 Largest Unsecured Creditors
WESTERN MEDICAL: Court Okays Assets Sale to Providential Holdings
WHX CORP: Handy & Harman Amends Loan Agreements with Two Lenders

WILLIAMS SCOTSMAN: Earns $11.6 Million in Second Quarter of 2006
WORLDCOM INC: 2nd Circuit Upholds Bernard Ebbers' 25-Yr. Sentence
WORLDCOM INC: Wants Michael Jordan's $8 Million Claim Reduced
YUKOS OIL: Moscow Arbitration Court Rules on Bankruptcy
YUKOS OIL: Court to Hear Rosneft's $8.4-Bln. Claim on Aug. 10

YUKOS OIL: Disputes FSA Ruling on Rosneft IPO at Court of Appeal

* Upcoming Meetings, Conferences and Seminars

                             *********

ADELPHIA COMMS: Closes Asset Sale to Time Warner Cable and Comcast
------------------------------------------------------------------
Adelphia Communications Corporation completed the sale of
substantially all of its assets to Time Warner Cable and Comcast
Corporation for aggregate consideration of $12.5 billion in cash
and 16% of the equity of Time Warner's cable subsidiary.

As a result of the sale, Adelphia will no longer operate as a U.S.
cable company.  Its approximately 4.8 million customers will be
distributed between Time Warner Cable and Comcast.

Teams from the buyers and Adelphia have worked together for months
to ensure an orderly transition for customers, communities and the
almost 13,000 Adelphia employees who will transfer to Time Warner
Cable and Comcast.

"The successful closing of this sale signals a major achievement
for Adelphia's Chapter 11 bankruptcy case on several fronts," said
Chairman and CEO William Schleyer.  "We've maximized the recovery
for our creditors, dramatically improved the quality and
performance of the systems going to Time Warner Cable and Comcast
and saved almost 13,000 jobs.  That stands in stark contrast to
the situation almost 40 months ago when there was serious talk of
liquidating Adelphia."

Concurrent with the closing of the sale, Adelphia also consummated
a plan of reorganization for the former joint ventures with
Comcast (Century-TCI and Parnassos), resulting in the repayment in
full of approximately $1.7 billion of indebtedness.  Adelphia
Communications Corporation will hold the remaining sale proceeds
for distribution to its creditors through a Plan of Reorganization
as it seeks to resolve its Chapter 11 bankruptcy case in the U.S.
Bankruptcy Court for the Southern District of New York.

As reported in the Troubled Company Reporter on July 25, 2006,
Adelphia reported an agreement on a framework for a Plan of
Reorganization intended to result in a fourth quarter 2006
emergence from Chapter 11.  The agreement enjoys widespread
support among Adelphia's major unsecured creditors, including the
Official Committee of Unsecured Creditors, though several
constituencies do not support it.  Adelphia's obligations under
the agreement and the reorganization plan envisioned by it are
subject to approval by the Bankruptcy Court.

"While our focus now turns to achieving a confirmed Plan of
Reorganization as soon as possible," added Mr. Schleyer, "we
should take this opportunity to thank Adelphia's employees who had
the faith to endure through four years of uncertainty and whose
hard work significantly increased values to our creditors and
delivered much-improved cable systems to our buyers."

UBS Investment Bank and Allen & Company LLC served as Adelphia's
financial advisors for the sale transaction.  Sullivan & Cromwell
LLP served as Adelphia's legal advisor for the sale.  Willkie Farr
& Gallagher LLP continues to serve as Adelphia's legal counsel for
the Chapter 11 bankruptcy process.

                   About Adelphia Communications

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

Adelphia 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 administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.


ADELPHIA COMMS: Time Warner to File for IPO of Cable TV Unit
------------------------------------------------------------
Bloomberg News reports that Time Warner, Inc., plans to file for
an initial public offering of its cable-television unit after the
sale of substantially all of the assets of Adelphia Communications
Corporation and its debtor-affiliates is consummated.

"An IPO will probably take place within three months following
registration," Mark Harrad, Time Warner Cable NY, LLC's
spokesman, told Bloomberg in an interview.  "If, however, the
creditors agree on a plan of reorganization anytime before then,
we could become a public company without holding an IPO."

                  About Adelphia Communications

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


ADELPHIA COMMS: Fee Panel Seeks Protective Order v. Boies Schiller
------------------------------------------------------------------
The Fee Committee asks the U.S. Bankruptcy Court for the Southern
District of New York for a protective order precluding Boies
Schiller & Flexner, LLP, from propounding discovery demands on it
and its agents including, but not limited to, requesting
documents, taking depositions and issuing subpoenas, and any
further discovery.

The Fee Committee is not a party to the contested matter relative
to Boies Schiller's final fee application in the chapter 11 cases
of Adelphia Communications Corporation and its debtor-affiliates,
Ronald R. Sussman, Esq., at Kronish Lieb Weiner & Hellman LLP, in
New York, argues.  No actual dispute currently exists between
Boies Schiller and the Fee Committee regarding the final fee
application.

Mr. Sussman relates that the Fee Committee, with the assistance
of its professionals, has issued audit reports providing its
analysis and supporting documentation of all fee applications
filed by Boies Schiller, including the Final Fee Application.  As
of July 14, 2006, the Fee Committee has not objected to the Final
Fee Application and is awaiting a response from Boies Schiller as
to various issues raised in the final audit report dated June 22,
2006.

Consistent with its charge as an officer of the Court performing
a core judicial function by Court Order, the Fee Committee has
reviewed the Final Fee Application and, pending the outcome of
the investigation, will advise and make recommendations to the
Court relative to the Final Fee Application, Mr. Sussman informs
the Court.

Mr. Sussman asserts that the Fee Committee, its members and
agents are afforded the maximum immunity permitted by law in the
performance of their judicial functions.

Mr. Sussman explains that the Fee Committee performs adjudicatory
function by reviewing the fee applications of retained
professionals and evaluating the reasonableness of those fees.
The Fee Committee's assessment, once approved by the Court,
determines the rights of the retained professional with respect
to that compensation.  Accordingly, as a court officer carrying
out an adjudicatory function, the Fee Committee is entitled to
absolute judicial immunity and, therefore, should be immune from
present and future discovery requests.

Mr. Sussman asserts that the Fee Committee also deserves to be
shielded from discovery with respect to its official actions
pursuant to the quasi-judicial immunity afforded certain court
officers.  As an officer of the Court, the Fee Committee is, like
an examiner, a disinterested, non-adversarial party, and a
fiduciary to the Court.

                     U.S. Trustee Deposition

In a Court-approved stipulation, the U.S. Trustee for the
Southern District of New York and Boies Schiller & Flexner, LLP,
extends the U.S. Trustee's deadline to file her objection to
Boies Schiller's notice of deposition of the U.S. Trustee to the
earlier of:

    (a) August 16, 2006, or

    (b) ten days after resolution of the Fee Committee's discovery
        immunity request.

                  About Adelphia Communications

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


AGRICORE UNITED: Moody's Rates CDN$525 Million Senior Loan at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to new senior
secured credit facilities for Agricore United and AU Holdings
Inc., a Ba2 rating to Agricore United's $525 million senior
secured revolving credit, and a Ba3 corporate family rating.
Moody's also assigned an SGL-2 speculative grade liquidity rating
to Agricore United.  The outlook on all ratings is stable.  These
represent first-time ratings for this company.  Ratings assigned
are:

Agricore United

   * CDN$100 million senior secured 7-year term loan at Ba3

   * CDN$525 million 3-year senior secured revolving credit
     at Ba2

   * Corporate family rating at Ba3

   * Speculative grade liquidity assessment of SGL-2

AU Holdings Inc.

   * CDN$50 million senior secured 7-year term loan at Ba3 based
     on the full unconditional guarantee of Agricore United

Ratings Outlook: Stable

The key factors driving Agricore's rating are: the company's
strong presence in its core Canadian market; Agricore's important
role in grain exports for Western Canada, as well as in the
production, sale, and distribution of crop production products and
services for farmers in the region.

Ratings also gain strength from the strategic relationship with
its 23.4% owner -- Archer Daniels Midland.  However these
strengths are tempered by its exposure to volatile commodity
agricultural markets; the high degree of geographic concentration
of raw material supply and product and service sales; its complex
business and capital structure; and its relatively high leverage
and weak debt protection measures for its rating.  Ratings also
reflect a degree of event risk as Agricore seeks to expand into
more stable, higher value-added, higher-margin businesses--a
strategy which could involve a more aggressive acquisition posture
than in the past.

The stable outlook on the rating reflects Moody's expectation that
the company will continue to work to strengthen its operating
performance and debt protection measures, and improve its overall
return on invested assets.

The speculative grade liquidity rating of SGL-2reflects Moody's
view that despite the volatility of its commodity-based businesses
and the high seasonality of earnings and cash flows, Agricore has
demonstrated its ability to operate efficiently and maintain
sufficient liquidity.  Over the next 12 to 18 months, Moody's
anticipates that the company will generate enough free cash flow
to satisfy its working capital, dividend and capital expenditure
requirements.  Moody's expects Agricore to remain in compliance
with financial covenants over the next 12 to 18 months, although
cushion is thin.  Agricore's alternative sources of liquidity are
limited since all of its assets are pledged to its credit
facilities.

The Ba2 rating on the CDN$525 million senior secured revolving
credit is notched up one level from the corporate family rating
reflecting a first lien on a high quality, liquid collateral pool.
The Ba3 rating on the CDN$100 million senior secured term loan to
Agricore and the CDN$50 million senior secured loan to Agricore
United Holdings are rated at the same level as the corporate
family rating reflecting a balance between debt that has a
preferential position as well as debt that is either contractually
or structurally subordinate to the Term B Loans.

The Term B Loans are pari-passu with approximately CDN$150 million
of other existing senior secured debt that hold a first lien on
all long-term assets, and a second lien position on all current
assets behind the senior secured revolving credit.  The revolver
also holds a second lien on all long term assets behind the Term B
Loans and other pari-passu debt.  Asset coverage for the Term B
Loans is thin in a distressed scenario, as its call on the most
liquid assets is behind the revolver.  All facilities benefit from
upstream guarantees from all key direct and indirect operating
subsidiaries.

Based in Winnipeg, Manitoba Canada, Agricore is a leading Canadian
agribusiness involved in grain handling, the production and sale
of agricultural production inputs such as fertilizer and crop
protection chemicals, and animal feed.  The company also provides
loans and financial services to farmers in western Canada.  Fiscal
Year 2005 revenues were CDN$2.7 billion.


AIRBASE SERVICES: Wants to Assume and Assign Residential Lease
--------------------------------------------------------------
Dennis Faulker, the Chapter 11 Trustee for Airbase Services, Inc.,
asks the U.S. Bankruptcy Court for the Northern District of Texas
in Fort Worth for permission to:

   a) assume a residential lease with Burchard and Bettina
      Albus; and

   b) assign that agreement to Tom McKeown or his assign without
      recourse to the Debtor.

Mr. Faulker believes that the continuation of this lease on a
postpetition basis will be detrimental to the estate.

The Debtor occupied the premise, located at 605 Connie Lane, in
Colleyville, Texas, beginning Sept. 1, 2005, through Aug. 31,
2006.

Mr. McKeown, former officer of the Debtor, occupied the premises
as part of his employment agreement.  He proposed to pay $3,800
monthly rentals for July and August, together with any other
expenses accruing under the lease, during the occupancy period.

The agreement between the Debtor, Mr. McKeown and the landlords
was reached as part of the negotiated sale of the Canadian assets.

The Court will convene a hearing at 1:30 p.m., on Aug. 9, 2006, to
consider the Chapter 11 Trustee's request.

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


ALLIED PROPERTIES: Case Summary & Two Largest Creditors
-------------------------------------------------------
Debtor: Allied Properties, LLC
        Debtor 5821 Southwest Freeway, Suite 500
        Houston, TX 77057

Bankruptcy Case No.: 06-33754

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

                  The Debtor filed for chapter 11 protection on
                  December 6, 2005 (Bankr. S.D. Tex. Case No. 05-
                  95389).  Its affiliate, Global Investments and
                  Holdings, LLC also filed for chapter 11
                  protection on December 6, 2005 (Bankr. S.D. Tex.
                  Case No. 05-95389).

Chapter 11 Petition Date: August 1, 2006

Court: Southern District of Texas (Houston)

Debtor's Counsel: Leonard H. Simon, Esq.
                  Pendergraft & Simon LLP
                  The Riviana Building, Suite 800
                  2777 Allen Parkway
                  Houston, TX 77019
                  Tel: (713) 528-8555
                  Fax: (832) 202-2810

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's Two Largest Creditors:

   Entity                            Claim Amount
   ------                            ------------
PIM Black Mountain                    $15,000,000
Domestic Venture 1, LLC
c/o Joseph Epstein
[no address/contact provided]

Ridge Financial Services Corp.         $1,200,000
Aka Ridge Financial Servicing Corp.
[no address/contact provided]


AMES DEPARTMENT: Wants Atwell Curtis to Collect Judgment Payments
-----------------------------------------------------------------
Pursuant to Section 363(b) of the Bankruptcy Code, Ames Department
Stores and its debtor-affiliates seek authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Atwell, Curtis & Brooks, Ltd., as their independent contractor, to
assist in the collection of certain of the Judgments.

During 2003, the Debtors commenced approximately 2,000 preference
actions.  Since many defendants failed to timely answer or
otherwise appear in the Preference Actions, the Debtors sought
entry of default judgments.  To date, 62 default judgments
totaling $754,000 have been entered in the Debtors' favor upon
which collection has not been realized.

According to Rolando de Aguiar, president of Ames Department
Stores, Inc., the Debtors selected Atwell because of the firm's
knowledge and expertise in collecting accounts receivable,
including default judgments.  Atwell is highly qualified and able
to provide the necessary services in a timely and efficient
manner, Mr. Aguiar adds.

In a services agreement dated July 27, 2006, Atwell and the
Debtors agree that Atwell will:

    (a) review and analyze files concerning the Judgments;

    (b) investigate the location and assets of the defendants
        against which Judgments have been entered;

    (c) prepare reports regarding Judgment recovery efforts to
        allow the Debtors to evaluate the collection process;

    (d) negotiate settlements with defendants to effect collection
        of 80% or more of the individual Judgment amounts; and

    (e) use best efforts to obtain waivers from defendants of (i)
        asserted administrative claims, and (ii) claims arising
        pursuant to Section 502(h) of the Bankruptcy Code from
        settlement payments that are made.

Other principal and salient terms of the Services Agreement are:

    (1) Atwell retains the right to cancel the Services Agreement
        by giving the Debtors written notice within the first
        30 days.  After that, Atwell and the Debtors will each
        have the right to terminate the Agreement by giving 60
        days' written notice to the other party.  If the Debtors
        elect to terminate the Agreement without cause, Atwell
        will be paid 10% of the amount of the collection on
        account of each Judgment that is collected by the Debtors,
        for a period of six months after termination of the
        Agreement.  Atwell will have the right to attempt to
        obtain an Order of the Bankruptcy Court and conduct an
        audit of the Debtors' books and records during the
        six-month period after the termination of the Agreement,
        to verify the status of its accounts with the Debtors; and

    (2) During the course of the Services Agreement, the Debtors
        will not enter into any agreement or contract with any
        outside party other than Atwell to collect the Judgments
        without prior notice to Atwell.

The Debtors will pay Atwell a contingent fee of 10% of any cash
recovery or administrative claim reduction realized from the
resolution or settlement of the Judgments, to be paid in addition
to a 25% cumulative contingency fee for the settlement of, or
recovery from, any preference action.

Arlene M. Angelilli, president of Atwell, assures the Court that
her firm (i) does not hold or represent any interest adverse to
the Debtors, their creditors or other parties-in-interest, and
(ii) is a "disinterested person", as that term is defined in
Section 101(14) of the Bankruptcy Code.

Counsel for the Official Committee of Unsecured Creditors and the
Office of the United States Trustee do not object to Atwell's
proposed employment, Mr. Aguiar says.

A full-text copy of the Atwell Services Agreement is available
for free at http://ResearchArchives.com/t/s?eb0

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


AMES DEPARTMENT: Can Assume & Assign Store No. 52 to Wal-Mart
-------------------------------------------------------------
Pursuant to proposed orders submitted by Ames Department Stores
and its debtor-affiliates and Colonial Associates, LLP, the
Honorable Robert E. Gerber of the U.S Bankruptcy Court for the
Southern District of New York rules that:

    (a) The Debtors are authorized to assume and assign the Lease
        for Store No. 522 to Wal-Mart Real Estate Business Trust,
        LLC;

    (b) The Debtors and Wal-Mart Trust have demonstrated adequate
        assurance of future performance by the Trust under the
        Lease;

    (c) The assignment of the Lease to Wal-Mart Trust will be
        subject to the obligations and conditions set forth in
        the Notice dated August 13, 2003, the Designation Rights
        Order, and this Order;

    (d) Wal-Mart Trust will be permitted to sublease the Store,
        subject to the terms of the Lease and the Designation
        Rights Order, to Regency Furniture, Inc., or to another
        sublessee consistent with Judge Gerber's Bench Ruling;

    (e) The Debtors, Parkway Ventures, Inc., and Colonial will
        attempt to resolve cures related to all alleged defaults
        governed by the Lease and, if and when the parties agree
        on the Disputed Cure in writing, the Debtors will pay
        the amount or provide the cure to Parkway or Colonial, as
        applicable, in full and final satisfaction of the Debtors'
        cure obligations under the Lease;

    (f) In the event the Debtors, Parkway and Colonial cannot
        agree on the Disputed Cure, any of them may request a
        hearing on notice to resolve the Disputed Cure;

    (g) Except for the Disputed Cure, the Debtors are authorized
        to cure all prepetition defaults under the Sublease, and
        outstanding postpetition amounts due and owing under the
        Sublease, which amount to at least $20,483.  The Debtors
        will pay this amount and any additional amounts which are
        due and owing or come due in the future -- up through
        closing -- and are not paid as of closing, to Parkway at
        closing of the assignment of the Lease to Wal-Mart Trust;

    (h) Wal-Mart Trust will assume and be liable for all
        obligations arising from, or related to, the Lease on and
        after assignment of the Lease;

    (i) The Debtors and their estates will be relieved from any
        and all liability for any and all breaches under the Lease
        occurring after the date on which the Lease is assigned to
        Wal-Mart Trust; and

    (j) All objections that have not been otherwise withdrawn are
        overruled.

As reported in the Troubled Company Reporter on June 16, 2006,
on March 30, 2006, Wal-Mart Stores, Inc., disclosed that it was
not going to occupy any portion of the property on which Ames
Department Stores and its debtor-affiliates formerly operated
Store No. 522 in Pasadena, Maryland.  Instead, Wal-Mart would
further sublet the Property to an undisclosed furniture retailer.

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


APHTON CORP: Sells Late-Stage Cancer Drug to Receptor BioLogix
--------------------------------------------------------------
Aphton Corp., sold its cancer vaccine Insegia (TM), and related
assets to Receptor BioLogix, Inc., in a Chapter 11 Bankruptcy
sales that was recently approved by the U.S. Bankruptcy Court for
the District of Delaware.  The transaction is expected to close
within 30 days, subject to certain conditions, including delivery
of specified assets and related technology associated with
Insegia.  Financial details were not disclosed.

Insegia, also known as G17DT, is a therapeutic cancer vaccine that
has been extensively studied for its effects on cancers of
gastrointestinal origin.  The immunotherapeutic stimulates
the body to produce antibodies that neutralize the peptide
hormone, gastrin.  Normally involved in the stimulation of gastric
acid secretion for digestion, gastrin is a potent
growth factor for GI malignancies, including stomach cancer
and pancreatic cancer -- two of the most deadly forms of cancer,
neither of which have satisfactory treatments.  Two Phase III
clinical trials of Insegia have been completed in patients with
advanced pancreatic cancer, and multiple Phase II trials have been
undertaken in patients with stomach cancer, which have shown
promising results.

"Insegia has been clinically studied in very difficult forms of
cancer," said Thomas A. Glaze, CEO of Receptor BioLogix.  "In view
of the promising clinical trial results to date, we believe there
is a strong likelihood Insegia has a beneficial effect on these
cancers and warrants further clinical development.  In addition,
the available mechanisms for expedited regulatory approval in the
United States and Europe will be pursued."

"We have assembled a team of manufacturing, regulatory and
clinical trial experts who will focus on the design and execution
of additional clinical studies that may be required for the drug's
market approval" According to Michael Shepard, Ph.D., Receptor
BioLogix's chief scientific officer, the company is well
positioned to further develop Insegia.  "Insegia will become the
most advanced product in our growing portfolio of growth factor
receptor antagonists to treat cancer and other diseases.  It fits
very well with our product development programs, especially
because a principal mechanism of gastrin tumor promotion is likely
mediated through a member of the EGF receptor family, an area of
focus for our company."

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

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


ARIZONA PUBLIC: S&P Puts BB+ Rating on Parent Sr. Unsecured Issues
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' rating to
Arizona Public Service Co.'s (APS; BBB/Stable/A-3) proposed $400
million senior unsecured notes.  The outlook is stable.

The utility's debt issuance is expected to be in two tranches,
due in August 2016 and 2036.  APS is the largest subsidiary of
Pinnacle West Capital Corp. (BBB-/Stable/A-3).  PWCC's
consolidated long-term debt, including current maturities, stood
at $3.2 billion as of March 31, 2006, of which $2.6 billion is at
APS (including current maturities).

Standard & Poor's also assigned preliminary ratings to PWCC's and
APS' unlimited co-issued shelf (S-3ASR) filed June 29, 2006.
Under the shelf, PWCC may issue unsecured debt, preferred stock,
or other debt securities as well as common stock.  The preliminary
PWCC ratings are 'BB+' for parent senior unsecured issues.  APS'
preliminary ratings are 'BBB-' for senior unsecured bonds.

APS' $400 million issuance is the first draw on the shelf.
Proceeds of the sale will be used to pay $84 million of notes that
come due in November 2006.  The company also plans to utilize a
portion of the proceeds to finance an expected tax refund.  The
refund relates to PWCC's 2001 consolidated income tax return,
which, due to a tax-accounting change, resulted in APS receiving a
$200 million refund in 2002.

"The new issuance and financing plans for 2007 are expected to
begin to strain the company's capital structure, which has
recently been adequate," said Standard & Poor's credit analyst
Anne Selting.

"Rating stability is predicated on the company achieving
consolidated credit metrics that are reasonably consistent with
our ratings benchmarks and which demonstrate expected but modest
improvement in funds from operations to total debt by year-end
2006."


AU HOLDING: Moody's Rates New Sr. Secured Credit Facility at Ba3
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to new senior
secured credit facilities for Agricore United and AU Holdings
Inc., a Ba2 rating to Agricore United's $525 million senior
secured revolving credit, and a Ba3 corporate family rating.
Moody's also assigned an SGL-2 speculative grade liquidity rating
to Agricore United.  The outlook on all ratings is stable.  These
represent first-time ratings for this company.  Ratings assigned
are:

Agricore United

   * CDN$100 million senior secured 7-year term loan at Ba3

   * CDN$525 million 3-year senior secured revolving credit
     at Ba2

   * Corporate family rating at Ba3

   * Speculative grade liquidity assessment of SGL-2

AU Holdings Inc.

   * CDN$50 million senior secured 7-year term loan at Ba3 based
     on the full unconditional guarantee of Agricore United

Ratings Outlook: Stable

The key factors driving Agricore's rating are: the company's
strong presence in its core Canadian market; Agricore's important
role in grain exports for Western Canada, as well as in the
production, sale, and distribution of crop production products and
services for farmers in the region.

Ratings also gain strength from the strategic relationship with
its 23.4% owner -- Archer Daniels Midland.  However these
strengths are tempered by its exposure to volatile commodity
agricultural markets; the high degree of geographic concentration
of raw material supply and product and service sales; its complex
business and capital structure; and its relatively high leverage
and weak debt protection measures for its rating.  Ratings also
reflect a degree of event risk as Agricore seeks to expand into
more stable, higher value-added, higher-margin businesses -- a
strategy which could involve a more aggressive acquisition posture
than in the past.

The stable outlook on the rating reflects Moody's expectation that
the company will continue to work to strengthen its operating
performance and debt protection measures, and improve its overall
return on invested assets.

The speculative grade liquidity rating of SGL-2reflects Moody's
view that despite the volatility of its commodity-based businesses
and the high seasonality of earnings and cash flows, Agricore has
demonstrated its ability to operate efficiently and maintain
sufficient liquidity.  Over the next 12 to 18 months, Moody's
anticipates that the company will generate enough free cash flow
to satisfy its working capital, dividend and capital expenditure
requirements.  Moody's expects Agricore to remain in compliance
with financial covenants over the next 12 to 18 months, although
cushion is thin.  Agricore's alternative sources of liquidity are
limited since all of its assets are pledged to its credit
facilities.

The Ba2 rating on the CDN$525 million senior secured revolving
credit is notched up one level from the corporate family rating
reflecting a first lien on a high quality, liquid collateral pool.
The Ba3 rating on the CDN$100 million senior secured term loan to
Agricore and the CDN$50 million senior secured loan to Agricore
United Holdings are rated at the same level as the corporate
family rating reflecting a balance between debt that has a
preferential position as well as debt that is either contractually
or structurally subordinate to the Term B Loans.

The Term B Loans are pari-passu with approximately CDN$150 million
of other existing senior secured debt that hold a first lien on
all long-term assets, and a second lien position on all current
assets behind the senior secured revolving credit.  The revolver
also holds a second lien on all long term assets behind the Term B
Loans and other pari-passu debt.  Asset coverage for the Term B
Loans is thin in a distressed scenario, as its call on the most
liquid assets is behind the revolver.  All facilities benefit from
upstream guarantees from all key direct and indirect operating
subsidiaries.

Based in Winnipeg, Manitoba Canada, Agricore is a leading Canadian
agribusiness involved in grain handling, the production and sale
of agricultural production inputs such as fertilizer and crop
protection chemicals, and animal feed.  The company also provides
loans and financial services to farmers in western Canada.  Fiscal
Year 2005 revenues were CDN$2.7 billion.


AVISTAR COMMS: Posts $3.7 Mil. Net Loss in Quarter Ended June 30
----------------------------------------------------------------
Avistar Communications Corporation generated $1.8 million of
revenue for the three months ended June 30, 2006, compared to
revenue of $1.9 million for the three months ended March 31, 2006,
and $1.3 million for the three months ended June 30, 2005.

Income from settlement and patent licensing was $1.1 million for
each of the three months ended June 30, 2006, March 31, 2006 and
June 30, 2005.

Avistar reported a net loss of $3.7 million, for the three months
ended June 30, 2006.  Avistar reported a net loss of $3.1 million
for the three months ended March 31, 2006 and $1.3 million for the
three months ended June 30, 2005.

The net loss for the second quarter of 2006 reflects $500,000 of
employee stock compensation expense related to the adoption of
Financial Accounting Standard No. 123R by Avistar.  Net loss for
the three months ended March 31, 2006 included $500,000 of stock
compensation expense, and net loss for the three months ended
June 30, 2005 did not include any employee stock compensation
expense.

At June 30, 2006, the Company's balance sheet showed $13.42
million in total assets and $23.23 million in total liabilities,
resulting in a stockholders' deficit of $9.81 million.

"Avistar has been in the process of transitioning its business
model from one of direct sales to a more diversified, multi-
channel sales and licensing approach," stated Gerald J. Burnett,
Chairman and Chief Executive Officer of Avistar.  "During the
second quarter, we achieved a number of important milestones on
that path.  In regards to direct sales, we acquired three new
accounts within the financial services vertical, two of which
represent large, multi-national organizations.  In the area of
monetizing the extensive patent portfolio of our intellectual
property subsidiary, CPI, on June 22, 2006, the United States
District Court's (Northern District of California) issued its
ruling relating to the claims construction or "Markman" hearing in
our infringement lawsuit against Tandberg, Inc. and Tandberg ASA.
We are pleased with the Court's findings in regards to this
important process milestone, and believe that they are supportive
of our claims. A jury trial date has not yet been scheduled."

Dr. Burnett continued, "Although it fell outside of the boundaries
of the second quarter, a significant, subsequent licensing event
was accomplished and communicated earlier this week.  On July 17,
we announced an agreement with Sony Corporation and Sony Computer
Entertainment, Inc., under which we have licensed CPI's patent
portfolio to Sony for a specific field of use relating to video
conferencing in a portion of their product portfolio. We see this
as reflective of the value that CPI is making available to leading
technology and product companies."

                          About Avistar

Avistar Communications Corporation -- http://www.avistar.com/--
develops, markets, and supports a video collaboration platform for
the enterprise, all powered by the AvistarVOS(TM) software.
Founded in 1993, Avistar is headquartered in Redwood Shores,
California, with sales offices in New York and London.

Collaboration Properties, Inc. (CPI), a wholly owned subsidiary of
Avistar, holds a current portfolio of 71 patents for inventions in
the primary areas of video and network technology.  CPI pursues
patents for presence-based interactions, desktop video, recorded
and live media at the desktop, multimedia documents, data sharing,
and a rich-service network video architecture that supports
Avistar's product suite and customers.  CPI offers licenses to its
patent portfolio and Avistar's video-enabling technologies to
companies in the video conferencing, rich-media services, public
networking, and related industries.


AVISTA CORPORATION: Fitch Affirms Preferred Stock's BB Rating
-------------------------------------------------------------
Fitch Ratings affirmed Avista Corporation's ratings as:

   -- Issuer Default Rating at 'BB';
   -- Senior secured debt at 'BBB-';
   -- Senior unsecured debt at 'BB+'; and
   -- Trust preferred and preferred stock at 'BB'.

At the same time, Fitch revised AVA's Rating Outlook to Positive
from Stable.  Approximately $1.1 billion of debt is affected by
the rating action.

The Positive Rating Outlook primarily reflects Fitch's expectation
that credit quality measures will trend upward beginning in 2007,
largely due to the improvement in cash flow and reduction in
deferred power costs balances that results from a return to more
normal water conditions, lowering the company reliance on higher
cost thermal and purchased power resources.  AVA's ratings and
Positive Rating Outlook also recognize the balanced regulatory
outcomes in recent filings in Washington, Idaho and Oregon and
assume a continuation of reasonable regulation.

In December 2005, the Washington Utilities and Transportation
Commission approved a proposed settlement in AVA's 2005 general
rate case and more recently approved a proposed settlement in its
2006 energy recovery mechanism proceeding.  Projected 2006 cash
flow-to-interest expense and debt-to-cash flow metrics are
supportive of the current rating category at 2.8x and 7.3x,
respectively, and are expected to improve meaningfully overtime.

The ratings also consider AVA's high debt leverage, the negative
effects of poor water conditions and high natural gas prices in
recent years on utility cash flows and the higher business risk
profile of Avista Energy, AVA's unregulated energy marketing and
resource management subsidiary.

While water conditions are expected to be slightly above normal in
2006, below normal water prevailed in five of the six years ended
2005, restraining relatively low-cost hydrogeneration output and
increasing reliance on higher cost thermal and purchase power
resources to meet AVA's load requirements.  The ratings and
Positive Rating Outlook assume normal water conditions and that
management will use projected free cash flow (after cap-ex and
dividends) to reduce debt.

The ratings also recognize the reduced scope of AVA's non-utility
investments.  Management's focus on the more stable utility
operation is a positive factor for fixed income investors.
Nonetheless, AVA continues its presence in western wholesale
energy markets through its indirect unregulated subsidiary, AE.

Prospective AE cash flows are subject to relatively high business
risk and are a source of uncertainty for investors.  The risk to
utility bondholders would be reduced somewhat if management
implements its plan to establish a holding company structure with
Avista Utilities as a separate utility subsidiary that is no
longer the parent of AE.

The primary concern for AVA fixed income investors continues to be
the potential impact of poor hydro conditions on utility cash
flow, credit metrics and liquidity.  While regulatory mechanisms
are in place to recover the majority of such prudently incurred
fuel and purchased power costs, the proportion absorbed by the
company together with regulatory lag in the recovery of large
deferred energy cost balances can be significant during poor water
years, particularly during periods of persistently high and
volatile energy commodity prices.


BERRY-HILL GALLERIES: Borrows $18MM from American Cap to Pay ACG
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed Berry-Hill Galleries, Inc., and Coram Capital, LLC, to
borrow $18,710,000 from American Capital Strategies, Ltd.  The
Debtor will use the loan proceeds to pay down obligations owed to
ACG Credit Company, LLC.

American Capital Strategies, Ltd. is a publicly traded buyout and
mezzanine fund with capital resources of approximately
$8.4 billion that invests in, and provides financing to, small and
middle-market companies.

Matthew K. Kelsey, Esq., at Kramer Levin Naftalis & Frankel LLP,
in New York City, told the Court that the Debtors have expended
significant efforts over the past several months exploring various
ways to:

   (1) generate funds to satisfy certain pay down obligations owed
       to ACG pursuant to the Court's stipulated cash collateral;
       and

   (2) formulate a plan for emergence from chapter 11.

Berry-Hill owes ACG approximately $17.4 million and, pursuant to
the Cash Collateral Stipulation, has until August 2, 2006, to pay
down approximately $4.4 million of this amount.  Absent funds to
make this payment, ACG may assert that it is entitled to exercise
its remedies under the Cash Collateral Stipulation, including
seeking to lift the automatic stay in an effort to foreclose on
Berry-Hill's assets (appraised at over $60 million).  Such a
result would cause considerable harm to Berry-Hill's estate and
unsecured creditors.

The Debtors have explored various ways to raise the funds
necessary to satisfy obligations to ACG and to maintain their
operations, including bulk art sales, sale of some or all of
Berry-Hill's real property, and third party financing.  During
this period, the Debtors have analyzed numerous third party
financing proposals and conducted extensive negotiations with
various potential financing sources.  As a result of this process,
the Debtors are now seeking to implement the terms of a debtor in
possession financing arrangement with American Capital Strategies.

The DIP Loan will provide the Debtors with postpetition financing
of up to $21 million, which will be used, among other things, to
pay down all obligations to ACG under the Cash Collateral
Stipulation.

The terms of the DIP Loan are:

Maturity Date: Borrowings under the DIP Credit Agreement will be
               repaid in full, at the earlier of:

               (a) 270 from the closing date; and

               (b) the occurrence of the effective date of a plan
                   of reorganization of either or both of the
                   Debtors.

Lender Fees:   $1.200,000 fully earned upon entry of the Interim
               DIP Order, of which $700,000 will be payable upon
               court approval of interim funding and $500,000 will
               be payable on the Maturity Date and to be
               creditable against commitment fees on any exit
               transaction if provided by the DIP Lender.

Interest Rate: LIBOR plus 10.5%, payable in cash monthly in
               arrears on the first business day of each month.

Default Interest: During the continuance of an Event of Default,
               the DIP Loan will bear interest at an additional
               5% per annum.

To secure repayment of the DIP Loan, the Debtors have agreed to
provide the DIP Lender with:

   -- first priority liens on all of Berry-Hill's assets,
      including a mortgage on the Real Estate;

   -- a second priority lien on all of the assets of Coram; and

   -- superpriority administrative expense claims.

The Debtors want to borrow as much as $21 million.  The Court will
consider allowing the Debtors to borrow that much during a hearing
on Aug. 9, 2006.

Headquartered in New York, New York, Berry-Hill Galleries, Inc.
-- http://www.berry-hill.com/-- buys paintings and sculpture
through outright purchase or on a commission basis and also
exhibits artworks.  The Debtor and its affiliate, Coram Capital
LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-60169 & 05-60170).  Robert T. Schmidt, Esq.,
at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors
in their restructuring efforts.  Robert J. Feinstein, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $100 million and debts between $1 million
and $50 million.


BLAST ENERGY SERVICES: To Resolve SEC Claim Investigations
----------------------------------------------------------
Blast Energy Services reported that the Securities and Exchange
Commission, as part of an agreed resolution of claims against the
Company, filed a civil complaint, consents, and proposed judgments
against the Company and two individuals in the U.S. District Court
for the Southern District of Texas.

The complaint and proposed judgments resolve the SEC's formal
investigation relating to the Company's reporting practices and
public statements made in 2003.  Without admitting or denying
the allegations in the complaint, Blast agreed to a proposed final
judgment that includes a permanent injunction against the Company
from violating Section 10(b) of the Exchange Act of 1934 and Rule
10b-5 thereunder.  The proposed final judgment does not assess any
civil penalties against the Company.  This settlement is subject
to the approval of the court.

Since December 2003, the Company has taken several steps to
address issues related to the SEC's inquiries, including the
termination and replacement of the previous CEO and COO.  Two
directors have resigned from the Company's board and the Company
has appointed a new CFO.  The Company strengthened internal
controls overall, particularly with respect to the public release
of information and the recognition of revenue.  The Company also
conducted an internal investigation of the matters of concern to
the SEC.  As a result, the Company restated its second and third
quarter financial statements from fiscal year 2003 to reverse all
revenue related to the aforementioned period.

                        Going Concern Doubt

As reported on the Troubled Company Reporter on June 30, 2006,
Malone & Bailey, P.C., in Houston, Texas, raised substantial doubt
about Blast Energy's ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005.  The auditor pointed to the Company's
recurring losses from operations, a working capital deficiency of
$0.6 million, a net loss of $2.9 million, and an accumulated
deficit of $29.9 million for the year ended Dec. 31, 2005.  The
Company is trying to raise additional capital in response to its
financial difficulty.

                        About Blast Energy

Headquartered in Houston, Texas, Blast Energy Services, Inc.
(OTCBB: BESV) -- http://www.blastenergyservices.com/-- has
developed a commercially viable lateral drilling technology with
the potential to penetrate through well casing and into reservoir
formations to stimulate oil and gas production.  The Company also
has a secondary business segment providing satellite communication
services to energy companies.  This service allows these energy
companies to remotely monitor and control wellhead, pipeline,
drilling, and other operations through low cost broadband data
and voice services.

The Company reported a $968,346 net loss on $291,961 of revenues
for the three months ended March 31, 2006.


BROOK MAYS: Panel Wants Ch. 11 Case Converted to Ch. 7 Liquidation
------------------------------------------------------------------
The Official Committee Of Unsecured Creditors appointed in Brook
Mays Music Company's chapter 11 case asks the U.S. Bankruptcy
Court for the Northern District of Texas to convert the Debtor's
case to a chapter 7 liquidation proceeding.

Scott E. Blakeley, Esq., at Blakeley & Blakeley, LLP, in Irvine,
California, tells the Court that general unsecured creditors would
rather have the Debtor's case immediately converted to Chapter 7
to avoid the "almost certain" administrative insolvency of the
Chapter 11 case and to prevent unencumbered assets from being
squandered away for the sole benefit of the Bank Group.

                      Bank Group Obligations

The Bank Group -- composed of certain financial institutions, with
JPMorgan Chase Bank, N.A., as administrative agent -- and the
Debtor are parties to a Credit Agreement.  The Credit Agreement
permitted Brook Mays to borrow funds of up to $60 million.  To
secure its performance under the Credit Agreement, the Debtor
granted the Bank Group a first-priority lien on substantially all
of its assets.  The Bank Group's collateral does not include the
Debtor's sixty-two leasehold interests.  When the Debtor filed for
bankruptcy, it owed the Bank Group approximately $41 million in
principal, interest, and other fees and costs.

The Debtor then sought to borrow more funds under a debtor-in-
financing facility from the Bank Group.  Among other things, the
terms of the proposed DIP financing grants the Bank Group
extraordinary protections such as super-priority claims on the
Debtor's leasehold interest and avoidance actions.  The Debtor
intends to use the proceeds from the DIP financing, among other
things, to fund the sale of its assets.

                      Committee's Concerns

Mr. Blakeley points out that pursuant to the Debtor's DIP
financing request, the grant of super-priority claim status to the
Bank Group would eliminate the only known source of recovery for
the unsecured creditors -- the equity in the leasehold interests
and avoidance actions.  Mr. Blakeley argues that if the liens
asserted by the Bank Group are valid and perfected, and the DIP
facility is granted as requested, there can be no distribution for
unsecured creditors.

In addition, the Committee also opposes the approaching sale of
the Debtor's assets.  An auction for these assets is currently set
for Aug. 8, 2006.

Mr. Blakeley says the sale should not be permitted to proceed at
this time because it would leave the Debtor with no ability even
to fund wind-down operations or confirm a liquidating plan. He
stressed that the Debtor cannot make any meaningful payment to
unsecured creditors from disposition of its assets under Chapter
11, and the Debtor cannot propose a confirmable plan.

                       Chapter 7 Conversion

The Committee contends that it is not appropriate to allow the
Bank Group to use Chapter 11 as a vehicle to liquidate the Debtor
solely for its own advantage.  The Committee questions why the
case should not be converted to Chapter 7 given that:

       -- reorganization is not in prospect;

       -- the Bank Group appears substantially undersecured by
          liens on the Debtor's salable assets; and

       -- the Bank Group solely benefits from the sale.

Promulgating a plan that benefits only a secured creditor at the
expense of other constituents is against the spirit and purpose of
Chapter 11, Mr. Blakeley says.

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


CADMUS COMMS: Inks Asian Joint Venture Pact with Periscope Inc.
---------------------------------------------------------------
Cadmus Communications Corporation entered into a joint venture
agreement with Periscope, Inc., a Minneapolis-based graphic
services and creative agency.  The new PeriscopeCadmus(TM) entity
will integrate Cadmus Specialty Packaging's global packaging
network with Periscope's design and pre-press capabilities to
provide an end-to-end worldwide print management solution.  The
joint venture agreement between Cadmus and Periscope was signed on
June 29, 2006.

Cadmus simultaneously disclosed that PeriscopeCadmus(TM) has been
selected as one of only four global print managers to serve a
large U.S. based retail chain.  This initial business development
success will provide the joint venture with an excellent
opportunity to win a significant portion of an estimated $200
million annual packaging buy.

PeriscopeCadmus(TM) has already begun operations at its new,
expanded pre-press and print management operation in Hong Kong.
John Riley, Vice President of Operations for Cadmus Specialty
Packaging, has relocated to Hong Kong to assume the position of
Director, Global Operations and lead the team that will manage
PeriscopeCadmus(TM) print operations in the eastern hemisphere.
Gilbert Lee has signed on as Director, Sales & Prepress and in
that role will share responsibility with Riley for leadership of
the business in Asia.  PeriscopeCadmus(TM) is currently adding 15
associates to existing Hong Kong staff in anticipation of rapid
sales growth in Asia.  Additional support offices are planned in
the next few months in Shanghai, India, and Thailand to provide
even closer regional support for anticipated business in those
regions.

Alan Parnell, Vice President of Global Packaging Solutions for
Cadmus, said, "this is a tremendous opportunity to apply our
global brand management expertise on a much larger scale.  It
expands the scope of our business in terms of services offered as
well as enhancing our global reach.  Our print and packaging
network has grown to include facilities in China, Thailand, India
and Turkey.  The establishment in Hong Kong of a pre-press and
print management hub, together with our existing U.S. and Central
American capabilities, positions us to provide our customers with
unparalleled global brand management solutions for packaging."

"This agreement and the related business development success
represents an opportunity to aggressively accelerate our growth in
Asia and sustain strong momentum in our Specialty Packaging
business," Paul Suijk, Senior Vice President and Chief Financial
Officer of Cadmus, commented.  "With this joint venture, we can
not only build on the success we have had in the Caribbean Rim,
but we now can extend our production management capabilities
literally around the world.  We expect the joint venture and our
Asian operation to move quickly from the current 'start up' phase
and adding significant revenue and profitability as early as the
fall of this year."

                         About Periscope

Periscope, Inc. -- http://www.periscope.com/-- is a marketing
agency providing clients with a full range of integrated services,
including advertising, media planning and buying, interactive,
public relations, design and graphic services.  With offices in
Minneapolis and Hong Kong, Periscope has 200 employees and $200
million in capitalized billings.  The agency's clients include
Arctic Cat, Buca di Beppo, Cox Communications, Humana, Papa
Murphy's Take 'N' Bake Pizza and Target.

                          About Cadmus

Based in Richmond, Virginia, Cadmus Communications Corporation --
http://www.cadmus.com/-- provides end-to-end, integrated graphic
communications services to professional publishers, not-for-profit
societies and corporations.  Cadmus is the world's largest
provider of content management and production services to
scientific, technical and medical journal publishers, the fifth
largest periodicals printer in North America, and a leading
provider of specialty packaging and promotional printing services.

                          *     *     *

Cadmus Communications' 8-3/8% Senior Subordinated Notes due 2014
carry Moody's Investors Service's B2 rating and Standard & Poor's
single-B rating.


CALPINE CORP: Appoints Brown & Kinneman as Executive Officers
-------------------------------------------------------------
As part of a program to enhance its Commercial Operations
organization, Calpine Corporation appointed two new members to its
senior management team.  The company named James D. Brown as
Senior Vice President-Commodity Structuring & Valuation and
Jeffrey Kinneman as Senior Vice President-Structured Finance,
Strategy & Restructuring.  Mr. Kinneman joins the company from
Texas Genco, which recently was acquired by NRG Energy.  At Texas
Genco he was acting Chief Risk Officer and Director of Credit and
Risk Management.  Mr. Brown returns to Calpine, having previously
served as Vice President-Structuring.

"Commercial Operations remains a key driver to maximizing value
from our power generation assets and positioning Calpine for
profitable growth," stated Thomas May, Calpine's Executive Vice
President-Commercial Operations.  "With the addition of Jeff and
Jim, we've taken further steps in assembling an experienced
leadership team to return maximum value for our key stakeholders
by providing customers with customized products and services --
backed by our 26,000-megawatt power plant fleet and disciplined
commodity risk management capability."

"Calpine has the right people and assets in place to position the
company for future growth," stated Mr. Kinneman.  "This is a great
time to join Calpine.  The company has tremendous opportunities to
optimize its power assets and provide new products and services to
the changing power industry, especially as non-traditional
participants continue to enter the marketplace.  I'm excited to be
part of a great team and an innovative company."

Mr. Kinneman, age 44, is leading the Commercial Operations group's
efforts in supporting Calpine's overall business planning and
restructuring, emphasizing enhancements to gross margins and
analysis of power markets.  Under his leadership, the group will
also focus on collateral enhancing structured transactions.  Mr.
Kinneman brings to Calpine more than 17 years of experience in the
energy business, specializing in risk management, credit
structuring and new business development, and has served in senior
management positions for leading banking and securities firms.
Following the acquisition of Texas Genco by NRG Energy, he also
focused on collateral-enhancing structured products for NRG
Energy.  He was Partner for Quint Capital, LP and served as Vice
President-Credit for Enron Corp.  Mr. Kinneman holds a Bachelor of
Arts degree in Economics from Rutgers University and is a
Chartered Financial Analyst.

"I'm excited about returning to Calpine and joining the company's
new Commercial Operations group," stated Mr. Brown.  "Tom May and
his team bring a renewed focus on creating value for customers and
optimizing Calpine's assets.  This is an exciting opportunity to
rejoin a team of great people and work with new leadership in
creating a new Calpine and positioning our company for future
growth."

Mr. Brown, age 40, is responsible for Calpine's Structuring,
Portfolio Economics and Fundamentals groups, providing pricing,
valuation and analytical support for all commodity-based
transactions.  Mr. Brown has served in the power industry since
1994, and has in-depth experience in commodity pricing, hedging,
risk management and forecasting.  He originally joined Calpine in
June 1997 and previously headed up Risk Management and Analytics
for Seattle-based Washington Natural Gas.  Mr. Brown holds a
Master of Economics degree from McGill University in Montreal, and
a Bachelor of Arts degree in Marketing and Economics from
University of Calgary.

Calpine's Commercial Operations also is responsible for the
company's power and gas trading, marketing and sales, and merchant
services, ensuring Calpine fuels its plants and delivers clean,
reliable power to its customers.  As an energy management services
provider, the Commercial Operations group also assists customers
with trading and physical liquidation of power and gas assets,
operational services, including scheduling and settlements, and a
variety of other customized energy management solutions.

                       About Calpine Corp.

Headquartered in San Jose, California, Calpine Corporation (OTC
Pink Sheets: CPNLQ) -- 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 CORP: CCFC Seeks Waiver Consents from Senior Noteholders
----------------------------------------------------------------
Calpine Construction Finance Company, L.P. and CCFC Finance Corp.
commenced a solicitation, for holders of record as of July 27,
2006, to seek consents to an amendment of a waiver under the
indenture governing their $415,000,000 principal amount of Second
Priority Senior Secured Floating Rate Notes due 2011.  CCFC also
is requesting consents to a similar amendment to a waiver from the
lenders under the credit and guarantee agreement governing its
$385,000,000 First Priority Senior Secured Institutional Term
Loans due 2009.

The proposed amendments will extend by one week the date by which
CCFC is required to reach agreement with the holders and lenders
regarding the treatment of a gas sale and power purchase agreement
in the Chapter 11 bankruptcy proceeding of Calpine Corporation,
the Company's ultimate parent, and certain of Calpine
Corporation's controlled subsidiaries.

CCFC is required to reach such agreement by Aug. 4, 2006, pursuant
to waivers obtained in June 2006 of specified defaults under the
Indenture and Credit Agreement resulting from the failure of
Calpine Energy Services, L.P., one of Calpine Corporation's
controlled subsidiaries that filed for bankruptcy, to make certain
payments due to CCFC under the gas sale and power purchase
agreement.  The amendments will amend the June 2006 waivers to
extend that date to Aug. 11, 2006.

CCFC is engaged in continuing negotiations with the holders and
lenders, with the expectation that a proposal for an agreement
regarding the gas sale and power purchase agreement will be
announced on or before expiration of the extension.

An agreement containing the amendment to waiver under the
Indenture will be executed following receipt by the Company of the
consent of holders of at least a majority in aggregate principal
amount of outstanding Notes.  An agreement containing a similar
amendment to waiver under the Credit Agreement will be executed
following receipt by CCFC of the consent of lenders holding more
than 50% of the aggregate outstanding Term Loans.

The effectiveness of each of the amendment agreements is
conditioned, among other things, upon the effectiveness of the
other.  Consents given in the consent solicitation may be revoked
at any time prior to the effectiveness of the amendment agreement
under the Indenture, but not thereafter.

Upon their effectiveness, the amendment agreements will bind all
holders of the Notes and lenders under the Term Loans whether or
not they provided their consent.

The consent solicitation under the Indenture and waiver amendment
request under the Credit Agreement will expire at 5:00 p.m., New
York City time, on Aug. 3, 2006, unless extended.

The consent solicitation may be amended, extended or terminated,
at the option of the Company as set forth in the solicitation
letter and consent form from the Company.  For a complete
statement of the terms and conditions of the consent solicitation,
holders of the Notes should refer to the solicitation letter and
consent form.

Global Bondholder Services Corporation will act as Information
Agent in connection with the consent solicitation.  Questions
concerning the terms of the consent solicitation, and requests for
copies of the solicitation letter, the consent form or other
related documents should be directed to the Information Agent by
calling (866) 736-2200.  Wilmington Trust Company will act as
Tabulation Agent.  Requests for assistance in delivering consents
should be directed to the Tabulation Agent at (302) 636-6181.

Goldman Sachs Credit Partners L.P. is the administrative agent
under the Credit Agreement.

               About Calpine Construction Finance

CCFC is an indirect subsidiary of Calpine Corporation.  It was
formed to develop, own and operate power-generating facilities.
CCFC currently owns and operates six natural gas-fired, combined-
cycle facilities located in California, Texas, Oregon, Florida and
Maine, which have a combined estimated peak capacity of nearly
3,700 megawatts.  CCFC Finance Corp. is a direct subsidiary of
CCFC that was formed solely to act as co-issuer of the Notes.

                      About Calpine Corp.

Headquartered in San Jose, California, Calpine Corporation (OTC
Pink Sheets: CPNLQ) -- 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.


CARGO CONNECTION: Reports Increased Sales at New York JFK Terminal
------------------------------------------------------------------
Cargo Connection Logistics Holding, Inc., reported that its wholly
owned subsidiary, Cargo Connection Logistics Corp., increased
sales at its New York JFK terminal.  The addition of Bill
O'Connell as vice president of sales and marketing has helped
yield new, monthly business in excess of $300,000.

"These past six weeks have proven to be very interesting and
certainly extremely opportunistic," said Bill O'Connell, Vice
President of Sales and Marketing.  "My arrival here has helped
open the door wide for our new customers' business.  For me, the
transition to Cargo Connection Logistics has been seamless.  I
enjoy being part of a progressive, well organized, management
team."

"It's time for my former customers to celebrate the transition to
Cargo Connection Logistics Corp.," added Mr. O'Connell.  "Cargo
Connection Logistics Corp. has all of the tools that my customers
have needed.  I also believe that web tracking and being able to
obtain a proof of delivery verification through web access are
many of the enhancements that my former customers demanded.  Cargo
Connection Logistics has expanded its operations at its New York
hub to include local cartage, city pickup, and delivery service
and the customers are using all aspects of the new service."

"Bill has hit the ground running and the new business is flowing
through our JFK facility," said Jesse Dobrinsky, President and CEO
of Cargo Connection Logistics Holding, Inc.  "He has already begun
working with some of the Fortune(R) 500 companies based out on
Long Island. Now he will begin tapping into relationships around
the Country to help introduce them to the quality services that
our Company provides."

"Cargo Connection Logistics Corp.'s reputation with United States
Customs and their professional Customer Service agents have made
our customers feel as though they have been doing business with
Cargo Connection Logistics for years," added Mr. O'Connell.
"While JFK was has been the primary target to initiate new
business, having facilities around the Country is a very helpful
and attractive sales tool that is already being well received by
many of my long-time industry contacts who appreciate the concept
of utilizing Cargo Connection Logistics Corp. as a single-source
solution for their logistics needs."

                     About Cargo Connection

Cargo Connection Logistics Holding, Inc. (OTCBB: CRGO) (BERLIN:
CD6) (FRANKFURT: 217026) --- http://www.cargocon.com/-- consists
of Cargo Connection Logistics Corp. and Cargo Connection
Logistics-International, Inc., which are both headquartered in
Inwood, New York.  The Company also has offices in Atlanta,
Georgia; Charlotte, North Carolina; Chicago, Illinois; Columbus,
Ohio; Miami, Florida; New York; Pittsburgh, Pennsylvania; and San
Jose, California.  Headquartered adjacent to JFK International
Airport, the company is a transportation logistics provider for
shipments importing into and exporting out of the United States,
with service areas throughout the United States and North America.

                       Going Concern Doubt

Friedman LLP  expressed doubt about Cargo Connection's ability to
continue as a going concern after it reviewed the Company's
financial statements for the years ended Dec. 31, 2005.

At March 31, 2006, the Company's balance sheet showed $2,024,483
in total assets and $10,580,161 in total liabilities, resulting in
a stockholders' deficit of $8,555,678.  The balance sheet also
showed strained liquidity with current assets totaling $1,577,223
and current debts totaling $9,347,896.  Further, the Company's
March 31 balance sheet showed that the Company has an accumulated
deficit totaling $11,425,607.


COLLECTIBLE CONCEPTS: Equity Deficit Widens to $22.67M at May 31
----------------------------------------------------------------
Collectible Concepts Group, Inc., and subsidiaries incurred a
$4,720,384 net loss on $443,795 of revenues for the quarter ending
May 31, 2006, the Company reported in a Form 10-QSB filed with the
Securities and Exchange Commission on July 24, 2006.

The Company's balance sheet showed that the Company had $962,872
in current assets and $6,288,420 in current debts as of
May 31, 2006.  The Company had $500,233 cash available at May 31,
2006.

As of May 31, 2006, the Company had assets aggregating $1,585,958
and debts totaling $24,257,481.  As of May 31, 2006, the Company's
equity deficit widened to $22,671,523 from a $19,480,090 equity
deficit at Feb. 28, 2006.

                       Going Concern Doubt

Weinberg & Co., P.A., the Company's auditor, expressed substantial
doubt about the Company's ability to continue as a going concern
after auditing the Company's financial statements for the year
ending Feb. 28, 2006.

The auditor pointed to the Company's working capital deficiency,
stockholders' deficiency, losses and cash burn.

                             Default

Paul S. Lipschutz, the Company's Chief Executive Officer, said the
Company has minimal cash available for operations and is in
default with respect to repayment provisions of certain
convertible secured and convertible subordinated debentures, and
notes and loans payables.  In addition, the Company was not able
to complete an effective registration statement within 150 days as
required in connection with the sale of certain convertible
secured debentures to a group of investors and, as a result, the
Company is in default of the debenture agreement.

Headquartered in Doylestown, Pa., Collectible Concepts Group, Inc.
-- http://www.collectibleconcepts.com/-- develops and markets
unique licensed entertainment, sports, and music collectible
merchandise for specialty, mass retail and online distribution.
Licenses include The Three Stooges(R), over 25 Colleges &
Universities, The National Football League, The NBA, Arena
Football and others.


COMPLETE RETREATS: Wants to Pay $140,000 of Foreign Vendor Claims
-----------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for authority to
pay $140,000 to the foreign creditors whom they have outstanding
agreements with.

The Debtors have foreign creditors in Abaco, Bahamas; Cabo San
Lucas, Mexico; Nevis, West Indies; and the Dominican Republic,
among other foreign locations.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, relates that certain Foreign Creditors have already
taken, or threatened to take, actions that could cripple the
Debtors' operations, including refusing to provide essential goods
and services to the Debtors or their affiliates until their claims
are paid.  In many instances, the Debtors would not be able to
locate replacement providers in time to avoid disrupting service
to their members, Mr. Mancuso says.

The Debtors also ask the Court for permission to require, to the
extent practicable and at their discretion, any particular Foreign
Creditor to provide goods or services during the course of their
bankruptcy cases on the same terms as those provided prepetition
or on other acceptable terms.

                       U.S. Trustee Objects

The United States Trustee says that the Debtors should provide it
and the Court with a list of the creditors to be paid for in
camera review as soon as possible.

                      About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts.  (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).


COMPLETE RETREATS: Can Pay Wages and Benefits to 170 Employees
--------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for permission
to:

    (a) continue to pay prepetition wages, salaries, commissions,
        and guaranteed bonuses, as well as all payroll
        withholding taxes and 401(k) plan obligations;

    (b) continue to honor prepetition vacation pay policies;

    (c) reimburse employees for flexible spending expenses,
        ordinary business expenses, and other expenses;

    (d) continue to pay outstanding prepetition premiums for
        health, dental, and vision insurance, life insurance,
        accidental death and dismemberment insurance, short-term
        disability insurance, long-term disability insurance and
        workers' compensation insurance, and to pay all related
        administration, servicing, and processing costs and
        expenses; and

    (e) satisfy all other prepetition employee benefits.

                        Employee Obligations

As of July 23, 2006, the Debtors have 170 employees.

Administaff Partners processes payroll, pays insurance premiums,
and performs other services for the Debtors.  The Debtors pay
Administaff a fee equal to 4% of the total payroll.  The Debtors
believe that they do not owe Administaff any fees as of the
Petition Date.

The Debtors owe their employees salaries and wages for
prepetition work.  The Debtors' employees are paid every other
Friday.  The Debtors' payroll, including overtime, totals
$478,000.  The Debtors' next pay day is scheduled for July 28,
2006.  As of the Petition Date, a total of 16 days of employees'
salaries and wages have accrued.

The Debtors believe that, as of the Petition Date, the aggregate
amount of salaries and wages that has accrued but has not yet
been paid, or that has been paid but not yet presented for
payment or cleared through the banking system, should not exceed
$800,000.

The Debtors have six sales representatives who, in addition to
their base salaries, are entitled to commissions that accrue when
membership deposits are paid.  As of the Petition Date, the
amount of commissions to be paid by the Debtors is $5,000.

Each of the Debtors' 17 destination club managers is entitled to
a guaranteed bonus of between $5,000 and $10,000 that accrues and
is paid quarterly with the first or second payroll payment after
the end of the quarter.  The Debtors believe that as of the
Petition Date, the amount of guaranteed bonuses to be paid should
not exceed $25,000.

The Debtors withhold taxes, deductions, and other amounts from
the wages and salaries of their employees, as required by
federal, state, and local laws.  As of the Petition Date, no
funds have been withheld and not yet transferred, or transferred
but not yet presented for payment or cleared through the banking
system.

                          Employee Benefits

The Debtors participate in, or are obligated under, a number of
different salary, wage, and benefit structures, programs, and
plans:

(A) 401(k) Plan

     The Debtors sponsor a 401(k) plan, which constitutes a
     qualified retirement savings plan under the Internal Revenue
     Code.

     The Debtors believe that, as of the Petition Date, no funds
     have been withheld and not yet transferred.

(B) Reimbursement of Expenses

     The Debtors reimburse employees for various expenses
     incurred, including business travel and entertainment
     expenses, cellular phone use, moving expenses, and, in some
     cases, home Internet access costs.  The Debtors believe that
     as of the Petition Date, the amount of expenses accrued but
     not yet reimbursed should not exceed $40,000.

(C) Paid Vacation

     The Debtors provide vacation pay to all eligible employees.
     As of July 23, 2006, many employees have not taken all of
     their accrued vacation days.  The Debtors' employees have
     accrued an aggregate of approximately $335,000 on account of
     unused vacation days.

(D) Severance Policy

     The Debtors maintain a severance policy pursuant to which
     all regular full-time salaried employees who meet certain
     eligibility requirements are entitled to severance payments
     upon involuntary termination.

     The Debtors are not currently making any payments under the
     Severance Policy to former employees terminated prepetition.
     The Debtors intend to make severance payments in the
     ordinary course of their business, in accordance with the
     Severance Policy, to any eligible employees who are
     terminated postpetition.

(E) Medical, Dental, Vision, and Life Insurance

     The Debtors provide all employees with the option of
     participating in a comprehensive medical, dental, vision,
     and life insurance program through United Health Care and
     Vision Service Plan.

     The premiums due to United and VSP are paid, in part, by the
     Debtors in connection with payroll, and, in part, by
     participating employees.  The Debtors believe that no
     premiums are owed to United or VSP as of the Petition Date.

(F) Flexible Spending Plan

     The Debtors offer a flexible spending plan that allows
     participating employees to have withheld, on a pre-tax
     basis, up to $200 per month for reimbursement of eligible
     medical care expenses.  Eight employees participate in the
     flexible spending plan.

     The Debtors estimate that the amount of claims under the
     flexible spending plan that has accrued prior to the
     Debtors' bankruptcy filing, but that has not yet been
     reimbursed should not exceed $10,000.

(G) CIGNA insurance

     The Debtors offer short-term disability insurance, long-term
     disability insurance and accidental death and dismemberment
     insurance to 23 employees through CIGNA.

     Premiums to CIGNA totaling approximately $5,800 per month
     are paid by the participating employees through wage and
     salary deductions.  The Debtors believe that no premiums are
     owed to CIGNA as of July 23, 2006.

(H) Workers' Compensation

     The Debtors maintain an insurance policy through Specialty
     Risk Service in connection with the operation of their
     business, pursuant to which they provide workers'
     compensation coverage to all of their employees.  No
     premiums are outstanding as of July 23, 2006.

(I) Other Benefits

     The Debtors provide eligible employees with certain
     other benefits that may have accrued prior to the Debtors'
     bankruptcy filing, but have not yet been paid by the
     Debtors.  The benefits include paid time off for jury duty
     and bereavement periods.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, argues that discontinuation of the Debtors
obligations and employee benefits will:

    (1) severely disrupt the Debtors' relationships with their
        employees;

    (2) irreparably impair employee morale at the very time when
        their dedication, confidence, and cooperation are most
        critical; and

    (3) seriously jeopardize the Debtors' ability to operate.

                        U.S. Trustee Objects

The United States Trustee asserts that the granting of a priority
claim for contributions to employee benefit plans for services
rendered within 180 days should be subject to the limits set
forth in Section 507(a)(5) of the Bankruptcy Code.

The U.S. Trustee says that prior to the entry of the proposed
order, proposed counsel to the Debtors should provide it and the
Court, for in camera review, a list containing the names of
employees, their titles, and the proposed wages and benefits to
be paid.

The U.S. Trustee asks the Court to grant the Debtors interim
relief to allow review of the matter by a creditors' committee
with the understanding that employees who are paid pursuant to
the interim order will not be subject to disgorgement.

                           *     *     *

The Court grants the Debtors' request in its entirety.

The Honorable Alan H.W. Shiff directs the Debtors to file with the
Court a list, certified by an officer of the Debtors, of each
employee:

    (a) whose prepetition salary or wage claim has been or will
        be paid, including the amount of each salary or wage
        claim; and

    (b) who has been or will be reimbursed for business expenses
        incurred on the Debtors' behalf, including the amount and
        a brief description of the expenses.

Judge Shiff further directs the Debtors to send a copy of the
court filing to the Office of the United States Trustee, and two
courtesy copies to chambers.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts.  (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).


CRDENTIA CORPORATION: Intends to Merge With Caregiver Services
--------------------------------------------------------------
Crdentia Corp. (OTCBB: CRDT) entered into a non-binding letter of
intent to merge with Caregiver Services, Inc.,

Under terms of the letter, CSI will merge into a wholly owned
subsidiary of Crdentia and CSI shareholders will receive Crdentia
common stock.  CSI will be provided representation on Crdentia's
Board of Directors and CSI's Chief Executive Officer, Alan
Soderquist, will also join Crdentia's executive management team.
Upon closing of the transaction, the parties contemplate that
shareholders of CSI will own approximately 60% of Crdentia's
outstanding common stock, subject to an adjustment of up to
5% up or down based upon an agreed upon formula to be calculated
after issuance of the audited 2006 year-end financial statements
of each entity.

The completion of the proposed transaction is subject to the
execution of a definitive agreement and approval of the Board of
Directors of both Crdentia and CSI, along with approval by the
shareholders of CSI.  The parties have also agreed to enter into
an exclusivity agreement regarding the proposed transaction for
a period of 30 days.  On a pro forma basis, the combined company
is expected to generate over $100 million in annual revenues
and operating income of between $5 and $7 million.

CSI is one of the largest providers of private duty nurse staffing
services in Florida, where favorable demographic trends and a
preference among seniors to live in the region offer strong and
growing demand.  In Florida, CSI operates as a nurse registry
whereby contracted caregivers are placed with clients to provide
assistance with activities of daily living.  While the majority of
CSI's business comes from in-home care services that enable
seniors to live independently in their homes, CSI also provides
temporary nurse staffing solutions for facilities-based settings
as well as supplemental staffing for hospice providers.  CSI was
founded in 2000 and generated 2005 annual revenues of
approximately $43 million.

"I am extremely pleased to announce Crdentia's letter of intent to
merge with CSI, which will enable Crdentia to fulfill a long
standing goal of attaining the critical mass necessary to be a
stronger competitor in the healthcare staffing industry," said
Crdentia's Chairman and Chief Executive Officer James D. Durham.
"We also believe that the combined company will have the
requisite size and customer base to achieve positive cash flow
from operations, which will give Crdentia the financial strength
to execute our business plan of expanding our multidimensional
approach to healthcare staffing services to new markets across
the country.  The completion of this merger will represent
an important operational and strategic milestone for
our Company."

"We are very excited about teaming-up with a company like
Crdentia, which is growing rapidly and becoming an important
competitor in healthcare staffing on a national scale," Alan
Soderquist, CEO of CSI, commented.  "CSI's market leadership in
Florida coupled with Crdentia's very strong market presence in
Texas and Arizona provides the combined company with a unique
opportunity to take advantage of the demographic trends in
healthcare.  We look forward to joining forces with Crdentia to
expand our reach and satisfy the large and growing market demand
for staffing services, while improving the overall level of
healthcare delivery in the communities we serve."

                       Going Concern Doubt

KBA Group LLP, in Dallas, Texas, raised substantial doubt about
Crdentia Corp.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005. The auditor pointed to the Company's
incurred net losses of $6,268,503 and $33,702,854 for the years
ended December 31, 2005 and 2004, respectively, and cash flows
from operating activities of $5,062,267 and $3,186,737 for
the years ended December 31, 2005 and 2004, respectively.
Additionally, the Company's current liabilities exceed their
current assets by $6,493,181 at December 31, 2005.

                        About the Company

Headquatered in Dallas, Texas, Crdentia Corp. --
http://www.crdentia.com/-- provides healthcare staffing services.
Crdentia seeks to capitalize on an opportunity that currently
exists in the healthcare industry by targeting the critical
nursing shortage issue.  There are many small, private companies
that are addressing the rapidly expanding needs of the healthcare
industry.  Unfortunately, due to their relatively small
capitalization, they are unable to maximize their potential,
obtain outside capital or expand.  By consolidating well-run small
private companies into a larger public entity, Crdentia intends to
facilitate access to capital, the acquisition of technology, and
expanded distribution that, in turn, drive internal growth.


CST INDUSTRIES: S&P Puts B Rating on Proposed $120 Mil. Facilities
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Kansas City, Kansas-based CST Industries, Inc.

At the same time, Standard & Poor's assigned its 'B' ratings and
recovery ratings of '2' to the company's proposed $100 million
seven-year senior secured term loan facility and $20 million five-
year senior secured revolving credit facility, indicating an
expectation of substantial recovery of principal (80%-100%) in the
event of a payment default.  The company's private $55 million
eight-year senior subordinated notes are not rated.

Proceeds from the new debt issues and equity capital, sponsored by
The Sterling Group, L.P., other investors, and management, will be
used to acquire the company in a leveraged buyout.  Total balance
sheet debt at the close of the proposed transaction will be
approximately $155 million.

"The ratings reflect CST's vulnerable business profile as a
manufacturer and erector of factory-coated metal storage tanks in
a fragmented and competitive market.  The ratings also reflect the
company's highly leveraged financial profile and thin cash flow
protection measures," said Standard & Poor's credit analyst Dan
Picciotto.

CST designs, fabricates, and erects factory-coated bolted and
welded tanks and aluminum geodesic domes for a variety of end-
markets including water, wastewater, industrial, agricultural,
oilfield, and other markets.  The tank industry is tied to certain
cyclical end-markets and is characterized by competing
technologies and numerous small players, which compete on the
basis of price, quality, and personal relationships.

While the company has leading niche market shares, it participates
in a large overall metal storage market.  The risks associated
with CST's narrow scope of operations are somewhat offset by a
diverse customer base with low sales concentration.


CYBERCARE INC: Fla. Bankr. Court Approves Disclosure Statement
--------------------------------------------------------------
The Honorable Michael G. Williamson of the U.S. Bankruptcy Court
for the Middle District of Florida approved the Disclosure
Statement explaining the Joint Plan of Reorganization filed by
CyberCare, Inc., fka Medical Industries of America, 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 an informed
decision.  The Debtors are now authorized to distribute copies of
the Disclosure Statement to solicit acceptances for their Plan.

The Court will consider confirmation of the Plan on Aug. 16, 2006.
Objections and ballots should be in by Aug. 9, 2006.

                     Overview of the Plan

The Plan divides Creditors and Holders of Equity Interests into
twelve classes and proposes to pay creditors from existing funds
and, exit financing loan proceeds and recoveries of causes of
action.  The Plan contemplates the distribution of New Stock of
CyberCare to:

    (a) the DIP Lender, which shares shall be contributed to the
        Equity Stock Pool,

    (b) to electing unsecured creditors, and

    (c) to U.S. Sustainable Energy Corporation in exchange for
        certain technology-related assts, business, and
        initiatives.

                      Treatment of Claims

Under the Plan, General Administrative Claims will be paid in full
and in cash.  The U.S. Trustee's Claims, Priority Tax Claims,
Priority Claims and Secured Tax Claims will also be paid in full.

On the effective date, all outstanding obligations of the Debtors
to the DIP Lender shall be fully and finally satisfied through:

    (a) receipt of New Stock equal to five percent of the New
        Stock of Reorganized CyberCare, which New Stock shall be
        contributed by the DIP Lender to the Equity Stock Pool;
        and

    (b) payment in Cash from the Exit Financing equal to the
        outstanding DIP Indebtedness, less the value of the Equity
        Stock Pool as determined by the Marshal & Stevens
        Valuation.

                      Cast-Crete's Claims

The Secured Claim of Cast-Crete Corporation with respect to any
secured post-petition DIP Financing will be waived as of the
effective date.  All of Cast-Crete's allowed administrative claim
will be treated through the receipt of New Stock of Reorganized
CyberCare equal to five percent of Reorganized CyberCare, as
provided in the Plan.

Cast-Crete, in full satisfaction of its unsecured claim, will
receive 100% of the new stock in Reorganized Cybertech.

                  Tang Entities' Secured Claims

The Secured Claims of the Tang Entities consists of some or all of
the security interests in the Debtors' accounts receivable,
furniture, fixtures and equipment, Causes of Action and the
proceeds thereof, and the Outreach Note.  The Debtors tell the
Court that except for CC Fortune's security interest in the
Outreach Note and the Lien asserted by CC Fortune in the CyberTech
Common Stock, the security interests of the Tang Entities are
unperfected and avoidable pursuant to Section 544 of the
Bankruptcy Code, and will be treated as a general unsecured claim.

The Secured Claim of CC Fortune secured by the pledge of the
CyberTech Common Stock will be satisfied through the issuance of a
nonrevocable license to market and distribute the CyberTech
Technology outside of North America.  The Secured Claim of CC
Fortune to the extent secured by the Outreach Note shall be paid
from the Outreach Proceeds in accordance with the Outreach Stay
Relief Order.

                     Judgment Lien Creditors

The Debtors disclose that the Judgment Lien Creditors consist of:

    * A. Razzak Tai, M.D.;
    * IMR Global Corp, n/k/a CGI Information Technology Services;
    * Medline Industries, Inc.;
    * Scott Printing;
    * Associated Global Systems;
    * Phoenix Leasing, Inc.;
    * Equilease Financial Services, Inc.;
    * Capital Publishing;
    * General Electric Capital;
    * International Business Machines Corp.; and
    * Rodger Hochman.

The Debtors believe that certain of the claims of the Judgment
Lien Creditors, including the claims of IMR Global, Phoenix
Leasing and Equilease may have been satisfied through a
Prepetition stock issuance.  Unless the lien of any Judgment Lien
Creditor is Subordinated Securities Claim pursuant to Section 510
of the Bankruptcy Code, or satisfied through prepetition issuance
of stock, then holders of these claims will be paid an amount
equal to their allowed secured Claim, to the extent secured by any
assets of the Debtor other than Causes of Action, as determined by
the Marshall & Stevens Valuation in accordance with the respective
priority of their respective Judgment Lien in the Assets, other
than Causes of Action, of the Debtors.

Any Liens of Judgment Lien Creditors that attached to Causes of
Action as of the Debtors filing of bankruptcy will continue in the
proceeds or recoveries of such Causes of Action and the Judgment
Lien Creditors will be paid the Net Recoveries of Causes of Action

The Debtors tell the Court that holders of Judgment Lien Claims
will be entitled to participate in distribution to general
unsecured claims, however, if these holders are entitled to a
distribution on account of a Lien against Net Cause of Action
Recoveries, then the Debtors will be authorized to retain from any
amounts to be paid, the amount of the prior payment that exceed
the value of the Collateral securing the Judgment Lien Claims will
be paid to general unsecured claims.

The claim of A. Razzak Tai, M.D. will be subordinated pursuant to
Section 510 of the Bankruptcy Code as a claim arising from the
purchase or sale of a security of the Debtor and will receive a
pro rata distribution of the Equity Share Pool along with all
other Equity Interests based on the percentage of shares of stock
of CyberCare owned by Mr. Tai.

                    General Unsecured Claims

Creditors holding general unsecured claims will receive, in
satisfaction of their claims, either:

    a) a pro rata distribution of a number of shares of New Stock
       equal to the Holders of Claims' Unsecured Proportional
       Stock Pool Share, or

    b) a pro rata distribution of Cash from the Plan Fund and a
       pro rata distribution of any Net Recoveries of Causes of
       Action available for distribution to Holders of Allowed
       Unsecured Claims.

The Debtors say that Holders of Allowed General Unsecured Claims
have the option to elect whether to receive New Stock or Cash on
the Ballot provided for submitting acceptances and rejections of
the Plan.  Holders of unsecured claims that fail to elect or vote
will be deemed to have irrevocably elected to receive Cash from
the Plan Fund, provided, however, the Tang Entities will be deemed
to irrevocably elect to receive a Proportional Stock Pool Share of
New Stock and shall not receive any distributions of Cash from the
Plan Fund.

                          Other Claims

Holders of Intercompany Claims will receive no distributions under
the Plan on account of their claims.

Holders of Equity Interests in Cybercare will receive on the
effective date, at the election of Reorganized CyberCare, either
of these treatments:

    (i) CyberCare Equity Interests will be cancelled and Holders
        of CyberCare Equity Interests may be entitled to receive
        their pro rata share of the DIP Loan Claims Shares or

   (ii) Reorganized CyberCare may effectuate a 1:10 reverse split
        of Existing Common Stock so that the aggregate New Stock
        held by the Holders of Equity Interests in CyberCare will
        equal five percent of the total New Stock to be issued.

CyberTech Equity Interests will be cancelled.

A full-text copy of the Debtors' Disclosure Statement explaining
their Joint Chapter 11 Plan of Reorganization is available for a
fee at:

  http://www.researcharchives.com/bin/download?id=060620052421

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

  http://www.researcharchives.com/bin/download?id=060801023907

Headquartered in Tampa, Florida, CyberCare, Inc., fka Medical
Industries of America, Inc. (PINKSHEETS: CYBR) is a holding
company that owns service businesses, including a physical therapy
and rehabilitation business, a pharmacy business, and a healthcare
technology solutions business.  The Company and its debtor-
affiliate, CyberCare Technologies, Inc., filed for chapter 11
protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268).
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser
represents the Debtors in their restructuring efforts.  No
Official Committee of Unsecured Creditors has been appointed in
the Debtors' case.  When the Debtors filed for protection from
their creditors, they listed $5,058,955 in assets and $26,987,138
in debts.


DANA CORP: Can Assume Supply Pacts with U.S. Mfg. and Nationwide
----------------------------------------------------------------
Dana Corporation and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
assume their supply agreements with U.S. Manufacturing Corporation
and Nationwide Precision Products Corporation.

The Court also issued a previous order authorizing the Debtors to
assume their supply agreements with:

   1. Haas TCM, Inc.,
   2. Houghton Fluidcare, Inc., and
   3. Moore's Machine Company of Chatham County.

As reported in the Troubled Company Reporter on June 13, 2006, the
Debtors sought authority from the Court to assume the Executory
Contracts.

The Debtors also asked the Court to approve the cure amounts to be
paid in connection with the assumption of the Contracts.

The Debtors have assessed the relevant markets and their business
operations and have made a preliminary determination that they
would be unable to find a replacement supplier on terms as
favorable as those in the Contracts, as modified.

Moreover, the Debtors believe that most of the Contracts will be
of long term benefit to their operations and restructuring
efforts and therefore likely would be assumed later in the
Chapter 11 process even if the concessions created by the
proposed modifications had not been obtained.

                      Five Supply Agreements

(A) USM Agreement

    The Debtors are party to a supply agreement with U.S.
    Manufacturing Corporation dated September 5, 2002, whereby
    U.S. Manufacturing supplies parts to the Debtors for
    specified prices.  The USM Agreement has a 10-year term and
    will expire in September 2012.  The annual amount of
    purchases made by the Debtors under the USM Agreement total
    approximately $100,000,000.

    The Debtors want to assume the USM Agreement and pay a
    $3,994,195 cure amount, which is subject to reconciliation,
    resulting in the full payment of all prepetition amounts owed
    to U.S. Manufacturing.  In exchange, the Debtors will receive
    a reduction in the prices paid under the USM Agreement of
    around 2.3%, with the potential for an additional price
    reduction if certain modifications to the manufacturing
    process utilized by U.S. Manufacturing, described as the
    variable wall tubing alternative, is implemented.

(B) The Nationwide Agreement

    The Debtors are party to a supply agreement with Nationwide
    Precision Products Corporation dated February 7, 2000,
    pursuant to which, Nationwide purchases components to be
    integrated into axle parts manufactured by the Debtors.
    Nationwide performs machining services on those components
    prior to selling them to the Debtors.  The Nationwide
    Agreement is scheduled to expire on December 31, 2006.  The
    annual dollar amount of purchases made by the Debtors under
    the Nationwide Agreement is around $25,000,000.

    The Debtors want to assume the Nationwide Agreement and pay
    a $1,005,440 cure amount, which subject to reconciliation,
    resulting in the payment to Nationwide of 40% of the
    prepetition claims not entitled to priority under Section
    503(b)(9) of the Bankruptcy Code.  Nationwide reserves its
    rights to assert the remaining 60% as general unsecured
    claims or as reclamation claims.  In exchange, Nationwide has
    agreed to enter into a supply agreement with the Debtors for
    year 2007.

(C) The Haas Agreement

    The Debtors are party to a Corporate Account Agreement for
    Chemical Management Services with Haas TCM, Inc., dated
    August 1, 2004.  Under the Haas Agreement, Haas is
    responsible for procuring, delivering, managing and disposing
    of various chemicals to the Debtors' facilities.

    The Haas Agreement is scheduled to expire on July 31, 2006,
    and, by its terms, is terminable by Haas upon 90 days' notice
    to the Debtors.  The annual dollar amount paid to Haas under
    the Haas Agreement exceeds $15,000,000.

    The Debtors want to assume the Haas Agreement and pay a
    $631,609 cure amount, of which $464,733 is to be paid on
    assumption and $166,875 is to be paid prior to the effective
    date of the Debtors' reorganization plan.  In exchange, Haas
    has agreed to, among other things:

    * refrain from exercising any termination rights it has under
      the Haas Agreement through August 1, 2007;

    * convert a 5% cost savings goals for the contract year
      August 1, 2006, through July 31, 2007, into a cost savings
      guarantee;

    * provide the Debtors with a one-year option to extend the
      term of the agreement and related statements of work
      through July 31, 2008, with an additional 5% guaranteed
      minimum savings for that contract year; and

    * provide other contract modifications that likely will
      result in cost savings for the Debtors.

(D) The Houghton Agreement

    The Debtors are also party to a Corporate Account Agreement
    with Houghton Fluidcare, Inc., dated July 15, 2004, under
    which Houghton provides chemical management services to 18 of
    the Debtors' facilities.

    The Houghton Agreement is scheduled to expire on July 14,
    2006 and, by its terms, is terminable by Houghton upon 90
    days' notice to the Debtors.  The annual dollar amount paid
    to Houghton under the Houghton Agreement exceeds $10,000,000.

    The Debtors want to assume the Houghton Agreement and pay a
    Proposed Cure Amount in two portions:

       (i) an estimated cure payment of $1,100,000; and

      (ii) the payment of an additional amount of around $375,000
           contingent upon Houghton providing certain cost
           savings under the Houghton Agreement.

    In exchange, Houghton has agreed to, among other things:

    * refrain from exercising any termination rights it has under
      the Houghton Agreement through July 15, 2007;

    * convert a 5% cost savings goals for the contract year July
      15, 2006, through July 14, 2007 into a cost savings
      guarantee; and

    * provide the Debtors with a current extension of the
      Agreement and related statements of work through July 14,
      2008, and with a further one-year option to extend the term
      of the agreement through July 14, 2009, with an additional
      5% guaranteed minimum year-over-year cost savings for each
      those contract years.

(E) The Moore's Machine Agreement

    The Debtors are party to a supply agreement with Moore's
    Machine Company of Chatham County, Inc., dated February 9,
    2004, pursuant to which Moore's Machine manufactures more
    than 100 part numbers utilized by the Debtors in their
    manufacturing operations.  The Moore's Machine Agreement is
    scheduled to expire on January 31, 2007, with the Debtors
    possessing two one-year options to extend the term of the
    agreement through January of 2008 or 2009.

    The Debtors want to assume the Moore's Machine Agreement and
    pay a $590,000 cure amount, subject to reconciliation,
    resulting in the payment to Moore's Machine of 55% of the
    prepetition claims not entitled to priority under Section
    503(b)(9) of the Bankruptcy Code, with the remainder to be
    asserted only as general unsecured claims in the Debtors'
    bankruptcy cases.  In addition, the Debtors have agreed to
    purchase a portion of the raw material inventory of Moore's
    Machine in certain circumstances.

    In exchange, Moore's Machine has agreed to permit the Debtors
    to re-source certain parts presently supplied by Moore's
    Machine in the event that Moore's Machine is no longer
    competitive with respect to those parts.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DANA CORP: Ryder Wants Truck Lease Pact with Debtor to Continue
---------------------------------------------------------------
Ryder Truck Rental Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York to deny Dana Corp. and its debtor-
affiliates' request to reject 10 equipment leases with Ryder,
effective July 31, 2006.

The Debtors and Ryder Truck are parties to a Truck Lease and
Service Agreement dated January 14, 1983, whereby Ryder Truck
provides approximately 554 vehicles for the Debtors' exclusive
use.

Ken Coleman, Esq., at Allen & Overy LLP, in New York, asserts
that the TLSA is a unitary contract.  The TLSA could not exist
without the schedules showing the vehicles leased to the
customer, nor could the schedules exist without the TLSA, which
sets the contractual terms between the parties.

Thus, the various schedules to the TLSA cannot be severed to
allow the Debtors to cherry pick those parts of the TLSA that
they deem necessary from those parts they deem unnecessary to
their on-going business operations, Mr. Coleman maintains.

Mr. Coleman emphasizes that the Debtors are not entitled to
partially reject a unitary contract like the TLSA.  They must
choose to reject or assume the TLSA as a whole.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DEATH ROW: U.S. Trustee Appoints R. Todd Neilson as Ch. 11 Trustee
------------------------------------------------------------------
Steven J. Katzman, the U.S. Trustee for Region 16, has appointed
R. Todd Neilson as Chapter 11 Trustee for the bankruptcy estate of
Marion "Suge" Knight's Death Row Records Inc.

As reported in the Troubled Company Reporter on July 11, 2006, The
Hon. Ellen Carroll of the U.S. Bankruptcy Court for the Central
District Of California in Los Angeles, ordered a Chapter 11
Trustee takeover at Death Row, saying the record label has
undergone gross mismanagement.

Headquartered in Compton, California, Death Row Records Inc. --
http://www.deathrowrecords.net/-- is an independent record
producer.  The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187).  Daniel J. McCarthy, Esq., at
Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
total assets of $1,500,000 and total debts of $119,794,000.


DELTA AIR: Can Amend Merrill Lynch Letter of Credit Facility
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Delta Air Lines, Inc., and its debtor-affiliates to
amend the Merrill Lynch Commercial Finance Corp. Letter of Credit
Facility without further Court order.

As reported in the Troubled Company Reporter on July 24, 2006, the
Debtors wanted to amend its L/C Facility without further Court
order if they determine, based on the final pricing offered by
Merrill Lynch, that it is in the best interests of the Debtors'
estates.

On January 26, 2006, Merrill Lynch, pursuant to a transaction with
a syndicate of other financial institutions, issued a $300,000,000
letter of credit for the Debtors' account in favor of U.S. Bank
National Association.

Merrill Lynch has informed Delta Air, that it may be possible to
modify the terms of the L/C Facility to obtain more favorable
pricing terms from the syndicate, thus reducing Delta's cost of
the L/C.  The amendment would also extend the term of the more
favorably priced L/C by approximately seven months.

In return for those concessions, Delta, according to Merrill
Lynch, would agree:

   -- not to terminate the L/C Facility for at least six months
      from the date of the amendment; and

   -- to pay Merrill Lynch a fee that will be substantially less
      than one year's savings from the repricing.

The Debtors have not yet made a final decision to proceed with
the amendment because Merrill Lynch has not yet completed the
arrangement process to set the final pricing terms for the
amended L/C Facility, Marshall S. Huebner, Esq., at Davis Polk &
Wardwell, in New York, relates.

However, according to Mr. Huebner, the Debtors need to be able to
proceed quickly with consummating the amendment once the pricing
terms are finalized in order to lock in the more favorable
pricing as quickly as possible.

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


DELTA AIR: Court Gives Nod on Panasonic Avionics Master Agreement
-----------------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York for to enter into, and perform under, the Letter
Agreement and the Master Agreement with Panasonic Avionics
Corporation.

As reported in the Troubled Company Reporter on July 24, 2006,
pursuant to a Master Agreement for the Purchase of Equipment,
Software Licenses and Services dated Feb. 28, 2003, Panasonic
Avionics provides electronic equipment, including in-flight audio
and video entertainment systems, for the Debtors' aircraft, and
related maintenance and support services.

The Debtors seek to continue purchasing equipment and availing
services from Panasonic.  The parties have reached regarding the
terms and conditions upon which further purchases may be made.

Pursuant to a Letter Agreement dated June 7, 2006, the parties
agree to:

   (i) resolve the $5,694,298 owing to Panasonic for all goods
       and services provided prepetition; and

  (ii) enter into a Master Agreement dated July 7, 2006, that
       will supersede and replace the Original Agreement.

While the Master Agreement does not obligate the Debtors to order
any minimum amount of equipment, the Debtors have budgeted
capital for the equipment and the maintenance fees for years 2006
and 2007:

                                 2006           2007
                                 ----           ----
      Capital                $35,000,000   $57,000,000
      Maintenance Fees        $4,000,000    $9,500,000

The term of the Master Agreement is five years, with various
options to extend or terminate the Master Agreement on certain
specified conditions.

Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that, pursuant to the Master Agreement, Panasonic will
ship the equipment and invoice the Debtors for the value of each
shipment.  The Debtors will pay the amount of the invoice to
Panasonic as it becomes due, the full amount of which will be
credited against the invoice and will also be credited in like
amount against the prepetition debt.

In this way, Mr. Huebner explains, the prepetition debt will be
reduced over time.  When the Debtors have made $5,694,298 in
total payments under the Master Agreement for postpetition goods
and services, the prepetition debt will be completely exhausted.

Mr. Huebner relates that the mechanism will encourage the Debtors
to make purchases under the Master Agreement because each
purchase will concomitantly reduce the prepetition debt.

The pricing terms of the Master Agreement are reasonable, and
eliminating the prepetition debt will obviate any potential
prepetition claim by Panasonic, Mr. Huebner asserts.

Panasonic is an important supplier of in-flight entertainment
systems for the Debtors' aircraft, Mr. Huebner asserts.
"Panasonic is an experienced provider of electronic equipment and
already maintains and repairs many of the in-flight entertainment
systems now used aboard the Debtors' 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. 38; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


DOLLAR FINANCIAL: S&P Affirms B+ Rating & Revises Outlook to Pos.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on its 'B+'
long-term counterparty credit rating on Dollar Financial Group
Inc. to positive from stable and affirmed the current rating.

The rating on Dollar is based on the company's:

   * low capital levels (negative tangible equity);
   * high leverage; and
   * moderate interest coverage.

The rating also imputes Dollar's good geographic diversity and
limited exposure to economic cycles as well as demographic and
technological trends that buttress management's strategy of
rolling up small competitors in its check-cashing/payday-lending
market segment.  The firm's exposure to adverse regulatory action
is a threat to earnings, but it may also benefit the firm from a
competitive standpoint because the firm's professional management
and diverse earnings stream provide advantages vis-a-vis smaller
and/or less diverse competitors.

"The outlook revision reflects the positive impact on leverage
that has resulted from Dollar's recent secondary offering of
stock.  We anticipate this transaction to result in improved
leverage and interest coverage, reducing the burden of interest
payments on earnings and capital," said Standard & Poor's credit
analyst Rian M. Pressman, CFA.

The proceeds from this offering were used to repurchase $70
million in senior notes and to partially pay down outstanding
borrowings under revolving credit facilities.

Additionally, management has repeatedly stated that the
refinancing of its remaining senior notes into its foreign
subsidiaries is a top priority.  Successful completion of such a
transaction would unlock significant value, as Dollar's interest
expense would offset the significant pretax income generated
by its subsidiaries in Canada and the U.K. and built-up net
operating losses could finally be utilized in the U.S.

The revised outlook reflects Standard & Poor's opinion that
Dollar's recently completed secondary offering, which resulted in
a partial delevering of the balance sheet, should improve interest
coverage.  A positive ratings action may occur if Dollar is able
to successfully rationalize its expense structure and reduce its
inflated effective tax rate.

Another consideration will be improvement in tangible equity to
levels that are appropriate to the degree of credit, market, and
operational risk exposure.  The outlook may be revised back to
stable if:

   * Dollar relevers its balance sheet;

   * the current expense structure is not successfully
     rationalized;

   * operational performance suffers; or

   * adverse changes take place in the regulatory environment.


EASTMAN KODAK: 2006 Second Quarter Loss Widens to $282 Million
--------------------------------------------------------------
Eastman Kodak Company reported second-quarter financial results
essentially in line with the company's expectations and the
achievement of digital profitability two quarters ahead of last
year's pace.

On the basis of generally accepted accounting principles in the
U.S., Kodak expects net cash provided by operating activities this
year of $800 million to $1 billion, which corresponds with
investable cash flow of $400 million to $600 million.  In
connection with its digital transformation, the company continues
to incur significant restructuring charges, as expected.
Accordingly, the company expects a GAAP loss from continuing
operations before interest, other income, net, and income taxes
for the full year of $500 million to $850 million.  This
corresponds to digital earnings from operations this year in a
range of $350 million to $450 million.  Consistent with its
previously reported emphasis on digital margin expansion, the
company revised its 2006 digital revenue growth forecast from a
range of 16% to 22% to 10%, reflecting the company's focus on
pursuing profitable sales.  Total 2006 revenue is expected to be
down 3%.

The company reported a second-quarter net loss of $282 million,
largely stemming from restructuring charges ($214 million after
taxes) and rising silver costs.  The loss is consistent with the
company's plan, announced in 2004, to create a digital business
model by restructuring its traditional businesses and the
associated manufacturing.  The company's second-quarter 2006 GAAP
pre-tax earnings were essentially unchanged from the previous
year.

"Our second-quarter results demonstrate continuing progress in the
execution of our digital business strategy and the implementation
of our digital business model," said Antonio M. Perez, Chairman
and Chief Executive Officer, Eastman Kodak Company.  "We are
coming into the final stages of our digital transformation.  By
the end of next year the majority of the restructuring costs will
be behind us and Kodak will be positioned for sustained success in
digital markets."

For the second quarter of 2006:

   * Sales totaled $3.360 billion, a decrease of 9% from
     $3.686 billion in the second quarter of 2005.  The decline in
     revenue was primarily in the Film and Photofinishing Systems
     Group and the Consumer Digital Imaging Group.  The Film and
     Photofinishing Systems Group decline is in line with company
     expectations, and the decline in the Consumer Digital Imaging
     Group results from the changing market dynamics, as well as
     the company's stated goal to emphasize margin expansion over
     revenue growth.  Digital revenue totaled $1.829 billion, a 6%
     increase from $1.720 billion.  Traditional revenue totaled
     $1.522 billion, a 22% decline from $1.950 billion.  New
     Technologies contributed an additional $9 million in the
     second quarter, compared with $16 million in the year-ago
     quarter.

   * The company's loss from continuing operations in the quarter,
     before interest, other income, net, and income taxes, was
     $167 million, compared with a loss of $137 million in the
     year-ago quarter, largely as a result of increased
     depreciation expense because of the change in useful life
     assumptions implemented in the third quarter of 2005.

   * The GAAP net loss was $282 million, compared with a GAAP net
     loss of $155 million, in the year-ago period.

   * Digital earnings were $4 million, compared with a negative
     $25 million in the year-ago quarter, primarily because of a
     year-over-year improvement in the company's Graphic
     Communications Group.

   * For the quarter, net cash provided by operating activities on
     a GAAP basis was $80 million, compared with a negative
     $207 million in the year-ago quarter.  Investable cash flow
     for the quarter was $15 million, compared with negative
     $297 million in the year-ago quarter.

   * Kodak held $1.055 billion in cash on its balance sheet as of
     June 30, compared with $1.077 billion on March 31, 2006, and
     $1.665 billion on Dec. 31, 2005.  This is consistent with
     the company's stated desire to maintain $1 billion of cash on
     hand.

   * Debt decreased $34 million from the first-quarter level, to
     $3.531 billion as of June 30, 2006, and was down $52 million
     from the Dec. 31, 2005 level of $3.583 billion.

   * Gross Profit was 24.1%, down from 28.2%, primarily because of
     the negative impact of rising silver prices and higher
     depreciation costs from changes in the useful lives of
     certain assets implemented in the third quarter of 2005.

                   20,500 Positions Eliminated

Kodak continues to implement its restructuring program to support
the company's goal of building a business model to achieve
sustained success in digital markets.  This program was first
announced in January 2004 and updated in July 2005, and included
the elimination of an estimated 25,000 positions and charges
totaling $3 billion.

During the second quarter of 2006, the company eliminated
1,630 positions, bringing the program's total to-date to more than
20,500 positions relative to the estimated 25,000.

Based on the restructuring actions completed to date, and an
understanding of the estimated remaining actions to conclude the
restructuring, the company expects that employment reductions and
total charges will now be within the range of 25,000 to 27,000
positions and $3 billion to $3.4 billion, respectively.  The
company continues to expect that these actions will be essentially
complete by the end of 2007.

           Evolution of Digital Camera Operating Model

The company reached an agreement with Flextronics International
Ltd. in order to streamline its digital camera operations.  Under
this agreement, Kodak will continue to manage high-level system
design and advanced research and development for its digital still
cameras, and will retain all of its intellectual property.
Flextronics will manufacture and distribute Kodak consumer digital
cameras on a global basis and will handle certain design and
development functions.  Flextronics will also manage the
operations and logistics services for Kodak's digital still
cameras.  This is consistent with Kodak's effort to drive further
improvements in the operating model of its Consumer Digital
Imaging Group.  Also under the agreement, approximately 550 Kodak
personnel are expected to be transferred to Flextronics
facilities.

"This evolution in our digital capture operating model is
consistent with our strategy and will enable us to compete in this
business with greater flexibility, cost efficiency and
predictability," said Mr. Perez.  "It will support our margin
expansion efforts and enable us to better serve our customers and
consumers by delivering Kodak's innovative digital products
through the world class operations of Flextronics."

Kodak plans to provide a detailed update on its transformation
during its Annual Strategy Review meeting scheduled for Nov. 15,
2006 in New York City.

                       About Eastman Kodak

Headquartered in Rochester, New York, Eastman Kodak Company --
http://www.kodak.com/-- is a worldwide vendor of imaging
products and services.  The company is committed to a digitally
oriented growth strategy focused on four businesses: Digital &
Film Imaging Systems - providing consumers, professionals, and
cinematographers with digital and traditional products and
services; Health -- supplying the medical and dental professions
with traditional and digital imaging and information systems, IT
solutions, and services; Graphic Communications - providing
customers with a range of solutions for prepress, traditional
and digital printing, document scanning, and multi-vendor IT
services; and Display & Components - supplying original
equipment manufacturers with imaging sensors as well as
intellectual property and materials for the organic light-
emitting diode and LCD display industries.

                         *     *     *

As reported in the Troubled Company Reporter on May 25, 2006,
Fitch downgraded Eastman Kodak's Issuer Default Rating to 'B'
from 'BB-' and the company's senior unsecured debt to 'B-' from
'B+' on May 16, 2006.  The Outlook remains Negative.  The ratings
reflected Fitch's growing concern regarding EK's ability to
generate profitable organic digital revenue growth and sufficient
free cash flow to offset continual declines in the company's
traditional business.

As reported in the Troubled Company Reporter on May 9, 2006,
Moody's Investors Service placed the ratings of the Eastman
Kodak Company on review for possible downgrade.  Ratings placed
on Review for Possible Downgrade included the Company's
Corporate Family Rating at B1; Senior Unsecured Rating at B2;
and Senior Secured Credit Facilities at Ba3.


ENTERGY NEW: Court Okays City Council's Move to Quash Deposition
----------------------------------------------------------------
The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana approved the request of the Council
of the City of New Orleans to:

   (1) quash the deposition notice and order that the deposition
       not take place; or in the alternative

   (2) enter a protective order directing the Plaintiffs'
       counsel, Steffes Vingiello, under the penalty of the
       Court's contempt, not to inquire during their deposition
       into any communication or information that is privileged
       under:

        -- the Council's legislative privilege,
        -- the deliberative-process privilege,
        -- the attorney-client privilege, and
        -- the work-product doctrine.

As reported in the Troubled Company Reporter on Jul 10, 2006, the
Plaintiffs sought the Court to dismiss the City Council's request
to quash the Deposition Notice.

The Reverend C.S. Gordon, Jr., et al., and Thomas P. Lowenburg, et
al., had served the City Council with a notice seeking its
deposition in connection with the Council's opposition to the
certification of their proofs and adversary proceeding as a class
action.

The Plaintiffs assert that they are representatives of a class of
all New Orleans ratepayers who are customers of Entergy New
Orleans Inc., and who were unlawfully and wrongfully overcharged
for electric services by the Debtor.  Various parties, including
the City Council, have opposed the Plaintiffs' request for class-
action certification in regard to their claims.

                 City Council Defends Request

Gayle P. Ehrlich, Esq., at Sullivan & Worcester LLP, in Boston,
Massachusetts, notes that the Lowenburg and Gordon Plaintiffs
failed to address the Council of the City of New Orleans' grounds
to quash the deposition notice.

Rather, the Plaintiffs assert a single position -- the Council's
processes in connection with their claims were not legislative,
but were judicial.

Mr. Ehrlich notes that the Plaintiffs failed to inform the Court
that:

   (1) the Lowenburg Plaintiffs took the opposite position in the
       proceedings before the City Council, asserting that the
       proceedings were legislative; and

   (2) the Gordon Plaintiffs have asserted, on appeal, before the
       Fourth Circuit Court of Appeal of the State of Louisiana,
       that the Council's proceedings are judicial.

As provided it its brief on appeal, the City Council maintains
that its actions in regard to the Plaintiffs were legislative.
Because this issue as regards to the Gordon Plaintiffs is pending
before the appropriate appeals court, the Bankruptcy Court should
refrain from considering the argument, Ms. Ehrlich asserts.

Even if the Bankruptcy Court considers its actions as judicial,
the Council's reasoning for its actions are not subject to
discovery, Ms. Ehrlich maintains.  She notes that the
deliberative-process privileged protects the Council from the
inquiry requested in the deposition.

To allow depositions, the Fifth Circuit requires exceptional
circumstances before a party may delve in the mental process of
government officials, Ms. Ehrlich notes, citing In re Office of
Inspector General, Railroad Retirement Board, 933 F.2d 276, 278
(5th Cir. 1991).

The Plaintiffs have not shown any exceptional circumstances that
will allow the involuntary depositions of Council members
regarding their reasons for taking official actions, Ms. Ehrlich
points out.

                     About Entergy New Orleans

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  Carey L. Menasco, Esq.,
Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq.,
at Liskow & Lewis, APLC, represent the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed total assets of $703,197,000 and total
debts of $610,421,000.  (Entergy New Orleans Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000)


FAIRFAX FINANCIAL: Moody's Holds Sr. Unsec. Debt's Rating at Ba3
----------------------------------------------------------------
Moody's Investors Service maintained the negative outlook on
Fairfax Financial Holdings and affirmed the company's Ba3 rating
on senior unsecured debt.  This follows Fairfax's announced
restatement of the company's financials and the consequent
reduction in its common equity base.  FFH has also delayed
the release of its second quarter 2006 financial statements.

Moody's stated that it maintained the Ba3 rating on FFH
because its liquidity, consolidated financial leverage, and
other key credit metrics, remain within the rating agency's
expectations for the company.  Moody's noted, however, that
it remains concerned about the potential for further FFH
restatements, the emergence of material weaknesses in FFH's
control environment, the possibility of enhanced regulatory
scrutiny and fines, as well as the emergence of litigation risk at
the company.  Moody's underlined that these concerns continue to
warrant the negative outlook on FFH.

The rating agency said that the announced restatement may presage
further events that could strain the capitalization and financial
flexibility of the company.  Such further events could include
additional financial restatements, the emergence of material
control weaknesses, and sizable regulatory penalties.  If any
of these events take place, Moody's said, then FFH's ratings could
be downgraded.

Moody's also noted that future rating actions would be influenced
by the strength of the liquidity position at the FFH holding
company, any future adverse reserve development at the FFH
operating and run-off subsidiaries, and the underwriting
profitability of FFH's key subsidiaries -- Odyssey Re Holdings
Corp, Crum & Forster Holdings Corp, and Northbridge Financial
Corporation.

On March 21, 2006 Moody's changed the rating outlook for FFH to
negative from stable following the delay in filing by Odyssey Re
Holdings Corp. of its 10-K and the consequent delay in the filing
of FFH's annual report.  In the interim, FFH and Odyssey Re
released the aforementioned reports, while FFH announced that it
had received subpoenas from the SEC in connection to information
disclosed on an investor call during 1Q06 results.

FFH's Ba3 rating is based on these expectations:

   (1) holding company cash remains at or above $400 million,

   (2) pre-tax coverage of interest, hybrid fixed payments, and
       preferred share dividends remains above 1x,

   (3) financial leverage continues to improve moderately with
       debt/hybrids/preferreds to total capital staying below
       45%,

   (4) only moderate adverse reserve development after
       reinsurance with run-off operations at or near break-even,
       and

   (5) any internal or external investigations into finite
       transactions or other accounting issues do not result in
       further material negative impact on FFH's common equity.

Fairfax Financial Holdings, based in Toronto, Ontario, is a
financial services holding with subsidiaries engaged in property
and liability insurance and reinsurance in Canada, the United
States, and internationally.  For 2005, Fairfax Financial reported
total revenue of $5.9 billion, a net loss of
$498 million, and year-end shareholders' equity of $2.8 billion.


FLYI INC: Wants to Sell Dulles Hangar Lease for $7.6 Million
------------------------------------------------------------
FLYi, Inc., and its debtor-affiliates, propose to sell
Independence Air, Inc.'s rights, title and privileges in a certain
real property and the aircraft maintenance facility and related
improvements -- Aircraft Maintenance Premises -- to Metropolitan
Washington Airports Authority for $7,600,000, subject to higher
and better offers, pursuant to a Bidding Procedures Order approved
by the U.S. Bankruptcy Court for the District of Delaware.

Independence Air's rights and privileges in the Aircraft
Maintenance Premises are subject of a Ground Lease Agreement --
the Hanger Lease -- dated as of June 23, 1997, between
Independence Air, Inc., and the MWAA wherein the MWAA designs,
constructs, operates and maintains an aircraft maintenance
facility at Washington Dulles International Airport.

Pursuant to the Hangar Lease, MWAA leases to the Debtors 6.96
acres of land at Washington Dulles International Airport.  The
term of the Lease expires on December 24, 2024.  Under the Lease
Terms, the Debtors pay a $17,000 monthly ground rent to MWAA and
other related charges.

The Debtors has made many substantial improvements to the Leased
Premises, including the construction of an estimated 112,000
square foot hangar that they used in their airline operations
prior to the shut-down.

In consultation with the Official Committee of Unsecured
Creditors, the Debtors determine that the MWAA's offer to
purchase the Hanger Lease and the Aircraft Maintenance Premises
was the highest and best bidder.

M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, relates that there is no cure cost for
the Assets.

A full-text copy of the MWAA Asset Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?eaf

                     Loudoun County Objects

The County of Loudoun, Virginia, asserts that the Debtors, as
lessee under the Hangar Lease, are responsible for the payment to
Loudoun County of the ad valorem real estate taxes levied on its
leasehold interest.  Loudoun County maintains that as of July 17,
2006, there were unpaid real estate taxes against the Hangar
Lease and the Aircraft Maintenance Premises for tax years 2005
and 2006.

As provided in Section 58.1-3203 of the Code of Virginia, ad
valorem real estate taxes are assessed as of January 1 of each
tax year.  Virginia law further provides that leasehold interests
in real property, which is exempt from assessment for taxation to
the owner, will be assessed for local taxation to the lessee.

Karen J. Stapleton, Esq., in Leesburg, Virginia, tells the Court
that Loudoun County has filed prepetition tax claims and
administrative claim for postpetition real estate taxes.  The
alleged total amount of real estate taxes due to Loudoun County
as of July 17, 2006 is $84,695.

Loudoun County's Tax Claim is fully secured as to Debtors'
leasehold interest in the Property, Ms. Stapleton asserts.

Ms. Stapleton notes that the Debtors' Proposed Sale Order fails
to specify that their claims and liens will attach to the
proceeds of the sale with the same validity and priority as those
liens had against the assets.

Moreover, Loudoun County complains that the Purchase Agreement
does not contain any statement with regard to the payment of real
estate taxes owed to it with reference to the Debtors' leasehold
interest in the Property.

Accordingly, Loudoun County asks the Court to amend the Proposed
Sale Order to provide that the secured, priority lien interests
of its Tax Claim will attach to the sale proceeds of the Hangar
Lease with the same validity and priority that those lien
interests had against the Debtors' leasehold interest in the
Property under Virginia law.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


FLYI INC: Wants Court to Approve Incentive Program for Employees
----------------------------------------------------------------
FLYi, Inc., and its debtor-affiliates ask the U.S. bankruptcy
Court for the District of Delaware to approve an Incentive Program
pursuant to Sections 105(a), 363(b) and 503 of the Bankruptcy
Code.

The Debtors had previously obtained the approval to implement a
Wind-Down Employee Plan.  The Wind-Down Employee Plan, which
commenced on January 5, 2006, expired on July 7, 2006.

M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, tells the Court that the Debtors will
continue to need certain employees to assist them in winding down
their affairs.  Specifically, those employees will:

   * liquidate the Debtors' remaining assets;

   * review and resolve claims; and

   * prepare the appropriate records and reports for the Court
     and the Debtors' constituencies.

The Debtors believe that without the institutional knowledge and
experience that those employees possess, the wind down process
would be chaotic.  However, retaining those employees is
difficult because the Debtors are in the process of liquidating,
so any tenure will be short.  In addition, the Debtors believe
that several of the remaining employees have received competing
job offers with higher compensation.

The Incentive Program covers the Debtors' nine remaining full-
time and three remaining part-time employees.  In addition, the
Incentive Program provides potential compensation to a few open,
entry-level employees that the Debtors may hire during the
program period to fill vacant positions.

Richard Kennedy, Esq., the Debtors' general counsel, is the only
current employee who is an insider.  Under the Incentive Program
Mr. Kennedy will also be the president of FLYi, Inc., and
Independence Air, Inc.

Mr. Cleary discloses that the Incentive Program is meant to:

   * bring the base compensation of the Debtors' employees closer
     to competitive market levels; and

   * provide further incentives to those employees to ensure the
     continued effective job performance necessary for the
     Debtors' wind-down process.

Under the Incentive Program, each of the full-time employees,
except Mr. Kennedy, would be entitled to a bonus equal to 75% of
their new annualized salary.  Mr. Kennedy will be entitled to a
bonus equal to 40% of his new annualized salary.

The Debtors expect to pay $1,408,166 in total compensation under
the Incentive Program.

Mr. Cleary notes that pursuant to the Incentive Program, the
Debtors will be able to:

   * provide a staff-level employee with a pro-rated bonus in
     exchange for remaining with them for a period less than
     through the end of the year; and

   * terminate the employee during the Incentive Program without
     cause and pay the employee's bonus, accrued wages and
     benefits.

The Debtors view the Incentive Program as a continuation of the
Wind-Down Employee Plan.  At the time of the discontinuation of
their operations, the Debtors could not fully predict the length
of time that they would need employees to complete the wind-down
of their affairs and confirm a plan of liquidation.  They also
could not yet fully predict the number of employees they would
need at various stages of the wind-down process.

The Debtors assure the Court that the Incentive Program complies
with Section 503(c) with respect to Mr. Kennedy's employment.
Bonuses under the Employee Wind Down Plan approved in January
2006 were interpreted as severance payments.

The Incentive Plan will be implemented through the execution of
an employee letter with each of the covered employees, Mr. Cleary
says.

                 Employees Pay & Bonuses Under Seal

The Debtors further seek the Court's authority to:

   (a) file the proposed salaries and bonuses to be paid under
       the Employee Program Motion under seal; and

   (b) establish procedures with respect to the Salaries and
       Bonuses.

Mr. Cleary contends that protection of the confidential employee
compensation information is justified because:

   -- the other potential employers would gain an unfair
      disadvantage in their efforts to recruit those employees;
      and

   -- employees are entitled to confidential treatment of their
      individual compensation arrangements.

Moreover, Section 107(b) of the Bankruptcy Code and Rule 9018 of
the Federal Rules of Bankruptcy Procedure authorize the courts to
protect the commercial information of any entity.

In connection with the Salaries and Bonuses, the Debtors seek
that:

   (a) they will not be required to serve the Salaries and
       Bonuses on any party-in-interest other than the United
       States Trustee and the counsel to the Official Committee
       of Unsecured Creditors;

   (b) the hearing to the Employee Retention Program, as it
       concerns the Salaries and Bonuses, will be held in camera
       and may only be attended by parties who have properly
       received the Salaries and Bonuses;

   (c) all parties who receive a copy of the Salaries and Bonuses
       are directed to maintain the strict confidentiality of the
       information contained in it; and

   (d) any objections to the Salaries and Bonuses will be filed
       under seal.

If the Court denies their request, the Debtors ask Judge Walrath
to direct the Clerk of the Bankruptcy Court to return the sealed
envelope containing the Salaries and Bonuses.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


FOAMEX INTERNATIONAL: Gets OK to Raise Salaries of Four Executives
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware grants the
request of Foamex International Inc. and its debtor-affiliates to
increase the salaries of executive officers Raymond Mabus Jr.,
Gregory J. Christian, Andrew Thompson and Don Phillips.

Judge Walsh preserves the Official Committee of Unsecured
Creditors' right to file a request for modification of Mr. Mabus'
compensation, should he remain as interim president and chief
executive officer beyond November 30, 2006.

As reported in the Troubled Company Reporter on July 20, 2006, the
Debtors 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 Compensation Committee of the Debtors' Board of Directors also
recommended salary increases for newly appointed chief
administrative officer Gregory J. Christian, and division heads
Andrew Thompson and Don Phillips.

Specifically:

   (a) Mr. Christian's annual base salary will be increased to
       $400,000;

   (b) Mr. Thompson, head of Foamex's foam products group, will
       receive a $50,000 pay raise, increasing his annual base
       salary to $315,000; and

   (c) Mr. Phillips, head of Foamex's automotive group, will also
       receive a $50,000 pay raise, increasing his annual base
       salary to $250,000.

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


FOAMEX INTERNATIONAL: Wants to Assume Lyondell Chemical Contract
----------------------------------------------------------------
Foamex L.P. seeks the U.S. Bankruptcy Court for the District of
Delaware's authorization to assume its amended executory contract
with Lyondell Chemical Company, pursuant to Section 365 of the
Bankruptcy Code.  Lyondell supplies certain chemicals needed in
Foamex's manufacture of foam products.

Lyondell agrees, immediately upon the Contract's assumption, to
restore trade terms that are comparable to the original terms in
place prepetition before it exercised its contractual right to
change them to "cash-before-delivery."

In addition, Lyondell agrees to give Foamex eight weeks to pay
the $14,865,338 unpaid cure amount owed on account of Foamex's
prepetition chemical purchases.  Foamex will make eight equal
weekly payments beginning on the first Thursday that is not more
than five business days after the Court approves the assumption.

Lyondell also agrees to withdraw Claim No. 740 within five
business days of Foamex's full payment of the Cure Amount.

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, relates that Lyondell has conditioned
the effectiveness of the amendment on Foamex's immediate
assumption of the Contract.

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


GENERAL MOTORS: Revising Second Qtr. Financials Due to GMAC Sale
---------------------------------------------------------------
General Motors Corporation is revising its previously reported
results for the second quarter of 2006 because of a change in the
estimated tax provision relating to an expected loss on the
pending sale of 51% interest in GMAC.  Its previously reported
adjusted earnings are not affected by this change.

GM and GMAC are working with the purchasers of 51% of GMAC equity
to try to avoid any delay in closing the GMAC transaction because
of a recent moratorium by federal regulators on approval of
certain bank transactions.

On July 26, 2006, GM reported a net loss of $3.2 billion, and
adjusted earnings, excluding special items, of $1.2 billion, a
significant improvement from the year-ago adjusted loss of
$231 million.

GM's reported net loss for the quarter has been increased by $200
million, to $3.4 billion.  The increase in the reported net loss
is attributable to the estimated tax provision related to the loss
from the announced sale of 51% of GM's interest in GMAC to a
consortium of investors.  The previously estimated after-tax
charge of $490 million has been increased to $690 million as the
tax provision from the GMAC transaction was adjusted to reflect
differences in book value and tax basis at several GMAC
subsidiaries.

The tax increase does not result in a current cash expense to
either GM or GMAC.  General Motors may adjust the estimated loss
on sale from the GMAC transaction each quarter until closing due
to potential changes in the other comprehensive income adjustment,
such as mark-to-market valuation, as well as other factors.

                         FDIC Moratorium

Separately, on July 28, 2006, the Federal Deposit Insurance
Corporation disclosed a six-month moratorium on the acceptance of,
or final decisions on, notices filed under the Change in Bank
Control Act with regard to industrial loan companies.  In
connection with the GMAC transaction, the consortium and its
members have submitted such notices with respect to GMAC's ILC,
GMAC Automotive Bank.  GM and GMAC are currently evaluating the
effect of the FDIC's action on these pending notices, but it
appears that the timing of any approval of the notices is likely
to be affected by the moratorium.  Since FDIC approval of the
Change in Bank Control Act notices with regard to GMAC Automotive
Bank is a condition to closing the GMAC Transaction, GM and GMAC
are now working with the consortium to consider ways to try to
avoid delaying the targeted closing date until 2007.

                    About General Motors Corp.

General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931.  Founded in 1908, GM employs about 317,000
people around the world.  It has manufacturing operations in 32
countries and its vehicles are sold in 200 countries.

                           *     *     *

As reported in the Troubled Company Reporter on April 7, 2006
Moody's Investors Service reviews for possible downgrade General
Motors Acceptance Corporation's Ba1 long-term rating and
Residential Capital Corporation's Baa3 long-term and Prime-3
short-term ratings will continue.

As reported in the Troubled Company Reporter on April 5, 2006,
Standard & Poor's Ratings Services held its ratings on General
Motors Acceptance Corp. ('BB/B-1') and on GMAC's subsidiary,
Residential Capital Corp. ('BBB-/A-3'), on CreditWatch with
developing implications.


GENESIS WORLDWIDE: Wants Until Apr. 30, 2007 to File Chap. 11 Plan
------------------------------------------------------------------
Genesis Worldwide, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Ohio to extend until
April 30, 2007, the time within which they have the exclusive
right to file a plan of reorganization and disclosure statement.
The Debtors also want the Court to extend their exclusive period
to solicit plan acceptances through June 29, 2007.

Nick V. Cavalieri, Esq., at Bailey Cavalieri LLC, tells the Court
that the Debtors have made significant progress in their
bankruptcy proceedings.  They have settled more than 260
preference claims, resulting in payments due of approximately
$2 million and claims waivers of $2.5 million.

The Debtors are not seeking an extension in order to assert
leverage against the creditors in plan negotiation but they are
working closely with the Committee in an effort to recover assets
for the benefit of the creditors, Mr. Cavalieri adds.

Mr. Cavalieri says that the extension will provide the Debtors and
the Official Committee of Unsecured Creditors with more time to
remain focused on collecting assets for the estates, avoiding the
unnecessary expenditure of limited funds in connection with the
formulation of Plans.

Headquartered in Dayton, Ohio, Genesis Worldwide Inc., fka The
Monarch Machine Tool Company, engineers and manufactures high
quality metal coil processing and roll coating and electrostatic
oiling equipment.  Genesis Worldwide and its debtor-affiliates
filed for chapter 11 protection on September 17, 2001 (Bankr. S.D.
Ohio Case No. 01-36605).  Nick V. Cavalieri, Esq., at Bailey
Cavalieri LLC, represents the Debtors in their chapter 11
proceedings.  Daniel M Anderson, Esq., at Schottenstein Zox & Dunn
represents the Official Committee of Unsecured Creditors.  As of
June 30, 2001, the Debtors reported assets totaling $122,766,000
and debts totaling $121,999,000.


GLENBOROUGH REALTY: 2nd Qtr. Net Income More Than Doubles to $28MM
------------------------------------------------------------------
Glenborough Realty Trust Inc. reported results for the second
quarter ended June 30, 2006.

The Company reported $28.628 million of net income available to
common stockholders for the second quarter ended June 30, 2006,
compared with $11.979 million for the same period in 2005.

For the three months ended June 30, 2006, the Company's total
operating revenue was $46.618 million compared with $38.787
million for the same period in 2005.

"We are pleased with the increases that we are experiencing in
occupancy, market rents, and same store net operating income
growth and to see the contributions our joint venture program made
this quarter," Andrew Batinovich, president and chief executive
officer commented.  "We believe that we are well positioned for
growth given the strengthening conditions in our core office
markets."

In the first quarter of 2006 the Company adopted FAS 123R, Share-
Based Payment, which resulted in a cumulative effect of a change
in accounting principle adjustment of $300,000.

For the second quarter 2006, Funds From Operations was
$15.4 million.  FFO for the quarter was positively impacted by fee
income from joint ventures and strong NOI increases at the
property level.  In comparison, the second quarter 2005 FFO was
$17.6 million.  The second quarter FFO results for 2006 and 2005
excluded net gains from sales of real estate of $30.2 million and
$9.3 million, respectively.

                       Property Acquisition

The property in 3330 Cahuenga Boulevard in Los Angeles,
California, was acquired on April 28, 2006, for $30.6 million.
The property is a 100% leased five-story office building
containing 103,781 square feet situated above a two-level
subterranean parking garage.  The building's modified rectangular
shape allows for an abundance of window offices, a feature that is
preferred by many tenants.  The property is situated along the
Hollywood (101) Freeway with two on/off ramps within one block and
is located in the Universal City submarket of Los Angeles and
caters primarily to entertainment industry tenants.

                    Montgomery Executive Center

During the quarter, the Company contributed Montgomery Executive
Center, a 120,000 square foot office building in Gaithersburg,
Maryland, at a value of $23.5 million for 100% of the property, to
a new joint venture with an investment advisor.  Glenborough will
recognize a gain from the June transaction of approximately
$10.5 million related to the 75% of the venture now owned by the
investment advisor.  Glenborough will retain a 25% interest and
will provide property management, leasing and asset management
services to the joint venture on an on-going basis.  Proceeds from
the sale of the property to an unconsolidated joint venture were
used to pay down short-term borrowings under the Company's
unsecured line of credit.

                    Rincon Center Joint Venture

The Company, through a joint venture with Blackstone Real Estate
Partners II, sold Rincon Center, a mixed-use property in San
Francisco comprised of 528,000 square feet of class "A" office and
retail and 320 apartment units for $275.0 million.  Glenborough's
share of the gain from the June sale was approximately
$9.5 million and the venture generated an internal rate of return
in excess of 20% to all investors.  The sale was prompted by the
renewal of one of the major office tenants and the potential to
convert the multi-family units to condominiums.

                2000 Corporate Ridge Joint Venture

In addition to the sale of Rincon Center, the Company, through a
joint venture, sold 2000 Corporate Ridge for $79.1 million in
McLean, Virginia.  Glenborough's share of the gain from the June
sale was approximately $10.1 million and the venture generated an
internal rate of return in excess of 20% to all investors.  The
sale was prompted by multiple expansions and a lease extension by
the major tenant that converted the formerly multi-tenant building
to a single tenant property.

                       Portfolio Performance

Overall portfolio occupancy increased 580 basis points from 88.3%
in the second quarter of 2005 to 94.1% in 2006.  For the second
quarter 2006, same store office net operating income increased by
3.7% as compared to the second quarter of 2005.  For the quarter,
same store occupancy increased by 370 basis points from 89.4% to
93.1%.

The Company's largest markets are:

   -- Washington, D.C. (27% of net operating income),
   -- Southern California (22%),
   -- Northern New Jersey (14%),
   -- San Francisco (11%), and
   -- Boston (11%).

Lease rollover for the remainder of 2006 is 4.3% of total base
rent of which approximately 45% is in the Company's top two
markets -- Washington, D.C., and Southern California.

                     Share Repurchase Program

On May 8, 2006, the Company's Board of Directors increased the
amount of common shares authorized for repurchase under the
company's previously announced common share repurchase program.
The previous authorization totaled 12.2 million shares, with a
remaining availability to repurchase 1.5 million shares.

Under the increased authorization, the Company may repurchase up
to an additional 2.5 million shares in the open market or in
privately negotiated transactions, at the discretion of the
company's management and as market conditions warrant.  The
resulting total current availability under the stock repurchase
program is 4.0 million shares.  Since the inception of the
repurchase program, a total of 10.7 million common shares have
been repurchased at an average price of $17.55 per share for a
total cost of approximately $188 million, although no shares were
repurchased during the second quarter.

                Balance Sheet and Operating Ratios

At quarter-end, Glenborough had $756.7 million of debt with a 47%
ratio of debt to total market capitalization.  Fixed rate debt
comprises 88% of all debt outstanding at quarter-end.  The average
interest rate on all debt is 5.8%. Secured debt comprises 88% of
all debt outstanding.

In July 2006, the Company renewed and extended its $180 million
unsecured line of credit resulting in reduced borrowing costs and
increased availability.  Spreads over LIBOR were reduced by 5 to
10 basis points depending on the leverage of the Company and the
capitalization rates used to value the Company's assets were
lowered to recognize the quality of the Company's property
portfolio.

                             Dividends

On May 4, 2006, the Board of Directors declared a dividend of
$0.275 per share of common stock for the second quarter of 2006.
This dividend was paid on July 17, 2006, to stockholders of record
on July 1, 2006.  Additionally, the Board of Directors declared a
dividend of $0.484375 per share on the Company's 7.75% Series A
Convertible Preferred Stock.  This dividend was paid on July 17,
2006, to stockholders of record on June 28, 2006, and represented
an annualized dividend of $1.9375 per share of Preferred Stock.

Glenborough Realty Trust Inc. (NYSE: GLB) (NYSE: GLB.PrA) is a
REIT which is focused on owning high quality, multi-tenant office
properties concentrated in Washington D.C., Southern California,
Boston, Northern New Jersey, and Northern California.  The Company
has a portfolio of 45 properties encompassing approximately
8 million square feet as of June 30, 2006.

                           *     *     *

Glenborough Realty Trust Inc. carries Moody's Investors Service's
Ba3 preferred stock rating.


GREAT ATLANTIC: Posts $6 Million Net Loss in Quarter Ended June 17
------------------------------------------------------------------
The Great Atlantic & Pacific Tea Company, Inc., reported unaudited
fiscal 2006 first quarter results for the 16 weeks ended
June 17, 2006.  Net loss for the quarter was $6 million this year
versus a loss of $89 million last year.

U.S. sales for the first quarter were $2.1 billion, compared with
$2.2 billion in the first quarter of fiscal 2005.  U.S. total
comparable store sales increased 1.5% vs. year-ago.  Fiscal 2005
first quarter total sales of $3.4 billion include $1.2 billion
related to A&P Canada, which was sold in August 2005.

The results for the first quarter of fiscal years 2006 and 2005
include items the Company considers non-operating in nature that
management excludes when evaluating the results of the U.S.
ongoing business.  Excluding these items, adjusted U.S. income
from operations was $3 million in the first quarter of fiscal 2006
versus a loss of $25 million in last year's first quarter.
Adjusted U.S. ongoing operating EBITDA was $58 million in the
first quarter of fiscal 2006 versus $36 million in last year's
first quarter.

Christian Haub, Executive Chairman of the Board, said, "I'm
pleased with our progress across the board in the first quarter.
Our management team is successfully executing our operating
strategy and is achieving better than expected top and bottom line
progress.  These results, and our merchandising and store
development plans going forward, increase my confidence that we
are on track to achieve our goal of overall profitability in
fiscal 2007."

Eric Claus, President and Chief Executive Officer, said, "We
remained on course with our previously stated operating,
merchandising and expense management strategies in the first
quarter.  As a result, we again increased comparable store sales,
reduced costs and thereby improved year over year EBITDA and
operating income.  Going forward, we will continue executing our
strategic plan as we drive toward overall profitability."

Founded in 1859, The Great Atlantic & Pacific Tea Company, Inc.,
-- http://www.aptea.com/-- is one of the nation's first
supermarket chains.  The Company operates 405 stores in 9 states
and the District of Columbia under the following trade names: A&P,
Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer
Jack, Sav-A-Center and Food Basics.

                         *     *     *

As reported in the Troubled Company Reporter on April 12, 2006,
Moody's Investors Service changed The Great Atlantic & Pacific Tea
Company, Inc.'s rating outlook to negative from stable and lowered
the company's speculative grade liquidity rating to SGL-3 from
SGL-1.  The company's debt ratings were affirmed including the B3
Corporate Family rating and Caa1 senior unsecured notes rating.

As reported in the Troubled Company Reporter on April 10, 2006,
Standard & Poor's Ratings Services lowered the short-term rating
on The Great Atlantic & Pacific Tea Co. to 'B-3' from 'B-2' and
revised the outlook to stable from developing.  The long-term
corporate credit rating is unchanged at 'B-'.


GREAT COMMISSION: Panel Hires Parente Randolph as Fin'l Advisor
--------------------------------------------------------------
The Hon. Mary D. France of the U.S. Bankruptcy Court for the
Middle District of Pennsylvania allowed the Official Committee of
Unsecured Creditors appointed in the chapter 11 case of The Great
Commission Care Communities, Inc., dba The Woods at Cedar Run, to
hire Parente Randolph, LLC, as accountant and financial advisor,
nunc pro tunc to June 7, 2006.

As reported in the Troubled Company Reporter on July 12, 2006,
Parente Randolph is expected to:

   (a) assist and advise the Committee in the analysis of the
       Debtor's current financial position;

   (b) assist and advise the Committee in its analysis of the
       Debtor's business plans, cash flow projections,
       restructuring programs, selling, general, and
       administrative structure and other reports or analyses
       prepared by the Debtor or its professionals, in order to
       assist the Committee in its assessment of the Debtor's
       business viability, the reasonableness of projections and
       underlying assumptions, and the impact of market conditions
       on the forecasted results of the Debtor;

   (c) assist and advise the Committee in its analysis of proposed
       transactions for which the Debtor seeks Court approval
       including, but not limited to, DIP financing or use of cash
       collateral, assumption/rejection of leases and other
       executory contracts, management compensation and retention
       and severance plans;

   (d) assist and advise the Committee in its analysis of the
       Debtor's internally prepared financial statements and
       related documentation, in order to evaluate the Debtor's
       performance as compared to the projected results;

   (e) attend and advise at meetings with the Committee and its
       counsel, the Debtor's representatives, and other parties;

   (f) assist and advise the Committee and its counsel in the
       development, evaluation, and documentation of any plan(s)
       of reorganization or strategic transaction(s), including
       developing, structuring and negotiating the terms and
       conditions of potential plan(s) or strategic transaction(s)
       including the value of consideration that is to be
       provided;

   (g) assist and render expert testimony on behalf of the
       Committee;

   (h) assist and advise the Committee in its analysis of the
       Debtor's hypothetical liquidation and analysis under
       various scenarios; and

   (i) assist and advise the Committee in other services,
       including but not limited to, other bankruptcy,
       reorganization and related litigation support efforts, tax
       services, valuation assistance, corporate finance/M&A
       advice, compensation and benefits consulting, or other
       specialized services as may be requested by the Committee.

Howard S. Cohen, CPA, a principal at the firm, disclosed that his
firm's professionals charge:

         Designation                        Hourly Rate
         -----------                        -----------
         Principals/Directors               $300 to $415
         Managers/Senior Associates         $175 to $315
         Staff                              $100 to $175
         Paraprofessional                   $ 80 to $100

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

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


GREY GOLF: Moody's Lifts Rating on $150 Million Sr. Notes to B1
---------------------------------------------------------------
Moody's Investors Service upgraded GW's Corporate Family Rating
and the $150 million 3.75% Contingent Convertible Senior Notes
Rating from B1 to Ba3 with a stable ratings outlook, completing
the review for upgrade.  Moody's does not rate the company's
$125 million floating-rate convertible senior notes or the
company's secured revolving credit facility.

The ratings upgrade reflects GW's currently very low adjusted
leverage metrics, as measured by adjusted Debt of less than
1x which compares favorably to its Ba3 peers; the company's
conservative financial policies and its strategy of carrying
significant cash balances; the trend of strong contracted dayrates
generated on its rig fleet which should provide continued support
for solid credit metrics and low leverage
into 2007; and expected prudent funding of any future
acquisition activity.

The ratings also reflect GW's exposure to the inherently highly
cyclical domestic onshore natural gas drilling markets, in
particular, the deeper horizon and horizontal drilling focused
resource plays that have been very strong.  However, Moody's
considers these to be the most commodity price sensitive and could
the first drilling activities to be impacted for commodity prices
decline and remain unsupportive for these plays which Moody's
views as needing relatively high commodity prices to remain
economical.

The ratings are also limited by the company's announced
$100 million stock repurchase plan which could ultimately reduce
the company's currently strong financial flexibility, especially
during 2007 when the wave of new drilling rigs enters the U.S.
onshore market over the next 18 months.  This could potentially
put significant pressure on currently strong sector day-rates and
would likely cause Grey Wolf's metrics to weaken within the
ratings.

A positive ratings action is unlikely in the near-term in the
absence of well-bought, heavily common equity funded acquisitions
that add sufficient scale, diversification, and cash flow
commensurate with a higher rating.  However, the stable outlook
and ratings would be pressured if GW changes its current financial
policies to a more aggressive approach, signals of
this would be significantly lower cash balances or an increase
in stock repurchases above announced levels.

Grey Wolf, Inc., headquartered in Houston, Texas, is a leading
provider of premium contract oil and gas land drilling services,
serving major and independent oil and gas companies.


HERCULES INC: Posts $52.3 Mil. Net Loss in Second Quarter of 2006
-----------------------------------------------------------------
Hercules Incorporated reported a net loss for the second quarter
ended June 30, 2006, of $52.3 million as compared to net income of
$9.2 million for the second quarter of 2005.

The Company recorded an after-tax charge of $68.9 million in the
second quarter of 2006 to increase its accrual for the recently
affirmed ruling in the lawsuit captioned United States of America
v. Vertac Chemical Corporation, et al.

Net income from ongoing operations for the second quarter of 2006
was $35.3 million compared with net income from ongoing operations
of $30.1 million in the second quarter of 2005.

Net income from ongoing operations for the six months ended
June 30, 2006, was $61.6 million, an increase of 22% per diluted
share versus the same period in 2005.

Cash flow from operations for the six months ended June 30, 2006,
was $64.0 million, an increase of $44.0 million as compared to the
same period last year.

Net sales in the second quarter of 2006 were $501.0 million, a
decrease of 6% from the same period last year.  The decrease in
net sales reflects the effects of the Company's sale of a majority
interest in FiberVisions on March 31, 2006.  Excluding the impact
of the FiberVisions transaction, sales increased 8% from the same
period of last year.  Volume and pricing increased by 8% and 2%,
respectively.  An unfavorable mix reduced sales by 2% during the
quarter.

Excluding the FiberVisions transaction, net sales for the six
months ended June 30, 2006, were $959.1 million, an increase of
$67 million or 8% as compared to the same period in 2005.

Excluding the impact of the FiberVisions transaction, net sales in
the second quarter of 2006 increased 13% in North America, 8% in
Latin America and 18% in Asia Pacific as compared to the same
period last year.  Europe was lower by 2%.  Excluding the impact
of the Euro, sales in Europe were flat as compared to the second
quarter of 2005.  Aqualon's increased European sales offset weaker
sales of Paper Technologies in that region.

Reported profit from operations in the second quarter of 2006 was
$65.6 million, an increase of 7% compared with $61.2 million for
the same period in 2005.  Profit from ongoing operations in the
second quarter of 2006 was $73.7 million, an increase of 3%
compared with $71.4 million in the second quarter of 2005.

"We were disappointed in the ruling recently received regarding
the Vertac lawsuit and will seek further review of the Court's
ruling.  However, we remain positive about our overall momentum
and our solid results," Craig A. Rogerson, president and chief
executive officer, said.

"Aqualon's volumes remain strong and Paper Technologies continues
to deliver solid results in a challenging marketplace.  We
continue to meet or exceed our expectations in sales, earnings and
cash flow growth, and continue to strengthen our balance sheet."

Interest and debt expense was $16.7 million in the second quarter
of 2006, down $6.1 million or 27% compared with the second quarter
of 2005, reflecting lower outstanding debt balances and improved
debt mix, partially offset by increased variable short term rates.
Interest expense decreased $4.0 million as compared to the first
quarter of 2006, partially reflecting lower debt balances
outstanding.

Total debt was $986.2 million at June 30, 2006, a decrease of
$122.8 million from year-end 2005.  Cash and cash equivalents were
$81.9 million at June 30, 2006, an increase of $4.6 million from
year-end 2005.

Capital spending was $14.8 million in the second quarter and
$22.9 million year to date.  This compares to $15.4 million and
$25.9 million in the second quarter and year to date periods last
year, respectively.  Cash outflows for severance, restructuring
and other exit costs were $6.5 million in the quarter and
$14.2 million year to date.

                 Segment Results - Reported Basis

In the Aqualon Group, net sales increased 14% while profit from
operations increased 13% in the second quarter as compared with
the second quarter of 2005.  All segments had increased sales in
the second quarter as compared to the prior year.  In the
aggregate, the sales increase was driven by 24% higher volume (12%
excluding the first quarter acquisition of a guar and guar
derivatives business and the consolidation of Hercules Tianpu, the
Company's Chinese methylcellulose joint venture), partially offset
by 9% unfavorable product mix (3% unfavorable excluding the
acquisition and Tianpu) and 1% unfavorable rates of exchange.
Overall the guar acquisition and Tianpu consolidation accounted
for a 7% sales increase.  Pricing, in the aggregate, was flat.

Coatings & Construction sales increased 10% in the second quarter
of 2006 as compared to the same period of last year, primarily due
to 18% higher volume (9% excluding the Tianpu consolidation)
partially offset by 4% unfavorable mix (1% unfavorable excluding
Tianpu), 3% lower pricing and 1% unfavorable rates of exchange.
Hercules Tianpu accounted for a 6% sales increase.  Sales were
strong in most regions, recovering from the soft conditions noted
last year in the European markets.  Sales of Coatings' products in
Asia were especially strong during the second quarter.  Pricing in
the segment was lower reflecting, in part, continued pricing
challenges in methylcellulose for construction products.

Regulated Industries sales increased 1% in the second quarter of
2006 as compared to the same period of last year, primarily due to
1% increased volume and 1% increased price, partially offset by 1%
unfavorable rates of exchange.  Volume increased modestly in the
food sector, whereas personal care sales were down slightly.

Energy & Specialties sales increased 33% in the second quarter of
2006 as compared to the same period of last year.  The increase
was due to 29% higher volume/mix (13% excluding the guar and guar
derivatives acquisition) and 5% higher prices, partially offset by
1% unfavorable rates of exchange.  The acquisition accounted for a
16% sales increase.  The natural gas and oil services sector
demand continues to be strong and price increases were achieved
across many of the specialty products families.

Aqualon Group's profit from operations increased $6.5 million,
primarily as a result of the higher volume and the associated
contribution margin, partially offset by higher raw material,
transportation and utility costs.  Selling, general and
administrative costs were slightly lower compared to the prior
year, primarily reflecting lower corporate support costs offset by
increased sales and marketing, business management and technology
costs incurred to support growth initiatives.

"Aqualon's volume continued to grow significantly versus last year
as we benefited from both organic growth and bolt-on
acquisitions," Mr. Rogerson said.  "We continue to grow in our
focused markets and expect pricing to show steady improvement
going forward."

In the Paper Technologies and Ventures Group, net sales in the
second quarter increased 2% and profit from operations increased
3% compared with the same quarter in 2005.

Paper Technologies sales increased 2% due to 3% increased price
and a 3% improved product mix, partially offset by 4% lower
volume.  Rates of exchange were flat.  The improved mix reflects
higher sales of new products in both the process and functional
products families. Increased pricing was achieved in all regions
of the world.  Volumes were lower in both the Americas and Europe,
while Asia remained strong.

Venture sales increased 4% primarily due to 5% higher price, a 1%
improved product mix, and 2% favorable rates of exchange,
partially offset by 4% lower volume.

PTV's increased profit from operations reflects improved selling
prices, a favorable product mix and lower SG&A costs, offset by
lower sales volume and higher raw material, transportation and
utility costs.  Severance, restructuring and other exit costs and
accelerated depreciation of impaired assets taken in the second
quarter of 2006 were $3.6 million as compared to $6.8 million in
the same period of 2005.  Reflecting the benefit of restructuring
initiatives, SG&A costs were lower than the prior year despite
higher legal fees associated with patent defense costs and higher
allocated pension expenses.  In addition, a legal settlement was
made for a net cost of $1.1 million in the quarter.

"Western European markets proved challenging again in the second
quarter of this year, but our strategy of improving product mix
through innovation and increasing selling prices continues to show
progress," Mr. Rogerson commented.  "And our continued focus on
streamlining the costs to effectively serve our customers has
helped improve our results."

                              Outlook

"We remain optimistic about both earnings and cash flow growth
from our businesses for the balance of the year," Mr. Rogerson
said.  "Aqualon's volumes should continue to be strong across its
markets and pricing should show steady improvement. Paper
Technologies' volumes are expected to improve modestly with our
new product pipeline and continued pricing discipline supporting
gross margins."


Hercules Inc. (NYSE: HPC) -- http://www.herc.com/-- manufactures
and markets chemical specialties globally for making a variety of
products for home, office and industrial markets. For more
information, visit the Hercules website at www.herc.com.

                           *     *     *

Hercules Inc. carries Moody's Investors Service's B1 preferred
stock rating and Standard and Poor's Ratings Services' BB long-
term foreign and local issuer credit ratings.


HUTCHINSON TECHNOLOGY: Earns $5.8MM in Fiscal 2006 Third Quarter
----------------------------------------------------------------
Hutchinson Technology Incorporated reported net income of
$5,838,000, on net sales of $169,599,000 for its fiscal third
quarter ended June 25, 2006.

The company's fiscal 2006 third quarter net income includes an
increase to operating income of $5,000,000, resulting from the
resolution of a dispute with a former supplier.  Excluding this
increase to operating income, the company's fiscal third quarter
net income would be $3,126,000.

In the comparable fiscal 2005 period, the company reported net
income of $19,642,000, on net sales of $169,676,000.  Net income
for the fiscal 2005 third quarter was increased by $2,792,000, as
a result of a refund, with interest, of certain Minnesota
corporate income taxes paid for the years 1995 through 1999 and
the reversal of a related tax reserve, offset in part by an
adjustment to the carrying value of net operating loss
carryforwards.  Excluding these items, the company's fiscal 2005
third quarter net income would have totaled $16,850,000.

The company shipped approximately 192 million suspension
assemblies in the fiscal 2006 third quarter compared with
approximately 188 million in the fiscal 2005 third quarter and
approximately 205 million in the preceding quarter.  Wayne M.
Fortun, Hutchinson Technology's president and chief executive
officer, said the company believes the decline in volume compared
with the fiscal 2006 second quarter resulted from seasonally lower
demand for disk drives used in desktop applications and certain
head-gimbal assemblers and disk drive manufacturers managing
existing suspension assembly inventories.  Overall average
suspension assembly selling prices in the fiscal 2006 third
quarter decreased to $0.84 compared with $0.86 in both the
preceding quarter and the fiscal 2005 third quarter as a result of
a higher mix of mature products with lower selling prices.

Gross margin for the fiscal 2006 third quarter was 19 percent,
compared with 22 percent in the preceding quarter and 30 percent
in the fiscal 2005 third quarter.  The decline in third quarter
gross margin was primarily the result of underutilization of
manufacturing capacity added in the last year and the associated
increases in depreciation and overhead.  The negative impact of
the underutilization was somewhat mitigated, however, by
improvements in yields and labor productivity.

"During the third quarter, we made substantial gains in yields on
advanced TSA products," said Mr. Fortun.  "Our overall TSA yields
in the fiscal 2006 third quarter were among the highest we have
ever achieved.  In addition, compared with the preceding quarter,
we made improvements in labor productivity in all of our
manufacturing processes."

The company generated $11,871,000 in cash from operations during
the fiscal 2006 third quarter.  At quarter end, the company's
cash, cash equivalents and securities held for sale totaled
$323,494,000 compared with $370,868,000 at the end of the
preceding quarter.  The decline is primarily the result of capital
expenditures that totaled $59,743,000 in the quarter. Mr. Fortun
said the company now expects to reduce capital spending for the
full year to about $250,000,000 as the company manages its
capacity and capital spending to align with near-term demand.  He
said the majority of planned capital spending for the remainder of
fiscal 2006 is focused on development of additive processes
required for next-generation suspension assemblies.

In updated forecasts, industry analysts now expect calendar year
2006 disk drive shipments to grow between 14 to 17 percent
compared with calendar year 2005.  "We continue to expect
worldwide demand for suspension assemblies to track the rate of
growth in disk drive shipments over the long term," said Mr.
Fortun.

For its fiscal 2006 fourth quarter, the company currently expects
suspension assembly shipments to range from 195 to 210 million
units.  Overall average selling prices are expected to range from
$0.83 to $0.84, generating net sales of approximately $170 to $185
million.  At the currently expected level of fourth quarter
production volume, the company's manufacturing capacity will be
further underutilized, resulting in fiscal 2006 fourth quarter
gross margin of 15 to 20 percent.

Hutchinson Technology is a worldwide supplier of suspension
assemblies for disk drives.  Hutchinson Technology's
BioMeasurement Division provides health professionals with
accurate methods to measure the oxygen in tissue.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 27, 2006,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Hutchinson Technology Inc.  At the same time,
Standard & Poor's assigned its 'B-' rating to the company's $225
million of convertible subordinated notes, issued on Jan. 25,
2006.  Hutchinson has $375 million of funded debt outstanding.
The outlook is stable.


HYNIX SEMICONDUCTOR: Rambus Accepts US$133-Mil Damages Payment
--------------------------------------------------------------
The Honorable Judge Ronald Whyte of the United States District
Court for the Northern District of California reduced the damage
amount that Hynix Semiconductor Inc. has to pay Rambus Inc. from
$307 million to $133.4 million.  The damages pertain to a patent
infringement case that Rambus filed against Hynix.

In an update, Reuters relates that Rambus has accepted the lower
award in its damages case against Hynix for violating its patents
on memory chips.

                       About Rambus Inc.

Rambus Inc. manufactures and licenses chip interface technologies.
The Company's chip interface technologies are designed to improve
the time-to-market and performance of its customers' semiconductor
and system products for computing, communications and consumer
electronics applications.  Rambus offers its customers two
alternatives for using its chip interface technologies in their
products.  The Company licenses its portfolio of inventions to
semiconductor and system companies, who use these inventions in
the development and manufacture of their own products.  The
licensing agreements may cover the license of part, or all, of the
Company's portfolio.

Rambus also develops its own and industry-standard chip interface
products, which are offered to its customers under license for
incorporation into their semiconductor and system products.  The
Company sells its chip interfaces and licenses to customers in the
Far East, North America and Europe.

                   About Hynix Semiconductor

Headquartered in Ichon, South Korea, Hynix Semiconductor Inc. --
http://www.hynix.com/-- is a semiconductor manufacturer.
Through a merger with LG Semiconductor in 1999, Hynix
Semiconductor now has the world's largest dynamic random access
memory chip production capacity as well as the industry's best
technical development capacity by fully exploiting synergies
resulting from the historical integration of both companies.

Standard & Poor's Ratings Services gave Hynix, and its U.S.
subsidiary, Hynix Semiconductor Manufacturing America Inc., a 'B+'
long-term corporate credit rating.


INNOVATIVE COMM: Case Summary & 24 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Innovative Communication Company, LLC
        48A Kronprindsens Gade
        P.O. Box 6100
        St. Thomas, VI 00801

Bankruptcy Case No.: 06-30008

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                            Case No.
      ------                            --------
      Jeffrey J. Prosser                06-10006
      Emerging Communications, Inc.     06-30007

Type of Business: Innovative Communication Company and Emerging
                  Communications, Inc., are diversified
                  telecommunications and media companies operating
                  mainly in the U.S. Virgin Islands.  Jeffrey J.
                  Prosser is the owner of Emerging Communications
                  and Innovative Communications.
                  See http://www.iccvi.com/

                  Greenlight Capital Qualified, L.P., Greenlight
                  Capital, L.P., and Greenlight Capital Offshore,
                  Ltd., which holds a $18,780,614 claim against
                  the Mr. Prosser, filed an involuntary chapter 11
                  petition against Innovative Communication,
                  Emerging Communications, and Mr. Prosser on
                  February 10, 2006 (Bankr. D. Del Case Nos. 06-
                  10133, 06-10134, and 06-10135).  Mr. Prosser
                  argues that the Greenlight entities, the former
                  shareholders of Innovative Communications, and
                  Rural Telephone Finance Cooperative, Mr.
                  Prosser's lender, conspired to take down his
                  companies into bankruptcy and collect millions
                  in claims.

Chapter 11 Petition Date: July 31, 2006

Court: District Court of the Virgin Islands

Debtors' Counsel: Carol Rich, Esq.
                  Dudley, Clark & Chan, LLP
                  9720 Estate Thomas, Havensight
                  St. Thomas, VI 00802
                  Tel: (340) 776-7474
                  Fax: (340) 776-8044

Estimated Assets: More than $100 Million

Estimated Debts:  More than $100 Million

A. Innovative Communication Company, LLC's Three Largest Unsecured
Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Greenlight                       Secured Judgment    Unliquidated
140 East 45th Street             Deficiency
New York, NY 10017

Orrick, Herrington and           Professional            $300,000
Sutcliffe LLP                    Services
Washington Harbour
3050 K Street, Northwest
Washington, DC 20007-5135
Tel: (202) 339-8400
Fax: (202) 339-8500

Sampson Firm                     Professional             $30,150
9202 West Dodge Road, Suite 307  Services
Omaha, NE 68114
Tel: (402) 934-7654

B. Jeffrey J. Prosser's 17 Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
Rural Telephone Finance Cooperative   $100,000,000
2201 Cooperative Way
Herndon, VA 20171

Greenlight Capital LP                 Undetermined
140 East 45th Street, NY 10017

Greenlight Capital Qualified LP       Undetermined
140 East 45th Street, NY 10017

Greenlight Capital Offshore, Ltd.     Undetermined
140 East 45th Street, NY 10017

Redwood Domestic Fund, LP                  Unknown
910 Sylvan Avenue, NJ 07362

Caribbean Property Management               $9,000

Kendricks Restaurant                        $7,000

Buccaneer Hotel                             $4,500

Tamarind Reef Hotel                         $2,000

Florida Power and Light                     $1,901

Wild Orchard Flower and Gift Shop           $1,500

Schooner Bay Market                         $1,200

El Patio Flower and Gift Shop               $1,200

Caribbean Cooling, Inc.                     $1,000

Bell South Telephone                          $840

Roof Top                                      $350

Direct TV                                     $115

C. Emerging Communications, Inc.'s Four Largest Unsecured
Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Greenlight                       Secured Judgment    Unliquidated
140 East 45th Street             Deficiency
New York, NY 10017

Banco Popular CC                 Company Credit          $406,067
Sugar Estate                     Card Unsecured Debt
St. Thomas, VI 00801
Tel: (340) 693-2823
Fax: (340) 693-2888

Orrick, Herrington and           Professional            $300,000
Sutcliffe LLP                    Fees
3050 K Street, Northwest
Washington, DC 20007-5135
Tel: (202) 339-8400
Fax: (202) 339-8500

Postmaster                       Services                  $1,481
585 Roosevelt Avenue
San Juan, PR 00936-9998
Tel: (787) 641-4811


INTERSTATE BAKERIES: Wants to Sell Matteson Property for $1.3 Mil.
------------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to sell their interest in a property located at 21403
Cicero Avenue, in Matteson, Illinois, to Realty America Group, LP,
for $1,300,000, subject to higher or better bids.

The Property is comprised of several parcels of commercial real
estate currently used as a depot and thrift store, and includes
about 2.82 acres of land with an approximately 13,435 square feet
building.  The Property is adjacent to the Lincoln Mall, which is
redeveloped by Realty America with assistance provided by the
Village of Matteson in the form of tax increment financing
initiatives and other entitlements, Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois,
tells the Court.

On April 4, 2006, the Illinois Senate approved legislation that
would allow the Village of Matteson to institute "quick-take
eminent domain" proceedings that would result in the Debtors
receiving as-is fair market value for the Property.  That
development substantially reduces any prospect of marketing the
Property to third parties, and would not include any assurance
that the Debtors would be able to obtain substitute property to
continue their current depot and retail operations, Mr. Ory says.

Because of the potential eminent domain proceedings and the
Debtors' desire to maintain operations in the area, the Debtors
did not seek the assistance of any broker.  Instead, the Debtors
obtained an independent broker's opinion of value and reviewed
two current appraisals obtained by Realty America, all of which
indicate the purchase price is at or above fair market value.
Moreover, the Debtors determined that the two new locations
contemplated for them under the Realty America Asset Purchase
Agreement would provide various operational advantages to them.

Accordingly, the Debtors have decided to proceed with the APA and
related transactions with Realty America as a stalking horse
bidder.

Realty America has made a $130,000 deposit, which is being held
by the escrow agent until all conditions to closing are satisfied
by the Debtors, for the proposed sale.

A material part of the proposed sale transaction is for the
proposed Purchase Price to be transferred to an escrow to be used
to acquire and construct a new depot and to perform certain
tenant improvements on the new store.

Pending the completion of the New Depot, the Property is being
leased back to the Debtors by Realty America pursuant to a lease
agreement.  The Debtors does not pay rent under the Lease
Agreement, except for an agreed amount for taxes.

Mr. Ory informs the Court that pending the Closing of the
proposed Sale, the Debtors and Realty America have entered into a
License Agreement, whereby Realty America currently performs
certain site preparation work, site improvement work, clearing,
grubbing and grading, among other things.

The Debtors also seek the Court's authority 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 also seek
the Court's authority to pay the Cook County Treasurer:

   -- $39,781 and $77,638 in principal for real and personal
      property taxes due for the 2003 and 2004 tax years;

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

   -- no penalties 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 2003-2004 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.

A full-text copy of the Matteson Asset Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?eb2

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


INTERSTATE BAKERIES: Wants to Sell New Bedford Property For $1.2MM
------------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to sell their interest in properties located in New
Bedford, Massachusetts, at:

   (a) 229-241 Coffin Avenue,
   (b) 193 Coffin Avenue,
   (c) 1502 Achusnet Avenue,
   (d) 128 Phillips Avenue,
   (e) 252 Coffin Avenue,
   (f) 360 Collette Street,
   (g) 173 Phillips Avenue, and
   (h) NS Collette Street.

The Debtors propose to sell the Property, including all
buildings, fixtures and equipment, to Lucar Development LLC, for
$1,200,000, subject to higher or better bids.

The Property is comprised of several parcels of land and several
structures, including a former bakery building.  The Debtors are
no longer using the Property in connection with their business
operations, Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, in Chicago, Illinois, relates.

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.

After exploring several alternatives, the Debtors have decided to
proceed with the Asset Purchase Agreement with Lucar Development
as a stalking horse bidder.

Lucar Development has agreed to purchase the Property for
$1,200,000, and has made a $240,000 deposit for the proposed
sale.  The deposit 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 Lucar Development in the form of
      a $24,000 termination fee to induce Lucar to makes the
      first qualified bid; and

   -- pay Lucar Development reasonable and documented expense
      reimbursement of up to $50,000.

A restrictive covenant will run with the land and effectively
prohibit Lucar Development's or any other party's use of 229
Coffin Ave. as a commercial bakery for 60 consecutive months.

The Debtors also seek the Court's authority 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 Office of Collector of Taxes for the City of New
Bedford, Massachusetts:

   -- $44,903 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;

   -- no penalties with respect to any and all delinquent taxes
      with respect to the Property; and

   -- no fees and charges relating to the release of any
      Instruments of Taking or other prepetition tax liens
      recorded against the Property in the Bristol County
      Registry of Deeds.

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.

A full-text copy of the New Bedford Asset Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?eb3

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


INTERVISUAL BOOKS: Educational Dev't Cancels DIP Financing Deal
---------------------------------------------------------------
Randall White, CEO and President of Educational Development
Corporation reported that effective July 26, 2006, the Plan of
Reorganization and DIP Financing Agreement with Intervisual Books,
Inc., that the Company entered into on July 13, 2006, has been
cancelled.

As reported in the Troubled Company Reporter on July 17, 2006,
Intervisual Books was operating as a debtor-in-possession in a
Chapter 11 bankruptcy case.  On July 26, 2006, in the U.S.
Bankruptcy Court in Los Angeles, California, the court conducted
an auction for the assets of Intervisual Books, Inc.  Educational
Development was not the successful bidder in this auction.
However, the Company is actively pursuing other acquisition
candidates that would provide an operational and financial fit for
the Company.

              About Educational Development Corp.

Based in Tulsa, Oklahoma, Educational Development Corporation
(Nasdaq: EDUC) -- http://www.edcpub.com/-- a Delaware
corporation, is a U.S. distributor of a line of children's books
produced in the United Kingdom by Usborne Publishing Limited.

                     About Intervisual Books

Headquartered in Inglewood, California, Intervisual Books Inc. --
http://intervisualbooks.com/-- aka Piggy Toes Press is an
international publisher and packager of pop-up books, novelty and
educational children's books, and playsets.  The Company filed for
chapter 11 protection on May 9, 2006 (Bankr. C.D. Calif. Case No.
06-11853).  Ron Bender, Esq., at Levene, Neale, Bender, Rankin &
Brill LLP, in Los Angeles, represents the Debtor.  When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $1 million and $10 million.


K2 INC: 2006 2nd Quarter Net Income Almost Doubles to $2.143 Mil.
-----------------------------------------------------------------
K2 Inc. reported net sales for the second quarter ended June 30,
2006 of $301.1 million versus $301.4 million in the prior year.
Net sales for the six-month period ended June 30, 2006, increased
4.8% over the prior year period.

The Company reported net income of $2.143 million, compared with
net income of $1.453 million for the same period in 2005.

Included in the second quarter 2006 results is a net after-tax
gain of $568,000 associated with the closing of the Worth bat
manufacturing facility in Tennessee, consisting of a $1.5 million
pre-tax gain on the sale of the facility, offset by $640,000 of
pre-tax related closure and severance costs.

"This is seasonally our lowest quarter of the year," Richard
Heckmann, Chairman and Chief Executive Officer, said.

"Our flat sales figure was largely due to the strength of the
first quarter, which was up 9.4%, and our licensing of bikes in
the third quarter of 2005, which resulted in a $4.2 million
reduction in sales for the quarter.  Adjusted diluted earnings per
share increased 20% as compared to 2005 after excluding the net
effect of the plant closure.  The earnings growth in the second
quarter was driven principally by continued sales growth and
margin expansion in Team Sports, and by lower interest expense as
we have continued to reduce debt through free cash flow.

"In the first six months of 2006, sales were up 4.8%, and
excluding the net gain of the plant closure, operating income was
up 14.0%, and Adjusted earnings per share were up 23.1%.

"For the remainder of 2006, we feel very good about the strength
of our orders for ski and snowboard equipment, winter and
performance apparel, and our line of fall hunting and fishing
products.  Despite the uncertain outlook for the economy, we
continue to expect our earnings to be at the upper end of the
guidance range of $0.83 to $0.86 Adjusted diluted earnings per
share."

         Review of Comparable 2006 Sales and Profit Trends

K2's net sales for the second quarter of 2006 were $301.1 million
versus $301.4 million in the second quarter of 2005, which
included the K2(R) Bike business that has been licensed.

K2's gross profit as a percentage of sales in the second quarter
of 2006 increased to 34.1% compared to 33.1% in the second quarter
of 2005.

K2's operating profit, as a percentage of net sales for the second
quarter of 2006 increased to 3.0% compared with 2.8% in the
comparable 2005 period.  The increase in operating margin for the
quarter was due to increased gross margins offset by increased
selling, general and administrative expenses as a percentage of
sales in the Action Sports and Apparel and Footwear segments.

For the second quarter of 2006 consolidated selling, general and
administrative expenses, as a percentage of consolidated net sales
increased to 31.0% compared with 30.3% of net sales for the second
quarter of 2005.

                   Second Quarter Segment Review

The Action Sports segment has historically included skis,
snowboards, bindings, snowshoes, in-line skates and paintball
products.  During 2005, the paintball business declined
significantly.  In order to improve efficiency, K2 reorganized the
paintball business to operate more in line with how the components
of the Team Sports segment operates, with increased emphasis on
the mass merchant and large sporting goods retailer distribution.
Upon completion of the reorganization in the first quarter 2006,
K2 has adjusted its segment reporting to include paintball
products in the Team Sports segment.  Historical numbers presented
below have been restated to reflect the change in segment
reporting.  For purposes of comparability, in 2005 paintball sales
were $82 million and on a quarterly basis sales were approximately
19% in the first quarter, 25% in the second quarter, 21% in the
third quarter, and 35% in the fourth quarter.

                        Marine and Outdoor

Shakespeare(R) fishing tackle and monofilament and Stearns(R)
marine and outdoor products generated net sales of $128.8 million
in the second quarter of 2006, a decrease of 1.2% from the
comparable quarter in 2005.  The sales decrease was due to
decreased sales of cutting line, marine antennas and ski vests,
offset by increased sales of fishing kits and combos, children's
flotation devices and Hodgman(R) waders (acquired in the second
quarter of 2005).  For the second quarter of 2006, operating
profits were $19.6 million, down slightly from $20.1 million in
2005 due to the decrease in sales.

                         Team Sports

Rawlings, Worth, K2 Licensed Products and Brass Eagle had net
sales of $96.5 million in the 2006 second quarter, up 8.1% from
the 2005 period.  Operating profits were $4.4 million in the 2006
second quarter, up 405.7% from the 2005 period due to improved
profitability in the paintball and souvenir and promotional
product lines and the gain on the previously mentioned facility
sale.  Sales growth in 2006 was driven primarily by Rawlings(R),
and Miken(R) baseball and softball products and paintball
products.

                           Action Sports

The first and second quarters are seasonally slow quarters.  Net
sales of winter products and in-line skates totaled $37.5 million
in the second quarter of 2006, a decrease of 14.9% from the 2005
second quarter, primarily due to licensing bikes to a third party
in the third quarter of 2005.  The operating loss was
$10.5 million, a slight increase in the loss compared to the loss
of $9.9 million in the second quarter 2005.

                       Apparel and Footwear

Apparel and Footwear had net sales of $38.3 million in the second
quarter of 2006, an increase of 1.8% from the 2005 period driven
by growth in skateboard shoes and the Ex Officio and Marmot
combination.  The operating profit for the second quarter of 2006
was $400,000 compared to an operating profit of $3.0 million in
the second quarter of 2005.  The decrease in profit was due to
start up expenses associated with the opening of a new
distribution center in Reno, Nevada, and integration expenses for
combining design, development, and sourcing for several apparel
brands.

                           Balance Sheet

At June 30, 2006, cash and accounts receivable increased to
$288.4 million as compared with $286.3 million at June 30, 2005.
Inventories at June 30, 2006, increased to $383.3 million from
$367.1 million at June 30, 2005, primarily as a result of the
growth in new product lines.

The Company's total debt decreased to $367.0 million at June 30,
2006, from $398.9 million at June 30, 2005.  The decrease in debt
as of June 30, 2006, is primarily the result of improved
profitability and cash flow from operations.

                             About K2

K2 Inc. (NYSE: KTO) is a premier, branded consumer products
company with a portfolio of brands including Shakespeare(R),
Pflueger(R) and Stearns(R) in the Marine and Outdoor segment;
Rawlings(R), Worth(R), K2 Licensed Products and Brass Eagle(R) in
the Team Sports segment; K2(R), Volkl (R), Marker(R) and Ride(R)
in the Action Sports segment; and Adio(R), Marmot(R) and Ex
Officio(R) in the Apparel and Footwear segment.  K2's diversified
mix of products is used primarily in team and individual sports
activities such as fishing, watersports activities, baseball,
softball, alpine skiing, snowboarding and in-line skating.  Among
K2's other branded products are Hodgman(R) waders, Miken(R)
softball bats, Tubbs(R) and Atlas(R) snowshoes, JT(R) and Worr
Games(R) paintball products, Planet Earth(R) apparel and
Sospenders(R) personal floatation devices.

Adio(R), Atlas(R), Brass Eagle(R), Ex Officio(R), Hodgman(R),
JT(R), K2(R), Marker(R), Marmot(R), Pflueger(R), Planet Earth(R),
Rawlings(R), Ride(R), Shakespeare(R), Sospenders(R), Stearns(R),
Tubbs(R), Volkl(R), Worth(R) and Worr Games(R) are trademarks or
registered trademarks of K2 Inc. or its subsidiaries in the United
States or other countries.

                           *     *     *

As reported in the Troubled Company Reporter on March 30, 2006,
Moody's Investors Service confirmed K2 Inc.'s Ba3 corporate family
rating, but lowered the company's senior unsecured notes rating to
B1 from Ba3.  The company's ratings outlook is negative.


KCH SERVICES: Dist. Ct. Upholds Nordam Group's $391,149 Claim
-------------------------------------------------------------
KCH Services, Inc., manufactures and installs a type of industrial
equipment called a "clean line," which is used to clean metal
parts for future use in assemblies.  The Nordam Group, Inc., hired
KCH to build and install a clean line system for Nordam's plant in
Tulsa, Oklahoma.  On-site installation began in or about June
2002, and KCH remained at the Tulsa site until late December 2002.
When KCH left the Tulsa site, it claimed the work was complete and
the workmanship was proper.  Nordam, on the other hand, claimed
that KCH failed to complete the project and that it's workmanship
was deficient in numerous ways.

KCH sought chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case
No. 03-40811), and Nordam timely filed a $391,149.07 unsecured
claim in KCH's chapter 11 bankruptcy proceeding .  Nordam's proof
of claim is based upon the failure of KCH to complete the clean
line project and the cost to complete the project or to correct
deficiencies in the project that Nordam incurred.  Nordam says
$81,370.07 is owed on account of the actual costs of repairs,
replacements, and corrections that Nordam has already performed,
and the $309,779 balance represents the estimated costs of the
repairs, replacements, and corrections that have not been
performed but that will be necessary due to KCH's alleged
deficient performance.

KCH objected to Nordam's claim, and the Bankruptcy Court held a
hearing on July 20, 2005, to determine whether and to what extent
Nordam's claim would be allowed.  Seven months after the hearing
in the Bankruptcy Court, with no consensual resolution or proposed
settlement, the Honorable Marvin R. Wooten ruled that Nordam had
made its case and Nordam's proof of claim should be allowed in its
entirety.

KCH appealed from Judge Wooten's ruling to the U.S. District Court
for the Western District of North Carolina, making a four-point
argument:

   (A) Nordam failed, on both procedural and substantive grounds,
       to present evidence sufficient to support its claim;

   (B) Nordam should not be allowed to prevail because Nordam
       did not present a warranty claim to KCH;

   (C) the bulk of Nordam's claim is a "guesstimate" that should
       not have been allowed; and

   (D) KCH presented sufficient evidence to rebut Nordam's
       claim, and the Bankruptcy Court clearly erred by not so
       finding.

In a decision published at 2006 WL 1995576, the Honorable Lacy H.
Thornburg concludes that Judge Wooten did not err in allowing
Nordam's claim, and affirms Judge Wooten's ruling.  Judge
Thornberg says:

   (1) the District Court finds no procedural error in the
       Bankruptcy Court's consideration of the matter;

   (2) KCH's argument that Nordam should not be allowed to
       prevail on its claim because Nordam didn't present a
       warranty claim to KCH is without merit;

   (3) The bankruptcy code allows for contingent or
       unliquidated "guesstimate" claims so long as they
       can be reasonably estimated, and Nordam's estimate
       is credible; and

   (4) KCH did not present sufficient evidence to rebut
       Nordam's claim.

David G. Gray, Esq., at Westall, Gray & Connolly, represents KCH
Services, Inc.  Charles Greenough, Esq., in Tulsa, Okla., and
Kenneth T. Lautenschlager, Esq., at Johnston, Allison & Hord, in
Charlotte, N.C., represented The Nordam Group, Inc., in this claim
dispute.


LEVITZ HOME: Wohl/Anaheim Opposes Store No. 30401 Lease Assumption
------------------------------------------------------------------
Wohl/Anaheim, LLC, asks the U.S. Bankruptcy Court for the Southern
District of New York to deny Levitz Home Furnishings, Inc., and
its debtor-affiliates' request to assume and assign the lease for
Store No. 30401.

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
    ------   -------         --------                -----------
    30401   Anaheim,        Wohl/Anaheim LLC, c/o       $15,475
            California      Wohl Investment Company

Wohl/Anaheim, LLC, had objected to the Debtors' request to assume
and assign the lease for Store No. 30401, asserting, among others,
that the Debtors and PLVTZ, LLC, failed to provide even minimal
proof of adequate assurances of future performance.

According to Ignacio J. Lazo, Esq., at Cadden & Fuller LLP, in
Irvine, California, since the time of the continuation of the
hearing for Store No. 30401, the Debtors have not responded to
Wohl/Anaheim's objections and have not provided Wohl with any of
the additional documentation concerning PLVTZ's financial
condition.

"Such silence is deafening," Mr. Lazo tells Judge Lifland.

Mr. Lazo notes that since PLVTZ acquired the Debtors' assets in
December 2005, the Debtors should be able to provide financial
information concerning PLVTZ's performance for the first two
quarters of 2006.  However, no actual numbers have been offered
or provided.

Additionally, a search of the levitz.com Web site discloses a
press release regarding PLVTZ's entering into an $89,000,000,
three-year, revolving credit facility.  Mr. Lazo asserts that no
lender would extend that amount of credit line without having
required the disclosure of significant financial information.
Presumably, providing Wohl/Anaheim with the documentation it
requires to evaluate the merits of the Debtors' request for Store
No. 30401 would require nothing more than photocopying the due
diligence disclosures furnished to PLVTZ's lenders, Mr. Lazo
says.

"Because neither the Debtors nor PLVTZ have provided the
financial information required to allow Wohl/Anaheim to evaluate
the proposed assignment, let alone substantiate the merits of
their request, Wohl/Anaheim infers that a review of the financial
information provided to the lender will show that the operations
are completely leveraged, with all assets of PLVTZ pledged to
secure the credit facility and the investment by the parent
entity of PLVTZ," Mr. Lazo asserts.

Moreover, the Debtors remain silent about the elements they must
prove before they can assume and assign Store No. 30401 under
Section 365(b)(3) of the Bankruptcy Code.  Specifically, the
Debtors must refute Wohl/Anaheim's observation that the premises
for Store No. 30401 are part of a shopping center in Anaheim,
California.  It is incumbent on the Debtors to prove that PLVTZ's
financial condition and operating performance is substantially
comparable to the financial condition of Levitz Furniture Company
of the Pacific at the time when Levitz Pacific first became the
lessee in 1989, Mr. Lazo maintains.

Wohl/Anaheim has served on both the Debtors and PLVTZ notices of
deposition with accompanying notices requiring the production of
documents and disclosure of financial records necessary for
Wohl/Anaheim to make an informed decision concerning the merits
of the Debtors' request.

If the Court desires to afford the Debtors the time to prove
their case at an evidentiary hearing, Wohl/Anaheim requests that
any hearing and concomitant briefing deadline be set no earlier
than September 11, 2006, to allow Wohl/Anaheim sufficient time
to:

    * conduct depositions;

    * review the documents obtained;

    * secure deposition transcripts; and

    * pursue one additional round of discovery to follow up on any
      information gleaned at the initial depositions.

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)


LIGHTPOINTE COMM: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: LightPointe Communications, Inc.
        10140 Barnes Canyon Road
        San Diego, CA 92121

Bankruptcy Case No.: 06-02040

Type of Business: The Debtor is an electronics company that
                  provides outdoor wireless solutions and
                  point-to-point, high-bandwidth local area
                  network backbone connectivity between buildings.
                  The Debtor has deployed thousands of wireless
                  systems that utilize free-space optics
                  technology, in more than 60 countries.
                  See http://www.lightpointe.com/

Chapter 11 Petition Date: July 31, 2006

Court: Southern District of California (San Diego)

Judge: John J. Hargrove

Debtor's Counsel: Ron Bender, Esq.
                  Levene, Neale, Bender, Rankin & Brill, LLP
                  10250 Constellation Boulevard, Suite 1700
                  Los Angeles, CA 90067
                  Tel: (310) 229-1234
                  Fax: (310) 229-1244

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
RHO Ventures                       Trade Debt            $403,146
525 University Avenue
Suite 1350
Palo Alto, CA 94301

Ampersand Group                    Trade Debt            $271,254
55 William Street, Suite 240
Wellesley, MA 02481

Sevin Rosen Ventures               Trade Debt            $321,969
500 Emerson Street
Palo Alto, CA 94301

SMS Technologies, Inc.             Trade Debt            $197,320
Department 9496
Los Angeles, CA 90084-9496

SMT & Hybrid GmbH                  Trade Debt            $170,786
An Der PrieBnitzaue 22
Dresden 01328

Santourian Manufacturing, Inc.     Trade Debt            $164,878

Linos-Photonics Inc.               Trade Debt            $111,440

Dresden Electonik                  Trade Debt            $102,271

OECA GmbH/Halbleiter               Trade Debt             $94,600
Import Vertriebs

Manpower Temp Services             Trade Debt             $92,321

Solectek - Sales                   Trade Debt             $88,905

LuminentOIC, Inc.                  Trade Debt             $82,440

Beijing Delfa                      Trade Debt             $78,720
Optoelectronics, Inc.

Salesforce.com                     Trade Debt             $69,000

Victory Foam, Inc.                 Trade Debt             $54,925

Knowledge Anywhere                 Trade Debt             $50,050

ULM Photonics                      Trade Debt             $50,010

Infoworld.com                      Trade Debt             $47,380

Henry Machine, Inc.                Trade Debt             $45,422

CMP Media LLC                      Trade Debt             $45,125


LUCENT TECHONOLOGIES: Posts $79 Mil. Third Quarter 2006 Net Income
------------------------------------------------------------------
Lucent Technologies reported a net income for the third fiscal
quarter ended June 30, 2006 of $79 million, on total revenues of
$2.05 billion.

The company's financial statements showed a decline of net income
and total revenues compared to net income of $181 million from
total revenues of $2.14 billion for the three months ended march
31, 2006 and net income of $372 million from total revenues of
$2.34 billion for the same period in 2005.

The Company's balance sheet showed total assets of $16.28 billion
and total liabilities of $15.60 billion as of June 30, 2006.
Accumulated deficit of $19.45 billion declined from $19.53 as of
March 2006 and $19.61 as of Sept. 2005.

The Company's chairman and chief executive officer, Patricia
Russo, said, "Our results this quarter reflect an impending shift
in spending as some of our North American customers begin to move
from current-generation to next-generation mobile high-speed data
solutions.  While these results were clearly disappointing, we do
not believe these results are indicative of the longer-term
opportunities we see in the global mobility market.  CDMA
continues to represent a large, sustainable market, and we see
significant growth in the UMTS market as our customers enable
their networks to deliver the exciting new applications their
customers are demanding,"

"In certain other regions, particularly in Europe, our revenues
grew sequentially this quarter," added Ms. Russo.

As of June 30, 2006, the Company had $3.7 billion in cash and
marketable securities, a decrease of $272 million from the quarter
ended March 31, 2006, driven by the Riverstone acquisition.

The Company also disclosed it was selected by:

   -- Verizon Wireless to deploy CDMA2000 1xEV-DO Rev. A into its
      nationwide network.

   -- Telecom New Zealand to upgrade its existing CDMA2000 1xEV-DO
      mobile network with Rev. A technology.

   -- VIVO, a mobile service operator in the Southern Hemisphere,
      to expand and enhance its 3G CDMA2000 1X and 1xEV-DO digital
      network in Brazil.

   -- Sky Link, which is establishing a nationwide CDMA450 network
      in Russia, to increase the capacity and coverage of its
      network.

The Company also disclosed agreements with:

   -- Manx Telecom, to supply additional elements of its IMS
      solution and increase the capacity of Manx Telecom's
      wireless network and upgrade the carrier's broadband
      wireline network with the Lucent Multimedia Access Platform.

   -- New World Telecommunications Limited, to provide its IMS
      platform for the creation and delivery of multimedia
      services over NWT's optical IP network.

   -- Costa Rica's Instituto Costarricense de Electricidad, to
      deploy elements of its IMS service architecture and
      Multiprotocol Label Switching solution to offer next
      generation voice and data services.

Headquartered in Murray Hill, New Jersey, Lucent Technologies
(NYSE: LU) -- http://www.lucent.com/-- designs and delivers the
systems, services and software that drive next-generation
communications networks.  Backed by Bell Labs research and
development, Lucent uses its strengths in mobility, optical,
software, data and voice networking technologies, as well as
services, to create new revenue-generating opportunities for its
customers, while enabling them to quickly deploy and better manage
their networks.  Lucent's customer base includes communications
service providers, governments and enterprises worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on April 7, 2006,
Moody's Investors Service placed Lucent Technologies, Inc.'s B1
corporate family rating, B1 senior unsecured rating, B3
subordinated rating, and B3 trust preferred rating under review
for possible upgrade following the company's announcement of a
definitive merger agreement with Alcatel.


MASSEY ENERGY: S&P Lowers Corporate Credit Rating to B+ from BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Richmond, Virginia-based Massey Energy Co. to 'B+' from
'BB-', reflecting:

   * its expectation of weaker-than-anticipated financial
     performance;

   * increased debt leverage; and

   * concerns about aggressive shareholders.

The outlook is stable.

The downgrade follows Massey's revision to its 2006 and 2007
guidance, which incorporated lower expected volumes, lower price
realizations, and higher costs.  The company said that lower labor
productivity and significant cost pressures were underlying
reasons for the revision.

"While we believe lower labor productivity and escalating costs
are issues for Massey Energy, we also believe the string of
negative revisions to guidance over the last year is indicative of
deteriorating geological conditions and reserve issues endemic to
the Central Appalachia mining region," said Standard & Poor's
credit analyst Dominick D'Ascoli.

In addition, Central Appalachian spot coal prices have materially
declined recently to less than $50 per ton from more than $60 per
ton earlier in 2006.  Should low spot prices persist, financial
leverage would increase dramatically in 2008 and beyond without a
meaningful reduction in debt.  Lower spot prices should not be a
material issue in 2007, as the company has already priced
approximately 83% of its 2007 expected production.

"We could revise the outlook to negative if sales volumes fall
significantly short of company guidance or costs significantly
increase.  We could also lower the ratings if the company
implements additional shareholder initiatives at a meaningful
detriment to the balance sheet," Mr. D'Ascoli said.

"We could revise the outlook to positive if productivity increases
and contributes to significantly higher cash flow generation or if
the company were to meaningfully reduce its debt leverage."

Standard & Poor's has longer-term concerns that Central
Appalachian coal will continue to lose market share to the
Illinois and Northern Appalachian coal-producing regions over the
next several years.

Mr. D'Ascoli said, "We expect coal-burning power plants in these
regions to install emission-control equipment to comply with
regulations that become more restrictive in 2010.  This equipment
removes the sulfur content from emissions and, hence, we expect
Central Appalachia's low-sulfur price premium to be substantially
eliminated."


MATHON FUND: Hires Francomano & Karpoook as Special Counsel
-----------------------------------------------------------
Mathon Fund LLC and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the District of Arizona to employ
John Francomano, Esq., and the law firm of Francomano & Karpook,
P.A. as special counsel, nunc pro tunc to Nov. 13, 2005.

Mr. Francomano and Francomano & Karpook will continue to represent
the Debtors with regards to the Debtors' real property in
Baltimore, Maryland.

Mr. Francomano and Francomano & Karpook also represented James C.
Sell, the receiver appointed to oversee the Debtors' receivership
estate in Baltimore, Maryland.

Mr. Francomano and Francomano & Karpook's other professionals will
be paid based on these hourly rates:

      Professional       Hourly Rate
      ------------       -----------
      Partner               $250
      Associate             $250
      Administrative        $N/A

Mr. Francomano, a shareholder and partner at Francomano & Karpook,
assures the Court that neither he nor the Firm holds any interest
adverse to the Debtor.

Headquartered in Phoenix, Arizona, Mathon Fund LLC and its
debtor-affiliates filed for chapter 11 protection on Nov. 13, 2005
(Bankr. D. Ariz. Case Nos. 05-27993 through 05-27995).
Lawrence E. Wilk, Esq., at Jaburg & Wilk, P.C. represents the
Debtors in their restructuring efforts.  Alan A. Meda, Esq., at
Stinson Morrison Hecker LLP represents the Official Committee of
Unsecured Creditors.  When Mathon Fund filed for protection from
its creditors, it listed assets totaling $16,851,721 and debts
totaling $79,259,996.


MATHON FUND: Turns to Robert C. Hubbard for Accounting Services
---------------------------------------------------------------
Mathon Fund LLC and its debtor-affiliates obtained permission from
the U.S. Bankruptcy Court for the District of Arizona to employ
Robert C. Hubbard, CPA and the firm Rubbart C. Hubbard, P.C., as
accountants, nunc pro tunc to Nov. 13, 2005.

Mr. Hubbard and his firm will continue to provide accounting and
auditing services to the Debtors.

Mr. Hubbard and his firm also provided similar services to James
C. Sell, the receiver appointed to oversee the Debtors'
receivership estate.

Mr. Hubbard bills $145 per hour for his services.

The Firm's other professionals will be paid based on these hourly
rates:

      Professional       Hourly Rate
      ------------       -----------
      Associate           $85 - $95
      Administrative         $36

Mr. Hubbard, a certified public accountant and principal of
Rubbart C. Hubbard P.C., assures the Court that neither he nor the
Firm holds any interest adverse to the Debtor.

Headquartered in Phoenix, Arizona, Mathon Fund LLC and its
debtor-affiliates filed for chapter 11 protection on Nov. 13, 2005
(Bankr. D. Ariz. Case Nos. 05-27993 through 05-27995).
Lawrence E. Wilk, Esq., at Jaburg & Wilk, P.C. represents the
Debtors in their restructuring efforts.  Alan A. Meda, Esq., at
Stinson Morrison Hecker LLP represents the Official Committee of
Unsecured Creditors.  When Mathon Fund filed for protection from
its creditors, it listed assets totaling $16,851,721 and debts
totaling $79,259,996.


MESABA AVIATION: Inks $24 Million DIP Financing Pact with Marathon
------------------------------------------------------------------
Mesaba Aviation, Inc., dba Mesaba Airlines, asks the U.S.
Bankruptcy Court for the District of Minnesota to enter a final
ruling approving all of the terms and conditions of the DIP Credit
Facility and DIP Loan Documents with Marathon Structured Finance
Fund, L.P.

The Debtor says that when it filed for bankruptcy, MAIR Holdings,
Inc., made a commitment to provide the Debtor with debtor-in-
possession financing.

As reported in the Troubled Company Reporter on Apr. 21, 2006,
MAIR Holdings disclosed in a filing with the Securities and
Exchange Commission that it would not renew its commitment to
provide DIP financing to the Debtor.

The Debtor has determined that a postpetition credit facility is
vital for its successful reorganization and for the continued
operation of its business.

With the cooperation of a representative of the Official
Committee of Unsecured Creditors, the Debtor engaged in good
faith, extensive, arm's-length negotiations with several DIP
lenders.  The negotiations culminated in an agreement with
Marathon Structured.

Pursuant to a commitment letter between the parties, Marathon
Structured agrees to provide a senior secured, revolving, DIP
credit facility to the Debtor in the aggregate principal amount
not to exceed $24,000,000, all subject to the terms and
conditions in the Commitment Letter, a final DIP order and DIP
Loan Documents.

Among other things, the Commitment Letter states that Marathon
Structured will provide the entire DIP Facility on a fully
underwritten basis.  Marathon may, however, seek to syndicate a
portion of the DIP Facility to other financial institutions that
are reasonably acceptable to the Debtor.  The only reasonable
basis for the Debtor to "not deem" a DIP Facility participant
acceptable will be because the potential participant is an
aviation industry competitor, or an "affiliate" of an aviation
industry competitor.

The Debtor will also immediately pay a deposit of $100,000 to
help cover Marathon Structured's costs in preparing to close the
transaction.

                            DIP Terms

Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman,
in Minneapolis, Minnesota, relates that the DIP Facility will be
available to:

    * to finance working capital from time to time for the Debtor
      and its subsidiaries;

    * to pay related transaction costs, fees, and expenses;

    * to pay certain restructuring fees and expenses of the
      Debtor's Chapter 11 case; and

    * for other general corporate purposes including capital
      expenditures contemplated in the Debtor's business plan and
      budget.

The Closing Date will occur not later than 30 days from the
Debtor's acceptance of the Commitment, unless extended by
Marathon Structured in its sole discretion.

The term of the DIP Agreement will run from the Closing Date to
the earliest to occur of:

    -- 24 months after the Closing Date;

    -- the effective date of the Debtor's plan of reorganization;
       and

    -- the occurrence of certain bankruptcy events customary for
       DIP financings.

The DIP Facility will, at all times, be:

    (i) entitled to super-priority administrative claim
        status, having priority over all other administrative
        claims, subject to a carve-out for certain professional
        fees and expenses in an amount to be determined by
        Marathon Structured, not to exceed $1,500,000, and the
        fees and expenses of Habbo G. Fokkena, U.S. Trustee for
        Region 12, which will be reserved and held back from the
        proceeds of the advance under the DIP Facility; and

   (ii) secured by a perfected first priority mortgage security
        interest and lien on all assets of the Debtor and each
        "Guarantor," in each case together with all fixtures,
        replacements, substitutions, products and the proceeds in
        them, which lien will have a priority over all other
        liens, encumbrances, and other similar charges on the
        assets of the Debtor, except for the Carve-out and:

        1) restricted cash for $4,715,000, presently
           collateralizing certain letters of credit issued by
           Wells Fargo Foothill;

        2) restricted cash for $910,000, presently serving as
           deposits for certain professional services; and

        3) a $6,875,000 amount as an already-claimed portion of
           an irreversible restricted tax trust, which by its
           terms will not prohibit any excess proceeds to the
           trust from becoming part of the Collateral.

Availability under the DIP Facility will be subject to a
discretionary borrowing base.  The Debtor did not provide further
information concerning the composition of the discretionary
borrowing base, except that this would be subject to imposition
of the reserves as Marathon Structured may require, including the
amount of required ongoing minimum DIP Facility Availability set
forth in certain "covenants".

                             Covenants

It is contemplated that the Loan Documentation will contain
covenants appropriate for the Transaction, the violation of which
would be an event of default.  The covenants include:

    (a) Regular financial and operational reporting to Marathon
        Structured by the Debtor, to be set forth in the Loan
        Documentation;

    (b) Affirmation regarding payments, conduct of business, and
        other typical affirmative covenants for similar
        transactions;

    (c) Protection against transferring assets, incurring
        indebtedness, creating or granting liens, providing
        guarantees, and other typical negative covenants for
        similar transactions;

    (d) Minimum ongoing DIP Facility availability, which will be a
        reserve against the DIP Facility Availability, as:

          Amount        Period Available
          ------        ----------------
          $3,000,000     until 03/31/07
          $2,000,000     04/01/07 to 05/31/07
          $1,000,000     06/01/07 to 01/31/08
          $2,000,000     after 02/01/08

    (e) The Debtor continuing to negotiated with Northwest
        Airlines, Inc., concerning a new Airline Services
        Agreement in good faith;

    (f) The Debtor actively operating at lest 40 aircraft
        throughout the term of the DIP Facility; and

    (g) The Debtor utilizing best efforts to attempt to sell
        relevant parts and equipment inventory as fleet size is
        reduced.

The redacted DIP Terms did not disclose specific interest rates
for the DIP Obligations except that these will be computed and
paid monthly, in arrears, at an annual rate, Mr. Meyers says.
Upon an event of default under the Loan Documentation, the
interest rates will be increased by 2%.

The Unused Line Fee is 0.50% per annum on the unused portion of
the DIP Facility, payable monthly in arrears, Mr. Meyers adds.

As closing fee, the Debtor will pay Marathon Structured $480,000
or 2% of the DIP Facility, payable solely to Marathon on these
terms:

    * $120,000 or 25% of the Closing Fee, due and payable upon
      acceptance of the DIP terms and conditions as a commitment
      fee; and

    * the remainder, due and payable at closing.

If the DIP Facility is terminated or repaid in full prior to the
Maturity Date, the Debtor will pay an early termination fee
equivalent to these percentages of the commitments under the DIP
Facility, as applicable, on the Closing Date:

    (a) 1.5% for the period from and including the Closing Date to
        and including the one year anniversary of the Closing
        Date;

    (b) 0.5% for the period after the one year anniversary of the
        Closing Date; and

    (c) 0% afterwards.

The Debtor will indemnify Marathon Structured in connection with
claims which do not involve Marathon's bad faith, gross
negligence or intentional misconduct.

In addition, during the pendency of the Debtor's Chapter 11 case
and subject to the Court's approval, the Debtor may incur up to
$10,000,000 of additional subordinated secured indebtedness from
third party financing sources, so long as:

    (i) The terms and conditions of, and documentation relating to
        the Additional DIP Loan are reasonably satisfactory to
        Marathon Structured and the required Lenders; and

   (ii) Both immediately prior to and after giving effect to the
        Additional DIP Loan, no Event of Default under the Loan
        Documentation has occurred and is continuing or would
        result from the Additional DIP Loan;

  (iii) Annualized cash interest on the Additional DIP Loan does
        not exceed $1,000,000; and

   (iv) The Debtor gives Marathon Structured the right of first
        refusal to match and provide the Additional DIP Loan on
        the terms of bona fide third party proposals for the
        Additional DIP Loan.  The Additional DIP Loan and the lien
        securing it will be fully subordinated in payment and
        enforcement to all obligations outstanding under the DIP
        Facility on terms, and pursuant to documentation,
        acceptable to Marathon Structured.

A redacted copy of the Commitment Letter and the DIP Term Sheet
is available for free at http://ResearchArchives.com/t/s?eac

                    DIP Terms Must be Approved

According to Mr. Meyer, as of July 21, 2006, the Debtor has been
unable to obtain:

    * postpetition financing on terms and conditions more
      favorable than those set forth in the Commitment Letter; and

    * additional needed credit on an unsecured basis as an
      administrative expense having:

        (i) administrative priority pursuant to Section 364(a) or
            364(b) of the Bankruptcy Code; or

       (ii) priority over all administrative expenses pursuant to
            Section 364(c)(1).

Aside from the ruling on the DIP Facility, the Debtor also seeks
the Court's authority to:

    (a) enter into the DIP Credit Facility;
    (b) pay all fees and expenses due to Marathon Structured; and
    (c) file the Commitment Letter under seal.

Filing the Commitment Letter under seal is appropriate because
disclosure of certain terms could harm Marathon Structured by
giving its competitors access to commercial information that
could be utilized to its detriment, Mr. Meyer explains.

All parties-in-interest who have played a substantial role in the
Debtor's Chapter 11 case and signed confidentiality agreements
have been, or will be, provided with a full copy of the
Commitment Letter.

The Debtor will also offer cash flow projections supporting the
need for financing and will offer testimony respecting its
efforts to secure a financing commitment on more favorable terms
than those offered by Marathon Structured, Mr. Meyer tells Judge
Kishel.

The Court will convene a Final DIP Hearing on August 15, 2006, at
1:30 p.m.  Objections must be filed and served no later than
August 10.

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


MESABA AVIATION: Unions Appeal Bankr. Court's Section 1113 Ruling
-----------------------------------------------------------------
The Air Line Pilots Association, International, the Association
of Flight Attendants-CWA, AFL-CIO, and the Aircraft Mechanics
Fraternal Association ask the U.S. District Court for the
District of Minnesota to review whether the U.S. Bankruptcy Court
for the District of Minnesota erred:

    (a) in its February 10, 2006, Order, when it:

        -- precluded the ALPA, AFA, and AMFA from taking discovery
           within the context of the Section 1113 of the
           Bankruptcy Code proceedings related to potential claims
           Mesaba Aviation, Inc., dba Mesaba Airlines, or its
           bankruptcy estate may have against it's parent company,
           MAIR Holdings, Inc., for recovery of more than
           $100,000,000 that the Debtor transferred to MAIR prior
           to the filing of the bankruptcy petition; and

        -- prohibited the ALPA, AFA, and AMFA from presenting
           evidence supporting fraudulent transfer and fraud
           claims against MAIR and the Debtor in connection with
           the hearing on the Debtor's Section 1113 Motions;

    (b) in concluding that the Debtor has met the procedural and
        substantive requirements of Section 1113, including
        without limitation, when it concluded that:

        -- the Debtor, in its June 1, 2006, Section 1113 proposal
           to the ALPA, AFA, and AMFA, had provided the unions a
           proposal based on the most complete and reliable
           information available at that time;

        -- prior to filing its renewed motion to reject its CBA's
           with the ALPA, AFA, and AMFA, the Debtor had provided
           the unions with the relevant information as is
           necessary to evaluate the Debtor's June 1, 2006,
           Section 1113 proposal;

        -- the Debtor satisfied its statutory obligation under
           Section 1113 to meet with the unions' representatives
           at reasonable times when it was undisputed that the
           Debtor refused to meet with the unions after it
           presented its amended Section 1113 proposal on June 23,
           2006;

        -- the Debtor had met its obligation to confer with the
           unions in good faith in an attempt to agree on mutually
           satisfactory modifications to the CBAs;

        -- the modifications proposed by the Debtor to the CBAs
           are necessary to permit the Debtor's reorganization;

        -- the proposed modifications to the unions' CBAs assure
           that all creditors, the Debtor and all of the affected
           parties are treated fairly and equitably;

        -- the unions lacked "good cause" to refuse to accept
           the Debtor's Section 1113 proposal;

        -- the balance of the equities clearly favored rejection
           of the unions' CBAs; and

        -- the likelihood of a strike by the unions upon rejection
           was not relevant to the availability of relief to the
           Debtor under Section 1113; and

    (c) in its July 14, 2006, on-the-record decision by declining
        to make detailed factual findings related to the Debtor's
        compliance with the meeting and other procedural
        requirements of Section 1113.

As reported in the Troubled Company Reporter on July 17, 2006, the
Court granted Mesaba's request for authority to reject its
contract with flight attendants, pilots and mechanics.  The ruling
only authorized Mesaba to make changes to its collective
bargaining agreements at a time that it determines to be
appropriate and does not mean changes are imposed automatically.
The Court also directed Mesaba to give the labor groups a 10-day
notice before rejecting the contracts and imposing new terms.

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


METAL STORM: Ernst & Young Raises Going Concern Doubt
-----------------------------------------------------
Metal Storm Limited's annual report on Form 20-F for the year
ended Dec. 31, 2005, filed with the Securities and Exchange
Commission on July 17, 2006, included an audit opinion that
contains a going concern qualification.

Ernst & Young LLP expressed substantial doubt about Metal Storm's
ability to continue as a going concern after auditing the
Company's financial statements for the year ended Dec. 31, 2005
and 2004.  The auditing firm pointed to the Company's recurring
operating losses and negative cash flows from operating
activities.

In a related SEC filing, the Company disclosed that it requires
additional capital by late November 2006.  On July 20, 2006, the
company signed a facilitation agreement with Harmony Investment
Fund Limited as a preliminary step to a capital raising of
AU$27.5 million through a Renounceable Rights Offer that will be
limited to existing shareholders who are resident in Australia and
New Zealand.

Metal Storm incurred a AU$10.9 million net loss in 2005, compared
to a AU$13.1 million net loss in 2004.

Revenue decreased AU$6,556 from AU$837,201 in 2004 to AU$830,645
in 2005 due to lower interest revenue, which was AU$599,902 in
2005 compared to AU$794,565 in 2004.  This decrease was partially
offset by contract revenue increasing by AU$188,107 from AU$42,636
in 2004 to A$230,743 in 2005.

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

                        About Metal Storm

Metal Storm Limited is a multi-national defense technology company
engaged in the development of electronically initiated ballistics
systems using its unique "stacked projectile" technology.  The
company is headquartered in Brisbane, Australia and incorporated
in Australia, with an office in Arlington, Virginia.


METALFORMING TECHNOLOGIES: Selling Burton Property for $830,000
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware will convene a hearing at 10:30 a.m. on
Aug. 7, 2006, to consider Metalforming Technologies, Inc., and its
affiliates' request to sell certain of their assets to H. Kent
Jones, Jr.

Mr. Jones proposes to acquire certain of Metalforming's real
property, located in the City of Burton, Genesee County, Michigan,
for $830,000.

Pursuant to Metalforming and its affiliates' confirmed Joint
Chapter 11 Plan of Liquidation, court-appointed chief liquidating
officer Michael D. Wilson is authorized to dispose of any
remaining estate assets without further court approval.  Mr.
Jones, however, conditioned payment of the purchase price upon the
entry of an order approving his purchase agreement with
Metalforming.

A copy of the purchase agreement is available for a fee at:

http://www.researcharchives.com/bin/download?id=060731225345

Headquartered in Chicago, Illinois, Metalforming Technologies,
Inc., and its debtor-affiliates manufacture seating components,
stamped and welded powertrain components, closure systems, airbag
housings and charge air tubing assemblies for automobiles and
light trucks.  The Company and eight of its affiliates filed for
chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos.
05-11697 through 05-11705).  Michael E. Foreman, Esq., Sanjay
Thapar, Esq., and Lia M. Pistilli, Esq., at Proskauer Rose LLP,
and Joel A. Waite, Esq., Robert S. Brady, Esq., Sean Matthew
Beach, Esq., and Timothy P. Cairns, Esq., at Young Conaway
Stargatt & Taylor LLP represent the Debtors in their restructuring
efforts.  Francis J. Lawall, Esq., at Pepper Hamilton LLP
represents the Official Committee of Unsecured Creditors.  Robert
del Genio at Conway, Del Genio, Gries & Co., LLC, provides the
Debtors with financial and restructuring advice and Larry H.
Lattig at Mesirow Financial Consulting LLC serves as the
Committee's financial advisor.  The Court confirmed the Debtors'
Joint Chapter 11 Plan of Liquidation on April 13, 2006.


METHANEX CORP: Earns CDN$82.1 Million in 2006 Second Quarter
--------------------------------------------------------
For the second quarter of 2006, Methanex Corp. recorded net income
of $82.1 million and Adjusted EBITDA of CDN$153 million.

Bruce Aitken, President and CEO of Methanex commented, "We are
pleased to deliver another quarter of strong earnings and cash
flows.  Continued demand growth and competitor outages caused the
market to remain balanced and pricing to remain at high levels in
the second quarter.  Our average realized price this quarter was
$279 per tonne compared with $283 per tonne for the first quarter
of 2006."

These results for the second quarter of 2006 compare with net
income of $115.2 million and Adjusted EBITDA of CDN$166.5 million
for the first quarter of 2006.  Before recording an adjustment in
the first quarter of 2006 to increase earnings and reduce future
income tax expense related to a change in Trinidad tax
legislation, income before unusual items (after-tax) was
CDN$89.4 million.

The Methanex European posted contract price has been set for the
third quarter at 250 euros per tonne (CDN$315 per tonne at the
time of settlement) and July posted contract prices for the United
States and Asia are CDN$333 per tonne and CDN$305 per tonne.  This
represents an average decrease to posted prices across the global
regions of approximately CDN$27 per tonne from April to July.

Mr. Aitken added, "Despite these recent decreases to our posted
prices, industry fundamentals continue to be very strong and our
August posted contract price in the United States has been
increased by US$10 per tonne to $343 per tonne.  Numerous planned
and unplanned outages during the second quarter have caused global
inventories for both producers and consumers to decline.  As we
enter the third quarter, demand continues to be strong and several
more maintenance outages have been announced. During July,
approximately 1.1 million tonnes of annual capacity was shut down
or idled including our 530,000 tonne Waitara Valley facility in
New Zealand, which was idled on July 10th.  This plant remains a
flexible asset for us with future operations dependent on securing
additional natural gas on commercially acceptable terms.  Finally,
we do not expect any production from new world-scale plants to be
available to the market until early 2007. As a result of these and
other factors, we expect the methanol market to be tight during
the third quarter."

Mr. Aitken concluded, "Our cash generation was excellent this
quarter.  With $174 million cash on hand at the end of the second
quarter, a strong balance sheet and a $250 million undrawn credit
facility, we have the financial capacity to complete our capital
maintenance spending program, pursue new opportunities to enhance
our leadership position in the methanol industry and continue to
deliver on our commitment to return excess cash to shareholders."

Methanex Corp. (TSX:MX)(NASDAQ:MEOH) is a Vancouver based,
publicly traded company engaged in the worldwide production and
marketing of methanol. Methanex shares are listed for trading on
the Toronto Stock Exchange in Canada under the trading symbol "MX"
and on the Nasdaq Global Market in the United States under the
trading symbol "MEOH."

                         *     *     *

Moody's Investors Service assigned in, July 2005, a Ba1 to the
$150 million senior unsecured notes due 2015 issued by Methanex
Corporation.  Moody's also affirmed the Ba1 ratings of Methanex
Corporation and the outlook on the company's ratings remains
stable.


MIRANT CORP: Inks San Francisco Power Contract With Pacific Gas
---------------------------------------------------------------
Mirant Corporation signed two contracts with Pacific Gas and
Electric Company to provide electricity from its natural gas-fired
Pittsburg and Contra Costa power plants located near San
Francisco, California.

PG&E has contracted for 2,000 megawatts of capacity for varying
terms ranging from one year up to about four years beginning in
2007.  The longer-term transaction will be submitted to the
California Public Utilities Commission for its review and
approval.  Mirant intends to withdraw immediately the notice of
intent to shut down Pittsburg Unit 7 and Contra Costa Unit 6 that
it had submitted to the CPUC and the California Independent System
Operator on May 4, 2006.

With continuing strong growth in electric demand and the
possibility of additional heat waves, these contracts provide an
important reliable electric supply for California consumers.

"We are pleased that we were able to reach an agreement with PG&E
that will allow us to keep Pittsburg 7 and Contra Costa 6
available to provide much needed and reliable power to the people
of California," said Robert M. Edgell, Mirant's executive vice
president and head of its United States business.

                         About PG&E Co.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on
April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L.
Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent
the Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.

                      About Mirant Corp.

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.

                        *     *     *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC.  The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed.  Additionally, Mirant's Speculative Grade Liquidity
rating was revised to SGL-2 from SGL-1.  The rating outlook is
stable for Mirant, MNA, MAG, and MIRMA.

Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2.  Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1.  Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.

Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.

Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative.  Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.

Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.


MOHEGAN TRIBAL: Posts $4.4 Mil. Quarter Ended June 30 Net Income
----------------------------------------------------------------
The Mohegan Tribal Gaming Authority's net income for the quarter
ended June 30, 2006 increased by $4.4 million, or 11.3%, to $42.9
million compared to $38.5 million for the same period in the prior
year.

Net revenues increased to $354 million for the three months ended
June 30, 2006 from $342.5 million for the same period in 2005, the
Authority reported.  Net Income for the nine-months ended June 30,
2006 also increased to $116 million from net revenues of $1.044
billion, compared to $101 million from net revenues of $974.6
million for the same period in 2005.

"The quarterly operating results for Mohegan Sun were
outstanding," commented Bruce Bozsum, Chairman of the Authority's
Management Board.  "Our property continues to offer the best
gaming and entertainment experience in the Northeast.  We commend
the management team and our 9,000 terrific employees."

Adjusted EBITDA at Mohegan Sun for the quarter ended June 30, 2006
increased by $4.9 million, or 5.3%, to $98.0 million compared to
$93.1 million for the same period in the prior year.

The Authority, as of June 30, 2006, reported cash and cash
equivalents of $84.6 million, an increase of $12.2 million from
$72.4 million as of September 30, 2005 and have no outstanding
draws under the its $450 million bank credit facility revolving
loan.  Its total debt was approximately $1.23 billion as of June
30, 2006.

Capital expenditures of the Authority totaled $85.8 million for
the nine months ended June 30, 2006 versus $35.5 million for the
same period in the prior year, comprised primarily of Pocono Downs
construction expenditures of $35.6 million and maintenance capital
expenditures at Mohegan Sun of $36.9 million.

The Authority also recently hired the architectural firm Wimberly
Allison Tong and Goo of Orlando, Florida to perform the master
planning services for a potential hotel and casino expansion at
Mohegan Sun.

Further, the Authority also disclosed that the distributions to
the Mohegan Tribe of Indians of Connecticut totaled $54.3 million
and $50.4 million for the nine months ended June 30, 2006 and
2005, respectively.

The Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is
an instrumentality of the Mohegan Tribe of Indians of Connecticut
a federally recognized Indian tribe with an approximately 405-acre
reservation situated in southeastern Connecticut.  The Authority
has been granted the exclusive power to conduct and regulate
gaming activities on the existing reservation of the Tribe, and
the non-exclusive authority to conduct such activities elsewhere,
including the operation of Mohegan Sun, a gaming and entertainment
complex that is situated on a 240-acre site on the Tribe's
reservation.  The Tribe's gaming operation is one of only two
legally authorized gaming operations in New England offering
traditional slot machines and table games.

                         *     *     *

The Mohegan Tribal Gaming Authority's $250,000,000 issue of 8%
Senior Subordinated Notes due April 1, 2012 carry Moody's Investor
Service's Ba3 rating and Standard & Poor's B+ rating.  The Tribe's
$500,000,000 five-year revolving credit agreement, under which
Bank of America, N.A., serves as the administrative agent for a
consortium of lenders, matures on March 31, 2008.  The loan
package, which includes a provision that could increase the
lenders' commitments to $600,000,000, is rated BB by S&P and Ba1
by Moody's.


NELLSON NUTRACEUTICAL: UBS Can Get Docs to Conduct Own Valuation
----------------------------------------------------------------
The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware allowed UBS AG, Stamford Branch, to
inspect some of the financial documents of Nellson Nutraceutical
Inc. and its debtor-affiliates relating to the Debtors' valuation
of their estates.

As reported in the Troubled Company Reporter on June 12, 2006, the
Court will conduct an evidentiary hearing concerning the
enterprise valuation of Nellson Nutraceutical, Inc., and its
debtor-affiliates' business on Sept. 13, 2006, to Sept. 22, 2006.
The Debtors asked the Court to determine their enterprise value
and the value of secured claims asserted by their prepetition
lenders.

Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl Young Jones
& Weintraub LLP, told the Court that the fundamental question in
the Debtors' cases is their ownership and capital structure.
There is an enormous divergence of opinion on the issue.  The
first step in effectuating a successful reorganization is a
valuation of the Debtors' enterprise value, Ms. Werkheiser
contended.

UBS AG said the Debtors are overstating their value by
$100 million, the Portfolio Media reports.   UBS AG is the
Debtors' agent for both the first lien debt and second lien debt.

The Court orders the Debtors to produce an index of every document
previously produced in informal discovery.  The Debtors are also
directed to produce all business plan created in 2005.

Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulates, makes and sells bars and powders for the
nutrition supplement industry.  The Debtors filed for chapter 11
protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072).
Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M.
Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.
represent the Debtors in their restructuring efforts.  Lawyers at
Young, Conaway, Stargatt & Taylor, LLP, represent an informal
committee of which General Electric Capital Corporation and
Barclays Bank PLC are members.  In its Schedules of Assets and
Liabilities filed with the Court, Nellson Nutraceutical reports
$312,334,898 in total assets and $345,227,725 in total liabilities
when it filed for bankruptcy.


NEWFIELD EXPLORATION: June 30 Working Capital Deficit Tops $7 Mil.
------------------------------------------------------------------
Newfield Exploration Company filed its financial results for the
first quarter ended June 30, 2006, with the Securities and
Exchange Commission on July 28, 2006.

For the three months ended June 30, 2006, the Company earned $94
million of net income on $390 million of net revenues, compared to
$104 million of net income on $446 million of net revenues in
2005.

The Company's June 30 balance sheet showed strained liquidity with
$812 million in total current assets available to pay $819 million
in total current liabilities coming due within the next 12 months.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?ea9

Newfield Exploration Company -- http://www.newfield.com/-- is an
independent crude oil and natural gas exploration and production
company.  The Company relies on a proven growth strategy that
includes balancing acquisitions with drill bit opportunities.
Newfield's areas of operation include the Gulf of Mexico, the U.S.
onshore Gulf Coast, the Anadarko and Arkoma Basins of the Mid-
Continent, the Uinta Basin of the Rocky Mountains and offshore
Malaysia.  The Company has international development projects
underway in the U.K. North Sea and in Bohai Bay, China.

                            *    *    *

As reported in the Troubled Company Reporter on March 31, 2006,
Moody's Investors Service assigned a Ba3 rating to Newfield
Exploration's pending $500 million of 10-year senior subordinated
notes and affirmed its existing Ba2 corporate family, Ba2 senior
unsecured note, and Ba3 senior subordinated ratings.  Moody's said
the rating outlook remains stable.


NORTHWEST AIRLINES: AFA-CWA Rejects Second Tentative Agreement
-------------------------------------------------------------
The Association of Flight Attendants-CWA disclosed that majority
of Northwest Airlines, Inc.'s flight attendants voted to reject
the agreement by a margin of 3,266 to 2,637.

"Our members have spoken -- these drastic cuts to our pay,
benefits and work rules are simply unacceptable," said Mollie
Reiley, AFA-CWA interim master executive council president.
"While we will attempt to go back to the negotiating table with
the company, we continue preparing for CHAOS."

"Our members refuse to watch more than 40 percent of our wages and
benefits get funneled into company profits and executive bonuses.
It is simply not necessary and will not be tolerated," Ms. Reiley
said.

AFA-CWA relates that it may call for a strike if Northwest
management imposes contract changes without the flight attendants'
consent.

       AFA Opposes Implementation of March 1 PFAA Accord

Due to the flight attendants' failure to ratify the July 17
Tentative Agreement, Northwest has advised AFA-CWA that it will
implement, effective August 1, 2006, the tentative agreement dated
March 1, 2006, reached with the negotiating team of the
Professional Flight Attendants Association, the flight attendant's
prior bargaining representative.

Should the Debtors impose any changes to the terms and conditions
of employment of their flight attendants, AFA-CWA asks the U.S.
Bankruptcy Court for the Southern District of new York to compel
the Debtors to only implement the terms recently agreed between
the AFA-CWA negotiating team and Northwest management on July 17,
2006.

Edward James Gilmartin, Esq., in Washington, D.C., explains, that
the tentative agreement dated July 17, 2006, between the Debtors
and AFA, provided important wage and work rule improvements over
the March 1 Agreement.  At the same time, the July 17 Agreement
fully met Northwest Airlines' needs as shown in its assertions in
its request to approve the terms of the July 17 Agreement, he
says.

Northwest must be restrained from implementing the March 1
Agreement, Mr. Gilmartin asserts.

"[The] Court has specifically addressed the issue of the proper
course of action by [the] Debtor in the event it rejects the
flight attendants' contract.  That course of action is to
implement only the most recently negotiated Tentative Agreement,
even if the Agreement has failed ratification," AFA-CWA asserts,
noting of the Court's memorandum of opinion dated June 29, 2006,
on Northwest's Section 1113(c) request to reject the PFAA CBA.

AFA-CWA says that it would prefer that the Debtors not reject the
June 2000 collective bargaining agreement with their flight
attendants and immediately resume negotiations to bridge the
remaining gap between flight attendant needs and the company's
plans.  AFA believes that a ratifiable agreement can yet be
reached.

In the interim, however, if the Debtors are to take any action, it
should be limited to implementation of the July 17 Agreement, Mr.
Gilmartin asserts.  Anything further would go beyond the necessary
modifications and would severely damage the ability of the parties
to reach a final consensual agreement, he contends.

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: Disappointed Over AFA Contract Vote
-------------------------------------------------------
Northwest Airlines was disappointed that its flight attendants,
represented by the Association of Flight Attendants-CWA, failed to
approve the tentative contract agreement reached earlier last
month between the company and the union.

"The tentative agreement was a product of nearly around-the-clock
negotiations involving substantial compromise on the part of both
parties," said Mike Becker, senior vice president of human
resources and labor relations.

"We reached a consensual agreement with the new union recently
chosen by our flight attendants and had hoped that Northwest
flight attendants would ratify the agreement."

As reported in the Troubled Company Reporter on July 10, 2006, the
National Mediation Board reported that Northwest flight attendants
voted to have the AFA-CWA replace the Professional Flight
Attendants Association as the flight attendants' bargaining
organization.

"Notwithstanding the results of the flight attendants' contract
vote, Northwest must continue to move forward with its
restructuring efforts," Mr. Becker continued.  "As previously
approved by the court, we now are implementing new contract terms
and conditions for our flight attendants which are consistent with
the judge's order and with the March 1 tentative contract
agreement which was not ratified.  This action will result in the
required $195 million in annual savings."

In late June, Judge Allan L. Gropper of the U.S. Bankruptcy Court
for the Southern District of New York granted the airline's
1113(c) motion to reject its contract with flight attendants.  The
airline was given authorization to implement the terms of an
earlier tentative agreement that it reached with PFAA in March.

Northwest has reached agreements on permanent wage and benefit
reduction agreements with the Air Line Pilots Association, the
International Association of Machinists and Aerospace Workers
(IAM), Aircraft Technical Support Association, the Transport
Workers Union of America, and the Northwest Airlines
Meteorologists Association.  Two rounds of salaried and management
employee pay and benefit cuts have also been instituted and the
needed aircraft maintenance employee labor cost savings have been
achieved.

Since beginning its restructuring process in September of last
year, Northwest has remained focused on its plan to realize
$2.5 billion in annual business improvements in order to return
the company to profitability on a sustained basis.

The restructuring plan continues to be centered on three goals:

   * resizing and optimization of the airline's fleet to better
     serve Northwest's markets;

   * realizing competitive labor and non-labor costs; and

   * restructuring and recapitalization of the airline's balance
     sheet.

                    About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.


NORTHWEST AIRLINES: Bargaining Talk with AMFA Set for August 15
---------------------------------------------------------------
The Aircraft Mechanics Fraternal Association, which represents
striking mechanics at Northwest Airlines Inc., confirmed on July
27, 2006, that Northwest Airlines and AMFA have agreed to resume
contract bargaining.

A bargaining session is scheduled for Aug. 15, 2006.  Neither side
has attached any preconditions.  The parties have not met in
contract bargaining since November 2005.  AMFA has been on strike
since August 20, 2005, when the company imposed a contract.

Jeff Mathews, spokesman for AMFA's Bargaining Committee, said:
"Our goal remains to obtain a consensual agreement.  We welcome
the resumption of face-to-face discussions.  The timing is
appropriate because, as of July, we are now the last labor group
with an unsettled contract.  We believe that both sides would
benefit by an agreement that will allow all to move forward."

                     About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.


NORTHWEST AIRLINES: Wants $1.375 Billion Citigroup DIP Pact Okayed
------------------------------------------------------------------
Northwest Airlines, Inc., and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York to:

   (i) authorize them to obtain secured postpetition financing on
       a super-priority secured and priming basis;

  (ii) at their election, authorize the cash collateralization or
       replacement of the letters of credit issued under the U.S.
       Bank letter of credit facility and the termination of all
       liens securing those obligations;

(iii) find that no prepayment fee is due or payable in respect
       of the repayment in full of the Existing Facilities and
       segregate disputed interest amounts, as to which the
       Debtors dispute payment;

  (iv) authorize them to pay all of the fees provided for in
       connection with the DIP Commitment Letter and the
       Operative Documents; and

   (v) authorize them to file supplemental documents under
       seal as a necessary measure to protect them and the DIP
       Lenders from disclosing confidential commercial
       information contained.

According to the Debtors' expert, John E. Luth, Seabury Group
LLC's president, the Debtors have significant cash needs.  Access
to substantial credit is necessary to meet the day-to-day costs
associated with maintaining business relationships with the
Debtors' vendors and suppliers, purchasing fuel and other goods
and services necessary to operate their businesses, and otherwise
financing their operations.  The inability to meet payments to
vendors and satisfy the demands of ordinary course business
operations would impair seriously the Debtors' prospects for
reorganization.

While the existing credit facilities and continuing operations
provide the Debtors access to adequate cash, replacement of the
Existing Facilities with debtor-in-possession financing
facilities will provide both a significant cost savings and
additional liquidity in the event of adverse changes in the
general industry or fuel environments or the Debtors' business
performance, Mr. Luth explains.

Pursuant to a commitment letter dated June 21, 2006, Citigroup
Global Markets Inc., on behalf of:

   -- itself,
   -- Citibank, N.A.,
   -- Citicorp USA, Inc.,
   -- Citicorp North America, Inc., and
   -- any of their affiliates as may be appropriate to consummate
      the transactions,

offered to provide the Debtors up to $1,375,000,000 through a
secured superpriority DIP loan facility, which is convertible to
a secured exit facility.

Citicorp USA will act Administrative Agent for the Facility,
subject to the Commitment Letter's terms and conditions.
Citigroup Global will serve as Joint Lead Arranger and Joint
Bookrunner.

After good faith and extensive, arm's-length negotiations,
Northwest Airlines, Inc., as borrower; its direct and indirect
parents, as guarantors; and Citigroup Global, et al., reached an
agreement on the principal terms of the DIP Facility.

The salient terms of the DIP Financing Agreement are:

Commitment:      A total commitment of up to $1,375,000,000 of
                 loans, in aggregate, consisting of:

                  * a term loan commitment of $975,000,000 to
                    $1,225,000,000; and

                  * a revolving commitment of up to $150,000,000
                    to $250,000,000.

Closing Date:    On or before August 18, 2006

Term:            The DIP Facilities will terminate, at the
                 earliest of:

                 (a) 24 months after the Closing Date if the Exit
                     Conditions have not been met prior to that
                     Date;

                 (b) at least five years after the Exit
                     Conditions are satisfied if the Exit
                     Conditions are satisfied prior to the 24th
                     month after the Closing Date; or

                 (c) acceleration of the loans in accordance with
                     the Operative Documents.

Purpose:         Proceeds of the DIP Facilities will be used
                 solely:

                 (a) for working capital and for other general
                     corporate purposes of the Borrower and its
                     Subsidiaries;

                 (b) to repay in full Northwest Airlines, Inc.'s
                     obligations totaling $975,000,000 under a
                     Second Amended and Restated Credit and
                     Guarantee Agreement, dated as of April 15,
                     2005, with, among others, J.P. Morgan Chase
                     Bank, N.A., as administrative agent, and
                     several prepetition secured lenders;

                 (c) at Northwest's option, to replace or provide
                     cash collateral for the prepetition secured
                     letter of credit obligations, totaling
                     $150,000,000, with U.S. Bank National
                     Association -- Pari Passu Obligations; and

                 (d) to pay related transaction costs, fees and
                     expenses.

                 The DIP Facilities will provide the Debtors with
                 new liquidity of up to $250,000,000 that will be
                 available for use as additional working capital.

Priority &
Liens            Subject to a Carve-Out, all amounts owing by
                 the Borrower and the Guarantors under the
                 facility will be secured by a first priority
                 perfected pledge and security interest in the
                 Collateral pursuant to Sections 364(c)(2),
                 364(c)(3) and 364(d)(1) of the Bankruptcy Code,
                 with priority over the liens securing the
                 Existing Junior Secured Claims.

                 In addition, unless and until the satisfaction
                 of the Exit Conditions prior to the 24th months
                 after the Closing Date, the Lenders will be
                 granted a super-priority administrative claim
                 under Section 364(c)(1) for the payment of the
                 obligations under the Facility with priority
                 above all other administrative claims, except
                 with respect to the Carve-Out and proceeds of
                 avoidance actions other than those relating to
                 obligations paid with the proceeds of the DIP
                 Facilities.

Exit
Conditions:      To convert the DIP Facilities into the Exit
                 Facilities, these conditions must be satisfied:

                 (a) the Administrative Agent will have a
                     perfected first priority security interest
                     on the Collateral after:

                      * a plan of reorganization has been
                        substantially consummated; and

                      * the reorganized Borrower and the
                        Guarantors have assumed the Loans and
                        other obligations under the Operative
                        Documents;

                 (b) the Debtors' disclosure statement shows
                     projected fixed charge coverage reflecting
                     pro forma compliance with the financial
                     covenants to be contained in the Operative
                     Documents;

                 (c) the annual labor savings of Borrower and
                     Guarantors is at least $1,300,000,000;

                 (d) the Borrower and Guarantors have received
                     legislative pension relief consistent with
                     the business plan previously furnished to
                     the Administrative Agent or have terminated
                     their pension plans without incurring
                     changes in cash flow in excess of those
                     contemplated in the business plan previously
                     furnished to the Administrative Agent after
                     giving effect to all forms of cash payments
                     made to employees in lieu of cash pension
                     benefits,

                 (e) the Borrower and Guarantors have cash
                     liquidity and unused availability under
                     committed credit facilities of
                     $2,000,000,000;

                 (f) no default or event of default have occurred
                     and continuing under the Operative
                     Documents;

                 (g) the Facility is rated by Moody's and by
                     Standard & Poors; and

                 (h) the Administrative Agent has received an
                     appraisal of the Collateral showing that the
                     market value of the Collateral is at least
                     1.5 times the aggregate amount of the sum
                     of:

                     * the Term Loans;

                     * the Commitments;

                     * the amount of the Pari Passu Obligations,
                       if any; and

                     * the amount of all hedging exposure, which
                       will not exceed $150,000,000, secured by
                       the Collateral.

Priming Liens:   U.S. Bank has consented and agreed to the
                 priming of its liens to those liens to be
                 granted to the DIP Lenders and in respect of the
                 Pari Passu Obligations pursuant to the Final
                 Order such that:

                 (a) if the Pari Passu Obligations remain
                     outstanding, the Pari Passu Obligations
                     will be secured by Liens with priority pari
                     passu with the Liens granted to the Lenders;
                     and

                 (b) the Second Lien Obligations will be secured
                     by Liens subordinate to the Liens granted to
                     the Lenders.

                 The Debtors owe the Pension Benefit Guaranty
                 Corporation approximately $370,000,000, which is
                 secured by a third priority lien and security
                 interest in the same collateral that secures the
                 Existing Facilities and Northwest's obligations
                 to U.S. Bank.

                 The Debtors believe that the PBGC will provide
                 its consent to the priming of the liens securing
                 the Third Lien Obligations prior to the DIP
                 hearing.

Permitted
Liens:           The DIP Lenders have agreed that the liens
                 securing these obligations are "permitted
                 liens":

                 -- the Pari Passu Obligations, to the extent
                    that those obligations are not cash
                    collateralized or otherwise indefeasibly paid
                    in full;

                 -- $500,000,000 loan obligation to U.S. Bank,
                    which is secured by a second priority lien
                    and security interest in the same collateral
                    that secures the Existing Facilities and the
                    Pari Passu Obligations; and

                 -- the Third Lien Obligations.

Carve-Out:       The DIP Lenders' liens and super-priority
                 administrative claim will be subject to a Carve-
                 Out for the payment of:

                 (a) allowed professional fees and disbursements
                     incurred by the Borrower and the
                     Guarantors', and a statutory committee of
                     unsecured creditors' retained professional
                     of up to $30,000,000, in aggregate; and

                 (b) fees pursuant to 28 U.S.C. Section 1930 and
                     any fees payable to the clerk of the
                     Bankruptcy Court.

Interest Rate:   (1) The Loans will bear interest of up to 2.5%
                     per annum plus the current LIBO Rate as
                     quoted by the Administrative Agent, adjusted
                     for reserve requirements, if any, and
                     subject to change of circumstance provisions
                     as set forth in the Existing Facilities, for
                     interest periods of one, two, three or six
                     months, payable at the end of the relevant
                     interest period, but in any event at least
                     quarterly;

                 (2) After satisfaction of the Exit Conditions,
                     the Loans will bear interest at one of these
                     rates:

                      * 2.5% per annum plus the current LIBO Rate
                        if the ratio of appraised market value of
                        the Collateral to the sum of the amount
                        of the Term Loans, the Commitments, the
                        amount of all hedging exposure secured by
                        the Collateral and the amount of the Pari
                        Passu Obligations which is not replaced
                        or cash collateralized, if any, is
                        greater than 1.75x,; and

                      * 3% per annum plus the current LIBO Rate,
                        if the ratio is equal to or less than
                        1.75x;

                 (3) Interest will be calculated on the basis of
                     the actual number of days elapsed in a
                     360-day year.

                 In the event of a default, the Interest Rate
                 increases by 2%.

Financial
Covenants:       Northwest covenants with the Lenders that the
                 ratio of trailing four-quarter Consolidated
                 EBITDAR to Consolidated Fixed Charges will not
                 be less than these targets:

                 Fiscal Quarter       Consolidated EBITDAR to
                     Ended            Consolidated Fixed Charges
                 --------------       --------------------------
                 12/31/06                    1.15 to 1.00
                 03/31/07                    1.20 to 1.00
                 06/30/07                    1.30 to 1.00
                 09/30/07                    1.40 to 1.00
                 12/31/07 and after          1.50 to 1.00

                 Northwest covenants that the minimum cash
                 liquidity is $750,000,000 at all times.

                 Additionally, Northwest covenants that the
                 Collateral's appraised value will not be less
                 than the sum of the:

                 (1) Term Loans,

                 (2) Commitments,

                 (3) amount of the Pari Passu Obligations, if
                     any, and

                 (4) amount of all hedging exposure, if any,
                     secured by the collateral of 1.5x at all
                     times.

Expenses:        The Borrower and each Guarantor will jointly and
                 severally agree to pay or reimburse the
                 Administrative Agent and the Arranger for all
                 reasonable costs and expenses incurred by the
                 Administrative Agent and the Arranger incurred
                 in connection with the Operative Documents.

Citicorp USA is represented by Latham & Watkins LLP in the
Debtors' cases.

A full-text copy of the Commitment Letter is available for free
At http://ResearchArchives.com/t/s?ead

A full-text copy of the Super-Priority DIP and Exit Credit and
Guarantee Agreement is available for free at:

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

The Court will convene a hearing on August 8, 2006 at 2:30 p.m.,
to consider approval of the DIP financing agreement.  Objections
to the Debtors' request are due August 2, 2006.

                 About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NUR MACROPRINTERS: Balance Sheet Upside-Down by $22MM at March 31
-----------------------------------------------------------------
NUR Macroprinters Ltd. generated approximately $18.8 million of
revenues from product sales and services for the first quarter
ended March 31, 2006, a 2.2% increase compared to revenues of
$18.4 million in the first quarter of 2005.  The gross margin in
the first quarter of 2006 was 33.6% compared to 35.2% in the first
quarter of 2005.

Operating income in the first quarter of 2006 was $11,000 and net
income was $53,000.  Operating loss and net loss in the first
quarter of 2005 were $400,000 and $1.4 million, respectively.  Net
income in the first quarter of 2006 includes, for the first time,
stock-based compensation expense related to NUR's adoption of
Statement of Financial Accounting Standard No. 123 (revised 2004),
"Share-Based Payment," in the amount of $300,000.

At March 31, 2006, the Company's balance sheet showed $46.57
million in total assets and $69.06 million in total liabilities,
resulting in a shareholders' deficiency of approximately $22.49
million.

The increase in cash balance is attributed to the second
installment of $5 million paid by investors led by Fortissimo
Capital Fund GP, LP, associated with their previously reported
investment in NUR.

The balance of long-term loans as of March 31, 2006, includes
$5 million that is related to non-interest bearing three-year
subordinated notes, which are payable only on occurrence of
certain events of liquidation, and accrued interest on the
restructured debt in the amount of $10 million.  Future interest
on the restructured debt will be recorded as a reduction to
accrued interest and not as interest expense charges.

                 About NUR Macroprinters

NUR Macroprinters -- http://www.nur.com/-- supplies wide-format
inkjet printing systems used for the production of out-of-home
advertising materials.


OGLEBAY NORTON: Completes $230 Mil. Refinancing With J.P. Morgan
----------------------------------------------------------------
Oglebay Norton Company syndicated and closed its $230 million
financing through sole bookrunner and sole lead arranger J.P.
Morgan Securities Inc.  The proceeds of the facilities will be
used to refinance its existing senior secured credit facilities,
to provide for the conversion of the convertible preferred stock
and to provide for capital expansion.

As reported in the Troubled Company Reporter on June 27, 2006, a
summary of key terms of the financing include:

   a) $230 million in total senior secured facilities:

      * $55 million, 5-year asset-based revolving credit facility
        with drawn pricing of LIBOR + 125 basis points;

      * $140 million, 6-year term loan facility and a $35 million
        delayed draw facility with drawn pricing of LIBOR + 250
        basis points; and

      * Pricing on the term loans can be reduced by 25 basis
        points if consolidated leverage is below 2.5 times.

   b) The term loan will be secured by a first lien on the fixed
      assets and capital stock of the company with a second lien
      on the assets that secure the revolver.

   c) The delayed draw term loan, which will be available to draw
      for up to 9 months, will serve as a backstop for
      opportunistic calls on the convertible preferred stock or
      for certain growth capital expenditures.

   d) Financial covenants include maximum leverage, minimum fixed
      charge coverage and maximum capital expenditures.

Headquartered in Cleveland, Ohio, Oglebay Norton Company --
http://www.oglebaynorton.com/-- mines, processes, transports and
markets industrial minerals for a broad range of applications in
the building materials, environmental, energy and industrial
market.  The Company and its debtor-affiliates filed for chapter
11 protection on February 23, 2004 (Bankr. D. Del. Case Nos.
04- 10559 through 04-10560).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $650,307,959 in total assets and
$561,274,523 in total debts.  The Debtors' plan of reorganization
became effective on Jan. 31, 2005.

                          *     *     *

As reported in the Troubled Company Reporter on July 3, 2006,
Standard & Poor's Rating Services assigned its 'B' corporate
credit rating to Cleveland, Ohio-based minerals and aggregates
producer Oglebay Norton Co.  The outlook is stable.

At the same time, Standard & Poor's assigned its 'B+' bank loan
rating and '1' recovery rating to Oglebay's proposed $55 million
secured revolving credit facility and up to $175 million in senior
secured term loans.  The bank loan and recovery ratings indicate
expectations of full recovery of principal in the event of a
payment default.  The ratings are based on preliminary terms and
conditions.  The proceeds from the issues will be used to repay
existing debt.


ON SEMICONDUCTOR: Earns $67.5 Mil. for the Second Quarter of 2006
-----------------------------------------------------------------
ON Semiconductor Corporation reported net income of $67.5 million
from total revenues of $375.3 million for the second quarter of
2006.

The Company's net income increased from $40.4 million for the
quarter March 31, 2006 and $18.5 million for the quarter ended
July 1, 2005.

Total stockholders' deficit, of the Company, narrowed to $100
million as of June 30, 2006 from to $249.7 million as of March 31,
2006 and $300.3 million as of December 31, 2005.  Its total assets
as of June 30, 2006 stood at $1.4 billion with long-term debts of
$1.010 billion.

Keith Jackson, ON Semiconductor president and chief executive
officer said,  "Our improving mix, new product introductions and
cost competitive manufacturing capabilities helped drive record
quarterly gross margin percentage, net income and earnings per
share.  During the second quarter we also grew cash and cash
equivalents by approximately $43 million to a record high balance
of approximately $295 million.  Going forward, we look to continue
our success and have focused the company on accelerating the
growth of our power solutions portfolio.  As part of this effort,
beginning in the third quarter, we have re-aligned the company
into four market-based divisions, the Digital and Consumer
Products Group, the Computing Products Group, the Automotive and
Power Regulation Group and the Standard Products Group.  We
believe this new organizational structure will enable ON
Semiconductor to continue to expand its development of innovative
power solutions for customers in these key markets."

"Based upon product booking trends, backlog levels, anticipated
foundry service revenue and estimated turns levels, we anticipate
that total revenues will be approximately $405 to $415 million in
the third quarter of 2006," Mr. Jackson said.

Headquartered in Phoenix, Arizona, ON Semiconductor Corp. (Nasdaq:
ONNN) -- http://www.onsemi.com/-- supplies power solutions to
engineers, purchasing professionals, distributors and contract
manufacturers in the computer, cell phone, portable devices,
automotive and industrial markets.


ORBITAL SCIENCES: Strong Cash Flow Cues Moody's to Lift Ratings
---------------------------------------------------------------
Moody's Investors Service raised the ratings of Orbital Sciences
Corporation.  The Corporate Family Rating was raised to Ba2 from
Ba3, while the company's Senior Notes due 2011 were upgraded to
Ba3 from B1.  The ratings outlook is stable.

The upgraded ratings reflect Orbital's modest debt levels, strong
cash flow generation and stable operating margins, its substantial
backlog providing revenue visibility, and a positive contracting
environment that applies to both the Launch Vehicle and Satellite
and Space Systems markets.  The rating also considers the
company's relatively small revenue base, the concentration of
sales on one customer, and uncertainties regarding future
profitability due to the large number of assumptions that must be
made with respect to percentage of completion accounting.

The stable rating outlook reflects Moody's expectations for
continued moderate organic revenue growth while maintaining,
and perhaps slightly improving, current operating margins, in
a supportive government and commercial contracting market
environment over the next 12-18 months.  Cash flow is expected to
remain strong and Moody's estimates that the company should
generate sufficient cash to redeem all unsecured notes outstanding
when they become callable in 2007.

Ratings or their outlook could be subject to upward revision if
the company were to successfully grow its revenue levels to over
$1 billion annually without substantial increase in debt levels or
business risk, while maintaining operating margins at greater than
10%.  While debt reduction is not likely until the notes are
callable, an upgrade could be considered if Debt were to fall
below 2 times, or if EBIT were to exceed 3 times on a sustained
basis.  Conversely, ratings or their outlook could be lowered if
operating results were to face unexpected deterioration, or if the
company were to increase debt for any reason, particularly if
management were to undertake an larger-than planned share
repurchase or levered acquisition, such that Debt were to increase
to over 3.5x, if EBIT were to fall below 2.5x, or if free cash
flow were to fall below 10% of total debt for a prolonged period.

The Ba3 rating of the senior unsecured notes, one notch below the
Corporate Family Rating, reflects the effective subordination in
claim behind the senior secured credit facility, which can
potentially be enlarged through a $25 million accordion feature.
These notes rank equally with all senior unsecured debt of the
company, and are guaranteed by all of the company's subsidiaries.

Upgrades:

Issuer: Orbital Sciences Corporation

   * Corporate Family Rating, Upgraded to Ba2 from Ba3
   * Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3
     from B1

Orbital Sciences Corporation, headquartered in Dulles, Virginia,
manufactures small space and missile systems for commercial, civil
government and military customers.  The company had LTM June 2006
revenue of $748 million.


OREGON STEEL: Notes Redemption Prompts Moody's to Withdraw Ratings
------------------------------------------------------------------
Moody's Investors Service withdrew its ratings for Oregon Steel
Mills, Inc. Effective July 15, 2006, the company redeemed all of
its outstanding 10% guaranteed first mortgage notes.  As this was
the only debt that Moody's rated for Oregon Steel Mills, Moody's
is withdrawing all of the company's ratings.

These ratings were withdrawn:

   * Ba3 for the10% guaranteed first mortgage notes due 2009
   * Ba3 corporate family rating

Oregon Steel Mills, Inc., headquartered in Portland, Oregon,
operates two steel minimills and several smaller tubular product
mills, all located in the western U.S. and Canada.


PACIFIC GAS: Inks San Francisco Power Contract With Mirant Corp.
----------------------------------------------------------------
Mirant Corporation signed two contracts with Pacific Gas and
Electric Company to provide electricity from its natural gas-fired
Pittsburg and Contra Costa power plants located near San
Francisco, California.

PG&E has contracted for 2,000 megawatts of capacity for varying
terms ranging from one year up to about four years beginning in
2007.  The longer-term transaction will be submitted to the
California Public Utilities Commission for its review and
approval.  Mirant intends to withdraw immediately the notice of
intent to shut down Pittsburg Unit 7 and Contra Costa Unit 6 that
it had submitted to the CPUC and the California Independent System
Operator on May 4, 2006.

With continuing strong growth in electric demand and the
possibility of additional heat waves, these contracts provide an
important reliable electric supply for California consumers.

"We are pleased that we were able to reach an agreement with PG&E
that will allow us to keep Pittsburg 7 and Contra Costa 6
available to provide much needed and reliable power to the people
of California," said Robert M. Edgell, Mirant's executive vice
president and head of its United States business.

                      About Mirant Corp.

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.

                         About PG&E Co.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on
April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L.
Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent
the Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.


PANTRY INC: Amends Contract with BP Products North America
----------------------------------------------------------
The Pantry, Inc., entered into a third amendment to its Branded
Jobber Contract, dated July 18, 2006, with BP Products North
America Inc.

The amendment extends the term of the Branded Jobber Contract
until September 30, 2012, and modifies these terms to the Original
Contract:

   -- The Company's obligation to purchase a minimum volume of BP
      branded gasoline each year was amended and is now subject to
      increase at a rate of approximately 7% per year during the
      remaining term of the agreement.

   -- In any period in which the Company fails to meet its minimum
      volume purchase obligation, the Company has agreed to pay BP
      an amount per gallon times the difference between the actual
      volume of BP branded product purchased and the minimum
      volume requirement.

Headquartered in Sanford, North Carolina, The Pantry, Inc. --
http://www.thepantry.com/-- is the leading independently operated
convenience store chain in the southeastern United States and one
of the largest independently operated convenience store chains in
the country, with net sales for fiscal 2005 of approximately $4.4
billion.  As of Sept. 29, 2005, the Company operated 1,400 stores
in eleven states under a number of banners including Kangaroo
Express(SM), Golden Gallon(R), and Cowboys(SM).  The Pantry's
stores offer a broad selection of merchandise, as well as gasoline
and other ancillary services designed to appeal to the convenience
needs of its customers.

As reported in the Troubled Company Reporter on May 16, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on The Pantry Inc. to 'BB-' from 'B+'.  At the same time,
the bank loan rating was raised to 'BB' from 'BB-', with the
recovery rating unchanged at '1', indicating expectations for full
recovery of principal in the event of a default.  The subordinated
debt rating was also raised to 'B' from 'B-'.  The outlook is
stable.


PELTS & SKINS: Case Summary & 35 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Pelts & Skins, LLC
        78070 Koogie Road
        Covington, Louisiana 70435

Bankruptcy Case No.: 06-10742

Debtor-affiliate filing separate chapter 11 petition:

      Entity                    Case No.
      ------                    --------
      PS Chez Sidney, LLC       06-10743

Type of Business: Pelts & Skins, LLC produces, processes, and
                  sells alligator skins to tanneries throughout
                  the country.  The Debtor owns four farms located
                  across the Gulf Coast, herds more than
                  200,000 alligators, and harvests them for their
                  meat and hide.  The Debtor's alligator meat is
                  packaged as Chef Penny's brand and is
                  distributed by their subsidiary, PS Chez Sidney.
                  See http://www.pelts.com/

Chapter 11 Petition Date: August 1, 2006

Court: Eastern District of Louisiana (New Orleans)

Debtors' Counsel: Douglas S. Draper, Esq.
                  Heller, Draper, Hayden, Patrick & Horn, LLC
                  650 Poydras Street, Suite 2500
                  New Orleans, Louisiana 70130
                  Tel: (504) 581-9595
                  Fax: (504) 525-3761

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

A. Pelts & Skins, LLC's 15 Largest Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
Apache Corp.                            $777,654
P.O. Box 206
Houma, LA 70361-0206

Morio Mito                              $390,000
828 Camino Del Poniente
Sante Fe, NM 87505

Texas Farm Products Company              $67,779
P.O. Box 630009
Nacogdoches, TX 75963-0009

Fitzmorris Gator Farm                    $56,000
James R. Fitzmorris
78070 Koogle Road
Covington, LA 70433

Peragine & Lee, LLC                      $31,158
527 East Boston Street
Suite 201
Covington, LA 70433

Dore Energy Corp.                        $30,612

Gloeckner Co., Inc.                      $29,700

La Porte, Sehrt, Romig & Hand, CPA       $23,945

Deloitte & Touche LLP                    $23,000

Parlier Associates - Terry Parlier       $21,531

Blue Cross/Blue Shield                   $20,038

Top Gun Aviation, Inc.                   $19,392

West Pass Farms, Inc.                    $18,750

BWI Companies, Inc.                      $18,138

Evangeline Gas Co., Inc.                 $18,579

DAD Transportation                       $11,898

Raydell Estrada                          $11,175

BankOne Visa                             $10,708

Arnie Thompson - Operation Petty Cash     $9,581

Cameron Parish School Board               $9,102

B. PS Chez Sidney, LLC's 20 Largest Unsecured Creditors:

   Entity                           Claim Amount
   ------                           ------------
William E. Brown                         $54,300
2040 North Causeway Boulevard
Mandeville, LA 70471

Peragine & Lea                           $29,372
527 East Boston Street, Suite 201
Covington, LA 70433

Matheson Tri-Gas                         $17,996
P.O. Box 845502
Dallas, TX 75284-5502

Atterbery Trucks                         $17,616
P.O. Box 16900
Lake Charles, LA 70616

A La Carte Foods Inc.                    $17,112
P.O. box 246
Paincourtville, LA 70391

M. Matt Durand, LLC                      $14,532

Donald Palmer Co., Inc.                   $7,520

Errol's Cajun Foods, Inc.                 $7,327

Cochran Scales                            $6,678

FFE Trucking                              $6,040

Southern Cold Storage                     $5,042

Fed Ex                                    $4,006

Penny Matthews                            $3,733

St. Martin Water Dist. 4                  $3,181

LWCC                                      $2,919

SLEMCO 1322034000                         $2,347

LaFleur Paper Company                     $2,445

SLEMCO 1322011503                         $2,209

PFG Florida                               $2,153

Mr. Broussard - Petty Cash                $2,105


PERKINELMER INC: Acquires Macri Tech. and NTD Labs for $56.65 Mil.
------------------------------------------------------------------
PerkinElmer, Inc., completed its acquisition of J.N. Macri
Technologies, LLC, and NTD Laboratories, Inc.  The purchase price
for both transactions was approximately $56.65 million.

"This acquisition represents the next step in our initiative to
build a comprehensive screening and diagnostics capability in
maternal health," Gregory L. Summe, chairman and chief executive
officer of PerkinElmer, Inc. said.  "It provides a leading
position in free Beta hCG measurement in the U.S. and will be an
integral part of expanding our maternal health portfolio
globally."

"This acquisition provides an opportunity to strengthen our
position with clinicians and our existing laboratory partners as a
result of NTD's strong and established relationships with maternal
health care providers," Robert F. Friel, president, PerkinElmer
Life and Analytical Sciences said.  "We expect this agreement will
accelerate PerkinElmer's own maternal health research and
development initiatives, by giving us the ability to better
understand first-hand the needs of the clinical community.  Our
future plans include the introduction of the free Beta hCG
biomarker, which is used throughout Europe, on PerkinElmer's
proprietary platforms, further extending our maternal health
solutions."

Dr. James Macri, president, NTD Laboratories said.  "We expect the
combination of NTD's expertise in providing first-trimester
prenatal screening services with PerkinElmer's market-leading
application expertise and strong distribution channels will
accelerate wider access to this important technology to clinicians
and patients."

                 About J.N. Macri Technologies

J.N. Macri holds and licenses global patents related to free beta
Human Chorionic Gonadotropin, a peptide hormone produced in the
early stage of pregnancy that is widely recognized as a critical
biomarker for first-trimester prenatal risk assessment.

                     About NTD Laboratories

NTD Laboratories, Inc. offers laboratory developed and validated
testing under the brand name UltraScreen, of which free Beta hCG
is a vital component.  NTD Labs generated $15 million of revenue
in its last fiscal year ending June 2006.

PerkinElmer Inc. (NYSE: PKI) -- http://www.perkinelmer.com/-- is
a global technology leader driving growth and innovation in Health
Sciences and Photonics markets to improve the quality of life.
PerkinElmer reported revenues of $1.5 billion in 2005, has 8,000
employees serving customers in more than 125 countries, and is a
component of the S&P 500 Index.

                       *     *     *

PerkinElmer Inc.'s Long Term Subordinated Debt carry Moody's
Investors Service's Ba1 rating.


PEACEFUL MANAGEMENT: Selling Parking Garage Lease for $314,000
--------------------------------------------------------------
Ian J. Gazes, the Chapter 7 Trustee of Peaceful Management Inc.,
will sell the Debtor's property lease for a parking garage located
at 700 Pacific Street in Brooklyn, New York, for $314,000.

The Trustee believes that the property lease has value to the
Debtor's estate.

Interested buyers may contact:

        G.E.M. Auction Corp.
        499 Van Brunt Street, Suite 4B
        Brooklyn, New York 11231
        Tel: (718) 222-0100
        FaX: (718) 222-4030

Headquartered in Brooklyn, New York, Peaceful Management Inc. owns
and operates parking services.  The Debtors filed for chapter 7
petition on June 5, 2006 (Bankr. S.D.N.Y. Case No. 06-11258).  Ian
J. Gazes serves as the Debtor's Chapter 7 Trustee.


PHIBRO ANIMAL: S&P Puts Junk Rating on $80 Million Sr. Sub. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Phibro Animal Health Corp. to 'B' from 'B-'.  The rating
was removed from CreditWatch, where it was placed with positive
implications July 13, 2006.

At the same time, Standard & Poor's affirmed its 'B-' senior
unsecured debt rating on the company's $160 million 10% senior
unsecured notes due 2013 and assigned a 'CCC+' subordinated debt
rating to its $80 million 13% senior subordinated notes due 2014.

Proceeds from the notes will be used to retire existing senior
secured and subordinated debt of Phibro. (Initially, the company
planned on issuing $240 million of senior unsecured notes.  The
deal has since been restructured.)

"The corporate credit rating upgrade reflects the lessening of
pressure on the company's cash flows given that the debt
refinancing extends debt maturities to 2013-2014," explained
Standard & Poor's credit analyst Arthur Wong.

Ridgefield Park, New Jersey-based Phibro continues to maintain its
position in the mature animal feed additives business.  However,
the company remains highly levered, with debt to EBITDA at 5.7x,
and cash flows are tepid, with funds from operations to total debt
expected to be less than 10% over the intermediate term.  EBITDA
interest coverage is just less than 2x.  Standard & Poor's expects
these credit measures to steadily improve, though Phibro remains
exposed to disruptions in worldwide demand for animal feed
additives and potential setbacks in obtaining FDA manufacturing
approval for key product virginiamycin at its Brazilian facility.

Privately held Phibro is the third-largest manufacturer of
medicated and nutritional animal feed additives for the livestock
industry.  Roughly 79% of the company's revenues are from its
animal feed additives segment, with specialty chemicals and
distribution accounting for the rest.  The demand for feed
additives is directly related to the agricultural market and
worldwide animal protein consumption (which has been rising), as
well as increased calls for food safety.  This business also has
significant barriers to entry -- mainly the extensive licensing
and registration required to manufacture and sell in various
markets.  No one customer accounts for more than 7% of the
company's total revenues.

Phibro continues to operate with a heavy debt load.  Total debt to
EBITDA is roughly 5.6x.  The company's EBITDA interest coverage is
just less than 2.0x, and funds from operations to total debt is
expected to be less than 10% over the intermediate term.  These
measures are commensurate with the low-speculative-grade rating.
EBITDA operating margins are relatively low, at 13%, reflecting
the commodity-like nature of the animal health business.


PLATFORM LEARNING: Gets Court's Final Okay to Use Cash Collateral
-----------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York authorized Platform Services, Inc.,
to use, on a final basis, the cash collateral securing repayment
of its indebtedness to Silicon Valley Bank, and three other
subordinated creditors.

The Debtor's subordinated creditors are:

   1) Capital Resource Partners V, L.P.;

   2) Stichting Pensioenfonds ABP; and

   3) Stichting Pensioenfonds Voor de Gezondheid, Geestelijke En
      Maatschappelijke Belangen.

                 Credit and Financing Agreements

Pursuant to a Loan Security Agreement dated Sept. 8, 2005,
Silicon Valley provided the Debtor a working capital line of
credit and an equipment line of credit for approximately
$15,000,000.  When the Debtor filed for bankruptcy, the aggregate
principal amount owed to Silicon Valley is $5,141,000.

In addition, the Company entered into a Senior Subordinated
Secured Note and Warrant Purchase Agreement with the subordinated
creditors, providing mezzanine financing to the Debtor in excess
of $10,000,000.  As of its bankruptcy filing, the Debtor says that
it owes the subordinated creditors an aggregate amount of
$14,410,147.

In accordance with the prepetition credit agreements and
subordinated credit agreements, the Debtor's obligations to
Silicon Valley and the subordinated creditors are secured by
substantially all of its assets.

Judge Drain says that allowing the Debtor to use the subordinated
creditors' cash collateral will minimize disruption of the
Debtor's business operations and permit the Debtor to meet payroll
and other operating expenses.

Judge Drain says that the cash collateral may be used only to:

   (a) meet and satisfy the Debtor's ongoing operational and
       administrative expenses specifically set forth in the cash
       collateral budget; and

   (b) make adequate protection payments.

A full-text copy of the Debtor's cash collateral budget is
available for free at http://researcharchives.com/t/s?deb

                       About Platform Learning

Based in Broad Street, New York, Platform Learning Inc. --
http://www.platformlearning.com/-- provides supplemental
educational services through their Learn-to-Succeed tutoring
program to students attending public schools that are "in
need of improvement."  The Debtor works together with parents,
schools, community organizations, and local educators to implement
their research-based program, which ensures that all children can
become successful students by providing appropriate support,
motivation and curriculum tailored to their individual needs.

The Company filed for chapter 11 protection on June 21, 2006
(Bankr. S.D.N.Y. Case No. 06-11391).  Andrew C. Gold, Esq., Eric
W. Sleeper, Esq., Paul Rubin, Esq., David M. Bass, Esq., and John
M. August, Esq., at Herrick, Feinstein LLP, represent the Debtor
in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$21,026,148, and total debts of $36,933,490.


PROVIDENTIAL HOLDINGS: Buying Western Medical Assets for $5.65MM
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona issued an
order approving Western Medical, Inc.'s motion to sell
substantially all of its assets, pursuant to Section 363 of the
Bankruptcy Code, to Providential Holdings, Inc. for a total
consideration of $5.65 million.  This amount may be subject to a
potential deduction on the basis of $1 for every $1 below
$9,330,260 that the Accounts Receivable total as of the closing
date, up to a total deduction of $500,000.

Funding for this transaction will be provided by Northern
Healthcare Capital, LLC.

According to the court order, the assets acquired by Providential
Holdings will be free and clear of all liens, interests and
encumbrances, and Providential has no liability for any other
liabilities of Western Medical, Inc.

The closing date is set to occur no later than 5:00 pm, Phoenix
time, Aug. 2, 2006.

"We look forward to building an exceptional company at all
levels," Robert Buceta, corporate strategist of Providential
Holdings, Inc. and Chairman of Providential Western Medical, Inc.,
re-iterated.  "Our experienced management team will make
Providential Western Medical an industry leader in providing the
highest quality services and products for home health care.  We
firmly believe that our growth and accomplishments stem from the
caliber of our employees, who strive to exceed our clients'
expectations."

                      About Western Medical

Headquartered in Phoenix, Arizona, Western Medical, Inc. --
http://www.westernmedicalinc.net/-- sells and distributes medical
and hospital equipment.  The company filed for chapter 11
protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784).
Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the
Debtor.  When the Debtor filed for protection from its creditors,
it estimated asstes between $1 million to $10 million and debts
between $10 million and $50 million.

                   About Providential Holdings

Based in Huntington Beach, California, Providential Holdings, Inc.
(OTCBB:PRVH) -- http://www.phiglobal.com/-- specializes in
mergers and acquisitions and independent energy business.  The
Company acquires and consolidates special opportunities in
selective industries to create additional value, acts as an
incubator for emerging companies and technologies, and provides
financial consultancy and M&A advisory services to U.S. and
foreign companies.

                     Going Concern Doubt

As reported in the Troubled Company Reporter on Dec. 14, 2005,
Kabani & Company, Inc., raised substantial doubt about
Providential Holdings, Inc.'s ability to continue as a going
concern after it audited the Company's financial results for the
year ended June 30, 2005.  The auditors pointed to the Company's
accumulated deficit and losses in the years ended June 30, 2005,
and 2004.  At March 31, 2006, the Company's balance sheet showed
accumulated deficit of $18,970,157.  The company posted a $186,050
net loss for the period ended March 31, 2006.


QUAKER FABRIC: Incurs $12.1 Mil. Net Loss in Quarter Ended July 1
-----------------------------------------------------------------
Quaker Fabric Corporation reported net sales of $42.9 million, and
a net loss of $12.1 million for the three-month period ended July
1, 2006, compared to net sales of $68.9 million and a net loss of
$10.3 million for the corresponding period of fiscal 2005.

Quaker's financial results for the second quarter of fiscal year
2006 include $9.1 million of after-tax restructuring and asset
impairment charges associated with the Company's current
restructuring activities.  Excluding these charges, net loss for
the second fiscal quarter of 2006 was $3.1 million.

At July 1, 2006, the Company's balance sheet showed stockholders'
equity of $125 million, as compared to $137.2 million at March 31,
2006 and $141.1 million at Dec. 31, 2005.

"The 7.3% drop in our sales versus the first quarter of this year
was disappointing.  At the same time, our second quarter margin
performance, variable costs, fixed costs and SG&A expenses
indicate a sequential improvement in our operating performance
compared to the first three months of this year - reflecting the
restructuring plan and cost cutting measures we have put in place,
and allowing us to remain in compliance with the financial
covenants in our loan documents while we simultaneously continue
working on our financial structure and focusing on restoring the
company to profitability.  Building sales continues to be one of
our biggest challenges.  Competition from imported fabric rolls
and kits remains intense, and the second quarter of this year saw
a 37.8% drop in our total revenues versus the comparable period of
last year - with domestic and international fabric sales for the
quarter of $34.9 million and $6.4 million, down 30.8% and 23.4%,
respectively. Net yarn sales, at $1.6 million, were down 84.0%,"
commented Larry A. Liebenow, Quaker's President and CEO.

"We are focused on achieving major long-term reductions in our
cost structure through the comprehensive consolidation of our
manufacturing operations.  This involves the disposition of
machinery and equipment no longer needed to support our operations
and the sale of excess real estate.  This program to achieve a
major consolidation of our operations going forward by reducing
the number of facilities we use to conduct our business, in
combination with the drop we have seen in our volume, resulted in
the $9.1 million after-tax restructuring and asset impairment
charge reflected in our second quarter financial results.  The
successful sale of two of our idled Fall River area manufacturing
facilities since the end of the first quarter, including the sale
of our Somerset, Massachusetts plant earlier this month, are part
of this overall plan," Mr. Liebenow added.

"An integral part of our ongoing restructuring plan includes
focusing on those domestic markets least sensitive to imported
products; building profitable volume in the outdoor fabric,
contract fabric and specialty yarns markets; and developing
strategically important commercial relationships with a limited
number of carefully chosen offshore fabric mills.  And, since the
end of the first quarter, we have continued to make a lot of
progress versus those objectives, including - a 66.2% increase in
our second quarter sales into the contract market versus the
comparable period of last year - the successful launch and first
sales of our new line of decorative outdoor fabrics to upscale
outdoor furniture manufacturers and the jobber and high-end
residential markets - and incremental sales to specialty furniture
retailers that helped to increase our average selling price per
yard," Mr. Liebenow added.

"Since the end of the first quarter, we have also made
considerable progress in further developing the strategically
important, offshore sourcing arrangement we put in place earlier
this year with Zhongwang, including assisting Zhongwang with the
installation of state-of-the-art finishing and post-finishing
capability.  Customer response to our outsourced products
continues to be great," Mr. Liebenow said.

"Since the second quarter of 2005, we have also implemented
further significant reductions in our cost structure.  In
addition, during the twelve-month period which began at the end of
fiscal June 2005, operating improvements and tight controls on
inventory levels and capital spending generated operating cash
flow of approximately $17 million.  This cash flow allowed us to
reduce debt from $51.9 million at the end of fiscal June 2005 to
$34.8 million at the end of this year's second quarter," Mr.
Liebenow added.

"Between now and the end of this year, we will remain focused on
effective execution of our restructuring plan, including -
continued aggressive marketing of both our offshore fabric
programs as well as the fabrics that it makes more sense, to us
and to our customers, for us to make here in the U.S. - the
consolidation of our Fall River manufacturing operations into
fewer facilities - active marketing of our excess real estate and
other assets - and implementation of additional substantial cost
reduction programs," Mr. Liebenow concluded.

                         Going Concern Doubt

As reported in the Troubled Company Reporter on April 12, 2006,
auditors at PricewaterhouseCoopers LLP in Seattle, Washington,
raised substantial doubt about Quaker Fabric Corporation's ability
to continue as a going concern after auditing the company's Dec.
31, 2005 and Jan. 1, 2005 consolidated financial statements and
its internal control over financial reporting as of Dec. 31, 2005.
PwC pointed to the Company's recurring losses from operations,
certain debt covenant defaults, and operating performance decline.

                       About Quaker Fabric

Based in Fall River, Massachusetts, Quaker Fabric Corporation
(NASDAQ: QFAB) -- http://www.quakerfabric.com/-- manufactures
woven upholstery fabrics for furniture markets in the United
States and abroad, and produces Jacquard upholstery fabric.


REFCO INC: U.S. Trustee Reconstitutes Official Creditors Committee
------------------------------------------------------------------
Diana G. Adams, the acting United States Trustee for Region 2,
reconstitutes the Official Committee of Unsecured Creditors as of
July 21, 2006.

The Creditors Committee is now composed of:

   1. Wells Fargo National Association, as Indenture Trustee
      6th Street, Marquette Ave., MAC N9303-120
      Minneapolis, Minnesota 55479
      Attention: Julie J. Becker, Vice President
      Phone: (612) 316-4772

   2. D.E. Shaw & Co., LP
      120 West 45th Street
      New York 10035
      Attention: Marc Sole
      Phone: (212) 478-0179

   3. Esopus Creek Advisors
      500 Fifth Avenue, Suite 2620
      New York 10110
      Attention: Joseph Criscione
      Phone: (212) 302-7214

                       About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News, Issue
No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).


REFCO INC: Chapter 11 Trustee hires Capstone as Financial Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Marc S. Kirschner, the Chapter 11 trustee overseeing
Refco Capital Markets, Ltd.'s estate, to employ Capstone Advisory
Group, LLC, as his financial advisor with respect to inter-
creditor and inter-Debtor issues, including intercompany claims,
where the RCM Trustee determines that RCM's interests may conflict
with those of the other Chapter 11 Debtors.

Capstone's scope of services will be limited to performing
confirmatory due diligence and analysis of compilations of
information produced by Goldin Associates LLC, and APS Service
LLC, with respect to claims arising out of transactions between:

   (i) RCM and one or more of the Other Chapter 11 Debtors and
       non-debtor affiliates or subsidiaries of Refco, Inc.; or

  (ii) two or more of the Other Chapter 11 Debtors and Refco's
       non-debtor affiliates.

Capstone will not provide any services to the RCM Trustee unless
and until the analysis of the Intercompany Claims has progressed
to the point where it can be furnished to Capstone by Goldin or
APS on the RCM Trustee's instruction.

At that time, however, Capstone will be permitted to perform its
confirmatory due diligence and advise the RCM Trustee with
respect to reviewing, analyzing, and inquiring of Goldin or APS
about their work product and back up materials and processes.

Capstone may be compensated in accordance with the Engagement
Letter, subject to applicable requirements for payment of fees
and disbursements under the Bankruptcy Code, the Bankruptcy
Rules, guidelines promulgated by the United States Trustee, the
rules and other Court orders.

As reported in the Troubled Company Reporter on July 7, 2006, Mr..
Kirschner told the Court that there are significant intercreditor
and other issues, including intercompany claims, which are unique
to RCM and with respect to which RCM's interests are, or may be,
in direct conflict with the interests of the other Chapter 11
Debtors' estates and stakeholders.

Capstone will:

   a.  assist the Trustee with analysis of RCM's books and
       records relating to intercompany transactions,
       intercompany accounting and related accounts of
       RCM;

   b.  advise the Trustee regarding any proposed transactions
       affecting the RCM estate or the resolution of the RCM
       case;

   c.  advise the Trustee regarding negotiations with
       stakeholders;

   d.  assist the Trustee and his counsel in negotiating and
       effecting a comprehensive resolution of the RCM
       bankruptcy;

   e.  perform other necessary financial advisory services for
       the Trustee in connection with the Chapter 11 case; and

   f.  provide valuation work and expert testimony as
       determined by the Trustee to be necessary.

Capstone will be paid based on the actual hours worked charged at
its standard hourly rates and reimbursed for its out-of-pocket
expenses.  The firm's current rates are:

     Position              Hourly Rate
     --------              -----------
     Executive Director    $530 - $575
     Staff                 $250 - $450
     Support Staff          $75 - $175

Capstone professionals who will have primary responsibility for
representing the Trustee are:

     Professional          Position at Capstone
     ------------          --------------------
     David Galfus          Member and Executive Director
     Robert Manzo          Executive Director
     Jack Surdoval         Managing Director

Other Capstone professionals may assist in the representation as
needed.

Mr. Galfus attests that Capstone (i) is not a creditor, an equity
security holder or an insider of RCM, or any other Chapter 11
Debtor; (ii) is not and was not within two years before the
Petition Date, a director, officer or employee of RCM or any
other Chapter 11 Debtor; and (iii) does not hold or represent any
interest that is materially adverse to the interest of the RCM
estate or of any class of creditors or equity security holders.

Capstone's professionals have played significant roles in many of
the largest and most complex cases under the Bankruptcy Code,
including the chapter 11 cases of Adelphia Communications
Corporation, Ames Department Stores, Inc., Enron Corp., Federal
Mogul, Inc., Mirant Energy, Inc., Owens Corning, Inc., Vencor,
Inc., and W.R. Grace.

                       About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News, Issue
No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).


RESORT FOODS: Case Summary & Two Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Resort Foods of York, Inc.
        1050 Hull Street, Suite 100
        Baltimore, MD 21230

Bankruptcy Case No.: 06-14504

Type of Business: The Debtor formerly operated retail restaurants.

Chapter 11 Petition Date: July 31, 2006

Court: District of Maryland (Baltimore)

Debtor's Counsel: Lawrence Joseph Yumkas, Esq.
                  Rosenberg Martin Greenberg, LLP
                  25 South Charles Street, Suite 2115
                  Baltimore, MD 21201
                  Tel: (410) 727-6600
                  Fax: (410) 727-1115

Total Assets:    $746,000

Total Debts:  $26,804,773

Debtor's Two Largest Unsecured Creditors:

   Entity                                Claim Amount
   ------                                ------------
GE Commercial Finance                     $25,254,000
Business Property Corporation
10900 Northeast 4th Street             Secured Value:
Suite 500                                    $746,000
Bellevue, WA 98004

Delaware Food Ventures, Inc.                 $804,773
1050 Hull Street, Suite 100
Baltimore, MD 21230


RIVERSTONE NETWORKS: Disclosure Statement Hearing Set for Aug. 9
----------------------------------------------------------------
The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware will convene a hearing at 9:30 a.m.
on Aug. 9, 2006, to consider approval of the disclosure statement
explaining RNI Wind Down Corporation, fka Riverstone Networks,
Inc., and its debtor-affiliates' Joint Plan of Reorganization
and Liquidation.

The Debtors' Plan, submitted on July 7, 2006, classifies these
claims as unimpaired and proposes to pay them in full:

   (a) administrative claims,

   (b) unclassified priority tax claims,

   (c) the secured claims of:

       -- Riverstone Networks, Inc.,
       -- The OASys Group, Inc.,
       -- Riverstone Networks SPC, Inc.,
       -- Pipal Systems, Inc.,
       -- Blue Coast, Inc.,

   (d) the priority claims of:

       -- Riverstone Networks, Inc.,
       -- The OASys Group, Inc.,
       -- Riverstone Networks SPC, Inc.,
       -- Pipal Systems, Inc.,
       -- Blue Coast, Inc.,

   (e) personal injury and other insured claims against Riverstone
       Networks, Inc.

Holders of general unsecured claims and indemnification claims
will be paid in full over time and their claims will earn a 5%
interest per annum until fully paid.

Each holder of the Debtors' bonds will be paid a pro-rata share of
the allowed aggregate bondholder claim.

Holders of equity interests will get nothing under the Plan.

A copy of the Disclosure Statement is available for a fee at:

http://www.researcharchives.com/bin/download?id=060717211521

Based in Santa Clara, California, Riverstone Networks, Inc.
-- http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services.  The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114).  Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors.  Kerri K. Mumford, Esq., at Landis Rath &
Cobb LLP, represents the Official Committee of Unsecured
Creditors.  The firm Brown Rudnick Berlack Israels LLP serves as
counsel to the Official Committee of Equity Security Holders.  As
of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947.


ROTEC INDUSTRIES: Panel Taps NachmanHaysBrownstein as Fin'l Expert
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Rotec
Industries, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court
for the District of Delaware for permission to employ
NachmanHaysBrownstein, Inc., as its financial advisors, nunc pro
tunc to June 14, 2006.

NachmanHaysBrownstein is expected to:

   a) review and analyze the Debtor's business management,
      operations, properties, financial condition and prospects;

   b) review the assumptions underlying the business plans and
      cash flow projections for the assets involved in any
      potential plan of reorganization;

   c) determine the reasonableness of the projected performance of
      the Debtor;

   d) monitor, evaluate and report to the Committee with respect
      to the Debtor's near-term liquidity needs, material
      operational changes and related financial and operational
      issues;

   e) review and analyze all material contracts and agreements;

   f) assist and assemble any necessary validations of asset
      values;

   g) provide ongoing assistance to the Committee and its legal
      counsel;

   h) evaluate the Debtor's capital structure and make
      recommendations to the Committee with respect to the
      Debtor's efforts to reorganize their business operations and
      confirm a plan;

   i) assist the Committee in preparing documentation required in
      connection with creating, supporting or opposing a plan and
      participating in negotiations on behalf of the Committee
      with the Debtor or any groups affected by a plan; and

   j) provide ongoing analysis of the Debtor's financial
      condition, business plans, capital spending budgets,
      operating forecasts, management and the prospects for their
      future performance.

The firm's professionals bill:

        Professional             Hourly Rate
        ------------             -----------
        John Bambach, Jr.           $375
        Edward T. Gavin             $375

Mr. Gavin assures the Court that his firm does not hold any
interest adverse to the interests of the Committee or the Debtor's
creditors.

Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. --
http://www.rotec-usa.com/-- is an industry leader in concrete
products and concrete placing technology & solutions.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del.
Case No. 06-10542).  Edward J. Kosmowski, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtor in its restructuring
efforts.  Adam G. Landis, Esq., and Megan Nancy Harper, Esq.,
represent the Official Committee of Unsecured Creditors.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


ROTEC INDUSTRIES: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Rotec Industries, Inc., delivered to the U.S. Bankruptcy Court for
the District of Delaware its schedules of assets and liabilities,
disclosing:

     Name of Schedule                Assets         Liabilities
     ----------------                ------         -----------
  A. Real Property
  B. Personal Property          $12,400,523
  C. Property Claimed
     as Exempt
  D. Creditors Holding                               $2,331,942
     Secured Claims
  E. Creditors Holding                                 $304,709
     Unsecured Priority Claims
  F. Creditors Holding                               $9,600,226
     Unsecured Nonpriority
     Claims
                                 ----------         -----------
     Total                      $12,400,523         $12,236,877

Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. --
http://www.rotec-usa.com/-- is an industry leader in concrete
products and concrete placing technology & solutions.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del.
Case No. 06-10542).  Edward J. Kosmowski, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtor in its restructuring
efforts.  Adam G. Landis, Esq., and Megan Nancy Harper, Esq.,
represent the Official Committee of Unsecured Creditors.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


SAINT VINCENTS: Sells St. Mary's to Backer Group for $21.2 Million
------------------------------------------------------------------
The Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for
the Southern District of New York authorizes and directs Saint
Vincents Catholic Medical Centers of New York to consummate the
Sale Transaction, pursuant to and in accordance with the terms and
conditions of the Purchase Agreement with Backer Group LLC.

The Debtors held an auction at the New York offices of Weil,
Gotshal & Manges LLP on July 11, 2006.

After the completion of the Auction, the Debtors, in consultation
with the Official Committee of the Unsecured Creditors,
determined that the bid from the Backer Group was the highest or
best offer for the St. Mary's Property and the bid from NAL of NY,
Inc., was the second highest.

Backer Group offered to pay $21,200,000 for St. Mary's Hospital
Complex while NAL of NY's final bid was $20,675,000.

A full-text copy of the Backer Group Purchase Agreement is
available for free at http://researcharchives.com/t/s?e9c

A full-text copy of the NAL Purchase Agreement is available for
free at http://researcharchives.com/t/s?e9d

The St. Mary's Property will be transferred to Backer Group, free
and clear of all Liens, with all Liens to attach to the net
proceeds of the Sale Transaction.

The Debtors will not sell or transfer any Purchased Assets that
are subject to a lien or security interest in favor of General
Electric Capital Corporation unless:

    (a) GE Capital consented to the sale or transfer;

    (b) the Court enters a subsequent order, upon notice to GE
        Capital, authorizing the Debtors to make the sale or
        transfer; or

    (c) GE Capital's consent is not required for the sale or
        transfer under the GE Capital Financing Agreements.

Moreover, the Debtors will pay any outstanding water and sewer
charges relating to the Property owed to the City of New York
prior to or at Closing; provided, that the Court will retain
jurisdiction to determine the amounts if the City of New York and
the Debtors are unable to agree on them.

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


SANDISK CORP: Posts $96 Million Second Quarter 2006 Net Income
--------------------------------------------------------------
SanDisk Corporation reported net income of $96 million for the
second quarter ended July 2, 2006.

The Company disclosed that total second quarter revenues increased
40% on a year-over-year basis to $719 million.

The Company also reported GAAP operating income for the second
quarter of 2006 of $129 million or 18% of revenues and non-GAAP
operating income of $159 million or 22% of revenue compared to
$106 million or 21% of revenue in the second quarter of 2005.

Cash flow from operations was $59 million, and total cash and
investments increased sequentially by $933 million to
$2.7 billion.

At July 2, 2006 the Company's balance sheet showed total assets of
$4.8 billion and total liabilities of $1.7 billion.

The Company also disclosed that it signed with Toshiba a
definitive agreement to build a new 300-millimeter NAND wafer
fabrication facility in Yokkaichi, Japan with initial production
expected to begin in the fourth quarter of 2007.

Headquartered in Milpitas, Calif., SanDisk Corp. (NASDAQ:SNDK)
-- http://www.sandisk.com/-- manufactures various formats of
flash memory cards for use in consumer electronics products,
including digital cameras, mobile phones, and game systems.  In
addition, the company produces devices such as USB drives and MP3
music players.

                           *     *     *

As reported in the Troubled Company Reporter on May 11, 2006,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Sunnyvale, California-based SanDisk Corp.'s proposed issue of $1.0
billion of senior unsecured convertible notes due 2013.  The 'BB-'
corporate credit rating on SanDisk was affirmed.  The rating
outlook is stable.


SCOTTISH RE: Profit Warning Prompts Moody's to Downgrade Rating
---------------------------------------------------------------
Moody's Investor Services downgraded to Ba2 from Baa2 the senior
unsecured debt rating of Scottish Re Group Limited following the
Company's profit warning.  The rating agency also downgraded to
Baa2 from A3 the insurance financial strength ratings of the
company's core insurance subsidiaries, Scottish Annuity & Life
Insurance Company (Cayman) Ltd. and Scottish Re (U.S.), Inc. All
debt and IFS ratings of Scottish Re remain on negative outlook.

On July 31, Scottish Re announced it expects to report a net
operating loss available to ordinary shareholders of approximately
$130 million for the second quarter ended June 30, 2006.  As a
result Moody's commented that the company will not meet the
earning's expectations for the company's ratings as previously
outlined by Moody's.

The rating agency noted that the company has announced a series of
"one time charges" and accounting adjustments over a period of
multiple quarters.  Despite a number of recent investments in
personnel and systems to improve risk management and internal
controls at the company, the recent earnings announcement
diminishes Moody's confidence that there will not be further
adverse developments over the near to medium term.

The rating agency also noted that the company will be challenged
to write business following the recent earnings' misses, thereby
reducing future earnings growth.  However, the company's liquidity
profile and capital position appear adequate over
the near to medium term.

The company also announced that Scott E. Willkomm has resigned his
position as President and Chief Executive Officer.  Moody's
commented that the recent events at the company suggest problems
with the quality of its governance.  The departure of the CEO, who
had been with Scottish Re since 2000 as president and CFO, raises
concerns about the board's CEO and senior executive succession-
planning efforts.

Consistent with Moody's practice of widening the notching between
the IFS ratings and debt ratings at the holding company as a
company's ratings move down, the debt ratings were downgraded
three notches as opposed to two for the IFS ratings.

These ratings were downgraded and remain on negative outlook:

Scottish Re Group Limited:

   * Senior Unsecured, to Ba2 from Baa2;
   * Senior Unsecured Shelf, to (P)Ba2 from (P)Baa2;
   * Subordinate Shelf, to (P)Ba3 from (P)Baa3;
   * Junior subordinate Shelf, to (P)B1 from (P)Ba1;
   * Preferred Stock, to B1 from Ba1;
   * Preferred Shelf, to (P)B1 from (P)Ba1

Scottish Holdings Statutory Trust II:

   * Preferred Shelf to (P)Ba3 from (P)Baa3

Scottish Holdings Statutory Trust III:

   * Preferred Shelf to (P)Ba3 from (P)Baa3

Scottish Annuity & Life Ins Co (Cayman) Ltd:

   * IFSR to Baa2 from A3

Premium Asset Trust Series 2004-4:

   * Senior Secured to Baa2 from A3

Scottish Re (U.S.), Inc.:

   * IFSR to Baa2 from A3

Stingray Pass-Through Trust Senior Secured: To Baa2 from A3

On October 18, 2004, Moody's affirmed the ratings of Scottish Re
and its subsidiaries following the announcement that Scottish Re
had agreed to acquire the individual life reinsurance business of
ING Re.  The outlook for the ratings was lowered to negative from
stable at that time.

Scottish Re Group Limited is a Cayman Islands company with
principal executive offices located in Bermuda; it also has
significant operations in Charlotte, NC, Denver, CO and Windsor,
England.  On March 31, 2006, Scottish Re reported assets of
$12.3 billion and shareholders' equity of $1.2 billion.


SILICON GRAPHICS: Winston & Strawn Hired as Committee's Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized the Official Committee of Unsecured Creditors in
Silicon Graphics, Inc., and its debtor-affiliates' chapter 11
cases, to retain Winston & Strawn LLP as its counsel, nunc pro
tunc to May 18, 2006.

As reported in the Troubled Company Reporter on June 30, 2006,
Winston & Strawn will:

    a. provide legal advice to the Committee with respect to its
       duties and powers in the Chapter 11 cases;

    b. consult with the Committee and the Debtors concerning the
       administration of the bankruptcy proceedings;

    c. assist the Committee in:

       -- in its investigation of the acts, conduct, assets,
          liabilities, postpetition financing, and financial
          condition of the Debtors, operation of the Debtors'
          businesses, and the desirability of continuing or
          selling businesses and assets, and other matters related
          to the bankruptcy case or to the formulation of a plan;

       -- in the evaluation of claims against the estates,
          including analysis of and possible objections to the
          validity, priority, amount, subordination, or avoidance
          of claims and transfers of property on account of the
          claims;

       -- in participating in the formulation of a plan, including
          the Committee's communications with unsecured creditors
          concerning the plan and collecting of, and filing with
          the Court, acceptances or rejections of the plan; and

       -- with any effort to request the appointment of a trustee
          or examiner;

    d. advise and represent the Committee in connection with
       administrative and substantive matters arising in the
       Chapter 11 cases, including the obtaining of credit, the
       sale of assets, and the rejection or assumption of
       executory contracts and unexpired leases;

    e. appear before the Court, any other federal court, state
       court or appellate courts; and

    f. perform other legal services as may be required and which
       are in the interest of the unsecured creditors.

Winston & Strawn will be paid on its current hourly rates and will
be reimbursed for necessary expenses.  The firm's customary hourly
rates, subject to periodic adjustment, were:

          Partners                    $360 to $765
          Associates                  $225 to $470
          Legal Assistants            $105 to $230

David Neier, a partner at Winston & Strawn, assured the Court that
his firm has no connection with, and holds no interest adverse to,
the Debtors, their creditors, or any other party-in-interest.
Winston & Strawn is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code.

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


SILICON GRAPHICS: Gets Final OK to Maintain Existing Bank Accounts
------------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York approved the request of Silicon
Graphics, Inc., and its debtor-affiliates to designate, maintain
and continue to use, with the same account numbers, all of the
bank accounts in existence on the Chapter 11 filing on a final
basis.

Furthermore, the Debtors are allowed to open new bank accounts or
close any existing bank accounts, as they may deem necessary.

The Debtors maintained 27 Bank Accounts with several financial
institutions.

A full-text copy of a list of the Debtors' Bank Accounts is
available for free at http://researcharchives.com/t/s?eab

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


SONICBLUE INC: Lease Rejection Proof of Claims Due on September 12
------------------------------------------------------------------
The U.S Bankruptcy Court for the Northern District of California
in San Jose has set 4:00 p.m., on Sept. 12, 2006, as the deadline
for filing proofs of claim arising from the rejection of certain
executory contracts and unexpired leases in the Chapter 11 cases
of SONICBlue Incorporated and its debtor-affiliates.

The rejection bar date applies to these leases and contracts
identified by the Debtors:

               http://researcharchives.com/t/s?e9f

Proofs of Claim must be delivered to:

             SONICBlue Incorporated
             c/o JP Morgan Chase Bank, N.A.
             P.O. Box 56636
             Jacksonville, FL 322416636

Additional information regarding the filing of proofs of claims
can be obtained from Nathan Weil at JP Morgan through telephone
number (904) 807 3021.

                        About SONICBlue

Headquartered in Santa Clara, California, SONICBlue Incorporated
is involved in the converging Internet, digital media,
entertainment and consumer electronics markets.  The Company,
together with three of its wholly owned subsidiaries, Diamond
Multimedia Systems, Inc., ReplayTV, Inc., and Sensory Science
Corporation, filed for chapter 11 protection on Mar. 21, 2003
(Bankr. N.D. Calif. Case Nos. 03-51775 to 03-51778).  Craig A.
Barbarosh, Esq., at the Law Offices of Pillsbury Winthrop,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
assets totaling $342,871,000 and debts totaling $335,473,000.


ST. JOSEPH: Ch. 7 Trustee Can't Recover Fees from Ch. 11 Lawyers
----------------------------------------------------------------
St. Joseph Cleaners, Inc., filed for Chapter 11 relief on November
10, 1997 (Bankr. W.D. Mich. Case No. HK 97-09742).

St. Joseph Cleaners hired the law firm of Kreis, Enderle,
Callander & Hudgins, P.C., to represent it shortly before it filed
its petition.  Kreis Enderle received a $10,000 retainer at the
outset of the representation.  Approximately $6,700 of the
original retainer remained when St. Joseph Cleaners filed its
petition.  St. Joseph Cleaners' interest in the retainer became
property of the estate pursuant to 11 U.S.C. Sec. 541(a)(1).

St. Joseph Cleaners, as a debtor-in-possession, immediately hired
Kreis Enderle to represent the bankruptcy estate in the Chapter 11
proceeding.  St. Joseph Cleaners confirmed a plan of
reorganization and operated for more than 18 months following
confirmation.  However, St. Joseph Cleaners defaulted on the plan
and the U.S. Trustee moved to convert the case on March 20, 2000.
The case was ultimately converted to a Chapter 7 proceeding on
September 14, 2000.

The Chapter 7 Trustee has administered the bankruptcy estate since
the case was converted.  On May 10, 2005, the Chapter 7 Trustee
filed his final report and account concerning that administration.
The final report disclosed total receipts of $12,479.14.  These
receipts were sufficient to pay all Chapter 7 administrative
claims.  However, only a small amount remains to pay the reported
$170,339.41 in unpaid Chapter 11 administrative claims.

The Chapter 7 Trustee's final report lists Kreis Enderle as having
received a "negative" distribution of $5,302.87.  Kreis Enderle
correctly interpreted this statement to mean that the Chapter 7
Trustee intended to recover from Kreis Enderle a portion of what
Kreis Enderle had received as compensation for its representation
of St. Joseph Cleaners during the Chapter 11.  Consequently, Kreis
Enderle filed an objection to the final report.  Kreis Enderle's
objection prompted the Chapter 7 Trustee to file a motion to
compel the law firm to disgorge the retainer.

In a decision published at 2006 WL 2023553, the Honorable Jeffrey
R. Hughes says the Chapter 7 Trustee can't recover professional
fee payments that were approved by the bankruptcy court six years
ago under St. Joseph's confirmed chapter 11 plan.

"Common sense suggests that Kreis Enderle should not now be
compelled to disgorge any of the retainer it had earned so many
years ago," Judge Hughes says.  "This is not an instance where the
professional has yet to receive final approval of its fees under
Section 330.  The court gave its final approval of Kreis Enderle's
fees over six years ago when Kreis Enderle's representation of the
bankruptcy estate ceased.."

"Section 726(b) d[oes] not give it the authority to 'reel-in'
payments previously made in conjunction with a confirmed plan,"
Judge Hughes writes.  "[P]arties must be able to rely on the
permanency of the plan. Negotiation and compromise of positions
would be greatly hindered or impossible if creditors had to
contend with the possibility of returning funds after disbursement
through valid court order."

Thomas G. King, Esq., in Kalamazoo, Mich., represented St.
Joseph's Cleaners, Inc., in its chapter 11 proceeding and his firm
in this litigation with the Chapter 7 Trustee.  The Chapter 7
Trustee is represented by Paul F. Davidoff, Esq., at Paul F.
Davidoff, P.C., and Thomas C. Richardson, Esq., at Lewis, Reed &
Allen, P.C.  Dean E. Rietberg, Esq., appeared in this matter on
behalf of the United States Trustee, supporting the Chapter 7
Trustee's position.


THORNBURG MORTGAGE: Earns $68.5 Million in Quarter Ended June 30
----------------------------------------------------------------
Thornburg Mortgage Inc. reported net income for the quarter ended
June 30, 2006, of $69.6 million, as compared to $68.5 million for
the quarter ended June 30, 2005.

Clarence Simmons, senior executive vice president and chief
financial officer, commented, "While net interest income declined
by $0.11 per share from the previous quarter in response to
declining portfolio spreads, we did benefit from tighter spreads
and rising rates as evidenced by a $9.1 million net gain on our
pipeline of mortgage loan commitments and offsetting pipeline
hedging transactions.  During the quarter, we acquired $1.3
billion of whole loans through bulk purchases, in addition to the
$1.4 billion of loans we originated through proprietary channels
in order to profitably grow the portfolio by permanently financing
and leveraging these assets at a higher multiple through CDO
transactions.  Additionally, we had a bulk loan pipeline totaling
$1.2 billion at June 30, 2006."

Simultaneous with the earnings announcement, the company's board
of directors declared a second quarter dividend of $0.68 per
common share, payable on Aug. 16, 2006, to shareholders of record
on Aug. 4, 2006.  The ex-dividend date is Aug. 2, 2006.  This
dividend is unchanged from both the year-earlier period and the
first quarter of 2006.

Garrett Thornburg, chairman and chief executive officer, remarked,
"The difficult competitive and operating environment facing
mortgage portfolio lenders has not abated, which continues to put
downward pressure on our portfolio margin and in turn our earnings
results.  We remain confident that our earnings over the balance
of the year when combined with our undistributed taxable income
will be sufficient to cover the dividend at the current level.
After the payment of the second quarter dividend, we have in
reserve an estimated $0.24 per share of undistributed taxable
income."

Larry Goldstone, president and chief operating officer, remarked,
"Mortgage spreads over our cost of funds have continued to narrow
across all of our asset acquisition channels as competition for
mortgage assets has further intensified. And the continued
increases in short-term interest rates and flat yield curve only
add to the difficult environment.  Our approach to offsetting
these competitive and market pressures remains the same -- to grow
our balance sheet using an array of asset acquisition, financing
and capital strategies including effectively employing our strong
capital base while still managing interest rate and credit risk."

Mr. Goldstone continued, "Strong origination volumes, combined
with increased bulk loan purchases during the quarter, allowed us
to complete two collateralized debt obligation transactions
through which we permanently financed $2.8 billion of ARM loans.
These transactions allowed us to deploy approximately
$197.6 million of freed-up capital and acquire approximately $2.2
billion in additional ARM assets.  At June 30, 2006, the balance
of our CDO financing had reached $14.7 billion, accounting for 31%
of our balance sheet financing, which should continue to add to
our profitability in future quarters."

"Notably, one of these transactions was comprised solely of high-
quality Pay Option ARM loans that we acquired through bulk loan
purchases during the quarter," said Mr. Goldstone.  "These ARM
assets have spreads that are wider than our hybrid ARMs, and
should further contribute to our future profitability.  We had set
a target to acquire and/or originate $4.0 billion of these assets
by yearend.  At June 30, 2006, we had achieved 55% of that goal."

Mr. Goldstone added, "An improvement in our stock price during the
second quarter allowed us to raise common equity in the net amount
of $151.9 million through our diverse capital-raising programs at
an average net price of $27.60.  Going forward, given the
extraordinarily tight spread environment, rate of return
opportunities are lower than they have been previously and we may
consider utilizing other lower cost, long-term capital sources to
support future earnings and balance sheet growth."

Goldstone concluded, "In the near term it is likely that spreads
on high-quality assets will remain tight, and that the interest
rate environment will remain difficult.  Despite these challenges,
we continue to implement strategies to improve our portfolio
margin and keep the dividend intact.  However, should these
strategies prove unsuccessful, or if we do not see a positive
change in the mortgage spread or interest rate environment, it is
likely that our earnings level in 2007 will continue to lag the
current dividend level, and that we may need to realign the
dividend to be more consistent with our earnings performance."

                       Origination Activity

Commenting on the mortgage origination program, Joseph Badal,
senior executive vice president and chief lending officer, said,
"Year-to-date loan origination activity remained quite strong,
increasing 27% over the first half of 2005, and totaling $2.9
billion at June 30, 2006.  Loan originations for the second
quarter totaled $1.4 billion.  Moreover, our prospects for third
quarter closings remain strong.  At June 30, 2006, our origination
pipeline totaled $839.8 million, up 24% from the year ago period
and up 1% from the first quarter.  We are currently ahead of our
$5.5 billion origination target for the year and fully expect to
meet it by year-end despite the declining loan origination
market."

Mr. Badal added, "The continuing strength of our loan origination
business can be primarily attributed to the addition of new
correspondent relationships.  Our correspondent relationships have
increased 41% year-over-year and we now have 269 correspondent
partners approved to originate loans to our pricing and
underwriting requirements.  Because of our proven expertise in
underwriting and funding jumbo and super-jumbo ARMs, the average
correspondent loan amount has continued to trend higher as we
continue to attract this business, increasing 34% in the first
half of 2006 to $805,014 compared to the same period last year.
Based on the latest mortgage industry origination statistics, we
have become the nation's 16th-largest correspondent lender."

"Additionally, our broker channel is now operational, and the
initial feedback on our fully paperless, leading-edge and
Internet-based platform has been extremely positive," remarked Mr.
Badal.  "We remain confident that as this channel grows, it will
become a tremendous source of higher-yielding loans for the
company.  We are also encouraged by the initial success of a
proactive customer retention program that focuses on borrowers who
are likely to enter into another mortgage transaction.  This
activity, combined with our loan modification program, has
accounted for the majority of our retail channel loan production
for the first half of 2006, which collectively totaled
$421.6 million.  Over time, as we expand our customer base, we
expect to continue growing our retention and referral business.
Our loan servicing portfolio grew 31% over the year-ago period to
$10.6 billion, and now represents 19,526 customers."

The credit quality of the company's originated and bulk purchased
loans has remained exceptional.  At June 30, 2006, the company's
60-day-plus delinquent loans and real estate owned were only 0.05%
of its $18.7 billion portfolio of securitized and unsecuritized
loans, down from 0.07% at March 31, 2006, and significantly below
the industry's conventional and prime ARM loan delinquency ratios
of 2.21% and 0.76%, respectively.  At June 30, 2006, loan loss
reserves totaled $11.8 million, which management believes is an
appropriate reserve level given the characteristics of the loan
portfolio.  The company has not realized a loan loss on its
originated and bulk purchased loans in the past 18 quarters, and
has experienced cumulative credit losses of only $174,000 on loans
it has originated or acquired since 1997.

                     About Thornburg Mortgage

Thornburg Mortgage -- http://www.thornburgmortgage.com/-- is a
single-family residential mortgage lender focused principally on
the jumbo segment of the adjustable rate mortgage market.
Thornburg Investment Management, a separate investment management
company founded in 1982, advises a series of eight laddered-
maturity bond mutual funds, four equity mutual funds and
separately managed equity and fixed income portfolios for
institutional and high-net-worth clients and sub-advisory
services.

                          *   *   *

As reported in the Troubled Company Reporter on April 26, 2006,
Standard & Poor's Ratings Services affirmed Thornburg Mortgage's
'BB' long-term counterparty credit rating and 'BB-' senior
unsecured debt ratings.  S&P also revised its outlook on the
Company to positive from stable.


TRAFFIC.COM INC: Posts $4.7 Mil. Net Loss in 2006 Second Quarter
----------------------------------------------------------------
Traffic.com, Inc., disclosed its financial results for the second
quarter ended June 30, 2006.

"We are pleased with the Company's execution against our goal of
creating a clear leadership position in the market for real-time
traffic information," Robert N. Verratti, chief executive officer
of Traffic.com, said.

"We continue to gain market share in our traditional advertising
business, and the significant growth in our Internet-related and
traffic data services results provide evidence that we are making
progress in the transition of our business model to one with
greater revenue and profitability growth potential."

For the quarter ended June 30, 2006, the Company reported total
revenue of $14.4 million, an increase of 18.4% from $12.1 million
in the second quarter of 2005.  Within total revenue, advertising
revenue of $12.5 million for the second quarter of 2006 was up
12.1% from $11.2 million in the same period a year ago and
included $200,000 in Internet advertising revenue.  Traffic data
service revenue of $1.9 million was up 91.0% from $1 million in
the same period a year ago.

The Company reported a net loss of $4.7 million in the second
quarter of 2006, compared to a net loss of $8.9 million in the
second quarter of 2005.

At June 30, 2006, the Company's balance sheet showed $22,287,000
in total stockholders' equity compared with a $97,677,000 deficit
at Dec. 31, 2005.

"Traffic.com achieved a milestone in geographic expansion to 50
metropolitan areas well ahead of its original year-end target. In
addition to the most comprehensive real-time traffic information
coverage and technology offering, our growing mindshare continues
to attract other industry leaders.  We recently added AOL and
Garmin International to our partner list.  These additions and our
existing partnership with NAVTEQ give us strategic relationships
with the dominant market share leaders in both the personal
navigation device and digital mapping data markets," Mr. Verratti
added.

Operational highlights:

   -- Monthly unique visitors to Traffic.com's Internet properties
      totaled 1.7 million in June 2006, an increase of 37% from
      March;

   -- The Company's registered user base grew to 240,000 as of
      June 30, 2006, an increase of 40% from the end of the prior
      Quarter;

   -- The Company increased its metropolitan area coverage to 50,
      an increase of 25% from the prior quarter's earnings release
      and well ahead of the Company's original target to have 50
      markets under coverage by the end of 2006;

   -- Traffic.com was chosen by Garmin International as the
      provider of real-time traffic information for its Mobile 20
      wireless GPS navigation system;

   -- The Georgia DOT signed an agreement to extend Traffic.com's
      sensor network into Atlanta and the Pennsylvania Turnpike
      Commission signed a $3.3 million contract for Traffic.com to
      build out its sensor network to provide real-time traffic
      information;

   -- The Florida DOT signed a $2 million agreement for
      Traffic.com to provide comprehensive real-time traffic
      information in Southwest Florida;

   -- Microsoft officially launched its local.live.com site, which
      offers real-time traffic information provided by
      Traffic.com;

   -- AOL chose Traffic.com to be the provider of real-time
      traffic information for its AOL.com and AOLCityGuide.com
      sites; and

   -- The Company launched its traffic hotline 1-866-MY-TRAFC for
      free real-time traffic reports on-the-go for both registered
      and unregistered users.

Traffic.com, Inc. (NASDAQ: TRFC) -- http://traffic.com/--  
provides personalized traffic information for drivers coast to
coast.  Through the industry's most comprehensive data collection
infrastructure, Traffic.com offers consumers real-time customized
traffic reports in 50 metropolitan areas.  These personalized
consumer reports are complete with predictive traffic trends,
vehicle speeds, congestion levels, travel times, and delay times
delivered via web, wireless device, radio, television, and in-
vehicle navigation systems.  Traffic.com's ability to distribute
traffic information via specialized data feeds and across multiple
platforms creates unique, cross-platform branding opportunities
for advertisers, enabling them to expand their reach and target
consumers with useful, relevant content multiple times per day.
Traffic.com's growing list of business partners includes AOL,
Microsoft, The Weather Channel(R), Comcast, Garmin International
Inc., Motorola's VIAMOTO(TM) Solutions, and XM Satellite Radio.

This report concludes the Troubled Company Reporter's coverage of
Traffic.com, until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.


UAL CORP: Returns to Profitability With $119 Million in 2nd Qtr.
----------------------------------------------------------------
UAL Corporation, the holding company whose primary subsidiary is
United Airlines, reported financial results for the second quarter
ended June 30, 2006, its first full quarter following the
company's exit from bankruptcy.

UAL reported net income of $119 million, an increase of
$145 million excluding reorganization and special items over the
comparable second quarter of 2005.  The company reported its first
net profit in the second quarter since 2000.

Second quarter operating profit of $260 million was an improvement
of $212 million over the comparable quarter in 2005.  Excluding
the severance charge, operating profit was $282 million.

Strong revenue and productivity improvements more than offset a
$344 million increase in fuel expense for mainline and regional
operations.

Strong operating cash flow totaled nearly $700 million.

                      Return to Profitability

Total revenues for the second quarter increased 16% to
$5.1 billion compared with $4.4 billion in the second quarter of
2005.  Mainline revenue increased 15 percent, reflecting strong
demand, industry capacity restraint and yield improvements.
Revenue from regional affiliates registered a strong 20% increase
over the previous quarter, a result of network optimization and a
strong revenue environment.

Total operating expenses increased 11% over the second quarter of
2005, including a 31% increase in fuel costs.  Operating margin
improved to 5.1% from 1.1% in the comparable 2005 quarter.
Excluding special items and the severance charge, operating
margins improved to 5.5% from 1.5% percent.  Mainline unit
earnings, which is mainline revenue per available seat mile (RASM)
minus mainline operating cost per available seat mile (CASM),
increased to 0.60 cents from 0.29 cents a year ago, and mainline
unit earnings excluding fuel expense for the quarter increased 35%
to 4.04 cents from 3.00 cents.

Regional affiliates contributed $46 million to operating income,
an improvement of $99 million compared with the second quarter of
2005.  Regional affiliates' expense increased by only 4%, despite
a 5% increase in capacity and 29% increase in fuel expense, as a
result of restructured carrier agreements.

"Our focus on strengthening the core business is creating momentum
within the company, and the results we have achieved this quarter
are a solid step forward.  We continue to identify process
efficiencies, which improve performance and drive down costs, as
we simultaneously enhance revenues to increase our margin," Glenn
Tilton, UAL's chairman, president and chief executive officer,
said.

"Our management team and our employees continue to identify and
pursue further opportunities for improvement."

The company had an effective tax rate of zero for all periods
presented, which makes UAL's pre-tax results the same as its net
results.

                        Solid Cash Position

The company ended the quarter with unrestricted cash and short-
term investments of $4.2 billion, and a restricted cash balance of
$0.9 billion, for a total cash balance of $5.1 billion.
Unrestricted cash and short-term investments increased by
$500 million during the quarter as the company generated operating
cash flow of nearly $700 million.  This represented an increase in
operating cash flow of $125 million year-over-year.

"United's ability to generate cash is strong.  The cash generation
power is masked somewhat by the non-cash, exit-related charges
included in our reported earnings, and our operating earnings show
improvement in our underlying performance," Jake Brace, UAL's
executive vice president and chief financial officer said.

"We delivered better-than-expected second quarter CASM results,
and we are working hard to bring a significant piece of the
$400 million in targeted 2007 cost savings into 2006."

                    Strong Unit Revenue Growth

Total passenger revenues increased 16 percent in the second
quarter.  Strong growth in all reportable segments was a major
contributor to the gains over last year's second quarter.  RASM
increased 12%, while mainline traffic increased by 5% on a 3%
increase in capacity and a 1.5 point increase in load factor.
Mainline yield was 10% higher than last year.  This resulted in
mainline passenger revenue per available seat mile increasing by
12%.

The company is implementing several new initiatives that are
expected to improve revenue performance.  In May, United launched
Choices, an enhancement to its Mileage Plus credit card program.
Customer reaction has been positive, and two months after
launching Choices, the company is encouraged by the early results
in cardholder acquisitions and spending.  United also announced
plans for a new international premium cabin product, the first of
which will debut in 2007.

In addition, United's Economy Plus premium coach product is
expected to generate more than $50 million this year from up-sales
at the time of passenger check-in, and plans are in place to grow
up-sale revenue to more than $100 million in 2007.  Finally,
United continues to optimize its route structure - improving
economic performance while broadening its customer offering in key
hubs.  The company recently announced plans to replace the

John F. Kennedy International Airport to Tokyo Narita service with
new service from Washington Dulles to Tokyo Narita.  The company
also sold its JFK to London route authority.  Those two actions
will enable the company to reintroduce non-stop service to Taipei
from its strong San Francisco gateway.  In addition, the company
will be the first U.S. carrier to serve Kuwait, with service
beginning in October from Washington Dulles.

"Our revenue results are competitive, and we are particularly
pleased with our domestic RASM improvement given our capacity
growth relative to the industry," John Tague, UAL's executive vice
president and chief revenue officer said.  "We are implementing a
wide range of initiatives that we believe will deliver industry-
leading revenue performance. We are optimizing our network to
increase profitability, and we are committed to providing a
superior customer experience that sets us apart from the rest of
the industry and that we believe will generate a revenue premium."

                  Controlling Operating Expenses

CASM increased by 9% from the year-ago quarter, primarily driven
by a 27% increase in mainline fuel prices.  Excluding fuel, a
$22 million one-time severance charge related to the company's
previously announced manpower reductions and a special item
recorded in the second quarter of 2005, mainline CASM was
7.64 cents, an increase of 1.5% compared with the second quarter
of 2005.

The company is engaged in a multi-year cost reduction program.
For 2006, United's business plan includes $300 million in benefits
over 2005, and the company has committed to an additional
$400 million in cost savings starting in 2007 on top of those
already included in the business plan.

To generate these additional cost savings, the company is focused
on fundamental improvements to its core business.  United has cut
advertising and marketing costs by $60 million, is reducing
purchased services costs by $200 million, and will reduce general
and administrative costs by $100 million and will secure
$40 million from operational efficiency improvements.

                      Improving Productivity

As a result of the company's resource optimization, continuous
improvement efforts across its operations and the outsourcing of
certain non-core functions, productivity continued to increase in
the second quarter.  Employee productivity (available seat miles
divided by employee equivalents) improved 7% for the quarter
compared to the same period in 2005 while full-time equivalent
employees decreased by 4%.  Aircraft productivity, as measured by
fleet utilization, improved 3% during the quarter to an average of
approximately 11 hours, 16 minutes per day.

The company continues to implement its resource optimization
efforts throughout the United system.  One goal is to reduce
average turn times by eight minutes system-wide by the end of
2006.  The first phase was initiated in San Francisco in January,
followed by all Ted markets in February.  In the second quarter,
optimization efforts expanded to Denver and Los Angeles and turn
times were reduced by four minutes.  The company expects to
capture the remaining benefits in the second half of the year as
the company implements another round of tighter turns in
Washington Dulles and Chicago.

             Performance Goals Target Productivity and
                      Customer Satisfaction

Customer service, as measured by the U.S. Department of
Transportation, improved slightly over the performance in the
first quarter of 2006.  Second quarter mishandled baggage
performance has improved from the first quarter and is on par with
last year.

On-time arrival performance was up slightly against the first
quarter of 2006 but below last year's performance.  The company
set goals to further reduce aircraft turn-times and achieve higher
levels of productivity.  These goals, along with record load
factors and severe weather in the Midwest and the East Coast,
challenged operations.  While improving productivity, United is
committed to enriching the customer experience, and the company
continues to focus on enhancing its operational execution.

"We are achieving improvements in turn times for our aircraft
despite extremely high load factors. These successes are due in
large part to the tremendous work being done by our employees
worldwide," Pete McDonald, UAL's executive vice president and
chief operating officer, said.

"While the changes we are making to our processes are having an
impact on our operational performance in the near term, they will
make us more efficient and enable us to meet our increased
operational goals.  We are pleased with the progress we have made
on reducing costs, and we expect continuous improvement efforts to
lower costs even further."

                      Operational Highlights

United Airlines won Best Economy/Coach Class in the world, at the
annual OAG Airline of the Year Awards held in London in May.
Separately, readers of Business Traveler magazine also voted
United as the best premium economy class in the world.

During the quarter, United and TACA GROUP announced the inception
of their new code-share agreement, which significantly expands
international destination options and frequent flyer opportunities
for customers of both carriers.  TACA serves 35 cities in 19
countries in the Americas, with hubs in San Salvador, El Salvador;
San Jose, Costa Rica; and Lima, Peru.

United, a founding member of the Star Alliance, moved into the new
South Wing of Tokyo's Narita Airport Terminal 1 at the beginning
of June.  This is Star Alliance's largest co-location project and
the global alliance's most ambitious project to date.  It offers
some of the fastest connection times for Star Alliance travelers
and provides world-class airport facilities and innovative
customer services.

                      Fresh Start Reporting

Upon emergence from its Chapter 11 proceedings in February 2006,
the company adopted fresh-start reporting in accordance with SOP
90-7 as of Feb. 1, 2006.  The company's emergence resulted in a
new reporting entity with no retained earnings or accumulated
deficit as of Feb. 1, 2006.

Accordingly, the company's financial information shown for periods
prior to Feb. 1, 2006, is not comparable to consolidated financial
statements presented on or after that date.

                           About United

Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- through United Air Lines, Inc., is
the holding company for United Airlines -- the world's second
largest air carrier.  The Company filed for chapter 11 protection
on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.  When the
Debtors filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts.  Judge
Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20,
2006.  The Company emerged from bankruptcy protection on Feb. 1,
2006.

                           *     *     *

As reported in the Troubled Company Reporter on July 31, 2006,
Moody's Investors Service assigned ratings to United Air Lines,
Inc.'s Pass Through Trust Certificates, Series 2000-1, 2000-2 and
2001-1:

Series 2000-1

   * $233,244,336 Class A-1 Certificates: Ba3
   * $324,913,300 Class A-2 Certificates: Ba3
   * $186,368,450 Class B Certificates: B3

Series 2000-2

   * $260,322,870 Class A-1 Certificates: Ba2
   * $684,117,291 Class A-2 Certificates: Ba2
   * $266,663,000 Class B Certificates: B1
   * $148,577,000 Class C Certificates: Caa2

Series 2001-1

   * $204,981,915 Class A-1 Certificates: Ba2
   * $207,139,050 Class A-2 Certificates: Ba2
   * $295,462,107 Class A-3 Certificates: Ba2
   * $150,168,000 Class B Certificates: Ba3
   * $251,885,000 Class C Certificates: B2
   * $137,268,000 Class D Certificates: B3


UNICO INC: Derivative Loss Miscalculations Prompt Restatements
--------------------------------------------------------------
Unico, Inc., amended its financial statements and annual report
for the year ending Feb. 28, 2006.

The Company informed the Securities and Exchange Commission in a
Form 10-KSB filing that the calculation of derivative loss based
on court ordered settlements on conversion of the debt for the
year then ended had utilized an incorrect measurement.  In
addition, it noted that certain equipment purchased for one of its
subsidiaries had erroneously been recorded on the books of both
Bromide Basin Mining Company, LLC and Deer Trail Mining Company,
LLC, two of our subsidiaries.  The net effect of all prior period
adjustments is an increase in retained deficit of $2,092,333, an
increase in paid in capital of $1,966,548, and a decrease in fixed
assets of $125,785.

The Company is also correcting the number of shares of its common
stock outstanding as of June 2, 2006, by increasing the number of
shares outstanding by 10,000,000, and have increased its audit
expense for the fiscal year ended February 28, 2006 by $4,500.

In its restated income statement, the Company posted a $2,272,097
net loss on $26,202 of revenues for the year ending Feb. 28, 2006.
As of Feb. 28, 2006, the Company has $29,508 in cash.

In its restated balance sheet, the Company reported $896,298 in
total assets, $6,302,507 in aggregate debt, and $5,406,209 in
stockholders' deficit as of Feb. 28, 2006.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on July 25, 2006,
HJ Associates & Consultants, LLP, expressed substantial doubt
about Unico, Incorporated's ability to continue as a going concern
after auditing the Company's financial statements for the years
ended Feb. 28, 2006 and 2005.  The auditing firm pointed to the
Company's recurring losses from operations and stockholders'
deficit.

                         About Unico

Unico, Incorporated (OTCBB: UNCN) -- http://www.uncn.com/-- is a
publicly traded natural resource company in the precious metals
mining sector focused on the exploration, development and
production of gold, silver, lead, zinc, and copper concentrates at
its three mine properties: the Deer Trail Mine, the Bromide Basin
Mine and the Silver Bell Mine.


USG CORP: Administrative Claims Bar Date Slated for August 21
-------------------------------------------------------------
Requests for payment of administrative claims in the chapter 11
cases of USG Corp. and its debtor-affiliates must be filed by
Aug. 21, 2006.

Objections to those requests must be filed by Oct. 18, 2006.

The Debtors' Plan of Reorganization became effective on June 20,
2006, formally concluding its Chapter 11 proceedings.  The Plan
was confirmed by two judges for the United States Bankruptcy Court
and the U.S. District Court for the District of Delaware, enabling
the building materials company to complete the bankruptcy case and
emerge from Chapter 11.  The company is beginning the process of
repaying its creditors and funding an asbestos trust that will be
responsible for compensating asbestos personal injury claimants.

The plan of reorganization, which was approved by more than 99
percent of the asbestos personal injury claimants voting, requires
USG to establish and fund a personal injury trust to pay asbestos
personal injury claims.  A $900 million payment to the new trust
was made today.  Two subsequent payments totaling $3.05 billion
would be made within the next 12 months if Congress fails to enact
legislation establishing a national asbestos personal injury trust
fund, such as the FAIR Act, which is currently being considered in
the United States Senate (S. 3274).  The terms of the agreement
are contained in the plan of reorganization that was confirmed by
the Delaware court.

Financing for the plan is expected to be provided from USG's cash
on hand, a $1.8 billion rights offering to stockholders
backstopped by Berkshire Hathaway Inc., tax refunds and new
long-term debt.

                            About USG

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  The
Debtors emerged from bankruptcy protection on June 20, 2006.


VARIG S.A: Brazilian Labor Court Freezes $75 Mil. Volo Funds
------------------------------------------------------------
The 33rd section of the Rio de Janeiro Labor Court granted on
Tuesday a request by airline workers' unions for preliminary
injunction freezing $75,000,000 deposited by Volo do Brasil to
VARIG S.A.'s account, Investnews (Brazil) reports.

The amount was Volo's first installment toward buying VARIG's
assets and had been allocated to pay operating costs, The
Associated Press says.

The Labor Court, however, directed VARIG to use the money to
settle the airline's labor debts for canceling work contracts.

Meanwhile, hundreds of workers at VARIG went on indefinite strike
after the airline announced its plan to cut ties with 5,500
workers as part of its plan of judicial recovery.

VARIG said last week that it would keep around 40% of its 9,485
employees and gradually rehire the dismissed workers once it
resumes growth.

According to EFE News Services (U.S.) Inc., VARIG has estimated
the layoffs to cost at around BRL253 million -- about $116
million.

VARIG is currently operating 10 aircraft with flights in seven
Brazilian cities -- Sao Paulo, Rio de Janeiro, Porto Alegre,
Fortaleza, Salvador, Recife and Manaus.  The airline still flies
to Frankfurt, Germany; Buenos Aires, Argentina; Miami and New
York, in the U.S.

                          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.


VCA ANTECH: Earns $29.6 Million in Quarter Ended June 30, 2006
--------------------------------------------------------------
VCA Antech, Inc., disclosed its reported financial results for the
quarter ended June 30, 2006.

The Company's financials showed that its:

   -- revenue increased 23.5% to a second quarter record of
      $255.2 million;

   -- gross profit increased 23.4% to $75.0 million;

   -- operating income increased 22.4% to $55.6 million; and

   -- net income was $29.6 million.

The quarter ended June 30, 2005, included an after-tax charge of
$11.5 million for debt retirement costs.  Excluding this item,
adjusted net income for the second quarter of 2006 increased 29.7%
to $29.6 million.

The Company's financials showed that its:

The Company also reported financial results for the six months
ended June 30, 2006, as follows:

   -- revenue increased 24.4% to a first six-months record of
      $489.3 million;

   -- gross profit increased 24.5% to $138.5 million;

   -- operating income increased 22.6% to $100.3 million;

   -- net income was $59.2 million.

The first quarter of 2006 included a tax benefit in the amount of
$6.8 million due to a favorable outcome of an income tax audit
that resulted in a change to the Company's estimated tax
liabilities.

The second quarter of 2005 included an after-tax charge of
$11.5 million for debt retirement costs.  Excluding these items
from the six months ended June 30, 2006, and 2005, adjusted net
income increased 30.9% to $52.4 million.

"Our operating results for the second quarter were marked by
continued growth in our core businesses," Bob Antin, chairman and
chief executive officer, stated.

"Our consolidated revenue increased to $255.2 million and our
consolidated gross profit margin of 29.4% remained unchanged from
the comparable prior year quarter.  Our consolidated operating
income margin was 21.8% compared to 22.0% in the comparable prior
year quarter.  Operating income for the second quarter of 2006
includes share-based compensation of $669,000, or 0.3% of
consolidated revenue, as a result of adopting SFAS No. 123R on
Jan. 1, 2006.  In addition, during the second quarter of 2006, we
made a $20.0 million prepayment of our senior term notes, which
brings the total year-to-date prepaid amount to $60.0 million.

"Our laboratory revenue for the second quarter of 2006 increased
15.8%, generating an 18.8% increase in laboratory gross profit and
our laboratory gross profit margin increased to 48.2% compared to
47.0% in the comparable prior year quarter.  Our laboratory
operating margin increased to 41.8% compared to 41.2% in the
comparable prior year quarter.  Laboratory internal revenue growth
was 14.9% for the second quarter.

"Our consolidated animal hospital revenue increased 25.7% to
$186.0 million.  We saw improvements in the performance of those
animal hospitals that we have operated for more than one year.  We
experienced animal hospital same-store revenue growth of 5.4% and
animal hospital same-store gross profit margin increased to 21.8%
from 21.7% in the comparable prior year period.  We continue to
experience lower gross profit margins on animal hospitals acquired
within the last year, including Pet's Choice, Inc. (acquired on
July 1, 2005), resulting in a consolidated animal hospital gross
profit margin of 21.3% for the second quarter of 2006 as compared
to 21.5% in the comparable period in 2005.  Our consolidated
animal hospital operating margin for the second quarter of 2006
was 18.6% compared to 19.0% in the comparable prior year quarter.

"Our medical technology revenue increased 56.8% to $8.4 million
and our medical technology gross profit margin increased to 37.4%
compared to 30.9% in the comparable prior year quarter.  Our
medical technology segment reported operating income of $595,000
compared to an operating loss of $264,000 reported in the second
quarter of 2005."

VCA Antech Inc. (NASDAQ:WOOF) owns, operates and manages the
largest networks of freestanding veterinary hospitals and
veterinary-exclusive clinical laboratories in the country.  The
Company also supplies ultrasound and digital radiography equipment
to the veterinary industry

                           *     *     *

VCA Antech carries Moody's Investors Service's Ba3 long-term
corporate family rating and Standard and Poor's Ratings Services'
BB- long-term foreign and local issuer credit rating.


WEB STAR: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Web Star, Inc.
        1001 North Crossroads Boulevard
        Seguin, TX 78155

Bankruptcy Case No.: 06-51382

Chapter 11 Petition Date: July 31, 2006

Court: Western District of Texas (San Antonio)

Judge: Leif M. Clark

Debtor's Counsel: William R. Davis, Jr., Esq.
                  Langley & Banack, Inc.
                  745 East Mulberry Avenue, Suite 900
                  San Antonio, TX 78212
                  Tel: (210) 736-6600
                  Fax: (210) 735-6889

Total Assets: $4,746,415

Total Debts:  $965,932

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Bradner National                   Goods                 $134,369
P.O. Box 730149
Dallas, TX 75373-0149

BRW Paper Co., Inc.                Goods and Services     $70,000
1435 Bradley Lane, Suite 130
Carrollton, TX 75002

First Commerce Leasing             Purchase Money         $39,028
[no address provided]              Security Interest

Anderson & Vreeland, Inc.          Goods                  $23,656
P.O. Box 1246
W. Caldwell, NJ 07007

International Corporation          Goods                  $20,712
4549 Leston Street
Dallas, TX 75247

Domino Amjet, Inc.                 Services               $16,605

TXU Energy                         Utilities              $14,733

Farmers Insurance Exchange         Insurance              $13,467

Primepapers, Inc.                  Goods                  $11,264

Narrowgate, Inc.                   Services                $9,779

Printers' Service                  Goods                   $9,641

Flint Ink                          Goods                   $8,162

Midsouth Pulp & Paper, Inc.        Goods                   $8,059

Principal Financial                Services                $6,184

Fleet Capital Leasing              Security Interest       $8,000

The Hartford                       Services                $4,196

Con-Way Transportation             Services                $3,967

Kirkpatrick Mathis & Co., PLLC     Services                $3,595

Heidelberg Web Systems, Inc.       Services                $3,577

Henkel Adhesives Corp.             Services                $3,408


WESTERN MEDICAL: Court Okays Assets Sale to Providential Holdings
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona issued an
order approving Western Medical, Inc.'s motion to sell
substantially all of its assets, pursuant to Section 363 of the
Bankruptcy Code, to Providential Holdings, Inc. for a total
consideration of $5.65 million.  This amount may be subject to a
potential deduction on the basis of $1 for every $1 below
$9,330,260 that the Accounts Receivable total as of the closing
date, up to a total deduction of $500,000.

Funding for this transaction will be provided by Northern
Healthcare Capital, LLC.

According to the court order, the assets acquired by Providential
Holdings will be free and clear of all liens, interests and
encumbrances, and Providential has no liability for any other
liabilities of Western Medical, Inc.

The closing date is set to occur no later than 5:00 pm, Phoenix
time, Aug. 2, 2006.

"We look forward to building an exceptional company at all
levels," Robert Buceta, corporate strategist of Providential
Holdings, Inc. and Chairman of Providential Western Medical, Inc.,
re-iterated.  "Our experienced management team will make
Providential Western Medical an industry leader in providing the
highest quality services and products for home health care.  We
firmly believe that our growth and accomplishments stem from the
caliber of our employees, who strive to exceed our clients'
expectations."

                   About Providential Holdings

Based in Huntington Beach, California, Providential Holdings, Inc.
(OTCBB:PRVH) -- http://www.phiglobal.com/-- specializes in
mergers and acquisitions and independent energy business.  The
Company acquires and consolidates special opportunities in
selective industries to create additional value, acts as an
incubator for emerging companies and technologies, and provides
financial consultancy and M&A advisory services to U.S. and
foreign companies.

                      About Western Medical

Headquartered in Phoenix, Arizona, Western Medical, Inc. --
http://www.westernmedicalinc.net/-- sells and distributes medical
and hospital equipment.  The company filed for chapter 11
protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784).
Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the
Debtor.  When the Debtor filed for protection from its creditors,
it estimated asstes between $1 million to $10 million and debts
between $10 million and $50 million.


WHX CORP: Handy & Harman Amends Loan Agreements with Two Lenders
----------------------------------------------------------------
WHX Corporation's wholly owned subsidiary, Handy & Harman and
certain of its subsidiaries, amended its Loan and Security
Agreement with Wachovia Bank, National Association and its Loan
and Security Agreement with Steel Partners II, L.P.

The amendments provided for the increase of $1.95 million of the
maximum availability under the revolving line of credit from $62.9
million to $64.85 million and for a 5-year supplemental term loan
up to an aggregate amount of $10,000,000.

                      About Steel Partners

Steel Partners II, L.P. is the beneficial holder of 5,029,793
shares of the WHX's common stock, representing approximately 50%
of the outstanding shares.  Warren G.  Lichtenstein, Chairman of
the Board of WHX, is the sole managing member of the general
partner of Steel Partners II, L.P.  In addition, Glen M. Kassan,
director and chief executive officer of WHX is an employee of
Steel Partners, Ltd., an affiliate of Steel Partners II, L.P.

                      About WHX Corporation

Headquartered in New York City, New York, WHX Corporation --
http://www.whxcorp.com/-- is a holding company structured to
acquire and operate a diverse group of businesses on a
decentralized basis.  WHX's primary business is Handy & Harman, a
diversified industrial manufacturing company servicing the
electronic materials, specialty wire and tubing, specialty
fasteners and fittings, and precious metals fabrication markets.
The Company filed for chapter 11 protection on March 7, 2005
(Bankr. S.D.N.Y. Case No. 05-11444).  When the Debtor filed for
protection from its creditors, it reported total assets of
$406,875,000 and total debts of $352,852,000.


WILLIAMS SCOTSMAN: Earns $11.6 Million in Second Quarter of 2006
----------------------------------------------------------------
Williams Scotsman International, Inc., reported its financial
results for the second quarter of 2006.  Revenues for the second
quarter were $159.1 million, an 18% increase from $135.0 million
in the comparable period of 2005.  Gross profit was $67.9 million,
a 30% increase as compared to $52.2 million for the prior year
quarter.  EBITDA for the current quarter was $55.1 million, which
was also up 30% from $42.2 million in the comparable period of
2005.

The Company reported net income for the quarter ended June 30,
2006 of $11.6 million compared with a net loss for the quarter
ended June 30, 2005, of $2.7 million.

During the second quarter of 2005, the Company recorded a loss on
the early extinguishment of debt of $5.2 million resulting from
the write-off of deferred financing costs as a result of entering
into an amended and restated credit facility in June of 2005.  Net
income for the three months ended June 30, 2005, excluding this
item was $0.5 million.

"Williams Scotsman continues to produce strong financial results,"
Gerry Holthaus, chairman, president and chief executive officer,
commented.

"We experienced a 16.4% improvement in leasing revenue, which was
driven by increased utilization to 82% in the second quarter of
2006 as compared to 81% in the second quarter of 2005, an increase
in our average rental rates from $259 to $287, and an increase in
our average units on rent of 3,900 units for the quarter as
compared to the prior year quarter.

"Our total fleet size is over 100,000 units at the end of the
second quarter, which is an important milestone for our company.
Leasing gross margins were 57.1% during the quarter as compared to
54.7% in the second quarter of 2005.

"Sales of new units and rental equipment increased by 27% as
compared to the prior year quarter as a result of strong unit
sales in the southeast, central southwest and Canadian regions of
the Company.

"Delivery and installation and other revenue again showed positive
results, consistent with the growth we experienced in our lease
and sale business.  We look forward to continuing to execute
against our plan for the remainder of 2006 which will result in an
excellent base for continued growth for Williams Scotsman."

                        Six Months Results

Revenues for the six months ended June 30, 2006, were
$324.1 million, a 24% increase from $261.1 million in the
comparable period of 2005.  Gross profit was $133.3 million, a 31%
increase as compared to $102.0 million for the prior year period.
EBITDA was $108.0 million for the six months ended June 30, 2006,
which was up 32% from $81.6 million in the comparable period of
2005.

The Company reported net income for the six months ended June 30,
2006, of $22.0 million as compared to net loss of $3.5 million for
the six months ended June 30, 2005.  During the six months ended
June 30, 2005, the Company recorded a loss on early extinguishment
of debt of $5.2 million.  Net loss for the six months ended June
30, 2005, excluding this item was $300,000.

Headquartered in Baltimore, Maryland, Williams Scotsman
International, Inc. (NASDAQ:WLSC) the parent company of Williams
Scotsman, Inc., provides mobile and modular space solutions for
the construction, education, commercial, healthcare and government
markets.  The company serves over 25,000 customers, operating a
fleet of over 100,000 modular space and storage units that are
leased through a network of 86 locations throughout North America.
Williams Scotsman provides delivery, installation, and other
services, and sells new and used mobile office products.  Williams
Scotsman also manages large modular building projects from concept
to completion. Williams Scotsman has operations in the United
States, Canada, Mexico, and Spain.

                           *     *     *

As reported in the Troubled Company Reporter on April 18, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating to
Williams Scotsman Inc.'s $100 million 8.5% senior notes due 2015.
At the same time, ratings on the company's outstanding $350
million 8.5% senior notes due 2015 were raised to 'B+' from 'B'.
Standard & Poor's affirmed its 'BB-' corporate credit rating on
Williams Scotsman and 'BB' ('1' recovery rating) rating on its
$650 million secured credit facility.

As reported in the Troubled Company Reporter on Sept. 9, 2005,
Moody's Investors Service assigned a (P)B3 rating to Williams
Scotsman's $325 million senior unsecured note offering.  The
outlook is stable.


WORLDCOM INC: 2nd Circuit Upholds Bernard Ebbers' 25-Yr. Sentence
-----------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit upheld U.S.
District Court Judge Barbara Jones' ruling in sentencing former
WorldCom Chief Executive Officer Bernard Ebbers to 25 years in
prison for leading the $11 billion WorldCom fraud in 2002, David
Glovin at Bloomberg News reports.

The Bureau of Prisons did not disclose details on where would Mr.
Ebbers would be incarcerated, according to Bloomberg.

The Court of Appeals also rejected Mr. Ebbers' claim that his
sentence was harsh.  The Court's opinion notes that "twenty-five
years is a long sentence for a white collar crime . . . Still,
federal sentencing guidelines recommend such sentences, a
reflection of Congress' judgment that they are appropriate for
such crimes."

"We are not giving up and won't stop fighting until Bernie Ebbers
is completely vindicated," Reid Weingarten, Ebbers's lawyer, told
Bloomberg.

WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532).  On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts.  The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc.  On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc.  MCI is now known as Verizon
Business, a unit of Verizon Communications.  (WorldCom Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


WORLDCOM INC: Wants Michael Jordan's $8 Million Claim Reduced
-------------------------------------------------------------
WorldCom Inc. and its debtor-affiliates oppose the allowance of
Michael Jordan's $8,000,000 claim in full.

The Debtors are pointing to Mr. Jordan's Claim No. 36077, seeking
payment of:

   (1) $2,000,000 for an annual compensation payment due on
       June 30, 2002; and

   (2) three $2,000,000 annual payments due on June 30 of 2003,
       2004 and 2005.

Mr. Jordan's claim dates back to July 10, 1995, when he and the
Debtors entered into an endorsement agreement, which the Debtors
subsequently rejected in July 2003.  The Endorsement Agreement
provided the Debtors a 10-year license to use Mr. Jordan's name,
likeness and endorsement to advertise their telecommunications
products and services.

The Debtors maintain that Mr. Jordan's Endorsement Agreement is an
"employment contract" and that Mr. Jordan is an "employee" under
Section 502(b)(7) of the Bankruptcy Code.

The Debtors also contend that Mr. Jordan failed to mitigate his
damages when they rejected the Agreement on July 18, 2003.

Mark A. Shaiken, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, notes that while Mr. Jordan renewed or extended
existing endorsement contracts between July 18, 2003, and
August 31, 2005, he did not pursue any new endorsement
opportunities.

Mr. Shaiken asserts that the Endorsement Agreement is an
employment contract within the meaning of Section 502(b)(7)
because it:

   (1) identifies job responsibilities;
   (2) provides the terms for compensation;
   (3) precludes Mr. Jordan from certain other activities;
   (4) is not assignable;
   (5) ceases when Mr. Jordan dies; and
   (6) contains provisions for its termination.

The characterization of Mr. Jordan as an independent contractor
under the Agreement is not dispositive of the issue of whether
Mr. Jordan is an employee within the meaning of Section
502(b)(7), Mr. Shaiken contends.  Thus, the claim limitations
provided for in Section 502(b)(7) should be applied to Mr.
Jordan's Claim.

Mr. Shaiken points out that in an interview with Rick Telander of
the Chicago Sun-Times in March 2000, Mr. Jordan disclosed his
desire to remove himself from product endorsements.  "I'm getting
totally out of the endorsement aspect of things as soon as the
contracts are up," Mr. Shaiken quotes Mr. Jordan.

Mr. Jordan's desire to refocus his career does not relieve him of
the consequences of failing to mitigate his damages, Mr. Shaiken
asserts.

Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
District of New York to:

   (a) grant summary judgment in their favor with respect to Mr.
       Jordan's Claim; and

   (b) reduce and allow Mr. Jordan's Claim as a $4,000,000 Class
       6 General Unsecured Claim.

                         About WorldCom

WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532).  On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts.  The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc.  On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc.  MCI is now known as Verizon
Business, a unit of Verizon Communications.  (WorldCom Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


YUKOS OIL: Moscow Arbitration Court Rules on Bankruptcy
-------------------------------------------------------
The Hon. Pavel Markov of the Moscow Arbitration Court upheld
creditors' vote to liquidate OAO Yukos Oil Co. and declared what
was once Russia's biggest oil firm bankrupt on Aug. 1.  The
expected court ruling paves the way for the company's liquidation
and auction.

"It is a death sentence for the company," Yukos lawyer Drew
Holliner told the Associated Press after the ruling.

Yukos's creditors, led by the Federal Tax Service and state-owned
OAO Rosneft Oil Company, will oversee the liquidation and
distribution of the company's assets.

According to The Guardian, Russian state-dominated companies like
Rosneft and Gazprom confirmed their interest in a business
expected to go for a knockdown price at auction.  Gazprom has
already proposed to pay close to US$2 billion for Yukos' 20% stake
on Gazprom Neft.

As reported by TCR-Europe on July 27, creditors of Yukos voted to
liquidate the oil firm after rejecting a management rescue plan,
which valued the company's assets at about US$30 billion.  This
would have permitted Yukos to continue its operations and attempt
to pay off US$18 billion in debts through asset sales.

The vote came after bankruptcy manager Eduard Rebgun said Yukos
couldn't pay its debts in the time allotted by law.

Former Yukos CEO Steven Theede, whose resignation took effect
yesterday, has expected the court to approve the ruling based on
Mr. Eduard Rebgun's recommendation amidst management's insistence
on the firm's solvency.

Yukos disclosed it would make an appeal against yesterday's
bankruptcy decision.

                           About Yukos

Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation.  Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.

The Company filed for Chapter 11 protection Dec. 14, 2004 (Bankr.
S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb.
24, 2005, by the Hon. Letitia Z. Clark.  A few days later, the
Government sold its main production unit Yugansk, to a little-
known firm Baikalfinansgroup for US$9.35 billion, as payment for
US$27.5 billion in tax arrears for 2000- 2003.
Yugansk eventually was bought by state-owned Rosneft, which is now
claiming more than US$12 billion from Yukos.

On March 10, a 14-bank consortium led by Societe Generale filed a
bankruptcy suit in the Moscow Arbitration Court in an attempt to
recover the remainder of a US$1 billion debt under outstanding
loan agreements.  The banks, however, sold the claim to Rosneft,
prompting the Court to replace them with the state- owned oil
company as plaintiff.

On April 13, court-appointed external manager Eduard Rebgun filed
a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06- 0775),
in an attempt to halt the sale of Yukos' 53.7% ownership interest
in Lithuanian AB Mazeikiu Nafta.

On May 26, Yukos signed a US$1.49 billion Share Sale and Purchase
Agreement with PKN Orlen S.A., Poland's largest oil refiner, for
its Mazeikiu ownership stake.  The move was made a day after the
Manhattan Court lifted an order barring Yukos from selling its
controlling stake in the Lithuanian oil refinery.


YUKOS OIL: Court to Hear Rosneft's $8.4-Bln. Claim on Aug. 10
-------------------------------------------------------------
A Russian court has postponed a hearing into an $8.4 billion claim
against Yukos Oil Co. by state-owned oil firm OAO Rosneft Oil
until Aug. 10, Reuters reports citing Interfax as its source.

Rosneft's RUB226.1 billion claim could increase its standing in
the list of Yukos creditors, who voted last week to declare Yukos
bankrupt, Reuters relates.

According to the report, Rosneft has accused Yukos of stripping
value from its former Yuganskneftegaz unit, which Rosneft bought
in 2004.

Yukos creditors listed in the claims register include:

  Company                             Amount
  -------                             ------
  Russian Federal Tax Service         RUB353.8 billion
  Yuganskneftegaz                     More than RUB108.8 billion
  Tomskneft-BNK                       RUB12.3 billion
  Samaraneftegaz                      RUB1.85 billion
  Yukos-Moscow                        RUB933 million
  Siberia Service Company             RUB228.4 million
  Yukos-RM                            RUB131.3 million
  Yukos-EP                            RUB110 million
  Prikaspiiburneft                    RUB54.9 million
  Sibinteklizing                      RUB52 million
  Orelnefteprodukt                    RUB25.7 million
  Tyumenskaya Kompleksnaya            RUB24.1 million
  Geologorazvedochnaya Ekspeditsiya
   Cargill Yug                        RUB18.8 million
  BDO Unicon Consulting               Around RUB12 million
  Yukos-Vostok Trade                  RUB4 million
  M-Reestr                            RUB3.5 million
  Progress insurance company          RUB2.3 million
  MGTS                                RUB586,000
  Center of Rescue and Environmental  Around RUB$90,000

Rosneft purchased Yukos' largest production unit, Yuganskneftegaz,
in December 2004 after the Russian government seized the asset as
payment for more than $30 billion in tax arrears for 2000-2003.

Rosneft acquired $482 million of Yukos' debts from a 14-bank
consortium, led by Societe Generale, which is the remainder of a
$1 billion loan owed by Yukos, in March.

On March 10, 2006, the bank group asked the Moscow Arbitration
Court to declare Yukos bankrupt in an attempt to recover the
remainder of the $1 billion debt under outstanding loan
agreements.

Creditors voted last week to liquidate what was once Russia's
biggest oil firm after rejecting a management rescue plan, which
values the company's assets at about $30 billion.

As reported in TCR-Europe on July 27, Yukos's creditors, led by
the Federal Tax Service and Rosneft, will oversee the liquidation
and distribution of the company's assets.

                          About Yukos

Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation.  Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.

The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark.  A few days
later, the Government sold its main production unit Yugansk, to
a little-known firm Baikalfinansgroup for US$9.35 billion, as
payment for US$27.5 billion in tax arrears for 2000- 2003.
Yugansk eventually was bought by state-owned Rosneft, which is
now claiming more than US$12 billion from Yukos.

On April 13, court-appointed external manager Eduard Rebgun
filed a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06-
10775), in an attempt to halt the sale of Yukos' 53.7% ownership
interest in Lithuanian AB Mazeikiu Nafta.

On May 26, Yukos signed a US$1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake.  The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.


YUKOS OIL: Disputes FSA Ruling on Rosneft IPO at Court of Appeal
----------------------------------------------------------------
Yukos Oil Co. has filed a challenge at the British Court of Appeal
against the decision of U.K.'s Financial Services Authority to
allow rival group OAO Rosneft's shares to float on the London
Stock Exchange on July 19, Karl West writes for The Herald.

Yukos has applied for permission to seek a judicial review on
decisions made by the FSA and the LSE as to whether they have
acted lawfully in allowing the shares to be listed in the London
market.

Mr. West reports that the appellate court will rule on the
application after Yukos submits its skeleton argument by Aug. 7.

If the court approves Yukos's request, FSA, the LSE and Rosneft
will have a chance to ask the court to reject Yukos's claim and
uphold the lower court's earlier decision, Mr. West relates.

As reported in TCR-Europe on July 20, Mr. Justice Charles of the
U.K. High Court of Justice denied Yukos's request to block
Rosneft's shares from trading in London.

The full listing of Rosneft shares began its formal trading on
the LSE on July 19, a few days after its shares kicked off in the
Moscow exchange.

Yukos lawyers argued at the High Court that the IPO amounts to
money laundering under the Proceeds of Crime Act, because 70% of
the company's value came from the unlawful seizure and sale of
Yukos.  Yukos is claiming that the flotation would amount to the
sale of the stolen property.

Rosneft purchased Yukos' largest production unit, Yuganskneftegaz,
in December 2004 after the Russian government seized the asset as
payment for more than $30 billion in tax arrears for 2000-2003.

Rosneft will use proceeds from the IPO to pay off a $7.5 billion
syndicated bank loan that helped finance the state buyback of a
10.7% stake in Gazprom.

                        About Rosneft

Headquartered in Moscow, Russia, OAO Rosneft --
http://www.rosneft.ru/eng-- produces and markets petroleum
products.  The Company explores for, extracts, refines and markets
oil and natural gas.  Rosneft produces oil in Western Siberia,
Sakhalin, the North Caucasus and the Arctic regions of
Russia.

                        About Yukos

Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation.  Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.

The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark.  A few days
later, the Government sold its main production unit Yugansk, to
a little-known firm Baikalfinansgroup for US$9.35 billion, as
payment for US$27.5 billion in tax arrears for 2000- 2003.
Yugansk eventually was bought by state-owned Rosneft, which is
now claiming more than US$12 billion from Yukos.

On March 10, a 14-bank consortium led by Societe Generale filed
a bankruptcy suit in the Moscow Arbitration Court in an attempt
to recover the remainder of a US$1 billion debt under
outstanding loan agreements.  The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.

On April 13, court-appointed external manager Eduard Rebgun
filed a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06-
10775), in an attempt to halt the sale of Yukos' 53.7% ownership
interest in Lithuanian AB Mazeikiu Nafta.

On May 26, Yukos signed a US$1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake.  The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
August 3, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Commercial Lenders Breakfast
         Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

August 3-5, 2006
   AMERICAN BANKRUPTCY INSTITUTE
      Mid-Atlantic Bankruptcy Workshop
         Hyatt Regency Chesapeake Bay, Cambridge, Maryland
            Contact: 1-703-739-0800; http://www.abiworld.org/

August 3, 2006
   BEARD AUDIO CONFERENCES
      Homestead Exemptions under BAPCPA
         Audio Conference
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

August 9, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Professional Development Meeting
         Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

August 15, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      DIP Panel Discussion
         Kansas City, Missouri
            Contact: http://www.turnaround.org/

August 16, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Family Night Baseball with the NJ Jackals
         (Yogi Berra Autograph Night)
            Jackals Stadium, Montclair, New Jersey
               Contact: 908-575-7333 or http://www.turnaround.org/

August 25, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Annual Fishing Trip
         Point Pleasant, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

August 29, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Luncheon
         Citrus Club, Orlando, Florida
            Contact: 561-882-1331 or http://www.turnaround.org/

September 6, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      4th Annual Alberta Golf Tournament
         Kananaskis Country Golf Course, Kananaskis, Alberta
            Contact: 403-294-4954 or http://www.turnaround.org/

September 7, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Business Mixer
         TBA, Seattle, Washington
            Contact: 503-223-6222 or http://www.turnaround.org/

September 7-8, 2006
   EUROMONEY
      Leveraged Finance
         Hotel Rey Juan Carlos I, Barcelona, Spain
            Contact: http://www.euromoneyplc.com/

September 7-8, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Saratoga Regional Conference
         Gideon Putnam Hotel, Saratoga Springs, New York
            Contact: http://www.turnaround.org/

September 7-9, 2006
   AMERICAN BANKRUPTCY INSTITUTE
      Southwest Bankruptcy Conference
         Wynn Las Vegas, Las Vegas, Nevada
            Contact: 1-703-739-0800; http://www.abiworld.org/

September 8-9, 2006
   AMERICAN BANKRUPTCY INSTITUTE
      International Insolvency Symposium
         London, England
            Contact: http://www.turnaround.org/

September 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast Meeting
         Marriott Tyson's Corner, Vienna, Virginia
            Contact: 703-912-3309 or http://www.turnaround.org/

September 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Networking Breakfast
         TBA, Secaucus, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

September 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      LI Turnaround Formal Event
         Long Island, New York
            Contact: http://www.turnaround.org/

September 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Networking Function
         Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

September 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Formal Event - Major Speaker to be Announced
         Long Island, New York
            Contact: 631-251-6296 or http://www.turnaround.org/

September 13-15, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Texas Regional Conference
         Hyatt Regency Resort & Spa
            Lost Pines, TX
               Contact: 870-760-7116 or http://www.turnaround.org/

September 14, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Kick-Off Reception
         Westin Buckhead, Atlanta, GA
            Contact: 678-795-8103 or http://www.turnaround.org/

September 15, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      BOK Review - Management
         Gardner Carton & Douglas, Chicago, IL
            Contact: 815-469-2935 or http://www.turnaround.org/

September 17-24, 2006
   NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
      Optional Alaska Cruise
         Seattle, Washington
            Contact: 800-929-3598 or http://www.nabt.com/

September 19-20, 2006
   STRATEGIC RESEARCH INSTITUTE
      2nd Annual Euro Distressed Debt Summit
         Le Meridien Parkhotel, Frankfurt, Germany
            Contact: http://www.srinstitute.com/

September 20, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      South Florida Dinner
         Bankers Club, Miami, Florida
            Contact: 561-882-1331 or http://www.turnaround.org/

September 21, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Restructuring Workshop With US
      Bankruptcy Judges Hale, Nelms and Lynn
         Belo Mansion - The Pavilion, Dallas, TX
            Contact: http://www.turnaround.org/

September 24, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Restructuring the Troubled High Tech Company
         Arizona
            Contact: http://www.turnaround.org/

September 26, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Luncheon
         Centre Club, Tampa, Florida
            Contact: 561-882-1331 or http://www.turnaround.org/

September 27, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Joint Education Program with NYIC Joint Reception
         CFA/RMA/IWIRC
            Woodbridge Hilton, Iselin, NJ
               Contact: http://www.turnaround.org/

September 27, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      7th Annual Cross Border Business Restructuring and
         Turnaround Conference
            Banff, Alberta
               Contact: http://www.turnaround.org/

October 5, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Commercial Lenders Breakfast
         Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

October 10, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast Meeting
         Center Club, Baltimore, Maryland
            Contact: 703-912-3309 or http://www.turnaround.org/

October 11, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Professional Development Meeting
         Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

October 11-14, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      2006 Annual Conference
         Milleridge Cottage, Long Island, New York
            Contact: 312-578-6900; http://www.turnaround.org/

October 12, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      UTS Fundamentals of Turnaround Management
         Mecure Hotel - Haymarket, Sydney, Australia
            Contact: http://www.turnaround.org/

October 17, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Updates on the New Bankruptcy Law
         Kansas City, Missouri
            Contact: http://www.turnaround.org/

October 19, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Billards Networking Night - Young Professionals
         TBA, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

October 26, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Hedge Funds - Expanded Financing Opportunities in Business
      Turnarounds
         Arizona
            Contact: http://www.turnaround.org/

October 26, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast Speaker Series #3
         TBA, Calgary, Alberta
            Contact: 403-294-4954 or http://www.turnaround.org/

October 26, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast Speaker Series #3
         TBA, Calgary, Alberta
            Contact: 403-294-4954 or http://www.turnaround.org/

October 27, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast with Coach Dan Reeves
         Westin Buckhead, Atlanta, GA
            Contact: 678-795-8103 or http://www.turnaround.org/

October 28, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      BK/TMA Golf Tournament
         Orange Tree Golf Resort, AZ
            Contact: 623-581-3597 or http://www.turnaround.org/

October 30-31, 2006
   Distressed Debt Summit: Preparing for the Next Default Cycle
      Financial Research Associates LLC
         Helmsley Hotel, New York, NY
            Contact: http://www.frallc.com/

October 31, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Luncheon
         Citrus Club, Orlando, Florida
            Contact: 561-882-1331 or http://www.turnaround.org/

October 31 - November 1, 2006
   INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
      IWIRC Annual Conference
         San Francisco, California
            Contact: http://www.iwirc.com/

November 1, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Halloween Isn't Over! - Ghosts of turnarounds past who
         remind you about what you should have done differently
            Portland, Oregon
               Contact: http://www.turnaround.org/

November 1-4, 2006
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      National Conference of Bankruptcy Judges
         San Francisco, California
            Contact: http://www.ncbj.org/

November 2-3, 2006
   BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
      Third Annual Conference on Physician Agreements & Ventures
      Successful Strategies for Medical Transactions and
      Investments
         The Millennium Knickerbocker Hotel - Chicago
            Contact: 903-595-3800; 1-800-726-2524;
            http://www.renaissanceamerican.com/

November 7, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Networking Breakfast
         Marriott, Bridgewater, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

November 8, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast Meeting
         Marriott Tyson's Corner, Vienna, Virginia
            Contact: 703-912-3309 or http://www.turnaround.org/

November 8, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Australia National Conference
         Sydney, Australia
            Contact: http://www.turnaround.org/

November 14, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Luncheon Program
         St. Louis, Missouri
            Contact: 815-469-2935 or http://www.turnaround.org/

November 15, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Joint Reception with NYIC/NYTMA
         TBA, New York
            Contact: 908-575-7333 or http://www.turnaround.org/

November 15, 2006
   LI TMA Formal Event
      TMA Australia National Conference
         Long Island, New York
            Contact: http://www.turnaround.org/

November 15, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      South Florida Dinner
         Citrus Club, Orlando, Florida
            Contact: 561-882-1331 or http://www.turnaround.org/

November 16, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Bankruptcy Judges Panel
         Duquesne Club, Pittsburgh, Pennsylvania
            Contact: http://www.turnaround.org/

November 16, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Dinner Program
         TBA, Seattle, Washington
            Contact: 503-223-6222 or http://www.turnaround.org/

November 23, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Martini Party
         Vancouver, British Columbia
            Contact: 403-294-4954 or http://www.turnaround.org/

November 27-28, 2006
   BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
      Thirteenth Annual Conference on Distressed Investing
      Maximizing Profits in the Distressed Debt Market
         The Essex House Hotel - New York
            Contact: 903-595-3800; 1-800-726-2524;
            http://www.renaissanceamerican.com/

November 28, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Luncheon
         Centre Club, Tampa, FL
            Contact: 561-882-1331 or http://www.turnaround.org/

November 29, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Special Program
         TBA, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

November 29, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Turnaround Industry Trends
         Jasna Polana, Princeton, NJ
            Contact: http://www.turnaround.org/

November 30-December 2, 2006
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Hyatt Regency at Gainey Ranch, Scottsdale, Arizona
            Contact: 1-703-739-0800; http://www.abiworld.org/

December 6, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Holiday Dinner
         Portland, Oregon
            Contact: 503-223-6222 or http://www.turnaround.org/

December 7, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Networking Breakfast
         The Newark Club, Newark, New Jersey
            Contact: 908-575-7333 or http://www.turnaround.org/

December 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      LI TMA Holiday Party
         TBA, Long Island, New York
            Contact: 631-251-6296 or http://www.turnaround.org/

December 13, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Christmas Function
         GE Commercial Finance, Sydney, Australia
            Contact: 0438 653 179 or http://www.turnaround.org/

December 20, 2006
   TURNAROUND MANAGEMENT ASSOCIATION
      Holiday Extravaganza - TMA, AVF & CFA
         Georgia Aquarium, Atlanta, GA
            Contact: 678-795-8103 or http://www.turnaround.org/

January 12, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      Annual Lender's Panel Breakfast
         Westin Buckhead, Atlanta, GA
            Contact: http://www.turnaround.org/

February 8-11, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      Certified Turnaround Professional (CTP) Training
         NY/NJ
            Contact: http://www.turnaround.org/

February 2007
   AMERICAN BANKRUPTCY INSTITUTE
      International Insolvency Symposium
         San Juan, Puerto Rico
            Contact: 1-703-739-0800; http://www.abiworld.org/

March 15, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      Martini Madness Cocktail Reception with Geraldine Ferraro
         Westin Buckhead, Atlanta, GA
            Contact: 678-795-8103 or http://www.turnaround.org/

March 15-18, 2007
   NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES
      NABT Spring Seminar
         Ritz-Carlton Buckhead, Atlanta, GA
            Contact: http://www.NABT.com/

March 27-31, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      Spring Conference
         Four Seasons Las Colinas, Dallas, Texas
            Contact: http://www.turnaround.org/

March 29-31, 2007
   ALI-ABA
      Chapter 11 Business Reorganizations
         Scottsdale, Arizona
            Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/

April 11-15, 2007
   AMERICAN BANKRUPTCY INSTITUTE
      ABI Annual Spring Meeting
         J.W. Marriott, Washington, DC
            Contact: 1-703-739-0800; http://www.abiworld.org/

April 20, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      Breakfast meeting with Chapter President, Bruce Sim
         Westin Buckhead, Atlanta, GA
            Contact: 678-795-8103 or http://www.turnaround.org/

June 6-9, 2007
   ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
      23rd Annual Bankruptcy & Restructuring Conference
         Westin River North, Chicago, Illinois
            Contact: http://www.airacira.org/

June 14-17, 2007
   AMERICAN BANKRUPTCY INSTITUTE
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800; http://www.abiworld.org/

July 12-15, 2007
   AMERICAN BANKRUPTCY INSTITUTE
      Northeast Bankruptcy Conference
         Marriott, Newport, RI
            Contact: 1-703-739-0800; http://www.abiworld.org/

October 10-13, 2007
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      National Conference of Bankruptcy Judges
         Orlando, Florida
            Contact: http://www.ncbj.org/

October 16-19, 2007
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         Marriott Copley Place, Boston, Massachusetts
            Contact: 312-578-6900; http://www.turnaround.org/

December 6-8, 2007
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Westin Mission Hills Resort, Rancho Mirage, California
            Contact: 1-703-739-0800; http://www.abiworld.org/

March 25-29, 2008
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Spring Conference
         Ritz Carlton Grande Lakes, Orlando, Florida
            Contact: http://www.turnaround.org/

September 24-27, 2008
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      National Conference of Bankruptcy Judges
         Scottsdale, Arizona
            Contact: http://www.ncbj.org/

October 28-31, 2008
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         Marriott Copley Place, Boston, Massachusetts
            Contact: 312-578-6900; http://www.turnaround.org/

October 5-9, 2009
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         Marriott Desert Ridge, Phoenix, Arizona
            Contact: 312-578-6900; http://www.turnaround.org/

2009 (TBA)
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      National Conference of Bankruptcy Judges
         Las Vegas, Nevada
            Contact: http://www.ncbj.org/

October 4-8, 2010
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         JW Marriott Grande Lakes, Orlando, Florida
            Contact: http://www.turnaround.org/

2010 (TBA)
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      National Conference of Bankruptcy Judges
         New Orleans, Louisiana
            Contact: http://www.ncbj.org/

   BEARD AUDIO CONFERENCES
      Coming Changes in Small Business Bankruptcy
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Distressed Real Estate under BAPCPA
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      High-Yield Opportunities in Distressed Investing
         Audio Conference Recording
            Contact: 240-629-3300;
          http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Fundamentals of Corporate Bankruptcy and Restructuring
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Reverse Mergers - the New IPO?
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Dana's Chapter 11 Filing
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Employee Benefits and Executive Compensation
      under the New Code
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/


   BEARD AUDIO CONFERENCES
      Validating Distressed Security Portfolios: Year-End Price
      Validation and Risk Assessment
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Changing Roles & Responsibilities of Creditors' Committees
      Audio Conference Recording
         Contact: 240-629-3300;
         http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Calpine's Chapter 11 Filing
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Healthcare Bankruptcy Reforms
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      Changes to Cross-Border Insolvencies
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com/

   BEARD AUDIO CONFERENCES
      The Emerging Role of Corporate Compliance Panels
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com

   BEARD AUDIO CONFERENCES
      Privacy Rights, Protections & Pitfalls in Bankruptcy
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com

   BEARD AUDIO CONFERENCES
      High-Yield Opportunities in Distressed Investing
         Audio Conference Recording
            Contact: 240-629-3300;
            http://www.beardaudioconferences.com

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland, USA.  Rizande B.
Delos Santos, Shimero Jainga, Joel Anthony G. Lopez, Tara Marie A.
Martin, Jason A. Nieva, Emi Rose S.R. Parcon, Lucilo M. Pinili,
Jr., Marie Therese V. Profetana, Robert Max Quiblat, Christian Q.
Salta, Cherry A. Soriano-Baaclo, and Peter A. Chapman, Editors.
Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.


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