TCR_Public/060810.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, August 10, 2006, Vol. 10, No. 189

                             Headlines

A.B. DICK: Files Fifth Modified Chapter 11 Plan of Liquidation
ABB LUMMUS: Has Until September 15 to Remove Civil Actions
ACXIOM CORP: ValueAct Capital Managing Partner Joins Board
ADSERO CORP: Receives $2.8 Million from Turbon Transaction
AES CORPORATION: Earns $169 Million in 2006 Second Quarter

ALASKA COMMS: June 30 Balance Sheet Upside-Down by $17.4 Million
ALERIS INT'L: Moody's Puts Rating on Review for Possible Downgrade
AMERICAN CELLULAR: Obtains New $250 Million Senior Credit Facility
AMERICAN REPROGRAPHICS: S&P Raises Corporate Credit Rating to BB
AMERISOURCEBERGEN CORP: Earns $188.8 Mil. in Fiscal Third Quarter

ANCHOR GLASS: District Court Rules on Encore's Appeal
ANCHOR GLASS: District Court Reverses Order on Naimoli Complaint
ANCHOR GLASS: Asks Court to Disallow 43 Retiree Claims
AOL LLC: Eyes 5,000 Job Cuts Over Next Six Months, Report Says
ARAMARK CORP: Fitch Downgrades Sr. Unsecured Debt Ratings to BB-

ARAMARK CORP: S&P Lowers Corporate Credit Rating to BB+ from BBB-
ARCH CAPITAL: Reports $142.9 Million Net Income in Second Quarter
ASARCO LLC: Wants to Hire Hydrometrics for Remediation Services
ASARCO LLC: Seeks Court's Approval for  EPA & Point Ruston Accords
BAKER & TAYLOR: Moody's Rates $165 Million Senior Notes at B3

BALLY TOTAL: Names Ronald G. Eidell as Senior VP and CFO
BALLY TOTAL: Moody's Holds $300 Million Sr. Notes' Rating at Ca
BIO-RAD LAB: Generates $317.7 Mil. of Revenues in 2006 Second Qtr.
BOYD GAMING: Purchases 3,447,501 Shares from Michael J. Gaughan
BROOKS SAND: Ch. 11 Trustee Selling All Assets for at Least $6.7M

BTAC MERGER: Moody's Withdraws B3 Rating on $200 Million Sr. Notes
CABLEVISION SYSTEMS: DBRS Reviews Low-B Ratings on Senior Notes
CARAUSTAR INDUSTRIES: Ceases Coated Recycled Paperboard Production
CATHOLIC CHURCH: Portland Can't Use Endowment Fund to Pay Claims
CATHOLIC CHURCH: Portland Settles Gripes on Appraisers' Retention

CENTURY ALUMINUM: Earns $45.8 Million in Second Quarter of 2006
CHC HELICOPTER: Investing $30 Million in New Helicopter Facility
CHENIERE ENERGY: Suppliers Accept CCTP Purchase Orders for Pipes
CHOICE HOTELS: June 30 Balance Sheet Upside-Down by $118 Million
CINEMARK USA: S&P Places B+ Corp. Credit Rating on Negative Watch

COLUMBUS MCKINNON: Earns $5.6 Million in 2007 1st Fiscal Quarter
COMMERCIAL CAPITAL: Fitch Affirms Class G Loan's Junk Rating
COMMSCOPE INC: Andrew Merger Prompts Moody's to Review Ratings
COMPLETE RETREATS: Gets Interim OK for Continued Utility Services
COMPLETE RETREATS: Paying $140,000 of Foreign Creditors' Claims

CORNING INC: Earns $514 Million in Second Quarter of 2006
CORRECTIONS CORPORATION: Board Approves 3-for-2 Stock Split
DADE BEHRING: Earns $37.6 Million in Quarter Ended June 30
DANA CORP: Equity Panel Questions Need to Modify Retiree Benefits
DANA CORP: Wants American Axle Settlement Pact Approved

DELTA AIR: Asks Bankr. Court to Terminate Pilots Retirement Plan
DELUXE CORP: Moody's Downgrades Senior Unsecured Ratings to Ba2
DIALOG GROUP: Restates 2005 Financial Statements
DOBSON COMMUNICATIONS: Posts $8.4 Million Net Loss in 2nd Quarter
ENTERPRISE PRODUCTS: Earns $126 Million in 2006 Second Quarter

EVERGREEN INT'L: Receives Required Consents for 12% Senior Notes
EXIDE TECH: Amends Proxy Statement for Aug. 22 Shareholders' Meet
FALCONBRIDGE LTD: Board Urges Shareholders to Take Xstrata's Offer
FASSBERG CONSTRUCTION: Files Second Amended Disclosure Statement
FLYI INC: Creditor Objects to Employee Incentive Plan Extension

FLYI INC: Can Sell Dulles Hangar Lease to MWAA for $7.6 Million
FORD MOTOR: To Invest $1 Billion in Michigan Facilities
FRESH DEL MONTE: Incurs $17.8 Million Net Loss in 2006 Second Qtr.
GENERAL MOTORS: Likely to Reach Job Cuts Targets Ahead of Schedule
GRUPO TMM: Shareholders to Approve $200 Million Securitization

GSI GROUP: Earns $6.2 Million in Second Quarter Ended June 30
HOME PRODUCTS: Atlas Partners Reports Sale of Georgia Facility
HONEY CREEK: MuniMae Asks Ct. to Determine Value of Apartments
INTERSTATE BAKERIES: Wants Joint Interest Pact With Panel Approved
INTERSTATE BAKERIES: Works on Overdue Annual & Quarterly Reports

JOY GLOBAL: ERISA Didn't Preempt Beloit Workers' Severance Claims
KAISER ALUMINUM: Salaried VEBA Trust Discloses 44% Equity Stake
LAND O'LAKES: Earns $34.8 Million in the Second Quarter of 2006
LUCENT TECH: Gets Autorite Des Marches Financiers' Approval Visa
MERIDIAN AUTOMOTIVE: Seeks Sept. 30 Plan-Filing Period Extension

MILLENIUM NEW: Moody's Junks Proposed $40 Mil. Secured Term Loan
MILLIPORE CORP: Earns $29.1 Million in Quarter Ended July 1
MITTAL STEEL: Moody's Confirms Ba1 Senior Unsecured Ratings
MUSICLAND HOLDING: Paul Weiss Hired as Trade Vendors Panel Counsel
NAVIGATOR GAS: Emerges from Chapter 11 Protection

OMI CORP: Earns $131.8 Million in 2006 Second Quarter
O'SULLIVAN IND: Hires BDO Seidman as Independent Accountants
OVERSEAS SHIPHOLDING: Earns $60.2 Million in Second Quarter 2006
OWENS CORNING: Balance Sheet Upside Down by $7.82 Bil. at June 30
OWENS CORNING: Wants to Pay Back Asbestos Trustees & Panel Members

PARAMOUNT RESOURCES: Moody's Junks Rating on $150 Million loan
PERKINELMER INC: Earns $35.7 Million in Quarter Ended July 2
PERKINELMER INC: Board Declares $0.07 Dividend Per Share
PETCO ANIMAL: Moody's Reviews Low-B Ratings for Possible Downgrade
PLIANT CORP: Plans $35 Mil. Issue of 13% Senior Notes Due 2010

PLIANT CORP: Enters into $200-Mil. Credit Pact with Merrill Lynch
PRESIDENT CASINOS: Taps Saul Leonard as Gaming Consultant
PROGRESS SOFTWARE: Delinquent Form 10-Q Prompts Delisting Notice
REFCO INC: Eight Refco LLC Claimants Can File Consolidated Claim
REFCO INC: Customers Want Rule 2004 Examination on Refco F/X

RENT-A-CENTER INC: S&P Puts BB+ Corp. Credit Rating on Neg. Watch
RENT-WAY INC: Acquisition Plan Prompts Moody's to Review Ratings
RF MICRO: Earns $14 Million in First Fiscal Quarter of 2007
SAINT VINCENTS: Plan-Filing Period Intact Until Further Ct. Ruling
SAINT VINCENTS: Agrees to Pay $3.6 Mil. Cure Amount for CBAs

SCHUFF INTERNATIONAL: S&P Affirms B- Rating & Revises Outlook
SILICON GRAPHICS: Wants to Enter Into Backstop Agreements
SILICON GRAPHICS: LGE Wants Stay Lifted to Pursue Dist. Ct. Action
STERLING FINANCIAL: Earns $10.3 Million in Quarter Ended June 30
TATER TIME: Files 3rd Amended Disclosure Statement in Washington

TENFOLD CORP: Posts $1.6 Million Net Loss in Second Quarter
TOWER AUTOMOTIVE: Wants Exclusive Period Extended to October 25
UNITY VIRGINIA: Wants to Hire Mullins Harris as Special Counsel
VESTA INSURANCE: District Court Appoints Subsidiaries' Liquidator
VESTA INSURANCE: Judge Bennett Converts Case to Chapter 11

W.R. GRACE: Has Until September 11 to File Plan of Reorganization
W.R. GRACE: Receives $2.54 Mil. from Mass. under Settlement Pact
WINN-DIXIE: Judge Funk Approves Solicitation Procedures
WINN-DIXIE: Inks Fifth Revision of DIP Financing Credit Agreement
WORLD HEALTH: Carve-Out Does Not Violate Absolute Priority Rule

XEROX CORP: Earns $260 Million in Second Quarter of 2006
XEROX CORP: Fitch Raises Trust Preferred Securities' Rating to BB
YUKOS OIL: Russian Prosecutors Begin Bankruptcy Fraud Probe

* Christopher Fagan Joins Seneca Financial as Financial Analyst

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

                             *********

A.B. DICK: Files Fifth Modified Chapter 11 Plan of Liquidation
--------------------------------------------------------------
A.B. Dick Company, nka Blake of Chicago, Corp., and its debtor-
affiliates filed with the U.S. Bankruptcy Court for the Central
District of California their Fifth Modified Chapter 11 Plan of
Liquidation on Aug. 4, 2006.

                       Terms of the Plan

The Plan provides for the transfer of the Debtors' cash and other
remaining assets, including all causes of action and avoidance
claims, to liquidating trusts that will be formed for the benefit
of holders of unsecured and subordinated claims.  The Blake
Liquidating Trust will be set-up to handle claims against Blake of
Chicago.  The Paragon Liquidating Trust will be set-up to handle
claims against Paragon Corporate Holdings, Inc.

As reported in the Troubled Company Reporter on Nov. 8, 2004,
Presstek, Inc., bought substantially all of the Debtors' assets
for $40 million.  The Debtors are still in the process of selling
their remaining assets including a facility in Rexdale, Ontario.

Proceeds from the sale of Blake's assets will be used to satisfy
claims against Blake's estate.  Proceeds from the sale of
Paragon's assets will be used to satisfy Paragon claims against
Paragon.

Holders of unsecured claims against Blake, owed $23,250,000, are
projected to recover 25.8% of their claims.  Subordinated claim
holders will get any cash left over after unsecured claims are
fully satisfied.  Holders of Blake equity interests get nothing
under the Plan.

Holders of unsecured claims against Paragon, owed $6,974,000, are
projected to recover 1.35% of their claims.  Subordinated claim
holders will get any cash left over after unsecured claims are
fully satisfied.  Holders of Paragon equity interests get nothing
under the Plan.

The Liquidating Trust will delegate the obligation to recover
preference and fraudulent transfers and other recoverable assets
to an oversight committee.  The Oversight Committee will be
composed of members of the Official Committee of Unsecured
Creditors, plus any members the Court may appoint.

                        Treatment of Claims

Under the Debtor's Plan, all Allowed Administrative Expenses and
Tax Claims will either be:

   a) paid in full on the Effective Date; or

   b) provided other treatment to which any holder and the
      Consolidated Estate will have agreed to in writing.

Holders of Secured Claims will receive either:

   a) the collateral in which it has a valid, perfected, and
      enforceable security interest (subject to any senior
      interests in that collateral under applicable law or
      contract) in full satisfaction of Allowed Secured Claim; or

  b) the proceeds of the liquidation of the claim holder's
     collateral up to the full amount of the holder's Allowed
     Secured Claim unless otherwise ordered by the Bankruptcy
     Court or agreed to by the holder.

If any Allowed Priority Claims have not been satisfied prior to
the Effective Date, unless the holder of that Claim has agreed
otherwise, the Disbursing Agent will pay all remaining Allowed
Class 2 Claims in full on the Effective Date.

MHR Fund holding MHR Monitoring Note Claim will receive in full
satisfaction a Pro Rata share of any distribution made by the
Blake Creditor Trust to holders of Allowed Class 3 Claims.

Holders of 2001 Note Claims will be entitled to their Pro Rata
share of any distributions after the MHR Monitoring Note has been
satisfied.

General Unsecured Claims Holders will receive a Pro Rata share in
full satisfaction of their claims.

A full-text copy of A.B. Dick's Modified Chapter 11 Plan of
Liquidation is available for a fee at:

http://www.researcharchives.com/bin/download?id=060809224009

Headquartered in Niles, Illinois, A.B. Dick Company --
http://www.abdick.com/-- is a global supplier to the graphic arts   
and printing industry, manufacturing and marketing equipment and
supplies for the global quick print and small commercial printing
markets.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Del. Lead Case No. 04-12002) on
July 13, 2004.  Frederick B. Rosner, Esq., at Jaspan Schlesinger
Hoffman, LLP, and H. Jeffrey Schwartz, Esq., at Benesch,
Friedlander, Coplan & Aronoff, LLP, represent the Debtors in their
restructuring efforts.  Richard J. Mason, Esq., at McGuireWoods,
LLP, represents the Official Committee of Unsecured Creditors.
When the Debtor filed for protection from its creditors, it listed
over $50 million in estimated assets and over $100 million in
estimated liabilities.  A.B. Dick Company changed its name to
Blake of Chicago, Corp., on Dec. 8, 2004, as required by the terms
of the APA with Presstek.


ABB LUMMUS: Has Until September 15 to Remove Civil Actions
----------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware extended, through Sept. 15, 2006, the
period within which ABB Lummus Global Inc. may remove actions
pursuant to Title 28, Section 1452 of the U.S. Code and Federal
Rules of Bankruptcy Procedure 9006 and 9027.

The Debtor does not anticipate that it will seek to remove any
civil actions, but asked for an extension to preserve its rights
to remove any civil action pending as of its bankruptcy filing.

Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process  
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries.  The group oversees
the construction of process plants and offshore facilities.  The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401).  Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor.  Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel.  No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's case.   When the Debtor filed for protection from its
creditors, it estimated more than $100 million in assets and
debts.


ACXIOM CORP: ValueAct Capital Managing Partner Joins Board
----------------------------------------------------------
Acxiom Corporation and ValueAct Capital have reached an agreement,
under which ValueAct Capital managing partner Jeffrey W. Ubben
will join the Company's board.

The agreement ends ValueAct Capital's attempt to elect its three-
person alternative slate to the Company's board of directors.  

Under the terms of the agreement:

   -- ValueAct Capital will vote its shares in favor of the
      Company's slate of board nominees - chairman and company
      leader Charles D. Morgan, Ann Die Hasselmo, William J.
      Henderson and Michael J. Durham - and terminates its
      proxy solicitation.  

   -- Mr. Ubben has been appointed to the Company's board of
      directors for a two-year term, effective immediately, and
      will become a member of the board's corporate governance
      committee and the newly created finance committee.  

   -- A second, ValueAct Capital selected, independent candidate
      for the board will be nominated for a two-year term,
      increasing the size of the Company's board of directors to
11. Mr. Ubben and the second candidate will be eligible for
      election to three-year terms in 2008.

The Company also disclosed that it seeks to repurchase
$300 million of it shares, in the range of $25 to $27, per share
through a modified "Dutch auction" self-tender offer.

Mr. Ubben, a ValueAct managing partner, said, "ValueAct Capital
has been investing in Acxiom since 2003, and today is the
company's largest shareholder, because we understand the value the
company delivers and its competitive advantage in the marketplace
and are committed to helping it deliver even greater value,"

                     About ValueAct Capital

ValueAct Capital(R), with approximately $3.7 billion in
investments, seeks to make active strategic-block value
investments in a limited number of public companies.  The
Principals have demonstrated expertise in sourcing investments in
companies they believe to be fundamentally undervalued, and then
working with management and/or the company's board to implement
strategies that generate superior returns on invested capital.
ValueAct concentrates primarily on acquiring significant ownership
stakes in publicly traded companies, and a select number of
control investments, through both open-market purchases and
negotiated transactions.

                   About Acxiom Corporation

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

                           *     *     *

Standard & Poor's Ratings Services assigned its 'BB' long term
issuer ratings on Acxiom, effective Aug. 8, 2006.  The outlook is
Stable.


ADSERO CORP: Receives $2.8 Million from Turbon Transaction
----------------------------------------------------------
ADSERO Corp. has closed a previously announced transaction with
Turbon in relation to selling certain customer accounts and
related inventory and fixed assets.  Turbon paid an aggregate of
approximately $2,800,000 of which approximately $1,920,000 reduced
the outstanding balance due to Turbon under the supply credit
facility between the Company and Turbon.  The balance of the
purchase price in the amount of approximately $880,000 was paid to
National Bank of Canada to reduce the Company's outstanding loan
balance with National Bank of Canada.

The Company also reported that it has signed a term sheet, with a
U.S. based fund, for a financing in the amount of $2.5 million in
order to replace the current senior lender and provide working
capital.  The term sheet is subject to due diligence and is
targeted to close today.

In addition, the Company also said it has signed a standstill
agreement with its senior lender to extend the time to pay the
loan out in full until tomorrow, August 11.

ADSERO Corp. (OTCBB:ADSO) -- http://www.adserocorp.com/--,  
through its wholly owned subsidiary Teckn-O-Laser Global Company,
is a North American printer cartridge re-manufacturer.  The
company manufactures and distributes re-manufactured toner
cartridges and inkjet cartridges.  These products are sold to a
variety of channels such as distributors and retail office supply
stores, both domestically and internationally.

                        Going Concern Doubt

Marcum & Kliegman, LLP, in New York, raised substantial doubt
about ADSERO Corp.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005.  The auditor pointed to the Company's
recurring operating losses and accumulated deficit of $19,376,401.


AES CORPORATION: Earns $169 Million in 2006 Second Quarter
----------------------------------------------------------
The AES Corporation's net income for the second quarter of 2006
increased 99% to $169 million, compared to $85 million in the
prior year quarter.

Revenues for the second quarter of 2006 increased 15% to
$3 billion, compared to $2.6 billion for the same quarter last
year.

Net cash from operating activities increased 32% to $434 million
in the second quarter, compared to $328 million last year, while
free cash flow increased 34% to $243 million compared to $182
million last year.

Net income for the six-months ended June 30, 2006 was $520 million
on revenues of $6 billion, compared to net income of $209 million
on revenues of $5.3 billion for the same period in 2005.

Net cash from operating activities for the six months ended June
30, 2006 was $977 million, versus $845 million for the same period
in the prior year.

"We had a strong quarter and AES continues to perform well," Paul  
Hanrahan, president and chief executive officer, said.  "Earnings
continued to benefit from solid operating price and volume trends.
The good earnings gains were also reflected in solid cash flow
growth, consistent with our guidance.  In the area of business
development, we increased our presence in alternative energy by
expanding into some of the fastest growing markets for wind
generation in the U.S. and Europe, and through the recent creation
of AES AgriVerde -- our first significant business venture in the
greenhouse gas offset production sector -- which should allow us
to capitalize on the growing market for greenhouse gas emissions
reductions."

Results for the second quarter reflect the Company's plans to sell
its 140 MW Indian Queens power generation plant in the U.K. and
Eden, a regulated utility in Argentina.  The operations have been
recorded as discontinued operations in the second quarter 2006
results.

AES Corp. (NYSE:AES) -- http://www.aes.com/-- is a global power  
company.  The Company operates in 26 countries on five continents.  
Generating 44,000 megawatts of electricity through 122 power
facilities, the Company's 14 regulated utilities amass annual
sales of over 82,000 GWh.

                           *     *     *

As reported in the Troubled Company Reporter on May 25, 2006,
Fitch affirmed The AES Corp.'s Issuer Default Rating at 'B+'.
Fitch also affirmed and withdrew the ratings for the company's
junior convertible debt.  Fitch said the Rating Outlook for all
remaining instruments is stable.

As reported in the Troubled Company Reporter on March 31, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on energy company The AES Corp. to 'BB-' from 'B+'.  S&P
said the outlook is stable.

As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including its
Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt.  Moody's said the rating outlook is stable.


ALASKA COMMS: June 30 Balance Sheet Upside-Down by $17.4 Million
----------------------------------------------------------------
Alaska Communications Systems Group, Inc.'s balance sheet at
June 30, 2006, showed total assets of $565.2 million and total
liabilities of $582.6 million, resulting in a stockholders'
deficit of $17.4 million.  The Company reported a $29.1 million
stockholders' deficit at March 31, 2006.

The Company posted net profit of $13.5 million from total
operating revenues of $85 million for the three months ended
June 30, 2006, compared to a net loss of $312,000 on total
operating revenues of $81 million for the same period in 2005.

For the six-months period ending June 30, 2006, the Company
reported a net loss of $15.96 million on total operating revenues
of $167.7 million, versus net loss of $44 million from total
operating revenues of $158.6 million for the same period in the
prior year.

A full-text copy of Alaska Communication's quarterly report is
available for free at http://ResearchArchives.com/t/s?f1d

Alaska Communications -- http://www.alsk.com/-- is an integrated  
communications provider in Alaska, offering local telephone
service, wireless, long distance, data, and Internet services to
business and residential customers.


ALERIS INT'L: Moody's Puts Rating on Review for Possible Downgrade
------------------------------------------------------------------
Moody's Investors Service placed Aleris International Inc.'s
ratings under review for possible downgrade.  This review is
prompted by the company's August 8 announcement of a merger
agreement with Texas Pacific Group.  The agreement provides for
TPG to acquire Aleris in a transaction valued at roughly
$3.3 billion, including existing debt to be assumed or repaid
of $1.6 billion.

Ratings placed under review:

On Review for Possible Downgrade:

Issuer: Aleris Deutschland Holding GMBH

   * Senior Secured Bank Credit Facility, Placed on Review for
     Possible Downgrade, currently Ba3

Issuer: Aleris International, Inc.

   * Corporate Family Rating, Placed on Review for Possible
     Downgrade, currently B1

   * Senior Secured Bank Credit Facility, Placed on Review for
     Possible Downgrade, currently Ba3

Outlook Actions:

Issuer: Aleris Deutschland Holding GMBH

   * Outlook, Changed To Rating Under Review From Negative

Issuer: Aleris International, Inc.

   * Outlook, Changed To Rating Under Review From Negative

Moody's review will focus on the capital structure of Aleris post
merger, the additional debt that might be incurred to finance the
transaction and the company's debt servicing capabilities.  
Moody's review will also focus on the strategic business impact
that might result and the growth objectives of the company going
forward.  The transaction, which remains subject to regulatory,
shareholder and other approvals, is not expected to close until
early 2007.

Aleris, headquartered in Beachwood, Ohio, had revenues of
$2.4 billion in 2005.  LTM March 31, 2006 pro-forma revenues for
the acquisitions made by Aleris in late 2005 and for the
acquisition of select aluminum assets of Corus Group plc were
$4.7 billion.


AMERICAN CELLULAR: Obtains New $250 Million Senior Credit Facility
------------------------------------------------------------------
American Cellular Corporation, a subsidiary of Dobson
Communications Corporation, has entered into a senior secured
credit facility that enables it to borrow up to $250 million from
a group of lenders.  Borrowings under the credit facility will
bear interest at a rate per annum equal to LIBOR plus an initial
2.25% spread.  The new senior secured credit facility consists of:

    -- A 5-year, $50.0 million senior secured revolving credit
       facility;

    -- A 7-year, $100.0 million senior secured multiple draw term
       loan facility; and

    -- A 7-year, $100.0 million senior secured delayed draw term
       loan facility.

The credit facility is guaranteed by ACC Holdings, LLC, American
Cellular's direct parent, and by each of American Cellular's
direct domestic subsidiaries (other than Alton CellTel Co.
Partnership) and is secured by a first priority security interest
in substantially all of the tangible and intangible assets of
American Cellular, its direct domestic subsidiaries (other than
Alton CellTel Co. Partnership) and ACC Holdings, LLC, as well as
by a pledge of American Cellular's capital stock and the capital
stock of its subsidiaries.  American Cellular intends to use
borrowings under the credit facility for general corporate
purposes.

The multiple draw term loan facility is available as:

    (i) $50 million was drawn down at the closing of the credit
        agreement; and

   (ii) the remaining $50 million may be drawn no later than
        Sept. 30, 2006.

The delayed draw term loan facility may be drawn in as many as
three draws prior to the first anniversary after the credit
agreement closing.

Under specified terms and conditions, including covenant
compliance, the amount available under the credit facility may be
increased by an incremental facility so long as:

    (i) American Cellular's ratio of consolidated secured debt to  
        EBITDA does not exceed 2.75 to 1.00; and

   (ii) American Cellular's ratio of consolidated debt to EBITDA
        does not exceed 6.50 to 1.00.

Under the credit facility, there are mandatory scheduled principal
or amortization payments of the term loan facilities and no
reductions in commitments under the revolving credit facility.  
Each term loan facility will amortize in an amount equal to 0.25%
per quarter, starting with the quarter ending Dec. 31, 2006 and
quarterly through June 30, 2013, with the balance due at maturity.   
The revolving credit facility is scheduled to mature in August
2011 and the term loan facilities are scheduled to mature in
August 2013.  However, if American Cellular has not refinanced or
repaid its 10% Senior Notes by February 1, 2011, then the
revolving credit facility and the term loan facilities will mature
on Feb. 1, 2011.

American Cellular is also required to make mandatory reductions of
the credit facilities with the net cash proceeds received from
certain issuances of debt and upon any material sale of assets by
it and its subsidiaries, subject to an 18-month reinvestment
provision.

Borrowings are subject to American Cellular's satisfaction of
various conditions at the time of borrowing.  The credit agreement
contains customary financial covenants and events of default.

American Cellular Corporation is a rural and suburban provider of
wireless communications services in the United States.  American
Cellular Corporation provides wireless telephone service in
portions of Illinois, Kansas, Kentucky, Michigan, Minnesota, New
York, Ohio, Oklahoma, Pennsylvania, West Virginia and Wisconsin.
American Cellular Corporation and ACC Holdings, LLC are owned by
Dobson Communications.

                           *     *     *

As reported in the Troubled Company Reporter on July 25, 2006,
Moody's Investors Service assigned a B1 rating to American
Cellular Corporations' proposed senior secured bank facility.  
At the same time, Moody's affirmed all existing ratings of ACC,
Dobson Cellular Systems, Inc. and their parent company, Dobson
Communications Corporation, including Dobson's B3 Corporate Family
Rating and SGL-2 speculative grade liquidity rating.  The outlook
is stable.


AMERICAN REPROGRAPHICS: S&P Raises Corporate Credit Rating to BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured ratings on Glendale, California-based American
Reprographics Co. LLC to 'BB' from 'BB-'.  The outlook is stable.

"The upgrade reflects the company's meaningfully improved credit
measures, due to continued debt reduction, and our expectation
that credit measures will remain consistent with the new rating
over the commercial construction cycle, notwithstanding the
company's aggressive acquisition strategy," said Standard & Poor's
credit analyst Emile Courtney.

EBITDA for the 12 months ended June 30, 2006, was approximately
$120 million, up 25% compared with the prior 12-month period.  
This was a result of increased commercial construction spending
and acquisitions completed in 2005.  The company's refinancing of
its first-lien credit facility in December 2005 resulted in a
decrease of annual interest expense by approximately $8 million.

Given expectations for growth in the commercial construction
industry in 2006, Standard & Poor's expects ARC's credit measures
to continue strengthening over the intermediate term.


AMERISOURCEBERGEN CORP: Earns $188.8 Mil. in Fiscal Third Quarter
-----------------------------------------------------------------
AmerisourceBergen Corporation reported operating revenue of
$14.4 billion for its fiscal third quarter ended June 30, 2006,
compared to $12.6 billion for the same period last year.  

Consolidated operating income in the fiscal 2006 third quarter
increased 12% to $188.8 million.  Consolidated operating income
was positively impacted by a gain in gross profit of $4.6 million
from pharmaceutical manufacturer antitrust litigation cases.

"Our June quarter results were excellent with pharmaceutical
distribution continuing its strong performance and PharMerica
improving," said R. David Yost, AmerisourceBergen's Chief
Executive Officer.  "Our record operating revenue was again above
our expectations, and our outstanding earnings per share
performance was driven by solid results in pharmaceutical
distribution, including continued strong growth in our specialty
business, improvement in PharMerica and our significant reduction
in interest expense.  With nearly $1.7 billion in cash, our
balance sheet continues to be strong and our financial flexibility
significant."

The Company repurchased $374 million of its stock in the June
quarter, and in the first nine months of fiscal 2006 has
repurchased $506 million of its stock, exceeding its target for
the fiscal year of $400 million to $450 million.

Cash generated from operations in the third quarter of fiscal year
2006 was $178 million and in the first nine months of fiscal 2006
was $881 million.

For the first nine months of fiscal 2006, AmerisourceBergen's
operating revenue was $42 billion compared to $37 billion for the
same period last year, a 13% increase.

Consolidated operating income in the first nine months of the
fiscal year increased 15% over the previous fiscal year's nine-
month period to $553.4 million primarily due to strong revenue
growth in both segments.

"In the quarter, another solid performance in Pharmaceutical
Distribution was aided by improving performance in PharMerica,"
said Kurt J. Hilzinger, AmerisourceBergen's President and Chief
Operating Officer.  "Drug Corporation's revenue growth was again
driven by our larger, lower-margin customers and new business,
while contributions from our fee-for-service agreements and
generic pharmaceuticals programs continued to be the primary
drivers of gross margin.  Our Canadian operations also contributed
to performance, and AmerisourceBergen Canada announced an
agreement to purchase Rep-Pharm, Inc., a distributor whose
addition is expected to increase annual Canadian operating revenue
to $1.4 billion, making the Company the second largest distributor
in Canada.

"Optimiz(R), our program to enhance the efficiency of our
distribution center network, continued to improve our cost
structure, and the last of six new large distribution centers
under the program became operational in Bethlehem, PA, during the
quarter.  Our customer-focused Transform program to improve value
to the customer and deliver better margins for the Drug
Corporation also aided performance.

"Our Specialty Group, which had more than $9 billion in revenue
over the last twelve months, continued to grow faster than the
broader pharmaceutical marketplace.  Its market-leading oncology
businesses continued their strong revenue and earnings
performance, while the Group's other distribution businesses
benefited from, among other things, new distribution agreements
for biotech drugs.

"The Packaging Group continued to expand its growing pipeline of
contract packaging programs for manufacturers and to broaden its
compliance packaging solutions for healthcare providers. The
integration of Brecon Pharmaceuticals Limited, a contract and
clinical trials packager located in Wales, United Kingdom, which
was acquired in the previous quarter, is proceeding smoothly.  
Brecon expands the Group's geographical reach to include packaging
for the European and Asian markets.

"Our PharMerica segment improved in the third quarter even as its
long-term care pharmacy business continues to be in a transition
year due to the implementation of Medicare Part D. Revenues
increased 8% over the previous fiscal year's third quarter, due to
the long-term care business's ability to capitalize on its
national footprint and deploy new technology offerings to
customers."

"We expect the fiscal year 2006 operating revenue growth to be in
a range of 12% to 13%, an increase from our previous range of 10%
to 12%, which assumes 9% to 11% growth in the fiscal fourth
quarter," said Mr. Yost.  "Our expected slower growth in the
coming quarter partially reflects the loss of two accounts
totaling $1.5 billion in annualized revenue which moved to another
distributor sooner than expected after they were acquired by a
company supplied by a competitor.

"We also are increasing, as well as narrowing, the range on our
expectations for diluted earnings per share on a GAAP basis in the
2006 fiscal year to a range of $2.16 to $2.24 from the previous
range of $2.06 to $2.21.  This fiscal 2006 guidance assumes a
fiscal fourth quarter range of $0.51 to $0.59 with no net impact
from special items in the quarter.  The new fiscal year guidance
range also reflects the net benefit of $0.11 from special items
including litigation gains; facility consolidations, severance and
other costs; and the fiscal second quarter tax adjustments and
investment gains, all recognized in the first nine months of
fiscal 2006.  Expectations for fiscal 2006 diluted earnings per
share continue to include the impact of $0.04 to $0.05 for equity
compensation expense.  For fiscal 2006, we expect operating
margins from the Pharmaceutical Distribution segment to be at the
lower end of our previously stated range of 1.15% to 1.25% due to
customer mix.

"Our expectation for cash flow from operations for fiscal 2006 is
being raised to a range of $700 million to $800 million from the
previous estimate of $600 million to $700 million.

"We repurchased $506 million of our stock during the first nine
months of fiscal 2006, exceeding our target for the fiscal year.
With $244 million remaining on our current share repurchase
program, we expect to continue to be active, depending on market
conditions, during the fourth fiscal quarter."

Mr. Yost concluded, "As is our normal practice, we will provide
guidance for fiscal year 2007 in early November when we release
the results for fiscal year 2006."

Headquartered in Valley Forge, Pa., AmerisourceBergen Corp.
(NYSE:ABC) -- http://www.amerisourcebergen.com/-- is one of the  
world's largest pharmaceutical services companies serving the
United States and Canada.  Servicing both pharmaceutical
manufacturers and healthcare providers in the pharmaceutical
supply channel, the Company provides drug distribution and related
services designed to reduce costs and improve patient outcomes.
AmerisourceBergen's service solutions range from pharmacy
automation and pharmaceutical packaging to pharmacy services for
skilled nursing and assisted living facilities, reimbursement and
pharmaceutical consulting services, and physician education.  With
more than $59 billion in annualized revenues, and employs more
than 13,000 people.  AmerisourceBergen is ranked #27 on the
Fortune 500 list.

                           *     *     *

As reported in the Troubled Company Reporter on June 5, 2006,
Moody's Investors Service upgraded AmerisourceBergen Corporation's
Corporate Family Rating to Ba1 from Ba2.  The Company's rating for
its senior unsecured notes was upgraded to Ba1 from Ba2.  The
speculative grade liquidity rating of SGL-1 is affirmed.  Moody's
said the rating outlook is stable.


ANCHOR GLASS: District Court Rules on Encore's Appeal
-----------------------------------------------------
Within the course of Anchor Glass Container Corporation' 2002
bankruptcy case, Encore Glass, Inc., filed a claim for $6,838,905.
Anchor Glass objected to Encore's claim.

Encore subsequently filed an appeal to the United States District
Court for the Middle District of Florida, Tampa Division, on the
Bankruptcy Court's order granting Anchor Glass' Motion for Summary
Judgment as to the contested matter.

Encore argued that the Bankruptcy Court erred by failing to
properly apply California law.  By ignoring California law, Encore
asserted that the Bankruptcy Court erred in determining that the
Amended Agreement was an unenforceable indefinite quantity supply
contract.

Encore further argued that the Bankruptcy Court erroneously
concluded that the Amended Agreement restricted manufacture of the
product at the Lavington Plant and that the sale of the Lavington
Plant excused Anchor Glass' performance under the Amended
Agreement.

The Honorable Susan Bucklew finds that the Bankruptcy Court's
legal conclusions adhere to basic principles of contract law and
would have been the same under California law.

Judge Bucklew also affirms the Bankruptcy Court's findings that:

   -- the Amended Agreement is not a requirements contract.
      Rather, the Amended Agreement is an unenforceable
      quantities contract since the parties have not contracted
      to buy or sell a readily ascertainable quantity; and

   -- Anchor Glass cannot perform under the Amended Agreement
      because of the sale of the Lavington Plant.  Judge Bucklew
      points out that the sale of the Lavington Plant is beyond
      Anchor Glass' control.

Accordingly, Judge Bucklew:

   (a) denies Encore's request for oral argument;

   (b) affirms the Bankruptcy Court's decision; and

   (c) directs the Clerk of the Court to close the case.

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: District Court Reverses Order on Naimoli Complaint
----------------------------------------------------------------
The Honorable James S. Moody, Jr., of the U.S. District Court for
the Middle District of Florida, Tampa Division, reversed an order
handed by the U.S. Bankruptcy Court for the Middle District of
Florida in Tampa dismissing a complaint filed by Vincent J.
Naimoli.  The District Court remands the Plaintiffs' cause for
further proceedings.

Mr. Naimoli, individually and on behalf of a class of retirees,
filed a complaint in the Bankruptcy Court against:

   * Anchor Glass Container Corporation,
   * The Service Retirement Plan Committee,
   * The Retirement Plan for Salaried Employees Committee,
   * Mark A. Kirk,
   * Carl H. Young III,
   * Jeffrey Tennyson,
   * Robert McGrew, and
   * John Ghaznavi.

Each of the Plaintiffs was a participant in a retirement benefit
plan for salaried workers.  Mr. Naimoli was the president and
chief operating officer of the old Anchor Glass until 1989.  At
retirement, his pension benefit should have been $6,488 per
month.  When Pension Benefit Guaranty Corporation took over the
Salaried Employees Plans, Mr. Naimoli received only $3,514 per
month.

Rebecca H. Steel, Esq., in Tampa, Florida relates that in 1989,
Vitro S.A. acquired substantially all of the original Anchor
Glass assets.  After Vitro's acquisition, old Anchor Glass did
not prosper and subsequently filed for a Chapter 11 bankruptcy
petition in 1996 in the United States Bankruptcy Court for the
District of Delaware.

During that period, in addition to the Salaried Employees Plan,
Anchor Glass maintained benefit plans for its hourly workers.  
The Hourly Workers Plans were heavily under funded by the end of
1996.

In 1997, substantially all of the old Anchor Glass assets were
sold to a group of purchasers, forming Anchor Glass Container
Corporation.  Mr. Ghaznavi became the chairman, chief executive
officer and director of the new Anchor Glass.

The Hourly Workers Plans remained under funded at the time the
old Anchor Glass was sold, Ms. Steele relates.  Thus, Anchor
Glass and Mr. Ghaznavi needed to develop a plan to reduce their
pension obligations.  Subsequently, Anchor Glass decided to merge
the Salaried Employees Plans and the Hourly Workers Plans in
1998.

The Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code mandate that a pension plan may not merge
one defined benefit plan with another unless each participant
would receive the same benefit immediately after the merger that
the participant would have received if the plan had terminated on
the date of the merger, Ms. Steel points out.

These statutes required the Plans to calculate the amount of
participants' benefits on a termination basis.  However, Anchor
Glass did not use the PBGC rates in calculating the termination
basis of benefits.  Instead, Anchor Glass used discount rates
that unreasonably made the plans seem more fully funded than they
actually were, Ms. Steel says.

In July 2002, the Plans were terminated due to under funding
problems.  PBGC assumed responsibility for the Plans.  PBGC
estimated that the Plans had $336,000,000 in assets to cover
approximately $555,000,000 in benefit liabilities.

Under the Complaint, Mr. Naimoli asserted three causes of action
against Anchor Glass and its officers and the Plans Committees:

   1. The Defendants breached their fiduciary duties by:

         * failing to adequately fund the Plans;

         * using unreasonable actuarial assumptions during the
           merger of the Plans;

         * using the assets of the Salaried Employees Plans
           for Anchor Glass' corporate interests and
           Mr. Ghaznavi's personal financial enrichment; and

         * related acts and omissions.

   2. Anchor Glass and Mr. Ghaznavi violated their duties to
      comply with ERISA requirements regarding plan mergers by
      purporting to merge the Salaried Employees Plan into the
      Hourly Workers Plans when they knew that they would cause
      the Hourly Workers Plans to fail to fulfill its pension
      obligations.

   3. The Defendants failed to provide plan documents as
      requested by Mr. Naimoli.

In June 2005, the Bankruptcy Court dismissed the Naimoli
Complaint.  In September 2005, Mr. Naimoli filed an appeal to the
United States District Court for the Middle District of Florida,
Tampa Division, on the Bankruptcy Court's order granting
dismissal of the Naimoli Complaint and the order denying a motion
for reconsideration and rehearing.

                   District Court Rules on Appeal

District Court Judge James Moody notes that the Plaintiffs
contended that the plan fiduciaries had overfunded the salaried
plan and underfunded two other plans for hourly workers.

Basically, the Plaintiffs argued that the Salaried Plan
participants have an available remedy to avoid any losses that
might be occasioned by the underfunded status created by the
merger of the plans.

On the other hand, the Defendants argued that Anchor Glass was
not a proper party to the Naimoli Complaint because once the
plans were merged and then terminated by the PBGC, neither Anchor
Glass nor any of the Defendants had any authority or power to
affect the Plaintiffs' retirement benefits because the PBGC now
controls the retirement benefits.

The District Court holds that granting the PBGC "the power to
commence, prosecute or defend on behalf of the plan any suit or
proceeding involving the plan" does not eliminate a participant's
existing right to bring suit, a right specifically granted to
plan participants under Section 1132(a)(2) of the Labor Code.

The District Court opines that while it is true that the decision
to merge plans may be an administrative decision rather than a
fiduciary one, it does not avoid a fiduciary's responsibility to
exercise loyalty to plan participants and protect their benefits.

The Naimoli Complaint asserted that the Defendants continue to
underfund the plan after the merger, which if proven would
constitute additional breaches of fiduciary duty, Judge Moody
says.

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: Asks Court to Disallow 43 Retiree Claims
------------------------------------------------------
Certain retirees and beneficiaries filed 43 claims arising from
Anchor Glass Container Corporation's life insurance policy,
medical insurance premium, pension payments and salaried
employees' savings plan.

Reorganized Anchor Glass asserts that the Retiree Claims are
invalid for one or more of these reasons:

   (a) The 2nd Amended Plan of Reorganization did not affect
       the life insurance policy, the medical premium payments
       and the salaried employees' savings plan;

   (b) The claimants receive pension payments from Pension
       Benefit Guaranty Corporation; or

   (c) The retirement benefits agreements with some claimants
       were rejected by the company.

Several of the claimants also filed multiple claims asserting
different statuses, Robert A. Soriano, Esq., at Shutts & Bowen
LLP, in Tampa, Florida, notes.

Accordingly, Reorganized Anchor Glass asks the U.S. Bankruptcy
Court for the Middle District of Florida to disallow 43 Retiree
Claims.

Among the largest Retiree Claims are:

       Claimant                   Claim No.   Claim Amount
       --------                   ---------   ------------
       Clifford Jones                1581      $1,879,085
       Larry Jones                   1161          93,776
       Elizabeth Rondi               1048          81,183
       Francis Wishart               1043          55,680
       Geneva Poole                  1507          44,660
       Cyril Kurtz                   1231          20,000
       Judith Willison                 35          17,000
       Paul Willison                   36          17,500
       Ernest Enocksen (deceased)     194          16,000
       Sharon Enocksen                195          16,000
       Lucille Podlucky               504          12,500

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)


AOL LLC: Eyes 5,000 Job Cuts Over Next Six Months, Report Says
--------------------------------------------------------------
AOL LLC is expected to reduce more than a quarter of its current
19,000 head count as it struggles to transform itself into a major
broadband provider, Antony Savvas writes for ComputerWeekly.com.

According to the report, around 5,000 employees will be affected
by the planned job cuts that will hit AOL operations worldwide
over the next six months.  The redundancies were announced during
a Web cast last week but did not specify what positions would be
eliminated, Megan Kuhn of Leesburg Today relates.

Mr. Savvas says AOL is expected to sell its European internet
access business as it concentrates more on offering free services
to help generate greater advertising revenues to its web portal
business.  According to Ms. Kuhn, AOL and France-based Neuf
Cegetel are negotiating the sale of AOL's French Access Services,
which includes its narrowband and broadband Internet Access
operations and a customer service in Marseille.  The transaction
is expected to close by the end of the year, the paper relates.

Headquartered in Dulles, Virginia, AOL LLC (fka America Online,
Inc.) is an online service provider, bulletin board system, and
media company operated by Time Warner.  In June, the company
launched portals in the UK, France and Germany.  AOL also offers
access and Web services in Canada.

In 2000, AOL and Time Warner announced plans to merge, in a deal
approved by the Federal Trade Commission on Jan. 11, 2001.  Since
its merger with Time Warner, the value of AOL has dropped from its
US$200 billion high and it has seen similar losses among its
subscription rate.


ARAMARK CORP: Fitch Downgrades Sr. Unsecured Debt Ratings to BB-
----------------------------------------------------------------
Fitch downgraded the Issuer Default Rating and senior unsecured
debt ratings for both ARAMARK Corporation and its wholly owned
subsidiary, Aramark Services, Inc., to 'BB-' from 'BBB'.  The
ratings remain on Rating Watch Negative.

The company disclosed that its board of directors agreed to accept
a management buyout offer from a group of investors led by
chairman and CEO, Joseph Neubauer, for $33.80 per share in cash.
The deal is still subject to stockholder and regulatory approval.

The transaction is to be financed through equity commitments by
the investors, as well as approximately $6.3 billion of debt
financing led by Goldman Sachs Credit Partners L.P. and J.P.
Morgan Securities, Inc.  

The transaction is valued at approximately $8.3 billion, including
the assumption of approximately $2.0 billion in debt.

Given the information available at this time, Fitch believes the
rating will be no higher than 'BB-' and could likely be downgraded
further; a multiple-notch downgrade upon closing of the
transaction is possible.

The resolution of Fitch's Rating Watch will be determined by an
evaluation of the ultimate financing of the purchase price,
overall mix of securities in the capital structure, and free cash
flow generating ability of the post-acquired entity.

As part of its rating evaluation, Fitch anticipates reviewing the
company's financial and operating strategies with ARAMARK's
management.  As this transaction demonstrates, existing language
in the 2002 indenture does not protect bondholders from a change-
in-control event and does not limit the company's ability to incur
additional indebtedness.  The indentures do have covenants that
have limitations on secured debt provisions.


ARAMARK CORP: S&P Lowers Corporate Credit Rating to BB+ from BBB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Philadelphia-based ARAMARK Corp. and its subsidiary, Aramark
Services Inc., including its corporate credit rating to 'BB+' from
'BBB-'.

All ratings remain on CreditWatch with negative implications where
they were placed on May 1, 2006, following an announcement that
ARAMARK's board of directors had received a proposal from a group
of investors led by its Chairman and CEO, Joseph Neubauer, to
acquire all of the outstanding shares of the company, for $32 per
share in cash.  This proposal included commitments from certain
investment banking firms stating that they were confident about
raising the approximately $6.25 billion of debt financing
necessary to complete the transaction.

The downgrade reflects Standard & Poor's assessment that ARAMARK
no longer possesses an investment-grade financial policy following
today's announcement that it has signed a definitive merger
agreement under which a group of investors including Joseph
Neubauer will acquire ARAMARK for $33.80 per share, plus the
assumption or repayment of approximately $2.0 billion of debt in a
transaction valued at approximately $8.3 billion.

The CreditWatch listing reflects Standard & Poor's expectation
that leverage for ARAMARK will increase substantially after
effecting the acquisition.  While financing details have yet to be
disclosed, a significant amount of the transaction is likely to be
financed with debt, and the corporate credit rating is likely to
fall to the 'B' rating category.  

The transaction, which is expected to be completed by late 2006 or
early 2007, is subject to receipt of stockholder and regulatory
approvals, as well as satisfaction of other customary closing
conditions.

To resolve the CreditWatch listing, Standard & Poor's will
continue to monitor developments, will meet with management to
discuss financial policies and operating strategies, and evaluate
the ultimate financing and terms of this going-private
transaction, including the implications to ARAMARK's existing
senior unsecured debt rating.


ARCH CAPITAL: Reports $142.9 Million Net Income in Second Quarter
-----------------------------------------------------------------
Arch Capital Group Ltd. filed its financial results for the second
quarter ended June 30, 2006, with the Securities and Exchange
Commission on Aug. 4, 2006.

For the three months ended June 30, 2006, the Company earned
$142.9 million of net income on $859.2 million of net revenues,
compared with $125.9 million of net income on $796.7 million of
net revenues in 2005.

At June 30, 2006, the Company's capital of $3.32 billion consisted
of $300 million of senior notes, representing 9% of the total,
$325 million of preferred shares, representing 9.8% of the total,
and common shareholders' equity of $2.69 billion, representing the
balance compared to the Company's capital of $2.78 billion
consisted of senior notes of $300 million, representing 10.8% of
the total, and common shareholders' equity of $2.48 billion,
representing the balance at Dec. 31, 2005.  The increase in
capital during 2006 of $535.3 million was primarily attributable
to the issuance of preferred shares and net income for the six
months ended June 30, 2006, partially offset by an after-tax
decline in the market value of our investment portfolio of $64.3
million, which was primarily due to an increase in the level of
interest rates.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f27

Arch Capital Group Ltd. (NASDAQ: ACGL) is a Bermuda public limited
liability company with approximately $3.32 billion in capital at
June 30, 2006 and, through operations in Bermuda, the United
States, Europe and Canada, writes insurance and reinsurance on a
worldwide basis.

                           *     *     *

As reported in the Troubled Company Reporter on July 4, 2006,
Standard & Poor's Ratings Services assigned its preliminary 'BBB'
senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock
ratings to Arch Capital Group Ltd.'s recently filed universal
shelf registration.


ASARCO LLC: Wants to Hire Hydrometrics for Remediation Services
---------------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to enter into
contracts with Hydrometrics, Inc., for remediation work at the
East Helena, Montana lead smelter plant.

ASARCO obtained the Court's permission to enter into a demolition
pact to satisfy the Environmental Protection Agency and the
Montana Department of Environmental Quality's requirement to clean
up the East Helena Facility by the end of 2006.

In conjunction with the demolition process, ASARCO contacted
Hydrometrics regarding three projects dealing with the waste from
the Facility's demolition:

   1. Corrective Action Management Unit Project

      Hydrometrics will submit a proposal for the design of the
      second phase of a Corrective Action Management Unit, which
      will be filled with construction debris from the smelter.

      In relation to this, Hydrometrics will:

         -- conduct a site geotechnical investigation;

         -- prepare a preliminary design to submit for regulatory
            review;

         -- respond to comments on the design; and

         -- make the necessary changes for inclusion in a final
            construction bid package.

      This project will take approximately five months to finish
      and is estimated to cost approximately $76,000.

   2. Remediation Cap Design

      Hydrometrics will design the remediation cap components for
      the smelter site, for use once the demolition is completed.
      The project will involve:

         -- conducting a site survey;

         -- preparing a preliminary design to submit for
            regulatory review;

         -- responding to comments on the design; and

         -- making the necessary changes for inclusion in a final
            construction bid package.

      The project will take approximately six months to finish
      and will cost approximately $99,000.

   3. Interim Measures Project

      Hydrometrics will provide ASARCO with certain technical
      support for 2006 interim measure and groundwater sampling
      activities at the Facility.

      The project will include ongoing groundwater and surface
      water monitoring, and field and technical support for site
      characterization activities associated with design and
      implementation of remedial action measures.

      The total cost for the project will not exceed $101,000.
      Payments will be made based on the actual hours performed
      and invoices, according to Hydrometrics' hourly rates.

Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas,
relates that Hydrometrics has previously worked on the Facility.  
Hydrometrics designed the Phase I CAMU cell for the Facility,
which was completed in 2001.  Hydrometrics also designed the cap
for the Tacoma, Washington smelter.

Mr. Davis adds that Hydrometrics' previous experience with
landfill design at the Facility will save on redundant
engineering costs.

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: Seeks Court's Approval for  EPA & Point Ruston Accords
------------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to approve the Environmental
Protection Agency Agreement and the Second Amendment to the Tacoma
Smelter Consent Decree.

In January 2006, the Court authorized ASARCO LLC to sell
approximately 97 acres of real property in Tacoma and Ruston,
Washington, to MC Construction Consultants, Inc.  MC Construction
subsequently assigned its rights under the Tacoma Purchase
Agreement to Point Ruston LLC.

Tony Davis, Esq., at Bakers Botts L.L.P., in Houston Texas,
relates that the Property was subject to remediation in accordance
with a consent decree dated Jan. 3, 1997, issued by the United
States District Court for the Western District of Washington in
the case United States v. Asarco, Inc., No. 91-5528B, and the
amendments thereto.  The United States Environmental Protection
Agency has a lien on the Property, Mr. Davis says.

The Sale Order provides that the Sale will not become effective
and the Closing will not occur until:

   -- an agreement resolving the EPA Lien is approved by the
      Bankruptcy Court; and

   -- the EPA and Ruston Point have entered into an amended
      Consent Decree that has been approved and entered by the
      Washington District Court.

Accordingly, to resolve the EPA Lien, ASARCO and the EPA agree
that:

   (a) Ruston Point will pay $1,500,000, from the Property's
       $6,220,000 Purchase Price, directly to the EPA at Closing;

   (b) ASARCO will receive a minimum payment of $7,500,000.  When
       ASARCO receives the payments, 1/3 of each payment will be
       paid directly to the EPA and 2/3 of each payment will be
       paid to ASARCO until the EPA has received $2,500,000;

   (c) any contingent payout will be split evenly between ASARCO
       and the EPA until the EPA receives $1,500,000;

   (d) ASARCO will grant to the EPA a security interest in the
       payments due, owing or payable to ASARCO under the Tacoma
       Purchase Agreement and Development Pay-out Agreement only
       to the extent of the payments required to be paid to the
       EPA; and

   (e) immediately after receipt of the $1,500,000 payment, the
       EPA will remove and release its Lien on the Property.

A full-text copy of the EPA Settlement Agreement is available for
free at http://ResearchArchives.com/t/s?f21

The EPA and Ruston Point also amended the Tacoma Smelter Consent
Decree to include Ruston Point as a new party to the Consent
Decree.  The Second Amendment provides that Ruston Point will be
responsible for the clean-up of the Tacoma smelter and its
adjacent properties.  The Amendment therefore suspends ASARCO's
obligations pending satisfactory completion of Ruston Point's
performance obligations.

A full-text copy of the 2nd Amended Tacoma Smelter Consent Decree
is available for free at http://ResearchArchives.com/t/s?f20

                          EPA's Statement

The federal government reached an agreement that will help to
protect the health and the environment of Tacoma and Ruston-area
citizens by expediting the estimated $28 million cleanup of the
Asarco Smelter Site in Tacoma and Ruston, Washington.  The
agreement will allow Asarco to sell the Asarco Smelter property,
which is part of the Commencement Bay Nearshore/Tideflats
Superfund Site, to Lacey Washington-based developer Point Ruston
LLC.  This ensures that the cleanup work required on the
approximately 97 acquired acres of contaminated land will be
completed.  Under this agreement, Point Ruston will assume all
cleanup obligations on the property owned by Asarco and assume
significant cleanup obligations on adjacent land which was also
contaminated by Asarco's past operations.

"[This] action marks significant progress in the ongoing
remediation of this site and reaffirms our continued commitment
to ensuring that hazardous waste sites are cleaned up," Matt
McKeown, principal deputy assistant attorney general for the
Justice Department's Environment and Natural Resources Division,
said.  

"We are pleased that the amended consent decree will provide a
positive outcome for all parties involved and most importantly
will expedite the start of the cleanup and remediation of the
site."

According to Granta Y. Nakayama, EPA's assistant administrator for
Enforcement and Compliance Assurance, "This agreement is a giant
step in transforming this site from a highly contaminated former
smelting facility to a residential development.  The cleanup and
redevelopment of this land is a win all around.  It enhances the
environment, improves the local community, and promotes economic
development."

Point Ruston intends to undertake residential and commercial
development on the purchased property and will clean up the land
to residential environmental standards.  Along with the purchased
property, Point Ruston has agreed to clean up the non-residential
adjacent, contaminated property, which due to the development will
have significant public access.

The land is the former site of a smelting facility operated by
Asarco from 1912 to 1985.  A byproduct of the smelting process,
called slag, was used by Asarco as fill material throughout the
facility and was also poured into Commencement Bay to extend the
shoreline of the smelter site by approximately 500 feet.  Slag and
other wastes from past smelter operations contaminate the
property, and are a continuing source of contamination of
groundwater below the site and to marine sediments offshore of the
smelter property.  According to current estimate, as much as
15 million tons of slag exists on the site today.

In 1997, a consent decree between EPA and Asarco mandated cleanup
of the uplands portions of the smelter property and the adjacent
properties.  In 2000, EPA issued an administrative order requiring
Asarco to perform the sediment and groundwater work.  While Asarco
has performed a substantial amount of the work required, much of
the cleanup has yet to be implemented.

On Aug. 9, 2005, Asarco filed for bankruptcy protection under
chapter 11 of the bankruptcy code in the United States Court for
the Southern District of Texas.  On Jan. 30, 2006, the Bankruptcy
Court approved the sale of the property to MC Construction and the
sale agreement was subsequently assigned to Point Ruston.

As part of pre-conditions of the sale set forth by the Bankruptcy
Court, Point Ruston was required to reach an agreement with the
Environmental Protection Agency regarding the cleanup of the
property it is attempting to purchase.  The United States has also
agreed to release a CERCLA lien against the property in exchange
for $1.5 million at closing and contingent payments over time that
may reach $4 million so that the property can be sold free and
clear of any encumbrances.  These funds will be placed into a
special account to be used to clean up contaminated sediments in
areas not covered by this agreement.  As part of the settlement,
Point Ruston will also pay EPA's oversight costs.

Residential yards in north Tacoma, Wash., which were contaminated
by the fallout from the Asarco Smelter are not covered in this
agreement.  The cleanup of these yards is being funded from a
Trust Fund using money from a previous settlement with Asarco.

The Department of Justice lodged the amendment to the existing
consent decree in the United States District Court for the Western
District of Washington.  The consent decree will be subject to a
30-day public comment period and subsequent judicial approval.  It
is available on the Justice Department Web site
http://www.usdoj.gov/enrd/Consent_Decrees.html

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).


BAKER & TAYLOR: Moody's Rates $165 Million Senior Notes at B3
-------------------------------------------------------------
Moody's Investors Service assigned ratings to Baker & Taylor
Acquisitions Corporation, the surviving entity, following its
merger with BTAC Merger Corp.  The merger occurred upon the
successful completion of the acquisition of BTAC Merger Corp. by
private equity sponsor Castle Harlan.

These ratings are assigned:

Baker & Taylor Acquisitions Corporation:

   * Corporate family rating of B2,
   * $165 million senior secured second lien notes of B3.

The outlook is stable.

These ratings are withdrawn:

BTAC Merger Corporation:

   * Corporate family rating at B2;
   * $200 million senior unsecured notes at B3.

The B2 corporate family rating is primarily driven by the
company's weak credit metrics and an aggressive financial policy
all of which constrain the rating category despite numerous
qualitative factors that support a higher rating.  Baker &
Taylor's sizable market share and efficient distribution network
are more indicative of an investment grade company; while its
scale, geographic and segmental diversification, and organic
revenue growth point to a Ba rating; however, its sizable customer
concentration is more reflective of a B rating.

The rating outlook is stable.  A positive outlook could be
assigned should the company sustain FCF above 5% and EBIT
above 1.5x.  Negative rating pressure could develop should the
company's liquidity deteriorate or operating performance decline
such that free cash flow remains consistently negative or should
Debt rise above 6.5x and EBIT fall below 1x.

The senior secured second lien notes are rated one notch below the
corporate family rating reflecting their junior position to the
secured first lien asset based revolving credit facility.  The
senior secured notes will be guaranteed by each subsidiary that is
either a borrower or guarantor under the asset based revolving
credit facility and will have a second lien on all assets behind
the asset based revolving credit facility.

Baker & Taylor Acquisitions Corp. is a holding company whose sole
asset is Baker & Taylor Corporation which is a leading domestic
and international distributor of books and entertainment products
to libraries and retailers that is headquartered in Charlotte,
North Carolina.


BALLY TOTAL: Names Ronald G. Eidell as Senior VP and CFO
--------------------------------------------------------
Bally Total Fitness Holding Corporation's Board of Directors named
Ronald G. Eidell as senior vice president, chief financial officer
and principal financial officer.

The Company disclosed that it entered into an interim executive
services agreement with Tatum LLC, pursuant to which Mr. Eidell, a
partner of Tatum LLC, was engaged as the Company's Senior Vice
President, Finance.

Prior to joining Bally, Mr. Eidell, served as interim president
and chief executive officer of NeoPharm, Inc. from March 2005 to
October 2005.  Mr. Eidell has been a partner with Tatum LLC, a
national professional services firm, since October 2004.  Prior to
that he served as the chief financial officer of each of Esoterix,
Inc., a provider of medical testing services, from 2001 to 2003,
NovaMed, Inc., a healthcare provider, from 1998-2001, and
Metromail Corporation, a provider of information services, from
1996-1998.  He also serves as a director of NeoPharm, Inc., where
he serves on the audit committee.

                Separate Agreement With Former CFO

The Company also disclosed that Carl J. Landeck ceased serving as
chief financial officer of the Company effective on April 13,
2006.  In connection with Mr. Landeck's departure, the Company
entered into a Separation Agreement with Mr. Landeck on Aug. 1,
2006.  The separation agreement released the Company from any and
all claims or causes of action that Mr. Landeck might have against
the Company.

     Modification of Chairman and CEO's Employment Agreement

The Company further disclosed that on August 6, 2006, the board of
directors, with Mr. Toback recusing himself, approved a
modification to the Employment Agreement with Paul A. Toback, the
Company's Chairman and Chief Executive Officer, in exchange for
Mr. Toback's agreement to resolve his various claims, including
the Company's obligation to implement a supplemental retirement
plan for his benefit.  Certain directors dissented from the
decision.

A full text-copy of the agreements with Mr. Toback and Mr. Landeck
may be viewed for free at http://ResearchArchives.com/t/s?f2a

Bally Total Fitness Holding Corporation
-- http://www.Ballyfitness.com/-- is the largest and only  
nationwide commercial operator of fitness centers, with over 400
facilities located in 29 states, Mexico, Canada, Korea, the
Caribbean, and China under the Bally Total Fitness, Bally Sports
Clubs and Sports Clubs of Canada brands.  Bally offers a unique
platform for distribution of a wide range of products and services
targeted to active, fitness-conscious adult consumers.

                         *     *     *

As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally Total
Fitness Holding Corp., including the 'CCC' corporate credit
rating, on CreditWatch with developing implications, where they
were placed on Dec. 2, 2005.  


BALLY TOTAL: Moody's Holds $300 Million Sr. Notes' Rating at Ca
---------------------------------------------------------------
Moody's Investors Service affirmed all the credit ratings of Bally
Total Fitness Holding Corporation.  The rating outlook remains
negative.

The rating action reflects:

   (1) significant near term debt maturities and a probable need
       for a recapitalization or sale of the company

   (2) negative free cash flow generation

   (3) litigation and regulatory risks and

   (4) extensive material weaknesses in internal controls.

The ratings also reflect the company's recent filing of financial
statements through the first quarter of 2006 with the Securities
and Exchange Commission and business model changes implemented to
address flat revenues and weak profitability.

Moody's affirmed these ratings:

   * $143 million senior secured term loan B facility due 2009,
     rated B3

   * $100 million senior secured revolving credit facility due
     2008, rated B3

   * $235 million 10.5% senior unsecured notes due 2011, rated
     Caa1

   * $300 million 9.875% senior subordinated notes due 2007,
     rated Ca

   * Corporate family rating, rated Caa1

The negative rating outlook reflects Moody's expectation that,
absent a sale of the company, Bally may need to restructure its
debt to stabilize its capital structure.

The outlook could be changed to stable or positive if:

   (i) the senior subordinated notes are refinanced on reasonable
       terms prior to April 15, 2007;

  (ii) adequate availability is maintained under the revolving
       credit facility;

(iii) regulatory and legal risks are substantially reduced;

  (iv) material progress is made in remediating internal control
       weaknesses; and

  (iv) positive free cash flows are expected to be sustained.

The rating could be downgraded if:

   (i) efforts to sell the company and refinance near term debt
       maturities are not successful and the probability of
       default increases or

  (ii) continued negative free cash flow generation results in a
       decrease in Moody's assessment of Bally's enterprise value
       at default.

Bally, through its wholly owned subsidiaries, is one of the
largest publicly traded commercial operators of fitness centers in
North America.  Revenues for the 12 month period ending March 31,
2006 were $1.1 billion.


BIO-RAD LAB: Generates $317.7 Mil. of Revenues in 2006 Second Qtr.
------------------------------------------------------------------
Bio-Rad Laboratories, Inc., reported its financial results for the
second quarter ended June 30, 2006.  Second-quarter revenues from
continuing operations were $317.7 million, up 9.1% compared to the
$291.3 million reported for the second quarter of 2005.  

Included in this figure is one-time additional revenue of
$11.7 million resulting from a licensing settlement agreement
reached with bioMerieux, which had a favorable impact on both the
second quarter and year-to-date figures for 2006.  On a currency-
neutral basis, revenues increased 9.7% compared to the same period
last year or 5.6% excluding the settlement.  This sales increase
was the result of growth across product areas in both the Life
Science and Clinical Diagnostics segments.  

Income from continuing operations for the quarter was
$32.3 million compared to $18.4 million during the second quarter
last year.  At 58.1%, second-quarter gross margin from continuing
operations was markedly higher than the 55.1% reported for the
second quarter of 2005.  Excluding the impact of the bioMerieux
settlement, gross margin was 56.5%.

Year-to-date revenues from continuing operations grew by 6% to
$626.1 million compared to the same period last year. Normalizing
for the impact of currency effects, growth was 9%.  Income from
continuing operations increased by 32.5% to $63.5 million, or
$2.41 per share compared to $47.9 million for the first six months
of 2005.  Year-to-date gross margin was 57.5% compared
to 55.4% in the same period last year.

                     Second-Quarter Highlights

Second-quarter basic earnings from continuing operations were
$1.22 per share compared to $0.71 and $0.69, respectively, during
the same period of last year.

As a result of a settlement reached with bioMerieux, Bio-Rad
reported additional revenue in the second quarter of
$11.7 million in royalties and licensing fees.

Life Science segment net sales for the quarter were $134.4
million, up somewhat from $133.1 million reported in the second
quarter of last year.  Sales in this area increased by 1.0% or
1.8% excluding currency effects over the same period last year.

The Clinical Diagnostics segment reported sales of $180.2 million,
a 16.1% increase over the same period last year of $155.2 million.  
On a currency-neutral basis, segment sales increased 16.6%.
Excluding the bioMerieux settlement, currency-neutral sales
increased by 8.9%.

In April, the Company announced that it had signed a multi-year
agreement in which Premier, one of the largest group purchasing
organizations in the United States, had agreed to a three-year
sole-source contract with Bio-Rad covering diabetes monitoring
instrumentation and products.

During the quarter, Cell Signaling Technology and Bio-Rad entered
into a partnership agreement in which CST will develop a broad
array of antibody assays that will run on the Bio-Plex(R)
suspension array system.
    
Life Science segment net sales for the quarter were
$134.4 million, up 1% compared to $133.1 million in the second
quarter last year.  On a currency-neutral basis, sales increased
by 1.8%.  Performance in this segment was the result of a number
of factors including sales of amplification reagents, process
chromatography media and the Bio-Plex(R) suspension array system,
which continue to show impressive growth worldwide.

These results were somewhat tempered, however, by the continued
erosion of BSE testing revenue as well as increased competition in
real-time instrument sales worldwide.  During the second quarter,
the Company launched iQ-Check(R) tests, a series of rapid food
diagnostic tests based on a quantitative PCR platform.  
The new tests are both sensitive and specific allowing for the
detection of common food pathogens in less than 24 hours.

The Clinical Diagnostics segment reported sales of
$180.2 million, a 16.1% increase over the second quarter last year
of $155.2 million.  On a currency-neutral basis, segment sales
increased 16.6%.  These results are due in part to growth across
the product line in addition to the bioMerieux settlement.

In April, the Company introduced the Platelia Dengue NS1 Ag
Assay for dengue screening.  The test provides early diagnosis of
dengue acute infections, a tropical disease transmitted to humans
from mosquitoes.  Also during April, the Company launched a
diagnostic test for celiac disease, an autoimmune disorder
characterized by individuals having abnormal reactions to
gluten, a protein found in wheat, barley, and rye.

"We are pleased to report overall solid financial performance
during the first half of the year," said Norman Schwartz, Bio-Rad
President and Chief Executive Officer. "As the year progresses, we
will continue to pursue targeted opportunities to expand the
business and improve operational efficiencies."

Bio-Rad Laboratories, Inc. (AMEX: BIO) (AMEX: BIOb)  --
http://www.bio-rad.com/-- is a multinational manufacturer and  
distributor of life science research products and clinical
diagnostics.  Based in Hercules, California, Bio-Rad serves more
than 70,000 research and industry customers worldwide through a
network of more than 30 wholly owned subsidiary offices.

                           *     *     *

As reported on the Troubled Company Reporter on June 2, 2006,
Bio-Rad Laboratories, Inc.'s 7-1/2% Senior Subordinated Notes due
2013 carry Moody's Investors Service's Ba3 rating and Standard &
Poor's BB- rating.


BOYD GAMING: Purchases 3,447,501 Shares from Michael J. Gaughan
---------------------------------------------------------------
Boyd Gaming Corporation purchased 3,447,501 shares of its common
stock from Michael J. Gaughan.

The Company disclosed it issued a primary share note to Mr.
Gaughan, in the aggregate principal amount of $111,990,001.48, as
consideration for the purchased shares.

The Company's purchase of the shares and issuance of the Primary
Share Note were consummated pursuant to the terms of the Stock
Purchase Agreement it entered into on Aug. 1, 2006 with Mr.
Gaughan.  The purchased shares were retired and returned to
authorized but unissued status.

Pursuant to the Unit Purchase Agreement between Mr. Gaughan, the
Company and certain Company affiliates, Mr. Gaughan has agreed to
resign from the Company's board of directors, and from his
positions with Coast Hotels and Casinos, Inc. and Coast Casinos,
Inc., by September 6, 2006.  However, he will remain the chief
executive officer of the South Coast Hotel and Casino until the
consummation of the sale of South Coast to him.

The Company further disclosed that the sale by Mr. Gaughan of
11,842,504 aggregate shares of the Company's common stock to a
group of underwriters in a registered public offering was
consummated on Aug. 7, 2006.

Based on the underwriting agreement the Company entered into on
Aug. 1, 2006 and the approved $32.4844 price per share to Mr.
Gaughan for the sale of his shares of the Company's common stock,
the Company expects to record a non-cash, pre-tax charge in the
third quarter of 2006 estimated to be approximately $65 million to
write-down South Coast to its fair value less costs to sell.

Deutsche Bank Securities Inc. and Lehman Brothers Inc. were joint
book-running managers of the offering.

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD)
-- http://www.boydgaming.com/-- is an owner and operator of 19  
gaming entertainment properties located in Nevada, New Jersey,
Mississippi, Illinois, Indiana and Louisiana.  The Company is also
developing Echelon Place, a world-class destination on the Las
Vegas Strip, expected to open in early 2010.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 30, 2006,
Standard & Poor's Ratings Services placed a 'B+' rating on Boyd
Gaming Corp.'s $250 million senior subordinated notes due 2016 and
affirmed its existing ratings on the Company, including its 'BB'
issuer credit rating.  S&P said the outlook is stable.

As reported in the Troubled Company Reporter on Jan. 27, 2006,
Moody's Investors Service assigned a B1 to Boyd Gaming
Corporation's new $250 million senior subordinated notes due 2016.

Fitch Ratings assigned a 'B+' rating to Boyd Gaming Corporation's
$250 million senior subordinated notes.


BROOKS SAND: Ch. 11 Trustee Selling All Assets for at Least $6.7M
-----------------------------------------------------------------
Kenneth C. Henry, the chapter 11 appointed in Brooks Sand &
Gravel, LLC's bankruptcy case, asks the U.S. Bankruptcy Court for
the Western District of Kentucky for permission to sell
substantially all of the Debtors assets to Johnson Materials, LLC,
subject to better and higher offers.

Johnson Materials is offering to buy the Debtor's assets for
$6.7 million in cash and the assumption of certain liabilities.  
It is entitled to a $335,000 break-up fees in case another entity
wins the auction for the assets.

Interested bidders must file a competing bid on or before
Aug. 25, 2006.  Competing bids must equal or exceed the sum of the
purchase price, the break-up fee, recoverable costs and $150,000.  
Interested bidders must also tender to the Chapter 11 Trustee a
$100,000 good faith cash deposit.  If there will be a qualifying
overbid, the Chapter 11 Trustee will conduct an auction in
Courtroom #1, Fifth Floor, United States Courthouse, 601 West
Broadway, Louisville, Kentucky 40202 at 9:30 a.m. on Wednesday,
Aug. 30, 2006.

Dean A. Langdon, Esq., at Wise Delcotto PLLC, in Lexington, Ky.,
told the Court that selling the Debtor's assets as a going concern
maximizes benefits to creditors.

Headquartered in Louisville, Kentucky, Brooks Sand and Gravel LLC
leases an 184-acre sand reserve and processing plant in Bethlehem,
Indiana, in Clark County and employs about 15 people.  Smith
Mining and Materials LLC owns a 226-acre limestone quarry in
Brooks, Kentucky, in Bullitt County and employs about 25 people.
Brooks Sand and Smith Mining filed for chapter 11 protection on
Feb. 9, 2006 (Bankr. W.D. Ky. Case No. 06-30259).  Dean A.
Langdon, Esq., and Laura Day DelCotto, Esq., at Wise DelCotto PLLC
represented the Debtors.  No Official Committee of Unsecured
Creditors has been appointed in this case.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.  Judge Cooper approved
the appointment of Kenneth C. Henry as chapter 11 trustee.  J.
Bruce Miller, Esq., and his firm, J. Bruce Miller Law Group
represent the chapter 11 trustee.


BTAC MERGER: Moody's Withdraws B3 Rating on $200 Million Sr. Notes
------------------------------------------------------------------
Moody's Investors Service assigned ratings to Baker & Taylor
Acquisitions Corporation, the surviving entity, following its
merger with BTAC Merger Corp.  The merger occurred upon the
successful completion of the acquisition of BTAC Merger Corp. by
private equity sponsor Castle Harlan.

These ratings are assigned:

Baker & Taylor Acquisitions Corporation:

   * Corporate family rating of B2,
   * $165 million senior secured second lien notes of B3.

The outlook is stable.

These ratings are withdrawn:

BTAC Merger Corporation:

   * Corporate family rating at B2;
   * $200 million senior unsecured notes at B3.

The B2 corporate family rating is primarily driven by the
company's weak credit metrics and an aggressive financial policy
all of which constrain the rating category despite numerous
qualitative factors that support a higher rating.  Baker &
Taylor's sizable market share and efficient distribution network
are more indicative of an investment grade company; while its
scale, geographic and segmental diversification, and organic
revenue growth point to a Ba rating; however, its sizable customer
concentration is more reflective of a B rating.

The rating outlook is stable.  A positive outlook could be
assigned should the company sustain FCF above 5% and EBIT
above 1.5x.  Negative rating pressure could develop should the
company's liquidity deteriorate or operating performance decline
such that free cash flow remains consistently negative or should
Debt rise above 6.5x and EBIT fall below 1x.

The senior secured second lien notes are rated one notch below the
corporate family rating reflecting their junior position to the
secured first lien asset based revolving credit facility.  The
senior secured notes will be guaranteed by each subsidiary that is
either a borrower or guarantor under the asset based revolving
credit facility and will have a second lien on all assets behind
the asset based revolving credit facility.

Baker & Taylor Acquisitions Corp. is a holding company whose sole
asset is Baker & Taylor Corporation which is a leading domestic
and international distributor of books and entertainment products
to libraries and retailers that is headquartered in Charlotte,
North Carolina.


CABLEVISION SYSTEMS: DBRS Reviews Low-B Ratings on Senior Notes
---------------------------------------------------------------
Dominion Bond Rating Service placed the ratings of Cablevision
Systems Corporation -- B (low) and its wholly-owned subsidiary,
CSC Holdings, Inc. -- BB (low) and B (high) Under Review with
Developing Implications following the Company's announcement that
it intends to restate its financial results related to stock
options and stock appreciation rights for the 1997-2002 period.  
This is as a result of a voluntary review that the Company
initiated to explore its past accounting treatment of these
options and rights.

   * Bank Debt  Under Review - Developing BB (low)

   * Senior Notes and Debentures Under Review -
     Developing B (high) -- Aug. 8, 2006

   * Senior Notes  Under Review - Developing B (low)

DBRS expects the adjustment to be relatively modest to the
Company's overall financial position. Despite this, DBRS's
review is expected to focus on two factors.  Firstly, the
Company's ability to attain waivers from debtholders and other
required parties as DBRS expects it will not be in a position to
file financial statements for some time -- until its review and
the necessary adjustments are made.  Secondly, while the Company
is expected to generate positive free cash flow for 2006, DBRS
will focus on the Company's liquidity position as this is mainly
in the form of unutilized credit facilities.

DBRS notes that the Company's cable operations continue to remain
strong with a stable business risk profile. Although limited Q2
2006 results were released, the Company reported good subscriber
growth in all of its services as a result of its successful
triple-play bundling strategy.  This has allowed the Company to
maintain its industry-leading service penetration levels and ARPU
and led it to increase its cable subscriber and revenue guidance
for 2006.


CARAUSTAR INDUSTRIES: Ceases Coated Recycled Paperboard Production
------------------------------------------------------------------
Caraustar Industries, Inc. ceased coated recycled paperboard
production at its Rittman Paperboard facility in Rittman, Ohio.

The step was made by the Company to exit the CRB business.  It
will incur approximately $1.7 million in severance and other costs
associated with the decision, which will be reported in
discontinued operations.  

Approximately 125 salaried and hourly employees will be affected
by the cease of CRB operations.  It will provide the employees
with transition services, including severance pay, limited
benefits continuation, and out placement assistance.  

Although CRB operations will cease, limited activities will
continue at the facility.

               Restructuring of Tube, Core Segment

The Company also disclosed on Aug. 2, its decision to restructure
certain aspects of its Tube, Core, and Composite Container
segment.  The restructuring will allow the Company to better
streamline sales, outsource certain engineering costs, and close
duplicative administrative offices.  

Caraustar will incur approximately $1.7 million in costs
associated with the restructuring, of which, approximately $1.4
million will be cash costs, consisting of severance and other
employee related costs, costs associated with lease buy out, and
costs associated with relocating equipment.  The remaining $0.3
million will be non-cash costs associated with asset impairment
charges.  Approximately 27 salaried and hourly employees will be
affected by the decision and is expected to result in
approximately $3 million in annual savings.  The Company will also
provide the employees with transition services.

Caraustar Industries, Inc. (Nasdaq: CSAR)
-- http://www.caraustar.com/-- is an integrated manufacturer of  
converted recycled paperboard.  Caraustar serves the four
principal recycled boxboard product end- use markets: tubes, cores
and composite cans; folding cartons; gypsum facing paper and
miscellaneous other specialty paperboard products.

                           *     *     *

The Company's $200 million 7.375% Senior Notes due June 1, 2009
and $29 million 7.25% Senior Notes due May 1, 2010, carry Standard
& Poor's B+ rating.  The Company's $285 million 9.875% Senior
Subordinated Notes due April 1, 2011, carry S&P's B- rating. Those
ratings were assigned on May 9, 2006.


CATHOLIC CHURCH: Portland Can't Use Endowment Fund to Pay Claims
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon rules that
the $36,000,000 Perpetual Endowment Fund listed by the Archdiocese
of Portland in Oregon in its Statement of Financial Affairs is not
property of the bankruptcy estate.   

The Archdiocese holds legal, but not the entire equitable title to
that Fund, Judge Perris says.  Hence, the Fund is not available to
pay the obligations Portland may owe to the tort claimants.  

According to Judge Perris, there is no evidence or argument that
the Archdiocese created the Fund with the intent of shielding its
assets from the claims of creditors.  The Fund is held in a valid,
charitable trust wherein the Archdiocese is not the sole
beneficiary, but is one of the multiple beneficiaries.

The Perpetual Endowment Fund was created in 1981 by a Declaration
of Trust, more than 20 years before the Archdiocese filed for
bankruptcy.  The Archdiocese of Portland in Oregon, as a non-
profit Oregon corporation incorporated in 1909, established the  
Fund.  The 1909 corporation merged with the Roman Catholic  
Archbishop of Portland in Oregon, as the surviving corporation in  
1991.

The Fund was originally made up of the proceeds from the sale of  
certain land owned by the 1909 corporation.  Judge Perris relates  
that there is no indication that the real property was a
substantial portion of the real property used in the 1909
corporation's operations.  Additions to the Fund included
unrestricted gifts to the Archdiocese or the Archbishop, and the  
Fund's interest income.

If there were indicators that the 1909 corporation had created  
the Fund to shield its assets from creditors, there might be  
theories available to support a claim for disregarding the trust,  
Judge Perris points out.  But none of those arguments was made in  
the case.

The Archdiocese has not retained complete control over the Fund,  
the Court says.  The Archdiocese itself does not have the right  
to modify or amend the Fund, and the Fund is irrevocable.   
Contrary to the Tort Committee's arguments, the Archdiocese does  
not have a right to use the principal for whatever uses it
desires.  The Declaration of Trust provides for the Archdiocese's  
right to distribute the Funds' income "only."   

While the Archdiocese's power to distribute the Fund's income is  
property of the estate, Judge Perris says that power may be  
exercised only:

   * as provided or limited by the Declaration of Trust; and  
   * in accordance with the Uniform Trustees' Powers Act.

The Court agrees with the Archdiocese's arguments that the Fund  
is similar to the fund that was found to be a charitable trust  
and so excluded from the debtor's estate in In re Parkview Hosp.,  
211 B.R. 619 (Bankr. N.D. Ohio 1997).  

In Parkview Hospital, a non-profit hospital established a  
development fund for use in furthering the hospital's research  
and staff development activities.  The hospital solicited  
donations for the fund and also placed unrestricted donations in  
the fund.  Only the income could be used to further the purposes  
of the fund; the principal was to remain untouched.

When the hospital ceased operation and filed for bankruptcy, the  
Chapter 11 trustee argued that the fund was property of the  
estate and should be available to pay the claims of the  
hospital's creditors.  The Ohio bankruptcy court concluded that  
the fund was a restricted charitable trust, and so was not  
property of the bankruptcy estate.

The Tort Committee has argued that the Perpetual Endowment is  
different from the fund in Parkview Hospital because:

   -- the hospital's solicitation of funds specified that the use  
      of the contributions would be restricted; and  

   -- the purpose of the charitable trust was not to benefit the  
      hospital.

There are many similarities between Parkview Hospital and the  
Archdiocese's case, Judge Perris says.  In both cases:

   * the non-profit organization created the fund and acted as  
     its trustee in administering the fund;

   * unrestricted gifts to the organization were placed in the  
     fund, wherein the principal may not be touched, and only the  
     income may be used to further the purposes of the fund.

Although the Archdiocese did not specifically solicit donations  
for the Fund, Portland has a written trust document creating the  
Fund and showing its intent with regard to the Fund, Judge Perris  
points out.  Thus, the Archdiocese's intent in creating the Fund  
can be determined from the trust document itself, rather than  
from looking at Portland's actions over a period of years.   

Judge Perris disagrees with the Tort Committee that the purpose  
of the Fund is solely to benefit the Archdiocese.  The  
Archdiocese's purpose is to further the work of the church  
locally, nationally, and internationally.  Thus, the purpose to  
benefit the public is similar to, not different from, the purpose  
of the fund in Parkview Hospital.

Judge Perris further rules that the property of the estate, which  
includes the Archdiocese's beneficial interest in the Fund's  
income subject to whatever restrictions on its use, is  
enforceable under nonbankruptcy law.

Thus, if income is distributed to the Archdiocese, subject to  
conditions on the use of the income in accordance with the  
Declaration of Trust, and those conditions are enforceable under  
nonbankruptcy law, the estate takes that income subject to the  
conditions on use, Judge Perris explains.

Because the Fund is a valid charitable trust that is excluded  
from the estate, and the Archdiocese's powers, as trustee, must  
be exercised pursuant to the Declaration of Trust, Judge Perris  
says she would no longer consider the parties' arguments based on  
the First Amendment and the Religious Freedom Restoration Act.

A full-text copy of Judge Perris' Memorandum Opinion determining  
that the Archdiocese's Perpetual Endowment Fund is not property  
of the bankruptcy estate, is available for free at
http://researcharchives.com/t/s?f2b

                       Portland's Statement

The Bankruptcy Court issued an opinion holding that the Perpetual
Endowment Fund for the Archdiocese of Portland in Oregon is not
itself part of the Archdiocese's estate in bankruptcy subject to
claims of creditors.  The Archdiocese of Portland is pleased the
Bankruptcy Court recognized that the Perpetual Endowment Fund is a  
charitable trust that can only be used in accordance with the  
provisions establishing the trust.  Judge Elizabeth L. Perris  
stated that "the fund is intended to benefit not only the debtor,  
but also the community that is served by the religious,  
charitable, and educational programs of the debtor and the  
national and international church."  The opinion continues: "I  
conclude that the Declaration of Trust created a valid,  
charitable trust, and that debtor is not the sole beneficiary of  
that charitable trust.  Therefore, the fund itself is not  
property of the bankruptcy estate . . . "

The litigation surrounding the Perpetual Endowment Fund was one
part of very complicated proceedings in the Archdiocese's  
Chapter 11 process.  While this issue may be resolved, the  
Archdiocese continues to work towards a fair, just and equitable  
resolution of pending claims and the confirmation of a Plan of  
Reorganization.  Its goal is to emerge from bankruptcy as soon as  
possible so that it may continue the mission of the Church --  
proclaiming the Gospel and performing charitable works -- without  
the distraction of legal proceedings.

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)


CATHOLIC CHURCH: Portland Settles Gripes on Appraisers' Retention
-----------------------------------------------------------------
To resolve the objections related to the retention of appraisers,
these parties entered into a stipulation:

   * Archdiocese of Portland in Oregon;

   * Tort Claimants Committee;

   * Committee of Catholic Parishes, Parishioners and
     Interested Parties;

   * Central Catholic High School Parents Association, and
     Central Catholic High School Alumni Association;

   * Friends of Regis High School and Regis High School
     Foundation; and

   * Marist Foundation and the Marist Parent and Alumni Service
     Club.

The parties agree that:

   (a) the value of each parcel of real property, which was
       assigned to be appraised by Duncan & Brown, Inc., Skelte &
       Associates, Inc., or Powell Valuation, Inc., will be
       determined by those commercial appraisers.  

       A full-text of the list of property assigned to each
       appraiser is available for free at:
       http://researcharchives.com/t/s?f2c

   (b) the value of each parcel of real property listed on
       Schedule A to the Archdiocese's Schedules of Assets or
       Exhibit 14 attached to Portland's Amended Second Statement
       of Financial Affairs that is not appraised will be
       determined by the current real market value on the most
       recent tax appraisal relating to that property;

   (c) except for the property listed to be appraised by the
       three commercial appraisers, the current real market value
       for each Tax Appraised Property will be the value for all
       purposes in the bankruptcy case through the entry of the
       Confirmation Order, except for purposes of:

       (1) the sale of the parcel of real property under Section
           363 of the Bankruptcy Code; and

       (2) any claim brought by a parish, parishioner or high
           school relating to one or more parcels of Tax
           Appraised Property.

   (d) any party may ask the Court for authority to retain an
       appraiser to appraise any Tax Appraised Property so long
       as that request is filed before November 15, 2006, or 60
       days prior to the hearing at which the appraisal is to be
       offered into evidence.  The lack of an appraisal by a
       commercial appraiser will not be a basis for the
       continuance of any hearing.

   (e) except for property appraised by the three commercial, the
       real market value determined by a tax assessor will
       continue to be binding on all parties until an appraisal
       by a commercial appraiser is completed and admitted into
       evidence;

   (f) the Stipulation, the retention applications, or any
       objections relating to the Applications, will not have any
       bearing on whether all or any particular parcel of real
       property is integral to religious function or has any
       religious, charitable, or spiritual use or purpose;

   (g) all arguments with respect to any First Amendment,
       religious freedom, Religious Freedom Restoration Act, or
       any related claim, argument, or defense are reserved; and

   (h) the Tort Committee's Applications are granted insofar as
       to the properties to be appraised by the three commercial
       appraisers are concerned.

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)


CENTURY ALUMINUM: Earns $45.8 Million in Second Quarter of 2006
---------------------------------------------------------------
Century Aluminum Company reported net income of $45.8 million for
the second quarter of 2006, versus the second quarter of 2005
reported net income of $40.7 million.

Sales in the second quarter of 2006 were $406 million, compared
with $283.3 million in the second quarter of 2005.  Shipments of
primary aluminum for the quarter totaled 378.6 million pounds
compared with 339.5 million pounds in the year-ago quarter,
reflecting the impact of the Nordural expansion.

For the first half of 2006 the company reported a net loss of
$95.8 million, which includes an after-tax charge of $203 million
for mark-to-market adjustments on forward contracts, compared with
net income of $52.5 million in the year-ago period.

Sales in the first six months of 2006 were $752.9 million compared
with $568.7 million in the same period of 2005.  Shipments of
primary aluminum for the first six months of 2006 were 724.6
million pounds compared with 676.5 million pounds for the
comparable 2005 period.

The Company also disclosed that it has reached a labor agreement
with the United Steelworkers at the Hawesville, Kentucky smelter
and it has signed a memorandum of understanding with Icelandic
power producers Hitaveita Sudurnesja and Orkuveita Reykjavikur, to
purchase electrical energy for the greenfield smelter project in
Helguvik, Iceland.

The Company further disclosed reaching an agreement for a joint
venture with Minmetals Aluminum Company, to explore the potential
of developing a bauxite mine and associated 1.5 million mtpy
alumina refining facility in Jamaica

A full-text copy of Century Aluminum's quarterly report is
available for free at http://ResearchArchives.com/t/s?f1e

Headquartered in Monterey, California, Century Aluminum Company
(NASDAQ:CENX) -- http://www.centuryca.com/-- owns and operates a  
244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant
at Ravenswood, West Virginia; and a 90,000 mtpy plant at
Grundartangi, Iceland.  The company also owns a 49.67% interest in
a 222,000 mtpy reduction plant at Mt. Holly, South Carolina.
ALCOA Inc. owns the remainder of the plant and is the operating
partner.  Century also holds a 50% share of the 1.25 million mtpy
Gramercy Alumina refinery in Gramercy, Louisiana and related
bauxite assets in Jamaica.

                           *     *     *

Moody's assigned Century Aluminum Company's senior secured debt
and long-term corporate family ratings at B1.  The ratings were
placed on April 22, 2003, with a positive outlook.

Standard & Poor's placed the Company's long-term local and foreign
issuer credit ratings at BB- with a stable outlook on March 13,
2001.


CHC HELICOPTER: Investing $30 Million in New Helicopter Facility
----------------------------------------------------------------
Heli-One, an operating subsidiary of CHC Helicopter Corporation,
has established a new helicopter maintenance, repair and overhaul
facility at Boundary Bay Airport in Delta, B.C., Canada.

Heli-One will establish a 235,000 square-foot facility including
aircraft hangar, workshops and office space, with completion
anticipated in October 2007. This new facility will support a wide
range of components, engines and aircraft types including
AgustaWestland, Bell, Eurocopter and Sikorsky.

CHC will invest approximately $30 million in establishing the new
facility, which will allow Heli-One to provide total helicopter
support and improved efficiency for CHC's rapidly expanding fleet
of aircraft and for third-party customers around the world.  The
facility will consolidate Heli-One's existing workshops and
facilities in the Vancouver area, and create additional capacity.

This new facility will complement Heli-One's major European Repair
and Overhaul center in Stavanger, Norway, which specializes in
tip-to-tail support of Eurocopter aircraft.

                          About Heli-One

Heli-One is the world's largest independent helicopter support
company, providing logistics, maintenance and power-by-the-hour
support for 14 different aircraft types operated by customers
around the world.

                       About CHC Helicopter

CHC Helicopter Corporation (TSX: FLY.A and FLY.B; NYSE: FLI) --
http://www.chc.ca/-- is the world's largest provider of   
helicopter services to the global offshore oil and gas industry
with aircraft operating in more than 30 countries.

                           *     *     *

CHC's $250 million senior subordinated notes due 2014 carry
Moody's B2 rating.


CHENIERE ENERGY: Suppliers Accept CCTP Purchase Orders for Pipes
----------------------------------------------------------------
Cheniere Energy, Inc.'s wholly-owned subsidiary, Cheniere Creole
Trail Pipeline, L.P., issued two purchase orders, which were
accepted by the suppliers, for the procurement of pipes to
construct the Creole Trail pipeline system.

The Company disclosed CCTP entered into a purchase order with
Corinth Pipeworks S.A. for the purchase of pipe at an aggregate
cost of approximately $63.8 million, payable in increments
beginning with a payment of approximately $6.38 million in August
2006.

CCTP also entered into a purchase order with ILVA S.p.A. for the
purchase of pipes at an aggregate cost of approximately $175.7
million.  Milestone progress payments will be payable on a per lot
basis.  Within 10 days after the execution of the purchase order,
CCTP will deliver a standby letter of credit to ILVA in the amount
of approximately $88 million to secure CCTP's obligations under
the purchase order.  The letter of credit will require a deposit
of $88 million with the issuer of the letter of credit.

The procurement of the pipes is to construct the approximately 252
miles Creole Trail pipeline system, comprised of 117 miles of dual
42-inch diameter pipe and 18 miles of 42-inch diameter
interconnection.  The aggregate cost of these purchase orders is
approximately $255,000,000.

Full text-copies of the purchase orders may be viewed for free
at http://ResearchArchives.com/t/s?f33

Based in Houston, Texas, Cheniere Energy, Inc., (AMEX:LNG)
explores and produces oil.  It also develops a liquefied natural
gas receiving-terminal business.  It operates a seismic database
covering about 7,000 sq. mi.  It also has a 9% interest in
exploration and production affiliate Gryphon Exploration, which
explores areas targeted by a seismic data licensed from Fairfield
Industries.  With proved reserves of 3,021 barrels of oil and
919.1 million cu. ft. of natural gas, it operates along the coast
of Louisiana, both onshore and in the shallow waters along the
Gulf of Mexico.  In 2005, it acquired BPU LNG.

                           *     *     *

Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Cheniere Energy Inc. and affirmed its 'BB' rating
on the $600 million term B bank loan at Cheniere LNG Holdings LLC,
an indirectly owned, 100% subsidiary of Cheniere Energy.  The
outlook is stable.


CHOICE HOTELS: June 30 Balance Sheet Upside-Down by $118 Million
----------------------------------------------------------------
For the second quarter of 2006, Choice Hotels International Inc.
reported net income of $24.1 million, a 12% increase compared with
$21.5 million in the second quarter of 2005.

The Company's operating income increased 13% to $42.1 million,
compared to $37.4 million for the same period in 2005.  Total
revenues increased 15% to $140.5 million compared to the second
quarter of 2005.

Choice Hotels' balance sheet at June 30, 2006, showed total
shareholders' deficit of $118.023 million resulting from total
assets of $280.276 million and total liabilities of
$398.299 million.

The Company's balance sheet also showed strained liquidity with
$71,730,000 in total current assets and $129,507,000 in total
current liabilities.

Commenting on the results, Charles A. Ledsinger, Jr., the
Company's president and chief executive officer, said "[w]e
continue to focus on brand enhancements and are seeing strong
growth in occupancy, average daily rate and RevPAR.  We are
pleased with the substantial increase in year-to-date sales of our
new construction brands, most notably with our Cambria Suites and
Comfort Suites offerings."

"We believe that the inherent strength of our business model, the
ongoing improvements to our core brands, and the expansion of our
newest brands will enable us to drive top-line and bottom-line
growth in a variety of economic cycles," Mr. Ledsinger added.  "We
are very pleased with the 13 percent increase in EBITDA over the
prior year's second quarter and remain confident about the
company's long-term prospects."

Choice Hotels International -- http://www.choicehotels.com/--
franchises more than 5,200 hotels, representing more than 430,000
rooms, in the United States and more than 40 countries and
territories.


CINEMARK USA: S&P Places B+ Corp. Credit Rating on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed all its ratings on
Cinemark Inc. and subsidiary company Cinemark USA Inc., which are
analyzed on a consolidated basis, including the 'B+' corporate
credit ratings, on CreditWatch with negative implications.

The CreditWatch listing follows the company's announcement that
it will be financing the acquisition of Century Theatres Inc.
(B+/Negative/--) with a senior credit facility.  Cinemark had $1
billion in debt and $846 million in present value of operating
leases as of March 31, 2006.

"Although Century's theaters are comparable to Cinemark's venues
and the acquisition could produce some opportunities for cost
reductions, we are concerned that credit statistics could worsen
as a result of the debt-financed transaction," said Standard &
Poor's credit analyst Tulip Lim.

Also, Standard & Poor's is concerned about secular issues in this
sector, including entertainment alternatives to moviegoing and
shortening intervals between theatrical and DVD releases of
movies.

Standard & Poor's will resolve the CreditWatch listing after
evaluating the new capital structure and future business
strategies, including the potential for cost savings as a result
of the acquisition.


COLUMBUS MCKINNON: Earns $5.6 Million in 2007 1st Fiscal Quarter
----------------------------------------------------------------
For fiscal 2007 first quarter ended July 2, 2006, Columbus
McKinnon Corporation reported net income of $5.6 million compared
with fiscal 2006 first quarter net income of $7.3 million.

Commenting on the results, Timothy T. Tevens, the Company's
president and chief executive officer, said "[s]ales trends in our
markets remain very favorable, and we continue to anticipate
growth in Products segment sales in the mid-to-high single digit
range as we convert our high level of orders to sales.  The broad-
based demand in our Products segment supports our belief that
expansion is continuing in the industrial economy worldwide."

Columbus McKinnon's operating income for the fiscal 2007 first
quarter was $17.8 million, up 21.6% on a 4.1% increase in net
sales to $146.7 million.

Fiscal 2007 first quarter net sales were $146.7 million, an
increase of $5.8 million, or 4.1%, over last year's first quarter
net sales of $140.9 million.

During the quarter, the Company reduced funded debt by
$26.3 million to $183.4 million, resulting in a funded debt to
total capitalization ratio of 46.1%.  Debt, net of cash at
July 2, 2006, was $163.5 million, a $89.5 million reduction from
$253.0 million a year ago, representing 43.2% net debt to total
capitalization.  The Company's availability on its line of credit
with its bank group at July 2, 2006, was $52.6 million.

Net cash provided by operations was $4.8 million for the fiscal
2007 first quarter compared with $10.6 million in the fiscal 2006
first quarter, with the fluctuation a result of changes in working
capital.

Columbus McKinnon Corporation -- http://www.cmworks.com/--  
designs, manufactures and markets material handling products,
systems and services, including hoists, cranes, chain and forged
attachments.  

                           *     *     *

In November 2005, Standard & Poor's Ratings Services raised its
corporate credit rating on Columbus McKinnon Corp. to 'B+' from
'B'.  S&P also raised its senior secured debt ratings on the
Company to 'B' from 'B-' and its subordinated debt rating to 'B-'
from 'CCC+'.  The outlook was stable.

In August 2005, Moody's Investors Services upgraded Columbus
McKinnon Corp.'s corporate family rating to B1 from B2 and
$115 million senior secured (2nd lien) notes due 2010 to B2 from
B3.  Moody's also assigned a B3 rating to the Company's
$136 million senior subordinated notes, due 2013.  The rating
outlook has been changed to stable from positive.


COMMERCIAL CAPITAL: Fitch Affirms Class G Loan's Junk Rating
------------------------------------------------------------
Commercial Capital Access One, Inc.'s commercial mortgage series
3, is affirmed by Fitch Ratings:

   -- $140.8 million class A2 'AAA';
   -- $43.4 million class B 'AAA';
   -- $43.4 million class C 'A+';
   -- $19.5 million class D 'BBB+';
   -- $6.5 million class E 'BBB';
   -- $100,000 class X 'AAA';
   -- $10.8 million class F 'BB'; and
   -- $17.3 million class G 'CCC/DR2'.

Fitch does not rate class H. Class A-1 has paid in full.

The affirmations are the result of stable loan performance and
minimal paydown since Fitch's last rating action.  As of the July
2006 distribution report, the transaction has paid down 33.3% to
$289 million from $433.7 million at issuance.

There are two loans (12.6%) in special servicing.  The largest
loan in special servicing (12.1%) is secured by a 618,899 square
foot office property located in St. Paul, Minnesota.  The loan
transferred to the special servicer due to monetary default.  The
special servicer foreclosed the asset in May of 2006 and is
currently marketing the property for sale.  Recent appraisal
valuation indicates losses upon the disposition of this asset.

The second largest asset in special servicing (0.5%) is secured by
a golf course in East St. Louis, Illinois.  The loan transferred
to special servicer due to monetary default and is currently being
reviewed by the special servicer.  It is uncertain as to whether
losses will be incurred upon the workout of this loan.

34% of the remaining pool is covered by a limited guaranty
provided by Sun America, Inc.  The guaranty requires Sun America
to pay the special servicer, on behalf of the trustee, an amount
equal to any realized losses arising from specially serviced
loans, or to purchase the specially serviced loans directly from
the trust.  Prior losses have reduced the outstanding coverage
from $14.4 million at issuance to approximately $11.3 million.  
The loans currently in special servicing are not covered by the
guaranty.


COMMSCOPE INC: Andrew Merger Prompts Moody's to Review Ratings
--------------------------------------------------------------
Moody's Investors Service placed the ratings of CommScope, Inc. on
review for possible downgrade following its announcement that it
has placed an all cash bid to acquire Andrew Corporation for
approximately $1.7 billion.  This bid is a competing offer set to
expire August 11th, 2006, with a 36% premium to that outstanding
by ADC Telecommunications Inc.  Moody's estimates that pro forma
for the acquisition prior to cost savings from synergies,
Commscope's financial leverage as measured by debt to TTM June
2006 EBITDA adjusted for capitalized operating leases would be
increased from about 2.2x to more than 5x, which could potentially
result in a multiple notch downgrade.

Moody's review of CommScope will assess:

   (1) the challenges of integrating Andrew, a company that is
       roughly equal to CommScope's size in terms of revenue and
       EBITDA,

   (2) the combined company's prospects cost synergies, asset
       sales, and debt reduction,

   (3) plans for acquisitions, and

   (4) the quality of sources of liquidity.

Ratings under review for downgrade include:

   * Corporate Family Rating -- Ba2
   * Senior Subordinated Note $250 million due 2024 - B1

Headquartered in Hickory, North Carolina, CommScope is a provider
of cable and connectivity solutions for enterprise, cable, and
telecom industries.


COMPLETE RETREATS: Gets Interim OK for Continued Utility Services
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut granted,
on an interim basis, Complete Retreats LLC and its debtor-
affiliates' request enjoining utility companies from discontinuing
their services to the Debtors.

The Troubled Company Reporter on Aug. 3, 2006 noted that the
Debtors asked the Court to:

    (i) determine that the Utility Companies have been provided
        with adequate assurance of payment under Bankruptcy Code
        section 366;

   (ii) approve the Debtors' proposed offer of adequate assurance
        and procedures governing the Utility Companies' requests
        for additional or different adequate assurance;

  (iii) prohibit the Utility Companies from altering, refusing,
        or discontinuing services on account of prepetition
        amounts outstanding or on account of any perceived or
        alleged inadequacy of the proposed adequate assurance;

   (iv) establish procedures for the Utility Companies to seek to
        opt out of the proposed adequate assurance procedures;

    (v) determine that the Debtors are not required to provide
        any additional adequate assurance;

   (vi) set a final hearing on the proposed adequate assurance
        procedures on August 17, 2006; and

  (vii) provide for the return of the unused portions of all
        deposits shortly after the substantial consummation of
        any confirmed plan of reorganization in their cases.

In connection with the operation of their business and management
of their properties, the Debtors obtain electricity, gas, water,
sewer, trash removal, telephone, Internet, cable television, and
other utility services from various utility companies.

A 14-page list of Utility Companies providing services to the
Debtors is available for free at:

               http://researcharchives.com/t/s?ec4

                     Proposed Adequate Assurance

The Debtors intend to pay all postpetition obligations owed to
the Utility Companies.  In addition, the Debtors propose to
provide a deposit equal to two weeks of Utility Service to any
Utility Company that requests a deposit in writing.  However, no
deposit will be given to a Utility Company that already holds a
deposit equal to or greater than two weeks of Utility Services
and that is paid in advance for its services.

Upon acceptance of the Deposit, the Utility Company would be
deemed to have stipulated that the Deposit constitutes adequate
assurance of payment under Bankruptcy Code section 366 and would
not be able to make an Additional Adequate Assurance Request.

               Proposed Adequate Assurance Procedures

In light of the severe consequences to the Debtors of any
interruption in services by the Utility Companies, but
recognizing the right of the Utility Companies to evaluate the
Proposed Adequate Assurance on a case-by-case basis, the Debtors
propose that the Court approve and adopt these uniform
procedures:

    a. If a Utility Company does not comply with the Adequate
       Assurance Procedures, it will be forbidden from
       discontinuing, altering, or refusing service.

    b. Any Utility Company requesting a Deposit must make a
       request in writing to:

          (i) the Debtors
              Tanner & Haley Resorts
              285 Riverside Avenue, Suite 310
              Westport, CT 06880
              Attn: Jason I. Bitsky, Esq., and

         (ii) counsel to the Debtors
              Dechert LLP
              30 Rockefeller Plaza
              New York, NY 10112
              Attn: Joel H. Levitin, Esq., and
                    David C. McGrail, Esq.

    c. If the requesting Utility Company satisfies the
       requirements, the Debtors would provide a deposit.

    d. Any Utility Company desiring additional adequate assurance
       of payment must serve its request on the Debtors and the
       Debtors' counsel.

    e. The Debtors have at least two weeks to reach a consensual
       agreement with the Utility Company resolving the
       Additional Adequate Assurance Request.

    f. The Debtors would be permitted to resolve any Additional
       Adequate Assurance Request by mutual agreement with the
       Utility Company and without further Court order.

    g. If the Debtors can't reach a timely consensual resolution
       with the Utility Company, a hearing will be held to
       determine the adequacy of adequate assurance of payment.

    h. Pending resolution of the Determination Hearing, that
       particular Utility Company would be prohibited from
       discontinuing, altering, or refusing service to the
       Debtors.

                       Process for Opting Out

A Chapter 11 debtor was historically able to place the burden on
utility providers to prove that the adequate assurance offered by
the debtor was insufficient.  After recent amendments to
Bankruptcy Code section 366, the burden has arguably shifted to
debtors to provide adequate assurance that the utility providers
find satisfactory and to seek court review if a utility provider
does not accept the proposed adequate assurance.

Under the new reading of Bankruptcy Code section 366, a Utility
Company could, on the 29th day after the Petition Date, announce
that the proposed adequate assurance is not acceptable, demand an
unreasonably large deposit from the Debtors, and threaten to
terminate Utility Service the next day unless satisfied.

The Debtors believe it is prudent to require Utility Companies to
raise any objections to the Adequate Assurance Procedures, so
that those objections may be heard by the Court within 30 days of
the Petition Date.

The Debtors propose these uniform objection procedures:

    a. Any Utility Company that objects to the Adequate Assurance
       Procedures must to file a timely objection.

    b. Any Procedures Objection must, among others, be made in
       writing and set forth the reason why the Utility Company
       believes it should be exempted from the Adequate Assurance
       Procedures.

    c. The Debtors would be permitted to resolve any Procedures
       Objection by mutual agreement with the Utility Company and
       without further Court order.

    d. If no prompt consensual resolution is reached, the
       Procedures Objection would be heard at the Final Hearing.

    e. All Utility Companies that do not timely file a Procedures
       Objection would be deemed to consent to the Adequate
       Assurance Procedures.

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


COMPLETE RETREATS: Paying $140,000 of Foreign Creditors' Claims
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates authority to pay,
at their discretion, the prepetition claims of their foreign
creditors, up to an aggregate amount of $140,000.

The Court directed the Debtors to file a list, certified by an
officer of the Debtors, of each Foreign Creditor whose
prepetition claims have been or will be paid, including the
amount of the claim.

The Debtors and their foreign affiliates are parties to numerous
agreements and leases with foreign creditors in Abaco, Bahamas;
Cabo San Lucas, Mexico; Nevis, West Indies; and the Dominican
Republic, among other foreign locations.

The Troubled Company Reporter on Aug. 2, 2006, noted that certain
Foreign Creditors have already taken, or threatened to take,
actions against the Debtors, including refusing to provide
essential goods and services to the Debtors or their affiliates
until their claims are paid.  In many instances, the Debtors told
the Court that they would not be able to locate replacement
providers in time to avoid disrupting service to their members.

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


CORNING INC: Earns $514 Million in Second Quarter of 2006
---------------------------------------------------------
Corning Inc. informed the Securities and Exchange Commission in a
Form 10-Q filing that for the three months ended June 30, 2006, it
generated a $514 million net income compared with a $165 million
net income for the same period in 2005.

The improvement in net income was due largely to these items:

   -- strong volume growth in the Company's Display Technologies
      and Telecommunications operating segments;

   -- an increase in equity earnings which included a gain of
      $33 million related to Dow Corning's settlement with the IRS
      regarding liabilities for tax years 1992 to 2003.  This
      settlement resolves all Federal tax issues related to Dow
      Corning's implant settlement;

   -- asbestos settlement gain of $61 million compared to expense
      of $143 million for the same  period last year resulting
      from the change in fair value of Corning's asbestos
      settlement liability.   The change in fair value for the
      second quarter of 2006 is due primarily to the decrease in
      the value of 25 million shares of Corning's common stock to
      be contributed to the proposed settlement.  

                         Financial Health

The Company's management said the Company's balance sheet remains
strong.  The Company continued to generate positive cash flows
from operating activities.   Significant activities during the
second quarter of 2006 were:

   -- the Company reduced its long-term debt in these
      transactions:

      * the Company redeemed $97 million of its 6.25% Euro notes,
        due in 2010;

      * the Company repurchased $96 million of its 6.3% notes due
        in 2009; and

      * the Company redeemed $125 million of its 8.3% medium-term
        notes due in 2025.

   -- the Company's debt to capital ratio declined to 18%;

   -- the Company received $134 million in deposits against  
      orders relating to its multi-year supply agreements with
      customers in the Display Technologies segment;

   -- the Company ended the second quarter of 2006 with
      $2.5 billion in cash and short-term investments.  Operating
      cash flow in the second quarter more than offset its capital
      spending.

At June 30, 2006, the Company's remaining capacity under its shelf
registration was approximately $2.1 billion.

                         Capital Spending

Capital spending totaled $554 million and $698 million during the
six months ended June 30, 2006, and 2005.  The Company's 2006
capital spending program is expected to be in the range of
$1.3 billion to $1.5 billion.  Of this amount, approximately
$900 million to $1.1 billion will be used to expand manufacturing
capacity for LCD glass substrates in the Display Technologies
segment and approximately $200 million will be directed toward its
Environmental Technologies segment.

                Management Assessment of Liquidity

A major source of funding for 2006 and beyond is the Company's
existing balance of cash, cash equivalents and short-term
investments.  From time to time, the Company may also issue debt
or equity securities for general corporate purposes.  The
Company's management believes that the Company has sufficient
liquidity for the next several years to fund operations,
restructuring, the asbestos settlement, research and development,
capital expenditures and scheduled debt repayments.

A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?f1f

                           About Corning

Headquartered in Corning, New York, Corning Inc. is a global,
technology-based corporation that operates in four reportable
business segments: Display Technologies, Telecommunications,
Environmental Technologies, and Life Sciences.

                           *     *     *

Moody's Investors Service upgraded the long-term debt rating
of Corning Incorporated in September 2005.  Moody's said the
rating outlook is stable.  Corning Inc.'s senior unsecured notes,
debentures, and IRBs were raised to Baa3 from Ba2.  Corning's
senior unsecured securities were raised to (P)Baa3 from (P)Ba2
while its preferred stock, issued pursuant to its 415 universal
shelf registration, was raised to (P)Ba2 from (P)B1.


CORRECTIONS CORPORATION: Board Approves 3-for-2 Stock Split
-----------------------------------------------------------
Corrections Corporation of America reported its financial results
for the three-month and six-month periods ended June 30, 2006.  
The Company's Board of Directors also approved a 3-for-2 stock
split to be effected in the form of a 50% stock dividend on its
common stock, payable on September 13, 2006.

The Company's Board of Directors declared a 3-for-2 stock split to
be effected in the form of a 50% stock dividend on its common
stock.  The stock dividend will be payable on Sept. 13, 2006, to
stockholders of record on Sept. 1, 2006.  Each shareholder of
record at the close of business on the record date will receive
one additional share of the Company's common stock for every two
shares of common stock held.  The stock split will increase the
number of shares of common stock outstanding to approximately 60.4
million shares.

                        Financial Review

             2006 and 2005 Second Quarter Comparison

For the three months ended June 30, 2006, the Company reported net
income of $25.6 million compared with net income of $14.9 million
for the 2005 comparable period.

Operating income for the second quarter of 2006 was $55.1 million,
compared with $38.2 million for the same period in the prior year.  
EBITDA, adjusted for refinancing charges, increased 35.4% to $71.5
million during the second quarter of 2006, from $52.8 million
during the second quarter of 2005.  The financial results for the
quarter ended June 30, 2006, were positively impacted by increased
populations at a number of the Company's facilities, most notably
the Northeast Ohio Correctional Center, where the Company
benefited from a full quarter of operating results from a contract
with the Federal Bureau of Prisons that commenced in June 2005.

Also of note was the commencement of a new contract with the U.S.
Immigration and Customs Enforcement at the T. Don Hutto
Residential Center in May 2006.  Total portfolio occupancy
increased from 90.1% during the second quarter of 2005 to 94.8%
during the second quarter of 2006, with compensated man-days
increasing 8.1%, from 5.67 million to 6.12 million.  The increases
in operating income and Adjusted EBITDA are net of an increase in
general and administrative expenses of $2.4 million, of which $1.3
million resulted from an increase in stock-based compensation
primarily resulting from a new accounting pronouncement effective
Jan. 1, 2006.

Adjusted Free Cash Flow, which does not include special charges,
increased by $16.6 million to $44.0 million during the second
quarter of 2006 from $27.4 million generated during the same
period in 2005.  The increase in Adjusted Free Cash Flow was
primarily brought about by the increase in operating income and a
reduction in interest expense resulting from the Company's
refinancing activities, partially offset by modest increases in
maintenance capital expenditures and income tax payments.

            2006 and 2005 First Six Months Comparison

For the six months ended June 30, 2006, the Company generated net
income of $47.0 million compared with $5.9 million for the six
months ended June 30, 2005.  Financial results for the first six
months of 2005 included a pre-tax charge of $35.3 million for
refinancing transactions completed during the first and second
quarters of 2005.

Operating income for the first six months of 2006 increased to
$105 million compared with $77.8 million for the first six months
of 2005.  Adjusted EBITDA also increased for the six months ended
June 30, 2006, to $137.2 million compared with $106.6 million
during the same period in 2005.  The financial results for the
six months ended June 30, 2006, were substantially the result of
higher inmate populations at a number of the Company's facilities
as well as the commencement of new management contracts.

Adjusted Free Cash Flow increased $43.9 million during the first
six months of 2006 to $87.0 million compared with $43.1 million
during the first six months of 2005.  Although strong operating
results contributed significantly to the increase in Adjusted Free
Cash Flow, the prior year period was negatively impacted by $15.5
million in income tax payments primarily for the repayment of
taxes associated with excess refunds received by the Company in
2002 and 2003, as described in the Company's fourth quarter 2004
earnings release.  Excluding these tax payments, Adjusted Free
Cash Flow increased $28.9 million.

Headquartered in Nashville, Tennessee, Corrections Corporation of
America (NYSE: CXW) -- http://www.correctionscorp.com/-- is the  
nation's largest owner and operator of privatized correctional and
detention facilities and one of the largest prison operators in
the United States, behind only the federal government and three
states.  

CCA currently operates 63 facilities, including 39 company-owned
facilities, with a total design capacity of approximately 71,000
beds in 19 states and the District of Columbia.  CCA specializes
in owning, operating and managing prisons and other correctional
facilities; and providing inmate residential and prisoner  
transportation services for governmental agencies.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 20, 2006,
Moody's Investors Service assigned a Ba3 rating to Correction
Corporations of America's $150 million new senior unsecured notes
due 2014.  The outlook for all of the firm's ratings was revised
to positive, from stable.  According to Moody's, this outlook
revision reflects a substantially reduced secured debt burden as
well as improving leverage and coverage statistics.


DADE BEHRING: Earns $37.6 Million in Quarter Ended June 30
----------------------------------------------------------
Dade Behring Holdings, Inc., reported second quarter net income of
$37.6 million, compared with $17.1 million of net income earned
during the same period in the prior year.

The Company generated revenue of $445 million, an increase of 5%
on both a reported and constant currency(1) basis.  Revenue for
the six months ended June 30, 2006, increased $24 million or 3% to
$860 million.

"Our strong and consistent financial performance is directly
related to the ability of our people to effectively execute our
customer excellence business strategy," Jim Reid-Anderson,
chairman, president, and chief executive officer of Dade Behring,
said.  "We are highly focused on providing practical, relevant
solutions to meet the needs of clinical laboratory customers
around the globe, which positions us well for long-term growth."

The company's worldwide installed base of instruments grew to
39,300 as of June 30, 2006, a 1.3% increase for the quarter and a
year-over-year increase of 7.5%.

Cash flow from operations, after investing activities and excess
tax benefits from stock-based compensation, was $20 million for
the second quarter and $66 million June year-to-date.  The company
paid a cash dividend of $0.05 per common share totaling
$4.3 million during the quarter and repurchased $57 million of its
common stock.  During the last four quarters the company has
repurchased $234 million of its common stock.

The first six months of spending for research and development
increased $11 million or 15% over the same period last year, and
represented 9.1% of revenue.

"An ongoing driver of our success has been new product
introductions," said John Duffey, Chief Financial Officer and
Senior Vice President, Dade Behring.  "Investing in new technology
is a high priority for us, given our goal of creating incremental
value for shareholders."

                        About Dade Behring

With 2005 revenue of nearly $1.7 billion, Dade Behring --
http://www.dadebehring.com/-- is the world's largest company  
solely dedicated to clinical diagnostics.  It offers a wide range
of products, systems and services designed to meet the day-to-day
needs of laboratories, delivering innovative solutions to
customers and enhancing the quality of life for patients.

                          *     *     *

Dade Behring Holdings, Inc.'s Senior Subordinated Debt carry Fitch
Ratings BB+ rating.


DANA CORP: Equity Panel Questions Need to Modify Retiree Benefits
-----------------------------------------------------------------
In Dana Corp. and its debtor-affiliates' request for appointment
of an official committee of retired employees, they admit that
they have not made any determination with respect to whether the
retiree benefits must be modified or the impact of any
modifications would have on their estates, Gregg Weiner, Esq., at
Fried, Frank, Harris, Shriver & Jacobson, LLP, in New York, tells
the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York.

The Debtors sought appointment of a Retiree Committee to act as
the authorized representative of persons receiving certain retiree
benefits that are not covered by an active or expired collective
bargaining agreement.

The Debtors currently sponsor at least 50 different Retiree
Benefit Plans for hourly and salaried retirees and their spouses
and eligible dependents, and that approximately 17,200 individuals
currently receive Retiree Benefits under collective bargaining
agreements that were negotiated with unions.

According to Mr. Weiner, the Debtors have stated that it will be
several months before they have finalized a business plan setting
forth management's views with respect to the future prospects of
the Debtors' businesses, and consideration of modifying the
Retiree Benefits can only be done in the context of understanding
the Debtors' business plan.

The Official Committee of Equity Security Holders agrees with the
Debtors that it is too early to determine whether the Retiree
Benefits should be modified, or whether the Debtors could satisfy
the rigorous requirements of Section 1114 of the Bankruptcy Code
if it were to modify the Retiree Benefits over the opposition of
the retirees.

However, Mr. Weiner tells the Court that the Equity Committee has
reservations as to whether there is a need for the Debtors to
modify the Retiree Benefits at all.  While the Equity Committee
recognizes that, on an annual basis, the Debtors spend substantial
amounts on account of their Retiree Benefits, modifications to the
benefits may worsen the situation.  

Wholesale modifications to the Retiree Benefits could result in
accelerating the Debtors' liabilities, which potentially could
saddle the Debtors' estates with between $1,000,000,000 and
$2,000,000,000 of additional claims that must be satisfied, Mr.
Weiner points out.  

The Equity Committee contends that the Debtors should not take any
precipitous action that results in burdening a solvent estate with
$1,000,000,000 to $2,000,000,000 of claims.

Mr. Weiner says the Equity Committee trusts and expects that the
determinations with respect to whether any modifications are
appropriate will be collaborative among the Debtors and their key
constituents.  The Equity Committee also trusts and expects if
there are discussions with the Retiree Committee, the Equity
Committee will have a seat at the table and the Debtors will not
attempt to act unilaterally.

Given this backdrop, the Equity Committee says it will work
cooperatively with the Debtors in analyzing whether any
modifications should be sought with respect to the Retiree
Benefits and in negotiating with the Retiree Committee should the
Debtors and the committees collectively determine that
modifications are appropriate.  

On important issues, the Equity Committee says the Debtors should
ensure that the official committees, as statutory fiduciaries, are
included from the outset so as to avoid any unnecessary future
contested proceedings.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball,
Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 18; 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: Wants American Axle Settlement Pact Approved
-------------------------------------------------------
In 1998, Dana Corporation filed a lawsuit against American Axle &
Manufacturing, Inc., in the United States District Court for the
Eastern District of Michigan, Southern Division.  Dana has alleged
that American Axle is infringing certain of Dana's patents in
connection with the production of driveline assemblies.  

In the 1998 Action, Dana has sought monetary damages ranging from
$2,500,000 to $7,700,000 for infringement of the Patents-in-Suit,
and an injunction preventing further infringement by American
Axle.

American Axle objected that any damages would be, at most,
$165,000.  American Axle asserted counterclaims alleging, among
other things, that the Patents-in-Suit are not valid because they
were not timely filed, and that no infringement has occurred.

In 2000, the District Court found Dana's Patents-in-Suit to be
invalid and granted summary judgment to American Axle.  Dana filed
another lawsuit against American Axle in the District Court to add
an antitrust counterclaim in the 1998 Action.

The United States Court of Appeals for the Federal Circuit,
however, vacated the District Court's summary judgment order and
remanded the case to the District Court for a determination
regarding infringement.

Based on a finding of non-infringement, in 2003, the District
Court granted American Axle's second motion for summary judgment.  
The Federal Circuit then vacated the second summary judgment order
on the basis that the District Court's construction of a disputed
patent claim term was incorrect.  The Federal Circuit furnished a
different definition for that term and remanded the case to the
District Court for a new trial.

In May 2005, American Axle filed a third motion for summary
judgment, which the District Court denied.  

In May 2006, the Bankruptcy Court modified the automatic stay to
allow American Axle to pursue its Counterclaims.  However, the
Court denied American Axle's request to pursue a reexamination in
the PTO.

Dana and its debtor-affiliates believe that they have a
meritorious case and could prevail in the litigation of the
Actions, however, Corinne Ball, Esq., at Jones Day, in New York,
points out that:

   (1) the Actions have been vigorously contested for nearly
       eight years;

   (2) litigating the Actions to the ultimate conclusion would be
       expensive and time consuming,

   (3) the outcome of litigation is uncertain; and

   (4) even if Dana were successful in litigation at trial, it
       would still have to collect any judgments rendered in the
       1998 Action and could face the further costs and delays of
       appeals.  

Ms. Ball adds that even if the Debtors are successful in proving
that American Axle had infringed one or more claims of the
Patents-in-Suit, there is a risk that American Axle would prevail
on its Counterclaims that one or more of the infringed patents was
invalid.  

American Axle could then move to have the case declared
exceptional and seek its own attorneys' fees and costs from Dana,
which the Debtors estimate could exceed $2,000,000, Ms. Ball
further points out.

Accordingly, while the final trial preparations were underway in
the 1998 Action, the Debtors and American Axle began negotiating a
settlement.  The District Court agreed to a 60-day stay of the
proceeding to permit the parties to finalize the settlement.

The salient terms of the Settlement Agreement are:

   (a) American Axle will pay to Dana a lump sum cash of
       $1,625,000 by wire transfer.

   (b) Dana will grant to American Axle a perpetual, fully
       paid license under the Licensed Dana Patents to make
       vehicle driveline assemblies.  The Licensed Dana Patents
       include the Patents-in-Suit and other patents owned by or
       licensed to Dana that are necessary for making driveline
       assemblies with reduced diameter portions.

   (c) American Axle will grant to Dana a perpetual, fully paid
       license under the Licensed AAM Patent to make Licensed
       Products for programs in commercial production.

   (d) The Licenses may be sublicensed to Dana or American Axle's
       affiliates, but may not be sublicensed to other third
       parties without the licensor's consent provided that the
       assignee agrees to be bound by the terms and conditions of
       the Settlement Agreement.  The licenses also will survive
       a change of control of the licensee.

   (e) The Actions will be dismissed with prejudice immediately
       after American Axle pays the Settlement Amount.

   (f) The parties will mutually release each other from certain
       liabilities for the period through the License Effective
       Date, including those claims asserted in the Actions, that
       were required to be asserted in the Actions or that are
       based on the Dana Licensed Patents or the Licensed AAM
       Patent.

The Settlement Agreement expressly authorizes Dana's use of the
Licensed American Axle Patent in connection with programs already
in commercial production.  Ms. Ball contends that absent the
licensed of the American Axle Patent, Dana's alleged used of these
patent right could be prohibited or subject to further litigation.

Ms. Ball further contends that the Settlement Agreement eliminates
the risks and costs of ongoing litigation of the Actions and
provides for the prompt payment of $1,625,000 in cash into the
Debtors' estates.  

Although the Debtors estimate that the judgment, if they prevailed
at trial, could be more than twice the Settlement Amount, Ms. Ball
argues that there is no assurance of prevailing at trial or being
able to collect any judgment promptly.  

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball,
Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 18; 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.


DELTA AIR: Asks Bankr. Court to Terminate Pilots Retirement Plan
----------------------------------------------------------------
Delta Air Lines took the next step toward termination of the Delta
Pilots Retirement Plan by filing a motion seeking U.S. Bankruptcy
Court approval of the termination.  The Air Line Pilots
Association, the union representing more than 6,800 Delta pilots,
does not oppose the termination of the plan.

Delta's other defined benefit pension plan, covering approximately
91,000 active and retired flight attendant and ground employees,
is not affected by this action.

Delta reported its intent to seek to terminate the pilot plan,
citing a financial and operational crisis from which it could not
recover should the plan remain in effect.  On June 19, 2006, Delta
provided its active and retired pilots with a Notice of Intent to
Terminate the pilot plan.  Delta also served notice at that time
to the Pension Benefit Guaranty Corporation, the federal agency
which insures defined benefit pension plans.  The plan covers more
than 13,000 active and retired Delta pilots and their
beneficiaries.  The proposed effective date of termination of the
plan is Sept. 2, 2006.

Delta stated it was seeking the distress termination of the pilot
plan because the plan's costs are unaffordable and would prevent
the company from successfully reorganizing and emerging from
bankruptcy.  The company said the pilot plan's costs are expected
to exceed $1 billion in the near term alone, even if pension
reform legislation passed by Congress is signed into law.

Delta voluntarily filed for Chapter 11 reorganization under the
U.S. Bankruptcy Code on September 2005.  Barring any disruptions,
the company is on track to achieve more than 70% of its business
plan's benefits by the end of this year, with the goal of
successfully emerging from bankruptcy in the first half of 2007.

                         About Delta Air

Headquartered in Atlanta, Georgia, Delta Air Lines (OTC:DALRQ) --
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.


DELUXE CORP: Moody's Downgrades Senior Unsecured Ratings to Ba2
---------------------------------------------------------------
Moody's Investors Service downgraded Deluxe Corporation's senior
unsecured ratings to Ba2 from Baa3 and the commercial paper rating
to Not Prime from Prime-3.  Moody's also assigned Deluxe a Ba2
Corporate Family Rating.  The rating outlook is negative.

Downgrades:

Issuer: Deluxe Corporation

   * Senior Unsecured Commercial Paper, Downgraded to NP from P-3

   * Senior Unsecured Medium-Term Note Program, Downgraded to Ba2
     from Baa3

   * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2
     from Baa3

   * Senior Unsecured Shelf, Downgraded to (P)Ba2 from (P)Baa3

Assignments:

Issuer: Deluxe Corporation

   * Corporate Family Rating, Assigned Ba2

Outlook Actions:

Issuer: Deluxe Corporation

   * Outlook, Changed To Negative From Rating Under Review

The downgrade reflects the ongoing and significant deterioration
in the company's revenue base and operating margins.  Moody's is
concerned that the company's overall business risk is increasing
as the ongoing shift toward electronic payments and forms
processing creates price, volume and adverse product mix pressure
on the company's mature print-based product lines.  Operating
performance in 2006 is particularly weak due to greater-than-
anticipated pricing pressure in Deluxe's consumer check businesses
and investments in sales force and training to build the Small
Business Services segment that are yielding smaller revenue gains
than the company expected.

Moody's expects these pressures will challenge the company's
ability to reverse the deterioration in operating performance and
debt leverage relative to EBITDA and free cash flow.  Moody's
believes that the company's $150 million cost reduction plan and
37% reduction in the dividend have the potential to alleviate some
of the intense margin and cash flow pressure, but do not remedy
the fundamental concern over the revenue base erosion.

The negative rating outlook reflects the execution risk associated
with the company's plans to reduce costs and stabilize revenues
and margins, the potential for increasing conditionality to access
the two credit facilities resulting from the declining margin of
compliance under the 3x EBIT to interest covenant requirement, and
the refinancing risk presented by the $50 million September 2006
and $325 million October 2007 debt maturities.

Deluxe Corporation, headquartered in St. Paul, Minnesota, uses
direct marketing, distributors and a North American sales force to
provide a wide range of customized products and services:
personalized printed items, promotional products and merchandising
materials, fraud prevention services,
and customer retention programs.


DIALOG GROUP: Restates 2005 Financial Statements
------------------------------------------------
Dialog Group, Inc., filed its annual report on Form 10-KSB/A to
amend its financial statements for the fiscal year ended Dec. 31,
2005, with the Securities and Exchange Commission on July 28,
2006.

The amended annual report restates the Company's financial
statements and Management's Discussion and Analysis or Plan of
Operations relating to the sale of AdValiant, Inc.

The original Income Statement contained three errors:

   1) inter-company accounts between the Company and AdValiant,
      which aggregated approximately $220,000, were not
      eliminated,

   2) the investment in AdValiant was not reduced by its
      impairment for the losses incurred in the operation of
      AdValiant before its elimination upon the sale, and

   3) adjustments for accounts receivable and bad debt reserves
      were not properly created.

The originally reported Loss on Discontinued Operations included
only approximately $490,000 of losses incurred in operating
AdValiant during the time it was owned by the Company.  In
addition, it should have reflected approximately $140,000 incurred
in the settlement of two lawsuits against a former subsidiary.
This later amount was originally reported as part of Gain on Sale
of Discontinued Operations.

The Gain on Sale of Discontinued Operations is the excess of the
consideration received for the sale of AdValiant over the sum of
the original investment (as reduced by the loss incurred in
operating AdValiant), the net of all inter-company accounts
between AdValiant and the Company, including its subsidiaries, and
the book value of all stock cancelled as part of the transaction.

                   Amended Financial Statements

The Company reported a $1,781,957 net loss on $6,722,703 of
revenues for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $1,596,195 in
total assets and $5,720,200 in total liabilities, resulting in a
$4,124,005 stockholders' deficit.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $973,986 in total current assets available to pay $4,010,909
in total current liabilities coming due within the next 12 months.

A full-text copy of the Company's 2005 Amended Annual Report is
available at: http://researcharchives.com/t/s?f23

                        About Dialog Group

Headquartered in New York, N.Y., Dialog Group, Inc., provides a
combination of traditional advertising (print, broadcast) and
marketing services (broadcast, new media, and internet-based
promotional venues), as well as a broad spectrum of proprietary
and exclusive databases for healthcare, pharmaceutical, consumer
and business-to-business market clients.

The Company and imx-eti LifePartners, Inc., its wholly owned
subsidiary, filed for chapter 11 protection on Nov. 20, 2000  
(Bankr. S.D. Fla. Case No. 00-35217).  The Bankruptcy Court
confirmed the Company's Third Amended Plan of Reorganization on
Oct. 11, 2001, and that Plan took effect on Dec. 11, 2001.  The
Bankruptcy Court finally closed the Company's cases on Oct. 24,
2002.


DOBSON COMMUNICATIONS: Posts $8.4 Million Net Loss in 2nd Quarter
-----------------------------------------------------------------
Dobson Communications Corporation today reported sequential growth
in sales, roaming revenue, EBITDA and EBITDA margin for the second
quarter of 2006, compared with the first quarter of 2006.

The Company reported approximately 127,900 total gross subscriber
additions for the second quarter of 2006, an increase of 2.1% over
the 125,300 total gross additions in the first quarter of 2006.
Postpaid sales grew at a faster rate of 5.7% to 89,600 in the
second quarter of 2006, versus 84,800 in the first quarter of
2006.  The Company reported 131,500 total gross additions and
87,600 postpaid gross additions for the second quarter of 2005.

Postpaid customer churn continued its recent positive trend,
declining to 1.84% in the second quarter of 2006, compared with
2.25% in the second quarter of 2005, 2.82% in the third quarter of
2005, 2.62% in the fourth quarter of 2005 and 2.08% in the first
quarter of 2006.

As a result, Dobson reported 17,300 net subscriber additions for
the second quarter of 2006, which included 13,800 postpaid
customers, 7,700 prepaid customers, and a reduction of 4,200
reseller customers.  Dobson reported 2,500 net subscriber
additions for the first quarter of 2006, which was the first time
in six quarters that the Company had grown its subscriber base. In
the second quarter of 2005, the Company reported a reduction of
1,100 customers.

For the second quarter ended June 30, 2006, Dobson reported a net
loss applicable to common shareholders of $8.4 million, which
included a $12.7 million loss from extinguishment of debt.  For
the second quarter of 2005, Dobson reported a net loss applicable
to common shareholders of $12.2 million.

Service revenue for the second quarter of 2006 was $223.3 million,
compared with $216.0 million for the second quarter of 2005.
Dobson reported $47.89 average revenue per unit for the second
quarter of 2006, compared with ARPU of $45.28 for the second
quarter of 2005.

Dobson reported second quarter 2006 roaming revenue of $71.0
million, compared with $61.1 million for the second quarter of
2005.  The Company's new roaming agreement with its principal
roaming partner, Cingular, was applied initially to the second
quarter results for 2005.  Dobson also signed a new roaming
agreement in the fourth quarter of 2005 with T-Mobile America, its
second largest roaming partner.

Second quarter 2006 roaming revenue reflected 676 million roaming
minutes of use, a 31% increase over the 517 million MOUs reported
for the second quarter of 2005.  Roaming yield was 10.5 cents per
MOU for the second quarter of 2006, versus 11.8 cents for the
second quarter last year.

Equipment and other revenue was $17.8 million for the second
quarter of 2006, compared with $20.5 million in the second quarter
of 2005.  However, equipment and other revenue for the second
quarter of 2005 included a prior-period payment of $5.8 million as
part of a settlement under various agreements between Dobson and
the former AT&T Wireless.

Second quarter 2006 operating expenses were generally in line with
the Company's expectations.  Cost of service for the second
quarter of 2006 increased by $12.5 million to $81.5 million, as
compared with the second quarter of 2005.  Incollect costs
contributed $5.3 million of this increase -- higher off-network
usage by the Company's growing GSM subscriber base was partially
offset by lower off-network per-minute rates, which were
negotiated in the Company's new roaming agreements that it signed
last year.  Higher cell site costs contributed an additional $3.6
million to the year-over-year increase in cost of service. Cell
site costs increased due to new cell sites added over the last
year and due to the sale of most of the Company's owned towers in
2005.  Cell site expense for the second quarter of 2006 included
the lease cost for these sites.  In the same quarter last year,
there was no lease cost on these towers, because they had not yet
been sold.

Dobson reduced general and administrative expense by $2.6 million
to $46.7 million for the second quarter of 2006, compared with
$49.3 million in the second quarter of 2005.  Last year's G&A
expense included a $2.8 million accrual related to closing the
Frederick, Maryland call center, while this year's second quarter
G&A expense included approximately $1.5 million related to the
expensing of stock options associated with SFAS 123R, which were
not expensed last year.  (Dobson implemented SFAS 123R on Jan. 1,
2006.  An additional $0.4 million for SFAS 123R stock options
expense was recognized in other expense lines in the second
quarter of 2006.)  Aside from the call center charge last year and
the implementation of SFAS 123R, the Company continued to see
improvements in operations in the second quarter of 2006, most
notably in bad debt and certain customer service operations.

Dobson reported EBITDA of $107.3 million for the second quarter of
2006, compared with EBITDA of $109.3 million for the second
quarter of 2005.  As noted above, the year-over-year decline is
primarily related to a $5.8 million prior-period payment received
in last year's second quarter.

The Company had 1,563,700 subscribers as of June 30, 2006, with
approximately 82% on GSM calling plans. As of the same date, 87%
of Dobson's postpaid customers were on G SM calling plans.

Capital expenditures were $50.1 million in the second quarter of
2006, of which $31.6 million was reported by Dobson Cellular
Systems and $18.4 million by American Cellular Corporation. In
total, the Company added 73 cell sites during the second quarter
of 2006, bringing its total cell sites to 2,679 at June 30, 2006.

At June 30, 2006, Dobson's balance sheet included $116.4 million
in unrestricted cash and cash equivalents, and $2.0 million in
unrestricted short term investments; $4.4 million in restricted
investments; $2.5 billion in long-term debt; and $135.7 million in
preferred stock.

Dobson Communications (Nasdaq: DCEL) -- http://www.bobson.net/--  
provides wireless phone services to rural and suburban markets in
the United States. Headquartered in Oklahoma City, the Company
owns wireless operations in 16 states.

                           *     *     *

As reported in the Troubled Company Reporter on July 25, 2006,
Standard & Poor's Ratings Services revised its outlook for Dobson
Communications Corp. and its wholly owned operating subsidiary,
American Cellular Corp. to developing from negative and affirmed
the 'B-' corporate credit rating for both entities.


ENTERPRISE PRODUCTS: Earns $126 Million in 2006 Second Quarter
--------------------------------------------------------------
Enterprise Products Partners L.P. reported net income of
$126 million for the second quarter of 2006 ended June 30, 2006, a
79% increase from net income of $71 million in the second quarter
of 2005.

Revenue for the second quarter of 2006 increased 32%, to
$3.5 billion compared to $2.7 billion for the second quarter of
2005.  Operating income for the second quarter of 2006 increased
48% to $186 million compared to $126 million for the second
quarter of 2005.  Gross operating margin increased 26% to $311
million for the second quarter of 2006 from $246 million for the
same quarter in 2005.  Earnings before interest, taxes,
depreciation and amortization for the second quarter of 2006
increased 31% to $299 million from $229 million for the second
quarter of 2005.

"Enterprise reported exceptional results for the second quarter of
2006. In what is generally a seasonally weak quarter for our
partnership, we posted one of the best quarters in Enterprise's
history," said Robert G. Phillips, President and Chief Executive
Officer of Enterprise.  "Strong demand for natural gas, NGLs and
crude oil resulted in our transporting over 1.8 million barrels
per day of NGLs, crude oil and petrochemicals and approximately
7.4 billion cubic feet per day of natural gas through our
pipelines during the second quarter of 2006."

"The 26% increase in gross operating margin for the quarter was
led by a record performance from our petrochemical services
segment and strong results from our NGL pipeline and services
segment, particularly from our natural gas processing business.  
The $40 million investment we made last year to modify our octane
enhancement facility to produce isooctane generated significant
returns during the second quarter as isooctane was in great demand
to complement the growing use of ethanol in the production of
motor gasoline.  Overall, our NGL value chain benefited from
strong demand for NGLs by the petrochemical and motor gasoline
industries while our onshore natural gas pipelines delivered solid
results and our offshore pipelines continue their recovery from
last year's hurricanes," continued Mr. Phillips.

Total debt outstanding at June 30, 2006 was approximately
$4.8 billion.  The partnership's debt to total capitalization at
June 30, 2006 was 44.1%.  Total capital spending in the second
quarter of 2006 was $274 million, which includes $35 million of
sustaining capital expenditures.  At the end of the second quarter
of 2006, Enterprise had total liquidity of approximately
$700 million, which includes availability under the partnership's
$1.25 billion credit facility and unrestricted cash.

On July 18, 2006 Enterprise issued $300 million of Fixed/Floating
Rate Junior Subordinated Notes due 2066.  Net proceeds from the
offering were used to temporarily reduce borrowings outstanding
under our multi-year revolving credit facility.  These notes pay
interest at a fixed rate of 8.375% for the initial 10-year period,
after which the interest rate will become floating.  The rating
agencies have assigned partial equity treatment to the notes, with
Moody's and S&P each assigning 50% equity content, while Fitch
Investors has assigned 75% equity content.

Enterprise Products Partners L.P.  -- http://www.epplp.com/--  
provides midstream energy services to producers and consumers of
natural gas, NGLs and crude oil.  Enterprise transports natural
gas, NGLs and crude oil through 33,100 miles of onshore and
offshore pipelines and is an industry leader in the development of
midstream infrastructure in the United States and the Gulf of
Mexico.  Services include natural gas transportation, gathering,
processing and storage; NGL fractionation (or separation),
transportation, storage, and import and export terminaling; crude
oil transportation and offshore production platform services.

                           *     *    *

As reported in the Troubled Company Reporter on June 19, 2006,
Standard & Poor's Ratings Services affirmed the 'BB+' corporate
credit rating on master limited partnership Enterprise Products
Partners L.P. and subsidiary Enterprise Products Operating L.P.,
as well as the 'B+' corporate credit on EPCO Holdings Inc.


EVERGREEN INT'L: Receives Required Consents for 12% Senior Notes
----------------------------------------------------------------
Evergreen International Aviation, Inc., disclosed that more than a
majority in aggregate principal amount of its outstanding 12%
Senior Second Secured Notes Due 2010 (CUSIP No. 30024DAF7) have
been validly tendered pursuant to the provisions of its tender
offer and consent solicitation for any and all of its outstanding
Notes.  

As of the expiration of the consent solicitation, holders of
approximately 97.94% of the outstanding principal amount of the
Notes had tendered and consented to the proposed amendments to the
indenture governing the Notes.  

Subject to the satisfaction or waiver of the remaining conditions
set forth in the Offer to Purchase and Consent Solicitation
Statement dated July 20, 2006, Evergreen currently intends to
accept the entire amount of Notes tendered pursuant to the tender
offer and consent solicitation.

Evergreen has received the requisite consents to certain proposed
amendments to eliminate substantially all of the restrictive
covenants in the indenture governing the Notes and certain other
provisions.  

Upon the satisfaction or waiver of the remaining conditions set
forth in the Statement, including the receipt of net cash proceeds
sufficient to finance the tender offer and consent solicitation
from its new Senior Secured Credit Facility, Evergreen intends to
accept the Notes for purchase and payment pursuant to the tender
offer and consent solicitation and execute the supplemental
indenture effecting the amendments to the indenture.

The consent solicitation expired at 5:00 p.m. New York City time,
on Aug. 8, 2006.  Holders of the Notes who validly tendered their
Notes pursuant to the offer and validly delivered their consents
pursuant to the solicitation by the Consent Date will receive
total consideration of $1,080.00 per $1,000 principal amount of
the Notes, which includes a consent payment of $30.00 per $1,000
principal amount of the Notes.  

Holders who tender their Notes after the Consent Date, but before
the expiration of the tender offer will not receive the consent
payment.  

The tender offer is scheduled to expire at 5:00 p.m., New York
City time, on Aug. 21, 2006, unless otherwise extended or earlier
terminated.

Credit Suisse Securities (USA) LLC is serving as the exclusive
Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation.  Questions regarding the terms of the tender
offer or consent solicitation should be directed to:

    Credit Suisse Securities (USA) LLC
    Attn: Liability Management Group
    Tel: (212) 325-7596 or (800) 820-1653.

The Tender Agent and Information Agent is D.F. King & Co., Inc.
Any questions or requests for assistance or additional copies of
documents may be directed to the Information Agent toll free at
(800) 290-6426 (bankers and brokers call collect at (212) 269-
5550).

Evergreen International Aviation, Inc. is a portfolio of five
diverse aviation companies headquartered in McMinnville, Oregon.
With international operating authority and a network of global
offices and affiliates, Evergreen consists of an international
cargo airline that owns and operates a fleet of Boeing 747s, an
unlimited aircraft maintenance, repair, and overhaul facility, a
full-service helicopter company, an aircraft ground handling
company, and an aircraft sales and leasing company.  In addition
to these endeavors, Evergreen owns and operates Evergreen
Agricultural Enterprises and is headquartered near the not-for-
profit Evergreen Aviation Museum, home of the Spruce Goose.

                           *     *     *

As reported in the Troubled Company Reporter on July 27, 2006,
Moody's Investors Service assigned ratings to Evergreen
International Aviation, Inc.'s new credit facilities.  A rating of
B1 was assigned to Evergreen's $350 million First Lien Senior
Secured Credit Facility, comprised of a $50 million revolver and a
$300 million term loan.  Additionally, Moody's assigned a Caa1 to
Evergreen's Second Lien Senior Secured Term Loan Facility.

Standard & Poor's Ratings Services also assigned its 'B' rating to
Evergreen Aviation International Inc.'s $350 million first-lien
credit facility, consisting of a $50 million first-lien revolving
credit facility maturing in 2011 and a $300 million first-lien
term loan maturing in 2011.  In addition, a 'CCC+' rating was
assigned to the $50 million second-lien term loan maturing in
2013.


EXIDE TECH: Amends Proxy Statement for Aug. 22 Shareholders' Meet
-----------------------------------------------------------------
Exide Technologies filed an amendment to the Proxy Statement dated
July 28, 2006, in connection with the annual meeting of the
Company's shareholders scheduled to be held on Aug. 22, 2006, at
9:00 a.m., at the Hilton Garden Inn Atlanta North/Alpharetta at
4025 Windward Plaza Drive in Alpharetta, Georgia.

During the meeting, shareholders will act on these matters:

     a) the election of seven directors;

     b) a proposal to approve

           * a $75,000,000 rights offering of 21,428,571 shares of
             common stock to the Company's shareholders at $3.50
             per share,  

           * the sale of any common stock not subscribed for in
             the rights offering to the standby purchasers and
             additional standby purchaser and the sale of another
             14,285,714 shares for $50,000,000 to the standby
             purchasers at the same price, and

           * the related Standby Purchase Agreement and
             Registration Rights Agreement and the other
             transactions contemplated;

     c) a proposal to amend the Company's Certificate of
        Incorporation to increase our authorized shares of common
        stock to 100,000,000 and the aggregate number of shares of
        capital stock to 101,000,000;

     d) a proposal to approve an amendment the Company's 2004
        Stock Incentive Plan; and  

     e) a proposal to ratify the appointment of the Company's
        independent auditors for fiscal 2007.

All holders of record of shares of the Company's common stock at
the close of business on July 27, 2006, are entitled to vote at
the meeting.

A full-text copy of the proxy statement for the annual
shareholders' meeting is available for free at
http://researcharchives.com/t/s?f2e

A full-text copy of the amendment is available for free at
http://researcharchives.com/t/s?f30

Headquartered in Princeton, New Jersey, Exide Technologies
(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.  

                           *     *     *

As reported in the Troubled Company Reporter on July 5, 2006,
PricewaterhouseCoopers LLP expressed substantial doubt about Exide
Technologies' ability to continue as a going concern after
auditing the Company's financial statements for the fiscal year
ending March 31, 2006.

PwC pointed to the Company's recurring losses and negative cash
flows from operations.  Additionally, given the Company's past
financial performance in comparison to its budgets and forecasts
there is no assurance the Company will be able to meet these
budgets and forecasts and be in compliance through March 31, 2007,
with one or more of the debt covenants of its senior secured
credit facility.


FALCONBRIDGE LTD: Board Urges Shareholders to Take Xstrata's Offer
------------------------------------------------------------------
The Board of Directors of Falconbridge Limited recommends that
Falconbridge shareholders tender their shares to the offer made by
the Anglo-Swiss mining company, Xstrata plc.  Under the terms of
its offer amended July 19, 2006, Xstrata offered to purchase all
of the outstanding common shares of Falconbridge it does not
already own for CDN$62.50 per Falconbridge share.  The offer
expires at 8:00 p.m. (Toronto time) on Aug. 14, 2006 and,
among other things, remains conditional on approval from Xstrata
shareholders.   With the termination of the Support Agreement
between Inco and Falconbridge, Falconbridge's Board of Directors
examined alternatives for the Company, including the possibility
of other potential acquirers of Falconbridge.  The Board is
satisfied that it is unlikely that an offer more attractive than
Xstrata's will emerge.

"Xstrata currently owns 24.5% of Falconbridge and since its offer
is for any or all shares of Falconbridge, it appears likely that
it will attract sufficient shares to gain effective control of
Falconbridge on August 14," said Derek Pannell, Falconbridge's
Chief Executive Officer.  "Although Xstrata has consistently
stated its desire to own 100% of Falconbridge, there can be
no assurance that shareholders who do not accept the Xstrata offer
on or before Aug. 14, 2006, will be able to sell their shares to
Xstrata for cash at CDN$62.50 at some later date.  Accordingly,
the Falconbridge Board of Directors recommends that shareholders
tender their shares to this offer in order to realize the value of
their Falconbridge shares.

"Furthermore, I believe Xstrata is a well-run company that values
both the physical assets and the human expertise within
Falconbridge.  The commitments Xstrata announced on July 25
relating to locating Xstrata Nickel as well as copper and zinc
offices in Toronto, job protection, research and development and
continued investment in Canada are reassuring to Falconbridge
employees."

                        About Xstrata

Xstrata plc (LSE: XTA) -- http://www.xstrata.com/-- is a major     
global diversified mining group, listed on the London and Swiss
stock exchanges.  The Group is and has approximately 24,000
employees worldwide, including contractors.

Xstrata does business in six major international commodities
markets: copper, coking coal, thermal coal, ferrochrome,
vanadium and zinc, with additional exposures to gold, lead and
silver.  The Group's operations and projects span four
continents and nine countries: Australia, South Africa, Spain,
Germany, Argentina, Peru, Colombia, the U.K. and Canada.

                      About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a
leading copper and nickel company with investments in fully
integrated zinc and aluminum assets.  Its primary focus is the
identification and development of world-class copper and nickel
orebodies.  It employs 14,500 people at its operations and
offices in 18 countries.  The Company owns nickel mines in
Canada and the Dominican Republic and operates a refinery and
sulfuric acid plant in Norway.  It is also a major producer of
copper (38% of sales) through its Kidd mine in Canada and its
stake in Chile's Collahuasi mine and Lomas Bayas mine.  Its
other products include cobalt, platinum group metals, and zinc.

                        *    *    *

As reported in the Troubled Company Reporter on Aug. 4, 2006,
Standard & Poor's Ratings Services revised the CreditWatch
implications on Inco Ltd. and Falconbridge Ltd. to positive from
developing, where they were placed July 18, 2006.  This action
stems from the lower probability under all current takeover
scenarios that ratings will be lowered into the speculative-grade
category.

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

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


FASSBERG CONSTRUCTION: Files Second Amended Disclosure Statement
----------------------------------------------------------------
Fassberg Construction Company delivered to the U.S. Bankruptcy
Court for the Central District of California a second amended
disclosure statement describing its chapter 11 plan of
reorganization.

The Court will convene a hearing to consider the adequacy of the
Debtor's disclosure statement on Aug. 22, 2006, 10:00 a.m., at
Court Room No. 303, Burbank Boulevard in Woodland Hills,
California.

Under the Amended Plan, distribution to the Debtor's creditors
will be funded by:

   a) the Debtor from fees of its current projects;

   b) Fassberg Contracting Corp. -- as a newly created non-debtor
      corporate entity -- through continued operations of the
      Debtor's business, upon entry of a court order approving a
      proposed management agreement between the Debtor and     
      Fassberg Contracting.  Under the proposed management
      agreement, Fassberg Contracting will bid all construction
      work of the Debtor, and the Debtor will provide Fassberg
      Contracting with construction and management related
      services.  Fassberg Contracting will operate pursuant to a
      budget that will be made available to the creditors and
      parties-in-interest of the Debtor's estate;

   c) Abraham Fassberg -- as existing shareholder -- through a
      $100,000 loan, which will fund Fassberg Contracting's
      operations; and

   d) Fidelity & Deposit Company of Maryland -- as a secured
      claim holder -- through bond payments or cash collateral
      released by Fidelity, disbursement of which will be made to
      cover Class 2 bonded claims and certain administrative
      claims of the estate.

                       Treatment of Claims

The priority tax claims of California FTB, IRS, and the City of
Los Angeles are entitled to a present value of the claims in
deferred cash payments, over a period not exceeding six years from
the date of the tax assessment.

Fidelity's secured claim is entitled to a total payout of $500,000
including an estimated $200,000 cash paid as reimbursement for
legal fees.  Fidelity's lien will be reduced by the Debtor's
payments to sub-contractors as projects are completed.

Holders of Class 2 Bonded Claims will be paid 30 days after the
effective date of the Plan with a total payout of $371,756, while
holders of Class 3 Non-Bonded Claims will receive a total payout
of $500,000 through quarterly payments from Dec. 1, 2006 until
Dec. 31, 2008.

In consideration for the new value contributed, Mr. Fassberg will
retain his 100% stock ownership in the Debtor.

A full-text copy of the Debtor's second amended disclosure
statement is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060809224753  
  
Headquartered in Encino, California, Fassberg Construction Company
is a full service general contracting and construction management
firm.  The Company filed for chapter 11 protection on April 1,
2005 (Bankr. C.D. Calif. Case No. 05-11957).  Douglas M. Neistat,
Esq., at the Law Offices of Greenberg & Bass, serves as counsel in
the Debtor's bankruptcy case.  David B Golubchik, Esq., represents
the Official Committee of Unsecured Creditors.  
When the Debtor filed for protection from its creditors, it had
assets of $15,267,175 and debts of $6,758,113.


FLYI INC: Creditor Objects to Employee Incentive Plan Extension
---------------------------------------------------------------
FLYi, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve an Incentive Program
pursuant to Sections 105(a), 363(b) and 503 of the Bankruptcy
Code, as reported in the Troubled Company Reporter on Aug. 2,
2006.

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

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

   * liquidate the Debtors' remaining assets;

   * review and resolve claims; and

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

                       Trident/BAE Objects

Trident Turboprop Limited, BAE SYSTEMS Limited, and BAE Regional
Aircraft, Inc., whose representative serves as chairperson of the
Official Committee of Unsecured Creditors, assert that the
process of filing and confirming a liquidation plan has lagged
significantly behind the liquidation of the Debtors' assets.

Barbara H. Stratton, Esq., at Knepper & Stratton, in Wilmington,
Delaware, points out that the work that remains to be done in the
Debtors' Chapter 11 cases should be performed under the auspices
of a liquidating trustee under a plan of liquidation.
Trident/BAE objects to the Motion to the extent that it will be
implemented without the Trustee's consultation.

As Committee Chairman, Trident/BAE has been involved in the
process of interviewing potential Trustee candidates and the
Committee has proposed the retention of Anthony H.N. Schnelling
of Bridge Associates, LLC, to serve in the capacity as Trustee in
FLYi's chapter 11 liquidating cases.  Trident/BAE asserts that
Mr. Schnelling's retention should be effective immediately on a
consulting basis pre-confirmation so that he can participate in
the formulation of the wind-down team and the wind-down plan, as
well as assist the Committee with its investigation of potential
causes of action.

Ms. Stratton points out that it is not clear from the Motion that
the proposed Incentive Program complies with Section 503(c) of
the Bankruptcy Code.  Ms. Stratton notes that it appears that the
Debtors' proposed payments are being made to retain the affected
employees.  "As such, it appears that the Debtors would need to
comply with section 503(c)(1)(A) [to] (C) rather than section
503(c)(2) of the Bankruptcy Code."

Trident/BAE also contends that paying retention bonuses to
employees that voluntarily terminate their employment is
antithetical to a retention program.

Moreover, there is not enough information or clarity contained in
the Motion to allow creditors to reasonably evaluate the Incentive
Program, or the wisdom of entering into it without consulting the
Trustee, Ms. Stratton maintains.

Therefore, Trident/BAE asks the Court to defer ruling on the
Motion.

Trident/BAE does not object to the concept of retaining certain of
the Debtors' employees to assist the Trustee in winding up the
Debtors' estates and appropriately compensating them for their
services.  However, Trident/BAE believes that retention bonus
programs should be as cost-effective as possible and be formulated
in consultation with the Trustee, Ms. Stratton says.

Ms. Stratton comments that the Debtors have incurred more than
$3,800,000 in estimated professional fees since January 2006,
when they ceased operations.  "Trident/BAE believes there is
reason for concern regarding whether [the Debtors'] cases are
proceeding as efficiently as possible."

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


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

As reported in the Troubled Company Reporter on Aug. 2, 2006,
Independence Air's rights and privileges in the Aircraft
Maintenance Premises are subject of a Ground Lease Agreement --
the Hanger Lease -- dated as of June 23, 1997, between
Independence Air, Inc., and the MWAA wherein the MWAA designs,
constructs, operates and maintains an aircraft maintenance
facility at Washington Dulles International Airport.

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

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

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

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

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

                      Loudoun County Objects

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

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

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

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

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

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

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

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


FORD MOTOR: To Invest $1 Billion in Michigan Facilities
-------------------------------------------------------
Ford Motor Company will increase the pace of new product
introductions and respond to fast-changing consumer-buying trends
as it accelerates its Way Forward turnaround plan and considers
investing up to $1 billion in several of the company's Michigan
facilities.  Mark Fields, Ford's president of the Americas,
disclosed, on Aug. 9, 2006, to industry leaders at the Center for
Automotive Research's 41st annual Management Briefing Seminars.

"We are rebuilding our business for the future with an emphasis on
more new products faster -- and that includes more customer
features and advanced technologies throughout our entire lineup,"
said Mr. Fields.  "Even as we reduce our overall capacity in line
with demand and make the tough but necessary cutbacks throughout
our business to secure our future, we are not retreating one bit
from the necessary investments to bring out more products for our
customers.  The competitive landscape and our future demand it."

      Investments on Manufacturing Expansion & New Products

Ford's potential $1 billion investment would be dedicated to
expanding flexible manufacturing at several Ford facilities in
Michigan and be used for the research and development of future
products, advanced powertrain technologies and hybrid vehicles.  
The investment is being considered in partnership with a Michigan
Economic Development Corporation incentive package designed to
encourage investment in the state and retain jobs.

"Today, the auto industry represents the single greatest engine of
economic activity in the world.  And nowhere is the impact more
profound than here in our back yard," Mr. Fields said.  "Ford is
proud to be part of Michigan, and our work to keep Ford's future
part of this great state's future underscores our serious
commitment to the people and the communities that have helped make
us great for more than a century."

The new investments are not yet finalized, Mr. Fields said, but
Ford will continue to work with the state and the company's
various facilities, and make decisions as part of its Way Forward
turnaround plan.

"There is no vision for Michigan's new economy that does not
include Ford cars and trucks designed, engineered and made in
Michigan," said Michigan Governor Jennifer M. Granholm.  "For more
than a century, Ford and the state of Michigan have been partners,
and today we are affirming that our partnership will continue far
into the future."

                    More New Products Faster

As part of plans to accelerate its turnaround, Ford will emphasize
the introduction of new products as core to going "further and
faster" throughout its business.

"We'll have more to say on the specifics of what we're
accelerating in September.  But I can confirm that our plans
include more new products, features and technologies throughout
our lineup," said Mr. Fields.  "We have nine new Ford and Lincoln
Mercury products going on sale in the next six months alone, and
we are rebuilding our business for the future with an emphasis on
new products."

Among the new products are the Ford Shelby GT -- on sale in
January -- and Lincoln MKS flagship sedan, which will arrive in
showrooms in 2008.

                         Ford Shelby GT

The 4.6-liter, 325-horsepower Ford Shelby GT will occupy a niche
between the Mustang GT and the Ford Shelby GT500 both in
performance and appearance.  It is a retail version of the Ford
Shelby GT-H Mustang developed for Hertz that was the surprise hit
of the 2006 New York International Auto Show.

"We know the combination of Mustang and Shelby is magic, and we
proved it again when we revealed the Ford Shelby GT-H. The car
received such rave reviews that our dealers and customers asked
for a version of their own," Mr. Fields explained.  "We listened,
and we're delivering."

The Ford Shelby GT will be on sale in January.

                           Lincoln MKS

The Lincoln MKS full-size flagship sedan will be based on the
concept vehicle first shown at the North American International
Auto Show in January.

"The Lincoln MKS will take Lincoln craftsmanship and comfort
beyond anything we've built before," Mr. Fields said.  "Its design
communicates power, motion and speed, and it will be packed with
more technology and features than any Lincoln before it."

One new technology on the Lincoln flagship comes straight from
Ford racing and the Ford GT: a capless fuel filler.  It eliminates
the inconvenience of forgetting to put the gas cap back on after
refueling and is better for the environment because no gas fumes
escape.

Ford's industry first technology that eliminates the fuel filler
cap was originally put into production on the Ford GT and is set
to debut across the company's product lineup starting with the
2008 Lincoln MKS.  The capless system is a tangible example of how
Ford is developing innovative product solutions to satisfy the
unmet needs of consumers.

The Lincoln MKS will be the next major step in establishing
Lincoln as America's luxury brand.  Lincoln is building momentum
-- with retail sales up 8% for the first half of 2006.  The new
Lincoln MKS flagship is designed to continue to introduce a new
face of Lincoln to the American public, building on the hallmarks
of design, a business class experience and a smooth, confident
ride.

                          Fuel Economy

Ford has identified two customer trends that will take future
products across the auto industry into new directions.  The first
is a growing, worldwide demand for sustainability and a smart
energy policy.  The second is a set of profound demographic
changes already affecting the auto industry that will accelerate
during the next decade.

"Consumers are speaking loud and clear.  They're telling us that
the social and environmental trade-offs associated with
automobiles are increasingly unacceptable," said Mr. Fields.  
"They want cleaner, safer, more efficient vehicles that don't
compromise on function or value.  The auto companies best able to
deliver vehicles that meet these needs will reap the rewards of
increased market share and the financial rewards of technology
innovation and leadership."

Ford research shows that the percentage of Americans who say they
are very concerned about the environment is approximately 70%, up
nearly 10 points in the last five years.  Fuel efficiency is now
among the top three purchase drivers, along with quality and
safety.

The rapid rise of fuel prices also has accelerated another trend
that began with the aging of the Baby Boomer generation, Mr.
Fields said.

"Baby Boomers are downsizing every aspect of their lives -
including their homes - and they are moving to smaller cars,
crossovers, small SUVs and small premium utilities," Mr. Fields
added.  "They're also buying fewer medium and large SUVs -- a
trend that actually started in 2003 and accelerated last year,
when gas prices increased."

This population shift will result in dramatic growth for
crossovers and small cars, as well as for premium utility
vehicles, Fields explained.  People-movers -- including medium and
large SUVs and minivans -- will decline because there will be a
smaller pool of family-oriented buyers purchasing vehicles that
their aging parents had been driving.

"The lesson we take from this tectonic shift is that listening to
our customers has never been more important.  We as an industry
can't sit back and complain about these changes.  We have to act
on them - and quickly," Mr. Fields said.  "The old saying 'If you
build it, they will buy it' needs to be put to rest.  'If they
will buy it, we will build it' is the way we need to approach the
future."

      Products for New Customers and a Changing Marketplace

With the fast-changing marketplace and the rise in demand for more
fuel-efficient vehicles, Ford has kicked off its new-model year
with a lineup of new cars, crossovers, hybrids, SUVs and trucks
that puts the company in its best position ever to attract new
customers.

"Ford never has been in a better position than this model year to
compete for customers in an environment of rising gas prices and
higher demand for more power, more performance and more features,"
said Mr. Fields.  "We're also leading the way with bold American
designs and innovations in our new vehicles hitting the market
this summer and fall."

Key new products include:

   * Ford Edge and Lincoln MKX crossovers, which are expected to
     shake up this fast growing market when they go on sale in
     November.

   * Ford Shelby GT500, which is now on sale as the most powerful
     production Mustang ever.

   * Lincoln MKZ, with its new 3.5-liter V-6 engine -- which
     eventually will power one of every five Ford and Lincoln
     Mercury vehicles.

   * Ford Expedition, Expedition EL and Lincoln Navigator, which
     go on sale in September, and the new Lincoln Navigator L in
     December.  The new SUVs offer more standard safety equipment,
     best-in-class towing for Expedition, a usable third row and
     additional cargo space.

   * Ford Explorer Sport Trac, which is now on sale with one of
     the segment's only V-8 engines.

   * Ford F-150 with increased towing to a best-in-class 10,500
     pounds, new FX2 Sport edition and new 6.5-foot box for the
     Super Crew.

   * New all-wheel-drive versions of the popular Ford Fusion,
     Mercury Milan and Lincoln MKZ -- a technology that more than
     half of new buyers say they want in their next vehicle.

Ford also this year is: delivering more standard safety equipment
on more vehicles, with a focus on rapidly increasing
standardization of side air bags and side air curtains; doubling
the number of vehicles available with DVD-based navigation
systems; and quadrupling the number of vehicles available with
SIRIUS satellite radio.

Drivers can now easily plug their iPod into the car thanks to new
audio features being introduced in new 2007-model Ford and Lincoln
Mercury vehicles.

Ford also is responding to the skyrocketing customer demand to
bring electronic devices into cars and trucks by building in iPod
connectivity in half of the Ford and Lincoln Mercury lineup.  The
company predicts that iPod and other MP3 player sales will reach
132 million units in 2009 -- more than double the 57.7 million
sold in 2005.

For the 2007-model year, built-in auxiliary audio-input jacks will
be offered on the Ford Edge, Explorer, Expedition, Mustang,
Fusion, Sport Trac, Ranger, F-150, Mercury Milan, Mountaineer,
Lincoln MKX, Lincoln MKZ, Navigator and Lincoln Mark LT.  The
jacks allow customers to bring any iPod or other MP3 player with a
standard 3.5-millimeter audio output into their vehicle and play
it through the audio system.

In addition, early next year, Ford and Lincoln Mercury dealers
throughout the U.S. will begin offering Ford's TripTunes Advanced
audio system -- an iPod integration feature that provides drivers
with top sound quality and recharging at the same time.  TripTunes
Advanced allows the driver to store the iPod in the vehicle's
glove box and select music using the steering wheel or radio
controls -- including shuffling songs and skipping between tracks
and play lists.

                        About Ford Motor

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

                          *     *     *

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


FRESH DEL MONTE: Incurs $17.8 Million Net Loss in 2006 Second Qtr.
------------------------------------------------------------------
Fresh Del Monte Produce Inc. reported a net loss of $17.8 million
for the second quarter of 2006, compared with net income of
$46.5 million in the year-ago period.  The second quarter results
include charges totaling $33.2 million for asset impairment and
other charges.

For the first six months of 2006, the Company had a net loss of
$1.6 million, due to increased production and transportation
costs, along with asset impairment and other charges.

Fresh Del Monte generated $907.1 million of net sales for the
second quarter ended June 30, 2006, compared with $922.8 million
in the second quarter of 2005.  The decrease in net sales was
mainly attributable to lower sales in the Company's other fresh
produce business segment.  For the first six months of 2006, net
sales were $1.75 billion, compared with net sales of $1.76 billion
for the same period in 2005.

Gross profit for the second quarter of 2006 was $71.3 million,
down 31 percent from the same period in 2005.  Gross profit for
the first six months was $139 million, compared with
$220.5 million for the same period in 2005.  The decrease in gross
profit for both periods was the result of continued higher costs
related to fuel, raw materials, packaging, labor and
transportation as well as the impact of lower sales in the
Company's other fresh produce and prepared food business segments.

"Our earnings in the second quarter indicate that we are operating
in what is the most difficult environment of the last ten years,"
said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer.
"However, we believe the steps taken over the past six months are
preparing us for these changing times.  Our ability to increase
North America banana contract pricing, our aggressive
implementation of cost-cutting programs, and our increased
strategic investments in our business collectively assisted us in
partially offsetting the impact of higher operating costs during
the quarter.  This demonstrates that our strategy to transform our
organization into a leaner, more efficient, more profitable and
more focused enterprise is working."  He added, "There are a
number of difficulties we believe will continue to affect our
industry during the remainder of 2006, including fuel,
transportation, and raw material costs.  Even so, we have managed
effectively through changing environments before, and we continue
to be confident as we make advancements toward our long-term
vision of becoming the world's leading supplier of healthful fresh
and prepared food and beverages to consumers of all ages."

A full-text copy of the Company's quarterly report on Form 6-K is
available for free at http://researcharchives.com/t/s?f2d

                       About Fresh Del Monte

Fresh Del Monte Produce Inc. -- http://www.freshdelmonte.com/--   
is one of the world's leading vertically integrated producers,
marketers and distributors of high-quality fresh and fresh-cut
fruit and vegetables, as well as a leading producer and
distributor of prepared fruit and vegetables, juices, beverages,
snacks and desserts in Europe, the Middle East and Africa.  Fresh
Del Monte markets its products worldwide under the Del Monte(R)
brand, a symbol of product quality, freshness and reliability
since 1892.

                           *     *     *

As reported in the Troubled Company Reporter on July 3, 2006,
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating and '2' recovery rating to Fresh Del Monte Produce, Inc.'s
term loan, indicating an expected substantial recovery of
principal in the event of a payment default, and a '2' recovery
rating to the revolving credit facility.

Standard & Poor's affirmed its 'BB' rating on Fresh Del Monte's
senior secured credit facilities following the addition of a new
$150 million term loan to its existing $600 million revolving
credit facility.  Existing ratings on the company, including its
'BB' corporate credit rating, have been affirmed.  The outlook is
negative.


GENERAL MOTORS: Likely to Reach Job Cuts Targets Ahead of Schedule
------------------------------------------------------------------
General Motors Corporation expects to reach reduced employment
level by Jan. 1, 2007, about two years ahead of its previously
announced target, in its pursuit to return its North American
operations to profitability and positive cash flow.

GM's actions to reduce hourly headcount started in November 2005
when GM announced plans to idle 12 facilities and reduce
manufacturing employment levels by approximately 30,000 employees
by the end of 2008.  During the first quarter of 2006, two
assembly plants referred to in the original disclosure stopped
production.  On March 22, 2006, GM, the UAW, and Delphi announced
they had entered into the UAW Attrition Agreement to reduce the
number of hourly employees of GM and of Delphi through a special
attrition program. In late June, GM announced that approximately
34,400 hourly employees (33,100 UAW-represented and 1,300 IUE-CWA-
represented) would participate in the program.

                  Other Cost-Reduction Efforts

With regard to costs, the Company's primary goals were to address
its legacy cost burden and reduce its structural costs in line
with current levels of revenue.  Legacy costs are primarily
related to the cost of benefits provided to retired employees and
their dependents, and costs associated with employees and their
dependents of businesses divested by GM.  Structural costs, such
as the cost of unionized employees, are those costs that do not
vary with production and include all costs other than material,
freight, and policy and warranty costs.  Some of these costs are
within the Company's control, while others such as interest rates
or return on investments (which influence the Company's pension
and OPEB expenses) are more dependent on outside factors.

To reduce legacy costs and structural costs, GM has taken action
in a number of areas.  To contain legacy health care costs for
retired hourly employees, GM entered into the UAW Health Care
Settlement Agreement, which received approval by the U.S.
Bankruptcy Court for the Southern District of New York -- the
Court handling Delphi Corp.'s chapter 11 case -- on March 31,
2006, and a tentative agreement with the IUE-CWA providing similar
terms, which was announced on April 10, 2006.  In addition, on
February 7, 2006, GM announced it would cap its contributions to
salaried retiree health care at the level of 2006 expenditures.  
To control pension costs, GM announced on March 7, 2006, that it
would freeze accrued pension benefits for U.S. salaried employees
and implement a new benefit structure for future accruals.  

                   Moves to Improve Liquidity

GM has also taken actions to improve liquidity. In February 2006,
GM's Board of Directors reduced the quarterly dividend by 50%,
which will conserve about $500 million on an annual basis.  Since
the fourth quarter of 2005, the Company has sold all or part of
its equity stakes in each of Fuji Heavy Industries, Isuzu and
Suzuki, adding more than $3 billion to GM's liquidity.  

In addition to these actions, on July 20, 2006, GM executed a
$4.63 billion amended and restated credit agreement with a
syndicate of banks restating and amending the $5.6 billion
unsecured line of credit.  This agreement provides additional
available liquidity that GM anticipates to draw on from time
to time to fund working capital and other needs.  

Also, on April 2, 2006 GM entered into a definitive agreement to
sell a 51% controlling interest in GMAC to a consortium of
investors.  GM's goal in selling the 51% interest in GMAC was
improving GMAC's current credit rating position for GMAC's long
term growth and provide a stronger foundation to support GM sales
and dealers.  The transaction also improves liquidity and results
in total value of cash proceeds and distributions to GM of
approximately $14 billion over three years, comprised of $7.4
billion purchase price, $4 billion of retained assets and $2.7
billion cash dividend.  The Company expects to receive
approximately $10 billion at closing.  $1.4 billion will be
invested by GM in new GMAC preferred equity.

                  Near Term Issues with Delphi

In addition to restoring GMNA operations to profitability, GM
needs to address near term issues associated with its largest
supplier, Delphi.  On March 31, 2006 Delphi filed motions under
the U.S. Bankruptcy Code seeking authority to reject its U.S.
labor agreements and modify retiree welfare benefits.  The unions
and certain other parties have filed objections to these motions.  
Hearings on these motions were adjourned until tomorrow, Aug. 11,
to allow Delphi, its unions and GM additional time to focus on
reaching comprehensive consensual agreements.   While Delphi has
indicated to us that it expects no disruptions in its ability to
continue supplying us with the systems, components, and parts that
we need as Delphi pursues its bankruptcy restructuring plan, labor
disruptions at Delphi resulting from Delphi's pursuit of a
restructuring plan could seriously disrupt our North American
operations, prevent us from executing our GMNA turnaround
initiatives, and materially adversely impact our business.  
Accordingly, resolution of the Delphi related issues remains a
critical near term priority.

Delphi also filed on March 31, 2006 a motion under the U.S.
Bankruptcy Code seeking authority to reject certain supply
contracts with GM. A hearing on this motion was adjourned by the
court until after the hearings related to Delphi's U.S. labor
agreements and retiree welfare benefits are completed or otherwise
resolved. Although Delphi has not rejected any GM contracts as of
this time and has assured GM that it does not intend to disrupt
production at GM assembly facilities, there is a risk that Delphi
or one or more of its affiliates may reject or threaten to reject
individual contracts with GM, either for the purpose of exiting
specific lines of business or in an attempt to increase the price
GM pays for certain parts and components. As a result, GM could be
materially adversely affected by disruption in the supply of
automotive systems, components and parts that could force the
suspension of production at GM assembly facilities.

                       About General Motors

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.


GRUPO TMM: Shareholders to Approve $200 Million Securitization
--------------------------------------------------------------
Grupo TMM, S.A. called a Shareholders Meeting to be held on
Aug. 18, 2006, to propose the approval of the purported
securitization of $200 million with Deutsche Bank.  The proceeds
from this transaction will be used to redeem its outstanding 2007
Senior Notes and to fund capital projects.

Headquartered in Mexico City, Grupo TMM S.A. (NYSE: TMM)(MEX
VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin American  
multimodal transportation and logistics company.  Through its
branch offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.

                           *     *     *

Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.'  The rating was
removed from Creditwatch, where it was placed on Dec. 15,
2004.  S&P said the outlook is positive.


GSI GROUP: Earns $6.2 Million in Second Quarter Ended June 30
-------------------------------------------------------------
For the second quarter ended June 30, 2006, GSI Group Inc.
reported net income of $6.2 million compared with net income of
$3.1 million for the same period in 2005.

The Company's revenue for the quarter rose to $76.4 million,
compared to revenue of $66.9 million for the same period of 2005.
Year to date revenues of $152.5 million are up 16% from this time
last year.  

GSI Group Inc. supplies precision technology to the global
medical, electronics, and industrial markets and semiconductor
systems.  GSI Group's common shares are listed on Nasdaq (GSIG).

                           *     *     *

In May 2005, Moody's Investors Service assigned a B3 rating to the
senior notes of The GSI Group, Inc.  In addition, Moody's affirmed
GSI's existing ratings, including its B2 senior implied
rating, and assigned a speculative grade liquidity rating of
SGL-2.

Also in May 2005, Standard & Poor's Ratings Services assigned its
'B' corporate credit rating to GSI Group and assigned its 'B-'
senior secured rating to the $125 million senior unsecured notes
due in 2013.  The outlook was stable.


HOME PRODUCTS: Atlas Partners Reports Sale of Georgia Facility
--------------------------------------------------------------
Atlas Partners, LLC, reports that it completed the sale of Home
Products International, Inc.'s 54,788 square-foot manufacturing
plant located in Thomasville, Georgia.  The sale price was not
disclosed.  

In November 2005, the Troubled Company Reporter related that Home
Products planned to:

   -- spend $10 million to expand and modernize its
      Chicago, Illinois, and El Paso, Texas, plastics
      manufacturing facilities, and

   -- consolidate its plastics manufacturing operations
      and close its Louisiana, Missouri, and Thomasville,
      Georgia, plants.  

"The consolidation of our facilities," Doug Ramsdale, Chief
Executive Officer of Home Prodcucts explained at the time, "allows
us to increase our capacity, raise the productivity of our
manufacturing operations, and improve our service to our customers
even further."

"The difficult, but necessary, decision to close two of our plants
better positions HPI for long-term growth and success," Mr.
Ramsdale continued.

Home Products International, Inc. -- http://www.hpii.com/and  
http://www.homz.biz/-- is an international consumer products  
company which designs and manufactures houseware products.  The
Company sells its products through national and regional
discounters including Kmart, Wal-Mart and Target, hardware/home
centers, food/drug stores, juvenile stores and specialty stores.

As of Oct. 1, 2005, Home Products' balance sheet showed an
$11,632,000 equity deficit.  

In January 2006, 94% of the holders of the Company's 9-5/8% Senior
Subordinated Notes due 2008 agreed to amend the Indenture
governing those notes to lift the requirement that the Company
voluntarily file reports with the Securities and Exchange
Commission that are required under Section 15(d) of the Exchange
Act of 1934, as amended.  As a result, Home Products has not
released more current financial data.

In December 2005, Home Products entered into a First Amendment to
its Amended and Restated Loan and Security Agreement, dated as of
December 21, 2005, with Bank of America, N.A., as successor-in-
interest to Fleet Capital Corporation, as agent for Lenders
thereunder.  Subject to required reserves, that facility gives the
company access to up to $60 million of debt financing.  


HONEY CREEK: MuniMae Asks Ct. to Determine Value of Apartments
--------------------------------------------------------------
MuniMae Portfolio Services, LLC -- the authorized servicing agent
for The Bank of New York Trust Company, N.A., as indenture trustee
under a $20,485,000 bond issued by the Texas Department of Housing
and Community Affairs to secure a loan owed by Honey Creek Kiwi
LLC -- asks the U.S. Bankruptcy Court for the Northern District of
Texas to determine the value of the Debtor's 656-unit apartment
complex known as the Honey Creek Apartments for purposes of a
chapter 11 plan.

John N. Schwartz, Esq., at Fulbright & Jaworski L.L.P., in Dallas,
Texas, tells the Court that the Debtor and MuniMae Portfolio
Services substantially disagree about the value of the Real
Property, the principal collateral for the Loan and the source of
the Debtor's revenue.  MuniMae's treatment under the Debtor's Plan
depends heavily upon the valuation of the Real Property and the
other Collateral.

The Debtor proposes to set the principal amount of MuniMae's
Series A Note under the Plan at $15.75 million, or the value of
the collateral securing the MuniMae claim, as determined by the
Court.  Mr. Schwartz points out that it is apparent from the
Debtor's Plan and its Disclosure Statement that the Debtor intends
to advocate for a value of the Real Property that is artificially
low.  Although the Debtor's Plan contemplates that the CHDO Tax
Abatement will continue (thereby relieving the Reorganized Debtor
from the obligation to pay ad valorem real property taxes), the
Debtor seeks a determination of value that assumes that there is
no CHDO Tax Abatement applicable to the Real Property.  As
explained by the Debtor in its Disclosure Statement, the Debtor's
sole equity holder, Alternative Building Concepts Group is a
qualified Community Housing Development Organization.  Its CHDO
status at the time of its acquisition of the Real Property
qualified the Debtor for its current 100% abatement from Ad
Valorem real and personal property taxes, known as the "CHDO Tax
Abatement."

        Treatment of MuniMae's Claim Under Debtor's Plan

With respect to MuniMae, the Debtor's Initial Plan Documents
provided two alternative treatments.  Under MuniMae Alternative
Treatment 1, MuniMae's secured claim was to be established in the
amount of the value of MuniMae's collateral in the form of a
modified "renewal note."  Moreover, to the extent MuniMae's
allowed claim was determined not to be fully secured, MuniMae
would be entitled to an unsecured deficiency claim.  Finally, the
Debtor proposed an "equity auction" that would have occurred only
if MuniMae Alternative Treatment 1 was in effect.

MuniMae Alternative Treatment 2 was effective only if MuniMae made
an election under Section 1111(b) of the Bankruptcy Code to have
its entire claim treated as secured.  MuniMae Alternative
Treatment 2 would split MuniMae's allowed claim into:

   (1) a modified "Series A Note," which was to be established in
       the amount of the value of MuniMae's collateral and, among
       other modifications, would have reduced the interest rate
       to 6.0%; and

   (2) a "Series B Note" which was established in the amount of
       the difference, if any, between MuniMae's allowed claim and
       the face amount of the Series A Note.  The Series B Note
       would neither accrue, nor pay, interest and it would be
       payable in 35 years or when the Real Property was
       refinanced or sold.

MuniMae determined not to make an election under Section 1111(b),
thereby choosing MuniMae Alternative Treatment 1 offered under the
Initial Plan Documents.  Based upon the express terms of the
Initial Plan Documents, MuniMae believed that it had the option to
choose its own treatment.  However, on June 30, 2006 -- within a
few days after MuniMae declined to elect treatment under Section
1111(b) -- the Debtor filed its First Modification of the Second
Amended Plan of Reorganization and Supplemental Disclosure
Statement, which, among other things, removed MuniMae Alternative
Treatment 1 in its entirety.  

According to Mr. Schwartz, this maneuver purportedly left MuniMae
without a deficiency claim and without the ability to bid for the
equity interest in a competitive auction.  The Debtor's
modification also rendered meaningless much of the Court's
consideration of the Initial Plan Documents during the hearing on
the Debtor's Disclosure Statement.

This prompted MuniMae to file its competing plan.  Under the
disclosure statement accompanying that plan, MuniMae disclosed
that it engaged a professional appraiser, Ben Barnett of American
Appraisal Associates, to value the Debtor's property -- a 656-unit
apartment complex known as the Honey Creek Apartments.  According
to Mr. Barnett's report, the value of the Honey Creek Apartments
is approximately $20,500,000 without the tax exemption from the
Community Housing Development Corporation, and $27,000,000 with
the CHDO Tax Exemption.

Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a
656-unit apartment complex known as the Honey Creek Apartments.
The company filed for chapter 11 protection on August 24, 2005
(Bankr. N.D. Tex. Case No. 05-39524).  Richard G. Grant, Esq., at
Roberts & Grant, P.C., represents the Debtor in its restructuring
efforts.  No Official Committee of Unsecured Creditors has been
appointed in the Debtor's case.  When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.


INTERSTATE BAKERIES: Wants Joint Interest Pact With Panel Approved
------------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to enter into a joint interest agreement with the
Official Committee of Unsecured Creditors, for itself and on
behalf of certain creditor parties.

In fulfillment of their fiduciary obligations, the Debtors are
investigating potential causes of action against third parties,
including causes of action under Chapter 5 of the Bankruptcy
Code, relating to the present circumstances and the events
leading to their Chapter 11 cases.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in New York, relates that the Official Committee of Unsecured
Creditors has asked for information as part of its investigation
of various aspects of the Debtors' businesses.  Some of the
requested information is sensitive to the Debtors' operation of
their businesses, Mr. Ivester notes.

Accordingly, the Debtors seek to establish a method by which both
parties can fully coordinate and cooperate with numerous requests
made by each other related to the Investigations without waiving
the attorney-client privilege, the attorney work product
doctrine, or any other privilege or protection attaching to any
produced information through the disclosure.

The Debtors and the Creditors Committee believe that it is in the
best interests of the Debtors' estates to disclose confidential
information related to the Investigations in order to keep them
adequately apprized of the ongoing progress of the Debtors' and
the Creditors Committee's investigations.

The salient terms of the Joint Interest Agreement are:

   (a) The Debtors and the Creditors Committee may voluntarily
       share Information related to the Investigations among the
       Debtors and the creditor parties.  The Creditor Parties
       may share and discuss Information with each other.  The
       Creditor Parties may disclose Information as necessary in
       the ordinary course of their work to legal assistants,
       secretaries, or other non-staff professional staff, but
       will disclose information only to individuals who have a
       need to know the Information for purposes of participating
       in the Investigation;

   (b) All Information received by the Debtors and the Creditor
       Parties in connection with the Investigations will be held
       in strict confidence and used solely for purposes of the
       Investigations and any litigation subsequently authorized
       by the Court;

   (c) All Information provided to the Creditor Parties prior to
       the execution of the Joint Interest Agreement was provided
       in furtherance of the parties' common interest and is
       subject to the Interest Agreement;

   (d) The production of Information pursuant to the Agreement
       does not constitute a waiver of the attorney-client
       privilege, the attorney work product doctrine, or any
       other applicable privilege or protection; and

   (e) Nothing in the Agreement will expand, limit, modify or
       otherwise diminish the Debtors' or the Creditors
       Committee's rights and powers under applicable law.

"The Debtors and the Creditors Committee believe that they share
common interests in this regard, and intend through the Agreement
that any and all sharing of information pursuant to the Agreement
be protected pursuant to the 'common interest' or 'joint defense'
doctrine, to the fullest extent that protection is available
under applicable case law subject to the provisions of the
Agreement," Mr. Ivester says.

The Debtors further ask the Court to grant them a protective
order with respect to information and documents produced pursuant
to the Agreement.

Even though the Debtors and the Creditors Committee are separate
fiduciaries with distinct fiduciary duties, they share a common
interest and fiduciary duty in preserving the continued
confidentiality of the Information as an estate asset, Mr.
Ivester says.

The parties agree that the Debtors should be able to disclose the
Information free from the risk that the Creditor Parties would be
required to divulge the Information to third parties later and
vice versa.

To ensure flexibility, the parties agree that neither the Debtors
nor the Creditors Committee are precluded from making future
waivers of applicable privileges if those waivers are specific
and narrowly tailored for the intended purpose.

The Debtors ask the Court to retain jurisdiction over the matter.
Given the nature of the information, any litigation arising in
connection with the Joint Interest Agreement may be significant
and time consuming, Mr. Ivester points out.

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: Works on Overdue Annual & Quarterly Reports
----------------------------------------------------------------
Interstate Bakeries Corporation continues to work towards
completion of its Annual Reports on Form 10-K for the fiscal
years ended May 29, 2004 and May 28, 2005, Quarterly
Reports for the quarters ended August 21, 2004, November 13,
2004, and March 5, 2005, and is hopeful that those reports may be
filed in the near term, the company reports in a press release.
Upon completion and filings of those reports, IBC will be working
expeditiously to complete and file other periodic reports that
have not yet been filed.  Despite IBC's desire to complete the
reports and file them with the Securities and Exchange Commission,
there can be no assurances as to the timing thereof or that these
reports will be finalized and filed.

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)


JOY GLOBAL: ERISA Didn't Preempt Beloit Workers' Severance Claims
-----------------------------------------------------------------
The Wisconsin Department of Workforce Development filed proofs of
claims against Harnischfeger Industries, Inc. (nka Joy Global,
Inc.) and Beloit Corporation on behalf of 378 former Beloit
employees, seeking to recover severance pay allegedly owed to
those employees under Wisconsin law.  

The U.S. District Court for the District of Delaware withdrew the
reference of the State's claims to the Bankruptcy Court and in
2001, the Honorable Roderick R. McKelvie ruled against the State
on its claims.  Harnischfeger Indus., Inc. v. Wis. Dep't of
Workforce Dev., 270 B.R. 188 (D. Del. 2001).  The State appealed
to the U.S. Court of Appeals for the Third Circuit.  On appeal,
Third Circuit concluded that the threshold issue of ERISA
preemption should have been resolved prior to the Wisconsin state
law issue.  The Third Circuit explained that the preemption issue
turns on whether Beloit's severance policy, which provided the
basis for the DWD's claims, was an "employee benefit plan" under
ERISA.  The court went on to note that whether there was such a
plan is a question of fact, "to be answered in light of all
surrounding facts and circumstances. . . . "  Accordingly, the
Third Circuit vacated the judgment in part and remanded for a
decision on whether the severance policy was an ERISA plan.

In late-2005, the Honorable Kent A. Jordan conducted a two-day
bench trial in the U.S. District Court on the issue of ERISA
preemption.  In a decision published at 2006 WL 2079141, Judge
Jordan finds that the weight of the evidence shows that the
severance policy was never treated like an ERISA plan and
concludes that Beloit's severance policy was not an "employee
benefit plan" under ERISA and, therefore, the DWD's claim is not
preempted by ERISA.

Bruce Grohsgal, Esq., and Scotta E. McFarland, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, and David F. Loeffler,
Esq., at Krukowski & Costello, S.C., represented Joy Global in
this matter.  The Wisconsin Department of Workforce Development
was represented by Richard B. Moriarty, Esq., and John R. Sweeney,
Esq., from the Wisconsin Department of Justice.


KAISER ALUMINUM: Salaried VEBA Trust Discloses 44% Equity Stake
---------------------------------------------------------------
The Voluntary Employees' Beneficiary Association Trust for
Salaried Retirees of Kaiser Aluminum Corp. is deemed to be the
beneficial owner of 8,809,900 shares or 44% of KAC's common stock,
with $.01 par value per share.

Gary Chontos, director of client service for National City Bank,
which serves as trustee of the Salaried VEBA Trust, discloses the
information in a Form SC 13G filing with the U.S. Securities and
Exchange Commission on July 24, 2006.

The Salaried VEBA Trust does not have the power to vote nor
dispose the shares it owns.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading    
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.  
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.  
The Debtors' Chapter 11 Plan became effective on July 6, 2006.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 101;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LAND O'LAKES: Earns $34.8 Million in the Second Quarter of 2006
---------------------------------------------------------------
Land O'Lakes Inc. reported sales of $1.7 billion and net earnings
of $34.8 million for the second quarter of 2006, compared with
$1.8 billion and $25.8 million for the second quarter of 2005.

The Company also reported year-to-date sales of $3.8 billion and
net earnings of $60.9 million, as compared to $3.8 billion and
$50.1 million, respectively, a year ago.

The Company's balance sheet at June 30, 2006, showed an improved
Long-Term Debt to Capital ratio of 39.9% versus 48.0% as of
June 30, 2005, and strong liquidity of $347 million in
cash on hand and unused borrowing authority.

Land O'Lakes Inc. -- http://www.landolakesinc.com/-- is a  
national farmer-owned food and agricultural cooperative, marketing
dairy-based consumer, foodservice and food ingredient products.

                           *     *     *

In November 2005, Moody's Investors Service placed Land O'Lakes
Inc.'s senior secured debt and long-term corporate family ratings
at B1.  Moody's also placed the Company's bank loan debt and
senior unsecured debt ratings at Ba3 and B2 respectively.  The
outlook was positive.

The Company's Long-term local and foreign issuer credits carry
Standard & Poor's B+ ratings, which were placed Aug. 26, 2005,
with a positive outlook.


LUCENT TECH: Gets Autorite Des Marches Financiers' Approval Visa
---------------------------------------------------------------
Lucent Technologies and Alcatel disclosed that the French
securities regulator, the Autorite Des Marches Financiers, granted
approval for Alcatel's French admission to trading prospectus
relating to its new ordinary shares to be issued relative to the
proposed merger transaction.

The Note D'Operation, along with Alcatel's annual report dated
March 31, 2006, constitute the prospectus regarding the issuance
of new Alcatel ordinary shares and is available on the web sites
of Alcatel and the AMF http://www.amf-france.org   

The Company also disclosed that on Aug. 4, 2006, the Securities
and Exchange Commission declared effective the registration of
Alcatel's ordinary shares with the SEC.  The registration
statement also included the Company's proxy statement for its
special meeting of shareowners to be held on Sept. 7, 2006, at
which shareowners will vote on a proposal to approve and adopt the
merger agreement and the proposed merger transaction.

The Company's shareowners with questions regarding the special
meeting of shareowners or the voting of their shares may contact
MacKenzie Partners, Inc., at 800-322-2885 or Morrow & Co., Inc.,
at 800-573-4370.

                           About Alcatel

Alcatel (NYSE:ALA) -- http://www.alcatel.com-- provides  
communications solutions to telecommunication carriers, Internet
service providers and enterprises for delivery of voice, data and
video applications to their customers or employees.  With 58,000
employees in 2005, Alcatel operates in more than 130 countries.

                     About Lucent Technologies

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

                           *     *     *

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


MERIDIAN AUTOMOTIVE: Seeks Sept. 30 Plan-Filing Period Extension
----------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates
further ask the U.S. Bankruptcy Court for the District of Delaware
to extend their Exclusive Filing Period through and including
Sept. 30, 2006, and their Exclusive Solicitation Period through
and including Nov. 30, 2006.

The Debtors have worked strenuously to engage their principal
creditor constituencies in negotiations that have resulted in the
Conformed Third Amended Joint Plan of Reorganization, Robert S.
Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, tells the Court.

The filing of the Third Amended Plan and the Court's approval of
the Disclosure Statement on July 21, 2006, constitute significant
milestones in the Debtors' steady march towards Plan
confirmation, Mr. Brady says.

Mr. Brady relates that the Plan is now supported by all of the
Debtors' principal creditor constituencies, including the
Informal Committee of First Lien Secured Lenders and the Official
Committee of Unsecured Creditors.  The Debtors are currently in
the process of mailing Plan solicitation packages to all their
creditors.

The brief extension of the Exclusive Periods is intended to
enable the Debtors to continue the Plan process in an orderly,
efficient and cost-effective manner, Mr. Brady explains.  To deny
further extension of the Exclusive Periods at this stage would
jeopardize the significant progress the Debtors have made toward
Plan confirmation.

The Court will convene a hearing on Aug. 15, 2006, to consider
the Debtors' request.  By application of Local Bankruptcy Rule
9006-2 for the District of Delaware, the Debtors' Exclusive
Filing Period is automatically extended until the conclusion of
that hearing.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,  
at Winston & Strawn LLP represents the Official Committee of  
Unsecured Creditors.  The Committee also hired Ian Connor  
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,  
to prosecute an adversary proceeding against Meridian's First Lien  
Lenders and Second Lien Lenders to invalidate their liens.  When  
the Debtors filed for protection from their creditors, they listed  
$530 million in total assets and approximately $815 million in  
total liabilities.  (Meridian Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


MILLENIUM NEW: Moody's Junks Proposed $40 Mil. Secured Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Millennium New Jersey Holdco, LLC.  Additionally, Moody's assigned
a B1 rating to the proposed $135 million first lien senior secured
credit facility and a Caa1 rating to the proposed $40 million
second lien secured 7-year term loan.  Proceeds of the transaction
will be used to refinance the company's existing facilities and
distribute approximately $70 million to investors.  This is the
first time Moody's has assigned ratings to Millennium New Jersey
Holdco, LLC.  The rating outlook is stable.

The B2 corporate family rating reflects Millennium's substantial
debt to EBITDA leverage, limited scale and adequate asset
coverage.  The rating also incorporates the company's lack of
geographic diversity, revenue concentration, the highly
competitive nature of the radio industry, the inherent cyclicality
of the advertising market, and Moody's belief that radio is a
mature industry with modest growth prospects.

Millennium's rating is supported by its strong EBITDA margins and
dominant market share.  The rating is further supported by the
preponderance of local advertising in the company's revenues.

Assignments:

Issuer: Millennium New Jersey Holdco, LLC

Corporate Family Rating, Assigned B2

   * $15M First Lien Senior Secured Bank Credit Facility,
     Assigned B1

   * $120M First Lien Senior Secured Bank Credit Facility,
     Assigned B1

   * $40M Second Lien Secured Bank Credit Facility, Assigned Caa1

The Outlook is Stable.

Millennium Radio Group, LLC, headquartered in Lawrenceville, New
Jersey, is a radio broadcaster with twelve stations located
throughout New Jersey.


MILLIPORE CORP: Earns $29.1 Million in Quarter Ended July 1
-----------------------------------------------------------
Millipore Corporation's revenues for the second quarter ended July
1, 2006, grew 12% to $273.8 million.  Changes in foreign exchange
rates during the quarter had no impact on total revenue growth.  
Millipore's Bioprocess Division grew 13% in the second quarter and
its Bioscience Division grew 10%. Excluding the impact of
acquisitions, revenue growth in the second quarter was 8%.

Millipore reported second quarter net income of $29.1 million,
compared to net income of $24 million in the second quarter of
2005.  Non-GAAP net income grew approximately 28% in the second
quarter totaling $38.9 million, compared to non-GAAP net income of
$30.3 million in the second quarter of 2005.

"During the second quarter, our Bioscience Division continued to
accelerate its performance due to improved execution and growth in
international markets," said Martin Madaus, Chairman & CEO of
Millipore.  "The momentum of our Bioscience business is
complementing the performance of our Bioprocess business, which is
delivering solid growth due to the attractive fundamentals of the
biopharmaceutical manufacturing market.  Over the long-term, this
balanced growth profile will help us to generate consistent
results and drive higher levels of earnings and cash flow.

"In addition to the strong quarterly performance of both of our
divisions, our global supply chain initiatives contributed
significantly to the 130 basis points of improvement in our non-
GAAP gross profit margins and is ahead of schedule.  We closed one
facility in the second quarter and have transferred 36 product
lines since we began this project.  We are now at the mid-point of
this program and we anticipate generating higher gross profit
margins over the next three years."

Millipore completed its previously announced acquisition of
Serologicals Corporation on July 14, 2006, shortly after the close
of the second quarter.  With the addition of Serologicals'
differentiated products, the Company will have a broad portfolio
of high-margin consumable products to generate growth in revenues
and profitability.

Madaus added, "We are excited about the talent and differentiated
product lines we are acquiring from Serologicals.  We expect to
build on our recent momentum by combining their products with our
strong global sales organization.  This combination will enable us
to increase our market penetration in dynamic segments, such as
cell culture supplements, nuclear function, and stem cell
research."

Second Quarter Highlights:

     -- Significant growth of the Company's laboratory water
        products and services in all geographic regions

     -- Strong growth in new Bioprocess products, including
        disposable technologies and virus filters

     -- Solid, balanced growth in Europe and the Americas

     -- GAAP earnings per share increase of 14%; Non-GAAP earnings
        per share increase of 20%

Millipore Corporation, headquartered in Billerica, Massachusetts,
is a bioprocess and bioscience products and services company.  The
Bioprocess division offers solutions that optimize development and
manufacturing of biologics.  The Bioscience division provides high
performance products and application insights that improve
laboratory productivity.  

                           *     *     *

As reported in the Troubled Company Reporter on July 19, 2006,
Moody's Investors Service downgraded the credit ratings of
Millipore Corporation.  The rating action concluded a rating
review for possible downgrade initiated on April 27, 2006
following the announcement by Millipore that it entered into a
definitive agreement to acquire all of the outstanding shares of
Serologicals Corporation for $1.4 billion, including the
assumption of about $100 million in Serologicals' debt.

The Baa3 rating on the Company's $100 million senior unsecured
notes, due 2007, was lowered to Ba2. The (P)Baa3 rating on the
$300 Million Shelf Registration was also lowered to (P)Ba2.  In
addition Moody's assigned a Ba1 Corporate Family Rating to the
Company.


MITTAL STEEL: Moody's Confirms Ba1 Senior Unsecured Ratings
-----------------------------------------------------------
Moody's Investors Service confirmed the Baa3 corporate family and
senior unsecured issuer ratings of Mittal Steel Company N.V., the
Baa3 rating of the guaranteed debt of Ispat Inland, ULC as well as
the Ba1 senior unsecured rating of Mittal Steel U.S.A. Inc. and
the Ba1 senior unsecured rating of bonds initially issued by Ispat
Inland, Inc.  

In addition, Moody's downgraded the long-term rating of Arcelor
Finance and Usinor, now Arcelor France, to Baa3 from Baa2 and the
short-term rating of Arcelor Finance to Prime-3 from Prime-2.  The
outlook is stable for all ratings.

The rating actions conclude the review for possible downgrade that
was initiated on Mittal Steel and Arcelor's ratings on January 30
as a result of Mittal Steel's bid for Arcelor and follow the
tender of 91.9% of Arcelor shares to Mittal Steel, paving the way
for a merger of the two groups.  Upon completion of the merger,
the combined entity will be the world's leading steel producer
with a steel-making capacity of 120 million tons p.a. and an
unrivalled product and geographical coverage - key factors
supporting the current ratings.

The Baa3 ratings are also underpinned by the group's solid
operational and cash flow profile, with financial metrics that
Moody's expects to show a trend of de-leveraging following the
transaction.  Both Arcelor and Mittal have demonstrated strong
performance over recent years, primarily as a result of the
buoyancy in steel prices but also thanks to cost improvements,
efficiencies in operations and, in the case of Mittal, better
access to lower-cost raw materials.  Cash flows from both
companies are substantial in the context of legacy individual
indebtedness and as such the individual company credit metrics
were strong pre-transaction.

As regards prospects for servicing the combined debt plus
acquisition debt, it is Moody's central scenario that steel prices
will remain robust over the next 12-18 months, thereby providing a
window for speedy debt reduction from a peak of adjusted proforma
US$36 billion.  

Pro-forma (2005) metrics for the transaction are:

      -- Operating Cash Flow less Dividends to Adjusted Debt of       
         21.8%;

      -- Free Cash Flow to Adjusted Debt of 9.3%; EBIT to Gross       
         Interest of 7.9x; and

      -- Adjusted Debt / EBITDA of 2.3x.

Moody's expects these metrics to develop as follows over the next
two to three years:

     -- Operating Cash Flow less Dividends to Adjusted Debt in the       
        high twenties;

     -- Free Cash Flow to Adjusted Debt in the mid teens;

     -- EBIT to Gross Interest above 6.0x; and

     -- Adjusted Debt / EBITDA below 2.5x.

Moreover, Mittal's access to raw materials and its high levels of
self-sufficiency should ensure that the group's exposure to
volatile prices is minimized, thus maintaining a good cash cushion
for variations in steel prices.

Given the immediate risks associated with combining the entities
at a relatively high point in the steel price cycle, and the need
to conclude on a number of outstanding pre-merger issues - not
least the likely sale of Dofasco, the possible buy-out of
Arcelor's Brazilian minorities and the composition of the senior
management roster.

Moody's has set certain financial metrics as a threshold to
maintaining investment grade, namely:

    -- Operating Cash Flow less Dividends to Adjusted Debt of at       
       least 20%;

    -- Free Cash Flow to Adjusted Debt of at least 5%; EBIT to       
       Gross Interest of at least 4x; and
   
    -- Adjusted Debt/EBITDA of below 3.5x.

Any improvement in the ratings will primarily depend upon the
success of the integration process and the performance of the
combined entity over the next 12-18 months, most notably to reduce
debt as expected.

Moody's will continue to assess the evolution of the debt and
capital structure of the combined entity.  At the outset it is
expected that the legacy debt outstanding at each entity will
remain in place.  Moreover, Moody's has not introduced any
notching for any structural subordination given the position of
the debt relative to the cash flow generation from the respective
entities.  The rating of Arcelor has therefore been aligned with
Mittal's Baa3 rating.

The stable outlook is based on Moody's expectation that the
combined cash flows will remain above the threshold metrics and
that the combined management of the two groups will be able to
integrate operations with a common strategic direction.

Ratings confirmed:

Mittal Steel Company N.V.

  -- Baa3 Corporate Family Rating; and
  -- Baa3 Issuer Rating

Mittal Steel USA, Inc.

  -- Ba1 Rating on the senior unsecured global notes

Ispat Inland Inc.

  -- Ba1 Rating on the senior unsecured industrial revenue       
     bonds; and   
  
  -- Ba1 Rating on the senior unsecured pollution control       
     bonds.

Ispat Inland U.L.C.


  -- Baa3 rating on the guaranteed senior secured notes due       
     2010 (floating rate); and

  -- Baa3 rating on the guaranteed senior secured notes.

Ratings downgraded:

Arcelor Finance

  -- Senior Unsecured Rating, to Baa3 from Baa2;
  -- Short-Term Rating, to Prime-3 from Prime-2; and
  -- Baa3 Senior Unsecured Rating of Usinor, to Baa3 from Baa2.

Mittal Steel Company N.V., the world's largest steel company, was
formed from the combination of Ispat International N.V., LNM
Holdings N.V. and ISG.  For the fiscal year 2005, the company
reported revenues of US$28 billion.

Arcelor, based in Luxembourg, is the world's second-largest steel
group with leading market positions in flat steel, long steel and
stainless steel.  In 2005 the group generated annual sales of
EUR32 billion.


MUSICLAND HOLDING: Paul Weiss Hired as Trade Vendors Panel Counsel
------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure, Andrew Rosenberg, Esq., at Paul, Weiss, Rifkind,
Wharton & Garrison LLP, in New York, discloses that his firm
serves as counsel to these members of the Informal Committee of
Secured Trade Vendors:

    (a) Bond Street Capital, LLC
        700 Palisade Avenue
        Englewood Cliffs, NJ 07632

    (b) Cargill Financial Services International, Inc.,
        12700 Whitewater Drive
        Minnetonka, MN 55343-9439

    (c) Credit Suisse International
        11 Madison Avenue
        New York, NY 10010

    (d) Hain Capital Group, LLC
        Meadowland Office Complex
        301 Route 17
        Rutherford, NJ 07070

    (e) Varde Investment Partners, LP
        8500 Normandale Lake Boulevard, Suite 1570
        Minneapolis, MN 55437

    (f) Metro-Goldwyn-Mayer Home Entertainment LLC
        10250 Constellation Boulevard, 10th Floor
        Los Angeles, CA 90067

    (g) The Walt Disney Company
        611 North Brand Boulevard, Suite 700
        Glendale, CA 91203

Mr. Rosenberg relates that the nature of the claims held by
members of the Informal Committee against Musicland Holding Corp.
and its debtor-affiliates includes claims secured by certain Trade
Collateral.

Mr. Rosenberg discloses that his firm also represents Magazine
Retail Enterprises, Inc., and its affiliates Time Direct
Ventures, Inc., and Entertainment Weekly, Inc.

Paul Weiss does not hold any other claims against or equity
interests in the Debtors, Mr. Rosenberg assures the U.S.
Bankruptcy Court for the Southern District of New York.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NAVIGATOR GAS: Emerges from Chapter 11 Protection
-------------------------------------------------
Navigator Gas Transport plc and its affiliated companies emerged,
on Aug. 9, 2006, from chapter 11 by completing the reorganization
provided for under the chapter 11 plan proposed by the Official
Creditors Committee appointed in Navigator's chapter 11 case.

The Committee's plan previously was approved by the U.S.
Bankruptcy Court for the Southern District of New York.  Under a
July 4 order of an Isle of Man court the Navigator companies'
emergence from chapter 11 also results in the permanent stay of
companion winding-up proceedings against the Navigator companies
that were brought in such jurisdiction by creditors when
Navigator's principals, including Giovanni Mahler, violated the
Bankruptcy Court's orders in an attempt to derail the creditor-led
reorganization.

Under the chapter 11 plan that became effective on Aug. 9, 2006,
all of the equity in Navigator Holdings PLC will be transferred to
the holders of Navigator's 10.5% First Priority Ship Mortgage
Notes and 12% Second Priority Ship Mortgage Notes in exchange for
the cancellation of such debt securities.  Management of the
Navigator companies, which had been subject to the control of a
liquidator appointed by the Isle of Man court, will now report to
a board of directors designated by the Creditors Committee.  The
companies' day-to-day operations will not be affected by the
change in control effectuated by the chapter 11 plan.

Mr. Mahler, a resident of Lugano, Switzerland, and various
affiliated entities and individuals, including Cambridge Gas
Transport Corporation and Navigator Gas Management Limited, remain
in contempt of the Bankruptcy Court's orders and are liable for
substantial unpaid judgments against them arising from their
attempts to thwart recoveries due to Navigator's creditors.

Headquartered in Castletown, Isle of Man, Navigator Gas Transport
PLC, transports liquefied petroleum gases and petrochemical gases
between ports throughout the world.  The Company along with its
debtor-affiliates filed for chapter 11 protection on Jan. 27, 2003
(Bankr. S.D.N.Y. Case No. 03-10471).  Adam L. Shiff, Esq., at
Kasowitz, Benson, Torres & Friedman LLP represents the Debtors in
the United States.  When the Company filed for protection, it
listed $197,243,082 in total assets and $384,314,744 in total
debts.


OMI CORP: Earns $131.8 Million in 2006 Second Quarter
-----------------------------------------------------
OMI Corporation reported record net income of $131,772,000, which
included gain on disposal of vessels of $78,038,000, in the second
quarter ended June 30, 2006, compared with net income of
$47,136,000 for the second quarter ended June 30, 2005.

For the six months ended June 30, 2006, net income was
$195,335,000, which included gain on disposal of vessels of
$78,038,000, compared to net income of $122,917,000 for the six
months ended June 30, 2005, which included gain on disposal of
vessels of $2,874,000.

Revenue of $183,270,000 for the second quarter ended June 30, 2006
increased $34,796,000 or 23% compared to revenue of $148,474,000
for the second quarter ended June 30, 2005.

Revenue of $376,462,000 for the six months ended June 30, 2006
increased $56,546,000 or 18% compared to revenue of $319,916,000
for the six months ended June 30, 2005.

Revenue from the Company's product carriers increased primarily
due to more operating days from vessels acquired and higher rates.
The revenue from our Suezmax vessels increased because of 3
additional vessels in our Gemini Suezmax Pool, which was offset by
the 2 Suezmax vessels sold in the fourth quarter of 2005.

Craig H. Stevenson, Jr., Chairman and Chief Executive Officer
commented that "On both a net income and earnings per share basis
the quarter was the best in the Company's history.  Even excluding
gains from sales of vessels it was the best second quarter in our
history.

"The strong performance of the Company has allowed us to
repurchase nearly 30% of our outstanding shares, reduce our net
debt to total capitalization to 40% and to institute and increase
our dividend.  We continue to use the strong markets to further
enhance our future revenue visibility with new time charters and
synthetic time charters and therefore expect continued strong cash
flows for years to come.  Our best use of cash today is to
repurchase our own shares.  OMI's fleet is one of the youngest in
the world and our share price is trading below our calculation of
net asset value. That combined with our time charter revenue makes
it a very compelling investment."

Other second quarter highlights:

     -- Gain on sale of 3 Suezmax vessels of $78 million was
        recognized in the second quarter.  Deferred gain on the
        sale leaseback of 1 Suezmax vessel of approximately
        $26.5 million was recorded.  The vessel continues to be
        commercially managed by the Company through the Gemini
        Pool.

     -- The Company currently has approximately $701 million in
        time charter revenue contracts (excluding any potential
        profit sharing) for the period from July 2006 to May 2012,
        including 3 contracts for Suezmax vessels entered into
        during the second quarter, of which 2 of these Suezmax
        vessels will continue to operate in the Gemini Pool.

     -- During the second quarter, the Board declared a quarterly
        dividend of $0.10 per share.

     -- In April 2006, the Board authorized $70 million for the
        repurchase of common stock.

     -- In July 2006, the Company entered into 3 synthetic time
        charters (FFA contracts), 2 commenced July 2006, a three
        year contract for a Suezmax vessel (130,000 metric tons
        "mt") at $37,250 per day and a six month contract for 1/2
        Suezmax vessel (65,000 mt) at $47,500 per day and 1 three
        year contract for a 1/4 Suezmax vessel (32,500 mt) at
        $40,000 per day will commence in October 2006. We
        currently have synthetic time charters of $116 million
        from July 1, 2006 through September 2009.

     -- In June 2006, contracted for sale of 1 product carrier for
        delivery in the third quarter, which will result in an
        estimated gain on sale of approximately $13 million.

     -- Took delivery of one 2006 built product carrier in May
        2006, which completes the Company's newbuilding program.

OMI Corporation is a seaborne transporter of crude oil and refined
petroleum products operating in the international shipping
markets.  

                           *     *     *

Standard & Poor's Rating Services assigned OMI Corporation a BB
corporate credit rating on Nov. 13, 2003, and has affirmed that
rating, most recently in December 2004.


O'SULLIVAN IND: Hires BDO Seidman as Independent Accountants
------------------------------------------------------------
In a Form 8-K filing with the Securities and Exchange Commission,
O'Sullivan Industries Holdings, Inc., discloses that on July 20,
2006, it appointed BDO Seidman, LLP, as its new independent
registered public accountants to audit the company's financial
statements.

President and Chief Executive Officer Rick A. Walters reports that
during the company's past two most recent fiscal years, the
company has not consulted BDO Seidman regarding either:

   (i) the application of accounting principles to a specified
       transaction, either completed or propose;

  (ii) the type of audit opinion that might be rendered on its
       financial statements; or

(iii) any other matters or reportable events as described in
       Items 304(a)(2)(i) and (ii) of Regulation S-K.

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)


OVERSEAS SHIPHOLDING: Earns $60.2 Million in Second Quarter 2006
----------------------------------------------------------------
Overseas Shipholding Group, Inc., reported results for the second
fiscal quarter of 2006.

For the quarter ended June 30, 2006, net income was $60.2 million,
down 47% from $114.2 million in the same period a year earlier.
The year ago quarter benefited from gains on vessel sales of
$13.2 million, compared with a loss of $3.5 million, in the
current quarter.

EBITDA for the second quarter declined 38% to $109.1 million from
$176.3 million in the second quarter of 2005.  TCE revenues in the
quarter decreased by 5% to $216.3 million from $228.6 million in
the second quarter of 2005.

For the six months ended June 30, 2006, the Company reported net
income of $188.6 million, a 32% decline from net income of
$279.1 million, recorded in the first half of 2005.  Net income
for the first half of 2005 benefited from gains on ship disposals
of $26.1 million, compared with a loss of $3.6 million for the
same period in fiscal 2006.  EBITDA for the first six months of
2006 was $289.2 million, a 28% decrease from $399.7 million in the
first half of 2005.  TCE revenues for the six months of 2006
increased less than 1% to $496.4 million from $495.8 million in
the first half of 2005.

Morten Arntzen, president and chief executive officer, stated, "It
was another quarter of strong performance in each of our sectors.
In what is generally a seasonally weak quarter, our crude oil
tanker fleet, which is entirely double hull, continued to benefit
from the tanker market's greater discrimination against single
hull tankers and from the tight oil markets across the globe.
During the same period, we continued to produce steady results
from our Product and U.S. segments, while also building a bigger
book of longer term time charters."  

Mr. Arntzen continued, "We continue to generate strong cash flow,
have nearly $350 million in cash and tax-effected Capital
Construction Fund and $1.8 billion of credit, all available for
future growth initiatives and our stock buyback program."

Overseas Shipholding Group, Inc. (NYSE:OSG) ---
http://www.osg.com/-- is one of the largest publicly traded  
tanker companies in the world with an owned, operated and newbuild
fleet of 117 vessels, aggregating 13.0 million dwt and 865,000
cbm, as of June 30, 2006.  As a market leader in global energy
transportation services for crude oil and petroleum products in
the U.S. and International Flag markets, the Company is committed
to setting high standards of excellence for its quality, safety
and environmental programs.  OSG is recognized as one of the
world's most customer-focused marine transportation companies,
with offices in New York, Athens, London, Newcastle and Singapore.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 9, 2006,
Moody's Investors Service affirmed the debt ratings of Overseas
Shipholding Group, Inc.'s Senior Unsecured at Ba1.  The outlook
has been changed to stable from negative.


OWENS CORNING: Balance Sheet Upside Down by $7.82 Bil. at June 30
-----------------------------------------------------------------
Owens Corning reported consolidated net sales and operating
results for the second quarter and the first six months of 2006.  
The company reported quarterly consolidated net sales of
$1.722 billion during the second quarter, compared with
$1.590 billion in the second quarter of 2005, representing an
8.3 percent increase from the prior year.

"We're pleased with the results of the second quarter that
reflected an environment of strong demand for many of our
products," said Dave Brown, president and chief executive officer.  
"While continued cost increases in energy-related commodities
impacted most of our product lines, we were able to offset in part
the impact of those higher costs through price increases and
improved productivity.

"We continue to make significant progress toward emergence from
Chapter 11 in 2006," said Mr. Brown.  "Reaching agreement with our
creditors on a plan of reorganization and the Bankruptcy Court
approval of our disclosure statement have paved the way for our
company to exit Chapter 11.  In preparation for emergence,
Standard & Poor's (S&P) and Moody's both announced their intent to
assign an investment-grade credit rating to Owens Corning, which
affirms our company's strong balance sheet and market leadership.

"We recently announced that we are in discussions with Saint-
Gobain to form a reinforcement and composite fabrics joint venture
that would better serve customers around the world," said Mr.
Brown.  "Combined with our planned acquisition of the
Modulo(TM)/ParMur Group in Europe, these initiatives would further
expand our company's global business."

Highlights of Consolidated 2006 Second Quarter and Six-Month
Results:

     -- Second quarter income from operations was $168 million,
        compared with $169 million for the same period of 2005.

     -- For the first six months, income from operations was
        $283 million, compared with a loss from operations of
        $4.112 billion for the same period of 2005.  The loss
        from operations for the first six months of 2005 was
        primarily a result of an additional $4.342 billion
        provision for asbestos liability, which the company
        recognized in the first quarter of 2005.

     -- Net sales for the first six months were $3.323 billion,
        compared with $2.992 billion in the first six months of
        2005, representing an 11.1 percent increase from the
        prior year.  The increase was driven by strong demand for
        building materials products and improved prices for
        certain products.

     -- For the first six months, cash flow from operations
        totaled $79 million, compared with $54 million in the
        prior year period.  The increase was due primarily to an
        increase in income from operations.

     -- For the first six months, the company's continued focus
        on employee safety resulted in a 17 percent reduction in
        injuries compared with the year ended December 31, 2005.

Gross margin for the second quarter was 17.2 percent compared with
19.6 percent in the prior year period.  While gross margin
improved in Insulating Systems, it was more than offset by
reductions due to inflation in material, energy and transportation
costs, the temporary unavailability of manufacturing capacity in
India and Brazil due to maintenance and expansion, and price
reductions in other business segments.

Selling, General and Administrative (SG&A) expenses, as a
percentage of consolidated net sales for the second quarter, were
8.1 percent compared with 8.9 percent in the second quarter of
2005.  For the first six months of 2006, SG&A expenses were
8.2 percent compared with 8.9 percent in the prior year period.  
The improvement in the expense ratio reflects the increase in the
company's net sales.

     Second Quarter 2006 Business Segment Highlights:

     Insulating Systems

        -- Sales were $519 million, compared with $459 million in
           the second quarter of 2005, representing a 13.1
           percent increase from the prior year.  Sales were
           lifted by continued strong demand in the U.S. housing
           and remodeling, commercial and industrial markets.

        -- Income from operations increased 15.5 percent to
           $112 million, compared with $97 million in the prior
           year period. Favorable pricing, higher volumes and
           improved productivity offset higher costs.

     Roofing and Asphalt

        -- Sales were $501 million, compared with $473 million in
           the second quarter of 2005, representing a 5.9 percent
           increase from the prior year.  The increase in sales
           was primarily the result of price increases, generally
           reflecting the pass through of higher energy, material
           and transportation costs, which offset volume
           declines.

        -- Income from operations decreased 5.9 percent to
           $48 million, compared with $51 million in the prior
           year period.  Volume declines and significant raw
           material cost increases offset price increases and
           improved productivity.

     Other Building Materials and Services

        -- Sales were $346 million, compared with $326 million in
           the second quarter of 2005, representing a 6.1 percent
           increase from the prior year.  Sales increased
           primarily due to higher volumes, particularly in the
           company's manufactured stone veneer and construction
           services businesses.

        -- Income from operations decreased 20 percent to $8
           million, compared with $10 million in the prior year
           period.  The decline was the result of higher costs in
           energy, materials, labor and transportation.

     Composite Solutions

        -- Sales were $411 million, compared with $384 million in
           the second quarter of 2005, representing a 7.0 percent
           increase from the prior year.  The acquisition of a
           manufacturing facility from the Asahi Glass Co. Ltd.
           on May 1, 2006, contributed to an increase in sales.

        -- Income from operations increased 54.5 percent to
           $51 million, compared with $33 million in the prior
           year period.  The increase reflects gains of
           $27 million from the replacement of metals used in
           certain production tooling and $8 million from
           insurance recoveries related to a flood at the
           company's Taloja, India plant in 2005.  Without these
           two gains, income from operations would have declined
           by $17 million due to facility maintenance and
           expansion, lower prices, higher raw material costs,
           and increased transportation and energy costs.

                         Business Outlook

Although market demand for building materials products remained
strong through the second quarter, recent increases in United
States housing inventory and higher interest rates are expected to
exert pressure on demand, which could impact prices for certain
products.

The Energy Policy Act of 2005 may somewhat offset this potential
softening of demand and stimulate demand for some Owens Corning
products in the United States due to the potential tax credits
offered to home builders for the construction of more energy-
efficient homes, and to homeowners for certain energy-efficient
home improvements.

Increased global demand for energy-related commodities and
services has resulted in continued cost increases, which will
require the company to continue to achieve additional productivity
gains to sustain margins.

                        Subsequent Events

In July 2006, S&P and Moody's announced their intent to assign a
BBB- and a Baa3 credit rating, respectively, to Owens Corning's
credit facilities upon emergence from Chapter 11.  The investment-
grade credit ratings are based on a detailed analysis of the
company's financial and market strength.

Owens Corning also announced a purchase agreement on July 25,
2006, to acquire the Modulo/ParMur Group, a market-leading
producer and distributor of manufactured stone veneer in Europe.  
The acquisition will further the global expansion of the Owens
Corning manufactured stone veneer business in the European
building products market.

On July 27, 2006, Owens Corning announced that it was in
discussions to merge its reinforcements business with Saint-
Gobain's Reinforcement and Composites businesses into a new
company to be called Owens Corning-Vetrotex Reinforcements.  The
combination would establish a new global company in reinforcement
and composite fabrics products with annual sales of $1.8 billion.  
The new company would be majority owned by Owens Corning and serve
customers with improved technology, an expanded product range and
greater geographic reach.  The transaction is expected to close by
early 2007 and is subject to the negotiation and execution of
definitive transaction documents, Board of Directors approval by
the parent companies, and regulatory and antitrust approvals.

           Progress Toward Emergence in 2006 Continues

Owens Corning announced on May 10, 2006, that it reached an
agreement with the representatives of each of its key creditor
groups on the terms of a Chapter 11 plan of reorganization.  This
represents a significant milestone in the company's Chapter 11
proceedings and, if confirmed, paves the way for Owens Corning to
emerge from bankruptcy in 2006.

The Disclosure Statement with respect to the Sixth Amended Joint
Plan of Reorganization for Owens Corning was approved by the
bankruptcy court on July 10, 2006.  A Confirmation hearing on the
Sixth Amended Joint Plan of Reorganization for Owens Corning and
its Affiliated Debtors and Debtors-in- Possession is scheduled for
September 18, 2006.

A full-text copy of Owens Corning's Form 10-Q report is available
for free at the Securities and Exchange Commission at
http://ResearchArchives.com/t/s?f28

                    Owens Corning and Subsidiaries
                     Consolidated Balance Sheets
                         As of June 30, 2006
                           (In millions)

                              ASSETS
CURRENT
    Cash and cash equivalents                            $1,493
    Receivables, less allowance of $19 million              826
    Inventories                                             528
    Other current assets                                     48
                                                    -----------
        Total current                                     2,895
                                                    -----------
OTHER
    Restricted cash - asbestos & insurance related          204
    Restricted cash, securities & other - Fibreboard      1,441
    Deferred income taxes                                 1,653
    Pension-related assets                                  441
    Goodwill                                                215
    Investment in affiliates                                 79
    Other non-current assets                                209
                                                    -----------
        Total other                                       4,242
                                                    -----------
PLANT & EQUIPMENT, at cost
    Land                                                     86
    Buildings & leasehold improvements                      813
    Machinery & equipment                                 3,394
    Construction in progress                                203
                                                    -----------
                                                          4,496
    Accumulated depreciation                             (2,414)
                                                    -----------
                                                          2,082
                                                    -----------
TOTAL ASSETS                                             $9,219
                                                    ===========

                LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT
    Accounts payable & accrued liabilities               $1,008
    Accrued postpetition interest                           890
    Short-term debt                                           8
    Long-term debt - current portion                         13
                                                    -----------
        Total current                                     1,919
                                                    -----------
Long-Term Debt                                               42
                                                    -----------
OTHER
    Pension plan liability                                  702
    Other employee benefits liability                       405
    Other                                                   215
                                                    -----------
        Total other                                       1,322
                                                    -----------
LIABILITIES SUBJECT TO COMPROMISE                        13,515
                                                    -----------
COMPANY OBLIGATED SECURITIES OF ENTITIES HOLDING
SOLELY PARENT DEBENTURES - SUBJECT TO COMPROMISE            200
                                                    -----------

MINORITY INTEREST                                            48
                                                    -----------
STOCKHOLDERS' DEFICIT
    Preferred stock, no par value 8,000,000 shares
        authorized, none issued or outstanding                -
    Common stock, part value $0.10 per share,
        100,000,000 shares authorized, 55.3 issued
        and outstanding                                       6
    Additional paid in capital                              692
    Accumulated deficit                                  (8,232)
    Accumulated other comprehensive loss                   (292)
    Other                                                    (1)
                                                    -----------
        Total stockholders' deficit                      (7,827)
                                                    -----------
TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT                $9,219
                                                    ===========

                   Owens Corning and Subsidiaries
                Consolidated Statement of Operations
                 For the Quarter Ended June 30, 2006
                           (In millions)

NET SALES                                                $1,722
COST OF SALES                                             1,426
                                                    -----------
        Gross Margin                                        296

OPERATING EXPENSES
    Marketing & administrative expenses                     140
    Science & technology expenses                            15
    Chapter 11 related reorganization items                  17
    Provision for asbestos litigation claims, Owens           -
    Provision for asbestos litigation claims, Fibreboard      -
    Gain on sales of fixed assets and other                 (44)
                                                    -----------
        Total operating expenses                            128
                                                    -----------
INCOME FROM OPERATIONS                                      168
Interest expense, net                                        86
                                                    -----------
INCOME BEFORE INCOME TAX BENEFIT                             82
Income tax benefit                                         (169)
                                                    -----------
INCOME BEFORE MINORITY INTEREST & EQUITY IN NET
EARNINGS OF AFFILIATES                                      251
Minority interest & equity in
   net earnings of affiliates                                 -
                                                    -----------
NET INCOME                                                 $251
                                                    ===========

                   Owens Corning and Subsidiaries
                Consolidated Statement of Cash Flows
                   Six Months Ended June 30, 2006
                           (In millions)

NET CASH FLOW FROM OPERATIONS
    Net income                                             $314
    Reconciliation of net cash used for operations
    Non-cash items:
        Provision for asbestos litigation claim               -
        Depreciation and amortization                       124
        Gain on sale of fixed assets                        (35)
        Impairment of fixed assets                            2
        Change in deferred income taxes                    (204)
        Provision for pension and other employee benefits    48
        Provision for postpetition interest/fees            155
    Increase in receivables                                (162)
    Increase in inventories                                 (31)
    Decrease in accounts payable & accrued liabilities      (95)
    Proceeds from insurance for asbestos litigation
        claims excluding Fibreboard                          17
    Pension fund contribution                                (5)
    Payments for other employee benefits liabilities        (14)
    Increase in restricted cash - asbestos and
       insurance related                                    (15)
    Increase in restricted cash, securities,
       and other - Fibreboard                                (9)
    Other                                                   (11)
                                                     ----------
        Net cash flow from operations                        79

NET CASH FLOW FROM INVESTING
    Additions to plant and equipment                       (189)
    Investment in subsidiaries & affiliates, net of
        cash acquired                                       (13)
    Proceeds from the sale of assets or affiliate            44
                                                     ----------
        Net cash used for investing                        (158)
                                                     ----------
NET CASH FLOW FROM FINANCING
    Proceeds from issuing long-term debt                     10
    Payments on long-term debt                               (4)
    Net increase in short-term debt                           2
                                                     ----------
        Net cash used for financing                           8
                                                     ----------
Effect of exchange rate changes on cash                       5
                                                     ----------
Net increase in cash and cash equivalents                   (66)
Cash and cash equivalents at beginning of year            1,559
                                                     ----------
Cash and equivalents at end of period                    $1,493
                                                     ==========

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: Wants to Pay Back Asbestos Trustees & Panel Members
------------------------------------------------------------------
The Sixth Amended Plan of Reorganization of Owens Corning and its
debtor-affiliates provides for the establishment of a trust into
which all asbestos-related personal injury claims will be
channeled.  Under the Plan, the occurrence of the "Effective Date"
is subject to conditions precedent that, inter alia:

   -- trustees for the Asbestos Personal Injury Trust will have
      accepted their appointment as Asbestos Personal Injury
      Trustees and will have executed the Asbestos Personal
      Injury Trust Agreement; and

   -- the individuals designated to serve as members of the
      Trustee's Advisory Committee for the Trust will have
      accepted their appointment as TAC members.

James J. McMonagle, the Court-appointed legal Future Claimants
Representative in the Debtors' Chapter 11 cases, and the Official
Committee of Asbestos Personal Injury Claimants have interviewed
approximately 80 candidates to serve as prospective trustees and
directors in several cases, including the Owens Corning cases, in
connection with the formation of asbestos personal injury trusts.

However, the Trustees have not yet been selected.  Once selected,
Marla R. Eskin, Esq., at Campbell & Levine LLC, at Wilmington,
Delaware, tells the U.S. Bankruptcy Court for the District of
Delaware that the Trustees will commence taking the steps
necessary to have the Asbestos Personal Injury Trust operational
and ready to receive, process and pay asbestos personal injury
claims as soon as reasonably practicable after the Effective Date.

The FCR and ACC expect that the Trustees will want to retain
separate counsel in connection with carrying out their duties.

Pursuant to the Asbestos Personal Injury Trust Agreement, the
Trustees are required to consult with the TAC and the FCR on
certain issues relating to the Asbestos Personal Injury Trust,
including issues relating to the Trust's general implementation
and administration.  Each member of the TAC will be entitled to
compensation from the Asbestos Personal Injury Trust in the form
of a reasonable hourly rate set by the Trustees for attendance at
meetings or other conduct of the Trust's business.  The TAC
members will also be reimbursed for reasonable out-of-pocket
costs and expenses.

The FCR and ACC want to have the Trustees and the TAC commence
establishing the Asbestos Personal Injury Trust and taking the
other steps necessary to have the Trust ready to be functioning
by the Effective Date.  As part of these preparations, the
Trustees will be meeting with representatives of the Debtors, the
FCR, the ACC and proposed TAC members.  

The FCR and ACC ask the Court to authorize the Debtors:

   a. to reimburse the Trustees for the reasonable attorneys'
      fees and out-of-pocket expenses incurred in connection with
      the establishment of the Asbestos Personal Injury Trust and
      other actions necessary to have the Trust ready to be
      operational by the Effective Date;

   b. if the TAC members undertake activities prior to
      confirmation, to reimburse those members for reasonable
      out-of-pocket expenses incurred in connection with the
      activities and pay the members a reasonable hourly rate
      established by the Trustees for meetings attended or other
      conduct of the Trust's business;

   c. pay the Trustees for meetings attended at the per diem rate
      as set forth in the Asbestos Personal Injury Trust
      Agreement and agreed on by the FCR and the FCC; and

   d. pay the premiums for errors and omissions insurance to be
      issued on the Trustees' behalf.

Pursuant to the Asbestos Personal Injury Trust Agreement, each of
the Trustees will be entitled to receive $60,000 per annum from
the Asbestos Personal Injury Trust for their services.  The
Managing Trustee will receive $75,000 for his service, plus:

   -- a per diem allowance for telephonic meetings or other
      Asbestos Personal Injury Trust business performed for
      $1,500;

   -- a per diem allowance for in-person meetings for $2,500; and

   -- the reimbursement of reasonable out-of-pocket costs and
      expenses.

Ms. Eskin points out that the reimbursable fees and expenses will
be of no cost to the Debtors' estates since payment will be
offset against the $1.25 billion payment to the Asbestos Personal
Injury Trust on the Effective Date.

The FCR and ACC further ask Judge Fitzgerald to authorize the
Debtors to make the payments without further authorization of, or
approval by, the Bankruptcy Court.

"By authorizing the Debtors to reimburse the Trustees and the TAC
members now . . . the Debtors will be in a position to consummate
the Sixth Amended Plan shortly after confirmation," Ms. Eskin
maintains.

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


PARAMOUNT RESOURCES: Moody's Junks Rating on $150 Million loan
--------------------------------------------------------------
Moody's Investors Service downgraded Paramount Resources'
Corporate Family Rating to Caa1 from B3 and its senior note
ratings to Caa2 from B3.  Moody's also assigned a Caa1 rating
to Paramount Resources' new $150 million senior secured term loan.  
The outlook is moved to stable from negative.

Proceeds from the new term loan are being used to refinance
existing borrowings under the revolver and for general corporate
purposes.  The term loan is secured by Paramount's 36% interest in
North American Oil Sands Company.  The term loan is not expected
to amortize but there is a mandatory prepayment requirement if the
shares are sold.

Moody's downgraded Paramount Resources' Corporate Family Rating to
reflect the company's very high leverage, high full-cycle costs,
relatively weakened capital productivity, and the weak organic
reserve and production growth.  On these measures, Paramount
Resources ranks among the weakest of all exploration and
production companies rated by Moody's.  The company has a total
full-cycle cost structure in the high $40 per boe range.

Contributing to the very high cost structure is the company's
3-year all-sources reserve replacement costs, driven by a reserve
replacement cost in the $60 per boe range in 2005.  Pro-forma for
the new $150 million term loan and expected future borrowings to
fund its capital expenditure program as it continues its pattern
of outspending cash flow, Paramount's gross adjusted leverage per
proven developed reserve will be in the mid-$20 range, which maps
to the very high end of the Caa range.  

Leverage remains in the Caa range when factoring in collateral
protection from the interest in North American Oil Sands securing
the term loan and from the Trilogy Unit Trusts securing the senior
notes.  There is considerable uncertainty regarding future
valuations of the collateral, especially in the event they are
needed to cover the secured debt instruments.

Based on the collateral protection offered to holders of the
$150 million term loan by Paramount's stake in North American Oil
Sands Company, Moody's believes it is appropriate to rate the term
loan in line with the Caa1 Corporate Family Rating.   Recently,
Paramount transferred 50% of its SAGD oil sands joint venture to
NAOSC for a 50% stake in the company.  Paramount currently holds
an approximate 36% stake in NAOSC after a recent private placement
of the equity in the second quarter of 2006.  

Moody's note that the NAOSC is not generating cash flow and will
have substantial capital expenditure needs; however, given the
recent very strong valuations in oil sands properties, there
currently appears to be significant value.  The term loan is not
notched up from the Corporate Family Rating as the underlying
interests are a minority interest in a private company which is an
illiquid investment and whose sole asset is undeveloped acreage
that requires substantial capital spending to develop, and
therefore could significantly impact valuations in a time of
distress at Paramount.

Moody's is downgrading the senior notes one notch below the
Corporate Family Rating and the term loan.  While the exact value
of the collateral for the term loan remains questionable, there
has been clear evidence of the fluctuating market values of the
Trilogy Units relative to the senior notes.  The value of the
Units has greatly fluctuated in recent months, and, at one time,
the collateral showed a 22% deficiency relative to the value of
the senior notes including the make-whole premium.  In addition,
the units, if sold at once would put significant downward pressure
on the Units.  The introduction of the term loan also removes an
asset providing some additional protection to note holders in the
event of a collateral shortfall.

Per Moody's Methodology, Paramount Resources maps to a Caa1
rating, among the lowest ratings for any exploration and
production company.  With the exceptions of a very borderline B
rating on proved developed reserves and leveraged full-cycle ratio
and Ba retained cash flow metric due to the recent
strength in commodity prices, all other reserve and production
characteristics, reinvestment risk characteristics, operating &
capital efficiency characteristics, and leverage characteristics
map to the Caa category.  As a result, the overall methodology
outcome is Caa1 based on some attribution for collateral securing
the senior notes and the $150 million term loan.

While the outlook is currently stable, the ratings could be
further pressured if management were to take significant
additional shareholder friendly action that further diminishes the
collateral protection.  In addition, further increases in
leverage, diminishment in the Trilogy Unit collateral and
value of oil sands interests, failure to reverse the negative
production trend, or failure to reverse the poor reserve
replacement rate could further pressure the ratings.

Paramount Resources is headquartered in Calgary, Alberta, Canada.


PERKINELMER INC: Earns $35.7 Million in Quarter Ended July 2
------------------------------------------------------------
PerkinElmer, Inc., generated revenues of $377 million for the
second quarter ended July 2, 2006.  Second quarter 2006 revenue of
$377 million increased 2% over the second quarter of 2005.  
Revenue growth was 3% in Life and Analytical Sciences and 1% in
Optoelectronics compared to the same period last year.  Second
quarter 2006 revenue from Health Sciences end markets,
representing 83% of total revenues for the quarter, increased 3%
over the same period of 2005, while second quarter revenue from
Photonics end markets increased 1% over the same period.

GAAP operating profit during the second quarter of 2006 was
$35.7 million, while GAAP operating margin for the same period was
9.5%.  Second quarter 2006 operating profit excluding intangibles
amortization of $7.8 million, stock option expense of $2.1 million
and a restructuring reversal of $.3 million was $45.3 million, or
12.0% as a percentage of revenue for the quarter, representing an
increase of 30 basis points compared to the same period of last
year.

Recently, the Company completed three acquisitions in the priority
growth areas of screening, diagnostics and service.

Within screening and diagnostics, the Company acquired the
business and associated intellectual property of NTD Laboratories
and Spectral Genomics.  NTD Laboratories is a leading provider of
first-trimester prenatal risk assessment, while Spectral Genomics
is a leader in molecular karyotyping technology used to research
chromosomal abnormalities.  NTD Laboratories and Spectral Genomics
provide additional technology and a broader platform to drive the
Company's high growth screening and diagnostics strategies.

Within service, the Company acquired Clinical & Analytical
Services Solutions, an asset management firm that the Company
expects will allow it to drive laboratory efficiency and cost
savings for customers through asset management and expert
maintenance.

"We were pleased to deliver excellent cash EPS growth during the
quarter, with strong performance in our key growth platforms of
genetic screening, imaging and service," said Gregory L. Summe,
chairman and CEO of the Company.  "We remain focused on driving
growth in these platforms as evidenced by our strategic
acquisitions of NTD Laboratories, Spectral Genomics and C&A as
well as our increased investment in R&D.  We are committed to
further increasing our investment in these attractive growth
areas," added Mr. Summe.

The Company generated operating cash flows of $53.2 million in the
second quarter of 2006.  Free cash flow for the second quarter of
2006, defined as operating cash flow of $53.2 million less capital
expenditures of $12.2 million, was $41 million.  This number
includes a tax payment of $4.6 million related to the gain on the
divestiture of Fluid Sciences. Free cash flow, net of divestiture
taxes, was $45.6 million.

                       Financial Guidance

For the third quarter of 2006, the Company projects GAAP earnings
per share from continuing operations of between $.22 and $.24.
Excluding the impact of intangibles amortization and stock option
expense, the Company projects earnings per share from continuing
operations of between $.27 and $.29 for the third quarter of 2006,
an increase of approximately 13% to 21% over the third quarter
2005.  For the full year 2006, the Company projects GAAP earnings
per share from continuing operations of between $.95 and $1.00,
and earnings per share excluding intangibles amortization and
stock option expense, of between $1.15 and $1.20 per share.  This
reflects approximately $.05 per share change in full year cash EPS
guidance due to dilution from acquisitions and increased growth
investments in the second half of 2006.

                         About PerkinElmer

PerkinElmer Inc. (NYSE: PKI) -- http://www.perkinelmer.com/-- is  
a global technology leader driving growth and innovation in Health
Sciences and Photonics markets to improve the quality of life.
PerkinElmer reported revenues of $1.5 billion in 2005, has 8,000
employees serving customers in more than 125 countries, and is a
component of the S&P 500 Index.

                          *     *     *

PerkinElmer Inc.'s Long Term Subordinated Debt carry Moody's
Investors Service's Ba1 rating.


PERKINELMER INC: Board Declares $0.07 Dividend Per Share
--------------------------------------------------------
The Board of Directors of PerkinElmer, Inc., has declared a
regular quarterly dividend of $.07 per share of common stock.  
This dividend is payable on Nov. 10, 2006, to all shareholders of
record at the close of business on Oct. 20, 2006.

PerkinElmer Inc. (NYSE: PKI) -- http://www.perkinelmer.com/-- is  
a global technology leader driving growth and innovation in Health
Sciences and Photonics markets to improve the quality of life.
PerkinElmer reported revenues of $1.5 billion in 2005, has 8,000
employees serving customers in more than 125 countries, and is a
component of the S&P 500 Index.

                           *     *     *

PerkinElmer Inc.'s Long Term Subordinated Debt carry Moody's
Investors Service's Ba1 rating.


PETCO ANIMAL: Moody's Reviews Low-B Ratings for Possible Downgrade
------------------------------------------------------------------
Moody's Investors Service placed all ratings of PETCO Animal
Supplies, Inc under review for possible downgrade.  The review
is prompted by the announcement that PETCO intends to be acquired
in a LBO privatization transaction by affiliates of Leonard
Green and Texas Pacific Group for total consideration of about
$1.8 billion.  Moody's notes that the rated senior subordinated
notes are puttable at 101% of par upon a change of control, and
first become callable at 105.375% of par in November 2006.

These ratings are placed under review for possible downgrade:

   * $89.3 million 10.75% senior subordinated note issue of B1,
   * Corporate family rating of Ba2.

During the review, Moody's will consider:

   (1) specific financing plans for the transaction, keeping in
       mind that the fixed charge burden for debt service
       probably will increase,

   (2) the outcome of potential attempts to redeem the senior
       subordinated notes and

   (3) operating performance expectations for PETCO.

If the transaction does not take place, then the ratings could be
confirmed at current levels.

PETCO Animal Supplies, Inc, with headquarters in San Diego,
California, is a specialty retailer of premium supplies, food, and
services for household pets.  The company currently operates more
than 800 stores in 49 states.  Revenue for the twelve months
ending April 29, 2006 was about $2 billion.


PLIANT CORP: Plans $35 Mil. Issue of 13% Senior Notes Due 2010
--------------------------------------------------------------
Pliant Corporation, certain of its subsidiaries and The Bank of
New York Trust Company, N.A., as trustee, entered into an
Indenture dated as of July 18, 2006, with respect to the issuance
of the company's 13% Senior Subordinated Notes Due 2010 in an
aggregate principal amount of $35,000,000, Pliant Chief Financial
Officer Joseph Kwederis reports in a filing with the Securities
and Exchange Commission.

The Indenture provides that interest will accrue on the New
Subordinated Notes from the date of issuance at a rate of 13% per
annum until maturity on July 15, 2010.

According to Mr. Kwederis, the New Subordinated Notes are subject
to the company's right, which will be assignable, to refinance
the New Subordinated Notes during the first year after issuance
by tendering to their holders cash equal to $20,000,000:

   (i) plus interest accrued at a rate of 13% per annum from the
       date of issuance through the date of payment on a
       principal amount of $20,000,000;

  (ii) minus any interest previously paid in cash on the New
       Subordinated Notes.

Commencing on July 19, 2007, the company may redeem the New
Subordinated Notes in whole or in part at a redemption price equal
to 100% of the aggregate principal amount of the New Subordinated
Notes plus accrued and unpaid interest to the redemption date.

The Indenture also provides the holders of the New Subordinated
Notes with the right to require the company to repurchase the New
Subordinated Notes at a repurchase price equal to 101% of their
aggregate principal amount plus accrued and unpaid interest upon a
change of control of the company.

The Indenture does not provide a sinking fund with respect to the
New Subordinated Notes.

A full-text copy of the 13% Senior Subordinated Notes Indenture
Due 2010 is available for free at:

               http://ResearchArchives.com/t/s?f29

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts.  The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel.   The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada.  Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors.  Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee.  As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts.  The Debtors emerged from chapter 11 protection on
July 19, 2006 (Pliant Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PLIANT CORP: Enters into $200-Mil. Credit Pact with Merrill Lynch
-----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Joseph Kwederis, senior vice president and chief
financial officer of Pliant Corporation, discloses that the
company and certain of its subsidiaries have entered into two
credit agreements, as contemplated in the Debtors' confirmed
Fourth Amended Joint Plan of Reorganization:

   (1) Working Capital Credit Agreement, among the company,
       certain of its subsidiaries, certain lenders, Merrill
       Lynch Bank USA, as administrative agent, and Merrill Lynch
       Commercial Finance Corp., as sole lead arranger and book
       manager; and

   (2) Fixed Asset Credit Agreement, among Pliant Corporation Pty
       Ltd., Pliant Corporation of Canada Ltd., Pliant Film
       Products GmbH and Aspen Industrial, S.A. de C.V., as
       borrowers, certain lenders, Merrill Lynch Bank USA, as
       administrative agent, and Merrill Lynch Commercial Finance
       Corp., as sole lead arranger and book manager.

According to Mr. Kwederis, the Credit Facilities provide up to
$200,000,000 of total commitments, subject to a borrowing base
and a required minimum availability amount of at least
$10,000,000.  The commitment fee for the unused portion of the
Credit Facilities is 0.375% per annum.

The Credit Facilities were funded on July 18, 2006, and replace
the company's prior credit facilities, Mr. Kwederis reports.

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts.  The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel.   The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada.  Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors.  Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee.  As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts.  The Debtors emerged from chapter 11 protection on
July 19, 2006 (Pliant Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PRESIDENT CASINOS: Taps Saul Leonard as Gaming Consultant
---------------------------------------------------------
President Casinos Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Missouri for
permission to retain Saul Leonard and the firm Saul F. Leonard
Company, Inc., as its gaming consultant and expert witness.

The Debtors want Saul Leonard's assistance in the evaluation of
gaming issues presented in the preparation and litigation of the
adversary proceeding pending against Columbia Sussex Corporation
and Wimar Tahoe Corporation.

Saul Leonard will:

   a) assist the Debtors in evaluating the applications of the
      Defendants for gaming license in Missouri;

   b) assist the Debtors in evaluating the applications of the
      Defendants for gaming license in jurisdiction other than
      Missouri;

   c) assist the Debtors in evaluating the gaming operation of the
      Defendants in jurisdiction other than Missouri and the
      potential purchase of additional gaming operation by
      Defendants;

   d) prepare an expert report on the impact of the Missouri
      Gaming Commission's investigation of the Defendants on the
      Defendants' gaming operation; and

   e) testify at depositions and at trial on the issues relating
      to gaming regulation and the impact of the Missouri Gaming
      Commission investigation of the Defendants on the
      Defendants' gaming operation, and, if appropriate, in
      rebuttal to any expert witness retained by Defendants.

Mr. Leonard will bill $400 per hour for his services.

Saul Leonard assures the Court that his firm is a "disinterested
person" as that term is defined in Sections 101(14) and 1107(b) of
the Bankruptcy Code.

                        About Saul Leonard

Leonard is a gaming industry consultant who works with companies
on gaming and regulatory issues in the gaming industry.  The
company is a nationally recognized figure within the gaming,
hospitality and leisure industry.

                      About President Casinos

Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a  
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri.  The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055).  On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court.  The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005).  Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts.  David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors.


PROGRESS SOFTWARE: Delinquent Form 10-Q Prompts Delisting Notice
----------------------------------------------------------------
Progress Software Corporation disclosed that, as a result of the
delay in filing its Quarterly Report on Form 10-Q for the three
months ended May 31, 2006, it has received a Nasdaq Staff
Determination Letter dated July 19, 2006 indicating that the
company's common stock is subject to delisting from the Nasdaq
Global Select Market pursuant to Nasdaq Marketplace Rule
4310(c)(14).  That rule requires companies listed on Nasdaq to
file on a timely basis all reports and other documents that are
required to be filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended.

Progress Software is undertaking a voluntary review of its stock
option practices.  Because the option review is not yet complete
and its impact on the stock-based compensation charges and related
tax matters in the company's financial statements for the periods
ended May 31, 2006 and 2005 has not yet been determined, the
company has not been able to file its Quarterly Report on Form 10-
Q for the period ended May 31, 2006 on a timely basis.

Progress Software will appeal the Nasdaq Staff's determination by
requesting a hearing before the Nasdaq Listing Qualifications
Panel pursuant to Nasdaq Marketplace Rule 4805.  The hearing
request will automatically stay the delisting of the company's
common stock pending the Panel's review and determination.

                      About Progress Software

Headquartered in Bedford, Mass., Progress Software Corporation
(Nasdaq: PRGS) -- http://www.progress.com/-- provides application  
infrastructure software for all aspects of the development,
deployment, integration and management of business applications.


REFCO INC: Eight Refco LLC Claimants Can File Consolidated Claim
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes certain entities that expressed intent to file similar
proofs of claim against Refco, LLC, to lodge a single master proof
of claim that will be deemed to have been filed against the Debtor
on their behalf.

The Refco Claimants include:

   * Bersec International, LLC,
   * Cargill Investor Services Limited,
   * Haut Commodities, LLC,
   * Kroeck & Associates, LLC,
   * Lind-Waldock Financial Partners, LLC,
   * Lind-Waldock Securities LLC,
   * Marshall Metals, LLC, and
   * New Refco Group Ltd., LLC.

Nothing will prohibit the Refco Claimants from filing individual
proofs of claim in lieu of a Master Proof of Claim against Refco
LLC.

In a separate order, Judge Drain grants Skadden, Arps, Slate,
Meagher & Flom LLP, until 5:00 p.m. on October 17, 2006, to file
a proof of claim against Refco LLC for professional services
rendered before November 25, 2005.

                          About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News, Issue
No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).


REFCO INC: Customers Want Rule 2004 Examination on Refco F/X
------------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, an ad hoc committee of Refco F/X Associates, LLC
customers asks the U.S. Bankruptcy Court for the Southern District
of New York to authorize and direct FXA to disclose names and
contact information of each of its account holders who maintained
trading accounts with a positive account balance as of Oct. 17,
2005.

The Customer Committee is currently composed of around 200 FXA
customers working to protect and advance the interests of the FXA
customer body as a whole.

The Customer Committee members believe that many additional
customers would be interested in participating in the proceeding
through the Committee if they were informed of the opportunity.  
By joining the Committee, the FXA customers will also be able to
enhance the value of FXA's estate by, among other things, working
with the Debtors and the Official Committee of Unsecured
Creditors to increase the proceeds from the sale of FXA assets.

Todd E. Duffy, Esq., at Duffy & Amedeo LLP, in New York, tells
Judge Drain that the Customer Committee is entitled to customer
information pursuant to the Bankruptcy Court's October 20, 2005
order and Bankruptcy Rule 1007(a)(1), which require FXA to file
with its petition a list containing names and addresses of each
of its creditors.

Mr. Duffy ensures that the requested disclosure will preserve the
FXA customers' rights.

To the extent that a settlement between the Customer Committee
and FXA is achieved, allowing more customers to participate in
the settlement could benefit the estate and its creditors by
satisfying a significant portion of FXA's creditor body and
clearing the way for a more comprehensive plan of reorganization,
Mr. Duffy states.

                         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).


RENT-A-CENTER INC: S&P Puts BB+ Corp. Credit Rating on Neg. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its debt ratings,
including its 'BB+' corporate credit rating, on Plano, Texas-based
Rent-A-Center Inc. on CreditWatch with negative implications.

At the same time, Standard & Poor's placed its ratings, including
the 'B+' corporate credit rating, on Erie, Pennsylvania-based
Rent-Way Inc. on CreditWatch with positive implications.

The rating actions follow Rent-A-Center's announcement that it had
reached a definitive agreement to acquire Rent-Way, a major
competitor, for about $567 million.  The acquisition will be
funded with an increase in Rent-A-Center's senior credit facility.
Based on Rent-Way's estimated EBITDA of $60 million for 2006, the
purchase price represents an approximate 9.5x multiple of EBITDA.

"Although Rent-A-Center anticipates significant cost savings from
the acquisition, we believe the transaction will weaken Rent-A-
Center's financial profile," said Standard & Poor's credit analyst
Robert Lichtenstein.

Moreover, Rent-Way, with $530 million in revenue and $49 million
in EBITDA, has been experiencing declining operating trends over
the past 18 months.

Standard & Poor's will consider the impact of the acquisition on
Rent-A-Center's credit profile, including:

   * the integration of poorer performing stores;

   * the elimination of a significant competitor;

   * the opportunity for cost savings through the elimination of
     redundant expenses and store closures; and

   * an increase in debt leverage.

The rating agency expects that any downgrade of the acquiring
company will still leave the rating above the current rating for
Rent-Way.


RENT-WAY INC: Acquisition Plan Prompts Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed all ratings of Rent-Way, Inc.,
under review for possible upgrade.  The review is prompted by the
announcement that Rent-A-Center, Inc. intends to acquire complete
ownership of Rent-Way.  Moody's notes that the rated senior
secured notes are redeemable at any time at the option of the
company.

These ratings are placed under review for possible upgrade:

   * $205 million 11.875% second-lien secured note issue of B3,
   * Corporate family rating of B3.

During the review, Moody's will consider the position of Rent-Way
within Rent-A-Center's corporate structure, the outcome of the
redeemable senior secured notes and preferred stock, and the
likelihood for post-transaction efficiencies and operating
improvements, keeping in mind that Rent-A-Center has successfully
integrated several previous acquisitions.  The senior secured
notes are redeemable at any time at a price based on the
equivalent Treasury yield. If the transaction does not take place,
then the ratings could be confirmed at current levels.

Rent-Way, Inc., with headquarters in Erie, Pennsylvania, operates
the third largest chain of consumer rental purchase stores with
792 stores in 34 states.  Revenue for the twelve months ending
March 31, 2006, was about $524 million.


RF MICRO: Earns $14 Million in First Fiscal Quarter of 2007
-----------------------------------------------------------
For the fiscal 2007 first quarter ended June 30, 2006, RF Micro
Devices Inc. reported revenues of $238.3 million, and operating
income of $14 million on a GAAP basis.

Commenting on the results, Bob Bruggeworth, RF Micro's president
and chief executive officer, said, "RFMD is successfully executing
on a plan to grow quarterly revenue and deliver improved quarterly
operating income.  During the June quarter, we took share in
cellular transceivers and transmit modules, and we expect this
trend to continue.  In fact, we are currently booked for
sequential revenue growth in the September quarter with the
world's four largest handset manufacturers.  In the second half of
calendar year 2006, we expect revenue, margins and earnings will
be favorably impacted by momentum at our leading customers, as
well as strong handset demand, new product launches and continued
design wins."

Headquartered in Greensboro, North Carolina, RF Micro Devices,
Inc. (Nasdaq: RFMD) -- http://www.rfmd.com/-- designs and  
manufactures radio systems and solutions for mobile communication
applications.

                           *     *     *

In April 2005, Standard & Poor's Ratings Services revised its
outlook on RF Micro Devices Inc. to negative from stable,
following the Company's announcement that its March quarter
earnings would be lower than expected because of increased
inventory reserves and high product development expenses.  The
corporate credit rating was affirmed at 'B+', and the subordinated
debt rating was affirmed at 'B-'.


SAINT VINCENTS: Plan-Filing Period Intact Until Further Ct. Ruling
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extends Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates' exclusive period to file a plan of
reorganization until a ruling on the request is entered.  A
hearing is scheduled on Aug. 29, 2006, to consider the Debtors'
request.

The Debtors are asking the Court to further extend the period
within which they have the exclusive right to:

     (a) file a plan of reorganization to Nov. 15, 2006; and

     (b) solicit acceptances of that plan to Feb. 1, 2007.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the   
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 31
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SAINT VINCENTS: Agrees to Pay $3.6 Mil. Cure Amount for CBAs
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation governing the assignment of certain of
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates' contracts and leases to Caritas Health Care
Planning, Inc.

The Debtors will assume and assign certain executory contracts
and unexpired leases to Caritas, Wyckoff Heights Medical Center's
affiliate, in connection with the sale of their Mary Immaculate
Hospital and St. John's Queens Hospital and certain related assets
located in Queens, New York.

The Assumed Contracts and Leases include the collective bargaining
agreements between the Debtors and 1199SEIU United Healthcare
Workers East to the extent they cover 1199SEIU bargaining unit
employees employed at the Queens Assets:

    (a) Brooklyn/Queens Central and Brooklyn/Queens Region CBAs,
    (b) St. John's Queens Hospital CBAs,
    (c) Mary Immaculate Hospital CBA, and
    (d) Monsignor Fitzpatrick Pavilion CBA.

The CBAs between the Debtors and 1199SEIU will remain executory
contracts, in full force and effect, as and to the extent they
apply to the Debtors' non-Queens Assets employees, subject to the
provisions of Sections 365, 1113 and 1114 of the Bankruptcy Code.

The Debtors, 1199SEIU and 1199SEIU National Benefit and Pension
Funds wish to resolve their disputes over the Cure Amounts for the
CBAs related to the Queens Assets employees and other issues
related to Sections 365, 1113 and 1114, without the cost and risk
of litigation.

The Debtors, 1199SEIU and 1199 Funds stipulate that:

    (a) The Debtors will pay these cure amounts for the CBAs:

           CBA                    Cure Amount
           ---                    -----------
           B/Q CBAs                  $551,930
           SJQ CBAs                 2,103,758
           MIH CBA                    862,973
           MFP CBA                     84,313
                                    ---------
           Total                   $3,602,975

    (b) If the Debtors produce evidence reasonably acceptable to
        1199 Funds of High Wage Earner Credits that have not been
        included in the Cure Amount, the Debtors may reduce the
        Cure Amount for the Brooklyn and Queens CBAs by an amount
        equal to the High Wage Earner Credits.

    (c) Payment of the Cure Amounts, as modified by the High Wage
        Earner Credits, will fully satisfy the requirements of
        Section 365(b) with regard to the CBAs.

    (d) The assignment of the CBAs to the Purchaser, to the extent
        they cover 1199SEIU bargaining unit employees at the
        Queens Assets, is acceptable.  The Debtors and the
        Purchaser have provided adequate assurance of the
        Purchaser's future performance under the CBAs.

    (e) The Debtors will pay the Paul Schweigert Arbitration
        Award.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the   
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 30
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SCHUFF INTERNATIONAL: S&P Affirms B- Rating & Revises Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Phoenix,
Arizona-based construction and engineering company Schuff
International to positive from stable.

At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'B-' corporate credit rating.  The company
had about $82 million of lease-adjusted debt at June 30, 2006.

"The outlook revision reflects the improvement in the company's
recent operating and financial performance," said Standard &
Poor's analyst Dan Picciotto.

The company recently reported that second quarter revenues
increased nearly 40% from year-ago levels and operating income
grew by around 90%.

A favorable rating action could follow if Schuff improves its cash
flow generation or liquidity profile.  A negative outlook or lower
rating may result from delays in cash inflows if Schuff's top
projects fall behind schedule, as these represent a meaningful
concentration in revenue.  Deterioration in liquidity from slowing
markets or increased working capital requirements could also
result in a lower outlook or rating.


SILICON GRAPHICS: Wants to Enter Into Backstop Agreements
---------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York's authority
to enter into Backstop Commitment Agreements in connection with
rights offering under their Plan of Reorganization.

The Debtors' Plan of Reorganization contemplates that some of the
New Common Stock to be issued by Reorganized Silicon Graphics will
be issued pursuant to a rights offering.

Under the Rights Offering, each holder of an Allowed Secured Note
Claim will receive subscription rights entitling the holder to
purchase its Ratable Proportion of 6,800,000 shares of the New
Common Stock, while each holder of an Allowed Cray Unsecured
Debenture Claim will receive subscription rights entitling the
holder to purchase its Ratable Proportion of 700,000 shares of the
New Common Stock, each at $6.67 per share.

The Plan allows Lampe Conway & Co., LLC, to purchase any amount of
New Common Stock not purchased pursuant to the Cray Rights, in
accordance with the Global Settlement Agreement.  The Plan also
provides that any amount of New Common Stock not purchased
pursuant to the subscription rights issued and the Lampe Option
will be purchased at the same price provided in the Rights
Offering by the "backstop purchasers" consisting of:

    -- QDRF Master Ltd.,
    -- Encore Fund, L.P.,
    -- Quadrangle Debt Recovery Income Fund Master, Ltd.,
    -- Quadrangle Debt Opportunities Fund Master Ltd.,
    -- Watershed Technology Holdings, LLC,
    -- Watershed Capital Partners, L.P., and
    -- Watershed Capital Institutional Partners, L.P., and
    -- Watershed Capital Partners (Offshore), Ltd.

                 The Backstop Commitment Agreements

The salient terms of each Backstop Commitment Agreement are:

    * Rights Offering: The Company will distribute subscription
      forms for the Rights and the Cray Rights as soon as
      reasonably practicable after the entry of orders approving
      the Backstop Commitment Agreement and the disclosure
      statement related to the Plan.  The Rights and the Cray
      Rights may be exercised during a period commencing on
      the Distribution Date and ending on the date that is the
      deadline for voting on the Plan, as specified in the
      subscription form, but subject to the Company's right to
      extend the date with the Backstop Purchaser's consent.

    * Backstop Commitment: Each Backstop Purchaser agrees to
      purchase -- at $6.67 per share -- and at the aggregate
      Purchase Price, its Pro Rata Share of:

        (i) one share for each Right that was not properly
            exercised by its holder as of the Subscription
            Expiration Date subject to the maximum number of
            shares that may be purchased and the maximum number of
            shares identified in each Backstop Commitment
            Agreement; and

       (ii) one share for each Cray Right that was not properly
            exercised by their holders and not purchased by Lampe
            Conway, subject to the Cray Share Cap.

      With respect to the Notes held by the Backstop Purchaser on
      the Record Date, the Backstop Purchaser will exercise and
      purchase the Rights distributed with respect to the Notes.

    * Overallotment Shares: In exchange for the Backstop
      Commitment, the Backstop Purchaser will have subscription
      rights to purchase an additional 1,125,000 total shares of
      New Common Stock.

    * Backstop Fee: Silicon Graphics, Inc., will pay to the
      Backstop Purchasers a $1,000,000 fee, which may be allocated
      among the Backstop Purchasers.  The Backstop Fee, which will
      be nonrefundable, will be paid to the Backstop Purchasers
      within two business days after the entry of the Court's
      order granting the Agreements.

    * Additional Fees: Upon entry of the Agreement Order, and upon
      demand, the Debtors will reimburse or pay within 10 days
      after presentation of an invoice approved by the Backstop
      Purchaser, without further Court approval, the reasonable
      fees and out-of-pocket expenses of Goodwin Procter LLC,
      incurred in connection with the Backstop Commitment
      Agreement.  Goodwin Procter represents the ad hoc committee
      of certain holders of 6.50% Senior Secured Convertible
      Notes.

      The Debtors also agree to pay the filing fee required under
      the Hart-Scott-Rodino Antitrust Act or any equivalent period
      under applicable foreign antitrust laws on behalf of the
      Backstop Purchasers when filings under the HSR Act are made.

    * Conditions: The obligations of each Backstop Purchaser are
      subject to various conditions precedent including:

      -- entry of the Disclosure Statement Order;

      -- entry of the Agreement Order;

      -- approval by the Backstop Purchaser, prior to the hearing
         on the request, a draft of the Plan, the Disclosure
         Statement, the Confirmation Order, and any amendments or
         supplements;

      -- entry of the Confirmation Order on a date that is
         on or before 135 days from the Petition Date;

      -- entry of a non-appealable Confirmation Order, which have
         not been appealed within 10 calendar days of entry, or
         which have not been stayed pending appeal, and which have
         not been subject to any reversal, modification or vacatur
         order entered by any court of competent jurisdiction;

      -- satisfaction of the conditions to confirmation and
         conditions to the Effective Date of the Plan;

      -- commencement by Silicon of the Rights Offering in
         accordance with the terms of the Backstop Agreement;

      -- receipt by the Backstop Purchaser of the Backstop Fee;
         and

      -- the absence of a Material Adverse Effect following the
         execution and the delivery of the Backstop Commitment
         Agreement, prior to the Closing Date.

    * Indemnification: Regardless of whether the Rights Offering
      is consummated or whether the Backstop Commitment Agreement
      is terminated, the Debtors agree to indemnify the Backstop
      Purchaser and certain related parties from and against all
      losses arising in connection with the Rights Offering, the
      Backstop Commitment, the Backstop Commitment Agreement, the
      Plan, the Agreement Order, or the Confirmation Order.

    * Termination: The Backstop Purchaser may terminate the
      Backstop Commitment Agreement (i) on or after the business
      day following the date the Backstop Fee has become payable
      and has not been received by the Backstop Purchaser; (ii) on
      or after August 24, 2006, if the Agreement Order will not
      have been entered by the Court by that date; (iii) on or
      after October 31, 2006; (iv) upon failure by Silicon to pay
      the Backstop Fee when due; or (v) upon the failure of any of
      the conditions of the Backstop Commitment Agreement to be
      satisfied.

                 Backstop Agreements are Necessary

Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that by entering into the Backstop Commitment
Agreements, the Debtors can be sure that all of the Rights and the
Cray Rights offered pursuant to the Rights Offering are subscribed
and exercised, thus ensuring an infusion of funds of approximately
$50,000,000.

Moreover, Mr. Youngman informs the Court that the Backstop
Commitment Agreements enable the Backstop Purchasers to purchase
the Overallotment Shares, potentially netting the Debtors an
additional $7,503,750.

A full-text copy of the master form for the Backstop Commitment
Agreements is available for free at:

                http://researcharchives.com/t/s?f32

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: LGE Wants Stay Lifted to Pursue Dist. Ct. Action
------------------------------------------------------------------
LG Electronics, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay to allow
it to proceed against Silicon Graphics, Inc., in the appropriate
district court for damages and injunctive relief related to
historic, prepetition infringements of its patents.

Lee S. Attanasio, Esq., at Sidley Austin LLP, in New York,
relates that for six years, the Debtors have been on notice that
certain of their products infringed several patents owned by LGE,
including:

    * U.S. Patent No. 4,654,484 entitled "Video Compression and
      Expansion System"; and

    * U.S. Patent No. 4,747,070 entitled "Reconfigurable Memory
      System".

The parties engaged in discussions regarding the appropriate
licensing terms for the Patents.  An agreement was not reached,
however, and formal discussions between the parties were
discontinued because the Debtors insisted on waiting for the
outcome of then-pending patent lawsuits filed by LGE against
third parties alleging infringement of most of the Patents.

Since 2003, LGE has continued to provide the Debtors with notice
regarding the status of the Infringement Actions and, in 2004,
reiterated its charges of infringement against them.

Ms. Attanasio asserts that the District Court will be able to
provide a complete and efficient resolution of the issues between
LGE and the Debtors.  The District Court Action will involve the
same factual circumstances, legal issues and witnesses for both
the pre- and postpetition acts of infringement.  If the stay is
not lifted, both parties will be forced to try the same facts
twice, once in District Court and once in the Bankruptcy Court.

"The interests of judicial economy weigh heavily in favor of
lifting the automatic stay so that both the pre and postpetition
infringements of the Patents can be litigated at the same time,"
Ms. Attanasio notes.

According to Ms. Attanasio, the District Court has the necessary
expertise to resolve these highly specialized issues and is a
universally recognized forum specializing in patent litigation.

Moreover, Ms. Attanasio points out that the balance of harms
weighs in favor of granting LGE relief from the stay because it
(i) has a strong interest in ensuring that its property rights
are protected from unauthorized use, and (ii) has the exclusive
right to sell and use the technology embodied by the Patents.

LGE wants the Court to declare that the stay does not restrict
LGE's ability to commence a District Court Action as it relates
to the Debtors' continuing, postpetition infringement.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)


STERLING FINANCIAL: Earns $10.3 Million in Quarter Ended June 30
----------------------------------------------------------------
For the quarter ended June 30, 2006, Sterling Financial Corp. of
Lancaster, Pennsylvania, reported net income of $10.3 million, an
increase of $597,000, or 6.2% from the second quarter of 2005.

Total revenue, comprised of net interest income and non-interest
income excluding net gains on sale of securities, totaled
$48.5 million for the second quarter of 2006, an increase of
$3.1 million or 6.9% from the same period last year.

Non-interest expense totaling $32.8 million for the second quarter
of 2006 increased $2 million or 6.6% from the second quarter of
2005.

Commenting on the results, J. Roger Moyer, Jr., the Company's
president and chief executive officer, said "[w]e delivered
another quarter of solid performance.  While we have experienced
some modest compression in our net interest margin, our company is
well positioned to meet a challenging interest rate environment as
we continue to focus on revenue growth by delivering a broad
portfolio of complementary financial services through our banks
and financial services group companies."

                  Six Months Ended June 30, 2006

Sterling's net income for the six months ended June 30, 2006 was
$20.4 million, an increase of $1.5 million, or 7.8% from the same
period in 2005.

Total revenue of $95.9 million for the first six months of 2006
increased $7.3 million or 8.3% from the same period last year and
exceeded growth in expenses of $4.2 million or 6.8%, for the same
comparison period.

Sterling's net interest income improved from $55.9 million for the
six months ended June 30, 2005 to $60.1 million in 2006, a 7.6%
increase.

                          About Sterling

Based in Lancaster, Pennsylvania, Sterling Financial Corporation
(NASDAQ: SLFI) -- http://www.sterlingfi.com/-- is a diversified  
financial services company.  Sterling Banking Group affiliates
offer a full range of banking services in south-central
Pennsylvania, northern Maryland and northern Delaware; the group
also offers correspondent banking services in the mid-Atlantic
region to other companies within the financial services industry.
Sterling Financial Services Group affiliates provide specialty
commercial financing; fleet and equipment leasing; investment,
trust and brokerage services; insurance services; and human
resources consulting services.

                           *     *     *

Sterling Financial Corp.'s senior unsecured debt and short-term
debt carry Fitch's BB+ and B ratings respectively.  The ratings
were placed on July 20, 2004 with a stable outlook.


TATER TIME: Files 3rd Amended Disclosure Statement in Washington
----------------------------------------------------------------
In a third amended disclosure statement explaining their plan of
reorganization, Tater Time Potato Company LLC and its debtor-
affiliates tell the U.S. Bankruptcy Court for the Eastern District
of Washington that they propose to pay, in full plus interest, the
claims of:

   a) Grant County, State of Washington; and

   b) Internal Revenue Service, Department of Labor & Industries,
      Employment Security Department

The claims of MONY Life Insurance Company or Mutual Life Insurance
Company of New York and Washington Mutual Savings Bank
will be paid in full, with interest from the sale of Cissne Family
LLC's 1290-Acre farm.

If Washington Bank is not paid as stated, its claim will be
allowed in the amount of $4,418,585.  Additionally, should
Washington Bank not be paid in full by Feb. 28, 2007, the
automatic stay will be lifted to permit Washington Bank to
exercise its rights granted by state law against its collateral.

The Class 9 Claim of Banner Bank will also be paid from the sale
of the 1290-Acre farm.

The claims of Fin-Ag, Inc. and Cenex Harvest States, Inc. or CHS
Inc. will be paid in full, as follows:

   -- the allowed amount will be reduced by the amount, if any,
      of any award to the Debtors by the liquidation of the
      Debtors' claims against Cenex, CHS or Fin-Ag for damages
      proximately caused as a result of actions of or inactions
      by Cenex, including, but not limited to, negligent chemical
      application, Consumer Protection Act violations, and breach
      of warranty; and

   -- the balance, if any, of the allowed claims will be paid by    
      Riley and Lora Cissne as shareholders and as proposed
      disbursing agents upon confirmation of the Debtors' Plan.

The Class 8 Claims of Jeffers, Danielson, et. al. will be paid in
full, pursuant to an order approving employment of attorneys on a
contingency fee basis entered by Court on Sept. 11, 2005.

The Order approved the fee agreement between the Debtors and
holders of Class 7 claims dated Feb. 3, 2005, authorizing and
employing Class 8 Claim holders to represent the Debtors and
others in pursuing the Debtors' claim against Cenex, CHS or
Fin-Ag.

To the extent the Class 8 Claim is not paid in full from
liquidating the claims against Fin-Ag, Cenex or CHS, the balance
due Class 11 claims will be paid in full as an allowed
administrative claim.

Holders of Class 10 Unsecured Claims will receive payment in full
plus interest at 6% per annum.

Holders of equity interests in the Debtors will receive nothing
under the Amended Plan other than approved salaries or wages,
until all allowed claims are paid in full.

A full-text copy of the Debtors' third amended disclosure
statement is available for a fee at:

http://www.researcharchives.com/bin/download?id=060809224426

Headquartered in Warden, Washington, Tater Time Potato Company,
LLC, packs and ships potatoes.  The Company and its debtor-
affiliates filed for chapter 11 protection on January 24, 2005
(Bankr. E.D. Wash. Case No. 05-00509).  Dan O'Rourke, Esq., at
Southwell & O'Rourke, P.S., represents the Debtors in their
restructuring efforts.  No Official Committee of Unsecured
Creditors has been appointed in this case.  When the Debtors filed
for protection from their creditors, it reported total assets of
$11,312,000 and total debts of $7,639,184.


TENFOLD CORP: Posts $1.6 Million Net Loss in Second Quarter
-----------------------------------------------------------
TenFold Corporation filed its financial results for the second
quarter ended June 30, 2006, with the Securities and Exchange
Commission on Aug. 1, 2006.

For the three months ended June 30, 2006, the Company incurred a
$1.6 million net loss on $710,000 of net revenues, compared with a
$1.3 million net loss on $1.7 million of net revenues in 2005.

As of June 30, 2006, the Company's principal source of liquidity
was its cash and cash equivalents of $3.2 million.  On March 30,
2006, the Company completed a capital raising transaction for
gross proceeds of approximately $6.3 million (before expenses and
repayment of $1.1 million of interim financing obligations).  The
Company believed that with the proceeds of this capital
transaction, and new sales that we believe that we can close
during 2006, the company will have sufficient liquidity for its
operations during 2006.  However, significant challenges and risks
remain:

   -- the Company has not been able to generate positive cash
      flow from operations for the three years ended Dec. 31,
      2005, or the six months ended June 30, 2006.  The Company's
      net cash used in operating activities was $4.5 million for
      the year ended Dec. 31, 2005, and $3.5 million for the six
      months ended June 30, 2006.  

   -- for the last several years, the Company has derived a
      significant portion of our cash inflows from time-and-
      materials consulting services performed for a limited number
      of large customers for whom we were completing enterprise
      applications development projects.  As these customers
      completed their initial projects and became self-sufficient,
      they reduced their purchases of time-and-materials
      consulting services (although some purchase support from us
      and other services from time to time).  The Company has not
      replaced these projects with similar sized projects with
      other customers.  These reductions have materially reduced
      our cash inflows.

   -- the Company has experienced difficulty closing substantial
      new sales, and it is unclear when or if the Company can
      expect to predictably close significant sales to new or
      existing customers, and to achieve and sustain positive cash
      flow from operations.  Under the leadership of the Company's
      new Chief Executive Officer, Robert W. Felton, the Company
      has recently changed our business model to focus on selling
      larger consulting projects, instead of the smaller prototype
      application projects that the Company primarily sold in
      2005.  Although the Company expects to be more successful
      with this new model, the Company has limited experience with
      the new model as it has introduced it only recently. And
      although the Company has closed some new sales under this
      model, the amount of that sales is not sufficient to
      generate positive cash flow from operations.  If the Company
      does not close significant sales in 2006, the funds from its
      recent capital raising alone will not be sufficient to fund
      its operations through all of 2006.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f22

                        Going Concern Doubt

Tanner LC expressed substantial doubt about TenFold Corporation's
ability to continue as a going concern after it audited the
Company's financial statements for the year ended Dec. 31, 2005.
The auditing firm points to the Company's reliance on significant
balances of its cash for its operating activities and the
likelihood that the Company will not have sufficient resources to
meet operating needs based on its present levels of cash
consumption.

TenFold Corporation (OTCBB: TENF) -- http://www.tenfold.com/--  
licenses its patented technology for applications development,
EnterpriseTenFold(TM), to organizations that face the daunting
task of replacing obsolete applications or building complex
applications systems.  Unlike traditional approaches, where
business and technology requirements create difficult IT
bottlenecks, EnterpriseTenFold technology lets a small, team of
business people and IT professionals design, build, deploy,
maintain, and upgrade new or replacement applications with
extraordinary speed, superior applications quality and power
features.


TOWER AUTOMOTIVE: Wants Exclusive Period Extended to October 25
---------------------------------------------------------------
Tower Automotive, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to further
extend, without prejudice, their exclusive periods to:

    (a) file a plan of reorganization to Oct. 25, 2006; and

    (b) solicit acceptances of that plan to Dec. 26, 2006.

Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
tells Judge Gropper that the Debtors have spent a significant
amount of time taking actions to obtain and implement settlements
with their union and retiree constituents.

On July 17, 2006, the Debtors reached an agreement in principle
with their active unions, which settlement is subject to
important conditions, including ratification by the affected
unions.

"The Debtors will be informed of the final voting results of the
ratification process," Mr. Sathy tells Judge Gropper.

In addition, Mr. Sathy says, the Debtors have spent the last
several weeks responding to requests filed by the Official
Committee of Unsecured Creditors -- before the Bankruptcy Court
and the U.S. District Court for the Southern District of New York
-- for a stay pending the resolution of the Creditors Committee's
appeal of the Bankruptcy Court's ruling approving key settlement
agreements between the Debtors and the Milwaukee Unions and the
Official Committee of Retired Employees.

The Debtors have also been, and remain, committed to working with
the Creditors Committee to develop a consensual plan of
reorganization, Mr. Sathy relates.  Negotiations regarding an
intercreditor settlement, which will be a significant component
of the plan, are ongoing, but not complete, he adds.

Mr. Sathy reasons that it would only invite more costly
litigation if the Debtors file a plan while the discussions for
an intercreditor agreement are still ongoing.  To ensure that a
plan may be filed on the earliest possible date, the Debtors have
begun drafting a plan of reorganization and accompanying
disclosure statement, Mr. Sathy assures Judge Gropper.

The Debtors have likewise:

    a. negotiated several claim settlements and set-off
       stipulations with their vendors and customers, as well as
       obtained valuable trade term concessions and agreements on
       both the customer and vendor level.  As a result, the
       Debtors have secured their customer's support for their
       restructuring efforts and have successfully secured or
       reconfirmed numerous awards for new business awarded since
       the Petition Date and are in the process of launching a
       substantial amount of previously-awaited business;

    b. identified contracts and leases which are beneficial in
       their estates, and have filed seven different motions
       requesting authority to assume key contracts, all of which
       the Court has granted.  The Debtors have also rejected over
       25 unfavorable leases;

    c. conducted a preliminary ongoing analysis as to the validity
       of the claims in connection with the Debtors' preparation
       and filing of their omnibus claims objections.  As of
       August 4, 2006, the Debtors have filed 22 omnibus claims
       objections, which are integral to the plan development
       process; and

    d. evaluation of their entire business model to rationalize,
       evaluate and enhance the efficiencies of the businesses.
       The Debtors have substantially completed the business plan
       that they expect will serve as the foundation for their
       Chapter 11 plan.

In light of this progress, the Debtors believe that they deserve
the opportunity to continue to pursue their restructuring
objectives without the distraction of allowing third parties the
opportunity to file and solicit acceptances of a competing plan
of reorganization.

                   About Tower Automotive

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo.  Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components.  The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts.  Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000).


UNITY VIRGINIA: Wants to Hire Mullins Harris as Special Counsel
---------------------------------------------------------------
Unity Virginia Holdings LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Texas for permission
to employ Mullins, Harris & Jessee, P.C., as its special counsel.

Mullins Harris will:

   a) represent the Debtors in matters to Virginia state law,
      including but not limited to representation before the
      Division of Mined Land Reclamation and the Office of Surface
      Mining;

   b) assist the Debtors generally in matters of Virginia state
      law, which may arise in the course of the administration of
      the estate; and

   c) provide any other necessary and proper purposes.

Elsey A. Harris, III, Esq., a Mullins Harris shareholder,
discloses that the firm's professionals bill:

        Position               Hourly Rate
        --------               -----------
        Shareholders              $250
        Associates             $100 - $125
        Paralegals                 $45

Mr. Harris assures the Court that his firm does not represent any
interest adverse to the Debtor, its estate or creditors.

Mr. Harris can be reached at:

        Elsey A. Harris, III, Esq.
        Mullins, Harris & Jessee, P.C.
        30 Seventh Street
        P.O. Box 1200
        Norton, VA 24273-0912
        Tel: (276) 679-3110
        Fax: (276) 679-3133

Headquartered in Dallas, Texas, Unity Virginia Holdings LLC,
operates a coal mining and processing company.  The company filed
for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex.  Case
No. 06-31937).  James C. Jarret, Esq., and Arnaldo N. Cavazos,
Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the
Debtor in its restructuring efforts.  No Official Committee of
Unsecured Creditors has been appointed in the Debtors cases.  When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.

Four of the Debtor's affiliates, Glamorgan Coal Resources LLC,
Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan
Refuse LLC, filed for chapter 11 protection on May 12, 2006
(Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956).  Another
affiliate, Glamorgan Operations, LLC, filed for chapter 11
protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995).


VESTA INSURANCE: District Court Appoints Subsidiaries' Liquidator
-----------------------------------------------------------------
Vesta Insurance Group, Inc. disclosed that on Aug. 1, 2006, the
District Court of Travis County, Texas entered the Order
appointing the Texas Commissioner of Insurance as Liquidator of
its Texas-domiciled subsidiaries.

The Texas-domiciled insurance subsidiaries are:

     (a) Vesta Fire Insurance Corporation;

     (b) The Shelby Insurance Company;

     (c) Shelby Casualty Insurance Corporation;

     (d) Texas Select Lloyds Insurance Company; and

     (e) Select Insurance Services, Inc.

The Texas Order also continues the rehabilitation of the Company
and the Commissioner's appointment as Rehabilitator pursuant to
the Agreed Order Appointing Rehabilitator and Permanent Injunction
entered on June 28, 2006.

Pursuant to the Texas Order, title to the assets of the Texas
Subsidiaries is vested in the Rehabilitator or Liquidator, who is
authorized to control the Texas Subsidiaries' property, conduct
their business, administer their operations and exercise all power
and authority under applicable Texas law.

The Texas Order further enjoins:

       (i) the Texas Subsidiaries and their agents from
           conducting the Texas Subsidiaries' business;

      (ii) financial institutions or depositories from taking any
           action in connection with the Texas Subsidiaries'
           property; and

     (iii) all claimants or creditors from asserting claims or
           causes of action against the Texas Subsidiaries.

The Texas Order also continues the automatic stay against the
subsidiaries or their property, and the 90-day automatic stay from
the entry of the Rehabilitation Order relative to actions against
persons insured by the subsidiaries.

The Company also disclosed that the Texas order may constitute an
event of default to the indenture, dated as of July 19, 1995,
between the Company and SouthTrust Bank of Alabama, and the
supplemental indenture, also dated as of July 19, 1995, governing
the Company's 8 3/4% Senior Debentures due 2025 or to the
indenture, dated as of Jan. 31, 1997, and under the amended and
restated declaration of trust, dated Jan. 31, 1997, among the
Company and Wilmington Trust Company, relating to the capital
securities issued by Vesta Capital Trust I and the 8.525% junior
subordinated deferrable interest debentures issued by the Company.

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding  
company for a group of insurance companies that primarily offer
property insurance in targeted states.

                           *     *     *

As reported in the Troubled Company Reporter on July 12, 2006,
A.M. Best Co. revised the financial strength rating to E (Under
Regulatory Supervision) from C++ (Marginal) and the issuer credit
ratings to "d" from "b" for the property/casualty affiliates of
Vesta Insurance Group (Vesta).  Concurrently, A.M. Best has
revised the ICR to "d" from "cc" for Vesta's parent, Vesta
Insurance Group, Inc. [Other OTC: VTAI.PK].  Additionally, A.M.
Best has revised the senior debt ratings to "d" from "cc" for
Vesta's $100 million 8.75% senior unsecured debentures, due 2025
and to "d" from "c" for Vesta Capital Trust I's $100 million
8.525% deferrable capital securities, due 2027.  All companies are
located in Birmingham, Alabama.

The rating revisions pertain to these property/casualty affiliates
of the Vesta Insurance Group: Vesta Fire Insurance Corporation;
Florida Select Insurance Company; The Hawaiian Insurance &
Guaranty Company, Limited; Shelby Casualty Insurance Company; The
Shelby Insurance Company; Texas Select Lloyds Insurance Company;
and Vesta Insurance Corporation.

As reported in the Troubled Company Reporter on July 7, 2006,
Moody's Investors Service lowered the senior debt rating of Vesta
Insurance Group to C from B3 and the trust preferred rating of
Vesta Capital Trust I to C from Caa2.  


VESTA INSURANCE: Judge Bennett Converts Case to Chapter 11
----------------------------------------------------------
The Hon. Thomas B. Bennett of the U.S. Bankruptcy Court for the
Northern District of Alabama converted Vesta Insurance Group,
Inc.'s involuntary chapter 7 case to a voluntary chapter 11 case.

As previously reported in the Troubled Company Reporter, the
Debtor disclosed in a Securities and Exchange Commission filing
that an involuntary Chapter 7 petition was filed against the
Company.  Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava
Partnership III, L.P., filed the petition alleging an aggregate of
$12.25 million in bondholder indebtedness against Vesta Insurance.

The Debtor informs the Court that the parties who filed the
involuntary petition don't object to the conversion of the case to
a chapter 11 proceeding.

                   About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).  R.
Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the petitioners.  Eric W. Anderson, Esq., at Parker
Hudson Rainer & Dobbs, LLP, represents the Debtor.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered the Order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.

At Dec. 31, 2004, Vesta Insurance's balance sheet showed
$1,764,247,000 in total assets and $1,810,022,000 in total
liabilities resulting in a $45,775,000 stockholders' deficit.


W.R. GRACE: Has Until September 11 to File Plan of Reorganization
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends the
period within which only W.R. Grace & Co., and its debtor-
affiliates can file a plan of reorganization and solicit
acceptances to any plan through the conclusion of the Sept. 11,
2006 hearing.  The hearing will be held at 10:00 a.m., in
Pittsburgh, Pennsylvania.

The Debtors and some parties-in-interest in their chapter 11 cases
has been at odds over the extension of the exclusive periods.  The
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Asbestos Property Damage Claimants, and
David T. Austern, the legal representative for future asbestos
claimants in the Debtors' Chapter 11 cases were in the forefront
in the objections against the extensions.   

Tort claimants started to give way to the extension saying that
monthly updates on the plan process should be provided.  Her
Majesty the Queen in Right of Canada wants to pursue negotiation
regarding its contribution and indemnification claims against the
Debtors arising out of litigation instituted by Canadian
claimants.  

The Debtors pointed out that they have always been prepared to
continue with the nearly successful plan discussion 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.  They contend that the key issue is not bad
faith, but the value of the claims against the estate.  They want
plan-filing delayed until the estimation of their asbestos
liabilities wraps up.

                         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: Receives $2.54 Mil. from Mass. under Settlement Pact
----------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates informed the U.S.
Bankruptcy Court for the District of Delaware that within the
first two quarters of 2006, they have settled a claim filed by the
state of Massachusetts Revenue Department against W.R. Grace &
Co.-Conn., in accordance with an amended order approving an
omnibus procedure for settling claims and causes of action brought
by or against the Debtors in a judicial, administrative, arbitral
or other proceeding.

James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C., in Wilmington, Delaware, reports that in
April 2006, Grace received payments from Massachusetts
aggregating $2,543,604 and $22,627 for refunded tax and accrued
interest for taxes previously paid for the 1988 and 1990 tax
years.

Mr. O'Neill advises that the Debtors may have settled certain
claims and actions during the period, which inadvertently were
not yet included in the report.  Those settlements will be
disclosed in future reports filed with the Bankruptcy Court.

                         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.  


WINN-DIXIE: Judge Funk Approves Solicitation Procedures
-------------------------------------------------------
The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the
Middle District of Florida approves Winn-Dixie Stores, Inc., and
its debtor-affiliates' proposed solicitation procedures, including
all the solicitation materials, and authorizes Logan & Company,
Inc., to serve as the Debtors' solicitation and noticing agent.

The Court sets August 1, 2006, as the record date for determining
the holders of claims and interests entitled to receive
solicitation or noticing materials.

Judge Funk directs all voting parties to submit their ballots to
Logan & Co. by September 25, 2006, at 4:00 p.m. (Eastern Time).  
The Debtors may extend the Voting Deadline, in consultation with
the Official Committee of Unsecured Creditors, by filing notice
of extensions with the Court and by serving a copy to Logan & Co.

Judge Funk notes that only the Debtors' and Creditors Committee's
solicitation letters are authorized for inclusion in the
solicitation materials.  

Creditors entitled to vote on the Plan are:

   -- holders of claims classified within Classes 7 to 17; and

   -- participants in the Debtors' management security plan,
      senior corporate officer's management security plan, or
      supplemental retirement plan who have filed proofs of
      claim.

Holders of Claims in Classes 10 to 17 whose claims are partly
contingent, unliquidated, untimely or disputed will not be
permitted to cast a provisional vote unless they file a motion
under Rule 3018(a) of the Federal Rules of Bankruptcy Procedure.

Judge Funk directs holders of Disputed Claims to file their
Rule 3018 Motions with the Court and serve upon the Debtors'
counsel, Creditors Committee's counsel and Logan & Co. before
September 18, 2006, at 4:00 p.m. (Eastern Time).

Parties to executory contracts or unexpired leases that have not
yet been assumed or rejected, but if rejected would give rise to
rejection damage claims, are permitted to cast a contingent vote.  
The contingent votes will be counted only if a motion to reject
the contract or lease is filed before the Confirmation Hearing
and if the Parties:

   (a) deliver to Logan & Co. a written request for a special
       ballot to vote a contingent rejection damage claim by
       September 25, 2006; and

   (b) properly complete and return the special ballot on or
       before the Voting Deadline.

With respect to potential holders of Landlord Claims in Class 12,
Vendor/Supplier Claims in Class 14, Retirement Plan Claims in
Class 15, and other Unsecured Claims in Class 16, the plan class
identified on the ballot or claim reduction form they will
receive will be binding unless they file with the Court a motion
seeking a determination of the proper Class before September 18,
2006.

Judge Funk directs all known record holders of Winn-Dixie debt
and securities to provide Logan & Co. with the addresses of the
beneficial holders in electronic format no later than August 6,
2006.  Logan & Co. will send solicitation packages to Noteholder
Claimants in Class 12 and notices of deemed rejecting status to
holders of Winn-Dixie common stock interests in Class 21 before
August 15, 2006.

Judge Funk instructs Logan & Co. to maintain the confidentiality
of social security numbers provided on the return ballots by
redacting the numbers before making a copy of any ballot
available to a third party.

The Court waives the requirements of Local Rule 3071-1(b) and
agrees that the terms of the Plan and Confirmation Order will
govern the establishment of a bar date for filing administrative
claims.

Judge Funk will convene a hearing on Oct. 13, 2006, at 9:00
a.m. (Eastern Time) to consider confirmation of the Joint Plan of
Reorganization.  The deadline for filing objections to
confirmation of the Plan is Sept. 25, 2006 at 4:00 p.m.
(Eastern Time).

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Inks Fifth Revision of DIP Financing Credit Agreement
-----------------------------------------------------------------
The fifth revision of the credit agreement between Winn-Dixie
Stores, Inc., its debtor-affiliates and certain lenders led by
Wachovia Bank, National Association, took effect Aug. 1, 2006,
Winn-Dixie Stores, Inc., says in a regulatory filing with the U.S.
Securities and Exchange Commission.

The parties amended, among others, the definition of "Excess
Availability" to include certain cash deposits.  The definition
of insurance is also modified to coincide with the current policy
terms.  In addition, Wachovia is allowed an unsecured interest
related to the bank's automated clearinghouse transfer exposure as
it relates to Winn-Dixie's banking transactions.

As of Aug. 2, 2006, no default under the credit agreement exists
or has occurred.

A full-text copy of the Fifth Amendment to the Wachovia Credit
Agreement is available at no charge at:

                 http://ResearchArchives.com/t/s?f26

Other members of the DIP lending syndicate pursuant to the Fifth
Amendment to the Credit Agreement are:

     * General Electric Capital Corporation, as Syndication
       Agent and Lender;

     * The CIT Group/Business Credit, Inc., as Syndication Agent
       and Lender;

     * Bank of America, NA, as Documentation Agent and Lender;

     * Merrill Lynch Capital, as Documentation Agent and Lender;

     * GMAC Commercial Finance LLC, as Documentation Agent and
       Lender;

     * Wells Fargo Foothill, LLC, as Documentation Agent and
       Lender;

     * LaSalle Retail Finance;

     * Westernbank Puerto Rico;

     * National City Business Credit, Inc.;

     * UBS AG, Stamford Branch;

     * PNC Bank, National Association;

     * State of California Public Employees' Retirement System;

     * AmSouth Bank;

     * Webster Business Credit Corp.;

     * Israel Discount Bank of New York;

     * Marathon Structured Finance Fund, L.P.;

     * RZB Finance LLC;

     * Sovereign Bank;

     * Erste Bank;

     * Azure Funding;

     * Senior Debt Portfolio;

     * Grayson & Co.; and

     * Eaton Vance Institutional Senior Loan Fund

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WORLD HEALTH: Carve-Out Does Not Violate Absolute Priority Rule
---------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware ruled that the letter agreement among World
Health Alternatives, Inc., and its debtor-affiliates, the Official
Committee of Unsecured Creditors and CapitalSource Finance LLC
does not violate the absolute priority rule, though the settlement
would permit distribution to unsecured creditors before priority
tax claims had been paid in full.

As reported in the Troubled Company Reporter on July 28, 2006, the
letter agreement resolves disputes regarding the proceeds of the
$43 million sale of substantially all of the Debtors' assets to
Jackson Healthcare Staffing, LLC, the validity of CapitalSource
lien, and the debtor-in-financing loan provided by CapitalSource.

The parties agreed that the cash proceeds from the asset sale,
together with all cash that has not been swept into a
concentration account, would be paid to CapitalSource in
satisfaction of the Debtors' prepetition and postpetition debt up
to a maximum amount of $42.5 million.  CapitalSource will pay
$1.625 million for the benefit of the Debtors' general unsecured
creditors from a carve-out from its lien.

In exchange for the carve-out, the Committee withdrew its
objection to the asset sale and waived its right to commence
causes of action against CapitalSource regarding CapitalSource's
lien.

                Absolute Priority Rule Clarified

The United States Trustee for Region 3 objected to the agreement
saying the Committee is not authorized to compromise estate claims
and causes of action at the expense of priority creditors in
chapter 11, citing the Third Circuit's ruling in Armstrong World
Industries, Inc.'s chapter 11 case.  The U.S. Trustee pointed out
that the Internal Revenue Service asserts a tax claim in excess of
$4 million.

Judge Walsh clarified that Section 1129(b)(2)(B) and the absolute
priority rule is not implicated in World Health's case because the
settlement does not arise in the context of a plan of
reorganization.  Additionally, the agreement does not involve
money belonging to the estate, but to CapitalSource.  An ordinary
carve-out would not offend the rule.  Citing the First Circuit's
ruling in SPM Manufacturing Corp.'s case, Judge Walsh says lenders
have a substantive right to dispose of their property, including
the right to share the proceeds subject to its lien, with other
classes.

                       Settlement is Fair

The Court further ruled that the settlement is fair, after
examination of these factors in deciding whether to exercise its
discretion to approve the settlement:

   (1) probability of success in litigation;

   (2) likely difficulties in collection;

   (3) complexity of litigation involved, and expense,
       inconvenience and delay necessarily attending it; and

   (4) paramount interest of creditors.

The Court found that factor one favors the settlement because
there is a low probability of litigation success.  As the
Committee states, "[o]ne arrow that the Committee did not have in
its quiver was a credible threat to challenge the validity, and
perfection of CapitalSource's liens, since it could discern no
infirmity in those liens."

The Court determined that factor two is seemingly not relevant,
and no party has addressed this point.  Factor three, however,
weighs in favor of approving the proposed settlement.  The
expense, inconvenience, and delay attendant to any litigation with
CapitalSource could be great.  Finally, factor four favors
settlement.  The estate is better off because the remaining
$1.34 million from the sale proceeds guarantees a substantial fund
to pursue appropriate causes of action against others, which may
produce recoveries distributable to all creditors.

The Court explains that it does not have to be convinced that
proposed settlement is best possible compromise in order to
approve it; rather, it needs only conclude that settlement is
within reasonable range of litigation possibilities.

Judge Walsh's Memorandum Opinion is published at 2006 WL 1888558.

Rafael X. Zahralddin, Esq., at Morris, James, Hitchens & Williams
LLP, in Wilmington, Del.; and Sarah Robinson Borders, Esq., Felton
E. Parrish, Esq., and Seema N. Patel, Esq., at King & Spalding
LLP, in Atlanta, Ga., represented the Debtors.

Joseph J. McMahon, Jr., Trial Attorney in the U.S. Department of
Justice, Office of the U.S. Trustee, in Wilmington, Del.,
represented Kelly Beaudin Stapleton, the U.S. Trustee for
Region 3.

Pauline K. Morgan, Esq., M. Blake Cleary, Esq., Erin Edwards,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Del., represented the Committee.

Kenneth J. Ottaviano, Esq., at Katten Muchin Rosenman LLP, in
Chicago, Ill., represented CapitalSource.

Spencer Jones, a managing director at Houlihan Lokey Howard &
Zukin Capital, Inc., testified for the Debtors.

Edwin T. Gavin, CTP, a managing director at NachmanHaysBrownstein,
Inc., testified for the Committee.

Headquartered in Pittsburgh, Pennsylvania, World Health
Alternatives, Inc. -- http://www.whstaff.com/-- is a premier
human resource firm offering specialized healthcare personnel for
staffing and consulting needs in the healthcare industry.  The
company and six of its affiliates filed for chapter 11 protection
on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168).
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams
LLP, represents the Debtors in their restructuring efforts.
Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.


XEROX CORP: Earns $260 Million in Second Quarter of 2006
--------------------------------------------------------
Xerox Corporation filed its second quarter financial statements
for the three months ended June 30, 2006, with the Securities and
Exchange Commission on Aug. 4, 2006.

Second quarter 2006 total revenues grew 1% compared to the second
quarter 2005.  Revenues included:

   -- Equipment sales were flat compared to second quarter 2005,
      including a 1-percentage point benefit from currency, and
      primarily reflected growth from Office multifunction color
      and Production color products as well as growth in
      Developing Markets Operations (DMO), which were offset by
      revenue declines in black and white products and color
      printers;

   -- 3% increase in Post sale and other revenue, including a
      1-percentage point benefit from currency, reflected growth
      in color products and DMO which more than offset declines in
      light lens products;

   -- 14% growth in color revenue.  Color revenue of
      $1,364 million comprised 34% of total revenue in the second
      quarter 2006 compared to 31% in the second quarter 2005; and

   -- 4% decline in Finance income included a 1-percentage point
      benefit from currency and reflected lower finance
      receivables.

Total revenues for the six months ended June 30, 2006, were flat
compared to the prior year period, including a 1-percentage point
negative impact from currency.  Total revenues included:

   -- 2% decline in Equipment sales, including a 1-percentage
      point negative impact from currency, primarily reflecting
      revenue declines in Office and Production black and white
      products, which were partially offset by revenue growth from
      Office multifunction color and Production color products, as
      well as, growth in DMO;

   -- 1% increase in Post sale and other revenue, including a
      1-percentage point negative impact from currency, primarily
      reflecting declines in light lens, licensing revenue, and
      digital black and white Production products which were more
      than offset by growth in digital color products and growth
      in DMO;

   -- 12% growth in color revenue.  Color revenue of
      $2,578 million comprised 34% of total revenue for the six
      months ended June 30, 2006, compared to 30% the prior year
      period; and

   -- 5% decline in Finance income, reflecting lower finance
      receivables.

Second quarter 2006 net income was $260 million, which included:

   -- $46 million tax benefit resulting from the resolution of
      certain tax matters associated with foreign tax audits;

   -- $25 million after-tax ($36 million pre-tax) charges related
      to restructuring; and

   -- $9 million after-tax ($13 million pre-tax) charge from the
      write-off of the remaining unamortized deferred debt
      issuance costs as a result of the termination of the
      Company's 2003 Credit Facility.

Second quarter 2005 net income was $423 million, which included:

   -- $343 million after-tax benefit related to finalization of
      the 1996-1998 IRS audit; and

   -- $130 million after-tax ($194 million pre-tax) charge related
      to restructuring.

The Company reported $260 million of net income for the second
quarter ended June 30, 2006, compared with $423 million of net
income for the same period in 2005.

Net income for the six months ended June 30, 2006, was
$460 million, which included:

   -- $46 million tax benefit resulting from the resolution of
      certain tax matters associated with foreign tax audits;

   -- $25 million after-tax ($36 million pre-tax) charge related
      to restructuring;

   -- $24 million after-tax benefit from the resolution of certain
      tax matters associated with an ongoing 1999-2003 Internal
      Revenue Service audit; and

   -- $9 million after-tax ($13 million pre-tax) charge from the
      write-off of the remaining unamortized deferred debt
      issuance costs as a result of the termination of the
      Company's 2003 Credit Facility.

Net income for the six months ended June 30, 2005, was
$633 million, which included:

   -- $343 million after-tax benefit related to the finalization
      of the 1996-1998 IRS audit;

   -- $58 million after-tax ($93 million pre-tax) gain from the
      sale of its equity interest in Integic Corporation; and

   -- $185 million after-tax ($279 million pre-tax) charge related
      to restructuring.

For the three and six months ended June 30, 2006, the Company
recorded restructuring charges of $36 million, respectively,
primarily related to headcount reductions of approximately 500
employees primarily in the North American service organizations.
The remaining restructuring reserve balance as of June 30, 2006,
for all programs was $135 million, of which approximately $42
million is expected to be spent over the remainder of 2006.

Worldwide employment of 55,100 at June 30, 2006, declined by
approximately 100 from year-end 2005 primarily reflecting
reductions from the Company's restructuring initiatives and other
attrition partially offset by hiring in certain strategic business
areas.

At June 30, 2006, Xerox Corp.'s balance sheet showed
$21.881 billion in total assets, $14.330 billion in total
liabilities, and $7.551 in stockholders' equity.

                         Subsequent Events

On Aug. 1, 2006, the Company received notice that the U.S. Joint
Committee on Taxation had completed its review of its 1999 - 2003
Internal Revenue Service audit, and as a result of that review,
the Company's audit for those years is now finalized.

The Company is still evaluating the impact of finalizing this
audit.  However, at this time the Company expects to record a
third quarter 2006 net income benefit in the estimated range of
$400 million to $450 million associated with the favorable
resolution of certain tax matters from this audit.

The recorded benefit will not result in a significant cash refund,
but the Company expects it to increase tax credit carryforwards
and reduce taxes otherwise potentially due.  The Company expects
that the net income benefit to the third quarter and full year
2006 will be partially offset by after-tax restructuring charges.

While these charges are expected to be in the range of
$125 million to $175 million after-tax, because of the preliminary
nature of the plans, the timing in 2006 of such charges has not
yet been determined.  The charges are expected to be associated
with new restructuring actions and other cost savings initiatives
that the Company is considering in the third and fourth quarters
of 2006, which it anticipates will be consistent with prior
restructuring and cost savings actions.

The actions and initiatives the Company is currently considering
are primarily related to headcount reductions across all
geographies and segments.  However, the Company has not yet
finalized or committed to any actions or initiatives.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?f2f

                           About Xerox

Headquartered in Stamford, Connecticut, Xerox Corporation
(NYSE: XRX) -- http://www.xerox.com/-- develops, manufactures,
markets, services, and finances document equipment, software,
solutions, and services worldwide.  It offers digital monochrome
and color systems for customers in the graphic communications
industry and enterprises, as well as various prepress and post-
press options.  Xerox Corporation markets its products through
direct sales force, as well as through a network of independent
agents, dealers, value-added resellers, and systems integrators.

                           *     *     *

As reported in the Troubled Company Reporter on April 17, 2006,
Dominion Bond Rating Service changed the trend on the Issuer
Rating of Xerox Corporation and Xerox Canada Inc., to Positive
from Stable.  The trend change recognizes the progress the Company
has made in strengthening its financial profile.

Trend Actions:

   * Xerox Canada Inc. -- Issuer Rating BB (high)
     Trend Changed to Positive

   * Xerox Corporation -- Issuer Rating BB (high)
      Trend Changed to Positive

As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Stamford, Connecticut-based Xerox Corp. and related
entities to 'BB+' from 'BB-', and removed it from CreditWatch,
where it was placed with positive implications on Jan. 26, 2006.
The upgrade reflected substantial recent debt reductions, good
cash flow and growth in equipment sales.  The outlook is stable.

As reported in the Troubled Company Reporter on Sept. 21, 2005,
Moody's Investors Service revised the rating outlook of Xerox
Corporation and supported subsidiaries to positive from stable.
Moody's previously raised the senior implied rating of Xerox and
its financially supported subsidiaries to Ba1 from Ba3.  The
action was prompted by Xerox's significant debt and leverage
reduction over the last year, stable operating profit and free
cash flow generation, and the prospects for further strengthening
of its credit metrics and overall financial flexibility.


XEROX CORP: Fitch Raises Trust Preferred Securities' Rating to BB
-----------------------------------------------------------------
Fitch upgraded Xerox Corp.'s and its subsidiaries' debt:

   -- Issuer Default Rating to 'BBB-' from 'BB+'
   -- Senior unsecured debt to 'BBB-' from 'BB+'
   -- Trust preferred securities to 'BB' from 'BB-'

In addition, Fitch affirmed the senior unsecured bank credit
facility at 'BBB-' and withdrawn the secured term loan rating of
'BBB-' since the secured term loan was repaid and the secured bank
facility terminated concurrently with the effectiveness of the new
unsecured credit facility.

Approximately $6.4 billion of securities, including the $1.25
billion credit facility, are affected by Fitch's action.  The
Rating Outlook is Stable.

Fitch's rating upgrades reflect Xerox's:

   -- solid balance sheet as a result of significant reductions in
      core (non-financing) and secured debt;

   -- strengthening credit metrics, especially core statistics;

   -- ample liquidity;

   -- improving post-sale revenue trends; and

   -- consistent financial performance of the core business
      measured by funds from operations (FFO; measured by cash
      flow from operations prior to changes in working capital),
      excluding cash flows associated with the financing
      portfolio.

Fitch's rating concerns center on:

   -- consistent equipment pricing pressure, particularly in the
      office segment;

   -- risk of more aggressive, and potentially debt-financed,
      shareholder-friendly initiatives and acquisitions;

   -- significant annual research and development expenditures;
      and

   -- potentially limited FFO growth near-term as the company
      utilizes its financial flexibility to continue increasing
      the percentage of internally funded financing assets.

Fitch believes the financial performance of Xerox's core business
has been relatively consistent despite volatility in free cash
flow caused by changes in the company's financing asset portfolio
and moderating annual improvement in the cash conversion cycle
since 2001.  FFO, excluding changes in Xerox's financing asset
portfolio, increased approximately 22% annually for 2004 and 2005,
reaching approximately $1.4 billion in 2005, and increased 2%
year-over-year to $1.3 billion in the LTM ended June 30, 2006.

Fitch expects continued improvement in higher-margin post-sale
revenue due to solid equipment install growth rates and the
increasing number of pages printed in color, which is considerably
more profitable than monochrome.  Fitch estimates year-over-year
color post-sale and financing revenue grew 15% in 2005 to nearly
$3.1 billion and 14% in the first half of 2006 to $1.7 billion.

Color accounted for 31% of total post-sale and financing revenue
in the quarter ended June 30, 2006.  Total post-sale revenue,
excluding financing, rose 2.5% in the second quarter, the highest
year-over-year growth in over three years.  In addition, the
light-lens business has steadily declined as expected and Fitch
believes it will have negligible impact on post-sale growth by
2007.

Xerox's credit protection measures for the LTM ended June 30,
2006, continue to improve, especially Xerox's core debt metrics,
as Fitch estimates 93% of the company's total debt is attributable
to the financing business.  Xerox's leverage, measured by total
debt to total operating EBITDA, declined to approximately 3.8x
compared with 4.4x and 5.1x for the LTM ended June 30, 2005, and
2004, respectively.

Similarly, Fitch estimates Xerox's core leverage (defined as non-
financing debt divided by non-financing operating EBITDA) at June
30, 2006, declined to approximately 0.4x compared with 1.3x and
2.4x for the LTM ended June 30, 2005, and 2004, respectively.

In addition, the company's overall interest coverage (including
the financing segment) was 3.8x, while Fitch estimates core
interest coverage (defined as core operating EBITDA divided by
core interest expense) was approximately 6.7x for the LTM ended
June 30, 2006, compared with 4.8x and 3.8x for the LTM ended June
30, 2005, and 2004, respectively.

The company's liquidity at June 30, 2006, consisted of
approximately $1.2 billion of cash and short-term investments and
a mostly undrawn $1.25 billion unsecured bank facility revolver
expiring April 7, 2011, which replaced a $1 billion secured credit
facility.  The bank facility is available, without sublimit, to
certain qualifying subsidiaries of Xerox.  The facility allows the
company to increase from time to time, with willing lenders, the
overall size of the credit facility to an aggregate amount not to
exceed $2 billion.  

Fitch believes Xerox could draw on this facility to support
ongoing increases of internally funded financing assets.  Fitch
believes Xerox has more than sufficient liquidity and financial
flexibility to meet upcoming debt maturities and absorb a
reasonable adverse monetary outcome from any currently outstanding
litigation.

To support business growth, Xerox also has access to a secured
eight-year $5 billion U.S. credit facility provided by General
Electric Vendor Financial Services expiring in December 2010.  
This facility is used for secured loans backed by U.S. finance
receivables arising from the sale of Xerox's products.

At June 30, 2006, nearly $3.8 billion was available under this
facility.  In June 2004, Xerox arranged a three-year $400 million
revolving credit facility secured by U.S. trade receivables with
General Electric Capital Corporation; as of June 30, 2006, this
facility was undrawn.

Additionally, Xerox has various multi-year committed secured
funding facilities totaling approximately $2 billion of which
approximately $0.9 billion was available at June 30, 2006.  Fitch
expects Xerox's usage of the aforementioned financing facilities
will continue to decline as the company reduces its reliance on
secured financing programs by maintaining a leverage ratio (debt-
to-equity) of 7:1 against finance assets by utilizing unsecured
capital market facilities and debt.

As of June 30, 2006, total debt with equity credit was $7.7
billion.  Total debt with equity credit consists of $4.5 billion
of senior unsecured debt, $604 million of liabilities to
subsidiary trusts issuing preferred securities (mandatorily
redeemable in 2027) and approximately $2.6 billion of secured
debt, consisting primarily of $2.5 billion secured by financing
receivables.

Debt secured by finance receivables accounted for approximately
33% of total debt with equity credit as of June 30, 2006, down
from 47% as of June 30, 2005.  Xerox's net finance receivables and
equipment on operating leases totaled $8.2 billion at June 30,
2006.  Debt maturities for the second half of 2006 are estimated
to be $647 million of which only $169 million is unsecured debt
and the remaining amount is debt secured by finance receivables
and other assets.

For 2007, $1.5 billion of debt matures, of which $269 million is
unsecured debt.  The conversion of $889 million of mandatorily
convertible preferred stock into common equity on July 3, 2006,
will not affect Xerox's outstanding debt figure or credit metrics
since Fitch previously awarded 100% equity credit to this issue.

In addition to Xerox Corp., the ratings affected are: Xerox Credit
Corp. and Xerox Capital (Europe) plc's rated senior debt.


YUKOS OIL: Russian Prosecutors Begin Bankruptcy Fraud Probe
-----------------------------------------------------------
The Russian Prosecutor General's Office is investigating a
possible fraud stemming from the bankruptcy proceedings of OAO
Yukos Oil Co., the Itar-Tass news agency says.  

The Moscow Arbitration Court declared what was once Russia's
largest oil producer bankrupt on Aug. 1, upholding creditors' vote
to liquidate the company.

According to the Jurist, Russian prosecutors have accused former
Yukos officials of embezzling money by securing a $4.5 billion
loan from Yukos Capital SARL, a Luxembourg-based unit and major
creditor for Yukos, through legal entities affiliated with the
company.  

Investigators alleged that the ex-Yukos officials masterminded a
plan to sell crude oil through trading companies Fargoil and
Ratibor under their control, acting both as fictitious owners and
buyers, RIA Novosti relates.

Prosecutors told the Russian news agency that "proceeds yielded
from the scheme through affiliated entities were then offered as
loans to Yukos and its subsidiaries."

Authorities are now seizing related documents from the offices of
Yukos, Yuganskneftegaz, Samarneftegaz, Tomskneft, Yukos Vostok
Trade, and Energotrade, MosNews.com reveals.

                           About Yukos

Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an   
open joint stock company existing under the laws of the Russian
Federation.  Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.

The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark.  A few days
later, the Government sold its main production unit Yugansk, to
a little-known firm Baikalfinansgroup for $9.35 billion, as
payment for $27.5 billion in tax arrears for 2000- 2003.  Yugansk
eventually was bought by state-owned Rosneft, which is now
claiming more than $12 billion from Yukos.

On March 10, a 14-bank consortium led by Societe Generale filed
a bankruptcy suit in the Moscow Arbitration Court in an attempt
to recover the remainder of a $1 billion debt under outstanding
loan agreements.  The banks, however, sold the claim to Rosneft,
prompting the Court to replace them with the state-owned oil
company as plaintiff.

On April 13, court-appointed external manager Eduard Rebgun
filed a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06-
0775), in an attempt to halt the sale of Yukos' 53.7% ownership
interest in Lithuanian AB Mazeikiu Nafta.

On May 26, Yukos signed a $1.49 billion Share Sale and Purchase
Agreement with PKN Orlen S.A., Poland's largest oil refiner, for
its Mazeikiu ownership stake.  The move was made a day after the
Manhattan Court lifted an order barring Yukos from selling its
controlling stake in the Lithuanian oil refinery.


* Christopher Fagan Joins Seneca Financial as Financial Analyst
---------------------------------------------------------------
Seneca Financial Group, Inc. reported the addition of a new
financial analyst, Christopher Fagan, who will be responsible for
company financial analysis, comparable company analysis, company
valuation analysis, industry research, and merger/divestiture
modeling.

"Christopher is a valuable new addition to our team," said James
Harris, president and founder of Seneca Financial Group.  "We are
confident that he will play a vital role in our firm's continued
growth and success."

Mr. Fagan joins Seneca after earning a Bachelors of Science in
Commerce with concentrations in Accounting and Finance from the
McIntire School of Commerce at the University of Virginia.  Mr.
Fagan grew up in Vernon, Connecticut, and currently resides in New
York City.

Mr. Fagan previously worked as an intern in the Financial
Management Leadership Development Program at St. Paul Travelers in
Harford, Connecticut.  At the University of Virginia, he was an
active participant in philanthropic efforts, volunteering
extensively on behalf of the American Cancer Society.

Over the last year, Seneca Financial Group has played an
instrumental role in a number of high-profile restructuring
assignments, including Evergreen International Airlines, Inc.,
Nellson Pharmaceutical, Con Edison, Metabolife International, A&H
Wayside, and J.B. Holding.

Seneca Financial Group -- http://www.senecafinancial.com/-- is a  
specialized investment banking firm focused on private and public
corporate restructurings.  Seneca is based in Greenwich,
Connecticut.


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:

In re Classic Yacht Charters, LLC
   Bankr. S.D. Calif. Case No. 06-02082
      Chapter 11 Petition filed August 1, 2006
         See http://bankrupt.com/misc/casb06-02082.pdf

In re John William Arndt
   Bankr. S.D. Tex. Case No. 06-50167
      Chapter 11 Petition filed August 1, 2006
         See http://bankrupt.com/misc/txsb06-50167.pdf

In re Pentecostal Cogic, Inc.
   Bankr. W.D. Tex. Case No. 06-60593
      Chapter 11 Petition filed August 1, 2006
         See http://bankrupt.com/misc/txwb06-60593.pdf

In re LWTI, Inc.
   Bankr. W.D. Va. Case No. 06-70854
      Chapter 11 Petition filed August 2, 2006
         See http://bankrupt.com/misc/vawb06-70854.pdf

In re Colonial Rug Company, Inc.
   Bankr. E.D. Mo. Case No. 06-43429
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/moeb06-43429.pdf

In re James Darrell Shelton
   Bankr. M.D. Tenn. Case No. 06-04098
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/tnmb06-04098.pdf

In re Omega Medical Office Services, Inc.
   Bankr. D. Ariz. Case No. 06-02389
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/azb06-02389.pdf

In re Platinum Fitness, Inc.
   Bankr. N.D. Ga. Case No. 06-21132
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/ganb06-21132.pdf

In re RPT PRN LLC
   Bankr. C.D. Calif. Case No. 06-11288
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/cacb06-11288.pdf

In re The Wellness Connection - A Home Healthcare Agency, Inc.
   Bankr. S.D. Ohio Case No. 06-54061
      Chapter 11 Petition filed August 3, 2006
         See http://bankrupt.com/misc/ohsb06-54061.pdf

In re Janie P. Etheridge
   Bankr. S.D. Ala. Case No. 06-11322
      Chapter 11 Petition filed August 4, 2006
         See http://bankrupt.com/misc/alsb06-11322.pdf

In re Piedmont Clothing, Inc.
   Bankr. N.D. Ala. Case No. 06-81501
      Chapter 11 Petition filed August 4, 2006
         See http://bankrupt.com/misc/alnb06-81501.pdf

In re Chameleon Enterprises, LLC
   Bankr. N.D. Fla. Case No. 06-40321
      Chapter 11 Petition filed August 5, 2006
         See http://bankrupt.com/misc/flnb06-40321.pdf

In re Athena Acquisitions, LLC
   Bankr. D. Ariz. Case No. 06-00899
      Chapter 11 Petition filed August 8, 2006
         See http://bankrupt.com/misc/azb06-00899.pdf

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  The Company's 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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