TCR_Public/060808.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, August 8, 2006, Vol. 10, No. 187

                             Headlines

2B OR NOT: Case Summary & 4 Largest Unsecured Creditors
ACURA PHARMACEUTICALS: Posts $6.7 Mil. Net Loss in Second Quarter
ADELPHIA COMMS: Century-TCI & Parnassos Submit Plan Supplements
ADELPHIA COMMS: Court Allows BofA to File Financing Documents
ADVOCACY & RESOURCES: Trustee Taps Gillis as Special IP Counsel

AEROSOL PACKAGING: Unsec. Creditors Can Recoup Up to 20% of Claims
ALERIS INT'L: Closes Buy on Corus' Downstream Aluminum Business
ALERIS INT'L: Completes Tender Offer on 10-3/8% & 9% Sr. Notes
ALLIED HOLDINGS: BFW Trustees Want Complaint Dismissed
AMERICAN AIRLINES: Earns $280 Million in Quarter Ended June 30

AMERICAN AIRLINES: Board Grants Salary Increase to Gerard Arpey
AMERICAN CREDIT: Hires Nicholls & Crampton as Bankruptcy Counsel
AMERICAN CREDIT: List of Twenty Largest Unsecured Creditors
ANCHOR GLASS: Has Until October 30 to Object to Claims
ANCHOR GLASS: Seeks Disallowance of 20 Noteholder Claims

APPC OIL: Case Summary & 20 Largest Unsecured Creditors
ASARCO LLC: Wants Settlement Pact With London Market Insurers OK'd
ASARCO LLC: Wants Prosecution of London Market Insurers Stayed
ATMEL: Steven Laub Replaces George Perlegos as CEO & President
BETH ISRAEL: Committee Taps Fox Rothschild as Bankruptcy Counsel

BETH ISRAEL: U.S. Trustee Appointed Seven-Member Official Panel
BROADVIEW NETWORKS: Moody's Rates Proposed $210 Mil. Notes at B3
BROADVIEW NETWORKS: S&P Places B- Rating to $210 Million Notes
BROOKLYN HOSPITAL: Wants Stay Lifted to Settle Malpractice Claims
CATHOLIC CHURCH: Portland Gets Limited Approval to Retain Experts

CNH GLOBAL: S&P Raises Corporate Credit Rating to BB from BB-
COI MIDWEST: Wants Court Nod on Leven Neale as Bankruptcy Counsel
COI MIDWEST: Taps Klein & Wilson as Special Litigation Counsel
COMCAST CORP: Completes Adelphia Asset Buy with Time Warner
COMMERCE PLANET: Earns $1.4 Million in Second Quarter of 2006

COMPLETE RETREATS: U.S. Trustee Picks 11-Member Creditors' Panel
COMPLETE RETREATS: Intagio Wants Debtors to Honor Reservations
CONSECO INC: S&P Affirms BB- Credit Rating With Stable Outlook
COOPER TIRE: Operating Losses Prompt S&P to Lower Ratings to B+
COSINE COMMS: Earns $205,000 in Second Quarter of 2006

CROWN CASTLE: S&P Puts BB Corporate Credit Rating on Neg. Watch
DANA CORP: Ohio Fraud Suit Continues Despite Bankruptcy
DANA CORP: Permo-Drive Wants Pact Applied on Hydraulic Asset Sale
DELPHI CORP: General Motors Files Multibillion-Dollar Claim
DELPHI CORP: Intends to Share Confidential Info to Equity Panel

DELPHI CORP: Panel Wants to Prosecute Claims Against GM
DELTA AIR: Court Approves 1110(b) Stipulations for Nine Aircraft
DELTA AIR: Comair Can Perform Obligations Under Interim Agreement
EMMIS COMMUNICATION: ECC Withdraws $15.25 Per Common Share Offer
ENERGY DEVELOPMENT: Section 341(a) Meeting Scheduled on August 30

EXIDE TECH: Pact Amendment Permits Issuance of Restricted Stocks
FLORICA INC: Case Summary & 19 Largest Unsecured Creditors
FOREST CITY: Restructuring Ratner Join-Venture Interests
FURNITURE KING: Case Summary & 20 Largest Unsecured Creditors
GARDNER DENVER: Moody's Lifts $125 Million Notes' Rating to B1

GENERAL MOTORS: Files Multibillion-Dollar Claim Against Delphi
GRAFTECH INT'L: Equity Deficit Narrows to $195 Mil. at June 30
H&E EQUIPMENT: Ends Solicitation on 12-1/2% Senior Sub. Notes
HANDEX GROUP: Judge Briskman Dismisses Chapter 11 Cases
HARTVILLE GROUP: Reduces Debt Under Financial Restructuring

HEATING OIL: Emerges from Bankr. Protection with $125M Facility
ICURIE INC: Posts $1.6 Million Net Loss in Second Quarter of 2006
IGIA INC: Completes $500,000 Secured Convertible Notes Sale
INDEPENDENCE TAX: June 30 Balance Sheet Upside-Down by $3.7 Mil.
INTERSTATE BAKERIES: Seeks Approval of Eight Amendment to DIP Pact

INTERSTATE BAKERIES: Wants Until Jan. 31 to File Chapter 11 Plan
KAISER ALUMINUM: Gets Okay to Return Asbestos Escrow Funds
KAISER ALUMINUM: Agrium Wants Injunction Modified to Pursue Claim
KAYDON CORP: Earns $17.7 Million in Second Quarter Ended July 1
KERZNER INTERNATIONAL: S&P Holds BB- Corp. Credit Rating on Watch

KMART CORP: Wants Charles Conaway's $19.6 Million Claim Denied
KMART CORP: Court Denies Himle's Lift Stay Motion to Pursue Claim
LA REINA: Wants Jose Raul Cancio Bigas as Bankruptcy Counsel
LA REINA: Section 341(a) Meeting Scheduled on August 24
LIBERTY TAX: June 15 Balance Sheet Upside-Down by $36 Million

METALDYNE COMPANY: S&P Puts B Rating on $574 Mil. Debt Facilities
MIRANT CORP: Wants CSX's $6.5 Million Claim Disallowed
MIRANT CORP: To Cut SO2 Emissions by 95% in Maryland Power Plants
MONTPELIER RE: S&P Puts BB+ Pref. Stock Rating With Neg. Outlook
NATIONAL ENERGY: Court Disallows Block's Claim No. 710 for $2.4MM

NAVISTAR INTERNATIONAL: S&P Holds BB- Ratings on Negative Watch
NOOR PROPERTIES: Case Summary & 5 Largest Unsecured Creditors
NORTHWEST AIRLINES: AFA-CWA Plans to Stage Strike on August 15
NORTHWEST AIRLINES: AFA Asked to Justify Why Strike is Necessary
NORTHWEST AIRLINES: More Parties Object to Citigroup DIP Financing

NVIDIA CORP: To Pay OPTi Inc. $10MM as Patent Breach Settlement
O'SULLIVAN INDUSTRIES: Board Elects Three New Audit Panel Members
OPTINREALBIG.COM: Claim Settlements Prompt Court to Dismiss Cases
OWENS CORNING: Plan-Filing Exclusive Period Stretched to Oct. 31
OWENS CORNING: Court Approves Royal Indemnity Settlement

POPULAR CLUB: Case Summary & 20 Largest Unsecured Creditors
PUBLICARD INC: Posts $433,000 Net Loss in Second Quarter of 2006
QWEST CORPORATION: Closes $600 Million Debt Securities Offer
QUEST MINERALS: Resolves Mining Issue With Former Gwenco Owner
REFCO INC: Judge Drain Okays Stipulations on Lease-Decision Period

REFCO INC: Debtors & Trustee Want UHY Advisors as Tax Consultants
RHODIA SA: June 30 Balance Sheet Upside-Down by EUR448 Million
RIVER ROCK: Moody's Holds Senior Unsecured Notes' Rating at B2
SCHOOL HOUSE: Gets Final Court Approval to Use Cash Collateral Use
SHACKLETON RE: S&P Puts BB Rating on Proposed $185 Million Loans

SIX FLAGS: Fitch Affirms Junk Ratings With Negative Outlook
SMART ONLINE: Posts $1.5 Million Net Loss in First Quarter of 2006
SOLUTIA INC: Taps Clarke Gittens & Farmer as Liquidation Counsel
SOLUTIA INC: Wants to Pay $5 Million Settlement Installment
SPECTRUM BRANDS: U.S. Attorney's Office Terminates Investigation

SPECTRUM BRANDS: Third Fiscal Quarter Earnings Down to $2.5 Mil.
SUN HEALTHCARE: Earns $7.9 Million for the Second Quarter 2006
SWELL PICTURES: Case Summary & List of 86 Creditors
THERMA-WAVE INC: Posts $1.1 Mil. Net Loss in 1st Qtr. Ended July 2
TRIMAS CORP: S&P Places B Corporate Credit Rating on Watch

UNIVERSAL CORP: Moody's Holds Ba1 Senior Unsecured Debt's Rating
UTILITY CRAFT: Panel Taps Poyner & Spruill as Bankruptcy Counsel
UTILITY CRAFT: Four-Member Official Creditors Committee Formed
VARIG S.A.: Submits Restated In-Court Reorganization Plan
VARIG S.A.: Workers Stage Strike after Retrenchment News

VARIG S.A.: Judge Ayoub Cancels Order Freezing Volo Deposit
VITACUBE SYSTEMS: Posts $1 Million Net Loss in Second Quarter
WABTEC CORPORATION: Earns $21.1 Million in 2006 Second Quarter
WATSON PHARMA: Moody's Rates $650 Million Senior Term Loan at Ba1
WATSON PHARMACEUTICALS: S&P Lowers $575 Mil. Notes' Rating to BB+

WERNER LADDER: Court Approves Willkie Farr as Bankruptcy Counsel
WERNER LADDER: Taps Young Conaway as Bankruptcy Co-Counsel
WERNER LADDER: Court Okays Use of Cash Collateral on Final Basis
WILLIAMS COMPANIES: Records $54 Mil. Charge Due to Jury Verdicts
WORLDCOM INC: Beepwear To Appeal Disallowance of $4.8 Mil. Claim

W.R. GRACE: Says Exclusivity Should Hinge on Asbestos Estimation
W.R. GRACE: Gets Court OK to Implement 2006-2008 Key Employee Plan

* Large Companies with Insolvent Balance Sheets

                             *********

2B OR NOT: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: 2B or Not 2B LLC
        13440 Ventura Boulevard, 2nd Floor
        Sherman Oaks, CA 91423

Bankruptcy Case No.: 06-11276

Chapter 11 Petition Date: August 4, 2006

Court: Central District Of California (San Fernando Valley)

Judge: Maureen Tighe

Debtor's Counsel: David B. Shermano, Esq.
                  Peitzman Weg & Kempinsky LLP
                  10100 Santa Monica Boulevard, Suite 1450
                  Los Angeles, CA 90067
                  Tel: (310) 552-3100

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 4 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Fried Bananas, LLC               Lease Agreement       $200,000
3710 South Robertson Road
Suite 202
Culver City, CA 90232

Caldwell Leslie                  Legal Fees             $10,000
Newcombe & Pettit
1000 Wilshire Blvd., Suite 600
Los Angeles, CA 90017

Los Angeles Department of        Trade Debt              $1,000
Water & Power
P.O. Box 5111
Los Angeles, CA 90051-0100

Verizon                          Trade Debt                $200
Customer Service
P.O. Box 11328
St. Petersburg, FL 33733


ACURA PHARMACEUTICALS: Posts $6.7 Mil. Net Loss in Second Quarter
-----------------------------------------------------------------
Acura Pharmaceuticals, Inc., filed its financial results for the
second quarter ended June 30, 2006, with the Securities and
Exchange Commission on July 27, 2006.

For the three months ended June 30, 2006, the Company incurred a
$6.7 million net loss on zero net revenue, compared to a
$3.3 million net loss on zero revenue in 2005.

As of June 30, 2006, the Company's balance sheet showed total
assets of $2.1 million and total debts of $10.6 million, resulting
in an $8.5 million deficit.

The Company's June 30 balance sheet showed strained liquidity with
$900,000 in total current assets available to pay $10.6 million in
total current liabilities coming due within the next 12 months.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f03

                        Going Concern Doubt

BDO Seidman, LLP, expressed substantial doubt about Acura
Pharmaceuticals' ability to continue as a going concern after
auditing the Company's 2005 financial statements.  The auditing
firm pointed to the Company's recurring losses from operations and
net capital deficiency at Dec. 31, 2005.

Headquartered in Palatine, Illinois, Acura Pharmaceuticals, Inc.
-- http://www.acurapharm.com/-- is a specialty pharmaceutical  
company engaged in research, development and manufacture of
innovative and proprietary abuse deterrent, abuse resistant and
tamper resistant formulations intended for use in orally
administered opioid-containing prescription analgesic products.
Acura is actively collaborating with contract research
organizations for laboratory and clinical evaluation and testing
of product candidates formulated with its Aversion(R) Technology.


ADELPHIA COMMS: Century-TCI & Parnassos Submit Plan Supplements
---------------------------------------------------------------
Adelphia Communications Corporation's Century-TCI and Parnassos
debtor-affiliates delivered to the U.S. Bankruptcy Court for the
Southern District of New York additional supplements to the Third
Modified Fourth Amended Joint Plan of Reorganization.

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.

The Amended Joint Venture Plan Supplements are:

    1. Forms of Organizational Documents for Parnassos
       Distribution Company I, LLC, a full-text copy of which is
       available for free at:

       http://ResearchArchives.com/t/s?f05

    2. Forms of Organizational Documents for Parnassos
       Distribution Company II, LLC.

       A full-text copy of Parnassos Distribution Company II's
       Organizational Documents is available for free at:

       http://ResearchArchives.com/t/s?f06

    3. Forms of Organizational Documents for Century-TCI
       Distribution Company, LLC.  A full-text copy is available
       for free at:

       http://ResearchArchives.com/t/s?f07

    4. Revised Plan Administrator Agreement.

       A full-text copy of the Revised Plan Administrator
       Agreement is available for free at:

       http://ResearchArchives.com/t/s?f09
       
                  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 Managed Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue No. 143; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ADELPHIA COMMS: Court Allows BofA to File Financing Documents
-------------------------------------------------------------
The Honorable Robert D. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York allows Bank of America to take
the necessary steps to effectuate the perfection steps by:

    (i) exchanging the stock certificates of Adelphia
        Communications Corp.'s Century RME debtor-affiliates; and

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

Pursuant to the Century Credit Agreement dated April 14, 2000,
Bank of America and the other members of the Century Facility
lending syndicate had claims and liens in the equity interests of
certain non-debtor entities owned directly or indirectly by the
Rigas family.

Borrowers under the Century Credit Agreement are:

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

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

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

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

On March 31, 2006, certain RMEs and certain newly formed entities
that hold the interests in certain forfeited entities filed their
own Chapter 11 petitions.  Although the Government Settlement
Order automatically granted the Century Lenders claims and
perfected liens in the equity interests of the Century RME
Debtors, in furtherance of the Government Settlement Order, Bank
of America has requested and the Debtors have agreed to make
perfection steps.
      
                   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 Managed Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue No. 143; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ADVOCACY & RESOURCES: Trustee Taps Gillis as Special IP Counsel
---------------------------------------------------------------
Michael E. Collins, Esq., the chapter 11 trustee appointed in
Advocacy and Resources Corporation's bankruptcy proceedings, asks
the U.S. Bankruptcy Court for the Middle District of Tennessee for
permission to employ Norman Gillis & Associates as his special
counsel.

Norman Gillis will assist the Trustee with matters related to the
Debtor's intellectual property issues.

The Trustee tells the Court that Norman Gillis, Esq., will be the
lead counsel and charges $225 per hour.  The Trustee discloses
that the firm's other professionals bill:

         Professional                   Hourly Rate
         ------------                   -----------
         Associates                        $125
         Paralegals                         $75

To the best of the Trustee's knowledge, Norman Gillis does not
represent any interest adverse to the Debtor or its estate.

Headquartered in Cookeville, Tennessee, Advocacy and Resources
Corporation is a non-profit corporation that manufactures food
products for feeding programs operated by the U.S. Government.
Customers include the U.S. Department of Agriculture, the
Department of Defense, and other private distribution firms.  The
Company filed for chapter 11 protection on June 20, 2006 (Bankr.
M.D. Tenn. Case No. 06-03067).  John Hayden Rowland, Esq., at
Baker Donelson Bearman Caldwell and Berkowitz, P.C., represents
the Debtor.  When the Debtor filed for chapter 11 protection, it
estimated assets and debts between $10 million and $50 million.


AEROSOL PACKAGING: Unsec. Creditors Can Recoup Up to 20% of Claims
------------------------------------------------------------------
Aerosol Packaging, LLC, aka Aerosol Specialties, filed its Plan of
Reorganization with the U.S. Bankruptcy Court for the Northern
District of Georgia on Aug. 2, 2006.

Under the Plan, the Debtor will sell substantially all of their
assets to Harbert Private Equity Fund II, LLC, for $3.3 million in
cash and the assumption of all claims of vendors, which agreed to
certain treatment of their outstanding vendor debt under a
Forbearance Agreement.  The proceeds of the sale will be deposited
into an interest-bearing trust account to be used to fund the
Plan.  

The Debtor will continue to exist until all amounts are disbursed
under the Plan Fund.  

                Treatment of Claims and Interests

Holders of administrative claims, professional fee clams, priority
tax and non-priority tax claims will be paid in full.

Wachovia Bank, N.A., will be paid $1.8 million in cash from the
Plan Fund.  Wachovia was owed around $6.23 million in principal
amount.

Blue Ridge Investors II Limited Partnership and Geneva Associates
Merchant Banking partners I, LLC, will each be issued a non-
interest bearing contingent three-year promissory note equal to a
percentage of $400,000, depending on the Debtor's cash flow.  The
Debtor owes Blue Ridge $4.6 million in principal amount.  The
Debtor owes Geneva Associates $1 million in principal amount.  

Badger Capital I, LLC, will be paid $150,000 in cash from the Plan
Fund to satisfy the loan for $250,389 in principal amount.  

Harbert Private Equity will pay each Forbearing Vendor a pro-rata
share of a $565,000 fund 60 days from the effective date of the
plan.

Each holder of general unsecured claim will be paid the lesser of:

   -- 20% of the claim;
   -- a pro-rata amount remaining in the Plan Fund.

Holders of equity interests will get nothing.  

A copy of the Plan is available for a fee at:

http://www.researcharchives.com/bin/download?id=060807042248

Headquartered in Canton, Georgia, Aerosol Packaging, LLC, aka
Aerosol Specialties -- http://www.aerosolspecialties.com/-- is a
manufacturer, and a private label & contract filler of aerosol,
liquid filling products, durable undercoatings, paints, fabric
treatments, and personal care items.  The Debtor filed for chapter
11 protection on June 21, 2006 (Bankr. N.D. Ga. Case No. 06-
67096).  Brian L. Schleicher, Esq., and P. Steven Kratsch, Esq.,
at Jampol, Schleicher & Jacobs, LLP, represent the Debtor.  When
the Debtor filed for protection from its creditors, it estimated
assets between $1 million and $10 million and debts between $10
million and $50 million.


ALERIS INT'L: Closes Buy on Corus' Downstream Aluminum Business
---------------------------------------------------------------
Aleris International, Inc., completed the purchase of the
downstream aluminum business of Corus Group plc.  The acquisition
includes Corus's aluminum rolling and extrusion businesses but
does not include Corus's primary aluminum smelters.

"We are extremely pleased to have completed this acquisition
which continues the transformation of our company," Steve
Demetriou, Chairman and CEO of Aleris International said.  "We are
delighted to welcome 4,600 new employees to Aleris.  The
acquisition provides Aleris with a world-class technology platform
and a portfolio of high value-added products that significantly
diversifies our current offerings.  Today, we are a global company
with significant assets in Europe and a foothold in the high-
growth China economy.  We expect to continue Aleris's track record
of growth and profitability and are very excited about the
future."

                  About Aleris International

Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris
International, Inc. -- http://www.aleris.com/-- manufactures  
rolled aluminum products and is a global leader in aluminum
recycling and the production of specification alloys.  The company
also manufactures value-added zinc products that include zinc
oxide, zinc dust and zinc metal.  The Company operates 42
production facilities in the United States, Brazil, Germany,
Mexico and Wales, and employs approximately 4,200 employees.

                           *     *     *

As reported in the Troubled Company Reporter on July 18, 2006,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Aleris International Inc. and removed it from
CreditWatch, where it was placed with negative implications on
March 21, 2006.  The CreditWatch placement followed Aleris'
announcement that it would acquire the downstream aluminum assets
of Corus Group PLC (BB/Stable/B) for US$880 million in cash and
assumed debt.  The outlook is negative.

At the same time, Standard & Poor's assigned its 'BB-' and '2'
recovery ratings to the company's proposed US$650 million senior
secured term loan B.  The '2' recovery rating indicates the
expectation of a substantial recovery of principal in the event of
a payment default.  The ratings are based on preliminary terms and
conditions and are predicated on the completion of the Corus
transaction and related financings substantially in the form
currently anticipated.

As reported in the Troubled Company Reporter on July 12, 2006,
Moody's Investors Service confirmed Aleris International, Inc.'s
B1 corporate family rating.  In a related rating action, Moody's
assigned a Ba3 rating to the company's proposed 7 year senior
secured guaranteed term loans aggregating US$650 million, which
Aleris is issuing to partially finance its EUR691 million
acquisition of certain aluminum assets from Corus Group plc and
refinance its existing debt.

The balance of the necessary funding will be provided under a
senior unsecured guaranteed bridge loan provided by Deutsche Bank
and Citigroup.  Aleris has initiated a tender offer for its
10-3/8% senior secured notes due 2010 and its 9% senior notes due
2014 and is seeking consent to a number of modifications to
restrictive covenants, events of default, and in the case of the
10-3/8% senior secured notes, the release of security.

Moody's confirmed the B2 rating on the 10-3/8% senior secured
notes and the B3 rating on the 9% senior unsecured notes.  The
ratings for the proposed financings assume that the tender offer
will be successful, the desired consents obtained and that the
acquisition and associated financing transactions will close as
contemplated.  At such time, Moody's ratings for Aleris's existing
debt will be withdrawn.  The ratings outlook is negative.


ALERIS INT'L: Completes Tender Offer on 10-3/8% & 9% Sr. Notes
--------------------------------------------------------------
Aleris International, Inc., completed its tender offer to purchase
for cash any and all of its outstanding 10-3/8% Senior Secured
Notes Due 2010 (CUSIP No. 449681AC9) and 9% Senior Notes Due 2014
(CUSIP No. 014477AA1).  The tender offer expired at 5:00 p.m., New
York City time, on July 31, 2006.  Through the expiration of the
tender offer, US$200,830,000 principal amount, or 96.17%, of the
outstanding principal amount of the 10-3/8% Notes and
US$124,910,000 principal amount, or 99.93%, of the outstanding
principal amount of the 9% Notes, and the consents related
thereto, have been validly tendered.  Aleris accepted for purchase
all of the Notes validly tendered prior to the expiration of the
tender offer and the related consents.

On July 14, 2006, the requisite consents were received to
eliminate or make less restrictive substantially all of the
restrictive covenants and events of default and certain related
provisions contained in the indentures governing the Notes.  As
a result of obtaining the requisite consents, Aleris executed
and delivered supplemental indentures setting forth the
amendments to the indentures governing the Notes.  The
supplemental indentures provide that the amendments to the
indentures have become operative as a result of Aleris having
accepted for purchase pursuant to the tender offer the validly
tendered Notes.

Each holder who tendered the 10-3/8% Notes and related consents
on or before the consent date will receive US$1,100.78 per
US$1,000 principal amount of the 10-3/8% Notes, which includes a
US$20 consent payment, and each holder who tendered the 10-3/8%
Notes and related consents after the consent date but on or
before the expiration date will receive US$1,080.78 per US$1,000
principal amount of the 10-3/8% Notes.

Each holder who tendered the 9% Notes and related consents on or
before the consent date will receive US$1,134.96 per US$1,000
principal amount of the 9% Notes, which includes a US$20 consent
payment, and each holder who tendered the 9% Notes and related
consents after the consent date but on or before the expiration
date will receive US$1,114.96 per US$1,000 principal amount of
the 9% Notes.  Holders of the Notes tendered and accepted for
payment pursuant to the Offer also will be paid accrued and
unpaid interest on their Notes to, but not including, the
applicable payment date.

In addition, Aleris is depositing funds with JPMorgan Chase Bank,
N.A., as trustee under the indenture for the 10-3/8% Notes to
effect a covenant defeasance, which terminated its obligations
with respect to substantially all of the remaining restrictive
covenants on the 10-3/8% Notes, and is depositing funds with
LaSalle Bank National Association, as trustee under the indenture
for the 9% Notes to effect a legal defeasance, which resulted in
Aleris being discharged from its obligations under the 9% Notes
and the indenture governing the 9% Notes.

Deutsche Bank Securities Inc. acted as dealer manager for the
tender offer and as the solicitation agent for the consent
solicitation and Mackenzie Partners, Inc. was the depositary and
information agent.

                  About Aleris International

Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris
International, Inc. -- http://www.aleris.com/-- manufactures  
rolled aluminum products and is a global leader in aluminum
recycling and the production of specification alloys.  The company
also manufactures value-added zinc products that include zinc
oxide, zinc dust and zinc metal.  The Company operates 42
production facilities in the United States, Brazil, Germany,
Mexico and Wales, and employs approximately 4,200 employees.

                           *     *     *

As reported in the Troubled Company Reporter on July 18, 2006,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Beachwood, Ohio-based Aleris International Inc.
and removed it from CreditWatch, where it was placed with negative
implications on March 21, 2006.  The CreditWatch placement
followed Aleris' announcement that it would acquire the downstream
aluminum assets of Corus Group PLC (BB/Stable/B) for $880 million
in cash and assumed debt.  The outlook is negative.

At the same time, Standard & Poor's assigned its 'BB-' and '2'
recovery ratings to the company's proposed $650 million senior
secured term loan B.  The '2' recovery rating indicates the
expectation of a substantial recovery of principal in the event of
a payment default.  The ratings are based on preliminary terms and
conditions and are predicated on the completion of the Corus
transaction and related financings substantially in the form
currently anticipated.

As reported in the Troubled Company Reporter on July 12, 2006,
Moody's Investors Service confirmed Aleris International, Inc.'s
B1 corporate family rating.  In a related rating action, Moody's
assigned a Ba3 rating to the company's proposed 7 year senior
secured guaranteed term loans aggregating US$650 million, which
Aleris is issuing to partially finance its EUR691 million
acquisition of certain aluminum assets from Corus Group plc and
refinance its existing debt.

The balance of the necessary funding will be provided under a
senior unsecured guaranteed bridge loan provided by Deutsche Bank
and Citigroup.  Aleris has initiated a tender offer for its
10-3/8% senior secured notes due 2010 and its 9% senior notes due
2014 and is seeking consent to a number of modifications to
restrictive covenants, events of default, and in the case of the
10-3/8% senior secured notes, the release of security.

Moody's confirmed the B2 rating on the 10-3/8% senior secured
notes and the B3 rating on the 9% senior unsecured notes.  The
ratings for the proposed financings assume that the tender offer
will be successful, the desired consents obtained and that the
acquisition and associated financing transactions will close as
contemplated.  At such time, Moody's ratings for Aleris's existing
debt will be withdrawn.  The ratings outlook is negative.


ALLIED HOLDINGS: BFW Trustees Want Complaint Dismissed
------------------------------------------------------
Beverly Wilson and Michael E. Axelrod, as Trustees of the BFW
Trust Agreement, ask the U.S. Bankruptcy Court for the Northern
District of Georgia to:

      -- dismiss Allied Holdings, Inc., and its debtor-affiliates'
         complaint and assess all costs against Allied Holdings,
         Inc.; and

      -- determine that the Trustees are entitled to recoup from
         any of the Debtors' interest in the insurance policies
         including damages.

On behalf of the Trustees, J. Robert Williamson, Esq., at
Scroggins & Williamson, in Atlanta, Georgia, argues that:

    -- the Debtors' Complaint fails to state a claim against the
       Trustees from which relief can be granted;

    -- the relief sought by the Debtors is barred by the doctrines
       of estoppel, waiver and release;

    -- the Debtors are precluded from obtaining equitable relief
       against the Trustees by the doctrine of unclean hands;

    -- the adversary proceeding is not a core proceeding and the
       Trustees do not consent to entry of final orders and
       judgments by the bankruptcy judge;

    -- the Debtors breached the Insurance Agreement by failing to
       make premium payments as required, thus, damaging the
       Insurance Trust by reducing the cash value of the policies
       and its death benefits; and

    -- the Debtors are only entitled to receive payment from the
       policies within 30 days after the earlier to occur of the
       death of the insured or the surrender of the insurance
       policies, neither of which has occurred.

The Trustees deny all allegations contained in the Complaint that
are not specifically admitted, denied or otherwise responded to,
Mr. Williamson asserts.

                       Debtors' Complaint

The Debtors had asked the Court to declare that:

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

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

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

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

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

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

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

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

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide  
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


AMERICAN AIRLINES: Earns $280 Million in Quarter Ended June 30
--------------------------------------------------------------
American Airlines, Inc., earned $280 million of net income for the
three months ended June 30, 2006, on $5.9 billion of revenues,
compared to $41 million of net income earned on $5.2 billion of
revenues for the same period in 2005.

The Company's balance sheet at June 30, 2006, showed $27.3 billion
in total assets and $28.1 billion in liabilities, resulting in a
stockholders' deficit of approximately $757 million.

At June 30, 2006, the Company had $5.1 billion in unrestricted  
cash and short-term investments, an increase of $1.3 billion from
Dec. 31, 2005.  Net cash provided by operating activities in the
six months ended June 30, 2006 was $1.5 billion, an increase of
$534 million over the same period in 2005 primarily due to an
increase in the Air traffic liability resulting from improved
economic conditions.  

American Airlines contributed $119 million to its defined benefit
pension plans in the first six months of 2006 compared to
$213 million during the first six months of 2005.

Capital expenditures for the first six months of 2006 were
$238 million and primarily included the acquisition of two Boeing
777-200ER aircraft and the cost of improvements at New York's John  
F. Kennedy airport.  Substantially all of the Company's
construction costs at JFK will be reimbursed through a fund
established from a previous financing transaction.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?f0b

                             Outlook

American Airlines currently expects third quarter 2006 mainline
unit costs to increase nearly seven percent year over year.  Full
year 2006 mainline unit costs are also expected to increase
approximately seven percent versus 2005.

Capacity for American's mainline jet operations is expected to
decline more than two percent in the third quarter of 2006
compared to the third quarter of 2005.  Mainline capacity is
expected to decline approximately one percent in the full year
2006 compared to 2005.

                      About American Airlines

American Airlines -- http://www.AA.com/-- is the world's largest  
airline.  American, American Eagle and the AmericanConnection
regional airlines serve more than 250 cities in over 40 countries
with more than 3,800 daily flights.  The combined network fleet
numbers more than 1,000 aircraft.  American Airlines is a founding
member of the oneworld Alliance, which brings together some of the
best and biggest names in the airline business, enabling them to
offer their customers more services and benefits than any airline
can provide on its own.  Together, its members serve more than 600
destinations in over 135 countries and territories.  American
Airlines, Inc. and American Eagle are subsidiaries of AMR
Corporation (NYSE: AMR).

                           *     *     *

As reported in the Troubled Company Reporter on April 25, 2006,
Standard & Poor's Ratings Services placed its ratings on AMR Corp.
(B-/Watch Pos/B-3) and subsidiary American Airlines Inc. (B-/Watch
Pos/--) on CreditWatch with positive implications.  The
CreditWatch placement reflected improving earnings and cash flow
prospects, which should translate into a strengthened financial
profile.  The 'B+' bank loan rating on American's $773 million
credit facility was placed on CreditWatch, but the '1' recovery
rating (which addresses recovery prospects in a default scenario)
was not placed on CreditWatch.

As reported in the Troubled Company Reporter on Feb. 24, 2006,
Moody's Investors Service affirmed all debt ratings of AMR Corp.,
and its primary subsidiary American Airlines, Inc. - corporate
family rating at B3 -- as well as all tranches of the Enhanced
Equipment Trust Certificates supported by payments from American
and the SGL-2 Speculative Grade Liquidity Rating.

The outlook was changed to stable from negative.  The stable
outlook reflects Moody's expectation of steadily improving
operating and financial performance during 2006 resulting
primarily from yield-driven revenue growth while maintaining
control of the growth of unit costs.  The company should generate
sufficient cash from operations to meet scheduled debt maturities
as well as planned capital spending without adding additional
debt.


AMERICAN AIRLINES: Board Grants Salary Increase to Gerard Arpey
---------------------------------------------------------------
The Compensation Committee of AMR Corp.'s Board of Directors
determined at the July 2006 meetings of the Compensation Committee
and the Board that a compensation increase for Gerard J. Arpey
Chairman, President and Chief Executive Officer of AMR Corporation
and American Airlines, Inc., was necessary based on several
considerations, including:

      -- According  to the data and recommendations of the
         Committee's independent compensation consultants, the
         adjustments were required to begin to bring Mr. Arpey's
         compensation more in-line with median CEO compensation at
         comparably-sized companies and other airlines.

      -- The need to retain Mr. Arpey over the long-term.

      -- Mr. Arpey declined base salary increases upon his
         promotion to CEO in 2003, and in each of 2004 and 2005
         (other than the 1.5% pay increase offered to all
         management employees).

      -- Internal equity related to the market-rate salary of the
         Company's new Chief Financial Officer.

These compensation initiatives were approved  for  Mr. Arpey:

      -- Base salary increase to $650,000.

      -- Long-term incentive grants (effective July 24, 2006),
         comprised of:

            * 75,000 stock-settled Stock Appreciation Rights

            * 20,000 Deferred Shares

            * 95,000 Performance Shares; and

            * 58,000 career performance shares (pursuant to the
              terms of the Career Performance Shares, Deferred
              Stock Award Agreement between the Company and Mr.
              Arpey, dated as of July 25, 2005.

                     About American Airlines

American Airlines -- http://www.AA.com/-- is the world's largest  
airline.  American, American Eagle and the AmericanConnection
regional airlines serve more than 250 cities in over 40 countries
with more than 3,800 daily flights.  The combined network fleet
numbers more than 1,000 aircraft.  American Airlines is a founding
member of the oneworld Alliance, which brings together some of the
best and biggest names in the airline business, enabling them to
offer their customers more services and benefits than any airline
can provide on its own.  Together, its members serve more than 600
destinations in over 135 countries and territories.  American
Airlines, Inc. and American Eagle are subsidiaries of AMR
Corporation (NYSE: AMR).

                           *     *     *

As reported in the Troubled Company Reporter on April 25, 2006,
Standard & Poor's Ratings Services placed its ratings on AMR Corp.
(B-/Watch Pos/B-3) and subsidiary American Airlines Inc. (B-/Watch
Pos/--) on CreditWatch with positive implications.  The
CreditWatch placement reflected improving earnings and cash flow
prospects, which should translate into a strengthened financial
profile.  The 'B+' bank loan rating on American's $773 million
credit facility was placed on CreditWatch, but the '1' recovery
rating (which addresses recovery prospects in a default scenario)
was not placed on CreditWatch.

As reported in the Troubled Company Reporter on Feb. 24, 2006,
Moody's Investors Service affirmed all debt ratings of AMR Corp.,
and its primary subsidiary American Airlines, Inc. - corporate
family rating at B3 -- as well as all tranches of the Enhanced
Equipment Trust Certificates supported by payments from American
and the SGL-2 Speculative Grade Liquidity Rating.

The outlook was changed to stable from negative.  The stable
outlook reflects Moody's expectation of steadily improving
operating and financial performance during 2006 resulting
primarily from yield-driven revenue growth while maintaining
control of the growth of unit costs.  The company should generate
sufficient cash from operations to meet scheduled debt maturities
as well as planned capital spending without adding additional
debt.


AMERICAN CREDIT: Hires Nicholls & Crampton as Bankruptcy Counsel
----------------------------------------------------------------
American Credit Company obtained authority from the U.S.
Bankruptcy Court for the Eastern District of North Carolina to
employ Nicholls & Crampton, P.A., as its bankruptcy counsel.

Nicholls & Crampton will:

    a. prepare on behalf of the Debtor necessary applications,
       complaints, answers, orders, reports, motions, notices,
       plan of reorganization, disclosure statement and other
       papers necessary in the Debtor's reorganization case;

    b. perform all necessary legal services in connection with the
       Debtor's reorganization, including appearances, research,
       opinions and consultations on reorganization options,
       direction and strategy; and

    c. perform all other legal services for the Debtor which may
       be necessary.

The Debtor tells the Court that Gregory B. Crampton, Esq., and
Stephani W. Humrickhouse, Esq., will serve as lead counsels for
this engagement.

Mr. Crampton bills at $325 per hour while Ms. Humrickhouse bills
at $300 per hour.  The Debtor discloses that the firm's other
attorneys bill at $250 per hour while paralegals bill at $90 per
hour.

The Debtor further discloses that it paid the firm a $100,000 pre-
petition retainer.

Mr. Crampton assures the Court that the firm does not represent
any interest adverse to the Debtor or its estate.

Mr. Crampton and Ms. Humrickhouse can be reached at:

         Gregory B. Crampton, Esq.
         Stephani W. Humrickhouse, Esq.
         Nicholls & Crampton, P.A.
         4300 Six Forks Road, Suite 700
         Raleigh, North Carolina 27609
         Tel: (919) 781-1311
         Fax: (919) 782-0465
         http://www.nichollscrampton.com/

Headquartered in Greenville, North Carolina, American Credit
Company, aka Resident Lenders of North Carolina, Inc. is a
financial services company that provides consumer loans and auto
financing.  The Debtor filed for chapter 11 protection on July 21,
2006 (Bankr. E.D. N.C. Case No. 06-02189).  The Debtor's financial
condition as of May 31, 2006 showed total assets of $21,263,884
and total debts of $18,075,640.


AMERICAN CREDIT: List of Twenty Largest Unsecured Creditors
-----------------------------------------------------------
American Credit Company released a list of its 20 Largest
Unsecured Creditors with the U.S. Bankruptcy Court for the Eastern
District of North Carolina, disclosing:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
Lewis Tyndall                 Debenture Holder          $750,000
151 Hall Road
Pink Hill, NC 28572-7561

George Saieed                 Debenture Holder          $500,000
2311 Big ben Drive
Greenville, NC 27858

Kimmi Hallow                  Debenture Holder          $310,766
2106 Bloombury Road
Greenville, NC 27858

Glenn Hardee                  Debenture Holder          $291,000
4551 Eastern Pines Road
Greenville, NC 27858

Beecher Kirkley               Debenture Holder          $270,933
1878 Heron Run
Hayes, VA 23072

Fred Meece                    Debenture Holder          $180,000

Benjamin Jones                Debenture Holder          $150,000

Life of the South Corp.       Debenture Holder          $150,000

Robert Saieed, Sr.            Debenture Holder          $143,500

Partners Reinsurance Co. Ltd. Debenture Holder          $135,000

Shelton White hurst           Debenture Holder          $108,000

Floyd Jordan                  Debenture Holder          $100,000

W. Gardiner                   Debenture Holder           $95,000

Rita Durham                   Debenture Holder           $78,631

Robert Saieed, Jr.            Debenture Holder           $70,500

Archie Burcham                Debenture Holder           $70,000

Matilda Caldwell              Debenture Holder           $69,100

Robert Holt                   Debenture Holder           $60,000

Robin Perkins                 Debenture Holder           $60,000

Sophie Mitchell               Debenture Holder           $60,000

Headquartered in Greenville, North Carolina, American Credit
Company, aka Resident Lenders of North Carolina, Inc., is a
financial services company that provides consumer loans and auto
financing.  The Debtor filed for chapter 11 protection on July 21,
2006 (Bankr. E.D. N.C. Case No. 06-02189).  Gregory B. Crampton,
Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton,
P.A., represent the Debtor.  The Debtor's financial condition as
of May 31, 2006 showed total assets of $21,263,884 and total debts
of $18,075,640.


ANCHOR GLASS: Has Until October 30 to Object to Claims
------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extends to Oct. 30, 2006, the time within which Reorganized Anchor
Glass Container Corporation must file objections to claims.

Anchor Glass' Second Amended Plan of Reorganization divides
responsibility for objecting to contested claims between
Reorganized Anchor Glass and the Alpha Resolution Trustee, Robert
A. Soriano, Esq., at Shutts & Bowen LLP, in Tampa, Florida,
relates.

The Alpha Resolution Trustee is responsible for objecting to Class
5 General Unsecured Claims.  The Alpha Resolution Trustee has
until October 30, 2006, to object to the Class 5 Claims.

On the other hand, Reorganized Anchor Glass is responsible for
objecting to all claims other than Class 5 Claims.  Reorganized
Anchor Glass had until August 1, 2006, to object to all the other
claims.

Reorganized Anchor Glass discovered that in certain instances, the
class to which certain claims belong are not clear, Mr. Soriano
tells the Court.

If Reorganized Anchor Glass does not file an objection by the
Plan-imposed deadline because it believes that a claim is a Class
5 claim and it is later determined that the claim is under a
different class, Reorganized Anchor Glass' objection may not be
valid, Mr. Soriano points out.

Thus, an extension of Reorganized Anchor Glass' objection deadline
is necessary, Mr. Soriano asserts.  Reorganized Anchor Glass needs
to coordinate its efforts with the Alpha Resolution Trustee to
make sure that objections are filed to invalid claims.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents Anchor Glass in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When Anchor Glass filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  The Court confirmed Anchor Glass' second
Amended Plan of Reorganization on April 18, 2006.  Anchor Glass
emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ANCHOR GLASS: Seeks Disallowance of 20 Noteholder Claims
--------------------------------------------------------
Reorganized Anchor Glass Container Corporation asks the U.S.
Bankruptcy Court for the Middle District of Florida to disallow 20
Noteholder Claims.

Twelve holders of Anchor Glass Container Corporation's 11% Senior
Secured Notes due 2013 asserted claims against the company:

   Claimant                             Claim No.   Claim Amount
   --------                             --------    ------------
   Depository Trust Company BD              1516         $18,953

   Depository Company RF                    1531           9,400

   Depository Trust Company FC              1444               -

   Merrill Lynch Bond Fund, Inc.-           1548               -
   High Income Portfolio                    1548.1             -

   Senior High Income Portfolio, Inc.       1549               -
                                            1549.1             -

   Managed Accounts Series-                 1550               -
   High Income Portfolio, Inc.              1550.1             -

   Masters U.S. High Yield Trust-           1551               -
   U.S. High Yield Portfolio                1551.1             -

   Merrill Lynch International              1552               -
   Investment Funds                         1552.1             -

   Merrill Lynch Variable Series            1553               -
   Funds, Inc.                              1553.1             -

   Diversified Strategies                   1554               -
   Portfolio, Inc.                          1554.1             -

   Debt Strategies Fund, Inc.               1557               -
                                            1557.1             -

   Merrill Lynch Global Investment          1556               -
   Series-Income Strategies Portfolio

Pursuant to Anchor Glass' Second Amended Plan of Reorganization,
Noteholders will receive equity in Reorganized Anchor Glass in
full satisfaction of the Notes, Robert A. Soriano, Esq., at Shutts
& Bowen LLP, in Tampa, Florida, relates.

Most of the Noteholders also filed multiple claims against
Reorganized Anchor Glass, Mr. Soriano notes.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents Anchor Glass in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When Anchor Glass filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  The Court confirmed Anchor Glass' second
Amended Plan of Reorganization on April 18, 2006.  Anchor Glass
emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


APPC OIL: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: APPC Oil Company, Inc.
        dba American Petroleum Products Company
        14 Garrison Inn Lane
        Garrison, NY 10524

Bankruptcy Case No.: 06-35782

Chapter 11 Petition Date: August 4, 2006

Court: Southern District of New York (Poughkeepsie)

Judge: Cecelia G. Morris

Debtor's Counsel: Anne J. Penachio, Esq.
                  575 White Plains Road
                  Eastchester, NY 10709
                  Tel: (914) 961-6003
                  Fax: (914) 961-5658

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
   Coolants Plus, Inc.                        $357,652
   4740 J Interstate Drive
   Cincinnati, OH 45246

   Alliance Group Properties, Inc.            $154,012
   1400 North Gannon Drive
   Hoffman Estates, IL 60194

   Evergreen Oil, Inc.                        $153,454
   2355 Main Street
   Irvine, CA 92614

   Effluent Technology, Inc.                  $104,841
   P.O. Box 893
   La Grange, IL 60525

   International Petroleum                     $68,126
   1745 East 165th Street
   Hammond, IN 46320

   Liquid Container                            $29,369
   1760 Hawthorne Lane
   West Chicago, IL 60185

   Tri-State Employment Services, Inc.         $22,337
   1600 Broadway, 15th Floor
   New York, NY 10038

   Patton Boggs, LLP                           $18,000
   The Legal Center
   One Riverfront Plaza
   Newark, NJ 07102

   Tapecon, Inc.                               $16,195
   10 Latta Road
   Rochester, NY 14612

   Palmer Packaging                            $15,950
   423 South Grace Street
   Addison, IL 60101

   Constar, Inc.                               $14,854
   One Crown Way
   Philadelphia, PA 19154

   American Chemical Exchange                  $13,000
   901 East Walnut Avenue, Suite 1308
   Pasadena, CA 91101

   North American Waste Refining                $7,585
   7601 West 47th Street
   McCook, IL 60525

   Ryder Transportation Services                $6,424
   6000 Windward Parkway
   Alpharetta, GA 30005

   Weyerhaeuser                                 $5,899
   7591 Collections Center Drive
   Chicago, IL 60693

   Aramark Uniform Services                     $5,200
   4200 South Halstead Street
   Chicago, IL 60609

   LA Chemicals, Ltd.                           $5,017
   2415 Gardner Road
   Broadview, IL 60155

   Illinois Department of Employee Security     $5,000
   120 South Mclean Street
   Lincoln, IL 62656

   Meyer Steel Drum                             $4,015
   3201 South Millard Avenue
   Chicago, IL 60623

   Univar                                       $3,998
   P.O. Box 34325
   Seattle, WA 98124-1325


ASARCO LLC: Wants Settlement Pact With London Market Insurers OK'd
------------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to approve its Settlement
Agreement with certain London Market Insurers.

Based on a number of alter-ego theories, numerous asbestos claims
filed against Asbestos Subsidiary Debtors Lac d'Amiante du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd., were also
asserted against ASARCO LLC, Jack L. Kinzie, Esq., at Baker Botts
L.L.P., in Dallas, Texas, relates.

To provide coverage for the alleged asbestos claims, ASARCO
purchased several insurance policies from certain London Market
Insurers.  In 2001, ASARCO and the Asbestos Debtors sued the LMIs
and Fireman's Fund Insurance Company in the United States
District Court of Nueces County, 105th Judicial District, Texas,
in connection with their rights for coverage in the insurance
policies.

In 2004, ASARCO and the Asbestos Debtors commenced discussions
with the LMIs and members of the asbestos plaintiffs' bar
regarding the global resolution of present and future asbestos
claims.

More than a year ago, ASARCO, the Future Claims Representative,
the Official Committee of Unsecured Creditors for the Asbestos
Debtors and the LMIs renewed settlement discussions.

Negotiations have been complex but ultimately, the parties have
entered into a settlement agreement to settle and release all
claims and insurance rights relating to the Subject Insurance
Policies, Mr. Kinzie relates.

The salient terms of the Settlement Agreement are:

   (a) The Participating LMIs will buy back their Insurance
       Rights in the Subject Insurance Policies for $18,943,000,
       which will be paid into an interest bearing escrow
       account;

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

   (b) ASARCO, the Asbestos Committee and the FCR reserve all
       rights to apportion the settlement amount among the
       estates;

   (c) Funds from the escrow will be used under the terms of the
       Escrow Agreement and the balance will remain in the escrow
       account subject to the provisions of the Escrow Agreement;

   (d) If the Court does not approve the Settlement Agreement,
       the Settlement Amount will be refunded from the escrow
       account to the Participating LMIs;

   (e) ASARCO will indemnify the Participating LMIs against all
       claims brought by third parties relating to the policies
       until the time the Participating LMIs receive the
       protections of a Section 524(g) injunction;

   (f) ASARCO will obtain a Section 105 injunction, enjoining all
       claims against the Participating LMIs during the pendency
       of its Chapter 11 case;

   (g) ASARCO will obtain a Section 524(g) injunction that will
       replace the Section 105 injunction at the confirmation of
       a plan of reorganization;

   (h) The final order approving the Settlement Agreement must,
       among other things, find that:

          * the sale, assignment and transfer of the Insurance
            Rights is in good faith and satisfied the
            Requirements of Section 363(m) of the Bankruptcy
            Code;

         * the pre-524(g) indemnity is an actual and necessary
           postpetition cost of preserving the estates; and

         * the insurance rights may be sold, assigned, or
           transferred, free and clear of the interests of the
           asbestos claimholders;

   (i) The Final Settlement Order and any plan must classify the
       Pre-524(g) Indemnity as an allowed administrative expense;

   (j) If the Section 524(g) injunction is later ruled
       unconstitutional and as a result, is successfully
       collaterally attacked and modified in a way that
       materially prejudices the Participating LMIs, ASARCO will
       indemnify the insurers;

   (k) The Section 524(g) trust created under a plan will provide
       quarterly claim reports for the Participating LMIs'
       reinsurance and reporting purposes, and the LMIs will
       exercise their best efforts to keep the substance of the
       reports confidential; and

   (l) If federal asbestos reform legislation is enacted into law
       by the later of January 31, 2007, or the adjournment of
       the current Congress, then ASARCO will return the
       Settlement Amount to the Participating LMIs.

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

Mr. Kinzie argues that without the Settlement Agreement, each of
the claims from the Texas Coverage Action is likely to result in
expensive, time-consuming and risky litigation.  "The
Participating LMI[s] have vigorously defended the Texas Coverage
Action, asserting a litany of defenses and claims.  ASARCO could
receive nothing should the Participating LMI[s] prevail at trial."

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


ASARCO LLC: Wants Prosecution of London Market Insurers Stayed
--------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to:

   (a) declare that continued prosecution against any of the
       Participating London Market Insurers based on alleged
       asbestos-related injuries violates the automatic stay
       in the Debtors' bankruptcy cases; or

   (b) in the alternative, enjoin the prosecution of any
       asbestos-related claim against the Participating LMIs
       during the pendency of the Debtors' Chapter 11 cases.

The Debtors have entered into a settlement agreement with certain
participating London Market Insurers, Jack L. Kinzie, Esq., at
Baker Botts L.L.P., in Dallas, Texas, relates.  The Agreement,
among others, requires ASARCO to obtain an injunction in favor of
the Participating LMIs.  The Agreement also provides that ASARCO
will indemnify the Participating LMIs relating to the Enjoined
Claims.  The indemnification will be effective until an injunction
pursuant to Sections 524(g) and 105(a) of the Bankruptcy Code is
issued.

In accordance with the Agreement, ASARCO LLC, Lac d'Amiante du
Quebec Ltee, Lake Asbestos of Quebec, Ltd., LAQ Canada, Ltd.,
CAPCO Pipe Company, Inc., and Cement Asbestos Products file a
complaint against several individuals who are believed to be
asserting asbestos claims that are currently pending before a
trial or appellate court against ASARCO and the Asbestos Debtors.

The complete list of defendants is too voluminous, but has been
provided to the Court in CD-ROM format, Mr. Kinzie states.  The
list can be made available to any party-in-interest upon request.

Mr. Kinzie contends that if the automatic stay is not extended to
the Participating LMIs, the Debtors will suffer irreparable harm:

   1. Prosecution against any of the Participating LMIs carries
      substantial risk that shared insurance that would be
      available to provide coverage to the Debtors will be
      depleted.  The insurance is a significant asset of the
      Debtors' estates and forms a key component of any
      reorganization.  A stay will prevent unnecessary and
      potentially premature exhaustion of a valuable asset that
      should be available to all creditors.

   2. Adverse judgments against the Participating LMIs in
      connection with the Enjoined Claims may put the Debtors at
      risk of collateral estoppel on questions of damages.

   3. If the Claims are permitted to proceed or be
      brought, the litigation may lead to the creation of a
      prejudicial evidentiary record that will fix the liability
      of the Debtors and limit the Debtors' remedies.

   4. If the Enjoined Claims are not stayed, the Participating
      LMIs will need to seek Debtors' assistance in handling and
      defending certain of the Claims, which may distract and
      impair the ability of the Debtors and their key executives
      to focus on the development and confirmation of a plan of
      reorganization.

Mr. Kinzie informs Judge Schmidt that the Debtors anticipate
filing a plan of reorganization that will result in all asbestos-
related claims against them and the Participating LMIs being
channeled to a trust created under Sections 105 and 524(g)
irrespective of the theory of liability.  "However, [the
Debtors'] ability to do so is closely tied with the relief being
requested in this Complaint."

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


ATMEL: Steven Laub Replaces George Perlegos as CEO & President
--------------------------------------------------------------
Atmel Corp.'s Board of Directors, by unanimous vote of the
independent directors, has appointed Steven Laub, currently a
director of Atmel and a 15-year industry veteran, as the Company's
President and Chief Executive Officer, effective immediately.

Mr. Laub's appointment follows the unanimous decision of the
Board's independent directors to terminate:

   -- George Perlegos, as:

      * President, and
      * Chief Executive Officer;

   -- Gust Perlegos, as:

     * Executive Vice President, Office of the President;

     * the Vice President and General Counsel and Assistant
       Secretary; and

     * the Vice President of Planning and Information Technology.

The Board's decision was made following an independent
investigation into allegations regarding the misuse of corporate
travel funds.  Messrs. George Perlegos and Gust Perlegos have been
asked to resign as directors of the Company.

"We are pleased that Steve will share his knowledge and
significant strategic planning, operating, and financial
experience with our Company," said David Sugishita, director and
newly appointed Non-executive Chairman of the Board of Atmel.  "As
a director, Steve is already familiar with Atmel's business and
has an appreciation of our Company's strengths and its dedicated
employees.  His appointment, together with the strong engineering,
sales and marketing teams in place and our more than 8,000
employees worldwide, provide the guidance and stability Atmel
needs to successfully manage through this period of change and
build on the Company's strong operating foundation."

"I am honored that the Board has selected me to lead Atmel," Mr.
Laub said.  "T[he] actions do not detract from our commitment to
the superior service and innovative technology that has set Atmel
apart for more than 20 years.  We understand the challenges ahead
and are committed to successfully addressing them.  Atmel's solid
operating performance demonstrates that Atmel's customers have
confidence in our Company, our people and our products."

"Thanks to the hard work and dedication of Atmel's employees, our
base business remains sound," said Robert Avery, Atmel's Vice
President Finance and Chief Financial Officer.  "We have
introduced a number of new products over the past few months that
we believe will help us maintain this positive momentum.  We are
also making progress on our efforts to refocus on high-growth
markets, lower costs and improve efficiencies.  By staying focused
on our goals, we are confident that Atmel will continue capturing
the opportunities in our marketplace."

Mr. Laub, 47, has served as a director of Atmel since Feb. 10,
2006.  He most recently was a technology partner at Golden Gate
Capital Corporation, a private equity buyout firm, and the
Executive Chairman of Teridian Semiconductor Corporation, a
fabless semiconductor company.  From 2004 to 2005, Mr. Laub was
President and Chief Executive Officer of Silicon Image, Inc., a
provider of semiconductor solutions.  Prior to that time, Mr. Laub
spent 13 years in executive positions (including President, Chief
Operating Officer and member of the Board of Directors) at Lattice
Semiconductor Corporation, a supplier of programmable logic
devices and related software.  Prior to joining Lattice
Semiconductor, Mr. Laub was a partner at Bain and Company, a
global strategic consulting firm.  Mr. Laub holds a degree in
economics from the University of California, Los Angeles (BA) and
a degree from Harvard Law School (JD).

Atmel said the disclosure is unrelated to the Company's July 25,
2006 announcement that the Board's Audit Committee, together with
independent legal counsel and independent accounting consultants,
is conducting an investigation regarding the timing of past stock
option grants and other potentially related issues.  The Audit
Committee's investigation is ongoing and, as previously announced,
the Company does not expect the investigation to be completed
prior to the due date for the Company's second-quarter Form 10-Q,
Aug. 9, 2006, or the extended due date of Aug. 14, 2006.  Atmel
executives will refrain from commenting further on this matter
until the independent investigation is concluded.

                           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.


BETH ISRAEL: Committee Taps Fox Rothschild as Bankruptcy Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Beth Israel
Hospital Association of Passaic's chapter 11 case asks the U.S.
Bankruptcy Court for the District of New Jersey for permission to
retain Fox Rothschild LLP, as its bankruptcy counsel.

Fox Rothschild will:

    a. assist, advise and represent the Committee with respect to
       the administration of the Debtor's chapter 11 case and the
       exercise of oversight with respect to the Debtor's affairs,
       including all issues arising from or impacting the Debtor,
       the Committee or this chapter 11 case;

    b. provide all necessary legal advice with respect to the
       Committee's powers and duties;

    c. assist the Committee in maximizing the value of the
       Debtor's assets for the benefit of all creditors;

    d. participate in the formulation of and negotiation of a plan
       of reorganization and approval of an associated disclosure
       statement;

    e. conduct an investigation, as the Committee deems
       appropriate, concerning, among other things, the assets,
       liabilities, financial condition and operating issues of
       the Debtor and any other matter relevant to the case or to
       the formulation of a plan;

    f. commence and prosecute any and all necessary and
       appropriate actions or proceedings on behalf of the
       Committee that may be relevant to the Debtor's chapter 11
       case;

    g. prepare on behalf of the Committee necessary applications,
       motions, answers, orders, reports and other legal papers;

    h. communicate with the Committee's constituents and others as
       the Committee may consider desirable in furtherance of its
       responsibilities;

    i. appear in Court and to represent the interests of the
       Committee; and

    j. perform all other legal services for the Committee which
       are appropriate, necessary and proper in the Debtor's
       chapter 11 case.

Hal L. Baume, Esq., a partner at Fox Rothschild, tells the Court
that he bills $450 per hour for his services.  Mr. Baume discloses
that the firm's other professionals who will also render their
expertise bill:

   Professional                      Designation       Hourly Rate
   ------------                      -----------       -----------
   Michael J. Viscount, Jr., Esq.    Partner              $405
   Allison M. Berger, Esq.           Partner              $390
   David Sokolow, Esq.               Partner              $390
   Teresa M. Dorr, Esq.              Associate            $320
   Robin I. Solomon                  Paralegal            $190
   Jennifer Zimmer                   Legal Assistant       $85

Mr. Baume assures the Court that his firm neither holds nor
represents any interest adverse to the Debtor, its estate, or its
creditors.

                       About Beth Israel

Headquartered in Passaic, New Jersey, Beth Israel Hospital
Association of Passaic, dba PBI Regional Medical Center --
http://www.pbih.org/-- is a 264-bed, non-profit acute care  
hospital located in the City of Passaic, New Jersey.  The Medical
Center represents the consolidation of two significant hospitals,
namely Passaic Beth Israel Hospital and the General Hospital
Center of Passaic, and provides medical and health services
including comprehensive cardiac services program, bypass surgery,
electrophysiology, off pump surgery, and others.

The Company filed for chapter 11 protection on July 10, 2006
(Bankr. D. N.J. Case No. 06-16186).  Mark J. Politan, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $50 million and $100 million.


BETH ISRAEL: U.S. Trustee Appointed Seven-Member Official Panel
---------------------------------------------------------------
The U.S. Trustee for Region 3 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Beth Israel
Hospital Association of Passaic chapter 11 case:

    1. Bonnie L. Shuman, Esq.
       Siemens Medical Solutions
       Health Services
       51 Valley Stream Parkway
       Malvern, PA 19355
       Tel: (610) 219-4251
       Fax: (610) 219-8333

    2. Jeffrey S. Moll
       3 Apache Way
       Montville, NJ 07045
       Tel: (973) 220-1272
       Fax: (973) 597-2549

    3. Douglas R. Ernst
       Medtronic USA, Inc.
       3850 Victoria Street
       Shoreview, MN 55126
       Tel: (763) 514-0420
       Fax: (763) 367-1400

    4. William J. Colgan
       Armanti Financial Services, LLC
       2 Broad Street
       Bloomfield, NJ 07003
       Tel: (973) 429-9645
       Fax: (973) 429-1211

    5. James T. Tobin
       Aramark Clinical Technology Services
       1101 Market Street
       Philadelphia, PA 19107
       Tel: (215) 258-8261
       Fax: (215) 238-3282

    6. David Walz
       Passaic Hyperbaric LLC
       32 Elm Place, 3rd Floor
       Rye, NY 10580
       Tel: (914) 921-9800
       Fax: (914) 921-1681

    7. Jack Bardon
       St. Jude Medical S.C., Inc.
       807 Las Cimas Parkway
       Suite 400
       Austin, TX 78746
       Tel: (512) 732-7463
       Fax: (818) 833-4987

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.

                         About Beth Israel

Headquartered in Passaic, New Jersey, Beth Israel Hospital
Association of Passaic, dba PBI Regional Medical Center --
http://www.pbih.org/-- is a 264-bed, non-profit acute care
hospital located in the City of Passaic, New Jersey.  The Medical
Center represents the consolidation of two significant hospitals,
namely Passaic Beth Israel Hospital and the General Hospital
Center of Passaic, and provides medical and health services
including comprehensive cardiac services program, bypass surgery,
electrophysiology, off pump surgery, and others.

The Company filed for chapter 11 protection on July 10, 2006
(Bankr. D. N.J. Case No. 06-16186).  Mark J. Politan, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $50 million and $100 million.


BROADVIEW NETWORKS: Moody's Rates Proposed $210 Mil. Notes at B3
----------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating
for the proposed $210 million second lien secured notes at
Broadview Networks Holdings, Inc.  In addition, the company is
seeking commitments for a $25 million revolving credit facility,
which Moody's not rated.  The outlook is stable.  The new notes
will be used to fund the acquisition of ATX Communications, Inc.
and to refinance existing debt.

Moody's assigned these ratings:

Issuer -- Broadview Networks Holdings, Inc.

   * Corporate Family Rating -- Assigned B3
   * 2nd Lien Secured Notes -- Assigned B3

Outlook is Stable.

The B3 corporate family rating reflects Broadview's financial
risk, lack of free cash flow generation, challenging competitive
position as a CLEC, the complexity of integrating the ATX
acquisition, and the potential for further acquisitions, which may
postpone debt reduction.  The ratings benefit from the company's
emerging operating scale in the northeast US, the expected EBITDA
growth driven by merger synergies, and continued sponsor support,
totaling about $70 million, which includes additional
contributions and conversion of existing subordinated debt into
preferred equity.

The company's leverage is expected to be about 5.1x TTM 1Q 2006
EBITDA at closing, and is high relative to the CLECs that Moody's
rates.  In addition, the company does not expect to commence
generating free cash flow until 2007.

The stable rating outlook considers the company's growth plans and
the reasonable likelihood of achieving merger synergies to
commence free cash flow generation to drive deleveraging over the
rating horizon.

Given the challenges management will face in integrating the
operations and achieving cost synergies, the ratings are somewhat
prospective in nature.  Should the company fail to quickly realize
on the expected merger benefits, the outlook and the rating could
come under downward pressure.

Broadview Networks, headquartered in Rye Brook, New York, is a
CLEC serving over 610,000 access line equivalents, pro forma the
acquisition of ATX, of King of Prussia, Pennsylvania.


BROADVIEW NETWORKS: S&P Places B- Rating to $210 Million Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Rye Brook, New York-based Broadview Networks
Holdings Inc., a competitive local exchange carrier.  The outlook
is stable.

Standard & Poor's also assigned a 'B-' bank loan rating, same as a
corporate credit rating, to the company's $210 million of senior
secured notes due 2012, and '5' recovery rating, indicating
expectations for negligible (0%-25%) recovery of principal in the
event of a payment default.  The notes will be issued under Rule
144A with registration rights.

Proceeds from notes will be used by Broadview:

   * to fund the $91 million acquisition of ATX Communications,
     also a CLEC;

   * to repay about $86 million of existing debt;

   * to pay for transaction fees; and

   * for general corporate purposes.

"The rating reflects the company's vulnerable business position
and highly leveraged financial profile," said Standard & Poor's
credit analyst Catherine Cosentino.

Broadview's business risk is very high as a CLEC facing ongoing
competitive threats from the much larger, financially stronger
incumbent telephone companies, predominantly Verizon
Communications Inc.

While Broadview has provided tailored communications services
and customer care, its prime differentiator in light of such
significant competition has been its lower service prices.  As
such, accelerated marketing by Verizon could place added pressures
on Broadview's prices and margins over the next few years.  In
light of such substantial business risk, the company's financial
resources are very limited given ongoing capital requirements to
support customer growth.

ATX serves markets adjacent to Broadview's northeastern and mid-
Atlantic markets.  This acquisition not only expands the company's
footprint but also promises material cost synergies, as well as
providing a broader product set.  The combined company will serve
20 markets in nine contiguous states, including:

   * New York,
   * Philadelphia,
   * Boston,
   * Baltimore, and
   * Washington, D.C.  

The company targets small to midsize businesses with a bundled T-1
offer.


BROOKLYN HOSPITAL: Wants Stay Lifted to Settle Malpractice Claims
-----------------------------------------------------------------
The Brooklyn Hospital Center and Caledonian Health Center, Inc.,
ask the U.S. Bankruptcy Court for the Eastern District of New York
to lift the automatic stay so they can liquidate certain
Prepetition Medical Malpractice Claims and implement a mandatory
claims resolution process to resolve these claims.  

The Debtors also ask the Court to direct the holders of Medical
Malpractice Claims to refrain from prosecuting any action related
to the claims against certain of the Debtors' current and former
employees until confirmation of a plan of reorganization.

Prior to their bankruptcy filing, the Debtors were named as
defendants and co-defendants in approximately 300 pending State
Court Actions based upon Medical Malpractice Claims.  State Court
Actions are stayed by operation of law against the Debtors, but
are not automatically stayed against any co-defendants in the
State Court Actions, including the Debtors' current or former
employees.

The Debtors tell the Court that under the circumstances, it would
be time consuming, burdensome and expensive for them to have to
defend against and liquidate hundreds of Medical Malpractice
Claims in other tribunals.  The cumbersome process would
significantly delay the resolution of their bankruptcy cases and
result in the waste of administrative expenses to the detriment of
the Debtors and their estates.  Therefore, the Debtors have
designed a comprehensive and systematic program to resolve the
Medical Malpractice Claims fairly and expeditiously through a
claims resolution process.

For Medical Malpractice Claims that arose during the periods in
which the Debtors believe they have insurance in an amount
sufficient to satisfy the Medical Malpractice Claims, the Debtors
want the automatic stay lifted to allow claimants to liquidate
their claims.

For claims that arose during period in which the Debtors had no or
limited insurance, the Debtors propose to institute a claims
resolution process pursuant to which the Debtors and claimants
would first attempt to settle, rather than liquidate, the claims
through a Court-imposed mediation process.  If the Debtors and a
particular claimant are unable to liquidate a claim through the
mediation requirement of the mediation process, the claimant would
retain its right to liquidate its claim in the federal district
court and the stay would be lifted for that limited purpose.

The Debtors believe that the Claims Resolution Process will
facilitate consensual settlement and liquidation of many Mediated
Claims in a manner that is most efficient for both the Debtors and
the Medical Malpractice Claimants.  They add that the proposed
program is also fair in that it merely requires a Medical
Malpractice Claimant to participate in the Mediation in good
faith; however, if a settlement cannot be reached, a Medical
Malpractice Claimant's right to litigate the merits of the
Mediated Claim in federal district court is preserved.  Thus, the
program protects the Medical Malpractice Claimants' rights, if
any, to have the Mediated Claims heard outside this Court.

A full-text copy of the Proposed Terms of the Claims Resolution
Process is available for free at:

             http://ResearchArchives.com/t/s?ec8

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


CATHOLIC CHURCH: Portland Gets Limited Approval to Retain Experts
-----------------------------------------------------------------
The Honorable Elizabeth L. Perris of the U.S. Bankruptcy Court for
the District of Oregon allowed the Archdiocese of Portland to hire
experts but limited her approval to those retained in the claims
and insurance litigation, absent further Court order.

Judge Perris says the counsel who retained experts will indicate
the experts' expenses as part of the counsel's bill, and may pay
the experts.

If the Archdiocese pays any experts, Portland must have a separate
entry in its Rule 2015 reports showing that payment.

As reported in the Troubled Company Reporter on July 13, 2006, the
Archdiocese in Oregon is currently pursuing adversary proceedings
regarding insurance coverage.  The Archdiocese needs to employ
experts to assist:

   * Schwabe Williamson & Wyatt, P.C., its claims attorney, in
     the defense and in the resolution of tort claims, which have
     been, or will be, authorized to proceed to trial in either
     state or federal district court; and

   * Miller Nash LLP, its insurance attorney, in pursuing claims
     asserted in the insurance adversary proceedings.

Susan S. Ford, Esq., at Sussman Shank LLP, in Portland, Oregon,
noted that the experts are not professionals under Section 327(a)
of the Bankruptcy Code.  Accordingly, the Archdiocese does not
believe that employment of experts requires Court approval.

However, out of an abundance of caution, the Archdiocese sought
permission from the U.S. Bankruptcy Court for the District Court
of Oregon to employ experts for claims and insurance litigation.

           Tort Committee Responds Prior to Court Ruling

The Tort Claimants Committee is concerned of the impact of the
Archdiocese of Portland in Oregon's request to the administration
of the bankruptcy estate, Albert N. Kennedy, Esq., at Tonkon
Torp, LLP, in Portland, Oregon, tells the U.S. Bankruptcy Court
for the District of Oregon.

Multiple parties in the Archdiocese's case have retained and will
retain professionals pursuant to Section 327(a) of the Bankruptcy
Code, Mr. Kennedy says.

Among the implications of the Archdiocese's request is that
experts will not be required to submit fee applications, Mr.
Kennedy points out.  The Archdiocese will treat experts'
compensation as an expense, and pay the fees in full on a monthly
basis.  

If experts appointed in the future are paid in full on a monthly
basis as an expense, then experts that have previously been
appointed should also be paid in full on a monthly basis, Mr.
Kennedy points out.

The Tort Committee, therefore, asks the Court to carefully
consider those implications.  

In the event the Court grants the Archdiocese's request, the Tort
Committee also asks the Court to apply the ruling to all experts
retained by all parties-in-interest, including those that are
entitled to be compensated by the estate.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers.  David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case.  In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.  (Catholic Church Bankruptcy News,
Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CNH GLOBAL: S&P Raises Corporate Credit Rating to BB from BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on agricultural equipment maker CNH Global N.V. and related
entities to 'BB' from 'BB-' following the same rating action taken
by Standard & Poor's on CNH's parent company, Italy-based Fiat SpA
(BB/Stable/B).  The outlook is stable.

The corporate credit rating and outlook on publicly traded CNH
are the same as those of the parent company, auto and truck
manufacturer Fiat, because of the close ties between the two
entities.  Fiat views CNH as a core business, and continues to
provide strong liquidity support to CNH in the way of
intercompany loans and bank loan guarantees.  Fiat also has an
approximate 90% equity ownership stake in CNH.

At June 30, 2006, CNH had $617 million of cash deposited with Fiat
affiliates' cash management pools (repayable to CNH upon one-day
notice).  CNH also had $571 million of intercompany borrowings
with Fiat affiliates.

The outlook could be changed to positive in the near term if the
trading profits of Fiat Auto continue to grow and free cash flows
continue to improve.  In addition, CNH's earnings and cash flows
are expected to continue strengthen modestly during the next year
because of reasonably favorable business conditions and the
benefits of the company's cost-reduction programs.


COI MIDWEST: Wants Court Nod on Leven Neale as Bankruptcy Counsel
-----------------------------------------------------------------
COI Midwest Investment LLC asks the U.S. Bankruptcy Court for the
Central District of California for permission to employ Levene,
Neale, Bender, Rankin & Brill L.L.P., as its bankruptcy counsel.

Levene Neale will:

    a. advise the Debtor with regard to the requirements of the
       Court, Bankruptcy Code, Bankruptcy Rules and the Office of
       the U.S. Trustee as they pertain to the Debtor;

    b. advise the Debtor with regard to certain rights and
       remedies of its bankruptcy estate and the rights, claims
       and interests of creditors;

    c. represent the Debtor in any proceedings or hearing in the
       Court involving its estate unless the Debtor is represented
       in such proceeding or hearing by other special counsel;

    d. conduct examinations of witnesses, claimants or adverse
       parties and represent the Debtor in any adversary
       proceeding except to the extent any advesary proceeding is
       in the area outside of Levene Neale's expertise or beyond
       Levene Neale's staffing capabilities;

    e. prepare and assist the Debtor in the preparation of
       reports, applications, pleadings and orders including, but
       not limited to, applications to employ professionals,
       interim statements and operating reports, initial filing
       requirements, schedules and statement of financial affairs,
       lease pleadings, cash collateral pleadings, financing
       pleading, and pleadings with respect to the Debtor's use,
       sale or lease of property outside the ordinary course of
       business;

    f. represent the Debtor with regard to obtaining use of cash
       collateral including, but not limited to, negotiation and
       seeking Court approval of any cash collateral pleading or
       stipulation and prepare any pleadings relating to obtaining
       use of cash collateral;

    g. assist the Debtor in negotiation, formulation, preparation
       and confirmation of a plan of reorganization and the
       preparation and approval of a disclosure statement in
       respect of the plan; and

    h. perform any other services which may be appropriate in
       Levene Neale's representation of the Debtor during its
       bankruptcy case.

David B. Golubchik, Esq., a partner at Levene Neale, tells the
Court that the firm received a $15,000 payment for services
rendered in connection with the Debtor's bankruptcy case.  Mr.
Golubchik discloses that the Debtor has agreed to pay a $50,000
postpetition retainer to Levene Neale.

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

Headquartered in the City of Industry, California, COI Midwest
Investments LLC leases its real property in Canyon Road.  The
Company filed for bankruptcy protection on June 1, 2006 (Bankr.
C.D. Calif. Case No. 06-12329).  Ron Bender, Esq., and David B.
Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP,
represent the Debtor in its restructuring efforts.  When the
Debtor filed for bankruptcy, it reported assets amounting between
$10 million and $50 million and debts aggregating between
$1 million and $10 million.


COI MIDWEST: Taps Klein & Wilson as Special Litigation Counsel
--------------------------------------------------------------
COI Midwest Investment LLC asks the U.S. Bankruptcy Court for the
Central District of California for permission to employ Klein &
Wilson as its special litigation counsel.

                    Prime Measurement Lease

The Debtor tells the Court that its primary asset is a real
property located at 900 South Turnbull Canyon Road in City of
Industry, California.  The property is being leased to Prime
Measurement Products, Inc.  The Debtor relates that Prime ceased
making payments and being its sole source of operating revenue, it
was unable to service its secured debt.  The Debtor reminds the
Court that it filed for chapter 11 protection in order to prevent
foreclosure actions by its secured creditor on the property as
well as preserve the value of the property.  The Debtor says that
despite the default, Prime continues to occupy the property.

The Debtor discloses that it is currently engaged in negotiations
with Prime in an attempt to effectuate a settlement.

                    Klein & Wilson's Retention

In the event a settlement is reached, Klein & Wilson will assist
the Debtor in monitoring Prime's compliance with the settlement
and provide services in the event of default under the settlement.  
Otherwise, Klein & Wilson will assist the Debtor in commencing and
prosecuting an unlawful detainer action against Prime and assist
the Debtor in addressing the current defaults under the lease.

Mark Wilson, Esq., a partner at Klein & Wilson, tells the Court
that attorneys at the firm bill at $325 per hour while legal
assistants bill between $95 to $125 per hour.

Mr. Wilson discloses that the Debtor will pay the firm a $10,000
postpetition retainer.

Mr. Wilson assures the Court that the firm does not hold or
represent any interest adverse to the Debtor or its estate.

Headquartered in the City of Industry, California, COI Midwest
Investments LLC leases its real property in Canyon Road.  The
Company filed for bankruptcy protection on June 1, 2006 (Bankr.
C.D. Calif. Case No. 06-12329).  Ron Bender, Esq., and David B.
Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP,
represent the Debtor in its restructuring efforts.  When the
Debtor filed for bankruptcy, it reported assets amounting between
$10 million and $50 million and debts aggregating between
$1 million and $10 million.


COMCAST CORP: Completes Adelphia Asset Buy with Time Warner
-----------------------------------------------------------
Time Warner Inc. and Comcast Corporation have completed the
acquisition of substantially all of Adelphia Communications
Corporation's assets.

With this acquisition as well as the swaps of cable systems
between them, Comcast and Time Warner Cable have expanded their
cable footprints and improved the geographic clusters of their
subscribers.  In addition, Comcast's historical ownership
interests in Time Warner Cable and Time Warner Entertainment
Company L.P. have been redeemed, with the result that Time Warner
Cable is now owned approximately 84% by Time Warner and 16% by
Adelphia.

Both companies are now focused on integrating their new cable
properties and laying the groundwork to accelerate the deployment
in the coming months of enhanced video, high-speed data, digital
voice and other advanced services to consumers formerly served by
Adelphia.

Brian L. Roberts, Chairman and Chief Executive Officer of Comcast,
said: "The first half of 2006 has been terrific for Comcast with
great consumer response to our new advanced products and triple
play offer.  Comcast is in the strongest position in our history
and the acquisition of these contiguous and complementary systems
could not come at a better time.  Steve Burke, Dave Watson and the
cable team have extensive experience integrating cable systems and
we look forward to delivering to our new customers the products
and services that are already so popular with Comcast's
subscribers.  Significantly, today's transactions also complete
the redemption of our stakes in Time Warner Cable and Time Warner
Entertainment, which is an important strategic milestone for our
Company.  We are grateful to Dick Parsons and his colleagues at
Time Warner and the team at Adelphia who worked so hard to
facilitate and close these transactions.  We'd also like to
welcome our new Adelphia and Time Warner employees and customers
into the family. Now it's time to get to work delivering on the
promise of these transactions."

Time Warner Cable has gained cable systems passing approximately
7.6 million homes, with approximately 3.3 million basic
subscribers.  Time Warner Cable now manages a total of
approximately 14.4 million well-clustered basic subscribers with
27.6 million homes passed.

Comcast has added about 1.7 million additional basic subscribers
for a total of approximately 23.3 million owned and operated
customers, with about 3.5 million additional subscribers held in
various partnerships attributed to it.

The combined purchase price for the assets acquired by Time Warner
Cable and Comcast consisted of $12.5 billion in cash and Time
Warner Cable common stock representing approximately 16% of Time
Warner Cable's total common equity.  The remaining 84% of Time
Warner Cable common stock will be held by Time Warner Inc.  In
addition, Time Warner Inc. will own a direct non-voting common
equity interest of approximately 12% in a subsidiary of the cable
company.

Under agreements entered into in connection with the acquisition,
Adelphia is required to sell at least one-third of the Time Warner
Cable common stock it received in the transaction in an
underwritten public offering within three months of the
registration statement for such offering becoming effective,
unless, prior to that, the shares are distributed to creditors of
Adelphia pursuant to a confirmed plan of reorganization.  Time
Warner Cable expects that any shares distributed to Adelphia
creditors pursuant to a plan of reorganization would be freely
transferable.

In addition, Time Warner Cable has redeemed Comcast's 17.9%
interest in Time Warner Cable Inc. and Time Warner Entertainment
has redeemed Comcast's 4.7% in TWE, which together represented an
effective 21% economic interest in Time Warner Cable.

Bear Stearns and Lehman Brothers acted as financial advisors to
Time Warner. The Blackstone Group acted as financial advisor to
Comcast on the Adelphia transaction and assisted on the Time
Warner Cable and Time Warner Entertainment redemptions. Morgan
Stanley acted as financial advisor to Comcast on the Time Warner
redemptions and assisted on Adelphia.  Paul, Weiss, Rifkind,
Wharton & Garrison LLP is legal advisor to Time Warner.  Davis
Polk & Wardwell is legal advisor to Comcast.  Ballard Spahr
Andrews & Ingersoll, LLP advised Comcast on bankruptcy-related
issues.

Headquartered in Philadelphia, Pennsylvania, Comcast Corporation
(Nasdaq: CMCSA, CMCSK) -- http://www.comcast.com/-- provides
cable, entertainment and communications products and services.  
With 21.7 million cable customers, 9.3 million high-speed Internet
customers, and 1.7 million voice customers, Comcast is principally
involved in the development, management and operation of broadband
cable networks and in the delivery of programming content.

The Company's content networks and investments include E!
Entertainment Television, Style Network, The Golf Channel, OLN,
G4, AZN Television, PBS KIDS Sprout, TV One and four regional
Comcast SportsNets. The Company also has a majority ownership in
Comcast-Spectacor, whose major holdings include the Philadelphia
Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team
and two large multipurpose arenas in Philadelphia.

                           *     *     *

Comcast Corp.'s preferred stock carry Moody's Investors Service's
Ba1 Rating.


COMMERCE PLANET: Earns $1.4 Million in Second Quarter of 2006
-------------------------------------------------------------
Commerce Planet, Inc., fka NeWave, Inc., filed its second quarter
financial reports for the three months ended June 30, 2006, with
the Securities and Exchange Commission on Aug. 2, 2006.

The Company reported $1,460,117 of net income on $7,086,818 of
total revenues for the second quarter ended June 30, 2006,
compared with $1,986,382 of net loss on $1,984,632 of total
revenues for the same period in 2005.

At June 30, 2006, the Company's balance sheet showed $4,559,484 in
total assets, $4,267,271 in total liabilities, and $292,213 in
stockholders' equity.

                   Onesource Imaging Acquisition

On June 1, 2006, the Company acquired all of Onesource Imaging's
fixed and intangible assets.  The assets were acquired in exchange
for assumption of certain liabilities.  On June 20, 2006, the
Company established three wholly owned subsidiaries, OS Imaging,
Inc., Legacy Media, Inc., and Consumer Loyalty Group, Inc.  These
subsidiaries had no balances at June 30, 2006.  

Effective June 22, 2006, the Company changed its name from NeWave,
Inc., to Commerce Planet, Inc.  The Company offers a comprehensive
line of products and services at wholesale prices through an
online club membership.  Additionally, the Company creates,
manages and maintains effective website solutions for e-Commerce.

                        Going Concern Doubt

Jaspers + Hall, PC expressed substantial doubt about Commerce
Planet, Inc., fka NeWave, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
second quarter ended June 30, 2006.  The auditing firm pointed to
the Company's recurring cumulative net losses.

The Company incurred cumulative net losses of $10,861,869 as of
Dec. 31, 2005.  As of June 30, 2006, net losses total $9,207,370.  
The financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going
concern. The Company plans to finance continuing operations with
cash generated from operations, and if necessary, private funding
and funding from the officers of the Company.

Full-text copies of the Company's second quarter financial
statements are available for free at:

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

Commerce Planet, Inc., fka NeWave, Inc. (OTCBB: CPNE) --
http://www.commerceplanet.com/-- provides e-commerce solutions  
and thousands of products at significant savings to its online
loyalty club customers and members through its Web sites:
http://onlinesupplier.com/http://buydiscount.com/and  
http://mysoftwaretutor.com/


COMPLETE RETREATS: U.S. Trustee Picks 11-Member Creditors' Panel
----------------------------------------------------------------
Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Diana G.
Adams, the Acting United States Trustee for Region 2, appointed
eleven parties to serve on the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Complete Retreats LLC and its
debtor-affiliates:

   (1) Joel S. Lawson III
       888 Parkes Run Lane
       Villanova, PA 19085
       Tel: 610-687-1281
       Fax: 610-688-8164

   (2) Boyd Fellows
       P. O. Box 182
       Ross, CA 94957
       Tel: 415-308-3200
       Fax: 415-256-9200

   (3) Fredric H. Gould
       60 Cutter Mill Road, Suite 303
       Great Neck, NY 11021
       Tel: 516-773-2747
       Fax: 516-466-3132

   (4) Intagio Corporation
       Attn: Steven Lewicky, V.P./General Counsel
       22 4th Street, Suite 1120
       San Francisco, CA 94103
       Tel: 415-247-9532
       Fax: 415-543-0375

   (5) Brian W. Anderson
       106 7th Street East
       Tierra Verde, FL 33715
       Tel: 813-842-4509
       Fax: 813-490-7111

   (6) Michael A. Freedman
       104 Bayberry Lane
       Westport, CT 06880
       Tel: 203-226-3160
       Fax: 203-226-3161

   (7) Robert L. Gulley
       62 - 2314 Kanehoa Street
       Kamuela, HI 96743
       Tel: 808-882-7243
       Fax: 208-279-7503

   (8) Stephen A. Kaplan
       434 Marguerita Avenue
       Santa Monica, CA 90402
       Tel: 310-394-7615
       Fax: 310-394-2853

   (9) Yvonne Marsh
       101 Central Park West, #18B
       New York, NY 10023
       Tel: 212-799-9786
       Fax: 212-799-4981

  (10) Michael Thoms
       4205 14th Street
       Rock Island, IL 61201
       Tel: 309-794-0091
       Fax: 309-794-0005

  (11) Mark Neuhaus
       1602 Alton Road, #487
       Miami Beach, FL 33139
       Tel: 646-645-4452
       Fax: 305-538-6560

The U.S. Trustee has appointed Mr. Lawson as chairman of the
Creditors Committee.

Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford,
Connecticut, serves as counsel to the Committee.

"We want to find out where the money went.  We want to preserve
vacations as much as we can.  And we want to get the company on
sound financial footing," Mr. Reilly told The Wall Street
Journal.

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


COMPLETE RETREATS: Intagio Wants Debtors to Honor Reservations
--------------------------------------------------------------
Intagio Corporation asks the U.S. Bankruptcy Court for the
District of Connecticut to:

   (a) direct Complete Retreats LLC and its debtor-affiliates to
       honor all THR Credit Reservations made, or to be made,
       under the 2005 Contract and any of the Prior Contracts;
       and

   (b) exempt the THR Credit Reservations, if necessary, from the
       provisions of the Reservations Order to the extent any of
       them apply to the THR Credit Reservations.

Intagio also asks the Court to schedule an expedited hearing to
consider its request.

In October 2005, Debtor Preferred Retreats LLC dba Tanner & Haley
Destination Clubs, and Intagio entered into a Media Purchase
Agreement, whereby Intagio agreed to place an advertising campaign
on behalf of Preferred Retreats.

In return, Preferred Retreats agreed to provide Intagio:

   -- a $647,045 cash payment for advertising; and

   -- credits, totaling $327,975, redeemable for occupancy rights
      at all THR Private Retreats, THR Distinctive Retreats, THR
      Distinctive Retreats II and THR Legendary Retreats
      properties.

Intagio and Preferred Retreats were also parties to prior
agreements of a similar nature, Louis J. Testa, Esq., at Neubert,
Pepe & Monteith, P.C., in New Haven, Connecticut, relates.  

Prior to the Debtors' bankruptcy filing, Intagio booked certain
reservations on behalf of its clients and resold some of the THR
Credits to third parties under the 2005 Contract and the Prior
Contracts, Mr. Testa states.

As of July 23, 2006, these THR Credit Reservations were
outstanding:

   (1) Reservations already booked through Intagio's travel
       department, on behalf of Intagio's clients;

   (2) THR Credits resold by Intagio to third parties for which
       reservations have been, or may be made, by the parties;
       and

   (3) THR Credits owned by Intagio but not yet sold to third
       parties or redeemed for Client Reservations.

On July 27, 2006, the Court authorized the Debtors to honor
existing reservations, accept new reservations and provide
services to members under certain terms and conditions.

Subsequent to July 23, 200, Intagio received formal
notification from the Debtors that they will not honor the THR
Credit Reservations.

Mr. Testa notes that Intagio is particularly concerned with a
client reservation made by Michael Cunningham in February 2006
for the Debtors' location at Palm Beach County, in Florida, for
occupancy commencing on August 16, 2006, and ending on August 21,
2006.

The remaining Client Reservations will commence on Oct. 2,
Oct. 19 and Dec. 8, 2006, Mr. Testa adds.

If the Debtors fail to honor the Client Reservations and the
Third Party Reservations, Intagio will be required and compelled
to reimburse at least $456,282 to the reservation holders in cash
or business credits, Mr. Testa informs the Honorable Alan H.W.
Shiff.

It is unlikely that Intagio will recover the amount of the
Reservation Obligations in the bankruptcy cases, Mr. Testa says.  
Unlike Intagio, however, the Debtors will not suffer significant
hardship or irreparable injury by being compelled to honor the
THR Credit Reservations pending confirmation of a plan of
reorganization, Mr. Testa continues.

According to Mr. Testa, a review of the Reservations Motion and
Reservations Order appears to indicate that the relief requested
is limited to reservations made by members only, and not third
party creditors like Intagio.  Nor does the order appear to apply
to the holders of Client Reservations and Third Party
Reservations.

The Reservations Order allows the Debtors to provide preferential
treatment for a group of unsecured creditors, namely members, to
the detriment of other unsecured creditors, like Intagio, and       
differentiate their treatment with respect to honoring of
reservations, Mr. Testa asserts.

Moreover, Intagio was not placed upon prior notice of the
Reservations Motion in order to protect its interests with
respect to the THR Credit Reservations.

"[Thus,] the balance of the equities weigh in favor of Intagio,"
Mr. Testa maintains.

Mr. Cunningham will need to be informed as soon as practically
possible prior to August 16, 2006, of the need to make alternate
vacation plans, if necessary, Mr. Testa tells the Court.  In
addition, the holders of the remaining Client Reservations will
need as much time as possible to make alternative plans, if
necessary.

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.  Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors.  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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


CONSECO INC: S&P Affirms BB- Credit Rating With Stable Outlook
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit and financial strength ratings on Conseco Inc.'s (NYSE:CNO)
core insurance companies and affirmed its 'BB-' counterparty
credit rating on Conseco Inc.

The outlook on Conseco Inc. is stable, and the outlook on the
operating companies is positive.

"The affirmations follow yesterday's earnings announcement, which
indicated that second-quarter 2006 earnings were affected by
several one-time events," explained Standard & Poor's credit
analyst Jon Reichert.

"These events included a tentative settlement in a litigation
issue related to certain policies sold by insurance companies
before they were later acquired by Conseco, and a release of
redundant reserves in the closed block."

In addition, the company reported the settlement of an outstanding
tax matter, which resulted in a direct increase to shareholders'
equity.
     
Also affecting income was an increase in claims in the closed
block of long-term care policies.  Exclusive of the reserve
release, pretax earnings related to the closed block of long-term
care polices declined by about $26 million dollars compared with
second-quarter 2006.  At this point it is not known whether it was
a singular quarter or whether it is a harbinger of a longer-term
trend.

The affirmation is based on the ongoing profitability of the core
operations not in runoff, as well as overall improvement in sales,
reflecting Standard & Poor's prior expectations.

At their current non-investment-grade level, all of the ratings on
Conseco incorporate an expectation for some degree of variability
in operating and financial results.

The positive outlook on the operating companies reflects Standard
& Poor's expectation that they will generate a level of sales and
earnings commensurate with an investment-grade rating.  However,
for the ratings to be raised, each of the core subsidiaries will
need to have a Standard & Poor's capital adequacy ratio of at
least 110%.
     
For the group, the consolidated CAR is expected to remain at more
than 125%, although the second-quarter loss will also impact
statutory capital, resulting in a consolidated NAIC risk-based
capital ratio estimated to be about 330% as of the end of second-
quarter 2006, down from 358% at year-end 2005.

However, Standard & Poor's still expects the company's CARs to get
to the expected levels by year-end 2006.  The outlook could be
revised to stable if the losses in the closed block continue
beyond the second quarter or if the company fails to restore
capital to expected levels in the near future.


COOPER TIRE: Operating Losses Prompt S&P to Lower Ratings to B+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on Cooper Tire & Rubber Co. to 'B+'
from 'BB' because of the company's continuing operating losses and
negative cash flow amid tough industry conditions and ongoing
internal challenges.  The ratings were removed from CreditWatch
with negative implications, where they were placed on July 20,
2006.

Findlay, Ohio-based Cooper Tire had total adjusted debt (including
the present value of operating leases and underfunded employee
benefit liabilities) of about $982 million on June 30, 2006.  The
rating outlook is negative.

Cooper has suffered from several years of poor financial
performance.

"Although results were expected to improve this year, so far the
company's performance has deteriorated further," said Standard &
Poor's credit analyst Martin King.

An unexpected decline in consumer demand for replacement tires,
reduced tire production, and high raw material costs contributed
to a 35% decline in adjusted EBITDA for the second quarter and a
25% drop for the first six months of the year.  Meanwhile, cash
flow generation has deteriorated from already low levels because
of weak earnings and bloated working capital.

Cooper's CEO has resigned, and a new interim CEO, who has served
on the company's board since 1998, has been appointed.  While the
change in leadership could create a distraction, it may also prove
to be a catalyst for implementing changes within the organization
necessary to return the company to profitability.

Standard & Poor's expects the seasonal patterns typical of the
tire industry to allow Cooper to improve its results in the second
half of the year.  However, the level of improvement is uncertain
as Cooper will face continued business challenges through the
remainder of 2006.  Consumer demand is down 6% so far this year,
possibly because of the effect of high gas prices on disposable
income.

Although worn tires must eventually be replaced, the timing of the
replacement cycle can be pushed out when consumer budgets are
squeezed.  If demand does not improve, Cooper may be forced to
reduce its production plans, which would strain profitability.


COSINE COMMS: Earns $205,000 in Second Quarter of 2006
------------------------------------------------------
CoSine Communications, Inc., disclosed revenues of $520,000 and
net income of $205,000 for the three months ended June 30, 2006,
compared with revenues of $699,000 and a net loss of $633,000 for
the three months ended June 30, 2005.  Revenues for the six months
ended June 30, 2006, were $1,099,000 and net income was $79,000
compared with revenues of $1,596,000 and a net loss of $1,511,000
for the six months ended June 30, 2005.

At June 30, 2006, the Company's balance sheet showed $23,611,000
in total assets, $888,000 in total current liabilities, and
$22,723,000 in total stockholders' equity.  On that date, the
Company had an accumulated deficit of $516,898,000.

                       Redeployment Strategy

The Company completed, in July 2005, a comprehensive review of
strategic alternatives, including:

   -- a sale of CoSine,

   -- a sale or licensing of intellectual property,

   -- a redeployment of its assets into new business ventures, or

   -- a winding-up and liquidation of the business and a return of
        capital.

The board of directors approved a plan to redeploy the Company's
existing resources to identify and acquire one or more new
business operations, while continuing to support its existing
customers and continuing to offer its intellectual property for
license or sale.

The Company's redeployment strategy involves the acquisition of
one or more operating businesses with existing or prospective
taxable earnings that can be offset by use of its net operating
loss carry-forwards.  

In March 2006, the Company signed an agreement to sell the rights
to its patent portfolio for cash consideration of $180,000.  The
agreement allows the Company to use the patents in support of its
existing customers through January 2008.

The report did not state the name to whom the Company made the
agreement.

A full-text copy of the Company's quarterly report, filed with the
Securities and Exchange Commission, is available for free
at http://ResearchArchives.com/t/s?f00

                        Going Concern Doubt    

As reported in the Troubled Company Reporter on April 6, 2006,
Burr, Pilger & Mayer LLP expressed substantial doubt about
CoSine's ability to continue as a going concern after it audited
the Company's financial statements for the years ended
Dec. 31, 2005 and Dec. 31, 2005.  The auditing firm pointed to the
Company's decision to terminate most of its employees and
discontinue production activities in an effort to conserve cash as
well as ongoing evaluation of strategic alternatives.

                          About CoSine

Based in San Jose, California, CoSine Communications, Inc. (OTC:
COSN.PK) -- http://www.cosinecom.com/-- provides customer support   
services for managed network-based Internet protocol and broadband
service providers under contract by a third party.


CROWN CASTLE: S&P Puts BB Corporate Credit Rating on Neg. Watch
---------------------------------------------------------------
Standard & Poor's Rating Services placed its ratings on Houston,
Texas-based wireless communication tower operator Crown Castle
International Corp., including its 'BB' corporate credit rating,
on CreditWatch with negative implications.

The 'BB' senior secured debt rating on related entity Crown Castle
Operating Co. also was placed on CreditWatch with negative
implications.  However, the '3' recovery rating is not on
CreditWatch.

These actions follow Crown Castle's announcement on Aug. 3, 2006,
in its second-quarter earnings press release that it was notified
on July 17, 2006, that the SEC is conducting an informal inquiry
into various accounting matters, including whether grants of stock
options may have been backdated.  Crown Castle has also initiated
a voluntary internal review of its equity-based compensation
practices, including a review of its underlying stock option and
restricted stock grant documentation and procedures and related
accounting.

"We will monitor events to assess what impact, if any, these
developments may have on the ratings on Crown Castle," said
Standard & Poor's credit analyst Catherine Cosentino.

Based on its current estimate of potential unrecorded non-cash
equity-based compensation charges associated with such stock
option grants, Crown Castle does not believe such amounts would
have been material to its financial statements for any of the
periods to which such charges would have related.


DANA CORP: Ohio Fraud Suit Continues Despite Bankruptcy
-------------------------------------------------------
Judge James Carr of the United States District Court for the
Northern District of Ohio has ruled that a class action alleging
that Dana Corp. began to misstate profits in 2000 to meet
earnings expectations can continue despite its bankruptcy,
Toledoblade.com reports.

Shareholder Roberta Casden filed a lawsuit, alleging breach of
fiduciary duties, against the directors of Dana in the Ohio
District Court.

In late 2005, five purported class actions against Dana and
certain of its current and former officers were filed, which were
later consolidated under the caption Howard Frank v. Dana
Corporation, et al.

In March 2006, the District Court appointed the City of
Philadelphia Board of Pensions & Retirement as the lead plaintiff
in the consolidated securities class action.

The plaintiffs in the consolidated case allege violations of the
U.S. securities laws arising from the issuance of false and
misleading statements about Dana's financial performance and
failures to disclose material facts necessary to make these
statements not misleading, the issuance of financial statements
in violation of generally accepted accounting principles and
U.S. Securities and Exchange Commission rules and the issuance
of earnings guidance that had no reasonable basis.

The defendants believe the allegations in the case are without
merit.  The company previously advised the District Court that
the claims in the case cannot proceed against it due to the
automatic stay provisions of the Bankruptcy Code.

Toledo, Ohio-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: Permo-Drive Wants Pact Applied on Hydraulic Asset Sale
-----------------------------------------------------------------
Pursuant to the Order approving procedures to sell or transfer
certain de minimis assets, Dana Corporation and its debtor-
affiliates sought to sell their assets associated with the
development and commercialization of the technology known as
Intelligent Hydraulic Drive to Bosch Rexroth Corporation for
approximately $2,700,000.

The Debtors later disclosed that they have received two valid
expressions of interest in purchasing the Intelligent Hydraulic
Drive Assets for potentially greater consideration than Bosch
Rexroth Corporation's $2,700,000 offer.  The Debtors did not
disclose the names of the potential purchasers.

                       Permo-Drive Objects

Mark H. Shapiro, Esq., at Steinberg, Shapiro & Clark, in
Southfield, Michigan, relates that at present, the Debtors and
Permo-Drive Technologies Limited and Permo-Drive, Inc., are
parties to a Master License and Research and Development
Agreement dated August 9, 2005.  The Agreement provides for the
joint efforts of the Debtors and Permo-Drive to develop hydraulic
regenerative drive systems in vehicles -- primarily heavy
vehicles to be used in the U.S. Military.  The Permo-Drive
Agreement is one of several projects and agreements under the
Hydraulic Drive Technology.

Pursuant to the Agreement, the Debtors and Permo-Drive are
obligated to:

   a. each designate a project director;

   b. dedicate necessary resources to perform the obligations
      under the Agreement;

   c. limit or preclude collaboration with any other parties
      relative to the development of technology being developed
      under the Agreement; and

   d. meet minimum performance obligations established under the
      Agreement.

The Agreement establishes the ownership and licensing of
technology and intellectual property developed under the
Agreement, as well as procedures for resolution of any disputes
that may arise in relation to ownership of the intellectual
property.  The Agreement also contains provisions for
confidentiality of information, technology and property rights
created under it.

Permo-Drive is concerned over the obligation to object to cure
provisions before it is even determined whether the contract is
to be assumed and assigned.

Permo-Drive's concerns primarily relate to the results of the
buyer's decision not to assume the Agreement, Mr. Shapiro notes.
If the Agreement is not assumed or assigned, the Debtors will be
unable to perform its obligations under the Agreement because all
of the personnel necessary to carry out the Debtors' obligations
under the Agreement will no longer be employed by them.  Instead,
pursuant to the Asset Purchase Agreement, the buyer will hire 10
of the Debtors' full-time employees.

Mr. Shapiro asserts that the proposed APA also fails to address
issues of confidentiality that will arise in the event the Permo-
Drive Agreement is not assigned to the buyer.

Upon information and belief, Bosch Rexroth Corporation is a
competitor of the Debtors and Permo-Drive in the field of
hydraulic regenerative drive systems in vehicles.  If the
Agreement is not assumed and assigned, the transfer of the full-
time employees having knowledge of the confidential information
under the Agreement creates a risk of disclosure of information.
In addition, it violates public policy by eliminating competition
to develop technology in that arena.

Accordingly, Permo-Drive asks the U.S. Bankruptcy Court for the
Southern District of New York to impose these conditions on the
proposed sale:

   a. the buyer should be required to unequivocally decide
      whether it is accepting the Permo-Drive Agreement as part
      of the sale;

   b. in the event that the buyer elects not to accept the Permo-
      Drive Agreement as part of the sale, the Debtors should
      file a separate motion to assume or reject the Permo-Drive
      Agreement; and

   c. if the Permo-Drive Agreement is to be rejected, the
      Debtors' Motion should indicate how they intend to enforce
      the provisions of the Agreement that will survive
      rejection, and should provide Permo-Drive with an adequate
      opportunity to establish its ownership of any patents being
      included in the proposed sale.

Toledo, Ohio-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.


DELPHI CORP: General Motors Files Multibillion-Dollar Claim
-----------------------------------------------------------
General Motors Corporation has filed a multibillion-dollar claim
against Delphi Corporation on July 31, 2006, the last day for
filing proofs of claim, Bloomberg News reports.

Although details of the claim were not provided according to
Bloomberg News, a search through the Delphi document site
maintained by Kurtzman Carson Consultants LLC, Delphi's claims
agent, revealed that GM filed multiple claims against various
Delphi-entities.

One particular claim filed by GM, Frigidaire, Fisher Body Company,
and Hamilton General Motors Assembly against Delphi Automotive
Systems LLC is listed at $6 million plus.

KCC's Delphi site is at http://www.delphidocket.com/delphi

Bloomberg News relates that GM's lawyers had stated in April that
the company would seek more than $4 billion from Delphi.

GM recently disclosed in a regulatory filing with the Securities
and Exchange Commission that Delphi's various financial
obligations to the company include a $951,000,000 owed by Delphi
relating to former GM employees who worked at Delphi and were
later transferred back to GM as job openings became available to
them.

GM said it may receive only a portion of the $951,000,000
receivable because the amount may be subject to compromise in
Delphi's bankruptcy proceeding.  GM said it seek to minimize this
risk by protecting its right to set-off against the $1,150,000,000
it owed to Delphi as of the Petition Date.

In May 2006, GM attempted to exercise its set-off rights for
$67,000,000.

In a notice to Delphi and the Official Committee of Unsecured
Creditors appointed in Delphi's bankruptcy cases, GM alleged that
catalytic converters Delphi supplied for certain 2001 and 2002
vehicle platforms did not conform to specifications.

Delphi said in an SEC filing that GM's warranty claims are without
merit.

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 CORP: Intends to Share Confidential Info to Equity Panel
---------------------------------------------------------------
Delphi Corporation and its debtor-affiliates intend to share
material confidential and privileged information with the Official
Committee of Equity Security Holders and consult it regarding
certain potential claims and defenses against General Motors
Corporation.

The Debtors believe that they share common interests with the
Equity Committee in respect of the GM Claims.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, relates that the Debtors will
provide that Information to keep the Equity Committee
appropriately informed and in a position to fulfill its
responsibilities.

Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to:

   (a) approve the form of a Joint Interest Agreement with the
       Equity Committee to provide the Information; and

   (b) implement a protective order with respect to information
       and documents produced pursuant to the Joint Interest
       Agreement.

The Debtors assure the Court that the cooperative process
described in the Joint Interest Agreement will result in an
efficient and cost effective review of potential claims held by
the Debtors against GM.

The Debtors recently entered into a Confidential Information,
Standstill and Nondisclosure Agreement with Appaloosa Management
L.P., and Harbinger Capital Partners Master Fund I, Ltd., pursuant
to which they may furnish to Appaloosa and Harbinger certain
information necessary to evaluate a possible business arrangement
involving Delphi.  Appaloosa and Harbinger agreed to keep the
Evaluation Material strictly confidential.

Appaloosa and Harbinger are the two largest shareholders of
Delphi.  They were not appointed to the Equity Committee.

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: Panel Wants to Prosecute Claims Against GM
-------------------------------------------------------
The Official Committee of Unsecured Creditors of Delphi
Corporation and its debtor-affiliates seeks authority from the
U.S. Bankruptcy Court for the Southern District of New York to, in
its discretion, file, serve and prosecute on behalf of the
Debtors' estates the Claims and Defenses raised in a complaint
against General Motors Corporation.

The Committee, following its formation, began to investigate
General Motors Corporation's involvement in the Debtors' business
affairs.  Based on its investigation, the Committee believes that
GM improperly used the Debtors' spin-off to divest itself of an
under-performing automotive parts division and the substantial
labor, pension and benefits liabilities related to that division.

Robert J. Rosenberg, Esq., at Latham & Watkins, LLP, in New York,
tells the Court that GM caused the Debtors to assume billions of
dollars in GM obligations and enter into transactions for GM's
benefit.

The Committee strongly believes that GM and its officers' conduct
leading up to and following the Spin-Off gives rise to significant
affirmative claims, as well as significant defenses and objections
to any claims they may assert against the Debtors.

In this regard, the Committee has prepared a draft complaint
against GM and the officers.  The Committee has filed the Claims
and Defenses under seal because it contains confidential
information.

Mr. Rosenberg asserts that the Claims and Defenses may well
support the recapture of billions of dollars in payments and
avoidance of obligations that the Debtors were forced to
undertake for GM's benefit.  The Claims and Defenses may also
reduce or eliminate the Defendants' claims against the Debtors.  
Successful prosecution of the Claims and Defenses will increase
dramatically the payout to unsecured creditors, Mr. Rosenberg
says.

The Committee anticipates that the Debtors might oppose the
request by asserting that it will jeopardize their ongoing
negotiations with GM, their commercial relationship with GM, and
GM's participation in the restructuring.  Mr. Rosenberg explains
that the Committee acknowledges GM's essential role in the
Debtors' reorganization but it also has to maximize recoveries
for unsecured creditors by seeking to recoup the massive sums
that the Debtors have already been paid for GM since the Spin-
Off.

According to Mr. Rosenberg, the Debtors had informed the
Committee that they would neither pursue the Claims and Defenses
at this time nor consent to the Committee's pursuit of them on
the Debtors' behalf.

The purpose of the Committee's request is not to file the
Complaint at this time but to ensure that it has a seat at the
table in the negotiations, Mr. Rosenberg clarifies.

Mr. Rosenberg argues that the ongoing exclusion of the Committee
from the Delphi-GM negotiations degrades the value of the Claims
and Defenses.  Mr. Rosenberg asserts that updates, briefings and
reports from the Debtors about their discussion with GM, and even
the consultation to which the Debtors have committed, are
insufficient to properly protect the interests of unsecured
creditors in receiving full value from the Claims and Defenses.

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)


DELTA AIR: Court Approves 1110(b) Stipulations for Nine Aircraft
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approves Section 1110(b) Stipulations entered into by Delta Air
Lines, Inc., and its debtor-affiliates and certain Aircraft
Parties with respect to 13 Aircraft, bearing Tail Nos. N619DL,
N620DL, N621DL, N622DL, N666DN, N901DL, N902DL, N903DL and N905DL.

The Debtors say that their aircraft fleet consists of aircraft
that are:

    (a) owned by the Debtors and are encumbered by various
        financing transactions or

    (b) leased or financed pursuant to a wide variety of leasing
        and financing agreements.

The Aircraft Equipment may constitute "equipment" within the
meaning of Sections 1110(a)(3) of the Bankruptcy Code.  Hence,
the Aircraft Equipment and the Aircraft Agreements may be
entitled to protections under Section 1110.

Pursuant to Section 1110(b), the Debtors may enter into
stipulations with aircraft lessors and financiers extending the
time to perform the Section 1110 obligations.

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: Comair Can Perform Obligations Under Interim Agreement
-----------------------------------------------------------------
Comair, Inc., obtained authority from the United States Bankruptcy
Court for the Southern District of New York to execute and perform
its obligations under the Interim Agreement with its Lenders.

As reported in the Troubled Company Reporter on July 21, 2006,
pursuant to loan and security agreements with Sumitomo Mitsui
Banking Corporation and Citigroup Financial Products, Inc., as
lenders, and Commerzbank, AG, as lender and as security trustee,
Comair, operates three aircraft bearing Tail Nos. N969CA, N971CA
and N973CA.

In exchange for the Lenders' financing to Comair in connection
with the acquisition of the Aircraft and to secure its obligation
to repay that financing, Comair granted the Security Trustee, for
the benefit of the Lenders, security interests in the Aircraft
Equipment.

After arm's-length, good faith negotiations, the parties have
reached an interim agreement providing for:

   (a) Comair's continued use of the Aircraft during the Debtors'
       Chapter 11 cases; and

   (b) the restructuring of the Existing Transaction Documents.

Richard F. Hahn, Esq., at Debevoise & Plimpton LLP, in New York,
asserts that Comair will obtain significant savings under the
terms of the Tentative Agreement.  At the same time, prior to
substantial consummation of the Debtors' plan of reorganization,
Comair will retain the right to abandon the Aircraft at any time
in the event that circumstances make it prudent for it to do so.

The principal terms of the Interim Agreement are:

   a. Comair and each Lender will enter into the Amendment
      relating to each Aircraft, effective as of the date when
      all these conditions are satisfied:

       * Execution and delivery of the applicable Amendment by
         parties and execution and delivery of an Amended and
         Restated Promissory Note by the Debtor;

       * Substantial consummation of the Debtor's plan of
         reorganization;

       * Debtor will not have abandoned the Aircraft;

       * No "Event of Loss" with respect to the Aircraft will
         have occurred;

       * Bankruptcy Court approval of the form of Amendment will
         have been obtained;

       * Filing with the U.S. Federal Aviation Administration of
         the Amendment and registration of same with the
         International Registry; and

       * An authorized officer of Debtor provides written
         representations and warranties as of effective date of
         the Amendment;

   b. Commencing on July 20, 2006, Comair will make a monthly
      payment to the Security Trustee with respect to each
      Aircraft in an agreed amount;

   c. Starting July 20, Comair will pay in a designated number of
      equal monthly installments for each Aircraft a catch up
      payment equal to the total of:

      -- the principal portion of the November 2005 scheduled
         payment due and owing under the applicable Existing
         Loan Agreement for the Aircraft; plus

      -- interest on the principal amount due and owing under
         that Existing Loan Agreement from the Petition Date
         up to, but excluding, June 20, 2006;

   d. With respect to each Aircraft, the Interim Payments will
      terminate upon the earlier of:

       * the Amendment Effective Date;

       * the date Comair abandons that Aircraft or the date that
         Aircraft's Existing Loan Agreement is deemed rejected
         pursuant to Section 1110(c) of the Bankruptcy Code; or

       * the date on which the Forbearance Period terminated with
         respect to the Aircraft;

   e. Administrative Expense Claims:

       * Payment in full of the Catch-Up Payment for an Aircraft
         will be deemed to satisfy in full all administrative
         expense priority claims with respect to that Aircraft
         for the period from the Petition Date through the
         applicable Amendment Effective Date if both:

         -- the Amendment Effective Date has occurred; and

         -- the applicable Existing Loan Agreement, as amended,
            remains in effect immediately after substantial
            consummation of the Debtors' Plan;

       * the Aircraft Parties will have an administrative expense
         claim for "maintenance burn" if prior to the Amendment
         Effective Date for an Aircraft:

         -- Comair abandons that Aircraft; or

         -- in addition to any claim for unpaid Interim Payments,
            the Existing Loan Agreement for that Aircraft is
            deemed rejected pursuant to Section 1110(c) in
            connection with a written demand for surrender and
            return of that Aircraft after a breach by Comair of
            any of the forbearance conditions in the Interim
            Agreement;

       * In the event the Amendment Effective Date does not occur
         with respect to an Aircraft, the Lenders will be
         entitled to an administrative expense claim equal to the
         sum of:

         -- any unpaid Agreed Monthly Payment, prorated for any
            partial month in which the Interim Agreement
            Termination Date occurs, for the period from July 20,
            2006 to, but excluding, the Interim Agreement
            Termination Date;

         -- any unpaid portion of the Catch-Up Payment; and

         -- the Usage Claim.

       * The Administrative Claim will be payable by Comair to
         the Security Trustee:

         -- upon substantial consummation of Comair's Plan; or

         -- when Comair's Chapter 11 case is converted to a case
            under Chapter 7, in which the Administrative Claim
            will be paid in the same manner and at the same time
            as all other administrative expense claims of equal
            priority are paid;

   f. Each Aircraft Party will forbear from exercising remedies
      in respect of any default under any of the applicable
      Existing Transaction Documents, as long as:

       * Comair complies with its obligations to make the Interim
         Payments; and

       * there are no defaults under the Existing Transaction
         Documents;

   g. The Section 1110 Period will be extended for all purposes
      with respect to the Aircraft from Nov. 14, 2005, until
      the applicable Interim Agreement Termination Date, as long
      as Comair complies with the forbearance conditions and none
      of the termination events occur;

   h. On July 20, 2006, Comair will pay the actual, reasonable
      and documented out-of-pocket fees and expenses of legal
      counsel incurred by all of the Aircraft Parties with
      respect to all Chapter 11 and Section 1110 activity
      relating to the Aircraft, the Amendments and the Interim
      Agreement, up to a cap per Aircraft upon which the parties
      have agreed.  From and after July 20, Comair will pay the
      reasonable and customary ongoing trustee fees and expenses
      of the Security Trustee.

The Existing Transaction Documents are amended to:

  (i) reflect Comair's issuance to the Security Trustee of an
      amended and restated note on the applicable Amendment
      Effective Date, evidencing Comair's obligation to repay the
      original principal amount of the loan, and accrued and
      unpaid interest through the payment of:

       * monthly installments equal to the Agreed Monthly Payment
         with payment to be allocated to principal and interest
         in accordance with the applicable Existing Loan
         Agreement; and

       * to the extent that any portion of the Catch-Up Payment
         remains due and owing as of the applicable Amendment
         Effective Date, further equal monthly installments of
         the Catch-Up Payment until the Catch-Up Payment is paid
         in full; and

(ii) to delete all terms, references and provisions relating to
      swap transaction and swap breakage.

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)


EMMIS COMMUNICATION: ECC Withdraws $15.25 Per Common Share Offer
----------------------------------------------------------------
Emmis Communications Corporation received a letter from ECC
Acquisition, Inc., withdrawing it's May 7, 2006 offer to acquire
the outstanding publicly held shares of the Company for $15.25 per
share.

ECC Acquisition, Inc., an Indiana corporation wholly owned by
Jeff Smulyan, made a non-binding offer on May 7, 2006 to acquire
all of the outstanding shares of Class A Common Stock of the
Company, that are not beneficially owned by Mr. Smulyan.

The Company disclosed that ECC withdrew its proposal because it
was unable to reach agreement with the Special Committee as to the
terms of a proposal to submit to a shareholder vote.

Based in Indianapolis, Indiana, Emmis Communications Corporation
(NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media  
firm with radio broadcasting, television broadcasting and magazine
publishing operations.  Emmis owns 22 FM and 2 AM domestic radio
stations serving New York, Los Angeles and Chicago as well as St.
Louis, Austin, Indianapolis and Terre Haute, Ind.  In addition,
Emmis owns a radio network, international radio interests, two
television stations, regional and specialty magazines, and
ancillary businesses in broadcast sales and publishing.

In May 2005, Emmis planned to seek strategic alternatives for its
16 television stations, and the Company has sold or signed
definitive agreements to sell 14 of them.  

                           *     *     *

In May 2005, Standard & Poor's assigned B+ ratings to Emmis
Communications' long-term local and foreign issuer credits.

In August 2005, Moody's placed the Company's long-term corporate
family rating at Ba3 with a negative outlook.


ENERGY DEVELOPMENT: Section 341(a) Meeting Scheduled on August 30
-----------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of Energy
Development Corporation's creditors at 2:00 p.m., on August 30,
2006, at 411 West Fourth Street, Room 1-159 in Santa Ana,
California.  This is the first meeting of creditors required under
Section 341(a) of the Bankruptcy Code in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Huntington Beach, California, Energy Development
Corporation filed for chapter 11 protection on July 21, 2006
(Bankr. C.D. Calif. Case No. 06-11175).  Simon H. Langer, Esq., in
Los Angeles, California, represents the Debtor.  When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $10 million and $50 million.


EXIDE TECH: Pact Amendment Permits Issuance of Restricted Stocks
----------------------------------------------------------------
Exide Technologies Inc., Tontine Capital Partners, L.P., Legg
Mason Investment Trust, Inc., and Arklow Capital, LLC, executed
the First Amendment to the Standby Purchase Agreement dated June
28, 2006.  The amendment permits the Company to issue up to
428,182 shares of restricted stock granted under its 2004 Stock
Incentive Plan, but which were not issued due to a clerical error.

Headquartered in Princeton, New Jersey, Exide Technologies, Inc.
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and  
distributes lead acid batteries and other related electrical
energy storage products.  The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004.  On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.


FLORICA INC: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Florica Inc.
        pka Wolfgang Puck Casual Dining Inc.
        pka Wolfgang Puck Food Co Inc.
        c/o Broadway Advisors LLC
        333 South Grand Avenue, Suite 4200
        Los Angeles, CA 90071

Bankruptcy Case No.: 06-13630

Type of Business: The Debtor formerly owned and operated
                  restaurants under the Wolfgang Puck Cafe name.
                  The last restaurant directly owned by Florica
                  closed in July 2004 and the Company has been in
                  liquidation since then.  The Company also
                  managed but did not own other restaurants,
                  which are also closed.

Chapter 11 Petition Date: August 4, 2006

Court: Central District Of California (Los Angeles)

Judge: Richard M. Neiter

Debtor's Counsel: David Gould, Esq.
                  McDermott Will & Emery
                  2049 Century Park E., Suite 3400
                  Los Angeles, CA 90067
                  Tel: (310) 277-4110

Total Assets: $1,625,966

Total Debts:  $6,200,681

Debtor's 19 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Mills Enterprises                "Preferred          $1,700,000
1300 Wilson Boulevard            Return" in
Suite 400                        relation to
Arlington, VA 22209              operating
                                 agreement of
                                 LLC (equity)

Clarity Realty Partners          Lease Settlement      $250,000
100 North Crescent Drive
Suite 15
Beverly Hills, CA 90210

Federal Insurance Company        Trade Debt            $123,300
410 Centre
1600 JFK Boulevard
Philadelphia, PA 19103

Westfield Topanga Owner LP       Lease Settlement      $100,000
6600 Topanga Canyon Boulevard    Lease Obligation       $25,000
Canoga Park, CA 91303

Host Marriott Service            Lease Settlement       $86,840

z*Orange City Mills LP           Lease Obligation       $59,240
                                 WPFC/Mills, LLC

Irvine Retail Properties         Lease Settlement       $53,465

LA Wilshire Corp.                Lease Obligation       $50,000

Goldberg & Solovy Foods          Trade Debt             $31,408

Sheldann Makena Realty           Lease Settlement       $27,000

LA Specialty Produce Company     Trade Debt             $23,909

z*Mills Kan Am Sawgrass          Lease Obligation       $22,154
                                 WPFC/Mills, LLC

Pacific Landmark LLC             Rent                   $21,850

Levy, Mosse & Company            Trade Debt             $20,970

Richman Mann Chizever            Trade Debt             $16,514
Philip & Duboff

Goetzman Lewis Company           Trade Debt             $15,000

Republic Master Chefs            Trade Debt              $9,647

Ontario Mills                    Trade Debt              $8,218

Sysco Food Services - 122        Trade Debt              $7,142


FOREST CITY: Restructuring Ratner Join-Venture Interests
--------------------------------------------------------
Forest City Enterprises, Inc., is negotiating with Bruce C. Ratner
to restructure their combined interest in a total of 30 retail,
office and residential operating properties and certain service
companies that currently are owned jointly by Forest City and
Ratner.  All of the properties included in this portfolio except
one are located in the New York City metropolitan area.

Currently Forest City owns a majority interest in its New York
portfolio.  Upon closing of the proposed transaction, Forest City
will be entitled to substantially all of the remaining economic
benefits of the underlying properties.  The parties also are
negotiating the restructuring of certain jointly owned projects
under active development which will be valued when each
development is completed.  Beyond these development projects,
Forest City will have the right to all future development.

In connection with the proposed transaction, Ratner will
contribute his ownership interest and Forest City will contribute
a portion of its ownership interest in the portfolio into a newly-
formed limited liability company.  Ratner will receive
approximately $60 million in cash and 3.9 million units in the new
limited liability company, although the mix of cash and units is
still under consideration.  This restructuring excludes the impact
of any non-recourse debt related to these assets because it
already is included in Forest City's consolidated financial
statements.

Following a one-year lockup period, each of these units may be
exchanged for one share of Forest City's Class A Common Stock or,
at Forest City's option, cash equal to the then-current market
price of the stock.  For the first five years only, units that
have not been exchanged will receive their proportionate share
of an aggregate annual preferred payment of $2.5 million plus an
amount equal to the dividends payable on Forest City stock.   
After five years, the annual preferred payment on the outstanding
units will equal only the dividends payable on Forest City stock.   
In addition, Forest City will indemnify Ratner for any tax
liability that he may incur as a result of the sale of any of
these properties during the 12-year period following the closing
of the transaction.

Forest City intends to conduct its New York operations in the same
manner as it has for the past 20 years.  Bruce Ratner will become
an executive employee of Forest City and will continue to be the
president and chief executive officer of Forest City Ratner
Companies.  In addition, upon closing of the proposed transaction,
Ratner will become a member of Forest City's Board of Directors.

The transaction is expected to be accretive to Forest City's per
share earnings before depreciation, amortization and deferred
taxes in the long term but slightly dilutive to EBDT per share
in the near term.

Forest City's Board of Directors has established a special
committee of independent directors to consider and act upon
the proposed transaction.  The special committee has engaged
Greenhill & Co., LLC as its adviser to evaluate the proposed
transaction from a financial perspective.

                         About the Company

Headquartered in Cleveland, Ohio, Forest City Enterprises, Inc.
(NYSE:FCEA) (NYSE:FCEB) is a $5.9 billion NYSE-listed real estate
company.  The Company is principally engaged in the ownership,
development, acquisition and management of commercial and
residential real estate throughout the United States. The
Company's portfolio includes interests in retail centers,
apartment communities, office buildings and hotels in 20 states
and the District of Columbia.

                           *     *     *

On Feb 1, 2005, Standard & Poor's Ratings Services affirmed its
ratings on Forest City Enterprises Inc. -- Forest City -- and
assigned its 'BB-' rating to the company's most recent senior note
issue.  The rating actions impacted roughly $550 million
in rated debt.  The outlook remains stable.


FURNITURE KING: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: The Furniture King, Inc.
             85 Market Street
             Newark, NJ 07102

Bankruptcy Case No.: 06-17282

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Furniture King of Third Avenue, Inc.       06-17283
      F.K. Furniture Warehouse, Inc.             06-17284
      Southern King Inc.                         06-17285

Type of Business: The Debtors sell furniture.

Chapter 11 Petition Date: August 7, 2006

Court: District of New Jersey (Newark)

Judge: Morris Stern

Debtors' Counsel: Morris S. Bauer, Esq.
                  Sheryll S. Tahiri, Esq.
                  Alyson Weckstein Tiegel
                  Ravin Greenberg PC
                  101 Eisenhower Parkway
                  Roseland, NJ 07068-1028
                  Tel: (973) 226-1500

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
   United Furniture Industries, Inc.          $192,087
   BB & T Commercial Finance
   950 East Paces Ferry Road, S-220
   Atlanta, GA 30326

   Inland Mid Atlantic Management Corp.       $120,187
   4687 Paysphere Circle
   Chicago, IL 60674

   Sealy Mattress Co.                         $116,081
   P.O. Box 828561
   Philadelphia, PA 19182-8561

   Global Furniture USA                       $104,234
   47 6th Street
   East Brunswick, NJ 08816

   Colorimpact                                 $87,325

   Orleans Furniture, Inc.                     $83,706

   Seaview Square LLC                          $83,592

   Eastern Imports, Inc.                       $79,496

   Rite-Chrome Furniture Manufacturing         $76,280

   Friedman, LLP                               $68,475

   American Furniture Manufacturing, Inc.      $65,383

   World Imports Ltd.                          $63,129

   Designs Unlimited                           $61,260

   Cramco Inc.                                 $57,654

   Dynamic Furniture Corp.                     $36,533

   Collezione Europa U.S.A. Inc.               $36,440

   Albany Industries Co.                       $36,359

   Sofa By Fancy                               $29,422

   MRS Future Manufacturing, Inc.              $28,660

   Valex Furniture, Inc.                       $27,018


GARDNER DENVER: Moody's Lifts $125 Million Notes' Rating to B1
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Gardner Denver,
Inc.

These ratings were upgraded:

   * Corporate Family Rating, from Ba3 to Ba2;

   * $125 million senior subordinated notes due 2013,
     from B2 to B1.

These rating was affirmed:

   * SGL-2 Speculative Grade Liquidity rating

Outlook remains stable.  Moody's does not rate the Company's
senior secured credit facilities.

The rating upgrade reflects the strong earnings growth GDI has
experienced since the closing of the Thomas Industries Inc.
acquisition in July 2005 as well as Moody's expectation of
continued de-leveraging over the upcoming twelve to eighteen
months.  The Company's leverage ratio has improved from 4.4x at
June 30, 2005 to approximately 2.6x as of June 30, 2006.  Moody's
projects that leverage will decrease below 2.0 times within the
coming twelve months.

The rating action also considers:

   (1) the Company's track record of strong free cash flow
       generation,

   (2) its portfolio of leading brand names, its broad and
       often exclusive distribution network in the legacy GDI
       businesses and its long-standing OEM relationships in
       the Thomas Products Division; and

   (3) its strong customer and geographic diversification.
      
On the other hand, the ratings are constrained, in part, by:

   (1) demand cyclicality for its products and the potential for
       significant earnings volatility due to the Company's fixed
       cost structure,

   (2) continued integration risks as acquisitions remain an
       important piece of GDI's growth strategy, and

   (3) risks associated with the Company's use of single source
       of supply for certain of its castings and other selected
       components.

Demand for GDI's compressor and vacuum products has been
strong reflecting continued supportive manufacturing capacity
utilization levels and demand for its fluid handling products
has been supported by high oil and natural gas prices which have
spurred demand for petroleum pumps and related parts and service.   
As volumes have increased, GDI's profitability has benefited from
increased operating leverage as well as price increases.  For the
six months ended June 30, 2006, consolidated organic revenue grew
by 22% over prior year and consolidated organic segment operating
earnings grew by 114%.  The Company's consolidated backlog as of
June 30, 2006 increased to $536 million from $296 million as of
June 30, 2005.

The Company's SGL-2 rating reflects good liquidity.  As of June
30, 2006, the Company had approximately $88 million of cash on
hand and approximately $73 million of availability under its
revolving credit agreement.  Internal cash flow generation is also
expected to be solid over the upcoming twelve to eighteen months,
though 2006 free cash flow generation will be adversely impacted
by continued cash integration expenses and by increased working
capital investment.  Decreased capital expenditure requirements
and improved working capital efficiency should result in improved
cash flow generation in 2007.

The stable outlook reflects Moody's expectation:

   (1) continued accommodative demand in the Company's key end
       markets over the upcoming twelve months, and

   (2) management's continued adherence to disciplined financial
       policies.

The ratings and or outlook may improve if the company can convert
current peak cycle profits into higher free cash flow available
for permanent debt reduction.  Positive ratings momentum would be
likely if the company was able to reduce its total debt to EBITDA
to less than 2x, generate free cash flow equal to at least 20% of
outstanding debt on a sustainable basis and improve its interest
coverage to above 5x.  These targets compare with the following
estimated ratios as of June 30, 2006: approximately 2.6x for debt
to adjusted EBITDA, 12% for free cash flow as a percentage of
total debt, and approximately 4x for adjusted EBIT to interest
expense.

Conversely, the ratings or outlook could deteriorate if demand for
the Company's products should decline materially or cash
investment requirements increase such that free cash flow
generation declined below 10% of total debt on a sustained basis.  
The ratings would also be likely impacted by an unexpected, large
debt-financed acquisition or the initiation of any distributions
to equity holders.

Gardner Denver, Inc., based in Quincy, Illinois, is a publicly-
traded manufacturer of compressor and vacuum products as well as
fluid transfer products.  The Company significantly expanded its
product offerings through its 2005 acquisition of Thomas
Industries Inc., a supplier of pumps and compressors for use
in a variety of OEM applications.  For the twelve months ended
June 30, 2006, reported revenues were approximately $1.5 billion.


GENERAL MOTORS: Files Multibillion-Dollar Claim Against Delphi
--------------------------------------------------------------
General Motors Corporation has filed a multibillion-dollar claim
against Delphi Corporation on July 31, 2006, the last day for
filing proofs of claim, Bloomberg News reports.

Although details of the claim were not provided according to
Bloomberg News, a search through the Delphi document site
maintained by Kurtzman Carson Consultants LLC, Delphi's claims
agent, revealed that GM filed multiple claims against various
Delphi-entities.

One particular claim filed by GM, Frigidaire, Fisher Body Company,
and Hamilton General Motors Assembly against Delphi Automotive
Systems LLC is listed at $6 million plus.

KCC's Delphi site is at http://www.delphidocket.com/delphi

Bloomberg News relates that GM's lawyers had stated in April that
the company would seek more than $4 billion from Delphi.

GM recently disclosed in a regulatory filing with the Securities
and Exchange Commission that Delphi's various financial
obligations to the company include a $951,000,000 owed by Delphi
relating to former GM employees who worked at Delphi and were
later transferred back to GM as job openings became available to
them.

GM said it may receive only a portion of the $951,000,000
receivable because the amount may be subject to compromise in
Delphi's bankruptcy proceeding.  GM said it seek to minimize this
risk by protecting its right to set-off against the $1,150,000,000
it owed to Delphi as of the Petition Date.

In May 2006, GM attempted to exercise its set-off rights for
$67,000,000.

In a notice to Delphi and the Official Committee of Unsecured
Creditors appointed in Delphi's bankruptcy cases, GM alleged that
catalytic converters Delphi supplied for certain 2001 and 2002
vehicle platforms did not conform to specifications.

Delphi said in an SEC filing that GM's warranty claims are without
merit.

                          About Delphi

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.  

                    About General Motors Corp.

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

                           *     *     *

As reported in the Troubled Company Reporter on July 28, 2006,
Standard & Poor's Ratings Services held all of its ratings on
General Motors Corp. -- including the 'B' corporate credit rating,
but excluding the '1' recovery rating -- on CreditWatch with
negative implications, where they were placed March 29, 2006.  The
CreditWatch update followed GM's announcement of second quarter
results and other recent developments involving its bank facility
and progress on the GMAC sale.

As reported in the Troubled Company Reporter on July 27, 2006,
Dominion Bond Rating Service downgraded the long-term debt ratings
of General Motors Corporation and General Motors of Canada Limited
to B.  The commercial paper ratings of both companies are also
downgraded to R-3 (low) from R-3.

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

As reported in the Troubled Company Reporter on June 21, 2006,
Moody's Investors Service assigned a B2 rating to the secured
tranches of the amended and extended secured credit facility of up
to $4.5 billion being proposed by General Motors Corporation,
affirmed the company's B3 corporate family and SGL-3 speculative
grade liquidity ratings, and lowered its senior unsecured rating
to Caa1 from B3.  The rating outlook is negative.


GRAFTECH INT'L: Equity Deficit Narrows to $195 Mil. at June 30
--------------------------------------------------------------
GrafTech International Ltd.'s balance sheet as of June 30, 2006
showed a total stockholders' deficit of $195 million, down from a
$210 million deficit at Dec. 31, 2005.

The Company disclosed that for the three months ended June 30,
2006 net income was $9 million compared to net income of
$6 million for the same period the previous year, and for the six
months ended June 30, 2006 net income was 4.26 million compared to
net income of $7.19 million for the same period in the past year.     

Net sales of the Company increased $35 million to $255 million, a
16% increase over net sales of $220 million in the second quarter
of 2005.  

The Company's gross profit increased $9 million, or 16%, to $66
million, versus $57 million in the second quarter of 2005.

Net cash provided by operating activities increased $47 million,
to $53 million versus $7 million in the 2005 second quarter.  

Craig Shular, chief executive officer of GrafTech, commented, "We
are pleased with the strong cash flow in the second quarter.  Our
Synthetic Graphite Segment delivered improved gross profit,
increasing 31% over the same quarter last year as a result of
higher graphite electrode prices and our ongoing cost containment
programs.  We now expect free cash flow before antitrust and
restructuring payments to be $10 million to $20 million for the
full year 2006."

During the second quarter of 2006, the company disclosed it
recorded restructuring charges of $3 million, primarily related to
severance payments associated with productivity and cost savings
programs.  It also recorded a $2.5 million charge in connection
with the settlement of the foreign customer antitrust lawsuits.
With the completion of the settlements, the Company expects to
obtain dismissal of all its pending civil antitrust lawsuits. The
Company further disclosed that it has three remaining antitrust
payments to the DOJ, one in each of the next three quarters, for
approximately $5.5 million each.

GrafTech International Ltd. (NYSE:GTI) --
http://www.graftechaet.com-- manufactures and provides synthetic  
and natural graphite and carbon based products and technical and
research and development services, with customers in 80 countries
engaged in the manufacture of steel, aluminum, silicon metal,
automotive products and electronics.  It manufactures graphite
electrodes and cathodes, products essential to the production of
electric arc furnace steel and aluminum.  It also manufactures
thermal management, fuel cell and other specialty graphite and
carbon products for, and provides services to, the electronics,
power generation, semiconductor, transportation, petrochemical and
other metals markets.  It operates 13 manufacturing facilities
located on four continents.  GRAFCELL, GRAFOIL, and eGRAF are its
registered trademarks.


H&E EQUIPMENT: Ends Solicitation on 12-1/2% Senior Sub. Notes
-------------------------------------------------------------
H&E Equipment Services, Inc., and its wholly owned subsidiary, H&E
Finance Corp. reported the completion of their cash tender offer
and consent solicitation for their 11-1/8% Senior Secured Notes
due 2012 and 12-1/2% Senior Subordinated Notes due 2013.  The
Company also reported the closing of its private offering of $250
million aggregate principal amount of its 8-3/8% senior unsecured
notes due 2016 as reported on the Troubled Company Reporter on
Aug. 3, 2006.

The Company has used the net proceeds of the offering of the
New Notes, together with cash on hand and borrowings under
its existing senior secured credit facility, to purchase the
$195.5 million in aggregate principal amount of the Senior Secured
Notes, and the $53 million in aggregate principal amount of the
Senior Subordinated Notes that were validly tendered pursuant to
the tender offer and consent solicitation prior to Midnight, New
York City time, on August 3, 2006, the expiration date of the
tender offer and consent solicitation.

The total principal amount, accrued and unpaid interest, consent
fee amounts and premiums paid for the Senior Secured Notes was
approximately $217,568,501.  The total principal amount, accrued
and unpaid interest, consent fee amounts and premiums paid for the
Senior Subordinated Notes was approximately $60,056,626.

The amendments to the indentures pursuant to which the Notes were
issued which were proposed in connection with the tender offer and
consent solicitation are now operative.  The amendments to the
indentures eliminate substantially all of the restrictive
covenants and eliminate or modify certain events of default and
related provisions previously contained in the indentures.

                             About H&E

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

                           *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Standard & Poor's Ratings Services assigned its 'B+' unsecured
debt rating to H&E Equipment Services Inc.'s proposed issue of
$250 million senior unsecured notes due in 2016, 144A with
registration rights.  These notes will be used to retire H&E's
approximately $250 million in existing debt which has been
tendered for cash.  The ratings on the existing senior secured
notes will be withdrawn following the successful completion of the
tender offer.  The corporate credit rating on H&E is BB-/Stable/.


HANDEX GROUP: Judge Briskman Dismisses Chapter 11 Cases
-------------------------------------------------------
For reasons stated in open court, the Honorable Arthur B. Briskman
of the U.S. Bankruptcy Court for the Middle District of Florida
dismissed the chapter 11 cases of Handex Group Inc. and its
debtor-affiliates.

As reported in the Troubled Company Reporter on June 7, 2006,
the Debtors no longer operate, has no employees, and has no
significant assets that can be distributed to unsecured creditors.  
The Debtors also failed to file a plan or disclosure statement,
and sees no reasonable likelihood of rehabilitation.

On March 14, 2006, the Debtors sold three pieces of equipment
acquired from Caterpillar Equipment Finance Inc. to Emeco USA for
$315,000.  Gronek & Latham retained $67,094, the remainder of the
sale proceeds, in its trust account.

The Debtors currently hold $260,336, which represent funds
collected from the City of Orlando, the State of New Jersey, the
City of Birmingham, and Georgetown County, South Carolina.  Demco-
Venco, L.L.C., and Great American Insurance Company both allege
liens against the funds.  Mr. Shuker says there are no more
account receivables to collect.  

Aside from the funds, the Debtors' remaining assets are probable
recoveries from two lawsuits:

   * the Uvalde Action; and
   * the WMDS Action.

The Debtors said that it is the best interests of their creditors
that the cases be dismissed and their remaining funds and actions
distributed:

   (i) the G&L Trust Account Funds and the DIP Bond Account Funds
       will first be used to pay the accrued G&L Fees and the
       accrued United States Trustee fees in the approximate
       amount of $20,000.00.  If after the said fees have been
       paid there is a remaining balance of G&L Trust Account
       Funds or DIP Bond Account Funds, the rest will be
       Disbursed to Demco;

  (ii) the Uvalde Action will be transferred to American
       International Group, Inc.; and

(iii) the WMDS Action will be transferred to Great American.

Headquartered in Mount Dora, Florida, Handex Group Inc. --
http://www.handex.com/-- and its affiliates help companies solve   
environmental issues.  The Debtors offer management and consulting
services, which include remediation, regulatory support, risk
management, waste minimalization, health and safety training, data
support, engineering and construction services.  The Debtors filed
for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case
No. 05-17617).  Mariane L. Dorris, Esq., and R. Scott Shuker,
Esq., at Gronek & Latham LLP, represent the Debtor.  The U.S.
Trustee advised the Bankruptcy Court on Dec. 30, 2005, that there
was insufficient interest among the Debtor's unsecured creditors
in order to form an official committee.  When the Debtors filed
for protection from their creditors, they listed estimated assets
and debts of $10 million to $50 million.


HARTVILLE GROUP: Reduces Debt Under Financial Restructuring
-----------------------------------------------------------
Hartville Group, Inc., completed a financial restructuring which
substantially reduced the Company's debt and provided significant
working capital to fund further operations.

Effective Aug. 1, 2006, Hartville entered into a Conversion
Agreement and Release with the holders of the two-year convertible
debentures due November 2006.  This Agreement provided that each
holder elect to either convert the aggregate outstanding principal
amount of convertible debentures into shares of the Company's
common stock or receive a cash payment at a substantial discount
to the face value of the debentures.  

In redeeming this debt, the Company issued 35,169,377 shares of
common stock and paid $1,373,303.  In addition, the holders have
agreed to release the Company from all obligations relating to the
convertible debentures.  As a result of this transaction, the
Company now has approximately 55 million shares outstanding.

As part of the financial restructuring, the Company issued
$5,063,291 of Original Issue Discount Secured Convertible
Debentures due July 2009 in order to provide additional working
capital and to facilitate the retirement of the $12 million of
convertible debt.  These Debentures can be converted into the
Company's common stock at a conversion price of $0.10 per share
and bear prepaid interest at an annualized rate of 7%.  Also
issued were four year warrants to purchase 50,632,912 shares of
common stock with an exercise price of $0.10 per share.  The
convertible and warrants were issued to Midsummer Investment, Ltd
and a private fund, and include registration rights which require
the Company to file a registration statement with respect to the
resale of the shares which may be issued upon conversion of the
debentures or the exercise of the warrants.

"We are pleased to have retired the $12 million debentures due
later this year.  We have been able to do so while still providing
significant working capital to the Company through the issuance of
a substantially reduced amount of debt," commented Dennis C.
Rushovich, Hartville's chief executive officer.  "The new cash
infusion provides us with the working capital needed to take the
Company to the next stage of development.  This new funding is a
vote of confidence that we are on the right track both with the
wide-ranging operational improvements we have attained over the
past 18 months as well as with the launch of marketing initiatives
aimed at achieving continued growth and profitability."

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 4, 2006,
BDO Seidman, LLP, raised substantial doubt about the ability of
Hartville Group, Inc., to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Dec. 31, 2004, and 2005.  The auditing firm pointed to
the company's recurring losses from operations, substantial
accumulated deficit, and impending due dates of some material
financial obligations.

                    About Hartville Corporation

A reinsurance company registered in the Cayman Islands, British
West Indies, Hartville Group, Inc. (OTCBB:HTVL) --
http://www.hartvillegroup.com/-- is a holding company whose  
wholly owned subsidiaries include Hartville Re Ltd. and
Petsmarketing Insurance.com Agency, Inc.  Hartville was formed to
reinsure pet health insurance that is being marketed by the
Agency.  The Agency is primarily a marketing/administration
company concentrating on the sale of its proprietary health
insurance plans for domestic pets.  Its business plan calls for
introducing its product effectively and efficiently through a
variety of distribution systems.  The Company accepts
applications, underwrites and issues policies

The Company reported a $2,479,978 net loss on $1,336,632 of gross
revenues for the three months ended March 31, 2006, versus a
$2,093,903 net loss on $1,090,796 of gross revenues for the three
months ended March 31, 2005.


HEATING OIL: Emerges from Bankr. Protection with $125M Facility
---------------------------------------------------------------
Heating Oil Partners, L.P., emerged from Chapter 11 bankruptcy
following a debt reorganization plan that transfers ownership of
the company to a private investment group lead by Longroad Asset
Management of Stamford, CT.  The company will now do business as
"HOP Energy, LLC".

"We have emerged from Chapter 11 under a best case scenario," said
Michael Anton, the Company's CEO.  "With a substantial infusion of
capital under new ownership, HOP Energy now stands as a formidable
leader in the heating oil industry."

Headquartered in Darien, Connecticut, HOP Energy, LLC is one of
the largest retail distributors of heating oil in the United
States, employing approximately 1,000 people, with operations in
Connecticut, New York, Pennsylvania, New Jersey, Massachusetts,
and Maryland.  HOP specializes in Residential Heating Oil,
Commercial Heating Oil, Service and Installation, and Fleet
Fueling.

"HOP Energy, LLC now has the strongest balance sheet in the
industry," said Steve Zambito of Longroad Asset Management and new
chairman of HOP Energy, LLC.  "In the coming months we will
institute an acquisition program and seek out high quality oil
retailers and distributors that will both strengthen our position
in existing regions and extend our reach into new sectors."

The plan of reorganization, which became effective Friday, Aug. 4,
2006, and which was previously approved by the U.S. Bankruptcy
Court for the District of Connecticut on June 15, 2006, provides
that 100 percent of the equity of the company will be distributed
to the HOP's prepetition secured lenders in complete satisfaction
of their secured claims against the company (approximately
$111 million).  The holders of unsecured claims will be entitled
to receive their pro rata share of a cash distribution from a
settlement pool.

In connection with its emergence from Chapter 11, the company also
finalized a $125 million working capital facility led by JP Morgan
Chase.  This facility was used to refinance its existing debtor-
in-possession facility and will also be used to provide for the
Company's future working capital needs. With its emergence, the
Company is now privately owned by a group of investors led by
Longroad Asset Management.

HOP Energy, LLC, will continue to operate along four main lines of
business: Residential Heating Oil, Commercial Heating Oil, Service
and Installation, and Fleet Fueling.

                    About Heating Oil Partners

Headquartered in Darien, Connecticut, Heating Oil Partners, L.P.,
nka HOP Energy, LLC -- http://www.hopheat.com/-- is one of the  
largest residential heating oil distributors in the United States,
serving approximately 150,000 customers in the Northeastern United
States.  The Company's primary business is the distribution of
heating oil and other refined liquid petroleum products to
residential and commercial customers.

The Company and its subsidiaries filed for chapter 11 protection
on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed
for recognition of the chapter 11 proceedings under the Companies'
Creditors Arrangement Act (Canada).  Craig I. Lifland, Esq., and
James Berman, Esq., at Zeisler and Zeisler PC, represent the
Debtors in their restructuring efforts.  Jeffrey D. Prol, Esq., at
Lowenstein Sandler PC, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $127,278,000 in total assets and
$155,033,000 in total debts.

The Bankruptcy Court confirmed Heating Oil Partners, LP, and
Heating Oil Partners, GP, Inc.'s First Amended Joint Plan of
Reorganization on June 15, 2006.  The Ontario Superior Court of
Justice Commercial List issued an order on June 26, 2006,
recognizing and implementing the order of the U.S. Bankruptcy
Court.


ICURIE INC: Posts $1.6 Million Net Loss in Second Quarter of 2006
-----------------------------------------------------------------
iCurie, Inc., filed its second quarter financial reports for the
three months ended June 30, 2006, with the Securities and Exchange
Commission on Aug. 2, 2006.

The Company reported a $1,650,974 net loss on $19,994 of revenues
for the second quarter ended June 30, 2006, compared with
$1,414,055 net loss with no revenue for the same period in 2005.

At June 30, 2006, the Company's balance sheet showed $4,458,603 in
total assets, $2,016,398 in total liabilities, and $2,442,205 in
total stockholders' equity.

Full-text copies of the Company's financials are available for
free at http://ResearchArchives.com/t/s?f04

                       Going Concern Doubt

PKF, P.C., in New York, raised substantial doubt about iCurie,
Inc.'s ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005.  The auditor pointed to the Company's accumulated
deficit and commencement of limited revenue producing operations.

iCurie, Inc., designs, develops, researches, manufactures, sells,
and markets heat management products or next generation cooling
solutions for the PC, flat panel display, and LED-lighting
industries.


IGIA INC: Completes $500,000 Secured Convertible Notes Sale
-----------------------------------------------------------
IGIA, Inc., has completed the sale to New Millennium Capital
Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd.
and AJW Partners, LLC, of:

      -- $500,000 in callable secured convertible notes; and

      -- stock purchase warrants to buy 75,000,000 shares of
         IGIA's common stock.

The Company received net proceeds of $89,933.79, after deducting
expenses of $15,066.21, and $395,000 was placed in escrow to be
distributed to the Company in equal payment over the subsequent
four months.

The Notes bear interest at 6%, mature three years from the date of
issuance, and are convertible into the Company's common stock, at
the Investors' option, at a conversion price equal to the lower of
$0.04 or 25% of the average of the three lowest intraday trading
prices for the Company's common stock during the 20 trading days
before, but not including, the conversion date.

As of July 26, 2006, the average of the three lowest intraday
trading prices for IGIA's common stock during the preceding 20
trading days as reported on the Over-The-Counter Bulletin Board
was $0.0042 and, therefore, the conversion price for the secured
convertible notes was $0.00105.  Based on this conversion price,
the $500,000 Notes, excluding interest, were convertible into
476,190,476 shares of common stock.

The Warrants are exercisable until seven years from the date of
issuance at a purchase price of $0.009 per share.  In addition,
the exercise price of the Warrants is adjusted in the event the
Company issues common stock at a price below market.

The Investors have contractually agreed to restrict their ability
to convert the Notes and exercise the Warrants and receive shares
of IGIA's common stock such that the number of shares of the
Company common stock held by them and their affiliates after a
conversion or exercise does not exceed 4.99% of the Company's then
issued and outstanding shares of common stock.

In addition, IGIA has also agreed to amend the terms of the
$760,000 in notes issued to the Investors on June 7, 2006 to
provide that the notes are convertible into common stock, at the
Investors' option, at a conversion price equal to the lower
of$0.04 or 25% of the average of the three lowest intraday trading
prices for the Company's common stock during the 20 trading days
before, but not including, the conversion date.

IGIA, Inc. (OTCBB: IGAI) -- http://www.igia.com/-- through its  
wholly owned subsidiaries, designs, develops, imports, and
distributes personal care and household products through direct
marketing and major retailers.  Its globally recognized portfolio
of brands includes IGIA(R) and the registered proprietary As Seen
On TV(TM) logo.  The IGIA name ranks amongst the most recognizable
personal care brands as cited by an industry publication.  In
addition, IGIA markets and sells products through TV infomercials,
mass-market retailers, specialty retailers, and catalogs.

At May 31, 2006, the Company's balance sheet showed $1,554,162 in
total assets and $16,161,669 in total liabilities, resulting in a
$14,607,507 stockholders' deficit.


INDEPENDENCE TAX: June 30 Balance Sheet Upside-Down by $3.7 Mil.
----------------------------------------------------------------
Independence Tax Credit Plus, L.P. II, filed its consolidated
financial statements for the quarter ended June 30, 2006, with the
Securities and Exchange Commission on July 31, 2006.

Independence's balance sheet at June 30, 2006, showed $78,364,847
in total assets, total liabilities of $83,189,498 and minority
interest of negative $1,045,499, resulting in a partners' deficit
of $3,779,152.

The partnership reported a $562,199 net loss on $3,203,211 of
revenues for the quarter ended June 30, 2006, compared to a
$1,232,555 net loss on $2,511,089 of revenues for the same period
in the prior year.

A full-text copy of Independence's quarterly report is available
for free at http://researcharchives.com/t/s?f0c

Independence Tax Credit Plus is a limited partnership formed under
the laws of Delaware on February 11, 1992.  Its partner Related
Independence Associates L.P. is and affiliate of CharterMac
Capital LLC.


INTERSTATE BAKERIES: Seeks Approval of Eight Amendment to DIP Pact
------------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to amend their DIP Agreement to, among other things:

   (a) extend the maturity date until June 2, 2007;

   (b) increase the sublimit to $150,000,000 for letters of
       credit to be issued; and

   (c) augment the Debtors' cash resources by allowing them to
       use 50% or approximately $44,000,000 of the restricted
       cash for general corporate purposes.  The remaining 50%
       will be used to repay the prepetition Secured Lenders as
       further adequate protection.

The Debtors and JPMorgan Chase Bank, as administrative agent and
collateral agent for the Lenders, executed a Seventh Amendment to
the DIP Financing Agreement on June 28, 2006.  The parties agreed
to extend the period during which the Debtors' compliance with the
minimum cumulative Consolidated EBITDA covenant is suspended until
July 29, 2006.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, asserts that the amendment is necessary for
the Debtors to achieve minimum financial performance targets.

A free copy of the proposed Term Sheet of the Eighth Amended
Credit Agreement is available at the Securities and Exchange
Commission at http://ResearchArchives.com/t/s?efc

            Debtors Seek to Extend Challenge Deadline

The Debtors ask the Court to extend the deadline to assert
certain claims and actions challenging the extent, validity,
enforceability, perfection or priority of their prepetition
obligations or the liens granted to the prepetition secured
lenders on the Prepetition Collateral through and including
September 22, 2006.

Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, asserts that the extension will allow the Debtors
and certain other parties additional time to investigate,
negotiate and pursue, if necessary, the claims and actions in the
context of the overall business reorganization being pursued.

                         IBC's Statement

Interstate Bakeries Corporation filed a motion in the U.S.
Bankruptcy Court seeking approval of a proposed extension of its
$200 million debtor-in-possession (DIP) financing facility to
June 2, 2007, the company states in a press release.  The
maturity date under the proposed extension coincides with the end
of IBC's 2007 fiscal year.  JPMorgan Chase Bank (JPM Chase), the
agent for the initial DIP facility which expires September 22,
2006, will continue to act as agent and syndicate the extended
financing facility.

According to Tony Alvarez II, chief executive of IBC and co-
founder and co-chief executive of Alvarez & Marsal (A&M), the
global corporate advisory and turnaround management services
firm,  "We are pleased to have reached agreement with JPM Chase
regarding the extension and believe the proposed terms provide us
with the liquidity necessary to complete our Chapter 11
restructuring."

Mr. Alvarez continued, "The improvement in financial performance
has taken longer to complete principally due to intense
competitive pressures and significantly higher ingredient costs,
particularly flour and sugar, and energy costs negatively
impacting our fiscal 2006 performance.  We believe fiscal 2007
will be a transitional year for the Company during which the
operational, financial and marketing initiatives we have
implemented during our restructuring will begin to impact our
results."

Terms of the proposed DIP financing facility extension were
attached to a Form 8-K that the company filed with the Securities
and Exchange Commission (SEC) and include, among other proposed
terms and conditions, financial covenants requiring IBC to
achieve minimum financial performance targets.  The minimum
financial performance targets resulted from a negotiation process
and are not necessarily indicative of the expected operating
performance of IBC in future fiscal periods, especially periods
beyond fiscal 2007.

The proposed extension of the DIP financing facility also
contains a provision to further augment IBC's cash resources by
allowing it to use for general corporate purposes 50 percent of
the restricted cash previously unavailable to the Company, with
the remaining 50 percent going to partially repay IBC's senior
secured pre-petition loans.  As of August 2, 2006, the amount of
such restricted cash is approximately $88 million.

As of July 1, 2006, the end of the company's first period of
fiscal 2007, the Company had $74.5 million of unrestricted cash
and $86.5 million of restricted cash.  As of August 2, 2006, IBC
has not borrowed under its $200 million DIP financing facility,
although it has issued letters of credit under the DIP financing
facility primarily in support of the Company's insurance
programs.  As of July 1, 2006, there were $105.8 million of
letters of credit outstanding and the amount of the DIP financing
facility available for borrowings as of that date was $72.8
million.

IBC said that it is optimistic that it will receive the support
of the lenders party to the DIP financing facility to extend the
facility through fiscal 2007 as well as consent of the pre-
petition lenders to such transactions; however, there can be no
assurances that such lenders will agree to the extended DIP
financing facility on the terms and conditions currently
contemplated by the proposed term sheet or that alternative
lenders or sources of financing will be available in the event no
agreement to extend is reached with such lenders.  It is
anticipated that both the exclusivity extension motion and the
motion seeking approval of the amended DIP financing facility
will be considered by the Bankruptcy Court at a hearing scheduled
for Aug. 23, 2006.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTERSTATE BAKERIES: Wants Until Jan. 31 to File Chapter 11 Plan
----------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Western District of Missouri to
further extend their exclusive periods to:

   (a) file a plan of reorganization through Jan. 31, 2007;
       and

   (b) file and solicit acceptances of that plan through
       April 2, 2007.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, reports that the Debtors have made progress
in their restructuring process.  As of March 2005, the Debtors
have effected the restructurings in all of their 10 profit
centers.  The Debtors have also consolidated their businesses by
a reduction of their bakeries, distribution centers, delivery
routes and workforce.  The Debtors have launched new products and
improved and redesigned marketing strategies for some of their
brand names.

In addition, the Debtors have made progress in their claims
resolution process.  The Debtors have rejected several leases and
sold real properties aggregating to $93,000,000.

Despite these efforts, the Debtors still need additional time to
resolve several issues that impedes their emergence from Chapter
11, Mr. Ivester asserts.

The Debtors' request for an extension of their exclusive periods
is not a negotiation tactic, but is merely a reflection of the
fact that their cases are still not ripe for the submission and
confirmation of a viable plan, Mr. Ivester asserts.

                          IBC's Statement

Interstate Bakeries Corporation relates in a press release that
it has asked the Court to extend the exclusive periods within
which it may file and seek acceptances of its plan of
reorganization until Jan. 31, 2007, and April 2, 2007,
respectively.  The extension of its exclusivity period is
intended to, among other things, permit IBC to complete the
valuation analysis and explore exit financing alternatives
necessary to develop the plan of reorganization.  Under the
previous schedule, the company had until September 22, 2006, to
file a plan of reorganization and until Nov. 21, 2006, to solicit
acceptance of that plan.

Since voluntarily filing to restructure under Chapter 11 of the
Bankruptcy Code on Sept. 22, 2004, the company has been
engaged on a number of fronts to streamline operations, enhance
revenue and decrease costs.  As part of a comprehensive plan to
return it to profitability, IBC has:

   * Restructured its 10 profit centers -- The company has
     closed nine bakeries and approximately 200 distribution
     centers; rationalized its delivery route network, reducing
     the number of routes by approximately 30 percent, from
     approximately 9,100 delivery routes to approximately 6,400;
     and reduced its workforce by approximately 7,000 positions.

   * Disposed of certain non-core assets during its Chapter 11
     case, the aggregate net proceeds of which are approximately
     $93 million.

   * Commenced negotiations of long-term extensions with respect
     to most of its 420 collective bargaining agreements with its
     union-represented employees resulting in ratification by
     employees or agreements reached in principle, subject to
     ratification by employees, of approximately 200 CBAs.  In
     total, these CBAs cover approximately 65% of IBC's unionized
     workforce.  IBC hopes to negotiate similar agreements with
     its remaining collective bargaining units, although there are
     no assurances that the CBA negotiation process will proceed
     in the same time frame or fashion as it has to date.  In
     addition, because the framework for the agreements was
     initially fashioned based upon operating assumptions made
     during the early stages of the PC restructuring process, it
     is possible that, if actual results do not meet
     expectations, these agreements (which remain subject to
     assumption or rejection in the Chapter 11 case) may need to
     be revisited and additional concessions may be necessary.

   * Initiated an aggressive marketing program designed to offset
     revenue declines by developing protocols to better
     anticipate and meet changing consumer demand through a
     consistent flow of new products.  Since the beginning of
     fiscal 2006, IBC has launched numerous new products and
     promotions.  While these efforts have met IBC's expectations
     to date, it continues to work on other programs and
     additional new product launches.

"During this fiscal year, we intend to further address our
declining sales through existing and additional marketing
initiatives, complete negotiations with our remaining union-
represented employees, and address the continued cost pressures
through price increases," Tony Alvarez II, chief executive of IBC
and co-founder and co-chief executive of Alvarez & Marsal (A&M),
said.  "The success and timing of those efforts will
significantly impact our future results."

The company noted that, while there can be no assurances as to
future market developments, any shifts in ingredients and energy-
related costs to more historic levels will also significantly
impact its future results.  With the PC restructuring efforts
completed and new marketing initiatives in place, IBC will also
focus on improving its manufacturing processes in the bakeries
and enhancing its service to customers through its field sales
force.

Mr. Alvarez said that granting the extension of the plan filing
and solicitation periods will allow the company time to complete
its remaining restructuring efforts, principally the on-going
negotiations with its union-represented employees.

The extension of its exclusive periods will also permit IBC to
continue what have thus far been constructive discussions with
its constituent groups about various alternatives for emergence
from Chapter 11.  However, in light of the inherent uncertainties
resulting from the financial performance of IBC's business and
the bankruptcy process, IBC cannot predict the amount or type of
distributions that stakeholders can expect to receive or retain,
if any.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)


KAISER ALUMINUM: Gets Okay to Return Asbestos Escrow Funds
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Kaiser Aluminum & Chemical Corporation to return certain funds
held in escrow pursuant to a prepetition asbestos claims
settlement processing agreement.

As reported in the Troubled Company Reporter on June 28, 2006,
KACC was named as a party-defendant in actions instituted in state
and federal courts in New York by asbestos-related personal injury
claimants represented by Weitz & Luxenberg, P.C.

As of KACC's bankruptcy filing, nearly $3,700,000 was held in
trust by Mr. Heslin.  Neither W&L nor KACC has taken any further
action with respect to the Settlement Agreement and no processing
or claim payments have occurred, Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, in Wilmington, Delaware, related.

Mr. Heslin has indicated that he will return the funds to KACC if
W&L agrees or the Court authorizes the return.  KACC has requested
W&L to permit Mr. Heslin to return the funds.  As of June 19,
2006, W&L has refused to do so, Mr. DeFranceschi said.

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: Agrium Wants Injunction Modified to Pursue Claim
-----------------------------------------------------------------
Agrium, Inc., and Agrium U.S., Inc., ask the U.S. Bankruptcy Court
for the District of Delaware to:

   (a) declare that the automatic stay does not apply;

   (b) interpret Kaiser Aluminum & Chemical Corp.'s Plan to
       determine the appropriate treatment of their claim; and

   (c) modify the discharge injunction to permit them to
       liquidate their claims against the estate, or the
       Reorganized Debtors, and pursue their claims against any
       available insurance.

Daniel Freeman and Lance Olson, as the Estate of Savannah Olson,
filed civil actions against Kaiser, the Agrium Companies, among
others, seeking recovery on numerous claims relating to
environmental contamination of ground water and soil.  The cases
are pending before the U.S. District Court for the Central
District of Illinois, Springfield Division.

William E. Chipman, Jr., Esq., at Edwards Angell Palmer & Dodge
LLP, in Wilmington, Delaware, relates that Messrs. Freeman and
Olson voluntarily dismissed Kaiser from the federal cases as
ordered by the Court in application of the automatic stay.

The Agrium Companies assert that they have a claim against Kaiser
for contribution under Illinois state law, which arose on the date
Messrs. Freeman and Olson filed their civil actions.

The dismissal of Kaiser from the federal cases should not prevent
the Agrium Companies from pursuing their claim for contribution
against Kaiser, Mr. Chipman contends.

The Agrium Companies also assert that their contribution claim
should be allowed as an administrative expense claim against
Kaiser's estate, or as postpetition claim not discharged by the
2nd Amended Plan of Reorganization.

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)


KAYDON CORP: Earns $17.7 Million in Second Quarter Ended July 1
---------------------------------------------------------------
Kaydon Corporation reported $17.704 million of net income for the
second quarter of 2006 ending July 1, 2006, compared with $12.418
million of net income for the three months ended July 2, 2005.

"The excellent financial results and positive order trends we
experienced during the second quarter reflect not only continued
strong demand from many key markets we serve, but also the success
of our efforts to drive growth through new product development,
our continued success in providing performance critical products
to meet demanding customer needs, and our operational excellence
initiatives," Brian P. Campbell, president and chief executive
officer commented.

"Kaydon's strong engineering and lean manufacturing capabilities,
our proprietary product positions, and our excellent financial
resources will provide us with further opportunities to enhance
both internal and external growth.  Based upon our excellent
first-half results and our current order backlog and incoming
order flow, we are looking forward to another successful year of
increased operating performance in 2006," Mr. Campbell further
said.

                   Second Quarter 2006 Results

Sales of continuing operations during the second quarter of 2006
equaled $102.7 million, an 8.7% increase compared to $94.5 million
during the second quarter of 2005.  Increased sales across many of
the Company's product lines, including specialty bearings, sealing
products, air and liquid filtration products, and specialty metal
alloys were only partially offset by decreases totaling $3 million
primarily related to metal forming equipment, and to a lesser
extent linear deceleration products and specialty ball products.

Gross profit from continuing operations equaled $43.6 million or
42.5% of sales for the second quarter of 2006 as compared to
$36.1 million or 38.2% of sales for the second quarter of 2005.
Second quarter 2006 gross profit was positively affected by higher
sales volume, and by selling price increases and operating
efficiency initiatives implemented in the second half of last
year.

Selling, general, and administrative expenses of continuing
operations, equaled $17.4 million or 17% of sales during the
second quarter of 2006 as compared to $18 million or 19.1% of
sales during the second quarter of 2005.

Operating income from continuing operations increased 44.5%, to
$26.2 million, in the second quarter of 2006, equal to 25.5% of
sales, compared to $18.1 million, or 19.2% of sales, in the second
quarter of 2005.

Interest income increased to $3.9 million during the second
quarter of 2006, compared with $1.7 million during the second
quarter of 2005.

Income from continuing operations for the second quarter of 2006
was $17.7 million.  During the second quarter of 2005, Kaydon
generated income from continuing operations of $11.3 million.

Income from discontinued operations for the second quarter 2005
equaled $1.1 million.  

Reflecting continued strength in the manufacturing economy, and
large orders related to the wind energy market, order entry during
the second quarter of 2006 equaled a record $119.6 million.
Backlog equaled a record $161.5 million at the end of the second
quarter 2006, a 28.6% increase compared to a backlog of continuing
operations of $125.6 million at the end of the second quarter
2005.

As a result of increased demand for specialty bearings utilized by
the wind energy industry, the Company has embarked on a major
expansion program to increase its capacity to serve this rapidly
growing market.  The Company intends to maintain its leadership
position in the supply of specialty bearings utilized in this
important end-market by investing approximately $30 million during
the next 18 months to expand capacity at two of its specialty
bearings manufacturing facilities.  The Company currently believes
that its sales to the wind energy industry will provide
substantial sales growth opportunities going forward.

Net cash flow from operating activities during the second quarter
2006 improved to $22.8 million, or 22.3% of sales, compared with
second quarter 2005 cash flow from operations of $12.6 million, or
13.3% of sales, primarily as a result of increased net income.
During the second quarter 2006, the Company paid common stock
dividends of $3.4 million, repurchased a total of 30,000 shares of
Company common stock for $1.1 million, and invested $3.5 million
in net capital expenditures.  The Company's cash and cash
equivalents equaled $343.3 million at July 1, 2006.

Free cash flow, defined as net cash flow from operating activities
less capital expenditures, equaled $19.4 million, or 18.9% of
sales, during the second quarter 2006, as compared with
$9.7 million, or 10.3% of sales, during the second quarter 2005.
Free cash flow for the last twelve months ended July 1, 2006,
totaled $46.0 million.

Depreciation and amortization of continuing operations equaled
$4.4 million during the second quarter of 2006, compared with
$4.3 million during the comparable period last year.

EBITDA from continuing operations, or earnings before interest,
taxes, depreciation and amortization, equaled $30.6 million, or
29.8% of sales, during the second quarter 2006, compared with
$22.4 million, or 23.7 percent of sales, during the second quarter
2005, and covered second quarter interest expense by 12.8x.

Sales from continuing operations during the first half of 2006
increased $25.1 million, or 14.0%, to $204.2 million, compared
with the first half of 2005.  First half operating income
increased $16.6 million, or 49.9%, to $49.8 million.  

                        Segment Discussion

During the second quarter of 2006, sales of the Friction and
Motion Control Products segment increased $9.7 million or 19.1%,
to $60.6 million, when compared with second quarter 2005.
Operating income increased 40.3%, to $17.8 million.  This segment
was positively affected by increased demand for specialty bearings
utilized in military, machinery, medical and heavy equipment
markets, including the wind energy market.  Second quarter 2006
operating income was favorably impacted by increased selling
prices and improved operating efficiencies related to military and
industrial programs.

Second quarter 2006 sales of the Velocity Control Products
segment, of $14.3 million, were essentially unchanged from the
$14.4 million achieved in the second quarter of 2005.  Operating
income of $3.3 million decreased slightly compared with the
$3.7 million generated in the second quarter of 2005 due primarily
to biennial advertising expenses and certain one-time employee-
related costs.

Sales of the Sealing Products segment increased slightly, to
$10.8 million, compared with last year's second quarter sales of
$10.4 million.  Operating income equaled $1.7 million during both
periods.

Sales of the Company's remaining businesses equaled $16.9 million
during the second quarter of 2006, a decrease from second quarter
2005 of $1.7 million, as a $2.7 million decrease in sales of metal
forming equipment was only partially offset by increased sales of
air and liquid filtration products, metal alloys and machine tool
components.  Due to lower segment sales volume and to certain
duplicative costs experienced by our liquid filtration business
which recently completed the consolidation of its operations to
one location, operating income for these businesses declined to
$1.5 million in the second quarter of 2006, compared to
$1.9 million during the second quarter of 2005.

In July 2005, Kaydon Corporation sold its Power and Data
Transmission Products Group.  The financial results of the Group
are reported as discontinued operations, and the Group has been
eliminated as a reportable segment.

Kaydon Corporation (NYSE:KDN) -- http://www.kaydon.com/-- is a  
leading designer and manufacturer of custom-engineered,
performance-critical products, supplying a broad and diverse group
of industrial, aerospace, medical and electronic equipment, and
aftermarket customers.

                           *     *     *

As reported in the Troubled Company Reporter on June 21, 2006,
Moody's Investors Service affirmed the Ba2 corporate family rating
of Kaydon Corp. and the Ba3 rating on the $200 million 4%
contingent convertible senior subordinated notes due 2023.  The
rating outlook was changed to positive from stable.


KERZNER INTERNATIONAL: S&P Holds BB- Corp. Credit Rating on Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings on Kerzner
International Ltd., including its 'BB-' corporate credit rating,
on CreditWatch with negative implications where they were placed
on March 20, 2006, following Kerzner's announcement that the
company would be acquired by a private investor group led by the
company's Chairman, Sol Kerzner, and its Chief Executive Officer,
Butch Kerzner.

The aggregate transaction value, including the assumption of
roughly $695 million of debt outstanding as of March 31, 2006, is
about $3.8 billion.  Closing of the transaction is subject to,
among other things, receiving the required regulatory approvals, a
shareholder vote, and the receipt of financing.

According to Schedule 13E-3 that was filed with the SEC on
July 11, 2006, the total amount of funds required to complete the
proposed merger and the related transactions, including payment of
fees and expenses, is expected to be approximately $4 billion.  
The transaction, and additional debt associated with outlined
capital spending projects, is expected to be funded through a
combination of $2.9 billion of commercial mortgage backed
securities, $575 million of bank debt, and $1.5 billion of sponsor
equity.

If the transaction, which is expected to close in the third
quarter of 2006, is completed as expected, all public bonds will
be repaid in full and we will withdraw our ratings on these notes.

In addition, under these circumstances, Standard & Poor's would no
longer maintain a public corporate credit rating on Kerzner, but
the additional indebtedness would clearly result in a decline in
credit quality from the existing level.  

If the transaction does not close as expected, Standard & Poor's
will resolve its CreditWatch listing after re-evaluating
management's strategic and financial policies.


KMART CORP: Wants Charles Conaway's $19.6 Million Claim Denied
--------------------------------------------------------------
Kmart Corporation asks the U.S. Bankruptcy Court for the Northern
District of Illinois to disallow Charles Conaway's Proof of Claim
in its entirety, or, in the alternative, equitably subordinate the
Claim.

Mr. Conaway, Kmart's former chairman and chief executive officer,
filed Claim No. 38498 against Kmart for $19,635,003.  Mr. Conway's
claim sought recovery of amounts due under his 2000 Employment
Agreement.  The Claim also credits all amounts paid to Mr. Conaway
under his March 11, 2002 Separation Agreement, in accordance with
the Court's order authorizing payment of severance benefits.

The amount of Mr. Conaway's allowable compensation is $3,025,000
for wages plus $5,500 for the value of benefits, William J.
Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman & Nagelberg
LLP, in Chicago, Illinois, relates.

Because Mr. Conaway has alleged no amounts that were actually due
and owing on the Petition Date without acceleration, the amount
subject to Section 502(b)(7)(B) of the Bankruptcy Code inclusion
is zero, Mr. Barrett says.

Mr. Barrett asserts that because Mr. Conaway's receipt of
$4,039,708 not only resulted in his receiving a full distribution
on his Proof of Claim but also caused him to be overcompensated,
the Proof of Claim should be disallowed in full, and Mr. Conaway
should be required to disgorge the overage.

To the extent the Proof of Claim is not disallowed, Mr. Barrett
maintains that Mr. Conaway's inequitable conduct toward creditors
requires that any remaining claims for compensation be equitably
subordinated.

"To allow further claims for excessive compensation by an
executive who deliberately misled the very creditors whose
recoveries his claims would dilute, offends the most fundamental
notions of equity upon which the Bankruptcy Code is predicated,"
Mr. Barrett emphasizes.

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 Denies Himle's Lift Stay Motion to Pursue Claim
-----------------------------------------------------------------
For reasons stated in open court, the U.S. Bankruptcy Court for
the Northern District of Illinois denied Amy Himle's request to
lift the automatic stay to allow her to pursue her claim against
Kmart Corp.

On July 9, 2001, Ms. Himle sustained a head injury at a Kmart
Store in Rapid City, South Dakota.  Ms. Himle filed Claim No.
8490 asserting permanent disability due to the injury.

Ms. Himle told the Court that due to the accident, she has lost
her short-term memory and has experienced seizures.  If highly
stressed, traumatic amnesia occurs.  In addition, Ms. Himle said
she needs lifetime medical attention to monitor her two brain
subdural hematomas.

Ms. Himle complained that she has "exhausted all efforts" to
communicate with Kmart lawyers.

Pursuant to a "prepetition bankruptcy court ordered judgment,"
Ms. Himle was awarded $1,750,000 as agreed settlement.

Ms. Himle refused to accept the settlement amount and asserted
that she wants to have a "decent living" and a "trust" for her
family.

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)


LA REINA: Wants Jose Raul Cancio Bigas as Bankruptcy Counsel
------------------------------------------------------------
La Reina Management, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Puerto Rico for authority to
employ Jose Raul Cancio Bigas, Esq., as their bankruptcy counsel.

The Debtors say that Mr. Bigas will represent them in their
chapter 11 cases.  The Debtors tell the Court that Mr. Bigas bills
at $160 per hour.

The Debtors discloses that Mr. Bigas was paid a $20,000
prepetition retainer.

The Debtor assures the Court that Mr. Bigas does not represent any
interest adverse to the Debtors or their estates.

Headquartered in Caguas, Puerto Rico, La Reina Management, Inc.,
is engaged in the administration of its affiliated companies'
funds through the performance of functions such as merchandise
purchases, payment to suppliers and employees, record keeping of
expenses allocation, and other miscellaneous management services.  
La Reina Management's revenues consist of fees charged to the
affiliates for these services.

The Company and 12 of its affiliates filed for chapter 11
protection on July 26, 2006 (Bankr. D. P.R. Case No. 06-02477).  
When La Reina Management filed for protection from its creditors,
it reported total assets of $14,166,830 and total debts of
$13,810,411.


LA REINA: Section 341(a) Meeting Scheduled on August 24
-------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of La Reina
Management Inc.'s creditors at 9:00 a.m., on Aug. 24, 2006, at the
Ochoa Building, 500 Tanca Steer, First Floor in San Juan, Puerto
Rico.  This is the first meeting of creditors required under
Section 341(a) of the Bankruptcy Code in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Caguas, Puerto Rico, La Reina Management, Inc.,
is engaged in the administration of its affiliated companies'
funds through the performance of functions such as merchandise
purchases, payment to suppliers and employees, record keeping of
expenses allocation, and other miscellaneous management services.  
La Reina Management's revenues consist of fees charged to the
affiliates for these services.

The Company and 12 of its affiliates filed for chapter 11
protection on July 26, 2006 (Bankr. D. P.R. Case No. 06-02477).  
Jose Raul Cancio Bigas, Esq., in Hato Rey, Puerto Rico, represents
the Debtors.  When La Reina Management filed for protection from
its creditors, it reported total assets of $14,166,830 and total
debts of $13,810,411.


LIBERTY TAX: June 15 Balance Sheet Upside-Down by $36 Million
-------------------------------------------------------------
Liberty Tax Credit Plus L.P. disclosed its financial results for
the second quarter ended June 15, 2006, to the Securities and
Exchange Commission on July 27, 2006.

For the three months ended June 15, 2006, the Company reported a
$2 million net loss on $4.6 million of net revenues, compared to
$354,207 of net income on $4.6 million of net revenues in 2005.

As of June 30, 2006, the Company's balance sheet showed total
assets of $82 million and total debts of $118.1 million, resulting
in a $36 million stockholders' deficit.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f08

                        Going Concern Doubt

As reported in the Troubled Company Reporter on July 3, 2006,
Trien Rosenberg Rosenberg Weinberg Ciullo & Fazzari LLP in New
York, raised substantial doubt about Liberty Tax Credit Plus
L.P.'s ability to continue as a going concern after auditing the
Partnership's consolidated financial statements for the year ended
Dec. 31, 2005.  The auditor pointed to the losses, contingencies
and uncertainties of the Partnership's three subsidiary
partnerships.

                     About Liberty Tax Credit

Liberty Tax Credit Plus L.P. is a limited partnership that invests
in other limited partnerships, each of which owns one or more
leveraged low- and moderate-income multifamily residential
complexes that are eligible for the low-income housing tax credit
enacted in the Tax Reform Act of 1986, and to a lesser extent, in
Local Partnerships owning properties that are eligible for the
historic rehabilitation tax credit.  As of June 15, 2006, the
Partnership has disposed of 21 of its 31 original properties.


METALDYNE COMPANY: S&P Puts B Rating on $574 Mil. Debt Facilities
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating and '2'
recovery rating to Metaldyne Company LLC's pending $574.7 million
amended and restated senior secured credit facilities, indicating
the expectation for substantial (80%-100%) recovery of principal
in the event of a payment default.

At the same time, Standard & Poor's affirmed its 'B' corporate
credit rating on parent Metaldyne Corp.  The outlook is negative.  

The ratings on the Plymouth, Michigan-based auto supply company
reflect:

   * the company's limited liquidity;

   * its highly leveraged capital structure; and

   * the cyclical and competitive pricing pressures of the
     capital-intensive automotive metal component supply industry.

Metaldyne is one of the largest independent manufacturers of
engineered metal components for the global automotive market, with
content on about 90% of the top 40 NAFTA light vehicles and
revenues of around $2 billion.


MIRANT CORP: Wants CSX's $6.5 Million Claim Disallowed
------------------------------------------------------
CSX Transportation, Inc., and Potomac Electric Power Company are
parties to certain Railroad Transportation Contracts -- Contract
Numbers CSXT-C-68229 and CSXT-C-68230.  Norfolk Southern Railway
Company is also a party to Contract Number CSXT-C-68230.

Pursuant to the Contracts, CSX agreed to transport coal from
various originating mines to certain of the generating stations of
Mirant Corp. and its debtor-affiliates at specified rates.

As a result of Mirant Corporation's purchase of PEPCO in 2000, the
Contracts were assigned to Mirant Americas Energy Marketing, LP.

The Debtors assumed the CSX Contracts pursuant to Schedule 12 of
the Plan of Reorganization.  Schedule 12 provided that the
required cure amount in connection with the assumption of the
Contracts was $0.

CSX objected to the cure amount.  CSX asserts that the cure amount
relating to the Contracts is $2,506,200:

    * $2,216,394 for CSXT-C-68229; and
    * $289,805 for CSXT-68230.

But the Debtors disputed CSX's Cure Amounts.

CSX also asserts a $3,974,622 administrative expense claim
against the Debtors.

Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, contends that CSX's administrative expense claim amount
does not correspond with New Mirant's books and records.

New Mirant have worked directly with the business people at CSX to
reconcile the amounts of the Claims, Ms. Campbell relates.  
Despite the effort, the parties have been unable to completely
resolve the Claims, as the Debtors' books and records demonstrate
that many of the amounts sought in the Claims have either already
been paid or should be offset against credits owing to the Debtors
pursuant to the Contracts.

Moreover, Ms. Campbell continues, CSX has not alleged sufficient
facts or provided sufficient documentation to demonstrate that the
amounts sought in the Claim remain due and owing.  Hence, CSX's
Claim lacks a basis in fact or law and should be disallowed in its
entirety.

For these reasons, New Mirant asks Judge Lynn to disallow CSX's
Claims.

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.
(Mirant Bankruptcy News, Issue No. 102; Bankruptcy Creditors'
Service, Inc., 215/945-7000)

                           *     *     *

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: To Cut SO2 Emissions by 95% in Maryland Power Plants
-----------------------------------------------------------------
Mirant Corporation disclosed a plan that will reduce sulfur
dioxide emissions by as much as 95% (approximately 220,000 tons
per year) at the Maryland power plants owned or operated by
subsidiaries of Mirant Corporation.

Mirant will install flue gas desulfurization emissions controls at
its three Maryland power plants: Chalk Point Generating Station
located in Prince George's County, Dickerson Generating Station
located in Montgomery County, and Morgantown Generating Station
located in Charles County.

In addition, Mirant will install a selective catalytic reduction
system at the Chalk Point facility that will further reduce
nitrogen oxides emissions by approximately 92% (approximately
4,500 tons per year).

Together, the FGDs and the SCR will reduce by approximately 90%
the emissions of ionic mercury from the three power plants.

"We are making a major investment in emission reduction
technologies," said Edward R. Muller, Mirant chairman and CEO.
"This equipment offers an excellent solution for substantially
improving air quality while maintaining system reliability and
efficient power generation for consumers and businesses."

These environmental upgrades are part of Mirant's environmental
capital expenditures program.

Shaw Stone & Webster has been awarded, through a competitive
process, the contract for the construction and installation of the
FGDs and the SCR.

Mirant will file a request for a Certificate of Public Convenience
and Necessity with the State of Maryland in September 2006.

                        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.


MONTPELIER RE: S&P Puts BB+ Pref. Stock Rating With Neg. Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BBB'
senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock
ratings to Bermuda-based Montpelier Re Holdings Ltd.'s (NYSE:MRH)
recently filed universal shelf.

At the same time, Standard & Poor's affirmed its 'BBB'
counterparty credit rating on MRH and its 'A-' financial strength
and counterparty credit rating MRH's operating subsidiary,
Montpelier Reinsurance Ltd.  The outlook remains negative.

The recent unlimited shelf registration is in accordance with the
new SEC rules and replaces MRH's previous $1 billion shelf
registration filed in 2005.  Standard & Poor's does not expect any
potential issuances under the new shelf to lead to material
changes in the group's financial leverage in the near term.

"The ratings on the group reflect its strong market position and
scale within the property catastrophe reinsurance market," Said
Standard & Poor's credit analyst Laline Carvalho.

"In addition, we expect that Montpelier will be successful in its
efforts to reduce the volatility inherent in its product mix while
generating an appropriate level of profitability through improved
risk-management and -modeling capabilities."

If Montpelier's risk-management and risk-modeling capabilities are
not successful in effectively rebalancing its operational profile
or if adverse Katrina loss reserve development or another major
catastrophic event highlight material enterprise risk management
or operational deficiencies, Standard & Poor's will lower the
ratings.

Alternatively, if Montpelier meets Standard & Poor's expectations
and is able to demonstrate strong enterprise risk management and
operational capabilities, the rating agency will consider revising
the outlook to stable.  

Any revision to a stable outlook will be contingent on Montpelier
demonstrating a track record of success over a sustained period of
time.


NATIONAL ENERGY: Court Disallows Block's Claim No. 710 for $2.4MM
-----------------------------------------------------------------
At the request of 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, the U.S. Bankruptcy Court for the Middle
District of Maryland disallowed as untimely and expunged in its
entirety Ira Block's Claim No. 710 for $2,460,562.

The Court previously disallowed Claim No. 704, which Mr. Block
filed against ET Gas.  The Court however allowed Mr. Block's Claim
No. 105 as a general unsecured claim against ET Holdings for
$780,562.

Mr. Block was employed and paid by NEGT Energy as an energy trader
prior to the Debtors' bankruptcy filing.  Mr. Block's employment
with ET Holdings was terminated on December 13, 2002.  

For 2001, in addition to a base salary, the energy traders were  
eligible to participate in a discretionary short-term incentive  
plan which had two components -- a base and a supplemental award.   
Any trader who was awarded a discretionary supplemental incentive  
award for the year 2001 was notified in March 2002 of the amount  
of his or her award.  Any discretionary supplemental incentive  
award up to $500,000 was paid in March 2002 and any amount over  
$500,000 was to be paid in equal installments with accrued  
interest in October 2002 and October 2003.

ET Holdings paid the portions of the supplemental incentive  
awards that were due in March 2002 and October 2002.  The second  
deferred payments that were scheduled to be paid in October 2003  
were not made, due to ET Holdings' intervening bankruptcy.

Mr. Block filed Claim No. 105 against ET Holdings for $780,562  
based on the 2001 Deferred Compensation.  ET Holdings conceded  
that it owed Mr. Block this amount.

Over nine months after the Bar Date for filing proofs of claim,  
Mr. Block filed Claim No. 704 to amend Claim No. 105, but the  
only change was to assert that the Debtor was ET Gas, rather than  
ET Holdings.

Subsequently, Mr. Block filed Claim No. 710 against ET Holdings  
to amend Claim No. 105, by adding a contingent breach of contract  
claim and changing the total amount claimed to $2,460,562.  Claim  
No. 710 alleged that in the event that ET Holdings settles any of  
the claims for supplemental incentive awards made in the Employee  
Actions, then under Mr. Block's Separation and Release Agreement,  
ET Holdings would be obligated to pay him a supplemental  
incentive award for 2002.

The ET Debtors objected to the claims contending that Claim Nos.
704 and 710 were entirely new claims rather than amendments to the
initial claim and that Claim No. 710 was a contingent claim
unrelated to the 2001 Deferred Compensation but asserted a claim
for an award allegedly earned in 2002.  

Steven Wilamowsky, Esq., at Willkie Farr & Gallagher LLP, in New
York, contended that ET Holdings did not award any discretionary
supplemental incentive awards for the years 2002 or 2003.

In addition, Mr. Wilamowsky argued that Claim No. 710 for  
$2,460,562 is not reasonably within the amount of the initial  
claim.  Moreover, Claim No. 710 was filed over 10 months after  
the Bar Date and Claim No. 704 was filed over eight months after  
the Bar Date.  Mr. Wilamowsky said the delay is unreasonable  
because Mr. Block was served with Bar Date notice and had been an  
active member of the ET Committee.

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)


NAVISTAR INTERNATIONAL: S&P Holds BB- Ratings on Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services held its 'BB-' corporate credit
ratings on North American heavy-duty and medium-duty truck
producer Navistar International Corp., and Navistar's subsidiary,
Navistar Financial Corp., on CreditWatch with negative
implications where they were placed on Jan. 17, 2006.

At the same time, Standard & Poor's withdrew the ratings on
several of the company's individual issue ratings, following the
completion of the company's tender offers.  The company's $190
million 2.5% senior convertible notes (maturing in 2007) remain
outstanding and remain on CreditWatch.  The ratings were
originally placed on CreditWatch on Jan. 17, 2006.

"The CreditWatch update follows Navistar's announcement of an
amendment to the company's $1.5 billion credit facility [unrated]
which allows the company to borrow the remaining balance under its
bank facility and place the funds in an escrow account to repay
the company's 2.5% convertible notes," said Standard & Poor's
credit analyst Eric Ballantine.

Repayment will cure the technical default on these notes.  The
funds in the escrow account can only be used for repayment of the
notes.  Almost all of the company's debt is now in the form of
bank debt, maturing in mid-2009.  The company's bank facility
contains a financial covenant, and Navistar is currently in
compliance and is expected to remain so.

Navistar continues to work with its new independent auditor, which
it hired in April 2006 on resolving various complex accounting
issues, in conjunction with its announced restatement of financial
results for the fiscal years 2002 through 2004 and for the first
nine months of 2005.  Navistar has yet to file its 2005 annual
report or 2006 quarterly financial results.  While the restatement
process moves forward Standard & Poor's will continue to monitor
the company's current situation and will continue to evaluate new
developments and their impact on the ratings.

Although Navistar is currently unable to provide audited publicly
filed financial results, Standard & Poor's believes that the
company continues to benefit from solid demand in the heavy-duty
truck market during 2006.  U.S. heavy-duty truck sales were up
more than 20% for full-year 2005, and are currently above 20% for
the first six months of 2006 versus the same period in 2005.  Cash
generation should remain solid, and the company is expected to
maintain a significant cash balance on its balance sheet.

Standard & Poor's had previously indicated that it expected
Navistar to maintain a cash balance of well over $500 million, and
the rating agency continues to believe that is the case.

Standard & Poor's anticipates that the ratings on Navistar will
remain on CreditWatch until the company has filed its 2005 10-K
and is current on all SEC financial reporting requirements and any
technical defaults have been resolved.  Once these events occur
and if results are not materially different from previous
expectations, the rating agency expects to affirm the ratings,
most likely with a stable outlook.  However, ratings could be
lowered if new accounting issues were to come to light that could
adversely affect Navistar's liquidity.


NOOR PROPERTIES: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Noor Properties LLC
        829 North Milwaukee Avenue
        Chicago, IL 60622

Bankruptcy Case No.: 06-09508

Type of Business: The Debtor owns a 10-unit apartment building
                  with 8 occupied apartments located at 6701 South
                  Carpenter in Chicago, Illinois; and a vacant
                  32-unit building located at 6101-11 South Laflin
                  in Chicago, Illinois.

Chapter 11 Petition Date: August 7, 2006

Court: Northern District of Illinois (Chicago)

Debtor's Counsel: Michael A. Yashar, Esq.
                  Yashar & Morgan, P.C.
                  829 North Milwaukee Avenue
                  Chicago, IL 60622
                  Tel: (312) 563-1208
                  Fax: (312) 563-1296

Total Assets:   $850,200

Total Debts:  $1,126,675

Debtor's 5 Largest Unsecured Creditors:

   Entity                      Nature of Claim     Claim Amount
   ------                      ---------------     ------------
Archer Bank                    Bank loan               $660,000
4970 South Archer              Value of Collateral:
Chicago, IL 60632              $850,000
c/o Darius Adamski
Tel: (773) 838-3000
Attn: Martin & Karcazes Ltd.
161 North Clark Suite 550
Chicago, IL 60601
Kevin M. Kelliher

Manuel A. Cardenas             Value of Collateral:     $87,100
1478 North Milwaukee Avenue    $500,000
Chicago, IL 60622
Tel: (773) 227-6858

City Of Chicago                                         $38,075
30 North LaSalle, Suite 700
Chicago, IL 60602

Peoples Energy                                          $25,000
Chciago, IL 60687-0001
Attn: Evelyn Wright

Globetrotters International                             $16,500


NORTHWEST AIRLINES: AFA-CWA Plans to Stage Strike on August 15
--------------------------------------------------------------
Northwest Airlines flight attendants, represented by the
Association of Flight Attendants-CWA informed the company of their
intent to exercise their right to strike in 15-days.  Effective
August 15 at 9:01 p.m., CHAOS could arrive at Northwest Airlines.

"Northwest flight attendants have been pushed too far.  Now we're
going to push back," said Mollie Reiley, Interim Master Executive
Council President.  "There is only so much we can give.  The wage
and benefit cuts that Northwest management has imposed on us are
far too deep, especially with all the executives getting in line
for huge bonuses.  We're now going to show these executives that
there are consequences to their greed."

CHAOS, or Create Havoc Around Our System(TM) is AFA-CWA's
trademarked strategy of targeted work actions using random,
unannounced strikes.  Actual targets are a closely guarded secret.  
AFA-CWA maintains that any unilateral change to a collective
bargaining agreement under the Railway Labor Act is prohibited
and, therefore, triggers the right to strike.

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


NORTHWEST AIRLINES: AFA Asked to Justify Why Strike is Necessary
----------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York orders Association of Flight
Attendants and its officers to show cause at a hearing tomorrow,
August 9, 2006, on why the Court should not immediately award
preliminary injunctive relief prohibiting AFA from authorizing or
approving self-help of any kind, including, but not limited to,
any strike, intermittent work-stoppage, CHAOS, sick-out, lowdown,
or other concerted refusal to perform normal employment duties,
including, but not limited to, a strike or self-help of any kind
until the time as a final judgment in the Adversary Proceeding may
be awarded, or at another earlier time as justice may require.

The Debtors had asked the Court to enjoin AFA certain of its
officers, including AFA president Patricia A. Friend, and vice-
president George M. Donahue; and all persons and organizations
acting in concert, from calling and permitting self-help of any
kind, including but not limited to, any strike or intermittent
work-stoppage.

The Debtors also asked Judge Gropper to find that any strike or
work stoppage violate the Railway Labor Act and Section 105 of
the Bankruptcy Code.

On July 31, 2006, the AFA-represented flight attendants voted to
reject the Tentative Agreement dated July 17, 2006 and on the same
day, the Debtors implemented the new terms and conditions of
employment not materially different from those contained in the
Tentative Agreement dated March 1, 2006.

Kent A. Yalowitz, Esq., at Arnold & Porter LLP, in New York, AFA
served Northwest Airlines, Inc., notice of the union's intent to
strike, and stated that it could engage in a Create Havoc Around
Our System(TM) action beginning on August 15, 2006.

Mr. Yalowitz asserts that a strike by the flight attendants
would:

    -- threaten continued viability of Northwest's
       reorganization;

    -- cause severe disruption to Northwest's customers; and

    -- interfere with interstate commerce.

The Debtors, according to Mr. Yalowitz, have made every
reasonable effort to resolve their dispute with AFA.

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


NORTHWEST AIRLINES: More Parties Object to Citigroup DIP Financing
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Aug. 2, 2006,
Northwest Airlines, Inc., and its debtor-affiliates asked the
United States Bankruptcy Court for the Southern District of New
York to:

   (i) authorize them to obtain secured postpetition financing on
       a super-priority secured and priming basis;

  (ii) at their election, authorize the cash collateralization or
       replacement of the letters of credit issued under the U.S.
       Bank letter of credit facility and the termination of all
       liens securing those obligations;

(iii) find that no prepayment fee is due or payable in respect
       of the repayment in full of the Existing Facilities and
       segregate disputed interest amounts, as to which the
       Debtors dispute payment;

  (iv) authorize them to pay all of the fees provided for in
       connection with the DIP Commitment Letter and the
       Operative Documents; and

   (v) authorize them to file supplemental documents under
       seal as a necessary measure to protect them and the DIP
       Lenders from disclosing confidential commercial
       information contained.

Pursuant to a commitment letter dated June 21, 2006, Citigroup
Global Markets Inc., on behalf of:

   -- itself,
   -- Citibank, N.A.,
   -- Citicorp USA, Inc.,
   -- Citicorp North America, Inc., and
   -- any of their affiliates as may be appropriate to consummate
      the transactions,

offered to provide the Debtors up to $1,375,000,000 through a
secured superpriority DIP loan facility, which is convertible to
a secured exit facility.

Citicorp USA will act Administrative Agent for the Facility,
subject to the Commitment Letter's terms and conditions.
Citigroup Global will serve as Joint Lead Arranger and Joint
Bookrunner.

As reported in the Troubled Company Reporter on Aug. 4, 2006,
Texas Tax Authorities asked the Court to deny the Debtors' request
to obtain secured postpetition financing on a super-priority
secured and priming basis.

                    Further Objections

A. JPMorgan Chase Bank

JPMorgan Chase Bank, N.A., as administrative agent under a Second
Amended and Restated Credit and Guarantee Agreement dated
April 15, 2005, between the Debtors and certain lenders, asks the
Court to condition the approval of the Debtors' request to obtain
up to $1,375,000,000 of DIP Financing from Citigroup Global
Markets Inc., et al., on Northwest's payment of a $19,500,000
repayment fee plus approximately $41,200,000 in fees and
expenses.

As previously reported, Northwest Airlines is seeking Court
approval to repay a $975,000,000 existing loan from JPMorgan to
obtain the new financing from Citigroup.

The Debtors are seeking authority to repay the principal of the
Credit Agreement's outstanding loans years before their scheduled
maturity on 2010 and before a Chapter 11 plan of reorganization
has even been filed.  The avowed purpose of this extraordinary
action is to take advantage of the lower interest rates currently
available in the market, and to obtain additional liquidity,
JPMorgan notes.

However, Harold S. Novikoff, Esq., at Wachtell, Lipton, Rosen &
Katz, in New York, points out that JPMorgan and the Prepetition
Lenders have never sent a notice of acceleration, moved to lift
the automatic stay, or taken any action whatsoever to collect the
principal of the Loans prior to their scheduled maturity.  
Instead, JPMorgan and the Debtors had entered into a Court-
approved stipulation, which:

   (i) permits Northwest to continue making payments under the
       Credit Agreement "without regard to any acceleration
       provisions";

  (ii) specifically allows Northwest to make current payments of
       postpetition interest at rates available only for Loans
       that have not matured by acceleration or otherwise;

(iii) expressly characterizes any repayment in full of the Loans
       during the Debtors' Chapter 11 cases as a "voluntary
       prepayment"; and

  (iv) permits the Debtors to continue using the collateral for
       the Loans.

The Debtors' proposed payment of $975,000,000 in principal could
be nothing but a "voluntary prepayment" of the Loans.  Under the
Credit Agreement, that voluntary prepayment must be accompanied
by a prepayment fee equal to 2% of the prepayment, Mr. Novikoff
asserts.  

"The purpose of this fee is to provide some compensation to the
Lenders in precisely the circumstances presented by the Motion --
a prepayment of the Loans with the proceeds of a lower cost
financing, which would deprive the Lenders of the full benefit of
their bargain."

Mr. Novikoff contends that the Debtors caused any acceleration of
the Loans when they filed their Chapter 11 petitions, and have
chosen to repay the Loans in full to cut interest costs and
increase liquidity, rather than de-accelerating them.  Ample
precedent, including a well-known decision from Sharon Steel
Corp. v. Chase Manhattan Bank, 691 F.2d 1039 (2d Cir. 1982),
prevents a borrower from escaping a contractual prepayment fee
based on the voluntary actions, he maintains.

The Debtors argue that the $19,500,000 prepayment fee, for
damages resulting from the proposed prepayment, does not reflect
the Lenders' actual damages and thus, is unreasonable.  

However, according to Mr. Novikoff, "Not only is there no legal
requirement that a prepayment fee reflect actual damages, but the
one-time prepayment fee is dwarfed by the approximately
[$34,000,000] per year that the Debtors stand to save at the
[JPMorgan] Lenders' expense."  Thus, the prepayment fee is
eminently reasonable and should be paid to the JPMorgan Lenders
along with the principal amount of the Loans, he contends.

Accordingly, JPMorgan asks the Court to determine that the
prepayment fee mandated by the Credit Agreement is payable to the
Lenders upon the prepayment in full of the principal amount of
the Loans.

Mr. Novikoff adds that the Debtors do not propose fair terms for
a reserve of disputed amounts under the Credit Agreement.  
Without mentioning the Adequate Protection Stipulation, the
Debtors proposed in their request:

   (i) not to reserve for all disputed items;

  (ii) to terminate their obligations under the Credit Agreement
       even though they have not fully repaid the Loans; and

(iii) to release the Prepetition Lenders' liens and security
       interests while granting them no recourse, except
       to the inadequate reserve, for all amounts owed to them
       under the Credit Agreement.

The proposal is defective on its face, inconsistent with the
relevant provisions of the Adequate Protection Stipulation, and
should be rejected, Mr. Novikoff contends.

JPMorgan also asks the Court to condition any grant of the
Debtors' DIP Financing request upon:

    -- the payment of all undisputed amounts owing to the
       Prepetition Lenders;

    -- the deposit in a segregated account of all disputed
       amounts payable under the Loan Documents; and

    -- the grant to the Prepetition Lenders of an administrative
       expense claim for any deficiency in the Segregated
       Account.

Specifically, JPMorgan wants not less than $41,192,291 in fees
and expenses provided for and included in the Segregated Account:

   (A) Incremental ABR Interest.  The difference between
       interest calculated at the rate applicable to Eurodollar
       Loans and the rate applicable to ABR Loans, during the
       period beginning on November 23, 2005 and ending on the
       date of the deposit.  Assuming the deposit is made on
       August 31, 2006, and that interest rates remain at current
       levels until then, the amount of Incremental ABR Interest
       to be deposited is $20,419,139;

   (B) Incremental Default Interest.  The default interest
       accrued from the Petition Date through the date of the
       deposit.  Assuming the deposit is made on the Assumed
       Deposit Date, and that interest rates remain at current
       Levels until then, the amount of Incremental Default
       Interest to be deposited is $15,307,177;

   (C) Interest on Overdue Interest.  The interest that has
       accrued on Incremental ABR Interest, Incremental Default
       Interest, and late paid interest through the date of the
       deposit.  Assuming the deposit is made on the Assumed
       Deposit Date, and that interest rates remain at current
       levels until then, the amount of Interest on Overdue
       Interest to be deposited is $2,758,778;

   (D) Future Interest on Overdue Interest.  The interest on the
       interest described in items (A) through (C) for six months
       following the date of deposit.  Assuming the deposit is
       made on the Assumed Deposit Date, and that interest rates
       remain at current levels until then, the amount of Future
       Interest on Overdue Interest to be deposited is
       $1,998,039;

   (E) L.E.K. Fees and Associated Interest.  The amount of
       L.E.K. Consulting's invoices for appraisal of certain
       assets in the Collateral package to JPMorgan was $260,899.
       Contractual interest on the amount from January 24, 2006,
       the date that the Agent paid the invoice, to the Assumed
       Deposit Date is $15,853, and projected future interest on
       the amounts for six months thereafter, assuming that
       interest rates remain at current levels until then, is
       $14,369;

   (F) Projected Counsel Fees.  JPMorgan projects that its
       counsel, Wachtell, Lipton, Rosen & Katz, will incur at
       least $300,000 in fees and expenses during the six months
       following the date of deposit in enforcing the rights of
       JPMorgan, as agent, and the Lenders; and

   (G) Other Amounts.  Funds should also be deposited in the
       Segregated Account as a reserve for:

        (1) unpaid reimbursable expenses of $18,038 owing to
            JPMorgan incurred in connection with prepetition
            syndication services and invoiced prepetition;

        (2) a $100,000 agency fee that will become due to
            JPMorgan on November 23, 2006; and
     
        (3) Eurodollar Loan prepayment breakage expenses in
            an amount to be calculated when the actual deposit
            date is known.

B. Aircraft Parties

The Aircraft Creditors, namely:

     * MBIA Insurance Company,
     * Bank of America,
     * Transamerica Aviation LLC And TA Air VII,
     * Goldman Sachs Credit Partners,
     * Credit Industriel et Commercial,
     * DVB Bank AG,
     * Halifax Bank plc,
     * The Governor and Company of the Bank of Scotland,
     * Bayerische Landesbank,
     * HSH Nordbank AG,
     * Lloyds Bank PLC, and
     * Sumitomo Bank,

contend that the Debtors' DIP Financing request, with its related
credit agreements, is unclear about the proposed treatment of the
Section 1110 assets and agreements under the DIP Facilities.  
Thus, the Aircraft Creditors object to the Debtors' request.

Similarly, U.S. Bank Trust National Association, and U.S. Bank
National Association, in their  capacities as Aircraft Trustees
with respect to the aircraft financing transactions relating to
certain Aircraft, object to the DIP Financing request to the
extent that it may:

    -- limit or impair their rights under either the Bankruptcy
       Code or under the operative aircraft financing agreements;
       and

    -- authorize the Debtors to grant liens that may attach to
       the Aircraft Equipment.

The Aircraft Trustees also ask the Court that any order approving
the DIP Financing request must be clarified to carve out all
their rights and interests created under the Aircraft Agreements.

C.I.T. Leasing Corporation and Kreditanstalt fur Wiederaufbau,
also parties to various leases and financing agreements with
respect aircraft equipment owned, leased or operated by the
Debtors, support the Aircraft Trustees' objection and request for
clarification.

        Creditors Panel Supports DIP Financing Request

The Official Committee of Unsecured Creditors believes that the
Citigroup DIP Financing will provide the Debtors with at least
$200,000,000 in additional liquidity and, subject to certain
conditions, at the Debtors' option, convert into an exit loan
upon the their emergence from bankruptcy with no additional fees
required to be paid.

Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen,
P.C., in New York, notes that the Debtors will not be required to
post any additional collateral, and the DIP Facilities will be
secured by exactly the same collateral currently securing the
JPMorgan Prepetition Facility.

Mr. Hazan also adds that by replacing the JPMorgan Prepetition
Facility with the Citigroup DIP Financing, the Debtors' interest
savings could be as great as $70,000,000 per year.

The DIP Financing also provides a significantly improved
amortization schedule compared to the JPMorgan Prepetition
Facility, Mr. Hazan says.

According to Mr. Hazan, while the DIP Financing will require the
expenditure of a significant amount of fees, estimated to be
approximately $25,000,000, based on the Creditors Committee's
analysis, it appears that the reduced interest rate will allow
those fees to be "repaid" in four to nine months, depending on
whether default interest is determined to be properly payable.

Although it does not believe that default interest is properly
payable under the circumstances, the Creditors Committee believes
that the Citigroup Financing provide the added benefit of
stopping the "ticking" of any potential default interest on the
Prepetition Facility, to the extent it is ultimately determined
that the interest should be paid.

The Citigroup Financing contains financial covenants generally
similar to those contained in the Prepetition Facility, Mr. Hazan
notes.

Mr. Hazan also argues that the Debtors could not compel to pay a
prepayment premium because the Debtors' proposed repayment to the
Prepetition Lenders is neither a prepayment nor voluntary.

Mr. Hazan contends that because the Debtors' Chapter 11 filing
accelerated the maturity date of the Prepetition Facility to the
Petition Date, the Debtors' anticipated payment of the
$975,000,000 to the Prepetition Lenders couldn't be deemed a
"voluntary prepayment" under the Credit Agreement.  Repayment of
the Prepetition Facility will be made after the maturity date of
the Prepetition Facility, he asserts.

              Carve-Out Provisions To Be Amended

Catherine Steege, Esq., in Chicago, Illinois, representing the
Section 1114 Committee of Retired Employees, notes that the
professional fee carve-out, as proposed in the Debtors' request
to obtain DIP Financing is limited to professionals retained by
the Debtors and the Official Committee of Unsecured Creditors.

On July 24, 2006, the Section 1114 Committee asked the Debtors to
amend the DIP Agreement to provide that the Carve-Out would also
include the Section 1114 Committee's retained professionals.  

The Debtors have agreed to the Section 1114 Committee's request,
Ms. Steege relates.

As a precautionary measure, the Section 1114 Committee informs
the Court of the issue to ensure that all parties are on notice
that the carve-out provisions of the agreement will be modified
by agreement.

                     PBGC Reserves Rights

Dennis L. Jenkins, Esq., at Pension Benefit Guaranty Corporation,
in Washington, D.C., notes that the Debtors' request to obtain
DIP Financing is premised, in part, on the PBGC's consent to the
priming of its liens on the Third Lien Collateral.

Mr. Jenkins inform the Court that the PBGC's consent is subject
to the terms and conditions and Court approval of the second
interim stipulation for Northwest Airlines, Inc.'s provision of
adequate protection to the Pension Benefit Guaranty Corporation
under the payment agreement dated July 25, 2003.

Accordingly, PBGC reserves all its rights pending:

   (i) the Court's approval and Debtors' compliance with the
       terms of the Second Interim Stipulation; and

  (ii) confirmation that:

         -- the aggregate principal amount of all indebtedness
            secured by liens in the Third Lien Collateral senior
            in priority to the PBGC's liens in the Third Lien
            Collateral will not exceed the amounts set forth in
            the Second Interim Stipulation; and

         -- no liens will be granted, in connection with the
            Debtors' DIP Financing request, in any of the First
            Lien Collateral.

The Court will convene a hearing to consider the Debtors' DIP
Financing request today, August 8, 2006 at 2:30 p.m.

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


NVIDIA CORP: To Pay OPTi Inc. $10MM as Patent Breach Settlement
---------------------------------------------------------------
nVidia Corporation and OPTi Inc. reached a licensing and
settlement agreement, which settles the lawsuit that OPTI filed
against nVidia in the Eastern District of Texas.

On Oct. 19, 2004, OPTI filed a complaint against nVidia in the
U.S. District Court for the Eastern District of Texas, for
infringement of five U.S. patents.  The five patents at issue in
the lawsuit are U.S. patent No. 5,710,906, U.S. patent No.
5,813,036, U.S. patent No. 6,405,291, all entitled "Predictive
Snooping of Cache Memory for Master-Initiated Accesses," U.S.
patent No. 5,944,807 and U.S. patent No. 6,098,141, both entitled
"Compact ISA-Bus Interface."  The complaint alleged that nVidia
infringes the patents by making, selling, and offering for sale
products based on and incorporating Predictive Snooping technology
and the Low Pin Count Interface Specification in various of its
products and inducing and contributing to the infringement of the
patents by others.

In exchange for OPTI agreeing to dismiss its lawsuit against
nVidia and the grant to nVidia of a non-exclusive, non-assignable
license under the OPTi patents at issue in the October 2004 claim,
nVidia will make initial payment of $10 million to OPTi for the
license grant and $1 million for a fully paid-up license on the
Compact ISA-Bus Interface patents within 5 business days.  OPTI is
also to receive quarterly royalty payments of $750,000 each from
nVidia, commencing in February 2007 and continuing so long as
nVidia continues to use the Company's Predictive Snooping
technology up to a maximum of 12 such payments.  As an alternative
to the quarterly royalty payments, at any time prior to or on
Jan. 31, 2008, nVidia can elect to per-pay to OPTi a lump sum of
$7 million less any quarterly royalty payments already paid to
termination their obligation to pay the quarterly royalties.

                         About OPTi Inc.

Headquartered in Mountain View, California, OPTi Inc. (OTCBB:OPTI)
-- http://www.opti.com/-- is an independent supplier of  
semiconductor products to the personal computer and embedded
marketplaces.  The Company is engaged in licensing its
intellectual property for use principally by PC manufacturers and
semiconductor device manufacturers.  In September 2002, the
Company sold its product fabrication, distribution and sales
operations to Opti Technologies, Inc., an unrelated third party,
and the Company ceased manufacturing, marketing and sales
operations.  In January 2004, OPTi signed an engagement letter
with a law firm to assist the Company in its attempts to license
its technology.

                        About nVidia Corp.

Headquartered in Santa Clara, California, NVIDIA Corporation
(Nasdaq: NVDA) -- http://www.nvidia.com/-- creates innovative,  
industry-changing products for computing, consumer electronics,
and mobile devices.  The NVIDIA(R) graphics processing unit and
media and communications processor brands include NVIDIA
GeForce(R), NVIDIA GoForce(R), NVIDIA Quadro(R), and NVIDIA
nForce(R).  These product families are transforming visually-rich
applications such as video games, film production, broadcasting,
industrial design, space exploration, and medical imaging.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 7, 2006,
Standard & Poor's Ratings Services removed its ratings on Santa
Clara, California-based Nvidia Corp. from CreditWatch, where they
were placed with positive implications on July 24, 2006, and
raised its corporate credit rating to 'BB-' from 'B+'.  The
outlook is stable.  The rating actions follow sustained strong
operating performance and strong liquidity.


O'SULLIVAN INDUSTRIES: Board Elects Three New Audit Panel Members
-----------------------------------------------------------------
In a Form 8-K regulatory filing with the Securities and Exchange
Commission, O'Sullivan Industries Holdings, Inc., discloses that
on July 20, 2006, the company's Board of Directors appointed three
new members to its Audit Committee effective April 12, 2006:

         1. Eugene I. Davis
         2. James R. Malone
         3. Tom Shandell

Rick A. Walters, the company's president and chief executive
officer, reports that Mr. Davis was named chairman of the Audit
Committee.

Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and  
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces.  O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot.  The Company and its subsidiaries filed for chapter
11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  Joel H. Levitin, Esq., at Dechert LLP, represents the
Debtors.  Michael H. Goldstein, Esq., Eric D. Winston, Esq., and
Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C.,
represent the Official Committee of Unsecured Creditors.  On Sept.
30, 2005, the Debtor listed $161,335,000 in assets and
$254,178,000 in debts.  (O'Sullivan Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


OPTINREALBIG.COM: Claim Settlements Prompt Court to Dismiss Cases
-----------------------------------------------------------------
The Honorable Howard R. Tallman of the U.S. Bankruptcy Court for
the District of Colorado overruled Infinite Monkeys & Co., LLC's
objection to the dismissal of the chapter 11 cases of
OptInRealBig.com LLC and its owner Scott Allen Richter.

Infinite Monkeys -- an entity created for the express purpose of
suing parties for violations of anti-spam statutes -- holds a
$44 million claim against the Debtors for recoverable preferences.

The Debtors sought dismissal of their cases after reaching
settlements with Microsoft Corporation and American Family Mutual
Insurance Company.  

Microsoft asserted a $57 million claim in a lawsuit alleging
the Debtors' e-mail advertising violations.  

American Family, as the company's insurer, asserted a $2.7 million
claim concerning coverage issues related to the Microsoft
litigation.

In the Settlement Agreements, Microsoft consented to have its
claim reduced to $7 million on the condition that the Debtors be
subject to monitoring to insure compliance with anti-spam laws.  
American Family withdrew its entire claim and agreed to pay the
Debtors an unspecified amount.

Infinite Monkeys argued that dismissal of the Debtors' cases
should be denied because it would prefer the interests of
Microsoft and American Family.

Judge Tallman, in a decision published at 2006 WL 1935999, held
that a bankruptcy court cannot insure all creditors will make a
pro-rata recovery of their debts after dismissal of a bankruptcy
case.  But, Judge Tallman ruled, when a court determines a
debtor's economic value is likely to be greater by dismissing the
case, that maximizes individual creditors' opportunities to
recover their claims.

Infinite Monkeys, in the alternative, moved for the conversion of
the cases into chapter 7 proceedings.

The Court declined that invitation because conversion of the cases
would prevent the terms of the Settlement Agreements from taking
effect.

On Infinite Monkeys' question whether cause exists for dismissal
of the Debtors' case, Judge Tallman noted that the law favors
consensual settlement of disputes.  "[T]he inveterate policy of
the law is to encourage, promote, and sustain the compromise and
settlement of disputed claims," Judge Tallman opined, citing
American Home Assur. Co. v. Cessna Aircraft Co., 551 F.2d 804, 808
(10th Cir. 1977) and Williams v. First Nat'l Bank, 216 U.S. 582,
595, 30 S.Ct. 441, 445, 54 L.Ed. 625 (1910) ("compromises of
disputed claims are favored by the courts") (citing Hennessy v.
Bacon, 137 U.S. 78, 11 S.Ct. 17, 34 L.Ed. 605 (1890)).

To the extent that Infinite Monkeys' claim is litigated on the
merits, the Court emphasized that whether the Debtors' cases are
converted or dismissed makes no difference to Infinite Monkeys'
litigation prospects.  Accordingly, the Court authorized Infinite
Monkeys to litigate its claim in the state or federal courts of
California.

Harvey Sender, Esq., and Bonnie Bell Bond, Esq., at Sender &
Wasserman PC, represent Mr. Richter in this case.  Infinite
Monkeys is represented by D. Bruce Coles, Esq., at Fish & Coles.

Headquartered in Westminster, Colorado, OptinRealBig.com LLC is
an e-mail marketing company.  The Company filed for chapter 11
protection on March 25, 2005 (Bankr. D. Colo. Case No. 05-16304).
John C. Smiley, Esq., and Harold G. Morris, Jr., Esq., at
Lindquist & Vennum PL, LLP, represents the Debtor.  No Official
Committee of Unsecured Creditors has been appointed in this case.  
When the Debtor filed for protection from its creditors, it listed
estimated assets of $1 million to $10 million and estimated debts
of $50 million to $100 million.


OWENS CORNING: Plan-Filing Exclusive Period Stretched to Oct. 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware further
extended the exclusive periods within which Owens Corning and its
debtor-affiliates retain the exclusive right to file a plan of
reorganization and solicit acceptances of that plan through and
including Oct. 31, 2006.

The Debtors need adequate time to complete the necessary
procedures to gain approval of the Disclosure Statement
accompanying their Sixth Amended Plan of Reorganization, solicit
votes on the Plan and, assuming the Court confirms the Plan, bring
the Plan to effectivity.

The Debtors asserted that they have made substantial progress
towards their reorganization.  In addition to the agreements the
Debtors have reached with their major creditor groups, these major
steps have been taken towards confirmation:

   * The Debtors completed the process leading to the final
     decision on whether the plan should contain substantive
     consolidation and, as a result, the Sixth Amended Plan
     addresses the distributable values of the Debtors considered
     on a non-substantively consolidated basis;

   * The Debtors completed the process leading to a decision
     estimating Owens Corning's aggregate present and future
     asbestos liabilities;

   * The Debtors have analyzed and objected to the validity of
     numerous claims resulting in the disallowance or withdrawal
     of claims totaling $5.9 billion and the reduction of the
     Currently Disputed Claims by $1.8 billion, as of March 31,
     2006;

   * Through the end of November 2005, the Debtors had rejected
     approximately 75 nonresidential real property leases,
     assumed 12 nonresidential real property leases, and assumed
     and assigned nine nonresidential real property leases;

   * The Debtors obtained a case management order relating to
     asbestos property damage claims and have resolved all but a
     handful of the hundreds of property damage cases originally
     filed for a fraction of the amounts originally claimed;

   * The Debtors sought approval of a settlement in principal of
     two purported nationwide class actions on behalf of
     purchasers of its Mira Vista roofing tile products.  The
     aggregate amount of the claims was $275 million -- although
     the claimants have asserted in pleadings filed with the
     Court that their claims total $80 million;

   * The Debtors reached settlements with FM Insurance Co., AIG
     Companies, Allianz and Royal Indemnity Company resolving
     insurance coverage disputes related to asbestos "non-
     property" claims and filed motions seeking Court approval of
     the settlements;

   * The Debtors have resolved the vast majority of their
     prepetition mutual obligations with creditors that are
     subject to set-off;

   * The Debtors have sought and obtained approval to sell
     certain assets;

   * The Debtors have obtained approval under Section 363 of the
     Bankruptcy Code for various special business transactions
     and ventures, including:

        -- the restructuring of two of Owens Corning's joint
           ventures in China (OC Shanghai and OC Guangzhou);

        -- the restructuring of Owens Corning's Indian joint
           venture, Owens-Corning (India) Limited;

        -- the purchase of assets from Wolverine Fabricating,
           Inc.;

        -- authorization for Owens Corning to consummate the
           terms of a Stock Purchase Agreement with Vitro, S.A.
           de C. V., and

        -- the acquisition of the composites business of the
           Asahi Fiber Glass Co., Ltd. in Japan; and

   * The Debtors have obtained approval to implement a foreign
     fund repatriation program for tax purposes, plan of
     reorganization and post-confirmation tax planning.

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: Court Approves Royal Indemnity Settlement
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the settlement agreement among Owens Corning and its debtor-
affiliates and Royal Indemnity Company regarding coverage for
"non-products" claims.   

The principal terms of the Settlement Agreement include:

   a. Royal will pay a monetary amount into an escrow account;

   b. Owens Corning and Royal will mutually release each other
      and their related entities from all claims relating to the
      excess liability policies issued by Royal to Owens Corning;

   c. Key terms of the Settlement Agreement are contingent on the
      entry of a final order confirming a plan of reorganization
      that includes an injunction pursuant to Section 524(g) of
      the Bankruptcy Code protecting, inter alia, Royal; and

   d. In the event that the Settlement Agreement becomes null and
      void -- for example, if a plan is confirmed by Final Order
      without a 524(g) Injunction -- Royal will be entitled to
      the prompt release and return of any payment previously
      made to the Escrow Account, and the parties will have
      restored all rights, defenses, and obligations relating to
      the excess liability policies issued by Royal to Owens
      Corning and the Wellington Agreement.

The Court makes it clear that its approval of the Debtors'
Settlement Agreement with Royal Indemnity Co. may not serve as a
basis for, or be relied on by, Owens Corning as a factual finding
or legal ruling that the insurance polices are exhausted.
However, the approval will not, among others:

    -- prevent Owens Corning or Royal Indemnity from asserting
       that the Policies have, in fact, been exhausted pursuant to
       the Settlement Agreement;

    -- prevent any insurer from arguing, as against Owens Corning,
       that the Policies were not exhausted by payments under the
       Settlement Agreement;

    -- be construed to suggest that Owens Corning is not required
       to establish exhaustion of the Policies in disputes with
       other insurers other than the Royal Entities; or

    -- be deemed to amend the rights, duties and obligations of
       the Settlement Agreement in any respect.

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)


POPULAR CLUB: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Popular Club Plan, Inc.
        22 Lincoln Place
        Garfield, NJ 07026

Bankruptcy Case No.: 06-17231

Type of Business: The Debtor is a catalog retailer.

Chapter 11 Petition Date: August 4, 2006

Court: District of New Jersey (Newark)

Judge: Novalyn L. Winfield

Debtor's Counsel: Barry W. Frost, Esq.
                  Teich Groh
                  691 State Highway 33
                  Trenton, NJ 08619-4407
                  Tel: (609) 890-1500
                  Fax: (609) 890-6961

Total Assets: $10,740,500

Total Debts:   $5,496,884

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Minnesota Telemarketing Corp.    Trade Debt          $1,140,216
Attn: P. Cariappa
c/o Federated Department Stores
7 West 7th STreet
Cincinnati, OH 45202

Commonwealth of Massachusetts    Sales & Use Tax       $480,000
[No address available]

Gene Pepe                        Trade Debt            $265,000
20 Jennifer Lane
Warren, NJ 07059

John Christophel                 Trade Debt            $255,000
10 Gary Lane
Woodcliff Lake, NJ 07677

Morris Truman, LLC               Trade Debt            $244,589
350 Veterans Boulevard
Rutherford, NJ 07070

Kevin Gilrain                    Trade Debt            $200,000
5 Highview Avenue
Norwalk, CT 06851

Etelecare International, Inc.    Trade Debt            $197,568
c/o Wells Fargo Bank N.A.
San Francisco, CA

E-Toys Direct                    Trade Debt            $156,297
1099 18th Street, Suite 1800
Denver, CO 80202

Joyce Zeronski                   Trade Debt            $145,000
14 Jackson Street
East Hanover, NJ 07936

Quebecor World (USA), Inc.       Trade Debt            $144,164
P.O. Box 98668
Chicago, IL 60693

Bill Runge                                             $127,500
278 Birch Parkway
Wyckoff, NJ 07481

Richard Moody                    Trade Debt            $116,250
124 Bartholdi Avenue
Butler, NJ 07405

CIT Systems Leasing              Trade Debt             $86,220
GPO Drawer 67865
Detroit, MI 48267

Vornado Finance, LLC             Trade Debt             $82,903
P.O. Box 32426
Hartford, CT 06150

G-III Leather Fashions, Inc.     Trade Debt             $60,000
P.O. Box 1213
Department #15109
Newark, NJ 07101

Timberland Company               Trade Debt             $50,899
P.O. Box 92550
Chicago, IL 60675

American Utex International      Trade Debt             $48,094
463 7th Avenue, Suite 1301
New York, NY 10018

Flamingo Las Vegas               Trade Debt             $44,542
3555 Las Vegas Boulevard South
Las Vegas, NV 89109

Canon USA, Inc.                  Trade Debt             $43,471
P.O. Box 33157
Newark, NJ 07188

GCB, Inc.                        Trade Debt             $35,910
c/o Hana Financial, Inc.
P.O. Box 92943
Los Angeles, CA 90009


PUBLICARD INC: Posts $433,000 Net Loss in Second Quarter of 2006
----------------------------------------------------------------
PubliCARD, Inc., reported its financial results for the three and
six months ended June 30, 2006.

Revenues for the second quarter of 2006 decreased to $799,000
compared with $909,000 in 2005.  Foreign currency changes had the
effect of decreasing revenues by 2%.  Excluding the impact of
foreign currency changes, revenues in 2006 decreased by 11% driven
by a decline in direct sales to customers located in the United
Kingdom as well as a decline in shipments to non-U.S. distribution
partners.

The Company reported a $433,000 net loss for the quarter ended
June 30, 2006, compared with a net loss of $453,000 a year ago.

For the six months ended June 30, 2006, sales were $1,548,000
compared with $1,660,000 a year ago.  Foreign currency changes had
the effect of decreasing revenues by 4%.  Excluding the impact of
foreign currency changes, revenues in 2006 decreased by 2% driven
by a decline in direct sales to U.K. customers.  The Company
reported a net loss of $882,000 for the six months ended June 30,
2006, compared with a net loss of $1,172,000 in 2005.

At June 30, 2006, the Company's balance sheet showed $1,523,000 in
total assets and $9,589,000 in total liabilities, resulting in an
$8,066,000 shareholders' deficit.

The Company's June 30 balance sheet also showed strained liquidity
with $1,488,000 in total current assets available to pay
$1,866,000 in total current liabilities coming due within the next
12 months.

                     PBGC Settlement Agreement

Under the terms of a Settlement Agreement, effective Sept. 23,
2004, between the Pension Benefit Guaranty Corporation and the
Company associated with a terminated underfunded defined benefit
pension plan, the Company issued a non-interest bearing secured
note payable to the PBGC with a face amount of $7.5 million.

Pursuant to an agreement dated July 27, 2006, between the PBGC and
the Company, the Company paid the PBGC $256,000 and the Note was
retired in full.  The Company has a further obligation to pay the
PBGC 50% of all future net proceeds in excess of $250,000 realized
from (a) the sale of the Company's interest in Infineer Ltd. and
TecSec, Incorporated and (b) any recoveries from the Company's
historic insurance program.  The future payment to the PBGC, if
any, cannot be estimated at this time.

Full-text copies of the Company's financials are available for
free at http://ResearchArchives.com/t/s?f0a

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 22, 2006,
Deloitte & Touche LLP, expressed doubt about PubliCARD, Inc.'s
ability to continue as a going concern after auditing the
company's 2005 financial statements.  The auditing firm pointed to
the company's recurring losses from operations, substantial
decline in working capital and negative cash flows from
operations, and need for additional capital to meet its
obligations at Dec. 31, 2005.

                          About PubliCARD

Headquartered in New York City, PubliCARD, Inc. (OTCBB: CARD.OB)
-- http://www.publicard.com/-- through its Infineer Ltd.  
subsidiary, designs smart card solutions for educational and
corporate sites.


QWEST CORPORATION: Closes $600 Million Debt Securities Offer
------------------------------------------------------------
Qwest Communications International Inc.' subsidiary, Qwest
Corporation, concluded an offering of $600 million aggregate
principal amount of debt securities due October 1, 2014, which was
upsized from the amount of $500 million.  The notes bear an
interest rate of 7.5 percent per annum, payable semi-annually on
October 1 and April 1, commencing on April 1, 2007.

"We're pleased with the strong demand and success of this
offer," said Oren G. Shaffer, Qwest vice chairman and CFO.  
"This transaction further strengthens our financial position
by reducing interest expense and extending maturities."

The eight-year notes were priced at par. The net proceeds of the
offering will be used for general corporate purposes, including
repayment of QC's indebtedness, and funding and refinancing
investments in the company's telecommunications assets.

Today, QC called the remaining $500 million of its floating rate
Term Loan at QC maturing in June 2007, which will be paid upon
closing of this offering.  In addition, QCII reiterated its
intention to pay off a maturity of $485 million on Aug. 15, 2006,
at its Qwest Capital Funding subsidiary with QCII'S cash on hand.

The sale of the notes is expected to close on Aug. 8, 2006.

Deutsche Bank Securities, Credit Suisse and Merrill Lynch & Co.
were joint book-runners for the offering, which was made in a
private placement transaction pursuant to Rule 144A under the
Securities Act of 1933, as amended.  JPMorgan, Lehman Brothers and
Wachovia Securities were co-managers.  The notes have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any other jurisdiction and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements.

Qwest Communications International Inc. -- http://www.qwest.com/
-- is a leading provider of high-speed Internet, data, video and
voice services.  With approximately 40,000 employees, Qwest is
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability.

                           *     *     *

As reported on the Troubled Company Reporter on Aug. 3, 2006,
Qwest Communications International Inc.'s $1,265 million 3.5%
convertible senior notes due 2025 carry Moody's Investors Service
B3 Rating.

As reported in the Troubled Company Reporter on Nov. 17, 2005,
Fitch upgraded and removed from Rating Watch Positive Qwest
Communications International, Inc.'s Issuer Default Rating to 'B+'
from 'B'.  Fitch also upgraded specific issue ratings and recovery
ratings assigned to Qwest and its wholly owned subsidiaries,
including upgrading the senior unsecured debt rating assigned to
Qwest Corporation to 'BB+' from 'BB'.  In addition, Fitch revised
the Rating Outlook to Positive from Stable.


QUEST MINERALS: Resolves Mining Issue With Former Gwenco Owner
--------------------------------------------------------------
Quest Minerals & Mining Corp. had taken a significant step towards
recommencing mining operations by reaching a settlement with the
former owner of its wholly owned subsidiary, Gwenco, Inc., Albert
Anderson.  As part of the settlement, Gwenco received mining
permit renewal and transfer documentation, which Gwenco is
required to obtain in order to recommence mining operations at its
Pond Creek mine at Slater's Branch, Kentucky.  Further, Mr.
Anderson agreed to provide all reasonable cooperation in
recommencing mining operations at the Slater's Branch mine.

In addition, the parties agreed to mutually dismiss their
respective counter-claims against each other in a civil action
pending in Boyd County Court, Kentucky.  In that action, Mr.
Anderson was seeking to rescind Quest's acquisition of Gwenco, or
alternatively, seeks unspecified compensatory and punitive
damages.

"Settling this matter with Mr. Anderson is a critical and
significant step in recommencing mining operations at our Pond
Creek mine at Slater's Branch," Eugene Chiaramonte, Jr., President
of Quest, stated.  "As a result of this settlement, we have
obtained certain necessary and critical mining permit and renewal
documentation which we need to recommence mining operations at
Slater's Branch.  By obtaining this documentation, Gwenco can now
proceed to complete the permit application process necessary to
recommence mining operations at the Pond Creek mine.

"In addition, this settlement is another step in our ongoing
initiative to resolve our debt and improve our financial
liquidity," continued Mr. Chiaramonte.  "This settlement resolves
any remaining uncertainties with respect to our obligations to Mr.
Anderson under the original purchase agreement for Gwenco, it
removes any possibility of an adverse ruling or judgment at trial,
and it alleviates our need to allocate resources to litigating the
dispute with Mr. Anderson.  We are pleased to have resolved these
uncertainties associated with our acquisition of Gwenco so we can
fully focus our energies and resources on growing the business.  
We are pleased to have brought this matter to a favorable
resolution for the parties involved and look forward to an ongoing
productive and cooperative working relationship with all parties
going forward."

In addition to the above, the parties agreed to terminate all
remaining rights, duties, and obligations under the original stock
purchase agreement entered into in connection with the acquisition
of Gwenco by Quest.  In consideration for Mr. Anderson's
cooperation and covenants, and in consideration for the releases,
dismissals, and terminations, Quest made a one-time cash payment
of $75,000 to Mr. Anderson, issued 3,500,000 shares of Quest
common stock, subject to a lock-up/leak out agreement, to Mr.
Anderson upon conversion of his Series B Preferred Stock, the
terms of which were amended under the settlement agreement, and
granted Mr. Anderson a sliding scale royalty on coal sales.  
Further, as part of the settlement agreement, Mr. Anderson
provided notarized resignations from Quest and Gwenco, and the
parties provided mutual non-disparagement covenants.

                   About Quest Minerals & Mining

Based in Paterson, New Jersey, Quest Minerals & Mining Corp.
(OTC BB:QMMG.OB) -- http://www.questminerals.com/-- acquires and
operates energy and mineral related properties in the southeastern
part of the United States.  Quest focuses its efforts on
properties that produce quality compliance blend coal.

At March 31, 2006, the Company's balance sheet showed total assets
of $6,776,800 and total liabilities of $7,368,152, resulting in a
stockholders' deficit of $591,352.


REFCO INC: Judge Drain Okays Stipulations on Lease-Decision Period
------------------------------------------------------------------
The Hon. Robert Drain of the U.S. Bankruptcy Court for the
Southern District of new York approves two stipulations extending
the time for Albert Togut, the Chapter 7 trustee overseeing the
liquidation of Refco, LLC's estate, to assume or reject unexpired
nonresidential real property leases.

Refco LLC leases a real property located at 1080 Indiantown Road,
Unit 200, in Jupiter, Florida, under an Oct. 22, 2004, agreement
with Cardi Corp.

Pursuant to their stipulation, Cardi agrees to extend the Refco
LLC Trustee's lease decision deadline until Sept. 30, 2006.  If
the Refco LLC Trustee is still undecided by that time, he will be
deemed to have rejected the Lease effective September 30.

Refco LLC also leases a real property located at 811 East Plaza
Drive, in Carroll, Iowa, under a March 31, 2004, agreement with
Vision Incorporated.

Vision agrees to extend Mr. Togut's lease decision deadline until
August 31, 2006.  If the Refco LLC Trustee won't assume the Lease
on or before August 31, the lease will be deemed rejected on that
day.

Mr. Togut says he will continue to timely perform all obligations
under the Cardi and Vision Leases prior to the Rejection Date to
the extent required under Section 365(d)(3) of the Bankruptcy
Code, including, without limitation, payment of the full monthly
rent for the Premises as required under the terms of the Leases
through and including the Rejection Date.

                     12 Leases Assigned to Man

Pursuant to separate notices filed with the Court, Mr. Togut
informs Judge Drain that he will assume and assign 12 of Refco
LLC's unexpired leases for non-residential real property to Man
Financial, Inc.

The leases relate to premises located at:

   -- 4800 Main Street, Kansas City, Missouri, Suite 231;

   -- 44 Union Blvd., Lakewood, Colorado;

   -- 400 South 4th Street, Minneapolis, Minnesota, Room 6;

   -- 400 South 4th Street, Minneapolis, Minnesota, Booth 300;

   -- 400 South 4th Street, Minneapolis, Minnesota, Booths 310
      and 320;

   -- 400 South 4th Street, Minneapolis, Minnesota, Booth 315;

   -- 400 South 4th Street, Minneapolis, Minnesota, Room 414;

   -- One North End Avenue, New York, New York, Suite 1101;

   -- One North End Avenue, New York, New York, Suite 1207;

   -- One North End Avenue, New York, New York, Suite 1223;

   -- One North End Avenue, New York, New York, Suite 1225 and;

   -- One North End Avenue, New York, New York, Suite 1304

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


REFCO INC: Debtors & Trustee Want UHY Advisors as Tax Consultants
-----------------------------------------------------------------
Refco, Inc., its debtor-affiliates and Marc S. Kirschner, the
court-appointed trustee for Refco Capital Markets, Ltd., seek
authority from the U.S. Bankruptcy Court for the Southern District
of New York to formally employ UHY Advisors NY, Inc., and its
affiliated entities as their tax advisors, nunc pro tunc to
Feb. 3, 2006.

The Debtors and the RCM Trustee believe that UHY, being the 14th
largest accounting firm of tax and business consultants in the
United States with an extensive network of affiliated firms
internationally, possesses expertise and knowledge to provide
services.

According to the Debtors, UHY will perform these necessary
services:

   (a) preparation, review and filing of federal, state and
       local tax returns and any amended returns, corresponding
       schedules, related documents, including any extensions of
       time to file tax returns as well as complex technical
       analysis of various issues and formulation of
       recommendations to the Debtors and the RCM Trustee;

   (b) attendance and assistance with meetings and examinations
       with Internal Revenue Service, international or state and
       local tax authorities, the executive management team at
       Refco, Inc., the Chapter 11 and Chapter 7 trustees for RCM
       and Refco, LLC;

   (c) advice and assistance regarding transaction taxes, state
       and local sales and use taxes, and audits;

   (d) assembly and compilation of information necessary to
       prepare tax returns;

   (e) accounting, auditing and bookkeeping services;

   (f) review and assistance with any international tax-related
       issues and documents;

   (g) tax consulting and strategy services relating to several
       complex transactions;

   (h) consulting services relating to treatment of transactions
       for financial reporting purposes in accordance with GAAP;

   (i) assistance with organizing and cataloging the Debtors'
       books and records; and

   (j) performance of other tax-related services and accounting
       and audit-related services that are mutually agreed on by
       the Debtors, the Trustee and UHY.

The Debtors assure the Bankruptcy Court that UHY's services will
not result in unnecessary duplication of efforts in their
bankruptcy cases.

In accordance with an order authorizing the Debtors to employ and
compensate professionals used in ordinary course, payments are
subject to Court approval if they exceed $50,000 in any month, or
exceed an aggregate of $500,000 in the Debtors' cases.

The Debtors' payments to UHY have not exceeded these caps as of
July 14, 2006.

Under an engagement letter with the Debtors and the RCM Trustee,
UHY agreed to fix its professional fee at $400,000, along with a
$50,000 retainer, for services relating to preparation of certain
partnership and corporation tax returns.  Specific services that
are encompassed in the fixed fee are:

     Fee        Service
     ---        -------
     $150,000   New Refco Group Ltd. LLC Partnership Returns for
                short year January 1, 2005, to August 10, 2005;
                and

     $250,000   Refco Inc. Corporate Tax Returns for tax year
                starting August 11, 2005, to June 30, 2006.

The fixed fee does not include any accounting, bookkeeping or
other support services necessary to prepare the returns.

For other services, UHY's standard hourly rates range from $150
for first year staff to $550 for managing directors.  It is UHY's
policy to adjust rates periodically to reflect economic and other
conditions.

Consistent with its policy with respect to its other clients, UHY
will bill for other charges and disbursements incurred, including
costs for long distance telephone usage, photocopying, travel,
messengers, computer usage and postage.

As of July 20, 2006, UHY has received $200,000 from the Debtors.  
UHY will then apply to the Court for allowance of compensation
for professional services rendered and reimbursement of expenses
incurred in the Debtors' cases.  However, services subject to the
fixed fee arrangement will be subject to the jurisdiction and
approval of the Court and the U.S. Trustee under Section 328(a)
of the Bankruptcy Code.

Michael Greenwald, managing director of UHY, attests that the
firm:

   (i) does not have any connection with the Debtors or any
       other party-in-interest;

  (ii) is a "disinterested person," as that term is defined in
       Section 101(14); and

(iii) does not hold or represent any interest adverse to the
       Debtors' estates.

                          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).


RHODIA SA: June 30 Balance Sheet Upside-Down by EUR448 Million
--------------------------------------------------------------
Rhodia SA disclosed its financial results for the second quarter
ended June 30, 2006.

Rhodia reported that its net sales increased 4.5% to
EUR1.321 billion in the second quarter 2006 from EUR1.264 billion
a year earlier, primarily reflecting the impact of a 3.2% increase
in prices.

Rhodia reported consolidated net income of EUR78 million for the
second quarter ended June 30, 2006, compared with a EUR196 million
net loss for the same period in 2005.

Operating performance improved, with recurring EBITDA up 18% at
EUR188 million compared with EUR159 million in the second quarter
2005.  Recurring EBITDA margin rose to 14.2%, illustrating the
Group's ability to pass on price increases to offset the rise in
the cost of raw materials.

Operating profit grew strongly to EUR100 million from
EUR35 million in the second quarter 2005.

At June 30, 2006, the Company reported a consolidated
EUR4.983 billion in total assets and EUR5.431 billion in total
liabilities, resulting in a EUR448 million stockholders' deficit.

Rhodia SA (NYSE: RHA) -- http://www.rhodia.com/-- is a global  
specialty chemicals company partnering with major players in the
automotive, electronics, pharmaceuticals, agrochemicals, consumer
care, tires, and paints and coatings markets.  Rhodia offers
tailor-made solutions combining original molecules and
technologies to respond to customers' needs.  Rhodia employs
around 19,500 people worldwide.   Rhodia is listed on Euronext
Paris and the New York Stock Exchange.

                           *     *     *

Standard & Poor's Ratings Services raised, in July 2006, its
long-term corporate credit rating on France-based chemical
producer Rhodia S.A. to 'B+' from 'B'.  At the same time, the 'B'
short-term rating was affirmed and the rating on senior unsecured
and subordinated bonds was raised to 'B-' from 'CCC+'.  S&P said
the outlook is stable.


RIVER ROCK: Moody's Holds Senior Unsecured Notes' Rating at B2
--------------------------------------------------------------
Moody's Investors Service affirmed River Rock Entertainment
Authority's B2 corporate family rating, B2 senior unsecured note
rating, and stable ratings outlook.

The ratings take into account that debt service is entirely
dependent on cash flow generated by a relatively small, single
gaming facility, and that leverage is not likely to improve
materially given River Rock's ability to take on additional debt.   
Debt was 4.1x for the 12-month period ended Mar. 31, 2006.  Debt
below 5x is considered low for a gaming issuer with a B2 corporate
family rating.  However, Moody's believes that River Rock will
eventually use its additional debt capacity to construct a
permanent facility, although the Tribe has no current plans to
construct one at this time.  The ratings also consider that River
Rock will maximize its ability to pay dividends to the Dry Creek
Rancheria Band of Pomo Indians.

Positive ratings consideration is given to River Rock's good
operating performance despite senior management turnover and
bridge damage in December 2005 that destroyed the primary route to
the casino facility.  The stable ratings outlook acknowledges the
favorable demographics and limited amount of competition in River
Rock's immediate market area.  While River Rock has several
existing competitors in the Northern California area, the amount
of direct competition is not material and not likely to increase
over the next several years.  The stable outlook also anticipates
that the bridge will be repaired and the primary route to River
Rock will be restored by the end of 2006, and that as a result,
EBITDA and EBITDA margins will rebound accordingly.

Moody's most recent rating action on River Rock occurred on
Oct. 29, 2003 with an initial rating assignment of a B2 corporate
family rating, B2 senior unsecured note rating, and stable ratings
outlook.

River Rock Entertainment Authority, an unincorporated
instrumentality of the Dry Creek Rancheria Band of Pomo Indians,
owns and operates the River Rock Casino located on the Tribe's 75-
acre reservation in Sonoma County, California, approximately 75
miles north of San Francisco.  The Dry Creek Rancheria Band of
Pomo Indians is a federally recognized Indian tribe that has a
compact with the State of California which expires in December
2020.


SCHOOL HOUSE: Gets Final Court Approval to Use Cash Collateral Use
------------------------------------------------------------------
The Honorable William C. Hillman of the U.S. Bankruptcy Court for
the District of Massachusetts authorized School House '77
Associates, L.P. to use, on a final basis, cash collateral
securing repayment of its debt to the U.S. Department of Housing
and Urban Development.

                            HUD Dispute

The Debtor faces an ongoing dispute with the HUD over four of its
apartment buildings in Roxbury and Mattapan, which houses senior
and disabled citizens.  HUD asserts a claim for approximately
$9.8 million as of the Debtor's bankruptcy petition date, secured
by the apartments together with rents, profits, and income.  The
Debtor argues that HUD mismanaged its properties and failed to
service the apartments' mortgages, over the 11 years it was under
the HUD's control.

                    Need to Use Cash Collateral

The Debtor relates that it has no source of income other than the
rents it receives directly from its residents, the monthly subsidy
from HUD pursuant to contract between the two companies, and a
small monthly amount received under a laundry-room contract.  

The Debtor tells the Court that it will need to use HUD's cash
collateral to pay its operational expenses.  The Debtor stresses
that it must meet obligations and avoid the disruption of services
at its properties, since many of the residents are seniors and the
disabled.  In addition, the Debtor wants to use cash collateral to
pay Chapter 11 professional fees and expenses allowed by the
Court.

The Debtor also tells the Court that it will need to use the cash
collateral on an interim and expedited basis, and will need
interim authority from the Court to use up to $60,000 of cash
collateral in accordance with a budget.

A full-text copy of the Debtor's cash collateral budget is
available for free at http://researcharchives.com/t/s?eca

Based in San Francisco, California, School House '77 Associates
L.P. is manages real estate property.  It manages four apartment
buildings in Roxbury and Mattapan, containing a total of 128
units.  The properties are operated as affordable housing,
primarily for seniors and the disabled.  The Company filed for
chapter 11 protection on June 22, 2006 (Bankr. D. Mass. Case No.
06-11963).  Christopher M. Candon, Esq. and Daniel C. Cohn, Esq.,
at Cohn Whitesell & Goldberg, LLP, represent the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.


SHACKLETON RE: S&P Puts BB Rating on Proposed $185 Million Loans
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' senior
secured debt rating to Shackleton Re Ltd.'s proposed $125 million
principal-at-risk variable-rate and $60 million Tranche B term
loan.

Standard & Poor's also assigned its 'BB+' senior secured debt
rating to Shackleton's proposed $50 million Tranche C term loan.

Shackleton is a special-purpose Cayman Islands exempted company
licensed as a restricted Class B insurer in the Cayman Islands.

"The ratings are based on the modeled probability of attachment,"
said Standard & Poor's credit analyst Gary Martucci.

"Risk Management Solutions Inc.'s RiskLink Interim Model was used
to determine the probability of attachment of each tranche."

The reinsurance agreement, which is effectively supported by the
proceeds from the issuance of the notes and the loans, will
provide Endurance Specialty Insurance Ltd. (A-/Positive/--) with a
source of index-based catastrophe coverage for hurricane and
earthquake events in the covered area.  For a hurricane event, the
covered area is the East and gulf coasts, along with the adjacent
inland states.  For an earthquake event, the covered area is
California.  Endurance and Shackleton will enter into a
reinsurance agreement that will establish the index-based
coverage.

Shackleton will invest the proceeds in high-quality permitted
investments within collateral accounts.  There will be a separate
collateral account for the notes and each loan tranche.  
Shackleton has entered into an agreement that swaps the total
return of each collateral account with Goldman Sachs
International, which has been guaranteed Goldman Sachs Group Inc.
(A+/Positive/A-1), in exchange for quarterly LIBOR-based payments
minus a spread.

The premium received by Shackleton pursuant to the reinsurance
Agreement -- combined with the payments received under the swap --
will be used to make the scheduled interest payments to the
lenders.  If there is a covered event, assets will be sold from
the related collateral account with the proceeds being distributed
to Endurance.  Principal on the notes and the loans will be paid
at maturity unless a covered event occurs.

Endurance will pay Shackleton an additional premium under the
reinsurance agreement that is intended to give Shackleton proceeds
to cover its up-front and ongoing expenses in connection with this
loan facility.


SIX FLAGS: Fitch Affirms Junk Ratings With Negative Outlook
-----------------------------------------------------------
Fitch affirmed and removed from Rating Watch Negative Six Flags
Inc.'s, following the company's earnings announcement on
Aug. 2, 2006.  The Rating Outlook is Negative.

Approximately $2.6 billion of debt (including $287.5 million of
preferred stock stated at liquidation value and treated as debt)
are affected by this action.

  Six Flags Theme Parks, Inc.:

    -- Issuer Default Rating 'B-'
    -- Bank credit facility 'BB-/RR1'

  Six Flags, Inc.:

    -- IDR 'B-'
    -- Senior unsecured notes 'CCC+/RR5'
    -- Preferred stock 'CCC-/RR6'

On June 26, Fitch placed the ratings for Six Flags on Rating Watch
Negative following the company's mid-quarter update.  Fitch's
rating action at that time reflected the heightened credit risk
associated with Six Flags' anticipated need to amend its bank
covenants, the company's reduced operating cash flow resulting
from additional expenses and asset dispositions, and negative
operating trends.

On August 2, the company announced that it received covenant
waivers and amendments from its lenders from the second quarter of
2006 through the fourth quarter of 2007.  The company also
disclosed that bank lenders will retain first-option on asset sale
proceeds.

Fitch recognizes the amendments enhance financial flexibility
somewhat, however, the Negative Outlook reflects the company's
operating trends which have continued to deteriorate with revenue
down 2.8% for the first half of the year driven by:

   * declining attendance associated with lower season pass
     enrollment;

   * the New Orleans park closure; and

   * adverse weather.  

Operating performance was also impacted due to higher costs
associated with the implementation of the company's operating
turn-around by new management.

Rating concerns are balanced somewhat by:

   * the company's leading position as the largest regional theme
     park operator;

   * strong brand awareness;

   * broad geographic presence; and

   * solid competitive position due to the high barriers to entry
     and market leadership, as well as significant real estate
     ownership underlying many of its 29 parks.

The company further reported plans to sell several theme parks,
cut outlays for new rides, focus aggressively on the family
market, increase marketing partnerships, and improve margins.  
Successful execution of new management's stated strategy will be a
major consideration in any future positive ratings momentum.

However, Fitch believes that the significant equity ownership
positions of larger hedge funds could have some negative impact on
bondholders as it relates to influencing fiscal policy and
shareholder initiatives.

Six Flags' liquidity is constrained and is supported by
approximately $150 million in revolving loans available to be
drawn and $83.4 million in cash as of June 30, 2006.  The bank
amendments provide some relief on covenants relating to leverage,
interest coverage and debt service coverage through the end of
2007 and eliminate the covenant relating to fixed charge coverage
through 2007, however, the interest cost of such loans has become
burdensome.

Importantly, the company also owns a significant amount of real
estate, which could provide an additional cushion with respect to
predictable liquidity needs.  The company's near-term debt
maturities are minimal until 2008.  However, Six Flags is required
to repay its entire outstanding term loan at the end of 2008, if
its preferred stock is outstanding at that time.


SMART ONLINE: Posts $1.5 Million Net Loss in First Quarter of 2006
------------------------------------------------------------------
Smart Online delivered its results for the first quarter ended
March 31, 2006, with the Securities and Exchange Commission on
Aug. 2, 2006.

"During the first quarter of 2006, we substantially increased our
revenue 648% over the same period for 2005," Michael Nouri, chief
executive officer and president of Smart Online, stated.

"We believe our acquisition strategy is paying off with top line
revenue growth along with new and enhanced products for our OneBiz
platform. In addition to our revenue growth, we launched our new
OneBiz platform Sales Force Automation and Customer Relationship
Management product, which should position us to take advantage of
the growing small business Software-as-a-Service market.  We are
committed to leveraging our expertise and significant investments
to date, and we will continue to execute our business plan going
forward in 2006."

For the first quarter of 2006, total revenue increased 648% to
approximately $1,896,000 compared with approximately $253,000 for
the same period last year.  Net loss attributable to common
stockholders for the first quarter was approximately $1,599,000
compared with approximately $294,000 for the same period last
year.  

This net loss is primarily attributable to:

   (1) approximately $470,000 of non-recurring legal expense
       related to the ongoing SEC action as well as the Company's
       own internal investigation,

   (2) a non-cash charge of approximately $257,000 related to its
       expensing of options, and

   (3) a non-cash amortization expense of intangible assets from
       the two acquisitions closed in the fourth quarter of 2005
       of approximately $289,000.

The expenses relating to these three items amount to approximately
$1,016,000.  There were no comparable charges in the first quarter
of 2005 for these expenses.

At March 31, 2006, the Company's balance sheet showed $14,238,320
in total assets, $7,885,047 in total liabilities, and $6,353,273
in total stockholders' equity.

The Company's March 31 balance sheet showed strained liquidity
with $2,519,197 in total current assets available to pay
$6,688,498 in total current liabilities.

                         SEC Investigation

On Jan. 17, 2006, the SEC temporarily suspended the trading of the
Company's securities.  In its "Order of Suspension of Trading,"
the SEC stated that the reason for the suspension was a lack of
current and accurate information concerning the Company's
securities because of possible manipulative conduct occurring in
the market for its stock.

By its terms, that suspension ended Jan. 30, 2006, at 11:59 p.m.
EST.  

As a result of the SEC's suspension, NASDAQ withdrew its
acceptance of the Company's application to have its common stock
traded on the NASDAQ Capital Market.

Simultaneously with the suspension, the SEC advised the Company
that it is conducting a non-public investigation.  While it
continue to cooperate with the SEC, the Company is unable to
predict at this time whether the SEC will take any adverse action
against it.

In March 2006, the Company's Board of Directors authorized its
Audit Committee to conduct an internal investigation of matters
relating to the SEC suspension and investigation.  The Audit
Committee retained independent outside legal counsel to assist in
conducting the investigation.

                         Subsequent Events

On July 7, 2006, the independent outside legal counsel conducting
the Company's internal investigation shared final findings with
the Audit Committee, which was then shared with the full Board of
Directors.

The Audit Committee did not conclude that any of the Company's
officers or directors has engaged in fraudulent or criminal
activity.  However, it did conclude that it lacked an adequate
control environment, and has taken action to address certain
conduct of management that was revealed as a result of the
investigation.

The Audit Committee concluded that the control deficiencies
primarily resulted from the Company's transition from a private
company to a publicly reporting company and insufficient
preparation for, focus on, and experience with compliance
requirements for a publicly reporting company.

As one of the results of these findings, Jeffrey LeRose was
appointed to the position of non-executive Chairman of the Board
of Directors to separate the leadership of the Board of Directors
from the management of the Company, which is a recommended best
practice for solid corporate governance.

Michael Nouri has stepped down as Chairman of the Board of
Directors, but will continue to serve as the Company's president,
chief executive officer and as a member of the Board of Directors.

Full-text copies of the Company's financials are available for
free at http://ResearchArchives.com/t/s?f02

                        Going Concern Doubt

Sherb & Co., LLP, expressed substantial doubt about Smart Online,
Inc.'s ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005
and 2004.  The auditing firm pointed to the Company's recurring
losses from operations and working capital deficit.

Smart Online Inc. -- http://www.SmartOnline.com/-- develops and
markets Internet-delivered Software-as-Service software
applications and data resources to start, run, protect and grow
small businesses.


SOLUTIA INC: Taps Clarke Gittens & Farmer as Liquidation Counsel
----------------------------------------------------------------
Pursuant to the Court-approved procedures for hiring ordinary
course professionals, Solutia Inc. and its debtor-affiliates
inform the U.S. Bankruptcy Court for the Southern District of New
York that they are employing Clarke Gittens & Farmer as counsel
with respect to the voluntary liquidation and dissolution of
Solutia International Sales, Inc.

Gillian M.H. Clarke, Esq., a partner at CG&F, discloses that
Solutia International has employed the firm since Jan. 6, 2006,
for services unrelated to the bankruptcy aspects of the Debtors'
Chapter 11 cases.

The professionals primarily responsible for representing the
Debtors are:

               Name                    Hourly Rate
               ----                    -----------
               Gillian M.H. Clarke        $300
               Rosalind L.C. Bynoe        $250
               Ruan C. Martinez           $150

Paralegals who assist the professionals will be paid a customary
hourly rate of $50.  The Debtors will also reimburse the firm for
necessary expenses.

According to Ms. Clarke, the Debtors owe CG&F $2,488 as of
June 6, 2006, for services rendered and expenses incurred as of
the commencement of Solutia International's voluntary liquidation
and dissolution.

Ms. Clarke assures the Court that CG&F has no connection with the
Debtors, their creditors, their attorneys or any other party-in-
interest and does not hold or represent any interest adverse to
the Debtors or their estates.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


SOLUTIA INC: Wants to Pay $5 Million Settlement Installment
-----------------------------------------------------------
Solutia Inc. and its debtor-affiliates ask permission from the
U.S. Bankruptcy Court for the Southern District of New York to pay
the third settlement installment of $5,000,000 is due on Aug. 26,
2006, under the Side Agreement and the Litigation Settlement
Agreements among Solutia, Monsanto Company, and Pharmacia
Corporation.

Solutia seeks the Court's authority to pay the third settlement
installment because:

   -- it will help preserve its ability to argue that Monsanto's
      release of the Anniston Indemnity Claim, a claim for
      $550,000,000, under the Side Agreement remains in effect;

   -- it is contemplated by the Debtors' business plan;

   -- it is permitted by the Debtors' postpetition financing
      agreement; and

   -- it is consistent with the First and Second Installment
      Payment Orders.

According to Solutia, one could interpret the Side Agreement as
an executory contract that it could assume or reject during the
Chapter 11 cases.  But this interpretation may be subject to
dispute and would require an analysis of whether assumption of
the Side Agreement is warranted.  Even if the agreement were
deemed to be subject to rejection, Solutia notes that a rejection
could trigger damage claims far exceeding the cost of the
proposed payment.  Thus, Solutia has decided not to bring these
issues before the Court at this time.

As previously reported, Solutia entered into the Global
Settlement Agreements with Monsanto and Pharmacia to resolve
certain lawsuits pending against them.  The Litigation Settlement
Agreements require an aggregate of $5,000,000 to be paid annually
from Aug. 26, 2004, to Aug. 26, 2013.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


SPECTRUM BRANDS: U.S. Attorney's Office Terminates Investigation
----------------------------------------------------------------
The U.S. Attorney's Office for the Northern District of Georgia
informed Spectrum Brands, Inc., on July 27, 2006, that it has
terminated its investigation initiated Nov. 9, 2005.

The investigation relates to the company's financial results for
the third and fourth quarters of fiscal year 2005 and the impact
of the results on anticipated fiscal year 2006 earnings, as well
as to the sale of company shares by senior management in advance
of negative financial disclosures in 2005.  The Company continues
to cooperate with the Atlanta District Office of the Securities
and Exchange Commission's investigation into the matters.

Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC)
-- http://www.spectrumbrands.com/-- is a consumer products  
company and a supplier of batteries and portable lighting, lawn
and garden care products, specialty pet supplies, shaving and
grooming and personal care products, and household insecticides.  
Spectrum Brands' products are sold by the world's top 25 retailers
and are available in more than one million stores in 120 countries
around the world.  The company's stock trades on the New York
Stock Exchange under the symbol SPC.

                           *     *     *

As reported in the Troubled Company Reporter on June 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on
Spectrum Brands Inc., including the 'B-' corporate credit rating.
At the same time, the ratings were removed from Credit Watch,
where they were placed with negative implications April 6, 2006,
following the Company's substantially lowered earnings guidance
for the second quarter.  The rating outlook is negative.

As reported in the Troubled Company Reporter on June 13, 2006,
Moody's Investors Service downgraded all ratings of Spectrum
Brands, Inc.  The outlook for the ratings is stable.  This action
concluded the review for downgrade that was initiated on April 7,
2006.  Ratings downgraded include Corporate family rating to B3
from B2; $300 million senior secured revolving credit facilities
to B2 from B1; $1.2 billion senior secured term loan facilities to
B2 from B1; $700 million senior subordinated notes due 2015 to
Caa2 from Caa1, and $350 million senior subordinated notes due
2013 to Caa2 from Caa1.


SPECTRUM BRANDS: Third Fiscal Quarter Earnings Down to $2.5 Mil.
----------------------------------------------------------------
Spectrum Brands, Inc. reported net income for the quarter ended
July 2, 2006 of $2.5 million compared to $23.7 million for the
quarter ended July 3, 2005.

The Company also disclosed net sales for the third fiscal quarter
ending July 2, 2006 was $698.3 million versus $707.8 million for
the same period a year ago.

Net income for the nine months ended July 2, 2006 was $5.4
million, compared to $49.7 million for the same period in the
previous year.

For the nine months ended July 2, 2006, net sales was $1.94
billion, up by 13% from $1.72 billion, for the same period a year
ago.

"Spectrum Brands continues to face challenges in our European
battery business, which was the leading contributor to our
disappointing third quarter results," David A. Jones, chairman and
chief executive officer, said.  "We also generated lower-than-
expected sales this quarter from Remington men's shaving in North
America at Father's Day.  However, there were a number of bright
spots in our third quarter results, including a strong performance
from Remington branded products in Europe and a modest but
encouraging sequential improvement in our North American battery
business.

Gross margin for the quarter was 38% versus 38.2% for the same
period last year.  The decline in gross margin percentage resulted
primarily from lower sales in the global battery business and
increased raw material costs.

Operating income was $49.0 million versus fiscal 2005's third
quarter operating income of $69.0 million.

Third quarter interest expense was $45.7 million versus $38.6
million last year due to increased debt levels from the Tetra
acquisition and higher interest rates.  Total debt at July 2, 2006
was $2.283 billion.

Corporate expenses were $27.6 million, compared to $22.1 million
in the prior year period.  Expansion of the global operations
support infrastructure and increased professional fees accounted
for the majority of the increase.

Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC)
-- http://www.spectrumbrands.com/-- is a consumer products  
company and a supplier of batteries and portable lighting, lawn
and garden care products, specialty pet supplies, shaving and
grooming and personal care products, and household insecticides.  
Spectrum Brands' products are sold by the world's top 25 retailers
and are available in more than one million stores in 120 countries
around the world.

                           *     *     *

As reported in the Troubled Company Reporter on June 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on
Spectrum Brands Inc., including the 'B-' corporate credit rating.
At the same time, the ratings were removed from CreditWatch, where
they were placed with negative implications April 6, 2006,
following the Company's substantially lowered earnings guidance
for the second quarter.  The rating outlook is negative.

As reported in the Troubled Company Reporter on June 13, 2006,
Moody's Investors Service downgraded all ratings of Spectrum
Brands, Inc.  The outlook for the ratings is stable.  The action
concluded the review for downgrade that was initiated on April 7,
2006.  Ratings downgraded include Corporate family rating to B3
from B2; $300 million senior secured revolving credit facilities
to B2 from B1; $1.2 billion senior secured term loan facilities to
B2 from B1; $700 million senior subordinated notes due 2015 to
Caa2 from Caa1, and $350 million senior subordinated notes due
2013 to Caa2 from Caa1.


SUN HEALTHCARE: Earns $7.9 Million for the Second Quarter 2006
--------------------------------------------------------------
Sun Healthcare Group, Inc., reported net income of $7.9 million
for the second quarter ended June 30, 2006, compared with
$6.9 million for the same period in 2005.

Total net revenues for the quarter ended June 30, 2006, increased
$74.5 million to $288.1 million, or 34.9%, as compared to net
revenues for the quarter ended June 30, 2005 of $213.6 million,
primarily as a result of the Peak Medical Corporation acquisition
in December 2005.

"Our 2006 initiatives focusing on improving consolidated margins,
profitability and cash flow are producing results as evidenced by
both the year over year comparisons as well as the strength of the
quarter on a stand-alone basis," Richard K. Matros, Sun's chairman
and chief executive officer, said.

For the six months ended June 30, 2006, the Company reported total
net revenues of $575.1 million and net income of $9.7 million.
For the comparable six months ended June 30, 2005, total net
revenues were $419.9 million with net income of $5.8 million.  Net
revenues for the six months ended June 30, 2006, increased
$155.2 million, or 37%, as compared to net revenues for the six
months ended June 30, 2005.

A full-text copy of the Company's quarterly financial report is
available at no charge at http://ResearchArchives.com/t/s?ef9

Sun Healthcare Group, Inc., with executive offices located in
Irvine, California, owns SunBridge Healthcare Corporation and
other affiliated companies that operate long-term and postacute
care facilities in many states.  In addition, the Sun Healthcare
Group family of companies provides therapy through SunDance
Rehabilitation Corporation, medical staffing through CareerStaff
Unlimited, Inc., and home care through SunPlus Home Health
Services, Inc.

The Company filed for chapter 11 protection on Oct. 14, 1999
(Bankr. D. Del. Case No. 99-03657).  Mark D. Collins, Esq., and
Christina M. Houston, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtor.  The Court confirmed the Debtor's chapter 11
Plan on Feb. 6, 2002, and the Plan took effect on Feb. 28, 2002.

As of Dec. 31, 2005, the Company's equity deficit narrowed to
$2,895,000 from a $123,380,000 deficit at Dec. 31, 2004.


SWELL PICTURES: Case Summary & List of 86 Creditors
---------------------------------------------------
Debtor: Swell Pictures, Inc.
        455 North Cityfront Plaza, Suite 1800
        Chicago, IL 60611

Bankruptcy Case No.: 06-09503

Chapter 11 Petition Date: August 5, 2006

Court: Northern District of Illinois (Chicago)

Judge: Susan Pierson Sonderby

Debtor's Counsel: Steve C. Repel, Esq.
                  Law Office of Steven Repel
                  2159 Linden
                  Highland Park, IL 60035
                  Tel: (847) 212-5178
                  Fax: (847) 433-3919

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's List of 86 Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
5 Alarm Music                               Unknown
35 West Dayton Street
Pasadena, CA 91105

American Chartered Bank                     Unknown
932 West Randolph Street
Chicago, IL 60607

American Express                            Unknown
P.O. Box 360002
Fort Lauderdale, FL 33336

Andy Montag                                 Unknown
827 Tallgrass Drive
Bartlett, IL 60103

APM - Assoc. Production Music               Unknown
6255 Sunset Boulevard, Suite #820
Hollywood, CA 90028

AT&T                                        Unknown
Bill Payment Center
Saginaw, MI 48663

AT&T                                        Unknown
P.O. Box 78152
Phoenix, AZ 85062

B & F Coffee Service                        Unknown
3535 Commercial Avenue
Northbrook, IL 60062

Boardman's Urban Kitchen                    Unknown
455 North Cityfront Plaza Drive
Chicago, IL 60611

Boards Magazine                             Unknown
366 Adelaide Street West, Suite #500
Toronto, Ontario M5VR9

Burhop                                      Unknown
1071 West Division Street
Chicago, IL 60622

Burwood Group, Inc.                         Unknown
20 North Clark Street, Suite 1950
Chicago, IL 60602

Buzzy's Recording                           Unknown
6900 Melrose Avenue
Los Angeles, CA 90038

CDW Computer Centers Inc.                   Unknown
P.O. Box 75723
Chicago, IL 60675

Charissa Reuss                              Unknown
25 East Delaware, Suite #702
Chicago, IL 60611

Chicago NBC Tower L.P.                      Unknown
c/o Bank of America Lockbox
P.O. Box 5982
Collections Center Drive
Chicago, IL 60693

Chicago Sun-Times, Inc.                     Unknown
P.O. Box 1003
Tinley Park, IL 60477

Cingular Wireless                           Unknown
P.O. Box 4628
Carol Stream, IL 60197

Citi Cards                                  Unknown
P.O. Box 688917
Des Moines, IA 50368

Comcast Cable Corporation                   Unknown
P.O. Box 3001
Southeastern, PA 19398

Commonwealth Edison                         Unknown
Bill Payment Center
Chicago, IL 60668

Crain Communications                        Unknown
Drawer # 5842
P.O. Box 79001
Detroit, MI 48279

Data Media Products, Inc.                   Unknown      
1946 Lehigh Avenue, Suite B
Glenview, IL 60026

Denormandie Towel                           Unknown
7789 Dante Avenue
Chicago, IL 60619

DeWolfe Music Library                       Unknown
25 West 45th Street
New York, NY 10036

EDNet                                       Unknown
1291 Southwest 29th Avenue
Pompano Beach, FL 33069

Erna Wallace                                Unknown
3803 Madison
Bellwood, IL 60104

Elsie Ogelle                                Unknown
2438 North Washtenaw Avenue
Chicago, IL 60647

Fast Company                                Unknown
P.O. Box 3016
Harlan, IA 51593

FastChannel Network, Inc.                   Unknown
Attn Accounts Receivable
P.O. Box 673378
Detroit, MI 48267

FC Walvisch bv                              Unknown
HJE Wenkebachweg
1096 AR Amsterdam

Federal Express                             Unknown
P.O. Box 94515
Paltine, IL 60094

FirstCom Music                              Unknown
P.O. Box 31001-1699
Pasadena, CA 91110

Fletcher Chicago, Inc.                      Unknown
39185 Treasury Center
Chicago, IL 60694

Frank Carioti                               Unknown
6 South Hi Lusi
Mt. Prospect, IL 60056

Gary L. Foreman Prod., LLC                  Unknown
1756 Clifty Creek Court
Valpariso, Indiana 46385

GE Capital                                  Unknown
P.O. Box 740423
Atlanta, GA 30374

Groen Flowers                               Unknown
DBA KaBloom
75 East Wacker Drive
Chicago, IL 60601

Gregory Kerr                                Unknown
2184 Hitching Post
Schaumburg, IL 60194

Health Concepts, LLC                        Unknown
566 West Lake Street, Lower Level
Chicago, IL 60661

Hill Mechanical Group                       Unknown
4241 Ravenswood Avenue
Chicago, IL 60613

InterParking                                Unknown
P.O. Box 91144
Chicago, IL 60693

Iron Mountain                               Unknown
P.O. Box 27128
New York, NY 10087

Joe Flores                                  Unknown
7919 Oak Knoll Lane
Palos Heights, IL 60463

John Vapensky                               Unknown
1924 Warren Street
Evanston, IL 60202

Joseph Hunnewell                            Unknown
5211 North Wayne, Third Floor
Chicago, IL 60640

JRT Music LLC                               Unknown
648 Broadway, Suite 911
New York, New York 10012

Judy Topel                                  Unknown
25 Plymouth Court
Lincolnshire, IL 60069

Juli Hudgins                                Unknown
703 West Junior Terr
Chicago, IL 60613

Justin Mayer                                Unknown
3303 West Ainslie Street, Unit 1
Chicago, IL 60625

L.A. Studios, Inc.                          Unknown      
P.O. Box 894045
Los Angeles, CA 90189

Laurel Coppock                              Unknown
10926 Hudson Street, Suite #105
N. Hollywood, CA 91601

Lock Up Storage Centers - Old Orchard       Unknown
5250 Golf Road
Skokie, IL 60077

MBNA America Business Card                  Unknown
P.O. Box 15469
Wilmington, DE 19886

McCarthy & Trinka, Inc.                     Unknown
1000 Jorie Boulevard, Suite 10A
Oak Brook, IL 60523

Midco Inc.                                  Unknown
16 West 221 Shore Court
Chicago, IL 60521

Michael Topel                               Unknown
2005 Larkdale Drive
Glenview, IL 60025

Monna O'Brien                               Unknown
6312 North Wayne
Chicago, IL 60660

Nicholas Papaleo                            Unknown
2136 North Maplewood Avenue, Apt. #2
Chicago, IL 60647

Ogden Plaza Self Park                       Unknown
300 East North Water Street
Chicago, IL 60611

Pazzo's                                     Unknown
455 North Cityfront Plaza Drive
Chicago, IL 60611

Pixel Films                                 Unknown
825 Chicago Avenue, Suite #J
Evanston, IL 60202

Protokulture                                Unknown
70 West Erie, 4th Floor
Chicago, IL 60610

Quill Corp.                                 Unknown
P.O. Box 94081
Paltine, IL 60094

Rackspace Managed Hosting                   Unknown
P.O. Box 671337
Dallas, TX 75267

Richard Termine                             Unknown
2013 North 73rd Court
Elmwood Park, IL 60707

Screen Enterprises, Inc.                    Unknown
222 West Ontario Street, Suite #500
Chicago, IL 60610

Solas Staffing Solutions                    Unknown
221 North La Salle Street, Suite 2300
Chicago, IL 60601

Source TV                                   Unknown
P.O. Box 671431
Dallas, TX 75267

Sprint                                      Unknown
P.O. Box 219623
Kansas City, MO 64121

Steven Repel                                Unknown
543 Sheridan Road
Evanston, IL 60202

Tape Company                                Unknown
P.O. Box 95169
Palatine, IL 60095

Timothy Konn                                Unknown
917 Windmere Court
Darien, IL 60561

U.S. Foodservice, Inc.                      Unknown
P.O. Box 98420
Chicago, IL 60693

United Parcel Service                       Unknown
Lockbox 577
Carol Stream, IL 60132

Velocity Courier, Inc.                      Unknown
703 North Wells, Suite #2
Chicago, IL 60610

Ver                                         Unknown
912 Ruberta Avenue
Glendale, CA 91201

Vanessa Gonzalez                            Unknown
3303 West Ainslie Street, Unit #1
Chicago, IL 60625

Verizon Wireless                            Unknown
P.O. Box 25506
Lehigh Valley, PA 18002

Volare                                      Unknown
201 East Grande Avenue
Chicago, IL 60611

VSA Partners, Inc.                          Unknown
1347 South State Street
Chicago, IL 60605

XO Communications                           Unknown
P.O. Box 828618
Philadelphia, PA 19182

Xytech                                      Unknown
2835 North Naomi Street, Suite 310
Burbank, CA 81504

Yorke Printe Shoppe Inc.                    Unknown
930 North lombard Street
Lombard, IL 60148

Zacuto Films                                Unknown
401 West Ontario, Suite 250
Chicago, IL 60610

Zachary Neumeyer                            Unknown
3012 West Logan Boulevard, Apt. 2R
Chicago, IL 60647


THERMA-WAVE INC: Posts $1.1 Mil. Net Loss in 1st Qtr. Ended July 2
------------------------------------------------------------------
Therma-Wave, Inc., reported 2007 first fiscal quarter financial
results for the three months ended July 2, 2006.

Net revenues for the fiscal first quarter 2007 were $17.9 million,
up $1.9 million or 12% sequentially from $16.1 million recorded in
the fiscal fourth quarter 2006.  Net revenues increased $400,000,
or 2%, from the $17.5 million reported for the fiscal first
quarter of 2006.  Total deferred revenues during the fiscal first
quarter 2007 were $9 million, up $0.5 million, or 6%, compared
with $8.5 million as of fiscal year end 2006.

Net loss available to common stockholders for the fiscal first
quarter 2007 was $1.1 million, including approximately $300,000 in
stock-based compensation costs related to the Company's adoption
of Statements of Financial Accounting Standards No. 123R during
the fiscal first quarter of 2007.

Sequentially, net loss available to common stockholders declined
by $2.5 million compared to a net loss available to common
stockholders of $3.6 million in the fiscal fourth quarter of 2006.

In the year ago period, the Company reported net income available
to common stockholders of $2.4 million including the positive
impact of a one time gain of $8.6 million associated with the sale
by the Company of the CCD-i product line and related assets during
the fiscal first quarter of 2006.

"We are pleased to be starting fiscal 2007 with measurable
improvements in terms of customer orders, revenue growth and
improved bottom line performance," Boris Lipkin, Therma-Wave's
president and chief executive officer, stated.

"We believe our results this quarter provide further evidence of
the progress our operating and financial initiatives are now
yielding and the confidence our customers continue to have in our
precision metrology solutions."

"While we are pleased with our financial improvements during the
quarter and the success we have had with our customers, we remain
focused on a number of strategic short-term and long-term
initiatives designed to support further gross margin expansion and
ultimately returning to profitability.  We are particularly
pleased with follow-on orders from leading fab and foundry
customers this quarter, as well as our entrance into the data
storage development and manufacturing market with our Opti-Probe
thin film technology," Mr. Lipkin continued.

Gross margin for the fiscal first quarter 2007 was 38% compared to
31% in the fiscal fourth quarter 2006 and 41% in the year ago
period.

Cash and cash equivalents totaled $18.9 million as of July 2,
2006, compared with $20.6 million as of April 2, 2006.  Fiscal
first quarter 2007 cash consumption of $1.7 million was at the low
end of management's stated consumption expectations for the
quarter of $1.5 million to $3.0 million.

                        About Therma-Wave

Based in Fremont, California, Therma-Wave, Inc. (NASDAQ: TWAV) --
http://www.thermawave.com/-- develops, manufactures and markets   
process control metrology systems used in the manufacture of
semiconductors.  Therma-Wave offers products to the semiconductor
manufacturing industry for the measurement of transparent and
semi-transparent thin films; for the measurement of critical
dimensions and profile of IC features and for the monitoring of
ion implantation.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on June 20, 2006,
PricewaterhouseCoopers, LLP, in San Jose, California, raised
substantial doubt about Therma-Wave, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended April 2, 2006.  The
auditor pointed to the Company's recurring net losses and
negative cash flows from operations.


TRIMAS CORP: S&P Places B Corporate Credit Rating on Watch
----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
engineered products manufacturer TriMas Corp. and subsidiary
TriMas Company LLC on CreditWatch with positive implications,
including its 'B' corporate credit rating.

The '1' recovery rating on TriMas Company LLC's $410 million bank
credit facility was affirmed.  Currently, the company has more
than $700 million in debt outstanding.

The CreditWatch listing follows the company's plan to undertake an
IPO for up to $201 million.  The net proceeds will be used for:

   * debt reduction;

   * the eventual termination of certain operating leases and
     acquisition of the underlying assets; and

   * general corporate purposes.

Standard & Poor's business risk assessment of TriMas indicates
that the company can support a higher rating if its pro forma
capitalization and financial policies were somewhat less
aggressive than in the past.

"The transaction could have a positive effect on credit measures,
depending upon the completion of the IPO and subsequent debt
repayment," said Standard & Poor's credit analyst Peter Kelly.


UNIVERSAL CORP: Moody's Holds Ba1 Senior Unsecured Debt's Rating
----------------------------------------------------------------
Moody's Investors Service confirmed the Ba1 corporate family
rating and other long-term ratings of the Universal Corporation.  
The company's Not Prime rating for commercial paper was not
affected by today's rating action.  The rating outlook is
negative.  This action concludes a review for possible
downgrade initiated on March 14, 2006.

These ratings were affected by this action:

   * Corporate family rating, confirmed at Ba1;
   * Senior unsecured debt, confirmed at Ba1;
   * Senior unsecured shelf, confirmed at (P)Ba1.

This rating was not impacted:

   * Commercial paper rating: Not Prime.

Outlook is negative.

The confirmation of the company's Ba1 rating is based on the
elimination of a series of financial uncertainties faced by
Universal including the resolution of its financing plans and
the potential benefit derived from asset sales.  In confirming the
company's long-term ratings, Moody's considered the significant
debt reduction achieved through the recent issuance of
approximately $220 million in preferred stock as well as
Moody's expectation that substantially all of the proceeds from
sale of the company's non-tobacco operations, expected to close
within the next two months, will be used to repay additional debt.

Moody's recognizes that Universal maintains sufficient liquidity
and is in compliance with its recently completed amendment to its
$500 million revolving credit agreement.  However, Moody's notes
the mismatch between the size of the company's $1 billion
uncommitted lines of credit and this $500 million revolving credit
facility.  We expect the company to maintain its practice of
limiting its borrowings under the uncommitted line to no more than
$500 million.

Despite the resolution of these uncertainties, Universal's Ba1
corporate family rating reflects the continued earnings and cash
flow challenges that the company faces as an intermediary between
large cigarette manufacturers and tobacco growers around the
world.  This position has been challenged over the last several
years due to the structural change away from auction markets to
"contracted" markets which shifts greater inventory risk to
Universal.

Universal's rating is supported by its number one market share
position in the leaf tobacco trading and processing industry, its
well established relationships with large cigarette companies, and
global procurement and processing network that provides a
significant defense to new competitors.  Nevertheless, Universal
faces the on-going challenge of ensuring a high quality and
diverse supply of leaf tobacco for its customers by often pre-
funding farmer activity, guaranteeing loans for its suppliers,
committing to purchase entire crops within a price range and while
funding significant capital requirements of its own to process the
leaf tobacco.

Despite these measures, Universal's customers often dictate the
timing and pricing of their purchases, which may result in large
working capital investments, weak cash flow and higher debt
levels.  These factors may be difficult for Universal to
anticipate.  Universal's credit metrics, including leverage,
interest coverage and FCF, will remain well below investment grade
levels, despite the expectation that all of the proceeds from the
sale of the company's non-tobacco assets will be used for debt
reduction.  The Ba1 rating incorporates the expectation that over
the next 12 months, Universal's free cash flow will turn positive
driven primarily by improved earnings, better working capital
management, and much reduced capital expenditure requirements.

Universal's negative outlook reflects the on-going volatility risk
to the company's profitability and cash flow due to current
difficult supply conditions in many of the markets in which the
company operates.  Further deterioration in the company's
operating performance will likely result in higher working capital
needs and continued negative free cash flow which would reduce the
company' financial flexibility and limit further meaningful debt
reduction.  Negative rating actions could be possible if
Universal's financial performance and liquidity deteriorates from
plan resulting in negative free cash flow for an extended period
or if leverage increases above 5x.

Potential drivers under this scenario could be further supply
imbalances, delays in inventory absorption or shareholder
initiatives.  An upgrade to the company's ratings is unlikely in
the near-term given the expectation of limited debt reduction in
excess of amounts from the asset sale.  To stabilize the ratings,
Universal needs to generate positive free cash flow after working
capital, dividends and capital expenditures.  Universal will need
to demonstrate FCF measures consistently in the high single digits
and reduce leverage through debt reduction or improved
profitability comfortably below 4x.

Based in Richmond, Virginia, Universal, through its subsidiaries,
is the world's largest independent tobacco merchant.  Total
revenues were approximately $2.1 billion for fiscal year 2006
ending March.


UTILITY CRAFT: Panel Taps Poyner & Spruill as Bankruptcy Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Utility
Craft, Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for
the Middle District of North Carolina for permission to retain
Poyner & Spruill, LLP, as its bankruptcy counsel.

Poyner & Spruill will:

    a. provide legal advice with respect to the Committee's powers
       and duties and keep the Committee and the other unsecured
       creditors in the case informed of developments;

    b. assist the Committee in evaluating the legal basis for, and
       effect of, the various pleadings that will be filed by the
       Debtor and other parties-in-interest in the Debtor's
       chapter 11 case;

    c. investigate the acts, conduct, assets, liabilities, and
       financial condition of the Debtor;

    d. assist the Committee in evaluating the monthly reports and
       evaluating and negotiating the Debtor's or any other
       party's plan of liquidation and any associated disclosure
       statement;

    e. consult with the Debtor and its professionals concerning
       administration of the case;

    f. commence and prosecute any and all necessary and
       appropriate actions or proceedings on behalf of the
       Committee in the Debtor's bankruptcy proceedings;

    g. appear in Court to protect the interest of the Committee;

    h. perform all other legal services for the Committee which
       may be necessary and proper in the Debtor's bankruptcy
       proceedings; and

    i. monitor the liquidation sale of the Debtor's assets.

The Debtor tells the Court that the firm's professionals bill:

         Attorney                   Hourly Rate
         --------                   -----------
         Judy D. Thompson, Esq.         $310
         Diane P. Furr, Esq.            $300
         Anna S. Gorman, Esq.           $275
         Deborah M. Tyson, Esq.         $190

         Paralegal                  
         ---------
         Susan Black                    $100

Ms. Thompson assures the Court that her firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Ms. Thompson can be reached at:

         Judy D. Thompson, Esq.
         Poyner & Spruill, LLP
         One Wachovia Center
         301 South College Street, Suite 2300
         Charlotte, North Carolina 28202
         Tel: (704) 342-5299
         Fax: (704) 342-5264
         http://www.poynerspruill.com/

Headquartered in High Point, North Carolina, Utility Craft, Inc.,
dba Wood Armfield Furniture, specializes in manufacturing high
quality furniture and accessories.  The Company filed for chapter
11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06-
10816).  Christine L. Myatt, Esq., and J. David Yarbrough, Jr.,
Esq., at Nexsen Pruet Adams Kleemeier, PLLC, represent the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.


UTILITY CRAFT: Four-Member Official Creditors Committee Formed
--------------------------------------------------------------
The Hon. Catharine R. Carruthers of the U.S. Bankruptcy Court for
the Middle District of North Carolina approved the request of
Michael D. West, the Bankruptcy Administrator, to appoint an
Official Committee of Unsecured Creditors in Utility Craft, Inc.'s
Chapter 11 case.

The Committee consists of:

    1. Camille Smith
       Bernhardt Furniture Company
       Box 740
       Lenoir, North Carolina 28645

    2. Allison Watts
       Century Furniture Industries, Inc.
       Box 608
       Hickory, North Carolina 28603

    3. Jack R. Hayes
       BB&T
       Box 1847
       Wilson, North Carolina 27894

    4. Graham White
       Stanley Furniture Company
       Box 30
       Stanleytown, Va 24168

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.

Headquartered in High Point, North Carolina, Utility Craft, Inc.,
dba Wood Armfield Furniture, specializes in manufacturing high
quality furniture and accessories.  The Company filed for chapter
11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06-
10816).  Christine L. Myatt, Esq., and J. David Yarbrough, Jr.,
Esq., at Nexsen Pruet Adams Kleemeier, PLLC, represent the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.


VARIG S.A.: Submits Restated In-Court Reorganization Plan
---------------------------------------------------------
Eduardo Zerwes, the Foreign Representative of VARIG, S.A., and its
debtor-affiliates, delivered a restated In-Court Reorganization
Plan for the Debtors and a certified English translation of the
Plan with the U.S. Bankruptcy Court for the Southern District of
New York on July 27, 2006.

The Foreign Debtors filed the Plan with the Eighth Commercial
Bankruptcy and Reorganization Court in Rio de Janeiro, Brazil, on
July 17, 2006.  The Plan won creditor approval at a general
assembly that same day.

                     Summary of Restated Plan

The In-Court Reorganization Plan, as restated, provides for the
judicial disposal of VARIG's production unit to Volo do Brasil,
the new owner of the airline.

As previously reported, Volo acquired VARIG's production unit at
a July 20 auction.  Volo also purchased VARIG's cargo unit, VARIG
Logistica S.A., early this year.

The VARIG Production Unit comprises all of VARIG's and Rio Sul
Linhas Aereas S.A.'s regular air-carriage operations, including
commercial operations, and the Smiles Program.  The Unit excludes
Nordeste Linhas Aereas S.A.'s regular air-carriage operations,
all real properties and the VARIG Flight Training Center.

The Reorganization Plan also proposes:

   -- the utilization of proceeds from, among others, judicial
      disposal and non-operating assets to equalize the Foreign
      Debtors' liabilities; and

   -- that the Foreign Debtors stay operational with a market-
      niche profile.

                          Means of Payment

The Plan contemplates paying the Foreign Debtors' liabilities
from funds derived from Volo's offer, the Foreign Debtors' fixed
assets, their contingency assets, and revenue from operations.

For the Production Unit, Volo offered:

   1) $20,000,000 in cash;

   2) Debenture for Class I Creditors:

         -- face value of BRL50,000,000 maturing in 10 years;

         -- fixed interest of BRL4,200,000 per annum;

         -- convertible into 5% of the total voting capital of
            the corporation that absorbs the Unit; and

         -- Volo may opt to replace the issuance of debenture by
            payment of BRL41,481,000 in cash;

   3) Debenture for Class II Creditors and bankruptcy creditors:

         -- holders of credits arising during in-court
            reorganization:

         -- face value of BRL50,000,000 maturing in 10 years;

         -- interest of BRL$4,200,000 per annum;

         -- convertible to 5% in the total voting capital of the
            corporation that absorbs the Unit;

         -- Volo may opt to replace the issuance of debenture by
            payment of BRL41,481,000 in cash; and

         -- may be replaced with a BRL41,481,000 cash;

   4) charter of selected aircraft on an Aircraft, Crew,
      Maintenance and Insurance basis, assuring a BRL5,000,000
      minimum remuneration per annum for at least three years;

   5) a BRL1,000,000 per annum contract for the use of the Varig
      Flight Training Center for 10 years;

   6) $75,000,000 advance deposit;

   7) assumption of all obligations relating to the SMILES
      program estimated at around BRL70,000,000;

   8) lease of real properties at 0.8% of the properties' market
      value; and

   9) assumption of the carriage obligations to be performed,
      estimated at around BRL245,000,000.

The Foreign Debtors' fixed assets are  appraised at
BRL120,000,000.

The Foreign Debtors will also look into funds -- Contingency
Assets -- from settlement of these proceedings:

   1) A court proceeding where the Foreign Debtors seek
      compensation amounts due to lagging tariffs;

   2) Court or out-of-court proceedings where the Debtors seek
      Value-Added Sales and Service Tax refunds -- ICMS; and

   3) Other court proceedings in which the Debtors seek
      compensation amounts, offsets or any relevant credits or
      rights.

                     Recovery Under the Plan

The Foreign Debtors group claims in three classes:

        Class     Creditors
        -----     ---------
           I      Employee and Former Employees

          II      Creditors with Real Guarantee

                  * Holders of credits arising during
                    in-court reorganization and other
                    secured creditors

                  * Instituto Aerus De Seguridade Social

                  * Brazilian American Merchant Bank

         III      Lessors and Other Creditors

The Plan provides for this treatment of claims:

A. Class I
   
   Class I creditors will receive the Class I Debentures with par
   value totaling BRL92,000,000.  The Debentures will be
   deposited with the Reorganization Court.  The creditors may
   also receive payments if certain of the Foreign Debtors'
   assets are realized.

B. Class II General

   Creditors will receive the Class II Debentures with par value
   totaling BRL92,000,000.  Payments are conditioned on the
   realization of certain of the Foreign Debtors' assets.  These
   creditors have secured priority over proceeds from disposal of
   asset encumbered in their favor.

C. Class II Aerus

   Aerus is a closed supplemental pension fund created in 1982 to
   institute and administer private plans for the granting of
   pensions and income to employees of the sponsoring companies,
   including VARIG.

   Aerus will receive shares issued by:

   -- VarigLog, subject to a lien in Aerus' favor, for
      BRL24,000,000; and

   -- VEM Manutencao e Engenharia S.A., for the pro-rated amount
      equivalent to the purchase price per share.

   Aerus will also participate in the Class II Debentures.
   Payments are conditioned on the realization of certain of the
   Debtors' assets.

   Aerus will have priority to receive proceeds from realized
   credits on Lagging Tariffs up to the lien amount.

D. Class II BAMB

   BAMB will receive gift in payment of free and clear real
   properties already carried out and Class II Debentures.  BAMB
   may also receive payments upon the realization of certain
   of the Debtors' assets.  The Bank will have priority to
   receive proceeds from realized ICMS credits up to the value of
   the real properties given in payment but not yet delivered,
   which is approximately BRL17,000,000.

E. Class III

   Distribution from Class III will come from 70% of the Debtors'
   net operating flow for 20 years.

                          New Corporation

Pursuant to the In-Court Reorganization Plan, the Foreign Debtors
will incorporate a special purpose entity, which will remain
jointly liable for their tax obligations and operate their
facilities.

The Foreign Debtors will transfer these assets to the SPE:

   -- rights to the Contingency Assets; and

   -- the Debtors' fixed assets.

Furthermore, the Foreign Debtors will issue profit-sharing
debentures in favor of the SPE.  The securities will give their
holders earnings equivalent to 70% of the Debtors' net operating
flow.

During the In-Court Reorganization period, the Foreign Debtors
will be managed by a Judicial Manager elected by the creditors.
In addition, the creditors may, at any time, exercise the right
to separately elect a majority of the Debtors' Board of
Directors' members, until the time as the full settlement of the
SPE Debentures has been verified.  Creditors will also have the
right to veto:

   -- any capital increases, issuance of debentures, founder's
      shares or subscription bonuses by the Debtors;

   -- the approval of any legal acts which give rise to an
      encumbrance or obligations for the Debtors in an amount
      higher than that established in the deed of SPE Debentures;

   -- the election of any member of the Debtors' executive
      officers' board whom they deem unsuitable for the job; and

   -- any disposal of assets in an amount higher than the amount
      stipulated in the Deed.

                          SPE Debentures

Under the Reorganization Plan, the SPE will issue debentures,
which will give their holders credit rights against the SPE,
equal to the Foreign Debtors' total current debt amount, maturing
on July 17, 2026, and repayments on June 30th and December 31st
of each year, each with a face value equal to BRL0.01.  

The SPE Debentures will be issued in 16 different series, each
for an amount equivalent to the debt of the group to which each
Series will be earmarked.

                    Conditions to Effectivity

The Reorganization Plan contemplates that a Collective Labor
Bargaining Agreement will be entered into governing the severance
of the Debtors' employees and dealing with the system for
settling the non-bankruptcy and bankruptcy credits derived from
labor and occupational accidents legislation, including severance
amounts.

The conditions precedent for the effectiveness of the
Reorganization Plan also include:

   a. The agreement between the Debtors and Volo regarding the
      solution for transferring or terminating the employees
      abroad; and

   b. The approval of the Reorganization Plan by the Debtors'
      corporate bodies;

A full-text copy of the Certified English Translation of the
Debtors' In-Court Reorganization Plan is available for free
at http://researcharchives.com/t/s?f0f
   
VARIG's Foreign Representative also filed with the U.S. Bankruptcy
Court a Certified English Translation of the Foreign Debtors'
Projected Cash Flows until the year 2022.

A full-text copy of the Certified English Translation of the
Projected Cash Flows is available for free
at http://researcharchives.com/t/s?f10

                           About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG S.A.: Workers Stage Strike after Retrenchment News
--------------------------------------------------------
Hundreds of workers at VARIG, S.A., went on indefinite strike
after the airline announced its plan to cut ties with 5,500
workers as part of its plan of judicial recovery.

VARIG had disclosed that it would keep around 40% of its 9,485
employees and gradually rehire the dismissed workers once it
resumes growth.

According to EFE News Services (U.S.) Inc., VARIG has estimated
the layoffs to cost at around BRL253 million -- about $116
million.

VARIG is currently operating 10 aircraft with flights in seven
Brazilian cities -- Sao Paulo, Rio de Janeiro, Porto Alegre,
Fortaleza, Salvador, Recife and Manaus.  The airline still flies
to Frankfurt, Germany; Buenos Aires, Argentina; Miami and New
York, in the U.S.

                           About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG S.A.: Judge Ayoub Cancels Order Freezing Volo Deposit
-----------------------------------------------------------
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Brazil overturned a preliminary injunction imposed by a Rio de
Janeiro labor court on the $75,000,000 advanced for the purchase
of VARIG, S.A.'s assets, The Associated Press reports.

At the request of the airline workers' unions, the 33rd section of
the Rio de Janeiro Labor Court issued an order on Tuesday freezing
Volo do Brasil'S deposit to VARIG's account.

The amount was Volo's first installment toward buying VARIG's
assets and had been allocated to pay operating costs.  Pursuant to
the Preliminary Injunction Order, the Labor Court directed VARIG
to use the money to settle the airline's labor debts for canceling
work contracts.

However, Judge Ayoub ruled that the Labor Court had no
jurisdiction over the case, AP says.

                          About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VITACUBE SYSTEMS: Posts $1 Million Net Loss in Second Quarter
-------------------------------------------------------------
VitaCube Systems Holdings, Inc., filed its financial results for
the second quarter ended June 30, 2006, with the Securities and
Exchange Commission on July 27, 2006.

For the three months ended June 30, 2006, the Company incurred a
$1 million net loss on $577,181 of net revenues, compared with a
$1 million net loss on $222,670 of net revenues in 2005.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f01

                        Going Concern Doubt

Gordon, Hughes & Banks, LLP, expressed substantial doubt about
VitaCube Systems' ability to continue as a going concern after it
audited the Company's financial statement for the fiscal years
ended Dec. 31, 2004 and 2005.  The auditing firm pointed to the
Company's net loss of $5,015,877 for the year ended Dec. 31, 2005,
and significant net losses since inception.

Headquartered in Denver, Colorado, VitaCube Systems Holdings,
Inc., dba XELR8 Holdings, Inc. -- http://www.XELR8.com/--  
develops, sells, markets, and distributes functional foods,
beverages, and nutritional supplements products in the United
States.  Its product lines consist of a sports energy drink, a
protein shake, and an appetite suppressant chew, as well as other
vitamins, minerals, and specialty formulations, which are sold in
the form of tablets, capsules, and soft gel formulations.


WABTEC CORPORATION: Earns $21.1 Million in 2006 Second Quarter
--------------------------------------------------------------
Wabtec Corporation reported $21.1 million of net income in the
second quarter, compared with net income of $15.2 million earned
in the same period last year.

Sales were $261.9 million, about the same as the first quarter of
2006, but 1.7% lower than the prior-year quarter, which was $266.3
million.  Gross margin was 29.3% compared with 24.9% for the year-
ago quarter and 28.6% in the first quarter of 2006.

Commenting on the results, Albert J. Neupaver, Wabtec's president
and chief executive officer, said "[t]he company's operating
performance in the second quarter was strong, with our gross
margin more than 4 percentage points higher than the year-ago
quarter.  This margin performance demonstrates that we are making
meaningful progress in our efforts to improve Wabtec's cost
structure."  

                        Restructuring Plan

The Company's Board of Directors has approved a restructuring plan
to improve the profitability and efficiency of certain business
units.  As part of the plan, Wabtec will downsize two of its
Canadian plants, in Stoney Creek and Wallaceburg, by moving
production to lower-cost facilities and outsourcing.

The restructuring plan includes expenses of about $11 million pre-
tax, primarily for pension-related accounting charges and fixed
asset writedowns.  The expenses, most of which are non-cash, will
be recorded in the second half of 2006 and the first half of 2007,
in accordance with accounting and regulatory guidelines.  The
Company expects to realize a payback of less than one year on cash
restructuring expenses, which are expected to be about $3 million.

Wabtec Corporation -- http://www.wabtec.com/-- provides  
technology-based products and services for the rail industry.

                           *     *     *

Moody's Investors Service placed Wabtec Corp.'s senior unsecured
debt and long-term corporate family ratings at Ba2.  The ratings
were placed on July 11, 2003, with a stable outlook.

Standard & Poor's assigned the Company's long-term foreign and
local issuer credit ratings at BB.  The ratings were placed on
May 26, 1995, with a stable outlook.


WATSON PHARMA: Moody's Rates $650 Million Senior Term Loan at Ba1
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to the proposed
new senior unsecured credit facilities of Watson Pharmaceuticals,
Inc., and affirmed Watson's Ba1 Corporate Family Rating.  At
the same time, Moody's lowered the rating on Watson's senior
unsecured convertible debentures due 2033 to Ba2 from Ba1,
concluding a rating review for possible downgrade initiated on
March 15, 2006.  Concurrently, Moody's confirmed Watson's SGL-1
speculative grade liquidity rating.  These rating actions follow a
review of the financing terms being contemplated related to
Watson's pending acquisition of Andrx Corporation.  Following
these rating actions, the rating outlook is stable.

The downgrade of the CODES to Ba2 from Ba1 reflects the structural
subordination created by the addition of bank debt that benefits
from subsidiary guarantees.  The CODES do not benefit from
subsidiary guarantees.

Watson's Ba1 Corporate Family Rating reflects the criteria
outlined in Moody's Global Pharmaceutical Rating Methodology, with
consideration given to Watson's significant focus as a player in
the generic pharmaceutical market.  The Ba1 rating considers the
company's top-five position in the U.S. generic drug market,
diversity provided by several branded products, its solid free
cash flow, and demographic and regulatory trends that support
utilization of generic drugs.  Offsetting Watson's credit
strengths, the pending acquisition of Andrx Corporation will
increase Watson's gross debt levels and significantly deplete its
cash balance.  In addition, Andrx faces unresolved compliance
issues at its Davie, Florida manufacturing facility, and Moody's
understands that the FDA will not approve any new Andrx products
until these deficiencies are corrected.

Moody's expects Watson will sustain ratios of cash flow from
operations to debt and free cash flow to debt at or above the high
ends of the "Ba" category.  These ranges are between 15%
and 25% for CFO and between 10% and 15% for FCF.

The rating outlook is stable, although financial flexibility
within the current Ba1 rating will be significantly reduced after
the completion of the Andrx acquisition.  The stable rating
outlook reflects Moody's assumption that compliance issues in
Andrx's Davie, Florida facility will be favorably resolved by
2007.

The ratings could face downward pressure if the ratios of CFO and
FCF decline below the high end of the "Ba" ranges, respectively,
as specified in our Global Pharmaceutical Rating Methodology, i.e.
25% CFO and 15% FCF.

Conversely, the rating could face upward pressure if the ratios of
cash flow relative to debt significantly improve. Because of
Watson's focused on the generic drug market, Moody's would prefer
to see Watson sustain the ratios at the high end of the "Baa"
ranges i.e. CFO/Debt between 25% and 40%, and FCF/Debt between 15%
and 25% to consider an upgrade of the Corporate Family Rating to
Baa3. Following the acquisition of Andrx, the potential to achieve
these ratios over the near term appears limited.

Ratings assigned:

   * Ba1 sr. unsecured revolving credit facility of $500 million  
     due 2011

   * Ba1 sr. unsecured term loan of $650 million due 2011

Rating affirmed:

   * Ba1 Corporate Family Rating

   * Rating affirmed and expected to be withdrawn at the close of
     the financing:

   * Ba1 sr. unsecured revolving credit facility of $300 million
     due 2008

Rating downgraded:

   * Convertible sr. debentures of $575 million due 2023 to Ba2
     from Ba1

Rating confirmed:

   * SGL-1 speculative grade liquidity rating

Headquartered in Corona, California, United States, Watson
Pharmaceuticals, Inc. is a specialty pharmaceutical company
focused on branded and generic products.  Revenues in 2005 totaled
approximately $1.6 billion.


WATSON PHARMACEUTICALS: S&P Lowers $575 Mil. Notes' Rating to BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBB-' corporate
credit rating on Corona, California-based Watson Pharmaceuticals
Inc.  This and other existing ratings on the company were removed
from CreditWatch, where they were placed with negative
implications on March 13, 2006, following the company's
announcement that it was acquiring fellow generic drug  maker,
Andrx Corp., for $1.9 billion in cash.  The rating outlook is
negative.

Also, Standard & Poor's assigned its 'BBB-' rating to Watson's
$1.15 billion senior unsecured credit facility, consisting of a
$500 million revolver and a $650 million term loan, both due in
2011.

In addition, Standard & Poor's lowered its rating on Watson's $575
million in senior unsecured convertible notes due 2023 to 'BB+'
from 'BBB-' to reflect the notes' structural subordination to the
$1.15 billion credit facility.  Specifically, the credit facility
will have guarantees from all of Watson's material subsidiaries
that the existing convertible notes do not.

"The CreditWatch removal reflects Watson's increased
diversification of earnings and cash flows following the
completion of the Andrx acquisition, the expectation for continued
solid free cash flows, and our belief that Watson will quickly de-
lever following the acquisition," said Standard & Poor's credit
analyst Arthur Wong.

"The rating reflects the company's solid position in the highly
competitive U.S. generic drug industry and moderate financial
policies, offset partially by the increasing level of competition
in the generics industry."

Watson is a leading manufacturer of specialty and generic drugs
and is among the largest U.S. generic drug makers.  The U.S.
generic drug industry is poised to continue its solid growth, as a
long list of major blockbuster branded drugs lose patent
protection over the next five years.

In addition, the greater focus on controlling rising drug spending
should lead to the increased penetration of generic drug usage.
However, the industry is highly competitive, characterized by a
high level of price competition.  Watson has traditionally focused
on harder-to-manufacturer generic drugs, drugs that have a short
supply of raw material sources, or drugs in which new entrants
have to face additional regulatory hurdles.  This focus has
partially insulated the company from the high level of price
competition in the generic industry.  Thus, Watson has solid
franchises in oral contraceptives, pain medications, nicotine gum,
and patch-based products.  It has also built a specialty drug
franchise, which offers the benefits of higher margins.


WERNER LADDER: Court Approves Willkie Farr as Bankruptcy Counsel
----------------------------------------------------------------
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates obtained permission from the U.S. Bankruptcy
Court for the District of Delaware to employ Willkie Farr &
Gallagher LLP as their lead bankruptcy counsel, nunc pro tunc to
June 12, 2006.

Willkie Farr will:

   (1) prepare, on the Debtors' behalf, all necessary documents in
       the areas of corporate finance, employee benefits, tax and
       bankruptcy law, commercial litigation, debt restructuring
       and asset dispositions;

   (2) take all necessary actions to protect and preserve the
       Debtors' estates during the pendency of their chapter 11
       cases, including the prosecution of actions by the Debtors,
       the defense of actions commenced against the Debtors,
       negotiations concerning all litigation in which the Debtors
       are involved, and objection to claims filed against the
       Debtors' estates;

   (3) prepare, on Debtors' behalf, all necessary motions,
       applications, answers, orders, reports and papers in
       connection with the administration of their chapter 11
       cases;

   (4) counsel the Debtors with regards to their rights and
       obligations as debtors-in-possession; and

   (5) perform all other necessary or requested legal services to
       the Debtors in their chapter 11 cases.

Matthew A. Feldman, Esq., a member of Willkie Farr, is one of the
lead professionals from the firm performing services to the
Debtors.  He disclosed that Willkie Farr received a $1,073,337
retainer.

Mr. Feldman further disclosed that Willkie Farr's professionals
bill:

                Professional         Hourly Rate
                -----------          -----------
                Counsel              $255 - $865
                Paralegals           $115 - $225

Mr. Feldman assured the Court that Willkie Farr is a
"disinterested person" as the term is defined in Section 101(14),
as modified by Section 1107(b) of the Bankruptcy Code, and that
the firm represents no interest adverse to the Debtors and their
estates.

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes     
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  The firm of
Willkie Farr & Gallagher LLP serves as the Debtors' counsel.  Kara
Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S.
Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents
the Debtors as its co-counsel.  The Debtors have retained
Rothschild Inc. as their financial advisor.  At March 31, 2006,
the Debtors reported total assets of $201,042,000 and total debts
of $473,447,000.  (Werner Ladder Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


WERNER LADDER: Taps Young Conaway as Bankruptcy Co-Counsel
----------------------------------------------------------
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates ask permission from the U.S. Bankruptcy Court
for the District of Delaware to employ Young, Conaway, Stargatt &
Taylor, LLP, as their bankruptcy co-counsel, effective as of the
Petition Date.  

Larry V. Friend, vice-president, chief financial officer and
treasurer of Werner Holding Co., Inc., explains that Young Conaway
has discussed with the Debtors' proposed lead counsel, Willkie
Farr & Gallagher LLP, a division of responsibility.  Young Conaway
will make every effort to avoid duplication of duties and
responsibilities.

According to Mr. Friend, the Debtors employed Young Conaway as
their co-counsel because of the firm's extensive experience and
knowledge in the field of debtors' and creditors' rights and
business reorganizations under chapter 11 of the Bankruptcy Code.

Young Conaway will:

  (1) advise the Debtors with respect to their powers and duties
      as debtors-in-possession in the continued operation of
      their businesses and management of their properties;

  (2) assist the Debtors in preparing and pursuing confirmation
      of a plan of reorganization and approval of a disclosure
      statement;

  (3) prepare on the Debtors' behalf, all necessary applications,
      motions, orders, reports and other legal papers;

  (4) appear in Court and protect the Debtors' interest before
      the Court; and

  (5) perform all other legal services to the Debtors that are
      necessary and required in their bankruptcy proceedings.

The hourly rates of Young Conaway's professionals are:

      Professional          Designation    Hourly Rate
      -----------           -----------    -----------
      Robert S. Brady       Partner           $500
      Joel A. Waite         Partner           $500
      Matthew B. Lunn       Associate         $305
      Kara Hammond Coyle    Associate         $255
      Kimberly A. Beck      Paralegal         $155

Young Conaway will also seek reimbursement of out-of-pocket
expenses incurred in connection with its representation of the
Debtors.

In accordance with a May 19, 2006 engagement agreement, the
Debtors paid the firm an initial retainer of $180,000 in
connection wit the planning and preparation of initial documents
and its proposed postpetition representation of the Debtors.  
About $51,754 of the retainer has been applied to outstanding
balances existing as of the Petition Date.

Joel A. Waite, Esq., a partner at Young Conaway, assures the Court
that Young Conaway is a disinterested person as that term is
defined Section 101(14) of the Bankruptcy Code, and that the firm
represents no interest adverse to the Debtors and their estates.

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes     
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  The firm of
Willkie Farr & Gallagher LLP serves as the Debtors' counsel.  Kara
Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S.
Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents
the Debtors as its co-counsel.  The Debtors have retained
Rothschild Inc. as their financial advisor.  At March 31, 2006,
the Debtors reported total assets of $201,042,000 and total debts
of $473,447,000.  (Werner Ladder Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


WERNER LADDER: Court Okays Use of Cash Collateral on Final Basis
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes,
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates to use, on a final basis, the Cash Collateral
of:

   (i) the Senior Prepetition Agent and the Senior Prepetition
       Lenders; and

  (ii) the Junior Prepetition Agent and the Junior Prepetition
       Lenders, to the extent that the value of the Prepetition
       Collateral exceeds the value of the Senior Prepetition
       Secured Obligations.

The Hon. Kevin J. Carey directs the Prepetition Secured Lenders to
promptly turn over to the Debtors all Cash Collateral received or
held by them, provided that they are granted adequate protection.

The Prepetition Secured Lenders are entitled to adequate
protection of their interest in the Prepetition Collateral in an
amount equal to the aggregate diminution in value of the
Collateral.

The Debtors' right to use the Cash Collateral will terminate
automatically on the Termination Date of the DIP Credit Agreement
between the Debtors and Black Diamond Commercial Finance, LLC.

Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes     
ladders, climbing equipment and ladder accessories.  The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578).  The firm of
Willkie Farr & Gallagher LLP serves as the Debtors' counsel.  Kara
Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S.
Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents
the Debtors as its co-counsel.  The Debtors have retained
Rothschild Inc. as their financial advisor.  At March 31, 2006,
the Debtors reported total assets of $201,042,000 and total debts
of $473,447,000.  (Werner Ladder Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


WILLIAMS COMPANIES: Records $54 Mil. Charge Due to Jury Verdicts
----------------------------------------------------------------
Williams Companies, Inc., disclosed that it would record a
nonrecurring, after-tax charge of approximately $54 million in the
second quarter of 2006 as a result of returned jury verdicts
against two of its subsidiaries.

The amount represents the Company's estimate of the potential
future exposure for actual damages of $68 million and potential
pre-judgment interest of approximately $20 million.

In addition, the company said it is reasonably possible that any
ultimate judgment may include approximately $185 million in excess
of the $54 million 2006 second quarter charge.

The jury verdicts are subject to trial and appellate court review.
Entry of a judgment in the trial court is expected later in the
third or fourth quarter of 2006.

The matter is related to a contractual dispute surrounding
construction in 2000 and 2001 of certain refinery off-gas
processing facilities by Gulf Liquids, which the Company owned.
Last year the Company sold substantially all of Gulf Liquids'
assets to a third party.

Headquartered in Tulsa, Oklahoma, Williams Companies, Inc.
(NYSE:WMB) -- http://www.williams.com/-- through its  
subsidiaries, primarily finds, produces, gathers, processes and
transports natural gas.  The company also manages a wholesale
power business.  Williams' operations are concentrated in the
Pacific Northwest, Rocky Mountains, Gulf Coast, Southern
California and Eastern Seaboard.

                           *     *     *

As reported in the Troubled Company Reporter on May 17, 2006,
Fitch upgraded Williams Companies' outstanding senior unsecured
debt and issuer default rating to 'BB+' from 'BB'.

As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services raised to 'BB-' from 'B+'.  The
Williams Cos. Inc.'s corporate credit rating, including Northwest
Pipeline Corp., Transcontinental Gas Pipe Line Corp., and Williams
Production RMT Co.  S&P said the outlook is positive.


WORLDCOM INC: Beepwear To Appeal Disallowance of $4.8 Mil. Claim
----------------------------------------------------------------
Beepwear Paging Products LLC notified the U.S. Bankruptcy Court
for the District of New York that it will appeal to the U.S.
District Court for the Southern District of New York the Honorable
Arthur Gonzalez's order expunging and disallowing its $4,825,658
claim against Debtor SkyTel Corporation.

SkyTel and Beepwear entered into a Joint Marketing Agreement
effective Dec. 2, 1997, to jointly market and promote SkyTel's
one-way wireless messaging services to end users of pager watches
developed and distributed by Beepwear.  The parties amended the
JMA in 1999 and 2000.

Thereafter, the parties disputed over their obligations under the
Amended JMA.  To settle their dispute, the parties entered into a
Settlement Agreement, Release and Covenant Not To Sue, on
December 20, 2001.

SkyTel subsequently rejected the JMA and the Settlement Agreement
pursuant to Section 365 of the Bankruptcy Code.

Beepwear filed two claims in WorldCom Inc. and its debtor-
affiliates' bankruptcy cases:

   (a) Claim No. 10345 for $4,825,658, based on alleged damages
       under the JMA; and

   (b) Claim No. 10335 for $1,013,000, based on alleged damages
       under the Settlement Agreement.

The Debtors did not object to Claim No. 10335 and conceded that
the amount asserted by Beepwear was properly calculated as the
damages for the rejection.  However, the Debtors objected to Claim
No. 10345.

The Debtors argued that the plain language of the Settlement
Agreement demonstrated that it was executed by the parties in
complete satisfaction of SkyTel's obligations under
the JMA.  

Beepwear sought partial summary judgment against SkyTel holding
that:

   (a) the Debtors' rejection of the Joint Marketing Agreement
       and the Settlement Agreement constituted breach of the
       Agreements which, in turn, gave rise to a valid unsecured
       claim for damages; and

   (b) the Debtors' breach of the Settlement Agreement reinstated
       Beepwear's claims under the JMA.

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)


W.R. GRACE: Says Exclusivity Should Hinge on Asbestos Estimation
----------------------------------------------------------------
Some parties-in-interest in the chapter 11 cases of W.R. Grace &
Co., and its debtor-affiliates want the extension of the exclusive
periods for the Debtors to file a chapter 11 plan and solicit
acceptances for that plan conditioned on certain factors.

               Tort Claimants Wants Monthly Update  

Certain law firms representing tort claimants in the Debtors'
Chapter 11 cases argue that even if estimation of asbestos
liabilities were to proceed, there would be absolutely no reason
to grant the Debtors yet another extension of the Exclusive
Periods.

The Tort Claimants' Counsel are:

   * Baron & Budd, P.C.,
   * Environmental Litigation Group, P.C.,
   * The Law Office of Peter G. Angelos, P.C.,
   * Provost & Umphrey, LLP,
   * Reaud, Morgan & Quinn, Inc.,
   * Silber Pearlman, LLP, and
   * SimmonsCooper, LLC.

It makes much more sense to see what other alternative plans
might be proposed, and have the case ready to move to a
solicitation footing immediately on the conclusion of any
estimation proceeding, Kathleen M. Miller, Esq., at Smith,
Katzenstein & Furlow, LLP, in Wilmington, Delaware, tells Judge
Fitzgerald.

Ms. Miller tells Judge Fitzgerald that declining to extend
exclusivity would remove any possibility of muzzling or market
misleading, and allow all parties to focus on implementing a
consensual and confirmable plan of reorganization.

In addition, Ms. Miller asserts that the last two exclusivity
extensions were premised on recently stalled attempts of an
appointed Plan Mediator to kick-start negotiations for a
consensual plan.  She affirms that the continued exclusivity
extension is not only unwarranted in the absence of plan
negotiations, but it also forecloses possibility of any
meaningful attempts at renewed negotiation.

Ms. Miller also notes that the Debtors seek a virtually open-
ended extension of exclusivity.  Even if the Bankruptcy Court
decides to grant another extension, it should be of short
duration and readily revocable in the event the Court changes its
mind.

Under Section 1141(c), a reorganizing debtor is entitled to an
exclusive right to file a plan of reorganization for the first
120 days following a petition date with a further 60 days
exclusivity to solicit acceptances of that plan.  In Grace's
case, the exclusivity period would have expired before the end of
2001 absent previous extensions granted by the Bankruptcy Court,
Ms. Miller says.

Effective in October 2005, Ms. Miller continues, certain changes
to the Bankruptcy Code were enacted by the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, radically
altering the calculation a court must apply to requests for
exclusivity extensions.

Ms. Miller relates that while retaining the necessity of showing
cause, BAPCPA capped the power to extend the exclusive periods to
absolute 18 months maximum for the filing of a plan, and 20
months maximum for soliciting acceptances.  No discretion is
permitted to further extend exclusivity.

"Had the BAPCPA reforms had [sic.] been in place [on the Petition
Date], exclusivity would have expired over three and a half years
ago, even with the maximum possible extensions," Ms. Miller says.

Without those interminable exclusivity extensions, the Debtors'
case may well have seen a confirmed plan by now, Ms. Miller
points out.

Accordingly, the Tort Claimants' Counsel ask Judge Fitzgerald to
deny the Debtors' request and to permit any and all parties-in-
interest to file alternative plans of reorganization.

If an extension is granted, the Tort Claimants' Counsel suggest
that the Debtors be required to return to the Bankruptcy Court
each month and prove the cause by which they deserve further
extension of their Exclusive Periods.

              Canadian Crown Insists on Negotiations

As previously reported, Her Majesty the Queen in Right of Canada
has asserted contribution and indemnification claims against the
Debtors arising out of litigation instituted by Canadian
claimants.  The Crown forwarded to the Debtors a settlement
proposal relating to its claims on February 8, 2006.

As a result of the Crown's previous response to the Debtors'
Exclusive Periods extension, the Debtors' counsel represented at
a February 2006 hearing that asbestos claims payment would be
paid in full.

Francis A. Monaco, Esq., at Monzack and Monaco, PA, in
Wilmington, Delaware, relates that the Court's mediation process,
however, did not resolve the Crown's claims.  In addition, the
Debtors never responded to the Crown's settlement proposals.

Mr. Monaco tells Judge Fitzgerald that the Debtors' existing Plan
and Disclosure Statement do not adequately address the Crown's
claims.  Moreover, no process or procedure has been established
in Canada or in the United States to deal with asbestos property
damage claims, contribution and indemnification claims, or the
Crown's claims.

Therefore, the Crown asks Judge Fitzgerald to condition any
further exclusivity extensions on its continuing good-faith
negotiations with the Debtors.

                         Debtors Respond

Grace agrees that there has been "no good faith" progress toward
a confirmable plan.  Grace, however, disputes any notion that it
has not acted in good faith.

Grace has always been prepared to continue with the nearly
successful plan discussion 18 months ago, and it is the asbestos
claimants who abrogated that position and entered into a side
agreement that will undercut negotiation of a fully consensual
plan, James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub LLP, in Wilmington, Delaware, reminds the
Bankruptcy Court.

Mr. O'Neill contends that the key issue is not bad faith, but the
value of the claims against the estate.  Moreover, Mr. O'Neill
insists that termination of the exclusive periods will not "jump
start" anything consensual because it will do nothing to resolve
the value issue.  The only effect of lifting exclusivity will be
to open up a litigation track over competing plans.

Now that asbestos claimants have agreed with the Debtors that no
plan of any kind can be confirmed and no consensual resolution of
the Debtors' cases is possible without estimation of Grace's
asbestos liability, estimation proceedings should proceed
forthwith, Mr. O'Neill tells Judge Fitzgerald.

With respect to the scope of the estimation, the asbestos
claimants propose that the Estimation be confined in first
instance to claims for malignant disease, the theory being that
the issues will be more limited and that the first estimation can
occur sooner.  Grace agrees that there is some merit to the idea
that the Bankruptcy Court hear the malignant claims before the
non-malignant claims, but believes that the claimants' proposal
goes much too far and should be decided later, when the Court
actually has a full pre-trial record.

Specifically, Mr. O'Neill notes, the estimation of malignant
claims can neither be as limited nor as dispositive as promised.

"It will not be as limited because it cannot, contrary to
representation, be confined to 'pathology'," Mr. O'Neill
explains.  "In Torts 101, we all learned that there is more to a
tort claim than injury.  There must also be liability and
causation."

Mr. O'Neill asserts that there are critical scientific issues as
to what exposures to Grace products are causative and whether the
disease alleged is even asbestos-related in a lung cancer case.
Exposure evidence will inevitably bring x-rays back into the mix
-- apparently something the claimants wish to avoid.

Moreover, Mr. O'Neill avers that if the estimate of malignant
disease shows Grace to be solvent, the claimants will surely seek
estimation of the other claims.  However, even if the result for
malignant disease exceeds Grace's value, the other personal
injury and property damage claims must still be estimated in
connection with plan confirmation, he insists.

Mr. O'Neill points out that asbestos claimants ignore the
estimation's potential value in guiding further plan
negotiations.

"While the personal injury and property constituencies apparently
have reached a side agreement that will effectively by-pass any
decision by the Court regarding the viability of property claims,
no other constituency has endorsed this agreement," Mr. O'Neill
says.  "It is Grace's belief that the valuation of property
claims will facilitate reaching a consensual plan."

Considering that the property claims are the easiest to estimate
and the furthest along in the estimation process, Grace proposes
that both estimation schedules be reset as previously instructed
by the Court.

"That is, allowing for the time that has been consumed in the
mediation, the schedules should be shifted back but otherwise
remain unchanged," Mr. O'Neill explains.

In this fashion, Mr. O'Neill continues, discovery and litigation
can proceed on all tracks.  As the parties get further into the
process, it could well be that the hearings on estimation should
be phased, and the malignant personal injury claims should be
heard before the non-malignant claims.

However, Mr. O'Neill notes, the sequencing should be informed by
both the Questionnaire responses and the expert reports, and
should not be decided in the abstract before there is a complete
record.

With respect to the schedule for property damage track, Mr.
O'Neill relates that moving the existing schedule back by three
months would mean that the Phase I hearing should take place in
December.

The Court has provided available dates in January, February,
March and April 2007.  Hearing noting from the parties, the Court
selected dates in January for Phase I and March for Phase II.

"The Debtors are agreeable to those dates," Mr. O'Neill says.

Mr. O'Neill notes that Martin W. Dies, III, Esq., at Dies & Hile
L.L.P., the only lawyer approved by the Court to act as special
counsel, personally cannot be available for Phase I proceedings
in January. Mr. O'Neill says Grace is prepared to agree to
substitution of another lawyer for Mr. Dies.  "Grace believes it
[is] essential that this case move forward, particularly given
the hiatus taken for mediation."

                         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: Gets Court OK to Implement 2006-2008 Key Employee Plan
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes,
but does not require, W.R. Grace & Co. and its debtor-affiliates
to implement a long-term incentive plan for 2006 to 2008 as part
of a continuing long-term, performance-based incentive
compensation program for key employees.

As previously reported, the Debtors have sought and obtained Judge
Fitzgerald's permission to implement LTIPs for four separate
periods from 20002 to 2007.

The Ongoing Long-Term Incentive Program continues to implement an
incentive plan each year, with payouts based on performance of
the Debtors' businesses, and measured on a three-year performance
period commencing with the year in which a specific plan is
implemented.

Currently, the Ongoing LTIP consists of the 2004-2006 LTIP and
the 2005-2007 LTIP.

In accordance with Grace's design and goals of motivating the Key
Employees, the ordinary administration and implementation of the
Ongoing LTIP requires that an annual long-term incentive awards
should be made to those employees in the ordinary course of the
Debtors' business through the periodic LTIP.

The adoption and design of the 2006-2008 LTIP is consistent with
the Ongoing LTIP and the four prior LTIPs.

The 2006-2008 LTIP provisions are identical to the terms of the
previous Court-approved LTIPs in that:

   (1) The payments under the 2006-2008 LTIP will consist of
       100% cash.

   (2) Business performance is measured on a three-year
       performance period, commencing with 2006.

   (3) The applicable compounded annual three-year growth rate
       in core earnings before interest and taxes to achieve a
       100% award of the 2006-2008 LTIP target payment will be
       6% per annum.

   (4) Partial payouts for EBIT growth rates between 0% and 6%
       will be implemented on a straight-line basis.

   (5) The 2006-2008 LTIP payments will be increased at EBIT
       compounded annual growth rates in excess of the 6%, up to
       a maximum of 200% of the Base Target Payment at an annual
       compounded EBIT growth rate of 25%.

   (6) Payouts -- if earned -- will occur in 1/3 and 2/3
       installments in March, following two and three years of
       the LTIP.

   (7) The total target payout for the 2006-2008 LTIP will be no
       more than $11,800,000, which is the same total target
       payout with respect to previous LTIPs.

Judge Fitzgerald modifies the 2006-2008 LTIP to include these
provisions:

    (1) The Debtors' actual annual earnings before interest and
        taxes during the three-year LTIP performance period will
        be adjusted to account for any business acquisition that
        occurs during the performance period that has a purchase
        price to the Debtors of more than $50,000,000, in this
        manner:

           (i) With respect to the calendar year during the three-
               year performance period in which the Significant
               Acquisition closes, the Debtors' Actual EBIT will
               be decreased by calculating the EBIT of the
               Significant Acquisition -- Base SA EBIT -- for the
               full calendar year prior to the calendar year
               that the Significant Acquisition closes, in the
               same manner as the Debtors' Actual EBIT,
               multiplied by the number of full months remaining
               in the calendar year that the Significant
               Acquisition closes divided by 12;

          (ii) With respect to the first subsequent full calendar
               year, if any, during the three-year performance
               period after the Significant Acquisition closes,
               the Debtors' EBIT will be further decreased by the
               Base SA EBIT for the Pre-Acquisition Calendar Year
               multiplied by 1.06; and with respect to the second
               subsequent full calendar year, the Debtors' Actual
               EBIT will be further decreased by multiplying the
               Base SA EBIT for the Pre-Acquisition Calendar Year
               by 1.06 the result of which is further multiplied
               by 1.06.

    (2) In the event that the Debtors divest any of their
        businesses resulting to more than $50,000,000 in total
        proceeds the three-year LTIP performance period, the
        Debtors' Actual EBIT for the performance period will be
        increased to account for the divestiture using the
        approach that is the converse of the approach with
        respect to the Significant Acquisitions, so that the
        effect of divestiture on the Actual EBIT will be
        neutralized in the same manner as the effect of a
        Significant Acquisition.  Any realized gains or losses
        that result from the Significant Divestiture will not be
        included in the Debtors' Actual EBIT.

                         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.  


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (22)         125       (6)
Adventrx Pharma         ANX         (26)          23      (27)
AFC Enterprises         AFCE        (44)         176       31
Alaska Comm Sys         ALSK        (17)         565       24
Alliance Imaging        AIQ         (29)         683       19
AMR Corp.               AMR        (508)      30,752   (1,392)
Atherogenics Inc.       AGIX       (114)         227      182
Bally Total Fitn        BFT      (1,430)         452     (430)
Biomarin Pharmac        BMRN         49          469      306
Blount International    BLT        (134)         462      129
CableVision System      CVC      (2,468)      12,832    2,643
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL     (1,069)       1,409       32
Cenveo Inc              CVO         (56)       1,045      157
Choice Hotels           CHH        (118)         280      (58)
Cincinnati Bell         CBB        (727)       1,888       33
Clorox Co.              CLX        (156)       3,616     (123)
Columbia Laborat        CBRX         11           43       24
Compass Minerals        CMP         (63)         664      161
Crown Holdings I        CCK         124        7,287      174
Crown Media HL          CRWN       (165)       1,229       93
Deluxe Corp             DLX         (90)       1,330     (234)
Domino's Pizza          DPZ        (609)         395       (4)
Echostar Comm           DISH       (690)       8,935    1,438
Emeritus Corp.          ESC        (105)         725      (19)
Emisphere Tech          EMIS        (26)          13      (11)
Encysive Pharm          ENCY        (38)         119       82
Foster Wheeler          FWLT       (239)       2,032      (52)
Gencorp Inc.            GY          (88)         990      (28)
Graftech International  GTI        (166)         900      250
H&E Equipment           HEES        204          667       13
I2 Technologies         ITWO        (55)         211       (9)
ICOS Corp               ICOS        (36)         266      116
IMAX Corp               IMAX        (25)         238       33
Immersion Corp.         IMMR        (20)          47       32
Incyte Corp.            INCY        (55)         375      155
Indevus Pharma          IDEV       (147)          79       30
J Crew Group Inc.       JCG        (489)         353       97
Koppers Holdings        KOP         (95)         625      140
Kulicke & Soffa         KLIC         65          398      230
Labopharm Inc.          DDS          (8)          46        9
Level 3 Comm. Inc.      LVLT        (33)       9,751    1,333
Ligand Pharm            LGND       (212)         289     (144)
Lodgenet Entertainment  LNET        (66)         262       15
Maxxam Inc.             MXM        (661)       1,048      101
Maytag Corp.            MYG        (187)       2,954      150
McDermott Int'l         MDR          50       3,160       277
McMoran Exploration     MMR         (21)         434      (38)
Movie Gallery           MOVI       (171)       1,248     (843)
NPS Pharm Inc.          NPSP       (164)         248      168
New River Pharma        NRPH          3           96       82
Omnova Solutions        OMN          (6)         366       67
ON Semiconductor        ONNN        (75)       1,423      279
Qwest Communication     Q        (2,826)      21,292   (2,542)
Riviera Holdings        RIV         (30)         219        7
Rural/Metro Corp.       RURL        (93)         302       50
Sepracor Inc.           SEPR       (109)       1,277      928
St. John Knits Inc.     SJKI        (52)         213       80
Sulphco Inc.            SUF          31           42       32
Sun Healthcare          SUNH         10          523      (34)
Sun-Times Media         SVN        (198)       1,038     (271)
Tivo Inc.               TIVO        (33)         143       19
USG Corp.               USG        (313)       5,657   (1,763)
Vertrue Inc.            VTRU        (16)         443      (72)
Weight Watchers         WTW        (110)         857      (72)
WR Grace & Co.          GRA        (515)       3,612      929

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

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