TCR_Public/060825.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, August 25, 2006, Vol. 10, No. 202

                             Headlines

ACCEPTANCE INSURANCE: Plan-Filing Period Stretched to February 9
ACXIOM CORP: Moody's Rates $800 Million Senior Loan at Ba2
ADELPHIA COMMS: CanPartners Holds Allowed $22,126,440 Claim
ADELPHIA COMMS: Senior Noteholders Want Exclusivity Terminated
ADVANTA CORP: Improving Performance Cues S&P to Upgrade Ratings

AIR CANADA: Arbitrator Issues Wage Review Award for IAMAW Groups
AIRNET COMMS: Plans to Pay Unsecured Creditors Over Three Years
ALLEGHENY ENERGY: Subsidiary Issues $145 Mil. First Mortgage Bonds
ALLIED PROPERTIES: Section 341(a) Meeting Scheduled on Sept. 14
ARMSTRONG WORLD: Parent Loses Ownership Under Chapter 11 Plan

ASARCO LLC: East Helena Equipment Auction Today
ASARCO LLC: Court Okays Pate Auction to Sell East Helena Equipment
ASARCO LLC: Wants to Pay Willis for Brokerage Services
ATLANTIC GULF: Trustee Michael Joseph Distributes $875,866
CATALYST PAPER: TSX Defers Acceptance of Shareholder Rights Plan

CATHOLIC CHURCH: Court Appoints Additional Mediators for Portland
CATHOLIC CHURCH: Portland Tort Committee Files Opening Brief
CERADYNE INC: Requests Nasdaq Listing Qualifications Panel Hearing
CHARTERMAC: Completes $455 Million Fixed-Rate Bond Securitization
CHASE MORTGAGE: Fitch Puts Low-B Ratings on Class B-3 & B-4 Certs.

COMVERSE TECHNOLOGY: Granted Continued Listing By NASDAQ Panel
CREATIVE BUILDING: Notices of Appearance Must Be Filed by Sept. 1
DANA CORP: Creditors Committee Selects ARPC as Consultants
DANA CORP: Equity Committee Selects Fried Frank as Counsel
DAYTON SUPERIOR: Moody's Holds Junk Ratings with Stable Outlook

DELPHI CORP: 7 Trade Creditors Retain Kasowitz as Legal Counsel
DELTA AIR: Wants Pilots Retirement Plan Terminated
DELTA AIR: Panel Supports Termination of Pilots' Retirement Plan
DOMTAR INC: Weyerhaeuser Merger Prompts DBRS to Review Ratings
FALCONBRIDGE LTD: Fails to Register Sale to Dominican Tax Dept.

FEDERAL-MOGUL: Abex Claimants' Move for Futures Rep. Draws Fire
FEDERAL-MOGUL: Underwriters Want to Conduct Discovery on Travelers
FLYI INC: Wants Court Approval on Committee Investigation Protocol
FLYI INC: Wants Solicitation and Tabulation Procedures Set
GOLD KIST: Pilgrim's Buy Offer Prompts Moody's to Hold Ratings

HARPER STREET: Case Summary & 5 Largest Unsecured Creditors
HARVEST OPERATIONS: Moody's Reviews Ratings and May Downgrade
INN OF THE MOUNTAIN: S&P Downgrades Issuer Credit Rating to B-
INTEGRATED HEALTH: U.S. Trustee Wants Reports Filed
INTEGRATED HEALTH: Court Extends Removal Period to November 3

INTERNATIONAL MANAGEMENT: Ct. Okays Auction Management's Retention
INTERSTATE BAKERIES: JPMorgan Supports DIP Financing Amendment
INTERSTATE BAKERIES: Sells Matteson Property to Realty America
JEAN COUTU: Inks $3.4 Billion Merger Transaction with Rite Aid
JEAN COUTU: Stores Sale Cues S&P to Put Ratings on Positive Watch

KMART CORP: Court Approves Pact Allowing Roldan to Pursue PI Suit
KMART CORP: Court Okays Pact Allowing Holmes, et al.'s PI Suit
LARRY'S MARKETS: Selling Three Grocery Stores for $6.2 Million
LIN TV: High Leverage Prompts S&P to Revise Outlook to Negative
MARSH & MCLENNAN: S&P Puts BB+ Preferred Stock Rating on New Shelf

MASTERCRAFT INTERIORS: Has Access to $1.5 Million BofA DIP Loan
MESABA AVIATION: Bankruptcy Contributes to MAIR's $2.5 Mil. Loss
MESABA AVIATION: Reports July 2006 Traffic Results
MIRANT: Asset Recovery Wants Foster Wheeler's $2M Claim Disallowed
MIRANT CORP: Files Adversary Case vs. Three Environmental NGOs

MUSICLAND HOLDING: Committee Has Until November 3 to File Claim
NATIONAL ENERGY: Littleton Electric Wants Claims Allowed
NATIONAL ENERGY: Wants Settlement Pact with ET Power & DTE Okayed
NORTEL NETWORKS: Unit Inks New $1.6 Mil. Court Records System Pact
NORTHWEST AIRLINES: Amadeus Wants Decision on Carrier Agreement

NORTHWEST AIRLINES: Wants Court Nod on Term Sheets for 5 Aircraft
NTL INC: In Talks With Four Buyout Firms Over Possible Takeover
O'SULLIVAN IND: Inks Stipulation with Mirisola to Pursue Action
PAN AM CORP: Admin. Claim Holders Can Confirm Claims Until Nov. 30
PERFORMANCE TRANSPORTATION: Donald Crumlich Wins Lift-Stay Plea

PIERRE FOODS: S&P Affirms Low-B Ratings With Negative Outlook
PILGRIM'S PRIDE: Gold Kist Buy Offer Cues Moody's to Hold Ratings
PREMIUM PAPERS: Court Okays Smart Papers Asset Sale to Plainfield
PREMIUM PAPERS: Has Until November 16 to File Chapter 11 Plan
PROFESSIONAL INVESTORS: Section 341(a) Meeting on September 8

QUANTUM CORP: Completes Acquisition of ADIC for $770 Million
QUIGLEY CO: Wants DIP Facility Extended Until March 2007
RADIOSHACK CORPORATION: 2006 Results Cue Fitch's Ratings Downgrade
REAL ESTATE: Section 341(a) Meeting Scheduled on September 15
REDCITY SEARCH: Gets TSX Nod to Complete Private Placement

REFCO INC: Official Committees Create Joint Subcommittee
REFCO INC: U.S. Trustee Reconstitutes Official Creditors Committee
RITE AID: Inks $3.4 Billion Merger Agreement with Jean Coutu
RITE AID: Jean Stores' Acquisition Prompts Fitch's Negative Watch
RITE AID: $3.4 Billion Jean Stores' Buy Cues S&P's Negative Watch

SAINT VINCENTS: Inks Resolution Agreement with NY Attorney General
SAINT VINCENTS: Moves to Renew Pacts with Six Bargaining Units
SANMINA-SCI: Fitch Lowers Issuer Default Rating to B+ from BB-
SATELITES MEXICANOS: Judge Drain Enters Order Enforcing Stay
SATELITES MEXICANOS: Valor Okayed as Interim Financial Advisors

SEARS HOLDINGS: Second Quarter Net Income Soars to $294 Million
SENECA GAMING: Low Leverage Cues Moody's to Upgrade Rating
SMART ONLINE: Sells $250,000 Common Shares to Investors
SOLUTIA INC: Sells European Unit to Dishman Pharma for $74.5 Mil.
SOLUTIA INC: Wants to Expand Colliers Turley's Scope of Duties

SOS REALTY: Court Okays Lacourse Construction as Gen. Contractor
SVP HOLDINGS: S&P Assigns B+ Rating to $280 Million Facilities
TOWER AUTOMOTIVE: Fuji Supplements Response to Objections
TOWER AUTOMOTIVE: Hires Heidrick & Struggles as Consultants
TRIPLE A POULTRY: Volvo Financial Wants Truck Leases Decided

USA COMMERCIAL: Equity Panel Hires Beckley Singleton as Counsel
USA COMMERCIAL: Equity Panel Hires Orrick Herrington as Counsel
USA COMMERCIAL: Court Okays Hilco as Real Estate Appraiser
USG CORP: Signs $2.8 Bil. Exit Financing with JPMorgan, et al.
VALHI INC: S&P Downgrades Corporate Credit Rating to BB- from BB

VARIG S.A.: Volo May Face Lawsuit Over Unpaid Wages
WADSWORTH HOUSING: S&P Downgrades $3.4 Million Bonds' Rating to B
WARD PRODUCTS: Section 341(a) Meeting Scheduled on September 14
WESTERN APARTMENT: Taps Matranga & Wiley as Accountants
WESTON NURSERIES: Disclosure Statement Hearing Set for Sept. 27

WESTON NURSERIES: Has Until October 31 to Decide on Leases
WESTON NURSERIES: No Takers for 655-Acre Property
WINN-DIXIE: Sets Sept. 12 as Special Bar Date for 287 Claimants
WINN-DIXIE: Wants Exclusive Solicitation Period Carried to Oct. 31
YUKOS OIL: Moscow Court Rejects Debtor's Bankruptcy Appeal

* BOOK REVIEW: The Big Board: A History of the New York Stock
               Market

                             *********

ACCEPTANCE INSURANCE: Plan-Filing Period Stretched to February 9
----------------------------------------------------------------
The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court
for the District of Nebraska in Omaha extended until Feb. 9,
2007, Acceptance Insurance Companies Inc.'s period to exclusively
file a chapter 11 plan.

The Debtor also has until April 9, 2007, to exclusively solicit
acceptances of that plan from its creditors.

As reported in the Troubled Company Reporter on June 12, 2006,
two of the Debtor's principal assets are its interest in
Acceptance Insurance Company and a takings claim from the United
States of America.  An extension, the Debtor contended, would
allow it to complete the liquidation of these assets.

                          Interest in AIC

The Debtor said it continues to diligently manage claims within
AIC in an effort to maximize the value of AIC for the benefit of
its creditors.  The Debtor discloses that the claims resolutions
process within AIC has not yet entered the stage where it will
permit the Debtor to structure an optimal plan of reorganization.  
The Debtor told the Court that insurance consultants have advised
it that the run-off of AIC's business is not yet at the point
where claims can be determined with sufficient precision to allow
AIC's assets to be sold.

                           Takings Claim

The Debtor told the Court that the takings claims started from the
initial stages of litigation.  The Debtor said that the United
States filed a motion to dismiss its complaint but was denied.  
The Debtor and the United States have filed cross motions for
summary judgments and the briefing on motions will close in
June 2006.  The Debtor expected a ruling on the cross motion in
August or September of 2006.  The Debtor said that if trial
becomes necessary, it would take place either in December 2006 or
the first quarter of 2007.

                  Granite Reinsurance Litigation

The Debtor also disclosed that along with AIC, it is currently
engaged in litigation with Granite Reinsurance Ltd. regarding a:

    * $10 million claims filed against the Debtor in its
       bankruptcy proceedings, and

    * $10 million lawsuit filed against AIC.

The bankruptcy claim and lawsuit have been procedurally
consolidated and are pending in the bankruptcy court.  The Debtor
said that Granite's claim represents approximately 10% of the
total claims filed against the Debtor.  The Debtor told the Court
that the Official Committee of Unsecured Creditors appointed in
its case has intervened in both matters.  The Debtor expected
resolution of the Granite litigation some time in December 2006 or
the first quarter of 2007.

The Debtor told the Court that once the takings claim and Granite
litigations are resolved, the run-off from AIC's business has
progressed to a point that AIC's assets can be sold and a buyer
for the assets is identified, then it will be in a position to
propose a plan of liquidation.

The Debtor revealed that the Committee has consented to the
extension.

Headquartered in Council Bluffs, Iowa, Acceptance Insurance
Companies Inc. -- http://www.aicins.com/- owns, either directly
or indirectly, several companies, one of which is an insurance
company that accounts for substantially all of the business
operations and assets of the corporate groups.  The Company filed
for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case
No. 05-80059).  The Debtor's affiliates -- Acceptance Insurance
Services, Inc., and American Agrisurance, Inc. -- filed separate
chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 & 05-
80058) on Jan. 7, 2005.  John J. Jolley, Esq., at Kutak Rock LLP,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed
$33,069,446 in total assets and $137,120,541 in total debts.


ACXIOM CORP: Moody's Rates $800 Million Senior Loan at Ba2
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Acxiom
Corporation's $800 million senior secured credit facilities, while
affirming its corporate family rating of Ba2.  The outlook is
stable.  The company expects to use proceeds from the proposed
offering for a recently authorized share repurchase program as
well as to repay amounts drawn on its revolving credit facility
and for general corporate purposes.

Acxiom's Ba2 corporate family rating is constrained by its
relatively high client concentration, modest size relative to
larger information technology services peers, and challenges to
address an increasing public sentiment for consumer privacy.  In
addition, the rating reflects the company's ample free cash flow
and modest financial leverage, which in isolation suggest a rating
within the Baa category.  Information technology outsourcing
services sector rating factors include competitive position, cash
flow, financial leverage, returns, and liquidity. For further
information, refer to Moody's credit opinion for Acxiom
Corporation.

Acxiom's Ba2 credit rating could experience upward pressure
if free cash flow to debt exceeds 15%, organic revenues and
operating profits continue to grow, if the company is able to grow
its asset and revenue levels to that of similarly rated companies,
and the company is able to reduce the level of secured debt and
obtain an unsecured bank facility.

Downward rating pressure could come from increased share
repurchase or acquisition activity such that there is a leveraging
event that results in free cash flow to debt less than 5%, if
operating margins vary significantly from forecasted results, or
if the company is unable to grow its asset and revenue levels to
that of similarly rated companies.

Headquartered in Little Rock, Arkansas, Acxiom Corporation is a
customer data integration and content software and information
technology outsourcing services provider.


ADELPHIA COMMS: CanPartners Holds Allowed $22,126,440 Claim
-----------------------------------------------------------
Adelphia Communications Corporation is a party to a Standard
Industrial Commercial Single-Tenant Lease-Net dated May 28, 1997,
as amended, governing the lease of certain premises located at
1260 S. Dupont Street in Ontario, California owned by Meredith
Enterprises, Inc., formerly known as West Coast Realty Investors,
Inc.

W. C. Communications, Inc., doing business as West Coast
Communications, filed proofs of claim against the ACOM Debtors
for amounts allegedly owing for certain construction services
performed for the ACOM Debtors, including services performed on
the Premises.

W. C. Communications subsequently assigned the Claims to
CanPartners Investments IV LLC.

By a Court order dated April 7, 2006, CanPartners was allowed a
secured claim for $81,200,000 plus interest from the date of the
Debtors' bankruptcy filing through the date of payment,
$22,126,440 of which was allowed on behalf of the Claims.

It is currently contemplated that the Allowed Claim will be paid
in full under the terms of a plan or plans of reorganization for
the ACOM Debtors' estates.

The ACOM Debtors proposed to assume and assign the Lease to
Comcast Corporation but Meredith objected to it, asserting
certain defaults under the Lease.

Given the resolution of the Claims and the proposed assumption
and assignment of the Lease, W. C. Communications, Meredith and
the ACOM Debtors stipulate that:

    1. Upon confirmation of a plan or plans of reorganization for
       ACOM, ACOM will pay CanPartners the $22,126,440 Allowed
       Claim in full;

    2. W. C. Communications will take all actions necessary to
       release the Lien from the Property, and all other parcels
       of real property covered by the Lien;

    3. Upon payment in full of the Allowed Claim, W. C.
       Communications and CanPartners releases and forever
       discharges the Premises and Meredith from all liens and
       actions in connection with the Claims;

    4. In the event the Allowed Claim is not paid in full or in
       the event the Claims are not fully paid and satisfied, W.
       C. Communications and CanPartners each agrees that the Lien
       and any future lien filed to enforce the Claims attaches
       not to the fee interest of Meredith and its successors and
       assigns in the Premises, but rather, solely to the
       leasehold interest of the ACOM Debtors and its
       successors-in-interest under the Lease or to any sale
       proceeds received by the ACOM Debtors from Comcast; and

    5. The Stipulation will constitute adequate assurance of
       prompt cure of Meredith's asserted defaults under the Lease
       relating to the Lien, as required under Section 365 of the
       Bankruptcy Code.

Judge Gerber approves the Stipulation.

                  About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 145; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


ADELPHIA COMMS: Senior Noteholders Want Exclusivity Terminated
--------------------------------------------------------------
These holders or investment advisors to certain holders of notes
and debentures issued by Adelphia Communications Corporation, ask
the Court to terminate the ACOM Debtors' exclusive periods to
allow them to file a competing chapter 11 plan of reorganization:

   * Aurelius Capital Management, LP;
   * Catalyst Investment Management Co., LLC;
   * Drawbridge Global Macro Advisors, LLC;
   * Drawbridge Special Opportunities Advisors, LLC;
   * Elliott Associates, LP;
   * Farallon Capital Management, LLC;
   * Noonday Asset Management, LP; and
   * Perry Capital, LLC,

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York,
notes that throughout the ACOM Debtors' Chapter 11 cases, the
Court has insisted on:

    (i) neutrality on the part of the ACOM Debtors, who are
        conflicted on intercompany issues; and

   (ii) the resolution of the intercreditor disputes through the
        Motion in Aid Process.

Mr. Rosen relates that the MIA Process, approved by the Court,
was designed to promote an open and valid assessment of the ACOM
Debtors' assets and liabilities, ensure that the merits of
intercreditor issues were considered and determined, and treat
all parties in the ACOM Debtors' Chapter 11 cases fairly and
equitably.  Thus, the Court has rebuked multiple attempts to
undermine a fair and open determinative proceeding.

Mr. Rosen informs the Court that the ACC Senior Noteholders have
relied on the repeated assurances that due process, fairness, and
the ACOM Debtor's neutrality were unyielding principles that the
Court would not compromise.

On April 6, 2006, the Court issued a Plan Procedures Order, which
provides that if the ACOM Debtors propose amendments to a chapter
11 plan of reorganization that include a proposed settlement of
the Intercreditor Disputes, the amended plan must be structured
to permit creditors to separately accept or reject a "Settlement
Plan" and a "Reserve Plan."

Mr. Rosen asserts that the ACOM Debtors have violated the Court's
Plan Procedures Order by:

    (i) publicly committing to filing a chapter 11 plan that
        mandates the "settlement" negotiated by certain
        constituencies and does not include the holdback plan
        alternative; and

   (ii) signing the amended and restated agreement concerning the
        terms and conditions of a modified chapter 11 plan dated
        July 21, 2006, that prohibits them from complying with the
        Plan Procedures Order.

To ensure that no one else can pursue the "Reserve Plan," the
ACOM Debtors have retained exclusivity and relinquished it only
in favor of the Official Committee of Unsecured Creditors, Mr.
Rosen relates.

It is extremely inappropriate for the ACOM Debtors to join in an
effort to coerce creditors into accepting the "settlement"
negotiated by certain parties and to deny creditors the holdback
plan alternative that the Court previously has ordered the
Debtors to provide, Mr. Rosen argues.

Mr. Rosen contends that since the ACOM Debtors will not adhere to
the Plan Procedures Order and propose the required alternative,
other parties should be given the opportunity to do so.  He notes
that the ACOM Debtors' alternative would provide for immediate
distributions to be made to the Bank Group and general unsecured
creditors except for holders of the ACC unsecured debt, the
Arahova Notes and the FrontierVision HoldCo Notes, for whom
distributions would be delayed, to the extent necessary, pending
a merits-based resolution of the intercreditor issues.

                    Need for an Alternative Plan

The ACC Senior Noteholders maintain that a two-pronged approach
consistent with the Plan Procedures Order is appropriate and
should be employed to rectify the current imbalance.  The two-
pronged approach will:

    -- eliminate the accrual of interest on the secured debt and
       unsecured subsidiary debt other than the Arahova Notes and
       FrontierVision Holdco Notes;

    -- allow for prompt distributions to all creditor classes
       other than to holders of the ACC unsecured debt, the
       Arahova Notes and the FrontierVision HoldCo Notes; and

    -- allow the MIA Process to reach its rightful conclusion
       expeditiously.

"The Debtors should not object to this balanced approach and, if
the Arahova Noteholders and FrontierVision Holdco Noteholders are
interested in knowing the truth of the MIA Process, they should
not be concerned about presenting the merits of the Intercreditor
Disputes," Mr. Rosen contends.

The ACC Senior Noteholders delivered to the Court their proposed
Term Sheet that provides for the same treatment as the ACOM
Debtors' Amended Term Sheet for all constituencies other than the
Bank Group and holders of the ACC unsecured debt, the Arahova
Notes and the FrontierVision HoldCo Notes.

Mr. Rosen explains that the Amended Term Sheet provides that
litigation over approval of the purported settlement of the
Intercreditor Disputes will delay distributions to all creditors,
while under ACC Noteholders' Term Sheet, all constituencies other
than the Bank Group and holders of the ACC unsecured debt, the
Arahova Notes and the FrontierVision HoldCo Notes will receive
their distributions regardless of whether the Intercreditor
Disputes are litigated now, later or consensually resolved.

A full-text copy of the ACC Noteholders' Term Sheet is available
for free at http://ResearchArchives.com/t/s?1050
    
Mr. Rosen asserts that the ACC Senior Noteholders should be
authorized to file and pursue confirmation of a competing plan
because the ACOM Debtors have waived exclusivity, which cannot be
done exclusively for the benefit of selective creditors and
constituencies to the detriment of others.

                  About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 146; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


ADVANTA CORP: Improving Performance Cues S&P to Upgrade Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Advanta
Corp., including its counterparty credit rating, which was raised
to 'BB-/B' from 'B+/B'.  

At the same time, the rating agency affirmed the 'BB/B'
counterparty credit rating on Advanta Bank Corp.  The outlook on
both entities is stable.

"The rating changes were driven by the strong performance of
Advanta's core business credit card unit, solid leverage metrics,
and steadily improving earnings and credit quality," said Standard
& Poor's credit analyst Rian M. Pressman, CFA.

Offsetting factors include:

   * the monoline nature of the company;

   * its lack of scale in the increasingly competitive card
     industry; and

   * reliance on securitization funding.

With the distractions caused by divested and closed business units
behind it, Advanta's focus on its niche card business has resulted
in improved financial and operational performance.  The company
has improved its performance by strengthening marketing practices,
improving underwriting, and lowering operational costs.

Managed receivables and transaction volume have been growing at a
rapid pace, with both increasing 25% year-over-year as of June 30,
2006.  Since 2003, FICO scores of new customers have been of high-
prime quality (about 730), resulting in steadily improving credit
quality.  With charge-offs approaching 3%, Standard & Poor's
believes asset quality is most likely near a cyclical high point.
Nevertheless, the company should perform better than it did during
the last industry downturn, reflecting tighter underwriting
standards.

Advanta's financial leverage is solid and compares favorably with
that of higher-rated peers.  At June 30, 2006, the company's ratio
of tangible equity to tangible managed assets (adjusted upward to
include reserves and downward for I/O securities) was 12.4%.

Advanta has announced plans to increase account originations
significantly from 2005 levels.  Standard & Poor's expects risk
adjusted revenues, managed net interest margin, asset quality, and
operating expenses may be pressured to accommodate this growth.
Despite the risks attendant to this rapid growth, the rating
agency expects future financial performance to remain strong.

The company's size relative to its credit card (and bank)
competitors is a limiting rating factor.  As the competitive
environment puts pressure on the profitability of consumer and
corporate credit cards, larger competitors are likely to work more
aggressively to penetrate other segments of the credit-card
market.  This, and the likelihood that credit card industry-wide
receivable growth will slow as the market becomes saturated, all
add the potential for volatility in Advanta's results.

Additionally, the high percentage of funding derived from ABS
markets constrains the rating.  At June 30, 2006, 71% of total
funding liabilities were derived from securitized receivables.
Although we consider the use of deposit funding (25% of funding
liabilities) to be a net positive, it no longer provides Advanta
with a competitive advantage vis-.-vis its competitors.  The
recent wave of consolidation between independent credit card
companies and banks has given the company's competitors greater
access to retail deposits.

The stable outlook is driven by Advanta's improved performance,
partially offset by rapid growth.  Downside movement may result if
profitability, asset quality, or leverage experience significant
deterioration due to the company's inability to support this
growth.

Upward movement in the rating may result if Advanta continues to
successfully execute its monoline business model.  Such upside is
limited, however, by:

   * the monoline nature of the company's business;

   * its lack of scale in the increasingly competitive card
     industry; and

   * reliance on securitization funding.


AIR CANADA: Arbitrator Issues Wage Review Award for IAMAW Groups
----------------------------------------------------------------
Air Canada Inc. reported that Arbitrator Donald Munroe has issued
his wage review award for two employee groups represented by the
International Association of Machinists and Aerospace Workers on
Aug. 24, 2006.  The award covers approximately 10,500 Technical,
Maintenance and Operational Support employees and approximately
300 employees in the Company's Finance Branch.  The arbitration,
dealing exclusively with adjustment to the hourly wage rate, was
conducted pursuant to a provision in collective agreements reached
between the Company and its unions in 2003.

Mr. Munroe's award granted IAMAW-represented employees a 1% wage
increase effective July 2006, 0.5 % effective January 2007, 1.75 %
effective July 2007 and 1.75% effective July 2008.

In July, Arbitrator Michel Picher awarded the 5,540 employees
represented by the CAW a 1% wage increase effective July 2006,
1.75% effective July 2007 And a 1.75 % increase effective July
2008.

Negotiations with all other major labour groups except CUPE have
moved to mediation/arbitration.  Negotiations with CUPE, which
represents the airline's approximate 6,000 flight attendants, are
scheduled to commence mid-September.

                       About Air Canada

Air Canada -- http://www.aircanada.com/-- together with Air
Canada Jazz and other business units of parent company ACE
Aviation Holdings Inc., provides scheduled and charter air
transportation for passengers and cargo to more than 150
destinations, vacation packages to over 90 destinations, as well
as maintenance, ground handling and training services to other
airlines.

Canada's flag carrier is recognized as a leader in the global air
transportation market by pursuing a strategy based on value-added
customer service, technical excellence and passenger safety.

                          *     *     *

As reported in the Troubled Company Reporter on April 24, 2006,
Standard & Poor's Ratings Services raised the long-term corporate
credit rating on ACE Aviation Holdings Inc. to 'B+' from 'B',
while affirming the 'B' long-term corporate credit rating on its
wholly owned subsidiary, Air Canada.  The outlook on both entities
remains stable.


AIRNET COMMS: Plans to Pay Unsecured Creditors Over Three Years
---------------------------------------------------------------
AirNet Communications Corp. filed a Modified Amended Plan of
Reorganization with the U.S. Bankruptcy Court for the Middle
District of Florida on Aug. 17, 2006.

The Plan contemplates that Reorganized AirNet will continue to
operate its business.  In addition, Tecore, Inc., will provide
exit financing, in the form of a credit line amounting to
$500,000.  Cash flow from the continued operation of business and
the Exit Financing will be used toward all required Plan payments.

             Classification and Treatment of Claims

Allowed priority tax claims will be paid quarterly over five
years, with a 6% per annum interest.

Priority wage, vacation, and benefit claims will be paid in full
over 12 months without interest.

Tecore's $2 million claim will be paid quarterly over ten years
with a 7% per annum interest.  Tecore's $5,448,190 remaining claim
will be waived in exchange for 100% of the new equity interests in
Reorganized AirNet.

Laurus Master Fund, Ltd.'s $4,249,000 claim will be reduced to
$3,300,000 and divided into two tranches.  Tranche A will be in
the amount of $800,000 and accrue 3% interest.  Reorganized AirNet
will repay Tranche A through 16 quarterly payments of $50,000 plus
interest.  Tranche B will be in the amount of $2,500,000 and won't
accrue interest.  Tranche B will be repaid upon each sale of any
item of inventory, which existed as of the Debtor's bankruptcy
filing.  The amount due upon each sale of Petition Date Inventory
will be 25% of that inventory's book value.  If sale of Petition
Date Inventory does not produce at least $1,700,000 in payments to
LMF as of four years from the Effective Date, the Reorganized
AirNet will pay Laurus an amount equal to the difference between
$1,700,000 and the amount previously paid on Tranche B.

Secured creditor SCP Private Equity Partners II will retain its
Lien against all of the Debtor's intellectual property to the same
extent, validity and priority as existed prepetition lien and
subject to a term sheet entered into between the Debtor and SCP
Private.  A full-text copy of the Term Sheet is available for free
at http://ResearchArchives.com/t/s?104d

Holders of general unsecured claims will receive a combination of
an initial payment on the Effective Date and deferred payments
over a three year period after the Effective Date with 10% annual
interest.

The deficiency claim of SCP Private Equity Partners II, amounting
to $2.1 million will be paid quarterly over 40 quarters plus 7%
annual interest.

Sacco and Associates, which asserts a retaining lien on certain
legal files, may retain those files as the indubitable equivalent
of its claim.

Holders of equity interest will get nothing.

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

  http://www.researcharchives.com/bin/download?id=060823061028

Headquartered in Melbourne, Florida, AirNet Communications
Corporation -- http://www.aircom.com/-- designs, manufactures,
and markets wireless infrastructure products and offers
infrastructure solutions for commercial GSM customers, and
government, defense, homeland security based agencies.  The Debtor
filed for chapter 11 protection on May 22, 2006 (Bankr. M.D. Fla.
Case No. 06-01171).  R. Scott Shuker, Esq., at Gronek & Latham,
LLP, represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed total
assets of $15,701,881 and total debts of $21,615,346.


ALLEGHENY ENERGY: Subsidiary Issues $145 Mil. First Mortgage Bonds
------------------------------------------------------------------
Allegheny Energy, Inc.'s wholly-owned subsidiary, West Penn Power
Company issued $145 million aggregate principal amount of 5.875%
First Mortgage Bonds due 2016.

The Bonds bear interest at the rate of 5.875% per annum, payable
semi-annually on each Feb. 15 and Aug. 15, beginning Feb. 15,
2007, and will mature on Aug. 15, 2016.  The Bonds are secured by
the First Supplemental Indenture, with Union Bank of California,
N.A. as the indenture trustee, which establishes a lien on all of
West Penn's fixtures and equipment, real property and tangible
personal property located in the Commonwealth of Pennsylvania that
it now owns or may own in the future.  The Bonds are West Penn's
senior secured indebtedness and rank pari passu in right of
payment with all securities issued under the Indenture.

At any time and from time to time on or after Aug. 16, 2006, the
Bonds may be redeemed in whole or in part at a redemption price
equal to the greater of:

    (i) 100% of the principal amount of the Bonds to be redeemed,
        plus accrued and unpaid interest to the redemption date;
        or

   (ii') the sum of the present values of the remaining scheduled
        payments of principal and interest on the Bonds to be
        redeemed, exclusive of interest accrued as of the
        redemption date, discounted to the redemption date on a
        semi-annual basis at the applicable Adjusted Treasury Rate
        plus 15 basis points, plus accrued interest to the
        redemption date.

The Bonds have not been registered under the Securities Act or any
state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.

Headquartered in Greensburg, Pennsylvania, Allegheny Energy, Inc.,
(NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor-  
owned utility consisting of two major businesses.  Allegheny
Energy Supply owns and operates electric generating facilities,
and Allegheny Power delivers low-cost, reliable electric service
to customers in Pennsylvania, West Virginia, Maryland and
Virginia.

                         *     *     *

As reported in the Troubled Company Reporter on June 28, 2006
Fitch upgraded the Issuer Default Rating and senior unsecured debt
ratings of Allegheny Energy, Inc., to 'BB+' from 'BB-'.  The
ratings of Allegheny Energy Supply Company, LLC, and Allegheny
Generating Company (AYE's non-regulated subsidiaries) were also
upgraded by Fitch.  The Rating Outlook for AYE, AE Supply and AGC
is Stable.


ALLIED PROPERTIES: Section 341(a) Meeting Scheduled on Sept. 14
---------------------------------------------------------------
The U.S. Trustee for Region 7 will convene a meeting of Allied
Properties, LLC's creditor at 11:00 a.m., on Sept. 14, 2006, in
Suite 3401, 515 Avenue in Houston, Texas.  This will be the
first meeting of creditors as required under Section 341(a)
of the Bankruptcy Code in all bankruptcy cases.

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

Headquartered in Houston, Texas, Allied Properties, LLC, is
a real estate developer.  The company filed for chapter 11
protection on August 1, 2006 (Bankr. S.D. Tex. Case No.
06-33754).  Leonard H. Simon, Esq., at Pendergaft & Simon,
LLP, represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


ARMSTRONG WORLD: Parent Loses Ownership Under Chapter 11 Plan
-------------------------------------------------------------
Armstrong Holdings, Inc., the parent company of Armstrong World
Industries, Inc., provided additional information regarding the
anticipated effect on Armstrong Holdings of the expected
consummation of the Chapter 11 reorganization of AWI.

As reported in the Troubled Company Reporter on Aug. 16, 2006,
AWI's "Fourth Amended Plan of Reorganization, as Modified" was
confirmed by the U.S. District Court and AWI currently expects to
emerge from Chapter 11 in the fourth quarter of 2006.

Pursuant to AWI's Chapter 11 Plan, Armstrong Holdings' ownership
of AWI will end.  All current AWI stock will be cancelled and no
payment or other distribution will be made to Armstrong Holdings
on account of its ownership interest.  AWI will distribute to
certain of its creditors under the Chapter 11 Plan cash and new
common stock of reorganized AWI, and in certain circumstances may
also distribute notes of reorganized AWI.  These creditors include
a trust that will be established to satisfy current and future
asbestos personal injury claimants, and allowed unsecured
creditors.

Although AWI's Chapter 11 Plan has been confirmed, Armstrong
Holdings has filed a claim against AWI in an unspecified amount in
respect of intercompany accounts and, to the extent such claims
are allowed by the Bankruptcy Court, Armstrong Holdings will
participate on a pro rata basis in the distributions that are to
be made under the Chapter 11 Plan to unsecured creditors.  The
cash and stock in AWI that Armstrong Holdings may receive as a
result of such claims is not expected to have a value in excess of
a few million dollars and there is no assurance that any claim
will be allowed.

Upon AWI's cancellation of Armstrong Holdings' ownership of AWI
pursuant to the Chapter 11 Plan, Armstrong Holdings also will have
a substantial ordinary income loss.  This loss will be in addition
to the substantial net operating loss, which AWI will incur in
connection with consummation of its Chapter 11 Plan.

As a result, the Armstrong consolidated group may be entitled to
receive a tax refund based upon a carry back of a portion of the
group's tax loss to prior years, in an amount estimated to be
approximately $37 million.  It is not possible for Armstrong
Holdings to estimate at this time the amount, if any, of such tax
refund to which it may be entitled.  Armstrong Holdings may also
be entitled to additional benefits from carrying forward the
balance of its tax loss.

Following AWI's emergence from Chapter 11, Armstrong Holdings and
AWI will cease reporting together as members of a consolidated
group for U.S. federal income tax reporting purposes.

A final federal income tax return for the companies on a
consolidated basis is expected to be filed by September 2007.  
After considering the result of its intercompany account claims
and the tax consequences to Armstrong Holdings of AWI's emergence
from Chapter 11, Armstrong Holdings is expected to decide whether
or not to dissolve.

A full-text copy of the Fourth Amended Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?fb4

                      About Armstrong World

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

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

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

When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities.


ASARCO LLC: East Helena Equipment Auction Today
-----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi authorized ASARCO LLC to sell the East Helena
Facility Equipment, free and clear of liens, claims, encumbrances
or interests, subject to an auction to be held today, Aug. 25,
2006.

As reported in the Troubled Company Reporter on July 21, 2006,
before ASARCO LLC filed for bankruptcy, it entered into a Consent
Decree with the Environmental Protection Agency and the Montana
Department of Environmental Quality requiring ASARCO to clean up
its lead smelter plant in East Helena, Montana.

ASARCO owns various pieces of heavy equipment at the East Helena
Facility used for its clean-up efforts.  A 3-page list of the
East Helena Equipment is available for free at
http://ResearchArchives.com/t/s?dec

ASARCO has determined that it is more cost-effective to hire
contractors to perform the clean-up work.  As a result, ASARCO no
longer has any use for the Equipment.

Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas,
said that the Auction will be an unreserved auction.  The
Property offered will be sold at the highest bidder on the date
of the Auction.

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. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


ASARCO LLC: Court Okays Pate Auction to Sell East Helena Equipment
------------------------------------------------------------------
In connection with its intent to sell its East Helena Property,
the U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi authorized ASARCO LLC to employ Pate Auction, Inc.,
as auctioneer.

As reported Troubled Company Reporter on July 21, 2006, as
auctioneer for the East Helena Property, Pate Auction will:

   (a) advertise the Auction;

   (b) prepare brochures;

   (c) make minor repairs and improvements as necessary to
       maximize the Property's value; and

   (d) conduct the Auction.

ASARCO will pay Pate Auction a 12% commission from the Property's
gross sales price.  The commission is expected not to exceed
$3,500.  ASARCO will also pay Pate Auction for any additional
advertising costs and repair expenses for the Property.

Pate Auction will collect the full proceeds from the Auction.  
All expenses incurred for the promotion, advertisement and
conduct of the Auction will be first paid from the sales
proceeds.

Within 14 days after the conclusion of the Auction, Pate Auction
will deliver to ASARCO the sales proceeds, less Pate Auction's
commission and the Approved Expenses, together with an accounting
of the successful bids, the monies received, and the expenses
incurred.

The accounting should also reflect the gross sales proceeds, the
amount of the commission, the amount of the approved expenses,
and the net sales proceeds being turned over to ASARCO.

Doug Dandro, secretary and treasurer of Pate Auction, Inc.,
assured the Court that his firm does not represent any interest
adverse to ASARCO or its estates, and is disinterested as defined
in Section 101(14) of the Bankruptcy Code.

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. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


ASARCO LLC: Wants to Pay Willis for Brokerage Services
------------------------------------------------------
ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to pay Willis of
Arizona, Inc., its fees as the company's insurance broker.

ASARCO LLC maintains insurance policies covering all aspects of
its business, including workers' compensation, business auto
coverage, umbrella liability, directors' and officers' liability,
employment practices liability, fiduciary liability, crime,
property coverage, cargo program, environmental liability
coverage and storage tank liability.

ASARCO is currently addressing its options in connection with its
insurance needs, James R. Prince, Esq., at Baker Botts L.L.P., in
Dallas, Texas, tells the Court.  Next year, ASARCO will need to
make important business decisions in connection with the
insurance policies, including:

   (a) evaluating their renewal, change and replacement;
   (b) the undertaking of risk, limit and retention analyses;
   (c) the completion of loss control analysis; and
   (d) the review of claims management issues, as needed.

ASARCO submitted proposal requests to four different brokers to
solicit interest for assistance in managing its insurance
portfolio of policies.  A consensus recommendation was presented
to, and approved by, ASARCO's Board of Directors.  Willis of
Arizona, Inc., was the recommended broker.

Accordingly, the Debtors and Willis entered into an engagement
letter, which provides for Willis' service and compensation
arrangement for the period Aug. 1, 2006, to Aug. 1, 2007.

As insurance broker, Willis will:

   (a) assess the adequacy of ASARCO's coverages under its
       current policies and advise of modifications based on the
       company's risk profile;

   (b) update ASARCO's insurance underwriting data;

   (c) assist ASARCO in the preparation of insurance underwriting
       submission for its review and approval before submission
       to insurance underwriters;

   (d) develop, before any policy renewal, a negotiation strategy
       for meetings with insurance underwriters;

   (e) in the context of selecting specific coverage, prepare a
       written summary of all quotes and other disclosures
       affecting the selected coverage and prepare insurance
       binders, review and transmit policies to ASARCO;

   (f) assess the financial soundness of the insurers recommended
       to provide coverage and, on ASARCO's request, provide a
       factual analysis of the insurers;

   (g) review all policies and endorsements delivered by insurers
       or intermediaries for the purpose of confirming their
       accuracy and conformity to negotiated specifications and
       ASARCO's instructions, and advise the company of any
       changes in the policies;

   (h) meet with ASARCO's representatives to explain coverage and
       policies and promptly respond to ASARCO's requests for
       coverage information and analysis of changing market
       conditions;

   (i) assist ASARCO in developing procedures for handling loss
       exposures and reporting subsequent changes in underwriting
       information to insurance companies; and

   (j) inform ASARCO of the reporting requirements for claims, if
       applicable.

ASARCO will pay Willis a $175,000 fee and a performance incentive
fee up to $20,000.  Willis will be also awarded by the Debtors
commissions and fees earned on international placements.

The Fees are in addition to the net premium paid for the
Coverages.  The Base Fee will be paid in equal quarterly
installments of $43,750, starting August 1, 2006.  The Incentive
Fee will be paid by August 1, 2007.  Any commission earned on the
domestic placements will be offset against the Fees and will be
disclosed quarterly.

The Willis Engagement Letter provides that either party can
terminate their agreement on a 60-day notice.  If Willis
terminates the Engagement Letter before the expiration of the
term, it will be deemed to have fully earned and entitled to a
pro rata portion of the Base Fee.

If ASARCO terminates the Engagement Letter, Willis will be deemed
to have fully earned and be entitled to a portion of the Base
Fee:

   -- 50% if terminated during the first six months; and
   -- 100% of the Base Fee if terminated after six months.

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. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


ATLANTIC GULF: Trustee Michael Joseph Distributes $875,866
----------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized Michael B. Joseph, the Chapter 7
Trustee appointed in Atlantic Gulf Communities Corporation and its
debtor-affiliates cases, to make a partial distribution to AGC
Anglo Services LLC for $875,866.

AGC Anglo serves as collateral agent for the Debtors' term loan
lenders.  The Trustee is disposing the assets pursuant to the
request of the term loan lenders.  The lenders hold liens and
security interests on substantially all of the Debtor's assets.

As consideration for the Trustee's administration of their assets,
the lenders have agreed to make available from their collateral
certain funds for distribution to other creditors and the payment
of chapter 7 administrative expenses.

The partial distribution came from:

                Sale                              Amount      
                ----                             --------  
      Syndicated Capital Sale of 11 Lots         $227,662
      Malinosky, sale of 3 parcels                112,313
      Moallem, sale of 13 lots                    133,446
      HT Land Trust, sale of 3 tracts             402,445   
                                                 --------
      TOTAL                                      $875,866

Headquartered in Fort Lauderdale, Florida, Atlantic Gulf
Communities Corporation was a developer and operator of luxury
residential real estate communities.  The Company and its
affiliates filed for chapter 11 protection on May 1, 2001 (Bankr.
D. Del. Case Nos. 01-01594 through 01-01597).  Michael R.
Lastowski, Esq., at Duane Morris LLP represents the Debtor.  The
Bankruptcy Court converted the Debtors' chapter 11 cases to a
chapter 7 liquidation proceeding on June 18, 2002.  Michael B.
Joseph is the chapter 7 Trustee for the Debtors' estates.  John D.
McLaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP
represents the chapter 11 Trustee.  When the Debtors filed for
chapter 11 protection, they listed $148,546,000 in assets and
$170,251,000 in liabilities.


CATALYST PAPER: TSX Defers Acceptance of Shareholder Rights Plan
----------------------------------------------------------------
Catalyst Paper Corporation disclosed that the Toronto Stock
Exchange has deferred its consideration of acceptance for filing
of the Company's adopted shareholder rights plan.

The deferment will be until such time as the TSX is satisfied that
the Ontario Securities Commission will not intervene pursuant to
National Policy 62-202 of the Canadian Securities Administrators
in any take-over bid for Catalyst.  A condition of acceptance of
notice of the rights plan by the TSX would be that the requisite
shareholder approval be obtained.  The rights plan remains
effective in accordance with its terms.

Based in Vancouver, British Columbia, Catalyst Paper (TSX: CTL)
-- http://www.catalystpaper.com/-- produces mechanical printing  
papers in North America.  The Company also produces market kraft
pulp and owns Western Canada's largest paper recycling facility.  
With five mills employing 3,800 people at sites within a 160-
kilometer radius on the south coast of British Columbia, Catalyst
has a combined annual capacity of 2.4 million tons of product.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 23, 2006
Moody's Investors Service revised the rating outlook for Catalyst
Paper Corporation from negative to stable.  Moody's also affirmed
Catalyst's senior unsecured notes and corporate family rating at
B1.


CATHOLIC CHURCH: Court Appoints Additional Mediators for Portland
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon appoints
these mediators in the Chapter 11 case of the Archdiocese of
Portland in Oregon and in all contested matters and adversary
proceedings pending in the bankruptcy case:

   (1) The Honorable Michael R. Hogan of the U.S. District Court
       for the District of Oregon; and

   (2) The Honorable Lyle C. Velure, Circuit Court Judge of the
       State of Oregon for Lane County.

Judge Elizabeth L. Perris says her Order does not supersede the
order appointing the Honorable Dennis Montali as settlement judge
entered on July 15, 2005, in Adversary Proceeding No. 04-3292.

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. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CATHOLIC CHURCH: Portland Tort Committee Files Opening Brief
------------------------------------------------------------
The Official Committee of Tort Claimants appointed in the Chapter
11 case of the Archdiocese of Portland in Oregon asks the U.S.
District Court for the District of Oregon to affirm Judge Perris'
ruling that:

   * certain parcels of real property to which the Archdiocese
     holds title -- the "Test Properties" -- are part of the
     Archdiocese's bankruptcy estate and must be included in
     determining the value of the bankruptcy estate; and

   * the unincorporated parishes and schools are part of the
     Archdiocese's corporation and do not have the capacity to
     sue or be sued, and therefore, denied the parishes' proofs
     of claim against the bankruptcy estate.

The Tort Committee also asks the District Court not to consider
the issue on whether or not the Test Properties are held in trust,
because the U.S. Bankruptcy Court for the District of Oregon did
not decide on it.

In ruling on the Test Properties, Robyn E. Ridler, Esq., at
Tonkon Torp LLP, in Washington Crossing, Pennsylvania, says the
Bankruptcy Court assumed, by prior agreement of the parties, that
the Test Properties are held in trust.  Hence, the District Court
must also assume, as what the Bankruptcy Court did.

Working on that assumption, the undisputed facts establish that
the Test Properties are held free and clear by the Archdiocese for
purposes of determining its bankruptcy estate, Ms. Ridler tells
the District Court.  

Ms. Ridler notes that Section 544(a)(3) of the Bankruptcy Code
maximizes the estates of bankrupt debtors by giving the bankruptcy
trustee or debtor-in-possession the same priority over other real
property interests that a bona fide purchaser would have under
state law.  In effect, Ms. Ridler explains, Section 544(a)(3)
causes a hypothetical sale of all of the debtor's real property to
a BFP at the moment the bankruptcy petition is filed, and includes
in the bankruptcy estate any interests the BFP would have acquired
in that transaction.

Oregon is a race-notice jurisdiction so subsequent purchasers who
record first take priority over prior interests, Ms. Ridler points
out.  However, Oregon law requires a subsequent purchaser to be
"without notice" to assert the rights of a bona fide purchaser.

Notice may be actual or constructive, Ms. Ridler says.  The
purchaser created by Section 544(a)(3), by definition, lacks
actual notice.  Therefore, the only question is whether the
Section 544(a)(3) purchaser would have had constructive notice of
the alleged interests at the moment the bankruptcy petition was
filed.

In this regard, Ms. Ridler argues that undisputed facts establish
that on the Petition Date, a purchaser would not have had
constructive notice of any of the parishes and schools' interests
in the Test Properties, other than the Archdiocese's.

The Parishes and Schools' interests are not recorded, which is
currently the only form of constructive notice under Oregon law,
Ms. Ridler points out.  Moreover, even if common law "inquiry
notice" still existed as a form of constructive notice, the
Bankruptcy Court correctly concluded that a purchaser would not
have had inquiry notice of the Parishes' alleged interests.

The Bankruptcy Court's ruling that unincorporated parishes are
part of the Archdiocesan corporation without the capacity to sue
and be sued are supported by the facts, which show that the
parishes may have significant day-to-day autonomy in operations
but are ultimately divisions of the Archdiocese, Ms. Ridler
asserts.

The Archdiocese itself has asserted repeatedly to Oregon courts
that its parishes and schools are part of its corporation, not
separate legal entities, Ms. Ridler reminds the District Court.  
As divisions of the corporation, the parishes do not have standing
to sue or be sued or to file claims against the corporation.  

Unhappy with the present consequences of those choices, Ms. Ridler
says the Archdiocese, and the Parishes and Schools have:

   * attempted to invoke the First Amendment and the Religious
     Freedom Restoration Act as a bar to the Bankruptcy Court's
     jurisdiction or as a limitation on its ability to apply
     neutral civil laws; and

   * sought to avoid the consequences of those choices by arguing
     that the Bankruptcy Court must interpret and apply the Roman
     Catholic Church's internal doctrine and rules.

Ms. Ridler contends that the Appellants' view of the First
Amendment is completely at odds with well established First
Amendment principles and Supreme Court jurisprudence.  The
Bankruptcy Court correctly recognized that the summary judgment
motions are not disputes over religious doctrine or ecclesiastical
questions.  Hence, the Bankruptcy Court was required to apply
ordinary principles of civil law, which is precisely what it did.  

The Bankruptcy Court could not interpret Roman Catholic canon law
as part of its analysis, nor could it let the Archdiocese
unilaterally decide the extent of its own bankruptcy estate, Ms.
Ridler says.  The Supreme Court has made abundantly clear that the
only laws that civil courts are competent or constitutionally
permitted to apply are civil laws.  

"Interpreting a religious organization's internal doctrine and
rules not only goes beyond the 'free exercise' guarantees of the
First Amendment, it violates the prohibition against the
government 'establishing' religion," Ms. Ridler notes.  
"Religious organizations, like everyone else, must utilize the
civil law to effectuate their intentions and preferences."

Even the Appellants' own canon law expert recognizes that
necessity, Ms. Ridler adds.  Hence, the Bankruptcy Court correctly
rejected the Appellants' invocation of the First Amendment.

With respect to RFRA, Ms. Ridler contends that the Bankruptcy
Court properly ruled that including the Test Properties in the
Archdiocese's bankruptcy estate does not substantially burden the
exercise of religion so as to implicate RFRA, particularly given
the limited number of Test Properties.

While some Appellants may be inconvenienced if any of the Test
Properties are ultimately sold to pay the Archdiocese's creditors,
they will not be compelled to abandon their religious principles,
Ms. Ridler asserts.  Having to use alternative facilities because
the Archdiocese declared bankruptcy is not a "significantly great
restriction or onus" upon the exercise of Roman Catholicism, Ms.
Ridler adds.

Moreover, Ms. Ridler argues that the Bankruptcy Court should have
denied the Appellants' RFRA defenses outright because RFRA is
inapplicable to the proceeding.  RFRA only applies to federal
government action, and there is no governmental actor in the
Chapter 11 case.

A full-text copy of the Tort Committee's 94-page Opening Brief is
available for free at http://researcharchives.com/t/s?1053

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. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CERADYNE INC: Requests Nasdaq Listing Qualifications Panel Hearing
------------------------------------------------------------------
Ceradyne, Inc., requested a hearing before the Nasdaq Listing
Qualifications Panel in response to its receipt of a Nadaq Staff
Determination letter on Aug. 17, 2006, indicating that the Company
is not in compliance with the filing requirements for continued
listing as set forth in Marketplace Rule 4310(c)(14).

The letter was issued in accordance with Nasdaq procedures due to
the delayed filing of the Company's Form 10-Q for the quarter
ended June 30, 2006.  Pending a decision by the Panel, the
Company's common stock will remain listed on The Nasdaq Stock
Market.

The Company disclosed that a special committee of independent
directors was formed, on Aug. 4, 2006, to conduct an internal
investigation of the Company's historical stock option grants and
related accounting treatment.  The special committee is being
assisted by independent legal counsel and forensic accountants.  
The special committee's investigation is ongoing and, accordingly,
the Company was unable to file its Form 10-Q for the quarter ended
June 30, 2006 by the required filing deadline.  The Company is
focused on resolving the issues as quickly as possible and plans
to file its Form 10-Q following completion of the independent
investigation by the special committee.

Based in Costa Mesa, California, Ceradyne, Inc. (Nasdaq: CRDN) --
http://www.ceradyne.com/-- develops, manufactures and markets  
advanced technical ceramic products and components for defense,
industrial, automotive/dieseland consumer applications.

                           *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Ceradyne's $50 million revolving credit facility due 2009 carries
Standard & Poor's BB- rating.  The Company's credit rating is also
rated BB- by Standard & Poor's.


CHARTERMAC: Completes $455 Million Fixed-Rate Bond Securitization
-----------------------------------------------------------------
One of CharterMac's subsidiaries completed a $455 million, fixed-
rate bond securitization transaction with a weighted average term
of 8 years.  The transaction was completed through the sale of
Class A Medium Term Tax-Exempt Multifamily Housing Trust
Certificates, Series 2006A to third-party investors.

The purpose of the securitization was to reduce the Company's
floating interest rate exposure with the proceeds being used to
retire existing bond securitizations that have floating-rates and
shorter terms.  As a result, more than 70% of the Company's
capital structure is fixed-rate, based on amounts outstanding at
June 30, 2006, as adjusted to include this transaction, the
incremental financing to acquire ARCap and hedges associated with
the new debt facility put in place at that time.

The Class A Certificates consist of $300 million Series A-1 and
$155 million Series A-2 Certificates.  The Company contributed 56
fixed-rate, tax-exempt multifamily housing and senior housing
revenue bonds totaling approximately $572.5 million in aggregate
principal into a trust, out of which was sold $455 million in
Class A Certificates to various institutional investors.  The
Series A-1 and Series A-2 Certificates bear interest at the fixed
rate of 4.54% and 4.72% per annum for 7 and 10 years,
respectively.  A wholly-owned indirect subsidiary of CharterMac
retained the subordinated Class B Certificates totaling
approximately $117.5 million.

Headquartered in New York City, CharterMac (NYSE: CHC)
-- http://www.chartermac.com/-- through its subsidiaries,   
CharterMac is a full-service real estate finance company, with
focus on the multifamily industry.  CharterMac offers capital
solutions to developers and owners of multifamily and commercial
real estate throughout the country and quality investment products
to institutional and retail investors.

                          *     *     *

As reported in the Troubled Company Reporter on July 18, 2006,
Moody's Investors Service assigned a rating of Ba3 to the
$500 million CharterMac guaranteed senior credit facility which
the company is issuing to acquire ARCap Investors, LLC, a private
real estate finance company specializing in high yield CMBS.  In
addition, Moody's assigned CharterMac a corporate family rating of
Ba3.  The outlook is stable.  The credit facility consists of a
three-year $150 million revolver and a six-year $350 million term
loan.


CHASE MORTGAGE: Fitch Puts Low-B Ratings on Class B-3 & B-4 Certs.
------------------------------------------------------------------
Chase Mortgage Finance Trust's $1.1 billion mortgage pass-through
certificates, series 2006-A1, were rated by Fitch Ratings:

   -- $1.1 billion classes 1-A1 - 1A-4, 1-AX, 2-A1 - A4, 2-AX,
      3-A1, 3-A2, 4-A1, 4-A2 and A-R senior certificates 'AAA'

   -- $16.9 million class M certificates 'AA'

   -- $8.2 million class B-1 certificates 'A'

   -- $4.9 million class B-2 certificates 'BBB'

   -- $3.3 million privately offered class B-3 'BB'

   -- $2.7 million privately offered class B-4 'B'

Fitch does not rate the $2.7 million privately offered class B-5
certificates.

The 'AAA' rating on the senior certificates reflects:

   * the 3.55% subordination provided by the 1.55% class M;
   * 0.75% class B-1;
   * 0.45% class B-2;
   * 0.30% privately offered class B-3;
   * 0.25% privately offered class B-4; and
   * 0.25% privately offered class B-5 certificate.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts.  In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures and the
primary servicing capabilities of JPMorgan Chase Bank, N.A. (rated
'RPS1' by Fitch).

The trust consists of 1,588 first-lien residential mortgage loans
with stated maturity of not more than 30 years and an aggregate
principal balance of $1,087,946,521 as of the cut-off date (Aug.
1, 2006).  The mortgage pool has a weighted average original loan-
to-value ratio of 69.62% with a weighted average mortgage rate of
6.362%.  The weighted-average FICO score of the loans is 745.  The
average loan balance is $685,105 and the loans are primarily
concentrated in California (37.4%), New York (20.7%) and Florida
(8.4%).

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

U.S. Bank, N.A. will serve as trustee.  Chase Mortgage Finance
Corporation, a special purpose corporation, deposited the loans in
the trust which issued the certificates.  For federal income tax
purposes, an election will be made to treat the trust fund as one
or more real estate mortgage investment conduits.


COMVERSE TECHNOLOGY: Granted Continued Listing By NASDAQ Panel
--------------------------------------------------------------
The NASDAQ Listing Qualifications Panel has granted Comverse
Technology, Inc.'s request for continued listing on the NASDAQ
National Market.  The Panel granted the company's request for
continued listing subject to the requirement that the company file
its Annual Report on Form 10-K for the fiscal year ended Jan. 31,
2006 and its Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 2006 by no later than Sept. 25, 2006.  The Panel
has advised the company that should it be unable to meet the
deadline, it will issue a final determination to delist the
company's shares from The NASDAQ Stock Market.

Headquartered in Woodbury, New York, Comverse Technology, Inc.
(NASDAQ: CMVT) -- http://www.comverse.com/-- provides software  
and systems that enable network-based multimedia enhanced
communication and billing services.  Over 450 communication and
content service providers in more than 120 countries use Comverse
products to generate revenues, strengthen customer loyalty and
improve operational efficiency.

                           *     *     *

As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services held its ratings on Comverse
Technology Inc. on CreditWatch with negative implications, where
they were placed on March 15, 2006, on the disclosure that the
board of directors at Comverse had created a special committee to
review matters relating to the company's stock option grants and
the likely need to restate prior-period financial results.

As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's placed its corporate credit and senior unsecured
debt ratings on Comverse Technology on CreditWatch with negative
implications.  The company has S&P's 'BB-' corporate credit and
senior unsecured debt ratings.


CREATIVE BUILDING: Notices of Appearance Must Be Filed by Sept. 1
-----------------------------------------------------------------
The Ontario Superior Court of Justice approved a claims bar
procedure for claims against Creative Building Maintenance Inc.,
an Ontario corporation, Creative Building Maintenance Inc., a
Delaware corporation, and Third Parties.

Creditors who want to appear at the claims bar motion must file a
notice of appearance and received no later than 5:00 p.m. on Sept.
1, 2006, to Doyle Salewski Inc.

DSI is the Monitor and Interim Receiver appointed by the Ontario
Superior Court of Justice for CBM Canada and CBM U.S.

A copy of the claim bar procedure order can be obtained at:

      Creative Building Maintenance Inc.
      c/o Doyle Salewski Inc.
      404 Bank Street
      Ottawa, Ontario K2P 1Y5
      Canada
      Tel: 613-569-4444 Ext. 212
      Toll Free: 1-888-489-5555
      Fax: 613-569-1116
      http://www.doylegroup.ca/

If a creditor fails to deliver a notice of appearance and attend
the claims bar motion, the creditor will be deemed to have
accepted that his claim against CBM Canada and CBM U.S. will be
extinguished and barred.

The Third Party Releasees are:

   -- Michal Cerny,
   -- Anca Periet aka Perieteanu,
   -- Phoenix Equity Inc.,
   -- 2072789 Ontario Ltd.,
   -- 1354828 Ontario Limited c.o.b. as ACSYS Group,
   -- Angela Cerny,
   -- Phoenix Equity Limited II,
   -- Antonia Alfonsi,
   -- Domenico Alfonsi,
   -- Alexandru Perieteanu (husband of Anca Periet)
   -- Perieteanu (son of Anca Periet), and
   -- Paul Hams.

The Ontario Court will convene a hearing on the claims bar motion
at 10:00 a.m. on Sept. 13, 2006, at 393 University Avenue at
Toronto, Ontario.

Creative Building Maintenance Inc., an Ontario corporation, and
Creative Building Maintenance Inc., a Delaware corporation, have
cases (06-CL-006425 and 06-CL-006426) in the Ontario Superior
Court of Justice commenced by HSBC Bank Canada, KeyBank National
Association, Key Equipment Finance Inc., and RoyNat Inc.


DANA CORP: Creditors Committee Selects ARPC as Consultants
----------------------------------------------------------
The Official Committee of Unsecured Creditors in Dana Corporation
and its debtor-affiliates' chapter 11 cases asks the Unite States
Bankruptcy Court for the Southern District of New York for
permission to retain Analysis, Research, and Planning Corporation
as its asbestos claims evaluation consultants, nunc pro tunc to
July 28, 2006.

Since 2001, the Debtors have employed Peterson Asbestos
Consulting Enterprise to administer claims, bill insurance
carriers and assist them in claims negotiation and resolution
related to their asbestos liabilities.  There are approximately
77,000 "active" asbestos cases against the Debtors.  The Debtors
estimate their asbestos liabilities for the next 15 years to be
within the range of $70,000,000 to $120,000,000, and that they
will have only "de minimis" liability thereafter.

Since its appointment, the Creditors Committee has reviewed
countless documents regarding the Debtors' asbestos liabilities
and has had at least three in-person meetings devoted solely to
asbestos and related issues, Thomas Moers Mayer, Esq., at Kramer
Levin Naftalis & Frankel, LLP, in New York, tells the Court.

Also, there is a substantial likelihood that a plan of
reorganization in the Debtors' Chapter 11 cases may permit
asbestos creditors to "pass-through" the case, Mr. Thomas adds.

However, Mr. Thomas relates, before the Committee can make a
determination as to how the asbestos liabilities should be
treated, it must, among other things:

   -- test the assumptions and calculations utilized by the
      Debtors in connection with the estimate of their present
      and future asbestos liabilities;

   -- examine the applicable insurance covering the liabilities
      and claims; and

   -- examine the costs and benefits of "resolving" the asbestos
      liabilities as part of the Chapter 11 cases as compared to
      "passing-through" the liabilities to the reorganized
      company.

To accomplish the task, the Committee has determined that it
requires the assistance of an industry expert as asbestos claims
evaluation consultants.

As the Committee's asbestos claim consultant, ARPC will:

   (a) determine whether a plan that "passes through" the
       Debtors' asbestos liabilities is feasible and appropriate;

   (b) compare a "pass-through" plan to the costs, benefits and
       feasibility of resolving the present and future asbestos
       claims as part of the Chapter 11 case; and

   (c) understand and use the estimates provided by the Debtors
       and test the assumptions and calculations on which the
       estimates are based.

ARPC will be paid according to its customary hourly rates:

       Professional                     Hourly Rates
       ------------                     ------------
       Partners and Principals          $350 to $550
       Managing Directors               $275 to $350
       Directors                        $225 to $275
       Consultants                      $185 to $225

ARPC will also be reimbursed for its necessary expenses incurred
while providing services to the Committee.

B. Thomas Florence, president of ARPC, in Washington, D.C.,
assures the Court that his firm does not represent any interest
adverse to the Debtors and their estates.  Mr. Florence maintains
that ARPC is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.

                      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. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 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: Equity Committee Selects Fried Frank as Counsel
----------------------------------------------------------
The Official Committee of Equity Security Holders in Dana
Corporation and its debtor-affiliates' chapter 11 cases asks the
U.S. Bankruptcy Court for the Southern District of New York for
permission to employ Fried, Frank, Harris, Shriver & Jacobson,
LLP, as its counsel, nunc pro tunc to June 30, 2006.

As the Equity Committee's counsel, Fried Frank will:

   (a) provide legal advice with respect to the Equity
       Committee's rights, powers and duties in the Chapter 11
       cases;

   (b) assist the Equity Committee in its analysis and
       negotiation of any plan of reorganization and related
       corporate documents;

   (c) assist and advise the Equity Committee with respect to its
       communications with the general equity body regarding
       significant matters in the Chapter 11 cases;

   (d) review, analyze, and advise the Equity Committee with
       respect to documents filed with the Court and respond on
       behalf of the Equity Committee to all applications,
       motions, answers, orders, reports, and other pleadings in
       connection with the administration of the Debtors' estates
       in the Chapter 11 cases; and

   (e) perform any other legal services requested by the Equity
       Committee in connection with the Chapter 11 Cases and the
       confirmation and implementation of a plan in the
       Chapter 11 cases.

Fried Frank will be paid based on its customary hourly rates:

       Professional                        Hourly Rate
       ------------                        -----------
       Partners                            $650 to $995
       Counsel                             $550 to $850
       Special Counsel                     $595 to $620
       Associates                          $315 to $540
       Legal Assistants                    $170 to $235

These professionals will have primary responsibility of providing
services to the Debtors:

      Professional                        Hourly Rate
      ------------                        -----------
      Brad Eric Scheler, Esq.                 $995
      Gregg Weiner, Esq.                      $750
      Gary Kaplan                             $650
      Brian Pfeiffer                          $525
      Julia Smolyanskiy                       $470
      Joanna Palacios                         $370

Fried Frank will also be reimbursed for all necessary expenses it
will incurr in providing services to the Equity Committee.

Brad Eric Scheler, Esq., member of Fried, Frank, Harris, Shriver
& Jacobson, LLP, in New York, assures the Court that his firm
does not represent any interest adverse to the Equity Committee
or the Debtors.  Fried Frank is also a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.

                      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. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

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


DAYTON SUPERIOR: Moody's Holds Junk Ratings with Stable Outlook
---------------------------------------------------------------
Moody's Investor Service affirmed Dayton Superior's ratings and
changed the ratings outlook to stable from negative to reflect the
improvement in the company's financial performance over the last
two quarters and an improved outlook for the company's businesses.

These ratings were affirmed:

   * Corporate family rating, affirmed at Caa1;

   * $165 million 10.75% senior secured second priority notes due
     2008, affirmed at Caa1;

   * $155 million 13% sr. subordinated notes due 2009, affirmed
     at Caa3.

The ratings outlook has been changed to stable from negative.

The change in outlook for the ratings reflects improved financial
performance over the last two quarters.  For the six months ended
on June 30, the company's net sales increased to $231.5 million
from $203.5 million for the same period a year earlier.

Operating income increased to $17.4 million for the six months
ended in June 30 against $3.9 million for the first six months of
fiscal year 2005.  The improvement is a result of both stronger
sales and a strong ability to pass on raw material prices.  The
company's product gross profit increased to $46 million for the
first half of fiscal 2006 against $40.1 million for the same
period in 2005.  For the same period, its rental gross profit
increased to $11.4 million from $4.3 million thereby proving to be
a meaningful contributor to the company's improved operating
performance.  The company continues to benefit from strength
in commercial construction.

The ratings and outlook may improve if the company shows
consistent improvement over the next couple of quarters.  The
ratings would particularly benefit if the company proved able
to generate positive free cash flow on a consistent basis.

The rating and outlook could decline if the company's margins
contract, if the company is unable to pass on its raw material
pricing, or if anticipated positive free cash flow generation
remains elusive.

Headquartered in Dayton, Ohio, Dayton Superior Corporation is
the largest North American manufacturer and distributor of metal
accessories and forms used in concrete construction, and metal
accessories used in masonry construction.


DELPHI CORP: 7 Trade Creditors Retain Kasowitz as Legal Counsel
---------------------------------------------------------------
Certain Delphi Corp. trade creditors have retained Kasowitz,
Benson, Torres & Friedman LLP, as legal counsel, to prosecute
their interests in Delphi and its debtor-affiliates' Chapter 11
cases.

The Trade Creditors are:

   (1) Argo Partners, Inc.
       12 West 37th Street, 9th Floor
       New York, NY 10018;

   (2) Avenue Capital Management, LLC
       535 Madison Avenue, 15th Floor
       New York, NY 10022;

   (3) Contrarian Capital Management, L.L.C.
       411 W. Putnam Avenue, Suite 225
       Greenwich, CT 06830;

   (4) Hain Capital Group
       Meadows Office Complex
       301 Route 17, 6th Floor
       Rutherford, NJ 07070;

   (5) King Street Capital Management, L.L.C.
       65 East 55th Street, 30th Floor
       New York, NY 10022; and

   (7) Longacre Fund Management, LLC
       810 Seventh Avenue, 22nd Floor
       New York, NY 10019

King Street Capital Management is the investment manager to King
Street Capital, Ltd.; King Street Capital, L.P.; and King Street
Institutional, Ltd.

The Trade Creditors collectively hold about $100,000,000 of trade
claims acquired after the Petition Date.

David S. Rosner, Esq., a partner at Kasowitz, Benson, Torres &
Friedman LLP, in New York, relates the Trade Creditors approached
his firm to discuss the treatment of holders of trade claims
during the Debtors' cases, and ultimately, in any proposed plan of
reorganization.

Kasowitz does not own any claims against or equity interests in
the Debtors, Mr. Rosner says in a Verified Statement filed with
the Court pursuant to Rule 2019(a) of the Federal Rules of
Bankruptcy Procedure.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/  
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


DELTA AIR: Wants Pilots Retirement Plan Terminated
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on Sept. 1, 2006, to consider Delta Air
Lines, Inc., and its debtor-affiliates' request for the voluntary
distress termination of the Delta Pilots Retirement Plan

Delta Air Lines, Inc., has maintained the Pilot Plan pursuant to
its collective bargaining agreement with the Air Line Pilots
Association, International, since 1972.  The Pilot Plan is a
defined benefit plan subject to the funding requirements of the
Employee Retirement Income Security Act and the Internal Revenue
Code, and is qualified under Section 401(a) of the IRC of 1986,
as amended.  A defined benefit plan guarantees participants a
specified level of income at retirement.

Employers contribute to their defined benefit plans, and these
payments are invested in income producing assets in a segregated
trust fund.  Qualified defined benefit plans are partially
insured by the Pension Benefit Guaranty Corporation, the federal
governmental agency that administers the pension plan termination
insurance program established by Title IV of ERISA.  When a
pension plan covered by Title IV terminates without sufficient
assets to pay all of its accrued liabilities, the PBGC typically
becomes trustee of the plan and pays plan participants their
pension benefits, subject to certain statutory limits.

               Pilots Plan's Liquidity Shortfall

Margaret M. McDaniel, principal in the Atlanta office of Towers
Perrin, says that as recently as 2002, the Pilot Plan's assets
exceeded its liabilities determined on an ERISA current
liability-funding basis.  Since that time, the funded status of
the Pilot Plan has deteriorated dramatically.

In 2004, in the face of Delta's pressing financial troubles, ALPA
and Delta agreed to freeze further accrual of benefits for future
service under the Pilot Plan.  In conjunction with the soft
freeze of the Pilot Plan, Delta agreed to establish the Delta
Pilots Defined Contribution Plan, a new defined contribution
pension plan for pilots covering future pilot service at Delta,
under which the Debtor contributed an average of 9% of each
pilot's earnings to an account in the individual pilot's name.

Pursuant to Letter of Agreement No. 51 to their CBA, Delta and
ALPA subsequently agreed to a hard freeze of the Pilot Plan and
fixed the defined contribution of the DC Plan at 9% of each
pilot's earnings.

Before the Petition Date, Delta made all required contributions
to the Pilot Plan.  Delta has continued to make all required
contributions attributable to postpetition labor, which,
according to Ms. McDaniel, have been small, totaling only
$4,702,861 through July 15, 2006, because of the soft freeze of
the Pilot Plan.  Delta also continued to make all payments to the
DC Plan, which are postpetition obligations.

After its bankruptcy filing, Delta ceased making contributions to
the Pilot Plan that were allocable to past service liabilities,
because these were considered to be prepetition costs.

The Pilot Plan contains a "lump sum" feature whereby pilots, when
they retire, can take 50% of the present value of their accrued
retirement benefits in the form of an immediate, up-front
payment.  Under ERISA's "anti-cutback" rules, that lump sum
option cannot be modified or eliminated, even if all affected
parties unanimously consented.

Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that since October 2005, the Pilot Plan has been in a
"liquidity shortfall", and has therefore been precluded as a
matter of law from making lump sum payments.  

The Pilot Plan emerged from liquidity shortfall by a small margin
on July 1, 2006.  If it did not, it is virtually certain to
emerge by Oct. 1, 2006.  Upon that emergence, the lump sum
option will again become available to retiring pilots unless
Court grants the Debtors' request to terminate the Plan,
Mr. Huebner notes.

The payment of those lump sums has been suspended by the filing
of a Notice of Intent to Terminate on June 19, 2006.  However,
according to Mr. Huebner, if the Debtors' request is denied and
the Pilot Plan is not terminated, the lump sum option will become
available.

            Legal Standard for Distress Termination

The Debtors ask the Court to find that they satisfy the financial
requirements for a distress termination of the Pilot Plan.

Title IV of the ERISA permits a debtor to terminate its defined
benefit pension plans if it meets the standard for a voluntary
distress termination, which requires that the bankruptcy court,
or other appropriate court, determines that, unless the plan is
terminated, the debtor will be unable to pay all its debts
pursuant to a plan of reorganization and will be unable to
continue in business outside the Chapter 11 reorganization
process, and approves the termination.

According to David Watson, director of Pilot Resources and
Scheduling of the Flight Operations division of Delta, if the
Pilot Plan is not terminated and the lump sum option again
becomes available, Delta will face an operational crisis that
could challenge Delta's survival, and in any event Delta will
remain unable to emerge from Chapter 11 due to billions of
dollars in additional financing needs that will not be
obtainable.

Similarly, the enormous obligations to the Pilot Plan would
prevent Delta, if it survived in the short term, from being able
to submit a feasible plan of reorganization that would satisfy
the standards of Section 1129 of the Bankruptcy Code, says
Timothy R. Coleman, senior managing director of The Blackstone
Group L.P.

          Delta Will Face Operational and Financial
             Crisis Absent Pilot Plan Termination

"If the Pilot Plan is not terminated and the lump sum door
reopens, Delta will immediately face a huge wave of pilot early
retirements by its most senior pilots", Ms. McDaniel states.

Ms. McDaniel explains that when the lump sum door opens, pilots
eligible for early retirement will understandably view this as
their only remaining chance to obtain a lump sum payment, which
for many pilots exceeds $500,000, and for some exceeds
$1,000,000.  The value of these up-front payments for pilots over
50 years old, relative to the value of continuing to work at
Delta until the mandatory retirement age of 60, is even greater
than it had been in the past because of the pay cuts under Letter
of Agreements No. 46 and 51 -- 32.5% followed by 14% cuts to
hourly wages -- not to mention other substantial concessions that
have had an economic and emotional impact on pilots.

According to Ms. McDaniel, approximately 1,820 Delta pilots will
be eligible to retire early on October 1, 2006.  In addition,
there are 126 pilots, mostly on disability, who are above age 60
and retirement eligible.  Of these 1,946 pilots, 857 would be
entitled to lump sum payments of $500,000 or more, and another
712 would be entitled to lump sum payments of between $250,000
and $500,000.

Delta believes that a reasonable estimate is that 800 to 1,000
pilots would immediately retire early if the lump sum door opens.  
In addition, the 126 other retirement eligible pilots over age 60
would also retire to secure their lump sums.

Mr. Watson contends that the simultaneous early retirement of
hundreds of senior pilots would have an immediate and devastating
impact on Delta's operations because it will result in the
cancellation of thousands of flights, and the grounding of a
significant percentage of Delta's entire fleet for a substantial
period.  The retirements would immediately cause a 29% to 41%
reduction in Delta's overall mainline capacity, and would
immediately slash Delta's international capacity almost in half,
by an estimated 43% to 50%, he explains.

The lost operating cash flow that would be associated with the
partial shutdown of its operations is estimated to be
approximately between $1,300,000,000 and $2,100,000,000, Edward
E. Bastian, Delta's executive vice president & chief financial
officer, says.

Moreover, according to Mr. Coleman, the enormous liquidity drain
would cause Delta to breach the financial covenants in its DIP
loans in short order, which would likely cause the DIP lenders to
exercise their rights and remedies under the loans, including
their rights with respect to their collateral, and potentially
lead Delta on a quick path toward liquidation.  To emerge from
bankruptcy, Delta will require approximately $2,000,000,000 to
repay the then outstanding amount on its DIP loans.

                   Debtors Can't Emerge Even
               If They Survive Short Term Crisis

Even if Delta somehow weathered the immediate crisis, it could
not obtain the exit financing needed to emerge from Chapter 11
without termination of the Pilot Plan, Mr. Coleman avers.

According to Mr. Coleman, as a result of the financial and
operational crisis, Delta would suffer an enormous liquidity
drain of an estimated $1,300,000,000 to $2,100,000,000, which
would need to be replenished for Delta to have the liquidity
necessary to run its business and provide a minimum cash cushion
to protect against future shocks and the seasonality that exists
within the airline industry.

Ms. McDaniel adds that Delta will be required to contribute
approximately $1,400,000,000 to $1,700,000,000 to the Pilot Plan
from the day it exits Chapter 11 to 12 months after, if:

    -- the Pilot Plan is not terminated;

    -- assuming U.S. President George W. Bush signed the proposed
       pension legislation; and

    -- an estimated 800 to 1,000 pilots retire early, in addition
       to the 126 other eligible pilots most of which would be
       due immediately upon exit.

To repay the DIP loans, maintain minimum liquidity, and satisfy
its financial obligations to the Pilot Plan and otherwise in the
first 12 months following its emergence from bankruptcy, Delta
would require between $5,200,000,000 and $6,600,000,000 of exit
financing, Mr. Coleman states.  If a slightly higher number of
1,200 pilots retired, the amount of exit financing required would
be $7,700,000,000.

Delta has virtually no unencumbered collateral against which to
secure an additional $3,000,000,000 to $4,400,000,000 in
financing above the level of its DIP financing, Mr. Coleman
notes.  "It is inconceivable that the exit lenders would provide
billions of dollars of incremental financing on the same
collateral pool."

Mr. Coleman asserts that, even if the financial impact of the
wave of early retirements was lower than anticipated, so that an
amount less than $5,200,000,000 in exit financing were needed,
lenders would be unwilling to provide billions of dollars in
incremental exit financing, especially where well over a billion
will not be invested in the Debtors to improve Delta's ongoing
prospects, but will immediately leave the Debtors already
dramatically weakened by the operational crisis in the form of
pension funding.

According to Mr. Bastian, additional factors would make the risk
to exit lenders even worse:

   (i) dramatic industry-wide changes in recent years have
       substantially increased competition and decreased profits
       in the airline industry;

  (ii) the problem of early retirements and significant
       operational disruptions would not disappear after the
       initial wave of early retirements;

(iii) absent termination of the Pilot Plan, no Delta plan of
       reorganization could meet the feasibility standard of
       Section 1129 of the Bankruptcy Code; and

  (iv) Delta would not be able to secure the $3,000,000,000
       to $4,400,000,000 in additional financing, above and
       beyond the amount of its then outstanding DIP financing,
       by making additional cost cuts or seeking additional
       revenue improvements.

Moreover, if the Pilot Plan is not timely terminated, the much
larger Delta Requirement Plan, which covers over 90,000 non-pilot
Delta employees and retirees, would need to be terminated as
well, Mr. Huebner asserts.

            Beneficiaries Do Not Oppose Termination

Mr. Huebner informs the Court that the representatives of the
majority of beneficiaries of the Pilot Plan do not oppose its
termination:

    -- ALPA, which represents over 6,800 Delta pilots, has
       acknowledged that termination of the Pilot Plan is
       necessary if Delta is to emerge from Chapter 11;

    -- DP3, Inc., representing 2,700 retired Delta pilots,
       has indicated that it will not oppose the Pilot Plan
       termination; and

    -- the Official Committee of Unsecured Creditors supports
       termination of the Pilot Plan, although it expressly
       reserves all of its rights with respect to any claims that
       may arise as the result of termination.

                     About Delta Air Lines

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELTA AIR: Panel Supports Termination of Pilots' Retirement Plan
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Delta Air Lines,
Inc., and its debtor-affiliates, believes that if the Delta Pilots
Retirement Plan is not terminated and the lump sum option again
becomes available, hundreds of senior pilots will immediately
retire.  The Committee finds the Debtors' estimate -- 800 to 1,000
pilots may retire -- very plausible, based upon the Debtors'
experiences in 2004 and 2005.

Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, explains that if the Pilot Plan is not terminated,
Delta Air Lines, Inc., will suffer a severe disruption to its
business, resulting to a significant financial loss.

In addition, according to Ms. Beckerman, even if Delta could
survive the damage caused by the large number of early
retirements by senior Delta pilots, it would be unable to
successfully emerge from Chapter 11 without termination of the
Pilot Plan.

Ms. Beckerman says that it is not realistic to believe that an
equity sponsor would be willing to invest funds in the Debtors if
the Debtors were:

   (i) weakened by the financial effects of the early pilot
       retirements; and

  (ii) facing large future pension payments and future waves of
       additional pilot retirements.

Without sufficient exit financing, the Debtors will be unable to
propose a feasible plan to emerge from Chapter 11 and
successfully reorganize, Ms. Beckerman asserts.

Thus, the Creditors Committee maintains that the termination of
the Pilot Plan is critical for both the Debtors' short-term
viability and their prospects for a successful reorganization.

                Objections to Plan Termination
   
Several retired pilots and parties-in-interest delivered to the
Court their objections to the termination of the Pilot Plan:

    -- the Pension Benefit Guaranty Corporation;

    -- Christopher N. Waggener;

    -- Roger Lee Edson;

    -- Delta Pilots Pension Termination Opposition, a recently
       organized group of retired Delta pilots;

    -- DP3, Inc., doing business as Delta Pilots' Pension
       Preservation Organization, and retired pilots James H.
       Gray, Reuben Black, Richard Colby, Don Mairose, Ron Stowe,
       William Wirth, John Mills, and Roger Ross; and

    -- Robert D. Berger; the Estate of Mac Braun, by Ann Braun
       Goldfein, Personal Representative; William G. MacAulay;
       and Samuel O. Gamble, on behalf of themselves and a
       certified class of participants; and

    -- William C. Buergey

DP3 and Mr. Gray, et al., ask the Court to adjourn the hearing on
the determination of the Debtors' financial distress, on the
basis that this determination may be premature, given that the
law which created the very problem of which the Debtors complain
is in flux.  

The delay of the hearing on the Debtors' request will allow for a
full examination of the recently passed Pension Protection Act of
2006 and the exploration of a legislative solution to the
problems caused by an accelerated benefits option or the lump sum
option, Shelley D. Rucker, Esq., at Miller & Martin PLLC, in
Atlanta, Georgia, contends.

In the alternative, DP3 and Mr. Gray, et al., ask the Court to
direct the Debtors to prove that the Pilot Plan must still be
terminated even if the Lump Sum Option can be removed.

Jeffrey B. Cohen, Esq., chief counsel of the PBGC, in Washington,
D.C., argues that the Debtors must prove to the Court that:

   (a) if the lump sum option opens, 800 to 1,000 Delta pilots
       will in fact immediately retire and elect to receive a
       lump sum;

   (b) no other options exist to prevent their argument that they
       will face an "imminent operational and financial crisis
       that will threaten Delta's near term survival" if those
       800 to 1,000 Delta pilots will in fact immediately retire;

   (c) they have exhausted all realistic measures to retain the
       Pilots Plan; and

   (d) they cannot rehire retired pilots on an interim basis, as
       it has done before, or even if it could, that measure
       would not avoid an operational and financial crisis.

In determining whether the Debtors could not secure the exit
financing necessary to emerge from bankruptcy absent the
termination of the Pilot Plan, Mr. Cohen proposes that the Court
must not only analyze the Debtors' proposed business plan but
should also look at all available financial information to assess
whether any business plan could be implemented that would allow
Delta to retain the Pilot Plan and emerge from bankruptcy.

Only if the Court is satisfied, after reviewing all available
financial and operational information, that the Debtors will not
be able to pay their debts when due and will not be able to
continue business, should it make the factual determination
required by the Employment Retirement Income Security Act of
1974, as amended, and grant the Debtors' request, Mr. Cohen
contends.

Representing DPPTO, Daniel A. Lowenthal, Esq., at Thelen Reid &
Priest LLP, in New York, asserts that Delta both failed to
exhaust all avenues available to restrict lump sums and provide
any substantiation for its assumption that 800 to 1200 pilots
will retire on Oct. 1, 2006.

According to Mr. Lowenthal, Delta conducted no analysis based on
fewer than 800 early retirements of its ability to continue
operations or its funding needs for the Plan.

Delta's failure to demonstrate that no reasonable scenario exists
equates to a failure to meet its burden of demonstrating the
necessity of the requested plan termination, Mr. Lowenthal
contends.

Mr. Lowenthal notes that Delta offers no explanation for its
assumed retirement rate other than several unproven assumptions,
which include:

    -- the 45% rate of retirements in the year preceding Delta's
       bankruptcy filing;

    -- the unsupported assertion that there is a pent up demand
       for lump sums;

    -- the unsupported assertion that the expected decrease in
       the calculation of lump sums slated for 2008 will
       encourage retirements now;

    -- the assertion that with recent pay cuts, the lump sum is
       more valuable; and

    -- the seemingly irrelevant assertion that Air Line Pilots
       Association, International, favors the termination of the
       Pilot Plan.

Mr. Lowenthal maintains that the circumstances have changed in a
number of ways since the 12-month period preceding Delta's
bankruptcy.  The reopening of the lump sum door will not result
in the number of early retirements that Delta assumes because:

    a. the lump sum a pilot would have received in September 2005,
       would have been larger than what he would receive in
       October 2006, due to changes in the GATT rate, which forms
       the basis for the calculation of lump sums;

    b. the Money Purchase Pension Plan, which provided a
       supplementary lump sum upon retirement, was terminated
       effective June 30, 2006, and the subsequent automatic
       distribution of the lump sums to all pilot participants,
       the incentive to retire to get the additional lump sum
       disappeared;

    c. an individual contemplating early retirement in 2005
       relied on the presence of a nonqualified benefit, which
       Delta has ceased paying since the Petition Date.

    d. in planning for retirement in 2005, a potential retiree
       could rely on health insurance coverage through Delta
       until reaching age 65 at a cost of 22% to 28% of the
       premium.  Based on changes in Letter of Agreement No. 51
       dated April 14, 2006, between Delta and ALPA, the retiree
       contribution has grown to 51%; and

    e. pilots have additional financial incentives to remain
       employed, including a very generous defined contribution
       plan, more profit sharing and increased seniority due to
       the 2004-2005 retirements.

Mr. Lowenthal further argues that:

   (i) Delta's quantitative analysis does not support its
       predicted number of early retirees;

  (ii) Delta can take steps to avoid an operational crisis;

(iii) Delta fails to acknowledge the true financial picture; and

  (iv) Delta fails to consider alternatives to maintain the
       funding of the Plan.

Mr. Berger, et al., and the Objecting Class, ask the Court to:

     * ensure that the Qualified Settlement Fund within the
       Retirement Plan Trust is fully protected; and

     * direct the Debtors to comply with the Settlement Agreement
       dated May 19, 2005, and related court orders that control
       the appropriate disposition of the assets in the Qualified
       Settlement Fund.

"[The] Debtors should not be allowed to use a distress
termination of the Pilot Plan to wash their hands of obligations
that they knowingly, willingly, and voluntarily undertook in
entering into the class action Settlement Agreement that forms
the basis for the Qualified Settlement Fund," Mr. Berger, et al.,
and the Objecting Class's counsel, Diogenes P. Kekatos, Esq., at
Seeger Weiss LLP, in New York, says.

Mr. Waggener, a retired pilot at Delta, relates that the Delta
management used "coercive tactics" to force him and other pilots
into early retirement.  The retired pilots detrimentally relied
on Delta's assurances as to guaranteed retirement benefits.

"Delta has discriminated against its former pilots by singling
them out regarding the diminution of retirement benefits,"
Mr. Waggener adds.

Mr. Waggener notes that Delta has recently announced that it is
now in a financial position to once again offer lump sum
retirement packages to retiring pilots but is simultaneously
representing that it cannot meet its obligations with respect to
its contractual annuities payments.

Mr. Waggener argues that Delta management has voluntarily chosen
to incur expenses other than the pension benefits to which he is
"lawfully and morally" entitled.  Among Delta's expenses that he
points out are:

    -- the new uniforms created by a professional design team;

    -- the renovation and refurbishment of terminals in at least
       two airports;

    -- the fee and reduced fare trips for vacationers stranded
       overseas; and

    -- corporate sponsorships.

                     About Delta Air Lines

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DOMTAR INC: Weyerhaeuser Merger Prompts DBRS to Review Ratings
--------------------------------------------------------------
Dominion Bond Rating Service placed the ratings of Domtar Inc.  
Under Review with Developing Implications following the
announcement that the Company will be combined with Weyerhaeuser
Company's fine paper and related assets to form a new U.S. company
that will continue to be called Domtar.

The Unsecured Notes and Debentures are rated at BB (low) and the
Preferred Shares at Pfd-5 (high). The rating status reflects the
uncertainty regarding Domtar's capital structure following closing
of the transaction, which is expected in Q1 2007.

Under the terms of the transaction, WY will contribute its fine
papers business and related assets, which include ten primary
pulp and paper mills facilities and two sawmills, along with
$1.35 billion of new debt, to the new Domtar.  WY will receive
$1.35 billion in cash for the fine paper and related assets from
the new Domtar.  In addition, WY's shareholders, after a share
spinoff or split-off by WY, will end up with a 55% equity interest
in the new company, while former Domtar shareholders will hold
45%.

On a pro forma basis, the transaction appears modestly positive to
Domtar's credit metrics, but additional information is required.  
The new Domtar is expected to have roughly $3.2 billion in debt.  
However, the debt structure has not been finalized, and could
include the new Domtar secured credit facility or a combination of
a secured credit facility and new unsecured debt.  In addition,
debt-to-capital of the new company cannot be determined, as
accounting equity is yet to be established.  Debt-to-EBITDA and
coverage ratios modestly improve, based on annualized Q2 2006
EBITDA of the combined businesses.

DBRS notes that the positive implications of the creation of
new Domtar include the significant increase in scale of its
uncoated free sheet operations, the addition of lower-cost assets,
and expected synergies of $200 million per year in two years.  
However, despite recent UFS pricing strength, demand remains
generally soft and margins are expected to remain
under pressure.

DBRS will continue to monitor developments with respect to the
transaction and make a rating determination prior to its closing.


FALCONBRIDGE LTD: Fails to Register Sale to Dominican Tax Dept.
---------------------------------------------------------------
Falconbridge Limited has not registered its sale to Xstrata plc
with the Dominican Republic's Tax Department, the DR1 Newsletter
reports.

DR1 relates that the Tax Department asked Falconbridge Limited on
July 19, 2006, to register the sale.

Falconbridge Limited sold most of its outstanding stock to Xstrata
for $20 billion, through the Toronto Exchange, DR1 notes.  The
sale includes 85% of Falconbridge Dominicana.

The Tax Department may fine Falconbridge for not registering the
sale, DR1 states.

                       About Xstrata

Xstrata plc -- 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 United Kingdom and
Canada.

                     About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL) (NYSE:FAL) -- http://www.falconbridge.com/-- is a
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.

Falconbridge has sales offices in Beijing, China, and Tokyo,
Japan, as well as a recycling plant in Penang, Malaysia.

                        *    *    *

Falconbridge's CDNUS$150 million 5% convertible and callable
bonds due April 30, 2007, carries Standard & Poor's BB+ rating.


FEDERAL-MOGUL: Abex Claimants' Move for Futures Rep. Draws Fire
---------------------------------------------------------------
Several parties-in-interest objected to the request by individual
personal injury claimants that assert claims for exposure to
asbestos-containing products produced by Pneumo Abex LLC to
appoint a separate Future Claimants' Representative in the chapter
11 cases of Federal-Mogul Corporation and its debtor-affiliates.

          Futures Rep. Say Another Rep. Is Unwarranted

"Appointing an additional future claimants' representative for
the Future Abex Claimants is unwarranted and unnecessary," Eric
D. Green, the Court-appointed legal representative for future
claimants in the Debtors' Chapter 11 cases, contends.

Counsel for the FCR, Edwin L. Patton, Jr., at Young Conaway
Stargatt & Taylor LLP, asserts that the FCR has faithfully
represented the Future Abex Claimants interests.  The FCR will
continue to do so throughout the Debtors' cases, he assures the
Court.

The application for Section 524(g) of the Bankruptcy Code does
not require the appointment of an additional futures
representative, even in instances where Section 524(g) channeling
injunction is proposed to be expected to third parties, Mr.
Patton argues.

The FCR believes that the Current Abex Claimants' ultimate
objective in its request is not to protect the interests of
Future Abex Claimants with regards to a Section 524(g) trust, but
rather to prevent Pneumo Abex LLC's claims from being channeled
to a Section 524(g) trust in the first place.

The FCR, however, asserts that the Current Abex Claimants'
ability to reach their objective is not contingent on the
appointment of another futures representative.  They can vote
against the Debtors' Plan of Reorganization, object to its
confirmation, and challenge the proposal for channeling Pneumo
Abex Claims to the Pneumo Abex Subfund meets the substantive
requirement of Section 524(g), Mr. Patton suggests.

Pneumo Abex supports the FCR's contentions and asks the Court to
deny the Current Abex Claimants' request.

             Mt. McKinley Wary About Factual Rulings

Mt. McKinley Insurance Company takes no position regarding the
Appointment Request.  

However, because some pending litigations can affect insurance
coverage for Pneumo Abex Claims and the impact of certain
transactions related to Pneumo Abex, Mt. McKinley asks the Court
to refrain from making any factual legal determinations, rulings
or findings concerning:

   -- the scope of coverage for Pneumo Abex asbestos claims;

   -- the impact any purported transfer or assignment of
      insurance coverage or insurance proceeds has on any party;
      and

   -- the impact the corporate transactions have on insurance
      coverage for Pneumo Abex asbestos liabilities.

"In determining whether to appoint an additional FCR, the Court
does not need to make any factual or legal findings regarding the
impact the corporate transactions have on insurance coverage,"
Sean J. Bellew, Esq., at Cozen O'Connor, in Wilmington, Delaware,
says.  "Moreover, any such findings made in connection with the
Abex Claimants' Motion may unfairly and unnecessarily prejudice
the rights of Mt. McKinley and other insurers in the pending
insurance coverage actions."

Ace Property & Casualty Insurance Company and certain other
insurers, including Central National Insurance Company of Omaha;
OneBeacon America Insurance Company; TIG Insurance Company; and
Allianz Global Risks U.S. Insurance Company, also ask the Court
to refrain from making any factual or legal findings regarding
any purported transfer of insurance coverage to Pneumo Abex,
Wagner, Cooper, PepsiAmericas, or Federal-Mogul or the existence
or nonexistence, or scope, of insurance coverage available for
the Abex-related asbestos personal injury claims.

"Any factual or legal finding could unfairly and unnecessarily
prejudice the ability of [the] Insurance Companies and others to
litigate those cases," Brian L. Kasprzak, Esq., at Marks O'Neill
O'Brien & Courtney P.C., in Wilmington, Delaware, explains on the
ACE parties' behalf.

          Debtors Says Abex Claimants Have No Standing

The Debtors ask the Court to deny the Appointment Request.

The Current Abex Claimants are not "Future Abex Claimants" and
are thus without standing to raise the legal rights of the third
parties, Scotta E. McFarland, Esq., at Pachulski Stang Ziehl
Young Jones & Weintraub LLP, in Wilmington, Delaware, argues.

Furthermore, Ms. McFarland continues, the Current Abex Claimants
fail to meet the exception set forth by the U.S. Court of Appeals
for the Third Circuit in Storino v. Borough of Point Pleasant
Beach, 322 F.3d 293 (3d Cir. 2003).

In Storino, the Third Circuit recognized a limited right of
litigants to bring actions on behalf of third parties when three
criteria are met:

   1. The litigant has suffered an injury in fact giving him a
      sufficiently concrete interest in the outcome of the issue;

   2. The litigant has a close relation to the third party; and

   3. There exists some hindrance to the third party's ability to
      protect his own interests.

The Debtors also contend that the Appointment Request is wholly
unsupported by the Bankruptcy Code, is lacking any legal or
factual basis, and would result in an unnecessary drain of a
potentially large amount of estate resources.

The Official Committee Of Asbestos Claimants and Cooper
Industries, LLC, agree with the Debtors' and the FCR's arguments.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion.  The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $10.15 billion
in assets and $8.86 billion in liabilities.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors.  (Federal-Mogul Bankruptcy News,
Issue No. 112; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FEDERAL-MOGUL: Underwriters Want to Conduct Discovery on Travelers
------------------------------------------------------------------
Since at least November 2004, the Plan Proponents -- Federal-Mogul
Corporation and its debtor-affiliates, the Official Committee of
Asbestos Claimants and the Legal Representative for Future
Asbestos Claimants -- and the Debtors' various insurers, Certain
Underwriters at Lloyd's, London and Certain London Market
Companies have been negotiating insurance neutrality language to
limit the areas of dispute between and among the insurers and the
Plan Proponents, Christopher M. Winter, Esq., at Duane Morris LLP,
in Wilmington, Delaware, relates.

According to Mr. Winter, substantial progress has been made with
respect to policies of insurance that may be implicated in
asbestos personal injury claims asserted against Debtor Federal-
Mogul Products, Inc.  However, the London Underwriters and the
Plan Proponents have reached an impasse with respect to two other
lines of insurance coverage -- the Fel-Pro Line of Coverage and
the Vellumoid Line of Coverage -- that would be affected by
confirmation of the Plan.

The London Underwriters want to continue negotiating the
neutrality language for the Fel-Pro and Vellumoid Lines of
Coverage.  However, their lack of any data on the Fel-Pro and
Vellumoid Claims make the negotiations exceeding difficult.

Among others, Mr. Winter notes that the Disclosure Statement
describing the Debtors' Third Amended Plan of Reorganization
states only that, as of the Petition Date, 33,625 asbestos
personal injury claims had been asserted against Fel-Pro, and
61,528 asbestos personal injury claims had been asserted against
Vellumoid.  Nothing more is known about them.

Moreover, the Ballot Summary filed in connection with voting on
the Third Amended Plan of Reorganization re-sent to the Court on
July 14, 2006, shows that there were 87,184 claims outstanding
against Fel-Pro and 149,948 claims outstanding against Federal-
Mogul, presumably due to the activities of its Vellumoid
division.

Pursuant to the proposed Trust Distribution Procedures to be
adopted at confirmation, Fel-Pro and Vellumoid Claims are to be
tendered directly to the insurers for defense or settlement, and
are not subject to the TDP claims handling procedures and payment
schedules established for the FMP Claims.

The London Underwriters, however, as excess insurers, have no
duty to defend claims, or to pay defense costs with respect to
claims that are not covered under their policies.

The London Underwriters need to know:

   -- the nature and extent of the Fel-Pro and Vellumoid Claims;
      and

   -- the extent to which the primary insurers on the Fel-Pro and
      Vellumoid Lines of Coverage have defended and paid the
      claims and eroded their policy limits.

Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the London Underwriters seek Judge Fitzgerald's
permission to examine and obtain documents from The Travelers
Indemnity Company, Travelers Casualty and Surety Company, and
certain affiliates, with respect to the Fel-Pro Claims and the
Vellumoid Claims.

Travelers is a primary insurer of Debtors Felt Products
Manufacturing Company and Federal-Mogul Corporation.

Without the discovery, the London Underwriters cannot evaluate
how the Trust Distribution Procedures would change the London
Underwriters' risk or negotiate insurance neutrality language
with respect to the Fel-Pro and Vellumoid Lines of Coverage, Mr.
Winter maintains.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion.  The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $10.15 billion
in assets and $8.86 billion in liabilities.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors.  (Federal-Mogul Bankruptcy News,
Issue No. 112; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FLYI INC: Wants Court Approval on Committee Investigation Protocol
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of FLYi, Inc., and
debtor-affiliates has sought a full investigation of potential
claims of the Debtors against the Debtors' current and former
officers, directors, employees, agents and professionals, as well
as certain other third parties, regarding the bankruptcy cases,
Margaret Whiteman, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, informs the U.S. Bankruptcy Court for the
District of Delaware.

The Debtors relate that they were not aware of the Committee's
actions.  The Debtors were not aware of any insider dealings with
respect to their prepetition activities, and neither the Debtors
nor their officers were subject to any securities or breach of
fiduciary duties lawsuits, Ms. Whiteman avers.

According to Ms. Whiteman, the Committee has indicated that there
are allegations that, for instance, the Debtors and their
officers may not have exercised due care in making key decisions
that led up to their Chapter 11 filing.

The Debtors disagree with the Committee's allegations.  However,
the Debtors understand that the Committee has the right and a
fiduciary obligation to conduct an investigation of any Potential
Claims.

"What the Debtors have requested, however, is that the Committee
conduct any investigation with promptness," Ms. Whiteman says.

The Debtors wish to clear their officers and employees of any
alleged wrongdoing and believe it is appropriate to give these
parties some certainty sooner, rather than later, Ms. Whiteman
states.

As part of the Plan discussions, the Debtors and the Committee
have reached a settlement as to how the investigation and all
other issues will be handled.

The salient terms of the Investigation Protocol are:

   (a) The investigation of Causes of Action will be commenced
       promptly and the Debtors' Joint Plan of Liquidation will
       provide that Causes of Action must be filed by no later
       than Feb. 28, 2007 or they will be released under the Plan.

       The Committee or a liquidating trust may seek extension of
       the bar date for filing Causes of Action.  However, the
       Causes of Action Bar D could not be extended beyond
       May 31, 2007;

   (b) If any Causes of Action are filed, they will be limited
       to:

       (1) those Causes of Action which the investigation
           recommends be brought; and

       (2) any other Causes of Action that:

           -- after the filing of a Cause of Action are
              identified for the first time in discovery; and

           -- could not reasonably have been discovered and
              asserted during the investigation.

       Otherwise, the Plan will provide that the Debtors and
       their officers will be released and no third party will be
       entitled to seek to assert any Causes of Action on behalf
       of the Debtors' estates;

   (c) The Plan will provide the standard Delaware "Bruno's"
       exculpation for postpetition acts of the Debtors, their
       officers and the Committee members in the form described
       in the Plan, which excludes exculpation for gross
       negligence or willful misconduct;

   (d) The Debtors will reimburse reasonable attorneys' fees and
       expenses, up to $500,000, of:

       (1) the Debtors' current and former officers, directors,
           and employees incurred in connection with the
           investigation contemplated by the Protocol;

       (2) the Debtors' current directors already incurred during
           the Chapter 11 cases leading up to the Committee's
           investigatory process; and

       (3) current or former professionals of the Debtors to whom
           the Debtors and the Committee or liquidating trustee
           agree;

   (e) The parties will discuss among themselves and with the
       Office of the U.S. Trustee the continuing need for the
       existing members of the Debtors' board of directors after
       Nov. 1, 2006.  The Committee will support the extension,
       renewal, or replacement of the D&O policies, and payment of
       the required premiums, as is necessary through the
       Effective Date of the Plan; and

   (f) Anthony Schnelling of Bridge Associates will be the
       liquidating trustee.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court's permission to implement
the Investigation Protocol.

Ms. Whiteman argues that the Protocol should be approved for four
reasons:

   1. It will provide a clear path for the Debtors and the
      Committee to complete certain key remaining aspects of the
      Debtors' bankruptcy cases;

   2. It is necessary to the administration of the Debtors'
      cases;

   3. It represents a settlement of certain key disputes between
      the Debtors and the Committee; and

   4. It involves the use of property of the Debtors' estates.

The Debtors have consented to the Committee's standing to bring
and prosecute any of the Causes of Action through the Effective
Date, Mr. Whiteman emphasizes.

                         About FLYi Inc.

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. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


FLYI INC: Wants Solicitation and Tabulation Procedures Set
----------------------------------------------------------
FLYi, Inc., and debtor-affiliates ask the U.S. Bankruptcy Court
for the District of Delaware to establish uniform procedures for
the solicitation and tabulation of votes to accept or reject the
Joint Plan of Liquidation filed by FLYi, Inc., and its debtor
affiliates on Aug. 15, 2006.

The hearing to approve the Disclosure Statement is scheduled for
Oct. 3, 2006.

Accordingly, the Debtors propose to mail a Disclosure Statement
Notice to:

   * all persons or entities that have filed proofs of claim on
     or before the Record Date;

   * all persons or entities listed in the Schedules of Assets
     and Liabilities as holding liquidated, non-contingent and
     undisputed claims as of the Record Date;

   * all other known holders of claims or potential claims
     against the Debtors;

   * the indenture trustee of the Convertible Notes as of the
     Record Date and each holder of record of the Convertible
     Notes as the Record Date;

   * the indenture trustees, loan trustees, collateral trustees
     and owner trustees with respect to the aircraft owned or
     leased by the Debtors as of the Petition Date;

   * all holders of record of the common stock of FLYi; and

   * all other parties-in-interest that have filed requests for
     notice pursuant to Rule 2002 of the Federal Rules of
     Bankruptcy Procedure in the Debtors' Chapter 11 cases.

The Disclosure Statement Notice identifies the date, time and
place of hearing to consider the approval of the Disclosure
Statement and the deadline and procedures for asserting
objections to the approval of the Disclosure Statement.

                       Solicitation Package

After the Court approves the Disclosure Statement, the Debtors
propose to mail Solicitation Packages containing copies of:

   a. the Confirmation Hearing Notice;

   b. the Disclosure Statement and the Disclosure Statement
      Order, together with the Plan and other exhibits;

   c. one or more letters recommending acceptance of the Plan;

   d. for Solicitation Packages sent to holders of claims in
      classes entitled to vote to accept or reject the Plan, an
      appropriate form of Ballot and a Ballot return envelope;

   e. for Solicitation Packages sent to former customers with
      credit balance on the Debtors' books and records, the
      Notice to Holders of Customer Flight Credit regarding
      Availability of Priority Treatment and related
      certification.

The Solicitation Packages will be mailed, not less than 35 days
prior to the Voting Deadline, to the Securities and Exchange
Commission, the U.S. Trustee and the same parties who were sent a
Disclosure Statement Notice.

With respect to (a) holders of claims and interests who are not
entitled to vote to accept or reject the Plan other than holders
of Class 7 Intercompany Claims and (b) parties to executory
contracts or unexpired leases to be rejected pursuant to the
Plan:

   (i) the Confirmation Hearing Notice and the applicable Ballot
       or Non-Voting Status sent to those entities will be a
       paper copy; and

  (ii) any other materials in the Solicitation Packages sent to
       those holders of claims and interests will be sent on
       CD-ROM.

For Credit Balance Customers for which the Debtors have a known
mailing address, the Solicitation Package will include only the
Confirmation Hearing Notice, applicable Ballot and the Customer
Certification.  For Credit Balance Customers for which the
Debtors do not have a known mailing address but do have an e-mail
address, the Confirmation Hearing Notice and the Customer
Certification will be sent to those entities solely through
e-mail.  The e-mail will contain a Internet link to any other
materials to be included in the Solicitation Packages for those
Credit Balance Customers.

In lieu of the Solicitation Packages, entities who are listed in
the Schedules in the amount of $0, or who are scheduled as
contingent, unliquidated, or disputed and who did not file a
proof of claim will only receive the Confirmation Hearing Notice.

All Plan documents, including the Disclosure Statement and forms
of the Ballots will be available by paper copy upon written
request to the Debtors' Voting Agent and via the Internet on the
Web site of the Debtors' Voting Agent at http://www.kccllc.net/ia

                           Ballot Forms

The Debtors will distribute to creditors entitled to vote on the
Plan ballots based on Official Form No. 14, but have been
modified to address the particular terms of the Plan.

Solicitation Packages for holders of claim against any Debtor in
a class under the Plan that is deemed to accept or reject the
Plan under Section 1126f) or 1126(g) of the Bankruptcy Code will
not include a Ballot but will include the appropriate notice with
respect to holders of claims and interests who are not entitled
to vote to accept or reject the Plan -- the Notice of Non-Voting
Status.

No Ballots have been proposed for creditors and interest holders
in Classes 1, 2, 7, 8 and 9 because solicitation of acceptances
from creditors and interest holders in those Classes is not
required.

                         The Record Date

Pursuant to Rule 3017(d) of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to establish October 3,
2006, as the record date for purposes of determining which
creditors are entitled to receive Solicitation Packages and,
where applicable, vote on the Plan.

With respect to a transferred claim, the transferred claim will
be entitled to receive a Solicitation Package and cast a Ballot
on account of the transferred claim only if by the Record Date:

   (i) all actions necessary to effect the transfer of the claim
       pursuant to Rule 3001(e) of the Federal Rules of
       Bankruptcy Procedure have been completed; or

  (ii) the transferee files the documentation required by Rule
       3001(e) to evidence the transfer and a sworn statement of
       the transferor supporting the validity of the transfer.

                         Voting Deadline

To be counted as votes to accept or reject the Plan, the Debtors
propose that all Ballots must be properly executed, completed,
and delivered to the Debtors' Voting Agent either by regular
mail, overnight mail or by personal delivery so that, in each
case, the Ballots are received by the Voting Agent no later than
5 p.m., Pacific Time, on a date established by the Debtors that
is at least 35 days after they substantially complete the mailing
of all of the Solicitation Packages in accordance with the
procedures set forth.

The Debtors further propose that the Convertible Note Master
Ballots, if necessary, may be submitted by facsimile so that they
are received by the Voting Agent prior to the Voting Deadline.

                  Procedures for Vote Tabulation

Solely for purposes of voting to accept or reject the Plan, the
Debtors propose that each claim within a class of claims entitled
to vote to accept or reject the Plan will be temporarily allowed.

Any claimant that seeks to challenge the allowance of its claim
for voting purposes will be required to file a motion pursuant to
Rule 3018 of the Federal Rules of Bankruptcy Procedure and serve
that Motion on the Debtors and the Official Committee of
Unsecured Creditors so that it is received on or before the date
that is 15 days prior to the Voting Deadline.

A full-text copy of FLYi's Solicitation and Tabulation Procedures
is available for free at http://ResearchArchives.com/t/s?1058

                    Confirmation Hearing Date

The Debtors ask the Court to schedule a hearing on the
confirmation of the Plan, which may be continued from time to
time by the Court without further notice other than the
announcement of the adjourned date.

Objections to the confirmation of the Plan, if any, must:

   (i) be in writing;

  (ii) state the name and address of the objecting party and the
       nature of the claim or interest of that party;

(iii) state with particularity the basis and nature of any
       objection to the confirmation of the Plan; and

  (iv) be filed with the Court.

The Confirmation Objections must be served on the counsel to the
Debtors, the counsel to the Creditors Committee and the U.S.
Trustee so that they are received at a date at least 35 days
after the Debtors substantially complete the mailing of the
Solicitation Packages.

The Debtors propose to publish an abbreviated form of the
Confirmation Hearing Notice not less than 25 days before the
Confirmation Hearing in the national edition of The Wall Street
Journal and The Washington Post.

                         About FLYi Inc.

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. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


GOLD KIST: Pilgrim's Buy Offer Prompts Moody's to Hold Ratings
--------------------------------------------------------------
Moody's Investors Service affirmed the B2 $130 million 10.25%
senior unsecured notes and B1 corporate family ratings and SGL-2
speculative grade liquidity rating for Gold Kist, Inc., but
changed the outlook to developing from stable.  This rating action
follows the announcement that Pilgrim's Pride Corporation has made
an offer to acquire Gold Kist for approximately $1 billion in cash
plus the assumption of $144 million in Gold Kist Debt.

The change in outlook to developing from stable reflects the
uncertainty surrounding Gold Kists' future ownership and financial
strategy following the Pilgrim's Pride acquisition bid.  While it
remains highly uncertain whether or not an acquisition by
Pilgrim's Pride will be consummated, the highly-publicized bid
could initiate increased shareholder pressure on Gold Kist's
management to take actions to improve shareholder returns.  
Such actions could include either Gold Kist continuing as a stand-
along company, an acquisition by a financially stronger company,
or a more financially aggressive policy toward share repurchases
and dividends.

Since the company's 2004 conversion from an agricultural
cooperative to a publicly held corporation, Gold Kist has
maintained a conservative capital structure with modest debt
and plentiful cash -- largely reflective of an investment grade
credit.  However the company's modest size for a protein
processor, its narrow product mix, geographically concentrated raw
material supply, and highly volatile earnings stream constrain the
rating.  Using financial data including the lagging 12-months
ended July 2006, the factors underlying Moody's Rating Methodology
for Global Natural Product Processors indicate a rating of Ba2,
two notches higher than the company's actual B1 rating.  

In Moody's view, Gold Kist's high degree of earnings volatility,
the recent severe earnings pressure in the overall poultry
industry, the possibility that financial metrics could weaken
further in the near term, the risk that the company's financial
policy could become more aggressive, and Gold Kist's relatively
short history as a public company justify a rating lower than the
rating methodology might otherwise indicate.

The affirmation of the company's SGL-2 speculative grade liquidity
rating reflects the company's good liquidity and the expectation
that internal cash flow, cash balances, and committed bank credit
availability are sufficient to cover all of the company's cash
needs over the coming year.

Headquartered in Atlanta, Georgia, Gold Kist is a major US chicken
processor and producer of value-added chicken products.


HARPER STREET: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Harper Street Realty Corp.
             151-21 Sixth Road
             Whitestone, New York 11357

Bankruptcy Case No.: 06-42966

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      30-01 Harper Street LLC                    06-42964

Chapter 11 Petition Date: August 18, 2006

Court: Eastern District of New York (Brooklyn)

Judge: Carla E. Craig

Debtor's Counsel: Matthew G. Roseman, Esq.
                  Cullen and Dykman Bleakley Platt LLP
                  100 Quentin Roosevelt Boulevard
                  Garden City, NY 11530
                  Tel: (516) 296-9106

                            Total Assets      Total Debts
                            ------------      -----------
Harper Street Realty Corp.    $9,609,000      $15,222,916
30-01 Harper Street LLC       $3,500,000      $18,196,673

A. Harper Street Realty Corp.'s 2 Largest Unsecured Creditors:

   Entity                               Claim Amount
   ------                               ------------
Stephan Kalaijian                           $500,000
140 East 72nd Street
New York, NY

Grace Asphalt, Inc.                         $116,558
151-21 Sixth Road
Whitestone, NY 11357

B. 30-01 Harper Street LLC's 3 Largest Unsecured Creditors:

   Entity                               Claim Amount
   ------                               ------------
Stephan Kalaijian                         $3,500,000
140 East 72nd Street
New York, NY

Grace Asphalt, Inc.                          $92,356
151-21 Sixth Road
Whitestone, NY 11357

Grace Industries, Inc.                        $3,635
151-21 Sixth Road
Whitestone, NY 11357


HARVEST OPERATIONS: Moody's Reviews Ratings and May Downgrade
-------------------------------------------------------------
Moody's Investor's Service placed Harvest Operations Corp.'s B2
corporate family rating and B3 rated $250 million 7.875% senior
unsecured notes due 2011 under review for a possible downgrade.

Harvest Energy Trust, the parent company of Operations announced
today that it has agreed to a CDN$1.6 billion purchase of the
"Come by Chance" refinery from North Atlantic Refining, Ltd. a
member of the Vitol Group.  Moody's ratings review for possible
downgrade will include a discussion with management regarding
its strategy, integration plans, and operation of the inherently
volatile, cyclical, and highly capital intensive refining assets
which has not been a core competency of the company and is being
acquired at a record multiple.  Conclusion of our ratings review
will include the impact of Moody's pending Loss Given Default
Methodology which will incorporate the pro forma liability
structure to determine the notching of the rated notes from
the Corporate Family Rating.

Moody's notes that pending the company's final financing package,
the trust is incurring very high initial leverage on complexity
barrels and daily throughput capacity, and at close would rank as
the highest leveraged refinery rated by Moody's.  In addition,
leverage in the company's E&P business on a Proved Developed
reserve base prior to this acquisition was full for the B2
ratings.  Pro forma for the Burchill acquisition which added
US$220 million of debt to the company, pro forma leverage on the
proven developed reserves rises to over CDN$8.00 per boe.  
Moreover, the company's capital draining unit trust structure
which makes regular distributions to the unit holders is already
challenging for an E&P company and is viewed by Moody's not to
be that compatible with the inherently volatile and capital
intensive refining business.

Moody's will also review the refinery's crude sourcing contracts
and evaluate the capabilities and operating history of the assets
as well as the size, scope, and timing of any planned capital
programs to be completed at the refinery which could carry
significant funding needs.

Moody's estimates that Harvest is paying a considerably high
multiple of over almost CDN$2,046 per complexity barrel for the
Newfoundland refinery, based on a nelson complexity rating of
6.8 and the company's stated throughput capacity of 115,000 bpd.
The refinery's hydrocracking configuration and location offers the
Trust a high degree of flexibility to source and process a wide
range of crude oils and feedstocks from Western Europe, Eastern
United States, Middle East, Russia, and Venezuela.  The refinery's
recently upgraded diesel unit has been producing ultra-low sulfur
diesel fuel and jet fuel marketed primarily in Boston, New York
city, and Newfoundland.

Harvest Operations Corp. is a wholly-owned subsidiary of Harvest
Energy Trust which is headquartered in Calgary, Alberta, Canada.


INN OF THE MOUNTAIN: S&P Downgrades Issuer Credit Rating to B-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Inn
of the Mountain Gods Resort and Casino, including its issuer
credit rating to 'B-' from 'B'.  The outlook is negative.

As of April 30, 2006, total debt outstanding was approximately
$215 million.  Mescalero, New Mexico-based IMG is an entity
formed to own and operate the casino and resort operations for
the Mescalero Apache Tribe.

The downgrade reflects:

   * disappointing earnings for the fourth quarter ended
     April 30, 2006;

   * a tight liquidity position; and

   * Standard & Poor's concerns regarding the one-time charges
     and reported internal control weaknesses.

While preliminary results indicate that first quarter financial
performance will be higher than the same prior-year period's, it
is unclear whether this is sustainable given a history of
inconsistent earnings performance.  

Revenues for IMG grew 22% for the fiscal 2006, resulting from
the opening of the new resort in the fourth quarter of the prior
fiscal year.  Despite double-digit revenue increases during fiscal
2006, EBITDA, adjusted for non-recurring charges declined about 5%
on higher general and administrative costs and some start-up
inefficiencies.  The EBITDA margin for the fiscal year was about
24%, down from 31% for fiscal 2005.


INTEGRATED HEALTH: U.S. Trustee Wants Reports Filed
---------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, asks the
U.S. Bankruptcy Court for the District of Delaware to:

   (i) compel Integrated Health Services, Inc., and its debtor-
       affiliates to file post-confirmation reports and pay
       quarterly fees; or in the alternative

  (ii) convert their Chapter 11 cases, pursuant to Section
       1112(b) of the Bankruptcy Code.

Ms. Stapleton says that the Reorganized Debtors failed to comply
with the United States Trustee Operating Guidelines and Reporting
Requirements for Chapter 11 cases.  The Reorganized Debtors have
not filed any post-effective date operating or disbursement
reports.

The failure to file the reports, inter alia, hinders the U.S.
Trustee's ability to monitor post-effective date operations and
whether the cases can be final decreed and properly closed,
Richard L. Schepacarter, Esq., trial attorney of the U.S.
Department of Justice, asserts.

In the absence of the reports, according to Mr. Schepacarter, it
is impossible to determine whether the Reorganized Debtors are
current with post-effective date obligations, paid the correct
amount of fees pursuant to 28 U.S.C. Section 1930(a)(6), or has
the present ability to "properly administer and final decree the
cases."

The U.S. Trustee adds that the Reorganized Debtors have not
properly paid quarterly fees and are in arrears through the second
quarter 2006 of about $874,500, based upon estimated
disbursements.

The U.S. Trustee was required to estimate the disbursements and
fees due to the Reorganized Debtors' failure to file timely post-
confirmation reports, Mr. Schepacarter explains.  The actual
quarterly fees may be greater based on the Reorganized Debtors'
actual disbursements.

The failure to file post-confirmation operating reports, comply
with Rule 2015(a) of the Federal Rules of Bankruptcy Procedure,
and pay quarterly fees is cause for the conversion of the case
pursuant to Section 1112(b), Mr. Schepacarter notes.

The U.S. Trustee reserves any and all rights, remedies and
obligations to, inter alia, complement, supplement, augment,
alter, substitute or modify its request and to conduct any and all
discovery as may be deemed necessary or as may be required, and to
assert other grounds as may become apparent.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its 437
debtor-affiliates filed for chapter 11 protection on Feb. 2, 2000
(Bankr. Del. Case No. 00-00389).  Rotech Medical Corporation and
its direct and indirect debtor-subsidiaries broke away from IHS
and emerged under their own plan of reorganization on March 26,
2002.  Abe Briarwood Corp. bought substantially all of IHS' assets
in 2003.  The Court confirmed IHS' Chapter 11 Plan on May 12,
2003, and that plan took effect Sept. 9, 2003.  Michael J. Crames,
Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at
Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS
Debtors.  On Sept. 30, 1999, the Debtors listed $3,595,614,000 in
consolidated assets and $4,123,876,000 in consolidated debts.  
(Integrated Health Bankruptcy News, Issue No. 107; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


INTEGRATED HEALTH: Court Extends Removal Period to November 3
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
the period within which IHS Liquidating LLC may file notices of
removal with respect to civil actions pending on its chapter 11
filing, through and including Nov. 3, 2006.

As reported in the Troubled Company Reporter on July 11, 2006,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, relates that IHS Liquidating is still
investigating disputed claims that are the subject of pending
prepetition actions.

The extension will provide IHS Liquidating an opportunity to make
more fully informed decisions concerning the removal of each
prepetition action and will assure that it does not forfeit its
valuable rights under Section 1452 of the Judicial Procedures
Code, Mr. Brady asserts.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 107; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


INTERNATIONAL MANAGEMENT: Ct. Okays Auction Management's Retention
------------------------------------------------------------------
The Honorable Paul W. Bonapfel of the U.S. Bankruptcy Court for
the Northern District of Georgia in Atlanta authorized William F.
Perkins, the chapter 11 trustee appointed in the bankruptcy cases
of International Management Associates LLC and its debtor-
affiliates to employ Auction Management Corp. as his auctioneer.

Auction Management will assist the Trustee in auctioning certain
of the Debtors' personal property in the Greater Atlanta area.

The Troubled Company Reporter reported on July 25, 2006, that
Auction Management's engagement will:

   -- not require an initial financial outlay from the Debtors'
      estates;

   -- be compensated solely out of sales proceeds the Trustee
      believes will be augmented as a result of the Firm's
      efforts; and

   -- allow the Trustee to market the Atlanta Assets without
      having to make initial provisions for a marketing budget.

Under Auction Management's employment terms, the Firm will be
compensated in this manner:

   a) With respect to sales of Atlanta Assets, the Firm will be
      paid a commission of 5% of the aggregate bid amount, plus
      the Firm will collect and retain the 10% buyer's premium
      added to all winning bids on the Atlanta Assets.

   b) In addition, the Firm has agreed to advance a $26,173
      marketing budget to be used to market the Atlanta Assets,
      with the marketing budget to be reimbursed to the Firm out
      of sales proceeds realized through the sale of Atlanta
      Assets.

Headquartered in Atlanta, Georgia, International Management
Associates, LLC -- http://www.imafinance.com/-- managed hedge  
funds for investors.  The company and nine of its affiliates filed
for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ga. Case
No. 06-62966).  David A. Geiger, Esq., and Dennis S. Meir, Esq.,
at Kilpatrick Stockton LLP, represent the Debtors in their
restructuring efforts.  James R. Sacca, Esq., at Greenberg
Traurig, LLP, and Mark S. Kaufman, Esq., at McKenna Long &
Aldridge, LLP, represent the Official Committee of Unsecured
Creditors.  When the Debtors filed for protection from their
creditors, they did not state their total assets but estimated
total debts to be more than $100 million.

On April 28, 2006, the Court appointed William F. Perkins as the
Debtors' chapter 11 trustee.  Kilpatrick Stockton LLP represents
Mr. Perkins.


INTERSTATE BAKERIES: JPMorgan Supports DIP Financing Amendment
--------------------------------------------------------------
JPMorgan Chase Bank, N.A., asks the U.S. Bankruptcy Court for the
Western District of Missouri to grant Interstate Bakeries
Corporation and its debtor-affiliates' request to amend their DIP
Agreement to, among other things:

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

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

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

JPMorgan Chase Bank, N.A., the administrative agent under the
Amended and Restated Credit Agreement dated April 25, 2002, tells
the Court that, together with the senior lenders, they have
consistently supported the Debtors' restructuring efforts.

In the latest fiscal year ended June 3, 2006, Interstate Bakeries
Corporation generated negative EBITDA of approximately $2,000,000,
Lisa A. Epps, Esq., in Spencer Fane Britt & Browne, LLP, in Kansas
City, Missouri, relates.

As of Aug. 18, 2006, the Debtors have spent more than $100,000,000
attempting to restructure their operations, yet they have been
unable to improve performance, Ms. Epps notes.  The Debtors'
efforts have come at the expense of sales, with a decline of more
than 11% in sales since fiscal year 2004, Ms. Epps adds.  JPMorgan
is concerned that the deterioration will continue for the
foreseeable future.

In light of these results, the Debtors have advised of the
importance for near-term emergence from Chapter 11 to address
their declining performance.  To that end, JPMorgan supports the
Debtors' request for an extension of the exclusive period as
appropriate to allow them, among others, to attempt to obtain
exit financing to support a plan of reorganization that will
provide for the repayment in full, in cash, of the Prepetition
Credit Agreement obligations.

If the Debtors cannot achieve financing transactions to provide
capital for the repayment of the Prepetition Credit Agreement,
JPMorgan expects the Debtors to consider other strategic
alternatives, including asset sales, to raise enough cash to pay
out the Prepetition Credit Agreement obligations.

If subsequent events later reveal that those transactions are not
feasible, JPMorgan intends to seek appropriate relief from the
Court.

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
Sept. 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 Aug. 15, 2014 on Aug. 12, 2004)
in total debts. (Interstate Bakeries Bankruptcy News, Issue No.
46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


INTERSTATE BAKERIES: Sells Matteson Property to Realty America
--------------------------------------------------------------
Judge Venters of the U.S. Bankruptcy Court for the Western
District of Missouri authorizes Interstate Bakeries Corporation
and its debtor-affiliates to sell their interest in a property
located at 21403 Cicero Avenue, in Matteson, Illinois, to Realty
America Group, LP, free and clear of all liens, claims, and
encumbrances.

The Debtors are directed to pay:

   -- $39,782 and $77,639 in principal for real property taxes
      that are due and owing for 2003 and 2004 tax years; and

   -- interest of the real property taxes at a 6% annual rate
      from the date the statutory interest began to accrue on the
      past due balance.

The Court clarifies that the Sale Order does not modify the
Debtors' obligations under the Successful Sale Agreement to
pro-rate taxes for the 2005 and 2006 tax years.

As reported in the Troubled Company Reporter on Aug. 2, 2006, the
Property is comprised of several parcels of commercial real
estate currently used as a depot and thrift store, and includes
about 2.82 acres of land with an approximately 13,435 square feet
building.  The Property is adjacent to the Lincoln Mall, which is
redeveloped by Realty America with assistance provided by the
Village of Matteson in the form of tax increment financing
initiatives and other entitlements.

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. 46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


JEAN COUTU: Inks $3.4 Billion Merger Transaction with Rite Aid
--------------------------------------------------------------
The Jean Coutu Group (PJC) Inc. and Rite Aid Corporation entered
into a definitive agreement, on Aug. 24, 2006, on a transaction in
which its US subsidiary, The Jean Coutu Group (PJC) USA Inc., will
be merged into Rite Aid, strengthening Rite Aid's position as the
third largest national drugstore chain in the United States and
creating the largest drugstore chain on the East Coast.  The Jean
Coutu Group (PJC) USA includes 1,858 drugstores (337 Brooks stores
and 1,521 Eckerd stores) and six distribution centers, all located
primarily on the East Coast and in the Mid-Atlantic states.  All
of the stores will be re-branded Rite Aid and Rite Aid
headquarters will remain in Camp Hill, Pennsylvania.

Under the transaction, The Jean Coutu Group will receive
$1.45 billion in cash, subject to customary working capital
adjustments, and 250 million shares of Rite Aid common stock
giving it a 32.0% common equity interest and 30.2% of the voting
power in the expanded Rite Aid.  Rite Aid also intends to assume
$850 million of The Jean Coutu Group's long-term debt.  Based on
Rite Aid's prior one-month average closing share price, the
transaction would be valued at approximately $3.4 billion.  The
Jean Coutu Group will continue to independently act as franchisor
and distributor for its Canadian network currently consisting of
327 franchised drugstores located in three provinces.

Upon completion of the transaction, which has been approved by the
Boards of Directors of both companies, there will be approximately
5,000 Rite Aid stores in 31 states and the District of Columbia,
with coverage on both the East and West coasts.  The stores Rite
Aid will acquire are located in 18 states, with Rite Aid currently
operating in 14 of the states and adding Massachusetts, Rhode
Island, South Carolina and North Carolina to its national
footprint.  The combined fiscal 2006 revenues of Rite Aid and The
Jean Coutu Group (PJC) USA were approximately $26.8 billion.

                         Executive Team

Mary Sammons will continue to lead Rite Aid as President and CEO
while also becoming Chairman of the Rite Aid Board of Directors.  
Michel Coutu, currently President of The Jean Coutu Group's U.S.
operations, will become Co-Chairman of Rite Aid's Board and a
member of the Board's Executive Committee.  The Jean Coutu Group
will name three other independent members to a 14-person Rite Aid
Board, including Francois J. Coutu, Vice Chairman of The Jean
Coutu Group, Andre Belzile, Senior Vice President of Finance and
Corporate Affairs of The Jean Coutu Group, and Dennis Wood, one of
the independent members of The Jean Coutu Group's Board of
Directors.  Robert G. Miller, the current Rite Aid Chairman, will
continue to serve as a Director.  Also, Pierre Legault, The Jean
Coutu Group's Executive Vice President who was recently appointed
to run its U.S. operations, will become Rite Aid Senior Executive
Vice President, Chief Administrative Officer, while Rite Aid's
current senior management team remains in place.  As CAO, Mr.
Legault will be responsible for finance, information technology
and real estate and will be a member of the integration leadership
team along with Ms. Sammons, Jim Mastrian, Rite Aid Chief
Operating Officer, and Chris Hall, Rite Aid Senior Vice President
of Strategic Business Development.

                            Synergies

Rite Aid expects the transaction will enable it to achieve
significant cost efficiencies in the areas of merchandising,
purchasing, advertising and distribution as well as administrative
expense.  Net synergies are estimated to be $150 million after the
first twelve months following the close, with some net synergies
experienced during the first twelve months.  The company said it
expects the transaction to be accretive 12 months after the close
by $.09 to $.15 per diluted share. The company said it expects the
transaction to be dilutive by $.03 to $.07 per diluted share for
the first twelve months because of integration and non-recurring
expenses associated with the transaction.  The estimate of
dilution for the first twelve months does not include a gain or
loss on any regulatory-required store dispositions.

                    Rite Aid Growth Strategy

"We're very excited about this unique opportunity that
dramatically accelerates our growth strategy, particularly in
areas where we've been focusing our new store development," Ms.
Sammons said.  "The Brooks and Eckerd stores are in good locations
with dedicated associates committed to serving their customers and
their communities.  Adding these stores to our company gives Rite
Aid scale comparable to our major drugstore competitors, and we
believe this enables us to compete more effectively in a highly
competitive business.  We also look forward to bringing the Rite
Aid shopping experience to four new states while at the same time,
we continue our organic growth program with our very successful
"Customer World" store design.

"Successfully integrating these stores requires a strong
infrastructure like the one we have built at Rite Aid, with
information systems and a supply chain already capable of
supporting a significant increase in the number of stores.  We
believe the stores will also benefit from our proven front-end
merchandising programs, innovative advertising and promotion
programs, successful pharmacy marketing initiatives, solid
supplier relationships, state-of-the-art technology and strong
field structure.  With 70% of the acquired stores located in
states where we already operate, we expect to leverage our
systems, programs, best practices and executive management talent
to improve profitability by achieving substantial cost savings and
growing sales.  We'll also capitalize on our leadership team's
expertise in retail mergers and turnarounds and plan to make a
significant financial investment to improve the acquired stores.  
We look forward to working with Brooks and Eckerd associates to
effect a smooth transition and create a distinctive health and
wellness focused shopping experience second to none."

                The Jean Coutu's U.S. Investment

Jean Coutu, Chairman, President and CEO of The Jean Coutu Group,
said, "We see this transaction as a unique strategic opportunity
to optimize our U.S. presence by transforming our investment in a
regional drugstore chain into the leading ownership position in a
major national chain with the scale to better compete in the
growing U.S. drugstore industry.  The Jean Coutu Group and its
four designated Directors, who will be members of Rite Aid's
various Board committees, are proud to be associated with Rite
Aid's management.  We are confident that the team has the skills
and experience to leverage its capabilities across a larger
network.  At the same time, this transformational event allows us
to deleverage our balance sheet, maintain focus on our leading
Canadian franchise and should generate significant value for our
shareholders."

Rite Aid recently increased its sales guidance for fiscal 2007,
citing positive pharmacy same store sales trends and continuing
solid front end same-store sales gains.  The company also remains
on target with its organic new store development program with
plans to open 800 to 1,000 new stores over the next five years.

                       Transaction Funding

Rite Aid expects to finance the transaction with a combination of
existing excess cash on hand and through a combination of bank
borrowings, the issuance of debt securities, the expected
assumption of previously issued Jean Coutu Group 8.5% Senior
Subordinated Notes in the amount of $850 million, subject to
satisfaction of certain conditions, and the issuance of 250
million shares of common stock.  In the event the $850 million
Senior Subordinated Notes are not assumed by Rite Aid, the cash
paid would increase to $2.3 billion and Rite Aid would issue
additional debt securities to fund the increased cash
consideration.  A financing commitment has been obtained from
Citigroup North America, Inc. and Citigroup Global Markets Inc.

                   Pro Forma Financial Impact

The investment by The Jean Coutu Group in Rite Aid will be
accounted for using the equity method in future periods.  US
operations will not be presented as discontinued operations
considering the continuing involvement by the company in the
business.  The estimated proceeds on disposal of $3.4 billion are
subject to fluctuation due to changes in the US dollar per
Canadian dollar exchange rate and the Rite Aid share price until
the transaction closes.  Based on Rite Aid's prior one-month
average closing share price of $4.41 and an average exchange rate
of 0.8885 US dollars per Canadian dollar, The Jean Coutu Group
would have recorded an after-tax loss of $140 million from the
transaction.

Closing of the transaction is subject to review under the Hart-
Scott-Rodino Act, Rite Aid stockholder approval and other
customary closing conditions.  The closing date is dependent on
these activities but could be as early as Rite Aid's fiscal 2007
fourth quarter, which begins Dec. 3, 2006 and ends March 3, 2007,
and The Jean Coutu Group's fiscal 2007 third quarter, which begins
on Nov. 26, 2006 and ends Feb. 24, 2007.

The Brooks stores Rite Aid will acquire are located in Maine,
Vermont, New Hampshire, Massachusetts, Rhode Island and
Connecticut.  The Eckerd stores Rite Aid will acquire are located
in New York, Pennsylvania, New Jersey, Maryland, Delaware,
Virginia, West Virginia, Tennessee, North Carolina, South
Carolina, Georgia and Ohio.  The distribution centers Rite Aid
will acquire are located in Atlanta, Georgia; Charlotte, North
Carolina; Philadelphia, Pennsylvania; Dayville, Connecticut;
Syracuse, New York and Bohemia, New York.  The transaction also
includes The Jean Coutu Group (PJC) USA's corporate headquarters
in Warwick, Rhode Island.

Financial advisors for Rite Aid are Citigroup Corporate and
Investment Banking and Rothschild; exclusive financial advisor for
The Jean Coutu Group is J.P. Morgan Securities, Inc.

                         About Rite Aid

Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation
(NYSE, PCX: RAD) -- http://www.riteaid.com/-- runs a drugstore  
chain with 2005 annual revenues of $17.3 billion and 3,320 stores
in 27 states and the District of Columbia.

                        About Jean Coutu

Headquartered in Longueuil, Quebec, The Jean Coutu Group Inc.
(TSX: PJC.A) -- http://www.jeancoutu.com/-- is the fourth largest  
drugstore chain in North America and the second largest in both
the eastern United States and Canada.  The Company and its
combined network of 2,175 corporate and franchised drugstores
(under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu,
PJC Clinique and PJC Sante Beaute) employ more than 60,000 people.

The Jean Coutu Group's United States operations employ 46,000
people and comprise 1,853 corporate owned stores located in 18
states of the Northeastern, mid-Atlantic and Southeastern United
States.  The Jean Coutu Group's Canadian operations and franchised
drugstores in its network employ over 14,000 people and comprise
322 PJC Jean Coutu franchised stores in Quebec, New Brunswick and
Ontario.


JEAN COUTU: Stores Sale Cues S&P to Put Ratings on Positive Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' long-term corporate credit rating, on Montreal, Quebec-
based Jean Coutu Group (PJC) Inc. on CreditWatch with positive
implications, meaning that the ratings could be raised or affirmed
following the completion of its review.

At the same time, the ratings on PJC's $850 8.5% million senior
subordinated notes were placed on CreditWatch with developing
implications.

"The CreditWatch placement follows Rite Aid Corp.'s announcement
that it will purchase PJC's Brooks and Eckerd 1,858-store pharmacy
chains in the U.S. for about $3.4 billion in cash and stock," said
Standard & Poor's credit analyst Don Povilaitis.

The purchase is also expected to result in Rite Aid assuming PJC's
$850 million 8.5% senior subordinated notes, in which case the
rating on the notes could be lowered.  Conversely, if the notes
remain with PJC, the rating on the notes could be raised.

Rite Aid will also assume substantial operating leases associated
with the Brooks Eckerd chain.  As of the end of the fourth quarter
(ended May 27, 2006), PJC had about $2.4 billion in total reported
debt.

Although the credit impact to PJC is positive, given that the sale
proceeds will allow for the company's net debt position to be
close to zero following the repayment of its revolving credit
facilities and senior unsecured notes, PJC will become a much
smaller regional Canadian operator with a 32% equity interest in
Rite-Aid (B+/Watch Neg/B-2).  PJC's Canadian franchising revenues
were CDN$1.6 billion (about $1.44 billion) in fiscal 2006.

The transaction is expected to close within PJC's fiscal 2007
year, contingent upon regulatory and shareholder approval.

Standard & Poor's will review PJC's financial plans with
management before resolving the CreditWatch.


KMART CORP: Court Approves Pact Allowing Roldan to Pursue PI Suit
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
approved a stipulation between Kmart Corporation and Carmen
Dominguez Roldan and her husband Francisco Martinez Arias
lifting the automatic stay and injunction provision under Kmart's
Plan of Reorganization to permit the litigation captioned Carmen
Dominguez v. Kmart, Case No. DKDP01-0313, to proceed and continue
to a final judgment or settlement.

Carmen Roldan and Francisco Arias filed Claim No. 30383 against
the Kmart and its debtor-affiliates for personal injury.  The
Debtors objected to the Claim.  Ms. Roldan and Mr. Arias then
asked the Court to either allow their Claim or lift the automatic
stay to allow them to pursue their Claim.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


KMART CORP: Court Okays Pact Allowing Holmes, et al.'s PI Suit
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
signed an agreed order between Kmart Corporation and its debtor-
affiliates and Eric and Natasha Holmes partially lifting the
automatic stay and injunction provision under the Debtors' Plan of
Reorganization to permit the litigation captioned Holmes, et al. v
Kmart, et al., Case No. 2866, to proceed to final judgment or
settlement.  

Eric and Natosha Holmes, as parents and natural guardians of
Tyron Rice, filed Claim No. 27068 against Kmart for severe and
permanent injuries Tyron Rice suffered when he was shot in the eye
by an airgun sold by Kmart on Oct. 30, 2001.  They then asked the
Court to allow them to pursue their Claim in a separate
litigation.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


LARRY'S MARKETS: Selling Three Grocery Stores for $6.2 Million
--------------------------------------------------------------
Larry's Markets, Inc., will sell three of its grocery stores for
$6.2 million, Puget Sound Business Journal reports.

The Company's original plan was to sell its five grocery stores to
LM Acquisition Partners LLC for $5.5 million but after this week's
negotiations, the Company accepted the offer of:

   -- Metropolitan Market to buy the Company's store in Seattle's
      Queen Anne area and Larry's Catering;

   -- TRF Northwest Inc. to buy the Larry's in Bellevue; and

   -- TRF Pacific LLC to buy the Larry's in Totem Lake/Redmond.

According to the news, the future remains uncertain for the
Larry's stores located at the Oak Tree Plaza in North Seattle,
Tukwila and Kirkland.

LM Acquisition was reported that it didn't participate in this
week's bidding.

The latest deal must be approved by the U.S. Bankruptcy Court for
the Western District of Washington.

Headquartered in Kirkland, Washington, Larry's Markets, Inc. --
http://www.larrysmarkets.com/-- operates several supermarkets and  
department stores in the U.S. Northwest.  The company filed for
chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case No.
06-11378).  Armand J. Kornfeld, Esq., at Bush Strout & Kornfeld,
represents the Debtor.  The Official Committee of Unsecured
Creditors is represented by Marc L. Barreca, Esq., and Michael J.
Gearin, Esq., at Preston Gates & Ellis LLP.  When the Debtor filed
for protection from its creditors, it listed total assets of
$12,574,695 and total debts of $21,489,800.


LIN TV: High Leverage Prompts S&P to Revise Outlook to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
LIN TV Corp. (B+/Negative/--) to negative from stable.  

The Providence, Rhode Island-based TV operator had approximately
$989 million in total debt outstanding as of June 30, 2006.

"The outlook revision reflects our concern about LIN's continued
high leverage resulting from debt-financed acquisitions and
declining profits," said Standard & Poor's credit analyst Heather
M. Goodchild.

The rating on LIN reflects:

   * financial risk from debt-financed TV station expansion;
   * ongoing acquisitions;
   * increasing competition for advertisers and audiences; and
   * advertising cyclicality.

These factors are only partially offset by the company's:

   * competitive positions in midsize TV markets;
   * broadcasting's good margin and free cash flow potential; and
   * relatively resilient station asset values.


MARSH & MCLENNAN: S&P Puts BB+ Preferred Stock Rating on New Shelf
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BBB'
senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock
ratings to Marsh & McLennan Cos.'s (NYSE:MMC) recently filed
unlimited universal shelf.

Standard & Poor's also affirmed its 'BBB' counterparty credit
rating on MMC.

The outlook remains negative.

The counterparty credit rating on MMC is based on the company's
Strong -- though markedly diminished -- competitive position.
Offsetting these strengths are the material competitive and
operational uncertainties resulting from the allegations of bid
rigging and other anticompetitive actions referred to in the
settlement with the New York Attorney General and Superintendent
of Insurance.

Although management has been proactive in addressing these
uncertainties, the ratings and outlook, in addition to reflecting
the potential for developments from ongoing regulatory
investigations to hamper MMC's competitive position and
prospective profitability, reflect the execution risks of
implementing management's new business model, which addresses the
elimination of contingent commissions.

Although MMC's financial flexibility has materially improved in
2005, it remains a weakness to the rating.  In summary, MMC is
faced with the challenge of rebalancing its financial leverage
with a diminished competitive and operating profile.

The negative outlook reflects continued uncertainties, heightened
by a disadvantageous medium-term debt structure ($1 billion of
debt due in 2007).  These uncertainties include:

   * significant concerns surrounding employee and client
     retention;

   * material execution risk because of the adoption of Marsh's
     new business model incorporating the elimination of
     contingent commissions; and

   * the potential for ongoing regulatory investigations to hamper
     MMC's competitive position.

Standard & Poor's expects that Marsh's new business model will
address the elimination of contingent commissions and concerns
surrounding employee and client retention by implementing cost and
revenue initiatives.

Operating performance in 2006, particularly in the latter half, is
expected to materially improve compared with 2005.  This continual
improvement will be driven by the immediate realization of cost-
control initiatives supplemented by organic growth steadily
improving to the level of MMC's peer group by late-2006.

"If MMC is successful in improving operating performance and
organic growth as outlined in our expectations, we will consider
revising the outlook to stable," said Standard & Poor's credit
analyst Steven Ader.

"Conversely, if MMC is unsuccessful in meeting our expectations or
if ongoing regulatory investigations materially affect MMC's
competitive or financial position, we will consider lowering the
rating."


MASTERCRAFT INTERIORS: Has Access to $1.5 Million BofA DIP Loan
----------------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
District of Maryland authorized, on a final basis, Mastercraft
Interiors Ltd. and its affiliate, Kimels of Rockville, Inc., to
obtain up to $1.5 million of debtor-in-possession loans from Bank
of America N.A.

To secure repayment of the DIP loans, the Debtors grant BofA a
security interest in and lien on all of their prepetition and
postpetition assets, except for their lease at Fair Oaks Mall in
Fairfax, Virginia.  BofA is also granted a superpriority claim
over all other administrative expenses subject to a $150,000 carve
out.

The Debtors also owe BofA approximately $10.4 million on account
of prepetition revolving and term loans.  The Court allows  the
Debtors to use cash collateral securing repayment of the Debtors'
prepetition and postpetition debts to BofA pursuant to a budget.  
A copy of the budget is available for free at:

             http://researcharchives.com/t/s?104b

As adequate protection for any diminution in value of its
collateral, BofA is granted replacement liens on its prepetition
collateral.

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


MESABA AVIATION: Bankruptcy Contributes to MAIR's $2.5 Mil. Loss
----------------------------------------------------------------
MAIR Holdings, Inc.'s financial results for the first quarter of
fiscal 2007 reflect the ongoing expenses associated with Mesaba
Aviation, Inc.'s bankruptcy, according to MAIR President and
Chief Executive Officer Paul F. Foley.

MAIR reported a net loss of $2,500,000, or $0.12 per diluted
share, for the quarter ended June 30, 2006, compared to net
income of $1,200,000, or $0.06 per share, during the same quarter
last year.

Because Mesaba is projecting significant losses in fiscal 2007,
MAIR did not record Mesaba's equity income at June 30, 2006, Mr.
Foley says.

Due to the reduction of its fleet by 19 Avros and 13 Saabs year-
over-year, Mesaba reported an operating loss of $1,600,000 for
the first quarter of fiscal 2007 compared to an operating loss of
$100,000 for the first quarter of fiscal 2006.  Mesaba also
reported net income of $100,000 in the first quarter of fiscal
2007 and 2006.

Mesaba's net income in fiscal 2007 was primarily the result of a
$1,800,000 credit to reorganization items due to the reversal of
$5,200,000 for maintenance associated with returned Avro
aircraft, Mr. Foley explains.

                      About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


MESABA AVIATION: Reports July 2006 Traffic Results
--------------------------------------------------
Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings,
Inc. (NASDAQ:MAIR), reported capacity and traffic for July 2006.

Mesaba Aviation flew 147.0 million available seat miles (ASMs) in
July, which was down 42.1% year over year.  Mesaba Aviation
carried 346,342 passengers in the month, which was down 35.4%
year over year generating 100.5 million revenue passenger miles
(RPMs).  Passenger load factor, representing capacity filled,
decreased 2.2 points year over year to 68.3%.

Separately, Mesaba Aviation also disclosed its operating
performance for the month of July:

                            Mesaba Airlines
                      July Operating Performance

                                  2006         2005     Change
                                  ----         ----     ------
Completion Factor                98.1%        98.0%     0.1 pts.
Arrivals within 14 minutes       82.1%        79.5%     2.6 pts.

                             Mesaba Airlines
                           July Traffic Results

                                FY 2007      FY 2006     Change
                                -------      -------     ------
ASMs (000)                     147,048      253,930    (42.1%)
RPMs (000)                     100,464      179,056    (43.9%)
Load Factor                      68.3%        70.5%    (2.2 pts.)
Passengers                     346,342      535,746    (35.4%)

  Fiscal Year to Date (4 Months)
  ------------------------------

                                FY 2007      FY 2006     Change
                                -------      -------     ------
ASMs (000)                     653,184    1,019,949    (36.0%)
RPMs (000)                     466,391      693,866    (32.8%)
Load Factor                      71.4%        68.0%      3.4 pts.
Passengers                   1,483,751    2,036,791    (27.2%)

  Calendar Year to Date (7 Months)
  -------------------------------

                                CY 2006      CY 2005     Change
                                -------      -------     ------
ASMs (000)                   1,212,073    1,776,629    (31.8%)
RPMs (000)                     837,521    1,169,287    (28.4%)
Load Factor                      69.1%        65.8%      3.3 pts.
Passengers                   2,565,377    3,370,301    (23.9%)


                      About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


MIRANT: Asset Recovery Wants Foster Wheeler's $2M Claim Disallowed
------------------------------------------------------------------
Foster Wheeler Energy Corporation entered into agreements for
purchase and sale of equipment with:

    (1) Mirant Kendall, LLC, on February 26, 2001; and
    (2) Mint Farm Generation, LLC, on June 3, 2002.

Foster Wheeler was contracted to design and provide equipment and
related services in connection with Mirant Kendall's and Mint
Farm's construction projects at the Debtors' power plants.

Foster Wheeler was to receive $12,132,000 as compensation under
the Kendall Agreement.  As of the Petition Date, Mirant Kendall
had paid Foster Wheeler $11,716,821 as compensation.  On the
other hand, Foster Wheeler was to receive $14,060,000 as
compensation under the Mint Farm Agreement.

                        Incomplete Projects

Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, relates that Mirant Kendall incurred approximately
$1,900,000 in damages as a result of Foster Wheeler's delay.

Foster Wheeler did not complete the project at the Mint Farm
facility.  Ms. Campbell notes that Mint Farm has prepaid Foster
Wheeler's goods and services.  Foster Wheeler, therefore, owes
Mint Farm more than $800,000.

On May 23, 2003, Foster Wheeler filed a complaint seeking a
mechanic's lien in the Superior Court for the Commonwealth of
Massachusetts.  The State Proceeding was automatically stayed
when Mirant Kendall filed for bankruptcy.  Foster Wheeler filed a
notice in the Bankruptcy Court reserving its rights with respect
to the mechanic's lien.

                      Foster Wheeler's Claims

Foster Wheeler filed Claim No. 5225 against Mirant Kendall
alleging a secured claim for $1,373,115 representing the
remaining amounts owing under the 2001 Agreement.

Foster Wheeler filed Claim No. 5359 against Mint Farm seeking
payment for $804,883 owing under the 2002 Agreement.

Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, asserts that after application of the credits Mint Farm
has accrued and the damages that Mirant Kendall suffered due to
Foster Wheeler's delays, no further amounts remain owing to
Foster Wheeler under both Agreements.

As the credits owed to Mint Farm and Mirant Kendall exceed the
amounts of the Claims, to require the Debtors to pay for the
Claims would result in a windfall to Foster Wheeler, Ms. Campbell
points out.

Therefore, MC Asset Recovery, LLC, the Debtors' successor-in-
interest, asks the U.S. Bankruptcy Court for the Northern District
of Texas to disallow or reduce Foster Wheeler's Claims as
appropriate pursuant to the doctrines of setoff and recoupment.

                          About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006.  (Mirant
Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC.  The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed.  Additionally, Mirant's Speculative Grade Liquidity
rating was revised to SGL-2 from SGL-1.  The rating outlook is
stable for Mirant, MNA, MAG, and MIRMA.

Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2.  Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1.  Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.

Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.

Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative.  Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.

Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.


MIRANT CORP: Files Adversary Case vs. Three Environmental NGOs
--------------------------------------------------------------
Mirant Corporation, Mirant Mid-Atlantic, LLC, and Mirant Chalk
Point, LLC, received on June 15, 2006, a notice from
Environmental Integrity Project, a non-government organization,
"threatening" to sue the Reorganized Debtors in federal court due
to certain discharged violations.

EIP asserts, on its behalf and on behalf of other private, non-
government and nonprofit organizations, that the Reorganized
Debtors violated the Clear Air Act due to emissions at Mirant
Chalk Point's power units, which "repeatedly violated opacity
limits under federal and state law."  The emissions occurred
between January 2002 and March 2006,

The other NGOs are:

    (1) Chesapeake Climate Action Network
    (2) Patuxent Riverkeeper
    (3) Environment Maryland Research and Policy Center

Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
relates that EIP and CCAN participated directly in the Debtors'
cases, including by objecting to the Plan.  Patuxent and EM also
participated in the bankruptcy cases to some degree, Mr. Peck
adds.

To prevent unnecessary litigation, the Reorganized Debtors
responded to each of the NGOs indicating that:

    * the Notice constituted a violation of the Plan, the
      Confirmation Order and Sections 524 and 1141 of the
      Bankruptcy Code; and

    * the failure to withdraw the Notice and the commencement of
      the litigation threatened in the Notice would also
      constitute violations.

But EPI, et al., refused to withdraw the Notice.  The period
of the impending action under the Clean Air Act runs until
August 14, 2006.

Mr. Peck notes that a large bulk of the "Alleged Violations"
occurred prior to the Effective Date.   Hence, those violations
have been discharged under the Plan, Mr. Peck asserts.

Mr. Peck points out that the Confirmation Order includes a
general discharge, which states that on the Effective Date of the
Plan "all Claims against and Equity Interests in the Debtors and
the Debtors-in-Possession [will] be satisfied, discharged and
released in full."

Additionally, the Confirmation Order includes a discharge
provision specifically negotiated for by the EIP and the CCAN,
Mr. Peck says.

The Chesapeake Discharge Provision provides that the rights of
the Chesapeake Bay Foundation, the EIP and the CCAN, if any, to
commence an action as a private attorney general under any
federal, state, or local environmental law or regulation
regarding the Debtors' postpetition acts or omissions are not
affected or impaired by the Plan or the Confirmation Order except
to the extent that any action gives rise to a Claim or debt
subject to discharge under Section 1141 of the Bankruptcy Code.

Mr. Peck points out that the deadline to file an administrative
claim against the Debtors expired on January 24, 2006.  At no
time did the NGOs file a proof of claim or an administrative
claim, Mr. Peck notes.

Mr. Peck adds that the Confirmation Order included provisions
enjoining holders of claims against and equity interests in the
Debtors from pursuing any actions in existence at the Effective
Date and pursuing actions based on Claims in existence prior to
the Effective Date.

The Confirmation Order, Mr. Peck further notes, includes language
that tracks the General Injunction Provision and provides that
all persons and entities who have been, are, or may be holders of
Claims are permanently enjoined from, among other things:

    * commencing, conducting or continuing in any manner, directly
      or indirectly, any suit, action or other proceeding of any
      kind; or

    * enforcing, levying, attaching, collecting or otherwise
      recovering by any manner or means, whether directly or
      indirectly, any judgment, award, decree or order.

For these reasons, Mirant, MIRMA, and Mirant Chalk Point ask
Judge Lynn to:

    (a) rule that:

        (1) the discharged violations and any liability of the
            Reorganized Debtors and the other New Mirant Entities
            were discharged by the Plan, the Confirmation Order
            and the Bankruptcy Code;

        (2) the NGOs violated the Plan, the Confirmation Order and
            the Bankruptcy Code by sending the Notice, and will
            violate the Plan, the Confirmation Order and the
            Bankruptcy Code if they commence any action in federal
            district court or otherwise to assert the "discharged
            violations";

        (3) the NGOs are in civil contempt for having violated the
            Confirmation Order by sending the Notice.  As a
            result, the Reorganized Debtors are entitled to money
            damages;

        (4) the Notice is deemed invalid as to all alleged
            violations; and

        (5) the NGOs may not bring a cause of action under the
            Clean Air Act with respect to post-Effective Date
            violations until a new notice is issued in accordance
            with Section 7604(a)(1) of the Clean Air Act;

    (b) issue a temporary restraining order, and preliminary
        and permanent injunction, enjoining the NGOs from
        commencing or continuing, or encouraging any person or
        entity to initiate or continue, any action based on the
        discharged violations and requiring the NGOs to
        immediately withdraw the Notice; and

    (c) award amounts owed to the Reorganized Debtors based on the
        NGOs' breach of the Plan, including, all attorney's fees
        incurred.

                          About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006.  (Mirant
Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC.  The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed.  Additionally, Mirant's Speculative Grade Liquidity
rating was revised to SGL-2 from SGL-1.  The rating outlook is
stable for Mirant, MNA, MAG, and MIRMA.

Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2.  Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1.  Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.

Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.

Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative.  Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.

Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.


MUSICLAND HOLDING: Committee Has Until November 3 to File Claim
---------------------------------------------------------------
In a Court-approved stipulation, Musicland Holding Corp. and its
debtor-affiliates, the Official Committee of Unsecured Creditors
and the Secured Trade Creditors stipulate that the Creditors
Committee's time to file any claim against the Secured Trade
Creditors under the DIP Order is further extended until Nov. 3,
2006.

The Creditors Committee reserves the right to seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission for examination of the Secured Trade Creditors,
provided that the Informal Committee of Secured Trade Vendors'
rights to object to the examination of its members are reserved.

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. 16; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


NATIONAL ENERGY: Littleton Electric Wants Claims Allowed
--------------------------------------------------------
Littleton Electric Light Department asks the U.S. Bankruptcy Court
for the Middle District of Maryland to:

   (1) grant summary judgment in its favor on the issue of
       whether its claims against NEGT Energy Trading Holdings
       Corporation and NEGT Energy Trading - Power, L.P. were
       timely filed and allow the Claims for purposes of
       distribution; and

   (2) overrule the Debtors' objection to its Claims.

Littleton Electric asserts claims against the Debtors in
connection with the rejection of their prepetition contracts:

    -- a Power Supply Agreement for Firm Energy dated March 14,
       2002, between Littleton and ET Power,

    -- a Power Supply Agreement for Installed Capacity dated
       May 29, 2002, between Littleton and ET Power, and

    -- a Guarantee dated March 14, 2002, between Littleton and ET
       Holdings.

The ET Debtors previously objected to four proofs of claim filed
by Littleton because the claims were filed nearly 17 months after
the bar date for filing proofs of claim in their Chapter 11 cases:

               Claim No.   Claim Amount
               ---------   ------------
                  738      $11,024,377
                  739       11,024,377
                  740        1,701,315
                  741        1,701,315

Nathan F. Coco, Esq., at McDermott, Will & Emery LLP in Chicago,
Illinois, asserts that the Littleton Claims were timely filed and
the Contracts were executory as a matter of law on numerous legal
grounds.

Mr. Coco explains that the Littleton Contracts were executory as
of the Debtors' bankruptcy filing as each party owed at least one
continuing material duty to the other party under each of the
Contracts.  For example, Mr. Coco notes that under the Firm Energy
Contract, ET Power's obligation to deliver power and Littleton's
obligation to receive and pay for the power commenced on Jan. 1,
2004, after the Debtors' bankruptcy filing and will continue
through Dec. 31, 2011, which proves the Firm Energy Contract's
executory status as of the Debtors' bankruptcy filing.

Moreover, the Debtors did not move to reject, and the Court did
not approve the rejection of the Littleton Contracts at any point
prior to confirmation of the ET Debtors' Amended Liquidation
Plan, which means the Contracts remained executory contracts
throughout the course of the ET Debtors' Chapter 11 cases until
they were ultimately deemed rejected pursuant to the Court's
Confirmation Order and Section 6.1 of the confirmed Plan,
Mr. Coco adds.

Mr. Coco asserts that applicable bar date for claims arising from
the rejection of an executory contract pursuant to the Plan and
Confirmation Order is June 1, 2005, not Jan. 9, 2004, as asserted
by the Debtors.

The ET Debtors cite in its Objection the provision of the
Confirmation Order, which provides that "Except as expressly
authorized herein, a Claim may not be filed after the
Confirmation Date without the prior authorization of the
Bankruptcy Court, and may be amended after the Confirmation Date
solely to decrease the amount of the Claims."

However, Mr. Coco points out, the Debtors ignore the opening
clause, "except as expressly authorized herein" and fail to
mention either provisions in the Confirmation Order or the Plan,
each of which expressly establishes a separate deadline for
rejection damage claims arising from a contract that is deemed
rejected pursuant to the Confirmation Order and the Liquidating
Plan.

Moreover, according to Mr. Coco, the Court's order establishing
the General Claims Bar Date provides that the Confirmation Order
is an Order authorizing the rejection of an executory contract
providing for a different bar date in which case a date will
govern in all respects.

Hence, Mr. Coco asserts, the specific bar date for rejection
damage claims under the Confirmation Order and the Plan should be
30 days after the effective date of the Plan.  The Plan became
effective on May 2, 2005, while Littleton filed its Claims on
May 27, 2005, well before the June 1, 2005 bar date.

Additionally, Mr. Coco argues, the Debtors are barred from
raising any new objections to the Littleton Claims other than on
the grounds of timeliness, which the Debtors did by questioning
the executory nature of the Contracts from which the Claims are
based.  

Pursuant to the Confirmation Order, the last date by which the
Debtors could file any objections to the allowance of the
Littleton Claims was September 24, 2005.  Mr. Coco notes that the
Debtors either declined or failed to seek an extension of the
objection deadline.  Any new or additional objections that the
Debtors could have raised to the Claims after September 24 are
barred under the Confirmation Order, he asserts.

                      About National Energy

Bethesda, MD-based PG&E National Energy Group Inc. nka National
Energy & Gas Transmission Inc. -- http://www.pge.com/--
develops, builds, owns and operates electric generating and
natural gas pipeline facilities and provides energy trading,
marketing and risk-management services.  The Company and six of
its affiliates filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459).  When the Company filed for
protection from its creditors, it listed $7,613,000,000 in assets
and $9,062,000,000 in debts.  NEGT received bankruptcy court
approval of its reorganization plan in May 2004, and emerged from
bankruptcy on Oct. 29, 2004.  

NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT
Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT
Energy Trading - Power, L.P., Energy Services Ventures, Inc., and
Quantum Ventures -- filed their First Amended Plan and Disclosure
Statement on March 3, 2005, which was confirmed on Apr. 19, 2005.  
Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie
Farr & Gallagher LLP represent the ET Debtors.  (PG&E National
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NATIONAL ENERGY: Wants Settlement Pact with ET Power & DTE Okayed
-----------------------------------------------------------------
National Energy & Gas Transmission Inc. and NEGT Energy Trading -
Power L.P. ask the U.S. Bankruptcy Court for the Middle District
of Maryland to approve the settlement agreement they entered into
with DTE Georgetown L.P.

On July 6, 2005, ET Power filed a complaint to avoid preferential
and fraudulent transfers and to recover property, amounting to
$31,191,382, against DTE Georgetown pursuant to Sections 547, 548
and 550 of the Bankruptcy Court.

Representing ET Power, Dennis J. Shaffer, Esq., Willkie Farr &
Gallagher LLP, in New York, recounts that ET Power and DTE
Georgetown were parties to a Tolling Agreement dated May 23,
2000.  On May 24, 2000, PG&E Corporation entered into a Guarantee
Agreement in favor of DTE pursuant to which, among other things,
PG&E, as the assignor, guaranteed to DTE the payment when due of
all amounts payable under the Tolling Agreement, subject to
certain limitations.  

On Jan. 19, 2001, PG&E Corporation entered into an Assignment and
Assumption Agreement with NEGT, as successor-in-interest to PG&E
Gas Transmission, Northwest Corporation.  Pursuant to the
agreement, NEGT, among others, assumed the due and punctual
performance, discharge and observation of all of PG&E Corp.'s
obligations in, related to, or arising under the Guarantee.

ET Power, DTE and NEGT entered into a Termination Agreement dated
as of June 24, 2003, to terminate and extinguish all of their
respective obligations and liabilities under and in respect of
the Tolling Contract.  In consideration of the Termination
Agreement, ET Power agreed to pay $30,716,800 to DTE as
Termination Payments.

During the 90-day period prior to its bankruptcy filing, ET Power
paid to DTE the Termination Payments and other payments pursuant
to the Tolling Contract, which all totaled $31,191,382.

DTE has asserted that it has defenses to the claims raised by ET
Power's avoidance action, including its defense that the
Guarantee covers its liability, if any, of up to $24,000,000.

ET Power; Charles R. Goldstein, the Plan Administrator for ET
Power's bankruptcy estate; NEGT; and DTE reached a settlement
agreement to resolve the Avoidance Action.

The parties agree that:

   (1) NEGT will pay $10,916,984 to ET Power's estate as initial
       settlement payment;

   (2) in addition to the initial settlement payment, there will
       be a settlement payment adjustment based upon the actual
       distribution to unsecured creditors;

   (3) ET will dismiss with prejudice the Avoidance Action;

   (4) the parties will release and waive each other from all
       claims relating to the Guarantee Contract and the
       Avoidance Action; and

   (5) the waivers by DTE and NEGT of any claims to which they
       would be entitled under Section 502(h) that have value to
       the ET Power's estate is expected to be $5,500,000.

ET Power and NEGT each believes that the terms of the settlement
are fair and equitable and in the best interests of their
respective estates.  The settlement provides a negotiated
resolution of the issues between the Parties while avoiding
costs, uncertainties and delays of litigation and collection.

                      About National Energy

Bethesda, MD-based PG&E National Energy Group Inc. nka National
Energy & Gas Transmission Inc. -- http://www.pge.com/--
develops, builds, owns and operates electric generating and
natural gas pipeline facilities and provides energy trading,
marketing and risk-management services.  The Company and six of
its affiliates filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459).  When the Company filed for
protection from its creditors, it listed $7,613,000,000 in assets
and $9,062,000,000 in debts.  NEGT received bankruptcy court
approval of its reorganization plan in May 2004, and emerged from
bankruptcy on Oct. 29, 2004.  

NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT
Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT
Energy Trading - Power, L.P., Energy Services Ventures, Inc., and
Quantum Ventures -- filed their First Amended Plan and Disclosure
Statement on March 3, 2005, which was confirmed on Apr. 19, 2005.  
Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie
Farr & Gallagher LLP represent the ET Debtors.  (PG&E National
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NORTEL NETWORKS: Unit Inks New $1.6 Mil. Court Records System Pact
------------------------------------------------------------------
Nortel Government Solutions will continue development and
operational support of a sophisticated records system for the
Fairfax County, Virginia Circuit Court under a five-year agreement
valued at $1.6 million.

First implemented in 1996, the Fairfax County Courts Automated
Recording System provides more than 1,400 users each day with
automated access to more than 31 million recorded images and
corresponding indexes dating back to 1742.

CARS was initially designed for the Land Records department, but
later enhanced with the help of Nortel Government Solutions to
include the Judgments, Public Services and Probate Departments.
The system is now used by banks, title examiners, law offices,
mortgage companies and county agencies.

Nortel Government Solutions developed and implemented the
integrated scanning, point-of-sale, verification, storage and
retrieval capabilities that enable CARS to capture images and
index data.  The system has been maintained and enhanced by Nortel
Government Solutions for the past 10 years.

"CARS has been a big success for Fairfax County," Chuck Saffell,
chief executive officer, Nortel Government Solutions, said.  "This
new agreement is a testament to our performance in maintaining and
enhancing the system for the past 10 years, and a vote of
confidence in our ability to evolve and improve it with new
technology over the next five years."
   
               About Nortel Government Solutions

Headquartered in Fairfax, Virginia, Nortel Government Solutions
-- http://www.nortelgov.com-- is a U.S. company wholly-owned by  
Nortel(x).  It offers a one-stop shop for solutions designed to
improve workforce productivity, reduce operating costs, and
streamline inter-agency communications.  Nortel Government
Solutions is a network-centric integrator.

                     About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology  
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries.

                        *    *    *

As reported in the Troubled Company Reporter on July 10, 2006,
Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks Corporation,
and Nortel Networks Limited at B (low) along with the preferred
share ratings of Nortel Networks Limited at Pfd-5 (low).  All
trends are Stable.

DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb
Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt;
Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and
Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred
Shares.

As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family rating
of Nortel; assigned a B3 rating to the proposed US$2 billion
senior note issue; downgraded the US$200 million 6.875% Senior
Notes due 2023 and revised the outlook to stable from negative.

Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and assigned
its 'B-' senior unsecured debt rating to the company's proposed
$2 billion notes.  The outlook is stable.


NORTHWEST AIRLINES: Amadeus Wants Decision on Carrier Agreement
---------------------------------------------------------------
Amadeus IT Group, S.A., asks the U.S. Bankruptcy Court for the
Southern District of New York to compel Northwest Airlines, Inc.,
and its debtor-affiliates to assume or reject a Participating
Carrier Agreement dated Feb. 16, 1990, between Northwest Airlines,
Inc., and Amadeus Marketing S.A.R.L.

Pursuant to the Agreement, Northwest supplies fares, schedules
and other essential information, as well as a variety of
reservations services, to Amadeus IT's global distribution system
on terms that are non-discriminatory relative to information and
services provided to subscribers of other GDSs.

Subscribers to the Amadeus GDS are able to access the information
from computers that are linked to the Amadeus GDS, make bookings
on the participating airline, and take advantage of other travel
services for the benefit of their business and their customers on
the same terms as subscribers of other GDSs in which that airline
participates.

The Agreement requires that Northwest provide information and
reservations services, at it own cost, on a basis that does not
discriminate against Amadeus Subscribers.

Amadeus relates that since the Debtors filed for bankruptcy:

   -- the Debtors have continued to use its services; and

   -- it has continued to render services to the Debtors and to
      permit travel agents and others to schedule and ticket
      flights on the Debtors' airline.

Greg R. Yates, Esq., at Steptoe & Johnson LLP, in New York, notes
that, like other major airlines, Northwest Airlines has
relationships with multiple GDS providers.  Northwest's
management has had ample time to evaluate the services provided
by those companies.

Amadeus says that Northwest Airlines has not yet indicated
whether it intends to assume the Agreement.  Negotiations
concerning the renewal of a related agreement have stalled.

However, according to Mr. Yates, on July 21, 2006, Northwest
Airlines announced that, effective Sept. 1, 2006, it would
impose a surcharge against travel agents making reservations
through the Amadeus reservation system.  

Northwest Airlines also stated that it might withhold content
from Amadeus subscribing agencies.  Northwest indicated that it
would not impose the surcharge on reservations made through
certain preferred distribution options, including "Sabre's
Efficient Access Solution Product, Galileo's Content Continuity
Product, Worldspan's Super Access Product, all G2 Switchworks
Products, Farelogix's Direct Connect Product, Northwest's agency
portal WorldAgentDirect.com, CorpNet Direct, nwa.com and
WorldVacations Tour Source."

Mr. Yates argues that any failure by Northwest Airlines to
provide travel agencies subscribing to the Amadeus GDS with
information and reservation services as advantageous as those
provided to subscribers of other GDSs would make Amadeus's GDS
services less comprehensive, or otherwise less attractive, to
present and prospective travel agency subscribers.  Thus, that
discriminatory treatment of Amadeus' subscribers will impair
Amadeus' ability to compete with other GDSs for new subscribers
and cause irreparable disruptions to Amadeus' established
relationships with its existing subscribers, he asserts.

Mr. Yates also argues that any surcharges on Amadeus agencies, or
withholding of content from them, would be in clear violation of
the non-discrimination obligations undertaken by Northwest
relative to Amadeus subscribers under the Agreement.

Amadeus informs the Court that due to the drastic and immediate
impact that the surcharge would have on its business, it has,
pursuant to the Agreement,

   (1) instituted an arbitration in Paris, France, seeking a
       determination that Northwest's surcharge is in violation
       of the Agreement; and

   (2) sought an injunction from the Southern District of New
       York barring Northwest from imposing the surcharge on
       Amadeus subscribers or withholding content from them.

Mr. Yates contends that absent the automatic stay and as a result
of Northwest's postpetition breach, Amadeus would have the right
to terminate the Agreement upon 15 days notice to Northwest,
pursuant to the Agreement.

                 About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 36; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


NORTHWEST AIRLINES: Wants Court Nod on Term Sheets for 5 Aircraft
-----------------------------------------------------------------
Northwest Airlines, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to enter into, implement and perform
the restructured financings and other agreements relating to five
aircraft:

    -- aircraft with Tail Nos. N552NW and N555NW, pursuant to a
       restructuring term sheet dated August 15, 2006, among
       Northwest, U.S. Bank National Association as security
       trustee, and DVB Bank AG, HSH Nordbank, AG, and ING Bank
       N.V.;

    -- aircraft with Tail No. N357NB, under a restructuring term
       sheet dated Aug. 15, 2006, among Northwest, U.S. Bank N.A.
       as security trustee, and DVB Bank;

    -- aircraft bearing Tail No. N556NW, under a restructuring
       term sheet dated August 15, 2006, among Northwest, U.S.
       Bank N.A. as security trustee, and ING Capital LLC; and

    -- aircraft with Tail No. N557NW, pursuant to a restructuring
       term sheet dated Aug. 16, 2006, among Northwest, U.S. Bank
       NA as security trustee, Bayerische Landesbank, and DVB
       Bank.

Northwest Airlines also seeks the Court's permission to file
redacted versions of the Term Sheets.

Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, asserts that the negotiated restructurings of the
financing arrangements for the Aircraft will provide Northwest
Airlines substantial savings over the existing financings.

Moreover, the agreements, Mr. Ellenberg adds, will settle other
disputes relating to each of the Aircraft, including certain
administrative expense claims, and claims for modification of the
existing financings.

Northwest Airlines currently owns the Aircraft, in each case
subject to a mortgage loan facility.  The Lenders and U.S. Bank
have a first priority lien and security interest in each Aircraft
and related collateral that secures all amounts payable by
Northwest under the respective indenture and related agreements.

The parties in each Term Sheet have agreed to modify the
financings for each Aircraft, including modifications favorable
for Northwest and:

   (a) in connection with Aircraft with Tail Nos. N357NB, N552NW
       and N555NW, a reduction in the interest rate margins under
       the loan facilities effective Sept. 1, 2006, an option for
       Northwest Airlines to convert the applicable rate to a
       fixed rate on the effective date of the amendment; and

   (b) a reduction of the interest rate under each of the loan
       facility with regards to:

         Aircraft Tail No.      Effective Date
         -----------------      --------------
              N556NW            August 20, 2006
              N557NW            January 16, 2007

Each of the Aircraft will serve as collateral under each of the
Amended Indentures.

Amended Indentures with regards to N552NW and N555NW will be
cross-defaulted to each other provided that the benefits of the
cross-collateralization and cross-default will only apply with
respect to Aircraft on which DVB Bank, HSH Nordbank and ING Bank
collectively hold 50% or more of the outstanding debt.

To the extent that DVB holds 50% or more of the outstanding debt
with respect to N357NB and continues to hold the same outstanding
principal amount of debt on N552NW, N555NW and N557NW as of
Aug. 15, 2006:

     * N357NB will also serve as collateral under the indentures
       for N552NW, N555NW and N557NW; and

     * an event of default with respect to N552NW, N555NW and
       N557NW will also constitute an event of default under the
       Amended Indenture for N357NB.

Upon its effectiveness, each of the Amended Indentures will
constitute Northwest's compliance with Section 1110(a)(2) of the
Bankruptcy Code with respect to the related Aircraft.  Any plan
of reorganization filed by the Debtor will provide for
reinstatement of the Amended Indentures.

U.S. Bank, as security trustee, will be entitled to allowed
general unsecured claims against Northwest as damages for
reduction of the interest rates under the existing financings in
these amounts:

         Claim Amount         Aircraft Tail No.
         ------------         -----------------
             $712,007              N552NW
              723,832              N555NW
              748,203              N357NB
            1,049,652              N556NW
              287,672              N557NW

After Court approval of each of the Term Sheets, Northwest will
pay these catch-up payments, with respect to:

   (i) N555NW, equal to all amounts of principal and interest
       due and owing through the date of payment at the
       non-default rate;

  (ii) N552NW, equal to all amounts of principal and interest
       that was due and owing on July 31, 2006, together with
       prorated interest for the period from July 31, 2006, to
       the date of payment at the non-default rate; and

(iii) N556NW, equal to all amounts of principal and interest due
       and owing with respect to U.S. Bank's notices of default
       under the existing agreements relating to a payment due
       May 20, 2006, at the non-default interest rate.

Other than with respect to the allowed unsecured claim, the
Catch-up Payments and the Debtor's other obligations under the
Term Sheet, the Lenders and U.S. Bank will waive any and all
claims under the current indentures and other operative documents
arising from the modification of those agreements pursuant to the
Term Sheet, as well as all claims for amounts calculated under
the original interest rates under the current indentures from the
effective date of the amendment.

The Lenders and U.S. Bank do not waive any of their secured
claims with respect to all other claims under the current
indentures, the Amended Indentures or other operative documents
and reserve all rights with respect to those.

Conditions precedent to effectiveness of the Amended Indentures
include, among other things, preparation of definitive
documentation, Bankruptcy Court approval, internal approvals of
the Debtor and the Lenders, and payment any amounts required
under the Term Sheet or the Section 1110(a) agreement.

                 About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 36; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


NTL INC: In Talks With Four Buyout Firms Over Possible Takeover
---------------------------------------------------------------
NTL Inc. is in talks with a group of four buyout firms including:

   -- Providence Equity Partners Inc.
   -- Blackstone Group LP
   -- Kohlberg Kravis Roberts & Co., and
   -- Cinven Ltd.

about a potential offer for Britain's biggest cable-television
company, Bloomberg News reports citing two unnamed sources.

According to the sources, the firms are contemplating a takeover
bid as NTL faces growing competition from British Sky Broadcasting
Group Plc and BT Group Plc.

"The company is an attractive target for private equity" because
of its cash flow and assets, Aryeh Bourkoff, an analyst at UBS AG
in New York, told Bloomberg.

In March 2005, NTL received and rejected several unofficial
takeover bids from private equity firms.

The Times reports that at least two investors are planning to
write NTL CEO Steve Burch to complain about the board's decision
to reject a US$32-a-share offer in 2005.

As previously reported in TCR-Europe, NTL opened itself to a GBP8
billion private equity offer on Aug. 8 after sustaining a
significant drop in customers.

In the company's financial report for the second quarter ending
June 30, 2006, net customer disconnections are 18,900 compared
with 25,800 net customer additions in the first quarter and
62,500 net customer additions for the second quarter in 2005.

According to the report, the group declined an unofficial GBP8
billion takeover offer from a consortium including Apax
Partners, Cinven and Permira last year, claiming that it was
below the company's worth. Since then, NTL's share price dropped
from US$27.25 to US$22.76.

                     About Providence Equity

Providence Equity Partners Inc. is a private investment firm
specializing in equity investments in communications and media
companies around the world.  The principals of Providence Equity
manage funds with over US$9 billion in equity commitments,
including Providence Equity Partners V, a US$4.25 billion private
equity fund, and have invested in more than 80 companies operating
in over 20 countries.  Providence Equity currently has offices in
Providence, Rhode Island, London, England, and New York, New York.

                    About Blackstone Group

The Blackstone Group -- http://www.blackstone.com/-- a global  
private investment and advisory firm, was founded in 1985.  The
firm has raised a total of more then US$63 billion for alternative
asset investing since its formation.  The Blackstone Group's core
businesses are Private Equity Investing, Private Real Estate
Investing, Corporate Debt Investing, Hedge Funds, Mutual Fund
Management, Private Placement, Marketable Alternative Asset
Management, and Investment Banking Advisory Services.  

                           About KKR

Kohlberg Kravis Roberts & Co., one of the world's largest and most
successful private equity firms, has completed buyout transactions
that are among the most complex in history.  The firm's investment
approach, however, is fundamentally simple: KKR acquires industry-
leading companies and works with management to improve them and
create shareholder value.

                          About Cinven

Established in 1977, Cinven Ltd. is one of the most prominent and
successful investors in the European buyout market.

                          About NTL Inc.

Headquartered in London, England, NTL Inc. (NASDAQ: NTLI) --
http://www.ntl.com/-- is a Delaware corporation and is publicly-
traded is the US on the Nasdaq Global Select Market under the
symbol "NTLI."  The Company provides broadband, digital
television, telephony, content and communications services,
reaching over 50% of UK homes and 85% of UK businesses.  

                         *     *     *

In July 2006, Fitch Ratings assigned NTL Cable PLC's $550 million
10-year senior notes a rating of B and a Recovery Rating of RR5.  
NTL Cable's existing senior notes were removed from Rating Watch
Negative, and downgraded to B.  At the same time, Fitch affirmed
NTL Inc.'s Issuer Default rating at B+ with Stable Outlook and its
Short-term rating at B.  NTL Investment Holdings Limited's
GBP5.275 billion senior secured credit facilities were affirmed at
BB+ and Recovery Rating RR1.


O'SULLIVAN IND: Inks Stipulation with Mirisola to Pursue Action
---------------------------------------------------------------
On Dec. 19, 2005, Marie Mirisola commenced an action in state
court against the Debtors, alleging negligence and seeking
recovery for a personal injury she allegedly suffered in December
2002 on a property controlled by the Debtors.

On July 27, 2006, Ms. Mirisola filed a Motion to suspend the stay
of the State Court Proceedings.

Ms. Mirisola now wishes to proceed, in name only, against the
Debtors in the State Court Action in order to seek judgment
against the proceeds of any available insurance of the Debtors.

To permit Ms. Mirisola to proceed in the State Court Action and to
ensure that the proceedings will not affect the Debtors'
bankruptcy estates,

To resolve their dispute, the Debtors and Ms. Mirisola stipulate
that:

   (a) The automatic stay will be modified for the limited
       purposes of allowing Ms. Mirisola to:

       -- discover the name or names of the insurers, if any,
          which have provided coverage to the Debtors for her
          claims;

       -- discover the policy or policies issued to the Debtors,
          which provide the coverage;

       -- discover the terms and limits of the insurance
          coverage; and

       -- pursue to final judgment her rights in the State Court
          Action against the Debtors in name only and solely
          Against any insurance proceeds that may be available to
          satisfy her claim;

   (b) Ms. Mirisola waives, and will be barred from asserting,
       any claims against the Debtors and their estates; and

   (c) Ms. Mirisola will withdraw her Stay Relief Motion.

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. 22; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


PAN AM CORP: Admin. Claim Holders Can Confirm Claims Until Nov. 30
------------------------------------------------------------------
On July 6, 2006, Pan Am Corporation and its debtor-affiliates
obtained permission from the U.S. Bankruptcy Court for the
Southern District of New York to make final distribution to
administrative creditors.

Holders of administrative claim will receive pro rata share of the
final distribution minus any tax or other withholdings, reasonably
determined by the Debtors to be legally required.

Claimants who did not receive mailed notices or who received
forwarded mailed notices must provide Wells Fargo Bank N.A.
-- the Debtors' distribution agent -- an updated contact
information until Nov. 30, 2006.

The Distribution Agent can be reached by:

   -- toll-free service and information line 1-877-813-3539
      between 9 a.m. and 5 p.m. EST, Monday to Friday

   -- mail to:
     
      Pan Am Liquidation Trust
      c/o Wells Fargo Bank N.A.
      P.O. Box 2370
      Minneapolis, MN 55402-0370

Additional information regarding the final distribution can be
accessed at http://www.panamliquidationtrust.com/

Headquartered in New York City, New York, Pan Am Corporation is a
holding company for Pan American World Airways, Pan Am Express and
the Pan Am Shuttle.  The Company's air transportation included
flights to Latin America, Europe, Middle East, Africa, the Bahamas
and domestic locations.  

Pan Am and certain of its affiliates filed for chapter 11
protection on Jan. 8, 1991 (Bankr. S.D.N.Y. Case No. 91-10080).
On Feb. 15, 1996, Pan Am Liquidation Trust was formed to handle
distribution to claim holders.  Paul A. Rendich, Esq. serves as
responsible officer and trustee.

The distribution fund is from settlement proceeds with Libya
regarding loss of Flight 103 over Lockerbie, Scotland.


PERFORMANCE TRANSPORTATION: Donald Crumlich Wins Lift-Stay Plea
---------------------------------------------------------------
The Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for
the Western District of New York modifies the automatic stay to
permit Donald W. Crumlich, Jr., to pursue his bodily injury action
against Debtor Leaseway Motorcar Transport Company before the
Connecticut State Court.

Mr. Crumlich asserts a personal injury claim against Leaseway
believing that it maintains a liability insurance with a pre-
accident deductible of $1,000,000.  Mr. Crumlich was a passenger
in one of the three vehicles involved in a June 2004 accident, one
of which was owned by Leaseway.  Janet G. Burhyte, Esq., at Gross
Shuman Brizdle & Gilfillan, P.C., in Buffalo, New York, estimated
Mr. Crumlich's personal injury claim not to exceed $1,000,000.

Performance Transportation Services, Inc., and its debtor-
Affiliates had asked the Court to deny Mr. Crumlich's request.  
The Debtors had argued that if the Court grants Mr. Crumlich's
request, he would receive preferential treatment of his claim in
direct violation of the principle that similarly situated
creditors are to be treated similarly.  The Debtors had claimed
that they will obligated to pay the first $1,000,000 of any
defense costs incurred or damages awarded in connection with Mr.
Crumlich's personal injury action.

                       About Performance

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest        
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


PIERRE FOODS: S&P Affirms Low-B Ratings With Negative Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' bank loan
rating and raised its recovery rating on Pierre Foods Inc.'s
senior secured credit facility to '2' from '3', indicating that
investors could expect substantial recovery of principal in the
event of a payment default.

Pierre Foods has added $24 million to its original $150 million
term loan B.  Prior to the add-on, the company had repaid about
$43 million of the $150 million term loan.  The existing ratings
on the company, including its 'B+' corporate credit rating, have
also been affirmed.  The outlook is negative.  

Pro forma for the transaction, the company is expected to have
about $256.8 million in total debt outstanding, excluding
operating lease obligations.

The rating actions follow the company's recent announcement that
it has signed a non-binding letter of intent to acquire Clovervale
Farms Inc., a producer and distributor of prepackaged food
products, for $22.8 million.  Clovervale serves the military and
school distribution channels.

In addition to expanding the company's presence in these channels,
the acquisition adds some diversity to Pierre's existing product
pipeline, including boxed and compartmentalized meals and other
ready-to-eat sandwiches.

"The ratings on Pierre Foods reflect its modest scale of
operations, high customer concentration, and leveraged financial
profile," said Standard & Poor's credit analyst Mark Salierno.

"These factors are partially mitigated by the company's leading
position in the niche markets for formed, precooked beef
and microwavable sandwiches and by the company's ability to manage
raw material costs through market-related pricing."

With sales of $431.6 million in fiscal 2006 (ended March), Pierre
Foods manufactures and markets processed food items with a niche
focus on formed, pre-cooked protein products and hand-held
convenience sandwiches.


PILGRIM'S PRIDE: Gold Kist Buy Offer Cues Moody's to Hold Ratings
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba2 senior unsecured,
Ba3 senior subordinated, and Ba2 corporate family ratings for
Pilgrim's Pride Corporation, but changed the outlook to
negative from stable.  This rating action follows the company's
announcement that it has made an offer to acquire Gold Kist,
Inc. for approximately $1 billion in cash plus the assumption
of $144 million in Gold Kist Debt.

The change in the outlook to negative reflects the possibility
that Pilgrim's Pride's capital structure and financial profile
could change materially should it succeed in its bid to acquire
Gold Kist.  While it remains highly uncertain whether any
transaction will be consummated, and if it were what the ultimate
post-transaction capital structure would be, the transaction could
result in a significant increase in Pilgrim's Pride's debt and
leverage.

PPC has maintained a conservative capital structure with modest
debt and plentiful cash -- largely reflective of an investment
grade credit.  However the company's narrow product mix, highly
volatile earnings stream, and history of periodic debt-financed
acquisitions constrain the rating.  Using financial data including
the lagging 12-months ended July 2006, the factors underlying
Moody's Rating Methodology for Global Natural Product Processors
indicate a rating of Baa3, two notches higher than the company's
actual Ba2 rating.

In Moody's view, PPC's high degree of earnings volatility, the
recent severe earnings pressure in the overall poultry industry,
the likelihood that financial metrics from its existing business
could weaken further in the near term, the risk of leveraged
acquisitions -- such as the recent offer to acquire Gold Kist --
justify a rating lower than the rating methodology might otherwise
indicate.

Headquartered in Pittsburgh, Texas, Pilgrim's Pride is a major US
chicken processor and producer of value-added chicken products.


PREMIUM PAPERS: Court Okays Smart Papers Asset Sale to Plainfield
-----------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware approved an offer from Plainfield Asset
Management to buy Smart Papers LLC's assets and assume $40 million
of its debt, the Journal-News reports.

As reported in the Troubled Company Reporter on Aug. 18, 2006,
other terms of the takeover include $5 million in interim
financing for Smart Papers to be followed by $5 million for the
reorganized company, including a $2 million payment plan now owed
to International Paper.

According to the news, Hamilton Mayor Don Ryan said he was told
that Plainfield plans to get the company the cash it needs to stay
in business and come out of bankruptcy.

"That will ensure the company will have the necessary resources to
continue operations, including normalizing vendor relationships,
purchasing raw materials and providing employees Plainfield's
commitment to stabilize operations and create the foundation for
the future," Mr. Ryan commented.  "They were very upbeat and very
positive.  From what I gather, they have the wherewithal both in
funds and management personnel to be able to step back and look at
the whole picture and come in and revitalize."

Journal-News staff writer Lisa A. Bernard states that Plainfield
Representatives are scheduled to meet with city officials in
September.

Al Williamson, president of United Steelworkers 1967 which
represents more than 300 Smart Papers workers, said his group also
will meet with Plainfield reps, but a date has yet to be set, Ms.
Bernard adds.

Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, --
http://www.smartpapers.com/-- is an independent manufacturer and  
marketer of a wide variety of premium coated and uncoated printing
papers, such as Kromekote, Knightkote, and Carnival.  The Company
and its debtor-affiliates, SMART Papers LLC and PF Papers LLC,
filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del.
Case No. 06-10269).  Ian S. Fredericks, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtors.  Mary E. Seymour,
Esq., at Lowenstein Sandler PC, represents the Official Committee
of Unsecured Creditors.  Traxi LLC serves as the Debtors'
financial advisor.  When the Debtors filed for protection from
their creditors, they listed unknown estimated assets and $10
million to $50 million estimated debts.


PREMIUM PAPERS: Has Until November 16 to File Chapter 11 Plan
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
extends the period within which Premium Papers Holdco, LLC, and
its debtor-affiliates have the exclusive right to file a chapter
11 plan through Nov. 16, 2006.  The Court also extends the
Debtors' period to solicit acceptance of that plan until Jan. 15,
2007.

The Debtors tell the Court that it has devoted its time to the
selling of all of their assets, including responding to inquiries
from and facilitating due diligence efforts by parties expressing
an interest in the Debtors' assets.

The extension, the Debtors believe, will give them opportunity to
propose a plan of reorganization without the deterioration and
disruption of the Debtors' business that caused by the filing of
competing plans by non-Debtor parties.

The Debtors add that the extension is necessary to enable them to:

    i) complete the auction and sale process;

   ii) formulate the terms of a chapter 11 plan; and

  iii) seek input from their various creditor constituencies.

Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, --
http://www.smartpapers.com/-- is an independent manufacturer and  
marketer of a wide variety of premium coated and uncoated printing
papers, such as Kromekote, Knightkote, and Carnival.  The Company
and its debtor-affiliates, SMART Papers LLC and PF Papers LLC,
filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del.
Case No. 06-10269).  Ian S. Fredericks, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtors.  Mary E. Seymour,
Esq., at Lowenstein Sandler PC, represents the Official Committee
of Unsecured Creditors.  Traxi LLC serves as the Debtors'
financial advisor.  When the Debtors filed for protection from
their creditors, they listed unknown estimated assets and $10
million to $50 million estimated debts.


PROFESSIONAL INVESTORS: Section 341(a) Meeting on September 8
-------------------------------------------------------------
The U.S. Trustee for Region 6 will convene a meeting of
Professional Investors Insurance Group, Inc.'s creditors at
10:00 a.m., on Sept. 8, 2006, in Room 976, U.S. Trustee's Office
at 1100 Commerce Street in Dallas, Texas.  This will be the first
meeting of creditors as required under Section 341(a) of the
Bankruptcy Code in all bankruptcy cases.

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

Headquartered in Plano, Texas, Professional Investors Insurance
Group, Inc., filed for chapter 11 protection on Aug. 9, 2006
(Bankr. N.D. Tex. Case No. 06-33278).  John P. Lewis, Jr., Esq.,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it estimated assets between $10 million and $50
million and debts between $1 million and $10 million.


QUANTUM CORP: Completes Acquisition of ADIC for $770 Million
------------------------------------------------------------
Quantum Corp., completed its acquisition of Advanced Digital
Information Corp.

Under the terms of the definitive agreement the Company acquired
all of ADIC and its outstanding shares for $770 million, primarily
in cash.  The Company is funding the transaction through a
combination of cash on hand and approximately $500 million in
financing from a group of banks and other lending institutions.  
The annual interest expense resulting from the financing is
expected to be approximately $50 million.

As a result of intensive integration planning over the last few
months, the Company has identified annualized cost synergies of
approximately $75 million to $80 million, compared to the
$45 million it had initially estimated.  The Company expects to
begin realizing the benefit of a significant portion of the
synergies by the end of the calendar year, the majority of the
synergy savings by the end of its fiscal year, and the remaining
synergy benefits in the following two quarters.  The synergies
will reduce both cost of goods sold and operating expenses and
primarily be generated by eliminating redundancies in internal
programs, processes and employee positions, rationalizing
facilities, leveraging higher manufacturing volumes to reduce
supply chain costs, and streamlining procurement processes.

With the acquisition of ADIC, the Company offers a comprehensive
portfolio of platform-independent systems, software, devices and
media.  In addition, with combined revenues exceeding $1.2 billion
over the last four quarters and a significantly larger sales and
service infrastructure, the Company now has the scale to engage
with customers at a more strategic level.

The Company further disclosed that, it will continue to sell and
support all current Quantum and ADIC products; sell all products
through the companies' respective partners and distribution
channels; and maintain existing service contracts and product
warranties.  The Company will have nearly a thousand Sales,
Marketing and Service employees providing informed expertise,
advice and support to customers around the world.

Based in San Jose, California, Quantum Corp., (NYSE: DSS)
-- http://www.quantum.com-- formerly a maker of hard disk drive  
for desktop computers, now produces digital linear tape
technology, such as DLT devices, automated tape library systems,
and the tape cartridges used in these systems.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 22, 2006
Standard & Poor's Ratings Services revised its rating and recovery
rating on Quantum Corp.'s proposed first-lien bank facility to
'B+' and '1' from 'B' and '3', respectively, following a recent
amendment to the terms of the proposed financing of Quantum's
acquisition of Advanced Digital Information Corporation.


QUIGLEY CO: Wants DIP Facility Extended Until March 2007
--------------------------------------------------------
Quigley Co., Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to extend until March 5, 2007,
the maturity date under its $20-million postpetition financing
agreement with Pfizer Inc.  The DIP facility matures on Sept. 7,
2006.

The Debtor is also asking the Court for permission to access its
parent company's cash collateral until the March 5 deadline.  

The original credit pact was signed on March 6, 2003.  Under that
agreement, Pfizer provides secured loans and advances on a
revolving basis to Quigley.  The loans are secured by liens
approved by the Court under Sec. 364 of the Bankr. Code.

Lawrence V. Gelber, Esq., at Schulte Roth & Zabel LLP, in New York
City that the proposed extension, is not a "material amendment" to
the DIP Facility.  Although the DIP Facility remains undrawn at
the present time, Quigley nevertheless seeks to extend the DIP
Facility so that the financing continues to be available in the
event that it is needed in the future, as Quigley proceeds toward
confirmation and consummation of its Plan.

A copy of the proposed budget on the use of the cash collateral
and the DIP Facility is available for free at:

              http://ResearchArchives.com/t/s?1059

Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary
of Pfizer, Inc., which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries.  The Company filed for chapter 11
protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to
resolve legacy asbestos-related liability.  Michael L. Cook, Esq.,
Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte
Roth & Zabel LLP, represent the Company in its restructuring
efforts.  Albert Togut, Esq., at Togut Segal & Segal serves as the
Futures Representative.  Elihu Inselbuchm Esq., at Caplin &
Drysdale, Chartered, represents the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $155,187,000 in total assets and
$141,933,000 in total debts.


RADIOSHACK CORPORATION: 2006 Results Cue Fitch's Ratings Downgrade
------------------------------------------------------------------
Fitch Ratings downgraded these ratings for RadioShack Corporation:

   -- Issuer Default Rating to 'BB+' from 'BBB'
   -- Bank credit facility to 'BB+' from 'BBB'
   -- Senior unsecured notes to 'BB+' from 'BBB'
   -- Commercial paper to 'B' from 'F2'

The Rating Outlook is Stable.  Approximately $500 million of debt
is affected by these actions.

The downgrades reflect RadioShack's weaker than expected operating
results year-to-date in 2006 and the challenges associated with
executing a turnaround in the face of increasing competition in
the company's core product segments.  The ratings also reflect
Fitch's expectation for modest improvement in the company's
performance in 2007 as a result of the cost cutting and other
turnaround initiatives implemented this year.

RadioShack continues to experience weakness in its core wireless
business, which represents about one-third of its total revenues,
through June 30, 2006.  Wireless sales were down 3% in the first
half of 2006 reflecting poor execution of the transition to
Cingular from Verizon at the end of 2005, Verizon's continued
stronghold in key markets in the northeast and northwest regions,
and increased competition from other retailers, as well as direct-
to-consumer distribution by the wireless carriers themselves.

Although sales in the first half of 2006 increased in some of the
company's product categories like accessories (up 4%) and personal
electronics (up 22%), they were inadequate in offsetting sales
declines in wireless and modern home products such as home audio
and video end-products, computers, etc. (down 6%).

In addition, the areas that expanded, such as kiosk operations,
personal electronics, and services, generated lower operating
margins than the other businesses, contributing to a decline in
the company's EBITDA margin to 6.6% in the 12 months ended
June 30, 2006 from 12.6% a year earlier.

To gain greater customer acceptance, RadioShack is carrying out
targeted marketing campaigns in local markets where Cingular is
weak in hopes of increasing its wireless sales.  In addition, the
company has remodeled over 1,000 stores in the past several years
and is in the process of re-merchandising all of its stores to
include more popular products like the flat-panel televisions and
MP3 players and accessories.  Fitch anticipates these initiatives
will take time to gain traction.

Given the company's weak sales and lower operating margins, its
credit metrics have come under pressure and are expected to remain
below their historical levels over the near to medium term.  In
the 12 months ending June 30, 2006, FFO fixed charge coverage
dropped to 1.8x from 2.6x while total adjusted debt/EBITDAR
increased to 4.7x from 3.0x in 2005.

At the same time, RadioShack's liquidity remains adequate with
cash of approximately $170 million and availability of around $575
million under its credit facilities as of June 30, 2006.

Fitch recognizes that a new top management team headed by CEO
Julian Day will provide additional energy to the company's
turnaround efforts.  In addition, the recent closure of 480 stores
and the cost savings from the consolidation of distribution
centers and the headquarters staffing reduction (400-450
employees) will lead to some margin improvement in late 2006 and
2007.

However, generating additional top-line momentum and restoring
margins to historical levels through changes to the merchandise
mix and improved service levels within the stores will take
additional time.


REAL ESTATE: Section 341(a) Meeting Scheduled on September 15
-------------------------------------------------------------
The U.S. Trustee for Region 10 will convene a meeting of Real
Estate Investors of Decatur, LLC's creditors at 11:30 p.m., on
Sept. 15, 2006, in Courtroom 5C, Macon County Courthouse, at
E. Wood Street in Decatur, Illinois.  This is the first meeting of
creditors as required under Section 341(a) of the Bankruptcy Code
in all bankruptcy cases.

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

Headquartered in Decatur, Illinois, Real Estate Investors of
Decatur, LLC, own four hotel in Illinois.  The Company filed
for chapter 11 protection on Aug. 9, 2006 (Bankr. C.D. Ill.
Case No. 06-71033).  John Barr, Esq., at Barr & Barr represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.


REDCITY SEARCH: Gets TSX Nod to Complete Private Placement
----------------------------------------------------------
redCity Search Company Inc. received conditional approval of the
TSX Venture Exchange to complete:

   (i) its private placement;
  
  (ii) its acquisition of all of the issued and outstanding
       securities of Zip411 Enterprises Inc.;

(iii) its acquisition of all of the issued and outstanding
       securities of Offsite Corporation;

  (iv) the settlement of a total of $4,927,249.33 in outstanding
       liabilities of the Company in exchange for the issuance of
       23,708,997 common shares; and

   (v) the redemption of its 944,444 issued and outstanding
       preferences shares, series A, subject to satisfaction of
       certain conditions imposed by the TSX-V.

                        Private Placement

redCity confirms that it is proceeding with its "best efforts"
private placement at $0.05 per common share of the Company for
minimum gross proceeds of $8,000,000.  A syndicate led by GMP
Securities L.P. and including Orion Securities Inc. is acting as
the Company's agents of the Offering.  redCity agreed to grant to
the Agents an option to sell additional common shares, at the
Offering Price, equal to up to 15% of the number of common shares
sold on the closing date of the Offering.  The Over-Allotment
Option will be exercisable for a period of 30 days from the
closing date of the Offering.

The Offering is subject to TSX-V and shareholder approvals as well
as the satisfaction by the Company of certain conditions
precedent, including obtaining the approval of the TSX-V for the
acquisitions of Zip411 and Offsite.  The proceeds raised from the
Offering will be used by the Company to fund payment of the cash
portion of the purchase price for Zip411 Enterprises Inc., the
cash portion of the purchase price of Offsite, to repay certain
outstanding indebtedness, to pay the expenses of the Offering and
related transactions and for general working capital purposes.

All common shares issued pursuant to the Offering will be subject
to the four-month hold period prescribed under applicable
securities laws and the policies of the TSX Venture Exchange.

                      Shareholder Approval

The Offering will result in, or will be considered part of a
transaction that will result in, the creation of a new control
person of redCity.  The TSX-V advised redCity that it requires
consent from disinterested shareholders, holding more than 50% of
the issued and outstanding common shares of redCity, to all
Transactions.  TSX-V policies provide that shareholder approval
may be obtained by ordinary resolution at a general meeting of
Shareholders or by the written consent of shareholders holding
more than 50% of the issued common shares.  Shareholders of
redCity who do not have an interest in any of the Transactions,
excluding existing shareholders who intend to participate in the
Offering, are eligible to be included in calculating disinterested
shareholder approval to the creation of a new control person, the
change of control and the change of management of redCity.

Accordingly, redCity is seeking written consent of its
disinterested shareholders.

                      Acquisition of Zip411

On April 21, 2006, redCity entered into an agreement in principle
to acquire Zip411 for a total purchase price of $5.4 million.  
Zip411 (formerly Tamec Inc.) is a national database publisher and
internet service provider based in Montreal, Quebec.

Pursuant to the Zip411 Acquisition, it is anticipated that redCity
will acquire all of the issued and outstanding shares of the
parent holding companies of Zip411 (9029-6534 Quebec Inc., which
is controlled by Michel Lafontaine and hold 50% of the shares of
Zip411, and 9060-8951 Quebec Inc., which is controlled by Yves St-
Sauveur and holds 45.91% of the shares of Zip411) and the 4.09%
interest in Zip411 held directly by Michel Lafontaine.  Initially,
the purchase price consisted of a cash payment of $3 million,
9,600,000 common shares of redCity (with an ascribed value of
$0.25 per share) and settlement of shareholder loans in the
principal amount of $236,267.

In addition, redCity intended to grant to the sellers of Zip411 up
to 2,600,000 warrants to purchase common shares of redCity, which
warrants would be exercisable, at prices ranging from $0.25 to
$0.60 per share, for a period two years from the closing date.  In
accordance with the JLA Term Sheet and the GMP Engagement Letter,
the terms of payment were subsequently amended to reduce the cash
payment portion of the purchase price to $2,000,000 from
$3,000,000 and to increase the aggregate number of securities to
be issued by redCity to 13,600,000 common shares (up from
9,600,000) and 3,600,000 warrants (up from 2,600,000).  The
parties have agreed to further amendments to the purchase price to
provide for the assignment to redCity by the vendors of their
outstanding shareholder loans to Zip411 in the total amount of
$200,000 and to further amendments to the number and terms of the
warrants.  redCity proposes to acquire the outstanding Zip411
shareholder loans for the face value thereof by issuing to the
vendors a total of 4,000,000 common shares at a deemed value of
$0.05 per share.  redCity further proposes to increase the total
number of warrants issuable to the vendors to 8,600,000 and to
reduce the exercise price to $0.25 per share.  It is proposed that
the warrants will be exercisable until the later of (i) the second
anniversary of the closing date, and (ii) subject to redCity's
graduation to Tier 1 of the TSX-V Exchange and receipt of all
necessary approvals, the fifth anniversary of the closing date.

The vendors will provide customary representations and warranties
regarding their holdings in Zip411 and in respect of Zip411 and
its business.  These representations and warranties are supported
by indemnities from the vendors.  In further support for the
vendors' indemnities, redCity will deposit into escrow 2,500,000
of the common shares issued at closing.  The escrowed shares will
be subject to release to redCity should it make an uncontested or
otherwise successful claim for indemnification against the
vendors.  If redCity does not make a claim for indemnification by
Aug. 31, 2008, such shares will be released to the vendors.

redCity intends to enter into employment agreements with each of
Michel Lafontaine, currently a director and President and Chief
Executive Officer of Zip411, and Yves St-Sauveur, currently a
director and Vice-President, Sales of Zip411, pursuant to which
Messrs. Lafontaine and St-Sauveur will become officers of redCity,
namely Vice-President Operations and Vice-President Sales,
respectively.  In addition, Mr. Lafontaine will be appointed to
redCity's board of directors.

Closing of the Zip411 Acquisition is subject to and conditional
upon the completion by redCity of a private placement offering of
its common shares with gross proceeds of at least $7,000,000.

               Acquisition of Offsite Corporation

redCity and Blair H. Calder entered into an agreement in principle
pursuant to which redCity will acquire all of the outstanding
shares of Offsite Corporation for a total purchase price of
$375,000.  Offsite is a custom software development company
located in Toronto, Ontario.  It is currently a service provider
to redCity under a services agreement dated June 14, 2004, and Mr.
Calder serves as redCity's Chief Information Officer.  redCity
intends to satisfy payment of the purchase price by $100,000 cash
and the issuance of 1,750,000 common shares of redCity, with an
ascribed value of $0.10 per share, at closing.  An additional
$100,000, and 750,000 of the common shares issued to Mr. Calder at
closing, will be held in escrow and released to Mr. Calder upon
completion of a technology transition period agreed to by the
parties.  redCity has agreed to enter into consulting agreements
with certain former employees of Offsite.  In addition, Mr. Calder
will receive an aggregate of 250,000 warrants to purchase common
shares of redCity, each such warrant exercisable at a price of
$0.45 for a period of not more than two years from closing.

Closing of the Offsite Acquisition is subject to certain
conditions, including the concurrent closing of the Offering.

Upon closing of the Offsite Acquisition, Mr. Calder will resign
from his positions with redCity.

                         Debt Settlement

As at Aug. 17, 2006, redCity had outstanding indebtedness owing to
trade and other creditors in the aggregate amount of
$6,427,249.33.  redCity anticipates settling $4,927,249.33 by the
issuance of its common shares at prices ranging from $0.05 to
$0.854 per share.

                    Series A Share Redemption

redCity has 944,444 issued and outstanding Series A Shares,
611,111 of which are held by ABM Investments Limited and 333,333
of which are held by Gould Leasing Ltd. Holders of Series A Shares
are entitled to receive a cumulative annual dividend of 13.9%.

The terms of the Series A Shares provide that redCity may at any
time call the Series A Shares for redemption upon payment of the
redemption price of $0.90 per share and all accrued and unpaid
dividends. To satisfy the Offering closing condition, redCity
called the Series A Shares for redemption and paid to the holders
thereof $0.90 per share and the further sum of $0.06245 per share
representing a dividend for the period from Feb. 1, 2006 (being
the last dividend payment date) to July 31, 2006.  As the Series A
Shares were not redeemed on the Deemed Redemption Date, an
additional amount of approximately $0.00034 per share per day,
representing a dividend for the period from the Deemed Redemption
Date to the actual date of redemption, is to be paid on the Series
A Shares.  Consequently, the total amount of approximately
$0.96245 per share (plus $0.00034 per share per day after the
Deemed Redemption Date to and including the actual date of
redemption) is to be paid.  The aggregate Redemption Amount
payable by redCity is anticipated to be $914,445.84, based on
calculations as of Aug. 17, 2006.

                          About redCity

Based in Toronto, Ontario, Canada, redCity Search Company Inc.
(TSX VENTURE:RDC) -- www.redcitysearch.com -- operates local
search engines that allow users to find local businesses quickly
and easily.  redCity's search websites include www.redToronto.com
and www.redMississauga.ca.  The Company also publishes The Red
Pages, a print directory of the websites of local Toronto
businesses, which is distributed to 400,000 households and
businesses throughout Toronto.

At March 31, 2006, the Company's balance sheet showed a
stockholders' deficit of CDN$1,786,227, compared to a deficit of
CDN$483,520 at March 31, 2005.


REFCO INC: Official Committees Create Joint Subcommittee
--------------------------------------------------------
In a stipulation approved by the U.S. Bankruptcy Court for the
Southern District of New York, members of the Official Committee
of Unsecured Creditors of Refco Inc., and its debtor-affiliates,
and the Additional Official Committee, along with Marc S.
Kirschner, the Chapter 11 trustee for Refco Capital Markets,
Ltd., agree that:

   (1) The Official Committees will create a joint subcommittee
       composed of the appointed and then serving members of the
       Official Committee and the Additional Official Committee.
       The Joint Subcommittee will represent the interests of
       all unsecured creditors in the Debtors' Chapter 11 cases
       with respect to all issues other than with respect to
       asset allocation, intercompany claim, and Chapter 11 plan
       issues between RCM and the other Debtors.

   (2) The Joint Subcommittee and its members will be subject to
       bylaws of the original nine-member committee, as agreed
       to and accepted by the Original Committee on November 14,
       2005, including the obligation to maintain information
       confidentiality and deliberations of the Joint
       Subcommittee.  However, those may be disclosed to certain
       professionals retained by each of the Official Committees
       and the Joint Subcommittee.

   (3) Each of the Official Committees and the Joint
       Subcommittee will be deemed to have retained and will be
       permitted to use the services of all professionals
       previously retained by the Original Committee, including
       Milbank, Tweed, Hadley & McCloy LLP, Houlihan, Lokey,
       Howard & Zukin LLC, and Kasowitz Benson Torres & Friedman
       LLP.  However, Milbank will not be retained as counsel by
       the Additional Official Committee without prior written
       consent of both the Official Committees.

       None of the professionals retained by any of the Official
       Committees will act as attorneys or financial advisors for
       any individual member of the Official Committee or the
       Additional Official Committee, or any other creditor in
       any matter relating to the Debtors' cases.  The
       Stipulation will not limit the right of each of the
       Official Committees to seek to retain additional
       professionals pursuant to Section 1103(a) of the
       Bankruptcy Code.

   (4) The Official Committees and the Joint Subcommittee will
       be permitted to use the Original Committee Professionals
       to assist the parties with respect to fact finding and
       analysis on matters in respect of which the Original
       Committee Professionals have performed.

       The RCM Trustee will be permitted access to all financial
       information and analysis prepared by the Original
       Committee Professionals.  The RCM Trustee may, although
       not on the basis of an advisor-client relationship,
       consult with the Original Committee Professionals
       concerning information and analysis and may also request
       that those professionals prepare reports and financial
       models to assist him with respect to fact finding and
       analysis on certain matters.

       None of the Official Committees, the Joint Subcommittee
       or the RCM Trustee may use any of the Original Committee
       Professionals as expert witnesses in litigation adverse
       to any of the other Parties.  However, if both of the
       Official Committees expressly consent, any of the
       Official Committees or the Joint Subcommittee may use the
       Original Committee Professionals as expert witnesses in
       litigation adverse to the RCM Trustee.

The Parties further clarify that that the Stipulation is not
intended to create an advisor-client relationship between the
Original Committee Professionals and the RCM Trustee with respect
to the Original Committee Professionals' factfinding and
analysis.

The Official Committees, the Joint Subcommittee, the Debtors and
the U.S. Trustee will not object to the retention of or seek
disqualification of any of the professionals engaged by any or
all of the Official Committees or the Joint Subcommittee based on
access given by any of the professionals to the RCM Trustee, or
services rendered by any professional to the Official Committees
or the Joint Subcommittee.  The RCM Trustee will not seek to
disqualify any professionals based on his access to those
professionals.

Nothing in the Stipulation will be deemed to limit the right of
any of the Parties, the Debtors, or the U.S. Trustee to oppose
the retention of or to seek disqualification of a professional
for an actual conflict of interest.  The Parties and the Official
Committee members consent to Kasowitz's retention as general
counsel to the Additional Committee, provided that a proper
application for that retention will be made to the Bankruptcy
Court.

                      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. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


REFCO INC: U.S. Trustee Reconstitutes Official Creditors Committee
------------------------------------------------------------------
Diana G. Adams, the acting United States Trustee for Region 2,
further reconstitutes the Official Committee of Unsecured
Creditors as of August 3, 2006, to enable its members to meet
their fiduciary obligations to their constituents.

The U.S. Trustee appoints additional members to the Creditors
Committee to represent the interests of Refco Capital Markets,
Ltd. account holders asserting claims against the "Other Refco
Debtors" for, among others:

   * wrongful interference with contract and prospective
     economic advantage;

   * common law conversion and law fraud;

   * aiding and abetting fraud and breach of fiduciary duty

   * constructive trust;

   * unjust enrichment;

   * violations of federal and state securities laws and the
     "RICO" Act and other causes and similarly situated
     claimants.

The Additional Committee is composed of:

   1. VR Global Partners, L.P.
      Avora Business Park
      77 Sadovnicheskaya Nab. Building 1
      Moscow, Russia 115035
      Attention: Richard Deitz
      Phone: (011) 709-578-78181

   2. Premier Bank International N.V.
      Abraham Veerstraatt 7-A
      Willemstad, Curazao, Netherlands Antilles
      Attention: Richard Levinson, U.S. Representative
      Phone: (59-99) 461-3967 or 465-7708

   3. Everest Asset Management, Inc.
      1100 North 4th Street, Suite 143
      Fairfield, Iowa 52556
      Attention: Peter Lamoureux, President
      Phone: (641) 472-5500

   4. Fimex International Ltd.
      375 Park Avenue
      New York, New York 10152
      Attention: David Martinez
      Phone: (212) 593-4500

   5. Markwood Investments, Ltd.
      Via Lovanio 19
      Rome, Italy 00198
      Attention: Salvador Frieri
      Phone: (212) 408-5100

                      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. 37; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


RITE AID: Inks $3.4 Billion Merger Agreement with Jean Coutu
------------------------------------------------------------
Rite Aid Corporation and The Jean Coutu Group (PJC) Inc. entered
into a definitive agreement, on Aug. 24, 2006, on a transaction in
which its US subsidiary, The Jean Coutu Group (PJC) USA Inc., will
be merged into Rite Aid, strengthening Rite Aid's position as the
third largest national drugstore chain in the United States and
creating the largest drugstore chain on the East Coast.  The Jean
Coutu Group (PJC) USA includes 1,858 drugstores (337 Brooks stores
and 1,521 Eckerd stores) and six distribution centers, all located
primarily on the East Coast and in the Mid-Atlantic states.  All
of the stores will be re-branded Rite Aid and Rite Aid
headquarters will remain in Camp Hill, Pennsylvania.

Under the transaction, The Jean Coutu Group will receive
$1.45 billion in cash, subject to customary working capital
adjustments, and 250 million shares of Rite Aid common stock
giving it a 32.0% common equity interest and 30.2% of the voting
power in the expanded Rite Aid.  Rite Aid also intends to assume
$850 million of The Jean Coutu Group's long-term debt.  Based on
Rite Aid's prior one-month average closing share price, the
transaction would be valued at approximately $3.4 billion.  The
Jean Coutu Group will continue to independently act as franchisor
and distributor for its Canadian network currently consisting of
327 franchised drugstores located in three provinces.

Upon completion of the transaction, which has been approved by the
Boards of Directors of both companies, there will be approximately
5,000 Rite Aid stores in 31 states and the District of Columbia,
with coverage on both the East and West coasts.  The stores Rite
Aid will acquire are located in 18 states, with Rite Aid currently
operating in 14 of the states and adding Massachusetts, Rhode
Island, South Carolina and North Carolina to its national
footprint.  The combined fiscal 2006 revenues of Rite Aid and The
Jean Coutu Group (PJC) USA were approximately $26.8 billion.

                         Executive Team

Mary Sammons will continue to lead Rite Aid as President and CEO
while also becoming Chairman of the Rite Aid Board of Directors.  
Michel Coutu, currently President of The Jean Coutu Group's U.S.
operations, will become Co-Chairman of Rite Aid's Board and a
member of the Board's Executive Committee.  The Jean Coutu Group
will name three other independent members to a 14-person Rite Aid
Board, including Francois J. Coutu, Vice Chairman of The Jean
Coutu Group, Andre Belzile, Senior Vice President of Finance and
Corporate Affairs of The Jean Coutu Group, and Dennis Wood, one of
the independent members of The Jean Coutu Group's Board of
Directors.  Robert G. Miller, the current Rite Aid Chairman, will
continue to serve as a Director.  Also, Pierre Legault, The Jean
Coutu Group's Executive Vice President who was recently appointed
to run its U.S. operations, will become Rite Aid Senior Executive
Vice President, Chief Administrative Officer, while Rite Aid's
current senior management team remains in place.  As CAO, Mr.
Legault will be responsible for finance, information technology
and real estate and will be a member of the integration leadership
team along with Ms. Sammons, Jim Mastrian, Rite Aid Chief
Operating Officer, and Chris Hall, Rite Aid Senior Vice President
of Strategic Business Development.

                            Synergies

Rite Aid expects the transaction will enable it to achieve
significant cost efficiencies in the areas of merchandising,
purchasing, advertising and distribution as well as administrative
expense.  Net synergies are estimated to be $150 million after the
first twelve months following the close, with some net synergies
experienced during the first twelve months.  The company said it
expects the transaction to be accretive 12 months after the close
by $.09 to $.15 per diluted share. The company said it expects the
transaction to be dilutive by $.03 to $.07 per diluted share for
the first twelve months because of integration and non-recurring
expenses associated with the transaction.  The estimate of
dilution for the first twelve months does not include a gain or
loss on any regulatory-required store dispositions.

                    Rite Aid Growth Strategy

"We're very excited about this unique opportunity that
dramatically accelerates our growth strategy, particularly in
areas where we've been focusing our new store development," Ms.
Sammons said.  "The Brooks and Eckerd stores are in good locations
with dedicated associates committed to serving their customers and
their communities.  Adding these stores to our company gives Rite
Aid scale comparable to our major drugstore competitors, and we
believe this enables us to compete more effectively in a highly
competitive business.  We also look forward to bringing the Rite
Aid shopping experience to four new states while at the same time,
we continue our organic growth program with our very successful
"Customer World" store design.

"Successfully integrating these stores requires a strong
infrastructure like the one we have built at Rite Aid, with
information systems and a supply chain already capable of
supporting a significant increase in the number of stores.  We
believe the stores will also benefit from our proven front-end
merchandising programs, innovative advertising and promotion
programs, successful pharmacy marketing initiatives, solid
supplier relationships, state-of-the-art technology and strong
field structure.  With 70% of the acquired stores located in
states where we already operate, we expect to leverage our
systems, programs, best practices and executive management talent
to improve profitability by achieving substantial cost savings and
growing sales.  We'll also capitalize on our leadership team's
expertise in retail mergers and turnarounds and plan to make a
significant financial investment to improve the acquired stores.  
We look forward to working with Brooks and Eckerd associates to
effect a smooth transition and create a distinctive health and
wellness focused shopping experience second to none."

                The Jean Coutu's U.S. Investment

Jean Coutu, Chairman, President and CEO of The Jean Coutu Group,
said, "We see this transaction as a unique strategic opportunity
to optimize our U.S. presence by transforming our investment in a
regional drugstore chain into the leading ownership position in a
major national chain with the scale to better compete in the
growing U.S. drugstore industry.  The Jean Coutu Group and its
four designated Directors, who will be members of Rite Aid's
various Board committees, are proud to be associated with Rite
Aid's management.  We are confident that the team has the skills
and experience to leverage its capabilities across a larger
network.  At the same time, this transformational event allows us
to deleverage our balance sheet, maintain focus on our leading
Canadian franchise and should generate significant value for our
shareholders."

Rite Aid recently increased its sales guidance for fiscal 2007,
citing positive pharmacy same store sales trends and continuing
solid front end same-store sales gains.  The company also remains
on target with its organic new store development program with
plans to open 800 to 1,000 new stores over the next five years.

                       Transaction Funding

Rite Aid expects to finance the transaction with a combination of
existing excess cash on hand and through a combination of bank
borrowings, the issuance of debt securities, the expected
assumption of previously issued Jean Coutu Group 8.5% Senior
Subordinated Notes in the amount of $850 million, subject to
satisfaction of certain conditions, and the issuance of 250
million shares of common stock.  In the event the $850 million
Senior Subordinated Notes are not assumed by Rite Aid, the cash
paid would increase to $2.3 billion and Rite Aid would issue
additional debt securities to fund the increased cash
consideration.  A financing commitment has been obtained from
Citigroup North America, Inc. and Citigroup Global Markets Inc.

                   Pro Forma Financial Impact

The investment by The Jean Coutu Group in Rite Aid will be
accounted for using the equity method in future periods.  US
operations will not be presented as discontinued operations
considering the continuing involvement by the company in the
business.  The estimated proceeds on disposal of $3.4 billion are
subject to fluctuation due to changes in the US dollar per
Canadian dollar exchange rate and the Rite Aid share price until
the transaction closes.  Based on Rite Aid's prior one-month
average closing share price of $4.41 and an average exchange rate
of 0.8885 US dollars per Canadian dollar, The Jean Coutu Group
would have recorded an after-tax loss of $140 million from the
transaction.

Closing of the transaction is subject to review under the Hart-
Scott-Rodino Act, Rite Aid stockholder approval and other
customary closing conditions.  The closing date is dependent on
these activities but could be as early as Rite Aid's fiscal 2007
fourth quarter, which begins Dec. 3, 2006 and ends March 3, 2007,
and The Jean Coutu Group's fiscal 2007 third quarter, which begins
on Nov. 26, 2006 and ends Feb. 24, 2007.

The Brooks stores Rite Aid will acquire are located in Maine,
Vermont, New Hampshire, Massachusetts, Rhode Island and
Connecticut.  The Eckerd stores Rite Aid will acquire are located
in New York, Pennsylvania, New Jersey, Maryland, Delaware,
Virginia, West Virginia, Tennessee, North Carolina, South
Carolina, Georgia and Ohio.  The distribution centers Rite Aid
will acquire are located in Atlanta, Georgia; Charlotte, North
Carolina; Philadelphia, Pennsylvania; Dayville, Connecticut;
Syracuse, New York and Bohemia, New York.  The transaction also
includes The Jean Coutu Group (PJC) USA's corporate headquarters
in Warwick, Rhode Island.

Financial advisors for Rite Aid are Citigroup Corporate and
Investment Banking and Rothschild; exclusive financial advisor for
The Jean Coutu Group is J.P. Morgan Securities, Inc.

                        About Jean Coutu

Headquartered in Longueuil, Quebec, The Jean Coutu Group Inc.
(TSX: PJC.A) -- http://www.jeancoutu.com/-- is the fourth largest  
drugstore chain in North America and the second largest in both
the eastern United States and Canada.  The Company and its
combined network of 2,175 corporate and franchised drugstores
(under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu,
PJC Clinique and PJC Sante Beaute) employ more than 60,000 people.

The Jean Coutu Group's United States operations employ 46,000
people and comprise 1,853 corporate owned stores located in 18
states of the Northeastern, mid-Atlantic and Southeastern United
States.  The Jean Coutu Group's Canadian operations and franchised
drugstores in its network employ over 14,000 people and comprise
322 PJC Jean Coutu franchised stores in Quebec, New Brunswick and
Ontario.

                         About Rite Aid

Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation
(NYSE, PCX: RAD) -- http://www.riteaid.com/-- runs a drugstore  
chain with 2005 annual revenues of $17.3 billion and 3,320 stores
in 27 states and the District of Columbia.


RITE AID: Jean Stores' Acquisition Prompts Fitch's Negative Watch
-----------------------------------------------------------------
Fitch Ratings placed its ratings on Rite Aid Corp. on Rating Watch
Negative:

   -- Issuer Default Rating 'B-'
   -- Bank credit facility 'BB-'/'RR1'
   -- Senior secured notes 'BB-'/'RR1'
   -- Senior unsecured notes 'CCC+'/'RR5'

Fitch's rating action follows the announcement that Rite Aid has
agreed to acquire 1,858 drug stores from The Jean Coutu Group for
approximately $3.4 billion.  Rite Aid's consideration for the
transaction includes:

   * $1.45 billion in cash;

   * 250 million of newly-issued Rite Aid common shares; and

   * the assumption of Jean Coutu's $850 million 8.5% senior
     subordinated notes.

Fitch expects that the cash portion of the transaction price will
be primarily financed with new debt.  The transaction is subject
to approval by Rite Aid shareholders as well as regulatory
approvals.  It is expected to close as early as the fourth quarter
of fiscal 2007.

Rite Aid will acquire Jean Coutu's drug stores currently operating
under the Brooks and Eckerd banners in 14 states, primarily in the
Northeast and mid-Atlantic regions of the US. Rite Aid will also
acquire six distribution centers.  This transaction will
significantly increase Rite Aid's current drug operations, to
approximately 5,000 stores, thus closing the gap with its largest
competitors.

Rite Aid will remain the third largest drug operator in the US,
and will have pro forma revenues of approximately $28.0 billion,
up from $17.4 billion for the latest 12 months ended June 3, 2006.

In addition, following the completion of the acquisition, Rite Aid
is expected to have approximately $5.5 billion of total debt.  As
a result, credit metrics are anticipated to remain weak as the
company's ability to delever will be constrained going forward.
For the LTM period ended June 3, 2006 Rite Aid's adjusted leverage
was 6.8x and EBITDAR coverage of interest and rents was 1.3x.

In resolving the Rating Watch Negative status, Fitch will consider
Rite Aid's ability to:

   * successfully integrate the acquired stores;

   * manage higher debt balances with limited financial
     flexibility; and

   * improve the current condition of its consolidated stores base
     through increased capital investments.

Fitch expects that the company will face significant challenges in
integrating its new stores while also positioning its store base
to better compete with other market players.  Also considered will
be Rite Aid's larger store base, and its ability to better
leverage its distribution and purchasing network.


RITE AID: $3.4 Billion Jean Stores' Buy Cues S&P's Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' corporate credit rating, on Harrisburg, Pennsylvania-
based Rite Aid Corp. on CreditWatch with negative implications.

This action follows the company's announcement that it will
acquire all of the U.S.-based Eckerd and Brooks drugstores from
Que., Canada-based Jean Coutu Group (PJC) Inc. in a transaction
valued at approximately $3.4 billion.  Although the purchase price
includes 250 million of Rite Aid common stock (about $1.1
billion), Rite Aid will also finance another $1.45 billion and
will assume $850 million of Jean Coutu's long-term debt.

"After including our estimate of the present value of the acquired
operating leases and EBITDA, Rite Aid's leverage is expected to
increase to perhaps 7.5x on a pro forma basis, from 7.0x at the
end of 2005," said Standard & Poor's credit analyst Gerald
Hirschberg.

"The increased financial risk and challenges of integrating the
acquired stores could result in a lower credit rating."

Standard & Poor's review of the rating will also factor in several
positives.  The acquisition should greatly strengthen Rite Aid's
position in the U.S. drug store industry (currently about 3,300
stores) and make the company a more formidable competitor with CVS
and Walgreen.  The acquired stores total 1,858 drugstores,
including 337 Brooks stores and 1,521 Eckerd stores, all located
primarily on the East Coast and in the Mid-Atlantic states.

Standard & Poor's expects that all of the stores will be rebranded
into the Rite Aid nameplate.  Combined revenues are approximately
$26.8 billion.  

Rite Aid expects the transaction will enable it to achieve
significant cost efficiencies in the areas of merchandising,
purchasing, advertising, and distribution, as well as
administrative expense.  Integration and nonrecurring expenses
associated with the transaction are expected to be dilutive during
the first 12 months, but savings of about $150 million are
anticipated in the next 12 months.


SAINT VINCENTS: Inks Resolution Agreement with NY Attorney General
------------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to approve their Resolution Agreement with
the Office of the Attorney General of the State of New York.

The OAG received complaints concerning the provision of language
interpretation and translation services at St. Vincent's Hospital,
Staten Island.  Subsequently, the OAG began an investigation into
SVHSI's policies, procedures, and practices regarding language
assistance services.

To avoid the expense and inconvenience of further investigation or
litigation, and while denying any wrongdoing or liability in the
matter, Saint Vincent Catholic Medical Centers, doing business as
SVHSI, entered into a resolution agreement with the OAG.

The Resolution Agreement revises SVHSI's policies in a number of
ways, specifically, in the areas of:

    * Assessment of Interpreters and Language Banks;
    * Providing and Securing Language Assistance Services;
    * Monitoring;
    * Training; and
    * Appointment of a Language Assistance Coordinator.

Among other things, the Resolution Agreement provides that:

    (a) SVHSI will establish a written Language Bank identifying
        Hospital Employees who may interpret or translate Medical
        Information to LEP Patients -- patients whose primary
        language is not English and who cannot speak, read, write
        or understand English at a level sufficient to permit the
        patient to interact effectively with health care
        providers.

    (b) SVHSI will ensure that each shift includes a sufficient
        number of Qualified Interpreters.

    (c) SVHSI will continue to maintain a contract with a
        company qualified to provide telephonic interpretation
        services.

    (d) Hospital Employees will seek to provide face-to-face
        interpretation services where possible.

    (e) SVHSI will collect and report data over three Reporting
        Periods.

    (f) SVHSI will prepare Language Assistance Monitoring Reports.

    (g) The Language Assistance Monitoring Reports will be used to
        address service deficiencies and to help prepare a
        separate report summarizing internal needs and plans for
        future changes.  Both the Language Assistance Monitoring
        Report and the Internal Needs Assessment Report will be
        provided to the OAG.

    (h) SVHSI will take additional steps to measure the adequacy
        of its language assistance services, including: (1)
        patient satisfaction surveys; (2) provider satisfaction
        surveys; (3) spot checks of various departments to
        determine the extent to which Hospital Employees are
        complying with language assistance policies and
        procedures; and (4) telephone tests to assess the
        adequacy of staff responses to telephone inquiries from
        LEP persons.

    (i) SVHSI will develop a concise summary of procedures to
        follow when employees come into contact with LEP Patients,
        which will be subject to the approval of the OAG.  Once
        approved, the LEP Policy Summary will be distributed to
        all employees who come into contact with patients, and
        will be posted in specific locations.

    (j) SVHSI will appoint a specific individual or individuals
        responsible for implementing language assistance services
        and for ensuring compliance with the Agreement.

A full-text copy of the Resolution Agreement is available for
free at http://ResearchArchives.com/t/s?1066

Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, New York,
notes that the Resolution Agreement will help the Debtors avoid
the significant time, expense and uncertainty of further
investigation and litigation on the matter, thus, allowing them
to focus on their reorganization.

The Resolution Agreement is also the product of arm's-length
bargaining over several months, and was entered into without
fraud or collusion, Mr. Troop asserts.

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. 32 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SAINT VINCENTS: Moves to Renew Pacts with Six Bargaining Units
--------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates have determined to renew or extend their
relationship with six separate collective bargaining units.

Specifically, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to enter into six agreements that
will govern their relationship with those collective bargaining
units for varied periods, generally between one and two years, to
ensure compliance, to the extent required, with Section 363(b) of
the Bankruptcy Code:

    1. The Master Clerical Agreement with the Teamsters Local 803
       covers the full-time and regular part-time office clerical
       and professional employees who are regularly scheduled to
       work 14 hours or more per week at St. John's Hospital,
       Queens, and Mary Immaculate Hospital, Queens.  The term of
       the agreement runs from February 15, 2006, through June 30,
       2007.

       The Local 803 Master Clerical Agreement supercedes all
       previously dated written agreements while maintaining the
       status quo with respect to the existing terms and
       conditions of employment for the Local 803 Employees.

    2. The Transportation Personnel Agreement with the Teamsters
       Local 803 covers the full-time and regular part-time office
       paramedics, emergency medical technicians, chauffeurs, and
       vehicle maintenance employees who are regularly scheduled
       to work 16 hours or more per week at MIH.  The term of the
       agreement runs from February 15, 2006, through June 30,
       2007.

       The Local 803 Transportation Personnel Agreement supercedes
       all previously dated written agreements while maintaining
       the status quo with respect to the existing terms and
       conditions of employment for the Local 803 Transportation
       Personnel Employees.

    3. The Memorandum of Agreement with the Special and Superior
       Officers Benevolent Association covers the security
       officers working at St. John's, MIH, St. Anthony's and St.
       Matthew's.  The Agreement extends the parties' relationship
       through September 30, 2006.

       The SSOBA Memorandum of Agreement makes changes to the
       vacation donation, meal break and training policies.
       Except for those changes, it maintains the status quo with
       respect to the existing terms and conditions of employment
       for the SSOBA Employees.

    4. The Memorandum of Agreement with Building and Construction
       Trades Council covers the MIH engineering and maintenance
       employees.  It runs through October 15, 2007.

       The BCTC Memorandum of Agreement maintains the status quo
       with respect to the existing terms and conditions provided
       by the CBA.

    5. The MIH Agreement and Monsignor Fitzpatrick Agreement with
       the New York State Nurses Association covers nurses working
       at MIH and Monsignor Fitzpatrick.  The NYSNA Agreements
       provide for an extension retroactive to Feb. 1, 2006, and
       effective through Jan. 31, 2007.

       The NYSNA Agreements maintain the status quo except for
       these changes:

       (a) an increase in employer pension plan contributions for
           eligible employees retroactive to February 1, 2006,
           and applicable through Dec. 31, 2006, at the rate of
           $7,278;

       (b) effective Jan. 1, 2007, through Jan. 31, 2007, an
           increase in employer pension plan contribution for
           eligible employees at the rate of $7,866; and

       (c) for permanent full-time employees, retroactive to
           Feb. 1, 2006, and effective during the term of the
           NYSNA Agreements, the Debtors will make a prorated
           monthly premium contribution on behalf of each full-
           time employee to the NYSNA benefits fund.  The premium
           that went into effect on Feb. 1, 2006, is $11,123
           annually.

Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that entry into the Labor Agreements will
facilitate the assignment of the Labor Agreements pursuant to the
terms of the asset purchase agreement applicable to the buyer of
St. John's, MIH and Monsignor Fitzpatrick.

Mr. Troop clarifies that the assumption of any predecessor
agreements will not constitute an assumption of any unpaid
contributions owed to any of the Unions that were not paid
prepetition, which will remain prepetition claims in the Debtors'
bankruptcy cases.

Moreover, Mr. Troop notes that the Labor Agreements are not and
will not be considered a postpetition agreement by the Debtors to
pay the Prepetition Obligations other than as may be provided in
a confirmed plan of reorganization subsequently confirmed in the
Debtors' Chapter 11 cases.

The Debtors owe Prepetition Obligations to Local 803, SSOBA and
NYSNA, Mr. Troop says.

Mr. Troop explains that absent approval, the Labor Agreements
will have expired and the Debtors will be at risk of work
stoppages by the employees that may severely disrupt the
Debtors':

    (i) ability to provide patient care at MIH and Monsignor
        Fitzpatrick;

   (ii) provision of services necessary for the efficient function
        of the Debtors' other facilities, St. John's, St.
        Anthony's and St. Matthew's; and

  (iii) ability to assign the Labor Agreements to the buyer
        pursuant to the terms of the applicable asset purchase
        agreement.

According to Mr. Troop, the Labor Agreements will preserve and
protect the value of the Debtors' estates and enable them to
maximize return to creditors by ensuring the effective
administration of certain critical aspects of the Debtors'
business, and continue the Debtors' mission of providing high
quality patient care at MIH and Monsignor Fitzpatrick.

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. 32 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)  


SANMINA-SCI: Fitch Lowers Issuer Default Rating to B+ from BB-
--------------------------------------------------------------
Fitch Ratings downgraded Sanmina-SCI Corporation:

   -- Issuer Default Rating to 'B+' from 'BB-'

Fitch also placed Sanmina's IDR, as well as these ratings, on
Rating Watch Negative:

   -- Senior subordinated debt 'B+'
   -- First lien senior secured credit facility 'BB+'

Additionally, Fitch initiated a 'RR1' recovery rating for
Sanmina's senior secured credit facility, and a 'RR4' for the
senior subordinated debt.  Fitch's action affects approximately
$1.5 billion of outstanding debt securities.

The downgrade reflects:

   * Sanmina's weaker financial profile and lower financial
     flexibility relative to peers;

   * Fitch's expectations for further delays in improving
     operating performance combined with weaker than anticipated
     sales growth trends; and

   * limited prospects for meaningful strengthening of credit
     protection measures.

Fitch anticipates total debt adjusted for rent expense and limited
recourse on sales of accounts receivables will remain at
approximately $2 billion through the intermediate term, among the
highest of its peer group, as Fitch expects Sanmina to refinance
its primary near-term maturities with long-term debt.

While refinancing will improve Sanmina's liquidity position, it
also will extend catalysts for debt reduction through 2009, when
the company's $400 million 6.75% senior subordinated notes become
callable.

Fitch revised Sanmina's Rating Outlook to Negative from Stable in
December 2005 due to pressured operating metrics and the company's
lack of debt reduction.  The ratings are supported by:

   * Fitch's expectation for longer term industry growth trends
     driven in part by increased penetration of the manufacturing
     and design outsourcing model;

   * Sanmina's strong historical relationships with tier-one
     customers; and

   * the significant scale and scope of the company's operations.

The Negative Rating Watch primarily reflects:

   * Sanmina's delayed filing of its 10Q and compliance
     certificates for the quarter ended July 1, 2006;

   * the resultant technical default under the terms of the
     subordinated and convertible indentures (the banks provided a
     compliance waiver through the cure period for both the credit
     facility and receivables sales agreement) and non-compliance
     with NASDAQ's filing requirements (the company continues to
     be listed on the exchange pending a decision by NASDAQ's
     Listing Qualifications Panel); and

   * the company's ongoing internal investigation by a special
     committee comprised of board members, independent outside
     legal counsel, and accounting consultants into the company's
     stock option administration practices dating back to
     Jan. 1, 1997.

The Negative Rating Watch also considers the heightened
refinancing risk related to the aforementioned $525 million
convertible subordinated notes due March 2007.  

Fitch believes that a resolution of the stock option
investigation, a satisfactory filing of Sanmina's 10Q and
compliance certificates, and further insight into the company's
refinancing plans, would resolve the Negative Rating Watch status.

Fitch anticipates further delays in meaningful operating EBIT
margin expansion due to ongoing industry-wide excess capacity,
continued program specific demand volatility, and sustained
pricing pressures related to Sanmina's personal computing
business.

In addition, Sanmina's components businesses and the company's
efforts to increase vertical integration have demonstrated
improvement but Fitch expects this effort to remain a relatively
small portion of total sales through the intermediate term.  Fitch
expects Sanmina's operating EBIT margins to increase to nearly
2.5% over the intermediate-term from 2.3% for the latest 12 months
ended April 1, 2006, and 2.1% in both fiscal years 2005 and 2004.

The lack of a significant improvement in profitability has been
compounded by declining sales trends which are expected to
stabilize in FY 2007 ending Oct. 1, 2007.  Fitch expects sales for
FY 2006 to be down 6.5%, well below beginning of the year
forecasts of 5%-10% growth despite relatively stable industry
demand.

Sanmina has been negatively affected by the company's meaningfully
higher exposure to the lower growth rates and more uneven demand
patterns of communications equipment and computing end markets,
which continue to represent approximately 80% of current revenues
(among the least diversified in the industry).  Revenue from
faster growing non-traditional end markets has not offset the
decline in Sanmina's core markets.

Fitch estimates Sanmina's sales will grow approximately 5% for FY
2007 despite potential further sales declines from Lenovo, a top
customer for Sanmina, based on the assumption that the company
will gain further traction in non-traditional markets with some
stabilization expected in the communications and computing
segments.

As a result, Fitch expects credit protection measures to remain
near current levels through FY 2007.  Total adjusted leverage is
expected to be 4.5x for FY 2006 and 4.3x for FY 2007, down from
4.8x for FY 2005.  Interest coverage is estimated to be near 3x
over the same period with the potential for higher interest costs
related to Sanmina's expected refinancing offsetting modest
profitability expansion.

The Recovery Ratings and notching reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of Sanmina, and hence,
recovery rates for its creditors, will be maximized in a
restructuring scenario (going concern) rather than a liquidation
scenario.  An estimate of Sanmina's enterprise value as a going
concern under a distressed scenario requires an estimation of: 1)
a percentage discount to apply to the LTM EBITDA that would likely
trigger a distressed scenario and 2) an appropriate EBITDA
multiple to apply to this stressed EBITDA to derive an estimate of
enterprise value.

Fitch applies 15% discount to LTM EBITDA based on an estimate of
Sanmina's current fixed charge coverage ratio of 2.6x versus the
minimum 1.75x required under its bank credit facility.  Fitch then
applies a 4x distressed EBITDA multiple to reflect Fitch's
expectations that Sanmina's current multiple of 6.3x would
contract under a stressed scenario.  

That leads to a distressed enterprise value estimate of
approximately $1 billion, providing the basis for a waterfall
analysis to determine recovery ratings.  The 'RR1' recovery rating
for Sanmina's secured bank facility reflects Fitch's belief that
100% recovery is realistic.  The 'RR4' recovery rating for the
subordinated debt reflects Fitch's estimate that a recovery of
31%-50% would be achievable.

Fitch believes liquidity was pressured as of July 1, 2006, and
supported by approximately $563 million of cash and equivalents
and an undrawn $500 million senior secured revolving credit
facility due 2008, which is not available for refinancing
purposes.  Sanmina's $200 million receivables sales facility due
2007 also supports liquidity.  

Total debt was approximately $1.5 billion at July 1, 2006, and
consisted primarily of:

   1) $525 million 3% convertible subordinated notes due
      March 2007;

   2) $400 million of 6.75% senior subordinated notes due
      March 2013 (callable in 2009); and

   3) $600 million of 8.125% senior subordinated notes due
      March 2016.


SATELITES MEXICANOS: Judge Drain Enters Order Enforcing Stay
------------------------------------------------------------
The Honorable Robert D. Drain, of the U.S. Bankruptcy Court for
the Southern District of New York, upon the request of Satelites
Mexicanos, S.A. de C.V., entered an order enforcing and restating
the automatic stay and ipso facto provisions of the Bankruptcy
Code.  

The Debtor is organized and operates in Mexico and has many
creditors and counterparties to contracts that may not be well-
versed in the restrictions of the United States Bankruptcy Code,
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
New York, relates.

According to Mr. Despins, various interested parties may attempt
to seize assets located outside of the United States to the
detriment of the Debtor, its estate and creditors, or take other
actions in contravention of the automatic stay under Section 362
of the Bankruptcy Code.  

Upon learning of the Debtor's bankruptcy, counterparties to the
Debtor's leases and executory contracts may attempt to terminate
those leases or contracts pursuant to ipso facto provisions
contained therein in contravention of Section 365 of the
Bankruptcy Code, Mr. Despins adds.

Mr. Despins explains that, notwithstanding the fundamental nature
of the automatic stay and ipso facto protections, and the fact
that they arise as a matter of law upon the commencement of a
Chapter 11 case, not all parties are aware of those Bankruptcy
Code provisions.  Nor are all parties cognizant of their
significance and impact.  

Furthermore, as the Chapter 11 Plan provides for payment in full
of the claims of all of the Debtor's creditors, other than holders
of Senior Secured Notes and Existing Bonds, the granting of the
Debtor's request will prevent unfair and obstructionist practices
by creditors who are going to receive full payment of their claims
under the Chapter 11 Plan, Mr. Despins maintains.

                   About Satelites Mexicanos

Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico.  Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds.  Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.  
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.

The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868).  Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings.  Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings.  UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor.  Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee.  As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.

On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.

On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103).  (Satmex Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


SATELITES MEXICANOS: Valor Okayed as Interim Financial Advisors
---------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., obtained authority, from the
U.S. Bankruptcy Court for the Southern District of New York, to
employ Valor Consultores S.A. de C.V., as interim financial
advisors.

Carmen Ochoa Avendano, Esq., general counsel of the Debtor, tells
the Court that the restructuring of the Debtor's liabilities will
require intensive participation of various advisors.  In this
regard, the Debtor has tapped Valor, as its financial advisors, to
work in tandem with UBS Securities LLC and any other financial
advisor it will retain.

Valor provides advisory services to companies in Mexico in the
areas of corporate finance, mergers and acquisitions and financial
restructurings.  Ms. Avendano relates that Valor is intimately
familiar with the Debtor's business and financial affairs and thus
is well qualified to provide financial advisory services.  Valor,
she continues, has been assisting the Debtor in its restructuring
efforts since September 2005, and has gained valuable knowledge of
the Debtor, its business operations, capital structure, strategic
and financial needs, and the negotiations with various creditor
constituencies leading to the filing of the Chapter 11 case.

Ms. Avendano also notes that Valor's Managing Partner, J. Sandor
Valner, who will be primarily responsible for the services
provided to the Debtor, ran Credit Suisse's Mexican operations
before joining Valor.  Mr. Valner has provided financial advisory
services in Mexico for more than 15 years and has led initial
public offerings, debt offerings, acquisitions, divestitures, and
restructurings with an aggregate value of more than $15 billion.

Pursuant to the parties' engagement letter, Valor will:

    (a) advise and assist the Debtor in analyzing, structuring,
        negotiating and implementing the financial aspects of any
        restructuring of the Debtor and its affiliates'
        liabilities, including any exchange, conversion,
        repurchase or repayment of any liabilities, or any
        modification, amendment, deferral, restructuring,
        recapitalization, rescheduling, moratorium, or adjustment
        of the terms or conditions of those liabilities;

    (b) advise and assist the Debtor with respect to a sale,
        merger, consolidation or liquidation of the Debtor's
        assets, including assisting the Debtor in analyzing,
        structuring, negotiating, and implementing the financial
        aspects of a Sale Transaction; and

    (c) provide other assistance and services.

All services to be provided by Valor will not be duplicative of
the services provided by UBS, Ms. Avendano assures the Court.

Valor will bill the Debtor:

     -- a $60,000 monthly financial advisory fee;

     -- a $500,000 Restructuring Transaction Fee, which will
        become due when a Restructuring Transaction becomes
        binding on the creditors affected thereby and payable on
        the date of the closing of the Restructuring Transaction;
        and

     -- a Sales Transaction Fee equal to 0.40% of the Transaction
        Value, payable at the closing of a Sale Transaction.

The Debtor will also reimburse Valor for all of its reasonable and
documented expenses, provided that Valor obtains the Debtor's
prior written consent before incurring any single expense in
excess of $10,000.

Ms. Avendano discloses that as of the date of filing for chapter
11 protection, the Debtor had paid 11 Monthly Advisory Fees
totaling $660,000 to Valor.  Of this amount, $330,000, as well as
50% of any Monthly Advisory Fees paid after the Petition Date,
will be credited against the first to occur of the Restructuring
Transaction Fee or the Sale Transaction Fee.

The Debtor will indemnify Valor and its related parties from any
liabilities and expenses in connection with the engagement, except
to the extent that it will be determined by a court of competent
jurisdiction in a final non-appealable judgment that those
liabilities resulted from the gross negligence or willful
misconduct of the indemnified parties.

Mr. Valner reports that, according to his firm's books and
records, for the year prior to the Petition Date, Valor received
$660,000 from the Debtor for services performed and expenses
incurred, plus $99,000 for applicable value-added taxes.

Mr. Valner assures the Court that Valor does not hold or represent
any other entity having an adverse interest in connection with the
Debtor's case.  Valor, he attests, is a "disinterested person," as
defined in Section 101(14) of the Bankruptcy Code as modified by
Section 1107(b).

                   About Satelites Mexicanos

Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico.  Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds.  Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.  
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.

The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868).  Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings.  Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings.  UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor.  Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee.  As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.

On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.

On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103).  (Satmex Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


SEARS HOLDINGS: Second Quarter Net Income Soars to $294 Million
---------------------------------------------------------------
Sears Holdings Corporation reported net income of $294 million for
the second quarter ended July 29, 2006, compared with net income
of $161 million for the second quarter ended July 30, 2005.

The second quarter 2006 results include a $36 million pre-tax
gain, or $22 million net of taxes representing the Company's
portion of proceeds received during the second quarter of 2006
related to the settlement of Visa/MasterCard antitrust litigation.
Excluding the impact of this gain, second quarter 2006 net income
was $272 million.

In addition, the prior year second quarter results included
$42 million in merger-related restructuring charges at Kmart, or
$26 million net of taxes.  Excluding the impact of these charges,
prior year second quarter net income was $187 million.

The improvement in second quarter 2006 earnings reflects improved
profitability at both Kmart and Sears Domestic, largely due to
reduced expenses and an increase of 120 basis points in gross
margin rate from 27.2% in 2005 to 28.4% in 2006.

"Sears Holdings' resolve to improve the profitability of this
business remains strong and is borne out in the company's second
quarter results," Aylwin Lewis, Sears Holdings' chief executive
officer and president, said.

He added, "While we are making progress, we must continue to focus
on our customers, improve the shopability of our stores and
continue to give our customers reasons to shop our stores more
frequently."

         Second Quarter Revenues & Comparable Store Sales

For the quarter, domestic comparable stores sales declined 3.8% in
the aggregate, with Sears Domestic comparable store sales
declining 6.3% and Kmart comparable store sales declining 0.6%.
The comparable store sales declines at both Kmart and Sears
Domestic reflect the impact of increased competition and lower
transaction volumes.

At Kmart, comparable store sales declines in home goods were
partially offset by increased sales within a number of merchandise
categories, including apparel, general merchandise, pharmacy and
food and other consumable goods.

At Sears Domestic, comparable store sales declined across most
categories and formats, with more pronounced sales declines within
both the home fashion and lawn and garden categories.

Total revenues declined $400 million to $12.8 billion for the 13
weeks ended July 29, 2006, as compared with total revenues of
$13.2 billion for the 13 weeks ended July 30, 2005.

Sears revenues were $8.3 billion for the 13 weeks ended July 29,
2006, as compared with $8.6 billion for the 13 weeks ended
July 30, 2005, primarily reflecting the impact of comparable store
sales declines, partially offset by an increase in the total
number of Sears Full-line stores in operation, resulting mainly
due to conversions from the Kmart format.

Total revenues at Kmart declined $1 million as compared with the
prior year period, primarily reflecting a reduction in the total
number of Kmart stores in operation.

                         Operating Income

Operating income was $517 million for the 13 weeks ended July 29,
2006, as compared with $324 million for the 13 weeks ended
July 30, 2005.  The increase in operating income was due to an
increase of $92 million of Kmart operating income, as well as a
$77 million increase in Sears Domestic operating income mainly due
to lower expenses as a result of realizing merger synergies and a
reduction of selling and administrative costs which decreased from
$3.0 billion (22.8% of revenues) last year to $2.8 billion (22.1%
of revenues) this year.

The second quarter 2006 results include a $36 million one-time
gain, recorded as a reduction of selling and administrative
expenses, representing the Company's portion of proceeds received
during the second quarter of 2006 related to the settlement of
Visa/MasterCard antitrust litigation.  Excluding the impact of
this gain, second quarter operating income was $481 million.

In addition, the prior year results included $42 million in
merger-related restructuring charges at Kmart.  Excluding the
impact of these charges, the prior year second quarter operating
income was $366 million.

Revenues declined from $13.2 billion last year to $12.8 billion
this year, however, the impact of this decline was largely offset
by an improvement in gross margin rate to 28.4% this year, an
increase of 120 basis points from the prior year rate.

                        Financial Position

The Company had cash and cash equivalents of $3.7 billion at
July 29, 2006 (of which $3.2 billion is domestic and $0.5 billion
is at Sears Canada) as compared with $2.1 billion at July 30,
2005, and $4.4 billion at January 28, 2006.

The decline in cash from fiscal 2005 year end is attributable to
share repurchases, cash used in the acquisition of additional
interests in Sears Canada, capital expenditures and debt
repayments, partially offset by cash generated from operations.

Merchandise inventories at July 29, 2006, were approximately
$9.5 billion, as compared with $9.0 billion as of July 30, 2005.  
The increase reflects planned increases due to earlier receipt of
product this year and increases in categories where the Company
believes business trends support higher inventory levels.

Merchandise payables were $3.3 billion at July 29, 2006, as
compared with $3.5 billion as of July 30, 2005.

                         Share Repurchase

During the second quarter of 2006, the company repurchased 700,000
common shares at a total cost of $91 million, or an average price
of $137.67 per share.

As of July 29, 2006, the Company had remaining authorization to
repurchase $406 million of common shares under its existing share
repurchase program approved by the board of directors.

The remaining shares may be purchased in the open market, through
self-tender offers or through privately negotiated transactions.
Timing will depend on prevailing market conditions, alternative
uses of capital and other factors.

Investment of Available Capital

The Company had total domestic cash and cash equivalents of
$3.2 billion at July 29, 2006.  Since the merger between Kmart and
Sears, the Company's cash flows have exceeded its working capital,
financing and capital investment needs, and management expects
that the Company's cash flows will continue to exceed its
operating cash needs for the foreseeable future.

The Company regularly evaluates how best to use available capital
to increase shareholder value.  The Company has and will continue
to invest in its businesses to improve the customer experience and
provide the opportunity for attractive returns.

The Company has also repurchased $1.1 billion of its common shares
since the merger and expects to continue to repurchase shares
subject to market conditions and board authorization.

In addition, the Company may pursue investments in the form of
acquisitions, joint ventures and partnerships where the Company
believes attractive returns can be obtained.

Further, the Company may determine under certain market conditions
that available capital is best utilized to fund investments that
it believes offer the Company attractive return opportunities,
whether or not related to its ongoing business activities.

The Company's Board of Directors has delegated authority to direct
investment of the Company's surplus cash to its Chairman, Edward
S. Lampert, subject to various limitations that have been or may
be from time to time adopted by the Board of Directors and Finance
Committee of the Board of Directors.

As of July 29, 2006, the Company's surplus cash was primarily
invested in short-term, highly liquid investments.  The Company is
currently using, and may in the future use, a portion of its
available capital to invest in marketable securities and other
financial instruments, including derivatives.

These investments may include significant and highly concentrated
direct investments and related derivative positions with respect
to the equity securities of public companies.

Derivative contracts would be recorded on the Company's balance
sheet at fair value and, for non-hedge contracts, changes in fair
value would be recognized currently in earnings as unrealized
gains or losses.

"Our strong financial position and cash flow generation provide us
with the flexibility to capitalize on a wide range of market
opportunities as they arise.

"In addition to investing in our business and acquiring our
shares, we are prepared to invest substantial amounts of capital
if we identify other attractive investment opportunities which
have the potential for returns we believe appropriately compensate
the Company for the associated risks." Edward S. Lampert, chairman
of Holdings, said.

Any such investments will involve risks, and shareholders should
recognize that Holdings' balance sheet may change depending on the
extent of excess funds and the timing, magnitude and performance
of investments which the Company may make.

Furthermore, such investments would be subject to volatility that
may affect both the recorded value of the investments as well as
the Company's periodic earnings.

The Company plans to file with the SEC its Quarterly Report on
Form 10-Q for the second quarter 2006 on or before Sept. 7, 2006.

                     About Sears Holdings Corp.

Hoffman Estates, Illinois-based Sears Holdings Corporation
(NASDAQ: SHLD) -- http://www.searsholdings.com/-- is the nation's  
third largest broadline retailer, with approximately $55 billion
in annual revenues, and with approximately 3,800 full-line and
specialty retail stores in the United States and Canada.  Sears
Holdings is a home appliance retailer as well as a retailer of
tools, lawn and garden, home electronics, and automotive repair
and maintenance.  Key proprietary brands include Kenmore,
Craftsman and DieHard, and a broad apparel offering, including
well-known labels as Lands' End, Jaclyn Smith, and Joe Boxer, as
well as the Apostrophe and Covington brands.  It also has Martha
Stewart Everyday products, which are offered exclusively in the
U.S. by Kmart and in Canada by Sears Canada.

                           *     *     *

As reported in the Troubled Company Reporter on June 23, 2006,
Standard & Poor's Ratings Services revised its outlook on Sears
Holdings Corp. to stable from negative.  All ratings, including
the 'BB+' corporate credit rating, and the 'B-1' short-term rating
for Sears Roebuck Acceptance Corp., are affirmed.

As reported in the Troubled Company Reporter on Jun 22, 2006,
Fitch affirms its ratings of Sears Holdings Corporation including
its Issuer Default Rating (IDR) at 'BB'; Senior notes at 'BB'; and
Secured bank facility at 'BBB-'.


SENECA GAMING: Low Leverage Cues Moody's to Upgrade Rating
----------------------------------------------------------
Moody's Investors Service raised Seneca Gaming Corporation's
corporate family rating to Ba2 from Ba3, and senior note rating to
Ba3 from B1.  At the same time, Seneca's SGL-2 speculative grade
liquidity rating was affirmed.  The ratings outlook is stable.

The upgrade considers that since the initial rating in April 2004,
Seneca's financial profile has improved despite significant
development activity, and that the Seneca Niagara casino facility
continues to have a strong hold on its local market.  The Ba2
rating and stable outlook also considers Seneca's low leverage,
relatively small size, dependence on a single market area, and
Moody's expectation that Seneca will continue to distribute most
of its surplus operating cash flow to the Seneca Nation of Indians
of New York.  Seneca's SGL-2 speculative grade liquidity rating
acknowledges the company's good liquidity and the expectation that
the company will be able to meet its obligations over the next
twelve months through a combination of internal sources of cash
flow and balance sheet cash.

Moody's previous rating action on Seneca occurred on May 16, 2005
with the confirmation of its corporate family rating and an
upgrade of its $300 million 7-1/4% senior note due 2012.  A new
rating was also assigned at that time to Seneca's $200 million
7-1/4% senior note add-on.

Seneca Gaming Corporation is an incorporated instrumentality of
the Seneca Nation of Indians of New York.  The Seneca Nation of
Indians of New York is federally recognized and has a compact with
the State of New York that provides the Nation with the right to
establish and operate three Class III gaming facilities in western
New York.  Net revenue reported for the 12-month period ended
June 30, 2006 was $493 million.  Total debt outstanding reported
was $500 million.


SMART ONLINE: Sells $250,000 Common Shares to Investors
-------------------------------------------------------
Smart Online, Inc., disclosed that in transactions that closed on
Aug. 17, 2006, and Aug. 21, 2006, it sold 50,000 shares of its
common stock to The Blueline Fund, a current investor, and 50,000
shares to an individual new investor.

The private placement shares were sold at $2.50 per share.  The
aggregate amount raised in the private placement was $250,000.

The Company, Blueline and the individual have entered into
Subscriber Rights Agreements whereby the Company has an obligation
to register the shares sold for resale by the purchaser by filing
a registration statement on or before Sept. 30, 2006.  If a
registration statement is not filed by that date, the Company is
obligated to pay a penalty obtained by multiplying the total
purchase price for the shares by 0.5% by the number of prorated 30
day periods after the target registration date.  At the Company's
sole discretion, the penalty can be paid in the number of shares
obtained by dividing the total penalty amount by the per share
purchase price.

The Company further disclosed that the investors have also entered
into Dribble Out Agreements with the Company, pursuant to which,
they may sell up to 25% of the shares during any rolling 30 day
period, following the effective date of the registration
statement.

The shares in the transactions were sold in reliance upon the
exception afforded by Rule 506 of Regulation D of the Securities
and Exchange Commission and Section 4(2) of the Securities Act of
1933, as amended.

The Company also disclosed that the proceeds from the transaction
are to be used primarily to pay for ongoing operations, current
liabilities, and legal and professional expenses related to
matters regarding the internal investigation and the SEC matters,
audit and professional fees related to SEC filings, and
installment payments due the sellers for the acquisition of iMart
Incorporated.

Smart Online Inc. -- http://www.SmartOnline.com/-- develops and  
markets Internet-delivered Software-as-Service software
applications and data resources to start, run, protect and grow
small businesses.

                      Going Concern Doubt

Sherb & Co., LLP, expressed substantial doubt about Smart Online,
Inc.'s ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005
and 2004.  The auditing firm pointed to the Company's recurring
losses from operations and working capital deficit.


SOLUTIA INC: Sells European Unit to Dishman Pharma for $74.5 Mil.
-----------------------------------------------------------------
Solutia Europe SA/NV, a subsidiary of Solutia Inc., completed the
sale of its Pharmaceutical Services business, comprised
principally of SESA's subsidiary CarboGen Amcis AG --
http://www.carbogen-amcis.com/

Dishman Pharmaceuticals and Chemicals Limited and its subsidiaries
have purchased 100% of the stock of CarboGen Amcis AG, as well as
certain other assets used in the Pharmaceutical Services business,
for approximately $74.5 million, subject to a working capital
adjustment.

The Pharmaceutical Services business provides seamless drug
development and commercialization services for leading
pharmaceutical and biotechnology companies.  During the year 2005,
the business had sales of approximately CHF80 million.  The
Pharmaceutical Services business has world-class research and
development facilities at three sites in Switzerland: Aarau,
Bubendorf, and Neuland. All intellectual property, patents and
trademarks, customer contracts, as well as employees of the
Pharmaceutical Services business are included in the transaction.

                  About Dishman Pharmaceuticals

Headquartered in Ahmedabad, India, Dishman Pharmaceuticals and
Chemicals Limited -- http://www.dishmangroup.com/-- is a globally  
focused company involved in the manufacture of APIs (active
pharmaceutical ingredients), API intermediates, quaternary
compounds and fine chemicals.  Dishman has exports spanning all
continents.

                       About Solutia Inc.

Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- with its subsidiaries, make and sell  
a variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.  Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis.  Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice.  (Solutia Bankruptcy News, Issue No. 65;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SOLUTIA INC: Wants to Expand Colliers Turley's Scope of Duties
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Solutia Inc. and its debtor-affiliates to employ
Colliers Turley Martin Tucker as their exclusive real estate
brokers on July 19, 2004.

The Debtors now want the Court order supplemented so that
Colliers can:

   (1) assist them in selling or renting of certain parcels of
       real estate that they own, including about 135 acres of
       property located in Houston, Texas; and

   (2) locate and negotiate a lease for about 18,000 square feet
       of office property in Kennesaw, Georgia, or assist them in
       the renegotiation of the existing lease of their Kennesaw
       office.

For these additional assignments, the Debtors signed a Master
Exclusive Listing Agreement and an Exclusive Tenant
Representation Agreement with Colliers on May 3, 2006.

The Listing Agreement runs from May 3, 2006, through the date it
is terminated by either party for cause at any time or without
cause by giving the other party 30 days advance written notice of
intention to terminate.

Colliers will be paid for its services under the Listing
Agreement with a monthly retainer plus commission, which will
depend on whether the Property is sold, leased or re-leased to
the current tenant.  The retainer payments will be deducted from
the net commission to be paid to Colliers.

The term of the Tenant Agreement is from May 3, 2006 through
Dec. 31, 2006, or any earlier date determined by the Debtors
in their sole discretion.

Colliers will be paid for its services under the Tenant Agreement
on a commission basis.  Colliers' commission will depend on
whether the Debtors relocate their Kennesaw office to a new
facility or renegotiate their existing lease and remain in the
current facility.

The Debtors believe that Colliers is both well qualified and
uniquely able to serve them in an efficient, cost-effective and
timely manner.

David Thiemann, vice president of Colliers, assures the Court
that Colliers is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code, and holds no interest adverse to
the Debtors and their estate.

                       About Solutia Inc.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/and 215/945-7000)


SOS REALTY: Court Okays Lacourse Construction as Gen. Contractor
----------------------------------------------------------------
The Honorable Joan N. Feeney of the U.S. Bankruptcy Court for the
District of Massachusetts in Boston authorized SOS Realty LLC to
employ Lacourse Construction Corporation to act as the Debtor's
general contractor for $2,854,370.

Lacourse Construction will complete the construction of the
Debtor's real property and condominium project known as Washington
Grove Condominums.  Lacourse Construction has agreed to complete
the entire construction project within three months.

The Washington Grove Condominums consist of two buildings with a
total of 48 residential condominiums as well as 54 underground
parking spaces.

Lacourse Construction is expected to:

   a. perform and execute all of the work described in the Site
      Plans, Drawings, Construction Draw Schedules, Master
      Electrical Plan, and the Revised Drainage Plan;

   b. use its best efforts to substantially complete all of the
      work at the Project within 12 weeks from the date of
      approval of this motion; and

   c. provide all labor and approved materials, appliances, and
      services of every kind necessary for proper execution of
      work at the Project and consistent with the Contract
      Documents.  

Lacourse Construction will execute, at its own cost, any work that
fails to conform to the requirements of the Agreement.  Lacourse
Construction will remove all of its construction debris from the
site and leave the premises in broom-clean condition.  All work
will be completed in a workmanship like manner and in compliance
with all code and other applicable laws.  

To the extent required by law, all work will be performed by
individuals duly licensed and authorized by law to perform said
work.  

Lacourse Construction will adequately protect the work, adjacent
property, and the public, and will be responsible for any damage
or injury due to its act or neglect.

Lacourse Construction will be given progress payments based on the
Construction Draw Schedules.  Final payment will be given upon the
work completion and the agreement fully performed.

Based in West Roxbury, Massachusetts, SOS Realty LLC, owns a
condominium development known as the "Washington Grove
Condominiums."  The company filed for chapter 11 protection on
May 11, 2006 (Bankr. D. Mass. Case No. 06-11381).  Jennifer L.
Hertz, Esq., at Duane Morris LLP, represents the Debtor in its
restructuring efforts.  No Official Committee of Unsecured
Creditors has been filed in the Debtor's case.  In its schedules
of assets and liabilities, it listed $12,009,000 in total assets
and $6,734,279 in total liabilities.


SVP HOLDINGS: S&P Assigns B+ Rating to $280 Million Facilities
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its loan and recovery
ratings to SVP Holdings Ltd.'s $280 million bank financing.

The first-lien senior secured credit facilities consist of:

   * a $50 million revolving credit facility;
   * a $160 million term loan A facility; and
   * a $70 million term loan B facility.

The facilities are rated 'B+' (at the same level as the 'B+'
corporate credit rating on SVP) with a recovery rating of '3',
indicating the expectation for meaningful recovery of principal
(50%-80%) in the event of a payment default.  These ratings are
based on preliminary offering statements and are subject to review
upon final documentation.

SVP revised the terms of its previously announced bank financing,
related to its planned refinancing.  The previously announced
offering of $315 million of senior secured credit facilities has
been terminated, and Standard & Poor's has withdrawn its loan and
recovery ratings on the terminated deal.

The corporate credit rating on Bermuda-based SVP is B+/Stable/--.
This rating reflects:

   * the company's narrow business focus;

   * participation in the mature and highly competitive consumer
     sewing machine industry;

   * customer concentration; and

   * highly leveraged financial profile.

These factors are somewhat mitigated by the company's leading
market position and portfolio of well-recognized brands.

Ratings List:

  SVP Holdings Inc.:

    * Corporate credit rating at B+/Stable/--

Ratings Assigned:

    * $280 Million secured first-lien financing at B+
      (Recovery rating: 3)


TOWER AUTOMOTIVE: Fuji Supplements Response to Objections
---------------------------------------------------------
As reported in the Troubled Company Reporter on May 30, 2006,
Fuji Dietec Corporation asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay in Tower
Automotive, Inc., and its debtor-affiliates' chapter 11 cases to
allow it to repossess the Fuji Tooling.

                Fuji Entities Supplements Response

Elaine A. Parson, Esq., at Strobl & Sharp, P.C., in Bloomfield
Hills, Michigan, tells the Court that the Debtors' objection to
Fuji Dietec Corporation and Fuji Technica, Inc.'s request ignored
the Debtors' own standard form, pre-printed Purchase Order form
-- specifically those Purchase Orders issued by the Debtors to
the Fuji Entities in Michigan which incorporated "Terms and
Conditions."

Ms. Parson relates that the Debtors' incorporated Terms and
Conditions clearly state that the laws of the state of Michigan,
including the Uniform Commercial Code and Michigan Tooling Lien
Act apply to the contracts between the Fuji Entities and the
Debtors.  It is well settled law in Michigan that parties to a
contract can agree to the law of a particular jurisdiction, Ms.
Parson says.

Ms. Parson further argues, among others, that:

    * The Debtor entered into several so-called "partnering
      agreements" with both Fuji Entities in Michigan, including
      an organizational chart delineating relationships for
      building the Step by Step Relationship 'A Partnership for
      the Future'."  The chart demonstrates the Fuji Entities'
      intentional presence in and availability to the Debtors in
      Michigan to achieve "partnering" goals;

    * It is an undisputed fact that as defined in the Tooling
      Act, the Fuji Entities are Special Tool Builders and the
      tools and dies at issue are Special Tools; and

    * The Fuji Entities substantially complied with the Tooling
      Act by permanently affixing multiple metal tags at
      different locations to the different parts of the Special
      Tools that they fabricated for the Debtors.

For these reasons, the Fuji Entities ask the Court to rule that:

    (a) the Choice of Law provision in the Debtors' Purchase
        Order Terms and Conditions for Michigan law is to be
        given full legal effect;

    (b) the Fuji Entities have substantially complied with the
        Tooling Act and, therefore, are secured creditors; and

    (c) the Fuji Entities will be awarded possession of the Tools
        at issue.

Alternatively, the Fuji Entities seek the Court's permission to
send a notice as provided in the Tooling Act to the Debtors and
necessary third parties, together with a ruling for an expedited
scheduling order for discovery.  The Fuji Entities ask the Court
to set an evidentiary hearing to determine the amount owing by
the Debtors to the Fuji Entities following which the Court should
enter an appropriate ruling for adequate protection payments to
the Fuji Entities.

                   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.,  
http://bankrupt.com/newsstand/or 215/945-7000).


TOWER AUTOMOTIVE: Hires Heidrick & Struggles as Consultants
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Tower Automotive
Inc., and its debtor-affiliates, obtained authority to enter into
an agreement with Heidrick & Struggles, Inc., as its consultants
for the purpose of identifying and selecting candidates for the
board of directors of reorganized Tower Automotive, Inc.

The Committee selected Heidrick & Struggles after interviewing
several firms that specialize in executive searches.  The Debtors
are familiar with Heidrick & Struggles.

Chris Reddy of Camulos Capital, chair of the Creditors'
Committee, tells the Court that Heidrick & Struggles is widely
recognized as an industry leader in the development of best-in-
class Boards of Directors, and is expert in recruiting board
members who fulfill the highest priorities of today's best-
managed companies, including directors with financial expertise,
operating experience, and strategic acumen.

The Committee and the Debtors will consult on the process
conducted by Heidrick & Struggles, including, discussing the
criteria for candidates, sharing information with potential
candidates, providing access for the current Board and management
to candidates and input regarding candidates for the Board of
Reorganized Tower.

The firm will assist the Creditors' Committee in making an
informed decision about the best-qualified candidates available
for the Board.  Heidrick & Struggles will assist the Debtors in
their evaluation and deliberation of the Board candidates.  The
firm says it will make every effort to complete the search in
three months.

Heidrick & Struggles will charge for its services on a retainer
basis, which fees will be structured this way:

      1st Director (Chair of Audit Committee)   $100,000
      2nd Director                              $100,000
      3rd and 4th Director                       $75,000 each
      Any additional Directors                   $55,000 each

The firm will seek reimbursement for expenses incurred.  Invoices
will be submitted to the Debtors.

Bo Herbst, a principal at Heidrick & Struggles, will be leading
the project with close support from his fellow partner John
Gardner, and associates Cheryl Doty and Amanda Henkel.

Kenneth J. Ashley, treasurer of Heidrick & Struggles, assures the
Court that his firm neither holds nor represents any interest
adverse to the Committee, the Debtors, their creditors or other
parties-in-interest in the Debtors' cases.  Mr. Ashley believes
Heidrick & Struggles is a "disinterested person" within the
meaning of the Bankruptcy Code.

The Committee and the Debtors submit that Heidrick & Struggles'
personnel providing the services are not "professional persons"
as contemplated by Section 327 of the Bankruptcy Code and, thus,
no retention or payment authorization is necessary.

Mr. Reddy contends that Heidrick & Struggles' personnel should
not be considered professionals within the meaning of Section 327
because:

    -- they do not and will not control, manage, administer,
       invest, purchase, or sell assets that are significant to
       the Debtors' reorganization;

    -- they are not involved in negotiating the terms of the
       Debtors' Plan;

    -- they will provide only a temporary service in more of an
       administrative capacity rather than providing advice to
       improve the operations of the Debtors' affairs;

    -- they have only limited discretion, and have no autonomy in
       performing their tasks; and

    -- they will not have involvement in the administration of
       the Debtors' estate, but rather will perform a specific,
       limited service to assist in locating director candidates.

"[A]lthough Heidrick & Struggles is providing services that
require some degree of special knowledge or skill, they are not
of a type that is considered 'professional' within the ordinary
meaning of the term," Mr. Reddy says.

If the Court finds that Heidrick & Struggles is a professional
within the meaning of Section 327, the Committee and the Debtors
seek Judge Gropper's permission to retain Heidrick & Struggles
pursuant to Sections 327(a) and 1103(a) of the Bankruptcy Code
and Rule 2014 of the Federal Rules of Bankruptcy Procedure.

                   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.,  
http://bankrupt.com/newsstand/or 215/945-7000).


TRIPLE A POULTRY: Volvo Financial Wants Truck Leases Decided
------------------------------------------------------------
Volvo Financial Services, a VFS US LLC division successor-in-
interest to Volvo Commercial Finance LLC asks permission from the
U.S. Bankruptcy Court for the Southern District of Texas to compel
Triple A Poultry Inc. to assume or reject leases related to two
Master Lease Agreements.

VFS is the Debtor's secured creditor by virtue of a series of
financial transactions with the Debtor and a related entity,
Cyclone Enterprises, Inc.  On Sept. 18, 2000, the Debtor entered
into a Master Lease Agreement with VFS in which the Debtor leased
specific vehicles.

The lease includes:

   -- a 2001 Volvo Truck for a 60-month period at the rate of
      $1,618.12 per month; and

   -- a 2002 Volvo Truck for a 60-month period at the rate if
      $1,363.99 per month.

The amounts financed pursuant to the terms of the leased trucks
were $99,129.42 and $191,207.27, respectively.

The Parties entered into a loan transaction on Sept. 18, 2005,
evidenced by the End of Term Promissory Note in the principal
amount of $191,207.27 relating to 2002 Volvo Truck lease.  The
Promissory Note 1 provided for monthly payments of $8,560.84.  
It also financed the purchase of 5 Volvo trucks that served as
collateral for the loan transaction.

On the same date as the Debtor's agreement with VFS, Cyclone and
VFS entered into a Master Lease Agreement.  The agreement provided
for the lease of a 2001 Volvo Truck for a 54-month period at the
rate of $1,463 per month.  The amount financed pursuant to the
terms of that lease was $78,869.61.

VFS believes that the vehicles subjected to the Cyclone financing
transactions in which the Debtor guaranteed are being used by the
Debtor.

VFS wants the Debtor to determine its interest in connection with
the leased equipments.  Moreover, VFS says that the Debtor needs
to decide on leases by a date certain to be set as soon as
practicable by this Court but before confirmation of its Plan.

Should the Debtor decide to assume the leases, VFS asserts that
the Debtor should cure the defaults, if any, and provide adequate
assurance of future performance.

Headquartered in Houston, Texas, Triple A Poultry, Inc., sells
meat and poultry products.  The company filed for chapter 11
protection on May 19, 2006 (Bankr. S.D. Tex. Case No. 06-32119).
John Matthew Vaughn, Esq., at Porter & Hedges, LLP, 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 between $1 million and $10 million and debts between $10
million and $50 million.


USA COMMERCIAL: Equity Panel Hires Beckley Singleton as Counsel
---------------------------------------------------------------
The Honorable Linda B. Riegle of the U.S. Bankruptcy Court for the
District of Nevada in Las Vegas authorized the Official Committee
of Equity Security Holders appointed in USA Capital Diversified
Trust Deed Fund, LLC, to retain Beckley Singleton, Chartered, as
special Nevada counsel, nunc pro tunc to June 9, 2006.

Beckley Singleton will:

   a. protect and preserve the collective interests of the equity
      security holders of USA Diversified as a classes;

   b. advise the Committee on the requirements of the Bankruptcy
      Code and the Bankruptcy Rules as they pertain to the
      interests of the Committee and its constituents;

   c. develop, through discussion with the Committee, its
      financial advisor, Orrick, and other parties-in-interest,
      the Committee's legal positions and strategies with respect
      to all facets of the Debtors' cases generally, and USA
      Diversified in particular, including analyzing the
      Committee's position on administrative and operational
      issues;

   d. prepare and respond to motions, applications, answers,
      orders, memoranda, reports, and papers in connection with
      representing the interests of the Committee;

   e. participate in the negotiations and resolution of issues
      related to financing and any plan of reorganization or plan
      of liquidation; and

   f. render other necessary advice and services that the
      Committee may require in connection with the Debtors' cases.

Beckley Singleton will assist Orrick, Herrington & Sutcliffe LLP,
USA Diversified's lead bankruptcy counsel.  The two firms will
coordinate responsibility to minimize duplication.

Bob L. Olson, Esq., a shareholder at Beckley Singleton, Chartered,
disclosed that professionals bill:

      Designation                         Hourly Rate
      -----------                         -----------
      Partners/Of Counsel                 $300 - $550
      Associates                          $165 - $300
      Law Clerks                          $120 - $165
      Paralegals                          $110 - $145

Mr. Olson assured the Court that the Firm does not hold nor
represent any interest adverse to USA Diversified's estate.

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital (USACM) -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  Candace
C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon,
Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and
Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent
the Debtors' Investor Committees.  Susan M. Freeman, Esq., and Rob
Charles, Esq., at Lewis and Roca LLP represent the Official
Committee of Unsecured Creditors.  Marc A. Levinson, Esq., and
Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP,
and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley
Singleton, Chartered, give legal advice to the Official Committee
of Equity Security Holders appointed in USA Capital Diversified
Trust Deed Fund, LLC.  When the Debtors filed for protection from
their creditors, they estimated assets of more than $100 million
and debts between $10 million and $50 million.


USA COMMERCIAL: Equity Panel Hires Orrick Herrington as Counsel
---------------------------------------------------------------
The Honorable Linda B. Riegle of the U.S. Bankruptcy Court for the
District of Nevada in Las Vegas authorized the Official Committee
of Equity Security Holders appointed in USA Capital Diversified
Trust Deed Fund, LLC, to retain Orrick, Herrington & Sutcliffe
LLP, as its lead bankruptcy counsel, nunc pro tunc to June 1,
2006.

Orrick Herrington will:

   a. protect and preserve the collective interests of the equity
      security holders of USA Diversified as a classes;

   b. advise the Committee on the requirements of the Bankruptcy
      Code and the Bankruptcy Rules as they pertain to the
      interests of the Committee and its constituents;

   c. develop, through discussion with the Committee, its
      financial advisor, Beckley, and other parties-in-interest,
      the Committee's legal positions and strategies with respect
      to all facets of the Debtors' cases generally, and USA
      Diversified in particular, including analyzing the
      Committee's position on administrative and operational
      issues;

   d. prepare and respond to motions, applications, answers,
      orders, memoranda, reports, and papers in connection with
      representing the interests of the Committee;

   e. participate in the negotiations and resolution of issues
      related to financing and any plan of reorganization or plan
      of liquidation; and

   f. render other necessary advice and services that the
      Committee may require in connection with the Debtors' cases.

Beckley Singleton Chartered will serve as the USA Diversified's
local counsel, and will assist Orrick Herrington.  The two firms
will coordinate responsibility to minimize duplication.

Marc A. Levinson, Esq., a partner at Orrick, Herrington &
Sutcliffe LLP, discloses that professionals bill:

      Designation                       Hourly Rate
      -----------                       -----------
      Partners/Of Counsel               $495 - $755
      Associates                        $235 - $490
      Law Clerks                            $225
      Paralegals                         $50 - $290

Mr. Levenson assures the Court that the Firm does not hold nor
represent any interest adverse to the estate of USA Diversified.

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital (USACM) -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  Candace
C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon,
Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and
Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent
the Debtors' Investor Committees.  Susan M. Freeman, Esq., and Rob
Charles, Esq., at Lewis and Roca LLP represent the Official
Committee of Unsecured Creditors.  Marc A. Levinson, Esq., and
Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP,
give legal advice to the Official Committee of Equity Security
Holders appointed in USA Capital Diversified Trust Deed Fund, LLC.  
When the Debtors filed for protection from their creditors, they
estimated assets of more than $100 million and debts between $10
million and $50 million.


USA COMMERCIAL: Court Okays Hilco as Real Estate Appraiser
----------------------------------------------------------
The Honorable Linda B. Riegle of the U.S. Bankruptcy Court for the
District of Nevada in Las Vegas authorized USA Commercial Mortgage
Company and its debtor-affiliates to employ Hilco Real Estate,
LLC, and Hilco Real Estate Appraisal, LLC, as their real estate
appraisers.

As reported in the Troubled Company Reporter on July 4, 2006, the
Debtors want Hilco to provide appraisal and related services
because of its broad national reach in the real estate
marketplace, its vast experience in conducting valuations of the
various types of properties securing the loans.

Hilco will:

   a) provide a range of valuation reports, determined by, among
      other things, the presence or absence of a current appraisal
      for a given property, the reliability of any existing
      appraisal and the payment history or status of the loan;

   b) provide expert witness services, including court testimony
      and deposition testimony, as necessary, on related matters;
      consulting services concerning the status of various
      properties and real issues relating to delinquent or
      defaulted loans; and advisory services relating to funding
      new loans, if any, or funding loans which currently are
      unfunded or under-funded; and

   c) provide services relating to the disposition of properties
      which the Debtors acquire through foreclosure, settlement or
      otherwise.

Jeffrey W. Linstrom, a member at Hilco, disclosed that Hilco and
the Debtors entered into an agreement on the firm's compensation.
Under the agreement, Hilco will be paid a $300,000 base fee for
its valuation services in three monthly installments of $100,000
each, beginning on May 31, 2006, through July 31, 2006.

For its expert witness, consulting and advisory services, the
firm's professionals bill:

          Designation                    Hourly Rate
          -----------                    -----------
          Senior Professionals              $450
          Midlevel Professionals         $350 - $400
          Junior Level Professionals     $250 - $300
          Administrative Staff              $100

Hilco will receive a disposition fee based on a sliding percentage
scale of the gross proceeds from the disposition of a property,
which fee will be paid out of the gross proceeds at the time of
closing of the disposition.

Those percentages are:

          Amount                      Percentage Scale
          ------                      ----------------
          up to $5,000,000                   5%
          $5,000,001 to $10,000,000          4%
          $10,000,001 to $20,000,000         3%
          over $20,000,000                  1.5%

Mr. Linstrom assured the Court that the Firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital (USACM) -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  Candace
C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon,
Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and
Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent
the Debtors' Investor Committees.  Susan M. Freeman, Esq., and Rob
Charles, Esq., at Lewis and Roca LLP represent the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated assets of more
than $100 million and debts between $10 million and $50 million.


USG CORP: Signs $2.8 Bil. Exit Financing with JPMorgan, et al.
--------------------------------------------------------------
USG Corp. discloses in a regulatory filing with the United States
Securities and Exchange Commission that it entered into a
$2.8 billion credit agreement with a syndicate of banks led by
JPMorgan Chase Bank, N.A., as administrative agent.

In addition, USG Corp. says the outstanding letters of credit
under its DIP credit agreement with LaSalle Bank National
Association were incorporated into the Exit Facility, and the DIP
agreement with LaSalle was terminated.

As of June 30, 2006, $86 million of letters of credit were
outstanding under the LaSalle facility.

As previously reported, the Exit Facility consists of:

   (i) a $650 million revolving credit facility with a
       $250 million sublimit for letters of credit;

  (ii) a $1 billion term loan facility; and

(iii) a $1.15 billion tax bridge term loan facility.

The revolving credit facility matures on August 2, 2011, unless
terminated earlier in accordance with its terms.  The revolving
credit facility has not been drawn upon as of August 3, 2003,
except for approximately $90,000,000 of outstanding letters of
credit.

The term loan facility matures on August 2, 2011, and the tax
bridge facility matures on February 2, 2009.

The term loan is to be made available to USG from the lenders in
a single drawing of up to $1 billion and the tax bridge
facility is to be made available to USG in a single drawing of
up to $1.15 billion -- in each case to be made on or before
January 31, 2007.

If the Fair Act of 2005, or substantially similar legislation, is
enacted but remains subject to constitutional challenge, USG
would be able to request that the availability of the term loan
and tax bridge facilities be extended.  However, the availability
of the term loan facility is not permitted to be extended beyond
August 1, 2008, and the availability of the tax bridge facility
is not permitted to be extended beyond February 1, 2008.

                            About USG

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094).  David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
The Debtors emerged from bankruptcy protection on June 20, 2006.
(USG Bankruptcy News, Issue No. 120; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


VALHI INC: S&P Downgrades Corporate Credit Rating to BB- from BB
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Valhi Inc. and its indirect subsidiary Kronos
International Inc. to 'BB-' from 'BB'.

At the same time, Standard & Poor's lowered its rating on Kronos'
EUR400 million senior secured notes issue due 2013 to 'B' from
'B+'.  All ratings remain on CreditWatch with negative
implications, where they were placed earlier this year in
connection with an adverse verdict in a Rhode Island lead pigment
lawsuit.

"The downgrade reflects deterioration in operating trends versus
our previous expectations, a modest weakening of the financial
profile due to increased share repurchases, and continued concern
regarding the potential negative implications stemming from the
lead litigation," said Standard & Poor's credit analyst Wesley E.
Chinn.

During the second quarter of 2006, the company experienced higher
raw-material and energy costs and weakening titanium dioxide
product pricing and mix.  When coupled with lingering economic
uncertainties for the second half of 2006, this could continue to
compress margins in Valhi's chemicals segment and limit the free
cash flow necessary to maintain its financial profile.  The
chemicals segment accounts for approximately 86% of the company's
total sales.

The ratings on Valhi reflect the company's:

   * limited business diversity;
   * exposure to cyclical commodity product cycles; and
   * an aggressive financial profile.

These factors are mitigated by the company's well-established
position among the leading global TiO2 producers and a niche
component products business through its CompX International Inc.
subsidiary (ergonomic computer support systems, precision ball-
bearing slides for furniture, and security products).  

In the TiO2 segment, Valhi benefits from:

   * good geographic diversity;

   * environmentally compliant proprietary chloride process
     technology; and

   * competitive cost positions.

With about $1.4 billion in sales, Valhi is a holding company that
derives the majority of its revenue and operating profits from its
ownership in Kronos Worldwide Inc., the world's fifth-largest
producer of TiO2.

On Feb. 22, 2006, a jury in Rhode Island found NL Industries Inc.
(a subsidiary of Valhi), along with Sherwin-Williams Co. and
Millennium Chemicals Inc., liable for creating a public nuisance
by making lead-based paints decades ago.  Possible damages could
be substantial, although the extent to which an adverse ruling
would affect Valhi or the credit quality of its other subsidiaries
is uncertain.

The verdict found the defendants responsible for the abatement of
lead-based paint, which has been banned in the U.S. since 1978
because of serious health issues caused by lead poisoning.  Some
estimates have placed the number of affected homes in Rhode Island
in the range of 200,000 to 300,000 and cleanup costs of $2 billion
to $3 billion.  The cost of abatement in Rhode Island is still
highly uncertain at this time as the judge presiding over the
trial will determine the specifics of that program.

Product liability insurance related to lead poisoning would be a
mitigating factor when assessing potential outlays for claims and
defense costs, but the extent of effective coverage, relative to
the potential obligations, is unknown.

Standard & Poor's expects to resolve the CreditWatch when
additional details of the abatement program are known.  These
include the possible dollar magnitude for the removal of lead
paint, lead paint removal procedures, and bonding requirements of
the appeals process.  The CreditWatch resolution would also take
into consideration the risk of additional lawsuits or other
pending legal actions against Valhi or its subsidiaries.  

In the interim, Standard & Poor's could lower the ratings if there
are prospects for extended adverse market conditions, further
deterioration of operating profitability and the financial
profile, or continued aggressive shareholder initiatives.


VARIG S.A.: Volo May Face Lawsuit Over Unpaid Wages  
---------------------------------------------------
Volo do Brasil, the purchaser of VARIG S.A.'s operating assets, is
facing a potential lawsuit by the Brazilian Labor Prosecutor's
Office, according to Investnews (Brazil).

The Prosecutor's Office said it will sue Volo and VARIG for
payment of late salaries and the rescission rights of VARIG's
workers, Investnews relates.  Rodrigo Carelli, Esq., of the
Prosecutor's Office, said the lawsuit will be aimed at Volo.

Volo acquired VARIG's operating assets at an auction in July 2006.  
Volo has pledged to infuse more than $500,000,000 to allow the
airline to pay debts and return to profitability.  The sale is
still subject to regulatory approval by the National Civil
Aviation Authority in Brazil.

Volo also acquired VarigLog, VARIG's former cargo unit, in a
transaction early this year.

                            About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


WADSWORTH HOUSING: S&P Downgrades $3.4 Million Bonds' Rating to B
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Wadsworth
Housing Development Corp., Ohio's $3.4 million mortgage revenue
bonds series 1993 to 'B' from 'BB-'.  The outlook is stable.

The bonds are secured by a first mortgage lien on the property.

The downgrade reflects:

   * declining debt service coverage, which is currently below
     the 1x level;

   * a steep rise in expenses at the project; and

   * contract rent above fair market rents.

The latest audited financial results for the fiscal year ended
June 30, 2005, indicate that debt service coverage declined to
0.87x from 1.01x in 2004 and 1.23x in 2001.  As per the year-to-
date financial statements for the eight months ended Feb. 28,
2006, annualized debt service coverage improved to 0.93x.

The average net rent is $594 per unit per month for June 2005.
Expenses per unit per year have increased to $4,295 in June 2005,
up from $3,769 in June 2004.  This increase was mainly due to:

   * a 10% increase in administrative expenses;
   * a 27% increase in maintenance expenses; and
   * a 10% increase in utilities expenses.

This sharp 14% increase in expenses partially led to a higher
expense ratio of 58.85% from 52.08% in June 2004.  As per the
year-to-date financial statements for the eight months ended Feb.
28, 2006, annualized expenses per unit increased to $4,397 and the
expense ratio deteriorated marginally to 57.92%.

The occupancy at the project was 100% as of December 2005, as per
the project manager report.  Debt per unit was $32,800 as of March
2006.


WARD PRODUCTS: Section 341(a) Meeting Scheduled on September 14
-------------------------------------------------------------
The U.S. Trustee for Region 9 will convene a meeting of Ward
Products, L.L.C.'s creditors at 10:00 a.m., on Sept. 14, 2006,
in Room 743 at 211 West Fort Street Building in Detroit,
Michigan.  This will be the first meeting of creditors as
required under Section 341(a) of the Bankruptcy Code in all
bankruptcy cases.

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

Headquarted in Royal Oak, Michigan, Ward Products, L.L.C.
manufactures receiving antennas.  The Company filed for chapter
11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No.
06-50527).  Jay L. Welford, Esq., Judith Greenstone Miller, Esq.,
Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe
Franklin Heuer & Weis, P.C. represents the Debtor.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


WESTERN APARTMENT: Taps Matranga & Wiley as Accountants
-------------------------------------------------------
Western Apartment Supply & Maintenance Company asks the United
States Bankruptcy Court for the District of Hawaii for permission
to employ Matranga & Riley as accountants.

The Debtor needs Matranga & Riley for an accounting and review of
all documents related to loans the Debtor received from La Jolla
Loans Inc.

The Debtor wants to determine the full amount of the La Jolla Loan
in order to determine how La Jolla will be paid and how other
creditors will receive distributions, if any.

La Jolla demanded payment of more than $12,300,000.  The Debtor
believes the amount is well beyond what La Jolla is entitled to
and intends to prepare its own history and accounting of the La
Jolla transaction.

Joseph E. Matranga, a certified public accountant at Matranga &
Riley says his Firm will charge $10,000 for this engagement.

Mr. Matranga assures the Court that Matranga & Riley does not hold
any interest adverse to the Debtor.

                     About Western Apartment

Based in San Diego, California, Western Apartment Supply &
Maintenance previously filed for chapter 11 protection on
Jan. 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072).  The case was
dismissed on May 16, 2006.

The Debtor filed its second chapter 11 petition on Apr. 18, 2006
(Bankr. S.D. Calif. Case No. 06-00821).  John L. Smaha, Esq., at
Smaha and Daley, represents the Debtor.  When the Debtor filed for
chapter 22, it listed total assets of $18,045,054 and total debts
of $18,131,069.

On June 30, 2006, at the request La Jolla Loans Inc., a secured
creditor, the U.S. Bankruptcy Court for the Southern District of
California transferred the Debtor's case to the U.S. Bankruptcy
Court for the District of Hawaii on July 1, 2006 (Bankr. D. Hawaii
Case No. 06-00459).


WESTON NURSERIES: Disclosure Statement Hearing Set for Sept. 27
---------------------------------------------------------------
The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for
the District of Massachusetts, Western Division, will consider the  
adequacy of the Disclosure Statement explaining Weston Nurseries,
Inc.'s Joint Chapter 11 Plan of Reorganization at a hearing on
Sept. 27, 2006, 10:00 a.m., at Courtroom 3, Harold Donohue,
Federal Building & Courthouse, 595 Main Street in Worcester,
Massachusetts.

                          Plan Overview

After emerging from bankruptcy protection, the Debtor intends to
continue to grow and market its agricultural nursery-related
products from its Hopkinton operations and maintain its
landscaping contractual services throughout New England.

The Joint Plan provides the Debtor with three options for
reorganization:

     1) a substantive consolidation of the Debtor and non-debtor
        Mezitt Agricultural Corporation;

     2) a merger of the Debtor and MezAG into the Reorganized
        Company; or

     3) the sale of certain real property that the Debtor
        determines to be no longer necessary for its future
        operations.

Distribution due to creditors will be funded from any combination
of:

     1) the funds the Reorganized Company receives on the
        effective date from post-confirmation financing with the
        Debtor's current DIP lender, Business Alliance Capital
        Corporation;

     2) net proceeds from the sale of certain real estate in which
        the Reorganized Company has an interest;

     3) a portion of the revenues generated by the Reorganized
        Company's business operations; and

     4) recoveries of proceeds from the prosecution or settlement
        of any causes of action.

The Debtor has also received a formal written proposal from an
unnamed developer that would fully fund the Plan, provide
financing for the Debtor (leaving in place the BACC exit
revolver), permit the Debtor to operate pursuant to its business
plan and generate substantial proceeds for shareholders.   Wayne
Mezitt, has conditionally accepted this proposal.  Roger Mezitt is
currently considering the offer.

Brothers Wayne and Roger Mezitt, currently own 13% of the Debtor's
stock and are the present beneficial holders of a trust that owns
the remaining 74% of stock.  Their long-standing dispute over
control of Weston Nurseries led to the Debtor's bankruptcy filing.

                       Treatment of Claims

BACC's secured claim on account of the DIP credit facility will be
paid in full on the effective date from the proceeds of the exit
facility.  BACC's claim is unimpaired.

First Pioneer Farm Credit ACA holds security interests in the
Debtor and MezAG.   In full satisfaction of its claim, First
Pioneer can elect either to:

       -- foreclose on real property its holds a security interest
          in and pay itself from the proceeds of the sale of the
          property;             

       -- receive payment from the planned sale of a portion of
          the Debtor's real property; or

       -- allow the Debtor to cure all monetary defaults,
          reinstate maturity and continue to make payment at the
          prevailing non-default interest rate until it is fully
          paid.

Claims arising from secured equipment liens will be paid, at the
option of the Debtor, through cash, surrender of collateral,
reinstatement of debt in accordance with Section 1124(2) of the
Bankruptcy Code or a modification and compromise of the debt
terms.

The allowed claim of the Town of Hopkinton will be paid from the
proceeds of the sale of the Debtor's properties.

Holders of general unsecured claims will receive payment for 100%
of their allowed claims through a Creditors' Trust established
pursuant to the Plan.   The Trust will  receive funds or property
from the Reorganized Company to cover full payment of all allowed
general unsecured claims over a period of no more 10 years.  
Distribution to the Creditors' Trust includes 6% of the
Reorganized Company's stock.  The Debtor estimates general
unsecured claims at $950,000.  The estimate does not include the
$2 million alleged unsecured claim of Roger Mezitt which the
Debtor disputes or argues should be subordinated.

Wayne and Roger Mezitt will divide equally the 94% equity interest
in the Reorganized Debtor due to them under the Plan.

A full-text copy of the Disclosure Statement explaining the
Debtor's Plan is available for a fee at:

   http://www.researcharchives.com/bin/download?id=060824054933

Objections to the Disclosure Statement or Plan must be filed by
4:30 p.m., on Sept. 18, 2006, with:

     a) The Clerk of the Bankruptcy Court
        District of Massachusetts, Western Division
        Harold Donahue Federal Building and Courthouse
        595 Main Street
        Worcester, MA 01608

     b) Counsel for the Debtor

        Alan L. Braunstein, Esq.
        Riemer & Braunstein LLP
        Three Center Plaza
        Boston, Massachusetts 02108

     c) the Office of the United States Trustee
        446 Main Street,
        Worcester, Massachusetts 01608.

The Debtor has filed a motion with the Court seeking to extend
their exclusive period to solicit acceptances of their Plan until
Nov. 30, 2006.  The Debtor says the solicitation period extension
will promote a focused and continued effort to confirm the Plan in
an agreeable and consensual matter.

Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc.,
-- http://www.westonnurseries.com/-- is central New England's   
premier resource in designing, creating, and enjoying outdoor
living areas.  Weston Nurseries grows and sells plants, trees,
shrubs, and perennials.  The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884).
Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, represents
the Debtor in its restructuring efforts.  Michael J. Fencer, Esq.,
and Steven C. Reingold, Esq., at Jager Smith, PC, represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it estimated assets and debts
of $10 million to $50 million.


WESTON NURSERIES: Has Until October 31 to Decide on Leases
----------------------------------------------------------
The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for
the District of Massachusetts extends, until Oct. 31, 2006, Weston
Nurseries, Inc.'s period to assume, assume and assign or reject
its unexpired leases on non-residential real property.

Christopher M. Condon, Esq., at Riemer & Braunstein LLP asserts
that it is in the best interest of the Debtor's business and its
creditors for certain alleged lease agreements to be preserved as
estate assets until the Court can make a determination on the
validity, amount and necessity of these leases.  

The Debtor will request disposition of the alleged lease
agreements during confirmation proceedings for their recently
submitted Plan of Reorganization.

The Debtor assures the Court that the proposed extension will not
prejudice the lessors of any unexpired leases because:

      -- each of the lessors is an insider of the Debtor; and

      -- the Debtor has sufficient assets to pay any court-a
         approved damages that might arise due to the prolongation
         of the time to assume or reject.

Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc.,
-- http://www.westonnurseries.com/-- is central New England's   
premier resource in designing, creating, and enjoying outdoor
living areas.  Weston Nurseries grows and sells plants, trees,
shrubs, and perennials.  The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884).
Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, represents
the Debtor in its restructuring efforts.  Michael J. Fencer, Esq.,
and Steven C. Reingold, Esq., at Jager Smith, PC, represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it estimated assets and debts
of $10 million to $50 million.


WESTON NURSERIES: No Takers for 655-Acre Property
-------------------------------------------------
Weston Nurseries, Inc., failed to attract any qualified bids for
its 655-acre real estate property in Hopkinton, Massachusetts.  

The U.S. Bankruptcy Court for the District of Massachusetts
subsequently cancelled the July 31, 2006 auction for the property.  
The Official Committee of Unsecured Creditors, the Town of
Hopkinton and Mezag Agricultural Corp. all agreed to the
cancellation.

The Troubled Company Reporter disclosed on June 19 that the Debtor
was looking for a $29.5 million minimum offer for the property if
a prospective buyer acquires stock in the company or $37 million,  
if the purchaser buys the entire land.  

The Debtor informs the Court that it is presently pursuing
alternative sale options for the land.

Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc.,
-- http://www.westonnurseries.com/-- is central New England's   
premier resource in designing, creating, and enjoying outdoor
living areas.  Weston Nurseries grows and sells plants, trees,
shrubs, and perennials.  The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884).
Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, represents
the Debtor in its restructuring efforts.  Michael J. Fencer, Esq.,
and Steven C. Reingold, Esq., at Jager Smith, PC, represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it estimated assets and debts
of $10 million to $50 million.


WINN-DIXIE: Sets Sept. 12 as Special Bar Date for 287 Claimants
---------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates inform the U.S.
Bankruptcy Court for the Middle District of Florida that they have
established Sept. 12, 2006, at 5:00 p.m. (Eastern Standard Time)
as a special bar date for 287 subsequently identified potential
claimants who were not identified in time to receive notice of
the original bar date established in the Debtors' Chapter 11
cases, including potential claimants whose claims may arise from
the provisions of the Debtors' proposed plan of reorganization.

On August 18, 2006, copies of notices establishing the special
bar date were mailed to:

    -- 76 subsequently identified potential claimants;
       See http://ResearchArchives.com/t/s?1054

    -- 82 potential claimants under Section 7.9(d) of the Plan;
       See http://ResearchArchives.com/t/s?1055

    -- 129 potential claimants under Section 7.10 of the Plan.
       See http://ResearchArchives.com/t/s?1056

Copies of the notices were also sent to the Office of the U.S.
Trustee, counsel of the Official Committee of Unsecured
Creditors, and counsel to the Debtors' postpetition secured
lender.

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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi.  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. 50; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


WINN-DIXIE: Wants Exclusive Solicitation Period Carried to Oct. 31
------------------------------------------------------------------
Pursuant to Sections 105(a) and 1121(d) of the Bankruptcy Code,
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to extend
their exclusive period to solicit acceptance of their plan of
reorganization, dated June 29, 2006, as amended, and subsequently
refiled, for about 60 days, to the earlier of:

   (a) the entry of an order confirming the Plan; or

   (b) October 31, 2006.

The Debtors seek an extension of their exclusive solicitation
period, which currently expires on August 29, 2006, to ensure
that they are able to complete the solicitation process without
the risk of distractions resulting from any party's efforts to
take advantage of the termination of the exclusive solicitation
period.

The Debtors ask the Court to approve the extension, without
prejudice to:

    -- their right to seek further extensions of the exclusive
       solicitation period; or

    -- any party-in-interest's right to seek to reduce the
       exclusive solicitation period for cause.

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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi.  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. 50; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


YUKOS OIL: Moscow Court Rejects Debtor's Bankruptcy Appeal
----------------------------------------------------------
The Moscow Arbitration Court rejected Wednesday OAO Yukos Oil
Co.'s appeal against an Aug. 1 bankruptcy ruling, upholding the
decision by creditors to liquidate the company, according to
published reports.

As previously reported in TCR-Europe, creditors voted on July 25
to liquidate what was once Russia's biggest oil firm rejecting a
management rescue plan that valued the company's assets at about
$30 billion.  The vote came after bankruptcy manager Eduard
Rebgun said Yukos couldn't pay its debts in the time allotted by
law.  Subsequently, the court declared the oil firm bankrupt on
Aug. 1 after three years of litigation over back taxes.

The company is facing up to $16.6 billion in claims filed by
more than 20 creditors including, among others:

         Yuganskneftegas         $4.07 billion
         Federal Tax Service     $11.6 billion
         OAO Rosneft Oil Co.     $482 million

The Prosecutor General's Office launched a probe on Aug. 8 into
alleged fraud during the oil group's bankruptcy procedure.  
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.

According to the Russian news agency, Mr. Rebgun agreed with
investigators that Yukos Capital had offered Yukos its own assets.  
While Yukos was in external administration, Yukos
Capital filed a motion to participate in the first creditors'
meeting and filed claims against Yukos, which the court
subsequently rejected.

                           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.


* BOOK REVIEW: The Big Board: A History of the New York Stock
               Market
-------------------------------------------------------------
Author:     Robert Sobel
Publisher:  Beard Books
Paperback:  412 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1893122662/internetbankrupt


First published in 1965, The Big Board was the first history of
the New York stock market.  It's a story of people: their foibles
and strengths, earnestness and avarice, triumphs and crash-and-
burns.  It's full of entertaining anecdotes, cocktail-party
trivia, and tales of love and hate between companies and
investors.

Early investments in North America consisted almost exclusively of
land.  The few securities holders lived in cities, where informal
markets grew, with most trading carried out in the street and in
coffeehouses.  Banking, insurance, and manufacturing activity
increased only after the Revolution.  

In 1792, 24 prominent New York businessmen, for who stock- and
bond-trading was only a side business, met under a buttonwood tree
on Wall Street and agreed to trade securities on a common
commission basis.  Five securities were traded: three government
bonds and two bank stocks. Trading was carried out at the Tontine
Coffee-House in a call market, with the president reading out a
list of stocks as brokers traded each in turn.  

The first half of the 19th century was heady for security trading
in New York.  In 1817, the Tontine gave way to the New York Stock
and Exchange Board, with a more organized and regulated system.  
Canal mania, which peaked in the late 1820s, attracted European
funds to New York and volume soared to 100 shares a day.  Soon,
the railroads competed with canals for funding.  

In the frenzy, reckless investors bought shares in "sheer
fabrications of imaginative and dishonest men," leading an
economist of the day to lament that "every monied corporation is
'prima facia' injurious to the national wealth, and ought to be
looked upon by those who have no money with jealousy and
suspicion."

Colorful figures of Wall Street included Jay Gould and Jim Fisk,
who in 1869 precipitated one of the worst panics in American
financial history by trying to corner the gold market.  Almost
lynched, the two were hauled into court, where Fisk whined, "A
fellow can't have a little innocent fun without everybody raising
a halloo and going wild."  

Then, there was Jay Cooke, who invented the national bond drive
and, practically unaided, financed the Union effort in the Civil
War.  In 1873, however, faulty judgment on railroad investments
led to the failure of Cooke & Co. and a panic on Wall Street.  The
NYSE closed for ten days.  A journalist wrote:  "An hour before
its doors were closed, the Bank of England was not more trusted."

Despite J. P. Morgan's virtual single-handed role in stemming the
Knickerbocker Trust panic of 1907, on his death in 1913, someone
wrote "We verily believe that J. Pierpont Morgan has done more
harm in the world than any man who ever lived in it."  

In the 1950s, Charles Merrill was instrumental in changing this
attitude toward Wall Streeters.  His firm, Merrill Lynch,
derisively known in some quarters as "We, the People" and "The
Thundering Herd," brought Wall Street to small investors,
traditionally not worth the effort for brokers.

The Big Board closes with this story.  Asked by a much younger man
what he thought stocks would do next, J.P. Morgan "never hesitated
for a moment.  He transfixed the neophyte with his sharp glance
and replied 'They will fluctuate, young man, they will fluctuate.'  
And so they will."

Robert Sobel died in 1999 at the age of 68.  A professor at
Hofstra University for 43 years, he was a prolific historian of
American business, writing or editing more than 50 books.

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

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