TCR_Public/060908.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, September 8, 2006, Vol. 10, No. 214

                             Headlines

ALLIANT TECHSYSTEMS: To Launch $300 Million Senior Notes Offering
ALLIANT TECHSYSTEMS: Moody's Rates Proposed Sr. Sub. Notes at B2
ALLIANT TECHSYSTEMS: S&P Rates Proposed $270 Million Notes at B+
ALLIED HOLDINGS: Wants to Sign Lease Agreement with New York City
ALLIED HOLDINGS: Wants to Pay Automobile Liability Claims

AMERICAN TISSUE: Trustee Taps Andrew Sklar as Special Counsel
ARMSTRONG WORLD: Court Okays Modified Reorganization Plan
AVNET INC: Higher Gross Level Cues Moody's to Upgrade Ratings
BEST MANUFACTURING: Hires Levett Rockwood as Special Counsel
BROOKS SAND: Court Approves Sale of All Assets for $6.7 Million

CATALYST PAPER: Earns $42.4 Million in 2006 Second Quarter
CATHOLIC CHURCH: Portland Court Okays Pact on Hiring Appraisers
CHAPARRAL STEEL: Moody's Review Low-B Ratings on Sr. Unsec. Bond
CHI-CHI'S: Court Approves Ecolab Adversary Proceeding Settlement
CHI-CHI'S: Court Approves Sysco Adversary Proceeding Compromise

CM INVESTOR: Ends Capri Capital Purchase Deal for $6 Million
COLLINS & AIKMAN: Magna Paying $2.7 Million Under Stipulation
COMPLETE RETREATS: Wants to Walk Away from 21 Contracts and Leases
COMPLETE RETREATS: Gets Final Okay for Continued Utility Services
CONGOLEUM CORP: Bondholders Support New Reorganization Plan Terms

CONNACHER OIL: S&P Assigns B+ Long-Term Corporate Credit Rating
COPELANDS' ENT: Meeting of Creditors Scheduled on September 21
CRDENTIA CORP: To Acquire iVOW for $3.5 Million
DANA CORP: Court Approves Toyota Tooling Pact Assumption
DANA CORP: Gets Court Approval on 2nd Settlement With Toledo Press

DELTA AIR: Court Approves 2001-1 EETC Stipulation with U.S. Bank
DELTA AIR: Wants to Sell 10 Airframes to Planet Marketing
DELTA MILLS: Fails to Make September 1 Interest Payment
DOMTAR INC: Posts $3 Million Net Loss in 2006 Second Quarter
EASY GARDENER: Files Liquidating Plan and Disclosure Statement

EDS CORP: Earns $104 Million in Second Quarter Ended June 30
ENRON CORP: Closes $2.9 Bil. Prisma Energy Sale to Ashmore Energy
EVERGREEN INT'L: Extends 12% Senior Notes Offering to Sept. 25
FIRST BANCORP: Board Declares $0.07 Dividend Per Common Share
FLINTKOTE COMPANY: Wants Exclusivity Period Extended to Dec. 28

FLINTKOTE COMPANY: Wants Until Dec. 28 to File Notices of Removal
FOAMEX INTERNATIONAL: Posts $13.2 Mil. Net Loss in Second Quarter
FOAMEX INTERNATIONAL: Wants to Assume Amended EDS Contract
FORD MOTOR: S&P Maintains Negative Watch on Low-B Ratings
GERDAU AMERISTEEL: Moody's Reviews Ba1 Sr. Unsec. Bond's Rating

GLOBAL MATRECHS: Inks Manufacturing Agreement With Dow Corning
HEMOSOL CORP: CA Court Resolves Prometic Biosciences License Pact
IMAX CORP: Shareholders Launches $200 Million Class Action Lawsuit
IPC ACQUISITION: Moody's Rates Proposed $50 Mil. Sr. Loan at Ba3
KAISER ALUMINUM: Extends Contract With A.M. Castle & Co.

LARRY'S MARKETS: Has Until Nov. 3 to File Chapter 11 Plan
LEVITZ HOME: Court OKs Assignment of 3 Additional Leases to PLVTZ
LUCENT TECH: Shareowners Approve Merger Agreement with Alcatel SA
LUXELL TECH: Closes $1 Million Interim Debt Financing
MACDERMID INC: Stock Purchase Proposal Cues S&P's Negative Watch

MARKETXT HOLDINGS: Court Declines to Dismiss Epoch Bankruptcy Case
MORRIS PUBLISHING: S&P Affirms BB Rating & Removes Negative Watch
NEENAH PAPER: Moody's Holds Low-B Ratings on $375 Mil. Sr. Notes
NORD RESOURCES: Stockholders' Deficit Tops $4.2 Mil. at June 30
OMEGA HEALTHCARE: Completes New Investments Totaling $25 Million

PERFORMANCE TRANSPORTATION: Can Assume Modified Bandag Contract
PERFORMANCE TRANSPORTATION: Court Approves Amended Firestone Pact
PERKINELMER INC: Acquires Avalon Instruments & Raman Spectroscopy
PERSONA COMMS: Moody's Junks $130 Million Sr. Sec. Loan's Rating
PERSONA COMMS: Acquisitions Prompts S&P's B Corp. Credit Rating

PINNACLE ENT: Sands & Traymore Buy Cues Moody's to Hold Ratings
RADNOR HOLDINGS: U.S. Trustee Picks Seven-Member Creditors' Panel
READERS DIGEST: Weak Liquidity Cues Moody's to Review Ratings
REFCO INC: Wants Exclusive Plan-Filing Period Extended to Dec. 5
REFCO INC: Wants Removal Period Extended to December 12

REPUBLIC STORAGE: Creditors Have Until September 11 to File Claims
RIGEL CORP: Wants More Time to File Schedules & Statements
RUSH FINANCIAL: Second Quarter Net Loss Increases to $1.4 Million
SEDGWICK CMS: High Leverage Prompts Moody's to Hold Ratings
SILICON GRAPHICS: Wants to Reject Seven Executory Contracts

SILICON GRAPHICS: Court Gives Final Nod on AFCO Financing Pact
SMASHING PICTURES: Section 341(a) Meeting Scheduled on October 3
SPOKANE RACEWAY: U.S. Trustee Wants Case Converted to Chapter 7
SPOKANE RACEWAY: Mr. Davidson Wants Case Converted to Chapter 7
THOMAS EQUIPMENT: Federal Partners Withdraws Redemption Notice

TOWER RECORDS: U.S. Trustee Appoints Seven-Member Creditors Panel
TOWER RECORDS: Taps Houlihan Lokey as Investment Banker
TOWER RECORDS: Court Gives Nod on Omni Management as Claims Agent
TRANSCAPITAL FINANCIAL: Files Schedules of Assets and Liabilities
UBONG AKPAN: Case Summary & 8 Largest Unsecured Creditors

U.S. STEEL: Moody's Reviews Ba1 Senior Unsec. Bond's Rating
VARIG S.A.: Brazilian Judge Sued for Stopping Route Redistribution
VARIG S.A.: ACE Aviation Mulls 10% Equity Purchase
VARIG S.A.: Port Authority Wants to Collect Flight Fees
VASOMEDICAL INC: Miller Ellin Raises Going Concern Doubt

VESTA INSURANCE: Files List of Six Largest Equity Holders
VESTA INSURANCE: Court Approves Funds Transfer to Gaines
VOLT INFORMATION: Amends Agreement to Extend Expiration Date
WARD PRODUCTS: Wants to Hire Jaffe Raitt as Local Counsel
WCN ENTERPRISES: Engages Keen Realty as Real Estate Consultant

WESTON NURSERIES: First Pioneer Sets September 7 Foreclosure Sale
WHITING PETROLEUM: Acquires 15% Working Interest in a Utah Acreage
XTREME COMPANIES: Appoints Jack Clark as New COO

* Law Firms Blank Rome and Healy & Baillie Will Merge

* BOOK REVIEW: The Turnaround Manager's Handbook

                             *********

ALLIANT TECHSYSTEMS: To Launch $300 Million Senior Notes Offering
-----------------------------------------------------------------
Alliant Techsystems Inc. intends to offer, subject to market
conditions and other factors, up to $300 million aggregate
principal amount of convertible senior subordinated notes due 2011
to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended, including up to $30 million
aggregate principal amount of such notes for which ATK plans to
grant to the initial purchasers an over-allotment option.

ATK expects that the notes will be unsecured, senior subordinated
obligations of ATK, will pay interest semi-annually, and will be
convertible upon satisfaction of certain conditions.  Upon
conversion, the holder will receive an amount in cash and, in
certain circumstances at the option of ATK, shares of its common
stock.  The notes will be guaranteed on a senior subordinated
basis by substantially all of the Company's existing subsidiaries.
Holders of the notes will have the right to require ATK to
repurchase all or some of their notes upon the occurrence of
certain events.

ATK intends to use the proceeds from the offering to:

   (a) purchase approximately $100 million of shares of ATK
       common stock and

   (b) make a contribution to its defined benefit pension plan
       and for other general corporate purposes

In addition, simultaneous with the offering of the notes, ATK
intends to enter into convertible note hedge transactions with one
or more of the initial purchasers of the notes.  The convertible
note hedge transactions are intended to offset potential dilution
to ATK's common stock upon potential future conversion of the
notes.  ATK will pay expenses of the offering and the related
convertible note hedge transactions through existing cash on hand
and other borrowings.

ATK also expects to enter into separate warrant transactions with
one or more of the initial purchasers of the notes.  In connection
with the convertible note hedge and warrant transactions,
affiliates of the initial purchasers that are a party to those
transactions have advised ATK that they will purchase ATK's common
stock in secondary market transactions and may enter into various
over-the-counter derivative transactions with respect to ATK's
common stock concurrently with or following pricing of the notes.

Headquartered in Edina, Minnesota, Alliant Techsystems, Inc.
(NYSE: ATK) -- http://www.atk.com/-- supplies propulsion,  
composite structures, munitions, precision capabilities, and civil
and sporting ammunition.


ALLIANT TECHSYSTEMS: Moody's Rates Proposed Sr. Sub. Notes at B2
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Alliant
Techsystems Inc.'s proposed senior convertible subordinated notes,
due 2011, and affirmed all of the company's existing ratings.  The
rating outlook has been changed to positive.

Assignments:

Issuer: Alliant Techsystems Inc.

   * Senior Subordinated Conv./Exch. Bond/Debenture, Assigned B2

Outlook Actions:

Issuer: Alliant Techsystems Inc.

   * Outlook, Changed To Positive From Stable

The ratings reflect ATK's strong and stable financial performance
and retained cash flow generation that has ensued from successful
integration of acquired companies amidst a favorable industry
environment.  The ratings also consider the company's relatively
high leverage, which includes under-funded pension levels, the
high level of goodwill in the company's asset base, as well as
modest anticipated free cash flows through FY 2007.

The positive ratings outlook reflects Moody's expectations that
ATK will continue to grow its revenue base while possibly pursuing
modestly-sized acquisitions with no significant increases in debt
levels, and will return to a policy of modest debt repayments upon
conclusion of its current share repurchase program over the near
term.  The positive outlook also takes into account longer range
prospects for space flight programs in light of NASA's recently-
announced awards of development contracts for next generation
space exploration programs, reducing ATK's reliance on the space
shuttle program in its Launch Systems Group.

Ratings would be subject to upward revision if the company were to
reduce debt and improve operating profits and cash flows such that
leverage were to fall below 4.0 times and if free cash flow were
to exceed 10% of debt for a sustained period, while the company
curtails its share repurchase program to more modest levels.   
Conversely, ratings or their outlook could be lowered if loss of
contracts or unexpected deterioration in operating performance
were to occur, if the company were to increase its use of cash for
share repurchase, or if ATK were to increase debt levels
materially for any reason, such that Debt per EBITDA were to
exceed 5 times or free cash flow were to fall below 5% of total
debt.

Proceeds from the proposed notes offering are expected to be used
for contributions to the company's pension plans as well as to
purchase approximately $100 million of common stock.  The
transaction will have only a modest affect on ATK's leverage,
since the under-funded status of a company's pension plans are
considered as debt per Moody's standard methodologies.  However,
the benefits that may ensue by bolstering pension funding could be
offset somewhat by additional levels of share repurchases that
have been announced.

The B2 rating assigned to the new senior convertible subordinated
notes reflect the substantial amount of senior secured debt that
is ahead of these securities in claim, as well as subordination to
all current and future potential senior unsecured obligations of
the company.

Headquartered in Edina, Minnesota, Alliant Techsystems Inc. is a
leading supplier of propulsion, composite structures, munitions,
precision capabilities, and civil and sporting ammunition.


ALLIANT TECHSYSTEMS: S&P Rates Proposed $270 Million Notes at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on Alliant Techsystems Inc.

At the same time, Standard & Poor's assigned its 'B+' rating to
the propulsion and munitions company's proposed $270 million
convertible subordinated notes due 2011.  The notes will be issued
via SEC rule 144A with registration rights and include a $30
million over allotment option.  The outlook is stable.

"The proceeds from the proposed notes will be used in part to fund
the company's defined-benefit pension plans, but pension-adjusted
credit protection measures will not materially change," said
Standard & Poor's credit analyst Christopher DeNicolo.

"Accordingly, the ratings on Alliant, which reflect a somewhat
aggressively leveraged balance sheet and limited, albeit improving
program diversity, but benefit from leading market positions and a
generally favorable environment for defense spending, are
affirmed," the analyst continued.

A portion of the proceeds will be used to repurchase $100 million
of stock to offset dilutive effect of the convertible notes.  The
pension contribution plus others already made or previously
planned will substantially reduce the pension underfunding, which
will reduce increased funding requirements under the recently
passed Pension Protection Act, eliminate higher premium payments
to the Pension Benefit Guaranty Corp. (about $3 million a year),
and allow the company to reverse a portion of the minimum pension
liability charge recorded in other comprehensive income.

Although debt levels will increase, leverage measures, adjusted
for postretirement obligations, will be largely unchanged, with
debt to EBITDA around 4x and debt to capital around 80%.  Funds
from operations to debt is expected to be appropriate for the
rating in the mid-20% area.  Excess cash flows are expected to be
used to reduce debt, pursue strategic acquisitions, and repurchase
shares.

Alliant is the leading manufacturer of solid rocket motors for
space launch vehicles and strategic missiles and is second in the
market for tactical missiles.  In addition, the firm is the
largest provider of small caliber ammunition to the U.S. military
and has strong positions in tank and other types of ammunition.
Edina, Minnesota-based Alliant's revenues have more than tripled
since 2000 due mostly to a series of acquisitions that have
improved product and program diversity.

Acquisitions in the high-priority precision-guided munitions area
have enabled the company to win key contracts for advanced guided
missiles and mortars.  Other acquisitions have bolstered Alliant's
R&D and hypersonic propulsion capabilities, and added new products
such as satellite components and propellant tanks.

Satisfactory profitability and cash flows, along with some debt
reduction, are expected to result in a steadily strengthening
credit profile, despite likely share repurchases and the
possibility of small to moderate-size debt-financed acquisitions.

The outlook could be revised to negative if leverage increases
materially to fund a major acquisition.  An outlook revision to
positive is less likely in the near term.


ALLIED HOLDINGS: Wants to Sign Lease Agreement with New York City
-----------------------------------------------------------------
Debtor Axis Group, Inc., seeks authority from the U.S. Bankruptcy
Court for the Northern District of Georgia for authority to enter
into a lease agreement with the city of New York for 74 acres of
land and improvements, located at the South Brooklyn Marine
Terminal in Brooklyn, New York, Block 662, portion of Lots 1 and
155.

Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, tells the Court that Axis will use and occupy the
Premises for the development of a maritime automobile processing
facility handling newly manufactured domestically produced
vehicles, imported new vehicles, and pre-owned vehicles.
Vehicles will arrive at the facility by truck, barge and deep-sea
vessels.  The lease contains an inducement to reduce the truck
traffic in the New York metropolitan area in the form of rent
credits.

The initial term of the Lease will be 15 years.

For the period beginning on the Petition Date and ending on the
day immediately preceding the two-year anniversary of the date
that NYC has delivered the entire Premises to Axis and NYC's work
has been completed with respect to the entire Premises in
accordance with a development plan, Axis will pay annual base
rent of $1 per square foot, Mr. Winsberg says.

Pursuant to the Lease, Axis will construct and install:

    (1) two security guardhouses,
    (2) a carwash building and systems,
    (3) a trucker support building, and
    (4) office and administration.

Mr. Winsberg relates that Axis has determined that the rent for
Premises is a good value.  Axis also believes it would be
advantageous to its operations to secure a leasehold interest in
the Premises.

Mr. Winsberg assures the Court that Axis has the ability to
perform all of the terms, provisions and conditions of the Lease.

A full-text copy of the NYC Lease Agreement is available for free
at http://researcharchives.com/t/s?1140

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide      
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.  (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)  


ALLIED HOLDINGS: Wants to Pay Automobile Liability Claims
---------------------------------------------------------
Allied Holdings, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Georgia for
authority to pay prepetition automobile liability claims in their
sole discretion, but, subject to terms and conditions of
applicable insurance policies and related agreements.

Pursuant to certain policies, two insurance carriers provide
automobile liability coverage for the Debtors, specifically:

    (i) the ACE Group of Companies through the ACE AL Program,
        which provided coverage for the U.S. Debtors from March 1,
        2003, through December 31, 2005; and

   (ii) the American Home Assurance Company by the AHA Policy,
        which provided coverage for the Debtors in Canada,
        prepetition.

Under the Insurance Policies, ACE and AHA retained a portion of
the premiums paid by the Debtors each year, and ceded the
remaining amount of premiums to Haul Insurance Limited in return
for Haul's agreement to reinsure a substantial portion of
automobile liability losses under the Policies.

To secure its obligations to ACE, Haul has caused letters of
credit to be issued in favor of ACE under their reinsurance
agreement.

In 2005, the ACE AL Program carried a $1,000,000 per incident
deductible and a $5,000,000 limit of coverage.  Under the ACE AL
Program, the Debtors are responsible for $7,000,000 inner-
aggregate liability between the $1,000,000 and $5,000,000 layers
of coverage.

On the same year, the AHA Policy carried a CN$500,000 per
incident deductible and a CN$2,500,000 limit of coverage, under
which the Debtors are responsible for CN$500,000 inner-aggregate
liability between the CN$500,000 and CN$1,000,000 layers of
coverage.

As of the Petition Date, the Debtors have approximately 204
claims pending for alleged automobile-related liability, of which
164 are in the U.S. and 40 are in Canada.

Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, tells the Court that if the Debtors do not pay amounts
within the deductible limits or Haul does not pay its obligations
under its reinsurance agreements, the Insurance Carriers may draw
on the letters of credit posted by the Debtors or Haul.

Mr. Winsberg points out that the draw would hurt Haul's and the
Debtors' ability to seek a return of any cash collateral posted
with the banks that issued the letters of credit.

Furthermore, the Debtors discovered that a policy regarding a
corridor deductible for 2005 contained an error.  Following
discussions with ACE, the Debtors received an endorsement that
corrects the 2005 policy to reflect the parties' prepetition
agreement.

The Debtors also ask the Court to approve the Corrective
Endorsement.

A full-text copy of the Corrective Endorsement if available for
free at http://researcharchives.com/t/s?113f

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide      
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.  (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)  


AMERICAN TISSUE: Trustee Taps Andrew Sklar as Special Counsel
-------------------------------------------------------------
Christine C. Shubert, Chapter 7 Trustee for the estate of American
Tissue, Inc., and its debtor-affiliates, asks the U.S. Bankruptcy
Court for the District of Delaware for authority to retain the Law
Offices of Andrew Sklar, P.C., as her special counsel related to
the collection of judgments in the Debtors' chapter 7 cases.

Andrew Sklar, Esq., a shareholder at Andrew Sklar, discloses that
the firm will receive a 40% contingency fee of the amount
collected from the judgments, plus reimbursement of all costs.

Mr. Sklar assures the Court that his firm does not hold or
represent any interest materially adverse to the Debtors' estate
or any class of creditors and is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.

American Tissue Inc. is an integrated manufacturer of tissue
products and pulp and paper in North America, with a comprehensive
product line that includes jumbo tissue rolls for converting and
converted tissue products for end-use.  The company filed for
Chapter 11 protection on September 10, 2001 (Bankr. Del. Case No.
01-10370).  On April 22, 2004, the Court converted the Debtors
cases into a chapter 7 liquidation proceeding.  Laura Davis Jones,
Esq., at Pachulski, Stang, Ziehl, Young & Jones, represents the
Debtors.  Dmitry Pilipis, Esq., and Frederick B. Rosner, Esq., at
Jaspan Schlesinger Hoffman LLP, represents the Official Committee
of Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it estimated assets and debts of more than $100
million.


ARMSTRONG WORLD: Court Okays Modified Reorganization Plan
---------------------------------------------------------
The Honorable Eduardo C. Robreno, U.S. District Court Judge for
the Eastern District of Pennsylvania, confirmed the Fourth Amended
Plan of Reorganization of Armstrong World Industries, Inc., as
modified.

Except for Section 1129(a)(8) of the Bankruptcy Code, Judge
Robreno finds that Debtor's Fourth Amended Plan satisfies the
statutory requirements under Section 1129(a) necessary to confirm
the Plan:

A. Pursuant to Section 1129(a)(1), the Debtor's Plan satisfies all
   the applicable provisions of the Bankruptcy Code in that, among
   others:

   -- the Plan and the Disclosure Statement describe the
      Asbestos PI Permanent Channeling Injunction, including
      the identities of the PI Protected Parties, and the
      Claims Trading Injunction, in compliance with the
      requirements of Rule 3016(c) of the Federal Rules of
      Bankruptcy Procedure;

   -- due and proper notice of the Disclosure Statement Hearing
      and the Confirmation Hearing was given to all parties-in-
      interest;

   -- the Plan designates 12 classes of claims against and
      interest in AWI; and

   -- the Plan provides adequate means of implementation.

B. Pursuant to Section 1129(a)(2), the Company complies with all
   of the applicable provisions of the Bankruptcy Code in that,
   among others:

   -- the Company is the proper debtor under Section 109;

   -- the Company complied with the applicable provisions of the
      Bankruptcy Code, the Bankruptcy Rules, the Voting
      Procedures, the Disclosure Statement Order and related
      documents in transmitting the Plan and in soliciting and
      tabulating Plan votes; and

   -- the Company complied with applicable bankruptcy and
      non-bankruptcy laws, the operating guidelines and financial
      reporting requirements enacted by the United States Trustee,
      and specific rules of the Bankruptcy Court throughout the
      Chapter 11 case.

C. The Court has examined the totality of the circumstances
   surrounding the formulation of the Plan.  The Plan has been
   proposed with the legitimate and honest purpose of
   reorganizing the Company's business and affairs, restructuring
   its asbestos-related liability, and maximizing the value
   available for distribution to creditors.  The Plan's discharge,
   exculpation and indemnification provisions have been agreed
   to in good faith and are consistent with Sections 105 and
   1129.  Thus, the Company complies with the "good faith and not
   by any means forbidden by law" requirement of Section
   1129(a)(3).

D. All payments made or to be made by the Company to professionals
   Will be subject to review and approval by the Bankruptcy Court
   or the District Court on final application under Section 330,
   331 or 503(b).  Thus, the Plan satisfies Section 1129(a)(4).

E. The Company has disclosed the identities and nature of
   compensation of those persons who will serve, on the Effective
   Date of the Plan, as directors and officers of the Reorganized
   Company, as well as the identities of the Asbestos PI Trustees
   and the members of the Trustees' Advisory Committee.  Hence,
   the Plan satisfies Section 1129(a)(5).

F. The Plan does not provide for any changes in rates that
   require regulatory approval of any governmental agency.
   Hence, Section 1129(a)(6) is inapplicable.

G. The Plan satisfies the "best interests" test as to all
   impaired classes of Claims and Equity Interests in accordance
   with Section 1129(a)(7).

H. All classes of impaired Claims that were entitled to vote on
   the Plan, other than Class 6 General Unsecured Claims, have
   voted to accept the Plan.

   Although the Plan does not comply with Section 1129(a)(8)
   because of the rejection of the Plan by Class 6, the Plan
   satisfies the "cramdown" provisions of Section 1129(b) in
   that it does not discriminate unfairly against the non-
   accepting class and is otherwise fair and equitable.

   With respect to Class 12 Equity Interest, which is deemed to
   reject the Plan, Section 1129(b) is satisfied because under
   the Plan no holder of any interest that is junior to the
   Equity Interests in Class 12 will receive or retain any
   property on account of that junior interest.

I. The Plan satisfies Section 1129(a)(9) because the Company has
   sufficient cash to fund payments of allowed Administrative
   Expense Claims, Priority Claims, and Priority Tax Claims:

   (a) Each holder of an Allowed Administrative Expense will be
       paid in full and in cash, on the Effective Date of the
       Plan; provided, however, that certain of the
       administrative expenses will be assumed and paid by the
       Reorganized Company in accordance with the terms and
       conditions of the parties' transactions and agreements;

   (b) Each holder of an Allowed Priority Claim will be paid in
       full, in cash, and in an amount equal to the Claim, on
       the later of the Effective Date and as soon as
       practicable after the date the Claim becomes Allowed; and

   (c) Each holder of an Allowed Priority Tax Claim will be paid
       either:

       (a) in full and in cash, on the latest of:

           * the Effective Date;

           * the date the Allowed Priority Tax Claim becomes
             Allowed; and

           * the date the Allowed Priority Tax Claim is payable
             under applicable non-bankruptcy law; or

       (b) on other terms as may be agreed between each Priority
           Tax Claim holder and the Reorganized Company.

J. The Plan satisfies Section 1129(a)(10) because Classes 3
   and 7, which are impaired classes, have voted to accept the
   Plan by the required majority.  Because Classes 3 and 7
   contain no insiders, at least one impaired class entitled to
   vote on the Plan has voted to accept the Plan by the required
   majority, determined without including any acceptance of the
   Plan by insiders.

K. The reorganized Company will not likely require liquidation or
   further financial reorganization after confirmation.  The
   Company carefully structured its Plan and the Asbestos PI Trust
   to provide appropriate mechanisms and funding to consummate the
   Plan with a high degree of certainty that the Reorganized
   Company will be able to meet its obligations under the Plan.
   Hence, the Plan satisfies Section 1129(a)(11).

L. The Plan provides for the payment on the Effective Date of
   all fees payable under Section 1930 of the Judiciary and
   Judicial Procedures Code.  All post-consummation fees that
   are due and payable will be paid by the Reorganized Company
   until the Chapter 11 case is closed pursuant to Section 350(a).
   Accordingly, the Plan satisfies Section 1129(a)(12).

M. On and after the Effective Date, the Reorganized Company will
   Continue to pay all retiree benefits for the duration of the
   Period that the Company has obligated itself to provide the
   benefits, in satisfaction of Section 1129(a)(13).

Judge Robreno also finds that the principal purpose of the
Company's Plan is not to avoid taxes or the requirements of
Section 5 of the Securities Act of 1933, as amended.  
Additionally, there has been no objection to the Plan by any
governmental unit alleging any tax avoidance by the Company.
Hence, the Plan satisfies Section 1129(d).

The District Court also rules that the Asbestos PI Channeling
Injunction and the establishment of the Asbestos PI Trust, comply
with Section 524(e), and is consistent with Sections 524(g) and
1129, and other applicable provisions of the Bankruptcy Code.

The Claims Trading Injunction under the Plan is consistent with
Sections 105 and 1129, and other applicable provisions of the
Bankruptcy Code.  The Plan provisions relating to discharge,
exculpation and indemnity are consistent with Sections 105 and
1129, and other provisions of the Bankruptcy Code.

Judge Robreno also approved the appointment of:

   -- Paul Knutti, Anne Ferazzi, Thomas Tully, Lewis Sifford and
      Harry Huge as initial Asbestos PI Trustees; and

   -- John D. Cooney, Russell W. Budd, Steven Kazan, Joseph F.
      Rice, and Perry Weitz as the five initial members of the
      Trust Advisory Committee.

The initial Asbestos PI Trustees and the initial TAC members will
serve in accordance with the terms of the Asbestos PI Trust
Agreement on the Plan Effective Date.

As of the Effective Date, the Future Claimants' Representative,
the Asbestos PI Claimants' Committee and the Unsecured Creditors'
Committee will be released and discharged of and from all further
authority, duties, responsibilities, and obligations relating to
and arising from and in connection with the Chapter 11 Case.  The
committees will be deemed dissolved.  The Future Claimants'
Representative will continue to serve through the termination of
the Asbestos PI Trust to perform the functions required by the
Asbestos PI Trust Agreement.

A full-text copy of Judge Robreno's Order confirming the Company's
Plan of Reorganization may be viewed at no charge at
http://bankrupt.com/misc/AWIConfirmationOrder.pdf

A full-text copy of Judge Robreno's Findings of Fact and
Conclusions of Law may be viewed at no charge at
http://bankrupt.com/misc/AWIModPlanFindings&Conclusions.pdf

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. (Armstrong Bankruptcy News, Issue No. 100; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


AVNET INC: Higher Gross Level Cues Moody's to Upgrade Ratings
-------------------------------------------------------------
Moody's Investors Service upgraded the corporate family and senior
unsecured debt ratings of Avnet, Inc. to Ba1 from Ba2 and assigned
a Ba1 rating to the proposed offering of up to $250 million senior
notes due 2016.  The new issue proceeds together with cash-on-hand
and other financial resources will be used to repurchase not less
than $250 million of the outstanding $361.4 million 9.75% senior
notes due February 2008.  The ratings outlook is stable.

The ratings upgrade considers the potential refinancing, which
should enhance pro forma credit metrics and improve financial
flexibility by reducing borrowing costs and extending near-term
debt maturities.  Importantly, the upgrade reflects realized
operating efficiency improvements that have resulted in operating
margin expansion, higher gross cash flow levels and an enhanced
business model that has the propensity to deliver consistently
higher levels of positive free cash flow compared to prior year
periods.  It also factors in the enhanced market position, more
favorable product mix and operating leverage via the Memec
acquisition coupled with better than anticipated results from the
integration plan.

The company's execution on realizing annualized cost synergies of
$150 million beginning in fiscal 2007 is higher than the original
plan of $120-130 million. The company's success in completing this
sizeable integration in one year is reflective of Avnet's
experience in integrating over 30 acquisitions over the past 11
years.

The stable outlook reflects Moody's expectations that organic
revenues will grow in line with the industry's mid-to-high single
digit growth rate; Avnet's diversified geographic presence; and
the value of working capital and operating improvements which have
increased operating efficiency.  The outlook also captures Avnet's
low single-digit, albeit improving, operating margins, which leave
limited cushion for unexpected setbacks or a disruptive
competitive environment.

The ratings or outlook could be positively influenced if Avnet:

   (i) sustains progress in improving its operating performance
       lifting operating margins;

  (ii) continues to improve financial leverage via debt reduction
       and higher operating cash flow leading to enhanced debt
       protection measures; and

(iii) demonstrates continued evidence of high levels of gross
       cash flow and stability in free cash flow generation,
       muting the inherent volatility of the semiconductor and
       computer products cycles.

This new ratings were assigned:

   * Up to $250 million Senior Unsecured Notes due 2016 -- Ba1

These ratings were upgraded:

   * Corporate Family Rating to Ba1 from Ba2

   * Senior Unsecured Notes with various maturities to Ba1
     from Ba2

   * Senior/Subordinated shelf ratings to (P)Ba1/(P)Ba2 from
     (P)Ba2/(P)Ba3

Avnet, Inc., headquartered in Phoenix, Arizona, is one of the
largest worldwide distributors of electronic components and
computer products, primarily for industrial customers.  Revenues
for the fiscal year ended July 1, 2006 were $14.3 billion.


BEST MANUFACTURING: Hires Levett Rockwood as Special Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey allowed
Best Manufacturing Group LLC and its debtor-affiliates to employ
Levett Rockwood P.C., as their special corporate counsel.

As reported in the Troubled Company Reporter on Sept. 6, 2006,
the Debtors related that Levett Rockwood has acted as general
corporate counsel to Best Manufacturing since on or about June 15,
2001.  The Debtors said that the firm has represented one or more
of the Debtors in numerous corporate matters including, but not
limited to, mergers and acquisitions, contract preparation and
review, strategic alliances, corporate structure, litigation,
employee and consulting agreements, and corporate finance.

Christopher M. Graham, Esq., a member at Levett Rockwood, told the
Court that the firm's professionals bill:

      Professional                   Hourly Rate
      ------------                   -----------
      Shareholders                   $320 - $375
      Associates                     $195 - $260
      Paralegals                     $135 - $150

Mr. Graham disclosed that the firm has received a $30,000
retainer.

Mr. Graham assured the Court that his firm does not represent any
interest adverse to the Debtors or their estates.

Headquartered in Jersey City, New Jersey, Best Manufacturing Group
LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture  
and distribute textiles, career apparel and other products for the
hospitality, healthcare and textile rental industries.  The
Company and four of its subsidiaries filed for chapter 11
protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415).
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.


BROOKS SAND: Court Approves Sale of All Assets for $6.7 Million
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Kentucky
gave Kenneth C. Henry, the chapter 11 trustee appointed in Brooks
Sand & Gravel, LLC's bankruptcy case, authority to sell
substantially all of the Debtor's assets to Johnson Materials LLC.

The Court specifically authorized the Trustee to pay to Bank of
America the sum of $6,200,000 from the proceeds of the sale, which
fund will be subject to disgorgement.

The Trustee is directed to pay $154,061, less any credit for sums
collected prior to closing, to Caterpillar Financial Services
Corporation at the closing of the sale.

The Trustee is further directed to retain the sum of $25,000 from
the Sale Proceeds pending resolution of Caterpillar's claim of
entitlement to fees and expenses pursuant to Section 506(b) of the
Bankruptcy Code.

Caterpillar will cause its lien against the 2003 Caterpillar
966GII Wheel Loader, Serial No. ANZ000597, to be released upon
receipt of the allowed payment, but will retain its lien on the
Sale Proceeds pending a determination or agreement regarding its
claim for fees and expenses.

As reported in the Troubled Company Reporter on Aug. 10, 2006,
Johnson Materials offered to buy the Debtor's assets for
$6.7 million in cash and the assumption of certain liabilities.  
Johnson Materials was entitled to a $335,000 break-up fee in case
another entity acquires the assets.

The competing bid deadline was Aug. 25, 2006, with competing bids
equal or more than the sum of the purchase price, the break-up
fee, recoverable costs and $150,000.  Interested bidders were
required of a $100,000 good faith cash deposit.  

The auction sale of the assets was held on Aug. 30, 2006, in
Courtroom No. 1, Fifth Floor, United States Courthouse, 601 West
Broadway in Louisville, Kentucky.

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


CATALYST PAPER: Earns $42.4 Million in 2006 Second Quarter
----------------------------------------------------------
Higher prices for pulp and paper products, along with continued
performance improvements and a favorable federal income tax
adjustment, boosted Catalyst Paper's net earnings in the second
quarter.

Net earnings were $42.4 million on sales of $469.6 million,
compared to a net loss of $23.6 million on sales of $456.3 million
in the first quarter.

The strong Canadian dollar continued to affect the company's
earnings as it reached a 28-year high versus the US currency.  
This reduced operating earnings, but resulted in a $26.2 million
after-tax foreign exchange gain on the translation of US-dollar-
denominated debt.

Net earnings were also bolstered by a $22.9 million release of
future income taxes that followed the federal government's
decision to reduce the corporate income tax rate.  Earnings before
income tax, depreciation and amortization for the second quarter
were $52.4 million, up from $47.3 million in the first quarter.

"There were a lot of positives for us in the second quarter.  
Operations ran well in all our mills and this was supported by
strong cost control and solid sales.  Pulp prices approached a
six-year high, but once again the Canadian dollar worked against
us to erase the gains made," said president and CEO Russell J.
Horner.  "That disappointment aside, we're well-positioned to take
advantage of a strong economy as we continue to capture new
operational efficiencies and market opportunities."

The company's performance improvement program delivered $19
million toward this year's $70 million goal in the second quarter.  
This brings the program's total for the year to $32 million,
primarily through product optimization, productivity improvements
and cost savings for fibre, energy, chemicals and freight.

Markets for the company's pulp products were strong in the second
quarter, with European benchmark pulp prices approaching a six-
year high.  Further pulp price increases were announced for the
third quarter.  Strong box shipments and low containerboard
inventories supported higher kraft paper prices.

Specialty paper markets were mixed, with coated paper prices
weakening.  Other paper grades fared better, with a US$40 per ton
price increase announced for the company's soft-calendered grades,
effective July 1.  Directory paper demand remained steady while
spot prices rose.

Newsprint consumption continued to decline, though industry
conditions supported higher prices in the quarter and a further
price increase of US$40 per tonne was announced for effect Aug. 1.

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: Portland Court Okays Pact on Hiring Appraisers
---------------------------------------------------------------
The Archdiocese of Portland in Oregon and these parties entered
into a stipulation governing the retention of certain real estate
appraisers who will provide a valuation of some of Portland's
selected properties:

   (1) The Official Committee of Tort Claimants;

   (2) Committee of Catholic Parishes, Parishioners and
       Interested Parties;

   (3) Central Catholic High School Parents Association, and
       Central Catholic High School Alumni Association;

   (4) Friends of Regis High School and Regis High School
       Foundation; and

   (5) Marist Foundation and the Marist Parent and Alumni Service
       Club.

The U.S. Bankruptcy Court for the District of Oregon approves the
parties' stipulation specifying that the maximum allowable fees
for each of the appraisers with respect to the appraisal of the
properties are:

         Appraiser                        Fee
         ---------                        ---
         Powell Valuation, Inc.         $56,000
         Duncan & Brown, Inc.            29,500
         Skelte & Associates, Inc.      100,000

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


CHAPARRAL STEEL: Moody's Review Low-B Ratings on Sr. Unsec. Bond
----------------------------------------------------------------
Moody's Investors Service placed three North American steel
companies under review for possible upgrade: United States Steel
Corporation's Ba1 corporate family rating, Gerdau Ameristeel
Corporation's Ba2, and Chaparral Steel Company's B1 CFR.  The
reviews for possible upgrade reflect the superior improvement
in financial metrics and overall financial risk reduction
evidenced by these companies, in combination with Moody's evolving
view regarding the expected duration of the current steel industry
upcycle.

This evolving perspective is primarily due to fundamental changes
that appear to have occurred within the industry over the last
several years, primarily as a result of industry consolidation.

Moody's expects to refine its opinion of the medium- and long-term
outlook for the steel industry over the review period, which is
expected to last approximately two months.  Should Moody's
prevailing industry outlook materially change, as is expected, it
will publish an Industry Outlook that summarizes its updated
thinking and discusses possible rating implications for the rated
steel company universe.

However, at this stage, Moody's has identified United States
Steel, Gerdau Ameristeel and Chaparral Steel as being the most
likely upgrade candidates.  It is important to note that these
companies are being placed on review reflecting certain common
factors as well as those unique to these three companies.  The
common factors include a combination of the strength in the
overall operating performance as well as management actions taken
to improve their capital structures
and financial flexibility.

Moody's review of US Steel, Gerdau Ameristeel and Chaparral
Steel will focus on the sustainability of improved margins and
debt protection measures as well as the likely capital structures
expected to be maintained through what will continue to be a
cyclical business.  

These ratings were placed under review for possible upgrade:

Chaparral Steel Company

Issuer: Chaparral Steel Company

On Review for Possible Upgrade:

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

   * Senior Secured Bank Credit Facility, Placed on Review for
     Possible Upgrade, currently Ba2

   * Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Upgrade, currently B1

Outlook Actions:

   * Outlook, Changed To Rating Under Review From Stable

Chaparral Steel Company, headquartered in Midlothian, Texas, had
revenues of $1.5 billion for its year ended May 31, 2006.


CHI-CHI'S: Court Approves Ecolab Adversary Proceeding Settlement
----------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved the compromise and settlement of an
adversary proceeding between Ecolab, Inc., aka Ecolab Pest
Elimination and William Kaye, the Liquidating Trustee for the
Liquidating Trust established pursuant to Chi-Chi's, Inc., and its
debtor-affiliates' confirmed plan of reorganization.

The Official Committee of Unsecured Creditors, on behalf of the
estates of Chi-Chi's commenced, on Oct. 6, 2005, adversary
proceeding no. 05-52967.

The complaint alleged that Ecolab received preferential and
fraudulent transfers from:

   -- Koo Koo Roo, Inc.,
   -- Chi-Chi's, Inc., and
   -- The Hamlet Debtors, H.H.K. of Virginia and H.H.K. of
      Maryland.

Under the December 2005 order of the Bankruptcy Court, the
Liquidating Trust was substituted as plaintiff in the complaint.

The Liquidating Trustee and Ecolab have negotiated and agreed a
settlement, which provides for the payment of a certain amount in
exchange for the dismissal of the adversary proceeding.

The Ecolab Settlement Agreement is filed under seal to preserve
confidentiality.  The settlement amount is not known.

Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business.  The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC).  Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors.  Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.  

The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005.  The Plan became effective on Dec. 27, 2005.  
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest.  William Kaye was appointed at
trustee for the Liquidating Trust.  When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.


CHI-CHI'S: Court Approves Sysco Adversary Proceeding Compromise
---------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved the compromise of the Adversary
Proceeding between Sysco Food Services of Los Angeles, Inc., and
William Kaye, the Liquidating Trustee for the Liquidating Trust
established pursuant to Chi-Chi's, Inc., and its debtor-
affiliates' confirmed plan of reorganization.

The Liquidating Trustee filed a stipulation of voluntary dismissal
of the Sysco Adversary Proceeding pursuant to Bankruptcy Rule
9019(a).

The Official Committee of Unsecured Creditors, on behalf of the
estates of Chi-Chi's commenced, on Oct. 6, 2005, adversary
proceeding no. 05-52978.

The complaint alleged that Sysco received preferential and
fraudulent transfers from:

   -- Koo Koo Roo, Inc.,
   -- Chi-Chi's, Inc., and
   -- The Hamlet Debtors, H.H.K. of Virginia and H.H.K. of
      Maryland.

Under the December 2005 order of the Bankruptcy Court, the
Liquidating Trust was substituted as plaintiff in the complaint.

The Plan provides that with respect to recovery actions brought
against Sysco "in which the asserted amount is greater than
$50,000, the Liquidating Trustee shall: (i) obtain the written
consent of the Oversight Committee; and (ii) obtain approval
[from] the Bankruptcy Court to settle, adjust, dispose of, or
abandon any such Recovery Rights in accordance with Bankruptcy
Rule 9019,"

The Liquidating Trustee has notified the Oversight Committee (as
defined in the Confirmation Order) of his dismissal of the Sysco
Adversary Proceedings.

The Liquidating Trustee, his legal advisors, and his financial
advisors have reviewed the claims asserted against Sysco.  Based
on this review, the Trustee has determined that it is in the best
interest of the Trust to dismiss the Sysco Adversary Proceeding.

Because of the currently pending litigation between the Trust and
Sysco regarding a Hepatitis A outbreak that occured at the
Debtors' Beaver Creek restaurant, the Liquidating Trustee has
determined that it is in the best interest of the Liquidating
Trust not to enter into a standard settlement agreement, which
would contain mutual releases.

Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business.  The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC).  Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors.  Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.  

The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005.  The Plan became effective on Dec. 27, 2005.  
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest.  William Kaye was appointed at
trustee for the Liquidating Trust.  When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.


CM INVESTOR: Ends Capri Capital Purchase Deal for $6 Million
------------------------------------------------------------
CM Investor, L.L.C., a CharterMac Subsidiary, terminated its
option to purchase a 49% interest in Capri Capital Advisors
in exchange for a $6 million termination fee from CCA.  In
connection with the termination of the option, CCA repaid the
$20 million loan that CharterMac originally made to CCA in July of
2004, when CCA went through a recapitalization event.

"This transaction represented a compelling opportunity to make a
solid return on our original investment, while still maintaining a
presence in the pension fund advisory business," said Marc D.
Schnitzer, Chief Executive Officer and President of CharterMac.

"Given our recent acquisition of ARCap, a company that has strong
relationships with major pension funds, we believe that CharterMac
is well positioned to expand our pension fund advisory platform in
the near term.  We are extremely excited about the addition of
CharterMac Urban Capital, through which we have established a
direct advisory relationship with CalPERS, one of the nation's
largest pension funds.  Daryl Carter, who is currently the Chief
Executive Officer of CharterMac Mortgage Capital and had been the
Co-Chairman and co-founder of Capri Capital Advisors, will oversee
CharterMac Urban Capital.  Mr. Carter sold his ownership interest
in CCA and will be focused exclusively on his executive role at
CharterMac."

As part of the transaction, CCA will transfer its interest in the
investment fund Capri Urban Capital to CharterMac and the fund
will be renamed CharterMac Urban Capital.  Formed in 2001, CUC is
an investment fund focused on making investments in multifamily
and commercial properties in major urban markets.  CUC's single
investor is the California Public Employees Retirement System.  
Currently, the fund has $58 million in assets under management,
with a commitment from CalPERS for up to $135 million.

Commenting on the transaction, Mr. Carter stated: "CharterMac
Urban Capital is a vehicle that has tremendous synergies with our
existing product offerings.  Already this year, we have closed two
major multifamily transactions in California where CUC provided
the equity and the first mortgage loan was provided by CharterMac
Mortgage Capital.  We could not ask for a better partner in
CalPERS, and I look forward to growing both CharterMac Urban
Capital and our pension fund advisory platform."

In addition to Mr. Carter, one other CCA employee will transfer to
CharterMac to oversee the day to day operations of CUC.

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.


COLLINS & AIKMAN: Magna Paying $2.7 Million Under Stipulation
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
approved a stipulation between Collins & Aikman Corporation, its
debtor-affiliates, Magna International Inc. and General Electric
Capital Corporation.

Pursuant to the stipulation, Magna agreed to pay $2,761,254 to a
CarCorp, Inc. account related to certain prepetition receivables.  
Upon receipt of payment by CarCorp, the parties will exchange
mutual releases.  The Debtors had assigned and transferred certain
of their accounts receivables to CarCorp who, in turn, assigned
all of those accounts receivables to GECC.

As reported in the Troubled Company Reporter on Aug. 15, 2006, the
Debtors purchase certain component parts or services from Magna.  
Magna asserted that the Debtors owed it $1,047,409 for parts
and services provided prior to the Debtors' bankruptcy filing.

Likewise, Magna purchased component parts, tooling and services
from the Debtors.  The Debtors assert that Magna owed them
$3,808,663 for parts and tooling provided prior to the Petition
Date.  In addition, the Debtors claimed that they continue to be
owed from Magna an additional $165,495 on account of prepetition
shipments.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


COMPLETE RETREATS: Wants to Walk Away from 21 Contracts and Leases
------------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates are parties to 21
executory contracts and unexpired leases for the use and rental of
various properties:

                                  Monthly  Effective Termination
Counterparty                       Fees      Date       Date
------                            -------  --------- -----------
Gordon & Joan Edwards             $20,000   09/06/05   09/31/06
Michael Ryan                        5,400   09/15/05   09/14/06
Desarrollos Turisticos Milenio     20,000   11/07/05   11/15/06
W. Klappenbach & C. Clift           5,000   09/06/05   08/30/06
Willian O'Neil                     31,200   09/14/05   12/31/06
Kenneth E. Moore                   15,000   04/10/06   04/30/08
Michelle Redlich                    8,500   11/30/05   12/31/09
Brian N. Hollinagel                30,000   04/19/06   04/30/07
Gail Kology                         6,000   09/19/06   11/30/06
Ruth Belleville                     5,200   08/02/05   08/21/06
Fontainebleau Florida Hotel        69,865   05/05/06   04/30/07
L+M Investment Group L.L.C.        15,000   04/23/04   04/30/07
Marlin Ventures USA Inc.           20,000   03/31/06   04/30/07
Bonita Stewart                      4,600   08/20/05   10/31/06
Ted & Lida Urban                    6,500   02/13/06   03/31/07
Charles & June McNeirney           10,609   03/16/04   03/31/07
Thomas H. Hurlburt                  5,062   11/18/02   12/31/06
Richard & Linda Sher                4,500   07/01/05   07/31/07
Frank Rostron                       7,000   05/31/05   07/31/07
Jeff Dishner                            -   07/29/04          -
Christopher Miller/Richard Treves       -   10/15/05          -

The Debtors have paid security deposits for six of the Contracts
and Leases:

            Agreement             Security Deposit
            ---------             ----------------
            Edwards Agreement          $20,000
            Hollinagel Agreement        30,000
            L+M Agreement               12,500
            Marlin Agreement            20,000
            Stewart Agreement            6,750
            McNeirney Agreement         30,000

The Debtors have exited all properties related to the Agreements
as of the Petition Date because those properties were no longer
beneficial to their business or necessary to their reorganization
efforts, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford,
Connecticut, tells the Court.

Thus, the Debtors ask the U.S. Bankruptcy Court for the District
of Connecticut to:

   (a) grant them authority to reject the 21 Contracts and Leases
       effective as of the Petition Date; and

   (b) require that claims arising from the rejection of an
       Agreement be filed within 30 days from the date the Court
       approves rejection of that Agreement.

According to Mr. Daman, the Dishner Agreement was terminated
prior to the Petition Date and the Debtors have surrendered
possession of the related property around that time.  In an
abundance of caution, the Debtors seek to reject the Dishner
Agreement as of the Petition Date.

The Miller Agreement was unilaterally terminated by the owners,
who took possession of the property and barred the Debtors from
the premises, Mr. Daman adds.  Accordingly, the Debtors were
forced to surrender control of the property.  Thus, the Debtors
seek to reject the Miller Agreement to the extent the contract
has not been terminated in accordance with its terms.  The
Debtors reserve their rights with respect to any violation of the
automatic stay committed by the lessor under the Miller
Agreement.

According to Mr. Daman, the Debtors currently receive limited, if
any, benefits from the Agreements, whereas they would owe
approximately $2,500,000 if the Agreements are not rejected,
potentially as an administrative claim.

The Debtors do not believe that the Rejected Agreements could be
assigned for any meaningful value or that they provide any other
potential value to their estates.  Thus, rejecting the Rejected
Agreements will clearly benefit the Debtors' estates, as well as
their creditors and other parties-in-interest, Mr. Daman asserts.

The Debtors propose that all non-debtor parties to the Agreements
should be required to return any amounts remaining after applying
any security deposits, moneys held in escrow, or any similar
funds to any prepetition arrearages or delinquencies under or
related to the Agreements.

The Debtors intend to pay, or have already paid, all non-Debtor
parties to the Agreements amounts due up to the Petition Date,
Mr. Daman says.

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors.  No estimated assets
have been listed in the Debtors' schedules, however, the Debtors
disclosed $308,000,000 in total debts.  (Complete Retreats
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


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

As reported in the Troubled Company Reporter on Aug. 10, 2006,
the Court had given its interim approval on the Debtors' request
for the Court to:

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

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

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

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

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

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

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

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

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

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

                    Proposed Adequate Assurance

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

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

              Proposed Adequate Assurance Procedures

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

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

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

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

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

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

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

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

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

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

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

                      Process for Opting Out

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

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

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

The Debtors propose these uniform objection procedures:

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

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

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

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

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

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors.  No estimated assets
have been listed in the Debtors' schedules, however, the Debtors
disclosed $308,000,000 in total debts.  (Complete Retreats
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

         
CONGOLEUM CORP: Bondholders Support New Reorganization Plan Terms
-----------------------------------------------------------------
The official committee representing Congoleum Corporation's
bondholders has reached an agreement in principle with both the
company and the asbestos claimants' representatives on certain
amendments to Congoleum's pending plan of reorganization.  As a
result, the official bondholders committee has agreed to support
Congoleum's reorganization plan and will be withdrawing the plan
of reorganization it had previously filed jointly with Continental
Casualty Company and Continental Insurance Company.

"We are extremely pleased to have a proposed plan supported by the
bondholders' committee and the asbestos claimants'
representatives, and expect to have our new plan filed with the
court by Sept. 15, 2006," Roger S. Marcus, Chairman of the Board,
commented.  "A disclosure statement hearing on the plan has been
scheduled for Oct. 19, 2006.  With all official committees and
representatives of future asbestos claims now on board, our
confirmation process should be easier and less expensive, and I am
optimistic that the plan will be confirmed in early 2007.  I
appreciate the efforts made by the Court-appointed mediators to
bring us to this point."

The agreement in principle is subject to mutually agreeable
definitive documentation, which will be submitted to the
Bankruptcy Court as part of a new amended plan of reorganization.

Copies of the modified plan and disclosure statement will be filed
by Congoleum with the Securities and Exchange Commission as
exhibits to a filing under the Securities Exchange Act of 1934.  
They will also be available on the investor relations section of
Congoleum's Web site at http://www.congoleum.com/

                    About Congoleum Corporation

Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM)
-- http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors.  The Company filed for
chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago.

Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A.
Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent
the Debtors in their restructuring efforts.  Elihu Insulbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Claimants' Committee.  R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP, and Ravin Greenberg PC.  Michael S.
Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the
Official Committee of Unsecured Bondholders.  When Congoleum filed
for protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.

At June 30, 2006, Congoleum Corporation's balance sheet showed
a $44,013,000 stockholders' deficit compared to a $44,960,000
deficit at Dec. 31, 2005.  Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).


CONNACHER OIL: S&P Assigns B+ Long-Term Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Calgary, Alta.-based Connacher Oil and
Gas Ltd.

At the same time, Standard & Poor's assigned its 'BB-' bank loan
rating with a recovery rating of '1' to Connacher Finance Corp.'s
proposed seven-year $180 million secured term loan B facility, and
Montana Refining Company, Inc.'s five-year $15 million secured
revolving credit facility.

The '1' recovery rating reflects expectations for a 100% recovery
of principal in a default scenario.  The 'BB-' bank loan rating
is one notch above the corporate credit rating, because the
collateral value supporting the loans have a high probability of
enabling lenders to recover all principal and accrued interest
under a default scenario.  The outlook is stable.

"The ratings on Connacher are constrained by its aggressive
financial risk profile, which reflects the company's lack of
meaningful cash flow generation until the first phase, Pod I, of
its Great Divide Project achieves full production -- expected in
2008 -- and its relatively high leverage," said Standard & Poor's
credit analyst Jamie Koutsoukis.

"Nevertheless, we believe Connacher will be able to complete
construction of Pod I without any additional debt funding.  The
risk of cost overruns is tempered by the cost performance of
existing steam-assisted gravity-drainage projects, which have been
completed on time and on budget.  Furthermore, the company's
conventional and refinery operations, which are self funding,
should allow Connacher to significantly reduce its exposure to
natural gas fuel prices, heavy oil differentials, and diluent
prices once the project begins operation, which we assess as a
strength to the company's credit profile," Ms. Koutsoukis added.

Connacher is an oil and natural gas exploration and production
company whose principal asset is its approximate 100% working
interest in almost 80,000 acres of oil sands leases at its Great
Divide oil sands project near Fort McMurray, Alta.

In addition to its oil sands project, Connacher has conventional
operations primarily at Battrum, Sask., and Marten Creek and Three
Hills in Alberta with production of 3,300 to 3,500 barrels of oil
equivalent per day.

The company also operates an 8,400 barrels per day refinery
located in Great Falls, Mont.  Following a turnaround and
debottlenecking of the refinery in April 2006, the throughput
capacity of the refinery has been expanded and up to 9,500 bbl/d
have recently been achieved.  Connacher owns approximately 30% of
and manages Petrolifera Petroleum Limited, which has interests in
Argentina and Peru.

The stable outlook reflects our expectation that Connacher will be
able to complete the development of Pod 1 of its Great Divide
project on schedule without any material cost increases or any
need for additional funding.  Once Connacher achieves full
production at its oil sands project and internally generated cash
flows are sufficient to meet the company's debt and capital
expenditure commitments, there should be a material improvement in
its financial risk profile.

An improvement in the company's existing financial profile would
strengthen the overall credit profile, which should, in turn,
result in a positive rating action.  Conversely, if Connacher
encounters cost overruns as it proceeds with construction and the
project economics deteriorate, a negative rating action could
occur.


COPELANDS' ENT: Meeting of Creditors Scheduled on September 21
--------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Copelands'
Enterprises, Inc.'s creditors at 2:00 p.m., on Sept. 21, 2006, at
Room 2112, Second Floor of the J. Caleb Boggs Federal Building,
844 King Street in Wilmington, Delaware.  This is the first
meeting of creditors required under Sec. 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.

Based in San Luis Obispo, California, Copelands' Enterprises,
Inc., dba Copelands' Sports -- http://www.copelandsports.com/--
operates specialty sporting goods stores.  The Company filed for
chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No.
06-10853).  Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and
Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, &
Weintraub LLP, in Los Angeles, California, represent the Debtor.
Clear Thinking Group serves as the Debtor's financial advisor.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $50 million and $100 million.


CRDENTIA CORP: To Acquire iVOW for $3.5 Million
-----------------------------------------------
Crdentia Corp. has signed a non-binding term sheet to acquire
iVOW, Inc., a provider of disease management services for the
treatment of chronic and morbid obesity.

The Company will acquire all outstanding shares of iVOW for
approximately $3.5 million in the Company's common shares, subject
to adjustment based on iVOW's debt and accounts receivable at
closing.

The Company disclosed that the acquisition of iVOW is anticipated
to facilitate the receipt of a NASDAQ Capital Market listing for
the combined company.  The completion of the transaction is
subject to negotiation and execution of a definitive agreement.  
Any potential closing would occur in the fourth quarter after
receipt of the requisite stockholder approvals.  The term sheet
requires iVOW to preserve its assets, and to have a minimum cash
balance upon signing of the definitive agreement.

                   CSI Discontinued Negotiations

Crdentia also disclosed that it has discontinued negotiations
under the non-binding letter of intent to merge with Caregiver
Services, Inc.

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

                        Going Concern Doubt

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


DANA CORP: Court Approves Toyota Tooling Pact Assumption
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Dana Corp. and its debtor-affiliates authority to assume
the tooling agreements they entered into with Toyota Motor
Engineering & Manufacturing North America Inc.

The operation of the Debtors' structures division requires them to
purchase tooling for use in the manufacturing process to meet
specialized customer orders.  The structures division manufactures
vehicle frames.  For many of their major projects, the Debtors are
required to arrange for the manufacture of so-called "customer
paid tooling" by third parties that is sold to them, and then
resold to original equipment manufacturers.

                        The TEMA Agreements

The Debtors have arranged for a number of Tooling purchases with
respect to the production of frames for the Toyota Tundra light
truck and Toyota Sequoia sport-utility vehicle.  Accordingly, the
Debtors and Toyota Motor Engineering & Manufacturing North
America, Inc., are parties to certain agreements, which commit
Toyota to purchase more than $100,000,000 worth of Tooling from
the Debtors.

The TEMA Agreements include these Supplier Tooling Business Unit
Toyota Motor Engineering & Manufacturing Purchase Orders:

                               Amount of Version Dated  
      Purchase Order                 April 2006
      --------------           -----------------------
      NATOL-WT00607290               $28,094,423
      NATOL-WT00607300                 1,944,501
      NATOL-WT00607310                46,295,768

The amount Toyota pays under the TEMA Agreements exceeds the
amount the Debtors pay to third parties by nearly $5,000,000.  
The excess payments cover the Debtors' internal costs, including
costs incurred in overseeing and coordinating the Tooling
procurement process and in integrating the Tooling into Dana's
production processes, Corinne Ball, Esq., at Jones Day, in New
York, relates.

With respect to the Toyota Tundra light truck Program, the TEMA
Agreements are comprised of three purchase orders requiring
Toyota to pay $76,334,692, in the aggregate, Ms. Ball states.
As of Mar. 3, 2006, the Debtors have delivered to Toyota some of
the Tooling required for the Toyota Tundra Program.

With respect to the Toyota Sequoia sport-utility vehicle, the
TEMA Agreements are comprised of a commitment letter, where
Toyota agrees to purchase Tooling from the Debtors with a value
of at least $28,000,000.  As of Mar. 3, 2006, the Debtors have not
yet delivered any Tooling to Toyota in connection with the Toyota
Sequoia Program.

                The Third Party Tooling Agreements

To fulfill their obligations under the TEMA Agreements, the
Debtors entered into a number of agreements with Tooling
Suppliers for the manufacture of Tooling for both Toyota Tundra
and Toyota Sequoia Programs.  Certain of those agreements were
fully completed by the Tooling Supplier and are not likely to be
executory contracts because the Tooling Supplier has delivered
the Tooling to the Debtors as of Mar. 3, 2006, Ms. Ball says.

A list of the Third Party Tooling Agreements is available for
free at http://researcharchives.com/t/s?f8f   

In May 2006, the Debtors sought and obtained the Court's
authority to pay the claims of several Tooling Suppliers to the
extent their claims were unpaid as of Mar. 3, 2006.  Other
third-party tooling agreements were not executed until after
Mar. 3, 2006.

                      August 2006 Agreement

To provide greater certainty relating to the programs in process
with the Debtors, Toyota asked the Debtors to negotiate the terms
of assumption of the TEMA and the Third Party Tooling Agreements,
Ms. Ball avers.  Toyota also asked the Debtors to negotiate the
terms of the Debtors' assumption and assignment of the Tooling
Agreements with Ogihara Corporation and Toyota Tsusho Corporation
to Toyota.  In return, Toyota offered to make certain valuable
concessions to the Debtors.

As a result of those negotiations, the parties entered into the
August 2006 Agreement with these salient terms:

   (a) The Debtors will assume the TEMA Agreements.  No amounts
       need to be paid to Toyota and no actions need be taken to
       cure any outstanding defaults by the Debtors under the
       TEMA Agreements;

   (b) Toyota agrees to a definitive and accelerated payment
       schedule under the TEMA Agreements;

   (c) Toyota has not yet committed to the terms or timing of any
       reimbursement of about $6,000,000 in costs that may be
       incurred by the Debtors.  The costs will be the subject of
       additional good faith negotiations between the parties;

   (d) The Debtors will pay certain amounts to tooling suppliers
       under the authority previously obtained through the
       Customer Paid Tooling Order, and Toyota will reimburse the
       Debtors for amounts so paid;

   (e) The Debtors will assume the Third Party Tooling
       Agreements;

   (f) The Debtors will perform under various purchase orders
       that were issued to toolmakers since Mar. 3, 2006 and
       issue certain new purchase orders to toolmakers;

   (g) The Debtors will assume and assign to Toyota the Japanese
       Tooling Agreements, and Toyota will pay any cure costs
       associated with that assumption and assignment.  The
       portion of the TEMA Agreements relating to tooling to be
       purchased under the Japanese Tooling Agreements will be
       terminated.

   (h) The Debtors will communicate with the various Tooling
       Suppliers and Japanese Toolmakers to seek confirmation
       that they have paid various amounts owed to the Suppliers.

The TEMA Agreements do not permit invoicing until certain
approvals were received, thus delaying reimbursement and required
the Debtors to pay the Tooling Suppliers before being reimbursed
by Toyota, Ms. Ball relates.

As of July 7, 2006, the Debtors have paid more than $50,000,000
to Tooling Suppliers, but have been paid less than $36,000,000 by
Toyota, Ms. Ball tells the Court.  Upon implementation of the
August 2006 Agreement, Toyota will make those payments to the
Debtors.

Ms. Ball asserts that by entering into the August 2006 Agreement,
the Debtors will:

   -- obtain a substantial cash flow benefit by avoiding costs
      relating to having to make out-of-pocket expenditures; and

   -- avoid the risk that Toyota later could determine that
      certain of the Tooling costs the Debtors incurred are not
      reimbursable.

Ms. Ball adds that the assumption of the Third Party Tooling
Agreements and the assumption and assignment of the Japanese
Tooling Agreements will:

   -- serve to prevent disruptions of the Debtors' business
      operations; and

   -- allay the Tooling Suppliers' fears by removing the risk
      that Tooling Suppliers and the Japanese Toolmakers will not
      be paid accordingly.

Nevertheless, the Debtors acknowledge that assumption of the
Tooling Agreements carries little downside for their estates.  
Ms. Ball explains that this is largely because of the "customer
paid" nature of the Tooling at issue.  The assumption of the
Third Party Tooling Agreements will unlikely result in any net
cash expenditure by the Debtors, as nearly every dollar paid to a
Tooling Supplier is to be reimbursed by Toyota to the Debtors
under the TEMA Agreements.

Pursuant to the August 2006 Agreement, Toyota commits to pay the
Debtors more than $110,000,000, more than 95% of the Debtors'
total costs, while leaving only an additional $6,000,000
remaining open to future negotiation.  In light of the nature of
these costs, the Debtors believe that they will be able to
demonstrate to Toyota that the additional costs are actual and
necessary and should be compensated.

The assumption and assignment of the Japanese Tooling Agreements
also takes the Debtors out of their "middleman" position between
Toyota and the Japanese Tooling Suppliers and at the same time,
allow the Debtors to continue to receive all of the benefits of
the agreements, Ms. Ball points out.

Moreover, the assumption of the Tooling Agreements is an
important step for the Debtors to help solidify their
relationship with Toyota, one of their key customers, Ms. Ball
contends.

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.  Fried, Frank, Harris, Shriver & Jacobson,
LLP serves as counsel to the Official Committee of Equity Security
Holders.  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. 20; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DANA CORP: Gets Court Approval on 2nd Settlement With Toledo Press
------------------------------------------------------------------
Dana Corporation and its debtor-affiliates obtained the U.S.
Bankruptcy Court for the Southern District of New York's approval
for their second settlement agreement with Toledo Press Company.

The Debtors and Toledo Press are parties to several equipment
purchase agreements pursuant to which the Debtors bought two
2,500-ton presses and two 1,000-ton presses and certain related
equipment from Toledo Press.

As reported in the Troubled Company Reporter on June 9, 2006, the
Debtors entered into a Settlement Agreement with Toledo Press,
resolving certain disputes between the parties relating to
shipping charges incurred in connection with the delivery of
certain equipment sold by Toledo Press to the Debtors.

The purchase price of the Equipment amounts to more than
$10,000,000, which will be paid through a series of quarterly
payments until July 2006.  The Equipment was used in the Debtors'
Structures Division for the manufacture of frames for light
trucks and automobiles.

Toledo Press procured the Equipment from China and shipped it to
the Debtors' facility in Hopkinsville, Kentucky.  Toledo Press was
responsible for installing the Equipment and providing other
related services.  The Purchase Agreements provided that the
Debtors grant purchase money security interests to Toledo Press to
secure payment of the Purchase Price.

According to Toledo Press, the Equipment arrived at the
Hopkinsville Facility from October 2005 through January 2006.  
After the delivery of the Equipment to the Debtors, Toledo Press
then filed financing statements in the Commonwealth of Virginia,
seeking to perfect the security interests granted pursuant to the
Equipment Purchase Agreements.

As of Mar. 3, 2006, the Debtors owed Toledo Press $3,825,100 under
the Equipment Purchase Agreements, Corinne Ball, Esq., at Jones
Day, in New York disclosed.

Subsequently, the Debtors and Toledo Press disputed:

   (a) whether the Equipment Charges represented a prepetition or
       postpetition claim, and whether any portion of the amounts
       should be paid on a postpetition basis;

   (b) whether the Alleged Perfection properly perfected the
       Security Interests; and

   (c) even if the Security Interests were properly perfected,
       whether the perfection would be subject to avoidance under
       Chapter 5 of the Bankruptcy Code.

On May 5, 2006, the Debtors and Toledo Press entered into a letter
agreement resolving certain of their disputes on a provisional
basis:

   * The Debtors agreed to pay $2,361,850 to Toledo Press;

   * The provisional payments would be disgorged to the extent
     that any Court order resolving the Secured/Administrative
     Claim Dispute provide that the perfection of the Security
     Interests should be avoided or that Toledo Press' claims are
     not secured or administrative claims; and

   * The Debtors would be entitled to hold the $700,000 balance
     owed under the Equipment Purchase Agreements pending the
     outcome of the Secured/Administrative Claim Dispute, but
     ultimately would pay that amount to Toledo Press if Toledo
     Press was successful in litigation.

The Debtors were scheduled to make a second provisional payment
of $763,250 to Toledo Press by the end of July 2006.  However,
because of the negotiation of a resolution of the issues, the
parties agreed that the Second Payment would not be paid as
scheduled, Ms. Ball says.

Also, in May 2006, the Equipment designated by the parties as
Press No. 27 malfunctioned and experienced certain mechanical
problems.  Toledo Press and the Debtors dispute whether the
actions of Toledo Press employees or the Debtors' employees caused
the mechanical problems with Press 27, Ms. Ball states.

Toledo Press was required to provide various warranties with
respect to the Equipment under the Purchase Agreements.  The
Debtors have advised Toledo Press that they are asserting a claim
with respect to Press 27 based on Toledo Press' breach of the
warranties.  Ms. Ball says the Debtors have paid approximately
$91,000 to third parties for the repair of Press 27.  The Debtors
expect to incur $5,000 in additional costs in connection with the
Press 27 Warranty Claim.

In June 2006, Toledo Press notified the Debtors that in addition
to the Security Interests, its claims were secured by a statutory
lien on the Equipment arising under Kentucky law.

The Debtors have found that litigating the Secured/Administrative
Claim Dispute and the Press 27 Warranty Claim in the Court could
take substantial time and resources.  Given the nature of the
dispute, litigation with Toledo Press would be highly fact-
intensive and require multiple witnesses, Ms. Ball notes.

Thus, the Debtors and Toledo Press negotiated a resolution of the
issues and ultimately agreed that:

   (a) Toledo Press will be permitted to retain the First Payment
       totaling $2,361,850;

   (b) the Debtors will not be required to make the Second
       Payment totaling $763,250, or pay the $700,000 Remaining
       Balance to Toledo Press;

   (c) Toledo Press will be have an allowed general unsecured
       non-priority claim for $1,433,250 against the Debtors;

   (d) Toledo Press will release the Debtors and other related
       parties from any claims it may have relating to the
       Equipment Purchase Agreements;

   (e) the Debtors will release Toledo Press from any claims they
       may have under Sections 544 through 550 relating to the
       potential avoidance of transfers under the Equipment
       Purchase Agreements and the Press 27 Warranty Claim; and

   (f) Toledo Press will continue to perform its warranty
       obligations under the Equipment Purchase Agreements and
       the Debtors will retain its warranty rights and claims,
       other than the Press 27 Warranty Claim.

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.  Fried, Frank, Harris, Shriver & Jacobson,
LLP serves as counsel to the Official Committee of Equity Security
Holders.  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. 20; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DELTA AIR: Court Approves 2001-1 EETC Stipulation with U.S. Bank
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the Stipulation entered into by Delta Air Lines, Inc.,
and U.S. Bank Trust National Association, as Subordination Agent
under an Intercreditor Agreement dated Sept. 17, 2001.

As reported in the Troubled Company Reporter on Sept. 5, 2006, in
September 2001, Delta Air, U.S. Bank, and certain other parties
entered into a pass through financing arrangement -- the 2001-1
Enhanced Equipment Trust Certificate -- in which Delta financed 36
Boeing aircraft.

As part of the 2001-1 EETC, Delta entered into 36 separate
Indenture and Security Agreements, one per aircraft, with respect
to which U.S. Bank currently acts as Loan Trustee.  Delta has
issued five series of Equipment Notes -- A-1, A-2, B, C, and D --
under each Indenture, the payment of which is secured by a
mortgage on, and security interest in, among other things, all of
Delta's right, title and interest in and to the corresponding
aircraft.

Each Equipment Note was purchased by one of five corresponding
Delta Air Lines Pass Through Trusts, known as the Delta Air Lines
Pass Through Trusts "2001-1A-1," "2001-1A-2," "2001-1B," "2001-
1C," and "2001-1D", for each of which U.S. Bank currently is
Trustee.  Each Pass Through Trust purchased all of the Equipment
Notes of a specific series using proceeds from the sale of
corresponding classes of enhanced equipment trust certificates --
the "Class A-1," "Class A-2," "Class B," "Class C," and "Class D
Certificates".

The Equipment Notes are registered in the name of U.S. Bank in
its capacity as Subordination Agent under an Intercreditor
Agreement dated September 17, 2001, as amended, originally
entered into by and among:

   (a) State Street Bank and Trust Company of Connecticut,
       National Association, not in its individual capacity, but
       solely as Pass Through Trustee of each of the Delta Air
       Lines Pass Through Trusts 2001-1A-1, 2001-1A-2, 2001-1B,
       2001-1C, and 2001-1D;

   (b) Landesbank Hessen-Thuringen Girozentrale as Class A-1,
       Class A-2, Class B and Class C Liquidity Provider; and

   (c) State Street in its capacity as Subordination Agent.

The Intercreditor Agreement controls the distribution of funds
among the parties.

Under the Indentures, Delta makes payments on the Equipment Notes
semi-annually on each March 18 and September 18.  Those payments
are received and allocated by the Subordination Agent in
accordance with the applicable provisions of the Intercreditor
Agreement, and, to the extent of sufficient funds, are distributed
to the Pass Through Trustees to make semi-annual payments on the
Certificates.

Payments of up to three semi-annual installments of interest
allocable to the holders of Class A-1, A-2, B and C Certificates
are supported by four separate liquidity facilities with the
Landesbank.  If for any reason the amount distributable to the
holders of Certificates of a supported Class is less than the
scheduled interest payment on the related Series of Equipment
Notes, the Subordination Agent is required to draw on the
Liquidity Facilities to the extent necessary to enable the
relevant Pass Through Trustee to distribute the full amount of
that interest.

Delta's filing of a voluntary petition under Chapter 11 of the
Bankruptcy Code constitutes a "Triggering Event" under the
Intercreditor Agreement.  Once a Triggering Event occurs, all
distributions under the Intercreditor Agreement are to be made
pursuant to Section 3.03 of the Agreement, which provides:

    -- for the payment of certain fees, expenses and other
       amounts, including, without limitation, the fees and
       expenses of U.S. Bank, Liquidity Expenses and Liquidity
       Obligations prior to payments to the Pass Through Trustees
       for further distribution on the Certificates; and

    -- that State Street, as subordination agent, is required to
       distribute to the Pass Through Trustees, to the extent o
       sufficient funds, the Adjusted Expected Distribution for
       their respective Class of Certificates in this order of
       priority:

         (i) the Class A-1 and A-2 Trustees, pro rata;
        (ii) the Class B Trustee,
       (iii) the Class C Trustee, and
        (iv) the Class D Trustee.

The next scheduled semi-annual payment due on the Equipment
Notes, totaling $363,783,038 in principal and accrued interest,
is due on September 18, 2006.

The Adjusted Expected Distribution for each Class of Certificates
on September 18, 2006, is:

   Class      Principal         Interest            Total
   -----      ---------         --------            -----
   A-1               --       $4,301,593       $4,301,593
   A-2               --       20,307,167       20,307,167
    B                --        7,983,584        7,983,584
    C      $169,782,000        6,196,194      175,978,194
    D       150,000,000        5,212,500      155,212,500
           ----------------------------------------------
   Totals  $319,782,000      $44,001,038     $363,783,038

Michael E. Wiles, Esq., at Debevoise & Plimpton LLP, in New York,
relates that the Adjusted Expected Distributions for the Class C
and Class D Certificates represent final distributions, as the
principal amount of the related Equipment Notes matures on
September 18, 2006.

Delta warrants that it currently holds a beneficial interest in
$110,392,256 in principal amount of the Class C Certificates,
about 65.02% of the total outstanding principal amount, and also
owns directly 100% of the principal amount of the outstanding
Class D Certificates.

Delta acknowledges that each of the aircraft included in the
2001-1 EETC is subject to the provisions of Section 1110 of the
Bankruptcy Code.  Delta has previously agreed, pursuant to
Section 1110(a)(2) and within the time period specified in
Section 1110, to:

    -- perform all obligations of Delta under the Indentures and
       those other agreements as may be determined to constitute
       the applicable security agreements under Section 1110; and

    -- cure defaults, if any, under the 1110 Documents, except to
       the extent that those defaults do not need to be cured
       under the terms of Section 1110(a)(2), and to do so within
       the time periods specified in Section 1110(a)(2).

In light of the size of the September 18, 2006 Payment, however,
Delta intends to have confirmation that if the Section 3.03
Amounts and the September 18, 2006 Payment are both timely paid,
then these payments will be applied in accordance with the terms
of the Intercreditor Agreement.

In a stipulation, Delta and U.S. Bank agree that, assuming that
Delta pays in full on September 18, 2006, an amount equal to:

   (i) Intercreditor Agreement's Section 3.03 Amount; and

  (ii) all payments of principal and interest due with
       respect to the Equipment Notes as of September 18
       2006, which is $363,783,038,

then the Subordination Agent will distribute to each Pass Through
Trustee, and each Pass Through Trustee will promptly distribute
to the holders as of the relevant record date of its Class of
Certificates the Adjusted Expected Distribution for each Class of
Certificates.

The parties agree that, once U.S. Bank, in its capacity as both
the Subordination Agent and the Pass Through Trustee, distributes
the September 18, 2006 Payment, any liability it may have had
with respect to the making of those payment will cease to exist.

U.S. Bank will not be responsible if any Certificate holders fail
to receive their respective portions of the September 18, 2006
Payment as long as it made distributions in accordance with the
Stipulation and the applicable provisions of the Pass Through
Trust Agreements.

Headquartered in Atlanta, Georgia, Delta Air Lines (Other
OTC: DALRQ) -- http://www.delta.com/-- is the world's second-
largest airline in terms of passengers carried and the leading
U.S. carrier across the Atlantic, offering daily flights to 502
destinations in 88 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners.  The Company
and 18 affiliates filed for chapter 11 protection on Sept. 14,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S.
Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in
their restructuring efforts.  Timothy R. Coleman at The Blackstone
Group L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELTA AIR: Wants to Sell 10 Airframes to Planet Marketing
---------------------------------------------------------
Delta Air Lines, Inc., seeks the U.S. Bankruptcy Court for the
Southern District of New York's consent to sell nine used Embraer
EMB-120ER airframes and one used Embraer EMB-120RT airframe,
together with related engines, four spare engines, miscellaneous
equipment and documents, to Planet Marketing International Ltd.,
for an $8,900,000 aggregate purchase price, pursuant to an
Aircraft Purchase and Sale Agreement dated Aug. 21, 2006.

Nine of the Aircraft bear U.S. Federal Aviation Administration
Registration Nos. N275AS, N281AS, N284AS, N286AS, N501AS, N502AS,
N504AS, N505AS, and N638AS.  One Aircraft does not currently have
a FAA registration number, and bears the Mexican registration
number XA-UAI.

Before the Petition Date, the Aircraft were owned by Atlantic
Southeast Airlines, Inc., a Delta subsidiary sold in August 2005.
ASA retired the Aircraft in 2002 and 2003 and parked them in Hot
Springs, Arkansas.

As part of the ASA sale, Delta and ASA entered into the Aircraft
Purchase and Sale Agreement dated August 26, 2005, pursuant to
which 16 Embraer EMB-120 aircraft and spare parts were purchased
by Delta, including the Aircraft.  Delta has never used the
Aircraft in its operations.

Before the Petition Date, Delta owned the Aircraft free and clear
of liens, claims and other encumbrances, except for applicable
statutory liens, if any.

On October 6, 2005, the Court authorized the Debtors to obtain
postpetition financing through two separate credit facilities.  
The Aircraft are subject to liens securing the Debtors'
obligations under the Postpetition Credit Facilities.

Michael E. Wiles, Esq., at Debevoise & Plimpton LLP, in New York,
relates that Delta has phased out its use of the Embraer model
120 aircraft, and has already sold 26 of that aircraft.  The last
Embraer model 120 aircraft was removed from revenue service in
September 2003, and the Aircraft comprise the last remaining 10
Embraer model 120 aircraft that Delta seeks to sell.

Mr. Wiles tells the Court that Delta has actively explored
possible transactions for the sale of the Embraer model 120
aircraft.  Delta has made extensive visits to potential customers
and regularly advertises the sale of the Aircraft.  As a result
of the negotiations surrounding its efforts to sell the surplus
Embraer model 120 aircraft, Delta is familiar with the market
value of the Aircraft.

Delta also seeks the Court's authority to sell the Aircraft to
Planet Marketing free and clear of liens, claims, encumbrances
and interests, pursuant to Sections 363(b) and 363(f) of the
Bankruptcy Code, other than any interests permitted under the
Sale Agreement.  Planet Marketing has indicated that it is not
willing to enter into the Sale Agreement in the absence of that
provision.

Delta does not anticipate that the sale of the Aircraft will
require the assumption of any leases or executory contracts to
which the Debtors are a party, or the assignment of any
agreements to Planet Marketing.  However, the Debtors reserve
their rights to file pleadings as may be necessary to assume any
leases and contracts, if necessary to further effectuate the
transactions contemplated by the Sale Agreement.

Headquartered in Atlanta, Georgia, Delta Air Lines (Other
OTC: DALRQ) -- http://www.delta.com/-- is the world's second-
largest airline in terms of passengers carried and the leading
U.S. carrier across the Atlantic, offering daily flights to 502
destinations in 88 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners.  The Company
and 18 affiliates filed for chapter 11 protection on Sept. 14,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S.
Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in
their restructuring efforts.  Timothy R. Coleman at The Blackstone
Group L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELTA MILLS: Fails to Make September 1 Interest Payment
-------------------------------------------------------
Delta Mills, Inc., disclosed that it will not make the $1,489,024
interest payment due on Sept. 1, 2006, on the Company's
outstanding 9-5/8% Senior Notes due 2007.

The Indenture relating to the Notes provides a 30-day grace period
before the nonpayment of interest due on the Notes will constitute
an event of default under the Indenture.  Upon any such event of
default, The Bank of New York, the Trustee under the Indenture, or
the holders of at least 25% in principal amount of the outstanding
Notes, would be entitled to declare all of the Notes to be due and
payable immediately.

In addition, under the Indenture, following the thirty-day grace
period, the Trustee could pursue any available remedy to collect
the payment of principal and interest on the Notes or to enforce
the performance of any provision of the Notes or the Indenture.

Under the Indenture, the Company must pay interest on overdue
installments of interest without regard to any grace period at the
rate of 10-5/8% per annum.  Currently $30,940,750 in aggregate
principal amount of the Notes is outstanding.  At this time, the
Company has not determined whether it will make the interest
payment prior to the expiration of the grace period.

Business conditions in the Company's principal lines of business
remain difficult, which is affecting the Company's liquidity.  As
disclosed in the Company's Quarterly Report on Form 10-Q for the
third quarter of the Company's fiscal year, defense budget
constraints and allocations are a significant factor in
determining the level of future business of the Company's
government business.

The Company has recently been informed by the U.S. Department of
Defense that overall demand at the Department of Defense for the
products of the Company's customers for the balance of the
government's current fiscal year and into the government's next
fiscal year will be considerably less than anticipated, even below
the minimum levels contained in the contracts currently in place
with the Company's customers.  At the same time, funding within
the Department has been tightening up, resulting in less money
being made available for supplies, and inventory levels are higher
than normal.  The Department has responded by lowering its monthly
delivery order quantities.  The Company's government business
customers have informed the Company that the government is seeking
modification of their contracts with the government with a view
towards contracts involving significantly lower levels of
business.  It is too early to tell the full impact that this
development will have on future orders and whether this reduction
in demand will be temporary or longer-term.

In addition, the Company has entered into a contract to sell its
inactive Pamplico plant and the adjacent real estate totaling
approximately 145 acres for approximately $2.25 million, but the
closing on that contract has been delayed.  The contract provided
for closing to occur no later than Aug. 28, 2006.  However,
shortly before Aug. 28, 2006, the potential buyer requested an
extension of the closing date.  The Company agreed to grant a
short extension of the outside date for closing, and the Company
and the potential buyer entered into a written amendment to the
contract providing for a new closing date of Sept. 6, 2006.

In addition to extending the closing date to Sept. 6, 2006, the
contract amendment requires that the $50,000 earnest money deposit
(to be applied against the purchase price) held in escrow be
released from escrow and paid to the Company.  The contract
amendment also contains a provision in which the potential buyer
acknowledged that it has completed its environmental due diligence
with respect to the property and is satisfied with the
environmental condition of the property.

The potential buyer has now requested an additional extension of
the closing date beyond Sept. 6, 2006, and has indicated that it
would like to extend the closing date for up to 60 additional days
to complete its financing.  The Company has not yet decided how to
respond to buyer's latest request for an extension of the closing
date.  The Company is considering its alternatives while it
evaluates the request by the potential buyer.

The Company currently intends to maintain its current operations
while it pursues its strategic alternatives.  The Company's Board
and management are actively exploring strategic alternatives
including selling or otherwise disposing of all or substantially
all of the Company's business to one or more third parties through
an insolvency proceeding, or initiating an insolvency proceeding
to provide for the orderly liquidation of the Company, or some
combination of these transactions.  The Company has not yet
determined which of these strategic alternatives may be most
advantageous to the Company or its stakeholders.

The Company is in discussions with a potential acquiror to
purchase the Company's Beattie plant and certain other assets and
assume certain liabilities of the Company.  The Company believes
that, if the acquisition were consummated, the acquiror would
continue to operate the Beattie plant.  The Company believes that
this potential acquiror has more than adequate financial resources
to effectuate any proposed acquisition.  The transaction currently
under discussion would be structured as an acquisition pursuant to
Sections 363 and 365 of the US Bankruptcy Code.

To implement the transaction, the Company would be required to
file a bankruptcy petition for reorganization under Chapter 11 of
the US Bankruptcy Code and to enter into an arrangement pursuant
to which the Company's Delta 3 plant would finish cloth for the
potential acquiror on a contract basis for a temporary period.  

Each of FTI Consulting, Inc. and Soles, Brower, Smith & Co. is
assisting the Company in evaluating its strategic alternatives,
including the possible transaction currently under discussion.  

The Company is also in communication with an ad hoc committee of
holders of Notes and has entered into confidentiality agreements
with members of the Ad Hoc Committee.  The Ad Hoc Committee has
informed the Company that the committee includes holders that
beneficially own approximately 41% of the outstanding Notes.

In evaluating its strategic alternatives, the Company is also in
close communication with GMAC Commercial Finance LLC, its senior
lender under its Credit Agreement.

GMAC has informally indicated a willingness to work with the
Company in connection with any debtor-in-possession financing
arrangement.  The Company believes that its Credit Agreement is
sufficient to meet its working capital needs while it pursues its
strategic alternatives, provided that the Company's vendors
continue to be supportive of the Company's operations.

The occurrence of an event of default under the Indenture, such as
the non-payment of interest on the Notes for more than 30 days
past the due date for that payment, would become a cross-default
under the Company's Credit Agreement unless the Company receives a
waiver of such default.

                        About Delta Mills

Delta Mills, Inc., a wholly owned subsidiary of Delta Woodside
Industries, Inc. (OTCBB:DLWI) -- http://www.deltawoodside.com/--   
produces a broad range of finished apparel fabrics in four
manufacturing plants in South Carolina.  Delta Mills sells and
distributes its fabrics through a marketing office in New York
City, with sales agents also operating from Atlanta, Chicago,
Dallas, Los Angeles, San Francisco and Mexico.

                         Going Concern Doubt

KPMG LLP in Greenville, South Carolina, raised substantial doubt
about Delta Mills, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended July 2, 2005.  The auditor pointed to the Company's
recurring losses from operations and uncertainties with regard to
its ability to operate within the covenants and availability
established by its  revolving credit facility with GMAC Commercial
Finance LLC.


DOMTAR INC: Posts $3 Million Net Loss in 2006 Second Quarter
------------------------------------------------------------
Domtar Inc. incurred a $3 million loss from continuing operations
in the second quarter of 2006 compared to a loss from continuing
operations of $22 million in the first quarter of 2006 and
earnings from continuing operations of $6 million in the second
quarter of 2005.

"Overall, our operations continued to benefit from price increases
covering most of our products, as well as continued strength in
all of our different market segments except for lumber.  While our
costs continue to be impacted by the strong Canadian dollar that
reached its highest level since the 1970s, today's improved
results from the first quarter also illustrate our employees'
efforts and focus on executing the restructuring plan announced in
November 2005.  The closure of our Vancouver mill in June was a
major step in a series of measures aimed at improving the
Company's profitability and cash flow generation."

"With regard to the softwood lumber dispute, Domtar remains
critical of the proposed framework agreement, considering Canada's
many key legal victories.  The settlement would deprive our
shareholders of 20% of the duties collected so far by the U.S.
Government, with no guarantee of a long-standing trade peace,"
said Raymond Royer, Domtar's President and Chief Executive
Officer.

In accordance with Canadian generally accepted accounting
principles, effective in the second quarter of 2006, the
information pertaining to the Company's Vancouver paper mill will
no longer be included in the Company's paper business but
presented as a discontinued operation and assets held for sale.  
Subsequent to quarter-end, the Company reached an agreement to
sell its Vancouver paper mill property, subject to a number of
closing conditions.

The $58 million increase in operating profit from continuing
operations excluding specified items in the Papers segment was
mainly the result of higher average selling prices for pulp and
paper as well as the benefit pursuant to the closures of the
Cornwall and Ottawa paper mills which were effective at the end of
the first quarter.  These factors were partially offset by lower
shipments for paper as well as the negative impact of a stronger
Canadian dollar.

Free cash flow amounted to $25 million in the second quarter of
2006 including $21 million of cash requirements for working
capital.

Domtar's net debt-to-total capitalization ratio at June 30, 2006
stood at 57.9% compared to 57.7% as at Dec. 31, 2005.  Domtar's
net indebtedness decreased by $53 million, largely due to the
positive impact of a stronger Canadian dollar (based on month-end
exchange rates) on the Company's U.S. dollar denominated debt.

                         About Domtar Inc.

Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) --
http://www.domtar.com/-- produces uncoated freesheet paper in   
North America.  The Company also a manufactures business papers,
commercial printing and publication papers, and technical and
specialty papers.  Domtar manages according to internationally
recognized standards 18 million acres of forestland in Canada and
the United States, and produces lumber and other wood products.  
Domtar has 10,000 employees across North America.  The company
also has a 50% investment interest in Norampac Inc., a Canadian
producer of containerboard.

                          *     *     *

As reported in the Troubled Company Reporter on April 18, 2006,
Dominion Bond Rating Service placed the Unsecured Notes and
Debentures' ratings at BB (low) and the Preferred Shares' rating
at Pfd-5 (high) 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 rating status reflects the uncertainty regarding Domtar's
capital structure following closing of the transaction, which is
expected in Q1 2007.


EASY GARDENER: Files Liquidating Plan and Disclosure Statement
--------------------------------------------------------------
Easy Gardener Products, Ltd., and its debtor-affiliates have filed
their Joint Plan of Liquidation and an accompanying Disclosure
Statement with the U.S. Bankruptcy Court for the District of
Delaware.

Under the liquidating plan, the Debtors will be deemed
substantively consolidated for distribution purposes, and all
intercompany claims will be eliminated.

On the effective date, Richard M. Kurz will be authorized to
implement the terms of the Plan.

                        Treatment of Claims

All Allowed Administrative Claims will be paid in full on the
later of the effective date, the date the claim becomes an allowed
administrative claim, or as soon as practicable.

All Allowed Priority Tax Claims will be paid in full on the
effective date, except those claims that have been paid before the
effective date.

All Class 1 Allowed Other Priority Claims will be paid in full on
the later of the effective date, the date the claim becomes an
allowed other priority claim, or as soon as practicable.

All Class 2 Allowed Lenders' Claims will be paid from the proceeds
of the asset sale, under the conditions stated in the Sale Order
and the Final DIP Financing Order.

Class 3 Allowed Other Secured Claims are impaired.  Except if a
creditor agrees to a different treatment, the collateral of each
claim will be reconveyed to the creditor as is, where is.  The
holder of the claim will receive a reconveyance of the collateral
securing the claim in full satisfaction on the effective date or
the date the claim becomes an allowed other secured claim.  All
costs associated with obtaining the collateral will be borne by
the creditors.  Any portion not satisfied by the return of the
collateral will be treated as a Class 4 Claim.

Holders of Class 4 Allowed General Unsecured Claims will receive a
pro rata share of 90% of the Net Available Funds within 30 days
after the effective date.  The remaining 10% will be retained by
the Debtors until the Final Distribution.  

The Net Avalaible Funds will be used to pay the administration of
the Plan, the filing of claims objections, the liquidation of the
excluded assets, and then distributed to holders of Allowed Class
4 Claims.

Class 5 Equity Interests will not receive anything under the Plan.

The Court will convene a hearing at 3:00 p.m. on Sept. 20, 2006,
to consider the adequacy of the Debtors' Disclosure Statement.  
Objections to the Debtors' Disclosure Statement, if any, must be
submitted by 4:00 p.m. on Sept. 13, 2006.

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

  http://www.researcharchives.com/bin/download?id=060907220652

A full-text copy of the Debtors' Joint Plan of Liquidation is
available for a fee at:

  http://www.researcharchives.com/bin/download?id=060907220946

Headquartered in Waco, Texas, Easy Gardener Products, Ltd. --
http://www.easygardener.com/-- manufactures and markets a broad
range of consumer lawn and garden products, including weed
preventative landscape fabrics, fertilizer spikes, decorative
landscape edging, shade cloth and root feeders, which are sold
under various recognized brand names including Easy Gardener,
Weedblock, Jobe's, Emerald Edge, and Ross.  The Company and four
of its affiliates filed for bankruptcy on April 19, 2006 (Bankr.
D. Del. Case Nos. 06-10393 to 06-10397).  James E. O'Neill, Esq.,
Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub LLP and John F.
Higgins, Esq., James Matthew Vaughn, Esq., and Joshua W.
Wolfshohl, Esq., at Porter & Hedges, LLP, represent the Debtors in
their restructuring efforts.  Adam Dunayer, Brett Lowrey, Michael
Boone, and Ben Williams at Houlihan Lokey Howard & Zukin give
financial advice to the Debtors.  Joel A. Waite, Esq., and M.
Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Official Committee of Unsecured Creditors.  Samuel
Star at FTI Consulting, Inc., gives financial advice to the
Committee.  When the Debtors filed for bankruptcy, they reported
assets amounting to $103,454,000 and debts totaling $107,516,000.


EDS CORP: Earns $104 Million in Second Quarter Ended June 30
------------------------------------------------------------
EDS Corp. reported second quarter net income of $104 million
versus net income of $26 million in last year's second quarter.

EDS' pro forma second quarter net income was $107 million versus
second quarter 2005 pro forma net income of $27 million.

Pro forma second quarter 2006 net income and EPS excludes after-
tax losses of $5 million for discontinued operations and a pre-tax
reversal of $4 million of previously recognized restructuring
expenses.

When further excluding the impact of expensing stock options and
performance-based restricted stock units ($43 million pre-tax),
pro forma net income was $136 million versus comparable second
quarter 2005 pro forma net income of $54 million.

"EDS continued to drive operational and financial improvements in
the second quarter," said Mike Jordan, EDS chairman and chief
executive officer.  "Our bottom line benefited from the improved
performance of some of our largest accounts, and we expect our
margins to continue to expand as we ramp up our productivity and
Best Shore initiatives.

"Our more than $15 billion in first-half contract signings
reflected EDS' best six-month total since 2001.  Importantly, this
new business was balanced across industries, services lines and
geographies and reflects an increasing number of new clients,
putting EDS on a path to achieve solid growth," Mr. Jordan said.

EDS signed $5.4 billion in contracts in the second quarter, up
103% from $2.6 billion in the year-ago quarter.  Significant
contracts for the quarter include Kraft Foods Inc., a $1.6 billion
new logo, and wins with existing clients Bank of America,
$700 million, and the Commonwealth Bank of Australia,
$350 million.

EDS also completed the acquisition of a majority stake in MphasiS
BFL Limited, a leading applications and business process
outsourcing services company based in Bangalore, India.

The acquisition provides EDS with strong complementary
capabilities in applications development and business process
outsourcing, particularly customer relationship management;
enhances the company's domain expertise in the financial sector;
and immediately quadruples the size of EDS' India workforce to
approximately 15,000.

EDS posted second quarter revenue of $5.19 billion, up 5% on an
organic basis (which excludes the impact of currency fluctuations,
acquisitions and divestitures) from $5 billion in the year-ago
quarter.

Free cash flow was $362 million in the second quarter, an
improvement of $244 million versus the year-ago period.

EDS' operating margin for the second quarter was 3.%, up from 1.7%
in the year-ago quarter.  Pro forma operating margin was 2.9%, up
from 1.5% in the year-ago quarter.  When further excluding the
impact of expensing stock options and performance-based restricted
stock units, pro forma operating margin was 3.7%, compared to 2.4%
in the year-ago quarter.

The company's effective tax rate from continuing operations for
the second quarter of 2006 was 16%.  This was primarily due to a
$46 million reduction of liabilities for tax contingencies,
including the impact of a settlement with the U.S. Internal
Revenue Service, partially offset by other items.  This resulted
in a 3 cent per share favorable impact to the tax rate assumed in
the company's second quarter guidance.

Second Quarter Results by Segment

    -- Americas: Second quarter revenue was $2.37 billion, up 3%
       compared to the prior-year period.  Operating profit was
       $364 million, up 15% from $318 million in the prior-year
       period, due to improved operating performance on certain
       major contracts.

    -- EMEA: Second quarter revenue was $1.60 billion, up 9%
       compared to the prior-year period, driven by the company's
       U.K. Ministry of Defence DII contract.  Operating profit
       was $215 million, down slightly from $218 million in the
       year-ago quarter.

    -- Asia-Pacific: Second quarter revenue was $352 million, down
       8% compared to the prior-year period.  Operating profit was
       $39 million, flat compared with the prior-year period of
       $39 million.

    -- U.S. Government: Second quarter revenue was $789 million,
       up 8% compared to the prior-year period.  Operating profit
       was $122 million, up 35% from $90 million in the prior-year
       period.  Both revenue and operating margin improvements
       were driven in large part by improved performance of the
       Navy Marine Corps Intranet contract.

                          About EDS Corp.

Headquartered in Plano, Texas, EDS Corp. -- http://www.eds.com/--
is a global technology services company delivering business
solutions to its clients.  EDS founded the information technology
outsourcing industry more than 40 years ago.  EDS delivers a broad
portfolio of information technology and business process
outsourcing services to clients in the manufacturing, financial
services, healthcare, communications, energy, transportation, and
consumer and retail industries and to governments around the
world.

                           *     *     *

EDS Corp.'s 7-1/8% Notes due 2009 carry Moody's Investors
Service's Ba1 rating.


ENRON CORP: Closes $2.9 Bil. Prisma Energy Sale to Ashmore Energy
-----------------------------------------------------------------
Enron Corp. has completed the sale of 100% of the outstanding
shares of Prisma Energy International Inc. to Ashmore Energy
International Limited, which is majority-owned by funds managed by
Ashmore Investment Management Ltd.

The first stage of the sales transaction closed in May 2006, with
Ashmore Energy acquiring an equity stake in Prisma Energy,
initially representing just less than 25% of the aggregate voting
interest.  In addition to amounts previously received at the first
stage closing in May 2006, Enron received $462,600,000 in
connection with this second stage closing, which amounts will be
included in the next creditor distribution in October 2006.  Enron
expects to realize a total of approximately $2.9 billion from its
ownership of Prisma Energy, including approximately $800 million
in cash dividends received from Prisma Energy prior to the first
stage closing.

"We are pleased that this transaction is now completed and the
expected value is over three times greater than the estimated
value of Prisma Energy contained in the disclosure statement filed
with Enron's Bankruptcy Plan," said John J. Ray III, Enron's
President and Board Chairman.  "This is an enormous milestone for
the Enron Estate."

Prisma Energy was the last of the three major platform entities
under the Bankruptcy Plan to be sold or distributed to Enron's
creditors.

Prior to entering into the sales transaction, Prisma Energy
transferred to a subsidiary of Enron 33.04% of the outstanding
stock of Promigas S.A., an energy concern in Colombia, which is
expected to be subject to a separate auction process by Enron's
subsidiary scheduled for November 2006 in Colombia.  Pursuant to
an existing agreement, Prisma has agreed to make a bid for such
auction shares, at an aggregate purchase price of $350 million.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply.  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.


EVERGREEN INT'L: Extends 12% Senior Notes Offering to Sept. 25
--------------------------------------------------------------
The pending offer to purchase any and all of Evergreen
International Aviation, Inc.'s outstanding 12% Senior Second
Secured Notes Due 2010 (CUSIP No. 30024DAF7) previously scheduled
to expire at 5:00 p.m., New York City time, on Sept. 5, 2006, has
been extended until 5:00 p.m., New York City time, on Sept. 25,
2006, unless otherwise extended or earlier terminated.  Except for
the above change, all terms and conditions of the tender offer are
unchanged and remain in full force and effect.

Holders of approximately 97.94% of the outstanding principal
amount of the Notes have tendered and consented to the proposed
amendments to the indenture governing the Notes.  Subject to the
satisfaction or waiver of the remaining conditions (including the
consummation of a new Senior Secured Credit Facility by Evergreen)
set forth in the Offer to Purchase and Consent Solicitation
Statement dated July 20, 2006, Evergreen currently intends to
accept the entire amount of Notes tendered pursuant to the tender
offer and consent solicitation.

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

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

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

Based in McMinnville, Oregon, Evergreen International Aviation,
Inc. -- http://www.evergreenaviation.com/-- is a privately held   
global aviation services company that is active through several
subsidiary companies.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 11, 2006,
Standard & Poor's Ratings Services raised its rating on Evergreen
International Aviation Inc.'s first-lien bank loan rating to 'B+'
from 'B' and changed the recovery rating to '1' from '2'.  The
rating action reflects a change in the structure of the proposed
credit facility.


FIRST BANCORP: Board Declares $0.07 Dividend Per Common Share
-------------------------------------------------------------
First BanCorp's Board of Directors has declared the next payment
of dividends on Common, Series A through E Preferred and Trust
Preferred I & II shares.

Common stockholders of record as of Sept. 15, 2006, will receive
the 45th consecutive quarterly dividend in the amount of $0.07 per
share for the 3rd Quarter of 2006, payable on Sept. 29, 2006.

The estimated dividend amounts, record dates and payment dates
are:

     Series    $Per/share    Record Date     Payment Date
     ------    ----------    -----------     ------------  
       A       0.1484375    Sept. 28, 2006   Oct. 2, 2006
       B       0.17395833   Sept. 15, 2006   Oct. 2, 2006
       C       0.1541666    Sept. 15, 2006   Oct. 2, 2006
       D       0.15104166   Sept. 15, 2006   Oct. 2, 2006
       E       0.14583333   Sept. 15, 2006   Oct. 2, 2006

Regulatory approvals were obtained as a part of the Company's
agreement with the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation and the Office
of the Commissioner of Financial Institutions of the Commonwealth
of Puerto Rico.

Luis Beauchamp, president and chief executive officer, said, "Our
45th consecutive dividend to common shareholders is evidence of
First BanCorp's continued operational and financial success, as
well as our continued commitments to our shareholders,"

First BanCorp (NYSE: FBP) is the parent corporation of FirstBank
Puerto Rico, a state chartered commercial bank with operations in
Puerto Rico, the Virgin Islands and Florida; of FirstBank
Insurance Agency; and of Ponce General Corporation.  First
BanCorp, FirstBank Puerto Rico and FirstBank Florida, formerly
UniBank, the thrift subsidiary of Ponce General, all operate
within U.S. banking laws and regulations.

                           *     *     *

As reported in the Troubled Company Reporter on March 22, 2006,
Fitch Ratings affirmed the ratings and Outlook for First Bancorp
and FirstBank Puerto Rico: long-term Issuer Default Rating
'BB'/short-term 'B'.  The Rating Outlook remains Negative.


FLINTKOTE COMPANY: Wants Exclusivity Period Extended to Dec. 28
---------------------------------------------------------------
Flintkote Company and Flintkote Mines Limited ask the U.S.
Bankruptcy Court for the District of Delaware to extend until Dec.
28, 2006, the period within which they have the exclusive right to
file a chapter 11 plan of reorganization.  The Debtors also want
their time to solicit acceptances of that plan extended to
Feb. 28, 2007.

The Debtors tell the Court that there has been a development in
the litigation against Imperial Tobacco Company of Canada seeking
to recover, with interest, at least $525,200,000 transferred by
Flintkote to Imperial Tobacco.

In addition, the Debtors have made significant progress in the
insurance coverage action againts Aviva Insurance Company of
Canada Limited and Aviva plc.  According to the Debtors, the
District Court recently denied Aviva's move to dismiss, on
ripeness and jurisdictional grounds, the Debtors' request in the
amended complaint for a declaration of coverage for future claims,
and extensive discovery is continuing.

The Debtors believe that the extension will give them, together
with the Asbestos Claimants Committee and Future Claimants
Representative, more time to finalize the terms of the joint plan
of reorganization and disclosure statement.

Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials.  The Company and its affiliate,
Flintkote Mines Limited, filed for chapter 11 protection on
April 30, 2004 (Bankr. D. Del. Case No. 04-11300).  James E.
O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.,
represent the Debtors in their restructuring efforts.  The
Bankruptcy Court appointed James J. McMonagle as the Legal
Representative for Future Asbestos Personal Injury Claimants for
Flintkote and Mines on Aug. 26, 2004, and Sept. 9, 2004,
respectively.  When the Debtors filed for protection from their
creditors, they estimated assets and debts of more than
$100 million.


FLINTKOTE COMPANY: Wants Until Dec. 28 to File Notices of Removal
-----------------------------------------------------------------
Flintkote Company and Flintkote Mines Limited ask the U.S.
Bankruptcy Court for the District of Delaware to extend, until
Dec. 28, 2006, the period within which they can remove prepetition
actions.

The Debtors are currently defendants in 157,000 asbestos-related
personal injury actions.  The Debtors and their creditor
constituencies have not yet completed their analysis in this
matter.

The Debtors explain that they have been working with Asbestos
Claimants Committee and Future Claimants Representative to design
and propose a joint plan of reorganization for the Debtors and
their estates.

The extension, the Debtors say, will preserve the estates'
existing rights while the Parties will finalize a consensual joint
chapter 11 plan, disclosure statement and related trust documents.

Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials.  The Company and its affiliate,
Flintkote Mines Limited, filed for chapter 11 protection on
April 30, 2004 (Bankr. D. Del. Case No. 04-11300).  James E.
O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.,
represent the Debtors in their restructuring efforts.  The
Bankruptcy Court appointed James J. McMonagle as the Legal
Representative for Future Asbestos Personal Injury Claimants for
Flintkote and Mines on Aug. 26, 2004, and Sept. 9, 2004,
respectively.  When the Debtors filed for protection from their
creditors, they estimated assets and debts of more than
$100 million.


FOAMEX INTERNATIONAL: Posts $13.2 Mil. Net Loss in Second Quarter
-----------------------------------------------------------------
Foamex International, Inc., filed its Form 10-Q for the second
quarter ended July 2, 2006, with the U.S. Securities and Exchange
Commission.

The company reported a net loss of $13,246,000 for the second
quarter of fiscal 2006 as compared to a net loss of $14,666,000
during the same period in fiscal 2005.

For the two quarters ended July 2, 2006, net income was
$3,804,000, as compared to a net loss of $25,520,000 for the same
six-month period in fiscal 2005.

Net sales for the second quarter of fiscal 2006 increased by 12%
to $344,900,000 from $307,200,000 in the prior-year quarter.  Net
sales for the six months ended July 2, 2006 also increased
12% to $710,800,000 from $633,100,000 in the six months ended
July 3, 2005.

According to Robert S. Graham, Jr., Foamex's principal financial
officer, the company is in compliance with the EBITDA, cumulative
cash flow, leverage ratio and capital expenditure covenants under
its DIP Facilities for the nine months ended July 2, 2006.

Foamex expects to contribute nearly $16,000,000 to its pension
plan in 2006, with $3,100,000 contributed during the second
quarter.

As of July 2, 2006, Foamex had accrued about $700,000 for
litigation and other legal matters and around $2,200,000 for
environmental matters.

Mr. Graham relates that company has revised its business plan in
light of its improved financial performance and has determined
that the financial projections underlying its December 23, 2005
proposed plan of reorganization are no longer valid and that the
plan should be substantially revised.

The company, according to Mr. Graham, is in the process of
negotiating exit financial commitments from a group of banks and
certain of its equity holders to fund the company's emergence from
Chapter 11 under an amended plan of reorganization.

A full text-copy of Foamex's Quarterly Report is available free of
charge at http://researcharchives.com/t/s?1138

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 25; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FOAMEX INTERNATIONAL: Wants to Assume Amended EDS Contract
----------------------------------------------------------
Foamex International Inc. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
assume its amended executory contract with Electronic Data Systems
Corp. and EDS Information Services LLC.

Pursuant to the original contract dated June 15, 2002, the EDS
Companies provide the Debtors information technology services that
impact all facets of their businesses, Joseph M. Barry, Esq., at
Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware,
says.

The assumption of the amended EDS Contract provides the Debtors
with material benefits, Mr. Barry tells the Court.

The parties have agreed that absent the EDS Contract Amendment,
the cure claim associated with the assumption of the Original EDS
Contract would be $1,495,382.  Based on the Debtors' agreement to
assume the Amended EDS Contract, the EDS Companies have agreed to
a 20% discount on the cure claim, thus saving the estates
$300,000, Mr. Barry relates.

Mr. Barry adds that the EDS Contract Amendment will reduce the
Debtors' ongoing monthly obligations to the EDS Companies by
$51,400 from mid-September 2006 through June 2007, when the term
of the Amended EDS Contract ends.

Moreover, according to Mr. Barry, through the EDS Contract
Amendment, the Debtors will obtain ownership rights in certain
information technology to which they might not otherwise be
entitled.

As part of the assumption of the Amended EDS Contract, the
Debtors and their estates waive and forever release all claims and
causes of action against the EDS Companies.

The EDS Companies have conditioned the effectiveness of the EDS
Contract Amendment on the Debtors' immediate assumption of the
amended contract and the payment of the Cure Amount by
Sept. 30, 2006.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 25; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FORD MOTOR: S&P Maintains Negative Watch on Low-B Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services' 'B+' long-term and 'B-2'
short-term ratings on Ford Motor Co., Ford Motor Credit Co.,
and related entities remained on CreditWatch with negative
implications where they were placed August 18.

The 'BB-' long-term and 'B-2' short-term ratings on FCE Bank PLC,
Ford Motor Credit's European bank, also remained on CreditWatch
with negative implications, reflecting its linkage to the Ford
rating.

"Ford's announcement that it has hired a senior executive from
Boeing Co. as the new Ford CEO broadens Ford's senior management
team and so we consider it a modest positive," said Standard &
Poor's credit analyst Robert Schulz.

The Ford CreditWatch reflects Standard & Poor's decision to review
the ratings in light of the sharply lower production schedule
announced for light trucks in the fourth quarter (down 155,000
units, or 28%, versus fourth-quarter production in 2005).  These
cuts, along with the very likely significant cost reductions to be
announced later in September, reveal the magnitude of turnaround
efforts needed to deal with Ford's deteriorating product mix,
lower market share, and excess production capacity in North
America.  The lower production will have a significant negative
effect on Ford's cash flow in the fourth quarter.

Although Ford's North American automotive operations are cash-flow
negative, Ford's liquidity should still be sufficient relative to
near-term requirements, as the company has a large liquidity
position composed of cash, marketable securities, and short-term
assets in its VEBA trust (which it could use to meet certain near-
term benefits costs, thereby freeing up other cash) totaled $23.6
billion at June 30, 2006 (excluding Ford Credit).

At June 30, Ford's cash position exceeded debt by about
$6 billion, and Ford expects to end 2006 with a cash balance of
at least $20 billion (excluding Ford Credit).

As of June 30, 2006, Ford had $6.3 billion of committed credit
facilities with various banks, most of which are committed through
June 30, 2010.  

Parent-level debt maturities are moderate for the near term ($1.3
billion for the 12 months from June 30, 2006), and long-term debt
has an exceptionally high average maturity of about 25 years.  

Even under the new pension legislation, Standard & Poor's does not
believe Ford faces any significant ERISA-mandated pension fund
contributions for the next few years or the need to make
contributions to avoid Pension Benefit Guaranty Corp. variable-
rate premiums.

Standard & Poor's plans to resolve this CreditWatch by the end of
September.  As part of the review, the rating agency will meet
with Ford's management to discuss the company's evolving plans to
address the heightened challenges it faces in North America.


GERDAU AMERISTEEL: Moody's Reviews Ba1 Sr. Unsec. Bond's Rating
---------------------------------------------------------------
Moody's Investors Service placed three North American steel
companies under review for possible upgrade: United States Steel
Corporation's Ba1 corporate family rating, Gerdau Ameristeel
Corporation's Ba2, and Chaparral Steel Company's B1 CFR.  The
reviews for possible upgrade reflect the superior improvement
in financial metrics and overall financial risk reduction
evidenced by these companies, in combination with Moody's evolving
view regarding the expected duration of the current steel industry
upcycle.

This evolving perspective is primarily due to fundamental changes
that appear to have occurred within the industry over the last
several years, primarily as a result of industry consolidation.

Moody's expects to refine its opinion of the medium- and long-term
outlook for the steel industry over the review period, which is
expected to last approximately two months.  Should Moody's
prevailing industry outlook materially change, as is expected,
it will publish an Industry Outlook that summarizes updated
thinking and discusses possible rating implications for the rated
steel company universe.

However, at this stage in our analysis, Moody's have identified
United States Steel, Gerdau Ameristeel and Chaparral Steel as
being the most likely upgrade candidates.  It is important to note
that these companies are being placed on review reflecting certain
common factors as well as those unique to these three companies.  
The common factors include a combination of the strength in the
overall operating performance as well as management actions taken
to improve their capital structures and financial flexibility.

Moody's review of US Steel, Gerdau Ameristeel and Chaparral
Steel will focus on the sustainability of improved margins and
debt protection measures as well as the likely capital structures
expected to be maintained through what will continue to be a
cyclical business.  

These ratings were placed under review for possible upgrade:

Gerdau Ameristeel Corporation

Issuer: Gerdau Ameristeel Corporation

On Review for Possible Upgrade:

   * Corporate Family Rating, Placed on Review for Possible
     Upgrade, currently Ba2

   * Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Upgrade, currently Ba2

Outlook Actions:

   * Outlook, Changed To Rating Under Review From Stable

Gerdau Ameristeel Corporation, headquartered in Tampa, Florida,
had revenues of $3.9 billion for the year ended December 31, 2005.


GLOBAL MATRECHS: Inks Manufacturing Agreement With Dow Corning
--------------------------------------------------------------
Global Matrechs, Inc. has signed a manufacturing agreement with
Dow Corning Corporation.

Dow Corning will manufacture NuCap(TM), Global Matrechs' lead
product, an advanced silicone geo-polymer composite that provides
superior containment of radioactive contaminants.  Modifications
to part of the facility at Dow Corning's manufacturing plant in
Midland, Michigan, that will manufacture NuCap(TM) will result in
improvements in the manufacturing process efficiency.  The
upgrades are expected to expand Global Matrechs' ability to meet
demand for its innovative materials.

"This agreement is a very important advancement in the growth of
this company," Michael Sheppard, CEO of Global Matrechs, said.  
"Dow Corning has collaborated with us for more than eighteen
months to help us obtain the level of equipment, management,
engineering support and training to meet the standards for quality
and quantity required by the growing customer base for our NuCapT
materials.  We believe this relationship with Dow Corning will
enable us to successfully fill certain large orders anticipated in
the near future."

                         About Dow Corning

Headquartered in Midland, Michigan, Dow Corning Corporation --
http://www.dowcorning.com/-- provides performance-enhancing  
solutions to serve the diverse needs of more than 25,000 customers
worldwide.  A global leader in silicon-based technology and
innovation, offering more than 7,000 products and services, Dow
Corning is equally owned by The Dow Chemical Company and Corning
Incorporated.  More than half of Dow Corning's sales are outside
the United States.

                       About Global Matrechs

Headquartered in Ridgefield, Connecticut, Global Matrechs, Inc.
(OTCBB: GBMR) -- http://www.globalmatrechs.com/-- operates a  
licensed technologies business.  Through its licensed technologies
business, Global Matrechs seeks to convert the licenses it has
acquired in emerging technologies in the nuclear energy,
environmental and chemical industries into manufactured products
primarily through sub-licenses of those technologies to
manufacturers.

                        Going Concern Doubt

Sherb & Co., LLP, in Boca Raton, Florida, raised substantial doubt
about Global Matrechs, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditor pointed
to the Company's recurring losses from operations, negative cash
flows and working capital, stockholders' and accumulated
deficiencies.


HEMOSOL CORP: CA Court Resolves Prometic Biosciences License Pact
-----------------------------------------------------------------
The Superior Court of Justice of Ontario released its decision
concerning the litigation involving the license agreement between
Hemosol LP, an affiliate of Hemosol Corp. and ProMetic Bioscience
Ltd.  On the three issues before the Court, it found:

   1. that the License Agreement includes within it the
      exclusive license for any Primary Step or Additional
      Primary Step if performed as a single step for the capture
      of Proteins or Additional Proteins from Raw Material as
      defined in the License Agreement.

   2. the License Agreement does not include the exclusive right
      to the capture of Proteins for the purpose of producing
      hyperimmune globulins.  Hyperimmunes are not caught by the
      definition of IVIG in the License Agreement.

   3. that neither the rights nor the technology granted to Nabi
      Pharmaceuticals under the Nabi Agreement between ProMetic
      and Nabi falls within the scope of the License Agreement.

As for the plan sponsorship agreement entered into between
PricewaterhouseCoopers Inc., in its capacity as interim receiver
of the assets, property and undertaking of Hemosol and the Plan
Sponsor, it continues to be conditioned upon a number of factors,
including obtaining the approval of Hemosol's creditors and the
Court on a proposed CCAA plan of compromise, and, unless waived by
the Plan Sponsor, a plan of arrangement under the OBCA, which, if
implemented, will result in a substantial dilution of the equity
of Hemosol held by the shareholders existing at the time of
implementation.

                        Prometic's Reaction

In a judgment that in many significant ways confirms ProMetic's
interpretation of the license agreement with Hemosol, Justice
Nancy J. Spies concluded that the license agreement did not grant
any rights whatsoever to Hemosol in regards to hyperimmune
products.  These are not within the scope of the license, and as a
result, there are no further obstacles to ProMetic's ability to
license its technology for the production of hyperimmune products.  
A license agreement for specific hyperimmune products associated
with milestone payments of up to $18 million and royalties on
sales was recently signed with Nabi Biopharmaceuticals.  In
addition, services and resin supply agreements were executed and
scheduled to commence this month.

The Court also clarified the Parties' rights in regard to
Hemosol's ability to use Prometic's Cascade Process or any portion
thereof. The Court clearly stated that in this respect, Hemosol's
rights were limited to the manufacture of the six proteins
pursuant to the License Agreement.

"We are pleased with this decision as this acknowledges our
interpretation and position since the beginning", stated Mr.
Pierre Laurin, ProMetic's President and CEO.  "More licensing
agreements are anticipated as we are executing on the business
plan and we are pleased that the court ruling is in line with our
strategy".

The parties are scheduled to appear before the Court on Sept. 11,
2006, to monitor the progress of negotiations and of the
restructuring process.  The potential purchaser of Hemosol
currently has an agreement with the Receiver of Hemosol whereby it
must conclude an agreement to its satisfaction by Sept. 15, 2006.

                   About ProMetic Life Sciences

Headquartered in Montreal, Canada, ProMetic Life Sciences Inc. --
http://www.prometic.com/-- is a biopharmaceutical company  
specialized in the research, development, manufacture and
marketing of a variety of commercial applications derived from its
proprietary Mimetic Ligand(TM) enabling technology used in large-
scale purification of biologics and the elimination of pathogens.

                           About Hemosol

Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/
-- is an integrated biopharmaceutical developer and manufacturer
of biologics, particularly blood-related protein based
therapeutics.  Information on Hemosol's restructuring is available
at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html

Hemosol Corp and Hemosol LP filed a Notice of Intention to Make
a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and
Insolvency Act on Nov. 24, 2005.  The Company had defaulted in
the payment of interest under its $20 million credit facility.
Hemosol said that it would require additional capital to
continue as a going concern and is in discussions with its
secured creditors with respect to its current financial position.
On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim
receiver of the Companies.


IMAX CORP: Shareholders Launches $200 Million Class Action Lawsuit
------------------------------------------------------------------
A $200 million class action lawsuit was commenced in the Ontario
Superior Court of Justice against IMAX Corporation.

Neil Silver of Windsor, Ontario, alleges that IMAX misrepresented
its revenue and earnings for the fourth quarter and fiscal year
ending on Dec. 31, 2005 and in the first quarter of 2006.  Mr.
Silver will be the first person in Ontario to seek permission from
the court to bring an action under the new provisions of the
Securities Act dealing with liability for secondary market
disclosure.

IMAX shares dropped 40% in value when the company revealed that
the U.S. Securities and Exchange Commission has started an
informal inquiry in respect of the alleged misrepresentations.

Mr. Silver is represented by Harvey T. Strosberg, Q.C., Patricia
Speight and Jay Strosberg of Sutts, Strosberg LLP; a Windsor-based
law firm specializing in class action lawsuits.

"If the allegations are proven, IMAX will be held accountable by
its shareholders," says Mr. Harvey Strosberg.  "We intend to use
our best efforts to ensure this happens."

The lawsuit is commenced on behalf of all persons who purchased
IMAX shares on or after March 9, 2006 and held them at market
close on Aug. 9, 2006.

Harvey T. Strosberg, Esq., is a specialist in class action
lawsuits.  As a lead counsel in the Hepatitis-C class action
against the federal government, Mr. Strosberg's efforts yielded a
settlement of $1.1 billion -- the largest in Canada's history.  He
was a lead negotiator in the groundbreaking settlement with the
Ontario government for Walkerton residents as a result of E coli
contamination and has settled other high profile class actions
including YBM Magnex.  He is currently prosecuting other large
class actions, including one against Atlas Cold Storage Income
Trust.

                            About IMAX    

IMAX Corporation -- http://www.imax.com/-- founded in 1967 and  
headquartered jointly in New York City and Toronto, Canada, is an
entertainment technology company, with particular emphasis on film
and digital imaging technologies including 3D, post-production and
digital projection.  IMAX also designs and manufactures cameras,
projectors and consistently commits significant funding to ongoing
research and development.

At June 30, 2006, IMAX Corporation's balance sheet showed a
stockholders deficit of $21,242,000, compared to a deficit of
$23,043,000 at Dec. 31, 2005.

                           *     *     *

IMAX Corporation's 9-5/8% Senior Notes due 2010 carry Moody's
Investors Service's and Standard & Poor's single-B ratings.


IPC ACQUISITION: Moody's Rates Proposed $50 Mil. Sr. Loan at Ba3
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to IPC Acquisition
Corporation's proposed $50 million senior secured first lien
revolving credit facility and to the $415 million senior secured
first lien term loan and a Caa1 rating to its proposed $170
million senior secured second lien term loan.

The ratings for the facilities reflect both the overall
probability of default of the company, to which Moody's assigns
a PDR of B3, and a loss given default of LGD 2 for the first
lien secured facilities and LGD 5 to the second lien facility.  
Proceeds from the credit facilities, in addition to up to
$253 million in new sponsor equity, will be used to repay about
$423 million in existing debt, and fund the acquisition of IPC
equity by Silver Lake Partners. Upon the closing of the
acquisition, the ratings on the existing credit facilities will be
withdrawn.  Additionally, Moody's has affirmed IPC's corporate
family rating at B2.

Moody's has taken these rating actions:

Issuer: IPC Acquisition Corp.

   * First lien senior secured revolving credit facility
     maturing 2012 -- Assigned Ba3

   * First lien senior secured term loan maturing
     2013 - Assigned Ba3

   * Second lien senior secured term loan maturing
     2014 -- Assigned Caa1

   * Corporate family rating -- Affirmed B2

   * Probability of default rating -- Assigned B3

   * First lien senior secured revolving credit facility
     maturing 2010 -- Affirmed B2 to be withdrawn

   * First lien senior secured term loan maturing
     2011 -- Affirmed B2 to be withdrawn

   * Second lien senior secured term loan maturing
     2012 -- Affirmed B3 to be withdrawn

The outlook on all ratings is stable.

The ratings broadly reflect IPC's high leverage and moderate
prospects for meaningful free cash flow generation.  Pro forma for
the acquisition financing, adjusted debt to fiscal year-end EBITDA
will be nearly 6.9x.  The B2 corporate family rating considers the
company's susceptibility to swings in the global financial
services industry, customer concentration and business risk as IPC
moves to diversify its revenue stream from customer installations
to generate recurring service and maintenance revenues.  IPC's
ratings benefit, however, from high barriers to entry for
competitors, high switching costs for the company's customers, and
IPC's market leadership position in a small, though highly
specialized, market.

The stable rating outlook reflects Moody's view that given the
company's stable cash flow generating ability, leverage and
ratings are unlikely to change over the near term unless triggered
by a specific event.

The Ba3 rating of the first lien senior secured credit facilities
reflects an LGD 2 loss given default assessment as this facility
is secured by a pledge of all of the company's domestic assets,
and 65% of the stock of foreign subsidiaries, while the second
lien facilities provide junior debt cushion of over 25% of total
obligations.  As a result, the second lien facility is rated Caa1,
with an LGD 5 loss given default assessment.

IPC Acquisition Corporation, headquartered in New York, New
York, is a global provider of voice communications solutions
to enterprises, primarily in the financial services industry.


KAISER ALUMINUM: Extends Contract With A.M. Castle & Co.
--------------------------------------------------------
Kaiser Aluminum reported the extension of a contract with A.M.  
Castle & Co. to supply aerospace manufacturer Raytheon Aircraft  
Company with high-quality fabricated aluminum products.  

The agreement extends an earlier contract to 2010 and calls for an
increased supply of high-quality fabricated aluminum sheet and
plate products.

"We're pleased to extend our collaboration with A.M. Castle & Co.
and to further support the production of Raytheon Aircraft
Company," said Jack A. Hockema, chairman, president and CEO,  
Kaiser Aluminum.

Kaiser Aluminum's sheet and plate products will be utilized in the
production of products for aircraft such as the Hawker 400XP, the
Hawker 4000 super-midsize business jet, the Beechcraft Premier IA
entry-level business jet, the Beechcraft King Air Series, and the
T-6 trainer aircraft.

                         About A.M. Castle

A.M. Castle & Co. is a specialty metals and plastics distribution
company serving the North American market, principally within the
producer durable equipment sector.

                           About Kaiser

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts.  Lazard Freres & Co. serves as the Debtors'
financial advisor.  Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.  
The Debtors' Chapter 11 Plan became effective on July 6, 2006.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 104;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 609/392-0900)


LARRY'S MARKETS: Has Until Nov. 3 to File Chapter 11 Plan
---------------------------------------------------------
The Honorable Philip H. Brandt of the U.S. Bankruptcy Court for
the Western District of Washington in Seattle gave Larry's
Markets, Inc., until Nov. 3, 2006, to file its plan of
reorganization and Jan. 2, 2007, to obtain confirmation of the
Plan.

The Debtor said its case is complex because it involves in-depth
and substantial negotiations with numerous interested purchasers,
negotiating a settlement of Section 503(b)(9) claims with the
Committee and Sterling Savings Bank, and addressing the rights of
Perishable Agricultural Commodities Act creditors.

The Debtor said it is paying its bills as they become due and has
maintained continuous and open communication with major parties.

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 has selected Marc L. Barreca, Esq., and
Michael J. Gearin, Esq., at Preston Gates & Ellis LLP, to
represent it in the Debtor's case.  When the Debtor filed for
protection from its creditors, it listed total assets of
$12,574,695 and total debts of $21,489,800.


LEVITZ HOME: Court OKs Assignment of 3 Additional Leases to PLVTZ
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allows Levitz Home Furnishings, Inc., and its debtor-affiliates to
assign these leases to PLVTZ, LLC, and pay the cure amounts:

     Store#   Address         Landlord                Cure Amount
     ------   -------         --------                -----------
      10205   Soundview,      BR Bruckner Corporation;    $55,649
              New York        First New York Partners

      10401   Middletown,     Topper Associates, LLC       44,688
              New York

      10504   Kenilworth,     Grand Pop Realty Co.,        16,500
              New Jersey      Inc.

PLVTZ, and the Pride Capital Group, are purchasers of
substantially all of the Debtors' assets.

Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of    
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States.  The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189).  David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.  Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005.  (Levitz Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


LUCENT TECH: Shareowners Approve Merger Agreement with Alcatel SA
-----------------------------------------------------------------
Lucent Technologies' shareholders overwhelmingly approved the
Agreement and Plan of Merger with Alcatel SA, dated as of April 2,
2006, at the Special Meeting of Shareowners held on Sept. 7, 2006.  
Final results of the shareowner vote will be disclosed in an
upcoming filing with the Securities and Exchange Commission.

French company Alcatel is buying its U.S. competitor for
$10.5 billion, according to Bloomberg News.

"As we have said from the start, the primary driver of this
combination is to create long-term value for shareowners,
customers, and employees," said Lucent Technologies Chairman and
CEO Patricia Russo.  "We received approval for the merger from
Lucent's shareowners, and as a result, we are another step closer
to creating the first truly global communications solutions
provider with the broadest wireless, wireline and services
portfolio in the industry."

Alcatel and Lucent expect to complete their merger transaction by
the end of calendar year 2006, within the six- to 12-month
timeframe originally announced on April 2.  The companies have
already cleared several key regulatory and antitrust milestones,
including antitrust clearance in the United States and the
European Union.  In addition, the companies have submitted a
formal notice to the Committee on Foreign Investment in the United
States, seeking U.S. governmental approval of their pending
merger.

                        Merger Agreement

As reported in the Troubled Company Reporter on Aug. 31, 2006, the
merger agreement will have an aggregate market capitalization of
approximately EUR30 billion ($36 billion), based upon the closing
prices on March 31, 2006.  Based on calendar 2005 sales, the
combined company will have revenues of approximately EUR21 billion
($25 billion), divided almost evenly among North America, Europe
and the rest of the world.

The combined company created by this merger of equals is
incorporated in France, with executive offices located in Paris.  
The North American operations will be based in New Jersey,
U.S.A., where global Bell Labs will remain headquartered.

The board of directors of the combined company will be composed of
14 members and will have equal representation from each company,
including Alcatel CEO Serge Tchuruk and Lucent CEO Patricia Russo,
five of Alcatel's current directors and five of Lucent's current
directors.  The board will also include two new independent
European directors to be mutually agreed upon.

Bloomberg News reports that Alcatel will have a 60% controlling
interest in the combined company, which will be named Alcatel
Lucent, with the rest held by Lucent shareholders.  Alcatel Lucent
intends to lay off 9,000 workers to achieve $1.7 billion in cost
synergies within three years.

                        About Alcatel

Headquartered in Paris, France, Alcatel S.A. (Paris: CGEP.PA and
NYSE: ALA) -- http://www.alcatel.com/-- provides communications
solutions to telecommunication carriers, Internet service
providers and enterprises for delivery of voice, data and video
applications to their customers or employees.  Alcatel brings
its leading position in fixed and mobile broadband networks,
applications and services, to help its partners and customers
build a user-centric broadband world.  With sales of EUR13.1
billion and 58,000 employees in 2005, Alcatel operates in more
than 130 countries.

                       About Lucent Technologies

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

                           *     *     *

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


LUXELL TECH: Closes $1 Million Interim Debt Financing
-----------------------------------------------------
Luxell Technologies Inc. has closed a $1 million debt financing
arrangement as part of the restructuring and refinancing.  This
will provide the company with working capital funding necessary to
support its operations.

John MacDonald, Luxell's Chairman of Board and interim CEO said he
was "especially pleased with the support the company has had from
its employees in this first phase of the company's restructuring
process and for the future of the company.  This interim financing
allows the company to continue its operations and pursue new
sales. We see the ability to produce order book growth, even at
this time, as being integral to the company's restructuring plan."

As reported in the Troubled Company Reporter on Aug. 30, 2006, Mr.
MacDonald stated, "...the Company's Board of Directors has
determined the best option to realize a possible future for the
Company, its shareholders, employees, suppliers and customers, is
to file a proposal to creditors under the Bankruptcy and
Insolvency Act, which will take a minimum of 45 days to complete
and provide the Company with a complete stay on any creditor
proceedings."

In order to continue operations, the Company sought new financing
for $1 million of Debtor-in-Possession Financing to provide the
Company with working capital as well as to fund C.O.D. payments to
suppliers.  This additional term debt is intended to provide
holders of promissory notes with assurance that if the assets of
the Company were sold they would not be prejudiced for having
accepted the proposal.

The Company is also examining the structuring of a further
$5 million convertible debenture and what the terms and conditions
of such additional financing would entail.

Luxell Technologies Inc. (TSX: LUX) -- http://www.luxell.com/
http://www.aktelux.com/and http://www.luxellresearch.com/--   
designs, manufactures and licenses flat panel display technologies
and solutions for defence and avionics industries through its
operating divisions Aktelux and Luxell Research.


MACDERMID INC: Stock Purchase Proposal Cues S&P's Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed all its ratings on
MacDermid Inc., including its 'BB+' corporate credit rating, on
CreditWatch with negative implications.

The CreditWatch listing follows the announcement that MacDermid
received a proposal letter from Daniel H. Leever, its chairman and
chief executive officer, and Court Square Capital Partners to
purchase all of its outstanding common stock at $32.50 per share.
A special committee of the company's outside directors will
consider the offer.

"The bid as currently structured would result in a significant
erosion of credit quality," said Standard & Poor's credit analyst
Cynthia Werneth.

If the transaction is consummated, MacDermid's debt could increase
to roughly $900 million from approximately $300 million at June
30, 2006, before a moderate amount of leases and postretirement
obligations.

The CreditWatch listing will be resolved after details of the
financing plan are known and Standard & Poor's has met with
management to assess its business and financial strategies in view
of the potentially highly leveraged capital structure.

Denver, Colorado-based MacDermid, with about $700 million in
annual sales, manufactures and markets specialty chemicals to a
variety of industries, including graphic arts, electronic
materials (primarily printed circuit boards), and metal finishing.


MARKETXT HOLDINGS: Court Declines to Dismiss Epoch Bankruptcy Case
------------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York denied creditor Empyrean Investment
Fund, L.P.'s request to dismiss the involuntary Chapter 11
petition pending against Epoch Investment, L.P.  The Court also
ruled that EIF's alternative request to appoint a trustee was
premature.

Epoch Investment, L.P., is one of the several companies that were
substantially or wholly controlled by Omar Amanat, who is a
Chapter 7 debtor.  The largest company was MarketXT Holdings,
Corporation, which was also in Chapter 11.  Epoch was formed as a
limited partnership, with Epique Revocable Living Trust, its
general partner, owning a 1% interest.  Another limited
partnership controlled by Mr. Amanat, Epic Investments Trust,
holds the 99% limited partnership interest in Epoch and is sole
beneficiary of Epique.  Epique's beneficiaries are members of Mr.
Amanat's family.

On May 12, 2005, Alan Nisselson, the Chapter 11 trustee for the
bankruptcy estate of MarketXT Holdings filed an involuntary
Chapter 11 petition against Epoch.  MarketXT Holdings asserted
that it had a bona fide claim against Epoch that was not
contingent as to liability and aggregated at least $2.5 million
more than the value of any collateral securing the claim.  
MarketXT Holdings also represented that Epoch had fewer than 12
creditors.  No opposition was filed.  On June 13, 2005, the Epoch
case was procedurally consolidated with the MarketXT Holdings
bankruptcy case.

EIF contends that the Epoch bankruptcy case should be dismissed on
the ground that MarketXT Holdings' claim is contingent and
disputed.  EIF asserts that while Mr. Amanat claims MarketXT
Holdings holds a liquidated and undisputed claim against Epoch,
MarketXT Holdings characterized those claims as contingent and
unliquidated in its own schedules.  EIF contends that the
contingent nature of MarketXT Holdings' claims deprives the Court
subject matter jurisdiction over the case and that the issue of
subject matter jurisdiction can be raised at any time.

In a decision published at 2006 WL 2335565, Judge Gropper decreed
that in an involuntary case, the requirement that a petitioning
creditor's claim not be subject to any bona fide dispute is
jurisdictional does not mean that an objection to the allegedly
disputed nature of petitioning creditor's claim may be raised by
any party at any time.  Rather, the sufficiency of an involuntary
petition may only be challenged by the Debtor and not by creditors
or third parties like EIF.

Judge Gropper also ruled that the request for appointment of a
Chapter 11 trustee is premature, and the Court will defer ruling,
pending a decision on the request of Mr. Nisselson and the
Creditors Committee appointed in MarketXT Holdings' bankruptcy
case to substantively consolidate the Epoch estate with the
MarketXT Holdings estate.

Alexander Cataldo, Esq., at Denner & Pellegrino, LLP, in Norwell,
Massachusetts, represents EIF.

MarketXT Holdings Corporation, fka Tradescape Corporation, is a
day-trading firm conducting electronic trades in equities on all
the major US stock exchanges including NASDAQ.  The Company filed
for chapter 11 protection on March 26, 2004 (Bankr. S.D. N.Y. Case
No. 04-12078).  Jonathan L. Flaxer, Esq., at Golenblock, Eisenman,
Assor, Bell & Peskoe, LLP, in New York City, represents the
Debtor.


MORRIS PUBLISHING: S&P Affirms BB Rating & Removes Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Morris
Publishing Group LLC, including the 'BB' corporate credit rating.

In addition, these ratings were removed from CreditWatch where
they were listed July 25, 2006, with negative implications.  The
outlook is negative.

The Augusta, Georgia-headquartered newspaper publisher had about
$520 million of debt outstanding at June 2006.

The ratings affirmation follows a review of the 2006 second
quarter results for Morris Publishing and its parent, Morris
Communications Co. LLC, which showed meaningful increases in
operating cash flow.  The ratings on Morris Publishing are based
on the consolidated credit quality of Morris Communications and
its restricted subsidiaries, which guarantee Morris Publishing's
senior secured credit facilities.

While the financial profile of Morris Communications has been
improving this year, it remains weak for the ratings.  Morris
Publishing accounts for the majority of Morris Communications'
revenues and cash flow.

In addition to Morris Publishing, other restricted subsidiaries
are involved in outdoor advertising, radio broadcasting, and
magazine, book and specialty publishing.  Morris Communications
does not publicly disclose its financial statements.


NEENAH PAPER: Moody's Holds Low-B Ratings on $375 Mil. Sr. Notes
----------------------------------------------------------------
Moody's Investors Service took these rating actions with respect
to Neenah Paper Inc.:

Ratings Affirmed:

   * Corporate family rating; B1
   * $150 million senior secured revolving credit facility, Ba3
   * $225 million senior unsecured notes, B1

Ratings Lowered:

   * Speculative Grade Liquidity Rating, SGL-3 from SGL-2

The outlook remains stable.

Key factors influencing Neenah's ratings and outlook are:

   i) Moody's belief that the company's operating performance and
      cash flows will improve over the intermediate term due to
      the transfer of the Terrace Bay pulp mill.

  ii) In terms of scale, breadth of product line, and geographic
      diversity, Neenah will display a Ba portfolio in the paper
      and forest products sector mainly due to the pending German
      technical products acquisition.  In Moody's view, the
      company's operations produce two separate and distinct
      product lines, premium papers and market pulp with
      locations potentially in two geographies.

iii) Profit margins consistent with those of a Ba rated paper
      and forest products company.

  iv) Execution risk regarding the company's strategic
      initiatives to transform itself into a premium fine paper
      and technical products company.

   v) Weakened credit metrics after the German technical products
      acquisition; however Moody's expects credit metrics to
      accommodate the company's current ratings in the
      intermediate term.

  vi) Vertical integration remains low with operational
      efficiency and margin stability representative of a B rated
      paper and forest products company.

The stable outlook reflects Moody's view that key rating factors
are not likely to change over the near term.  Given the company's
recent events and the expected transition period, Moody's does not
anticipate the ratings moving up in the intermediate term.  
Although the transfer of the Terrace Bay pulp mill will improve
overall results, Moody's expects a modest level of volume growth
in the fine paper and technical products sectors along with
relatively stable pricing, offsetting continued high input costs.

Furthermore, Moody's believes the company's debt level will remain
consistent with the post-acquisition balance.  Factors that would
negatively impact the rating and/or outlook would be an inability
to execute its strategic initiatives or successfully integrate the
German technical products acquisition.  A negative action could
also result from an increase in leverage due to a significant
debt-financed acquisition, deterioration in volumes and/or margins
in the fine paper, technical products, or other pulp operations,
or deterioration in liquidity.

The downgrade of the speculative grade liquidity rating to SGL-3
reflects Neenah's requirement to amend its $150 million revolving
credit facility due to the size of the German technical products
acquisition.  Moody's SGL ratings and SGL rating methodology do
not assume that borrowers will be able to obtain amendments,
resulting in the downgrade.  At the same time, Moody's believes
that Neenah will generate enough free cash flow to internally fund
all of its cash requirements, and that existing cash balances
should be sufficient to fund any shortfall with the exception of
extraordinary capital expenditures or seasonal working capital
needs.  If the company is able to obtain an amendment with terms
consistent with the current credit agreement, the SGL rating will
likely return to SGL-2.

The most recent prior rating action for Neenah occurred on
November 8, 2004.  Moody's assigned the current ratings to Neenah,
as a first time issuer, based primarily on the current key rating
factors mentioned above.  In Moody's opinion, Neenah's expected
improvement in operating performance over the intermediate period
justifies an affirmation of the corporate family rating at this
time.  An established track record of the company's current
operating strategy could improve ratings as the transfer of the
Terrace Bay facility represents a positive ratings event.

Neenah Paper, Inc., headquartered in Alpharetta, Georgia, is a
producer of specialty papers and market pulp.


NORD RESOURCES: Stockholders' Deficit Tops $4.2 Mil. at June 30
---------------------------------------------------------------
Nord Resources Corporation filed its financial statements for the
second quarter ended June 30, 2006, with the Securities and
Exchange Commission.

The Company reported a $3,521,229 net loss for the second quarter
of 2006 compared with a $1,941,702 net loss for the same period in
2005.  The Company had no revenue in these quarters.

At June 30, 2006, the Company's balance sheet showed $4,214,657 in
total assets and $8,430,713 in total liabilities, resulting in a
$4,216,056 stockholders' deficit.  The Company had a $3,120,573
deficit at March 31, 2006.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?113e

                        Going Concern Doubt

As reported in Aug. 3, 2006, Mayer Hoffman McCann PC expressed
substantial doubt about Nord's ability to continue as a going
concern after it audited the Company's financial statements for
the years ended Dec. 31, 2005 and 2004.  The auditing firm pointed
to the Company's significant operating losses.  Nord incurred a
$3,084,166 net loss for the year ended Dec. 31, 2005, in contrast
to a $864,357 net loss in the prior year.

                       About Nord Resources

Headquartered in Dragoon, Arizona, Nord Resources Corporation
(Pink Sheets: NRDS) -- http://www.nordresources.com/-- is a  
natural resource company focused on near-term copper production
from its Johnson Camp Mine and the exploration for copper, gold
and silver at its properties in Arizona and New Mexico.  The
Company also owns approximately 4.4 million shares of Allied Gold
Limited, an Australian company.  In addition, the Company
maintains a small net profits interest in Sierra Rutile Limited, a
Sierra Leone, West African company that controls the world's
highest-grade natural rutile deposit.


OMEGA HEALTHCARE: Completes New Investments Totaling $25 Million
----------------------------------------------------------------
Omega Healthcare Investors, Inc. closed on $25 million of new
investments on Sept. 1, 2006, with subsidiaries of Guardian LTC
Management, Inc., an existing operator of the Company.

The transaction involved the sale and leaseback of two facilities,
a skilled nursing facility in Pennsylvania and a combination SNF
and rehabilitation hospital in West Virginia.  The facilities and
related $2.6 million of initial annual rent were added to an
existing master lease with Guardian.  The amended master lease now
includes 17 facilities and $11.2 million of annual rent, with
annual escalators.  In addition, the master lease term was
extended from October 2014 through August 2016.

Based in Timonium, Maryland, Omega HealthCare Investors, Inc.
(NYSE:OHI) -- http://www.omegahealthcare.com/-- is a real-estate  
investment trust investing in and providing financing to the long-
term care industry.

At June 30, 2006, the Company owned or held mortgages on 208 SNFs
and ALFs with approximately 23,573 beds located in 27 states and
operated by 34 third-party healthcare operating companies.

                           *     *     *

As reported in the Troubled Company Reporter on June 29, 2006,
Fitch upgraded Omega Healthcare Investors' senior unsecured notes
to 'BB' from 'BB-' and its preferred stock to 'B+' from 'B'.
Additionally, Fitch assigned the Company's secured credit facility
at 'BB+'.  The Outlook on all Ratings is Stable.


PERFORMANCE TRANSPORTATION: Can Assume Modified Bandag Contract
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
allowed Performance Transportation Services, Inc., and its debtor-
affiliates to assume a modified contract with Bandag, Inc.

The Debtors entered into a contract for tire-related services with
Bandag on Oct. 6, 2005.  Bandag provided standard tire repair and
retreading services including casing inspection and repair, casing
retreading, tire mounts and dismounts, tire repair, and emergency
tire assistance.

On April 11, 2006, Bandag notified the Debtors of its intent to
terminate the Contract, effective July 15, 2006.  The Debtors said
that without Bandag's services, they will not have access to the
significant advantages offered by a national retread vendor.

Hence, the Debtors convinced Bandag to continue providing tire-
related services to ensure a continued supply of useable tires.
The Debtors and Bandag consequently agreed to amend the Contract.

The amended contract allows either party to terminate the Contract
prior to Oct. 24, 2007, at the option of the non-defaulting party.  
Termination without cause is no longer permitted.

Pursuant to the Amendment, the Debtors will pay to Bandag $113,975
for the prepetition debt owed.

                 About Performance Transportation

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


PERFORMANCE TRANSPORTATION: Court Approves Amended Firestone Pact
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
approved a modified supply contract between Performance
Transportation Services, Inc., its debtor-affiliates and
Bridgestone/Firestone, Inc.

The Court clarifies that upon the Debtors' payment of $199,926,
they will be deemed to have fully cured all default arising under
the Tire Supply Contract.

As reported in the Troubled Company Reporter on Aug. 24, 2006,
Firestone has provided the Debtors with specialized tires for the
last ten years under a lease agreement.  The Debtors decided to
enter into an addendum to the Firestone Contract to extend its
term through Dec. 31, 2009.

The Debtors will pay Firestone $199,926 representing unpaid
prepetition fees, in exchange for Firestone's agreement to execute
the Addendum.

The Debtors estimated that assuming the Contract, as modified,
rather than entering into an agreement with any other supplier
provides them with approximately $102,000 of annual cost savings.  

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


PERKINELMER INC: Acquires Avalon Instruments & Raman Spectroscopy
-----------------------------------------------------------------
PerkinElmer, Inc., disclosed the acquisition of Avalon Instruments
Limited, based in Belfast, Northern Ireland.  

The acquisition expands and complements PerkinElmer's Molecular
Spectroscopy product portfolio through adding a family of
innovative bench-top dispersive Raman spectrometers.  The Avalon
Raman platforms support both bulk analysis and microscopic
imaging, enabling scientists and technicians to gain more
information about their samples with excellent reproducibility.
Terms of the deal were not disclosed.

"Customers will now have a single dependable source for high-
throughput IR, NIR and Raman, along with integrated software and
accessories," said Robert F. Friel, president of PerkinElmer Life
and Analytical Sciences.  "The PerkinElmer Raman instrumentation
is designed for intuitive use, minimal operator intervention, and
highly reproducible results to help labs achieve a high level of
throughput and productivity."

Raman spectroscopy identifies and characterizes the composition of
both organic and inorganic materials in a wide range of
applications.  It is a complementary analysis technique to near
infrared spectroscopy and infrared spectroscopy.  Raman provides
labs with the ability to analyze solids, liquids, powders, gels,
slurries and aqueous solutions in bulk or to address variation in
sample distribution with imaging.  The technology is applicable to
a diverse range of end markets, including pharmaceuticals,
forensics and academia.

"We are excited to join PerkinElmer and contribute to their
innovative approach to product development and continuous
improvement, along with becoming part of a global leader in
customer service and support," said Dr. Andrew Dennis, managing
director, Avalon Instruments.

PerkinElmer Inc. (NYSE: PKI) -- http://www.perkinelmer.com/--
is a global technology leader driving growth and innovation in
Health Sciences and Photonics markets to improve the quality of
life.  PerkinElmer reported revenues of $1.5 billion in 2005, has
8,000 employees serving customers in more than 125 countries, and
is a component of the S&P 500 Index.

                           *     *     *

PerkinElmer Inc.'s Long Term Subordinated Debt carry Moody's
Investors Service's Ba1 rating.


PERSONA COMMS: Moody's Junks $130 Million Sr. Sec. Loan's Rating
----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Persona
Communications Corp. consisting of a B2 Corporate Family Rating,
Ba3 first lien senior secured rating and Caa1 second lien senior
secured rating.  The ratings reflect both the overall probability
of default of the company, to which Moody's assigned a PDR of B3,
and a loss given default of LGD 2 for the first lien secured
facility and LGD 4 to the second lien secured facility.  The
outlook is stable.

Ratings assigned:

   * Corporate family rating B2;

   * Probability-of-default rating B3;

   * CDN$60 million 1st lien senior secured revolver due
     September 2011 at Ba3;

   * $145 million 1st lien senior secured term loan B due
     September 2013 at Ba3;

   * $90 million 1st lien senior secured delayed draw term loan B  
     due September 2013 at Ba3;

   * $130 million 2nd lien senior secured term loan due March
     2014 at Caa1.

The rating action incorporates Persona's pending acquisition
of Delta Cable Systems and Coast Cable Systems and refinancing
of its existing indebtedness, including the conversion of its
CDN$125 million of subordinated debt into preferred equity by
December 31, 2006.

The B2 Corporate Family Rating reflects initial pro-forma leverage
of over 6x EBITDA, our expectation that Persona's current capital
expenditure program will consume cash through 2007, the company's
relatively small scale, ongoing basic video subscriber losses
albeit at declining rates, and the potential for Persona's network
to require further upgrades after 2007.  The rating also reflects
Persona's market position as the incumbent cable provider in many
small-sized Canadian markets, the potential for growth in Internet
and digital TV products, which remain under-penetrated, and a
strong management team.

The stable outlook reflects Moody's view that Persona is likely to
make steady progress towards generating free cash flow over the
next couple of years but that leverage is unlikely to reduce
materially during this time horizon.

The Ba3 ratings of the first lien senior secured facility reflects
an LGD 2 loss given default assessment as the facility is secured
by a first priority lien on substantially all assets of the
company, its parent, and key subsidiaries and there is
a meaningful amount of junior debt.  The Caa1 rating of the
$130 million second lien credit facility reflects an LGD 4 loss
given default assessment as it is secured by a secondary
position in the same collateral package.

Persona is the fifth largest cable company in Canada, based in St.
John's, Newfoundland.


PERSONA COMMS: Acquisitions Prompts S&P's B Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate rating to the Newfoundland-based cable operator Persona
Communications Corp., following the company's announcement to
acquire B.C.-based cable operators Delta Communications Ltd.,
Guiness Communications Inc., and Coast Cable Communications Ltd.

At the same time, Standard & Poor's assigned:

   * a 'B+' debt rating to the company's CDN$318 million
     equivalent first-lien senior secured credit facilities,
     consisting of:

     -- a CDN$60 million five-year revolving credit facility, and

     -- a $235 million seven-year term loan B, with a recovery
        rating of '1'; and

   * a 'CCC+' debt rating to the company's $130 million
     second-lien senior secured credit facility, with a recovery
     rating of '5'.  

The outlook is negative.

At the same time, Persona is expected to refinance the existing
CDN$348 million equivalent debt facilities.  The Delta
acquisitions are expected to be debt financed using a $90 million
seven-year term loan B.  Expected total balance-sheet debt
outstanding at the close of the Delta acquisitions is about
CDN$417 million.  The collective acquisition is expected to close
in early December 2006.

"The ratings on Persona reflect high debt leverage, weak financial
metrics, and weak profitability trends, partially mitigated by a
modestly improving business risk profile given an improving asset
quality," said Standard & Poor's credit analyst Madhav Hari.

"Overall asset quality improves from the combination of
significant cable plant upgrades and the addition of
demographically attractive cable systems (and corresponding
synergies), both of which should support healthy broadband growth
and slower basic subscriber erosion," Mr. Hari added.

The acquired systems are in areas adjacent to other Persona cable
systems in western Canada, and are largely upgraded for both
digital TV and high-speed Internet services.  Together with the
early-December 2005 acquisition of Alberta-based Northern
Cablevision Ltd., these acquisitions should meaningfully enhance
Persona's customer demographics, scale, and geographic
diversification.

The negative outlook reflects weak operating performance coupled
with a further weakening of credit measures following recent debt-
financed acquisitions.  

The ratings on Persona could be lowered if the company fails to
deliver EBITDA growth as forecast, and shows little progress
toward achieving positive free operating cash flow within the next
18 months.  Consideration of a stable outlook will depend on the
company meeting its EBITDA and free operating cash flow targets,
and on lease-adjusted debt to EBITDA remaining below our 5.5x
expectation at year-end 2007.


PINNACLE ENT: Sands & Traymore Buy Cues Moody's to Hold Ratings
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings and positive
outlook of Pinnacle Entertainment, Inc., following the company's
announcement that it signed a definitive agreement under which
Pinnacle agreed to purchase the entities that own The Sands and
Traymore sites in Atlantic City, New Jersey from entities
affiliated with financier Carl Icahn for approximately $250
million, plus an additional $20 million for certain tax-related
benefits and real estate.  The transaction is expected to close by
the end of 2006 and is subject to customary approvals.  Pinnacle
has a B2 corporate family rating, B1 senior secured bank debt
rating, and Caa1 senior subordinated debt rating.

The affirmation considers that the purchase of The Sands Atlantic
City site is consistent with the company's plans to diversify
geographically into major gaming markets, a key factor with
respect to ratings improvement.  At the same time, the affirmation
acknowledges that Pinnacle will likely have to obtain additional
external financing to support the purchase of The Sands, and that
as part of the agreement, Pinnacle required that the sellers
proceed to close the existing hotel-casino.  As a result, Pinnacle
will not be acquiring any immediate cash flow from the
transaction.  The company plans to design and build an entirely
new casino hotel on the site.  Although no specific development
plans are in place at this time, Moody's expects that Pinnacle
will spend upwards of $1 billion to develop a new Atlantic City
property.

The positive ratings outlook continues to reflect the improvement
in Pinnacle's overall operating results and liquidity profile.  In
addition, it takes into account the two St. Louis developments
that will provide Pinnacle with an increased level of
diversification, the purchase of certain Lake Charles, LA gaming
assets from Harrah's, and the sale of Casino Magic Biloxi to
Harrah's.  Continued revenue and cash flow growth could have a
positive impact in ratings although any upgrade would need to
consider longer-term plans to develop and finance an Atlantic City
casino.

Moody's previous rating action on Pinnacle occurred on
May 22, 2006 with the confirmation of ratings and the assignment
of a positive ratings outlook.

Pinnacle Entertainment, Inc. owns and operates five casino
properties in the United States. In addition, the company is
developing two casinos in St. Louis, Missouri and also signed an
agreement to acquire two additional gaming licenses in Louisiana,
one of which it intends to utilize to build a second casino resort
in Lake Charles, Los Angeles.  Internationally, Pinnacle operates
casinos in Argentina, and since May 2006, a casino adjoining the
Four Seasons Resort Great Exuma at Emerald Bay in the Bahamas.


RADNOR HOLDINGS: U.S. Trustee Picks Seven-Member Creditors' Panel
-----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed
seven creditors to serve on an Official Committee of Unsecured
Creditors in Radnor Holdings Corporation and its debtor-
affiliates' chapter 11 cases:

     1. U.S. Bank N.A.
        Attn: Laura L. Moran
        One Federal Street, 3 Floor
        Boston, MA 02110
        Phone: 617-603-6429
        Fax: 617-603-6640

     2. Airlie Group
        Attn: Jeremy Bloomer
        115 East Putnam Avenue
        Greenwich, CT 06830
        Phone: 203-661-6200
        Fax: 203-661-0479;

     3. Barclays Bank PLC
        Attn: Mark Manski
        200 Park Avenue
        New York, NY 10166
        Phone: 212-412-3326
        Fax: 212-412-5660

     4. Peritus I Asset Management LLC
        Attn: Timothy Gramatovich
        26 West Anapamu Street, 3 Floor
        Santa Barbara, CA 93101
        Phone: 805-882-1100
        Fax: 805-882-1122; rd

     5. Total Petrochemicals USA, Inc.
        Attn: Letitia H. White
        1201 Louisiana Street, Suite 1800
        Houston, TX 77002
        Phone: 713-483-5372
        Fax: 713-483-5383

     6. Lyondell Chemical Company
        Attn: J. Donald Hamilton
        1221 McKinney Street
        One Houston Center, Suite 700
        Houston, TX 77010
        Phone: 713-309-4980
        Fax: 713-652-4542

     7. Polar Plastics, Inc.
        Attn: Eric Cohen
        4210 Thimens Blvd
        Saint-Laurent, OC. Canada H4R2B9
        Phone: 514-331-0207
        Fax: 514-331-2475

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

Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation
-- http://www.radnorholdings.com/-- manufactures and distributes  
a broad line of disposable food service products in the United
States, and specialty chemicals worldwide.  The Debtor and its
affiliates filed for chapter 11 protection on Aug. 21, 2006
(Bankr. D. Del. Case No. 06-10894).  Gregg M. Galardi, Esq., and
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher,
represent the Debtors.  When the Debtors filed for protection from
their creditors, they listed total assets of $361,454,000 and
total debts of $325,300,000.


READERS DIGEST: Weak Liquidity Cues Moody's to Review Ratings
-------------------------------------------------------------
Moody's Investors Service placed The Reader's Digest Association,
Inc.'s Ba1 Corporate Family Rating and Ba2 senior unsecured note
rating on review for possible downgrade.  The review is prompted
by increasing debt to fund acquisitions and return of capital to
shareholders, deterioration in cash generation, and Moody's
concern regarding the company's weakened liquidity position.

On Review for Possible Downgrade:

Issuer: Reader's Digest Association, Inc.

   * Corporate Family Rating, Placed on Review for Possible
     Downgrade, currently Ba1

   * Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Downgrade, currently Ba2

Outlook Actions:

Issuer: Reader's Digest Association, Inc.

   * Outlook, Changed To Rating Under Review From Negative

Moody's will evaluate the company's plans to stabilize and reverse
the significant operating performance decline in the consumer
business segment, and improve working capital management in
support of new product introductions and the international
expansion strategy.  Moody's will also assess the company's
financial policies and priorities for the use of debt and cash
generated to fund acquisitions and capital returns to
shareholders.  In addition, Moody's will review the liquidity
position as Reader's Digest enters its peak seasonal borrowing
period, including the company's ability to maintain compliance
with restrictive financial covenants in the credit facility at
September 30, 2006 and beyond.

The Reader's Digest Association, Inc, headquartered in
Pleasantville, New York, is a global publisher and direct marketer
of products including magazines, books, recorded music collections
and home videos.  Products include Readers Digest magazine, which
is published in 50 editions and 21 languages.  Annual revenues
approximate $2.4 billion.


REFCO INC: Wants Exclusive Plan-Filing Period Extended to Dec. 5
----------------------------------------------------------------
Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend, for an
additional 95 days, the periods for them to:

   -- exclusively file a Chapter 11 plan through and including
      December 5, 2006; and

   -- solicit acceptances of that plan until February 3, 2007,

without prejudice to the Debtors' right to seek further extensions
of the Exclusive Periods.

From the outset of their Chapter 11 cases, the Debtors have worked
diligently to stabilize and preserve the value of their
businesses, Sally McDonald Henry, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in New York, tells the Bankruptcy Court.

After the Debtors filed for bankruptcy, Ms. Henry relates, the
Debtors initiated the process to sell their regulated futures
brokerage business.  Despite facing numerous complicated issues,
the Debtors managed in roughly a month to hold a competitive
auction with five active bidders and structure the sale of their
assets in an unprecedented dual-bankruptcy structure, ultimately
resulting in enormous benefit to the estates through a sale of
futures brokerage business to Man Financial Inc.

Ms. Henry notes that through the Man Sale and various other
smaller asset sales, more than $1,000,000,000 in proceeds has come
into the Refco, Inc. estates for ultimate distribution to
creditors.  The Debtors and Marc Kirschner, the Chapter 11 Trustee
of Refco Capital Markets, Ltd.'s estate, continue to analyze and
value their remaining assets to realize value for the Debtors'
creditors and interest holders for distribution through a plan of
reorganization.

Concurrently with managing the orderly sale and wind-down of their
business operations, Ms. Henry states that the Debtors have been
involved in numerous complex and expedited litigations that have
returned significant value to their estates and have helped to
clarify legal positions of various case constituencies.  The
Debtors continue to evaluate other possible causes of action
against various parties that might serve as additional sources of
value to fund a plan.

In addition, the Debtors and their advisors continue to devote
significant time and effort to analyze, among others:

   (i) the complex web of intercompany obligations among the
       Debtors; and

  (ii) the quantification and evaluation of claims asserted
       against the Debtors' estates by third-party creditors.

Although the claims analysis process has been ongoing since the
Petition Date, Ms. Henry points out that the claims bar date
recently passed and the last of the timely filed proofs of claim
was added to the claims register as of August 21, 2006.  Thus, the
full-blown claims analysis is only in its early stages, and the
results of that process may fundamentally affect the structure of
any proposed reorganization plan.

In this light, Ms. Henry states that the Debtors have been able to
develop a framework for a consensual resolution of their cases.
The process is ongoing, and the Debtors' models may require
revision as newly received claims data is used to confirm or
revise the Debtors' underlying liability assumptions.

Furthermore, the Debtors continue to assess potential claims and
causes of action that may provide additional assets to fund a
reorganization plan.

Now that the Debtors' efforts have yielded fruit and the
groundwork for a global resolution of their cases is in place, the
Debtors should be given the opportunity to bring the process to
completion, Ms. Henry tells Judge Drain.

The Debtors maintain that the Exclusive Periods are designed to
afford them the opportunity to negotiate and propose a Plan
without the disruption that might be caused by competing plans.

A hearing on the Debtors' Second Extension Motion will be held on
September 12, 2006, at 10:00 a.m.

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


REFCO INC: Wants Removal Period Extended to December 12
-------------------------------------------------------
Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend, until
Dec. 12, 2006, the period within which they may file notices of
removal with respect to actions, pursuant to Bankruptcy Rule
9006(b).

The Debtors tell the Court that when they filed for bankruptcy,
they were plaintiffs in 37 actions and proceedings in a variety of
state and federal courts throughout the country.

Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York, relates that neither the Debtors nor Refco
Capital Markets, Ltd., has reviewed all the Actions to determine
whether any of those should be removed under Rule 9027(a)(2) of
the Federal Rules of Bankruptcy Procedure because the Debtors have
continued to focus primarily on winding down their businesses and
formulating a global resolution of their cases.

Ms. Henry asserts that the extension of the Removal Period will
afford the Debtors sufficient opportunity to assess whether the
Actions can and should be removed, hence, protecting their
valuable right to adjudicate lawsuits under Section 1452 of the
Judiciary and Judicial Procedure Code.

Until the Debtors have had a sufficient time to develop a
consensual plan of reorganization in their cases, it would be
premature to allow the Removal Period to lapse, as the plan
formation process may well impact the Debtors' decisions regarding
the removal of the Actions, Ms. Henry insists.

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


REPUBLIC STORAGE: Creditors Have Until September 11 to File Claims
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio set
Sept. 11, 2006 as the last day for persons owed money by Republic
Storage Systems Company Inc. nka The Belden Locker Company to file
proofs of claim in the Debtor's Chapter 11 case.

Proofs of claim must be filed with the Court electronically or in
paper at:

   U.S. Bankruptcy Court
   Northern District of Ohio
   Frank T. Bow Building
   201 Cleveland Avenue, S.W.
   Canton, OH 44702

Based in Canton, Ohio, Republic Storage Systems Company Inc. nka
The Belden Locker Company -- http://www.republicstorage.com/-- an  
employee-owned firm, manufactures industrial and commercial
shelving, storage rack, mezzanine systems and shop equipment.  The
Company filed for Chapter 11 protection on March 14, 2006, (Bankr.
N.D. Ohio Case No. 06-60316).  James Michael Lawniczak, Esq., at
Calfee, Halter & Griswold, LLP, represents the Debtor in its
restructuring efforts.  Dov Frankel, Esq., at Buckley King, LPA,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


RIGEL CORP: Wants More Time to File Schedules & Statements
----------------------------------------------------------
Anthony H. Mason, the Chapter 7 Trustee of Rigel Corporation, asks
the U.S. Bankruptcy Court for the District of Arizona, to extend
until Sept. 23, 2006, its deadline to file its schedules of assets
and liabilities and statements of financial affairs.

Currently, the Debtor is in the process of compiling information
That will be made available to the Chapter 7 Trustee.

Headquartered in Tempe, Arizona, Rigel Corporation, is a Krispy
Kreme franchisee.  The Company also operates Godfather's Pizza,
KFC and Bruegger's Bagels' franchises.  The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case NO.
06-02480).  Michael W. Carmel, Esq., at Michael W. Carmel, Ltd.,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.

The Court converted the Debtor's chapter 11 case to a chapter 7
proceeding on Aug. 15, 2006.  Anthony H. Mason is the Chapter 7
Trustee.


RUSH FINANCIAL: Second Quarter Net Loss Increases to $1.4 Million
-----------------------------------------------------------------
Rush Financial Technologies, Inc., filed its financial statements
for the second quarter ended June 30, 2006, with the Securities
and Exchange Commission on Aug. 21, 2006.

The Company reported a $1,414,737 net loss on $9,676,044 of total
revenues for the second quarter of 2006 compared with an $809,544
net loss on $540,631 of total revenues for the same period in
2005.

At June 30, 2006, the Company's balance sheet showed $216,859,206
in total assets, $187,995,275 in total liabilities, and
$28,863,931 in total shareholders' equity.

The Company had a $2,077,281 shareholders' deficit at Dec. 31,
2005.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?113d

                        Going Concern Doubt

KBA Group LLP in Dallas, Texas, raised substantial doubt about
Rush Financial Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005, and 2004.  The
auditor pointed to the Company's negative working capital, net
losses, negative cash flows from operations, unpaid payroll tax
obligations, past due convertible notes payable, and significant
amount of past due trade payables.

                 About Rush Financial Technologies

Headquartered in Dallas, Texas, Rush Financial Technologies, Inc.,
-- http://www.rushgroup.com/http://www.terranovatrading.com/
http://www.daytrade.comand/and http://www.rushtrade.com/--  
through its subsidiaries, provides various broker/dealer services
in the United States. It develops and operates portfolio
management software products, order management systems, direct-
access trading software applications, and data services center.  
The company offers market data platforms and direct access trading
systems to online investors, semiprofessional traders or
institutional portfolio managers, and traders using its direct
access routing technology.  Rush Financial also provides
securities and direct access online brokerage, trading, and order
routing services to retail customers utilizing its software
products.


SEDGWICK CMS: High Leverage Prompts Moody's to Hold Ratings
-----------------------------------------------------------
Moody's Investors Service affirmed the B1 rating on the
senior secured credit facility of Sedgwick CMS Holdings, Inc.
which is to be increased by $150 million to $505.5 million in
order to finance the acquisition of CompManagement, Inc.  The
modified credit facility will consist of a $445.5 million
senior secured term loan and a $60 million revolving credit
facility.  In the same action, Moody's also assigned a B1
Corporate Family Rating to Sedgwick.  The rating outlook for
Sedgwick is stable.

Sedgwick's rating is based primarily on the company's high
degree of financial leverage, with debt-to-EBITDA on a pro forma
basis of approximately 5x.  Other risks include a low level of
financial flexibility and marginal coverage interest and fixed
charges.  These risks are offset to a degree by Sedgwick's status
as a market leader in the claims management sector, its strong
historic organic revenue growth, its diverse customer base,
product line and geographic spread and its relatively stable
cost structure.

Moody's considers the acquisition of CMI to be consistent
with the company's growth strategy and its current operational
profile.  CMI operates in similar lines of business to Sedgwick,
and the acquisition will add scale and increase market share
in key product lines.  However, a strategy of growth through
acquisitions also creates integration risk in terms of systems,
operations and turnover among employees.

At its current rating level, Moody's expects Sedgwick to maintain
its debt-to-EBITDA ratio between approximately 4x and 5x; free
cash flow-to-debt coverage between 5% and 8%; and interest
coverage above 2x.

The last rating action occurred on January 24, 2006, when Moody's
assigned a B1 rating to Sedgwick's senior secured credit facility.

Sedgwick CMS Holdings, Inc. is the holding company for Sedgwick
Claims Management Services, Inc.  Sedgwick is headquartered in
Memphis, Tennessee, and is a market leader in insurance claims
management services.  For 2005, the company reported total revenue
of $398 million.


SILICON GRAPHICS: Wants to Reject Seven Executory Contracts
-----------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to reject seven Contracts, effective as of
Aug. 25, 2006.

The Debtors are  party to:

    1. a U.S. business travel services agreement with American
       Express Travel Related Services Company, Inc., dated
       March 1, 2003;

    2. an American Express Corporate Travel Online (CTO) Agreement
       with American Express, dated July 6, 2005;

    3. an American Express Interactive Travel Group (ITG) Central
       E-Fulfillment Services Agreement with American Express,
       dated July 6, 2005;

    4. a co-marketing agreement with SpaceWorld Foundation, dated
       November 1, 2005, which contemplated the creation of a
       theatre utilizing certain visual graphics-related products
       of the Debtors;

    5. a consulting agreement with Atle Technology, Inc., dated
       September 29, 2005, under which, the Debtors pay about
       $18,000 per month;

    6. a QualysGuard service user agreement, dated February 3,
       2004, with Qualys, Inc., wherein the Debtors pay Qualys
       around $5,500 per month for network scanning security
       services; and

    7. a master services agreement, dated February 5, 2001, with
       Electronic Data Systems Corporation and EDS Information
       Services L.L.C., pursuant to which the Debtors pay about
       $110,000 per month.

Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that after examining the needs of their businesses, the
Debtors concluded that the seven Contracts and their related
obligations constitute unnecessary expenses.  Continued compliance
with the Contracts' terms would be burdensome and would provide
little benefit to the Debtors and their estates.

Mr. Waisman discloses that rejection of the Contracts will not
prejudice the counterparties.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  The Debtors' exclusive plan-filing
period will expire on Dec. 29, 2006, and its exclusive
solicitation period will expire on Feb. 28, 2007.  (Silicon
Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SILICON GRAPHICS: Court Gives Final Nod on AFCO Financing Pact
--------------------------------------------------------------
On a final basis, Judge Burton R. Lifland of the U.S. Bankruptcy
Court for the Southern District of New York authorizes Silicon
Graphics, Inc., and its debtor-affiliates to:

    -- enter into, and pay all sums due under, the Premium Finance
       Agreement with AFCO Premium Acceptance, Inc.; and

    -- grant AFCO a security interest that extends to all unearned
       insurance premiums, which may become payable under the
       insurance policies, and loss payments that reduce the
       unearned insurance premiums subject to any mortgagee or
       loss payee interests.

In the event the Debtors default on any of the terms of the
Agreement, the automatic stay will be modified solely to the
extent necessary to permit AFCO to exercise its rights, without
prejudice to the Debtors' rights, and without the necessity of
further application to the Court, to cancel the Insurance
Policies financed under the Agreement, Judge Lifland says.

AFCO may receive and apply all unearned premiums returned to the
Debtors upon cancellation of the Insurance Policies to any amounts
owed by the Debtors to AFCO, without further Court order.

If the unearned premiums received by AFCO are insufficient to pay
the Debtors' total amount due, any remaining amount owing to AFCO
will be given administrative expense priority in any distribution
of assets pursuant to the Debtors' Plan of Reorganization.

Judge Lifland further authorizes the Debtors to execute and
deliver the necessary documents and amendments to the Agreement.

The validity of the lien granted to AFCO will not be affected by
any reversal or modification on appeal of the authorization under
the Order and Section 364 of the Bankruptcy Code.  AFCO's rights
pursuant to the Agreement will be preserved and protected and will
not be impaired by, among others, the pendency of the Chapter 11
cases.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  The Debtors' exclusive plan-filing
period will expire on Dec. 29, 2006, and its exclusive
solicitation period will expire on Feb. 28, 2007.  (Silicon
Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SMASHING PICTURES: Section 341(a) Meeting Scheduled on October 3
----------------------------------------------------------------
The U.S. Trustee for Region 16 set a meeting of Smashing Pictures
LLC's creditors at 1:00 p.m., on Oct. 3, 2006, at Room 2610, 725
South Figueroa Street in Los Angeles California.  This is the
first meeting of creditors required under 11 U.S.C. Sec. 341(a) 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 Manhattan Beach, California, Smashing Pictures
LLC, filed for chapter 11 protection on Aug. 28, 2006 (Bankr. C.D.
Calif. Case No. 06-14100).  David A. Tilem, Esq., in Glendale,
California represents the Debtor.  When the Debtor filed for
protection from its creditors, it listed total assets of
$7,000,400 and total debts of $29,740,875.  The Debtor's exclusive
period to file a chapter 11 plan expires on Dec. 26, 2006.


SPOKANE RACEWAY: U.S. Trustee Wants Case Converted to Chapter 7
--------------------------------------------------------------
Ilene J. Lashinsky, the U.S. Trustee for Region 18, asks the U.S.
Bankruptcy Court for the Eastern District of Washington to convert
Spokane Raceway Park, Inc.'s chapter 11 case to a chapter 7
liquidation proceeding or, in the alternative, appoint a chapter
11 trustee.

The Trustee reminds the Bankruptcy Court that Barry Davidson, the
Receiver appointed by the Washington Superior Court of Spokane
County for Washington Motorsports Limited, also filed a motion
seeking to convert the Debtor's case to a chapter 7 liquidation.

Washington Motorsports was formed as a limited partnership to own
and develop real property in Spokane, Washington with the Debtor
as the general partner.

The Trustee tells the Court that the conversion to Chapter 7 or
appointment of a chapter 11 trustee is warranted citing:

    (a) the Debtor has filed inaccurate schedules;

    (b) the existence of secret bank accounts;

    (c) the Debtor's withholding of titles to vehicles from the
        receiver; and

    (d) the Superior Court's determination that the Debtor failed
        to keep adequate books and records.

                       Inaccurate Schedules

The Trustee says that the State Court had ordered the Debtor to
turnover the assets of Washington Motorsports to Mr. Davidson.

The Trustee relates that the Debtor's schedules, when viewed in
light of the ruling, are inaccurate and misleading.  The Debtor
asserts ownership over property it was ordered to turnover.  The
Trustee contends that according to Mr. Davidson, although the
Debtor was ordered to turnover the assets, it did not do so.  The
Trustee further says that the Debtor failed to list the assets as
held by another nor explain the situation it has with Washington
Motorsports in its Schedules of Assets and Liabilities and
Statement of Financial Affairs.

The Trustee says that the Debtor failed in its fiduciary
obligation by failing to disclose material information to the
Bankruptcy Court and its creditors.

The Trustee also discloses that the Debtor lists some $830,000 in
bank accounts without comment or qualification.  Mr. Davidson
however has shown that the bank account belongs to Washington
Motorsports, the Trustee relates.

The Trustee further discloses that the Debtor's list of creditors
does not include the investors who have asserted claims against
the Debtor for the portion of profits due the investors.  Despite
the existing litigation in which the Receiver was appointed, the
investors are not listed as parties with a claim to some sort of
payment.  The very parties that have forced the Receiver's
appointment and the examination of the financial condition of the
raceway are not on the master mailing list.

Further, the Trustee says that the Knaez Joint Venture listed in
the Debtor's Schedule G has already been ruled by the Superior
Court to be in the name of Washington Motorsports.

                       Secret Bank Accounts

The Trustee reveals that the State Court found that Mr. Orville
Moe, the Debtor's manager, diverted some funds from Washington
Motorsports to an unauthorized bank account.  The Trustee contends
that even if the intent was to use the funds to pay the bills of
Washington Motorsports, taking of another's funds can constitute
as fraud and dishonesty.

                  Withholding Titles to Vehicles

The Trustee discloses that one year prior to appointing a Receiver
for Washington Motorsports, the Superior Court had already ordered
the Debtor to turn over the titles to the vehicles.  The Debtor
had to be ordered again to comply with the original ruling.

                   Inadequate Books and Records

Finally, the Trustee tells the Court that when the receiver was
appointed, one of Mr. Davidson's duties was to determine who and
where the investors are.  The Trustee argues that this was because
the Debtor did not keep proper records under state law.  The same
was found true about the financial records of the debtor.  That
failure to meet the minimum statutory record-keeping can be
considered as gross mismanagement.

                       About Spokane Raceway

Headquartered in Spokane, Washington, Spokane Raceway Park Inc.
-- http://www.spokaneracewaypark.com/-- operates a 2.5 mile Grand  
Prix Road Course and racing facility.  The Debtor filed for
chapter 11 protection on Aug. 17, 2006 (Bankr. E. D. Wash. Case
No. 06-01966).  Bruce R. Boyden, Esq., in Spokane, Washington,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it listed total assets of $62,904,383 and total
debts of $2,252,748.


SPOKANE RACEWAY: Mr. Davidson Wants Case Converted to Chapter 7
---------------------------------------------------------------
Barry W. Davidson, General Receiver for Washington Motorsports,
Ltd. asks the U.S. Bankruptcy Court for the Eastern District of
Washington to convert Spokane Raceway Park, Inc.'s chapter 11 case
to a chapter 7 liquidation, or in the alternative, appoint a
chapter 11 trustee.

Washington Motorsports was formed as a limited partnership to own
and develop real property in Spokane, Washington with the Debtor
as the general partner.

Mr. Davidson tells the Bankruptcy Court that the Debtor has no
reasonable likelihood of rehabilitation, and no ability to
effectuate a plan.  Additionally, Mr. Davidson also cites these
reasons as cause for conversion:

    * the Debtor commenced its bankruptcy proceeding in bad faith,
      having with no liquidity from available assets with which to
      reorganize;

    * the Debtor has no employees;

    * the Debtor has little or no cash flow;

    * the Debtor has no income to sustain a plan of
      reorganization;

    * the Debtor has few non-insider unsecured creditors whose
      claims are relatively small;

    * the Debtor's unsuccessful efforts in defending state court
      actions;

    * allegations of wrongdoing the Debtor and its principals; and

    * rulings by Spokane County Superior Court that the Debtor
      breached contractual, statutory, and fiduciary duties to
      Washington Mutual.

Mr. Davidson contends that the Debtor has invoked the jurisdiction
of the Bankruptcy Court for the apparent purpose of interfering
with the administration of the Receivership Action and related
litigation, including:

    (1) the Aug. 25, 2006 presentment hearing on a written order
        on the Receiver's Motion For Order Finding Spokane Raceway
        Park, Inc. And Orville Moe In Contempt Of Court And
        Imposing Remedial Sanctions, And On Amended Motion For
        Clarification And Further Instructions Pursuant To RCW
        7.60.060(1)(g);

    (2) the Aug. 25, 2006 hearing on the Receiver's Second Motion
        For Order Finding Spokane Raceway Park, Inc. And Orville
        Moe In Contempt Of Court And Imposing Remedial Sanctions,
        Including Attorneys Fees;

    (3) the Aug. 25, 2006 hearing on the Receiver's Motion to
        Employ Kennedy Wilson, Inc. As Exclusive Selling Agent For
        Receiver;

    (4) the Aug. 25, 2006 hearing on the Derivative Plaintiffs and
        Receiver's Motion to Realign Washington Mutual as a
        Plaintiff and to Separate and Stay Derivative Claims; and

    (5) the Aug. 25, 2006 hearing on remand of certain causes of
        action in Kalispel v. Spokane Raceway Park Inc. et. al.,
        No. 2:03-cv-00423 EFS, pending in the U.S. District Court
        for the Eastern District of Washington.

Mr. Davidson discloses that it objects to the dismissal of the
Debtor's case saying that conversion to a Chapter 7 liquidation or
appointment of a chapter 11 trustee is in the best interest of the
Debtor's creditors.

Headquartered in Spokane, Washington, Spokane Raceway Park Inc.
-- http://www.spokaneracewaypark.com/-- operates a 2.5 mile Grand  
Prix Road Course and racing facility.  The Debtor filed for
chapter 11 protection on Aug. 17, 2006 (Bankr. E. D. Wash. Case
No. 06-01966).  Bruce R. Boyden, Esq., in Spokane, Washington,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it listed total assets of $62,904,383 and total
debts of $2,252,748.


THOMAS EQUIPMENT: Federal Partners Withdraws Redemption Notice
--------------------------------------------------------------
Thomas Equipment, Inc., received a letter from Federal Partners
L.P. exercising their right of redemption pursuant to the terms of
the Preferred Stock it owns, on Aug. 28, 2006.  On Sept. 1, 2006,
Federal Partners agreed to withdraw its request without further
consideration.

Pursuant to the Certificate of Designation for the Preferred
Stock, upon a redemption of the Preferred Stock the Company is
required to redeem such shares of Preferred Stock in cash for an
amount equal to 110% of the stated value of the Preferred Stock,
plus accrued and unpaid dividends and all other amounts due to the
holder, payable within 10 trading days of the notice of
redemption.

The stated value of the shares of Preferred Stock held by Federal
is $7,400,000, which would require a payment of $8,140,000, plus
accrued and unpaid dividends and all other amounts due to the
holder.  The company has advised Federal that it does not
currently have the resources with which to pay the redemption
amount.

                      About Thomas Equipment

Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. --
http://www.thomas-equipment.com/-- is a technologically advanced  
global manufacturer of a full line of skid steer and mini skid
steer loaders as well as attachments, mobile screening plants and
six models of mini excavators.  The Company distributes its
products through a worldwide network of distributors and
wholesalers.  In addition, the Company's wholly owned subsidiaries
manufacture specialty industrial and construction products, a
complete line of potato harvesting and handling equipment, fluid
power components, pneumatic and hydraulic systems, spiral wound
metal gaskets, and packing material.

At March 31, 2006, Thomas Equipment Inc.'s balance sheet showed a
stockholders' deficit of $31,289,000, compared to a $67,129,000 at
June 30, 2005.


TOWER RECORDS: U.S. Trustee Appoints Seven-Member Creditors Panel
-----------------------------------------------------------------
The U.S. Trustee for Region 3 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in MTS, Inc., dba
Tower Records, and its debtor-affiliates' chapter 11 cases:

    1. The Bank of New York, Trustee
       Attn: Kenny Tang, Vice President
       101 Barclay Street, 8W
       New York, NY 10286
       Tel: (212) 815-2816
       Fax: (212) 815-5131

    2. ALJ Capital II, L.P
       c/o ALJ Capital Management
       Attn: Lawrence B. Gill
       6300 Wilshire Boulevard, Suite 700
       Los Angeles, CA 90048
       Tel: (323) 651-3508
       Fax: (323) 927-1806

    3. Baldwin Place Refi Co., LLC
       c/o JP Morgan Investment Management, Inc.
       Attn: James P. Shanahan, Jr.
       8044 Montgomery Road, Suite 555
       Cincinnati, OH 45236
       Tel: (513) 985-3200
       Fax: (513) 985-3217

    4. Baker & Taylor, Inc.
       Attn: Sarah Moore
       2550 West Tyvola Road Suite 300
       Charlotte, NC 28217
       Tel: (704) 998-3410
       Fax: (704) 998-3317

    5. International Periodical Distributors, Inc.
       Attn: Douglas J. Bates
       27500 Riverview Center Boulevard, Suite 400
       Bonita Springs, FL 34134
       Tel: (239) 949-7688
       Fax: (239) 949-7689

    6. Harmonia Mundi USA
       Attn: Rene Goiffon
       1117 Chestnut Street
       Burbank, CA 91506
       Tel: (818) 333-1515
       Fax: (815) 364-1078

    7. Majap Investments Limited
       Attn: John Kearney
       4 Neidpath Road West
       G46655 Glasgow, Scotland
       Tel: (44) 0141-639-4509
       Fax: (44) 0141-639-4509

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

Documents with the Court does not show who the Committee has
selected to represent it in the Debtors' bankruptcy proceedings.

Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music    
in the U.S., with nearly 100 company-owned music, book, and video
stores.  The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893).  Richards, Layton & Finger, P.A. and O'Melveny
& Myers LLP represent the Debtors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.  The Debtors' exclusive period to file
a chapter 11 plan expires on Dec. 18, 2006.

The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394).  The Court confirmed the plan on March 15, 2004.


TOWER RECORDS: Taps Houlihan Lokey as Investment Banker
-------------------------------------------------------
MTS, Inc., dba Tower Records, and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ Houlihan Lokey Howard & Zukin Capital, Inc., as their
investment banker.

Houlihan Lokey will:

    (a) solicit, coordinate, and evaluate indications of interest
        regarding a sale of the Debtors;

    (b) facilitate due diligence requests by interested parties;

    (c) assist the Debtors in communications and negotiations with
        its constituents, including creditors, vendors,
        shareholders, and other parties-in-interest in connection
        with a sale of the Debtors; and

    (d) conduct and facilitate the auction process to be run
        pursuant to Section 363 of the Bankruptcy Code.

The Debtors tell the Court that it will pay Houlihan Lokey a
transaction fee, upon closing or consummation of a sale, equal to
2% of the aggregate gross consideration of up to $85 million, plus
4% of incremental aggregate gross consideration from $85 million
to $120 million, plus 6% aggregate gross consideration in excess
of $120 million, less $488,000.

To the best of the Debtors' knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music    
in the U.S., with nearly 100 company-owned music, book, and video
stores.  The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893).  Richards, Layton & Finger, P.A. and O'Melveny
& Myers LLP represent the Debtors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.  The Debtors' exclusive period to file
a chapter 11 plan expires on Dec. 18, 2006.

The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394).  The Court confirmed the plan on March 15, 2004.


TOWER RECORDS: Court Gives Nod on Omni Management as Claims Agent
-----------------------------------------------------------------
MTS, Inc., dba Tower Records, and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Omni Management Group, LLC, as their noticing,
claims and balloting agent.

Omni Management is expected to:

    (a) prepare and serve certain required notices in the Debtors'
        chapter 11 cases, including:

         * notice of commencement of the Debtors' chapter 11 cases
           and the initial meeting of creditors under Section
           341(a) of the Bankruptcy Code,

         * notice of the claims bar date,

         * notice of objection to claims,

         * notice of any hearings on a disclosure statement and
           confirmation of a plan of reorganization, and

         * other miscellaneous notices to any entities as the
           Debtors or the Court may deem necessary or appropriate
           for an orderly administration of the Debtors'
           chapter 11 cases;

    (b) within five days after mailing of a particular notice,
        file with the Clerk's Office a certificate or affidavit of
        service that includes a copy of the notice involved, an
        alphabetical list of person to whom the notice was mailed
        and the date of mailing;

    (c) maintain copies of all proofs of claim and proofs of
        interest filed;

    (d) maintain official claims registers by docketing all proofs
        of claims and proofs of interest on claims registers,
        including these information:

         * name and address of the claimant and any agent thereof
           if the proof of claim or proof of interest was filed by
           agent;

         * date received;

         * claim number assigned, and

         * asserted amount and classification of the claim;

    (e) implement necessary security measures to ensure the
        completeness and integrity of the claims registers;

    (f) regularly transmit to the Clerk's Office a copy of the
        claims registers as requested by the Clerk's Office;

    (g) maintain an up-to-date mailing list for all entities that
        have filed a proof of claim or proof of interest, which
        list shall be available upon request of a party in
        interest or the Clerk's Office;

    (h) provide access to the public for examination of copies of
        proofs of claim or interest without charge during regular
        business hours;

    (i) record all transfers of claims pursuant to Bankruptcy Rule
        3001(e) and provide notice of the transfers as required by
        Bankruptcy Rule 3001(e);

    (j) comply with applicable federal, state, municipal and local
        statutes, ordinances, rules, regulations, orders, and
        other requirements;

    (k) provide temporary employees to process claims, as
        necessary; and

    (l) promptly comply with further conditions and requirements
        as may be requested by the Debtor or the Clerk's Office or
        the Court may at any time prescribed.

The Debtor tells the Court that Omni's professionals bill between
$35 to $285 per hour.

To the best of the Debtors knowledge, Omni Management does not
represent any interest adverse to the Debtors or their estates.

Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music    
in the U.S., with nearly 100 company-owned music, book, and video
stores.  The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893).  Richards, Layton & Finger, P.A. and O'Melveny
& Myers LLP represent the Debtors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.  The Debtors' exclusive period to file
a chapter 11 plan expires on Dec. 18, 2006.

The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394).  The Court confirmed the plan on March 15, 2004.


TRANSCAPITAL FINANCIAL: Files Schedules of Assets and Liabilities
-----------------------------------------------------------------
TransCapital Financial Corporation, filed with the U.S. Bankruptcy
Court for the Southern District of Florida, Miami Division, its
schedules of assets and liabilities, disclosing:

     Name of Schedule             Assets           Liabilities
     ----------------             ------           -----------
  A. Real Property               
  B. Personal Property         $109,311,837
  C. Property Claimed
     as Exempt
  D. Creditors Holding
     Secured Claims                                 $1,586,521
  E. Creditors Holding
     Unsecured Priority Claims                         
  F. Creditors Holding                              $2,690,589
     Unsecured Nonpriority
     Claims
                               ------------         ----------
     Total                     $109,311,837         $4,277,110

The Debtor's Schedule of Creditors Holding Secured Claims and
Creditors Holdings Unsecured Nonpriority Claims contain amounts
labeled as unknown relating to Judgment Proceeds in its
litigation.

The Debtor's Schedule of Creditors Holding Unsecured Priority
Claims all contain amounts marked unknown.

A full-text copy of the Debtor's Schedules of Assets and
Liabilities is available for free at:

                http://ResearchArchives.com/t/s?1139

                      Government Litigation

On Aug. 8, 1995, America Capital Corporation, along with
TransCapital, filed a complaint in the U.S. Court of Federal
Claims asserting both breach of contract and takings claims styled
"America Capital Corporation & Transcapital Financial Corporation
v. United States (Case No. 95-523C)."

The America Capital and Transcapital discloses that on May 31,
2005, the Court of Federal Claims issued its Final Opinion and
Order awarding TransCapital $109.309 million in damages.  The
Government filed an appeal with the U.S. Court of Appeals for the
Federal Circuit on July 27, 2005.  Oral argument in the appeal of
the TransCapital Judgment was conducted on June 5, 2006, and the
appeal is still pending.

                   About TransCapital Financial

Based in Miami, Florida, TransCapital Financial Corporation is a
holding and management company that conducted substantially all of
its operations through its wholly-owned subsidiary, Transohio
Savings Bank, FSB.  Transohio Savings' key activities as a savings
and loans institution were banking and lending and its primary
lending activity was the originating and purchasing of loans
secured by mortgages on residential properties.  Transohio Savings
also endeavored to generate residential loan originations through
branch personnel and real estate brokers.  Mobile home and home
improvement loans were generated through dealers and contractors
and additionally, Transohio Savings made construction loans
generated by contractors that usually extended to not more than
one year in length.  America Capital Corporation owns 65.19% of
TransCapital's interest.

TransCapital Financial Corporation filed for chapter 11 protection
on June 19, 2006 (Bankr. S.D. Fla. Case No, 06-12644).  Paul J.
Battista, Esq., at Genovese Joblove & Battista, P.A., represents
the Debtor.  When the Debtor filed for protection from its
creditors, it listed total assets of $109,309,000 and total debts
of $36,094,038.

America Capital also filed for chapter 11 protection on June 19,
2006 (Bankr. S.D. Fla. Case No.  06-12645).  Mindy A. Mora, Esq.,
at Bilzin Sumberg Baena Price & Axelrod LLP, represents American
Capital.


UBONG AKPAN: Case Summary & 8 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Ubong Akpan
        2522 Claremont Drive
        Grand Prairie, TX 75052

Bankruptcy Case No.: 06-42987

Chapter 11 Petition Date: September 5, 2006

Court: Northern District of Texas (Ft. Worth)

Judge: Russell F. Nelms

Debtor's Counsel: Thomas Dwain Powers, Esq.
                  Harris, Finley and Bogle
                  777 Main St., Suite 3600
                  Ft. Worth, TX 76102
                  Tel: (817) 870-8700
                  Fax: (817) 333-1188

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 8 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
First National Bank of Omaha  Credit Card                 $7,873

Washington Mutual P.C.        Credit Card                 $5,400

Bank of America               Credit Card                 $5,367

Beneficial                    Credit Card                 $4,000

Chase                         Credit Card                   $957

Office Max                    Credit Card                   $470

Chevron Texaco                Credit Card                   $415

American Express              Credit Card                     $0


U.S. STEEL: Moody's Reviews Ba1 Senior Unsec. Bond's Rating
-----------------------------------------------------------
Moody's Investors Service placed three North American steel
companies under review for possible upgrade: United States Steel
Corporation's Ba1 corporate family rating, Gerdau Ameristeel
Corporation's Ba2, and Chaparral Steel Company's B1 CFR.  The
reviews for possible upgrade reflect the superior improvement
in financial metrics and overall financial risk reduction
evidenced by these companies, in combination with Moody's evolving
view regarding the expected duration of the current steel industry
upcycle.

This evolving perspective is primarily due to fundamental changes
that appear to have occurred within the industry over the last
several years, primarily as a result of industry consolidation.

Moody's expects to refine its opinion of the medium- and long-term
outlook for the steel industry over the review period, which is
expected to last approximately two months.  Should Moody's
prevailing industry outlook materially change, as is expected,
it will publish an Industry Outlook that summarizes updated
thinking and discusses possible rating implications for the rated
steel company universe.

However, at this stage, Moody's has identified United States
Steel, Gerdau Ameristeel and Chaparral Steel as being the most
likely upgrade candidates.  It is important to note that these
companies are being placed on review reflecting certain common
factors as well as those unique to these three companies.  The
common factors include a combination of the strength in the
overall operating performance as well as management actions taken
to improve their capital structures and financial flexibility.

Moody's review of US Steel, Gerdau Ameristeel and Chaparral
Steel will focus on the sustainability of improved margins and
debt protection measures as well as the likely capital structures
expected to be maintained through what will continue to be a
cyclical business.  In the case of US Steel, the review will also
consider the secured nature of its bank credit facility, which
is a limiting factor in achieving investment grade status.

These ratings were placed under review for possible upgrade:

United States Steel Company

Issuer: Allegheny County Industrial Dev. Auth., PA

On Review for Possible Upgrade:

   * Senior Unsecured Revenue Bonds, Placed on Review for
     Possible Upgrade, currently Ba1

Issuer: United States Steel Corporation

On Review for Possible Upgrade:

   * Corporate Family Rating, Placed on Review for Possible
     Upgrade, currently Ba1

   * Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Upgrade, currently Ba1

Outlook Actions:

   * Outlook, Changed To Rating Under Review From Stable

United States Steel Corporation, headquartered in Pittsburgh,
Pennsylvania, had revenues of $14 billion for the year ended
December 31, 2005.


VARIG S.A.: Brazilian Judge Sued for Stopping Route Redistribution
------------------------------------------------------------------
Brazil's Civil Aviation Agency has filed a formal complaint
against Judge Marcia Cunha Silva de Carvalho of the Commercial
Bankruptcy and Reorganization Court in Rio de Janeiro for stopping
the redistribution of VARIG's former routes and slots to other
airline companies, Investnews (Brazil) reports.

ANAC commenced the action before the Brazilian Justice Council,
Investnews says.  ANAC argued that only the federal justice could
suspend the redistribution of routes and slots.

ANAC began redistributing VARIG's international routes and take-
off and landing slots late in August 2006 despite an injunction
entered by the Brazilian Bankruptcy Court, Bloomberg News relates,
citing Brazilian newspaper O Estado de S. Paulo.  ANAC gave
VARIG's routes to TAM, Gol, OceanAir, and BRA.

The Injunction allows ANAC to act only if VARIG fails to resume
service on its 272 routes within 30 days of receiving a new route
permit, Estado said, according to Bloomberg.  VARIG has not
received new permits.

ANAC was fined BRL1,000,000 -- $467,500 -- by the Brazilian
Bankruptcy Court for violating the injunction, Bloomberg relates,
citing another Brazilian newspaper Folha de S. Paulo.  Judge Cunha
lifted the fine after ANAC agreed to stop the redistribution.

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


VARIG S.A.: ACE Aviation Mulls 10% Equity Purchase
--------------------------------------------------
ACE Aviation Holdings, parent of Air Canada, is in discussions to
acquire a 10% equity interest in VARIG S.A., Dow Jones reports,
citing Brazilian newspaper O Estado de S. Paulo.

ACE, however, refused to comment on the report.  A spokeswoman for
ACE said the company "looks at a number of investment
opportunities on an ongoing basis but we do not comment on
specifics," according to Flightglobal.com.

As previously reported, Volo do Brasil acquired the operating arm
of VARIG at an auction in July 2006.  Volo pledged to invest more
than $500,000,000 to pay VARIG's debt and keep the airline
flying.

O Estado said a draft deal between the parties provides for the
transfer of certain of Air Canada's Boeing 767 fleet and at least
six orders for Embraer E190 planes to VARIG, Dow Jones relates.  
A spokesperson for Volo told Dow Jones that Air Canada has no
stake in VARIG at present.

According to Dow Jones, Estado said Air Canada's involvement
depends on the approval of the sale of VARIG's operating unit to
Volo do Brasil.  Estado noted that the National Civil Aviation
Agency in Brazil was expected to rule on the sale on August 25,
2006.  Estado further relates that Air Canada's acquisition of a
stake in VARIG still needs sanction from ANAC.  Brazilian law
prohibits foreign companies from owning more than 20% equity
stake in local airlines.

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


VARIG S.A.: Port Authority Wants to Collect Flight Fees
-------------------------------------------------------
The Port Authority of New York and New Jersey asks the Honorable
Robert D. Drain of the U.S. Bankruptcy Court for the Southern
District of New York to compel VARIG, S.A., and its two foreign
debtor-affiliates to pay postpetition flight fees and other fees
totaling $207,500 as an administrative expense pursuant to
Sections 105, 503 and 507 of the Bankruptcy Code.

The Port Authority operates four airports in the New York-New
Jersey metropolitan area:

   * John F. Kennedy International Airport,
   * LaGuardia Airport,
   * Newark Liberty International Airport, and
   * Teterboro Airport

VARIG is a party to a Flight Fees Agreement, dated Jan. 1, 2004,
with the Port Authority for flights that take off from the Kennedy
Airport.

VARIG agreed to submit an activity report, setting forth, inter
alia, the number of flights it had taken off at the Kennedy
Airport each month.  VARIG also agreed to pay a flight fee to the
Port Authority.  The activity report is due on the 10th day of the
month following the month the flights occurred.  The payment of
the flight fees is due to the Port Authority 10 days after the
activity report is due.

VARIG submitted its activity report for May, June and July 2006.  
According to the activity report, VARIG owed these flight fees to
the Port Authority:

                 Month             Amount Due
                 -----             ----------
                 May 2006            $63,752
                 June 2006           $49,614
                 July 2006           $35,359

VARIG also owed these fees to the Port Authority:

        Month       Description                Amount Due
        -----       -----------                ----------
        July 2006   Itinerant aircraft fees      $58,368
        July 2006   Supplemental Flight Fee         $250
        May 2006    Monthly parking fee              $50
        June 2006   Monthly parking fee              $50
        June 2006   Lost card fee                    $50
        June 2006   Interterminal vehicle
                      connection service charge       $6

In an e-mail message dated August 25, 2006, the Port Authority
asked VARIG pay the outstanding amounts.  To date, VARIG has not
paid to the Port Authority any of the flight fees, parking fees,
and charges it incurred at the Kennedy Airport between May and
July 2006.

The Port Authority is entitled to an administrative expense claim
because all the fees and charges accrued postpetition, Milton H.
Pachter, Esq., tells Judge Drain.

The Port Authority has no obligation to continue to allow VARIG to
fly in and out of the Kennedy Airport pending the assumption or
rejection of their Agreement unless VARIG pays for its
obligations, Mr. Milton contends, citing In re NLRB v. Bildisco
and Bildisco, 465 U.S. 513, 531, 104 S. Ct. 1188, 1199 (1984).

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


VASOMEDICAL INC: Miller Ellin Raises Going Concern Doubt
--------------------------------------------------------
Miller Ellin & Company, LLP, expressed substantial doubt about
Vasomedical, Inc.'s ability to continue as a going concern after
auditing the Company's financial statements for the fiscal year
ended May 31, 2006.  The auditing firm pointed to the Company's
recurring losses from operations and a net capital deficiency.

The Company recorded a net loss attributable to common
shareholders of $504,000 during the three months ended
May 31, 2006, compared to a loss of $1,001,000 in the same period
in fiscal 2005.

Vasomedical generated $1.9 million of total revenues in the fourth
quarter of fiscal 2006, compared with $3.8 million of total
revenues in the fourth quarter of fiscal 2005.

Revenues from equipment sales declined approximately 72% to
$822,000 in the fourth quarter of fiscal 2006 compared to
$2,888,000 for the same period in the previous year.  Equipment
rentals and services were $1,063,000 in the three months ended
May 31, 2006, up approximately 11% from $960,000 for the same
period in the previous year.  

For the fiscal year 2006, total revenues were $10.9 million,
compared with $15.1 million for the fiscal year 2005.  The net
loss attributable to common shareholders for the fiscal year ended
May 31, 2006, was $11.6 million, which included a non-recurring
income tax expense for $7.1 million compared with a net loss of
$5.6 million for the fiscal year ended May 31, 2005.

As of May 31, 2006, the Company had cash, cash equivalents and
certificates of deposit balances of $2.9 million compared with
$2.7 million as of May 31, 2005 and working capital as of
May 31, 2006 of $2.9 million as compared with $3.9 million as of
May 31, 2005.

A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?1142

Thomas Glover, president and chief executive officer of
Vasomedical, commented, "EECP(R) therapy has been proven to be an
effective, safe, noninvasive, low cost therapy for ischemic heart
disease, however the therapy continues to face significant
challenges obtaining broader adoption in the cardiology community
due in large part to reimbursement policies that limit the patient
population and restrict availability of the therapy.  We are
committed to working diligently with leading physicians in the
cardiology community to obtain a broader understanding of the
therapy's many benefits and with CMS to expand reimbursement
coverage for patients not already covered under the existing
guidelines."

Mr. Glover continued, "In order to preserve cash we have found it
necessary to reduce expenditures in all areas including clinical
research, product development, as well as sales and marketing,  
and we are continuing to restructure our costs to be better
aligned with potential near-term sales.  These cuts, while
necessary,  have delayed our ability to advance the adoption of
EECP therapy in the medical market place."

                          About Vasomedical

Vasomedical, Inc. -- http://www.vasomedical.com/-- is primarily  
engaged in designing, manufacturing, marketing and supporting EECP
external counter-pulsation systems based on the Company's unique
proprietary technology.  EECP therapy is a noninvasive, outpatient
therapy for the treatment of diseases of the cardiovascular system
currently indicated for use in cases of stable or unstable angina,
congestive heart failure, acute myocardial infarction and   
cardiogenic shock.  The Company provides hospitals, clinics and
private practices with EECP equipment, treatment guidance and a
staff training and equipment maintenance program designed to
provide optimal patient outcomes.


VESTA INSURANCE: Files List of Six Largest Equity Holders
---------------------------------------------------------
Vesta Insurance Group Inc. disclosed that it has six principal
stockholders as of Dec. 31, 2005, at which time the company had
37,101,129 shares of common stock outstanding:

    Name and Address                      No. of Shares   Percent
    ----------------                      -------------   -------
    Jana Partners, LLC                        3,583,588     9.7%
    201 Post Street, Suite 1000
    San Francisco, California 94108

    Newcastle Partners, LP                    3,050,700     8.3%
    300 Crescent Court, Suite 1110
    Dallas, Texas 75201

    Becker Capital Management                 2,898,400     7.9%
    1211 SW Fifth Avenue, Suite 2185
    Portland, Oregon 97204

    Alabama Reassurance Company               2,767,338     7.5%
    P.O. Box 020152
    Tuscaloosa, Alabama 35402

    Dimensional Fund Advisors, Inc.           2,692,510     7.3%
    1299 Ocean Avenue
    Santa Monica, California 90401

    Heartland Advisors, Inc.                  2,512,800     6.8%
    789 North Water Street
    Milwaukee, Wisconsin 53202

                      About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517).  Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.  
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors.  In its schedules of
assets and liabilities, Vesta listed $14,919,938 in total assets
and $214,278,847 in total liabilities.

J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers.  The Company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts.   In its
schedules of assets and liabilities, Gaines listed $19,818,094 in
total assets and $16,046,237 in total liabilities.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered the Order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.  (Vesta
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


VESTA INSURANCE: Court Approves Funds Transfer to Gaines
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
authorized Vesta Insurance Group Inc. to transfer funds to J.
Gordon Gaines Inc. for the purpose of funding an amount equal
to the 50% of Executive Payroll due on Aug. 18, 2006, and
Sept. 1, 2006.

The Hon. Thomas B. Bennett defers consideration of the request to
fund 100% of the Executive Payroll commencing September 2, 2006.

As reported in the Troubled Company Reporter on Sept. 4, 2006,
Vesta asked Judge Bennett of the U.S. Bankruptcy Court for the
Northern District of Alabama for authority to transfer funds to
Gaines for the purpose of:

   (a) funding an amount equal to 50% of the Executive Payroll
       due on August 18, 2006, and Sept. 1, 2006; and

   (b) funding 100% of the Executive Payroll, with the exception
       of the payroll obligation relating to Norman Gayle who
       does not currently hold an executive position with VIG,
       commencing on September 2, 2006, and continuing thereafter
       for so long as the Executives are employed by VIG.

As of Dec. 31, 2005, J. Gordon Gaines, Inc., had more than
300 employees, the majority of which were located in Birmingham,
Alabama.  These employees included the executives who held these
positions with Vesta Insurance Group, Inc., and Gaines:

   Name                      VIG               Gaines
   ----                      ---               ------
   Norman Gayle              Director          Chairman/President
                                               Director

   David W. Lacefield        President/CEO     Senior VP
                             Director

   John Hines                Senior VP, CFO    Senior VP, CFO
                             and Treasurer     and Treasurer

   Donald Thornton           Senior VP,        Senior VP,
                             General Counsel   General Counsel
                             and Secretary     and Secretary

   John McCullough           VP, Associate     VP, Associate
                             Counsel and       Counsel, Assistant
                             Assistant         Secretary and
                             Secretary         former Director

   Edwin M. Meadows          VP Controller
                             and Chief
                             Accounting
                             Officer

Payment of payroll to these Executives was routinely accomplished
through the Gaines Payroll.

Pursuant to a management agreement, Gaines provided the personnel
and infrastructure support for Vesta Fire Insurance Corporation,
Texas Select Lloyds Insurance Company, Vesta Insurance
Corporation, Shelby Casualty Company, The Shelby Insurance
Company, The Hawaiian Insurance & Guaranty Company, Ltd., Florida
Select Insurance Company, and Select Insurance Services, Inc., in
the ordinary course of their businesses.  Gaines also provided an
array of management and support services to VIG.

Prime Tempus, Inc., the Special Deputy Receiver for the Texas
Insurance Subsidiaries, purported to terminate the Management
Agreement on behalf of the Texas Commissioner of Insurance, as
rehabilitator and liquidator for the Texas Receivership Entities.

C. Edward Dobbs, Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in
Atlanta, Georgia, relates that at this time, the effectiveness of
the termination remains a disputed issue.  Notwithstanding the
asserted termination, the SDR, acting on behalf of the Texas
Commissioner and purporting to act at the request of the
Insurance Commissioner of the State of Hawaii, as rehabilitator
of The Hawaiian Insurance & Guaranty Company, asked Gaines to
continue, for a limited period of time, to provide services of
essentially the same type and nature previously provided under
the Management Agreement in exchange for compensation generally
consistent with that set forth in the Management Agreement.

According to Mr. Dobbs, at the close of business on August 4,
2006, without assurances of a source of revenue from which to pay
its employees, Gaines was forced to terminate substantially all
of its employees based in locations outside of Birmingham,
Alabama, and a substantial number of its workforce in Birmingham,
Alabama, leaving Gaines with approximately 190 employees to
service the needs of any area of the Vesta Insurance Group.

Gaines elected to retain some 190 of its employees, Mr. Dobbs
says, based on representations of the SDR that it would be
prepared to fund the payroll and infrastructure expenses for
those employees pending execution of a definitive agreement.

Since Aug. 4, 2006, Gaines and the SDR have engaged in
negotiations for the terms and conditions on which Gaines would
continue to provide management services to the SDR and the Hawaii
Commissioner.  These discussions culminated in a "Client Services
Agreement."

Gaines, the SDR, and the Hawaiian Commissioner have entered into
the Client Services Agreement, which provides essentially for the
same type of services, but on a reduced scale, and essentially
the same form of payment for those services and infrastructure,
as existed under the Management Agreement.  Mr. Dobbs relates
that the SDR has agreed to fund in advance of any approval the
amounts to which the SDR committed under the proposed Client
Services Agreement, including amounts relating to the August 18,
2006, payroll.

Under the Client Services Agreement, the SDR is funding an amount
relating to the Executives equal to 50% of the Executive Payroll
for the period of Aug. 7, 2006, through Sept. 1, 2006.  The
SDR does not currently propose to pay Gaines an amount
attributable to the Executives for any time after Sept. 1, 2006.

With regard to the Aug. 18, 2006, payroll, the SDR's funding
leaves unpaid a $37,052 balance for the Executives.

VIG and Gaines anticipate that the shortfall for the payroll due
on Sept. 1, 2006, will be approximately the same, Mr. Dobbs
says.

As of the end of August 2006, the Executive ranks will be reduced
by resignations of John Hines and John McCullough.  Mr. Dobbs
tells the Court that the Executive ranks may also be further
reduced during this period by additional resignations or
terminations.

Commencing on Sept. 2, 2006, and continuing thereafter for so
long as the Executives are employed by VIG or Gaines, the
shortfall will be equal to the entire amount of the Executive
Payroll absent a change in the position of the SDR or other
developments, Mr. Dobbs says.

"Absent the VIG Payroll Funding, neither VIG nor Gaines will be
able to retain key members of the management team that are
critical to the operation of VIG and Gaines.  Such individuals
have considerable institutional knowledge regarding VIG which is
irreplaceable and central to the performance of VIG's duties
under the Bankruptcy Code and to any prospect of a successful
outcome in [the Debtor's] bankruptcy case," Mr. Dobbs says.

                      About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517).  Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.  
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors.  In its schedules of
assets and liabilities, Vesta listed $14,919,938 in total assets
and $214,278,847 in total liabilities.

J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers.  The Company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts.   In its
schedules of assets and liabilities, Gaines listed $19,818,094 in
total assets and $16,046,237 in total liabilities.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered the Order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.  (Vesta
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


VOLT INFORMATION: Amends Agreement to Extend Expiration Date
------------------------------------------------------------
Volt Information Sciences, Inc., Volt Funding Corp. and Three
Rivers Funding Corporation amended their Receivables Purchase
Agreement, to extend the expiration date from April 2, 2008 to
April 2, 2009.

                The Receivables Purchase Agreement

The Company entered into a $100 million receivable securitization
program, under which, receivables related to its staffing
solutions business and of its subsidiaries are sold from time to
time by the Company to Volt Funding Corp., a wholly owned special
purpose subsidiary of the Company.  Volt Funding, in turn, sells
to Three Rivers Funding Corporation, an asset backed commercial
paper conduit sponsored by Mellon Bank, N.A., an undivided
percentage ownership interest in the pool of receivables Volt
Funding acquires from the Company.  The Company retains the
servicing responsibility for the accounts receivable.

The Securitization Program is designed to enable receivables sold
by the Company to Volt Funding to constitute true sales of those
receivables.  As a result, the receivables are available to
satisfy Volt Funding's own obligations to its own creditors before
being available, through the Company's residual equity interest in
Volt Funding, to satisfy the Company's creditors.  TRFCO has no
recourse to the Company for any of the sold receivables.

Volt Information Sciences, Inc. -- http://www.volt.com/--  
provides national Staffing Services and Telecommunications and
Information Solutions to Fortune 100 customers.  Operating through
a network of over 300 Volt Services Group branch offices, the
Staffing Services segment fulfills IT and other technical,
commercial and industrial placement requirements of its customers,
on both a temporary and permanent basis.  The Telecommunications
and Information Solutions businesses, which include the
Telecommunications Services, Computer Systems and Telephone
Directory segments, provide complete telephone directory
production and directory publishing; a full spectrum of
telecommunications construction, installation and engineering
services; and advanced information and operator services systems
for telephone companies.

                           *     *     *

As reported in the Troubled Company Reporter on July 4, 2006 Fitch
Ratings upgraded Volt Information Sciences' Issuer Default Rating
to 'BB' from 'BB-', and has affirmed its senior secured rating at
'BBB-'.  The Rating Outlook is Stable.


WARD PRODUCTS: Wants to Hire Jaffe Raitt as Local Counsel
---------------------------------------------------------
Ward Products, L.L.C., asks the U.S. Bankruptcy Court for the
Eastern District of Michigan for permission to employ Jaffe,
Raitt, Heuer & Weiss, P.C., as its local counsel, nunc pro tunc to
Aug. 4, 2006.

Jaffe Raitt is expected to assist McGuireWoods, L.L.P., the
Debtor's primary bankruptcy counsel, and perform all necessary
legal tasks on the Debtor's chapter 11 case.

The Debtor tells the Court that the Firm has received a $25,000
retainer.

Documents filed with the Court do not disclose how much Jaffe
Raitt will be paid.

The Firm assures the Court it does not hold any interest adverse
to the Debtor's estate and is a "disinterested person" as that
term defined in Section 101(14) of the Bankruptcy Code.

The Firm can be reached at:

     Jaffe, Raitt, Heuer & Weiss, P.C.
     27777 Franklin Road
     Suite 2500
     Southfield, MI 48034
     Tel: (248) 351-3000
     Fax: (248) 351-3082
     http://www.jaffelaw.com

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.


WCN ENTERPRISES: Engages Keen Realty as Real Estate Consultant
--------------------------------------------------------------
WCN Enterprises, Inc., has retained Keen Realty, LLC, to market
and sell their former Quality Inn and Suites located in San
Angelo, Texas.

The hotel consists of 51,150+/- sq. ft. with 105 rooms situated on
5.19+/- acres in the Historic Concho Street District of San
Angelo, Texas.  The property's amenities include a lounge, indoor
pool with Jacuzzi, sauna, indoor miniature golf, game room, high
speed Internet, a business center, meeting facilities, and bus
parking.

Located in the historic downtown area of San Angelo, Texas, the
former Quality Inn & Suites is located within 5 miles of all San
Angelo's attractions.  The hotel overlooks the Concho River and is
within walking distance to both the Convention Center, shops, and
dining.

"Interested parties are encouraged to act immediately," said
Matthew Bordwin, Keen Realty's Executive Vice President.  "This
former Quality Inn and Suites represents an excellent opportunity
to enter into the market with an already existing facility.  The
property's amenities and its proximity to downtown San Angelo are
unmatched.  I anticipate there to be a tremendous amount of
interest in this property."

The Firm can be contacted at:

     Matthew Bordwin
     EVP
     Keen Realty, LLC
     60 Cutter Mill Road
     Suite 214, 11021
     Great Neck, New York
     Tel: (516) 482-2700 ext. 226
     Fax: (516) 482-5764

Headquartered in Dallas, Texas, WCN Enterprises, Inc., aka Quality
Inn & Suites and Clarion Inn & Suites operates a hotel.  The
Company filed for chapter 11 protection on July 1, 2006 (Bankr.
N.D. Tex. Case No. 06-32628).  Robert A. Simon, Esq., at Barlow
Garsek & Simon, LLP, in Fort Worth, Texas, represents the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $1 million and $10 million.


WESTON NURSERIES: First Pioneer Sets September 7 Foreclosure Sale
-----------------------------------------------------------------
First Pioneer Farm Credit of Bedford plans a mortgage foreclosure
sale at 11 a.m., on Sept. 27, 2006, to auction off over 350 acres
of Weston Nurseries, Inc.'s property after the Debtor failed to
pay off its $7 million debt, Milford Daily News reports.

The farmland will be divided into three parcels -- ranging from 90
to 135 acres each -- and sold off separately, according to the
news.  Weston's CEO Gary Furst said the Company hopes to raise
enough money without selling off the entire 350-acre section.

Daily News staff writer John Hilliard says that in July, about 655
acres of the 920-acre property were up for sale at a bankruptcy
auction.  However, the auction failed to attract bidders primarily
because of certain purchase requirements such as minimum bids and
the sale of the land as a single piece.

Mr. Furst told the Daily News that company officials are
considering more than four proposals from private developers, who
have plans for both housing and commercial uses on the Nurseries'
property.

Mr. Furst added that the Company is also in talks with leaders
from the town of Hopkinton.  The town is funding a $200,000 master
plan for East Hopkinton and any sale of the Nurseries' land should
not affect it, selectmen Chairwoman Muriel Kramer said.

According to State law, the town has the right of first refusal on
any farmland, but that right does not apply to a mortgage
foreclosure sale.  The town must receive 90 days notice before the
sale.

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.


WHITING PETROLEUM: Acquires 15% Working Interest in a Utah Acreage
------------------------------------------------------------------
Whiting Petroleum Corporation has acquired, for an undisclosed
price, a 15% working interest in approximately 170,000 leased
acres in the central Utah Hingeline play from a privately held
independent oil company.

The acquired acreage is on trend with, but not a part of, the
Covenant field, which was discovered in 2004.  Covenant field
currently produces approximately 7,000 barrels of oil per day from
10 wells.

The seller of the acreage retained a 20% working interest and a
third-party oil company owns a 65% working interest in the acreage
and will be operator of the majority of the acreage.  As part of
the transaction, the operator will pay 100% of the Company's total
drilling and completion cost for the first three wells in the
project.  The initial wells are located on seismically defined
structures that are on trend with Covenant field.

Drilling operations on the first of the three planned wells are
expected to begin in the fourth quarter of 2006.

James J. Volker, president and chief executive officer, commented,
"This acreage acquisition and the carried working interest in the
initial three wells provides Whiting exposure to an exploration
play that we believe holds large reserve potential.  Multiple
structurally based drilling prospects have been identified on the
acreage."

Based in Denver, Colorado, Whiting Petroleum Corporation
(NYSE: WLL) -- http://www.whiting.com/-- is a holding company  
engaged in oil and natural gas acquisition, exploitation,
exploration and production activities primarily in the Rocky
Mountains, Permian Basin, Gulf Coast, Michigan and Mid-Continent
regions of the United States.

                           *     *     *

As reported on the Troubled Company Reporter on May 11, 2006,
Standard & Poor's Rating Services placed its 'B+' corporate credit
rating on oil and gas exploration and production company Whiting
Petroleum Corp. on CreditWatch with positive implications.  The
ratings action follows the recent change in Standard & Poor's oil
pricing assumptions.  In 2006, 2007, and 2008, S&P raised its   
pricing assumptions for West Texas Intermediate oil by $10 to $60,
$50 and $40 per barrel, respectively.  These changes positively
affect the calculation of Whiting's credit measures for these
years under our pricing assumptions and could, on further
examination, be sufficient to warrant upgrading the corporate
credit rating by one notch.


XTREME COMPANIES: Appoints Jack Clark as New COO
------------------------------------------------
Xtreme Companies, Inc., has appointed former Fountain Powerboat
Industries COO, Jack Clark as new Chief Operating Officer.

The Company disclosed that Mr. Clark served as Fountain's chief
operating officer from 2002 to 2005.  Fountain is one of the
leading manufacturers of high performance powerboats in the world.

Laurie Phillips, chief executive officer, stated, "Having worked
informally with Jack as we restructured our organization over the
past several months, it quickly became clear that we were a
perfect match for one another.  His in-depth knowledge,
established relationships and years of experience as a senior
executive in the boating industry fit seamlessly with our mission
and new direction.  She added, "One of our recently stated primary
initiatives was to begin assembling some of the best talent in the
industry. We couldn't have gotten off to a better start."

Mr. Clark commented, "Working with the Xtreme team over the past
few months has been exciting.  The Company is committed to
building a quality product, distribution network, and organization
that delivers value.  I believe that the new boats that are being
engineered and tooled now, will move the Company to a new level of
customer satisfaction in performance, sales, and service. With
this being the stated and demonstrated goals of the organization,
I am pleased to join the Xtreme management team."

The Company further disclosed that, prior to joining the Company,
Mr. Clark was recently a consultant to the Sea Swirl Boats
Division of Genmar, one of the largest boat manufacturers in the
world.  In addition to his tenure at Fountain, his 40 years of
experience in the boating industry included tenure as GM/VP Donzi
Marine, VP Operations Glaston-Carlson Boats and start-up Plant
Manager with Bayliner Marine Corp.

Headquartered in Washington, Missouri, Xtreme Companies, Inc.,
(OTC Bulletin Board: XTME) -- http://www.xtremecos.com/--  
manufactures and markets mission-specific Fire-Rescue and Patrol
boats used in emergency, surveillance and defense deployments.  
The boats have been marketed and sold directly to fire and police
departments, the U.S. Military and coastal port authorities
throughout the United States.

The Company's balance sheet at June 30, 2006 showed a total
shareholders' deficit of $9.7 million.


* Law Firms Blank Rome and Healy & Baillie Will Merge
-----------------------------------------------------
Blank Rome LLP and Healy & Baillie, LLP will combine their
practices as of Oct. 1, 2006.  Healy & Baillie is ranked as one of
the leading maritime law firms in the United States with a notable
international practice and office in Hong Kong.  The combined firm
will house the nation's largest Maritime practice.

"We are thrilled to welcome Healy & Baillie to the Blank Rome
family.  Their depth of experience in international, maritime and
admiralty law is unmatched and will be an excellent complement to
our existing practice," said Carl M. Buchholz, Managing Partner
and Chief Executive Officer of Blank Rome.  "This combination
clearly strengthens our national platform and international
presence by positioning Blank Rome in Hong Kong, which is well
aligned with our overall strategic growth strategy."

Founded in 1948, Healy & Baillie provides legal services to the
maritime industry in New York, Hong Kong, New Jersey, and
Connecticut.  The Firm is consistently listed as one of the
leading maritime law firms in the United States by Chambers Global
and US editions of "Leading Lawyers."

"Blank Rome is a forward-thinking and results-driven firm with a
growing national and international platform, which made it the
perfect choice for us," said John D. Kimball, Chairman of Healy &
Baillie, LLP and 2006 recipient of the Chambers Award for
Excellence as the leading lawyer in shipping litigation in the
United States.  "We are confident that our combination will
provide substantial benefits for our clients.  The strengths of
Healy & Baillie's admiralty expertise and international footprint
mesh ideally with the regulatory, legislative and environmental
practices of Blank Rome.  This is a combination in which the whole
will be far greater than the sum of the two parts."

This combination follows Blank Rome's recently announced strategic
alliance with Brussels-based public affairs and public relations
agency Interel.  This partnership was designed to link Blank Rome
and Interel core competencies to provide a seamless US-EU legal,
public affairs, government relations, and strategic communications
service offering to companies and organizations who are
increasingly impacted by decisions taken on both sides of the
Atlantic.

                    About Healy & Baillie, LLP

Healy & Baillie is an international law firm providing legal
services in New York, Hong Kong, New Jersey and Connecticut.  The
firm was formed in 1948, and currently has 28 attorneys,
specializing in both maritime and general international commercial
law.  Healy & Baillie has a long history of representing
international clients in the United States and in assisting
domestic clients in protecting their interests abroad.  It is the
only U.S.- based maritime law firm with a local license to
practice Hong Kong law.  The Firm's Hong Kong office offers a
full-service maritime practice in that jurisdiction and is also
well-positioned to assist clients in China and throughout Asia and
Oceania.

                       About Blank Rome LLP

Blank Rome LLP -- http://www.blankrome.com/-- is one of America's  
largest law firms.  With nearly 500 attorneys serving clients
across the United States, Blank Rome is a national law firm
representing businesses and organizations ranging from Fortune 500
companies to start-up entities.  Blank Rome helps its clients in
all aspects of their businesses.  The firm's practices cover areas
including business tax; commercial and corporate litigation;
employment benefits and labor; financial services; bankruptcy and
financial restructuring; government relations; health law;
intellectual property; maritime, international trade and
procurement; matrimonial; privately held and emerging companies;
product liability; public companies and capital formation; public
finance; real estate; trusts and estates; and white collar,
internal and government investigations. Blank Rome also represents
pro bono clients in a wide variety of cases and matters.


* BOOK REVIEW: The Turnaround Manager's Handbook
------------------------------------------------
Author:     Richard S. Sloma
Publisher:  Beard Books
Paperback:  244 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122409/internetbankrupt

In the introduction to this book, the author suggests that an
accurate subtitle could be "How to Become a Successful Company
Doctor."  Using everyday medical analogies throughout, he targets
"corporate general practitioners" charged with the fiscal health
of their companies.  

As with many human diseases, early detection of turnaround
situations is critical.  The author describes turnaround
situations as a continuum differentiated by length of time to
disaster: "Cash Crunch," "Cash Shortfall," "Quantity of Profit,"
and "Quality of Profit."  

The book centers on 13 steps to a successful turnaround.  The
steps are presented in a flowchart form that relates one to
another.  Extensive data collection and analysis are required,
including the quantification of 28 symptoms, the use of 48
diagnostic and analytical tools, and up to 31 remedial actions.  
(In case the reader balks at the effort called for, the author
points out that companies that collect and analyze such data on a
regular basis generally don't find themselves in a turnaround
situation to begin with!)

The first step is to determine which of 28 symptoms are plaguing
the company.  The symptoms generally pertain to manufacturing
firms, but can be applied to service or retail companies as well.  
Most of the symptoms should be familiar to the reader, but the
author lays them out systematically, and relates them to the
analytical tools and remedial actions found in subsequent
chapters.  

The first seven involve the inability to make various payments,
from debt service to purchase commitments.  Others include
excessive debt/equity ratio; eroding gross margin; increasing unit
overhead expenses; decreasing product line profitability;
decreasing unit sales; and decreasing customer profitability.

Step 2 employs 48 diagnostic and analytical tools to derive
inferences from the symptom data and to judge the effectiveness of
any proposed remedy.  The author begins by saying "...if the only
tool you have is a hammer, you will view every problem only as a
nail!"  He then proceeds to lay out all 48 tools in his medical
bag, which he sorts into two kinds, macro- and micro-tools.  

Macro-tools require data from several symptoms or assess and
evaluate more than a single symptom, whereas micro-tools more
general-purpose in function.

The 12 macro-tools run from "The Art of Approximation" to
"Forward-Aged Margin Dollar Content in Order Backlog."   

The 36 micro-tools include "Product Line Gross Margin Percent
Profitability," "Finance/Administration People-Related Expenses As
Percent Of Sales," and "Cumulative Gross $ by Region."

Next, managers are directed to 31 possible remedial actions,
categorized by the four-stage turnaround continuum described
above.  The first six actions are to be considered at the Cash
Crunch stage, and range from a fire sale of inventory to factoring
accounts receivable.  

The next six deals with reducing people-related expenses followed
by 13 actions aimed at reducing product- and plant-related
expenses.  The subsequent five actions include eliminating
unprofitable products, customers, channels, regions, and reps.  

Finally, managers are advised on increasing sales and improving
gross margin by cost reduction in various ways.

The remaining steps involve devising the actual turnaround plan,
ensuring management and employee ownership of the plan, and
implementing and monitoring the plan.  

The advice is comprehensive, sensible and encouraging, but doesn't
stoop to clich, or empty motivational babble.  The author has
clearly operated on patients before and his therapeutics have no
doubt restored many a firm's financial health.

                             *********

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.

                    *** End of Transmission ***