TCR_Public/060804.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, August 4, 2006, Vol. 10, No. 184

                             Headlines

ACE SECURITIES: Interest Shortfalls Prompt S&P's D Rating
ACE SECURITIES: S&P Junks Rating on Class M-4 Certificates
ACXIOM CORP: Earns $17.8MM in 2007 1st Fiscal Qtr. Ended June 30
ADELPHIA COMMS: Files Asset Sale & Units' Plan Documents
ADELPHIA COMMS: Can Settle EPA's Environmental Claims

AGILYSYS INC: Moody's Withdraws Corp. Family & Sr. Notes' Rating
AIRADIGM: FCC Wants More Info on Licenses in Disclosure Statement
AMKOR TECHNOLOGY: Earns $24 Million in Second Quarter of 2006
ARMSTRONG WORLD: Says Confirmation & Emergence Remain Uncertain
ARMSTRONG WORLD: Balance Sheet Upside-Down by $1.2B at June 30

ATLAS AIR: Paying $141MM of Principal Under Financing Facilities
ATMEL CORPORATION: Completes $140 Mil. Atmel Grenoble Sale to e2v
AVIS BUDGET: Strong Market Position Cues S&P to Assign BB+ Rating
BALCO EQUITIES: Debtor's Counsel Ordered to Disgorge Retainer
BOSTON SCIENTIFIC: Resolves Patent Litigation with St. Jude Med.

BRISTOL WEST: Debt Refinancing Prompts S&P to Withdraw Ratings
CALPINE CORP: Fund Submits Claims in Insolvency Proceedings
CALPINE CORP: To Sell Russell Equity Stake To PG&E Co. for $80MM
CARMIKE CINEMAS: Obtains Extended Listing from Nasdaq Panel
CASCADIA LIMITED: Fitch Upgrades $300 Million Notes' Rating to BB+

CASELLA WASTE: Moody's Holds B3 Rating on $195 Million Sr. Notes
CENTRAL VERMONT: Weak Credit Measures Cue S&P to Hold BB+ Rating
CIRRUS LOGIC: Earns $7.7MM in 2007 1st Fiscal Qtr. Ended June 24
COMMUNITY HEALTH: Earns $52.4 Million in Second Quarter of 2006
COMPLETE RETREATS: Can File Schedules Until September 21

COMPLETE RETREATS: Wants to Honor Existing Destination Bookings
CONSECO FINANCE: Fitch Holds Junk Ratings on Three Loan Classes
CONSECO INC: Recognizes $10MM Expense on Class Action Settlement
CRESCENT REAL ESTATE: Earns $3.2 Million in 2006 Second Quarter
CST INDUSTRIES: Moody's Rates Proposed $200 Million Loan at B2

DANA CORPORATION: Navistar Wants Stay Lifted to Obtain Property
DANA CORP: Extends Expiration Date of Rights Agreement to 2016
DAYTON POWER: Debt Reduction Prompts S&P to Upgrade Ratings
DELPHI CORP: Inks Nondisclosure Deal With Appaloosa & Harbinger
DELPHI CORP: Discloses Update on Routine Business Litigation

DELTA AIR: Gets Final Nod on Babcock & Brown as Financial Advisor
DELTA AIR: Allows Eight Claimants to Pursue Actions
DELTA AIR: Flight Attendants Appeal Court Ruling on Contracts
DLJ COMMERCIAL: Fitch Lifts Rating on $27MM Class B Certs. to BB+
EASYLINK SERVICES: Files Proxy Statement for Reverse Stock Split

ENESCO GROUP: Inks 12th Amendment to U.S. Credit Facility
ENESCO GROUP: Posts $24.9 Million Net Loss in Second Quarter 2006
FALCONBRIDGE LTD: Bid Changes Prompts S&P's Positive Watch
FIRST HORIZON: Fitch Puts Low-B Ratings on $2 Million of Certs.
FOAMEX INTERNATIONAL: Trade Creditors Sell 27 Claims for $337,305

FORD MOTOR: Recalls 1.2 Million Trucks, SUVs and Vans in the U.S.
FORD MOTOR: Revises Quarter Results, Net Loss Rises to $254 Mil.
FORD MOTOR: Hires Keneth Leet as Strategic Advisor to Bill Ford
H. B. WILLIAMSON: Case Summary & 18 Largest Unsecured Creditors
HEALTHTRONICS INC: Sells Unit to Oshkosh Truck for $140MM in Cash

HESS CORP: Earns $565 Million in Second Quarter of 2006
HIGHLANDS INSURANCE: Rehabilitation Plan Hearing Set for Sept. 8
HILL HEALTH: Moody's Withdraws B1 Rating on $3.2 Million Bonds
ITRON INC: Earns $10.204 Million in Second Quarter of 2006
J.P. MORGAN: Fitch Puts Low-B Ratings on $3.7 Million of Certs.

JDA SOFTWARE: Reports Total Revenues of $51.8 Mil. in 2nd Quarter
KAISER ALUMINUM: Court of Appeals Affirms District Court Ruling
KAISER ALUMINUM: Law Debenture Removes Holder Affidavits Objection
KERZNER INT'L: Launches Offering to Redeem 6-3/4% Senior Notes
KMART CORP: Gets Final Court OK on $13 Mil. Disability Settlement

KMART CORP: Court Okays Reversion of 142,308 Unclaimed Shares
KULICKE & SOFFA: Sale Cues S&P to Lift Ratings and Remove Watch
LOVESAC CORP: Court OKs Series A Investors Settlement & Asset Buy
MERRILL LYNCH: S&P Puts Low-B Ratings on $30.8 Mil. Cert. Classes
MIRANT CORP: Fifth Circuit Rules on Pepco APSA-Related Dispute

MIRANT CORP: Bowline Unit Wants 2006 Consent Order Approved
MORGAN STANLEY: Fitch Holds Low-B Ratings on $27 Mil. of Certs.
MUSICLAND HOLDING: Wants to Pay $26M to Secured Trade Debt Holders
MUSICLAND HOLDING: Court Extends Solicitation Period to October 9
MUSTANG ALARM: Case Summary & 19 Largest Unsecured Creditors

NATIONAL ENERGY: Asserts "Mutual Mistake" on Pact with Lehman
NATIONAL ENERGY: Files Quarterly Report Ending May 31, 2006
NETWORK EQUIPMENT: Posts $3.7MM Net Loss in 2007 First Fiscal Qtr.
NEWMARKET CORP: Earns $20.4 Million in Second Quarter of 2006
NORTHWEST AIRLINES: Taxes Tax Authorities Object to DIP Agreement

NORTHWEST AIRLINES: Wants to Assume Galileo Distribution Agreement
NRG ENERGY: Earns $203 Million in Second Quarter 2006
NRG ENERGY: Fitch Upgrades Rating on Senior Notes to B+
ORIUS CORP: Court OKs Field Jerger's Retention as Special Counsel
OWENS CORNING: Wants $32-Mil. Modulo(TM)/ParMur Purchase Approved

OWENS CORNING: Gets Prelim. Okay on MiraVista Claims Settlement
PENN TREATY: Parent's 10-K Filing Delay Cues S&P's Negative Watch
PSS WORLD: Earns $11MM in 1st Fiscal Quarter Ended June 30, 2006
REFCO INC: Chapter 7 Trustee Wants to Wind Down Refco Trading
REFCO INC: Wants Stipulation Resolving Intercompany Debts Approved

REICHOLD INDUSTRIES: Moody's Rates $195 Million Sr. Notes at B2
RENT-A-CENTER: Earns $39.8 Million in Quarter Ended June 30
RETROCOM GROWTH: Files Notice Under Bankruptcy and Insolvency Act
SAINT VINCENTS: Submits Amended Reclamation Claims Schedule
SANDISK CORP: Acquiring msystems in All-Stock Deal

SCOTTISH RE: Fitch Holds Negative Watch on Low-B Ratings
SILICON GRAPHICS: Gets Court Approval to Continue Refund Program
SILICON GRAPHICS: Gets Court OK to Hire Morgan Lewis as IP Counsel
SIRIUS SATELLITE: Posts $237.8MM Net Loss in 2006 Second Quarter
SIX FLAGS INC: Moody's Junks Senior Unsecured Notes' Ratings

SORIN REAL: Fitch Holds BB Rating on $4 Million Class F Notes
SOUTHWESTERN ENERGY: S&P Cuts Rating to BB+ with Stable Outlook
SUNCOM WIRELESS: S&P Affirms Ratings and Removes Negative Watch
ST. MARYS: Refinancing Prompts S&P to Upgrade Rating to BB+
STATION CASINOS: Issues $400 Million of 7-3/4% Senior Notes

SUNCOM WIRELESS: June 30 Balance Sheet Upside-Down by $338 Million
SUNSHINE-JR.: 11th Cir. Upholds Sanctions Against Bank of New York
SUPERVALU INC: Earns $87MM in First Fiscal Quarter Ended June 17
UAL CORP: Elects Mary K. Bush to the Board of Directors
UNITY VIRGINIA: Court Extends Cash Collateral Use Authorization

USG CORP: Grosses $1.8 Billion from Rights Offering
VERESTAR INC: Committee Can Prosecute Claims vs. SES & Westar
W.R. GRACE: Equity Deficit Narrows to $570.4 Million at June 30
W.R. GRACE: Court Enjoins Prosecution of N.J. State Court Action
WACHOVIA BANK: S&P Affirms Low-B Ratings on Six Cert. Classes

WESTERN MEDICAL: Sells Assets to Providential for $5.65 Million
WILLIAM LYON: Inks $50 Million Credit Agreement with Calif. Bank
WILLIAM LYON: Merger Completion Cues S&P to Remove Dev. Watch
WINDSWEPT ENVIRONMENTAL: Amends Fee Waiver Pact with Laurus Master
WINN-DIXIE: Ten More Parties Object to Disclosure Statement

WINN-DIXIE: 76 Landlords Want Asserted Cure Amounts Paid
WORLDCOM INC: Court Discharges Mesquite's and F.A. McComas' Liens
WORLDCOM INC: Court OKs Payment of Shepherd's & Goldfarb's Claims
WYANDOTTE COUNTY: S&P Junks Rating on $4.9 Million Revenue Bonds

* BOOK REVIEW: Hospitals, Health and People

                             *********

ACE SECURITIES: Interest Shortfalls Prompt S&P's D Rating
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Ace
Securities Corp. Home Equity Loan Trust Series 2004-HE1's class B
certificates to 'D' from 'CCC'.  At the same time, the 'BBB-'
rating on class M-6 remains on CreditWatch with negative
implications.  Additionally, the ratings on the remaining publicly
rated classes from this transaction are affirmed.

The lowered rating is based on interest shortfalls caused by
interest being paid on a written-down principal balance instead of
the amortized balance, and the expectation that the principal
write-downs totaling approximately $461,550 to the B class will
not be recovered.

The 'BBB-'rating on class M-6 remains on CreditWatch with negative
implications because we expect additional losses to result from
high delinquencies.  As of the July 2006 distribution date, total
delinquencies were 23.50% of the current pool principal balance,
with 17.59% categorized as seriously delinquent (90-plus days,
foreclosure, and REO).

Standard & Poor's will continue to closely monitor the performance
of this transaction.  S&P will downgrade class M-6 if the
delinquent loans translate into realized losses, depending on the
size of the losses and the amount of credit support remaining.  In
contrast, if delinquencies improve and do not cause significant
additional realized losses, S&P will affirm the rating and remove
it from CreditWatch.

The rating affirmations reflect loss coverage percentages that
meet or exceed the levels necessary to maintain the current
ratings.  This transaction benefits from credit enhancement
provided by subordination, overcollateralization, and excess
spread.

As of the July 2006 remittance date, cumulative losses, as a
percentage of the original trust balance, were 2.41%.  The
outstanding pool balance of this transaction is 25.49% of its
original size.

The collateral for this transaction consists of loans secured by
first liens on one- to four-family residential properties.
   
                       Rating Lowered
   
                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2004-HE1

                               Rating
                               ------
                   Class     To     From
                   -----     --     ----
                   B         D      CCC
   
             Rating Remaining on Creditwatch Negative

                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2004-HE1
     
                 Class            Rating
                 -----            ------
                 M-6              BBB-/Watch Neg
   
                      Ratings Affirmed

                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2004-HE1
   
                   Class            Rating
                   -----            ------
                   A-3              AAA
                   M-1, M-2         AA
                   M-3              A
                   M-4              A-
                   M-5              BBB+


ACE SECURITIES: S&P Junks Rating on Class M-4 Certificates
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class M-4
from Ace Securities Corp. Home Equity Loan Trust Series 2002-HE1
to 'CCC' from 'B'.  Additionally, the rating on class M-3 is
lowered to 'BB' from 'BBB' and placed on CreditWatch with negative
implications.  At the same time, the ratings on the remaining
publicly rated classes from this transaction are affirmed.

The lowered ratings reflect actual and projected credit support
percentages that are insufficient to maintain the previous
ratings.  Monthly excess interest has been insufficient to cover
monthly realized losses.  The overcollateralization level of the
transaction is below its target because overcollateralization is
being used to cover losses.

The 'BB' rating on class M-3 is placed on CreditWatch with
negative implications because S&P expects additional losses to
result from the high level of delinquencies.  As of the July 2006
distribution date, total delinquencies were 40.58% of the current
pool balance, with 21.33% categorized as seriously delinquent (90-
plus days, foreclosure, and REO).  Cumulative losses, as a
percentage of the original trust balance, were 2.68%.  The
outstanding pool balance of this transaction is 9.83% of its
original size.

Standard & Poor's will continue to closely monitor the performance
of this transaction.  S&P will downgrade class M-3 if the
delinquent loans translate into realized losses that result in
remaining credit support that is insufficient to support the
current rating.  In contrast, if delinquencies improve and do not
cause significant additional realized losses, S&P will affirm the
rating and remove it from CreditWatch.

The rating affirmations reflect loss coverage percentages that
meet or exceed the levels necessary to maintain the current
ratings.

This transaction benefits from credit enhancement provided by
subordination, overcollateralization, and excess spread. The
collateral for this transaction consists of loans secured by first
liens on one- to four-family residential properties.
    
                       Rating Lowered

                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2002-HE1

                               Rating
                               ------
                   Class     To      From
                   -----     --      ----
                   M-4       CCC     B
     
       Rating Lowered and Placed on Creditwatch Negative

                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2002-HE1
     

                               Rating
                               ------
               Class     To                From
               -----     --                ----
               M-3       BB/Watch Neg      BBB
   
                       Ratings Affirmed

                     Ace Securities Corp.
                    Home Equity Loan Trust
                      Series 2002-HE1
   
                      Class     Rating
                      -----     ------
                      M-1       AA+
                      M-2       A+


ACXIOM CORP: Earns $17.8MM in 2007 1st Fiscal Qtr. Ended June 30
----------------------------------------------------------------
Acxiom Corporation disclosed financial results for the first
fiscal quarter of 2007 ended June 30, 2006.  

Consolidated net earnings for the quarter increased 168% to
$17.8 million.  First-quarter revenue totaled $336.7 million,
representing an 8.5% increase over the same quarter last year.

"Our first-quarter results were strong and in line with our long-
term Financial Road Map.  These results reflect the growing
strength of our company and the benefits from our ongoing
initiatives to transform Acxiom," Company Leader Charles D. Morgan
said.

"Our first-quarter operating income increased 143% over the same
quarter last year, and our overall revenue growth of 8.5% was led
by a 9.8% increase in our services business.  We are clearly on
the right path operationally and will continue to stay focused on
executing our priority initiatives to deliver superior financial
performance."

                            Highlights

   -- Revenue of $336.7 million, up 8.5% from $310.3 million in
      the first quarter a year ago;

   -- Income from operations of $36.3 million, a 143% increase
      compared to $15.0 million in the first quarter last year;

   -- Pre-tax earnings of $29.2 million, up 173% from
      $10.7 million in the first quarter of fiscal 2006;

   -- Operating cash flow of $56.4 million and free cash flow
      available to equity of $11.9 million.  The free cash flow
      available to equity of $11.9 million is a non-GAAP financial
      measure;

   -- Services gross margin increased to 25.1% from 18.5% in the
      same quarter last year and from 23.7% in the sequential
      quarter ended March 31, 2006;

   -- Computer and related expense continued to decline as a
      percentage of revenue.  This key performance metric fell to
      21.7% versus 25.0% in the first quarter last year; and

   -- Share repurchases for the quarter were approximately
      576,000 shares for a total value of approximately
      $13.9 million.

"Our revenue and operating income are record results for the first
fiscal quarter," Mr. Morgan continued.  "We are pleased with our
performance in the first quarter, but we believe we have
considerable opportunity to improve operating performance and
deliver additional growth through execution of our long-term
strategies."

Mr. Morgan noted that Acxiom recently completed new contracts with
General Motors Corporation; AutoNation, Inc.; Unilever; Yellow
Book USA; AccuData and Southern Progress Corporation.

Based in Little Rock, Arkansas, Acxiom Corporation (Nasdaq: ACXM)
-- http://www.acxiom.com/-- integrates data, services and  
technology to create and deliver customer and information
management solutions for many of the largest, most respected
companies in the world.  The core components of Acxiom's
innovative solutions are Customer Data Integration technology,
data, database services, IT outsourcing, consulting and analytics,
and privacy leadership.  Founded in 1969, Acxiom has locations
throughout the United States, Europe, Australia and China.

                           *     *     *

As reported in the Troubled Company Reporter on July 15, 2005,
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Acxiom Corp.  At the same time, the outlook was
revised to negative from positive.


ADELPHIA COMMS: Files Asset Sale & Units' Plan Documents
--------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
filed certain documents with the U.S. Bankruptcy Court for the
Southern District of New York in connection with the Court's order
approving the sale of their assets to Time Warner Cable and
Comcast Corporation and the Court's confirmation of the Third
Modified Fourth Amended Plan of Reorganization for the Century-TCI
and Parnassos Debtors:

    a. Amendment No. 4 To Asset Purchase Agreement Between
       ACOM and Time Warner NY, a full-text copy of which is
       available for free at:

       http://ResearchArchives.com/t/s?ed8

    b. Escrow Agreement Between ACOM and Time Warner NY.

       A full-text copy of the Escrow Agreement is available for
       free at:

       http://ResearchArchives.com/t/s?ed9

    c. Letter agreements between ACOM and Time Warner NY
       regarding:

        * cost center changes,
        * bonus payments,
        * lock boxes;

       A full-text copy of the three Time Warner letter agreements
       is available for free at:

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

    d. Assumption Agreement between ACOM and Time Warner NY, a
       full-text copy of which is available for free at:

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

    e. Amendment No. 4 to Asset Purchase Agreement between ACOM
       and Comcast.

       A full-text copy of the Amended Comcast Asset Purchase
       Agreement is available for free at:

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

    f. Escrow Agreement between ACOM and Comcast, a full-text copy
       of which is available for free at:

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

    g. Letter agreements between ACOM and Comcast regarding:

        * cost center changes,
        * bonus payments,
        * lock boxes;

       A full-text copy of the three Comcast Letter Agreements is
       available for free at:

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

    h. Assumption Agreement between ACOM and Comcast, a full-text
       copy of which is available for free at:

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

    i. Letter Agreement between ACOM and Comcast regarding
       Ordinary Course of Business Contracts pursuant to which
       ACOM agrees that with respect to any OCB Contract that
       Comcast has rejected and ACOM does not terminate at
       Closing, Comcast's liability will not exceed the liability
       it would have been had that OCB Contract been terminated at
       Closing.

The Century-TCI Debtors and the Parnassos Debtors are debtor-
affiliates of Adelphia Communications Corporation.  As defined in
the Plan for Century-TCI and Parnassos Debtors, Adelphia sits as
the interim Plan Administrator.

The Century-TCI Debtors are comprised of:

   * Century-TCI California, L.P.,
   * Century-TCI California Communications, L.P.,
   * Century-TCI Distribution Company, LLC, and
   * Century-TCI Holdings, LLC,

The Parnassos Debtors are comprised of:

   * Parnassos Communications, L.P.,
   * Parnassos Distribution Company I, LLC,
   * Parnassos Distribution Company II, LLC,
   * Parnassos, L.P.,
   * Parnassos Holdings, LLC, and
   * Western NY Cablevision, L.P.

                  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: Can Settle EPA's Environmental Claims
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed Adelphia Communications Corporation and its debtor-
affiliates to enter into a Settlement Agreement with the United
States of America, on behalf of the Environmental Protection
Agency for the Debtors to avoid civil and administrative claims,
including potentially significant civil penalty claims.

Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New
York, said that the ACOM Debtors own and operate approximately
4,000 facilities located in 31 States and majority of these
facilities consist of cable television operating plants and
equipment, which may have stand-by electric power generating
equipment, including diesel generators and sulfuric acid
batteries.  Many of the facilities are subject to federal and
state environmental laws.

To resolve potential violations of the relevant federal
environmental statutes, rules and regulations at its facilities,
the ACOM Debtors voluntarily initiated an environmental self-
audit of their facilities.

The ACOM Debtors and the EPA sought to ensure that the ACOM
Debtors come into and remain in compliance with the Environmental
Requirements.  Based upon preliminary results of the Audit, the
EPA believes that it has claims against the ACOM Debtors for
violations of Environmental Requirements at some of their
facilities.

The ACOM Debtors have completed the Audit and have agreed to
submit to the EPA a final and a supplemental report disclosing
violations and certifying that all disclosed violations were
corrected.

Mr. Shalhoub informed the Court that the ACOM Debtors already have
taken corrective actions to resolve the EPA Claims.

The principal terms of the Settlement Agreement are:

    a. For violations of Environmental Requirements discovered
       pursuant to the Audit and corrected by the ACOM Debtors as
       provided for in the Settlement Agreement, the ACOM Debtors
       will pay civil penalties of:

        * $800 per facility in violation of the Clean Air Act
          Sections 110 and 113(a)(1);

        * $1,150 per facility in violation of Emergency Planning
          and Community Right-to-Know Sections 311 and 312;

        * $1,500 per facility in violation of Clean Water Act
          Section 311 for failure to have a Spill Prevention,
          Control and Countermeasures plan; and

        * $2,600 per facility in violation of CWA Section 311 for
          both failure to have a SPCC plan and failure to have
          adequate secondary containment.

       Additionally, the ACOM Debtors will pay $20,000 for South
       Coast Air Quality Management District violations for which
       compliance with best available control technology is
       necessary.

    b. The ACOM Debtors will be liable to pay penalties up to
       a maximum aggregate cap of $233,000, provided that any
       violation disclosed in the Final Audit Report in excess of
       category-specific totals are not included in the Settlement
       Agreement;

    c. The ACOM Debtors will submit a Final Audit Report in the
       two days after the Court approves the Settlement Agreement;

    d. The ACOM Debtors will submit a Supplemental Report upon
       completing all required corrective actions with respect to
       the SCAQMD Violations;

    e. Upon receipt of the Final Audit Report, the United States
       will determine the consistency of the disclosures in the
       Final Audit Report with the requirements of the Settlement
       Agreement.  If the United States accepts the ACOM Debtors'
       disclosures, the United States will present them with a
       draft Final Settlement Agreement that specifies those
       violations for which they must pay civil penalties;

    f. Upon the United States' receipt of the ACOM Debtors'
       certified Final Audit Report and Supplemental Report and
       upon the ACOM Debtor's payment in full of civil penalties,
       the Settlement Agreement will resolve the United States'
       civil and administrative claims for the violations for
       which corrections are made and penalties paid;

    g. The Unites States' agreement to the terms of the Settlement
       Agreement is expressly conditioned on the completeness,
       truth and accuracy of all certifications made by the ACOM
       Debtors in its Audit Reports;

    h. The civil penalties will be treated as allowed
       administrative expenses.  The United States will not
       required to file an application for administrative expenses
       in order to receive payment from the Debtors; and

    i. In the event that the Court has not approved the Settlement
       Agreement before the effective date of the Company Sale,
       Adelphia will not oppose any request by the United States
       for an extension of the deadline for filing its
       administrative expense claims against the ACOM Debtors up
       to 60 days after the date of the Court's approval or denial
       of the Settlement Agreement.

                  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)


AGILYSYS INC: Moody's Withdraws Corp. Family & Sr. Notes' Rating
----------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings for Agilysys,
Inc. with the final redemption of the remaining $59.4 million of
the $150 million 9.5% Senior Notes on August 1, 2006.

These ratings were withdrawn:

   * Corporate Family Rating of Ba3
   * Senior Notes rating of Ba3


AIRADIGM: FCC Wants More Info on Licenses in Disclosure Statement
-----------------------------------------------------------------
The Federal Communications Commission objects to the Disclosure
Statement explaining Airadigm Communications, Inc.'s Chapter 11
Plan of Reorganization and asks the U.S. Bankruptcy Court for the
Western District of Wisconsin to deny approval.

Mary A. DeFalaise, Esq., an attorney at the Commercial Litigation
Branch, Civil Division, of the U.S. Department of Justice, tells
the Court that the FCC, under the Communications Act of 1934,
auctions the licenses for wireless telecommunication services
known as Personal Communication Services.  

Based on winning bids at two separate FCC auctions in 1996 and
1997, the FCC awarded Airadigm 13 C block and two F block
licenses, covering Basic Trading Areas in Wisconsin, Iowa and the
Upper Peninsula of Michigan.  The total aggregate bid price for
the 15 licenses equaled $71,401,519.  At the time the auctions
were completed, Airadigm made a 10% down payment on each of the
licenses and executed individual installment payment notes and
security agreements for the remainder of its winning bid
obligations in the aggregate amount of $64,219,422.

                   Airadigm I Bankruptcy Case

On July 28, 1999, two days before the end of all applicable grace
periods on Airadigm's installment payment obligations on the
licenses, Airadigm filed its first bankruptcy petition.  After
that, Airadigm made no further payments on account of the
licenses.  On March 10, 2000, the FCC timely filed a proof of
claim in the principal amount of $64,219,422 based upon the Notes
secured by the Licenses.  In Airadigm I, as in other bankruptcies
throughout the country, the FCC took the position that the
licenses had canceled due to Airadigm's failure to make timely
installment payments for the Notes.  While not conceding that its
licenses canceled, Airadigm requested that the FCC waive the
automatic cancellation rule or reinstate the licenses.

On Nov. 15, 2000, over the objection of the FCC, the Court
confirmed the Debtor's Plan Of Reorganization, which provided
essentially two options for dealing with the licenses.  The
"primary" option contemplated that the FCC would be paid in full,
or the obligations to the FCC would be assumed and paid according
to their terms, following the FCC's regulatory determination that
Airadigm was the lawful holder of the Licenses.

The other option, or the "back up plan," provided that, if the FCC
either denied or took no action on the Reinstatement Petition
within a certain time, the potential buyers (including Telephone &
Data Systems, Inc., would acquire Airadigm's assets, except for
the licenses, in exchange for forgiveness of debt and assumption
of certain liabilities.  Furthermore, under the back-up plan, if
the FCC reinstated the licenses after June 30, 2001, but before
June 30, 2002, the buyers could make the "Reinstatement Loan"
pursuant to the Plan.  If the FCC did not reinstate the licenses,
the back-up 2000 Plan envisioned that the licenses would cancel
and the FCC would be able to issue new licenses for the underlying
spectrum.

On Jan. 27, 2003, the Supreme Court, in NextWave Personal
Communications, Inc.'s case, issued an opinion that FCC licenses
do not cancel due to a debtor's failure to pay a debt
dischargeable in a bankruptcy case.  On August 8, 2003, the FCC
confirmed that the NextWave decision applied to Airadigm's
Licenses.  The FCC also held that, since the licenses had not
canceled, Airadigm's Reinstatement Petition was moot.  TDS has
twice sought reconsideration of this decision, despite the fact
that a reversal of that decision would be against its own
interests.  The second of these petitions for reconsideration is
currently pending.

On Nov. 17, 2003, the Court ordered that the Back-up Transfer Date
had occurred on November 14, 2002, triggering the "back-up plan."  
After that, on May 20, 2004, the Court, without objection by
Airadigm, granted the FCC an Allowed Claim in the principal amount
of $64,219,422.55, which claim was secured by liens on the
licenses.

                   Airadigm II Bankruptcy Case

On May 8, 2006, while Airadigm I was still pending, Airadigm filed
its second bankruptcy petition.  On the same day, TDS filed a
motion to terminate the Airadigm I bankruptcy case alleging that
the 2000 Plan was substantially consummated.  Specifically, TDS
argued that administrative claims, unclassified priority claims
and certain other payments were made under the 2000 Plan.  TDS
also alleged that all of the assets of Airadigm, as a debtor-in-
possession, were transferred to Airadigm as a reorganized debtor
pursuant to the 2000 Plan.  The motion did not address the
treatment of the FCC's licenses or unpaid Allowed Claim.

The FCC objected to TDS' motion and, after much negotiation,
Airadigm, TDS and the FCC entered into a stipulation in the
Airadigm I bankruptcy case which would allow the case to be
terminated.  The Stipulation provided, in relevant part, that the
FCC's rights as a holder of an Allowed Claim under the 2000 Plan
were in "no way prejudiced by the closing of [Airadigm I] and
proceeding with [Airadigm II]."  The Stipulation further provided
that the FCC's Allowed Claim under the 2000 Plan would be allowed
in the Airadigm II bankruptcy case.

To date, Airadigm has retained and continued to use the licenses
over the last nine years despite the fact that the FCC received no
payment or other compensation on account of its Allowed Claim.  
The licenses were awarded for a ten-year period and are scheduled
to expire within the year -- the C Block licenses on Sept. 17,
2006 and the F Block Licenses on April 28, 2007.

             The Disclosure Statement and 2006 Plan

On June 20, 2006, the Debtor filed its Disclosure Statement along
with the 2006 Plan.  In its 2000 Plan, the Debtor proposed to
transfer its licenses to the buyers (i.e., TDS), who would then
pay the FCC in full and, more importantly, accept any fluctuation
in the market with respect to the value of the Licenses.  Pursuant
to the Disclosure Statement and the 2006 Plan, though, the Debtor
seeks to modify its confirmed 2000 Plan so that it retains the
benefits under that plan, but without transferring the licenses to
TDS and without paying for the licenses in full.  According to Ms.
DeFalaise, it proposes to do so by a facially non-confirmable Plan
accompanied by a hopelessly inadequate Disclosure Statement that
violates bankruptcy law and FCC regulations.

Specifically, Ms. DeFalaise adds, the Disclosure Statement lacks
the fundamental information necessary for approval.  It, inter
alia, contains no information with respect to the Debtor's
business plan or the value of its business, and no valuation of
the TDS' secured claim (which it plans to pay in full).  It
further contains no material to assess what assets it will retain,
what money is available to fund its Plan, and what, if any, value
the alleged undersecured claims will receive. Moreover, the
Disclosure Statement and Plan contemplate the possible return of
spectrum to the FCC in contravention of FCC regulations and
contemplate the possibility of paying an indeterminate portion of
the FCC's Allowed Claim in stock of questionable value.  Because
the amount, or even the very issuance of such stock is unknown,
the FCC cannot make a meaningful decision about the Plan at this
time.

Finally, Ms. DeFalaise contends, the Plan appears to contemplate
the potential return of all of the licenses to the FCC, depending
on decisions that, under the Plan, will not be made until after
the valuation hearing and perhaps, after Plan confirmation.  This
means that the Plan may essentially turn out to be a liquidation
plan.  If so, such a plan obviously would raise an entirely
different set of concerns for the FCC, as well as for other
parties, in the context of treatment of claims as well as
potential objections.  Thus, Ms. DeFalaise concludes, the
Disclosure Statement describes a Plan that is facially non-
confirmable and not feasible.  Accordingly, because the Disclosure
Statement fails to provide adequate information and because the
Plan is not feasible or confirmable on its face, this Court should
deny the approval of the Disclosure Statement, Ms. DeFalaise
asserts.

                         About Airadigm

Headquartered in Little Chute, Wisconsin, Airadigm Communications,
Inc. -- http://www.eisnteinpcs.com/-- provides local wireless    
phone services through its Einstein PCS wireless networking
technology.  The company filed for chapter 11 protection on July
28, 1999 (Bankr. W.D. Wis. Case No. 99-33500).  The Court
confirmed its plan of reorganization in 2000.

The company filed a new chapter 11 petition on May 8, 2006 (Bankr.
W.D. Wis. Case No. 06-10930).  Kathryn A. Pamenter, Esq., and
Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black, Rosenbloom
& Moritz, Ltd., represent the Debtor in its new bankruptcy
proceedings.  No Official Committee of Unsecured Creditors has
been appointed in the Debtor's new bankruptcy case.  In its second
bankruptcy filing, the Debtor estimated assets between $10 million
to $50 million and debts of more than $100 million.


AMKOR TECHNOLOGY: Earns $24 Million in Second Quarter of 2006
-------------------------------------------------------------
Amkor Technology, Inc., reported second quarter 2006 sales of
$687 million, up 40% from the second quarter of 2005 and up 6%
from the first quarter of 2006.

Amkor's second quarter 2006 net income was $24 million compared
with a net loss of $52 million in the second quarter of 2005.
During the second quarter of 2006, in connection with refinancing
transactions to address near-term debt maturities, Amkor recorded
charges, with no net tax effect, of $28 million.

"I am pleased with our performance this quarter, as we realized
continued strong growth in flip chip, 3D packaging and test,
consistent with the strategic investments we've made in these
areas during the past two years," James Kim, chairman and chief
executive officer, said.

"During the quarter, we continued to build on our industry
leadership in a variety of advanced package applications."

"We expect that the robust year-over-year growth rates achieved
over the past several quarters will begin to moderate," Mr. Kim
said.

"While there are signs that the U.S. economy is slowing, the
global economy does not appear to be slowing as fast.  Given the
breadth of our customer base and end markets that we support, we
believe that this should provide some stability with respect to
overall demand."

"During the second quarter, we completed a series of financing
transactions to address our near-term debt maturities and reduce
ongoing interest expense.  We also used available cash to retire
$132 million in 5.75% convertible subordinated notes at maturity
on June 1, 2006, and to repurchase $4 million in 5% convertible
notes due March 2007," Mr. Kim said.

"To put our improved liquidity into perspective, at the beginning
of 2005, we had more than $1.1 billion of debt maturing through
2009.  [Now] the amount is approximately $360 million."

"We remain committed to maintaining a disciplined approach to our
business model, with rational capital investments, continued cost
management, and a clear focus on driving operating efficiencies
throughout the organization," Mr. Kim said.

"I expect that we will make additional progress in utilizing free
cash flow to reduce our remaining debt.  Based on current
forecasts, we believe we will have sufficient cash resources
available to retire the remaining $142 million of 5% convertible
notes due March 2007.

"We achieved record sales and units in the second quarter, driven
by high performance applications, cell phones and other portable
devices," Ken Joyce, Amkor's chief financial officer, said.

Second quarter gross margin rose to 25% from 24% in the first
quarter.  "During the second quarter, we commenced the build out
of our new wafer bumping and test facility in Singapore and our
new assembly and test factory in Shanghai," Mr. Joyce said.

"Depreciation expense and other costs associated with these
factories will continue to influence gross margin until we build a
critical mass of revenue in these operations.  During the quarter,
we recorded a $3 million impairment of an equity investment, which
is reflected in Other (income) expense, net.

Capital expenditures totaled $93 million in the second quarter and
$196 million for the first six months.

"We currently plan to limit our full year 2006 capital additions
to $300 million, which includes approximately $50 million for
facilities principally for our new factories in China and
Singapore," Mr. Joyce said.

"Our 2006 capital equipment budget remains focused on strategic
growth areas of wafer level processing, test, and flip chip
assembly.  We will continue to monitor business conditions and are
prepared to adjust this estimate."

"During the quarter, we took several steps to strengthen our
financial liquidity," Mr. Joyce said.

"We issued $400 million of 9.25% senior notes due 2016 and used
most of the net proceeds to repurchase $352 million of our 9.25%
senior notes due 2008.  In addition, we issued $190 million in
2.5% convertible senior subordinated notes due 2011 and used the
net proceeds to redeem $178 million of our $200 million in 10.5%
senior subordinated notes due 2009.  In connection with the
repurchased and redeemed notes, we recognized charges, with no net
tax effect, totaling $28 million.  Going forward, we expect to
realize substantial interest savings from refinancing most of the
10.5% senior subordinated notes with 2.5% senior subordinated
convertible debt."

"We have achieved positive free cash flow for the past three
quarters, and given our financial strategy and current view of
business conditions, we anticipate that this trend should continue
for the rest of the year," Mr. Joyce said.

For the full year 2006, the Company anticipates an effective tax
rate of 7.8%, which reflects the utilization of U.S. and foreign
net operating loss carryforwards and tax holidays in certain of
our foreign jurisdictions.

At June 30, 2006, Amkor had U.S. net operating losses available
for carryforward totaling $336 million expiring through 2025.
Additionally, at June 30, 2006, the Company had $78 million of
non-U.S. operating losses available for carryforward, expiring
through 2011.

The Company also disclosed that its Board of Directors has formed
a special committee of independent directors to undertake a
voluntary review of Amkor's historical stock option practices.  
The committee will be assisted by independent counsel.

Chandler, Arizona-based Amkor Technology, Inc. (NASDAQ: AMKR) --
http://www.amkor.com/-- provides advanced semiconductor assembly  
and test services.  The company offers semiconductor companies and
electronics original equipment manufacturers a complete set of
microelectronic design and manufacturing services.

                           *     *     *

As reported in the Troubled Company Reporter on May 12, 2006,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Amkor Technology's $300 million senior unsecured note due 2016 and
its 'CCC' rating to a new $150 million subordinated convertible
note due 2011.  S&P said the corporate credit rating on Amkor
Technology is B-/Positive/--.

As reported in the Troubled Company Reporter on April 27, 2006,
Moody's Investors Service affirmed Amkor Technology, Inc.'s
corporate family rating at Ba3; $300 million senior secured term
loan due October 2010 at B2; senior unsecured notes with various
maturities totaling $1.1 billion at Caa1; subordinated notes with
various maturities totaling $479.4 million of Caa3, and revised
the ratings outlook to stable from negative.  In addition, the
speculative grade liquidity rating was upgraded to SGL-3 from
SGL-4.


ARMSTRONG WORLD: Says Confirmation & Emergence Remain Uncertain
---------------------------------------------------------------
Armstrong World Industries, Inc., and its subsidiaries disclose in
a recent quarterly financial report that the timing and terms of
resolution of their Chapter 11 cases remain uncertain.

AWI cannot predict:

    * when and if a plan of reorganization will be confirmed by
      the Bankruptcy Court and the U.S. District Court;

    * the impact of a proposed asbestos claims litigation reform
      bill pending in Congress; and

    * the financial condition of AWI's insurance carriers.

If the Plan is confirmed, AWI cannot also predict when it will be
implemented, F. Nicholas Grasberger III, Armstrong's senior vice
president and chief financial officer, says.

Mr. Grasberger adds that as long as the uncertainty exists, future
changes to AWI's recorded liability and insurance asset are
possible, and could be material to the company's financial
position and the results of its operations.

The confirmation hearing on Armstrong's Plan commenced on May 23,
2006, and concluded with oral arguments on July 11, 2006.  At that
hearing, Judge Robreno of the U.S. District Court for the Eastern
District of Pennsylvania heard testimony and received evidence
relating to the objection of the Official Committee of Unsecured
Creditors that AWI's Plan unfairly discriminates against the
unsecured creditors.

Judge Robreno took the matter under advisement and is expected to
issue his decision in the near future.

                      About Armstrong World

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

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

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

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


ARMSTRONG WORLD: Balance Sheet Upside-Down by $1.2B at June 30
--------------------------------------------------------------
Armstrong Holdings, Inc., reported second quarter 2006 net sales
of $945.5 million that were 3% higher than second quarter net
sales of $919 million in 2005, including a $4.1 million negative
impact from foreign exchange rates.  Second quarter 2006 operating
income improved to $72.5 million from $36.6 million in the second
quarter of 2005, primarily on the growth in sales.  Increased
manufacturing productivity offset inflationary cost increases.  
Net gains from sales of buildings were largely offset by non-cash
charges related to an employee benefit plan and to accrual
adjustments.

                       Segment Highlights

Resilient Flooring net sales were $305.3 million in the second
quarter of 2006 and $317.6 million in the same period of 2005.
Excluding the unfavorable impact of foreign exchange rates, net
sales decreased 4%.  The decline was primarily due to decreased
residential vinyl volume and lower selling prices for laminate in
the Americas, and to lower volumes in Europe.  Operating income of
$17.6 million in the quarter compared to a loss in the second
quarter of 2005 of $3.9 million.  The improvement is primarily
attributable to $17 million in net gains from the sale of
buildings.  In addition, benefits from previously implemented cost
reductions were partially offset by sales declines and by
inflation in raw materials and freight.

Wood Flooring net sales of $222.6 million in the current quarter
grew 4% from $214.6 million in the prior year due to the benefit
from previously announced acquisitions and to volume growth in
both engineered and solid wood floors.  These benefits were
partially offset by price declines.  Operating income of
$18.2 million in the quarter compared to $19.9 million in the
second quarter of 2005.  The decline includes approximately
$4 million in non-cash charges related to an adjustment to
accruals and to fixed asset impairment.  Improved operating income
from increased sales volume and production efficiencies largely
offset both the charges and the price declines.

Textiles and Sports Flooring net sales in the second quarter of
2006 increased to $71.5 million from $68.8 million.  Excluding the
effects of unfavorable foreign exchange rates of $1.8 million,
sales grew 7% on improved price and product mix, which offset
volume declines in broadloom carpet.  An operating loss of
$9.6 million in 2006 compares to an operating loss in 2005 of
$0.5 million.  The increased operating loss was primarily driven
by an $8.5 million non-cash charge related to the transfer of a
defined benefit pension plan to a multi-employer industry plan.

Building Products net sales of $287.4 million in the current
quarter increased from $262.7 million in the prior year.  
Excluding the effects of unfavorable foreign exchange rates of
$1.6 million, sales increased by 10%, primarily due to price
increases made to offset inflationary pressures, and to increased
volume in the strong U.S. Commercial markets.  Operating income
increased to $53.2 million from operating income of $37.6 million
in the second quarter of 2005.  The growth was driven by improved
price realization, better product mix and increased equity
earnings in WAVE, which were only partially offset by inflation in
raw materials, energy and freight.

Cabinets net sales in the second quarter of 2006 of $58.7 million
increased from $55.3 million in 2005 on higher selling prices and
improved product mix, which more than offset lower volume.  
Operating income for the second quarter of $2.1 million improved
from the prior year's $3.3 million operating loss, primarily
driven by the sales growth.  In addition, the 2005 operating loss
included higher SG&A expense and costs related to the shutdown of
the Morristown, Tennessee manufacturing plant, which were not
repeated in 2006.

                      Year-to-Date Results

For the six-month period ending June 30, 2006, net sales were
$1,822.1 million compared to $1,759.7 million reported for the
first six months of 2005.  Excluding the $23.8 million impact from
unfavorable foreign exchange rates, net sales increased by 5%.  
Increases were reported in all segments except Resilient Flooring.

Operating income in the first half of 2006 was $120.7 million.
This compares to operating income of $44.3 million for the first
six months of 2005.  The improvement in operating income was
primarily due to higher sales, improved manufacturing
productivity, and reduced SG&A expenses.  In addition, a higher
pension credit, gains from real estate sales, and a favorable
settlement of a patent infringement case contributed to the
year-over-year improvement.  Inflationary cost increases partially
offset these benefits.

A full-text copy of Armstrong's Second Quarter 2006 Financial
Report on Form 10-Q is available for free at:

               http://ResearchArchives.com/t/s?ee7

           Armstrong World Industries, Inc., and Subsidiaries
                  Unaudited Consolidated Balance Sheet
                           At June 30, 2006
                            (in millions)

                                 Assets

Current Assets:
    Cash and cash equivalents                             $535.0
    Accounts and notes receivable, net                     398.5
    Inventories, net                                       557.9
    Deferred income taxes                                   15.4
    Income tax receivable                                   18.2
    Other current assets                                    66.2
                                                        --------
Total current assets                                    1,591.2

Property, plant and equipment, less
    accumulated depreciation and amortization            1,146.0
Insurance receivable for asbestos-related
    liabilities, non-current                                91.5
Prepaid pension costs                                      483.8
Investment in affiliates                                    87.0
Goodwill, net                                              143.5
Other intangibles, net                                      83.7
Deferred income taxes, non-current                        967.4
Other non-current assets                                    94.9
                                                        --------
Total assets                                           $4,689.0
                                                        ========

              Liabilities and Shareholders' Equity

Current liabilities:
    Short-term debt                                        $21.8
    Current installments of long-term debt                   3.5
    Accounts payable and accrued expenses                  401.5
    Short term amounts due to affiliates                    10.1
    Income tax payable                                      14.5
    Deferred income taxes                                    0.8
                                                        --------
Total current liabilities                                 452.2

Liabilities subject to compromise                        4,868.2

Long-term debt, less current installments                   12.4
Postretirement and post-employment benefit liabilities     259.5
Pension benefit liabilities                                229.2
Other long-term liabilities                                 81.1
Deferred income taxes                                       26.0
Minority interest in subsidiaries                            8.0
                                                        --------
Total non-current liabilities                           5,484.4

Shareholders' equity (deficit):
    Common stock                                            51.9
    Capital in excess of par value                         172.6
    Reduction for ESOP loan guarantee                     (142.2)
    Accumulated deficit                                   (842.6)
    Accumulated other comprehensive income (loss)           41.2
    Less common stock in treasury                         (528.5)
                                                        --------
Total shareholders' (deficit)                          (1,247.6)
                                                        --------
Total liabilities and shareholders' equity             $4,689.0
                                                        ========


           Armstrong World Industries, Inc., and Subsidiaries
              Unaudited Consolidated Statement of Earnings
                    Three Months Ended June 30, 2006
                            (in millions)

Net sales                                                $945.5
Cost of goods sold                                        729.2
                                                        --------
Gross profit                                              216.3

Selling, general and administrative expenses              151.3
Restructuring charges, net                                  7.8
Equity (earnings) from joint venture                      (15.3)
                                                        --------
Operating income (loss)                                    72.5

Interest expense                                            1.8
Other non-operating expense                                 0.5
Other non-operating (income)                               (2.9)
Chapter 11 reorganization (income) costs, net               6.0
                                                        --------
Earnings before income taxes                               67.1
Income tax expense                                         26.9
                                                        --------
Net earnings (loss)                                       $40.2
                                                        ========


           Armstrong World Industries, Inc., and Subsidiaries
            Unaudited Consolidated Statement of Cash Flows
                    Six Months Ended June 30, 2006
                            (in millions)

Cash flows from operating activities:
    Net earnings (loss)                                    $68.2
    Adjustments to reconcile net earnings to net earnings
       (loss) to net cash (used for) operating
       activities:
       Depreciation and amortization                        68.5
       Fixed assets impairment                               0.7
       Deferred income taxes                                 8.5
       Gain on sale assets                                 (17.1)
       Equity (earnings) from affiliates, net              (27.3)
       Chapter 11 reorganization costs, net                  6.5
       Chapter 11 reorganization costs payments             (9.0)
       Restructuring charges, net of reversals              10.5
       Restructuring payments                               (2.5)
       Cash effect of hedging activities                    (2.5)
    Increase (decrease) in cash from change in:
    Receivables                                            (59.7)
    Inventories                                            (29.8)
    Other current assets                                     0.8
    Other non-current assets                               (17.0)
    Accounts payable and accrued expenses                    1.7
    Income taxes payable                                     4.3
    Other long-term liabilities                             (4.9)
    Other, net                                               1.1
                                                        --------
Net cash (used for) operating activities                     1.0
                                                        --------
Cash flows from investing activities:
    Purchases of property, plant and equipment
       and computer software                               (49.3)
    Purchase of minority interest                           (1.5)
    Acquisitions                                           (60.5)
    Distributions from equity affiliates                    12.0
    Investment in affiliates                                (4.3)
    Proceeds from sale of assets                            37.8
                                                        --------
Net cash (used for) investing activities                   (65.8)
                                                        --------
Cash flows from financing activities:
    Increase in short-term debt, net                         5.3
    Payments of long-term debt                             (12.6)
    Other, net                                               0.6
                                                        --------
Net cash provided by financing activities                   (6.7)
Effect of exchange rate changes on cash and
    cash equivalents                                         4.3
                                                        --------
Net decrease in cash and cash equivalents                  (67.2)
Cash and cash equivalents at beginning of year             602.2
                                                        --------
Cash and cash equivalents at end of period                $535.0
                                                        ========

                      About Armstrong World

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

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

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

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


ATLAS AIR: Paying $141MM of Principal Under Financing Facilities
----------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. elected on behalf of itself and
certain of its subsidiaries to pay off approximately $141 million
of principal under two aircraft financing facilities, using cash
from existing Company balances, and to terminate an existing
revolving credit facility under which no borrowings are
outstanding.

"We are taking advantage of our healthy cash position, which
totaled $309 million at the end of the first quarter, to pay down
and terminate certain credit facilities that inhibit our strategic
and operating flexibility," President and Chief Executive Officer
William J. Flynn said.

On July 31, 2006, AAWW plans to repay approximately $141 million
of principal (before discount related to fair market value
adjustments) outstanding under two credit facilities administered
by Deutsche Bank Trust Company Americas, the Aircraft Credit
Facility and the AFL III Credit Facility.  In connection with the
repayment, AAWW expects to incur a one-time, non-cash pretax
expense of approximately $13 million in the third quarter of 2006,
related to the write-off of the remaining, unamortized discount
associated with such debt.

AAWW's decision to terminate the Exit Facility with Wachovia Bank
National Association, as agent, was effective on Aug 3, 2006.  
While no borrowings are outstanding under the credit facility,
letters of credit totaling approximately $400,000 were
outstanding.  No early termination penalties or fees will result
from the early termination of the credit facility.

As a result of the terminations of the Deutsche Bank and Exit
facilities, all covenants associated with them will be eliminated.  
In addition, financing liens will be removed on the following AAWW
assets, among others: one 747-100 aircraft, 14 747-200 aircraft,
one 747-300 aircraft, accounts receivable, certain inventory and
spare parts, and certain spare engines.

               About Atlas Air Worldwide Holdings

Based in Purchase, New York, Atlas Air Worldwide Holdings, Inc.
(Nasdaq: AAWW) -- http://www.atlasair.com/-- is a worldwide all-
cargo carriers that operate fleets of Boeing 747 freighters.  The
Company filed for chapter 11 protection (Bankr. S.D. Fla. Case No.
04-10794) on January 30, 2004.  The Honorable Robert A. Mark
presided over Atlas' restructuring proceeding.  Jordi Guso, Esq.,
at Berger Singerman, represents the debtor.  Atlas Air emerged
from bankruptcy on July 27, 2004.  When the Company filed for
bankruptcy, it listed $1,451,919,000 in assets and $1,425,156,000
in debts.


ATMEL CORPORATION: Completes $140 Mil. Atmel Grenoble Sale to e2v
-----------------------------------------------------------------
Atmel Corporation concluded the sale of its Grenoble, France
subsidiary including the manufacturing facility for $140 million
to e2v technologies plc, a British corporation.

George Perlegos, chairman and chief executive officer said, "As we
previously announced on July 13, 2006, this sale represents
another milestone in Atmel's plan to consolidate its manufacturing
operations.  We remain committed to focusing resources on our core
technologies and developing leading-edge products for growth
markets,"

The Company retains rights to its patented finger-print scanning
recognition technology.  All other Grenoble products including
image sensors and aerospace qualified microprocessors are included
in the purchase by e2v.

                           About e2v

Headquartered in Chelmsford, UK, e2v - http://www.e2v.com-- is a  
designer, developer and manufacturer of electronic tube and sensor
components & sub-systems that are supplied to niche markets within
the three core areas of Medical & Science, Aerospace & Defense and
Commercial & Industrial.

                          About Atmel

Atmel Corporation -- http://www.atmel.com-- (Nasdaq: ATML)  
designs and manufactures microcontrollers, advanced logic, mixed-
signal, nonvolatile memory and radio frequency (RF) components.
Leveraging one of the industry's broadest intellectual property
(IP) technology portfolios, Atmel is able to provide the
electronics industry with complete system solutions.  It is
focused on consumer, industrial, security, communications,
computing and automotive markets.

                          *     *     *

Standard & Poor's Rating Services assigned its single-B long-term
foreign issuer and long-term local issuer credit ratings to Atmel
Corp. on Oct. 24, 2001, and said the outlook, at that time, was
negative.


AVIS BUDGET: Strong Market Position Cues S&P to Assign BB+ Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Avis Budget Car Rental LLC.  In addition, the company's
outstanding ratings were affirmed.

Avis Budget is currently a subsidiary of Cendant Corp., whose
ratings were withdrawn on Aug. 1, 2006.  Cendant is expected to
complete the sale of its other operating entity, Travelport, by
the end of August 2006.  Avis Budget's ratings assume the
completion of this sale.  The outlook is stable.

The ratings reflect the strong position of Avis and Budget car
rental brands within the North American on-airport car rental
market and access to fleet financings through asset-backed
securitizations," said Standard & Poor's credit analyst Betsy
Snyder.  "However, the company's global car rental operations are
more limited than those of its major competitor Hertz Corp., and
its consumer truck rental operation is approximately one-half the
size of competitor U-Haul International," she continued.


BALCO EQUITIES: Debtor's Counsel Ordered to Disgorge Retainer
-------------------------------------------------------------
Paul Banner, the Chapter 7 Trustee overseeing the liquidation of
Balco Equities Ltd. Inc. and its debtor-affiliates, filed a
complaint against Cohen, Estis and Associates, LLP -- the Debtors'
restructuring counsel -- seeking disgorgement of a retainer paid
to the firm pre-petition and denial of any fees and expenses.  

The Trustee contended that Cohen Estis failed to:

   1) disclose that it represented:

       a) Donald Boehm, the Debtors' principal and largest
          unsecured creditor holding a claim of more than
          $4 million; and

       b) the Estate of Frederic J. Warmers, another major
          creditor -- of which Mr. Boehm was executor -- holding
          a $2.7 million secured claim; and

   2) apply to the Court for allowance of fees as required by     
      Section 330 of the Bankruptcy Code.

The Honorable Cecelia G. Morris of the U.S. Bankruptcy Court for
the Southern District of New York entered an order:

   -- denying all professional compensation requested by Cohen
      Estis in its first and final fee application for attorneys'
      fees of $113,707;

   -- allowing the reimbursement of $2,517 in expenses; and

   -- directing Cohen Estis to disgorge the $42,483 retainer
      Cohen Estis received after deduction of the allowed
      expenses, to be held by the Trustee pending further order
      of the Court.

Cohen Estis moved for reconsideration, particularly justifying its
participation in the transfer of a real estate in New Windsor, New
York, from the Frederic Warmers Estate to the Debtors.

Cohen Estis argued that it should be awarded compensation because
"[it] only tried to generate a dividend for unsecured creditors
and therefore acted consistently with [its] fiduciary duty to the
Debtor, the estate and its creditors."

The Court sustained its prior ruling.  

In a decision published at 2006 WL 1892598, the Court held that no
matter how laudable the law firm's intentions, the failure to
reveal obvious and extensive connections and conflicts of interest
could never be excused based upon a desire to help unsecured
creditors.  To rule otherwise would render all professional
disclosure obligations meaningless, Judge Morris explained,
pointing to Section 101(14) of the Bankruptcy Code.

The Court also noted that because the litigation over the proceeds
of the New Windsor Property is ongoing, it is not yet clear that
the estate will receive any benefit from the sale.  

"While there is still a potential for a distribution to unsecured
creditors, it is also possible that the estate could wind up
administratively insolvent," Judge Morris opined.

Richard L. Weisz, Esq., at Hodgson Russ LLP represented Cohen
Estis in this matter.

Balco Equities Limited Inc. and its debtor-affiliates filed for
chapter 11 protection on March 31, 2004 (Bankr. S.D.N.Y. Case No.
04-35777).  Ronald J. Cohen, Esq., at Cohen, Estis and Associates,
LLP, represented the Debtors in their restructuring efforts.  On
December 14, 2004, the Debtors' case was converted into a chapter
7 proceeding.  Paul Banner serves as the Chapter 7 trustee, and is
represented by Mark D. Glastetter, Esq., at Deily, Mooney &
Glastetter, LLP.


BOSTON SCIENTIFIC: Resolves Patent Litigation with St. Jude Med.
----------------------------------------------------------------
Boston Scientific Corporation and St. Jude Medical, Inc. entered
into an agreement that resolves four previously disclosed patent
litigation matters pending between the companies and certain of
their affiliates.

The Company and St. Jude Medical also agreed to limit how two
previously disclosed unresolved patent cases will be pursued.

St. Jude Medical and the Company also agreed to a patent cross
license of the companies' cardiac rhythm management patent
portfolios, and a separate cross license of certain patents held
by each of their affiliates related to neuromodulation.

St. Jude Medical chairman, president and chief executive officer
Daniel J. Starks said, "We are pleased to have reached these
agreements, which eliminate much of the expense and uncertainty
associated with the litigation and enable the company to focus its
resources and attention on providing patients with life-saving
products,"

"We are pleased to have reached a reasonable commercial settlement
of the lawsuits between Boston Scientific and St. Jude Medical,"
Jim Tobin, the Company's president and chief executive officer,
said.  "We are also pleased to have reached agreement on
additional cross licenses, which will help reduce the possibility
of future patent disputes between our companies.  This is very
welcome news, which we believe will benefit both companies and
offer physicians and patients continued access to a broad range of
treatment alternatives."

                     About St. Jude Medical

Headquartered in St. Paul, Minn., St. Jude Medical (NYSE: STJ)
-- http://www.sjm.com-- is dedicated to making life better for  
cardiac, neurological and chronic pain patients worldwide through
excellence in medical device technology and services.  The Company
has five major focus areas that include: cardiac rhythm
management, atrial fibrillation, cardiac surgery, cardiology and
neuromodulation.  The Company employs approximately 10,000 people
worldwide.

                     About Boston Scientific

Headquartered in Natick, Massachusetts, Boston Scientific
Corporation (NYSE: BSX) -- http://www.bostonscientific.com/--  
develops, manufactures and markets medical devices used in a broad
range of interventional medical specialties.

                           *     *     *     

As reported in the Troubled Company Reporter on April 25, 2006,
Moody's Investor Services lowered the credit ratings of Boston
Scientific following the close of the acquisition of Guidant
Corporation.  Affected ratings include: senior notes to Baa3 from
Baa1; short-term rating to Prime-3 from Prime-2; senior shelf to
(P)Baa3 from (P)Baa1; subordinated shelf to (P)Ba1 from (P)Baa2;
and preferred stock shelf to (P)Ba2 from (P)Baa3.


BRISTOL WEST: Debt Refinancing Prompts S&P to Withdraw Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB+' counterparty
credit and senior unsecured ratings on Bristol West Holdings Inc.

The company's $69 million of outstanding bank debt has been
refinanced with a new facility that Standard & Poor's was not
requested to rate.


CALPINE CORP: Fund Submits Claims in Insolvency Proceedings
-----------------------------------------------------------
Calpine Power Income Fund (TSX: CF.UN) submitted various claims in
Canadian and US insolvency proceedings related to Calpine
Corporation and its subsidiaries.

On December 20, 2005 Calpine Corporation and certain subsidiaries
and affiliates filed for voluntary reorganization under Chapter 11
of the US Bankruptcy Code and certain subsidiaries and affiliates
of Calpine in Canada filed for voluntary reorganization under the
Companies' Creditors Arrangement Act in Canada.  The claims bar
date under both the Chapter 11 Proceedings and the CCAA
Proceedings was Aug. 1, 2006.

The Fund and certain of its subsidiaries have completed assessing
claims to submit with respect to obligations owed to them by
Calpine and its subsidiaries and filed claims under both
proceedings prior to the claims bar date.  Each of the claims is
unproven and will be subject to proof proceedings in each of the
CCAA and Chapter 11 Proceedings.

                        Tolling Agreement

Calpine Power L.P., which is 70% owned by the Fund, submitted a
claim under the CCAA Proceedings against Calpine Energy Services
Canada Partnership and its partners with respect to the
repudiation on Jan. 16, 2006 of the tolling agreement related to
Calgary Energy Centre.  The claim, for payments under the tolling
agreement, is in the amount of $769 million, before giving effect
to mitigation of the claim through short-term and any long-term
retolling of the capacity of Calgary Energy Centre and discounting
to provide for the net present value of the claim.  The mitigation
and discounting are expected to significantly reduce the claim by
an amount that is currently undetermined but that is expected to
be substantial.  A claim for costs, expenses and legal fees was
also filed.  CLP also submitted a similar claim under the Chapter
11 Proceedings against Calpine with respect to Calpine's guarantee
of CESCP's obligations under the tolling agreement plus costs,
expenses and legal fees.

                          Manager Loan

Calpine Commercial Trust submitted a claim against Calpine Canada
Power Limited, the manager of CLP and CCT and the administrator of
the Fund under the CCAA Proceedings demanding payment of the loan
owing by the Manager to CCT.  The claim is for principal and
interest in the amount $33.9 million, yield protection in the
amount of $3.8 million and legal and accounting fees and expenses.

The Manager Loan is a full recourse obligation of the Manager, and
is secured by a pledge of the Manager's Class B Subordinated Units
in CLP.  Additionally, the subsidiary of Calpine which is the
lessee of the King City Facility has provided a subordinated
guarantee of the Manager's obligations under the Manager Loan.  
Recourse under this guarantee is subordinated and is limited to
Calpine King City's interest in distributions from the operation
of the King City Facility.  The Manager has previously indicated
its belief that the Manager Loan is fully collectible based upon
the Calpine King City guarantee and security subject to the
lifting of the stay in the CCAA Proceedings to allow a formal
demand to be made against the Manager.  On July 25, 2006, the stay
was temporarily lifted and a demand for payment was made.

                           Whitby Loan

The Fund, CCT and CLP submitted a claim against the Manager under
the CCAA Proceedings seeking a declaration that a purported
intercompany loan owing by Calpine Canada Whitby Holdings Company
to the Manager, is subordinated to the loan owing by CCWH to CLP,
which is CLP's participating loan interest in the Whitby power
plant in Ontario.  Certain other alternative relief including
without limitation unliquidated damages, as well as related costs
and expenses, is also sought.

The Manager advised the Fund that the amount of such intercompany
loan is $32.7 million.  The Whitby Loan subsists in the principal
amount of $35 million, however an impairment charge of $16 million
was accrued against the Whitby Loan in the CLP financial
statements for the year ended Dec. 31, 2005.  The Manager has
indicated that it considers such intercompany loan to be
subordinated to the Whitby Loan, and has further indicated an
intention to document this subordination through a written
agreement, which would be subject to the approval of the Court in
the CCAA Proceedings.  To date, the Manager has not commenced the
Court approval process.

                      Management Agreements

The Fund, CCT and CLP submitted a claim against the Manager under
the CCAA Proceedings seeking a declaration the Manager has
breached and repudiated the management agreement and the
administrative services agreement relating to the Fund and its
subsidiaries, seeking a declaration that the Fund, CCT and CLP are
entitled to terminate the Management Agreements, and seeking
related relief and costs and expenses of enforcement.  No claim
was filed with respect to the operating and maintenance agreements
of the Fund, under which the Manager provides operational services
relating to facilities of subsidiaries of the Fund.

The Manager disputes the allegations of breach and repudiation
made by the Fund, CCT and CLP in relation to the Management
Agreements.  It is the Manager's view that it has acted, and
continues to act, in compliance with its obligations under the
Management Agreements.  Further, the Manager disputes any
allegation that its conduct could be construed as a repudiation of
the Management Agreements.  The Manager intends to continue to
fulfill its obligations to the Fund, CCT and CLP under the
Management Agreements.

                          Other Claims

CLP submitted contingent and unliquidated claims against the
Manager, and Calpine as guarantor, under the CCAA Proceedings and
the Chapter 11 Proceedings respectively with respect to the heat
rate indemnity relating to CLP's Island co-generation facility and
related costs and expenses.  Under the contribution agreement
whereby the Island Facility was contributed to CLP, a predecessor
to the Manager agreed to indemnify CLP for heat rate penalties
incurred under the Island Electricity Purchase Agreement above
stipulated thresholds.  Calpine guaranteed this obligation. As of
the date hereof, no amount is owing under this indemnity.

The Fund and CLP submitted contingent and unliquidated claims
against the Manager in the CCAA Proceedings with respect to the
transfer fee relating to the Island co-generation facility and
related costs and expenses, and CLP submitted a similar contingent
and unliquidated claim against Calpine in the Chapter 11
Proceedings relating to its guarantee of such transfer fee and
related costs and expenses.  A future sale by the Manager of its
Class B Subordinated Units of CLP could trigger an obligation to
pay a transfer fee to BC Hydro.

                 About Calpine Power Income Fund

Calpine Power Income Fund (TSX:CF.UN) is an unincorporated open-
ended trust that invests in electrical power assets.  The Fund
indirectly owns interests in power generating facilities in
British Columbia, Alberta and California.  In addition, the Fund
owns a participating loan interest in a power plant in Ontario and
has made a loan to Calpine Canada Power Ltd.  The Fund is managed
by Calpine Canada Power Ltd., which is headquartered in Calgary,
Alberta.

                      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: To Sell Russell Equity Stake To PG&E Co. for $80MM
----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates agreed to sell its
interest in Russell City Energy Center, LLC, a San-Francisco power
plant, to Pacific Gas & Electric Company for $80 million.

Russell City was formed to develop and own the Russell City
Project, a transmission system that serves the power needs of the
San Francisco Bay Area.  The Russell City Project is operated by
PG&E.  The Russell City Project is scheduled to commence
operations on June 1, 2010.

A critical element of the Russell City Project's ultimate
viability and the timely commencement of its operations is a long-
term Power Purchase Agreement with PG&E.  The PPA is a 10-year
tolling agreement where Russell City Energy will build, own and
operate the Project, and PG&E will provide fuel, have full
dispatch rights and own all of the Project's capacity, energy and
ancillary service products.  The proposed PPA is subject to the
California Public Utilities Commission's approval, which PG&E has
agreed to seek and obtain by November 2006.

In March 30, 2006, Russell City Energy and PG&E entered into a
Letter of Intent, which provides that:

   (a) PG&E will not enter into the proposed PPA unless Russell
       City Energy transfers all of its tangible and intangible
       assets to a special purpose entity, organized as a limited
       liability company that is not subject to any bankruptcy or
       insolvency proceedings and is bankruptcy-remote.  

       The Acquired Assets include:

          * two new Siemens Westinghouse 501 FD combustion gas
            turbines,

          * one new Toshiba steam turbine generator,

          * certain land assets located at 3862 and 3878 Depot
            Road in Hayward, California,
   
          * all existing Russell City permits,

          * a LOI with PG&E regarding the PPA for the Project,
            and

          * certain other consulting services and other assets.

   (b) at least 35% of the equity interest in the Purchasing
       Entity must be owned by a third-party investor unrelated
       to the Debtors.

Without a PPA with PG&E and the Russell City Project's ability to
sell power to PG&E, the Russell City Project's value will be
dramatically impaired, Bennett L. Spiegel, Esq., at Kirkland &
Ellis LLP, in Los Angeles, California, contends.

Mr. Spiegel adds that without the PPA, Russell City Energy will
effectively face no other choice but to halt all development
efforts and dispose of the Project for scrap value.  

With the PPA and the timely commencement of operations, the
Project is estimated to be valued from $649,000,000 to
$841,000,000.

In accordance with the LOI, Russell City Energy engaged in
negotiations regarding the financing and structuring of a sale of
the Acquired Assets with the Proposed Partner, whose identity will
be disclosed on the Aug. 15, 2006, hearing.  

There is still no definitive documentation for the transaction but
the transaction is anticipated to involve:

   (a) Creation of the Purchasing Entity.

       The Proposed Partner will create the Purchasing Entity,
       and Russell City Energy and the Proposed Partner will
       enter into an Interim LLC Agreement, which will provide
       that Russell City Energy will own 65% of the Purchasing
       Entity's equity, and the Proposed Partner will own the
       remaining 35%.

       After the execution of the Interim LLC Agreement, Russell
       City Energy will place its 65% equity interest in the
       Purchasing Entity into escrow.

       Upon closing of an Asset Purchase Agreement, Russell City
       Energy's interest in the Purchasing Entity will be
       released from escrow and the Interim LLC Agreement will be
       replaced by an Amended and Restated LLC Agreement.

   (b) Entry into an Asset Purchase Agreement

       Russell City Energy and the Purchasing Entity will execute
       an APA that will provide for the transfer of the Acquired
       Assets.  

       As consideration for the sale of the Assets, Russell City
       Energy will have its 65% stake in the Purchasing Entity
       confirmed, and will be credited with $80,000,000 to its
       capital account under the Amended and Restated LLC
       Agreement.

   (c) Internal Transfer of Assets to Russell City Energy.  

       Immediately before the consummation of the transactions
       contemplated by the APA, Lone Oak Energy Center, Calpine
       Power Company and Anacapa Land Company, LLC will transfer
       certain of the Acquired Assets to Russell City Energy.

   (d) Entry into the Amended and Restated LLC Agreement

       The Amended and Restated LLC Agreement will provide that
       the Proposed Partner will:

         i. fund the next $43,000,000 of equity to the Purchasing
            Entity whether during development or as mutually
            agreed with project lenders,

        ii. provide the approximately $37,000,000 letter of
            credit to be posted upon CPUC's approval of the PPA,
            and

       iii. provide 100% of any equity credit support mutually
            agreed with project lenders.

       Russell City Energy will have the right to purchase the
       Proposed Partner's interest, at any time following the
       second anniversary of the commercial operations date under
       the PPA, but not later than the fifth anniversary of the
       Commercial Operations Date, at a price equal to the amount
       necessary to yield a pre-tax internal rate of return to
       the Proposed Partner of 25%.

The proposed sale to the Proposed Partner, subject to a market
test through an auction, will serve to maximize the value received
for the sale of the 35% Partnership Interest in the Project.

To participate in the bidding process and be deemed a "Qualifying
Bidder," each potential bidder other than the Proposed Partner
must deliver to Russell City Energy, the Official Committee of
Unsecured Creditors, the Official Committee of Equity Security
Holders and the Unofficial Committee of Second Lien Debtholders, a
written offer to be deemed a "Qualifying Bid" no later than 5:00
p.m., on Sept. 15, 2006.

The written offer, among other things, must state the Bidder's
offer to purchase the Partnership Interest and must state that the
Bidder is financially capable of consummating the transactions
contemplated by the Modified Definitive Documents.  

A Qualifying Bidder's offer must be accompanied by a $5,000,000
cash deposit.

If there are two or more Qualifying Bids received, Russell City
Energy will conduct an auction on Sept. 19, 2006, at Kirkland &
Ellis LLP, Citigroup Center, 153 East 53rd Street, New York.  

If the Debtors accept an offer from another bidder, the Debtors  
agree to pay the Proposed Partner a $1,000,000 break-up fee.

If no timely, conforming Qualifying Bids are submitted, Russell
City Energy will seek a sale hearing to take place on Sept. 21,
2006, to consider the APA with the Proposed Partner.  

                      About Calpine Corp.

Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with  
electricity from clean, efficient, natural gas-fired and
geothermal power plants.  Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces.  Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.

The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts.  Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.


CARMIKE CINEMAS: Obtains Extended Listing from Nasdaq Panel
-----------------------------------------------------------
Carmike Cinemas, Inc., received a notice from Nasdaq indicating
that the Nasdaq Listing Qualifications Panel has determined to
grant Carmike's request for continued listing on the Nasdaq Global
Market based on Carmike's most recent extension request.  The
Panel's determination is conditioned upon Carmike filing its
Annual Report on Form 10-K for the fiscal year ended Dec. 31,
2005, all required restatements, and its Quarterly Report on Form
10-Q for the quarter ended March 31, 2006 by no later than Aug.
22, 2006.

In addition, if Carmike meets this extended deadline, the Panel
also agreed to consider a brief extension of time to allow Carmike
to file its Form 10-Q for the quarter ended June 30, 2006.  While
Carmike hopes to satisfy all terms of the Panel's decision and
thereby maintain its Nasdaq listing, it can provide no assurances
that it will ultimately be able to do so.

                       About Carmike Cinemas

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

                           *     *     *

As reported in the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service placed Carmike Cinemas, Inc.'s ratings
on review for possible downgrade include B2 corporate family
rating; B1 senior secured bank credit facility; and Caa1 senior
subordinated bonds rating.  The Company's outlook was changed to
rating under review from negative.


CASCADIA LIMITED: Fitch Upgrades $300 Million Notes' Rating to BB+
------------------------------------------------------------------
Fitch Ratings upgraded the rating of Cascadia Limited's variable-
rate notes due 2008 to 'BB+' from 'BB'.  The upgrade affects
$300 million of variable-rate notes due 2008.

The rating action reflects refinements in Fitch's catastrophe bond
rating methodology and changes in modeled loss statistics.  Fitch
has updated its proprietary model stress factors to consider
actual catastrophe bond losses experienced over the past ten years
and updates in catastrophe modeling.  Fitch continues to believe
some perils are more readily modeled and some models are more
robust.  Thus, Fitch's stress factors continue to vary by peril
and location.

Additionally, Cascadia's loss statistics were originally modeled
by EQECAT Inc.  based on its USQUAKE(R) Version 5.3 model.  EQE
has subsequently released USQUAKE(R) Version 6.1.  The combination
of these changes was sufficient to warrant a change in the notes'
ratings.

Cascadia is a Cayman Islands-domiciled company formed solely to
issue variable-rate notes, enter into a counterparty contract with
Factory Mutual Insurance Company (FM Global) -- a U.S. domiciled
insurer, and to conduct activities related to the notes' issuance.
FM Global and its subsidiaries write commercial property insurance
worldwide.  Fitch rates FM Global's insurer financial strength
'AA'.

Under the counterparty contract, Cascadia will make specified
payments to FM Global if, during the notes' risk period,
earthquakes of various magnitudes occur in the Pacific Northwest
portion of the U.S. or in portions of British Columbia.

Fitch upgrades this rating:

  Cascadia Limited:

    -- Variable-rate notes due 2008 to 'BB+' from 'BB'


CASELLA WASTE: Moody's Holds B3 Rating on $195 Million Sr. Notes
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Casella Waste
Systems, Inc., including the B3 rating on the company's
$195 million senior subordinated notes due 2013.  The action was
prompted by the company's July 25, 2006 upsizing of the April 2005
senior secured credit facility under a $100 million accordion
feature.  The amendment comprised an incremental $90 million term
loan B and an increase of $10 million in the committed revolver,
bringing the total revolver to $360 million.   The term loan
proceeds were used to repay a portion of revolver advances.  
Previously, on June 2, 2006, the company amended the capital
expenditure and financial covenants under its credit facility.  
The senior secured credit facility is not rated by Moody's.

Notwithstanding the assumption of additional senior debt which, in
conjunction with the potential repayment of the company's
redeemable preferred stock, deepens the subordination of the
company's senior subordinated notes, Moody's believes that this
leaves the recovery prospects for the notes within the range
associated with a B3 instrument rating.  

Also, despite relatively weak financial metrics for the rating
category, the ratings benefit from the improved liquidity
associated with the amendments, the company's accumulation of
scarce, valuable landfill and transfer station assets in niche,
non-urban, less densely populated markets in the Northeast, along
with the relative lack of cyclicality in the municipal solid waste
industry.

Notwithstanding expectations of negative free cash flow for the
fourth year in a row in 2007, Moody's believes that the record of
increasing waste flow to Casella's landfills, enhanced disposal
capacity and improving interest coverage support the B1 Corporate
Family Rating.  The ratings continue to be constrained by the
company's high leverage.

Sustainable improvements in adjusted free cash flow to debt ratios
toward 10% while maintaining adequate capital expenditure levels
or progress toward debt reduction below adjusted debt to EBITDA
ratios of four times could lead to a positive outlook.

Negative free cash flows beyond the current fiscal year, debt-
financed acquisitions or increases in debt to EBITDA beyond
current levels could lead to an immediate downgrade.

Moody's affirmed these ratings:

   * B3 rated $195 million issue of 9.75% guaranteed senior
     subordinated notes due 2013;

   * B1 Corporate Family Rating.

The rating outlook is stable.

Casella Waste Systems, Inc., based in Rutland, Vermont, is a
vertically-integrated regional solid waste services company that
provides collection, transfer, disposal and recycling services to
residential, industrial and commercial customers, primarily in the
eastern United States.  As of May 31, 2006, the company owned
and/or operated nine Subtitle D landfills, two landfills permitted
to accept construction and demolition materials, 39 solid waste
collection operations, 33 transfer stations, 39 recycling
facilities, one waste-to-energy facility and had a 50% interest in
a joint venture that manufactures, markets and sells cellulose
insulation made from recycled fiber.  For the 2006 fiscal year,
which ended April 30, 2006, the company had revenues of
approximately $526 million.


CENTRAL VERMONT: Weak Credit Measures Cue S&P to Hold BB+ Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating and 'BBB' senior secured bond rating on electric
utility Central Vermont Public Service Corp.

At the same time, the preferred stock rating was lowered to 'B+'
from 'BB-'.  The outlook is stable.

"The lowering of the preferred stock rating reflects our notching
criteria for preferred stock of speculative-grade companies," said
Standard & Poor's credit analyst Kenneth Farer.  "The criteria
requires preferred stock to be rated three notches below the
corporate credit rating," said Mr. Farer.

The ratings on Rutland, Vermont-based Central Vermont reflect a
challenging regulatory environment, material off-balance-sheet
debt obligations, relatively weak credit measures, and limited
flexibility with regard to certain capital expenditures.  These
concerns outweigh Central Vermont's good customer mix, supply
contracts at below-current-market rates, and minimal operating
risk.

The stable outlook on Central Vermont reflects expectations that
credit measures will remain weak but acceptable, absent material
rate relief.

S&P could revise the outlook to positive if regulators grant
substantive rate relief, although this is unlikely over the near
term.  S&P could revise the outlook to negative if cash flow
measures decline or if Central Vermont pursues significant
discretionary capital projects.


CIRRUS LOGIC: Earns $7.7MM in 2007 1st Fiscal Qtr. Ended June 24
----------------------------------------------------------------
Cirrus Logic, Inc., reported its financial results for the first
quarter of fiscal year 2007, which ended June 24, 2006.

The company reported first quarter fiscal year 2007 revenue of
$45.2 million, compared with $42.2 million of total revenue during
the fourth quarter of fiscal year 2006.  This represents 7% growth
from the prior quarter.  

First-quarter gross margin was 60.1% compared to 58.1% for the
fourth quarter of fiscal year 2006. Combined research and
development and selling, general and administrative expenses for
the first fiscal quarter of 2007 were $22.9 million, which
included $1.4 million in stock-based compensation expense due to
the Company's adoption of SFAS 123(R) at the beginning of this
fiscal year.

Net income for the first fiscal quarter was $7.7 million.  
Non-GAAP net income, excluding the stock-based compensation
expense was $9.0 million.

Total cash and marketable securities at the end of the first
fiscal quarter was $251.9 million, compared with $243.5 million at
the end of the prior fiscal year.

At June 24, 2006, the Company's balance sheet showed
$327.542 million in total assets, $50.644 in total liabilities,
and $276.898 in stockholders' equity.

"I am pleased with our first-quarter results.  We achieved higher
than expected cash flow and gross margin of 60%, reflecting the
strengths of our diversified analog and mixed-signal product
portfolio," David D. French, president and chief executive officer
of Cirrus Logic, said.

Full-text copies of the Company's 2007 first quarter financials
are available for free at http://ResearchArchives.com/t/s?ee1

Cirrus Logic, Inc. (Nasdaq: CRUS) -- http://www.cirrus.com/--  
develops high-precision, analog and mixed-signal integrated
circuits for a broad range of consumer and industrial markets.
Building on its diverse analog mixed-signal patent portfolio,
Cirrus Logic delivers highly optimized products for consumer and
commercial audio, automotive entertainment and industrial
applications. The company operates from headquarters in Austin,
Texas, with offices in Colorado, Europe, Japan and Asia. More
information about Cirrus Logic is available at www.cirrus.com.

                           *     *     *

Cirrus Logic Inc.'s subordinated debt carries Moody's Investors
Service's Caa2 rating and the Company's corporate credit rating
carries Standard & Poor's Ratings Services' B rating.


COMMUNITY HEALTH: Earns $52.4 Million in Second Quarter of 2006
---------------------------------------------------------------
Community Health Systems, Inc., disclosed its financial and
operating results for the second quarter and six months ended
June 30, 2006.

Net operating revenues for the quarter ended June 30, 2006,
totaled $1.061 billion, a 15.5% increase compared with
$918.7 million for the same period last year.

Income from continuing operations increased 13.5% to
$52.4 million for the quarter ended June 30, 2006, compared with
$46.2 million for the same period last year.

Net income increased to $52.4 million for the quarter ended
June 30, 2006, compared with $40.5 million for the same period
last year.

The second quarter 2006 results include additional compensation
expense of $3.8 million resulting from stock-based compensation
calculated under SFAS No. 123(R), "Share-Based Payment".

Adjusted EBITDA for the second quarter of 2006 was $156.7 million,
compared with $140.2 million for the same period last year,
representing an 11.8% increase.  Adjusted EBITDA is EBITDA
adjusted to exclude discontinued operations and minority interest
in earnings.  The Company uses adjusted EBITDA as a measure of
liquidity.  Net cash provided by operating activities for the
second quarter of 2006 was $116.2 million, compared with
$127.7 million for the same period last year.

The consolidated financial results for the quarter ended June 30,
2006, reflect a 10.5% increase in total admissions compared with
the same period last year.  This increase is primarily
attributable to hospitals acquired during 2006 and 2005.  On a
same-store basis, admissions increased 1.1% and adjusted
admissions increased 0.5%, compared with the same period last
year.  On a same-store basis, net operating revenues increased
7.7%, compared with the same period last year.

Net operating revenues for the six months ended June 30, 2006,
totaled $2.088 billion, a 14.3% increase compared with
$1.827 billion for the same period last year.

Income from continuing operations increased 15.1% to
$109.6 million for the six months ended June 30, 2006, compared
with $95.2 million for the same period last year.

Net income increased to $106.4 million for the six months ended
June 30, 2006, compared with $76.5 million for the same period
last year.

Loss on discontinued operations for the six months ended June 30,
2006, consists of an after-tax loss of approximately $3.2 million
related primarily to the sale of one hospital in March of 2006,
which was designated as being held for sale at Dec. 31, 2005.

The results for the six months ended June 30, 2006, include
additional compensation expense of $6.9 million resulting from
stock-based compensation calculated under SFAS No. 123(R), "Share-
Based Payment".

Adjusted EBITDA for the six months ended June 30, 2006, was
$315.2 million, compared with $283.9 million for the same period
last year, representing an 11.0% increase.  Net cash provided by
operating activities for the six months ended June 30, 2006, was
$207.0 million, compared with $276.4 million for the same period
last year.

The consolidated financial results for the six months ended
June 30, 2006, reflect a 7.4% increase in total admissions
compared with the same period last year.  This increase is
primarily attributable to hospitals acquired during 2006 and 2005.
On a same-store basis, admissions decreased 0.7% and adjusted
admissions decreased 0.2%, compared with the same period last
year.  A less severe flu season and lower respiratory related
volume contributed to these decreases compared with a strong
season last year.  On a same-store basis, net operating revenues
increased 7.3%, compared with the same period last year.

"Community Health Systems delivered another very strong financial
and operating performance for the second quarter of 2006," Wayne
T. Smith, chairman, president and chief executive officer of
Community Health Systems, Inc., commented on the results.

"These results reflect consistent execution of our centralized and
standardized operating strategy, the successful integration of
recently acquired hospitals and our continued focus on quality
care."

On April 1, 2006, the Company completed the acquisition of two
hospitals from the Baptist Health System, Birmingham, Alabama:
Baptist Medical Center - DeKalb (134 beds) located in Fort Payne,
Alabama, and Baptist Medical Center - Cherokee (60 beds) located
in Centre, Alabama.  Both hospitals are the sole providers of
hospital services in their respective communities and have been
renamed "DeKalb Regional Medical Center" and "Cherokee Medical
Center", respectively.

On May 1, 2006, the Company completed the acquisition of Via
Christi Oklahoma Regional Medical Center, a 148-bed acute care
hospital located in Ponca City, Oklahoma.  This hospital is the
sole provider of hospital services in its community and has been
renamed "Ponca City Medical Center".

On June 1, 2006, the Company completed the acquisition of Mineral
Area Regional Medical Center, a 135-bed acute care hospital
located in Farmington, Missouri.

On July 1, 2006, the Company completed the acquisition of the
healthcare assets of Vista Health, a non-profit corporation, which
included Victory Memorial Hospital (336 licensed beds) and St.
Therese Medical Center (currently utilizing 71 non-acute care
beds), both located in Waukegan, Illinois and renamed "Vista
Medical Center East" and "Vista Medical Center West",
respectively.

"Our acquisition pace has been exceptionally strong through the
first half of 2006," added Mr. Smith.  "As we have continued to
acquire new facilities and assimilate them into our system, we
have realized greater operating efficiencies while improving
volumes and revenues.  At the same time, we have created an
opportunity to capture healthcare services that were previously
sent out of the local market.  Our proven ability to deliver
improved results and foster positive community relations has
continued to be a distinct competitive advantage for Community
Health Systems. We will continue to look for opportunities to
selectively acquire new hospitals."

Located in the Nashville, Tennessee, Community Health Systems,
Inc. (NYSE: CYH) -- http://www.chs.net/-- operates general acute   
care hospitals in non-urban communities throughout the U.S.  
Through its subsidiaries, the company currently owns, leases or
operates 76 hospitals in 22 states.  Its hospitals offer a broad
range of inpatient medical and surgical services, outpatient
treatment and skilled nursing care.

                           *     *     *

As reported in the Troubled Company Reporter on Sept. 26, 2005,
Standard & Poor's Ratings Services revised its outlook on
Community Health Systems Inc. to positive from stable.  Ratings on
the company, including the 'BB-' corporate credit rating, were
affirmed.

As reported in the Troubled Company Reporter on Dec. 8, 2004,
Moody's Investors Service assigned a B3 rating to Community Health
Systems' $250 million senior subordinated notes due 2012.  Moody's
affirmed CHS/Community Health Systems, Inc.'s Ba3 ratings on its
$1.2 billion senior secured term loan B due 2011; and $425 million
senior secured revolver due 2009.  Moody's also affirmed Community
Health Systems, Inc.'s senior implied rating at Ba3; senior
unsecured issuer rating at B2; and $287.5 million 4.25%
convertible subordinated notes due 2008, rated B3.  Moody's said
the outlook is stable.

As reported in the Troubled Company Reporter on Dec. 7, 2004,
Fitch Ratings assigned a 'B+' rating to Community Health Systems,
Inc.'s $250 million senior subordinated notes.  Fitch also
affirmed Community's 'BB' rated, $1.625 billion secured
credit facility and 'B+' rated convertible subordinated notes due
2008.  Fitch said the rating outlook is stable.


COMPLETE RETREATS: Can File Schedules Until September 21
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates until Sept. 21,
2006, within which to file their Schedules of Assets and
Liabilities, Schedules of Executory Contracts and Unexpired
Leases, and Statements of Financial Affairs.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, tells the Court that the Debtors have not yet had
sufficient time to collect and assemble all of the requisite
financial data and other information for their Schedules and
Statements.

"The Debtors must gather information from various documents and
locations and complete the posting of their books and records as
of the Petition Date or other dates, as appropriate," Mr. Mancuso
says.  "Then the Debtors must review the information and prepare
and verify the Schedules and Statements."

According to Mr. Mancuso, the Debtors have already begun and will
continue to work diligently to compile the information necessary
to complete their Schedules and Statements.

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


COMPLETE RETREATS: Wants to Honor Existing Destination Bookings
---------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for permission
to continue to the honor existing reservations of their
destination clubs members.

The Debtors also seek authority to accept new reservations, and
provide services through use of the Visa credit card in the
ordinary course of their business, under the terms and conditions
as they may require in their discretion.

Members of the Debtors' destination clubs pay annual dues and
daily usage fees.  Annual dues are paid semi-annually, at the end
of either the first and third quarters or the second and fourth
quarters, while daily usage fees are paid upon completion of a
member's retreat.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, tells the Court that thus far, the Debtors have
received approximately $15,400,000 in annual dues from members
during 2006.  The next installment of dues, totaling
approximately $2,200,000, is due at the end of September.

Currently, Mr. Mancuso says, members have pending reservations
for an aggregate of more than 10,000 room nights, which would
translate into an estimated $1,700,000 in daily usage fees.

In the past, the Debtors have made every effort to honor members'
travel requests, including, if necessary, entering into costly
short-term leases with third parties.  The Debtors have recently
discontinued this practice since it is one of the major causes of
their financial difficulties.

According to Mr. Mancuso, the Debtors are in the process of re-
evaluating their business model.

The Debtors have determined that it may not be economical for
them to honor each and every pending reservation or to accept
each new reservation, especially in light of the relatively low
annual fees and daily usage fees that certain members currently
enjoy.  In some instances, Mr. Mancuso notes, even the marginal
daily costs of accommodating a member significantly exceed the
associated daily usage fees.

"The Debtors also recognize, however, that if they fail to honor
pending reservations and routinely decline new ones during the
course of these [Chapter 11] cases, their members will likely
cease paying annual dues and/or attempt to resign from the
destination clubs, which could be disastrous to their business,"
Mr. Mancuso says.

Thus, Mr. Mancuso contends, while the Debtors ultimately may not
honor 100% of existing reservations, or accept every new
reservation going forward, especially with respect to popular
winter weeks, they need to have the discretion to do so, should
circumstances warrant.

The Debtors typically provide their members with certain
amenities during their retreats, including fine wine, ski passes,
and personal chefs.  The Debtors pay for these amenities with a
Visa corporate credit card.  The credit card has a $400,000
limit, and the Debtors' obligations to Visa are secured by a
$300,000 bond posted by Bank of America.  The Debtors make
frequent payments on the credit card.  Upon completion of a
member's retreat, the Debtors are reimbursed by that member for
expenses incurred during the retreat.

As of July 22, 2006, the Debtors had incurred but not yet paid
approximately $267,000 to Visa.

Mr. Mancuso clarifies that the Debtors are not yet seeking to
assume any executory contracts or unexpired leases to which any
of the Debtors may be a party.

                     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).


CONSECO FINANCE: Fitch Holds Junk Ratings on Three Loan Classes
---------------------------------------------------------------
Fitch Ratings has assigned these Distressed Recovery Ratings to
Conseco Finance Vehicle Trust 2000-B:

    -- Class M-1 'DR5';
    -- Class M-2 'DR6';
    -- Class B 'DR6'.

Additionally, the long-term ratings for classes M-1 and M-2 remain
at 'C', while Fitch revises the long-term rating on Class B to 'C'
from 'D'.

The rating changes reflect reduction in the credit enhancement
Fitch expects will be available to support each class in the above
transaction.  Anticipated credit enhancement is determined by
Fitch's cash flow model and considers stressed remaining losses,
prepayment rates, recovery rates and unique structural
characteristics.  The trust is backed by sales contracts and loan
agreements secured by commercial trucks and trailers made by
Conseco Finance Corp.  The loans are now serviced by the
indentured trustee U.S. Bank, N.A.


CONSECO INC: Recognizes $10MM Expense on Class Action Settlement
----------------------------------------------------------------
Conseco, Inc. reached a tentative settlement in the class action
litigation case referred to as In Re Conseco Life Insurance
Company Cost of Insurance Litigation.

The settlement, involving policies sold by insurance companies
acquired by the Company, is subject to a court fairness hearing
and other conditions.  As a result of the settlement, the Company
expects to record additional expenses of approximately
$100.3 million, after taxes, in the quarter ended June 30, 2006.

James Hohmann, the Company's interim chief executive officer, said
"implementation of this settlement will resolve a significant
historical issue and will allow our current management team, our
associates, our regulators and our rating agencies to focus more
fully on Conseco's progress toward becoming a leading provider of
life insurance, supplemental health insurance and annuities for
middle America."

The Company also disclosed that the tentative settlement with the
Internal Revenue Service, which involved the characterization of
the its net operating loss pertaining to its investment in Conseco
Finance, was finalized.  The Company expects the resolution will
reduce the valuation allowance on its deferred income tax assets
by approximately $260 million at June 30, 2006.

The tentative litigation settlement charge and the deferred tax
valuation allowance adjustment will increase shareholders' equity
by approximately $160 million at June 30, 2006.

Based in Carmel, Indiana, Conseco, Inc. (NYSE:CNO)
-- http://www.conseco.com/-- through its subsidiaries, engages in  
the development, marketing, and administration of supplemental
health insurance, annuity, individual life insurance, and other
insurance products throughout the United States.  The company
operates in two segments, Bankers Life and Conseco Insurance.  The
Bankers Life segment markets and distributes Medicare supplement
insurance, life insurance, long term care insurance, and certain
annuity products to the senior market.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit and financial strength ratings on Conseco Inc.'s core
insurance companies and its 'BB-' counterparty credit rating on
Conseco Inc.

Standard & Poor's also said that the outlook on Conseco Inc. is
stable, and the outlook on the operating companies is positive.


CRESCENT REAL ESTATE: Earns $3.2 Million in 2006 Second Quarter
---------------------------------------------------------------
Crescent Real Estate Equities Company reported net income for the
three months ended June 30, 2006 of $3.2 million from total
property revenues of $195.1 million compared to a net loss of
$5.5 million from total property revenues of $208 million for the
same period in 2005.

At June 30, 2006 the Company's balance sheet showed total assets
of $4.172 billion and total liabilities of $2.859 billion.

Net loss available to common shareholders for the three months
ended June 30, 2006, was $4.7 million compared to net loss
available to common shareholders of $13.6 million for the three
months ended June 30, 2005.

                         Cash Dividends

The Company's Board of Trust Managers had declared, on July 14,
2006, cash dividends of $0.375 per share for its Common Shares,
$0.421875 per share for its Series A Convertible Preferred Shares,
and $0.59375 per share for its Series B Redeemable Preferred
Shares. The dividends are payable August 15, 2006.

                   Disposition of Chase Tower

The Company, on June 20, 2006, sold Chase Tower on behalf of the
owner, Austin PT BK One Tower Office Limited Partnership.  The
Company had a 20% interest in Chase Tower is a 389,503 square-foot
office property in downtown Austin.  It recorded a gain on the
sale of approximately $4.3 million including a deferred gain
recorded on the initial joint venture in 2001.

                  About AmeriCold Realty Trust

AmeriCold Realty Trust, of which the Company owns a 31.7%
interest, on June 30, 2006, entered into a $400 million, one-year,
interest-only line of credit collateralized by 21 of its owned and
six of its leased temperature-controlled warehouses. Approximately
$243 million of the loan has been drawn to repay its Morgan
Stanley loan.

Headquartered in Fort Worth, Texas, Crescent Real Estate Equities
Company (NYSE: CEI) -- http://www.crescent.com/-- is one of the  
largest publicly held real estate investment trusts in the nation.
Through its subsidiaries and joint ventures, Crescent owns and
manages a portfolio of 75 premier office buildings totaling 31
million square feet located in select markets across the United
States, with major concentrations in Dallas, Houston, Austin,
Denver, Miami and Las Vegas.  Crescent also makes strategic
investments in resort residential development, as well as
destination resorts, including Canyon Ranch(R).

                          *     *     *

Moody's Investors Service assigned a B3 rating to Crescent Real
Estate Equities Company's preferred stock on Nov. 11, 2004.

Standard & Poor's assigned a BB- long-term foreign and local
issuer credit rating to Crescent Real Estate Equities Company on
June 30, 2004.


CST INDUSTRIES: Moody's Rates Proposed $200 Million Loan at B2
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to CST Industries,
Inc.'s proposed $20 million five-year senior secured first
lien revolving credit facility, a B2 rating to its proposed
$100 million seven-year senior secured first lien term loan, and a
B2 corporate family rating.  CST's privately-placed $55 million
eight-year senior subordinated notes will not be rated.  Proceeds
from the term loan facility, the subordinated notes and equity
will be used to fund the acquisition of CST by The Sterling Group,
L.P., other investors, and management.  This is the first time
that Moody's has rated the company.  The rating outlook is stable.

CST's B2 corporate family rating is largely based on its credit
metrics, both on an historical pro forma basis, which represents
the increased interest and debt, as well as Moody's belief of
stable future performance.  The greatest restraints on the rating
are the company's small size and the limited free cash flow it is
projected to have for debt coverage.  

The Company's B2 corporate family rating is supported by its
secure market position and recent positive financial performance.  
It is also impacted by Moody's determination that CST will
continue to show strong results and maintain revenues and margins.  
Few companies in the metal storage tank industry rival CST in
size, and the company has been able to raise its prices as the
price of steel, the primary component in its products, has risen.
CST has been able to increase both its gross and operating margins
over the past three years.

The company has invested significant time and money into creating
a glass-fused-to-steel product which would be very difficult for
competitors to replicate because the cost of such research and
development would likely overwhelm the smaller companies.  In
addition, CST has a broad customer base, supplying various
distinct products to a variety of end markets.  These markets
tend to be fairly stable and resilient to economic cycles.

CST's stable outlook is supported by its stable operating margins,
secure competitive position relative to its peers, and the
stability of the metal storage tank industry.  Failure to maintain
these levels due to weaker than anticipated operating results or
an impaired ability to pass on higher input costs could put
negative pressure on the outlook and ratings.

Alternatively, Moody's could consider a ratings upgrade if the
company improved upon its cash flow generation and in effect
considerably de-levered its balance sheet.  Moody's does not
expect any major market or competitive changes to occur that would
significantly affect CST either positively or negatively
in the intermediate term.

Assignments:

Issuer: CST Industries, Inc.

   * Corporate Family Rating, Assigned B2
   * Senior Secured Bank Credit Facility, Assigned B2

Headquartered in Kansas City, Kansas, CST Industries is a
leading manufacturer and erector of pre-engineered factory coated
sectional metal storage tanks, as well as aluminum geodesic domes,
and agricultural feed and waste storage systems.  CST serves
numerous end markets including municipal water and wastewater,
fire protection, oilfield, agriculture, industrial liquid,
plastics, chemicals, minerals, food, construction materials and
energy.


DANA CORPORATION: Navistar Wants Stay Lifted to Obtain Property
---------------------------------------------------------------
Navistar Financial Corporation asks the U.S. Bankruptcy Court for
the Southern District of New York to lift the automatic stay
to allow it to obtain possession, and possibly dispose, of its
2001 International 4900 Truck.  

The Truck is leased by Dana Corporation and its debtor-affiliates
for $1,024 per month for a term of 36 months pursuant to a
Feb. 6, 2001 Retail Lease Agreement with Navistar.

The Debtors and Navistar also executed various renewal agreements
on the Lease.  In the most recent Lease Renewal Agreement, the
monthly payment due and owing to Navistar is $624 per month.

According to F. Matthew Jackson, Esq., at Deily, Mooney &
Glastetter, LLP, in Albany, New York, as of July 12, 2006, the
Debtors owe Navistar a net balance of $14,995.  About $624 of the
net balance represents postpetition arrears for May, June and
July 2006.

Navistar has ascertained that the wholesale value of the Truck is
$26,450 based on estimated value of the vehicle in average
condition.

Mr. Jackson tells the Court that pursuant to the Lease Agreement,
upon the failure of the Debtors to cure any default, Navistar is
entitled to immediate possession of the vehicle.

Mr. Jackson asserts that Navistar's request is warranted for four
reasons:

   1. The Debtors are in default under the Lease Agreement by,
      among other things, failing to make the monthly payments
      due;

   2. The ownership interests of Navistar with respect to the
      Truck are not adequately protected;

   3. The Truck is not necessary for an effective reorganization
      of a bankruptcy estate; and

   4. The Truck is subject to the possibility of injury by way of
      accident or collision.

Alternatively, if the Court does not lift the automatic stay,
Navistar asks the Court to compel the Debtors to immediately
provide adequate protection by, among other things:

   (a) curing any default of payment obligations arising
       pursuant to the terms and conditions of the Retail Lease
       Agreement;

   (b) making timely payment;

   (c) maintaining adequate and continuous insurance coverage on
       the Truck; and

   (d) providing Navistar with adequate assurance of future
       performance in the event the Lease is to be assumed by the
       Debtors.

                      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. 17; 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: Extends Expiration Date of Rights Agreement to 2016
--------------------------------------------------------------
Dana Corporation's Board of Directors extended the final
expiration date of the rights under a Rights Agreement dated April
25, 1996, between Dana and The Bank of New York to July 25, 2016,
Michael L. DeBacker, Esq., Dana's vice president, general
counsel and secretary of said in a regulatory filing with the
Securities and Exchange Commission.

According to Mr. DeBacker, Dana has a preferred share purchase
rights plan designed to deter coercive or unfair takeover tactics.  
The Plan was adopted in 1996 to replace a predecessor rights plan
that had been in effect since 1986 and expired after 10 years.

The Rights Plan is administered under the April 1996 Rights
Agreement, as amended.  The Bank of New York serves as the Rights
Agent.  Pursuant to the Rights Agreement, one right to purchase
1/1000th of a share of Series A Junior Participating Preferred
Stock, no par value, has been issued on each share of Dana's
common stock outstanding on and after July 25, 1996.  Dana
registered the rights on a Form 8-A filed on May 1, 1996.

Under certain circumstances, the holder of each right may
purchase the number of shares of Dana common stock that have a
market value of twice the right's exercise price.  If Dana merges
with or sells 50% or more of its assets or earnings power to an
acquirer or engages in similar transactions, any rights not
exercised can be used to purchase from the acquiring company the
number of shares of its common stock that have a market value of
twice the right's exercise price.

No other changes were made to the Rights Agreement, apart from
conforming the legend on Dana's share certificates and the
exhibits to the Rights Agreement in a manner consistent with the
amendment.

A full-text copy of the Second Amendment to the Rights Agreement
is available for free at http://researcharchives.com/t/s?ed6

                      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. 17; 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.


DAYTON POWER: Debt Reduction Prompts S&P to Upgrade Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
ratings on DPL Inc. and its regulated subsidiary, Dayton Power &
Light Co., to 'BB+' from 'BB'.  In addition, Standard & Poor's
raised its rating on DP&L's first mortgage bonds to 'BBB' from
'BBB-'.

The outlook is positive.  Dayton, Ohio-based DPL had about
$1.7 billion of debt outstanding as of March 31, 2006.

"The rating action incorporates the company's continued
improvement in its financial profile with the reduction of about
$450 million of debt and improved cash flow generation from its
core utility operations," said Standard & Poor's credit analyst
Todd Shipman.  "The upgrade also reflects the company's focus on
improving its internal control and past corporate governance
issues."

Nevertheless, the corporate credit rating on DPL reflects the
company's aggressive financial profile with high debt leverage,
weak -- albeit improving -- cash flow coverage measures, adequate
liquidity, and its satisfactory business risk profile risk of the
consolidated enterprise, including its utility subsidiary, DP&L,
as well as its non-regulated gas-fired peaking plants.

The positive outlook on DPL incorporates expectations that new
management will continue to reconcile the company's former weak
internal controls and corporate governance issues, combined with
the utility generating sufficient cash flow and further reduction
of DPL's consolidated debt leverage.


DELPHI CORP: Inks Nondisclosure Deal With Appaloosa & Harbinger
---------------------------------------------------------------
Appaloosa Management L.P., Harbinger Capital Partners Master Fund
I, Ltd., and Delphi Corp. entered into a Confidential Information,
Standstill and Nondisclosure Agreement on July 31, 2006, pursuant
to which Delphi may furnish to Appaloosa and Harbinger certain
information necessary to evaluate a possible business arrangement
involving Delphi.  Appaloosa and Harbinger agree to keep the
Evaluation Material strictly confidential.

Appaloosa and Harbinger agree to discuss and negotiate exclusively
with Delphi and its legal and financial advisors with respect to a
possible business arrangement.  In addition, Appaloosa has
withdrawn its March 15th Letter to Delphi's Board of Directors.
The letter expressed concerns over current Delphi management in
connection with the Debtors' Chapter 11 cases.

On July 31, 2006, Appaloosa engaged UBS Securities LLC as its lead
financial advisor and lead capital markets advisor, and Merrill
Lynch & Co. as additional financial advisor, in connection with
any potential restructuring, acquisition or other transaction
involving Delphi.  The financial advisors are to be given an
opportunity to participate in any debt or equity financing
transaction involving Delphi that is sponsored by Appaloosa and
not financed by Appaloosa.

Harbinger is also a party to the UBS and Merrill Lynch engagement
letters.

Appaloosa and Harbinger are the two largest shareholders of
Delphi.

Appaloosa has disclosed that it holds 9.3% of the shares of
Delphi.  Regulatory filings with the Securities and Exchange
Commission show that Appaloosa Management L.P., Appaloosa Partners
Inc. and David A. Tepper beneficially own 52,000,000 shares of
Common Stock.  Appaloosa Investment Limited Partnership I
beneficially owns 27,716,000 of those shares while Palomino Fund
Ltd. beneficially owns 24,284,000 of those shares.

Harbinger also disclosed with the SEC that it beneficially owns
32,025,000 shares of Delphi common stock.  The shares represent
5.7% of the 565,000,000 shares issued by Delphi as of April 30,
2006.

A full-text copy of the Confidentiality Agreement is available for
free at http://researcharchives.com/t/s?ef2

A full-text copy of the UBS Engagement Letter is available for
free at http://researcharchives.com/t/s?ef3

A full-text copy of the Merrill Lynch Engagement Letter is
available for free at http://researcharchives.com/t/s?ef4

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/      
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELPHI CORP: Discloses Update on Routine Business Litigation
------------------------------------------------------------
Delphi Corporation is involved in routine litigation incidental to
the conduct of its business, the company discloses in a Form 10-K
filing with the Securities and Exchange Commission.

Delphi received an arbitrator's binding decision on Sept. 7, 2004,
resolving a dispute with Litex over infringement of certain
patents regarding methods to reduce engine exhaust emissions.  
Delphi says that the results of the arbitration did not have a
material impact on its financial condition, operations or business
prospects.  However, in March 2005, Delphi received correspondence
from Litex that it intended to file various tort claims against
Delphi in California state court.

On March 4, 2005, Delphi filed a complaint in the United States
Federal Court for the District of Massachusetts seeking to enforce
the parties' settlement agreement in the original case,
prohibiting Litex from bringing the tort claims.  On April 18,
2005, Litex countersued asserting various tort claims against
Delphi.  On Oct. 17, 2005, the Court entered judgment in Delphi's
favor and dismissed all of Litex's claims with prejudice.  Litex
had until Dec. 16, 2005, to file a notice of appeal, but has taken
the position that the automatic stay in place in Delphi's Chapter
11 cases prevented Litex from doing so.  Delphi believes that
Litex has waived its right to appeal.

For the past several years, Delphi has been involved in patent
licensing negotiations with Denso Corporation relating to engine
control technology.  This matter has now been resolved through
entry of a patent cross license agreement.  Patent license
negotiations are ongoing with Denso in connection with variable
valve timing technology and it is expected that these negotiations
will be concluded on commercially reasonable terms and in
accordance with ordinary industry practices.

Delphi believes that it is adequately insured, with respect to
product liability coverage, at levels sufficient to cover any
potential claims, subject to commercially reasonable deductible
amounts. The company has also established reserves in amounts it
believes are reasonably adequate to cover any adverse judgments
with respect to the other claims.  However, any adverse judgment
in excess of the company's insurance coverage and the such
reserves could have a material adverse effect on its business.

Under Section 362 of the Bankruptcy Code, the filing of a
bankruptcy petition automatically stays most actions against a
debtor, including most actions to collect prepetition indebtedness
or to exercise control over the property of the debtor's estate.  
Absent a Court order, substantially all prepetition liabilities
are subject to settlement under a plan of reorganization.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/     
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELTA AIR: Gets Final Nod on Babcock & Brown as Financial Advisor
-----------------------------------------------------------------
The Hon. Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for
the Southern District of New York gave its final approval for
Delta Air Lines, Inc., and its debtor-affiliates to employ
Babcock & Brown LP as their financial advisor with respect to
aircraft financing in their Chapter 11 cases.

Judge Hardin rules that Babcock & Brown's monthly compensation
after June 2006 will be $225,000.

Edward H. Bastian, executive vice president and chief financial
officer of Delta Air Lines, Inc., related that Babcock & Brown LP
has a wealth of experience in providing specialized financial
advice to airlines, investors and financing entities in the
airline industry.

In addition, Babcock & Brown has been Delta's primary advisor for
aircraft financing since 1984.  Moreover, it has advised the
Comair entities since 1991 and ASA Holdings, Inc., since 1998.
During this period, Babcock & Brown has advised Delta and its
subsidiaries with respect to the financing of over 350 aircraft,
valued in excess of $10 billion.

Pursuant to an Engagement Letter, Babcock & Brown will:

    (a) work with the Debtors to develop a general economic
        restructuring strategy for all of the Debtors' aircraft-
        related secured debt and lease obligations;

    (b) provide estimates of current fair market values and fair
        market rental values for all aircraft types in the Debtors
        fleet of aircraft;

    (c) assist in the organization and preparation of existing
        debt balance, debt payment, lease obligation, or other
        relevant information by aircraft tail number and finance
        group type and issuance;

    (d) prepare and assist in the preparation of reports and
        analyses of cost savings or any other analysis required by
        the Debtors in connection with the restructuring of the
        their aircraft-related secured debt and lease obligations;

    (e) advise and assist the Debtors in structuring and effecting
        the financial aspects of the Debtors' aircraft-related
        secured debt and lease obligations in the context of the
        their bankruptcy cases including recommendations for
        strategic and tactical alternatives and approaches to
        financing parties;

    (f) provide contact information for bank and insurance company
        aircraft lenders and lessors as necessary, assist in the
        organization of information to be disseminated, and
        arrange and participate in meetings and discussions with
        those parties;

    (g) assist in the preparation of any offering materials or
        requests for proposals for lenders and lessors;

    (h) assist the Debtors and their counsel in negotiating
        restructuring offers through the final documentation of
        the leases, mortgages and related transactions in
        connection with the Debtors' bankruptcy cases, including
        acting as lead negotiator in select negotiations;

    (i) finalize and confirm all lease rental, debt amortization,
        stipulated loss and termination value schedules in
        connection with any documentation related to the
        restructuring of the Debtors' aircraft-related secured
        debt and lease obligations;

    (j) provide other services as are customarily provided in
        connection with the analysis and negotiation of the
        restructuring of the Debtors' aircraft-related secured
        debt and lease obligations as reasonably requested by the
        Debtors; and

    (k) identify and negotiate with financing parties to (i)
        acquire Debtors' aircraft in a sale/lease back financing
        structure or (ii) provide debt financing to refinance
        amount due with respect to Debtors operating aircraft.

Babcock & Brown will have the right of first refusal to provide
other aircraft financing services, including a merger or
acquisition of or by the Debtors, the right to acquire secondary
market aircraft or dispose of existing aircraft and the right to
negotiate aircraft purchase agreements, at fees to be determined
prior to the rendition of those services.

The principal Babcock & Brown professionals presently designated
to represent the Debtors include Paul Marini, Matt Landess, Tom
Tuggle, Robert Clinton, Bruce Tang and Judy Hall.  Additions or
deletions to the team will be subject to mutual written agreement
between the parties.

Without Delta's prior written consent, during the term of the
engagement, the team will not provide aircraft restructuring
advisory services to any other major U.S. air carrier other than
under the existing advisory engagements with United Air Lines,
which engagements will only continue through the completion of
each existing mandate or a renewal.  

At Babcock & Brown's sole discretion, Delta has agreed that
certain of the services may be performed by Babcock & Brown
Financial Co. LLC, a wholly owned subsidiary of Babcock & Brown,
provided only that the Babcock & Brown personnel will remain
responsible for the engagement.

In consideration for Babcock & Brown's agreement to perform the
services, the Debtors agree to pay:

    (1) a $445,000 monthly advisory and restructuring fee;

    (2) a success fee capped at $4,000,000 and equal to 2% of
        average annual aircraft cost savings, calculated based on
        a 60-month period commencing on the Petition Date,
        inclusive of all aircraft rejections or abandonment except
        for MD11 rejections.  The gross success fee will be
        reduced and set off by dollar-for-dollar credits against
        the aggregate monthly fees earned greater than $5 million.

    (3) financing fees to be paid upon closing of a lease
        agreement or mortgage agreement:

         * as it pertains to a sale/leaseback restructuring:

           -- a fee of 75 basis points multiplied by the sales
              price of the first aircraft purchased by a lessor
              and leased back to Delta, and

           -- a fee of 50 basis points multiplied by the sales
              price of any subsequent aircraft purchased by the
              same New Financing Party and leased back to Delta;

        * with respect to any debt restructurings, a fee of 35
          basis points multiplied by the price paid by the
          acquiring creditor for the outstanding principal and
          interest balance on each aircraft; and

    (4) a fee in connection with the Firm's acquisition services
        in an amount mutually agreed between the parties.

The Debtors will reimburse Babcock & Brown for its reasonable
out-of-pocket expenses incurred in conjunction with the services.

The Debtors will also provide limited indemnification of Babcock
& Brown related to its services.

Prior to the Petition Date, the Debtors have paid Babcock & Brown
all prepetition fees and expenses due for services rendered and
to be rendered through September 14, 2005.

Judith A. Hall, vice president of Babcock & Brown GP LLC,
discloses that, in addition to UAL Corporation, Babcock has been
retained in the Chapter 11 case of Atlas Air Worldwide Holdings,
Inc.  In addition, as part of its diverse practice, the Firm
appears and participates in numerous cases, proceedings and
transactions involving many different professionals, including
Davis Polk & Wardwell and other attorneys, accountants and
financial consultants, some of which may represent claimants and
parties-in-interest in the Debtors' Chapter 11 cases.

Babcock & Brown is a disinterested person, as that term is
defined in Section 101(14) of the Bankruptcy Code, as modified by
Section 1107(b) of the Bankruptcy Code, Ms. Hall says.

             Subsidiary to Trade in Debtors' Aircraft

Babcock & Brown's wholly owned subsidiary, Babcock & Brown
Aircraft Management LLC, is in the business of:

    (i) acquiring and selling aircraft to both trade and
        financial buyers;

   (ii) arranging aircraft leases with end users; and

  (iii) providing management and remarketing services to
        investors.

Babcock & Brown requests that BBAM be permitted to acquire for
its own account or for the account of its clients, equipment
subject to aircraft leases that the Debtors have determined or
determine in the future to reject pursuant to Section 365 of the
Bankruptcy Code, as well as aircraft owned by the Debtors, which
the Debtors have determined to liquidate.

In each instance any offer made by BBAM will be made subject to
higher and better offers made at an auction sale to be conducted
by the Debtors or their other professionals, other than Babcock &
Brown.

Babcock & Brown assures the Court that it will establish a
firewall regarding the confidential information it has obtained
as special financial consultant to the Debtors, so that any
information it acquires in the performance of its duties will
remain confidential.  The only information obtainable by BBAM
will be by virtue of BBAM's direct inquiries with the Debtors and
other information is publicly available.

                     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: Allows Eight Claimants to Pursue Actions
---------------------------------------------------
Delta Air Lines, Inc., is a defendant to civil actions commenced
by:

    1. Paula James and David James on account of property damage
       or personal injury, initiated in the United States
       District Court for the Central District of California, and
       now on appeal to the United States Court of Appeals for
       the Ninth Circuit;

    2. Mark Keating on account of property damage or personal
       injury, initiated in the United States District Court for
       the Northern District of California;

    3. Frank S. Klonoski and Sydne E. Klonoski on account of
       property damage or personal injury, initiated in the
       United States District Court for the Northern District of
       California;

    4. Steven Marsh and Valerie Marsh on account of property
       damage or personal injury, initiated in the United States
       District Court for the Northern District of California;

    5. Andrew McLachlan on account of property damage or personal
       injury, initiated in the United States District Court for
       the Northern District of California;

    6. Daniel Robinson on account of property damage or personal
       injury, initiated in the United States District Court for
       the Northern District of California;

    7. Robert Vilato and Francine Vilato on account of property
       damage or personal injury initiated in the United States
       District Court for the Northern District of California;
       and

    8. Mary Emily Wright on account of property damage or
       personal injury, initiated in the United States District
       Court for the Northern District of California.

When Delta Air filed for bankruptcy, the Claimants were
automatically stayed from commencing or continuing an action to
seek recovery for alleged property damage or personal injury.

The Claimants are willing to waive any and all claims against
Delta related to the civil actions and seek recovery solely from
the insurance coverage, if any, available under one or more
insurance policies issued to Delta.

In separate stipulations approved by the U.S. Bankruptcy Court for
the Southern District of New York, the parties agree to seek
modification of the automatic stay solely to the limited extent
necessary to enable:

   (a) their claims to proceed to final judgment or settlement;
       and

   (b) the Claimants to attempt to recover any liquidated final
       judgment or settlement on their claims solely from
       available coverage, if any.

Any final judgment or settlement will be reduced by:

   (i) the amount of any applicable deductible or self-insured
       retention under the applicable insurance policy; and

  (ii) any share of liability under the applicable insurance
       policy of any insolvent or non-performing insurer or co-
       insurer.

The automatic stay will not be modified for purposes of
permitting the Claimants to attempt to recover from any party for
intentional conduct or punitive damages.

                     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: Flight Attendants Appeal Court Ruling on Contracts
-------------------------------------------------------------
Teamster flight attendants at Delta Comair filed an appeal of
Federal Bankruptcy Judge Adlai Hardin's July 21 decision
permitting Delta Comair to reject its flight attendants' contract.  
Judge Hardin had denied the airline's first motion to reject the
flight attendant agreement on the basis that it sought excessive
concessions from the employees.

Flight attendants are scheduled to negotiate with the company
later this month and are still pursuing a consensual agreement
with the company.

"We believe the bankruptcy court's decision could very well
warrant reversal on appeal," said Connie Slayback, Local 513
President in Florence, Kentucky.  "Our flight attendants should
not be asked to do more than their fair share for the company."

The Cincinnati-based Comair filed for bankruptcy protection, along
with Delta last year, and had sought $8.9 million in cuts from the
flight attendants.

"We have demonstrated that we are committed to keep this airline
flying," Ms. Slayback said.  "If Comair moves to implement the
judge's most recent decision and abrogate our agreement, travelers
should be aware that strike activity is possible and would disrupt
operations at both Comair and Delta."

Founded in 1903, the Teamsters Union represents more than 1.4
million hardworking men and women in the United States and Canada.

                    About Delta Air Lines

Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. --
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.


DLJ COMMERCIAL: Fitch Lifts Rating on $27MM Class B Certs. to BB+
-----------------------------------------------------------------
Fitch upgrades DLJ Commercial Mortgage Corp.'s commercial mortgage
pass-through certificates, series 1998-CG1:

    -- $70.4 million class B-1 to 'AAA' from 'AA+'';

    -- $23.5 million class B-2 to 'AAA' from 'AA-';

    -- $15.6 million class B-3 to 'AAA' from 'A+';

    -- $66.5 million class B-4 to 'A-' from 'BBB-', removes from
        rating watch positive;

    -- $15.6 million class B-5 to 'BBB' from 'BB+', removes from
       rating watch positive;

    -- $27.4 million class B-6 to 'BB+' from 'B+'.

In addition, Fitch affirms these classes:

    -- $687.2 million class A-1B at 'AAA';
    -- $39.1 million class A-1C at 'AAA';
    -- Interest-only class S at 'AAA';
    -- $39.1 million class A-2 at 'AAA';
    -- $78.2 million class A-3 at 'AAA';
    -- $23.5 million class A-4 at 'AAA';
    -- $15.6 million class B-7 at 'B-'.

Fitch does not rate the $13.8 million class C certificates.  Class
A-1A has paid in full.

In March 2006, classes B-4 and B-5 were placed on rating watch
positive.  The upgrades are a result of increased subordination
levels due to additional paydown and additional defeasance.  To
date, forty-nine loans (23.3%) have defeased.  As of the July 2006
distribution date, the pool's aggregate certificate balance has
decreased 28.7% since issuance, to $1.11 billion from
$1.56 billion.

Currently, there is one 90 day delinquent loan (0.1%) in special
servicing and minimal losses are expected.  The loan is secured by
a retail property located in Jackson, Mississippi.  The decline in
occupancy is a result of the anchor tenant which occupied 72% of
the center vacating in early 2006.  At this time, there are no
prospective tenants for the vacant space.

The transaction's three credit assessed loans (12.2%) remain
investment grade due to their stable performance.  Fitch reviewed
operating statements analysis reports and other performance
information provided by Wachovia.  The DSCR for the loans are
calculated based on a Fitch adjusted net cash flow (NCF) and a
stressed debt service based on the current loan balance and a
hypothetical mortgage constant.

Rivergate Apartments (7.4%) is an apartment property located in
Manhattan, New York.  The Fitch stressed year-end (YE) 2005 debt
service coverage ratio (DSCR) was 1.37 times (x) compared to 1.35x
as of YE 2004 and 1.36x at issuance.  As of YE 2005, the
property's occupancy has remained at 97% since issuance.

The Camargue (2.2%) is an apartment property located in Manhattan,
New York.  The Fitch stressed YE 2005 DSCR, without credit for
amortization, was 1.65x up from 1.48x at YE 2004 and 1.22x at
issuance.  As of YE 2005, the property's occupancy declined to 90%
from 94% at YE 2004 and 99% at issuance.

Resurgens Plaza (2.6%) is an office property located in Atlanta,
Georgia.  The Fitch stressed YE 2005 DSCR was 2.22x up from 1.70x
at YE 2004 and 1.84x at issuance.  As of YE 2005, the property's
occupancy declined to 88% from 97% at YE 2004 and 96% at issuance.


EASYLINK SERVICES: Files Proxy Statement for Reverse Stock Split
-----------------------------------------------------------------
EasyLink Services Corporation filed a definitive proxy statement
with the Securities and Exchange Commission to obtain shareholder
approval of a reverse split of its common stock.

The filing, approved by EasyLink's Board of Directors, is for
reverse splits ranging from 1 for 3, 1 for 5 and 1 for 7, to give
the company the flexibility to implement the split that will best
meet its objectives.  The Company expects to affect the split
after a special shareholder meeting scheduled for Aug. 24, 2006.

Thomas Murawski, chairman, president and chief executive officer
of EasyLink stated: "Continuing to be a NASDAQ listed company is
of paramount concern to our investors, customers, partners and
employees, and implementing a reverse split will raise our stock
price to a level that complies with NASDAQ requirements.  Most
importantly, we are taking this action at a time when we believe
that the Company is poised to deliver improving revenue and
earnings results.  Our split-adjusted stock price will give us
greater access to share the investment rationale for EASY with a
broader segment of the investment community as we work to rebuild
our investor base.  I strongly urge all shareholders to vote in
favor of the reverse split prior to the shareholder meeting."

                      Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Grant Thornton LLP expressed substantial doubt about Easylink's
ability to continue as a going concern after it audited the
Company's financial statement for the year ended Dec. 31, 2005.  
The accounting firm pointed to the Company's history of operating
losses, accumulated deficit and negative working capital.

                     About Easylink Services

Headquartered in Piscataway, New Jersey, Easylink Services
Corporation -- http://www.EasyLink.com/-- provides outsourced  
business process automation services to medium and large
enterprises, including 60 of the Fortune 100, to improve
productivity and competitiveness by transforming manual and paper-
based business processes into efficient electronic business
processes.


ENESCO GROUP: Inks 12th Amendment to U.S. Credit Facility
---------------------------------------------------------
Enesco Group, Inc., signed a twelfth amendment to its current U.S.
credit facility with Bank of America, N.A. and LaSalle Bank N.A.,
effective as of July 20, 2006, to increase its borrowing
availability in amounts from $9 million to $15 million.  With the
signing of the twelfth amendment, the facility now has a
termination date of Sept. 15, 2006.

The amendment replaces most of the previous financial covenants
with covenants requiring compliance (subject to permitted
variances) with budgeted cash receipts, cash disbursements and
loan formulas.  The amendment also provides for a waiver of
existing events of default under the credit agreement as of the
date of the twelfth amendment and requires that the Company obtain
commitments for new financing.

"The twelfth amendment to our current credit facility provides
Enesco with the appropriate financing to meet the Company's
seasonal needs, as well as allows us to pursue and complete new
long-term financing," stated Marie Meisenbach Graul, Executive
Vice President and Chief Financial Officer.  "The amendment
maintains the $70 million ceiling on our credit facility while
providing us with expanded financial flexibility over the next two
months.  We remain focused on implementing initiatives to improve
and better manage the Company's cash flow.  Managing our expenses
remains our critical priority and we continue to evaluate
additional opportunities for operating expense reductions."

                 About Enesco Group, Inc.

Enesco Group, Inc. --- http://www.enesco.com/-- is a world leader  
in the giftware, and home and garden decor industries.  Serving
more than 44,000 customers worldwide, Enesco distributes products
to a wide variety of specialty card and gift retailers, home decor
boutiques, as well as mass-market chains and direct mail
retailers.  Internationally, Enesco serves markets operating in
the United Kingdom, Canada, Europe, Mexico, Australia and Asia.
With subsidiaries located in Europe and Canada, and a business
unit in Hong Kong, Enesco's international distribution network is
a leader in the industry.  Enesco's product lines include some of
the world's most recognizable brands, including Border Fine Arts,
Bratz, Circle of Love, Foundations, Halcyon Days, Jim Shore
Designs, Lilliput Lane, Pooh & Friends, Walt Disney Classics
Collection, and Walt Disney Company, among others.

                What Happened to Precious Moments?

On May 17, 2005, the Company terminated its license agreement with
Precious Moments, Inc., to sell Precious Moments(R) products in
the U.S.  On July 1, 2005, the Company we began operating under an
agreement with PMI where Enesco provided PMI transitional services
related to its licensed inventory through December 31, 2005.  In
conjunction with the PMI agreement, in June 2005 the Company
incurred a loss of $7.7 million equal to the cost of inventory
transferred to PMI.  The Company has not recorded any revenues for
transition services in 2006, as PMI has exercised its option to
perform the services in-house beginning January 1, 2006.

During the transition period, Enesco maintained inventories of PMI
products on a consignment basis and processed sales orders on
PMI's behalf.  Enesco recorded the gross sale and cost of sale of
PMI products and, additionally, recorded a charge to cost of sales
for the sale amounts to be remitted to PMI, net of the amounts due
from PMI for inventory purchases.  Enesco also earned sales
commissions and service fees from PMI for product fulfillment,
selling and marketing costs.  In the three months ended June 30,
2006, Enesco and PMI reconciled the amounts owed to each other
and, as a result, the Company recorded an additional charge of
$355,000 to cost of sales to properly reflect amounts due to PMI.
At June 30, 2006, the net amount owed PMI was $1 million, payable
in three equal installments in July, August and September.


ENESCO GROUP: Posts $24.9 Million Net Loss in Second Quarter 2006
-----------------------------------------------------------------
Enesco Group, Inc., reported financial results for the second
quarter ended June 30, 2006.

Net revenues were $37.8 million compared to $45.7 million in the
second quarter of 2005.  Second quarter 2006 revenues do not
include U.S. Precious Moments sales while second quarter 2005
included $8.0 million in U.S. Precious Moments sales.  Excluding
U.S. sales of Precious Moments from the second quarter of 2005,
net revenues in the second quarter of 2006 have remained unchanged
at $37.8 million.  Flat revenue primarily reflects the impact from
slower ramp-up of product shipments at the new third-party
distribution center, lost sales due to manufacturing capacity
losses and lost sales of replenishment product due to the U.S.
warehouse shipping delays.  Enesco also experienced lower sales
from collectibles and Gregg Gift.

Gross profit was $11.0 million compared to $9.7 million in the
second quarter of 2005.  Gross profit margin expanded 7.9
percentage points to 29% from 21.1% in the second quarter of 2005,
which included the loss on the Precious Moments license
termination.  The second quarter 2006 gross margin includes a
$4.2 million increase in our inventory reserves, made necessary by
the Company's accelerated initiatives to sell slow-moving
inventory in order to help expedite resolving its distribution
issues and clear out the Elk Grove Village facility that most
likely will be vacated by year end.  Gross profit margin in the
second quarter 2005 was significantly impacted by the $7.7 million
loss recognized on the Precious Moments license termination in the
U.S., the guaranteed minimum royalty costs and generally lower
margins on the product line.  Excluding the effects of Precious
Moments from the second quarter of 2005, gross margin in the
second quarter of 2006 would have decreased 7.3% points to 29%
from 36.3% in the second quarter of 2005.  This decline is due
primarily to the $4.2 million increase in the lower of cost or
market reserves established as of June 30, 2006.

Second quarter net loss was $24.9 million compared to a net loss
of $22.0 million in the second quarter of 2005.  Net loss for the
quarter includes a $2.2 million charge after-tax, related the sale
of the Dartington operation, as well as a charge of $4.6 million
resulting from the impairment of goodwill related to Gregg Gift.
Excluding the losses related to Dartington and Gregg Gift, the net
loss for the quarter improved to $17.4 million.

Basil Elliott, President and Chief Executive Officer at Enesco,
stated, "Despite the challenges Enesco is currently facing, we
continue to make progress in implementing our Operating
Improvement Plan.  Our sales in the second quarter were negatively
impacted in large part by the rationalization of our product lines
at the end of last year, as well as a shipping disruption which
resulted when we transitioned to a third-party warehouse.  
However, our exit from the U.S. Precious Moments business and our
product rationalization are benefiting our operating margin.  In
addition, while the ramp-up at the new distribution center was
slower than anticipated, we have reached targeted shipping levels
as of the last week of the second quarter.  We are continuing to
work with our third-party logistics provider to improve
performance and also plan to utilize additional distribution
resources to fulfill orders for the remainder of the year.

"Our near-term top priority is to obtain the new long-term
financing to replace our current U.S. credit facility.  Other
priorities for the upcoming months include improving our
distribution processes and continuing to decrease corporate
expenses.  Our manufacturing relationships are also being
strengthened and new sourcing opportunities are being explored. We
remain committed to completing our Operating Improvement Plan and
returning to profitability."

Mr. Elliott added, "We will continue to focus on positioning
Enesco as a leader in our industry once more.  We took steps
toward this goal with the successful launch of new products
developed within our four merchandise categories at the summer
gift shows, including a new baby line from the Land of Milk &
Honey license and a new everyday product statement for Heartwood
Creek. We also are delighted to have received several top honors
from NALED 10 days ago at their Industry Achievement Awards.  Jim
Shore was named Artist of the Year for an unprecedented third
consecutive year, and Enesco received the Collectible of the Year
award for the Heartwood Creek 'A Star Shall Guide Us' angel
figurine.  We are proud to be honored by the industry and the
customers we serve."

Cash and cash equivalents as of June 30, 2006 were $7.3 million,
versus $12.9 million as of December 31, 2005.  Cash and cash
equivalents are a function of cash flows from operating, investing
and financing activities.  Historically, the Company says it has
satisfied capital requirements with borrowings.  Cash balances and
working capital requirements fluctuate due to operating results,
shipping cycles, accounts receivable collections, inventory
management and timing of payments, among other factors.  Working
capital requirements fluctuate during the year and generally are
greatest early in the fourth quarter and lowest early in the first
quarter.  Enesco has been extending payables in order to conserve
cash since May 15, 2006.

                        Financial Advisor

During the quarter, Enesco appointed Jefferies & Company as its
new financial advisor and Mesirow Financial, LLC as its new
restructuring consultant.

                          Defaults

For the week ended June 4, 2006, the Company's actual borrowings
exceeded the allowable maximum borrowing capacity under the terms
of the current credit agreement by approximately $1.0 million,
which constituted a default under the agreement.  The Company has
been working with its vendors to extend payment terms and as a
result have unfortunately slowed down some inventory shipments.

The Company says that if it is not successful in extending payment
terms with its suppliers, or otherwise unable to pay its suppliers
promptly, the suppliers may be unwilling to ship products, and its
business, financial condition and results of operations would be
materially and adversely impacted.

The Company disclosed that on June 14, 2006, it was in technical
default of its existing U.S. credit facility as the Company had
exceeded the maximum allowable borrowing capacity under the credit
facility without immediate repayment of the excess amount.

The Company disclosed that it entered into a twelfth amendment to
our existing U.S. credit facility, which increased its borrowing
availability, provided a waiver to our defaults under the credit
agreement and set a new facility termination date of September 15,
2006.  Under the twelfth amendment to its credit facility the
Company will be required to pay significant usage and credit
facility extension fees (ranging from $1.4 million to $2.1
million) to its lenders on or prior to the facility termination
date.  The Company relates that these payments may have a material
adverse effect on its available cash position.

                    Notes and Loans Payable

At June 30, 2006, Enesco had total lines of credit providing for
maximum borrowings of $73.3 million, $70.0 million of which is
available under the Company's existing U.S. credit facility.
Actual borrowings of $42.6 million and letters of credit and a
customs bond totaling $4.0 million were outstanding at June 30,
2006. The net available borrowing capacity under our existing U.S.
credit facility based on eligible collateral as of June 30, 2006
was $1.7 million.

Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006 is available for free at:

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

                 About Enesco Group, Inc.

Enesco Group, Inc. --- http://www.enesco.com/-- is a world leader  
in the giftware, and home and garden decor industries.  Serving
more than 44,000 customers worldwide, Enesco distributes products
to a wide variety of specialty card and gift retailers, home decor
boutiques, as well as mass-market chains and direct mail
retailers.  Internationally, Enesco serves markets operating in
the United Kingdom, Canada, Europe, Mexico, Australia and Asia.
With subsidiaries located in Europe and Canada, and a business
unit in Hong Kong, Enesco's international distribution network is
a leader in the industry.  Enesco's product lines include some of
the world's most recognizable brands, including Border Fine Arts,
Bratz, Circle of Love, Foundations, Halcyon Days, Jim Shore
Designs, Lilliput Lane, Pooh & Friends, Walt Disney Classics
Collection, and Walt Disney Company, among others.

                What Happened to Precious Moments?

On May 17, 2005, the Company terminated its license agreement with
Precious Moments, Inc., to sell Precious Moments(R) products in
the U.S.  On July 1, 2005, the Company we began operating under an
agreement with PMI where Enesco provided PMI transitional services
related to its licensed inventory through December 31, 2005.  In
conjunction with the PMI agreement, in June 2005 the Company
incurred a loss of $7.7 million equal to the cost of inventory
transferred to PMI.  The Company has not recorded any revenues for
transition services in 2006, as PMI has exercised its option to
perform the services in-house beginning January 1, 2006.

During the transition period, Enesco maintained inventories of PMI
products on a consignment basis and processed sales orders on
PMI's behalf.  Enesco recorded the gross sale and cost of sale of
PMI products and, additionally, recorded a charge to cost of sales
for the sale amounts to be remitted to PMI, net of the amounts due
from PMI for inventory purchases.  Enesco also earned sales
commissions and service fees from PMI for product fulfillment,
selling and marketing costs.  In the three months ended June 30,
2006, Enesco and PMI reconciled the amounts owed to each other
and, as a result, the Company recorded an additional charge of
$355,000 to cost of sales to properly reflect amounts due to PMI.
At June 30, 2006, the net amount owed PMI was $1.0 million,
payable in three equal installments in July, August and September.


FALCONBRIDGE LTD: Bid Changes Prompts S&P's Positive Watch
----------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications on Inco Ltd. and Falconbridge Ltd. to positive from
developing, where they were placed July 18, 2006.  This action
stems from the lower probability under all current takeover
scenarios that ratings will be lowered into the speculative-grade
category.

The ratings on Falconbridge will likely be raised or affirmed at
'BBB-', assuming that Xstrata PLC (parent of Xstrata Queensland
Ltd. (BBB+/Watch Neg/--)) is successful in acquiring Falconbridge
on Aug. 14, 2006, which now appears highly probable after Inco
dropped its bid last week.

Falconbridge Ltd.'s CDN$0.9 Million Cumulative Preffered Shares
Series 1, CDN$119.7 Million Cumulative Preferred Shares Series 2,
and CDN$150 Million Preferred Shares Series H, all carry Standar &
Poor's BB rating.  

"The most important factor in resolving the CreditWatch will be an
assessment of Xstrata's post-acquisition financing plan," (details
of which have yet to be disclosed) said Standard & Poor's credit
analyst Donald Marleau.  Xstrata has publicly stated its
commitment to an investment-grade rating.  "Furthermore, to
determine the ultimate rating for each debt issue, Standard &
Poor's will evaluate the ownership structure and the relative
positioning of obligations within the enlarged Xstrata group that
could contribute to structural subordination," he added.

The ratings on Inco will also probably be raised or affirmed at
'BBB-'.

With a friendly bid from Phelps Dodge Corp. (BBB/Watch Neg/A-2)
and a hostile bid from Teck Cominco Ltd. (BBB/Watch Neg/--)
outstanding, the ultimate ownership of Inco will be determined
only after Aug. 16, 2006, at the earliest.  "In both cases,
however, the corporate credit ratings will likely remain
investment-grade, notwithstanding the more aggressive capital
structures currently being contemplated," said Mr. Marleau.  The
uncomplicated ownership structure in both cases should also shield
the eventual issue-level ratings from the negative effects of
structural subordination.

Teck Cominco's increased bid of July 31, 2006, would result in a
decidedly more aggressive capital structure.  Standard & Poor's
estimates that the combined entity's total debt would be more than
$9.5 billion, resulting in pro forma debt to last 12 months (LTM)
EBITDA of about 2.25x.  After accounting for $2.8 billion of
combined unfunded pensions and other postemployment benefits and
asset retirement obligations, the combined entity's fully adjusted
debt would exceed $12 billion.  As such, total debt to LTM EBITDA
of 2.8x would be aggressive, especially considering that metals
prices are at a cyclical peak.


FIRST HORIZON: Fitch Puts Low-B Ratings on $2 Million of Certs.
---------------------------------------------------------------
Fitch rates First Horizon Alternative Mortgage Securities Trust
mortgage pass-through certificates, series 2006-FA5 as:

    -- $271.13 million classes A-1 through A-5, A-PO, A-R
       certificates (senior certificates) 'AAA';

    -- $3.4 million class B-1 certificates 'AA+';

    -- $4.1 million class B-2 certificates 'AA';

    -- $2.4 million class B-3 certificates 'A';

    -- $1 million class B-4 certificates 'BBB+';

    -- $858,000 class B-5 certificates 'BBB';

    -- $1.2 million class B-6 certificates 'BB';

    -- $858,000 class B-7 certificates 'B'.

The 'AAA' rating on the senior certificates reflects the 5.20%
subordination provided by the 1.20% class B-1, the 1.45% class B-
2, the 0.85% class B-3, the 0.35% class B-4, the 0.30% class B-5,
the 0.45% class B-6, the 0.30% class B-7, and the 0.30% privately
offered class B-8 (not rated by Fitch).

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts.  In addition, the
ratings reflect the quality of the mortgage collateral, strength
of the legal and financial structures, and the servicing
capabilities of First Horizon Home Loan Corporation, currently
rated 'RPS2' by Fitch Ratings.

Substantially all of the mortgage loans were underwritten to First
Horizon's 'Super Expanded Underwriting Guidelines'.  These
guidelines are less stringent than First Horizon's general
underwriting guidelines and could include limited documentation,
higher loan-to-value ratios and lower FICO scores.  Mortgage loans
underwritten to the 'Super Expanded Underwriting Guidelines' could
experience higher rates of default and losses than loans
underwritten using First Horizon's general underwriting
guidelines.

As of the cut-off date, July, 1st, 2006, the aggregate pool
consists of conventional, fully amortizing, fixed-rate mortgage
loans secured by first liens on single-family residential
properties, substantially all of which have original terms to
maturity of 30 years.  Approximately 35.61% of the mortgage loans
in the aggregate pool have interest only payments scheduled for a
period of ten years following the origination date of the mortgage
loan. Thereafter, monthly payments will be increased to include
principal and interest payments to sufficiently amortize the loan
over the remaining term.  The principal balance of the aggregate
pool is $286,012,680 and the average principal balance is
approximately $216,512.  The mortgage pool has a weighted average
original loan-to-value ratio (OLTV) of 71.09% and the weighted
average FICO is 718.  Rate/Term and cash-out refinance loans
account for 11.34% and 36.52% of the pool, respectively.  Second
homes represent 4.52% of the pool, and investor occupancies
represent 22.46% of the pool.  The states with the largest
concentrations are California (10.02%), Maryland (9.22%),
Washington (8.15%), Arizona (6.75%), Idaho (5.91%), and Virginia
(5.67%).  All other states represent less than 5% of the pool as
of the cut-off date.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

The trust, First Horizon Alternative Mortgage Securities Trust
2006-FA5, was created for the sole purpose of issuing the
certificates.  For federal income tax purposes, an election will
be held to treat the trust as multiple real estate mortgage
investment conduits.  The Bank of New York will act as trustee.


FOAMEX INTERNATIONAL: Trade Creditors Sell 27 Claims for $337,305
-----------------------------------------------------------------
From July 5 to July 25, 2006, the Clerk of the U.S. Bankruptcy
Court for the District of Delaware recorded 27 claim transfers
totaling $337,305 in the Debtors' Chapter 11 cases.

Argo Partners paid $306,102 for 13 claims:

     Transferor                   Claim Amount
     ----------                   ------------
     Environmental Training         $3,000
     TEC                            16,297
     Albis Plastics                 21,473
     Sunrise Pad & Foam             97,666
     Morgan Wood Products            9,431
     Shanghai Vehicle Awning         8,602
     United Way Hamblen County       1,551
     ChemPoint.com                  28,272
     Gorman Ind. Supply Co.          1,391
     Curtis Glenchem Corp.           6,081
     Wellman, Inc.                  31,414
     Accutech Films, Inc.           69,023
     Huber Engineered Materials     11,903

Revenue Management acquired 12 claims for $23,538:

     Transferor                   Claim Amount
     ----------                   ------------
     Southern Tire Mart             $1,503
     Wyler Industrial Works Inc.     4,445
     IPS                             4,440
     Inland Associates               2,126
     Atlas Spring Mfg. Corp.         1,503
     Precision Machine Eng (US)      1,318
     Schermerhorn Brothers           1,228
     Monterey Landscape              1,200
     Mildreds Florist Gifts          1,083
     Best Western Concordville       1,014
     Daily Saw Service               1,886
     Technifoam Inc.                 1,792

Capital Markets bought one claim from Beckman Lawson LLP for
$4,590, and Liquidity Solutions acquired a $3,075 claim from E.S.
Kluft & Company LLC.

The claim transfers were filed by:

* Matthew Gold on behalf of Argo Partners
  12 West 37th Street, 9th Floor
  New York, NY 10018
  Tel. No. (212) 643-5443

* Robert Minkoff on behalf of Liquidity Solutions,
  Capital Markets, and Revenue Management
    One University Plaza, Suite 312
  Hackensack, NJ 07601
  Tel. No. (201) 968-0001

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)


FORD MOTOR: Recalls 1.2 Million Trucks, SUVs and Vans in the U.S.
-----------------------------------------------------------------
Ford Motor Company is supplementing the 2005 speed control
deactivation system recall to include certain speed control-
equipped gas or natural gas 1994-2002 F-250 through F-550 F-Super
Duty trucks, 2000-2002 Excursions, 1994-1996 Econoline vans and
1996-2002 E-450 vans, as well as speed control-equipped 1998
Explorers and Mountaineers.  Ford estimates that there are
approximately 1.2 million of these vehicles currently on U.S.
roads.

"Today's action includes those vehicles that were identified as
having a interaction issue between the speed control deactivation
switch and the brake system that could, in rare cases, cause the
switch to overheat and ultimately catch fire," said Ray Nevi,
assistant director, Ford Automotive Safety Office.

Last year, Ford conducted a recall of approximately five million
vehicles to add a fused wiring harness to the speed control
deactivation switch to eliminate the potential risk of fire if the
switch leaked.  The fused wiring harness cuts off the electrical
current to the switch in the rare event there is increased current
due to a leaking switch.  Increased current can result in the
switch overheating.

"Following last year's recall, we indicated further analysis would
continue to determine what vehicle characteristics were
contributing to the potential for switch leakage," said Mr. Nevi.  
"After a year of intensive research, including working with
NHTSA's engineers, we have concluded that certain factors on the
affected vehicles may lead to the switch overheating."

These factors include the specific orientation of the switch on
the brake master cylinder and repeated high vacuum events at the
switch due to typical brake system operation.  It is the repeated
high vacuum events that may cause some speed control deactivation
switch seals to become more susceptible to failure, thus allowing
brake fluid to pass through the seal to the electrical side of the
switch.  Brake fluid leaks into the switch can cause it to corrode
and possibly overheat.  The high vacuum events combined with the
switch orientation increase the potential for a fire in these
vehicles.  Therefore, Ford is recalling these additional vehicles.

Ford has a sufficient supply of fused wiring harnesses to repair
customers' vehicles.  Customers affected by this recall are
instructed to take their vehicles to a Ford or Lincoln Mercury
dealership to have fused wiring harness installed.

Owners of affected vehicles will be notified by mail shortly.  
Owners who have not already had their previously recalled vehicles
repaired should contact their dealers to make arrangements for the
repair.

Customers may contact Ford's Customer Relationship Center at
1-888-222-2751.

                    About Ford Motor Company

Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F)
-- http://www.ford.com/-- manufactures and distributes  
automobiles in 200 markets across six continents.  With about
300,000 employees and more than 100 plants worldwide, the
company's core and affiliated automotive brands include Aston
Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and
Volvo.  Its automotive-related services include Ford Motor Credit
Company.

                          *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and senior
unsecured ratings of Ford Motor Company to B2 from Ba3 and the
senior unsecured rating of Ford Motor Credit Company to Ba3 from
Ba2.  The Speculative Grade Liquidity rating of Ford has been
confirmed at SGL-1, indicating very good liquidity over the coming
12 month period.  The outlook for the ratings is negative.


FORD MOTOR: Revises Quarter Results, Net Loss Rises to $254 Mil.  
----------------------------------------------------------------
Ford Motor Company revised its results for the second quarter of
2006 to reflect a $131 million increase in net loss.

From a reported net loss of $123 million on July 20, 2006, the
Company's net loss for the second quarter of 2006 has been
increased to $254 million to reflect the increase in estimates of
its pension curtailment loss, as well as subsequent events that
existed as of the date of its balance sheet.

The Company also projects its full-year 2006 pension curtailment
expense to be $1.2 billion and full-year 2006 special items to be
$3.8 billion.

At June 30, 2006, its retiree Voluntary Employee Beneficiary
Association trust contained $6.2 billion, invested on a long-term
basis.  The Company plans to invest about $3 billion of the total
VEBA amount in shorter-duration fixed income investments to
facilitate retiree benefits payment.

The Company further disclosed that it expects its Premier
Automotive Group operating segment to be unprofitable for 2006.

Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F)
-- http://www.ford.com/-- manufactures and distributes  
automobiles in 200 markets across six continents.  With about
300,000 employees and more than 100 plants worldwide, the
company's core and affiliated automotive brands include Aston
Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and
Volvo.  Its automotive-related services include Ford Motor Credit
Company.

                      *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and senior
unsecured ratings of Ford Motor Company to B2 from Ba3 and the
senior unsecured rating of Ford Motor Credit Company to Ba3 from
Ba2.  The Speculative Grade Liquidity rating of Ford has been
confirmed at SGL-1, indicating very good liquidity over the coming
12 month period.  The outlook for the ratings is negative.


FORD MOTOR: Hires Keneth Leet as Strategic Advisor to Bill Ford
---------------------------------------------------------------
Ford Motor Company hired Kenneth H.M. Leet as a strategic advisor
to Bill Ford, the company's chairman and chief executive officer.

Mr. Leet is an 18-year veteran of Goldman Sachs, serving the firm
in its London and New York offices as a partner and was
responsible for its investment banking activities with industrial
companies, including Ford Motor.  Mr. Leet has also led European
banking operations for Bank of America.  Mr. Leet will report
directly to Bill Ford and work closely with senior management in
exploring strategic alternatives for the company.

Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F)
-- http://www.ford.com/-- manufactures and distributes  
automobiles in 200 markets across six continents.  With about
300,000 employees and more than 100 plants worldwide, the
company's core and affiliated automotive brands include Aston
Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and
Volvo.  Its automotive-related services include Ford Motor Credit
Company.

                      *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and senior
unsecured ratings of Ford Motor Company to B2 from Ba3 and the
senior unsecured rating of Ford Motor Credit Company to Ba3 from
Ba2.  The Speculative Grade Liquidity rating of Ford has been
confirmed at SGL-1, indicating very good liquidity over the
coming12 month period.  The outlook for the ratings is negative.


H. B. WILLIAMSON: Case Summary & 18 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: H. B. Williamson Company
        dba Art Appeal
        17182 East Illinois Highway 15
        Mount Vernon, IL 62864

Bankruptcy Case No.: 06-40790

Type of Business: The Debtor creates unique designs in custom
                  frames.  See http://www.williamsonco.com/

Chapter 11 Petition Date: August 3, 2006

Court: Southern District of Illinois (Benton)

Debtor's Counsel: Laura K. Grandy, Esq.
                  Mathis Marifian Richter and Grandy Ltd.
                  P.O. Box 307
                  Belleville, IL 62222-0307
                  Tel: (618) 234-9800
                  Fax: (618) 234-9786

Total Assets: $1,202,494

Total Debts:  $4,269,922

Debtor's 18 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Maley & Wertz, Inc.              Equipment,            $834,986
P.O. Box 4537                    inventory,
900 East Columbia Street         fixtures,
Evansville, IN 47724             machinery,
                                 receivables
                                 including proceeds

Terry & Laura Schaubert          Business debts        $738,733
44 Country Club Road
Mount Vernon, IL 62864

Lee W. Lipps Trust &             Receivables,          $729,710
C. Patrick Williams Trust        inventory,
44 Country Club Road             equipment and
Mount Vernon, IL 62864           proceeds (joint
                                 lenders)
                                 Value of Security:
                                 $643,500

City of Fairfield                Unpaid rents -        $580,000
Julie Duncan Treasurer           Factory lease
109 NE 2nd Street                On equipment and       $76,707
Fairfield, IL 62837              Accounts Receivable

Minerva Industries &             Business debts        $507,113
Associates, Inc.
3FI, No. 13,
Lane 35 Jihu Road
Neihu District, Taipei 114
TAIWAN, REP. OF CHINA

Patsy Hicks Lipps Trust          Receivables,          $250,000
c/o John Lipps                   inventory,
Tamarron Resort #731             equipment and
40292 US Highway 550 N.          proceeds
Durango, CO 81301

Adhisa                           Business debts        $120,839
Antonio Diza e Hijos, SA
Ctra. M-506, Rm. 4
28935 Mostoles, Madrid
SPAIN

Vista Imports, Inc.              Business debts        $101,063
Industria E. Comercio De
Molduras
Rodovia SC 438,
KM 32 Rio Bonito
CEP 83750000
Braco do Norte SC
BRAZIL

American Express Co.             Business debts         $80,823

John Derda                       Business debts         $38,155
c/o Sopko, Nussbaum &
Inabnit

US Bancorp Manifest              On IBM Facts           $34,960
Funding Service                  computer system,
                                 capital lease
                                 Value of Security:
                                 $3,000

United Parcel Service            Business debts         $30,773

Phillip R. Corley                Business debts         $27,000

Omnia Industries Inc. -          Business debts         $13,258
Manfredini

Markestil S. L.                  Business debts         $12,806

Information Management           Business debts          $9,460
Consultants

UPS Supply Chain Solutions       Business debts          $8,067

Garrett Moulding                 Business debts          $7,370


HEALTHTRONICS INC: Sells Unit to Oshkosh Truck for $140MM in Cash
-----------------------------------------------------------------
HealthTronics, Inc. has completed the sale of its Specialty
Vehicles Division to Oshkosh Truck Corp. for $140 million in cash.

HealthTronics used approximately $124 million of the sale proceeds
to repay in full the Term Loans B under its senior credit
facility.

                          CFO to Resign

The Company also reported that Senior Vice President and Chief
Financial Officer John Q. Barnidge will resign his positions
effective Aug. 10, 2006 to pursue other business interests.

"We appreciate the contribution John has made to HealthTronics. We
wish him well in his future endeavors," Sam Humphries, the
Company's President and Chief Executive Officer, commented.

                    About HealthTronics, Inc.

Based in Austin, Texas, HealthTronics, Inc. (NASDAQ:HTRN) --
http://www.healthtronics.com/-- provides healthcare services    
primarily to the Urology community, and manufactures and
distributes medical devices.  The Company also manufactures
specialty vehicles used for the transport of high technology
medical devices, broadcast & communications equipment and the
Homeland Security marketplace.

                          *     *     *

As reported in the Troubled Company Reporter on April 7, 2006,
Moody's Investors Service placed HealthTronics, Inc.'s ratings
under review for possible downgrade following the company's
announcement on March 31, 2006, that its financial statements
should be restated.

Moody's rates HealthTronic's corporate family rating at Ba3;
$50 million senior secured revolving credit facility due 2010 at
Ba3; and $125 million senior secured term loan B due 2011 at Ba3.


HESS CORP: Earns $565 Million in Second Quarter of 2006
-------------------------------------------------------
Hess Corporation reported net income of $565 million for the
second quarter of 2006 compared with net income of $299 million
for the second quarter of 2005.

Exploration and production earnings were $501 million in the
second quarter of 2006 compared with $263 million in the second
quarter of 2005.  The Corporation's oil and gas production, on a
barrel-of-oil equivalent basis, was 354,000 barrels per day in the
second quarter of 2006 compared with 355,000 barrels per day in
the second quarter of 2005.

In the second quarter of 2006, the Corporation's average worldwide
crude oil selling price, including the effect of hedging, was
$59.00 per barrel, an increase of $26.53 per barrel from the
second quarter of 2005.  The increase reflects higher crude oil
prices and reduced hedge positions in 2006.

The Corporation's average United States natural gas selling price
was $6.23 per Mcf in the second quarter of 2006, compared to $6.47
per Mcf in the second quarter of 2005.

Marketing and refining earnings were $121 million in the second
quarter of 2006 compared with $98 million in the second quarter of
2005.  Refining earnings were $107 million in the second quarter
of 2006 compared with $77 million in the second quarter of 2005.
The increased refining earnings principally reflect higher refined
product margins.

Marketing operations generated earnings of $15 million in the
second quarter of 2006, compared with $14 million in the same
period of 2005.

Second quarter 2006 results included a gain related to the sale of
onshore Gulf Coast oil and gas producing assets and a charge for
vacated leased office space.  First half 2006 results also
included a gain of $186 million related to the sale of certain
producing properties located in the Permian Basin in Texas and New
Mexico.

Capital and exploratory expenditures for the second quarter of
2006 amounted to $808 million of which $766 million related to
exploration and production activities.  Capital and exploratory
expenditures for the second quarter of 2005 amounted to
$527 million, including $507 million for exploration and
production.

At June 30, 2006, cash and cash equivalents totaled $486 million
compared with $315 million at Dec. 31, 2005.  The Corporation's
debt to capitalization ratio at June 30, 2006, was 34.5% compared
with 37.6% at the end of 2005.  Total debt was $3.774 billion at
June 30, 2006, and $3.785 billion at Dec. 31, 2005.

Based in New York, Hess Corporation (NYSE:HES) --
http://www.hess.com/-- is a global integrated energy company  
engaged in the exploration for and the development, production,
purchase, transportation and sale of crude oil and natural gas.
The Corporation also manufactures, purchases, trades and markets
refined petroleum and other energy products.

                           *     *     *

Hess Corp.'s preferred stock carries Moody's Investors Service's
Ba3 rating and Standard and Poor's Ratings Service's BB rating.


HIGHLANDS INSURANCE: Rehabilitation Plan Hearing Set for Sept. 8
----------------------------------------------------------------
Prime TEMPUS Inc., the designated special deputy receiver in
Highlands Insurance Company's receivership estate, has filed its
rehabilitation plan with the 53rd Judicial District Court of
Travis County, Texas.  All claimants and parties-in-interest will
be bound by the terms of the Plan.  

A hearing on the Plan is scheduled for Sept. 8, 2006, at 9:00 a.m.  
Objections to the Plan must be filed by Aug. 21, 2006.  

The Receivership Court has set 11:59 p.m., on March 30, 2007, as
the deadline for filing proofs of claim.

Copies of all relevant documents and forms can be viewed and
downloaded from http://www.HighlandsRehabPlan.com/or can be  
requested by mail from:

    Highlands Insurance Co., in Receivership
    Attn: Operations
    P.O. Box 6013
    Lawrenceville, NJ
    08648-0013   

Headquartered in Lawrenceville, New Jersey, Highlands Insurance
Group Inc. and its subsidiaries are insurance holding companies
operating a property and casualty insurance business.  The Company
and its affiliates filed for chapter 11 protection on October 31,
2002 (Bankr. Del. Case No. 02-13196).  When the Debtors filed for
protection from their creditors, they listed $1,643,969,000 in
total assets and $1,820,612,000 in total debts.

On Nov. 6, 2003, Highlands Insurance was placed in permanent
receivership for the purposes of rehabilitation under Case No. GV-
3-04537 by order of the 53rd Judicial District Court of Travis
County, Texas, under its Agreed Permanent Injunction and Order
Appointing Permanent Receiver.  The Texas Commissioner of
Insurance has been appointed Receiver of Highlands, and has
designated Prime TEMPUS Inc. as Special Deputy Receiver.


HILL HEALTH: Moody's Withdraws B1 Rating on $3.2 Million Bonds
--------------------------------------------------------------
Moody's Investors Service has withdrawn the B1 rating assigned to
approximately $3.2 million of Series 1992 bonds issued by Hill
Health Corporation, through the City of New Haven.  On or about
May 1, 2006, Hill Health redeemed all outstanding maturities of
this Series through a refunding transaction.  Moody's not rated
the new series of bonds, which were sold in a private placement.


ITRON INC: Earns $10.204 Million in Second Quarter of 2006
----------------------------------------------------------
Itron, Inc., reported its financial results for the second quarter
ended June 30, 2006.

The Company reported $10.204 million of net income on
$163.810 million of total revenues for the three months ended
June 30, 2006, compared with $9.313 million of net income on
$135.123 million of total revenues for the second quarter in 2005.

At June 30, 2006, the Company's balance sheet showed $613.971
million in total assets, $250.889 million in total liabilities,
and $363.082 million in total stockholders' equity.

"We are excited about our results for both the quarter and six
month periods," LeRoy Nosbaum, chairman and chief executive
officer, said.

"Our operating groups' results are strong and once again we have
achieved a record level of revenue and earnings, giving us
confidence that our 2006 expectations are on track and that we are
executing well on our business plans for the year.  The economic
drivers for Itron solutions remain strong and we are pleased with
the level of industry-wide activity."

Revenues for the second quarter of 2006 were $163.8 million, 21%
higher than second quarter 2005 revenues of $135.1 million.
Revenues for the six months ended June 30, 2006, were
$319.4 million, which reflects a 27% increase over revenues of
$251.6 million in the first six months of 2005.  The increased
revenues in 2006 were primarily due to higher shipments of Itron
Automated Meter Reading (AMR) technology.

The Company shipped more than 2.3 million meters and modules with
Itron AMR technology during the quarter compared with 1.7 million
in the second quarter of 2005, a 40% increase.  For the six month
period ended June 30, 2006, the Company shipped over 4.7 million
meters and modules with Itron AMR technology compared to
3.0 million during the same period last year, which reflects a 58%
increase year over year.

Meter Data Collection segment revenues of $60.1 million in the
quarter were down slightly from $62.2 million in the second
quarter of 2005.  Year-to-date 2006 MDC revenues of $121.9 million
were 9% higher than the $111.9 million year-to-date in 2005.  
Lower volumes of stand alone electric AMR modules were offset by
increased shipments of gas AMR modules in 2006.  Sales of stand
alone electric AMR modules have decreased in 2006 as customers are
purchasing new Itron electricity meters with embedded AMR
technology.  Revenues for this embedded AMR technology are
reflected in Electricity Metering revenue.

Electricity Metering segment revenues were a record $88.5 million
in the quarter compared with $60.6 million in the second quarter
of 2005.  For the six months ended June 30, Electricity Metering
revenues were $168.8 million in 2006 compared with $114.7 million
in 2005.  The 46% and 47% respective increases in revenues were
primarily driven by shipments of electricity meters with embedded
AMR to Progress Energy.  The Progress Energy contract, which calls
for delivery of 2.7 million electricity meters with embedded AMR
over approximately 15 months, was signed in the third quarter of
2005.

Software revenues were $15.2 million during the second quarter or
24% higher than $12.3 million in the comparable quarter of 2005.
For the six months ended June 30, 2006, Software revenues of
$28.7 million were 15% higher than 2005 revenues of $25.0 million.
Software revenues have increased in 2006 primarily due to
increased software license sales for a broad mix of products.

New order bookings for the quarter and year-to-date periods in
2006 were $107 million and $313 million, compared with
$177 million and $294 million in 2005.  Twelve month backlog,
which represents the portion of backlog that will be earned over
the next twelve months, was $225 million at June 30, 2006,
compared with $151 million one year ago.  Total backlog was
$351 million at June 30, 2006, down 9% from the record backlog of
$387 million at March 31, 2006, but up 44% from $243 million one
year ago.

Total company gross margins were 42% for the second quarter of
2006 and 2005 and 43% for the year-to-date periods in 2006 and
2005.  Fluctuations in Hardware Solutions Operating Group gross
margins in 2006, compared with 2005, were primarily due to changes
in the mix of product sold and manufacturing volumes.  Software
Solutions gross margins increased in 2006, compared with 2005, due
to a higher mix of software licenses.

Pro forma operating income, which excludes intangible asset
amortization expenses in both 2006 and 2005, restructuring charges
in 2005 and SFAS 123(R) stock option compensation expense in 2006,
was $27.1 million and $55.2 million, or 16.5% and 17.3%
respectively of revenues for the three and six months ended
June 30, 2006.  Pro forma operating income in the second quarter
and first six months of 2005 was $20.0 million and $35.9 million
respectively, or 14.8% and 14.3% of revenues. The improved
operating margin in 2006 reflects lower operating expenses as a
percentage of revenues in almost all operating expense areas.

GAAP net income was $10.2 million for the current quarter,
compared with net income of $9.3 million for the second quarter of
2005.  For the six months ended June 30, 2006, GAAP net income was
$17.3 million compared with $10.1 million for the same period in
2005.  GAAP net income in the three and six month periods in 2005
included a $5.9 million tax benefit for additional research and
development credits for the years 1997 through 2004.

On Jan. 1, 2006, the Company adopted Statement of Financial
Accounting Standard No. 123(R), Share-Based Payment (SFAS 123
(R)), which requires the expensing of share-based compensation.
Total stock-based compensation in the quarter and year to date
periods was $2.1 million and $4.1 million respectively, of which
$1.8 million and $3.6 million was due to the adoption of SFAS
123(R) for our stock options.

Pro forma net income was $16.4 million for the current quarter and
$31.5 million for the six months ended June 30, 2006, compared
with $10.4 million in the second quarter of 2005 and $17.6 million
for the six months ended June 30, 2005.  Pro forma net income
excludes intangible asset and debt fee amortization expenses in
2005 and 2006, restructuring charges and the benefit of R&D tax
credits in 2005 and SFAS 123(R) stock option compensation expenses
in 2006.

During the first six months of 2006, the Company prepaid in full
its variable-rate term loan and a variable-rate real estate term
loan, which had balances at Dec. 31, 2005, of $24.7 million and
$14.8 million, respectively.  Additionally, the Company prepaid in
full $3.2 million in project financing debt.  Interest expense for
the three and six months ended June 30, 2006, decreased
$3.8 million and $2.6 million compared with the same periods in
2005 due to the lower debt levels in 2006.

The Company generated $56.8 million of cash from operations during
the first six months of 2006 compared with $36.6 million in 2005.
Capital expenditures were $14.4 million in the first six months of
2006 compared with $5.3 million in the first six months of 2005.
The increase this year is primarily related to an enterprise
software upgrade and capital improvements associated with our new
headquarters building.

EBITDA (earnings before interest, income taxes, depreciation and
amortization) was $28.8 million in the current quarter and
$58.3 million in the first six months of 2006, compared with
$23.9 million and $42.8 million in the comparable periods of 2005.
Adjusted EBITDA, which excludes the effect of non-cash stock
option compensation expense in 2006, was $30.6 million for the
three months and $61.9 million for the six months ended June 30,
2006.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?ed4

Headquartered in Spokane, Washington, Itron, Inc. (NASDAQ: ITRI)
-- http://www.itron.com/-- provides critical source of knowledge  
to the global energy and water industries.  Nearly 3,000 utilities
worldwide rely on Itron technology to deliver the knowledge they
require to optimize the delivery and use of energy and water.  
Itron delivers value to its clients by providing solutions for
meter data collection, energy information management, demand side
management and response, load forecasting, analysis and consulting
services, transmission and distribution system design and
optimization, Web-based workforce automation, C&I customer care,
enterprise and residential energy management.


                           *     *     *

Itron, Inc.'s 7-3/4% Convertible Senior Subordinated Notes due
2012 carry Moody's Investor Service's B2 rating and Standard &
Poor's Rating Services' B rating.


J.P. MORGAN: Fitch Puts Low-B Ratings on $3.7 Million of Certs.
---------------------------------------------------------------
J.P. Morgan Mortgage Trust mortgage pass-through certificates,
series 2006-S3 are rated by Fitch as:

Group 1 (Pool 1 and 2)

    -- $972,051,180 classes 1-A-1 through 1-A-31, 2-A-1 through
       2-A-8 ,A-X, A-P, A-R, and the privately offered P (senior
       certificates) 'AAA';

    -- $19,089,300 class B-1, 'AA';

    -- $5,525,900 class B-2, 'A';

    -- $3,014,100 class B-3, 'BBB';

    -- $2,009,400 privately offered B-4, 'BB';

    -- $1,507,100 privately offered B-5, 'B'.


Group 2 (Pool 3 and 4)

    -- $122,653,404 privately offered classes 3-A-1, 4-A-1, and
       II-A-R (senior certificates) 'AAA';

    -- $683,479 privately offered class B-1 'AA';

    -- $248,537 privately offered class B-2, 'A';

    -- $310,672 privately offered class B-3, 'BBB';

    -- $124,268 privately offered B-4, 'BB';

    -- $124,268 privately offered B-5, 'B'.

For Pool 1 the 'AAA' rating on the senior classes reflects the
3.25% subordination provided by the 1.90% class B-1, the 0.55% B-
2, the 0.30% B-3, the 0.20% privately offered class B-4, the 0.15%
privately offered class B-5 and the 0.15% privately offered, non-
rated class B-6 certificates.

For Pool 2 the 'AAA' rating on the senior classes reflects the
1.30% subordination provided by the 0.55% privately offered class
B-1, the 0.20% privately offered class B-2, the 0.25% privately
offered class B-3, the 0.10% privately offered class B-4, the
0.10% privately offered class B-5 and the 0.10% privately offered,
non-rated class B-6 certificates.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts.  In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures, and
the master servicing capabilities of Wells Fargo Bank, N.A., which
is rated 'RMS1' by Fitch.

This transaction contains certain classes designated as
exchangeable certificates and others as regular certificates.
Class 1-A-2, 1-A-9, 1-A-10, 1-A-30, 1-A-31, 2-A-7 and 2-A-8 are
exchangeable certificates.  Class 1-A-1, 1-A-3 through 1-A-8, 1-A-
11 through 1-A-29, 2-A-1 through 2-A-6, 3-A-1, 4-A-1, A-X, A-P, A-
R, II-A-R, B-1 through B-6, and II-B-1 through II-B-6 are regular
certificates.

All or a portion of certain classes of offered certificates may be
exchanged for a proportionate interest in the related exchangeable
certificates.  All or a portion of the exchangeable certificates
may also be exchanged for the related offered certificates in the
same manner.  This process may occur repeatedly.  The classes of
offered certificates and of exchangeable certificates that are
outstanding at any given time, and the outstanding principal
balances and notional amounts of these classes, will depend upon
any related distributions of principal, as well as any exchanges
that occur.  Offered certificates and exchangeable certificates in
any combination may be exchanged only in the proportions shown in
the governing documents.  Holders of exchangeable certificates
will be the beneficial owners of a proportionate interest in the
certificates in the related combination group and will receive a
proportionate share of the distributions on those certificates.

On each distribution date when exchangeable certificates are
outstanding, principal distributions from the applicable related
certificates are allocated to the related exchangeable
certificates that are entitled to principal.  The payment
characteristics of the classes of exchangeable certificates will
reflect the payment characteristics of their related classes of
regular certificates.

U.S. Bank National Association will serve as trustee.  J.P. Morgan
Acceptance Corporation I, a special purpose corporation, deposited
the loans in the trust which issued the certificates.  For federal
income tax purposes, the trustee will elect to treat all or
portion of the assets of the trust funds as comprising multiple
real estate mortgage investment conduits.


JDA SOFTWARE: Reports Total Revenues of $51.8 Mil. in 2nd Quarter
-----------------------------------------------------------------
JDA(R) Software Group Inc. disclosed its financial results for the
second quarter ended June 30, 2006.  JDA reported total revenues
of $51.8 million and software revenues of $10.4 million for the
second quarter of 2006, compared to total revenues of
$54.9 million and software revenues of $15.3 million for the
second quarter of 2005.

"As a consequence of our software performance in the second
quarter, we have reduced our annual guidance.  We now expect total
revenues for 2006 to range from $290 million to $299 million,
software revenues to range from $61 million to $70 million and
adjusted non-GAAP earnings per share, excluding amortization of
intangibles and restructuring charges."  stated JDA CEO Hamish
Brewer.

"We believe our acquisition of Manugistics will have an immediate
positive impact on earnings in the second half of 2006.  We also
look forward to more predictable earnings as our financial model
has changed with the acquisition and we now expect over 45% of our
total revenues to come from a stable maintenance base.  This
increased financial strength should enable us to drive accelerated
innovation to our 5,500 customers and create a clear and sustained
competitive differentiation for JDA," added Mr. Brewer.

                  Second Quarter 2006 Highlights

Manugistics Acquisition: The Company announced its planned merger
with Manugistics Group Inc. during second quarter 2006 and
subsequently completed the acquisition on July 5, 2006.  With this
acquisition, JDA is now uniquely positioned to offer the first
vertically-focused optimization solution to the Global Supply and
Demand Chain market that addresses mission critical requirements
from raw materials flowing into production to end-consumer
products at the shelf.

JDA FOCUS 2006: JDA hosted its most successful FOCUS global
conference on May 7 to 10 in Las Vegas.  More than 1,400
registered representatives endorsed JDA's growth initiatives and
product roadmap.  JDA announced an update on the evolution of the
next generation of JDA Portfolio(R) solutions and the planned
release of Strategic Supply and Demand Management on the
PortfolioEnabled(R) framework.

Regional Sales Activity: In Europe, Middle East and Africa, JDA
closed $3.2 million in software license deals in second quarter
2006, compared to $1.7 million in first quarter 2006 and $3.4
million in second quarter 2005.  Asia Pacific closed $2.1 million
in software license deals in second quarter 2006, compared to
$131,000 in first quarter 2006 and $2.3 in second quarter 2005.  
The Americas closed $5.1 million in software license deals in
second quarter 2006, compared to $5.3 million in first quarter
2006 and $9.5 million in second quarter 2005.

Software Deals: JDA signed 74 new software deals during the second
quarter, including five deals for two or more JDA Portfolio
software applications and two deals greater than $1 million.  
Essar Information Technology Limited, a multibillion-dollar Indian
conglomerate, signed a software license for applications from
eight JDA product families including Enterprise Planning by
Arthur(R), a next-generation application that operates on the
PortfolioEnabled(R) framework.  JDA also signed additional
licenses in second quarter 2006 with existing customers including
American Eagle Outfitters Inc., Carrefour Belgium, Farmacias
Ahumada, S.A. and Northern Tool & Equipment Co.

Strong Cash Generation: JDA ended second quarter 2006 with $130.8
million in cash and marketable securities as compared to $111.5
million at Dec. 31, 2005.  JDA generated $13.3 million in cash
flow from operations during second quarter 2006 as compared to
$1.7 million in second quarter 2005.  DSOs were 64 days at the end
of second quarter 2006, compared to 81 days at the end of first
quarter 2005 and 66 days at the end of second quarter 2005.

                       About JDA Software

Headquartered in Scottsdale, Arizona, JDA Software Group, Inc.
(Nasdaq:JDAS) -- http://www.jda.com/-- provides software  
solutions tailored to the retail industry and their suppliers.  
JDA commits significant resources to advancing the JDA
Portfolio(R) suite of supply and demand chain solutions.  JDA
Portfolio software enables high-performance business process
optimization and execution from the manufacturer's plant, through
distribution to an end customer or a retailer's shelf.

                         *     *     *

As reported in the Troubled Company Reporter on June 12, 2006,
Moody's Investors Service assigned a B1 corporate family rating
and B1 ratings to JDA Software Group's proposed $50 million six-
year first lien senior secured Revolver and $175 million first
lien Term Loan B.  The outlook is stable.

As reported in the Troubled Company Reporter on June 9, 2006,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to JDA Software Group, Inc.  At the same time,
Standard & Poor's assigned its 'B+' senior secured ratings, with a
recovery rating of '2', to JDA's $225 million senior secured bank
facilities, consisting of a $50 million revolving credit facility
(due 2012); and a $175 million term loan B (due 2013)


KAISER ALUMINUM: Court of Appeals Affirms District Court Ruling
---------------------------------------------------------------
The U.S. Court of Appeals for the Third Circuit affirms the
District Court's decision to uphold the U.S. Bankruptcy Court for
the District of Delaware's ruling that Kaiser Aluminum Corporation
and its affiliates had satisfied the reorganization test with
respect to six pension plans that they sought to terminate.

Judge Joseph Farnan of the U.S. District Court for the District of
Delaware affirms the Bankruptcy Court's February 5, 2004 order
assessing and approving the distress termination of the Debtors'
plans and authorizing implementation of a replacement plan.

The Bankruptcy Court previously applied the reorganization test
required by the Employee Retirement Income Security Act of 1974 to
six plans in the aggregate and concluded that their termination
was required by Kaiser to emerge from bankruptcy protection.

The Pension Benefit Guaranty Corporation, which is responsible
under ERISA to provide benefits to participants in terminated
plans, appealed the Bankruptcy Court's decision arguing that it
should have applied the reorganization test on a plan-by-plan
basis to each of Kaiser's pension plans.

Under their suggested approach, the PBGC maintains that some of
Kaiser's plans would not fulfill the reorganization test, and
therefore could not be terminated.

The District Court upheld the Bankruptcy Court's decision and the
PBGC appealed to the Court of Appeals for the Third Circuit.

In a 41-page opinion, Judge Marjorie O. Rendell, of the Third
Circuit Court of Appeals, concludes that the Bankruptcy Court
correctly applied the reorganization test to multiple plans in the
aggregate.

According to Judge Rendell, applying the reorganization test to
multiple plans in the aggregate is straightforward.  On the other
hand, she says, the PBGC's suggested plan-by-plan approach is
"unworkable" and would result in unfair and inequitable
consequences in that it would require bankruptcy courts to give
preference to some similarly situated constituents over others.

The PBGC has leveled several arguments against the Court of
Appeal's reading of ERISA contending that legislative history, its
administrative interpretation, and public policy support its
analysis of ERISA.  Judge Rendell does not find the PBGC's
arguments persuasive.

The PBGC contends that the Single-Employer Pension Plan Amendments
Act and the Pension Protection Act of 1997, taken together,
reflect a clear congressional purpose to limit terminations of
pension plans and reduce financial burden on the PBGC.

Judge Rendell acknowledges that legislative history demonstrates
Congress' intent to make it more difficult for employers to
terminate pension plans, but she stresses that legislative history
is not determinative of whether, or how, the reorganization test
should be applied in the multi-plan context.

"We view the absence of any guidance in the text of ERISA as more
indicative of congressional intent than anything the PBGC has
cited in the legislative record," Judge Rendell says.

In addition, Judge Rendell disagrees with the PBGC's contention
that the Court of Appeals should defer to its interpretation of
the reorganization test under Chevron USA Inc. v. Natural
Resources Defense Council, Inc., 467 U.S.837 (1984).

Although Congress has delegated to the PBGC the power to adopt
rules and regulations necessary to carry out the purposes of Title
IV of ERISA and the Supreme Court has accorded Chevron deference
to the PBGC's interpretation on other occasions, Judge Rendell
holds that deference to the PBGC in this matter is improper
because the agency has neither the expertise nor the authority to
determine when a plan should be terminated under the
reorganization test.

Judge Rendell adds that to merit deference, the PBGC's
interpretation of the statute must be supported by regulations,
rulings, or administrative practice.

The PBGC has contended repeatedly that an aggregate approach to
the reorganization test harms American workers who participate in
ERISA plans because it subjects them to plan terminations that are
economically unnecessary.

The PBGC also claims that, interpreting ERISA in a way that
triggers more plan terminations, and thereby increases the burdens
on the PBGC, could undermine the PBGC's already shaky financial
position and "pose a considerable risk to the single-employer
termination insurance program."

There is no question that this case implicates significant policy
concerns that potentially affect millions of American workers and
hundreds of businesses, Judge Rendell says.

"Nevertheless, 'we do not sit here as a policy-making or
legislative body,'" Judge Rendell avers, citing DiGiacomo, 420
F.3d at 228.

Judge Rendell rules that there are no clear answers to the
difficult policy issues involved in this case, and in any event,
their resolution is better left to Congress than the courts.

"We have taken Congress' failure to provide a shred of guidance on
how to apply a plan-by-plan approach as indicative of its intent.  
If Congress perceives our holding to be in error, the cure is to
amend ERISA," Judge Rendell states.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading    
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.  
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.  
The Debtors' Chapter 11 Plan became effective on July 6, 2006.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 102;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KAISER ALUMINUM: Law Debenture Removes Holder Affidavits Objection
------------------------------------------------------------------
Creditors Law Debenture Trust Company of New York and Liverpool
Limited Partnership withdraw their objection to the affidavits
submitted by 97 holders of the Liquidating Debtors' 9-7/8% Notes.

The noteholders include:

      Holder Name                      Amount
      -----------                      ------
      Mariner LDC                    $767,000
      TCM Spectrum Fund               815,000
      TCM Select Opportunities      1,670,000
      Morgan Stanley                1,470,000
      Locker & Co.                  1,100,000
      Credit Suisse Securities     24,870,000
      Mason Capital Ltd.            1,816,000
      Camulos Master Fund LP       19,000,000

A list of the 97 Holder Affidavits is available for free at:

                http://researcharchives.com/t/s?ee9

The objection to other Holder Affidavits remains pending and
unaffected.

As reported in the Troubled Company Reporter on June 7, 2006,
Law Debenture objected to approximately 400 Holder Affidavits
submitted.

Mr. Bodnar said, several of the Holder Affidavits are defective
because of holders' failure to:

    (1) sign the affidavit or sign on behalf of the correct
        noteholder;

    (2) sign the verification or identify the signer of the
        verification;

    (3) obtain the NYSE Medallion Stamp Signature;

    (4) indicate the dollar amount of the noteholder's holdings;

    (5) include all pages of the Holder Affidavit;

    (6) state the noteholder's net worth or the net worth stated
        was insufficient under the terms of the Holder Affidavit;
        or

    (7) provide the noteholder's address, tax identification
        number, and complete broker information.

Law Debenture supplied the Senior Indenture Trustees with a list
detailing the specific defects.  Mr. Bodnar noted that no party
disputed that the Holder Affidavits are, in fact, defective.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading    
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.  
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.  
The Debtors' Chapter 11 Plan became effective on July 6, 2006.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 102;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KERZNER INT'L: Launches Offering to Redeem 6-3/4% Senior Notes
--------------------------------------------------------------
Kerzner International Limited commenced a cash tender offer to
purchase any and all of their outstanding 6-3/4% Senior
Subordinated Notes due 2015.  The tender offer is being made
pursuant to an Offer to Purchase and Consent Solicitation
Statement and a related Letter of Transmittal and Consent, each
dated Aug. 1, 2006.  The tender offer is scheduled to expire at
12:01 a.m., New York City time, on Aug. 29, 2006, unless extended
to a later date or time or earlier terminated.

In conjunction with the tender offer, the Company and KINA will be
soliciting consents to proposed amendments to the indenture
governing the notes that would eliminate substantially all of the
restrictive covenants and certain events of default and related
provisions contained in the indenture governing the notes.   
Holders that tender their notes will be required to consent to the
proposed amendments, and holders that consent to the proposed
amendments will be required to tender their notes.

Subject to the terms and conditions set forth in the Statement,
the total consideration to be paid for each properly delivered
consent and validly tendered note accepted for payment on or prior
to 5:00 p.m., New York City time, on Aug. 15, 2006 and accepted
for payment will be $1,071.67 per $1,000 of principal amount, plus
accrued and unpaid interest.

The total consideration for each note tendered includes an early
consent premium of $20 per $1,000 of principal amount of notes
payable only to those holders that tender their Notes on
or prior to 5:00 p.m., New York City time, on the Consent Date.   
Holders that properly deliver consents and validly tender notes
after that time but prior to the expiration of the tender offer
will receive $1,051.67 per $1,000 of principal amount, plus
accrued and unpaid interest.  Holders will receive payment
promptly after the expiration date for the tender offer, which
is currently scheduled to be Aug. 29, 2006.

Tenders of notes and deliveries of consents made on or prior
to 5:00 p.m., New York City time, on the Consent Date, may be
withdrawn or revoked at any time on or before the Consent Date.   
Tenders of notes made after 5:00 p.m., New York City time, on the
Consent Date, may be withdrawn at any time until 12:01 a.m., New
York City time, on the expiration date for the tender offer.

The tender offer is conditioned upon consummation of the
acquisition of the Company by an investor group and a minimum
tender condition, as well as other general conditions.

Copies of the tender offer and consent solicitation documents
can be obtained by contacting MacKenzie Partners, Inc., the
Information Agent for the tender offer and consent solicitation,
at 800-322-2885 and 212-929-5500.

Deutsche Bank Securities Inc. is acting as Dealer Manager for the
tender offer and Solicitation Agent for the consent solicitation.   
Questions concerning the tender offer and consent solicitation may
be directed to Deutsche Bank Securities Inc., High Yield Capital
Markets, at 800-553-2826.


                    About Kerzner International

Kerzner International Limited (NYSE: KZL) --
http://www.kerzner.com/-- through its subsidiaries, is a leading  
international developer and operator of destination resorts,
casinos and luxury hotels.  The Company is also a 37.5% owner of
BLB Investors, L.L.C., which owns Lincoln Park in Rhode Island and
pari-mutuel racing facilities in Colorado.  In the U.K., the
Company is currently developing a casino in Northampton and
received a Certificate of Consent from the U.K. Gaming Board in
2004.  In its luxury resort hotel business, the Company manages
ten resort hotels primarily under the One&Only brand.  The
resorts, featuring some of the top-rated properties in the world,
are located in The Bahamas, Mexico, Mauritius, the Maldives and
Dubai.  An additional One&Only property is currently in the
planning stages in South Africa.

                            *   *   *

As reported in the Troubled Company Reporter on Mar. 22, 2006,
Moody's Investors Service placed the ratings on review for
downgrade on Kerzner International Limited's Ba3 Corporate Family
Rating and B2 Guaranteed Senior Subordinate Ratings; and Kerzner
International North America, Inc.'s (P) B2 Guaranteed Senior
Subordinate shelf.

As reported in the Troubled Company Reporter on Mar. 22, 2006,
Standard & Poor's Ratings Services placed its ratings on the
hotels and a casino owner and operator Kerzner International Ltd.,
including its 'BB-' corporate credit rating, on CreditWatch with
negative implications.


KMART CORP: Gets Final Court OK on $13 Mil. Disability Settlement
-----------------------------------------------------------------
Following the Fairness Hearing held on July 27, 2006, the
Honorable John Kane, Jr., of the U.S. District Court for the
District of Colorado, entered a final order approving the
Settlement Agreement between Kmart Corporation and Carrie Ann
Lucas, Debbie Lane, Julie Reiskin, Edward Muegge, Robert Geyer,
Stacy Berloff, Jean Ryan and Jan Campbell.

Judge Kane declared that:

    -- the Damages Settlement Sub-Class is certified under Rules
       23(a), (b)(2), and (b)(3) of the Federal Rules of Civil
       Procedure;

    -- the notice program implemented by the parties was the best
       notice practicable under the circumstances and satisfied
       the requirements of due process and Rule 23; and

    -- the members of the Nationwide Class and the Damages Sub-
       Class are permanently enjoined from bringing any claims
       seeking injunctive relief or for Statutory Minimum Damages
       relating in any way to the accessibility of Kmart stores
       to persons who use wheelchairs or scooters.

                        Miller's Objection

The District Court received only one objection to the Settlement
Agreement, which was filed by Marc Miller -- an individual who
does not use a wheelchair or scooter.

Mr. Miller asked that the class definition of the Nationwide
Class be rewritten to exclude individuals who become disabled in
the future.  Mr. Miller also complained that he "cannot determine
with certainty if [he is] a member of the subclass entitled to a
monetary award."

Judge Kane overruled Mr. Miller's objection, holding that it is
common and proper to include future class members in a class
definition where the predominant relief is injunctive.  

Judge Kane opined that because Mr. Miller is not currently using a
wheelchair or scooter, he is not entitled to a monetary award
under the Settlement Agreement.

A full-text copy of the Colorado District Court's Final Order
granting approval of the Settlement is available for free at:

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

                        Disability Lawsuit

In July 2005, Carrie Ann Lucas, Debbie Lane, Julie Reiskin, Edward
Muegge, Robert Geyer, Stacy Berloff, Jean Ryan and Jan Campbell
obtained certification from the District Court as a nationwide
class of individuals who use wheelchairs or scooters and who shop
at Kmart stores.  

Under the Certification, the Plaintiffs were able to file claims
as a class against Kmart for alleged architectural and policy
barriers to accessibility for people with disabilities.

                       Settlement Agreement

In August 2005, the Nationwide Class and Kmart initiated
settlement negotiations, and agreed, among others, that:

   (a) Kmart will survey and, with few exceptions, bring all of
       its stores into compliance with the Department of Justice
       Standards for Accessible Design, and all of its stores in
       California into compliance with Title 24 of the California
       Code of Regulations within seven and a half years;

   (b) Kmart will ensure that all merchandise on "fixed displays"
       as well as large appliances, drive aisle displays and
       sidewalk displays will be on an accessible route of at
       least 36 inches;

   (c) Kmart will ensure that all accessible restrooms and
       fitting rooms will be on an accessible route and
       maintained free and clear of obstructions;

   (d) Kmart will ensure that one accessible check-out lane is
       open at all times the store is open;

   (e) Kmart will, in all but 10% of its stores, provide a path
       of at least 32 inches to at least one side of moveable
       apparel displays in 80% of floor space occupied by
       moveable displays as well as a distance of 32 inches
       between some types of moveable apparel displays when
       they are placed next to one another;

   (f) Kmart will implement a customer service system for access
       to moveable apparel displays and furniture displays under
       which customers with disabilities who use wheelchairs or
       scooters for mobility will have the option of requesting
       assistance or requesting that Kmart provide them with a
       two-way communications device so that they may summon
       assistance when they need it;

   (g) Kmart will amend its policy and training materials to
       implement the new policies;

   (h) Compliance will be monitored using "mystery shoppers," as
       well as customer feedback through the Internet, a toll-
       free phone line, and in-store forms;

   (i) The Nationwide Class will release claims for injunctive
       relief under Title III of the ADA, under state statutes
       that incorporate or are equivalent to Title III, and under
       California law through the end of the term of the
       settlement;

   (j) Kmart will establish a $13,000,000 fund -- consisting
       of $8,000,000 in cash and $5,000,000 in gift cards
       redeemable at face value -- from which members of a
       "Damages Sub-Class" -- that the Plaintiffs have requested
       the Colorado Court to preliminarily certify for settlement
       purposes concurrently with the requested preliminary
       approval of the settlement -- are eligible to recover;

   (k) The Damages Sub-Class Fund will be allocated among
       California, Colorado, Hawaii, Massachusetts, New York,
       Oregon and Texas -- the Sub-Class States -- based on a
       formula that reflects the number of Kmart Stores in each
       Sub-Class State, and the Statutory Minimum Damages
       recoverable in each State;

   (l) For each qualifying visit to a Kmart store, a member of
       the Sub-Class may recover up to the Statutory Minimum
       Damages recoverable in the Sub-Class State in which he or
       she shopped, and the maximum number of qualifying visits
       for which a Sub-Class member may recover is two;

   (m) Kmart will pay damages of $10,000 each to the three
       original named Plaintiffs, and $1,000 each to the six
       named Plaintiffs of the proposed Damages Sub-Class;

   (n) The majority of any funds remaining in the Damages Sub-
       Class Fund after the claims period will be given to
       specified non-profit entities that advocate for the rights
       of persons with disabilities;

   (o) Members of the Sub-Class have the right to opt out of the
       damages provisions of the Settlement Agreement, but
       members of the Nationwide Class and Sub-Class cannot opt
       out of the injunctive provisions;

   (p) In addition to releasing claims for injunctive relief
       under Title III, equivalent state statutes, and California
       law, Sub-Class members will release claims for Statutory
       Minimum Damages under the laws of the seven Sub-Class
       States through the end of the term of the Agreement, but
       will not release claims for any other damages;

   (q) No member of the Nationwide Class will release damages
       claims with respect to the laws of any state other than
       in the Sub-Class States;

   (r) Notice will be provided to the Nationwide Class;

   (s) Kmart will pay attorneys' fees up to the date of final
       approval of $3,250,000, subject to Court approval, and
       will pay class counsel additional reasonable fees in the
       future for work that they do during the term of the
       Agreement, implementing and assuring compliance; and

   (t) The Colorado Court would retain continuing jurisdiction
       throughout the term of the Agreement to interpret and
       enforce the Agreement.

                        About Kmart Corp.

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


KMART CORP: Court Okays Reversion of 142,308 Unclaimed Shares  
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
granted Kmart Corporation's request for reversion of the 142,308
Unclaimed Shares, which have not been claimed.

The Court deemed all Unclaimed Shares held by claimholders who
have not completed transfer or sale of their Unclaimed Shares by
close of business on July 17, 2006, reverted to the Reorganized
Debtors for redistribution to other holders of allowed Class 5
claims.

The Redistribution is part of the final distribution to be made at
the conclusion of the claims reconciliation process pursuant to
Kmart's confirmed Plan of Reorganization.

A full-text copy of the list of Unclaimed Distribution
Claimholders is available for free at:

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

Computershare is authorized to take any actions as directed by
Kmart Corporation to effectuate the transfer of the Unclaimed
Shares that remain in the Registered Accounts of Unclaimed
Distribution Claimholders.

                        About Kmart Corp.

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


KULICKE & SOFFA: Sale Cues S&P to Lift Ratings and Remove Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on Willow
Grove, Pennsylvania-based Kulicke & Soffa Industries Inc. from
CreditWatch, where they were placed with positive implications on
June 2, 2006; raised the corporate credit rating to 'B+' from 'B',
and its subordinated ratings to 'B-' from 'CCC+'.  The outlook is
positive.

The rating actions follow the company's sale of the test division
and application of the proceeds to permanently reduce debt.  Pro
forma for the elimination of the test division and reduced debt
levels, debt to EBITDA levels have improved to about 2x from 2.8x
as of March 31, 2006.

The ratings on Kulicke & Soffa reflect expectations for continued
volatility in sales and profitability levels, despite the sale of
the loss-producing test division and modest profitability through
the cycle.  These factors are offset by the company's leading
niche market position and its adequate cash balances.  Kulicke &
Soffa is a supplier of equipment and materials used in
semiconductor packaging, including ball bonders, related
consumable tools and gold wire.  Total lease-adjusted debt was
about $226 million as of March 2006.

Sales for the March and June quarters, at $160 million and $169
million, respectively, are off 22% from the December 2005 peak
(all figures are adjusted for the sale of the test division),
driven by a drop in the sale of bonder units.  The packaging
materials division, composed primarily of gold wire sales, remains
stable.  Growth in the semiconductor packaging industry had been
very strong and now remains moderate, sustaining bonder sales at
the mid-point of the company's historical range.  While
profitability levels will remain volatile, the company should
benefit from the absence of the test division losses, which
amounted to about $37 million for the 12 months ended December
2005, offset by $10 million to $15 million of corporate overhead
costs that were retained in the sale.  Kulicke & Soffa will exit
these expenses over time.


LOVESAC CORP: Court OKs Series A Investors Settlement & Asset Buy
-----------------------------------------------------------------
Pursuant to the confirmed Joint Plan of Liquidation of The LoveSac
Corporation and its debtor-affiliates, the Honorable Christopher
S. Sontchi of the U.S. Bankruptcy Court for the District of
Delaware approved the settlement agreement between the Debtors
and:

   * Walnut Investment Partners, LP;
   * Walnut Private Equity Fund, LP;
   * Brand Equity Ventures, II, LP;
   * Barfair Ltd., L.P.;
   * Millivere Holdings, Ltd.; and
   * Hauser 41, LLC.

These Series A Investors hold certain equity interest in LoveSac.
They have also engaged in lending transactions with the Debtors.
Some of the Series A Investors have designated members that have
served or currently serve on the board of directors of LoveSac.

The Court also approved the sale of substantially all of the
Debtors' assets to Sac Acquisition LLC, an affiliate of the Series
A Investors for at least $750,000.  The final purchase amount will
be determined by the gross receipts of the business.

The settlement agreement and the asset sale are cornerstones of
the Plan.

                     Settlement Agreement

Under the Settlement Agreement, each of the Series A Investors
will pay their ratable share of $75,000 to the liquidating trust
to be established under the Plan upon the closing of the Asset
Sale, with the condition that either the Plan must be confirmed,
or the order approving the Settlement Agreement has become final
and non-appealable prior to that payment.  

Additionally, each of the Series A Investors will pay their
ratable share of a second $75,000 to the liquidating trust
established under the Plan on or before January 15, 2007.  In
addition to the payment of these funds, each of the Series A
Investors will assign to the liquidating trust established under
the Plan, all distributions to which the Series A Investors are or
may become entitled to under the Plan, pursuant to their claims.  
In the event that the liquidating trust under the Plan is not yet
established when either the cash payments or the assignment of
claims are called for under the Settlement Agreement, the cash
payments or the assignment will all be made to the Debtors for the
benefit of the liquidating trust.

In exchange for the consideration to be paid to the liquidating
trust, and the assignment of the Series A Investors' claims
against the estate to the other creditors, the Debtors will
provide a comprehensive general release of all claims that the
Debtors may have against any of the Series A Investors or their
affiliates and representatives.

A full-text copy of the Asset Purchase Agreement is available for
a fee at:

   http://www.researcharchives.com/bin/download?id=060802213205

A full-text copy of the Settlement Agreement is available for a
fee at:

   http://www.researcharchives.com/bin/download?id=060802213404

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


MERRILL LYNCH: S&P Puts Low-B Ratings on $30.8 Mil. Cert. Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Merrill Lynch Mortgage Trust 2006-C2's $1.5 billion
commercial mortgage pass-through certificates series 2006-C2.

The preliminary ratings are based on information as of Aug. 1,
2006.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans.  Class A-1, A-2, A-3, A-
4, A-1A, AM, AJ, B, C, and D are currently being offered publicly.
The remaining classes will be offered privately.  Standard &
Poor's analysis determined that, on a weighted average basis, the
pool has a debt service coverage Of 1.28x, a beginning LTV of
100.5%, and an ending LTV of 89.7%. The rated initial maturity
date for these certificates is August 2043.

                     Preliminary Ratings Assigned
                  Merrill Lynch Mortgage Trust 2006-C2
       
                               Preliminary    Recommended credit
   Class          Rating         amount            support(%)
   -----          ------       -----------    ------------------
   A-1*           AAA           $45,567,000         30.000
   A-2*           AAA           $95,000,000         30.000
   A-3*           AAA          $110,000,000         30.000
   A-4*           AAA          $435,122,000         30.000
   A-1A*          AAA          $393,198,000         30.000
   AM*            AAA          $154,270,000         20.000
   AJ*            AAA          $109,917,000         12.875
   B*             AA            $30,854,000         10.875
   C              AA-           $15,427,000          9.875
   D              A             $26,997,000          8.125
   E              A-            $17,355,000          7.000
   F              BBB+          $25,069,000          5.375
   G              BBB           $15,427,000          4.375
   H              BBB-          $15,427,000          3.375
   J              BB+            $9,642,000          2.750
   K              BB             $3,857,000          2.500
   L              BB-            $5,785,000          2.125
   M              B+             $3,856,000          1.875
   N              B              $3,857,000          1.625
   P              B-             $3,857,000          1.375
   Q              NR            $21,212,551          1.375
   X**            AAA        $1,542,696,551           N/A
    
* Class A-1, A-2, A-2FL, A-3, A-3FL, A-1A, A-SB, and A-4 receive
interest and principal before class AJ. Losses are borne by class
AJ before class A-1, A-2, A-2FL, A-3,A-3FL, A-1A, A-SB, and A-4,
which will be applied pari passu.

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


MIRANT CORP: Fifth Circuit Rules on Pepco APSA-Related Dispute
--------------------------------------------------------------
As previously reported, the U.S. District Court for the Northern
District of Texas issued rulings in 2004 and 2005 relating to the
contractual dispute between Mirant Corp. and its debtor-affiliates
and Potomac Electric Power Company arising from their Asset
Purchase and Sale Agreement.

The District Court denied Mirant's motion to reject a Back-to-Back
Agreement under the APSA in December 2004.  The District Court
ruled that the BTB Agreement was not severable from the APSA and
thus, was not eligible for rejection under Section 365 of the
Bankruptcy Code.

Mirant took an appeal from the District Court's December 2004
Order to the U.S. Court of Appeals for the Fifth Circuit.

After the District Court's ruling on the Rejection Motion, Mirant
also filed with the Bankruptcy Court another motion to reject.
But the District Court withdrew the Second Rejection Motion and
related pleadings from the Bankruptcy Court.

In March 2005, the District Court directed Mirant to perform
under the BTB until:

    * either rejection was approved; or

    * the Debtors demonstrated that discontinuing performance
      pending rejection was within the public interest.

Mirant brought the March 2005 Orders to the Fifth Circuit for a
review.  Mirant also asked for a stay of the order to perform
under the BTB Agreement pending ruling on the merits of the
Second Rejection Motion.

On July 19, 2006, a three-judge Fifth Circuit panel ruled in
favor of PEPCO and affirmed the District Court's December 2004
and March 2005 decisions.

In a 23-page Opinion, the Fifth Circuit says the District Court
was correct to refuse Mirant's motion to reject its obligations
under the BTB Agreement under Section 365 of the Bankruptcy Code.
The BTB Agreement is not separate or severable from the remaining
portions of the APSA since the parties themselves did not intend
it to be severable from the purchase agreement as a whole.

The Fifth Circuit rules that it has no appellate jurisdiction to
review the District Court's withdrawal of Mirant's Second
Rejection Motion because the Order is not a final appealable
order.

According to the Fifth Circuit, the District Court didn't err in
directing Mirant to perform under the BTB Agreement pending
resolution of the Second Rejection Motion.  By the time the
District Court issued the March 2005 Orders, the Debtors have
been directly or indirectly ordered to perform under the BTB at
least four times.

"This is not the first time that Mirant and PEPCO have been
before us, and we recognize that it may not be the last," the
Circuit Judges note.

Hence, the Fifth Circuit cautions Mirant that, while the Fifth
Circuit Court welcomes legitimate appeals, any future appeals
that continue the pattern of attempts to reject the BTB Agreement
or efforts to refuse payment pending rejection will face the most
severe sanctions available.

A full-text copy of the Fifth Circuit's Opinion dated July 19,
2006, is available for free at http://researcharchives.com/t/s?ee3


The Fifth Circuit Panel comprises of Circuit Judges Emilio M.
Garza, E. Grady Jolly, and Jerry E. Smith.

Prior to the Fifth Circuit's ruling, Mirant and its affiliates,
and PEPCO, et al., have entered into a settlement agreement to
resolve their disputes, including those with respect to the BTB
Agreement and withdrawal of the reference.

PEPCO spokeswoman Mary-Beth Hutchinson told Bloomberg News that
the Circuit Court's decision will have no effect on the
Settlement Agreement, which is now waiting for the Bankruptcy
Court's approval.

                      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.


MIRANT CORP: Bowline Unit Wants 2006 Consent Order Approved
-----------------------------------------------------------
Mirant Bowline, LLC, a Mirant Corp. debtor-affiliate asks the U.S.
Bankruptcy Court for the Northern District of Texas to approve the
2006 Consent Order extending Mirant Corporation and its debtor-
affiliates' license to operate under a Major Petroleum Facility
License.

Mirant Bowline, owns and operates a generating station located in
West Haverstraw, New York.  As an Onshore Major Oil Storage
Facility, Mirant Bowline is subject to extensive environmental
regulations by federal, state, and local authorities, which
require continuous compliance with conditions established by
licensing.

The New York Department of Environmental Conservation has the
authority to enforce the state's environmental laws including
Parts 612-614 of Chapter V of the New York Environmental
Conservation Rules and Regulations.  The DEC is responsible for
the regulation of the storage and handling of petroleum as well as
licensing a MOSF in New York.

The DEC issued to Mirant Bowline a Major Petroleum Facility
License for its Haverstraw generation station, which expired on
March 31, 2006.

On January 4, 2006, the DEC issued a Notice of Violation to
Mirant Bowline alleging that the Debtor:

   -- violated various provisions of 6 NYCRR Parts 612 through
      614; and

   -- was not in complete compliance with the terms and conditions
      of its MPFL.

Mirant Bowline responded to the alleged violations and presented
a proposal to demonstrate its compliance.

Mirant Bowline also submitted an application for the renewal of
its MPFL.  The DEC is currently reviewing Mirant Bowline's
renewal application.  The DEC is also reviewing Mirant Bowline's
Compliance Proposal and has reserved its rights to accept or
reject the Compliance Proposal.

Before the March 31 expiry of the MPFL, Mirant Bowline and the
DEC executed an Order on Consent, which authorizes the Debtor to
continue to operate the Facility under the terms and conditions
of its MPFL until May 30, 2006, pending the DEC's review of the
Debtor's renewal application.  The DEC further extended that
authority until August 1, 2006.

Under the 2006 Consent Order, the DEC assessed a $20,000 civil
penalty against Mirant Bowline.

A full-text copy of the July 2006 Consent Order is available for
free at http://bankrupt.com/misc/bowline2006consentorder.pdf

                      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.


MORGAN STANLEY: Fitch Holds Low-B Ratings on $27 Mil. of Certs.
---------------------------------------------------------------
Fitch upgrades Morgan Stanley Dean Witter Capital I Trust 2001-
TOP1's:

    -- $34.7 million class B to 'AAA' from 'AA';
    -- $31.8 million class C to 'AA'- from 'A';
    -- $11.6 million class D to 'A' from 'A-'.

In addition, Fitch affirms these classes:

    -- $72.4 million class A-2 at 'AAA';
    -- $72.4 million class A-3 at 'AAA';
    -- $576 million class A-4 at 'AAA';
    -- Interest Only (IO) classes X-1 and X-2 at 'AAA';
    -- $27.5 million class E at 'BBB';
    -- $10.1 million class F at 'BBB-';
    -- $18.8 million class G at 'BB';
    -- $8.7 million class H at 'B+'.

The $5.8 million class J remains at 'CCC/DR3'; the $5.8 million
class K remains at 'C/DR6'; the $6.6 million class L remains at
'C/DR6'; and the $393,146 class M remains at 'C/DR6'.

Class N is not rated by Fitch and has been fully depleted.  Class
A-1 has been paid in full.

The upgrades are the result of the payoff of the Wisconsin Trade
Center Office Properties loan since Fitch's last formal review.  
As of the July 2006 distribution date, the transaction's aggregate
principal balance decreased 23.7% to $882.5 million from $1.16
billion at issuance.

Currently, three loans (6.4%) are in special servicing, of which
two (5.9%) are in foreclosure and one (0.5%) is 30 days
delinquent.

The largest specially serviced loan, an office property in San
Jose, CA (4.9%), is the second largest loan in the pool.  The loan
is in foreclosure and received an appraisal reduction amount of
$12.8 million based on an April 2006 appraisal that valued the
property at $35 million.  The collateral consists of 310,000
square feet (sf) with a current occupancy of 56%.  Based on the
appraisal, Fitch anticipates losses for this loan upon
liquidation.

The second largest specially serviced loan is collateralized by an
office property in Robinson Township, PA (0.9%) and is in
foreclosure.  Fitch anticipates losses for the loan upon
liquidation.

The 30 day delinquent loan (0.5%) is collateralized by a retail
center in Lewisville, Texas.  The loan transferred to special
servicing in June 2006 and the special servicer is in the process
of contacting the borrower.  Nineteen loans (22.8%) are considered
Fitch Loans of Concern due to decreases in debt service coverage
ratio (DSCR) and occupancy or other performance issues.  These
loans' higher likelihood of default has been incorporated into
Fitch's analysis.

Four loans were considered investment grade at issuance.  Two
loans, Federal Express (4.8%) and Shoreline Investments V (2.6%)
have performed at or better than at issuance.  The YE 2005 Fitch
stressed DSCR for the Federal Express loan is 1.63 times (x)
compared to 1.56x at issuance.  The YE 2005 Fitch stressed DSCR
for the Shoreline V loan is 2.49x compared to 2.09x at issuance.  
The remaining two loans, Santa Monica Place and Richfield
Portfolio, are no longer considered investment grade.

The Santa Monica Place loan (9.1%), the largest loan in the pool,
is secured by 277,171 sf of in-line space in a 560,000 sf regional
mall located in Santa Monica, California.  Macerich Company, an
affiliate of the borrower, has identified this mall as a
redevelopment project.  The Santa Monica retail market remains
strong with the subject's location one of the more popular
shopping/tourist destinations in Los Angeles.

The Richfield Portfolio loan (3.8%) is secured by 2,732 units in
five multifamily apartments located in Houston, Texas.  The Fitch
adjusted year-end (YE) 2005 net cash flow (NCF) has declined 32.6%
since issuance.


MUSICLAND HOLDING: Wants to Pay $26M to Secured Trade Debt Holders
------------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York's authority
to repay up to $26,000,000 of the principal amount due and
outstanding to the holders of their Secured Trade Debt.

On the their bankruptcy filing, the Debtors had two major groups
of secured creditors -- the bank group led by Wachovia Bank,
National Association; and the secured trade creditors' group.

The Wachovia facility was paid in full from the proceeds of the
sale to TransWorld Entertainment Corporation.

The secured debt is based, in part, on a November 5, 2003,
security agreement pursuant to which trade creditors party to it
were granted a security interest in the inventory of Musicland
Purchasing Corp. and its subsidiaries.  Pursuant to an
intercreditor agreement, the security interest was subordinate in
priority to the security interest granted to Wachovia.  The second
lien position enabled the Debtors to re-establish more normal
trade terms.

Jonathan P. Friedland, Esq., at Kirkland & Ellis LLP, in New York,
tells the Court that on the Petition Date, the Debtors estimated
that they owed $186,000,000 on the Secured Trade Debt.  After
reconciliation with the holders of the Secured Trade Debt, the
Debtors now estimate that they owed between $170,000,000 and
$173,000,000, as of the Petition Date.

As a result of the TWEC-sale and other income-producing
activities, the Debtors currently have about $46,000,000 in excess
cash.  The Debtors are currently managing that amount for the
benefit of their creditors, Mr. Friedland relates.

Mr. Friedland says that allowing the Debtors to make the proposed
principal repayment falls within Section 105(a) of the Bankruptcy
Code.

The holders of the Secured Trade Debt will receive the vast
majority of the distributions in the Debtors' Chapter 11 cases,
Mr. Friedland notes.  After distributing the $26,000,000, the
Debtors will retain enough money to fully pay any claims that the
Court may determine to stand ahead of the claims of the holders of
the Secured Trade Debt, including all accrued and to-be accrued
administrative and other priority expenses.

In addition, Mr. Friedland continues, repaying some of the
Secured Trade Debt would benefit the holders in that their
acceptable investment risk level would likely allow them to earn
more than the investment return the funds earn while the Debtors
invest only in low risk bank deposits acceptable to the U. S.
Trustee.

The holders of the Secured Trade Debt have also been continuing to
permit the Debtors' use of their collateral to fund the Chapter 11
cases without any objection, Mr. Friedland notes.

                      About Musicland Holding

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSICLAND HOLDING: Court Extends Solicitation Period to October 9
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the exclusive period within which Musicland Holding Corp.
and its debtor-affiliates may solicit and obtain acceptances for
their Chapter 11 Plan through and including Oct. 9, 2006.

As reported in the Troubled Company Reporter on July 19, 2006, the
Debtors' limited resources in the first months of their Chapter 11
cases were deployed to achieve the fastest possible disposition of
their assets, Jonathan P. Friedland, Esq., at Kirkland & Ellis
LLP, in New York, told the Court.  Since their bankruptcy filing,
the Debtors devoted its efforts to pursue matters relating to:

   * a sale of substantially all of their assets to Trans World
     Entertainment Corporation;

   * the filing of sale procedure motions for hundreds of leases;

   * the conduct of two auctions with respect to those leases;

   * multiple round competitive bidding and selection process for
     a going-out-of-business sale liquidation agent;

   * procedures for the conduct of two separate rounds of going
     -out-of-business sales;

   * the resolution of numerous disputes with certain significant
     vendors and other parties-in-interest; and

   * the approval of a contested final postpetition financing
     order.

Mr. Friedland informs Judge Bernstein that the Debtors need to
accommodate the time needed to:

   -- revise the Plan to reflect the terms of the agreement
      ultimately reached;

   -- file and garner the Court's approval of a disclosure
      statement; and

   -- conduct solicitation of that amended Plan.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSTANG ALARM: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mustang Alarm Services, Inc.
        aka Mustang Alarm & Electric
        475 East Greg Street, Suite 117
        Sparks, NV 89431

Bankruptcy Case No.: 06-50557

Type of Business: The Debtor is a general and electrical
contractor that provides alarm system service, and monitoring low-
voltage electrical installation.

Chapter 11 Petition Date: August 3, 2006

Court: District of Nevada (Reno)

Debtor's Counsel: Alan R Smith, Esq.
                  Law Offices of Alan R. Smith
                  505 Ridge Street
                  Reno, NV 89501
                  Tel: (775) 786-4579

Total Assets:   $705,139

Total Debts:  $1,648,032

Debtor's 19 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service         Tax                   $366,254
Stop 5028lvg
110 City Parkway
Las Vegas, NV 89106

ADI                              Goods/Services        $306,316
263 Old Country Road
Melville, NY 11747

Royal Wholesale Electric (CED)   Goods/Services        $250,000
100 Dermody Way
Sparks, NV 89502
c/o Gibbs, Giden,
Locher & Turner
Attn: Becky Pintar, Esq.
3993 Howard Hughes Pkwy, #530
Las Vegas, NV 89109-0918

Rexel Pacific Electrical         Goods/Services        $140,000
6606 LBJ Freeway, Suite 200
Dallas, TX 75240

WEDCO                            Goods/Services         $63,400

GMAC                             Purchase Money         $60,040
                                 Security

Ford Motor Credit                Purchase Money         $41,500
                                 Security

Citicorp Leasing, Inc.           Purchase Money         $22,594
                                 Security

Home Depot                       Goods/Services         $17,000

Northern Video                   Goods/Services         $17,000

States Recovery Systems, Inc.    Goods/Services         $11,500

Blakely Johnson & Ghusn, Inc.    Goods/Services         $10,100

Statewide Lighting               Goods/Services         $10,000

A.G. Adjustments                 Goods/Services          $7,100

Western Nevada Supply            Goods/Services          $6,000

High Desert Door and Trim        Goods/Services          $5,300

Overhead Fire Protection         Goods/Services          $5,300

Office Depot                     Goods/Services          $5,000

CINTAS                           Goods/Services          $4,900


NATIONAL ENERGY: Asserts "Mutual Mistake" on Pact with Lehman
-------------------------------------------------------------
National Energy & Gas Transmission Inc. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Middle District of Maryland
to deny Lehman Brothers Inc.'s $7,217,000 claim.

Lehman Brothers pursued claims against the Debtors asserting an
unliquidated claim for services performed and for damages arising
out of the Debtors' rejection of an investment banking agreement
the Debtors entered into with Lehman before their bankruptcy
filing.  Under the Agreement, Lehman provided advisory services to
the Debtors concerning the potential sale of some of NEGT's
assets.

Lehman mischaracterizes the Debtors' legal arguments while at the
same time misdirects the Court's attention away from the Debtors'
primary arguments that compelled them to ask for the disallowance
of Lehman's Claims, asserts John F. Carlton, Esq., at Whiteford,
Taylor & Preston L.L.P., in Baltimore, Maryland.

The Agreement expressly provides that it would be of no force and
effect if it was not approved by the Court in the event NEGT
filed for bankruptcy.  The Court has never approved the
Agreement, Mr. Carlton notes.  

Under the Agreement, Lehman was a prepetition investment banker
for NEGT.  Consequently, pursuant to Sections 327(a) and 101(14)
of the Bankruptcy Code, the Agreement could not have been
approved by the Court under any circumstances, Mr. Carlton
contends.

Mr. Carlton adds that both Lehman and NEGT were legally
prohibited from performing any of their obligations under the
Agreement, thereby creating a "mutual mistake" of the parties and
a legal impossibility of performance that excused and discharged
the performance obligations of both parties under applicable
state law.

Generally, under New York law, a contract entered into under a
mutual mistake "is voidable and subject to rescission",
Mr. Carlton notes, citing Gould v. Board of Education of the
Sewanhaka Central High School District, 616 N.E. 2d 142, 146-47
(N.Y. 1993).

In the instant case, Mr. Carlton relates, the parties both
believed that Lehman would be able to continue to perform under
the Agreement.  The parties did not anticipate the circumstance
where NEGT would be faced with hiring a new broker because it
would be forbidden to hire Lehman and yet be exposed to paying
two success fees for one transaction, one to Lehman and another
to the new broker.

Clearly, the legal ability of Lehman to continue providing service
after the bankruptcy was an integral part of the Agreement, Mr.
Carlton says.  He avers that, whether Lehman would have been ready
and willing is irrelevant -- the parties mutually, but mistakenly,
assumed that Lehman would be able to perform, but it was not.

Moreover, NEGT did not "elect" to terminate the Agreement,
Mr. Carlton contends.  He maintains that NEGT's rejection of the
Agreement pursuant to Section 365 of the Bankruptcy does not
equate to termination.

Because Lehman could not lawfully perform its duties under the
Agreement, by necessity, NEGT claims that it was compelled to
retain and compensate Lazard Freres & Co. LLC as replacement
investment banker.

Moreover, the employment of Lehman as postpetition broker for
the sale of NEGT's equities did not create a windfall for NEGT,
Mr. Carlton notes.  Rather, because the purpose of the
Agreement was frustrated, NEGT was forced to incur commissions
to Lazard for $9,800,000 that far exceeded the $7,200,000
commission that would have been due to Lehman had it lawfully
been able to continue as broker postpetition and complete the
eventual sale of NEGT's equities.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 63; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NATIONAL ENERGY: Files Quarterly Report Ending May 31, 2006
-----------------------------------------------------------
Pursuant to their First Amended Plan of Liquidation, NEGT Energy
Trading Holdings Corporation, NEGT Energy Trading - Gas
Corporation, NEGT ET Investments Corporation, NEGT Energy Trading
- Power, L.P., Energy Services Ventures, Inc., and Quantum
Ventures delivered to the Court their quarterly report for the
period March 1, 2006, through May 31, 2006.

The ET Debtors disclosed that PENTA Advisory Services, LLC, their
plan administrator, has continued to make substantial progress
toward liquidating their remaining non-cash assets, settling
outstanding liabilities, and winding down their affairs pursuant
to the Plan.  

The Chapter 5 avoidance actions are progressing toward
resolution, and numerous adversary proceedings have been settled
for the quarter.  Some are in the process of settlement
negotiation and others are in the discovery phase.

The ET Debtors continued to work in resolving the remaining
claims.  Most notably, the ET Debtors entered into an agreement
settling the claims of National Energy & Gas Transmission, Inc.,
for payments made on behalf of ET Gas.  The Debtors transferred
$49,103,853 to NEGT in satisfaction of the claims.

As of the conclusion of the Reporting Period, several substantial
claims and litigation matters remained open and unresolved, and
the timing of any additional interim distributions to holders of
general unsecured claims will, in large measure, depend upon the
speed at which those matters are resolved.  These include most
aspects of the FERC Proceedings, the California Actions, the
Employee Litigation, and the Tolling Agreement Disputes.

ET Holdings paid $146,681 and ET Power paid $586,725 for the
Plan Administrator's services during the Reporting Period.

The ET Debtors made payments to members of the Board of
Directors:

      Member                                   Amount Paid
      ------                                   -----------
      Charles Goldstein (PENTA)                       $400
      ET Director, c/o Alvarez & Marsal              1,600

In addition, the ET Debtors paid $2,585,001 in total fees to
these professionals during the Reporting Period:

      Professional                                    Fees
      ------------                                    ----
      Bishop, Daneman & Simpson, LLC                $2,700
      C. Kevin Renner                                4,888
      CRA International, Inc.                       32,324
      Econ One Research, Inc.                      222,290
      Ernst & Young                                  2,379
      FTI Consulting, Inc.                          70,988
      Gibbs & Bruns, L.L.P.                      1,107,812
      Hosie McArthur, LLP                          128,231
      Morrison Foerster, LLP                       197,883
      National Energy & Gas Transmission, Inc.      65,487
      Parker Poe Adams & Bernstein LLP                 136
      Resolutions, LLC                              14,288
      Richard Bethman                                5,325
      Robert Barron                                 12,602
      Roy J. Shanker, Ph.D.                        176,500
      Sidley Austin LLP                             21,248
      Small Business Support Services Pty Ltd       12,061
      Sutherland, Asbill & Brennan, LLP            176,620
      Whiteford, Taylor & Preston LLP              240,166
      Willkie Farr & Gallagher, LLP                 91,075

The amounts disbursed by each ET Debtor for the professional fees
are:

      Debtor                         Amount Paid
      ------                         -----------
      Energy Services Ventures            $2,700
      ET Holdings                        147,245
      ET International                    14,440
      ET Power                         2,420,617

The ET Debtors did not pay any amounts for the ET Committee
professionals' fees during the Reporting Period.

The ET Debtors also paid $1,470,327 for other post-effective date
expenses:

      Debtor                         Amount Paid
      ------                         -----------
      ET Gas                              $4,500
      ET Holdings                        239,513
      ET Investments                         425
      ET Power                         1,225,889

The Debtors paid $2,900,000 on account of Mirant Americas Energy
Marketing, LP's Secured Claim No. 146B.  The Debtors also paid
$50,385,420 for 12 allowed unsecured claims:

      Claimant                 Claim No.   Debtor    Amount Paid
      --------                 ---------   ------    -----------
      NEGT                      689        Gas       $49,103,853
      Keyspan Gas East Corp.    54         Gas           334,467
      APB Financial, LLC        110        Gas             3,997
      McDermott, Will & Emery   357        Holdings        1,038
      Reuters                   S000007    Holdings          581
      Direct TV                 S000026    Holdings        1,038
      DTN                       S000002    Holdings        1,834
      Texas Eastern
         Transmission Corp.     381        Power          54,425
      Madison Windpower, LLC    1002       Power          15,006
      Entergy Mississippi Inc.  730        Power           1,263
      Kase & Company            726        Power             420
      Citibank NA               322        Power       1,100,000

Aside from MAEM's Claim No. 146B and NEGT's Claim No. 689, the
ET Debtors resolved two additional disputed claims:

                                                          Amount
      Claimant                  Claim No.   Debtor        Allowed
      --------                  ---------   ------        -------
      Pacific Gas                337        ET Gas              0
      GE Capital Corp.           493        ET Power            0     

About 43 disputed claims totaling $969,835,529 remain unresolved.

The ET Debtors made no distributions for administrative claims
and priority claims during the Reporting Period.

As of May 31, 2006, the Plan Administrator maintained a
$7,667,000 reserve for secured claims and a $2,807,610,837
reserve for unsecured claims.

                      About National Energy

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (nka National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 63; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NETWORK EQUIPMENT: Posts $3.7MM Net Loss in 2007 First Fiscal Qtr.
------------------------------------------------------------------
Telecommunications equipment maker Network Equipment Technologies,
Inc., reported its results for the three months ended June 30,
2006, for the first quarter of fiscal 2007.

Total revenue was $17.4 million, up from $13.4 million in the
prior quarter and down from $18.4 million in the same period of
the prior year.  Product revenue was $14.8 million, up from
$10.2 million in the prior quarter and up from $14.7 million in
the same period of the prior year.

Net loss for the quarter was $3.7 million compared with a net loss
of $10.2 million in the prior quarter and a net loss of
$5.1 million for the same period of the prior year.

Cash and investment balances at the end of the quarter were
$84.8 million, compared with $86.2 million at the end of the prior
quarter and $100.6 million, including $405,000 of long-term
restricted cash included in other assets, at the end of the first
quarter of the prior year.

"In the first quarter, our government business rebounded,
primarily due to new orders," president and chief executive
officer C. Nicholas Keating remarked.

"Government revenue was also aided by a $1.7 million milestone
payment on an existing contract.  We are making progress on our
new product initiatives, which we hope over the course of the next
year, will help stabilize our government business and also
revitalize our enterprise business.  While we are working on our
new product portfolio we are striving to maintain a strong cash
position.  Our cash balance at the end of the quarter declined
only $1.4 million as we continue to work through this transition
period."

"The new network exchange product we are jointly developing with
Bay Microsystems, providing high-speed SAN to WAN communications
and secure grid computing, continues to perform in lab trials, and
our other NX Series products are on track," Mr. Keating said.

"During this past quarter, we introduced the VX Series Universal
Voice Exchange, a next-generation solution for delivering
integrated, secure lower cost VoIP and mobility to government and
enterprise customers.  Based on our core voice technology, the VX
Series offers a comprehensive VoIP solution with intelligent
switching functionality and interoperability with existing
telecommunications and data network infrastructure.

Additional advances in the VX Series included:

   -- The NET VX400 Tactical Voice Exchange, a deployment of
      NET's Voice Exchange VoIP software platform on DTECH
      LABS' mobile VoIP hardware platform.

   -- The VX Security Accelerator Module, the industry's
      first wire-speed, full-capacity solution using the secure
      real-time transport protocol to provide military-grade
      encryption."

"During the quarter, we established additional reseller agreements
including Nanotel, a network integration services provider for
applications requiring VoIP telephony, and Aspect Solutions, a
data security and IT solutions firm targeting the health care
industry.  These relationships are early examples of our
partnership distribution strategy," Mr. Keating continued

Network Equipment Technologies, Inc. (NYSE:NWK) --
http://www.net.com/-- provides networking equipment that enables  
its customers to adapt to a broadband future.  An architect of the
networking industry, N.E.T. has been supplying service providers,
governments and enterprises around the world with networking
technology for more than 20 years.

                           *     *     *

Network Equipment Technologies, Inc.'s subordinated debt carries
Moody's Investors Service's B2 rating.


NEWMARKET CORP: Earns $20.4 Million in Second Quarter of 2006
-------------------------------------------------------------
NewMarket Corporation reported its results for the second quarter
ended June 30, 2006.

Earnings for the second quarter 2006, excluding special items,
were $15.5 million, a significant improvement over earnings on
this same basis for second quarter last year of $10.6 million.
Including special items, net income for the second quarter of this
year was $20.4 million compared with net income for the second
quarter last year of $13.1 million.

For the first six months of 2006, earnings excluding special items
also improved significantly and amounted to $29.2 million.  This
compares with earnings on this same basis for the first six months
last year of $15.3 million.  Including special items, net income
for the first six months of 2006 was $34.1 million, compared with
net income for the same period last year of $17.8 million.

The special items included in the second quarter and first half of
2006 included a gain on a tax settlement of $2.9 million, as well
as a gain on the sale of property of $2.0 million.  The special
item in second quarter and first half of last year was a
$2.5 million benefit of an insurance settlement.  

The increase in earnings for the second quarter and first six
months of this year over the same periods last year reflects
significant improvement in the petroleum additives segment
results.

At June 30, 2006, the Company's balance sheet showed $722.394
million in total assets, $422.672 million in total liabilities,
and $241.245 million in total stockholders' equity.

For the second quarter of this year, petroleum additives net sales
increased to $325 million, an improvement of 21% over net sales of
$269 million for the second quarter last year.

For the first six months of this year, petroleum additives sales
were $624.5 million, up 23% over net sales for the same period
last year of $506.2 million.  Volumes shipped in the first half of
2006 improved five percent over the same period last year.
Petroleum additives operating profit for the second quarter of
this year improved to $27.1 million, an increase of 65% over
operating profit for the same period last year of $16.4 million.

For the first half of 2006, petroleum additives operating profit
reached $52.8 million, an improvement of 106% over results for the
first half of last year of $25.6 million.  All of the Company's
major product lines had improved profits in the first half of
2006.

The growth in petroleum additives operating profit for the first
half of 2006 includes the benefit of higher volumes shipped as
well as a favorable sales mix of higher margin products.  The
Company also made progress on restoring margins by increasing
prices and introducing more cost effective products.  The improved
results further reflect the benefit of the close partnership of
its petroleum additives customers and its technical, marketing,
sales, and product supply personnel.

Tetraethyl lead (TEL) operating profit for the second quarter and
six months of this year amounted to $2.3 and $2.5 million,
respectively.  As expected, the results were lower than TEL profit
from operations for the second quarter and first half of 2005 of
$5.5 and $9.7 million, respectively.  The lower profit in the 2006
periods reflects the expected and continuing decline in shipments
of this product.

"We are pleased with the continuing improvement in our petroleum
additives business.  This business is experiencing increased raw
material and energy costs and remains a highly competitive
marketplace.  We remain confident in our team and their ability to
lead us through this on-going condition," Thomas E. Gottwald,
president and chief executive officer, said.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?ed7

NewMarket Corporation (NYSE:NEU) through its subsidiaries, Afton
Chemical Corporation and Ethyl Corporation, develops,
manufactures, blends, and delivers chemical additives that enhance
the performance of petroleum products.  From custom-formulated
chemical blends to market-general additive components, the
NewMarket family of companies provides the world with the
technology to make fuels burn cleaner, engines run smoother and
machines last longer.

                           *     *     *

As reported in the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service upgraded the corporate family rating of
NewMarket Corporation to Ba3 from B1, its senior secured
debt rating to Ba2 from Ba3, and its unsecured debt rating to B1
from B2.  Moody's said the rating outlook is stable.

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services raised its ratings on NewMarket
Corp., including its corporate credit rating to 'BB' from 'BB-'.  
S&P said the outlook is stable.


NORTHWEST AIRLINES: Taxes Tax Authorities Object to DIP Agreement
-----------------------------------------------------------------
Texas Tax Authorities ask the United States Bankruptcy Court for
the Southern District of New York to deny Northwest Airlines,
Inc., and its debtor-affiliates request to obtain secured
postpetition financing on a super-priority secured and priming
basis.

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.

Bexar County, Harris County/City of Houston, Houston ISD, and
Tarrant County, local government units in Texas, possess the
authority under the laws of the State to assess and collect ad
valorem taxes on real and personal property.

Elizabeth Weller, Esq., at Linebarger Goggan Blair & Sampson,
LLP, in Dallas, Texas, relates that The Texas Ad Valorem Tax
Authorities claims are for real and personal property taxes
incurred by the Debtors in the ordinary course of business on
January 1 of each year.  

The Tax Authorities' prepetition claims for unpaid delinquent
2005 taxes total over $200,000.  The Tax Authorities are in the
process of assessing postpetition administrative expense taxes
for the 2006 tax year which they expect will total at least as
much as the 2005 taxes.  The taxes are secured by first priority
liens pursuant to Texas Property Tax Code

Ms. Weller notes that:

   -- the Debtors' request to obtain secured postpetition
      financing on a super-priority secured and priming basis
      made no provision to adequately protect the Tax Authorities
      claims; and

   -- the imposition of the statutory tax liens may violate the
      proposed agreements.

Ms. Weller says that the Debtors' representatives have not
contacted the Tax Authorities to ascertain their position.  "The
Texas Ad Valorem Tax Authorities do not consent to the imposition
of liens which would prime their pre- or postpetition tax liens."

The Tax Authorities ask the Court to deny the Debtors' request to
the extent they seek to prime or subordinate the liens or claims
of the Tax Authorities.

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


NORTHWEST AIRLINES: Wants to Assume Galileo Distribution Agreement
------------------------------------------------------------------
Northwest Airlines, Inc., seeks authority from the United States
Bankruptcy Court for the Southern District of New York to assume:

   (i) a Galileo International Global Airline Distribution
       Agreement between Northwest and Galileo International LLC
       and Galileo Nederland, B.V., as previously amended and as
       amended by a Preferred Fares Agreement dated July 12,
       2006;

  (ii) a Second Amended and Restated Airline Charter Associate
       Agreement between Northwest and Orbitz, LLC; and

(iii) a Supplier Link Agreement between Northwest and Orbitz, as
       amended by a First Amendment dated July 12, 2006.

Northwest Airlines also seeks the Court's permission to file the
GIGADA, the Charter Agreement, and the Supplier Link Agreement,
with their amendments, under seal pursuant to Section 107(b) of
the Bankruptcy Code and Rule 9018 of the Federal Rules of
Bankruptcy Procedure.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, relates that the GIGADA, the Charter Agreement, and
the Supplier Link Agreement are all important components in the
Debtors' distribution system that enable them to widen the
distribution of their products and services to customers.

                      The GIGADA and PFAA

On December 16, 1993, Northwest, entered into the GIGADA under
which Galileo International LLC and Galileo Nederland, B.V.,
agreed to distribute Northwest Airlines' products and services
through their computerized reservation system.

After the Petition Date, Northwest and the Galileo parties
negotiated the terms of a Preferred Fares Agreement, which will
amend the GIGADA beginning August 1, 2006, for a five-year term.  
The effectiveness of the PFA is conditioned upon approval by the
Court of the assumption of the GIGADA along with the PFA.

Pursuant to the PFA, Northwest and the Galileo parties agreed,
among other things, to:

   -- renegotiate the CRS booking fees on terms beneficial to
      Northwest's estate; and

   -- grant ticketing authority to Trip Network, Inc., doing
      business as CheapTickets.com, in accordance with their
      agreed terms and conditions.

In connection with the assumption of the GIGADA and the PFA, the
parties agree that:

    * the Galileo parties will have an allowed unsecured claim
      for $3,566,884 for prepetition amounts due under the
      GIGADA; and

    * any "cure" obligations Northwest may have to the Galileo
      parties in connection with Northwest's prepetition defaults
      under the GIGADA are deemed satisfied.

      The Charter Agreement and Supplier Link Agreement

On December 19, 2003, Northwest and Orbitz entered into the
Charter Agreement, pursuant to which:

   -- Northwest will provide to Orbitz information regarding
      air travel information; and

   -- Orbitz will display that information on the Orbitz Web site
      and to pay Northwest a percentage of certain amounts earned
      by Orbitz.

On January 30, 2004, Northwest and Orbitz entered into the
Supplier Link Agreement, pursuant to which Orbitz provided
certain communications and computer related services to Northwest
Airlines in connection with the sale of Northwest' products and
services, including the booking and ticketing of tickets through
the Orbitz Web site, http://www.orbitz.com/

The Supplier Link Agreement provides for the utilization of
technology that bypasses the CRS entirely, thereby eliminating a
significant CRS cost to Northwest Airlines.

Northwest and Orbitz negotiated the terms of the Second Amendment
to the Charter Agreement, which will amend the Charter Agreement
effective July 12, 2006.  Under the Amendment, Northwest agrees
not to exercise its right to terminate the Charter Agreement on
30 days prior written notice to Orbitz for at least five years
following the amendment's effective date.

Pursuant to the amendment to the Supplier Link Agreement,
effective July 12, 2006, Northwest will not exercise its right to
terminate the Agreement upon prior written notice to Orbitz for
at least five years following the amendment's effective date.

The effectiveness of the amendments to the Charter Agreement and
the Supplier Link Agreement is conditioned upon Court approval of
the assumption of the Agreements, as amended.

Northwest and Orbitz further agree that in connection with the
assumption of the Orbitz Agreements:

   -- Orbitz will have an allowed general unsecured claim for
      $575,719 for prepetition amounts due under the Orbitz
      Agreements; and

   -- any "cure" obligations Northwest may have to Orbitz in
      connection with Northwest's prepetition defaults under the
      Orbitz Agreements are deemed satisfied.

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


NRG ENERGY: Earns $203 Million in Second Quarter 2006
-----------------------------------------------------
NRG Energy, Inc. reported second quarter 2006 operating income of
$416 million versus $43 million for the second quarter of 2005.
Cash flow from operations was $238 million, including a
$42 million reduction in the amount of cash collateral posted in
support of trading operations, compared to $27 million during the
same period last year which included a collateral outflow of
$179 million.

For the six months ended June 30, 2006, operating income was
$626 million versus $90 million for the same period last year.
Cash flow from operations year to date was $604 million for 2006,
an increase of $513 million over 2005.

Net income for the three months ended June 30, 2006, was
$203 million compared to a net income of $24 million for the same
period in 2005.  For the six months ended June 30, the Company
reported net income of $229 million compared to a $47 million net
income for the same period last year.

Net income in 2006 included $105 million in after tax refinancing
expenses incurred as part of the first quarter closing of the
Texas Genco acquisition, partially offset by $49 million in after-
tax one-time gains related to the resolution of disputes and
litigation.  The quarter-on-quarter and year-to-date operating
income increases largely reflect the February 2, 2006 acquisition
of Texas Genco (now known as NRG Texas).

Also contributing to the improved second quarter performance were
plant operating rate improvements at five of the six classic NRG
baseload coal plants and higher New York capacity prices versus
the same period last year.  These improvements were partially
offset by increased general and administrative expenses associated
with the NRG Texas integration and Mirant-related expenses.  The
year-to-date results benefited from $67 million in surplus
emissions allowance sales and $30 million in improved South
Central margins achieved primarily through higher plant operating
rates and increased merchant sales.  Offsetting these increases
were $69 million in lower Northeast margins due primarily to the
unseasonably mild weather in the first quarter, higher operations
and maintenance expenses due to increased major maintenance, and
higher general and administrative expenses.

"As we informed the market during the Texas Genco acquisition
financing, we expected cash generation from both our Texas
business and the classic NRG portfolio to pay immediate benefits
in terms of a return to our shareholders," said David Crane, NRG's
President and Chief Executive Officer.  "Now, with all aspects of
our business performing at higher levels as a result of the
continued success of the FORNRG program and the integration of NRG
Texas almost complete, we are in a position to fulfill our promise
with a $750 million capital allocation program."

                    Share Repurchase Program

The Company disclosed a $750 million share repurchase program
which, due to the restrictions imposed by our loan covenants, will
be implemented in two phases.

Phase One is a $500 million common share repurchase program which
the Company intends to commence immediately and complete over the
course of 2006.  In addition, the sale of the Australian business
is expected to provide approximately $400 million in net cash
proceeds that NRG intends to use to pay down its Term B loan in
the first quarter of 2007.  Consolidated project level debt
associated with Australia is $177 million, bringing total expected
debt reduction to $577 million.

Phase Two of the share repurchase plan-which will be initiated
after the expected step up in the Company's restricted payment
capacity at the end of the first quarter 2007-is an additional
$250 million common share buyback.  The Company reserves the
flexibility-based on market conditions at the time-to reallocate
all or a portion of Phase Two to the initiation of a common share
dividend.

"The capital allocation program that we are announcing today has
been carefully sized and structured to return significant capital
to shareholders in the near term, reduce leverage at the corporate
level, and retain financial flexibility to support the ongoing
fleet redevelopment initiative," said Robert Flexon, NRG's
Executive Vice President and Chief Financial Officer.  "By
focusing on a large buyback in the near term, we expect to be able
to take maximum advantage of the significant undervaluation of our
equity," added Flexon.

To execute the first phase of the share repurchase plan, within
the limitations contained in the Company's credit agreement and
bond indenture, the Company will form two wholly owned
subsidiaries to hold the repurchased shares. The initial
capitalization of the subsidiaries includes $166 million in cash
from the NRG parent.  Additionally, the subsidiaries will enter
into non-recourse debt and preferred purchase agreements with
units of Credit Suisse for an incremental $334 million-funded
through $250 million in debt and $84 million of preferred equity.
Neither the debt nor the preferred will be recourse to NRG. The
shares, which will be repurchased between now and year end, will
serve as collateral for the debt.  Periodic funding will be drawn
pro rata from the subsidiary's $166 million in cash received from
the parent and the $334 million in debt and preferred financings
from Credit Suisse.  The difference between the $334 million of
facilities and the $400 million of maturities reflects accrued
interest and dividends to be paid at maturity.  Credit Suisse will
retain the economic benefit of share price appreciation in excess
of a 20 percent compound annual growth rate.

                      About NRG Energy

NRG Energy, Inc. (NYSE: NRG) -- http://www.nrgenergy.com/--  
presently owns and operates a diverse portfolio of power-
generating facilities, primarily in Texas and the Northeast, South
Central and Western regions of the United States.  Its operations
include baseload, intermediate, peaking, and cogeneration
facilities, thermal energy production and energy resource recovery
facilities.  NRG also has ownership interests in generating
facilities in Australia and Germany.


NRG ENERGY: Fitch Upgrades Rating on Senior Notes to B+
-------------------------------------------------------
Fitch Ratings has upgraded the rating of NRG Energy's senior notes
to 'B+' from 'B' and affirmed the company's issuer default rating
and all other instrument ratings.  The Rating Outlook is Stable.

The upgrade of the senior notes is in no way connected to the
recently announced share repurchase.  Rather, the upgrade of the
rating of the company's senior notes reflects increased expected
recovery for senior notes holder should the company default on its
debt.  The expectation of improved recoveries is driven primarily
by Fitch's expectation of continued high forward natural gas
prices.  While near term gas prices have declined significantly
from the very high prices prevailing following Hurricane Katrina,
the prices several years out have increased from those prevailing
earlier this year.  Forward gas prices are key inputs into Fitch's
wholesale power forecast which is used to derive valuations for
the recovery rating process.  Accordingly, the expectation of
higher gas prices in the future have resulted in improved recovery
prospects for the senior notes.

On Aug. 1, 2006, NRG announced a share repurchase program pursuant
to which the company expects to repurchase up to $750 million of
the company's stock.  Phase I of the program entails the
repurchase of $500 million of stock.  The repurchase will be
effected through two newly formed subsidiaries.  NRG will
contribute $166 million into the new subsidiaries and they will
raise non-recourse debt and preferred stock totaling $334 million.
The total proceeds of $500 million will be used to execute the
stock repurchase.

Given that the initial $166 million contribution to the new
subsidiaries is a permitted payment pursuant to the restricted
payments provisions under the company's secured credit facility
and unsecured notes, and given the non-recourse nature of the
newly raised financing, Fitch views the proposed repurchase to
have no impact of the company's credit ratings.  Fitch stresses
that NRG has the option, but no obligation to support in any way
the debt and preferred stock incurred by the newly formed
subsidiaries.  Should the company have the capacity under its
restricted payments tests and the prevailing stock price be
attractive, NRG can make the necessary contributions to retire the
outside financing. Should this not be the case, the shares held by
the subsidiaries will be liquidated to retire the debt and
preferred stock.

Fitch stresses that it does not view the new subsidiary structure
as a credit enhancing structure.  Rather the timing of the upgrade
of the senior notes is coincidental to the announcement of the
repurchase and reflects only the periodic review Fitch conducts on
all the credits followed by Fitch.

NRG owns and operates a diverse portfolio of power-generating
facilities, primarily in Texas and the Northeast, South Central
and Western regions of the United States.  Its operations include
baseload, intermediate, peaking, and cogeneration facilities,
thermal energy production and energy resource recovery facilities.
NRG also has ownership interests in generating facilities in
Australia and Germany.

Fitch upgrades this rating with a Stable Outlook:

    -- Senior notes to 'B+'/'RR3' from 'B'/'RR4'.

Fitch affirms these ratings with a Stable Outlook:

    -- Senior secured term loan B at 'BB'/'RR1';
    -- Senior secured revolving credit facility at 'BB'/'RR1';
    -- Convertible preferred stock at 'CCC+'/'RR6';
    -- Issuer default rating at 'B'.


ORIUS CORP: Court OKs Field Jerger's Retention as Special Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Orius Corp. and its debtor-affiliates permission to employ
Field Jerger LLP as its special purpose litigation counsel.

The Debtor plans to file a complaint in the U.S. District Court
for the District of Oregon against Budget Boring LLC asserting
$84,000 in claims for recovery of property, breach of contract,
unjust enrichment, conversion and constructive trust.

Field Jerger will represent the Debtor as local Oregon counsel in
the Oregon Litigation.

Joseph A. Field, Esq., a Field Jerger partner, discloses that he
will charge $310 per hour for his services.  Other professionals
who will work for the Debtor will bill at an hourly rate ranging
from $235 to $260.

Mr. Field assures the Court that his firm is disinterested as that
term is defined in Section 101(14) of the Bankruptcy Code.

Mr. Field can be reached at:

        Joseph A. Field, Esq.,
        Field Jerger LLP
        610 SW Alder St., Ste. 910
        Portland, Oregon 97205
        Tel: (503) 228-9115

Headquartered in Barrington, Illinois, Orius Corp. --
http://www.oriuscorp.com/-- is a nationwide provider of     
construction, deployment and maintenance services to customers
operating within the telecommunications; broadband; gas and
electric utilities; and government industries.  The Company and
its affiliates filed for chapter 11 protection on Dec. 12, 2005
(Bankr. N.D. Ill. Case No. 05-63876).  Aaron C. Smith, Esq., and
Folarin S. Dosunmu, Esq., at Lord, Bissell & Brook LLP represent
the Debtors in their restructuring efforts.  Aaron L. Hammer,
Esq., Joji Takada, Esq., Thomas R. Fawkes, Esq., at Freeborn &
Peters LLP, represent the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they listed estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.


OWENS CORNING: Wants $32-Mil. Modulo(TM)/ParMur Purchase Approved
-----------------------------------------------------------------
Owens Corning has signed a purchase agreement to acquire The
Modulo(TM)/ParMur Group for $32 million (EUR25.5 million), as
reported in the Troubled Company Reporter on July 31, 2006.

Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve a share purchase and
warranty agreement dated July 17, 2006, between Owens Corning, as
purchaser, and Modalis Holdings, Einar Hafstad and Christian
Roggeman, as sellers.

Owens Corning will acquire the issued and outstanding shares of
ParMur SRL, Modulo USA L.L.X., Modalis S.A.  The Target Companies
are part of a group of companies that specialize in the design,
manufacture and marketing of various types of manufactured stone
veneer in France and Romania, as well as in other foreign
countries, principally Italy, Germany, Spain, Scandinavia and
Japan.

The purchase of the Target Companies is in line with the Debtors'
strategic plans to expand the geographic reach of their cultured
stone business to become the market share leader, not only in the
United States and Canada, but also in Europe and the Asia Pacific
market by 2010, MaryJo Bellew, Esq., at Saul Ewing LLP, in
Wilmington, Delaware, says.

The Debtors provide a summary of the Group's corporate structure:

A. Modalis Holdings, a holding company organized under the
    laws of the state of Delaware, holds 95% of the shares of
    Modalis S.A.  Modalis Holdings is wholly owned by Valhall
    Investment Management LLC, which is in turn wholly owned by
    Einar Hafstad.

B. Modalis S.A., a holding company organized under the laws of
    France, holds 100% of the shares of Modulo S.A.  Mr. Roggeman
    owns 5% of Modalis S.A.

C. Modulo S.A., an operating company organized under the laws of
    France, carries out production, marketing and distribution in
    France and other countries.

D. ParMur SRL, an operating company organized under the laws of
    Romania, carries out manufacturing and sales activities in
    Romania and other foreign countries.  Mr. Hafstad directly
    owns 95% of ParMur SRL, while the balance is owned by Mr.
    Roggeman.

E. Modulo USA L.L.C. is organized under the laws of the state of
    Delaware.  It has offices located in Maple Grove, Minnesota,
    and distributes the Group's products within North and South
    America.  Modulo USA L.L.C. is wholly owned by Mr. Hafstad.

F. Mr. Hafstad is the president and chairman of the Board of
    Directors of Modalis S.A. and Modulo S.A., and is the
    president of Modulo USA L.L.C.  Mr. Hafstad controls 95% of
    ParMur SRL and Modalis S.A., and 100% of the other companies
    in the Group.

G. Mr. Roggeman is the chief operating officer of Modulo S.A. and
    holds a 5% interest in ParMur SRL and a 5% interest in Modalis
    S.A.

In sum, Modalis Holdings, Messrs. Hafstad and Roggeman own or
control 100% of ParMur SRL, Modulo USA L.L.C. and Modalis S.A.

The principal terms of the Purchase Agreement are:

    a. Owens Corning or its designee will pay EUR25,500,000 for
       the Shares, subject to certain increases or decreases,
       which will not exceed EUR4,700,000, to the extent there is
       an excess or shortfall between the "closing net assets" and
       the "target net assets" as of the closing date.

       If Modulo S.A. completes its acquisition of the full title
       to a building in Bray-sur-Seine, France, prior to closing,
       then, at closing, Owens Corning will:

          * pay EUR20,800,000 directly to the Sellers; and

          * deposit EUR4,700,000 into an escrow account to be
            reserved as a holdback to secure any shortfall in the
            "target net assets" and any claims for indemnification
            under the Share Purchase Agreement.

       If the Bray Acquisition is not completed prior to closing,
       then, at closing, Owens Corning will:

          * pay EUR20,000,000 directly to the Sellers; and

          * deposit the Holdback Amount into an escrow account,
            plus an additional EUR800,000 to secure payment of the
            estimated loss if the Bray Acquisition is not
            completed before the first anniversary of the closing
            date .

    b. The Sellers are bound by certain non-competition provisions
       for a period of three years after the closing and by
       certain confidentiality provisions.

    c. Prior to closing, Einar Hafstad will transfer:

          * his "community trademark rights" in the trademarks
            "ParMur" and "Madrague" to ParMur SRL;

          * his "community trademark rights" and French trademark
            rights in the trademark "Cote Mur" to ParMur SRL; and

          * any other intellectual property rights used by the
            Target Companies or Modulo S.A., or related to the
            business of these companies, to the relevant company.

    d. For a period of six months from the closing date, Einar
       Hafstad and Christelle Hafstad will make themselves
       available to the Target Companies and Modulo S.A., for up
       to 10 hours per month, to answer questions and provide
       information in connection with various accounting
       procedures.

    e. On or before the closing date, the Sellers will:

          * repay or cause the repayment to each of the Target
            Companies and Modulo S.A. any debt owed to that
            company by the Sellers or any related person,
            including interest;

          * terminate or cause the termination of all contracts
            between any Seller or any Related Person, on the one
            hand, and any of the Target Companies or Modulo S.A.,
            on the other hand, without any penalty or liability to
            any of the companies, with certain exceptions; and

          * obtain the full release of all past, present or future
            guarantor obligations of any of the Target Companies
            or Modulo S.A. that benefit any Seller or Related
            Person.

    f. The Sellers will take, or cause Modulo S.A. to take, all
       actions required to legally liquidate Modulo Dekorative
       Steine GmbH, a subsidiary of Modulo S.A., prior to closing,
       without any liability to the Group.

    g. The Parties' obligations to be performed on the closing
       date are conditioned on, among other things:

          * the entry by the Bankruptcy Court of a final order
            approving the Share Purchase Agreement; and

          * expiration or termination of the waiting period under
            the Merger Notification, as required under German law,
            or the transaction having been approved by the
            relevant governmental authority.

    h. Owens Corning's obligation to consummate the transactions
       contemplated by the Share Purchase Agreement is subject to
       fulfillment of these conditions:

          * Owens Corning engaging in continued customer due
            diligence;

          * each Seller, each Target Company and Modulo S.A.
            performing each covenant or condition set forth in the
            Share Purchase Agreement; and

          * Mr. Roggeman and Mihai Gavris, key employees of the
            Target Companies, each entering into a new, indefinite
            term employment contract on terms reasonably
            acceptable to Owens Corning.

    i. Subject to certain conditions, the Sellers will indemnify
       Owens Corning from any damages suffered by the Target
       Companies, Modulo S.A. or Owens Corning as a result of any:

          * inaccuracy or breach of any representations and
            warranties in the Share Purchase Agreement;

          * breach of the covenants set forth in the Share
            Purchase Agreement; or

          * tax liability relating to any period closed on or
            prior to December 31, 2005, and any liability for
            environmental matters related to events occurring or
            circumstances existing on or prior to the closing
            date.

       Owens Corning will indemnify the Sellers from any damages
       suffered by the Sellers as a result of any breach of the
       representations and warranties set forth in the Share
       Purchase Agreement.

    j. The Share Purchase Agreement is to be governed by French
       law.  Any dispute that arises in connection with the Share
       Purchase Agreement will be finally settled by an arbitral
       panel as described in the Share Purchase Agreement.

A full-text copy of the Share Purchase Agreement is available for
free at http://ResearchArchives.com/t/s?ee4

Owens Corning will deposit EUR4,700,000 of the Purchase Price,
designated as the "Holdback Amount", into an escrow account on
the closing date to secure the payment by the Sellers of any
amounts that become due under the Share Purchase Agreement, with:

    -- the EUR1,000,000 designated as the "closing adjustment
       holdback" and will secure any shortfall between the "target
       net assets" and the "closing net assets"; and

    -- the EUR3,700,000 to secure indemnification payments due to
       Owens Corning in accordance with the Share Purchase
       Agreement.

The Escrow Agreement generally contemplates that the escrowed
funds will be used to satisfy claims by either Owens Corning or
the Sellers relating to the final determination of the Purchase
Price, or claims by Owens Coming relating to certain
indemnification claims.

The EUR1,000,000 will be released from the escrow agent upon the
final determination of the Purchase Price, which will be
approximately 120 days after closing.  Eighteen months after the
date of the Escrow Agreement, the escrow agent is to release to
the Sellers' agent EUR2,775,000 of the escrowed funds, less any
previous payment or amounts in dispute.  The escrow agent is to
release the remaining balance of the escrowed funds to the
Sellers' agent 30 months after the date of closing, subject to
certain conditions.

In addition, if the Bray Acquisition is not completed prior to
closing, the Bray Holdback also will be deposited into the escrow
account at closing.  In that circumstance, the Escrow Agreement
will be modified prior to closing to reflect the Bray Holdback in
this manner:

    -- If the Bray Acquisition is completed by the first
       anniversary of the closing date, the escrow agent will
       release the Bray Holdback, plus interest, to the Sellers
       within five business days of the Bray Acquisition.

    -- If the Bray Acquisition is not completed by the first
       anniversary of the closing date, the escrow agent will
       release the Bray Holdback to Owens Corning within five
       business days of the first anniversary of the closing date,
       provided that Modulo S.A. assigns any rights or claims it
       has to Einar Hafstad, subject to the consent of the lessor,
       for a consideration equal to the Bray Holdback.

The Escrow Agreement will also be governed by the laws of France.

                       About Modulo/ParMur

The Modulo/ParMur Group, based in Bray-sur-Seine, France, designs,
manufactures and markets manufactured stone veneer wall and floor
products under the Modulo and ParMur brands.  Modulo and ParMur
are plaster-based interior wall and cement-based exterior wall-
cladding products, which are distributed primarily through the Do-
It-Yourself market in Europe.

In addition to Bray-sur-Seine, the company operates two additional
manufacturing sites in Forbach, France, and Turda, Romania.
Modulo/ParMur has nearly 150 employees.

                About Owens Corning Cultured Stone

Owens Corning Cultured Stone(R) -- http://www.culturedstone.com/-
- manufactures stone veneer products.  The business began making
replicas of natural stone in 1962 and today offers more than 20
textures, 80 colors and countless blended texture and color
options for interior and exterior applications.

                      About Owens Corning

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--   
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 136; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


OWENS CORNING: Gets Prelim. Okay on MiraVista Claims Settlement
---------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware grants preliminary approval to the
settlement agreement resolving claims asserted by John Stratton,
Robert Lopez and Anne Rudin, and the claims asserted in the
lawsuit entitled McIlhargie, et al. v. Molded Fiber Glass Cos., et
al.

                         Settlement Terms

The Settlement Agreement calls for the creation of an $11,000,000
Settlement Fund against which the Settlement Class can make
claims based on a Plan of Distribution.  Owens Corning will
contribute the $11,000,000 in cash and its complete inventory of
MiraVista Tiles to the Settlement Fund.

The cash payment will cover the notice costs and administrative
costs associated with the Settlement, any attorneys' fees and
monetary awards to the Class Members.

The inventory of MiraVista Tiles will be available as an
alternative to, or a supplement to, a monetary award.  Class
Members may recover either for existing damage to their MiraVista
roof or for the costs of prior replacement of a MiraVista roof
due to damage.

In addition, the administrator of the claims process will
consider reimbursing Class Members for other damage to their
buildings that was caused by the MiraVista Tiles.  Upon receiving
notification that a claim has been allowed, a Class Member will
elect either a monetary or product award.

The amount of a meritorious claimant's monetary award will depend
on both the size of the MiraVista roof as well as the timing of
the claim.  After a one-year processing period, 75% of the cash
in the Settlement Fund will be disbursed on a pro rata basis to
each claimant with a valid claim.

After initial distribution, the Settlement Fund will continue to
accept claims until two years have elapsed, at which point the
remaining 25% will be disbursed.  All eligible claimants who
filed their claim in the second year of the fund will receive a
pro rata share, but the amount of their share will be no greater
than their share would have been had they filed their claim in
the first year of the fund.  To the extent that any cash remains
after the second distribution, the balance will be paid to all
eligible claimants on a pro rata basis.

In contrast to monetary awards, product awards will be disbursed
throughout the entire life of the Settlement Fund.  Claimants may
receive product awards beginning at the time that the Settlement
Fund begins accepting claims and continuing until there is no
inventory remaining.  Claimants who fail to file a claim within
the first two years of the fund may nonetheless file a claim for
a product award as long as supplies last.

A full-text copy of the redacted version of the Settlement
Agreement is available for free at:

               http://ResearchArchives.com/t/s?d29

Furthermore, the Court certifies:

    a. a settlement class of all owner of residential commercial
       property in the United States on which Owens Corning
       MiraVista roofing tiles, both shake and slate have been
       installed since January 1, 1995; and

    b. two sub-classes of the Settlement Class:

          1. The Prepetition Sub-Class comprising all members of
             the Settlement Class who purchased MiraVista Tiles
             before October 5, 2000, and their transferees and
             assigns; and

          2. The Postpetition Sub-Class comprising all members of
             the Settlement Class who purchased MiraVista Tiles on
             or after October 5, 2000, and their transferees and
             assigns.

Robert Lopez, John and Kathleen Stratton, and Anne Rudin will
represent the Prepetition Sub-Class.  Dewayne Hall and Allison
Morse Wilson will represent the Postpetition Sub-Class.

The Court appoints Birka-White Law Offices and Norton & Melnik as
the Settlement Class counsel.  Farella Braun + Martell LLP is
appointed Class Counsel for the Postpetition Sub-Class.

The Court further certifies these issues for class treatment:

    a. Whether MiraVista Tiles are unduly prone to excessive
       warping, lifting, cracking or breaking or are otherwise
       defective;

    b. Whether MiraVista Tiles are likely to deteriorate
       progressively over time resulting in damage to roof felt
       underlayment or other parts of the structure on which they
       have been installed;

    c. Whether MiraVista Tiles are negligently or defectively
       designed;

    d. Whether Owens Corning made express warranties to purchases
       of the MiraVista Tiles to which the tiles do not conform;

    e. Whether MiraVista Tiles breached the implied warranty of
       merchantability;

    f. Whether MiraVista Tiles met the reasonable expectations of
       consumers;

    g. Whether the benefits of the design of MiraVista Tiles
       outweigh the risks of the design;

    h. Whether MiraVista Tiles have caused current compensable
       damage to themselves or other property; and

    i. The amount of the damage, if any, suffered by the class.

The Court will convene a hearing on Jan. 23, 2007, at 1:30
p.m., to determine final approval of:

    a. the fairness, reasonableness and adequacy of the terms and
       condition of the Settlement Agreement;

    b. the proposed Plan of Distribution;

    c. an award of counsel's fees and reimbursement of expenses to
       Class Counsel; and

    d. an award to the Class Representatives.

The Court gives the Class Counsels until Nov. 10, 2006, to serve
an application for an award of attorneys' fees, costs and
disbursements, and the Class Representatives' award.

                      About Owens Corning

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--   
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 136; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PENN TREATY: Parent's 10-K Filing Delay Cues S&P's Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' counterparty
credit and financial strength ratings on Penn Treaty Network
America Insurance Co. on CreditWatch with negative implications
because the company's parent, Penn Treaty American Corp. (NYSE:
PTA; not rated) still has not released its year-end 2005 audited
financial results.

"The absence of the parent company's GAAP financial statements
prevents a full understanding of PTNA's financial condition, as
GAAP accounting for long-term care insurance is very different
from statutory accounting," explained standard & Poor's credit
Neal Freedman.  In addition, GAAP accounting treatment of the
company's reinsurance agreements with Imagine International
Reinsurance Ltd. is significantly different than its treatment
under statutory accounting.  Finally, the lack of audited
financial statements limits PTAC's financial flexibility and
access to the capital markets.  Nevertheless, Standard & Poor's
has reviewed PTNA's 2005 statutory financial results and believes
that they are consistent with the current rating.  (PTNA
constitutes more than 90% of PTA's consolidated premium revenue.)

The CreditWatch will be resolved upon filing and review of PTA's
10-K.  Until that time, Standard & Poor's will continue to monitor
and analyze PTNA's filed statutory financial statements and review
transactions necessary to understand the company's
creditworthiness.


PSS WORLD: Earns $11MM in 1st Fiscal Quarter Ended June 30, 2006
----------------------------------------------------------------
PSS World Medical, Inc., reported its results for the fiscal 2007
first quarter ended June 30, 2006.

Net sales for the three months ended June 30, 2006, were
$413.3 million, an increase of 6.8%, compared with net sales of
$387.1 million for the three months ended July 1, 2005.  

Net sales for the three months ended June 30, 2006, for the
Physician Business increased by 13.6%, while net sales for the
Elder Care Business decreased by 5.8%.

Income from operations for the three months ended June 30, 2006,
increased by 30.5% to $18.7 million compared with income from
operations for the three months ended July 1, 2005, of
$14.4 million.

Net income for the three months ended June 30, 2006, increased by
34.6% to $11.0 million compared with net income for the three
months ended July 1, 2005, of $8.1 million.

"We are on track for a good year delivering on our earnings goal
for fiscal year 2007 of $0.76 - $0.78 per diluted share.  Our
customer-solutions and marketing programs are creating solid,
above-market growth in all of our new and existing focus segments.
We continue to see momentum in the leveraging of our
infrastructure and growth in our global sourcing initiative,"
David A. Smith, president and chief executive officer, commented.

"Each of our business units reported profitable growth in the
first quarter, a solid start to achieving our objectives for
fiscal year 2007.  Operating cash flow in the first quarter was
negatively impacted by timing of inventory payables, but is
expected to rebound in our second quarter and through the
remainder of the fiscal year," David M. Bronson, executive vice
president and chief financial officer, commented.

PSS World Medical, Inc. (NASDAQ: PSSI) --
http://www.pssworldmedical.com/-- is a national distributor of  
medical products to physicians and elder care providers through
its two business units.  Since its inception in 1983, PSS has
become a leader in the two market segments that it serves with a
focused market approach to customer services, a consultative sales
force, strategic acquisitions, strong arrangements with product
manufacturers and a unique culture of performance.

                           *     *     *

PSS World Medical carries Standard & Poor's Ratings Services' 'BB-
' corporate credit rating.


REFCO INC: Chapter 7 Trustee Wants to Wind Down Refco Trading
-------------------------------------------------------------
Albert Togut, the Court-appointed Chapter 7 trustee for Refco,
LLC's estate, seeks the U.S. Bankruptcy Court for the Southern
District of New York's authority to complete a wind-down and
dissolution of Refco Trading Services, LLC's business operations
in accordance with Delaware laws.

Refco Trading was formed in 2003 when Refco, Inc., acquired
United Kingdom-based MacFutures, a day-trading business engaging
in commodity futures and options.

Refco Trading followed a similar model to MacFutures and became
Refco LLC's proprietary trading subsidiary.  Most Refco Trading
employees traded using accounts funded by Refco LLC, and only a
few workers had any customer accounts.

Like the Refco Trading proprietary accounts, any third-party
customer accounts were settled on a daily basis to the extent
that the business day would rarely, if ever, end with Refco
Trading having any open trade positions, Scott E. Ratner, Esq.,
at Togut, Segal & Segal LLP, in New York, relates.

Before the Petition Date, Refco Trading had over 100 employees
and business operations in Montreal, Canada; Chicago, Illinois;
and Miami, Florida.  Refco Trading hired employees, trained them
using a proprietary training system, and provided an account with
which to trade. Most of the employees were paid a flat salary and
traded on an account that was settled on a daily basis.

The traders also received profit percentages of successful trades
as additional remuneration.  Consistent with their Acquisition
Agreement, Man Financial, Inc., has hired most or all of Refco
Trading's former employees.

Refco Trading ceased all trading operations after the Petition
Date.

Refco Trading currently holds approximately $1,600,000 in cash.  
The company's liabilities are uncertain, but Mr. Togut believes
that there may be intercompany obligations.  Refco Trading
participated in an intercompany cash management system that paid
the company's obligations to outside sources and repaid the
obligations with intercompany receivables.  Mr. Togut also
believes that there may be liabilities to Canadian taxing
authorities.

Specifically, Mr. Togut proposes to direct certain actions as are
necessary and appropriate to Refco Trading's dissolution and
wind-down, including:

   (a) preparation of accounting reports, statements of receipts
       and disbursements and income statements;

   (b) preparation, signing, and filing of any tax returns in
       the United States or Canada;

   (c) appearances before any governmental authority as may be
       necessary to effectuate a legal wind-down;

   (d) adjudication and resolution of any claims asserted
       against Refco Trading and authorization for payment of
       any allowed claims from Refco Trading's assets to the
       extent required by law; and

   (e) performing any other related tasks as may be necessary to
       effectuate a proper and legal wind-down and dissolution.

Mr. Togut also seeks to pay, without further Court order, all
necessary costs and expenses incurred in connection with the
wind-down, provided that any payments will be made from Refco
Trading's assets, and not those of Refco LLC's estate.

Furthermore, Mr. Togut asks Judge Drain for qualified immunity
from personal liability for his actions in furtherance of Refco
Trading's wind-down.

According to Mr. Togut, Refco LLC's ownership interest in Refco
Trading is an asset of its Chapter 7 estate.  To the extent that
Refco Trading is solvent, its remaining assets will inure to
Refco LLC's benefit.  Therefore, Refco Trading's wind-down and
dissolution pursuant to Delaware laws is consistent with Mr.
Togut's duty to "collect and reduce to money the property of the
estate" under Section 704(a)(1) of the Bankruptcy Code.

Considering that the scope of Refco Trading's assets and
liabilities are unknown, Mr. Togut insists that he must wind down
Refco Trading to determine whether there are any residual assets
that will flow to Refco LLC's estate.

                       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: Wants Stipulation Resolving Intercompany Debts Approved
------------------------------------------------------------------
Refco, Inc., and its debtor-affiliates, ask the U.S. Bankruptcy
Court for the Southern District of New York to approve a
Stipulation entered into by the Debtors, Refco Securities, LLC,
Refco Capital Markets, Ltd., Marc Kirschner, the Court-appointed
trustee for RCM, and the Official Committee of Unsecured
Creditors, pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure.

Refco Securities, is a non-debtor subsidiary of Refco Regulated
Companies LLC and a registered broker-dealer.  According to its
books and records, RSL -- which is currently undergoing an orderly
out-of-court wind-down -- owes Refco Capital LLC (RCC) an
aggregate of $127,459,910, on account of a series of transactions
between them that occurred before the Petition Date.

Mr. Kirschner asserts that RCM has an ownership interest in the
RCC Debt and that RCM has additional claims against Refco Capital.  
Refco Capital contests the RCM Trustee's assertions.

The Official Committee of Unsecured Creditors has stated that it
is prepared to take action in the Court to obtain the right to
act on Refco Capital's behalf and to collect the RCC Debt.

To avert potential litigation, Refco Capital is willing to accept
full payment of the RCC Debt over time.

           RSL Segregated Funds and Sberbank Judgment

As of May 31, 2006, RSL maintained approximately $7,000,000 in
segregated funds under Rule 15c3-3 of the Securities Exchange Act
of 1934 on account of claims or potential claims of unaffiliated
third-party customers.

As an RSL customer, RCM asserts that it is owed not less than
$42,900,000 -- RCM-RSL Claim -- from RSL, which currently
maintains approximately $45,900,000 in additional segregated
funds on account of claims or potential claims asserted by RCM
against RSL.

The SEC has informally requested that RSL segregate funds for
protection of unknown RSL customers.  RSL does not currently have
sufficient available liquid assets to satisfy the non-customer
claims against it and to segregate additional funds requested by
the SEC.

Moreover, the Savings Bank of the Russian Federation has a
judgment against RSL for $123,733,733, plus interest from June 2,
2006, and costs.  RSL and Sberbank have entered into a separate
agreement under which RSL will pay the Sberbank Judgment, but on
a basis that is pari passu with the RCC Debt.

          Intercompany Obligations Between RSL and RCM

RSL asserts that it is owed approximately $92,000,000 -- RSL-RCM
Claim -- from RCM, but that amount remains subject to further
review.

RSL has asked the RCM Trustee to consent to a set-off of
intercompany debts between RSL and RCM, including the debt
related to the RCM-Related Segregated Funds.

However, the RCM Trustee has not consented to a set-off of the
RCM-RSL Claim, but has agreed to other accommodations to permit
the pari passu payment of the RCC Debt with the Sberbank
Judgment, on terms and conditions similar to that agreed to by
Sberbank.

                      Parties Stipulate

Recognizing that RSL lacks current liquidity sufficient to
satisfy all of the outstanding claims against it and to meet all
segregation requirements and requests, and to avoid possible
litigation costs, RSL, Refco Capital, the RCM Trustee, and the
Creditors Committee entered into a stipulation dated July 20,
2006.  The parties agree that:

   (1) RSL will pay the $127,459,910 RCC Debt through pro rata
       distributions to Refco Capital based on available cash
       amount within two business days after any date on which
       available cash exceeds $2,000,000.  The Stipulation
       recognizes RSL's obligation to segregate funds for the
       customers' benefit and accounts for RSL's obligation to
       pay Refco Capital over time.

   (2) In any event, RSL is unconditionally obligated to pay
       Refco Capital at least certain aggregate percentage
       amounts of the RCC Debt on or before these dates:

          * within two business days after the execution of the
            Stipulation, 80% of the RCC Debt equal to
            $101,967,928; and

          * by December 22, 2006, 100% of the RCC Debt, plus a
            4.98% interest accruing from and after April 30,
            2006, on a sum of the unpaid portion of the RCC
            Debt.

   (3) All payments made by RSL to Refco Capital are to be held
       in a separate segregated account designated by Refco
       Capital until the Stipulation becomes final and no longer
       subject to review.  At that time, 60% of any payments
       made from RSL to Refco Capital are to be held in a
       segregated account until disputes related to ownership of
       the RCC Debt have been determined by Court order.  Refco
       Capital will be free to use the remaining 40% of funds in
       the ordinary course of administering its estate.  All
       liens and encumbrances on the RCC Debt will attach to all
       payments made by RSL in respect of the RCC Debt.  This
       provision makes significant assets available to Refco
       Capital's estate, at the same time preserving disputes
       related to the ownership of the RCC Debt for a later
       date.

   (4) RCC and the Creditors Committee will forebear from taking
       any and all actions to obtain a judgment or collect on
       the RCC Debt unless and until approval of the Stipulation
       is denied by the Court or a defined event of default
       occurs under the Stipulation.

   (5) On the occurrence of a defined event of default:

          -- the entirety of the RCC Debt becomes immediately
             due and payable;

          -- Refco Capital and the Creditors Committee are
             entitled to seek a judgment and otherwise pursue
             collection on the RCC Debt against RSL's assets;

          -- certain provisions of the Stipulation terminate
             without further Court order; and

          -- Refco Capital and the Creditors Committee reserve
             all rights to enforce the entirety of the RCC Debt,
             and all rights reserved by any party under the
             Stipulation remain reserved.

   (6) RSL is prohibited from paying or reserving for or
       granting a lien on collateral to secure any RSL Creditor
       Claim or any other non-customer claims that may become
       known to RSL following July 20, 2006, unless RSL
       contemporaneously makes a pro rata payment or grant of
       collateral to Refco Capital on the RCC Debt, or unless
       Refco Capital consents in writing.  This provision
       protects Refco Capital if additional non-customers are
       asserted against RSL.

   (7) Pending further Court order, the RCM Trustee is not to
       seek payment of or from the RCM-Related Segregated Funds,
       which are to be placed in a separate escrow account
       bearing interest.  RSL, Refco Capital, and the RCM
       Trustee also reserve their rights with respect to
       entitlement to the RCM-Related Segregated Funds.
       In addition, RSL is not to offset the RCM-RSL Claim
       against the RSL-RCM claim.

   (8) If RSL's Third-Party Customer Claims exceed the amounts
       held as Third Party Segregated Funds, the Third-Party
       Segregated Claims are to be paid first from the Excess
       Customer Segregated Funds and second from the RCM-Related
       Segregated Funds.  To the extent that any Third-Party
       Customer Claims are paid from RCM-Related Segregated
       Funds, RCM's claim will be treated as a non-customer
       claim.

              Approval of Stipulation is Necessary

J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York, tells Judge Drain that the Stipulation
harmonizes the payments to be made to Refco Capital with those
made to Sberbank pursuant to a similar payment agreement.

Although RSL lacks currently available liquid assets sufficient
to meet SEC segregation requirements and to satisfy both
Sberbank's claim and the RCC Debt in full, Mr. Milmoe asserts
that the payment schedules in the Sberbank agreement and the
Stipulation facilitate immediate payment to the extent of RSL's
currently available liquid assets.

Mr. Milmoe also notes that the proposed agreement was negotiated
whereby the RCC Debt is to be satisfied in full by the end of
2006, and in the event of non-payment, Refco Capital's remedies
are preserved.  RCM's claims against RSL and Refco Capital are
fully preserved for future resolution and distribution.

In addition, Mr. Milmoe asserts, the Debtors' consent to the
authority of the Creditors Committee to bring any action
necessary to enforce the RCC Debt if there is an Event of Default
under the Stipulation is necessary and beneficial for the
efficient administration of Refco Capital's estate.

Mr. Milmoe explains that the Creditors Committee's advisors have
significant involvement in investigating Refco Capital's claims
against RSL and have played a key role in negotiating payment
terms under the Stipulation on Refco Capital's behalf.  Moreover,
Refco Capital and RSL, which are related companies, are
represented by the same counsel.  It would maximize efficiency
and expedience to authorize other professional to undertake
litigation on Refco Capital's behalf against RSL.

                       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).


REICHOLD INDUSTRIES: Moody's Rates $195 Million Sr. Notes at B2
---------------------------------------------------------------
Moody's assigned a B1 corporate family rating to Reichhold
Industries, Inc. and a B2 rating to its $195 million senior
unsecured notes due 2014.  The ratings were assigned in connection
with the upcoming issuance of the senior unsecured notes.  The
proceeds of the notes will be used to refinance $170 million of
existing debt due Sept. 15, 2008, and pay a dividend to the
private owners and transaction fees.  A stable outlook was also
assigned.

Ratings assigned:

Reichhold Industries, Inc.

   * Corporate family rating -- B1
   * $195 million of senior unsecured notes due 2014 -- B2

The ratings recognize Reichhold's recent low profitability
and lack of free cash flow generation in recent years, but
incorporate the expectation that the company will to continue to
improve its performance and generate financial metrics supportive
of its rating.  During 2004 and 2005, Reichhold did not generate
positive free cash flow and, despite improved profitability, also
failed to do so in the first quarter of 2006 as a result of
increases in working capital.

Additionally, the ratings reflect the cyclical nature of
Reichhold's business, exposure to volatile energy and raw material
prices, and significant environmental remediation obligations and
asbestos exposure.  Reichhold has established reserves of $84.9
million as of March 31, 2006, for estimated environmental
remediation costs, however potential environmental liabilities
estimated by consultants to the company could total $42 million to
$64 million in excess of amounts reserved in accordance with
generally accepted accounting principles, as disclosed in
Reichhold's offering memorandum for the notes.

As is often the case, actual environmental remediation costs may
increase over time as remediation efforts are conducted.

The ratings reflect the transition Reichhold has recently made
to profitability, the company's operational and geographic
diversity, stability of its customer base, strong market
positions, significant asset coverage and good liquidity.   
Reichhold operates from 18 production sites globally and more than
half of its revenues are sourced outside of the US. Many of its
top customers have been doing business with Reichhold for more
than 10 or 20 years.

The notching down from the corporate family rating of the rating
on the notes due 2014 reflect the fact that the notes will be
issued by a holding company, Reichhold Industries, Inc., and are
structurally subordinated to the debt at Reichhold's operating
subsidiaries.  Additionally, the operating company debt is
secured, while the new notes will be unsecured.

The stable outlook reflects Moody's expectation that Reichhold
will be able to continue to improve its profitability from the
prior year's levels and generate free cash flow that will be
applied towards debt reduction.  The short track record of
improved profitability at Reichhold limits the likelihood of an
upgrade in the corporate family rating in the near-term. Reichhold
would have to demonstrate over a significant time frame the
ability to maintain higher margins and generate meaningful free
cash flow before an upgrade would be considered.

The corporate family rating could come under pressure if Reichhold
were not able to continue to improve margins and cash flow metrics
to levels that would be supportive of its rating category or if
significant additional dividends were paid.   Additionally, any
significant increase in environmental liabilities or litigation
costs, or a change in the company's liability profile could put
downward pressure on the rating.

Reichhold is a leading supplier of unsaturated polyester resins
for composites applications and of resins and other polymers for
coatings applications.  It manufactures over one billion pounds of
thermoset resins and gelcoats annually.  Reichhold has more than
3,000 products used in thousands of applications, but products
generally fall within two categories: Composites, which account
for almost three-quarters of sales, and Coatings.  Products are
typically sold to a broad base of customers primarily for
industrial purposes.  Reichhold's sales for 2005 were
approximately $1.1 billion.


RENT-A-CENTER: Earns $39.8 Million in Quarter Ended June 30
-----------------------------------------------------------
Rent-A-Center, Inc., reported total revenues for the quarter ended
June 30, 2006, of $583.6 million, a $3 million increase from
$580.6 million for the same period in the prior year.  This
increase of 0.5% in revenues was primarily driven by a 1.1%
increase in same store sales plus an increase in incremental
revenues generated in new and acquired stores, offset by the
revenue lost from stores that were closed or sold during the
previous twelve months.

For the three months ended June 30, 2006, the Company's net
earnings were $39.8 million representing an increase of 7.7% from
the net earnings of $39.6 million for the same period in the prior
year, when excluding the benefit of the 2005 tax audit reserve
credit.  The increase in reported net earnings per diluted share
is primarily attributable to the increase in same store sales, as
well as the reduction in the number of the Company's outstanding
shares, offset by increases in normal operating costs, such as
utility and fuel costs, and expenses related to stock options.  
When including the 2005 tax audit reserve credit, reported net
earnings per diluted share for the quarter increased 1.8% from the
reported net earnings of $41.7 million for the same period in the
prior year.

Reported net earnings per diluted share also increased as a result
of a $2.0 million insurance reserve credit resulting from the use
of certain company specific loss development factors developed by
independent actuaries, rather than the general industry loss
development factors previously used by the Company.

"Our second quarter same store sales continued a positive trend in
2006," commented Mark E. Speese, the Company's Chairman and Chief
Executive Officer. "Our same store sales increased 1.1% for the
quarter, which is primarily related to changes in our promotional
activities as well as an increase in the number of units on rent,"
Mr. Speese continued. "In addition, we believe our customer has
adjusted to the current level of fuel costs.

                       Operations Highlights

During the second quarter of 2006, the Company opened 9 new rent-
to-own store locations, acquired 16 stores as well as accounts
from 15 additional locations, consolidated 19 stores into existing
locations, and sold 12 stores, for a net reduction of six stores
and an ending balance of 2,749 stores.  During the second quarter
of 2006, the Company added financial services to 21 existing rent-
to-own store locations and ended the quarter with a total of 77
stores providing these services.

Through the six month period ending June 30, 2006, the Company
opened 19 new rent-to-own store locations, acquired 18 stores as
well as accounts from 20 additional locations, consolidated 33
stores into existing locations, and sold 15 stores, for a net
reduction of 11 stores.  Through the six-month period ending
June 30, 2006, the Company added financial services to 38 existing
rent-to-own store locations and consolidated one store with
financial services into an existing location, for a net addition
of 37 stores providing these services.

Since June 30, 2006, the Company has opened 1 new rent-to-own
store location and acquired 1 store, as well as accounts from 4
additional locations. The Company has added financial services to
4 existing rent-to-own store locations since June 30, 2006.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?ed2

Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) --
http://www.rentacenter.com/-- operates the largest chain of  
consumer rent-to-own stores in the U.S. with 2,751 company
operated stores located in the U.S., Canada, and Puerto Rico.  The
company also franchises 297 rent-to-own stores that operate under
the "ColorTyme" and "Rent-A-Center" banners.  

                         *    *    *

As reported in the Troubled Company Reporter on June 29, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Rent-A-Center Inc.'s $725 million credit facility.  It also
assigned a recovery rating of '4' to the facility, indicating the
expectation for marginal recovery of principal in the event of a
payment default.  The loan comprised a $400 million revolving
credit facility due in 2011, a $200 million term loan A due in
2011, and a $125 million term loan B due in 2012.  The corporate
credit rating on Rent-A-Center Inc. is 'BB+' with a negative
outlook.  
      
As reported in the Troubled Company Reporter on June 23, 2006,
Moody's Investors Service assigned a Ba2 rating to the bank loan
of Rent-A-Center, Inc., and affirmed the Ba2 corporate family as
well as the senior subordinated note issue at Ba3.  The
continuation of the positive outlook reflected Moody's opinion
that ratings could be upgraded over the medium-term once the
company establishes a lengthier track record of sales improvement
and Moody's becomes more comfortable with the company's financial
policy.


RETROCOM GROWTH: Files Notice Under Bankruptcy and Insolvency Act
-----------------------------------------------------------------
Retrocom Growth Fund Inc. filed a notice of Intention to make a
proposal under Canada's Bankruptcy and Insolvency Act, the
Investment Executive reports.  RSM Richter Inc. has been appointed
trustee.

The Notice was prompted by the fund's insolvency.  

RSM Richter was initially retained as a financial advisor to
assist the Fund Board in the review of strategies.  Under the BIA
protection, the Fund can examine restructuring initiatives.   

In the interim, the fund has disposed of eight properties for a
total of $16.5 million.  The fund continues to hold around
15 different investments and approximately 250,000 units of the
Retrocom mid-market real estate investment trust.  At the present
time, it appears unlikely that the recoveries will be sufficient
to allow a distribution to be made to shareholders of the fund.

                          About Retrocom

Retrocom -- http://www.retrocom.ca/-- is a labor-sponsored  
investment fund corporation established in 1995.  The fund
currently has assets invested in a diverse portfolio of
investments in the commercial and residential construction, resort
condominium, sports entertainment and facilities management and
tourism sectors, among others.


SAINT VINCENTS: Submits Amended Reclamation Claims Schedule
-----------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates delivered to the U.S. Bankruptcy Court for the
Southern District of New York an amended statement of all
reclamation claims asserted against them, on July 14, 2006.

                                                         Valid
                                            Amount       Claim
    Claimant              Claim Date       Claimed       Amount
    --------              ----------       -------       ------
    Abbott                  07/07/05        13,812        9,466
    AFI Food Service        07/15/05        13,311        5,081
    Aramark                 07/11/05         N/A            -
    Bayer Healthcare        07/07/05        60,296       32,383
    Caligor                 07/07/05        35,787       14,260
    Cardinal                07/11/05       414,575      266,737
    Corporate Express       07/12/05       222,586       42,974
    Fisher Scientific       07/11/05         8,316        6,281
    Johnson & Johnson       07/06/05       366,525       14,318
    Mallinckrodt            07/06/05        37,154       24,218
    Medtronic               07/13/05        37,440       37,440
    Ross Products           07/08/05         4,099        2,794
    Smith and Nephew        07/08/05        23,520        5,546
    Source One              07/06/05        40,573       15,335
    US Food Service         07/07/05         N/A            -
                                         ----------    --------
    TOTAL                                $1,277,999    $476,837
                                         ==========    ========

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: Acquiring msystems in All-Stock Deal
--------------------------------------------------
SanDisk Corporation and msystems Ltd. have entered into definitive
agreements for SanDisk to acquire msystems in an all-stock
transaction.

In the transaction, each msystems ordinary share will be converted
into 0.76368 of a share of the Company's common stock, or a 26%
premium over the average closing price of msystems' shares for the
last thirty trading days.  The transaction is expected to close in
the fourth quarter of 2006.

Eli Harari, the Company's chairman and chief executive officer
said, "SanDisk and msystems, over the past 18 years, have been
leading innovators in the flash storage market.  This strategic
acquisition will give us the critical mass and complementary
products, customers, channels, technology and manufacturing base
to take our shared vision to the next level.  The NAND flash data
storage business is in its early stages and we believe the market
opportunity is largely untapped,"

Mr. Harari further said, "msystems is a leader in flash memory
systems addressing mobile, portable and embedded markets and they
have a strong team, significant IP and important OEM customers.  
SanDisk has a record of creating new market categories, world-
class manufacturing capabilities and leading market share in the
retail channel.  Both companies are noted for their relentless
innovation, and this acquisition is intended to further accelerate
our pace of innovation.  In the near term, this transaction better
positions SanDisk to serve the expanding storage needs of handset
manufacturers and mobile network operators.  In the long term, the
combination with msystems will be a catalyst in the development of
next generation flash enabled consumer applications.  We are
extremely excited about joining forces with the msystems team to
achieve our shared vision.  We are committed to serving msystems'
OEM customers after the transaction closes."

msystems also reported its intention to release its second quarter
2006 financial results on Aug. 7, 2006.

                       About msystems Ltd.

msystems (NASDAQ:FLSH) has been transforming raw flash into
smarter storage solutions since 1989.  From embedded flash drives
deployed in mobile handsets to U3 USB smart drives designed for
leading global brands, msystems creates, develops, manufactures
and markets smart personal storage solutions for a myriad of
applications.

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.  The company
also 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
billion of senior unsecured convertible notes due 2013.  The 'BB-'
corporate credit rating on SanDisk was affirmed.  The rating
outlook is stable.


SCOTTISH RE: Fitch Holds Negative Watch on Low-B Ratings
--------------------------------------------------------
Fitch Ratings has downgraded these Scottish Re ratings:

Scottish Re Group Ltd.

    -- Issuer default rating to 'BBB-' from 'BBB'.

Operating subsidiaries:

    -- Insurer financial strength (IFS) to 'BBB+' from 'A-'

All ratings remain on Rating Watch Negative.

The ratings action reflect Fitch's heightened concern over the
increased stress placed on financial flexibility of the holding
company following SCT's announcements yesterday.  The announced
writedown of the deferred tax asset by $112 million, as well as
the impact on new business production of subsequent rating
downgrades, are expected to further pressure the company's
earnings performance going forward.  Fitch believes that the
company has adequate liquidity over the near term and its capital
position, as measured by risk adjusted capital is within ratings
expectations.

Progress on strategic initiatives undertaken will be reflected as
they materialize and execution of plans with regard to potential
capital sources would help to alleviate ratings pressure.

The following ratings remain on Rating Watch Negative:

Scottish Annuity & Life Insurance Company (Cayman) Limited

    -- IFS downgraded to 'BBB+' from 'A-'.

Scottish Re (U.S.) Inc.

    -- IFS downgraded to 'BBB+' from 'A-'.

Scottish Re Limited

    -- IFS downgraded to 'BBB+' from 'A-'.

Scottish Re Group Limited

    -- IDR downgraded to 'BBB-' from 'BBB';

    -- 4.5% $115 million senior convertible notes downgraded to
       'BB+' from 'BBB-';

    -- 5.875% $142 million hybrid capital units downgraded to
       'BB' from 'BB+';

    -- 7.25% $125 million non-cumulative perpetual preferred stock
       downgraded to 'BB' from 'BB+'.


SILICON GRAPHICS: Gets Court Approval to Continue Refund Program
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Silicon Graphics, Inc., and its debtor-affiliates to:

     -- continue their Refund Program, including the ordinary
        course practice of issuing Credit Memos to customers; and

     -- perform and honor their prepetition obligations under the
        Refund Program, including the issuance of approximately
        $100,000 in Credit Memos relating to refund credit
        requests received prepetition.

In addition, Judge Lifland permits the Debtors to issue
approximately $100,000 in Credit Memos applicable to future
purchases of their products and services in respect of refund
requests received prepetition.

As reported in the Troubled Company Reporter on Jul 24, 2006, the
Debtors want to continue their customer refund program and issue
Credit Memos to customers to ensure customer satisfaction,
effectively compete with their market, develop and sustain
customer loyalty, improve profitability, and generate goodwill for
the Debtors and their products.

Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York,
told the U.S. Bankruptcy Court for the Southern District of New
York that Credit Memos avoid the need to issue cash refunds to
customers, which are less likely to yield future benefits to the
Debtors, as customers are not obligated to use their cash refund
to make additional purchases from the Debtors.  On the other hand,
Credit Memos incentivize customers to continue their business
relationship with the Debtors as opposed to purchasing similar
products and services from a competitor.

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 Court OK to Hire Morgan Lewis as IP Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed Silicon Graphics, Inc., and its debtor-affiliates to
employ Morgan, Lewis & Bockius LLP as their special intellectual
property counsel, nunc pro tunc to their bankruptcy filing.

As reported in the Troubled Company Reporter on June 21, 2006,
Morgan Lewis will be responsible for:

    -- counseling the Debtors with respect to patent, trademark,
       licensing, open source, and other issues relating to
       transactional and non-transactional matters; and

    -- the litigation of intellectual property disputes, including
       matters that may come before the Court in connection with
       the Debtors' Chapter 11 case concerning intellectual
       property.

Morgan Lewis' customary hourly rates are:

             Professionals             Rates Per Hour
             -------------             --------------
             Counsel                    $330 to $530
                Douglas J. Crisman              $450

             Partners                   $430 to $750
                Andrew Gray                     $530
                James Bollinger                 $750

             Associates                 $210 to $500
                Tim Heaton                      $500

             Paraprofessionals          $130 to $200
                Jeremy Sullivan                 $175

Mr. Crisman assures the Court that his firm does not have any
connection with or interest adverse to the Debtors or any party-
in-interest.

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)


SIRIUS SATELLITE: Posts $237.8MM Net Loss in 2006 Second Quarter
----------------------------------------------------------------
SIRIUS Satellite Radio reported a net loss of $237.8 million for
the second quarter of 2006.  The net loss in the second quarter of
2006 included impact associated with the write-off of certain
long-lead time parts purchased in 1999 that will no longer be
needed in light of the company's new satellite contract.

SIRIUS disclosed that its second quarter 2006 revenue nearly
tripled from the year-ago second quarter to more than
$150 million.  The company increased its 2006 guidance for total
revenue to $615 million and for year-end subscribers to 6.3
million.

SIRIUS ended the second quarter with 4,678,207 subscribers, 158%
higher than second quarter 2005 ending subscribers of 1,814,626.
During the second quarter of 2006, SIRIUS added 600,460 net
subscribers, a 64% increase over second quarter 2005 net
subscriber additions of 365,931.  For the third consecutive
quarter, SIRIUS led the satellite radio industry in net subscriber
additions, capturing a record 60% share of industry net additions
in the second quarter.

"Continued strong demand for SIRIUS' products and programming
gives us confidence to increase our revenue and subscriber
guidance," Mel Karmazin, chief executive officer of SIRIUS, said.

"We continue to be excited about the growth prospects for
satellite radio and remain pleased with our solid execution as we
approach positive free cash flow."

Total revenue for the second quarter of 2006 increased to a record
$150.1 million, nearly triple last year's second quarter total
revenue of $52.2 million.  Average monthly revenue per subscriber
(ARPU) was $11.16 in the second quarter of 2006, up from $10.50 in
the year-ago second quarter.  ARPU for the second quarter of 2006
included a $0.62 contribution from net advertising revenue,
compared with a $0.22 contribution from net advertising revenue in
the second quarter of 2005.  Average monthly churn was 1.8%, in
line with the company's annual churn guidance, reflecting total
churn from both retail and OEM channels.  SAC per gross subscriber
addition was $131 for the second quarter of 2006, an 18%
improvement over second quarter 2005 SAC per gross subscriber
addition of $160.

During the second quarter of 2006, SIRIUS added 276,294 net
subscribers from its retail channel, a 13% increase over 244,985
retail net additions during the second quarter of 2005.  The
company also added 324,574 net subscribers from its automotive OEM
channel, 167% more than second quarter 2005 OEM net subscriber
additions of 121,664.  Strong contributions by SIRIUS' exclusive
automotive partners, DaimlerChrysler and Ford, fueled original
equipment manufacturer growth during the quarter.

                        Other Developments

In the second quarter of 2006, SIRIUS continued to augment "The
Best Radio on Radio" by announcing a variety of new programming
initiatives, including:

   -- The Catholic Channel, a 24x7 lifestyle channel in
      collaboration with The Archdiocese of New York, that will
      feature contemporary talk and music programming as well as
      live daily masses from St. Patrick's Cathedral in New York
      City;

   -- A radio news bureau with Variety, the "show business bible,"
      originating from Variety's Los Angeles offices.  Variety
      will provide the latest in entertainment news to SIRIUS'
      national radio audience multiple times per hour every day;

   -- A weekly two-hour series featuring dynamic and compelling
      interviews by broadcasting icon Barbara Walters from her
      30-year archive of interviews with great entertainers and
      world leaders;

   -- A live, weekly three hour health and wellness call-in talk
      show on Saturday mornings hosted by Deepak Chopra, the
      best-selling author and leader in the field of mind and body
      medicine;

   -- An exclusive weekly talk show with Mark Cuban, the
      groundbreaking entrepreneur and outspoken owner of the
      NBA's Dallas Mavericks; and

   -- New talk shows featuring leading sports personalities
      Jerry Rice, the legendary NFL receiver; Tiki Barber, the
      New York Giants running back; and Tony Stewart, the
      two-time and reigning NASCAR NEXTEL Cup Series champion.

                     SIRIUS and Kia Agreement

During the second quarter of 2006, SIRIUS and Kia announced that
Kia will exclusively offer SIRIUS as factory standard equipment in
all of its vehicles through 2014, with an optional three-year
extension to 2017.  SIRIUS will become a standard feature in all
2009 model year Kia vehicles, beginning in 2008.

               SIRIUS Canada's Subscriber Milestone

SIRIUS' Canadian affiliate, SIRIUS Canada, passed the
100,000-subscriber milestone in early May, less than six months
after launching its Canadian service.  SIRIUS Canada is Canada's
leading satellite radio service and the number one choice among
Canadian satellite radio subscribers.  Ford of Canada and SIRIUS
Canada recently announced an exclusive long-term agreement to make
SIRIUS receivers factory-installed equipment in virtually all Ford
vehicles sold in Canada by 2008.

                         Satellite Design

In June 2006, SIRIUS announced that it had entered into an
agreement with Space Systems/Loral for the design and construction
of a new satellite.  Construction of the satellite is expected to
be completed in the fourth quarter of 2008.  The satellite will be
launched on a Proton rocket acquired by SIRIUS under a launch
contract.  The aggregate cost of designing, building and launching
the satellite and insuring its launch will be approximately
$260 million.

                            FCC Review

SIRIUS has disclosed that the Federal Communications Commission is
conducting a review of the company's products as well as products
of other companies containing FM transmitters.  SIRIUS believes
the company's radios that are currently being produced comply with
applicable FCC rules.  SIRIUS and its manufacturers are
cooperating with the FCC to obtain new equipment authorizations
for the company's remaining affected products.

          Second Quarter 2006 Versus Second Quarter 2005

For the second quarter of 2006, SIRIUS recognized total revenue of
$150.1 million compared with $52.2 million for the second quarter
of 2005.  This 188%, or $97.9 million, increase in revenue was
primarily driven by an $88.0 million increase in subscriber
revenue resulting from the net increase in subscribers of
2,863,581, or 158%, from June 30, 2005, to June 30, 2006, and a
$7.1 million increase in net advertising revenue.

The company's adjusted loss from operations increased
$17.7 million to $126.5 million for the second quarter of 2006
from $108.8 million for the second quarter of 2005.  This increase
was driven by a 58%, or $40.0 million, increase in subscriber
acquisition costs reflecting higher shipments of SIRIUS radios and
chip sets and increased commissions to support a 92% increase in
gross subscriber additions from 432,687 for the second quarter of
2005 to 830,571 for the second quarter of 2006.  The increase in
subscriber acquisition costs was more than offset by the 177%, or
$88.0 million, increase in subscriber revenue as a result of a
158% increase in the company's subscriber base.

Satellite and transmission expenses increased $11.0 million to
$17.7 million for the second quarter of 2006 from $6.7 million for
the second quarter of 2005.  The increase was primarily
attributable to an impairment charge associated with certain
satellite long-lead time parts that will no longer be needed in
light of the company's new satellite contract.

Programming and content expenses increased $37.2 million to
$53.0 million for the second quarter of 2006 from $15.8 million
for the second quarter of 2005.  The increase was primarily
attributable to license fees and consulting costs associated with
new programming, and higher broadcast and Web streaming royalties
as a result of the company's larger subscriber base.

Customer service and billing expenses increased $6.0 million to
$13.7 million for the second quarter of 2006 from $7.7 million for
the second quarter of 2005.  The increase was primarily
attributable to call center operating costs necessary to
accommodate the increase in the company's subscriber base and
transaction fees due to the addition of new subscribers.  Customer
service and billing expenses per average subscriber per month
declined 34% to $1.05 for the second quarter of 2006 from $1.60
for the second quarter of 2005.

Sales and marketing expenses increased $22.4 million to
$56.6 million for the second quarter of 2006 from $34.2 million
for the second quarter of 2005.  This 65% increase in sales and
marketing expenses compared with a 92% increase in gross
subscriber additions from 432,687 for the three months ended
June 30, 2005, to 830,571 for the three months ended June 30,
2006.  The increase was primarily attributable to less spending in
second quarter 2005 in anticipation of the fourth quarter 2005
marketing campaign associated with the launch of Howard Stern;
advertising costs for the new marketing campaign; cooperative
marketing spend with the company's channel partners; and increased
residuals and OEM revenue share as a result of a 158% increase in
the company's subscriber base.

General and administrative expenses increased $7.6 million to
$21.7 million for the second quarter of 2006 from $14.1 million
for the second quarter of 2005.  The increase was primarily a
result of legal fees, employment-related costs and bad debt
expense to support the growth of the business.

SIRIUS reported a net loss of $237.8 million for the second
quarter of 2006 compared with a net loss of $177.5 million in the
year-ago quarter.  

              Six Months 2006 Versus Six Months 2005

For the six months ended June 30, 2006, SIRIUS recognized total
revenue of $276.7 million compared with $95.4 million for the six
months ended June 30, 2005.  This 190%, or $181.3 million,
increase in revenue was primarily driven by a $161.3 million
increase in subscriber revenue resulting from the net increase in
subscribers of 2,863,581, or 158%, from June 30, 2005, to June 30,
2006, and a $13.9 million increase in net advertising revenue.

The company's adjusted loss from operations increased
$27.4 million to $263.2 million for the six months ended June 30,
2006 from $235.8 million for the six months ended June 30, 2005.
This increase was driven by a 60%, or $82.0 million, increase in
subscriber acquisition costs reflecting higher shipments of SIRIUS
radios and chip sets and increased commissions to support a 127%
increase in gross subscriber additions from 787,395 for the six
months ended June 30, 2005, to 1,791,181 for the six months ended
June 30, 2006.  The increase in subscriber acquisition costs was
more than offset by the 176%, or $161.3 million, increase in
subscriber revenue as a result of a 158% increase in the company's
subscriber base.

Satellite and transmission expenses increased $11.5 million to
$25.0 million for the six months ended June 30, 2006, from
$13.5 million for the six months ended June 30, 2005.  The
increase was primarily attributable to an impairment charge
associated with certain satellite long-lead time parts that will
no longer be needed in light of the company's new satellite
contract.

Programming and content expenses increased $69.5 million to
$109.5 million for the six months ended June 30, 2006, from
$40.0 million for the six months ended June 30, 2005.  The
increase was primarily attributable to license fees and consulting
costs associated with new programming, and higher broadcast and
Web streaming royalties as a result of the company's larger
subscriber base.

Customer service and billing expenses increased $12.3 million to
$29.5 million for the six months ended June 30, 2006 from
$17.2 million for the six months ended June 30, 2005.  The
increase was primarily attributable to call center operating costs
necessary to accommodate the increase in the company's subscriber
base and transaction fees due to the addition of new subscribers.
Customer service and billing expenses per average subscriber per
month declined 38% to $1.21 for the six months ended June 30,
2006, from $1.96 for the six months ended June 30, 2005.

Sales and marketing expenses increased $26.5 million to
$95.9 million for the six months ended June 30, 2006, from
$69.4 million for the six months ended June 30, 2005.  This 38%
increase in sales and marketing expenses compared with a 127%
increase in gross subscriber additions from 787,395 for the six
months ended June 30, 2005, to 1,791,181 for the six months ended
June 30, 2006.  The increase was primarily attributable to
increased residuals and OEM revenue share as a result of a 158%
increase in the company's subscriber base, as well as increased
cooperative marketing spend with the company's channel partners,
advertising costs for the new marketing campaign and compensation
related costs.

General and administrative expenses increased $11.8 million to
$40.8 million for the six months ended June 30, 2006, from
$29.0 million for the six months ended June 30, 2005.  The
increase was primarily a result of legal fees, employment-related
costs and bad debt expense to support the growth of the business.

For the six months ended June 30, 2006, the company recorded
$4.4 million for its share of SIRIUS Canada, Inc.'s net loss.

SIRIUS reported a net loss of $696.4 million for the six months
ended June 30, 2006 compared with a net loss of $371.2 million for
the six months ended June 30, 2005.  

                           About SIRIUS

New York-based SIRIUS Satellite Radio Inc. (NASDAQ: SIRI) delivers
more than 125 channels of the best programming in all of radio.
SIRIUS is the original and only home of 100% commercial free music
channels in satellite radio, offering 67 music channels available
nationwide.  SIRIUS also delivers 61 channels of sports, news,
talk, entertainment, traffic, weather and data.  SIRIUS is the
Official Satellite Radio Partner and broadcasts live play-by-play
games of the NFL, NBA and NHL and.  All SIRIUS programming is
available for a monthly subscription fee of only $12.95.

SIRIUS products for the car, truck, home, RV and boat are
available in more than 25,000 retail locations, including Best
Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's
Club, RadioShack and at http://shop.sirius.com/

SIRIUS radios are offered in vehicles from Audi, BMW, Chrysler,
Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover, Lexus,
Lincoln-Mercury, Mazda, Mercedes-Benz, MINI, Nissan, Rolls Royce,
Scion, Toyota, Porsche, Volkswagen and Volvo.  Hertz also offers
SIRIUS in its rental cars at major locations around the country.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 5, 2005,
Moody's Investors Service assigned a Caa1 corporate family rating
and a SGL-2 speculative grade liquidity rating for SIRIUS
Satellite Radio, Inc., as well as a Caa1 rating to the
$500 million senior unsecured notes due 2013.

As reported in the Troubled Company Reporter on Aug. 4, 2005,
Standard & Poor's Ratings Services assigned its 'CCC' rating to
SIRIUS Satellite Radio Inc.'s $500 million Rule 144A senior
unsecured notes maturing in 2013.   At the same time, S&P affirmed
its existing ratings on the company, including its 'CCC' corporate
credit rating.  S&P said the outlook remains stable.


SIX FLAGS INC: Moody's Junks Senior Unsecured Notes' Ratings
------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
for Six Flags, Inc., to B3 from B2.  Moody's also downgraded the
ratings on the senior unsecured notes to Caa2 from Caa1 and the
rating on the preferred stock to Caa3 from Caa2.  Moody's
maintained the B1 bank rating. Moody's changed the outlook to
stable from negative.

The downgrade reflects expectations that Six Flags will consume
cash flow after debt service and capital expenditures throughout
2006 and 2007.  The transition to new management's strategy
requires increased expenses prior to any revenue benefits,
challenging the company's already weak financial position.   
Furthermore, while operational improvement remains uncertain, with
evidence of progress unlikely before the end of summer
2007, some short term financial deterioration is highly likely.  
Offsets to these risks include potential benefits from asset
sales, if such sales occur at multiples that would lead to a
decline in leverage.

Moody's maintained the B1 secured bank rating based on the
substantial junior debt cushion. Bank debt comprises only about
one-third of total debt, with leverage at the bank level in the
3 times range.

A summary of actions.

Six Flags Inc.

   * Corporate Family Rating, Downgraded to B3 from B2
   * Senior Unsecured Bonds, Downgraded to Caa2 from Caa1
   * Preferred Stock, Downgraded to Caa3 from Caa2
   * Senior Unsecured Shelf, Downgraded to (P)Caa2 from (P)Caa1
   * Preferred Stock Shelf, Downgraded to (P)Caa3 from (P)Caa2
   * Preferred Stock 2 Shelf, Downgraded to (P)Caa3 from (P)Caa2
   * Senior Subordinated Shelf, Downgraded to (P)Caa3 from
     (P)Caa2

Six Flags Theme Parks Inc.

   * Affirmed B1 Senior Secured Bank Rating

Outlook Changed to Stable from Negative

Six Flags, Inc., headquartered in New York City, is the world's
largest regional theme park company with annual revenue of
approximately $1 billion.


SORIN REAL: Fitch Holds BB Rating on $4 Million Class F Notes
-------------------------------------------------------------
Fitch Ratings affirms all classes of notes issued by Sorin Real
Estate CDO I, Ltd.  These affirmations are the result of Fitch's
review process, and are effective immediately:

    -- $302,000,000 class A1 notes at 'AAA';
    -- $27,600,000 class A2 notes at 'AAA';
    -- $20,000,000 class B notes at 'AA';
    -- $12,100,000 class C notes at 'A';
    -- $13,962,896 class D notes at 'BBB';
    -- $3,961,104 class E notes at 'BBB-';
    -- $4,000,000 class F notes at 'BB'.

Sorin Real Estate CDO I is a collateralized debt obligation (CDO)
managed by Sorin Capital Management, LLC, which closed on July 21,
2005.  The collateral is composed of a revolving portfolio of
fixed-rate and floating-rate assets selected by Sorin Capital
Management.  The collateral consists of 59.89% commercial
mortgage-backed securities (CMBS), 30.35% residential mortgage-
backed securities (RMBS), 8.52% commercial real estate loans
(CREL), and 1.24% CDO assets.

The affirmations are due to the stable performance of the
collateral since the close of the transaction.  The CMBS portion
of the collateral has shown marginal positive credit migration, as
evidenced by the improvement in the weighted average rating factor
to 7.07 as of the June 2006 trustee report, from 7.16 at closing.
The CDO is currently in its revolving period in which new
collateral may be purchased or existing collateral may be
replaced.

The ratings of the class A1, A2 and B notes address the likelihood
that investors will receive full and timely payments of interest,
as per the governing documents, as well as the aggregate
outstanding amount of principal by the stated maturity date.  The
ratings of the class C, D, E, and F notes address the likelihood
that investors will receive ultimate interest payments, as per the
governing documents, as well as the aggregate outstanding amount
of principal by the stated maturity date.

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


SOUTHWESTERN ENERGY: S&P Cuts Rating to BB+ with Stable Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
rating on exploration and production company Southwestern Energy
Co. to 'BB+' from 'BBB-'.  At the same time, Southwestern's senior
unsecured ratings were lowered to 'BB+' from 'BBB-'.  Finally, the
outlook was revised to stable from negative.

As of June 30, 2006, Houston, Texas-based Southwestern had about
$137 million of debt.

The rating action reflects the limited diversity in Southwestern's
proved reserves and growth prospects relative to investment-grade
E&P companies.  In  addition, aggressive spending levels, which
are currently heavily weighted to  the Fayetteville Shale play,
were factored into the ratings.  However, the revised ratings are
supported by strong financial metrics that reflect low finding and
development and productions costs, which should enable
Southwestern to maintain adequate financial metrics if natural gas
prices come under prolonged significant pressure.

"The stable outlook reflects expectations for continued moderate
financial policies, while Southwestern pursues the development of
the Fayetteville Shale play," said Standard & Poor's credit
analyst Paul B. Harvey.  In addition, based on its success to
date, Southwestern should be able to improve asset diversity with
the development of the Fayetteville Shale play.  "If Southwestern
pursues a more aggressive financial policy, or fails to meet
expected reserve and production growth, ratings could be lowered,"
he continued.  No positive rating actions are expected in the near
term.


SUNCOM WIRELESS: S&P Affirms Ratings and Removes Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Berwyn,
Pennsylvania-based SunCom Wireless Holdings Inc. and its operating
subsidiaries, including the 'CCC+' corporate credit rating, and
removed the ratings from CreditWatch.  The outlook is negative.

The ratings were placed on CreditWatch with negative implications
Jan. 23, 2006, after the company announced the hiring of financial
and legal advisers to consider alternatives to improve its
financial position.  Debt outstanding as of June 30, 2006, was
about $1.7 billion, including $244 million of secured bank debt.

"The affirmation reflects our belief that a bankruptcy filing or
restructuring announcement by the parent company or its operating
subsidiaries, while still possible, is less imminent," said
Standard & Poor's credit analyst Susan Madison.

Although the company continues to retain advisers, it is not
currently engaged in formal discussions with bondholders regarding
potential restructurings.  The decision by parent SunCom Wireless
Holdings in May to contribute $194 million to its operating
company, SunCom Wireless Inc., eliminated a substantial point of
contention between management and bondholders.

Additionally, SunCom's operating trends appear to have stabilized
during the first half of 2006, after a year of rapid decline
following the acquisition of its primary roaming partner AT&T
Wireless Inc.  Nevertheless, the outlook for SunCom remains
negative since the company continues to face significant
operational challenges as it transitions to a stand-alone wireless
provider.  SunCom is an independent regional wireless service
provider in two regional territories.  SunCom's southeast region
includes all of North and South Carolina, and portions of northern
Georgia and eastern Tennessee.  SunCom also operates in Puerto
Rico and the U.S. Virgin Islands.


ST. MARYS: Refinancing Prompts S&P to Upgrade Rating to BB+
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Toronto-based cement producer St. Marys Cement
Inc. to 'BB+' from 'BB-'.

At the same time, Standard & Poor's assigned a 'BBB-' bank loan
rating with a recovery rating of '1', indicating a high
expectation of full recovery of principal in the event of default,
to the group's proposed new senior secured credit facility.  The
existing debt ratings on St. Marys will be withdrawn at the close
of the refinancing in the next month, and Standard & Poor's will
assign a 'BB+' long-term corporate credit rating to Votorantim
Cimentos North America, a new holding company that will own 100%
of St. Marys Cement.  All current ratings on St. Marys were
removed from CreditWatch, where they were placed with positive
implications on June 16, 2006.  The outlook is stable.

The upgrade reflects a proposed restructuring and refinancing that
will result in the formation of VCNA, which will own St. Marys,
St. Barbara Cement Inc., and several joint venture interests in
Florida.  All of the North American cement assets of ultimate
parent Votorantim Participacoes S.A. (BBB-/Stable/--), will be
held through VCNA.

"Standard & Poor's imputes some credit support from the ultimate
parent, as the Brazilian conglomerate has provided additional
equity to support strategic and operating needs in the past," said
Standard & Poor's credit analyst Daniel Parker.

"The ratings on VCNA and St. Marys, however, will not necessarily
move in lockstep with those on Votorantim, as there are no formal
guarantees of support," Mr. Parker added.

The ratings on VCNA will reflect its regional geographic focus and
its position as a midsize North American cement producer competing
against much larger, diversified competitors.  The addition of
Votorantim's joint-venture assets in Florida improves the limited
operational and geographic diversity, but does not completely
mitigate this risk.

St. Marys does not publicly disclose its financial statements.
Profitability, cash flow, and credit metrics have materially
improved in the past two years, due to strong demand and improved
pricing for cement and cost synergies.  The company does not
expect to generate free cash flow in the next two years, however,
as it undertakes projects in Florida, including the construction
of a new cement plant.  The company will be unable to materially
reduce debt in the near term because of the high capital
expenditures.

The outlook is stable.  The strong cement-pricing environment may
not remain as robust, as residential construction is slowing and
economic activity could slow down with rising interest rates.
Nevertheless, VCNA will benefit from the reorganization and
refinancing, and Standard & Poor's expects the company will
improve its credit metrics.  Large debt-financed acquisitions or
significant deterioration in operating margins and cash generation
would result in the ratings being reevaluated.


STATION CASINOS: Issues $400 Million of 7-3/4% Senior Notes
-----------------------------------------------------------
Station Casinos, Inc. has agreed to issue $400 million of 7-3/4%
senior notes due August 15, 2016.   Proceeds from the sale of the
notes will be used to reduce a portion of the amounts outstanding
on the Company's revolving credit facility.  The borrowings were
used for capital expenditures and general corporate purposes,
including the repurchase of shares of the Company's common stock
previously authorized for repurchase by the Company's Board of
Directors.

Station Casinos, Inc. (NYSE:STN) -- http://www.stationcasinos.com/  
-- is a provides gaming and entertainment to the residents of Las
Vegas, Nevada.  Station owns and operates Palace Station Hotel &
Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel &
Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel
in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and
Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset
Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star
Casino and Gold Rush Casino in Henderson, Nevada.  Station also
owns a 50% interest in Green Valley Ranch Station Casino, Barley's
Casino & Brewing Company and The Greens in Henderson, Nevada and a
6.7% interest in the Palms Casino Resort in Las Vegas, Nevada.  In
addition, Station manages Thunder Valley Casino near Sacramento,
California on behalf of the United Auburn Indian Community.

                          *     *     *

As reported in the Troubled Company Reporter on Aug. 3, 2006,
Moody's Investors Service assigned a Ba3 to Station Casinos,
Inc.'s new $300 million senior notes due 2016.  Net proceeds from
the offering will be used to repay a portion of the $1.2 billion
of outstanding borrowings under the company's $2 billion revolving
credit facility.  Station has a Ba2 corporate family rating, SGL-2
speculative grade liquidity rating, and stable ratings outlook.  
The company has a 'Ba' weighted average indicated rating category
according to Moody's Global Gaming rating methodology.

At the same time, Standard & Poor's Ratings Services assigned its
'BB-' rating to Station Casinos, Inc.'s proposed $300 million
senior notes due 2016.  Proceeds will be used to reduce amounts
outstanding under the company's revolving credit facility, a large
majority of which has been the result of aggressive share
repurchase activity during the past few quarters.  Standard &
Poor's also affirmed Station's existing ratings, including its
'BB' issuer credit rating.  The outlook is stable.  Pro forma
consolidated debt outstanding at June 30, 2006, was approximately
$3 billion.


SUNCOM WIRELESS: June 30 Balance Sheet Upside-Down by $338 Million
------------------------------------------------------------------
SunCom Wireless Holdings, Inc., reported 2006 second quarter
financial results, which reflected a continuation of the Company's
improving operating and cash flow profile.

At June 30, 2006, the company's stockholders' deficit widened to
$338,223,000 from an $83,266,000 deficit at Dec. 31, 2005.

During the second quarter, the Company generated Adjusted EBITDA
of $24.5 million compared with $7.4 million in the first quarter
2006, while net cash used in operating activities was
$21.2 million compared with $21.6 million in the first quarter.

During the quarter, the company added a net 24,329 subscribers on
gross additions of 92,131.  Monthly churn continued to improve as
operations further stabilized, declining to 2.2% from 2.5% in the
first quarter 2006 and 3.2% a year ago.  SunCom Wireless ended the
quarter with 1,031,443 subscribers.

The increased subscriber count during the quarter, along with
higher average revenues per user led to a 5.8% increase in service
revenues as compared to the first quarter of 2006.  ARPU rose to
$52.89 from $51.55 in the first quarter 2006, which reflected
adjustments to SunCom's rate plan offerings that began in March of
this year as well as seasonally higher usage.  Roaming revenues
were $19.5 million compared to $21.5 million in the first quarter.

"SunCom's second quarter results reflect the continued
stabilization of our business and demonstrate the company's
opportunity to grow cash flows", said Interim Chief Executive
Officer, Eric Haskell.  He added, "The Company has made solid
strides in improving its operating metrics while at the same time
addressing our need to grow revenues and leverage our existing
cost structure."

Second quarter financial results also reflect a full quarter's
benefit of initiatives taken in the first quarter to reduce off-
network roaming expenses as well as lower retention spending and
bad debt expense.

Bill Robinson, Executive Vice President of Operations added, "Both
our domestic and Puerto Rico operations contributed to the
significant improvement experienced in the quarter and we believe
that the business has reached a state of normalcy following the
integration and transition activities that we completed over the
past 18 months."

Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc.
(NYSE: TPC) -- http://www.suncom.com/-- offers digital wireless  
communications services to more than one million subscribers in
the southeastern United States, Puerto Rico and the U.S. Virgin
Islands.  SunCom is committed to delivering Truth in Wireless by
treating customers with respect, offering simple, straightforward
plans and by providing access to the largest GSM network and the
latest technology choices.


SUNSHINE-JR.: 11th Cir. Upholds Sanctions Against Bank of New York
------------------------------------------------------------------
The United States Court of Appeals for the Eleventh Circuit Court
of Appeals upheld the decision of the U.S. District Court
affirming a Bankruptcy Court order imposing sanctions on the Bank
of New York and ordering the Bank to pay Sunshine-Jr. Stores,
Inc., interest on unclaimed funds and all of the Debtor's
attorneys' fees to obtain an accounting for those funds.

In Dec. 1992, Sunshine-Jr. Stores, Inc., commenced bankruptcy
proceedings in the U.S. Bankruptcy Court for the Middle District
of Florida.  On May 12, 1994, the Honorable Thomas E. Baynes of
the Bankruptcy Court confirmed the Debtor's Plan of
Reorganization.

As part of the Plan, Sunshine executed a Trust Indenture Agreement
to establish an efficient method for paying general unsecured
creditors who were numerous and geographically scattered.

Under the Agreement, each Class 7 Creditor was issued a promissory
note in satisfaction of its allowed claim.  These Notes were then
secured by a lien on substantially all of the Debtor's assets,
valued at approximately $14 million.

To avoid the administrative difficulties of having each individual
Noteholder hold a lien on the Collateral, the Trust Indenture
Agreement will have an Indenture Trustee to hold the liens in
trust for the benefit of all Noteholders.  

The Debtor appointed NationsBank as the Indenture Trustee.

The Agreement limited the responsibilities and duties of the
Indenture Trustee to those specifically set forth in the
Agreement, qualified under the Trust Indenture Act of 1939.  

The Agreement also permitted the creation of a separate trust in
which the Debtor would place funds sufficient to satisfy the
principal and interest of the Notes in full, if the Debtor decided
to call the Notes in advance of maturity.  

In 1995, E-Z Serve Convenience Stores, Inc., agreed to acquire the
Debtor and its assets.  To allow the acquisition to proceed, the
Debtor moved the Bankruptcy Court on July 6, 1995, to enter an
order allowing all of the Notes to be called and prepaid in full,
and directing the Indenture Trustee to release its liens on the
Collateral.  

The Bankruptcy Court granted the Debtor's motion, and on Oct. 2,
1995, the Debtor called the Notes for prepayment and deposited
with NationsBank approximately $1 million, the amount necessary to
prepay all of the Notes.  

The Notes became immediately due and payable by the Debtor when
they were called and ceased to accrue interest.  Upon receipt of
the Prepayment Funds, NationsBank released the liens on the
Collateral.

In December 1995, Bank of New York acquired the corporate trust
division of NationsBank.  As part of this acquisition, NationsBank
transferred to BNY $983,935.11 in Prepayment Funds that had yet to
be claimed by Noteholders.  The record does not indicate whether
BNY also received from NationsBank a copy of the Trust Indenture
Agreement or the Debtor's Reorganization Plan, or whether it was
otherwise appraised of the circumstances under which NationsBank
came into possession of the Prepayment Funds.  BNY nevertheless
disbursed Prepayment Funds to those Noteholders who tendered their
Notes.

The Debtor made several requests to the Bank of New York to
account for those Noteholders who had yet to tender their Notes
for payment.  BNY then provided what the Debtor regarded as an
inaccurate printout of the unpaid Noteholders.  Based on this
printout, the Debtor issued a second call notice to Noteholders.  
BNY paid those Noteholders who tendered their Notes.  During this
period, the Debtor continued to ask BNY for a more accurate
accounting, but BNY did not respond to its requests.

The Debtor made numerous requests from April 2000 to September
2001 to the Bank of New York to provide a final accounting for all
payments NationsBank and BNY made to Noteholders.

On Oct. 29, 2001, BNY finally appeared before the Bankruptcy Court
and informed that Court that it held $487,844.90 of Prepayment
Funds.  Judge Baynes ordered BNY to immediately return the
unclaimed Prepayment Funds, which BNY did.  Judge Baynes also
ordered final accounting of the Prepayment Funds.

On April 16, 2002, the Debtor's counsel moved the Bankruptcy Court
for reimbursement of all fees and expenses incurred to obtain
final accounting from the Bank of New York during the period from
Dec. 8, 2000, to Oct. 26, 2001.

The Debtor asserted that under Florida law, the Bank of New York
had breached its fiduciary duty to provide it with a timely
accounting.  The Debtor also claimed that BNY had violated the
terms of the Trust Indenture Agreement, which required the Funds
to be promptly returned to the Debtor three years after the Notes
became due and payable.

The Debtor said the Notes were called on Oct. 2, 1995, so BNY was
required to return the Funds on Oct. 3, 1998.  The Bank of New
York only delivered it because of the Court's order on Oct. 29,
2001.  The Debtor calculated that it was entitled to $$273,343.87
in interest.

The Bank of New York argued that it did not owe any interest
because it was an Indenture Trustee.  BNY asserted that its
obligations to the Debtor and the Noteholders were solely
contractual.

The Bank of New York failed to respond to the Bankruptcy Court's
orders directing it to provide final accountings for all
disbursements of prepayment funds made to debtor's creditors, to
release remaining funds to debtor, to appear before the court, and
to comply with debtor's discovery requests.

Judge Baynes sanctioned the Bank of New York by striking its
response to Debtor's claim for interest on funds it held, awarding
Debtor judgment for the interest, and ordering BNY to pay Debtor's
attorneys' fees.  The Bank of New York appealed Judge Baynes'
decision.

U.S. District Court Judge Elizabeth A. Kovachevich affirmed Judge
Baynes' conclusion.  BNY appealed Judge Kovachevich's decision.

In a decision published at 2006 WL 1982956, a three-judge panel in
the Eleventh Circuit held that:

   (1) the Bankruptcy Court did not abuse its discretion in
       finding that BNY acted in bad faith;

   (2) the Bankruptcy Court did not abuse its discretion in
       invoking its inherent powers to sanction BNY by assessing
       it with the Debtor's attorneys' fees;

   (3) the Bankruptcy Court did not abuse its discretion by
       entering a default against BNY with respect to the interest
       payable to the Debtor on the funds in question;

   (4) the Bankruptcy Court's imposition of sanctions did not
       violate BNY's due process rights;

   (5) under Florida law, BNY did not hold the prepayment funds as
       an Indenture Trustee; and

   (6) under Florida law, BNY held the prepayment funds as a
       common law trustee, and was liable to the debtor for
       interest.

Vance E. Salter, Esq., Jeffrey P. Bast, Esq., and Gustavo J.
Membiela, Esq., at Hunton & Williams, LLP, in Miami, Florida,
represented the Bank of New York in this litigation.

Marsha G. Rydberg, Esq., and Thomas H. Rydberg, Esq., at The
Rydberg Law Firm, P.A., in Tampa, Florida, represented Sunshine-
Jr. Stores, Inc., in this matter.

Sunshine-Jr. Stores, Inc., filed for chapter 11 protection in Dec.
1992 (Bankr. M.D. Fla. Case No. 92-16406).  On May 12, 1994, the
Bankruptcy Court confirmed the Debtor's Plan of Reorganization.


SUPERVALU INC: Earns $87MM in First Fiscal Quarter Ended June 17
----------------------------------------------------------------
SUPERVALU INC. reported results for 2007 first fiscal quarter
ended June 17, 2006, marking a successful beginning to the
recently completed $12.4 billion acquisition of Albertson's
premier retail properties.

"We are off to a great start following our transformational
acquisition in June," Jeff Noddle, SUPERVALU chairman and chief
executive officer said.

"The financial results of the new SUPERVALU will continue to
emerge over the remainder of the year.  We are confident that the
benefits of the acquisition of Albertsons' premier retail
properties will be evident.  The first quarter of fiscal 2007,
which primarily reflects stand alone SUPERVALU prior to the impact
of the newly acquired Albertson's operations, was on track with
our expectations.  We delivered a strong quarter even when
absorbing $0.05 of stock option expense and $0.06 of one-time
transaction costs."

During the first quarter, SUPERVALU completed its $12.4 billion
acquisition of Albertsons' premier retail properties.  The
acquisition, which closed on June 2, transformed SUPERVALU into
the nation's third-largest supermarket chain, with the addition of
more than 1,100 stores -- including Acme Markets, Bristol Farms,
Jewel-Osco, Shaw's Supermarkets, Star Market, and Albertsons
banner stores in the Intermountain, Northwest and Southern
California regions.  The acquisition also includes the related in-
store pharmacies under the Osco Drug and Sav-on banners.

                       First Quarter Results

The first quarter does not include operating results of the
acquired operations but includes the acquired operations balance
sheet with preliminary purchase accounting and one-time
transaction costs.  The fiscal quarters of the acquired operations
will become aligned with SUPERVALU's at the end of fiscal 2007.
Operating results in the second quarter of fiscal 2007, to be
released by mid-October, will include the acquired operations.

The company reported fiscal 2007 first quarter net sales of
$5.8 billion, down slightly in comparison to the same period of
fiscal 2006, net earnings of $87 million compared with $91 million
last year.  First quarter results include net after-tax charges of
approximately $9 million, primarily due to one-time transaction
costs.  First quarter results also include costs of approximately
$8 million after-tax from the adoption of FAS123R related to stock
option expensing.

At June 17, 2006, the Company's balance sheet showed
$23.033 billion in total assets, $17.866 billion in total
liabilities, and $5.167 billion in total stockholders' equity.

                          Segment Results

Retail Food Segment

First quarter retail net sales were $2.9 billion compared with
$3.2 billion last year.  The decline in net sales primarily
reflects store divestitures.  Identical store sales growth for the
quarter was negative 1.8%.  When adjusted for planned in-market
store expansion, first quarter identical store sales growth was
negative 1.3%.  Identical store sales growth for corporate-owned
Save-A-Lot stores was slightly positive during the quarter.
Exclusive of the divested Cub Foods stores in Chicago, Shop 'n
Save stores in Pittsburgh and Deals stores, total retail square
footage, including licensed stores, increased by approximately
2.7% from last year's first quarter.

The reported retail operating earnings for the first quarter was
$128 million compared to $128 million last year.  Reported
operating earnings as a percent of sales was 4.4% compared to 4.0%
last year.  First quarter fiscal 2007 reported operating earnings
as a percent of sales included the benefit of approximately
$10 million pre-tax, or approximately 40 basis points, from the
planned sale of a minority partnership interest in two retail
stores in the Northwest.  This quarter's performance reflects the
benefits of merchandising programs offset by higher utilities and
employee benefit related expenses including approximately
$4 million pre-tax of expense, or 12 basis points from the
adoption of FAS123R related to stock option expensing.

Net new store activity since last year's first quarter, including
licensed stores, included seven regional banner stores, 14 Save-A-
Lot stores and 1,113 acquired properties. The store activity
excludes market exits.  Save-A-Lot, including licensee stores,
operated 1,162 stores at the end of the quarter.

As of June 17, 2006, SUPERVALU's retail store network, including
the acquired properties, consists of 2,504 stores, including 870
licensed stores.  The company's store network includes
approximately 900 in-store pharmacies and 118 fuel centers.

Supply Chain Services Segment

First quarter net sales for supply chain services were
$2.9 billion compared with $2.8 billion last year.  The increase
in sales primarily reflects new business growth, which was
partially offset by normal customer attrition.

Reported supply chain services operating earnings for the first
quarter were $76 million, compared with $71 million last year, an
increase of approximately 6%.  Reported operating earnings as a
percent of sales were 2.7%, compared with 2.6% in last year's
first quarter.  The increase in operating earnings as a percent of
sales primarily reflects sales leverage and improved perishable
performance.  Operating results include approximately $3 million
pre-tax of expense, or 10 basis points from the adoption of
FAS123R related to stock option expensing.

                            Other Items

General corporate expense for the first quarter was $33 million
compared to $17 million last year primarily reflecting pre-tax
one-time transaction costs of approximately $14 million and
$6 million pre-tax of expense from the adoption of FAS123R related
to stock option expensing.  SUPERVALU's effective tax rate for the
first quarter was 38.6% in contrast to last year's 37.0%,
reflecting the estimated effective tax rate for fiscal 2007 as a
result of the acquisition.

Net interest expense for the first quarter was $26 million
compared to $37 million last year reflecting increased interest
income from higher invested cash balances partially offset by
approximately $7 million of interest related to the new borrowings
from the acquisition.

Capital spending for the first quarter was $90 million, including
approximately $7 million in capital leases.  Capital spending
primarily included retail store expansion, store remodeling, and
supply chain growth initiatives.

Total debt to capital was 64.3% at quarter end compared to 36.7%
at fiscal 2006 year-end, reflecting the acquisition.  The total
debt to capital ratio is calculated as total debt, which includes
notes payable, current debt and obligations under capital leases,
long-term debt and obligations under capital leases, divided by
the sum of total debt and total stockholders' equity.

                  Share Repurchase Authorization

SUPERVALU's Board of Directors has authorized the company to
repurchase up to 10 million shares of SUPERVALU common stock to
offset stock option exercises by former Albertsons employees, now
employed by SUPERVALU, subsequent to the acquisition.  The
authorization will remain in place until June 1, 2007, and is in
addition to the company's existing share repurchase program.

"As the third largest grocery retailer in the country, we remain
steadfastly committed to serving our customers through day to day
excellence at the store level, while delivering the economics of
our new business model through a balance of both earnings growth
and debt reduction," Mr. Noddle said.

Full-text copies of the Company's financials are available for
free at http://ResearchArchives.com/t/s?ee2

SUPERVALU INC. (NYSE:SVU) -- http://www.supervalu.com/-- is one  
of the largest companies in the United States grocery channel with
annual sales approaching $40 billion.  SUPERVALU has approximately
2,500 retail grocery locations.  Through SUPERVALU's nationwide
supply chain network, the company provides distribution and
related logistics support services to more than 5,000 grocery
retail endpoints across the country, including SUPERVALU's own
retail store network.  SUPERVALU currently has approximately
200,000 employees.

                           *     *     *

As reported in the Troubled Company Reporter on June 1, 2006,
Moody's Investors Service downgraded certain ratings of SUPERVALU,
Inc., including the senior unsecured long-term rating to B2 and
the corporate family rating to Ba3.

Standard & Poor's Ratings Service assigned on June 5, 2006,
SUPERVALU's long-term foreign and local issuer credit rating at
BB-.


UAL CORP: Elects Mary K. Bush to the Board of Directors
-------------------------------------------------------
Mary K. Bush, president of Bush International, accepted a seat on
UAL Corporation's board of directors.  Ms. Bush succeeds Janet
Langford Kelly, who resigned from UAL's board last month.

Ms. Bush has served three U.S. presidents, is widely recognized
for her work in international finance and banking and has managed
major financial transactions in world capital markets for
commercial and financial institutions.  As president of Bush
International, Bush advises governments and corporate clients on
capital markets and banking systems as well as strategies to
support market development and free enterprise.  She founded the
company in 1991.

"I am pleased to welcome Mary to a board that combines the
experience of those who have gone through United's restructuring
and the fresh perspective of those who joined the board upon its
exit from bankruptcy," said Glenn Tilton, United's chairman,
president and CEO.  "Her wealth of knowledge and expertise in
economics and international business will be a key advantage as we
do the work to ensure United's place as a long-term competitor in
this industry."

Prior to founding Bush International, Ms. Bush advised the
government of the District of Columbia on financing and investor
relations issues as financial advisor at the D.C. Financial
Responsibility and Management Assistance Authority.  From 1989 to
1991 she served as managing director and chief operating officer
of the Federal Housing Finance Board, the oversight body for the
nation's 12 Federal Home Loan Banks.  Among her accomplishments in
that role, she strengthened portfolio risk analysis and oversight
and created an affordable housing program.

Prior to the Board, Ms. Bush was vice president, International
Finance at Fannie Mae, where her successes included the creation
of Fannie Mae's first mutual fund of mortgage-backed securities.  
From 1982 to 1984, she served as U.S. Alternate Executive Director
of the International Monetary Fund Board, a position appointed by
the President of the United States and confirmed by the Senate.  
She is a frequent speaker on business and financial issues, and
periodically a guest commentator on financial market matters on
PBS's NewsHour with Jim Lehrer.

Ms. Bush holds a bachelor's of arts degree in economics and
political science from Fisk University and a master of business
administration degree from the University of Chicago.  She serves
on a number of boards of directors, including Mortgage Guaranty
Insurance Corporation, The Pioneer Family of Mutual Funds, Brady
Corporation and Briggs & Stratton Corporation.  She is also a
member of the Kennedy Center Board and Governing Council of the
Independent Directors Council.

                         About UAL Corp.

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


UNITY VIRGINIA: Court Extends Cash Collateral Use Authorization
---------------------------------------------------------------
The Hon. Harlin DeWayne Hale of the U.S. Bankruptcy Court for the
Northern District of Texas authorized Unity Virginia Holdings LLC
and its debtor-affiliates to use cash collateral until Sept. 15,
2006.  The cash collateral secures repayment of the Debtor's debts
to PlainsCapital Bank and Prospect Energy Corporation.

The Debtors are authorized to use Cash Collateral for the specific
purposes and in the specific amounts identified in a court-
approved budget.  A copy of this budget is available for free
at http://researcharchives.com/t/s?c53

Headquartered in Dallas, Texas, Unity Virginia Holdings LLC,
operates a coal mining and processing company.  The company filed
for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex.  Case
No. 06-31937).  James C. Jarret, Esq., and Arnaldo N. Cavazos,
Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the
Debtor in its restructuring efforts.  No Official Committee of
Unsecured Creditors has been appointed in the Debtors cases.  When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.

Four of the Debtor's affiliates, Glamorgan Coal Resources LLC,
Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan
Refuse LLC, filed for chapter 11 protection on May 12, 2006
(Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956).  Another
affiliate, Glamorgan Operations, LLC, filed for chapter 11
protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995).


USG CORP: Grosses $1.8 Billion from Rights Offering
---------------------------------------------------
USG Corporation reported that 37.95 million rights were exercised
in the company's recently concluded rights offering.  Berkshire
Hathaway Inc. acquired 6.97 million shares in connection with its
role as backstop purchaser for the rights offering.  These shares
include 6.5 million shares underlying rights distributed to
Berkshire Hathaway in connection with the shares it owned on the
record date for the rights offering and 0.47 million shares
underlying rights distributed to other stockholders that were not
exercised in the rights offering.  As a result, Berkshire Hathaway
now owns 13.47 million shares, or 15%, of the company's
outstanding common stock.

"We are gratified to see the very high level of participation in
the rights offering," said USG Corporation Chairman and CEO
William C. Foote.  "We appreciate the ongoing support of
stockholders, including Berkshire Hathaway, which has been a
significant USG stockholder for more than five years."

The company used a portion of the $1.8 billion gross proceeds from
the rights offering and the Berkshire Hathaway backstop commitment
to repay prepetition bank debt and senior notes, plus accrued
interest, as contemplated in USG's Plan of Reorganization.  
Remaining proceeds, together with other available funds, will be
used as required to make the balance of the payments contemplated
by USG's Plan of Reorganization and for general corporate
purposes.

The company also reported that its previously disclosed
$2.8 billion credit facility is now effective.  The credit
facility, which is rated Baa3 by Moody's and BB+ by Standard and
Poor's, consists of a $650 million revolving credit facility, a $1
billion term loan facility and a $1.15 billion tax bridge term
loan facility.

"The successful completion of the rights offering and the closing
of the credit agreement put the company in a sound financial
position," said Mr. Foote.  "We are able to meet the financial
obligations of the Plan of Reorganization while still continuing
to implement our strategy to expand our distribution business,
invest in our market-leading wallboard manufacturing operations
and develop new building solutions for our customers."

                            About USG

Headquartered in Chicago, Illinois, USG Corporation (NYSE:USG) --
http://www.usg.com/-- through its subsidiaries, is a 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.


VERESTAR INC: Committee Can Prosecute Claims vs. SES & Westar
-------------------------------------------------------------
The Honorable Allan L. Gropper allowed the Official Committee of
Unsecured Creditors appointed in the chapter 11 case of Verestar,
Inc., and its debtor-affiliates to immediately be substituted as
plaintiff in the complaint against SES Americom, Inc., and Cedar
Hill Texas Video Network LP, nka Westar Satellite Services LP, for
the benefit of the Debtors' estates.

The Debtors have causes of action against SES/Westar, arising from
SES' and Westar's agreement to purchase Verestar's assets and
various related agreements.  

The U.S. Bankruptcy Court for the Southern District of New York
had given the Committee authority, on July 12, 2004, to assert
claims against American Tower Corporation.

Headquartered in Fairfax, Virginia, Verestar, Inc. --
http://www.verestar.com/-- was a provider of satellite and
terrestrial-based network communication services prior to the sale
of substantially all of its assets.  Verestar is a wholly owned
subsidiary of American Tower Corporation, a non-debtor.  The
Company and two of its affiliates filed for chapter 11 protection
on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03-18077).  Matthew
Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represents
the Debtors.  When the Company filed for protection from its
creditors, it listed $114 million in assets and more than $635
million in debts.  David S. Rosner, Esq., Cindy C. Kelly, Esq.,
Michael J. Bowe, Esq., Brian Condon, Esq., and Erin Zavalkoff,
Esq., at Kasowitz, Benson, Torres & Friedman LLP, represent the
Official Committee of Unsecured Creditors.  Barry N. Seidel, Esq.,
and Scott E. Eckas, Esq., at King & Spalding LLP, represent
American Tower Corporation and the Individual Defendants.  Barry
H. Berke, Esq., and Stephen M. Sinaiko, Esq., at Kramer, Levin,
Naftalis & Frankel, LLP, represent the Bear Stearns Defendants.


W.R. GRACE: Equity Deficit Narrows to $570.4 Million at June 30
---------------------------------------------------------------
W. R. Grace & Co. disclosed its financial results for the second
quarter ended June 30, 2006.  Second quarter highlights are:

      -- Sales for the second quarter were $729.1 million
         compared with $676.5 million in the prior year quarter,
         a 7.8% increase.  The increase was attributable
         primarily to higher sales volume in all geographic
         regions, improved product mix, and selling price
         increases in response to cost inflation.  Sales
         increased 9.8% for the Grace Performance Chemicals
         operating segment and 6.0% for the Grace Davison
         operating segment.

      -- Grace recorded a net loss for the second quarter of
         $(5.2) million, or $(0.08) per diluted share, compared
         with net income of $32.7 million, or $0.49 per diluted
         share, in the prior year quarter.  The second quarter
         net loss is attributable to a $30.0 million increase in
         Grace's estimated liability for environmental
         remediation, principally related to Grace's former
         vermiculite mining operation in Montana, and to
         $24.3 million in costs for Chapter 11, litigation and
         other matters not related to core operations.  Excluding
         these costs, net income would have been $34.1 million
         for the second quarter of 2006 compared with
         $28.8 million calculated on the same basis for the
         second quarter of 2005, an 18.4% increase.

      -- Pre-tax income from core operations was $70.7 million
         in the second quarter compared with $56.6 million last
         year, a 24.9% increase.  Pre-tax operating income of the
         Grace Performance Chemicals segment was $53.1 million,
         up 16.2% compared with the second quarter of 2005,
         attributable principally to higher sales of commercial
         construction products.  Pre-tax operating income of the
         Grace Davison segment was $46.3 million, up 7.4%
         compared with the second quarter of 2005, attributable
         primarily to higher sales of specialty materials and
         catalysts used in refining, chemical, and industrial
         applications.  Corporate operating costs were
         $3.5 million lower than the second quarter of 2005 due
         to reduced pension expense resulting from recent cash
         contributions to Grace's pension plans.

      -- Sales for the six months ended June 30, 2006, were
         $1,387.7 million compared with $1,279.7 million for the
         prior period, an 8.4% increase.  Grace recorded a net
         loss for the six months ended June 30, 2006, of
         $(5.1) million, or $(0.08) per diluted share, compared
         with net income in the comparable period of 2005 of
         $35.8 million, or $0.53 per diluted share.  The net loss
         was principally caused by an increase in the estimated
         costs to reimburse the U.S. Government for environmental
         remediation in Montana and defense costs of the related
         criminal proceeding.  Excluding non-core and Chapter 11
         related costs, net income would have been $56.0 million
         for the six months ended June 30, 2006, compared with
         $43.2 million calculated on the same basis for 2005, a
         29.6% increase.  Pre-tax income from core operations was
         $118.5 million for the six months ended June 30, 2006, a
         23.1% increase over 2005, primarily attributable to
         higher sales volume in all geographic regions and higher
         selling prices to offset cost inflation, and from lower
         overall pension costs.

"We are very pleased with our second quarter and six month
operating results," said Grace's President and Chief Executive
Officer Fred Festa.  "Fundamentals in our key end-use markets
remain favorable from high demand for transportation fuels and
good commercial construction activity worldwide.  However, we
continue to incur significant unpredictable costs to resolve
litigation and legacy issues which can cause volatility in our net
results."

                          CORE OPERATIONS

                           Grace Davison

Second quarter sales for the Grace Davison operating segment,
which includes silica- and alumina-based catalysts and materials
used in a wide range of industrial applications, were
$380.3 million, up 6.0% from the prior year quarter.  Key factors
contributing to the sales increase were:

      (1) continued strong demand for hydroprocessing catalysts
          used to upgrade heavy crude oil;

      (2) selling price increases to partially offset natural gas
          and raw material cost inflation;

      (3) higher volume of specialty materials and specialty
          catalysts used in industrial and chemical applications
          from stronger economic activity, and of materials used
          in pharmaceutical applications.

Pre-tax operating income of the Grace Davison operating segment
for the second quarter was $46.3 million compared with
$43.1 million in the second quarter last year, a 7.4% increase.
Operating margin was 12.2%, about equal with the prior year
quarter.  The improvement in operating profits is attributable to
higher volume of industrial-use materials, particularly in
Europe, higher selling prices, lower operating expenses and a
better product mix.

Sales of the Grace Davison operating segment for the first six
months of 2006 were $736.7 million, up 6.2% from the same period
of 2005.  Year-to-date pre-tax operating income was $82.3 million,
compared with $80.8 million for the prior year, a 1.9% increase,
with operating margins at 11.2% compared with 11.6% last year.  
Year-to-date operating results reflect higher sales in most
regions, offset by the negative effects of higher raw material and
energy costs.

                    Grace Performance Chemicals

Second quarter sales for the Grace Performance Chemicals operating
segment, which includes specialty chemicals and building materials
used in commercial and residential construction and sealants and
coatings used in rigid food and beverage packaging, were $348.8
million, up 9.8% from the prior year quarter.  Key factors
contributing to the sales increase were:

      (1) strong commercial construction activity in the United
          States, which more than offset softness in new
          residential construction;

      (2) improved construction activity and product acceptance,
          particularly in Europe; and

      (3) higher selling prices in response to increases in raw
          material costs.

Pre-tax operating income for the Grace Performance Chemicals
operating segment was $53.1 million compared with $45.7 million
for the second quarter last year, a 16.2% increase.  Operating
margin of 15.2% was 0.8 percentage point higher than the second
quarter of 2005.  The higher operating income was primarily a
result of sales volume growth in all geographic regions and
selling price increases, partially offset by raw material cost
inflation.

Sales of the Grace Performance Chemicals operating segment for the
six months ended June 30, 2006, were $651.0 million, up
11.1% from 2005.  Year-to-date pre-tax operating income was
$87.3 million compared with $73.0 million for the first six
months of the prior year, a 19.6% increase, reflecting higher
sales volume globally, selling price increases and positive
results from productivity and cost containment initiatives,
partially offset by raw material cost inflation.  Operating
margin of 13.4% was 0.9 percentage point higher than the first
six months of last year.

                          Corporate Costs

Corporate costs related to core operations were $28.7 million in
the second quarter of 2006 compared with $32.2 million in the
prior year quarter, and $51.1 million year-to-date compared with
$57.5 million in 2005.  The decrease in the second quarter and
year-to-date was attributable primarily to lower pension expense
from the effect of contributions made to defined benefit pension
plans in recent years.

          PRE-TAX INCOME (LOSS) FROM NONCORE ACTIVITIES

Non-core activities comprise events and transactions not directly
related to the generation of operating revenue or the support of
core operations.  The pre-tax loss from non-core activities was
$(42.8) million in the second quarter of 2006 compared with
pre-tax income of $13.1 million in the prior year quarter, and a
pre-tax loss of $(62.9) million year-to-date in 2006 compared with
pre-tax income of $5.0 million in 2005.  The year-to-date loss
is principally due to revised estimates of environmental
clean-up costs ($30.0 million) and higher legal defense costs
($18.5 million), both related to issues arising from Grace's
former vermiculite mining operations in Montana.

The revised estimate of environmental clean-up costs is primarily
based on new information provided by the U.S. Government related
to amounts chargeable to Grace over the period January 1, 2002, to
December 31, 2005, for remediation activities in Montana.  The
charge brings Grace's recorded liability for vermiculite-related
environmental clean-up costs to $255.4 million at June 30, 2006,
of which $172 million is for reimbursement of costs incurred by
the U.S. Government from 1999 through 2005 as disclosed to Grace.  
Grace has also been informed that, later this year, the U.S.
Government will provide projections of reimbursable costs for 2006
and future years, which could result in another material revision
to the estimated cost of this clean-up.  Other changes to pre-tax
loss from non-core activities relate to a number of miscellaneous
income and expense items, and to an additional $13.4 million in
gains recorded in the first half of 2005 from insurance recoveries
on pre-Chapter 11 environmental and asbestos-related costs.

                      Chapter 11 Proceedings

On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary W.
R. Grace & Co.-Conn., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware.  
Grace's non-U.S. subsidiaries and certain of its U.S. subsidiaries
were not part of the Filing.  Since the Filing, all motions
necessary to conduct normal business activities have been approved
by the Bankruptcy Court.

On November 13, 2004, Grace filed a plan of reorganization, as
well as several associated documents, including a disclosure
statement, with the Bankruptcy Court.  On January 13, 2005, Grace
filed an amended plan of reorganization and related documents to
address certain objections of creditors and other interested
parties.  The amended Plan is supported by committees
representing general unsecured creditors and equity holders, but
is not supported by committees representing asbestos personal
injury claimants and asbestos property damage claimants.  As part
of determining the confirmability of the Plan, the Bankruptcy
Court had approved a process and timeline for the estimation of
asbestos-related property damage and personal injury claims.
This process had been deferred to provide Grace and the
committees an opportunity to negotiate a consensual plan of
reorganization.  These negotiations were not successful.  As a
result, Grace is continuing to pursue a Bankruptcy-Court approved
estimation of its asbestos-related liabilities.

Expenses related to Grace's Chapter 11 proceedings were
$11.5 million in the second quarter and $20.2 million year-to-
date in 2006, about twice the spending rate for the same period in
2005.  The increase relates directly to a higher level of activity
around the bankruptcy process of claims resolution and estimation.

Most of Grace's non-core liabilities and contingencies, including
asbestos-related litigation, environmental claims and other
obligations, are subject to compromise under the Chapter 11
process.  The Chapter 11 proceedings, including related litigation
and the claims valuation process, could result in allowable claims
that differ materially from recorded amounts.  Grace will adjust
its estimates of allowable claims as facts come to light during
the Chapter 11 process that justify a change, and as Chapter 11
proceedings establish court-accepted measures of Grace's non-core
liabilities.

                      Cash Flow And Liquidity

Grace's net cash flow from operating activities for the first six
months of 2006 was $11.1 million, compared with a negative
$(74.6) million for the comparable period of 2005.  The higher
cash flow is attributable to improved operating results in 2006
and the non-recurrence of $119.7 million paid to settle tax and
environmental contingencies in 2005.  Year-to-date pre-tax income
from core operations before depreciation and amortization was
$175.0 million, 11.5% higher than in the prior year, a result of
the higher income from core operations described above.  Cash used
for investing activities was $64.8 million for the first six
months of 2006, primarily reflecting capital replacements and
investments in new production capacity, and the acquisition of a
custom catalyst business in June 2006.

At June 30, 2006, Grace had available liquidity in the form of
cash ($443.2 million), net cash value of life insurance
($86.6 million) and available credit under its debtor-in-
possession facility ($199.4 million).  Grace believes that these
sources and amounts of liquidity are sufficient to support its
business operations, strategic initiatives and Chapter 11
proceedings for the foreseeable future.

W. R. Grace & Co. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
==================================           June 30,  Dec. 31,
Amounts in millions                            2006      2005
----------------------------------           --------  --------
ASSETS
Current Assets
Cash and cash equivalents                      $443.2    $474.7
Trade accounts receivable, net                  472.4     401.7
Inventories                                     309.3     278.3
Deferred income taxes                            26.6      27.3
Other current assets                             54.3      71.6
                                              --------  --------
Total Current Assets                          1,305.8   1,253.6

Properties and equipment, net                   640.2     632.9
Goodwill                                        103.6     103.9
Cash value of life insurance policies, net       86.6      84.8
Deferred income taxes                           726.4     703.9
Asbestos-related insurance expected to be
   realized after one year                      500.0     500.0
Other assets                                    249.1     238.1
                                              --------  --------
Total Assets                                 $3,611.7  $3,517.2
                                              ========  ========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Liabilities Not Subject to Compromise
Current Liabilities
Debt payable within one year                     $3.2      $2.3
Accounts payable                                164.8     166.8
Income taxes payable                             16.9      10.1
Other current liabilities                       191.5     197.9
                                              --------  --------
Total Current Liabilities                       376.4     377.1

Debt payable after one year                       0.4       0.4
Deferred income taxes                            59.9      54.3
Minority interest in consolidated affiliates     55.7      36.4
Unfunded defined benefit pension liability      445.5     447.5
Other liabilities                                38.6      41.7
                                              --------  --------
Total Liabilities Not Subject to Compromise     976.5     957.4

Liabilities Subject to Compromise
Prepetition debt plus accrued interest          710.3     684.7
Accounts payable                                 31.6      31.5
Income tax contingencies                        134.4     134.5
Asbestos-related liability                    1,700.0   1,700.0
Environmental remediation                       368.6     342.0
Post-retirement benefits                        180.2     187.7
Other liabilities                                80.5      72.7
                                              --------  --------
Total Liabilities Subject to Compromise       3,205.6   3,155.1
                                              --------  --------
Total Liabilities                             4,182.1   4,112.5
                                              --------   -------

Shareholders' Equity (Deficit)
Common stock                                      0.8       0.8
Paid-in capital                                 423.2     423.4
Accumulated deficit                            (511.0)   (505.9)
Treasury stock, at cost                        (103.8)   (119.7)
Accumulated other comprehensive loss           (379.6)   (393.9)
                                             ---------  --------
Total Shareholders' Equity (Deficit)           (570.4)   (595.3)
                                             ---------  --------
Total Liabilities and Shareholders'
    Equity (Deficit)                          $3,611.7  $3,517.2
                                             =========  ========


W. R. Grace & Co. and Subsidiaries
Consolidated Statement of Operations         Three Months Ended
(Unaudited)                                       June 30,
==================================           ==================
Amounts in millions                            2006      2005
----------------------------------           --------  --------
Net sales                                      $729.1    $676.5
                                              --------  --------

Cost of goods sold, exclusive of
    depreciation and amortization                470.2     439.7
Selling, general and administrative
    expenses, exclusive of
    net pension expense                          141.5     117.8
Depreciation and amortization                    28.4      30.2
Research and development expenses                15.1      15.1
Net pension expense                              16.8      19.5
Interest expense and related financing costs     19.9      13.3
Other (income) expense                          (13.9)    (23.9)
                                              --------  --------
                                                 708.0     611.7

Income (loss) before Chapter 11 expenses,
    income taxes and minority interest            21.1      64.8
Chapter 11 expenses, net                        (11.5)     (4.6)
Benefit from (provision for) income taxes        (4.5)     (8.6)
Minority interest in consolidated entities      (11.5)     (7.5)
                                              --------  --------
Net income (loss)                               ($5.2)    $32.7
                                              ========  ========


W. R. Grace & Co. and Subsidiaries
Consolidated Statement of Cash Flows          Six Months Ended
(Unaudited)                                       June 30,
==================================           ==================
Amounts in millions                            2006      2005
----------------------------------           --------  --------
OPERATING ACTIVITIES
Income (loss) before Chapter 11 expenses,
    income taxes & minority interest             ($5.1)    $35.8

Reconciliation to net cash provided
by (used for) operating activities:
Chapter 11 expenses, net                         20.2      10.6
(Benefit from) provision for income taxes         7.8      28.6
Minority interest in consolidated entities       18.3      11.0
Depreciation and amortization                    56.5      60.7
Interest accrued on prepetition debt
    subject to compromise                         34.7      25.4
Net (gain) loss on sale of investments and
    disposals of assets                           (2.8)     (0.5)
Net pension expense                              31.6      37.1
Payments to fund pension plans                  (37.5)    (13.2)
Provision for uncollectible receivables           0.5       0.9
Provision for environmental remediation          30.0         -
Income from life insurance policies, net         (1.7)     (1.9)
Payments under post-retirement benefit programs  (6.5)     (5.1)
Expenditures for environmental remediation       (3.4)     (3.0)
Expenditures for retained obligations of
    Divested businesses                           (1.3)     (0.5)
Changes in assets and liabilities, excluding
    effect of businesses acquired/divested and
    foreign currency translation:
       Working capital items                     (86.2)    (71.7)
       Other accruals and non-cash items          (9.3)    (45.2)
                                               -------  --------
Net cash provided by (used for) operating
    activities before income taxes, Chap. 11
    expenses, and settlement of non-core
    contingencies                                 45.8      69.0
Cash paid to settle non-core contingencies          -    (119.7)
Chapter 11 expenses paid, net                   (16.9)     (9.0)
Income taxes paid, net of refunds               (17.8)    (14.9)
                                               -------  --------
Net cash provided by (used for) operating
    activities                                    11.1     (74.6)

INVESTING ACTIVITIES
Capital expenditures                            (51.9)    (36.8)
Business acquired, net of cash acquired         (20.0)     (2.5)
Proceeds from termination of life
    insurance policies                               -      14.8
Net investment in life insurance policies        (0.1)      2.4
Proceeds from sales of investments
    and disposals of assets                        7.2       1.9
                                               -------  --------
Net cash provided by (used for)
    investing activities                         (64.8)    (20.2)

FINANCING ACTIVITIES
Net payments of loans secured by cash
    value of life insurance policies                 -      (0.6)
Net (repayments) borrowings under credit
    arrangements                                   0.6      (1.2)
Fees under DIP facility                          (1.1)     (1.1)
Proceeds from exercise of stock options          15.8       3.0
                                               -------  --------
Net cash provided by (used for) financing
    activities                                    15.3       0.1
                                               -------  --------

Effect of currency exchange rate changes
    on cash and cash equivalents                   6.9     (11.7)
                                               -------  --------
Increase (decrease) in cash and
    cash equivalents                             (31.5)   (106.4)
Cash & cash equivalents, beginning of period    474.7     510.4
                                               -------  --------
Cash & cash equivalents, end of period         $443.2    $404.0
                                               =======  ========

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica  
products, especially construction chemicals and building
materials, and container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


W.R. GRACE: Court Enjoins Prosecution of N.J. State Court Action
----------------------------------------------------------------
The Honorable Fitzgerald enjoins the continued prosecution of a
state court action commenced by the New Jersey Department of
Environmental Protection against W.R. Grace & Co., and its two
former employees, at the request of W.R. Grace and its debtor-
affiliates.

The NJDEP filed the lawsuit before in the Superior Court of New
Jersey Law Division: Mercer County, on June 1, 2005.  The NJDEP
sought civil penalties for misrepresentations and false
statements made in a Preliminary Assessment/Site Investigation
Report and Negative Declarations submitted by Grace to the NJDEP
in 1995 pursuant to the New Jersey Industrial Site Recovery Act.

Grace submitted the report, which was prepared by an independent
environmental consultant, in connection with the closing of
Grace's former plant in Hamilton Township, New Jersey.

The NJDEP argued that Grace should have provided additional
information about the expansion of vermiculite concentrate.  
Because Grace failed to do so, the NJDEP asserted that the state
of New Jersey may recover $75,000 in civil penalties for every
day over the last 10 years that Grace failed to correct the false
report.

Grace initiated an adversary proceeding in September 2005 to stop
NJDEP Commissioner Bradley M. Campbell and Peter C. Harvey,
Attorney General of New Jersey, from prosecuting the New Jersey
action until it may be transferred to the Bankruptcy Court or, in
the event the transfer is unsuccessful, until the Debtors emerge
from bankruptcy.

Separate prosecution of the New Jersey action threatens the
orderly administration of the Grace estate, James E. O'Neill,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP,
in Wilmington, Delaware, told Judge Fitzgerald.  Mr. O'Neill
noted that the Bankruptcy Court will determine in the course of
resolving related personal injury and property damage claims
whether the expansion of vermiculite at Grace's New Jersey
factories posed any health risk to the public.

If the NJDEP is correct, Mr. O'Neill continued, then the agency
may win a judgment outside the confines of the bankruptcy cases
for more than $800,000,000.  "So long as the New Jersey action
continues outside [the Bankruptcy] Court, no plan of
reorganization for Grace could be completed," he said.

Mr. O'Neill also pointed out that the NJDEP waited almost 10
years to bring the action.  The agency cannot demonstrate any
harm either from delaying its action or from having the action
resolved in the bankruptcy court.

Grace has filed a notice to remove the lawsuit to the U.S.
District Court for the District of New Jersey and seeks to have
the case transferred to the District of Delaware where the claims
may be referred to the Bankruptcy Court for adjudication within
the context of the company's bankruptcy proceeding.

Messrs. Campbell and Harvey sought dismissal of Grace's adversary
complaint.  They pointed out that no penalties have yet been
fixed, hence, Grace's contention that the New Jersey action would
disrupt the administration of the bankruptcy case is premature.

Messrs. Campbell and Harvey also argued that the New Jersey is
seeking to enforce state environmental laws, which constitute an
exercise of the state's police and regulatory powers.  An action
for penalties up to the point of attempted collection, is not
governed by the automatic stay.

The Bankruptcy Court will convene a hearing on August 21, 2006,
to consider continuation of the Injunction while the parties
confer to settle the issue.  The New Jersey action is stayed
until conclusion of the August hearing or further Court order,
Judge Fitzgerald says.

Grace purchased the Hamilton plant assets in 1963 and ceased
operations in 1994.  During the operating period, Grace produced
spray-on fire protection products and vermiculite-based products
at the plant.  

The state of New Jersey and U.S. Department of Justice also are
conducting criminal investigations related to Grace's former
operations of the Hamilton plant, Grace disclosed in a regulatory
filing with the Securities and Exchange Commission.  The current
property owners are conducting remediation activities as directed
by the EPA.  The property owners and the EPA have filed proofs of
claim against Grace aggregating $4,000,000 with respect to the
Hamilton plant site.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica  
products, especially construction chemicals and building
materials, and container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdale represent the
Official Committee of Asbestos Personal Injury Claimants.  
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  


WACHOVIA BANK: S&P Affirms Low-B Ratings on Six Cert. Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on seven
classes of commercial mortgage pass-through certificates from
Wachovia Bank Commercial Mortgage Trust's series 2003-C5.

Concurrently, ratings are affirmed on 11 other classes from the
same series.

The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.

As of the July 17, 2006, remittance report, the collateral pool
consisted of 152 loans with an aggregate trust balance of $1.155
billion, compared with 152 loans totaling $1.201 billion at
issuance.  The master servicer, Wachovia Bank N.A. (Wachovia),
reported primarily full-year 2005 financial information for 97% of
the pool.  Based on this information, Standard & Poor's calculated
a weighted average debt service coverage ratio (DSCR) of 1.50x,
compared with 1.49x at issuance.  The current DSCR figure excludes
$19.6 million (2%) of defeased loans.  All of the loans in the
pool are current with the exception of one loan that is 90-days
delinquent ($2.9 million) and one asset that is REO
($3.5 million), both of which are with the special servicer, LNR
Partners Inc., and are discussed below.  Two appraisal reduction
amounts totaling $2.4 million are outstanding on the two
exposures.  To date, the trust has not experienced any losses.

The top 10 loans have an aggregate outstanding balance of
$311.8 million (27%) and a weighted average DSCR of 1.51x, down
from 1.64x at issuance.

The largest exposure in the pool, Lloyd Center Mall, is a pari
passu loan with a whole loan balance of $134.1 million and an in-
trust balance of $67.1 million (6% of the pool).  The loan is
secured by 1.23 million sq. ft. of a 1.47-million-sq.-ft. regional
mall in Portland, Oregon.  The sponsor and manager of the property
is Glimcher Realty Trust (BB/Stable/--).  Standard & Poor's
adjusted net cash flow (NCF) for the property has been stable
since issuance and the loan continues to exhibit credit
characteristics consistent with an investment-grade-rated
obligation.

The sixth-largest exposure in the pool, Columbiana Station
Shopping Center, has a balance of $25.9 million (2%) and is
secured by a 270,187-sq.-ft. retail property in Columbia, South
Carolina.  Current occupancy at the property is 92%, down from 98%
at issuance.  Additionally, Standard & Poor's adjusted NCF is 21%
below its level at issuance.  The loan had an investment-grade
shadow rating at issuance, but no longer exhibits credit
characteristics consistent with an investment-grade-rated
obligation.  The decline in the DSCR for the top 10 loans since
issuance is largely due to the performance of the Columbiana
Station Shopping Center loan and the third-largest loan ($34.1
million, 3%), which was placed on the master servicer's watchlist
after reporting a 60% decline in NCF since issuance.

Standard & Poor's reviewed property inspections provided by the
master servicer for all of the assets underlying the top 10 loans.
Three properties were characterized as "excellent," while the
remaining collateral was characterized as "good."

There are two loans and the aforementioned REO asset with the
special servicer ($26.3 million aggregated balance, 2%).  Plaza
Gardens South Apartments, which secures the 10th-largest loan
($19.8 million), is a 250-unit multifamily property in Overland
Park, Kansas.  The loan was transferred to LNR in December 2004
due to delinquency.  The loan was brought current in April 2006,
but is now less than 30-days past due.  An assumption of the loan
is in process and no losses are expected at this time.

Plaza Apartments is a 144-unit REO asset located west of Fort
Worth, Texas, with a related total exposure of $3.7 million.  The
asset became REO on Feb. 7, 2006, because the borrower was unable
to keep the former loan current due to cash flow problems.  The
asset was appraised for $2.3 million in December 2005.

Shockoe Place is a 45-unit multifamily property in Richmond,
Virginia, securing the previously mentioned loan that is 90-days
delinquent, and has a total exposure of $3.0 million.  The loan
was transferred to LNR in April 2006 due to delinquency.  Property
performance is strong, with a reported year-end 2005 DSCR of
1.25x, and LNR is proceeding with foreclosure on the collateral.
Standard & Poor's expects a minimal loss upon resolution of the
loan.

Wachovia reported a watchlist of 18 loan exposures ($111.8
million, 10%).  673 First Avenue in New York, N.Y., secures the
third-largest loan ($34.1 million, 3%).  The 426,596-sq.-ft.
office building has performed poorly due to significant lease
rollover, primarily in 2004 and 2005.  The loan appears on the
watchlist because it reported a 2005 DSCR of 0.64x.  The remaining
loans on the watchlist appear there primarily because of low DSCRs
or occupancy issues.

Standard & Poor's stressed the loans on the watchlist and other
loans with credit issues as part of its analysis. The resultant
credit enhancement levels support the raised and affirmed ratings.
    
                          Ratings Raised
     
               Wachovia Bank Commercial Mortgage Trust
           Commercial mortgage pass-through certificates
                          series 2003-C5

                        Rating
                        ------
            Class     To      From   Credit enhancement(%)
            -----     --      ----   ---------------------
            B         AAA     AA            16.77
            C         AA+     AA-           15.47
            D         AA      A             12.74
            E         A+      A-            11.83
            F         A       BBB+          10.40
            G         BBB+    BBB            8.71
            H         BBB     BBB-           7.02
     
                          Ratings Affirmed

               Wachovia Bank Commercial Mortgage Trust
           Commercial mortgage pass-through certificates
                          series 2003-C5

     
           Class     Rating         Credit enhancement(%)
           -----     ------         ---------------------
           A-1       AAA                    20.28
           A-2       AAA                    20.28
           A-1A      AAA                    20.28
           J         BB+                     5.07
           K         BB                      4.03
           L         BB-                     3.51
           M         B+                      2.99
           N         B                       2.47
           O         B-                      2.08
           XC        AAA                     N/A
           XP        AAA                     N/A

                         N/A - Not applicable.


WESTERN MEDICAL: Sells Assets to Providential for $5.65 Million
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona allowed
Western Medical, Inc., to sell substantially all of its assets to
Providential Holdings, Inc. for a total consideration of
$5.65 million, pursuant to Section 363 of the Bankruptcy Code.

The amount may be subject to a potential deduction on the basis of
One Dollar for every One Dollar below $9,330,260 that the Accounts
Receivable total as of the closing date, up to a total deduction
of $500,000.

Funding for the transaction was be provided by Northern Healthcare
Capital, LLC.

Pursuant 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.

Robert Buceta, corporate strategist of Providential Holdings, Inc.
and Chairman of Providential Western Medical, Inc., re-iterated:
"We look forward to building an exceptional company at all levels.
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

Providential Holdings (OTCBB:PRVH) -- http://www.phiglobal.com/--  
is a diversified holding company primarily engaged 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.  Pachulski Stang Ziehl Jones and Weintraub LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtor
filed for protection from its creditors, it estimated assets
between $1 million to $10 million and debts between $10 million
and $50 million.


WILLIAM LYON: Inks $50 Million Credit Agreement with Calif. Bank
----------------------------------------------------------------
William Lyon Homes wholly-owned subsidiary William Lyon Homes,
Inc., and California National Bank, entered into a certain
Borrowing Base Revolving Line of Credit Agreement dated as of July
10, 2006.
  
The "Commitment Amount" under the Agreement is $50,000,000.  The
maturity date under the agreement and all related loans is July
10, 2007, provided that the maturity date may be extended for one
year on each anniversary of the effective date with the consent of
the lender.  If not so extended on any anniversary date, the
maturity date will nonetheless be for one additional year, during
which time California Lyon may borrow amounts, subject to
applicable borrowing base limitations, as defined, under this
facility solely to complete the construction of residences begun
prior to such date in approved projects funded by disbursements
under this facility.

The Commitment Amount may, with the consent of the lender, be
increased or decreased in $10,000,000 increments, up to a maximum
Commitment Amount of $70,000,000, provided no events of default
have occurred, as defined.  In addition, the Loan Agreement
contains an unconditional guaranty by the Registrant of all
indebtedness or obligations of California Lyon to CNB.

The Agreement includes a Note Secured by Deeds of Trust dated as
of July 10, 2007, executed by California Lyon for the benefit of
CNB, which evidences:

    (i) the maximum principal amount of the loan is $50,000,000,

   (ii) the Maturity Date is July 10, 2007, and

  (iii) at the discretion of California Lyon, interest paid on
        borrowings by California Lyon under the Loan Agreement can
        be based upon "Base Rate" borrowings, which approximate
        the prime rate, or "Base Libor" borrowings, which
        approximate a LIBOR base rate index, as defined in the
        Loan Agreement.

A full-text copy of the Agreement is available for free at:

              http://ResearchArchives.com/t/s?ed3

Headquartered in Newport Beach, California, William Lyon Homes --
http://www.lyonhomes.com/-- is one of the oldest and largest   
homebuilders in the Southwest with development communities in
California, Arizona and Nevada.


WILLIAM LYON: Merger Completion Cues S&P to Remove Dev. Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and 'B' senior unsecured debt ratings on William Lyon Homes
and removed them from CreditWatch, where they were placed with
developing implications March 20, 2006.  The outlook is stable.
The rating actions affect $550 million of senior unsecured notes,
which will remain outstanding.

"The CreditWatch removals follow the recent completion of the
merger of WLH Acquisition Corp., an entity owned by General
William Lyon and certain trusts, with and into WLS, effectively
completing WLS' privatization.  WLS will continue as the surviving
entity," explained Standard & Poor's credit analyst George
Skoufis.

"The ratings reflect the company's overall good position within
its markets, albeit a geographically concentrated business, as
well as its attractive margins and an appropriate balance sheet
with good liquidity," Mr. Skoufis commented.  "Challenging housing
conditions are having a negative impact on sales, which will weigh
on profitability and interest coverage over the next several
quarters; however, debt protection measures are expected to remain
acceptable for the rating."

WLS' currently strong margins provide some downside cushion,
which, along with sufficient liquidity and a stronger balance
sheet, should support the current rating despite the uncertain
depth and duration of the housing market correction.  In the
longer term, an upgrade would be warranted if management prudently
manages its land investments and community growth and remains
committed to a moderate financial profile.  Negative rating
actions would be warranted if management leverages the balance
sheet to aggressively pursue land investments or if market
conditions deteriorate more sharply than expected, resulting in
materially weaker interest coverage measures.


WINDSWEPT ENVIRONMENTAL: Amends Fee Waiver Pact with Laurus Master
------------------------------------------------------------------
Windswept Environmental Group, Inc. entered an Amendment and Fee
Waiver Agreement with Laurus Master Fund, Ltd., which further
amends the terms of the registration rights agreement dated as of
June 30, 2005.

The Amendment and Fee Waiver Agreement extend the deadline of the
Initial Registration Statement must be declared effective by the
SEC from July 21, 2006 to Aug. 25, 2006.

The Amendment and Fee Waiver Agreement also postponed, until Aug.
26, 2006, the date by which any Fees may accrue and become payable
with respect to the initial registration statement.

A full-text copy of the Amendment and Fee Waiver Agreement is
available for free at http://ResearchArchives.com/t/s?ecd

Based in Bay Shore, New York, Windswept Environmental Group, Inc.,
through its wholly owned subsidiary, Trade-Winds Environmental
Restoration, Inc. -- http://www.tradewindsenvironmental.com/--  
provides a full array of emergency response, remediation, disaster
restoration and commercial drying services to a broad range of
clients.  The Company specializes in hazardous materials
remediation, microbial remediation, testing, toxicology, training,
wetlands restoration, wildlife and natural resources
rehabilitation, asbestos and lead abatement, technical advisory
services, restoration and site renovation services.

                       Going Concern Doubt

Massella & Associates, CPA, PLLC, in Syosset, New York, raised
substantial doubt about Windswept Environmental Group, Inc.'s
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
June 28, 2005.  The auditor pointed to the Company's recurring
losses from operations, difficulty in generating sufficient cash
flow, and working capital and stockholders' deficiencies.


WINN-DIXIE: Ten More Parties Object to Disclosure Statement
-----------------------------------------------------------
Ten more parties filed objections to Winn-Dixie Stores, Inc., and
its debtor-affiliates' disclosure statement:

   -- the U.S. Trustee for Region 21;
   -- the U.S. Internal Revenue Services;
   -- Florida Tax Collectors;
   -- Hamilton County, Tennessee
   -- Henrico County, Virginia;
   -- ACE American Insurance Company;
   -- Prudential Insurance Company of America
   -- Nina Gonzalez, et al.;
   -- F.R.O. LLC VII and F.R.O. LLC VIII; and
   -- Catamount Landlords.

                           U.S. Trustee

Felicia S. Turner, the United States Trustee for Region 21,
objects to the Debtors' Disclosure Statement on grounds that it
does not contain adequate information that would allow claimants
to make fully informed judgment on whether to vote to accept or
reject the Debtors' Joint Plan of Reorganization.

William Porter III, Esq., trial attorney of the U.S. Trustee,
says that the Disclosure Statement fails to provide adequate
information regarding:

   (1) the actual value of the Debtors' remaining assets and the
       avoidable transfers and potential recovery in other
       litigation, including non-bankruptcy litigation, that
       could generate funds for the estates;

   (2) the Debtors' condition and performance while in
       bankruptcy;

   (3) the methods or underlying data used to produce the
       financial projections and liquidation analysis;

   (4) each of the Debtors' independent obligation to pay
       quarterly fees to the U.S. Trustee and to continue
       reporting disbursements post-confirmation until each of
       their respective cases is converted, dismissed or a final
       decree is entered;

   (5) payments the Debtors intend to make to professionals whose
       employment was not authorized by the U.S. Bankruptcy Court
       for the Middle District of Florida;

   (6) the factual and legal bases for the Debtors' intention to
       grant broad releases of liability to various officers,
       professionals, insiders and similar parties; and

   (7) the factual and legal bases for exculpation provisions
       intended to benefit various non-debtor entities.

The Plan and its accompanying Disclosure Statement are misleading
in that they improperly suggest some authorization under the
Bankruptcy Code for multiple Debtors to be absolved of all
liabilities as of the effective date of the Plan without
presenting any factual basis or legal authority for the actions
contemplated, Mr. Porter asserts.

Mr. Porter also says that the Plan and Disclosure Statement not
only fail to articulate a basis for the non-debtor releases but
also fail to address certain factors to support the necessity for
the extraordinary act of releasing non-debtors.

                     Internal Revenue Services

The U.S. Internal Revenue Services hold claims of approximately
$82,000,000 to $84,000,000 arising from the Debtors' consolidated
federal income tax liabilities.

The IRS holds a priority tax claim that is unclassified under the
Debtors' Joint Plan of Reorganization, a secured tax claim
classified under Class 10, and a general unsecured claim the
classification of which is unclear, Deborah M. Morris, Esq.,
trial attorney of the U.S. Department of Justice, relates.

The IRS cannot determine the classification of its general
unsecured claim because the Disclosure Statement contains unclear
and overlapping definitions of classes, Ms. Morris explains.

In addition, the Disclosure Statement does not contain adequate
information that will allow the IRS to make an informed judgment
about the Plan, Ms. Morris says.  She notes that the Disclosure
Statement is deficient in a number of areas, including:

    -- the description of assets and value;

    -- condition and performance of the Debtors while in
       bankruptcy protection; and

    -- accounting and valuation methods used to produce the
       financial information in the Disclosure Statement.

Accordingly, the IRS suggests that the Plan be amended to include
sufficient information that will enable it to decide whether:

   (i) the substantive consolidation compromise is in its best
       interest;
  
  (ii) it would receive as much under the Plan as it would in a
       Chapter 7 liquidation; and

(iii) the Plan appears feasible.

                      Florida Tax Collectors

Tax collectors from 57 counties within Florida collect ad valorem
property taxes assessed against both real estate and tangible
personal property located within their respective counties.  The
taxes are secured by a statutory first lien on the assessed
property.

Brian T. FitzGerald, Esq., of the Hillsborough County Attorney's
Office, in Tampa, Florida, relates that the Debtors currently
have outstanding ad valorem Florida property taxes for years 2004
to 2006.

Mr. Fitzgerald asserts that the Disclosure Statement fails to
adequately address the treatment of the Debtors' property tax
obligations.  Accordingly, the Florida Tax Collectors suggest
that the Debtors' representation of their payment obligations
with respect to secured tax claims be expanded to include the tax
years, a general description of the type of tax and the amounts
due within each state.

Mr. FitzGerald explains that the Debtors' intention to contest
postpetition ad valorem Florida property taxes needs to be
clarified given the language used in the Disclosure Statement and
the fact that there are pending omnibus tax claim objections
within other states.

The Florida Tax Collectors ask the Court to direct the Debtors to
clearly disclose their intended treatment of the 2004-2006 ad
valorem Florida property taxes in their Disclosure Statement.

                    Hamilton County, Tennessee

Hamilton County, Tennessee, objects to the proposed treatment of
Class 10 secured tax claims on grounds that it is only authorized
under the Bankruptcy Code for general unsecured priority tax
claimants, but not for secured tax claimants.

Pursuant to the Plan and Disclosure Statement, Class 10 secured
tax claims will be paid in full over a period of six years, with
interest at 6% per annum.  The secured tax claims are impaired.

Hamilton County filed Claim No. 4206 for $15,431, plus interest,
representing the Debtors' ad valorem taxes for 2005, and had a
valid first lien on the Debtors' assets at four stores located in
the County.

According to Scott N. Brown, Jr., Esq., at Spears, Moore, Rebman
& Williams P.C., in Chattanooga, Tennessee, the Debtors sold the
assets with Hamilton County's lien attached to the proceeds.  
Though the county has not received any report on the sale, it
believes that the proceeds exceeded the amounts owed by the
Debtors.

Hamilton County wants the Plan and Disclosure Statement amended
to provide for the full payment in cash of the Debtors' taxes
plus delinquent interest at a fixed date.

                     Henrico County, Virginia

Henrico County, Virginia, objects to the proposed treatment of
Class 10 secured tax claims under the Disclosure Statement.

Henrico County filed Claim No. 7447 for $11,610, excluding
interest, to secure payment of the Debtors' ad valorem taxes for
2005.  The Claim constitutes a valid first lien on the Debtors'
tangible property assets located at the stores the Debtors'
previously operated in the county.

Rhysa Griffith South, Esq., Henrico County's assistant county
attorney, relates that the Debtors sold the assets with the
county's lien attaching to the proceeds and that Henrico County
has not received any report of the results of the sale.

Henrico County believes that the proceeds of the sale
substantially exceeded its tax claim and that it is entitled to
immediate payment of the taxes plus interest.

In addition, Ms. South asserts, the treatment proposed for
secured tax claims under Class 10 is not authorized under the
Bankruptcy Code.

Accordingly, Henrico County asks the Court to require the
amendment of the Disclosure Statement to provide for the full
payment of Claim No. 7447 in cash on the confirmation or
effective date of the Plan.

              ACE American Insurance Company, et al.

ACE American Insurance Company, Indemnity Insurance Company of
North America, and the Illinois Union Insurance Company provide
insurance coverage to the Debtors for general liability, workers'
compensation, automobile liability and other casualty or risk
policies.

The ACE Companies complain that the Disclosure Statement lacks
information that would enable them as creditors to understand and
assess the Debtors Joint Plan of Reorganization and its impact on
their interests.

The ACE Companies ask the Court to direct the Debtors to modify
the Disclosure Statement so that:

   (1) the reorganized Debtors will assume all of the Debtors'
       ACE Companies-issued insurance policies, and on or before
       the effective date of the Plan:

       (a) cure any default under the Insurance Program;

       (b) compensate the ACE Companies for any actual pecuniary
           loss resulting from the defaults; and

       (c) provide adequate assurance of future performance under
           the Insurance Program;

   (2) any claim filed by the ACE Companies arising under the
       Insurance Program will not be discharged but allowed as
       administrative claims that will be paid in full in the
       ordinary course of the reorganized Debtors' business; and

   (3) nothing in the Plan or any order confirming the Plan will
       modify the terms and conditions of the Insurance Policies
       or Agreements or release the Debtors or their respective
       successors from any liability under the Insurance Program.

              Prudential Insurance Company of America

The Prudential Insurance Company of America owns three shopping
centers in Florida wherein the Debtors remain tenants pursuant to
three unexpired leases.

Prudential says that the Joint Plan of Reorganization and its
accompanying Disclosure Statement fail to disclose adequate
information concerning the assumption of the Leases and the
payment of the cure claims.

Moreover, the Disclosure Statement describes a Plan that
improperly seeks authority to reject nonresidential real property
leases after the voting deadline, potentially impacting
Prudential's recovery of cures and disenfranchising Prudential
from the voting process, Kimberly Held Israel, Esq., in
Jacksonville, Florida, contends.

Ms. Israel also asserts that the injunction provision in the Plan
should be revised so that landlords like Prudential will not be
deprived of their right to assert set-offs or exercise recoupment
if claim objections or preference actions are prosecuted against
the landlords or if the Reorganized Debtors breached an assumed
lease following confirmation of the Plan.

Prudential asks Judge Funk not to approve the Disclosure
Statement unless and until it is amended to provide adequate
information concerning the assumption of the Leases.

                       Nina Gonzalez, et al.

In a letter filed with the Clerk of the Bankruptcy Court, Nina
Gonzalez relates that she has been a stockholder of Winn-Dixie
Stores for nearly 70 years and that she objects to the treatment
of old stockholders.

Ms. Gonzalez says that if the Debtors continue to use the Winn-
Dixie Stores name, then old stockholders who have supported the
company for a long time should be given an opportunity to be a
part of the reorganized Winn-Dixie and "not cast aside with
nothing more than a write off."

Ronnie Wilson, a long-time employee of Winn-Dixie Stores who also
bought the company's stocks, objects to the Debtors' Disclosure
Statement accompanying the Joint Plan of Reorganization.  
Mr. Wilson proposes that the equity allocated to certain company
associates when the company emerges from bankruptcy protection be
divided among the current shareholders so they could recoup some
of their investment.

Sarah and William Box each held 12,896 shares of Winn-Dixie
common stock as of August 2003.  Ms. Box asserts that if Winn-
Dixie Stores' board of directors or the bankruptcy trustee is
"unable to make at least a gesture of settlement with the
stockholders, then the best and most honorable move would be to
sell the Winn-Dixie stores, its lands and other holdings and
simply get out of the grocery business."

The Boxes object to any reorganization plan that fails to
penalize the officers, directors and other insiders for the sale
of their personal Winn-Dixie stocks prior to the bankruptcy
filing.

Rodney Butler, a minor, sustained injuries due to a slip and
fall accident at one of the Debtors' stores.  The Debtors have
not paid the third-party insurance companies for his medical
bills.

Ethel Butler, on behalf of Mr. Butler, objects to the Disclosure
Statement.

                      F.R.O. Joins Objection

Before the Debtors filed for bankruptcy, F.R.O. LLC VII and F.R.O.
LLC VIII leased to the Debtors certain real property located in
Wake Forest, North Carolina and Daphne, Alabama.

F.R.O. filed claims for rejection damages against Winn-Dixie,
Inc., and Winn-Dixie Raleigh, Inc., in October 2005 after the
Debtors rejected the Wake Forest Lease.  The Debtors' request to
assume the Daphne Lease as of the effective date of their
reorganization plan is still pending.

F.R.O. joins in the Terranova Landlords' objection that the
Disclosure Statement accompanying the Joint Plan of
Reorganization fails to provide adequate information regarding:

   -- the treatment of landlords' cure and rejection claims under
      the proposed Plan; and

   -- the effect of substantive consolidation on the rights of
      the landlords.

                 Catamount Landlords' Joinder

Catamount Rockingham LLC, Catamount Atlanta LLC, and Catamount
LS-KY LLC leased to Winn-Dixie Montgomery, Inc., and Winn-Dixie
Raleigh, Inc., Store No. 2045, in Rockingham, North Carolina;
Store No. 2712, in Atlanta, Georgia; Store NO. 1676, in
Louisville, Kentucky, and Store No. 1673, in Shelbyville,
Kentucky.  Winn-Dixie Stores, Inc., guaranteed its subsidiaries'
obligations under the Leases.

The Catamount Landlords filed proofs of claim against the Debtors
for damages arising from the rejection of the Leases.  They also
hold administrative claims with respect to the Leases.

The Catamount Landlords join the E&A Landlords' objection to the
Disclosure Statement.  Like the E&A Landlords, the Catamount
Landlords want more information on how the proposed deemed
substantive consolidation would affect their claims.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: 76 Landlords Want Asserted Cure Amounts Paid
--------------------------------------------------------
Seventy-six landlords ask the U.S. Bankruptcy Court for the Middle
District of Florida to require Winn-Dixie Stores, Inc., and its
debtor-affiliates to pay their asserted cure amounts as condition
to the assumption of their respective leases:

                          Store No.    Debtors'    Landlords'
Landlord                & Location  Cure Amount   Cure Amount
--------                ----------  -----------   ----------
5 Points West Shopping   405 (AL)     $24,790      $282,673
98 Palms Center, Ltd.    560 (FL)       8,196       142,219
AEI Net Lease et al.     481 (FL)       6,032        25,282
Anthony Balzebre et al.  370 (FL)      64,652        69,602
Avon Square Ltd.         609 (FL)      31,896        37,192
Beach Walk Centre II     561 (FL)         812        30,121
Bedford Avenue Realty    336 (FL)      39,192        43,111
Benderson Dev't. Co.     657 (FL)         973         7,421
Benjamin Chaves          512 (AL)       5,115        11,578
Blue Angel Crossing      535 (FL)       6,562        32,292
Camilla Marketplace      175 (GA)           0        27,513
Cantonment Partners Ltd. 498 (FL)       1,519         7,897
Cardinal Entities Co.   2603 (FL)      22,356        69,728
Casto Investments Co.    236 (FL)      19,775       221,095
Cedar Hills Consolidated 177 (FL)      79,038        81,247
Clanton Partners Ltd.    411 (AL)       3,396        10,594
Clay Plaza Investors       8 (FL)      31,173        36,190
Colonial Realty Limited  190 (FL)      14,771        44,007
                        2393 (FL)       5,634        14,056
Corporate Property      518BL(AL)       1,597        39,048
Crestview LLC            558 (FL)       1,401        32,735
Davie Plaza LP           311 (FL)      31,958        38,231
Eagle Harbor Investors   103 (FL)     196,819       208,745
Eastgate Investors       472 (MS)      37,173        43,038
Equity One Inc.          572 (AL)      35,714       133,222
Equity One-Alpha          51 (FL)      12,018        44,457
Equity One-Commonwealth 2601 (FL)      14,685        86,482
Equity One-Delta         249 (FL)      18,883        65,062
Equity One-Lantana       271 (FL)      54,589        76,925
Equity One-Louisiana    1353 (LA)      19,438        55,460
Equity One-Monument       54 (FL)       8,527        43,169
Equity One-Point Royale  371 (FL)       8,686        10,520
Equity One-Summerlin     717 (FL)      21,896        24,463
Equity One-West Lake     361 (FL)      12,338        11,772
Gardens Park Plaza       333 (FL)      90,443       115,439
Great Oak LLC            676 (FL)       3,127         6,159
Hobe Sound SC Co. Ltd.   305 (FL)       9,256        34,121
Inland SE Bridgewater   2269 (FL)       9,655        31,658
Inland SE Lake Olympia  2250 (FL)      44,910        46,438
Inland SE St. Cloud     2238 (FL)       8,751        11,455
IRT Partners LP         2383 (FL)      23,037        29,959
Jupiter Palms Associates 272 (FL)      70,171        78,565
Madison Investors LLC     28 (FL)      48,540        58,832
Mandarin Loretto Dev't.  141 (FL)      19,484        51,537
Mandeville Partners     1446 (LA)      77,465       140,395
Marketplace of Americus  545 (GA)      55,637        63,203
Monroe Center Partners   569 (AL)           0        18,317
Morris Realty Company    422 (AL)      22,259        48,682
Moulton Properties Inc.  412 (FL)      49,481        50,635
                         493 (FL)      51,641        53,064
Moultrie Square
   New Orleans LLC       101 (GA)      34,313        38,930
Navarre Square Inc.      501 (FL)      22,607        37,412
Nine Mile Partners Ltd.  506 (FL)         764        72,124
NOM Franklin Ltd.        550 (AL)       6,122        16,640
Northway Investments     343 (FL)       7,234       312,043
Ramco-Gershenson         345 (FL)      38,010        45,309
Regent Investment Corp. 2626 (MS)      10,979        22,001
Riley Place LLC          507 (FL)      38,204        32,735
RLV Marketplace LLC      255 (FL)       5,064         6,477
Salerno Village Shopping
   Center LLC            364 (FL)      34,026        89,630
                         365 (FL)           0         9,822
Sarria Enterprises Inc.  270 (FL)       1,949        20,055
                         237 (FL)     124,036       162,138
                         330 (FL)       7,254         7,524
                         302 (FL)           0        30,793
SES Group Miami Springs  726 (FL)       1,801       131,750
St. Stephens Square      581 (AL)           0         8,705
Three Lakes Plaza LC     210 (FL)      12,337        15,077
Tiger Crossing           579 (AL)       7,583        41,868
Towne South Plaza Ltd.  2355 (FL)      36,462        42,558
UIRT-Skipper Palms LLC   627 (FL)      53,585        62,840
Victory Berryland LLC   1540 (LA)      68,355        96,143
Victory Coldwater Plaza  462 (AL)      29,824        27,488
Victory Gretna LLC      1405 (LA)     131,607       172,156
Victory Kenner LLC      1406 (LA)      96,986       108,827
Victory River Square     438 (GA)      52,608        61,422
Victory Saks Plaza LLC   434 (AL)      27,158        40,774
Victory Three Notch      471 (AL)      22,426        49,583
Watkins Investments LP   630 (FL)         792        18,357
Weigel Family Trust     1483 (MS)       7,048        13,919
Weinacker's Shopping
   Center LLC           1333 (AL)      31,819        44,367
WYE Partners Ltd.        494 (FL)      19,950       108,952

The Landlords object to the Debtors' proposed cure amounts
because they do not account for all unpaid charges or taxes due
under their respective leases.

Most of the Landlords say they are entitled to the recovery of
their attorneys' fees.  They ask the Court to include their
expenses for legal services in the cure amounts.

In addition, two landlords object to the Debtors' proposed cure
amounts but have not asserted any amount to cure the defaults
under their respective leases.

                                    Store No.         Debtors'
     Landlord                       & Location      Cure Amount
     --------                       ----------      -----------
     Alfa Mutual Fire Insurance Co.  503 (AL)         $19,216         
     Alfa Properties Inc.            446 (AL)               0
                                     448 (AL)               0

Moreover, three landlords do not dispute the Debtors' proposed
cure amounts for their respective leases but submit that
additional rent and other charges will be due, pursuant to the
leases, between July 28, 2006, and the effective date of the
assumption.

                                    Store No.
     Landlord                       & Location
     --------                       ----------
     59 West Partners Ltd.           538 (FL)
     Golden Springs Partners Ltd.    447 (AL)
     Opelika Partners Ltd.           437 (AL)
     
              Lease Assignees Object to Cure Amount

(1) F.R.O. LLC

F.R.O. LLC VIII is the assignee of a lease agreement dated
April 13, 1999 between Winn-Dixie Montgomery, Inc., and Daphne
Pines LLC.  The Lease was assigned to F.R.O. in May 2000.

Mary Joanne Dowd, Esq., at Arent Fox PLLC, in Washington, D.C.,
relates that the Debtors are obligated to
pay all property taxes.  The Debtors, according to Ms. Dowd,
acknowledged the obligation and the their non-payment of certain
taxes in a letter dated December 16, 2005, to F.R.O.

The Debtors have only paid $29,867 to cover the tax bills
incurred postpetition, and the pro-rated prepetition portion of
the tax bills totaling $19,461 remains unpaid, Ms. Dowd says.

Accordingly, F.R.O. asks the Court to direct the Debtors to pay
$19,461 as cure amount, plus attorneys' fees, immediately after
the assumption of the lease.

(2) KRG Waterford

The lease agreement of Store No. 2270, between Faison Capital
Development, Inc., and Winn-Dixie Stores, Inc., was assigned to
KRG Waterford Lakes, LLC, as of February 21, 2005.

KRG filed a proof of claim asserting $111,632 in unpaid
additional rent and $16,481 for common area maintenance
reconciliation for 2004.

The Debtors sought the reduction of the claim to zero on grounds
that KRG provided no supporting documentation to the claim
despite repeated requests.  KRG, however, claims it has not
received any request for documentation from the Debtors.

Roy S. Kobert, Esq., at Broad and Cassel, in Orlando, Florida,
says that KRG and the Debtors have reached an impasse relating to
the CAM charges.  None of the other components of the claim
amount appear to be in dispute, Mr. Kobert adds.

KRG asks the Court to deem its general ledgers sufficient proof
of the Debtors' pro-rata share of the 2004 CAM reconciliation and
order the Debtors to pay $122,564 upon the assumption of the
Store 2270 Lease.

          Pass-Through Trustee Objects to Cure Amount

Deutsche Bank Trust Company Americas acts as trustee under a
Pass-Through Trust Agreement dated February 1, 2001, as well as
to 15 indentures under the agreement.

Pursuant to the Pass-Through Agreement, some of the Debtors
sponsored the issuance of over $402,000,000 in securities
denominated as " Winn-Dixie Pass-Through Certificates Series
1999-1" of which $301,400,000 remains outstanding as of July 31,
2006.

Dennis J. Drebsky, Esq., at Nixon Peabody LLP, in New York,
relates that the Certificates represent undivided interests in a
pool of notes issued pursuant to the Indentures that are secured
by:

   (a) mortgages on 15 manufacturing, warehouse and office
       properties each owned by a special purpose entity and
       leased, under separate leases, to Winn-Dixie Stores, Inc.
       or its subsidiaries;

   (b) assignments of the Leases; and

   (c) a Residual Value Surety Bond issued by Centre Reinsurance
       (U.S.) Limited to assure the residual value of the leased
       premises at the end of the Lease terms.

The Offering Memorandum for the Certificates dated August 16,
1999, state that the leased facilities then had an aggregate
appraised value of over $421,000,000, Mr. Drebsky discloses.

Eight of the Deutsche Leases were rejected and one was assumed
and assigned by the Debtors.  The Debtors want to assume three
Deutsche Leases in Florida, and one each in Alabama, Georgia, and
Louisiana.  

The Debtors maintain that no cure amounts are due with regard to
the six Deutsche Leases.  Deutsche Bank says this is incorrect
and asserts that the Debtors should pay its legal and related
fees, as well as real estate taxes and other accruing amounts as
part of the cure payments.

Furthermore, Deutsche Bank maintains that the Winn-Dixie Stores'
Guaranty Agreement for each of the six Deutsche Leases must be
reaffirmed and assumed as part of the lease assumption.

Deutsche Bank asks the Court to set a date 30 days after approval
of the assumption of the Deutsche Leases as a status hearing with
regard to any remaining disputed cure claims, and set a further
date no later than 60 days after the approval date for a final
hearing to determine the remaining disputed cure claims.

           Newport Wants Assumption Request Deferred

The Morris Tract Corp., The Williston Highlands Development
Corp., and The Morris Tract Corp., doing business as Newport
Partners, doing business as Partnership/Newport Motel have
contested the assumability of the lease of Store No. 251 located
in Miami, Florida.

Peter D. Russin, Esq., at Meland, Russin & Budwick P.A., in
Miami, Florida, tells the Court that Newport Partners' dispute
with the Debtors over the Lease is currently being litigated in
an adversary proceeding.  

As of July 25, 2006, the motions for summary judgment filed by
both parties have not been fully briefed and the Court has not
yet ruled in the Adversary Proceeding, Mr. Russin relates.

Accordingly, the Newport Partners ask the Court to deny the
Debtors' request to assume the Store 251 Lease pending completion
of the Adversary Proceeding, or abate consideration of the
Debtors' request until there is a final ruling.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WORLDCOM INC: Court Discharges Mesquite's and F.A. McComas' Liens
-----------------------------------------------------------------
At WorldCom Inc. and its debtor-affiliates' request, the U.S.
Bankruptcy Court for the District of New York discharged the
liens filed by Mesquite Interior Systems and F.A. McComas on the
Debtors' property in San Antonio, Bexar County, Texas.

The Debtors objected to Mesquite Interior's and F.A. McComas'
Liens, contending that the Liens:  

   (1) have expired by operation of law and should be recorded as
       released in the Bexar County public records; and

   (2) violated the confirmed Plan, the Confirmation Order and
       Section 524 of the Bankruptcy Code.

On August 27, 2002, Mesquite Interior filed with the Recording
Department of the County Clerk of Bexar County an affidavit for a
mechanic's lien and materialman's lien regarding the Texas
Property for labor and materials it provided for the period from
March 2001 through June 2002.  Mesquite asserted the goods it
furnished was pursuant to its contract with Construction
Management Technology.

On September 13, 2002, F.A. McComas also filed with the Recording
Department of the Bexar County Clerk a Subcontractor's Lien
regarding the Texas Property for labor and materials it allegedly
provided for the period from May 2002 through August 2002.

The Debtors argued that the Liens are not valid or operative as
there is insufficient evidence that they were timely filed or
that they fully comply with Texas law and that any alleged
indebtedness is not barred by Texas' statute of limitations.

Under their confirmed Plan of Reorganization, the Debtors also
argued that the automatic stay terminated on April 20, 2004, and
pursuant to Section 108(c)(2) of the Bankruptcy Code, an action to
continue Mesquite's and McComa's alleged mechanic's liens had to
be brought on or before May 20, 2004.

The Debtors noted that as of June 7, 2006, Mesquite and McComas
have not instituted any lawsuit to foreclose their Liens and that
the Liens remained in the Bexar County public records.

The Debtors also noted that, upon the Effective Date of the
confirmed Plan and Sections 1141(b) and (c) of the Bankruptcy
Code, the leasehold interests to which the Mesquite and McComas
Liens are allegedly attached are now vested in the Reorganized
Debtors, free and clear of all claims, liens and encumbrances.

Furthermore, the Debtors assert that Mesquite and McComas had
knowledge and notice of their bankruptcy case and the deadline to
file proofs of claims pursuant to various publications, including
daily national newspapers.  However, the Debtors contended that
Mesquite and McComas did not assert a claim in the Debtors' cases,
hence, they cannot be considered secured creditors nor creditors
holding an allowed secured 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)


WORLDCOM INC: Court OKs Payment of Shepherd's & Goldfarb's Claims
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New York approved
the stipulation resolving WorldCom Inc. and its debtor-affiliates'
dispute with David Shepherd and Bruce Goldfarb and allowing
Messrs. Shepherd and Goldfarb's Claim Nos. 17672 and 17682 as
Class 6 General Unsecured Claims.  

The Claims will be paid in accordance with the Debtors' Second
Amended Joint Plan of Reorganization.

Messrs. Shepherd and Goldfarb's claims dates back to year 2001
when the Debtors adopted a uniform, neutral absenteeism policy
providing that any employee who exhausted all available leave time
would be terminated after the employee has not been
actively at work for 18 weeks.  

As a result, Messrs. Shepherd and Goldfarb were discharged on July
31, 2001 and December 7, 2001 for violation of the Policy.

On January 22, 2003, Messrs. Shepherd and Goldfarb individually
filed Claim Nos. 17672 and 17682, and a purported class proof of
claim identified as Claim No. 17681, as representatives of a
class of similarly situated individuals.  Messrs. Shepherd and
Goldfarb asserted prepetition claims for $100,000 each and
$40,000,000 for the class.

The Claims were based on the allegations made in a prepetition
lawsuit against both the Debtors and the WorldCom Health and
Welfare Benefits Plan filed by Messrs. Shepherd and Goldfarb in
the United States District Court for the Southern District of
Texas, Galveston Division.  Messrs. Shepherd and Goldfarb sought
to recover lost benefits, the cost of replacement benefits, back
pay, front pay, reinstatement, other unspecified remedies under
ERISA, injunctive relief, declaratory relief, attorneys' fees,
interest, and court costs.

The Debtors objected to the Claims contending that:

   (a) Messrs. Shepherd and Goldfarb did not file a proper class
       proof of claim; and

   (b) The proposed class proof of claim does not satisfy the
       requirements for class action treatment.  Messrs. Shepherd
       nor Goldfarb also haven't filed a request with the
       Bankruptcy Court seeking class certification.

The Court, in its previous decision on the matter, disallowed and
expunged Claim No. 17681.  

                         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)


WYANDOTTE COUNTY: S&P Junks Rating on $4.9 Million Revenue Bonds
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Wyandotte
County/Kansas City Unified Government, Kansas' $4.9 million
floating-rate single-family mortgage revenue bonds series 1981A to
'CCC' from 'B'.  The outlook is stable.

The downgrade reflects the expectation that the project's assets
and earnings will not be adequate to pay debt service through
maturity and pay all bondholders in full.  Reserves are currently
sufficient to pay debt service on the bonds over the near term.
Once these reserves are depleted, however, there will be
insufficient funds to pay future debt service on the remaining
outstanding bonds.  

The current asset-to-liability ratio is lower than the expected
level of 97.3% that was forecast assuming the highest prepayment
scenario of 275% of FHA prepayment experience.  The substantial
reduction in the mortgage pool is largely due to refinancing,
stemming from historically low mortgage rates as well as loan
delinquencies.  The total pool of mortgages outstanding has fallen
to 32 loans, down from 35 loans in October 2005; the original pool
consisted of 864 mortgage loans.  The trustee, U.S. Bank N.A., has
redeemed bonds with prepayments, however, due to the rapid
reduction of the mortgage pool, there are insufficient revenues to
meet debt service payments and as of June 2003, the trustee has
been required to draw on reserves to satisfy semiannual debt
service payments.  This continuing trend will result in a default
once reserves have been depleted.

Prepayments have been occurring at a rate higher than expected,
which in turn caused the asset-to-liability ratio to drop,
increasing the likelihood that bondholders would not be paid.


* BOOK REVIEW: Hospitals, Health and People
-------------------------------------------
Author:     Albert W. Snoke, MD
Publisher:  Beard Books
Softcover:  244 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981610/internetbankrupt


Snoke's experience in hospitals goes back to the early 1930s when
he was a medical student and resident physician at Stanford-Lane
University Hospital in San Francisco.  Between then and when he
wrote Hospitals Health and People, he was a top hospital
administrator at prestigious medical centers in Rochester and New
Haven.  Snoke began his career as an administrator with Dr. Basil
MacLean, one of the giants in hospital administration.

The author's career spanned the post-World War II decades when the
place of the hospital in American healthcare expanded
dramatically.  This expansion was partly due to demographic
changes, notably the influx of the Baby Boom generation and the
increased affluence of the society and, with this, the expectation
of better healthcare.  During the 1950s through the 1980s, no one
had a more critical role in bringing needed change to healthcare
than the administrators at leading hospitals.  Thus, Snoke was at
the center of the transformation of American hospitals during
these critical years.

This change occurred incrementally and affected all aspects of
healthcare.  At the core of the change was, as Snoke notes, "the
transition from a physician's firm dedication to diagnosing and
treating a patient's disease to a broader concern for the patient
himself."  This change in hospitals and other areas of healthcare
continues to influence current professional and public
expectations regarding hospital services, treatment, and results.

A perfect relationship between physicians and patients is
unachievable.  Nonetheless, in the pursuit of this relationship,
hospitals have come, says the author, to "join with education,
social work, employment placement, vocational guidance, and any
number of related services with the help [patients] need to
restore them to their maximum functioning."  Hospitals realize
they are no longer in the business of simply treating patients'
illnesses and medical problems.  They must go beyond this to help
patients regain the productive life they lost because of their
medical problems.

The work of hospitals has, therefore, expanded far beyond simple
treatment or cure to rehabilitation.  Formerly, after treatment or
cure "fixed the problem," so to speak, patients were left to their
own devices to recover their former general well being.  But as
anyone with any experience in today's hospitals knows, physical
therapy, psychological counseling, and various outpatient services
are all a part of the hospital's mission.

To keep this mission in mind, Snoke kept in his office a picture
of a statue titled "Discharged Cured."  This statue of a sad-
looking man in rumpled clothing carrying a paper bag containing
his few possessions symbolized the shortcomings and blind spots of
hospitals in the time before their transformation.  It was a
recognition of these shortcomings and blindnesses -- a recognition
that hospitals could do better in caring for patients -- that
prompted the transformation in hospitals that started in the
1950s.  No longer would the patient/hospital relationship end
abruptly with the treatment of medical problems.  "Discharged -
cured" was the standard notation used on medical charts for
patients who had been treated and released upon meeting the
standard of acceptable service.  In contrast to this, hospitals
today take a broader view.  They are obligated to not only cure,
but to rehabilitate so as to bridge "the gap between the sick and
a job," says the author.  Hospital care extends to the end of
putting patients back on their feet, not merely treating their
medical problems.

The picture of the statue "Discharged Cured" was given to the
author when he was at Yale-New Haven Hospital in the 1940s by Dr.
Jack Masur.  Masur referred to it in an article "Some Challenges
in Hospital Administration" published in the October 1955 issue of
the Journal of Medical Education.  Snoke notes that he saw a copy
of this same picture hanging on a wall in the office of one of his
former students when he was the head of a major university
teaching hospital.  The picture is a constant reminder of how far
hospitals have come and also how far they have to go to reach the
ideal toward which Snoke and others like him worked.

During his career as a hospital administrator, Dr. Albert W. Snoke
was the director of Yale-New Haven Hospital, President of the
American Hospital Association, and advisor on health to the
Governor of Illinois.  Hospitals have clearly come a long way from
the indictment by the pitiable figure of the statue "Discharged
Cured."  Yet, as in all relationships between persons, the
relationship between hospital physician and patient always has
room for improvement.  The analyses Snoke brings to bear on the
range of topics affecting this relationship -- including the
hospital governing board, salaried physicians, nursing, training,
and national healthcare policies -- always have this relationship
in mind.  While some topics, such as medical school education for
prospective doctors, may seem peripheral to this relationship, the
author demonstrates, via his thorough familiarity with hospitals
and hospital administration, that relevance.

In his career in hospital administration, Dr. Albert W. Snoke was
director of Yale-New Haven Hospital, President of the American
Hospital Association, and advisor on health matters to the
Governor of Illinois.

                             *********

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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