TCR_Public/060922.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 22, 2006, Vol. 10, No. 226

                             Headlines

AMERICAN ENTERTAINMENT: S&P Rates Proposed $250 Mil. Notes at B-
AMERICAN ENTERTAINMENT: Moody's Junks Proposed $250MM Senior Notes
AMERICAN TOWER: Restating Annual and Quarterly Financial Reports
ACORN PARTNERS: Case Summary & 20 Largest Unsecured Creditors
ARAMARK CORP: Moody's Lowers $250MM Senior Notes to B2 from Baa3

ASARCO LLC: CBRY Stockholders Pact Effective as of August 29
ASARCO LLC: Wants Srackangast as Special Environmental Auditor
ASHLAND INC: CFO Provides Quarter Ended September 30 Outlook
ATLANTIS PLASTICS: Moody's Affirms Caa1 Rating on $75MM Jr. Loan
AVIALL INC: S&P Withdraws BB Corp. Credit Rating & Removes Watch

AXCESS INT'L: Incurs $965,812 Net Loss in Quarter Ended June 30
BAINBRIDGE REALTY: Voluntary Chapter 11 Case Summary
BATTERSON PARK: Moody's Pares $16.5MM Cl. B Notes to Caa3 from B3
BLEECKER STRUCTURED: Moody's Puts Junked $40 Mil. Notes on Watch
BOOKHAM INC: Sells UK Assembly and Test Facility for $9.5 Million

BIOFORCE NANOSCIENCES: Losses Continue in 2006 Second Quarter
CALPINE CORP: Can Sell 35% Russell Stake to GE Energy for $44MM
CAPRIUS INC: Incurs $687,424 Net Loss in Quarter Ended June 30
CEP HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
CG MULTIFAMILY: Wants Court to Dismiss Chapter 11 Proceeding

COMPLETE RETREATS: Administaff Wants Debtors Decision on Two Pacts
COMPLETE RETREATS: Bingham & Kramer Files Creditors Update Report
CONDO 53: Case Summary & Largest Unsecured Creditor
CONTINENTAL AIRLINES: Defends DOT China Route Application
DATALOGIC INT'L: Subsidiary Determines Source of $550,000 Deposits

DELPHI CORP: Computer Patent Seeks Decision on Services Contract
DORAL FINANCIAL: Agrees to Pay $25 Mil. Civil Penalty to the SEC
DURA AUTOMOTIVE: Moody's Pares Junked Ratings on $856MM Sr. Notes
DYNEGY INC: LS Power Merger Cues Moody's to Affirm Low-B Ratings
E.DIGITAL CORP: June 30 Balance Sheet Upside Down by $3.5 Million

EXIDE TECHNOLOGIES: Seeks Summary Judgment on EPA Response Claims
EXIDE TECHNOLOGIES: U.S. Seeks Summary Judgment on Response Costs
FORD MOTOR: Buying Rover Brand Name From BMW
FOSS MANUFACTURING: Disclosure Statement Hearing Set for Oct. 10
FRIENDLYWAY C0RP: Posts $3.5M Net Loss in 3rd Qtr. Ended July 31

FTS GROUP: Earns $1.6 Million for the Period Ended June 30
G+G RETAIL: Assigns More than 400 Leases to Max Rave
GENERAL MOTORS: Talks with Nissan and Renault Enter Final Phase
GEORGIA GULF: Fitch Assigns B Rating to Proposed Sr. Sub. Notes
GLOBAL EMPIRE: Chapter 11 Trustee Hires Hughes Watters as Counsel

GMAC COMMERCIAL: S&P Upgrades Three Cert. Classes' Low-B Ratings
GRAFTON PROPERTIES: Case Summary & Two Largest Unsecured Creditors
INFORMATION ARCHITECTS: IFGT-SI Submits Replacement Asset
INFORMATION ARCHITECTS: Inks Merger Agreement with Global Triad
INSIGHT MIDWEST: S&P Rates New $2.57 Bil. Debt Facilities at BB-

INVESTOOLS INC: Inks $340 Million Merger Deal with thinkorswim
IRIDIUM SATELLITE: Names Matthew J. Desch as New CEO
ISLE OF CAPRI: Earns $9 Million for the Quarter Ended July 30
IVOW INC: Net Loss Increases to $589,248 in Quarter Ended June 30
J.P. MORGAN: S&P Puts Class B-5 Loan's B Rating on Negative Watch

JAMES VANN: Case Summary & Six Largest Unsecured Creditors
LASELL COLLEGE: Moody's Affirms Ba1 Rating on $9.6 Million Bonds
LONDON FOG: DJM & Hilco Joint Venture to Facilitate Sale of Leases
LONDON FOG: Panel Taps McDonald Carano as Substitute Nev. Counsel
MCCOMBS REALTY: Posts $112,000 Net Loss in Quarter Ended June 30

MICHAEL EZZO: Case Summary & 15 Largest Unsecured Creditors
MIRANT CORP: Mirant Delta & Vogt-NEM Want Claims Dispute Resolved
MIZAC PROPERTIES: Voluntary Chapter 11 Case Summary
MORTGAGE ASSISTANCE: June 30 Equity Deficit Increased to $1.6 Mil.
NANOBAC PHARMACEUTICALS: Posts $835,460 Net Loss in Second Quarter

NATIONAL ENERGY: Court Allows Lehman's Claim No. 699 for $7.2 Mil.
NATIONAL ENERGY: ET Debtors Say Littleton's Claim Was Filed Late
NELNET INC: Moody's Rates $200 Mil. Sub. Debt Securities at Ba1
NETWORK INSTALLATION: June 30 Balance Sheet Upside Down by $47,839
NORTH AMERICAN: Restructures $25.5 Million of Debts

NORTHWEST AIRLINES: Flight Attendants Declare Talks at Impasse
NOTIFY TECHNOLOGY: Inks Amendments to Terms of Issued Warrants
NUNET INC: Debtor Did Not Assume Liability for Claimant's Loans
PARMALAT: Hermes et al., Balk at Credit Suisse's Motion to Dismiss
PARMALAT USA: Court Okays Pact on George's Suit Against Farmland

PEP BOYS: $120 Mil. Facility Increase Cues S&P to Affirm B+ Rating
PITTSFIELD WEAVING: Case Summary & 20 Largest Unsecured Creditors
PORTRAIT CORP: Hires BSI as Claims and Balloting Agent
PREMIER ENTERTAINMENT: Chapter 11 Filing Cues S&P's Default Rating
PROTECTION ONE: Has $71.4 Million Stockholders' Deficit at June 30

RADNOR HOLDINGS: Committee Taps Greenberg Traurig as Counsel
RALPH STRUCHTEMEYER: Voluntary Chapter 11 Case Summary
REAL ESTATE: Reports $217,000 Net Loss in Quarter Ended June 30
ROCKPORT HEALTHCARE: June 30 Balance Sheet Upside-Down by $1.9MM
RONALD STAHL: Case Summary & 4 Largest Unsecured Creditors

ROWE COS: Receives Court Approval of First-Day Motions
SECUNDA INTERNATIONAL: S&P Holds B- Corp. Credit & Debt Ratings
SIERRA PACIFIC: Fitch Lifts Issuer Default Rating to BB- from B+
SILICON GRAPHICS: Delays Filing of 2006 Annual Report
SILICON GRAPHICS: Enters Into $115 Mil. Commitment Letter

SINGING MACHINE: Incurs $1.1 Mil. Net Loss in 2006 Second Quarter
STANFIELD ARBITRAGE: Moody's Reviews Low-B Ratings on $32MM Notes
STERLING FINANCIAL: Fitch Affirms C Individual Rating
SUPERB SOUND: Court Dismisses Case, Okays Kimco Lease Assumption
TERWIN MORTGAGE: Moody's Rates Cl. I-B-5 & I-B-6 Certs. at Low-B

TOWER RECORDS: Committee Taps McGuireWoods as Bankruptcy Counsel
TRANS ENERGY: Has $2.1 Million Working Capital Deficit at June 30
TRANSAX INT'L: June 30 Balance Sheet Upside-Down by $3.7 Million
TRIBUNE CO: Forms Special Panel to Enhance Shareholders' Value
TRIBUNE CO: Shareholder Files Suit Against Eight Directors

TRM CORPORATION: S&P Holds CCC Ratings on Developing Watch
UNION STAMPING: Involuntary Chapter 11 Case Summary
URANIUM RESOURCES: 2nd Quarter 2006 Net Loss Decreases to $2.1MM
USGEN NEW ENGLAND: Braskan Claim Hearing Scheduled on Sept. 26
USGEN NEW ENGLAND: Wants Tennessee Gas' Claim Reduced to $1.2 Mil.

UTILITY CRAFT: Wants Hale Resources as Bankruptcy Consultant
VERIDIEN CORP: June 30 Balance Sheet Upside-Down by $6.3 Million
VESCOR DEVELOPMENT: Taps Lionel Sawyer as Bankruptcy Counsel
VESTA INSURANCE: Court Grants Injunction Against Utility Companies
VESTA INSURANCE: Court Lets Gaines Reject Four Property Leases

VIASYSTEMS INC: Earns $202.5 Mil. in Quarter Ended June 30, 2006
VIOQUEST PHARMACEUTICALS: Posts $1.8MM Loss in 2006 2nd Quarter
WELLINGTON APARTMENT: Bankr. Ct. Awards Debtor $2.5 Mil. Judgment
WEST VIRGINIA: Hires Joseph Caldwell as Legal Counsel
WILLOWBEND NURSERY: Case Summary & 16 Largest Unsecured Creditors

WINN-DIXIE: Four Parties Want Leesburg & Edgewood Taxes Attached
WINN-DIXIE: Panel Hires Spencer Stuart to Search for Directors
YOUTHSTREAM MEDIA: Earns $459,180 in Quarter Ended June 30

* BOOK REVIEW: Grounded: Frank Lorenzo and the Destruction of
               Eastern Airlines

                             *********

AMERICAN ENTERTAINMENT: S&P Rates Proposed $250 Mil. Notes at B-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B-' rating to the
proposed $250 million senior floating rate notes due 2014 to be
issued by American Entertainment Properties Corp. and its
subsidiary, American Entertainment Properties Finance Corp.
Proceeds from the proposed notes, in addition to AEPC's excess
cash, will be used to fund a dividend to the company's parent.

In addition, a 'B+' corporate credit rating and stable outlook
were assigned to AEPC.  Pro forma for the proposed notes issue,
consolidated debt outstanding at AEPC approximated $525 million
at June 30, 2006.

Concurrently, Standard & Poor's revised its outlook on AEPC's
subsidiary, American Casino & Entertainment Properties LLC, to
stable from positive.

At the same time, ACEP's existing ratings, including its 'B+'
corporate credit rating, were affirmed.  ACEP owns and operates
four casinos in Nevada.

AEPC and ACEP are subsidiaries of American Real Estate Partners
L.P., an entity engaged in acquiring and managing real estate and
other activities, which is controlled by Carl Icahn.

The outlook revision on ACEP reflects the additional leverage in
the consolidated capital structure and reduced financial
flexibility as a result of the proposed debt-financed dividend.
The proposed dividend significantly alters AEPC's consolidated
financial profile, but to a level that we consider to be in line
with the ratings.  However, ratings upside potential has been
eliminated given the more aggressive financial policy.

The ratings on AEPC and ACEP are based on the consolidated credit
quality of AEPC.  With no operations, AEPC is dependent upon cash
flow from ACEP to fund its debt service obligations, including the
proposed senior notes.

Ratings reflect:

   * a relatively small portfolio of second-tier assets;

   * the disadvantaged location on the Las Vegas Strip of its
     largest cash flow-generating property;

   * a moderately sized cash flow base; and

   * pro forma credit measures that are in line for the rating.

These factors are somewhat tempered by steadily improved operating
results during the past few years.


AMERICAN ENTERTAINMENT: Moody's Junks Proposed $250MM Senior Notes
------------------------------------------------------------------
Moody's Investors Service took a number of rating actions in
relation to American Entertainment Properties Corp. and its
subsidiary, American Casino & Entertainment Properties LLC:
   * assigned a B2 corporate family rating to AEP,
   * assigned a Caa1 rating to its proposed $250 million senior
     unsecured floating rate notes,
   * withdrew ACEP's B2 corporate family rating, and
   * applied Moody's new Probability of Default and Loss Given
     Default rating methodology to the long term ratings of both
     AEP and ACEP.
The rating outlook on all ratings is stable.
The proceeds from the new notes will be used to pay a dividend to
AEP's parent, a newly formed corporation.  AEP is the holding
company of American Casino & Entertainment Properties LLC.  AEP
and ACEP are indirect wholly owned subsidiaries of American Real
Estate Partners, L.P. American Entertainment Properties Finance
Corp. will be the co-issuer of AEP's new notes.

Ratings assigned:

   * American Entertainment Properties Corp.

     -- Corporate Family Rating at B2

     -- Probability-of-default rating at B2

     -- $250 million senior unsecured floating rate notes due
        2014 at Caa1 (LGD 5, 80%)

Ratings upgraded:

   * American Casino & Entertainment Properties LLC

     -- $215 million 7.85% senior secured second lien notes due
        2012 to Ba3 (LGD 2, 29%) from B2

Ratings withdrawn:

   * American Casino & Entertainment Properties LLC

     -- Corporate Family Rating of B2.

Moody's has applied its new Probability-of-Default and
Loss-Given-Default rating methodology to AEP and ACEP.  Moody's
current long-term credit ratings are opinions about expected
credit loss which incorporate both the likelihood of default and
the expected loss in the event of default.  The LGD rating
methodology disaggregates these two key assessments in long-term
ratings.  The LGD rating methodology also enhances the consistency
in Moody's notching practices across industries and improves the
transparency and accuracy of our ratings as our research has shown
that credit losses on bank loans have tended to be lower than
those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale.  They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.

Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0%-9%) to
LGD6 (loss anticipated to be 90%-100%).

AEP's B2 corporate family rating reflects higher pro-forma debt to
EBITDA (5.2x) and lower EBITDA/interest (2.1x) resulting from the
issuance of the new notes.  The assignment of Caa1 ratings to
AEP's senior unsecured notes, as well as the rating actions taken
in relation to ACEP existing second lien notes reflects Moody's
new methodology for assigning ratings to individual securities
rather than a change in the characteristics of any debt security
or in the company's fundamental credit profile.  The lower rating
on AEP's senior unsecured notes reflects its structural and
effective subordination to the senior secured second lien notes
issued by ACEP that also benefit from upstream guarantees from its
operating subsidiaries.

The stable rating outlook is based on the favorable demand outlook
for gaming in Nevada, the absence of near term maturities and
adequate liquidity.

Headquartered in Las Vegas, Nevada, AEP and ACEP are wholly owned,
indirect, unrestricted subsidiaries of American Real Estate
Partners, L.P., a publicly traded firm engaged in both real estate
and non-real estate activities.  Carl Icahn currently owns
approximately 86% of AREP through non-AREP subsidiaries. AEP's
principal asset is its ownership of ACEP, which in turn owns and
operates three gaming properties in the Las Vegas metropolitan
area and one in Laughlin, Nevada.


AMERICAN TOWER: Restating Annual and Quarterly Financial Reports
----------------------------------------------------------------
Based on facts ascertained by the special committee of Board of
Directors of American Tower Corporation investigating its stock
option grants, the Company has determined that it will need to
restate its financial statements.

The restatement of the previously issued financial statements is
to record charges for stock-based compensation expense related to
certain option grants and to account for the tax-related
consequences.  The special committee's investigation is ongoing
and it is continuing its review of the matters.

The Company expects to file an amended Annual Report on
Form 10-K/A for the year ended Dec. 31, 2005 to reflect the
restatement of its consolidated financial statements as of
Dec. 31, 2005 and 2004 and for each of the years ended
Dec. 31, 2005, 2004 and 2003.  The amended Annual Report will also
reflect the restatement of selected financial data as of and for
the years ended Dec. 31, 2005, 2004, 2003, 2002 and 2001.

The Company also expects to file an amended Quarterly Report for
the quarter ended March 31, 2006 to reflect the restatement of its
condensed consolidated financial statements as of March 31, 2006
and for the three month periods ended March 31, 2006 and 2005.  In
addition, the Company expects to file its Quarterly Report for the
quarter ended June 30, 2006.

The Company currently expects to file with the Securities and
Exchange Commission its restated annual and quarterly reports in
the next three to five weeks.

Headquartered in Boston, Massachusetts, American Tower Corporation
(NYSE: AMT) -- http://www.americantower.com/-- is an independent
owner, operator and developer of broadcast and wireless
communications sites in North America.  American Tower owns and
operates over 22,000 sites in the United States, Mexico, and
Brazil.  Additionally, American Tower manages approximately 2,000
revenue producing rooftop and tower sites.

                            *   *   *

As reported in the Troubled Company Reporter on Sept. 21, 2006
Standard & Poor's Ratings Services' ratings for Boston-based
wireless tower operator American Tower Corp. and its related
entities remained on CreditWatch with negative implications,
including the 'BB+' corporate credit rating.  The '1' recovery
ratings for the company's bank loans are not on CreditWatch.

As reported in the Troubled Company Reporter on Sept. 4, 2006
Moody's Investor Service lowered American Tower Corporation's
Speculative Grade Liquidity Rating to SGL-3 from SGL-1 and
affirmed all long term ratings of AMT, American Tower Inc. and
Spectrasite Communications Inc., including AMT's Ba2 Corporate
Family Rating.  At the same time, Moody's changed the outlook to
developing from stable.


ACORN PARTNERS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Acorn Partners, Ltd.
        dba Schulz Nursery
        dba Texas Plant Ranch
        P.O. Box 128
        Marion, TX 78124

Bankruptcy Case No.: 06-51825

Type of Business: The Debtor operates a floral and plant nursery.
                  See http://www.schulznursery.com/

Chapter 11 Petition Date: September 19, 2006

Court: Western District of Texas (San Antonio)

Judge: Leif M. Clark

Debtor's Counsel: William B. Kingman, Esq.
                  William B. Kingman, P.C.
                  4040 Broadway, Suite 430
                  San Antonio, TX 78209
                  Tel: (210) 829-1199
                  Fax: (210) 821-1114

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Joe Tocquigny                      Judgment              $140,436
c/o Robin Dwyer, Esq.
Pape & Dwyer, LLP
109 West Court Street
Sequin, TX 78155

McHutchison                                              $122,712
P.O. Box 92170
Elk Grove Village, IL 60009-0794

Texas Comptroller of               Sales Tax             $101,795
Public Accounts
P.O. Box 13528
Austin, TX 78711-3528

Capital Lease Administration                              $79,000
Stephen Lalinski
1818 Market Street, 9th Floor
Philadelphia, PA 19103

Internal Revenue Service           Employment Taxes       $76,395
Special Procedures Staff
STOP 5022 AUS
300 East 8th Street
Austin, TX 78701

Guadalupe County Tax A/C           Ad Valorem Taxes       $69,525

Gryphon Group                                             $64,556

ITML                                                      $64,222

BWI                                Judgment               $50,000

Marion State Bank                  Line of Credit         $47,000

Wells Fargo WF Processing Center                          $45,627

Fischer's                                                 $37,204

GroLink                                                   $26,941

San Antonio Express News                                  $25,081

Ball Seed                          Judgment               $22,000

Ran Pro Farm                       Judgment               $21,000

Sequin Electric                    Judgment               $17,041

Willtex Stores                     Judgment               $16,490

Peerless Farms                                            $15,129

Innovative Financial Solutions                            $13,129


ARAMARK CORP: Moody's Lowers $250MM Senior Notes to B2 from Baa3
----------------------------------------------------------------
Moody's Investors Service downgraded the 5% senior notes due 2012
of ARAMARK Services, Inc. to B2 from Baa3, confirmed the Baa3
ratings on the senior notes due 2007 and 2008, and assigned a
corporate family rating of Ba3 to ARAMARK Corporation, ARAMARK
Services' holding company parent.  The B2 rating on the 5% senior
notes due 2012 and the Ba3 corporate family rating are under
review for possible downgrade.

Moody's placed all the credit ratings of ARAMARK on review for
possible downgrade on May 1, 2006 following the announcement that
it received a proposal from the company's CEO and a group of
investors to acquire all of the outstanding shares of common
stock.

In August 2006, ARAMARK signed a definitive merger agreement under
which the company's Chairman and Chief Executive Officer and a
group of investment funds will acquire the company in a
transaction valued at approximately $8.3 billion, including the
assumption or repayment of approximately $2 billion of debt.  The
merger agreement was approved by the board of directors based on
the unanimous recommendation of a special committee consisting of
independent directors.

In August, Moody's confirmed the Baa3 rating on the 7.1% senior
notes due 2006 of ARAMARK Services and left all other senior note
issues on review for possible downgrade.  This rating action
reflected the uncertainty as to whether the senior notes maturing
in 2007-2012 would be refinanced in connection with the
acquisition.

ARAMARK recently disclosed the expected financing package for the
acquisition in its proxy statement filed with the U.S. Securities
and Exchange Commission.  The assignment of a Ba3 corporate family
rating to ARAMARK reflects the substantial increase in debt levels
and weakening of credit metrics expected in the post-acquisition
capital structure.  Based on information included in ARAMARK's
proxy statement, Moody's believes that pro forma Debt to EBITDA
will likely exceed 6 times and that a corporate family rating in
the single B rating category is possible upon conclusion of the
review.  The rating review will focus on ARAMARK'S post-
acquisition capital structure, liquidity position and operating
strategies.

The confirmation of the Baa3 rating on the senior notes due
2007-2008 reflects the company's intention to refinance these
notes in connection with the acquisition.  Based on disclosure in
ARAMARK's proxy statement, Moody's understands that the company
does not intend to refinance its 5% senior notes due 2012, which
lack guarantees from ARAMARK's major operating subsidiaries.  The
downgrade of the 5% senior notes due 2012 to B2, two notches below
the corporate family rating, reflects the expected structural
subordination of those notes to high levels of secured and
guaranteed debt in the post-acquisition capital structure.

The acquisition is expected to be completed by late 2006 or early
2007, subject to receipt of stockholder approval.  The investor
group has obtained equity and debt financing commitments for the
transactions contemplated by the merger agreement.  There is no
financing condition to the proposed transaction.

Moody's took these rating actions:

   * Affirmed $125 million senior unsecured notes due 2006,
     rated Baa3

   * Confirmed $300 million senior unsecured notes due 2007,
     rated Baa3

   * Confirmed $31 million senior unsecured notes due 2007,
     rated Baa3

   * Confirmed $300 million senior unsecured notes due 2008,
     rated Baa3

   * Downgraded $250 million senior unsecured notes due 2012, to
     B2 from Baa3

   * Downgraded senior unsecured shelf registration, to (P) B2
     from (P)Baa3

   * Downgraded senior subordinated shelf registration, to (P) B2
     from (P)Ba1

   * Assigned corporate family rating, rated Ba3

These ratings remain on review for possible downgrade:

   * $250 million senior unsecured notes due 2012, rated B2
   * Senior unsecured shelf registration, rated (P) B2
   * Senior subordinated shelf registration, rated (P) B2
   * Corporate family rating, rated Ba3

ARAMARK Corporation, a managed services company headquartered in
Philadelphia, Pennsylvania, provides or manages a variety of
services, including food and support services, and uniform rental
and sales.  The company's revenues were approximately $11.5
billion for the twelve-month period ending June 30, 2006.


ASARCO LLC: CBRY Stockholders Pact Effective as of August 29
------------------------------------------------------------
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas in Corpus Christi rules that the
Stockholders Agreement for the sale of Rail Partners II, LLC's
shares in Copper Basin Railway, Inc., is deemed effective as of
Aug. 29, 2006.

Judge Schmidt directs ASARCO to pay $11,455,000 for the purchase
of Rail Partners' interest in CBRY.

From Sept. 12, 2006, until the Closing of the sale, Rail Partners
will not cause CBRY to operate and transfer other than in the
ordinary course of business.

Upon payment of the Purchase Price, ASARCO, Rail Partners and
Mr. Durden will deliver full and complete releases of all claims
made against each other.

Judge Schmidt also directs Rail Partners and Mr. Durden to
promptly furnish the initial draft of all Closing documents and to
reasonably cooperate with ASARCO in closing the sales and in
transitioning control of CBRY.

                            Objections

1. Committees

The Official Committees of Unsecured Creditors for ASARCO LLC and
the Asbestos Subsidiary Debtors were concerned that Mr. Durden of
Rail Partners II, LLC, may be threatening ASARCO LLC with unjust
rate hikes to coerce the company into paying the overstated
$11,300,000 purchase price for Rail Partners' 2,200 shares.

Jacob L. Newton, Esq., at Stutzman, Bromberg, Esserman & Plifka,
in Dallas, Texas, counsel to the Asbestos Committee, noted that
Mr. Durden had recently notified ASARCO that he is selling his
ownership interest in Rail Partners to an affiliate of Washington
Transportation Group -- a company that is aggressively seeking to
buy ASARCO and is likely looking to exert whatever pressure it
can on the Debtors.

While the Committees did not object to ASARCO's exercise of its
business judgment in deciding to assume the Copper Basin Railway,
Inc., Stockholders Agreement, and purchase the remaining 2,200
shares from Rail Partners, the Committees did not agree to
ASARCO's paying for the shares an amount that could be overstated
by 30% or more.

The Committees contended that the $11,300,000 cure amount does not
take into consideration ASARCO's payment of a $2,600,000 account
receivable after the Ernst & Young valuation was made, and for
which it should get a dollar-for-dollar credit.

Hence, the Committees asked the Court to deny ASARCO's assumption
of the CBRY Stockholders Agreement absent modifications in the
Agreement and the Assumption Motion.

2. Rail Partners

Rail Partners complained that the $11,300,000 purchase price
failed to include payments of interest.

According to Patricia Reed Constant, Esq., at Corpus Christi,
Texas, the $11,300,000 valuation was due from ASARCO on Feb. 13,
2005, and under Arizona law, all liquidated debt is to bear
interest at a 10% annual rate until paid in full.  Ms. Constant
calculated that the interest of $11,300,000 at 10% from Feb. 13,
2005, to Sept. 12, 2006, is $1,783,296, plus $3,096 in per diem
interest thereafter.

Ms. Constant argued that to assume the Stockholders Agreement,
ASARCO is required to promptly cure all defaults and compensate
Rail Partners for any actual pecuniary losses.

Rail Partners also complained that ASARCO failed to include
payment of attorneys' fees it incurred in pursuit of redress for
ASARCO's breach.  Rail Partners' attorneys' fees for seeking
redress for ASARCO's breach total $47,500, as of Sept. 8, 2006,
Ms. Constant said.

Accordingly, Rail Partners asked the Court to deny ASARCO's
assumption of the Stockholders Agreement.

                      ASARCO Amended Request

Ernst & Young was retained in connection with the valuation
dispute and in January 2006, it completed an appraisal of Rail
Partners' 2,200 shares at $11,300,000.  Mercer Management
Consulting had prepared an independent evaluation materially lower
than the E&Y report, James R. Prince, Esq., at Baker Botts L.L.P.,
in Dallas, Texas, informed the Court.  However, common to both
reports was the acknowledgment of the dollar-for-dollar addition
to the valuation of a $2,600,000 account receivable due to Railway
Partners by ASARCO.

The Mercer evaluation opined that ASARCO should be entitled to a
credit for the post-appraisal payment of the account receivable.
The E&Y evaluation did not give credit for the payment only
because it was not treated as paid when the report was published,
Mr. Prince pointed out.

ASARCO addressed changes to the evaluation after the value was
set and established by E&Y related to the payment of the account
receivable, without waiver of any claims, rights or offset or
recoupment remedies in the event that relief through its
Assumption request is not granted.

Mr. Prince asserted that ASARCO had paid the account receivable.
If ASARCO is bound by E&Y's evaluation, its post-appraisal
payment of the account receivable should reduce the cure amount
by 55% of the payment, Mr. Prince contended.   Rail Partners'
position is that it may keep the payment, and demand the full-
appraised value of E&Y.  "Such windfall is not supported by law
or fact," Mr. Prince said.

The valuation dispute including the potential for an E&Y conflict
prevented the closing of the stock sale arising from Rail
Partners' exercise of its put rights under the Stockholders
Agreement, Mr. Prince stated.  The demand for a credit of the 55%
had further prevented the closing of the stock sale by agreement.

Accordingly, ASARCO sought the Court's authority to assume the
CBRY Stockholders Agreement and purchase Rail Partners' equity
interest for $11,300,000.

       Mercer's Valuation is Invalid, Rail Partners Argued

ASARCO's Amended Motion is no longer a motion to assume, but a
motion to unilaterally alter and assume or perhaps alternatively,
a motion to value and assume, Rail Partners complained.

Ms. Constant contended that ASARCO has waived any of its right to
complain about the E&Y's appraisal by failing to raise the matter
in the lawsuit filed against it in the Superior Court of the
state of Arizona, and the assertions cannot now be raised due to
laches.

The alleged account receivable due CBRY from ASARCO did not form
the basis for E&Y's appraisal because the appraisal, as most all
railroad appraisals, was based on discounted cash flow, not
assets, Ms. Constant emphasizes.

Furthermore, Ms. Constant argues, Mercer's valuation is not
independent because it was prepared with no input from Rail
Partners or by Arthur Anderson as provided by the Stockholders
Agreement.  Ms. Constant recalls that Mercer was retained to
advise the ASARCO's new Board of Directors so it can make
responsible decisions, including whether to assume the
Stockholders Agreement.

Rail Partners disputes ASARCO's assertions that there has been
demand for credit against the stock sale and no issue has delayed
any closing.

Accordingly, Rail Partners asked the Court to deny ASARCO's
assumption of the Stockholders Agreement, unless it provides that
the total cure amount to be paid is $13,130,796.

                         About ASARCO LLC

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 Boudloche as Encycle/Texas, Inc.'s
d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy liquidation proceeding. The Court
appointed Michael News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


ASARCO LLC: Wants Srackangast as Special Environmental Auditor
--------------------------------------------------------------
ASARCO LLC seeks permission from the Honorable Richard S. Schmidt
of the U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi to employ Arnold Srackangast as its special purpose
environmental professional.  Mr. Srackangast will conduct the air
quality modeling audit for the El Paso smelter.

ASARCO LLC has submitted an application to the Texas Commission
on Environmental Quality for renewal of certain air quality
permit necessary for the operation of its El Paso smelter, Tony
M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas,
relates.

As required by TCEQ, ASARCO submitted an air dispersion modeling
protocol to support its permit renewal application.

However, the TCEQ has advised ASARCO that it will not consider
its review completed until a third-party contractor audits the
air modeling results.  The TCEQ believes that an independent
audit will ensure "a thorough and impartial review of the
emissions from and related to the El Paso Plant and their impacts
on surrounding areas . . ."

Pursuant to an Engagement Letter, Mr. Srackangast will:

   (a) review ASARCO's air dispersion modeling to determine
       whether it complies with TCEQ protocols; and

   (b) prepare for the TCEQ Executive Director a final report,
       which will be in a form substantially conforming with
       the TCEQ's standard modeling report and will include the
       information and conclusions as required by the standard
       modeling report.

ASARCO understands that the TCEQ staff will consider and rely on
the final report in preparing its own independent review of the
modeling.  Thus, the parties have agreed that, in performing the
air quality modeling audit, Mr. Srackangast will not act as an
advocate for ASARCO, but as an independent third-party consultant
paid for by ASARCO.

ASARCO will pay not more than $30,000 to Mr. Srackangast on a
time and material basis.  To reduce administrative expenses,
ASARCO also seeks permission to pay Mr. Srackangast's invoices in
the ordinary course of business.

Mr. Srackangast assures the Court that he does not represent any
entity having adverse interest to ASARCO or its estate, and is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

                         About ASARCO LLC

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


ASHLAND INC: CFO Provides Quarter Ended September 30 Outlook
------------------------------------------------------------
Ashland, Inc.'s Senior Vice President and Chief Financial Officer,
J. Marvin Quin, provided participants in the Credit Suisse 19th
Annual Chemical Conference in New York City with an update on the
Company's outlook for its fiscal fourth quarter, ending
Sept. 30, 2006.

Commenting on Valvoline, Mr. Quin estimated that it would incur an
operating loss due to weak operating margins, especially early in
the current quarter.  "The previously disclosed price increase of
roughly 50 cents per gallon does appear to be holding," Mr. Quin
said, "so we are more optimistic about the next quarter, beginning
Oct. 1, which should be profitable."  Mr. Quin also noted that the
establishment of a $3 million reserve related to the sale of 33
Valvoline Instant Oil Change stores will contribute to the
operating loss.

Commenting on the Company's other divisions, Mr. Quin said,
"Performance Materials and Distribution have performed well thus
far this quarter.  Performance Materials should produce operating
results well above the prior year, and Distribution should report
solid profit growth."

Mr. Quin noted that the Company's Water Technologies division is
also performing better, due in large part to the operating income
produced by the Environmental and Process Solutions flocculants
business acquired from Degussa AG in May 2006.

Concluding, Mr. Quin said, "I do want to caution that we may
record restructuring and severance charges in the quarter that are
not reflected in my outlook.  Also, we are now conducting our
regular quarterly review of various assets and contingent
liabilities, including insurance receivables and environmental
remediation, and the associated reserves could increase or
decrease.  In total, we do not expect reserve adjustments to be
material to Ashland as a whole.  Of course, these items may impact
some divisions more than others.  However, we cannot accurately
project the impact of these items until our accounting close
processes are complete."

Ashland, Inc., (NYSE: ASH) -- http://www.ashland.com/-- a
diversified, global chemical company, provides quality products,
services and solutions to customers in more than 100 countries.
Ashland operates through four wholly owned divisions: Ashland
Performance Materials, Ashland Distribution, Valvoline and Ashland
Water Technologies.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 24, 2006
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Ashland to 'BB+' from
'BBB-', and its short-term corporate credit and commercial paper
ratings to 'B' from 'A-3'.  The outlook is stable for this
Ashland, Kentucky-based company.


ATLANTIS PLASTICS: Moody's Affirms Caa1 Rating on $75MM Jr. Loan
----------------------------------------------------------------
Moody's changed the outlook for the ratings of Atlantis Plastics,
Inc. to negative from stable, and affirmed the existing ratings:

     * B2 Corporate Family Rating;
     * Caa1 rating for the $75 million junior term loan;
     * B2 rating for the $25 million sr. secured revolver, and,
     * B2 rating for the $120 million senior term loan.

The change of the ratings outlook to negative from stable reflects
some deterioration in Atlantis' operating and financial
performance during the past few quarters, which has resulted in
margin compression, inability to generate positive free cash flow,
and increased receivables days outstanding and average inventory
days.  Key factors that explain the negative trend include
increased resin costs accompanied by the inability to pass through
a significant part of these costs, a slowing housing market
affecting its injection molding business, and an inventory
correction in the company's plastic films' business.

The negative ratings outlook expresses some tolerance at existing
ratings for limited further slippage in credit statistics.
However, the cumulative effects of reduced profitability have
resulted in an impaired financial profile, which if not remedied
in the near term, could result in a downgrade of the CFR.  The
company's ability to maintain adequate liquidity is essential to
the ratings, and should the current pressure on liquidity not
abate in the very near term, the ratings could be downgraded.

The affirmation of Atlantis' B2 CFR reflects the company's
moderate, although deteriorated, credit statistics as evidenced by
EBIT coverage of interest coverage at roughly 1.8 times and
adjusted debt to EBITDA at approximately 4.6 times.  In Moody's
opinion, the company's business fundamentals remain sound, despite
the likely continuation of operating challenges.  New business
opportunities are expected to ramp up in the near term which
should help to alleviate some of the current margin pressure.

In the event of default, the likely recovery on first lien debt
should be solid, thus, upward movement on the first lien ratings
is possible in the near term.

Moody's affirms these ratings:

   * B2 rating for the $25 million senior secured revolver
   * B2 rating for the $120 million senior term loan
   * Caa1 rating for the $75 million junior term loan
   * B2 Corporate Family Rating

The ratings outlook changed to negative from stable.

Atlantis Plastics, Inc. is a leading manufacturer of specialty
polyethylene films and molded and extruded plastic components used
in a variety of industrial and consumer applications.
Headquartered in Atlanta, Georgia, Atlantis Plastics had revenues
of approximately $443 million for the twelve months ended
June 30, 2006.


AVIALL INC: S&P Withdraws BB Corp. Credit Rating & Removes Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings, including
the 'BB' corporate credit rating, on Aviall Inc. and removed the
ratings from CreditWatch, where they were placed with positive
implications on May 1, 2006.

The aircraft parts distributor was acquired by Boeing Co.
(A/Positive/A-1) for $2 billion and its rated debt has been
repaid.


AXCESS INT'L: Incurs $965,812 Net Loss in Quarter Ended June 30
---------------------------------------------------------------
AXCESS International Inc. posted a $965,812 net loss for the three
months ended June 30, 2006, compared to a loss of $939,408 for the
three months ended June 30, 2005.  The increase is mainly related
to the expensing of stock based compensation that began in 2006,
by an increase in research and development relating to the
Company's next generation product development, the paying of
directors' fees to the Company's independent directors that began
in 2006 and increased investor relations activities.

Sales for the quarter ended June 30, 2006 were $354,475, compared
to $206,818 of sales generates for the three months ended
June 30, 2005.  Cost of sales for the three months ended
June 30, 2006 were $189,215 and for the three months ended
June 30, 2005 were $123,545.

The Company's balance sheet at June 30, 2006, showed total assets
of $1,973,477 and total liabilities of $5,009,103, resulting in a
stockholders' deficit of $3,035,626.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1203

                      Going Concern Doubt

Hein & Associates LLP expressed substantial doubt about Axcess
International's ability to continue as a going concern after
auditing the Company's financial statements for the years ended
Dec. 31, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses from operations and resulting continued
dependence upon access to additional external financing.

Headquartered in Dallas, Texas, AXCESS International Inc. --
http://www.axcessinc.com-- through its proprietary technology, is
a manufacturer of advanced physical security and enterprise asset
management systems that can automatically locate, identify, track,
monitor, count, and protect people, property and vehicles.  The
purpose of the systems is: to reduce loss and liability; to
increase the efficiency of a client's employees; and to improve
the management of personal property, logistics, and facilities.
Axcess utilizes two patented and integrated technologies: battery-
powered wireless tagging called Active-Radio Frequency
Identification and network based streaming digital video.


BAINBRIDGE REALTY: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Bainbridge Realty Corp.
        514 Broadway Providence, RI 02909

Bankruptcy Case No.: 06-11003

Chapter 11 Petition Date: September 19, 2006

Court: District of Rhode Island (Providence)

Debtor's Counsel: Robert Pierce, Esq.
                  43 Hewitt Circle
                  Needham Heights, MA 02494
                  Tel: (781) 449-7399

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

The Debtor did not file a list of its 20 largest unsecured
creditors.


BATTERSON PARK: Moody's Pares $16.5MM Cl. B Notes to Caa3 from B3
-----------------------------------------------------------------
Moody's Investors Service has taken these rating actions on four
classes of notes issued by Batterson Park CBO I, Ltd.  Moody's has
withdrawn the ratings on $172,400,000 Class A-3 Notes due 2011 and
$32,000,000 Class A-4 Notes due 2011, upgraded the rating on
$49,500,000 Class A-5 Notes due 2011 and downgraded the rating on
$16,500,000 Class B Notes due 2011.

Withdrawal Action:

   * Tranche description: $172,400,000 Class A-3 Notes due
     2011; and $32,000,000 Class A-4 Notes due 2011

     -- Previous Rating: Aa1 on review for possible upgrade
     -- Current Rating: WR

Upgrade Action:

  * Tranche description: $49,500,000 Class A-5 Notes due 2011

     -- Previous Rating: Ba1 on watch for possible upgrade
     -- Current Rating: A2

Downgrade Action:

   * Tranche description: $16,500,000 Class B Notes due 2011

     -- Previous Rating: B3 on watch for possible downgrade
     -- Current Rating: Caa3

Moody's noted that the deal, which closed in November of 1998, is
currently failing the Moody's Average Debt Rating Test, the
Overcollateralization Ratio Test and the Moody's Diversity Test,
each as reported in the Trustee Report dated Aug. 25, 2006.  Since
the last rating action in Nov. 22, 2002, the portfolio has
incurred further loss of par.  This has resulted in the
Overcollateralization Ratio to remain below 100%.  The
concentration of assets rated Caa1 or below by Moody's is
approximately 20%.

Moody's stated that upgrade and downgrade actions are a result of
the amortization of the senior liabilities and the deterioration
in the aggregate par of the collateral pool.


BLEECKER STRUCTURED: Moody's Puts Junked $40 Mil. Notes on Watch
----------------------------------------------------------------
Moody's Investors Service puts on watch for possible downgrade the
ratings on these notes issued in 2000 by Bleecker Structured Asset
Funding, Ltd., a managed structured finance collateralized debt
obligation issuer:

   * The $45,000,000 Class A-1 First Priority Senior Secured
     Floating Rate Notes Due April 1, 2035

     -- Prior Rating: Baa3
     -- Current Rating: Baa3, on watch for possible downgrade

   * The $315,000,000 Class A-2 First Priority Senior
     Secured Floating Rate Notes Due April 1, 2035

     -- Prior Rating: Baa3
     -- Current Rating: Baa3, on watch for possible downgrade

   * The $40,000,000 Class B Second Priority Senior Secured
     Floating Rate Notes Due April 1, 2035

     -- Prior Rating: Ca
     -- Current Rating: Ca, on watch for possible downgrade

The rating actions reflect the deterioration in the credit quality
of the transaction's underlying collateral portfolio, consisting
primarily of asset-backed securities and related synthetic
securities, as well as the occurrence of asset defaults and par
losses, and the continued failure of certain collateral and
structural tests, according to Moody's.

Since the time of the transaction's last rating action, the
overcollateralization ratio for the Class A notes decreased by
more than 20%, as reported in the July 2006 trustee report,
Moody's noted.


BOOKHAM INC: Sells UK Assembly and Test Facility for $9.5 Million
-----------------------------------------------------------------
Bookham,  Inc., signed an agreement for the sale of its Paignton,
UK, assembly and test facility on Sept. 20, 2006.  On closing,
which is expected to occur in the middle of November, the Company
expects to receive proceeds of approximately $9.5 million.

"With this latest transaction we will have raised approximately
$41 million from the recent private placement of common stock and
the sale of our Paignton facility," said Dr. Giorgio Anania,
president and CEO of Bookham Inc.  "We now have a much stronger
balance sheet, which we plan to leverage to better address our
growing markets."

                       About Bookham Inc.

Bookham, Inc. -- http://www.bookham.com/-- designs, manufactures
and markets optical components, modules and subsystems that
generate, detect, amplify, combine and separate light signals
principally for use in high-performance fiber optics
communications networks.  The Company has manufacturing facilities
in the UK, US, Canada, China and Switzerland; and offices in the
US, UK, Canada, France and Italy and employs approximately 2000
people worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 21, 2006,
Ernst & Young LLP expressed substantial doubt about Bookham's
ability to continue as a going concern after auditing the
Company's financial statements for the fiscal year ended
July 1, 2006.  The auditing firm pointed to the Company's
recurring operating losses.


BIOFORCE NANOSCIENCES: Losses Continue in 2006 Second Quarter
-------------------------------------------------------------
BioForce Nanosciences, Inc., incurred a $626,603 net loss for the
three months ended June 30, 2006, compared to a $631,263 loss for
the three months ended June 30, 2005.

During the three months ended June 30, 2006, revenue decreased 34%
from the same period of 2005.  Revenue for 2006 was $28,822, which
is a $14,909 decrease from fiscal 2005 sales of $43,731.  The
decrease in revenue was realized in all of the Company's products
and services but is most directly attributable to decreased AFM
solution revenues.  AFM Solutions are a line of products sold to
the Atomic Force Microscopy community.  These products include
modified AFM probes and a device for cleaning AFM probes called
the TipCleaner.

At June 30, 2006, The Company had total assets of $5,936,043 and
total stockholders' equity of $5,332,801, compared to total assets
of $1,422,182 and a stockholders' deficit of $789,595 at
Dec. 31, 2005.  The Company's working capital as of June 30, 2006
was $4,693,423 compared to $166,730 at Dec. 31, 2005.  This
increase in working capital is directly attributed to completion
of the Company's private placement stock offering in March 2006.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1200

                      Going Concern Doubt

Moore & Associates, Chartered, expressed substantial doubt about
BioForce Nanosciences' ability to continue as a going concern
after auditing the Company's financials statements for the years
ended Dec. 31, 2005 and 2004.  The auditing firm pointed to the
Company's recurring  losses and lack of operations.

                 About BioForce Nanosciences

BioForce Nanosciences, Inc. -- http://www.bioforcenano.com/-- is
a nanotechnology tools and applications company, providing
products that support the growth of the nanotechnology industry.
BioForce is a wholly owned subsidiary of BioForce Nanosciences
Holdings, Inc.


CALPINE CORP: Can Sell 35% Russell Stake to GE Energy for $44MM
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the sale of a 35% equity interest in Calpine Corp's
Russell City Energy Center to GE Energy Financial Services for
approximately $44 million. Calpine will own the remaining 65-
percent interest. GE Energy Financial Services' equity will be
applied toward completion of development and construction of the
power plant, and it also will provide related credit support for
the project. The Russell City Energy Center is a proposed 600-
megawatt, natural gas-fired power plant to be built in Hayward,
Calif. that will help power the San Francisco Bay Area.

"With the growing demand for power in California, especially the
Bay Area, the Russell City Energy Center is well positioned to
help meet demand in a manner that is environmentally friendly and
cost-effective," stated Calpine Chief Executive Officer Robert P.
May.  "Calpine looks forward to building upon our long-term
relationship with GE.  With a strong record of achievement in the
power industry, GE Energy Financial Services will be a valued
strategic partner to Calpine."

"Russell City represents a unique opportunity to invest in a
critical new-build generation facility in the highly sought-after
California market," said Leanne Bell, Managing Director for Power
at GE Energy Financial Services.  "This investment will help
California meet its power needs and is consistent with our growth
strategy.  GE Energy Financial Services also values the
opportunity to partner with Calpine, an experienced developer
familiar with the California market."

Construction of the fuel-efficient, combined-cycle power plant is
scheduled to begin by the spring of 2008 and to be completed in
mid-2010, in time to help meet peak electricity summer demand.  In
March 2006, a Calpine affiliate agreed in a letter of intent to
sell the Russell City Energy Center's full output to Pacific Gas
and Electric Company.  Calpine and PG&E expect to replace the
letter of intent in October 2006 with a ten-year tolling
agreement.

               About GE Energy Financial Services

Based in Stamford, Connecticut, GE Energy Financial Services --
http://www.geenergyfinancialservices.com/-- invest with a long-
term view, across the capital spectrum and the energy and water
industries, to help their customers and GE grow.  With $13 billion
in assets, including investments in power projects with a capacity
to produce 22 gigawatts, GE Energy Financial Services, invests
more than $3 billion annually in two of the world's most capital-
intensive industries, energy and water.

                       About Calpine Corp.

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

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


CAPRIUS INC: Incurs $687,424 Net Loss in Quarter Ended June 30
--------------------------------------------------------------
Caprius, Inc., posted a $687,424 net loss for the three-month
period ended June 30, 2006, compared to a $739,163 net loss for
the three-month period ended June 30, 2005.

Revenues generated from MCM Environmental Technologies Ltd.'s
product sales totaled $266,431 for the three months ended
June 30, 2006 as compared to $185,878 for the three months ended
June 30, 2005.  Revenues generated from MCM rentals totaled $0 as
compared to $2,677 for the comparable period.  The Company owns a
majority interest in MCM, which develops, markets and sells the
SteriMed and SteriMed Junior compact systems that simultaneously
shred and disinfect Regulated Medical Waste.  The SteriMed Systems
are sold and leased in both the domestic and international
markets.

Consulting and royalty income from the TDM Business, which was
sold in 2002, totaled $54,145 for the three months ended
June 30, 2006 as compared to $15,157 for the three months ended
June 30, 2005.

The Company's balance sheet at June 30, 2006, showed total assets
of $3,958,823, total current liabilities of $547,997 and
stockholders' equity of $3,410,826.  At June 30, 2006, the
Company's cash and cash equivalents position approximated
$1,721,000.

A full-text copy of the Company's quarterly reports is available
for free at http://researcharchives.com/t/s?1205

                      Going Concern Doubt

Marcum & Kleigman LLP expressed substantial doubt about Caprius,
Inc.'s ability to continue as a going concern after auditing the
Company's financial statements for the fiscal years ended
Sept. 30, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses from operations.

                          About Caprius

Caprius, Inc. -- http://www.caprius.com/-- is a manufacturer of
proprietary equipment for the on-site disinfection and disposal of
infectious medical waste through its subsidiary, M.C.M.
Environmental Technologies, Inc.


CEP HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: CEP Holdings, LLC
        3650 West Market Street
        Akron, OH 44333

Bankruptcy Case No.: 06-61796

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                                       Case No.
      ------                                       --------
      Creative Engineered Polymer Products, LLC    06-61794
      Thermoplastics Acquisition, LLC              06-61797

Type of Business: The Debtors manufacture hard, molded rubber
                  products and extruded plastic materials
                  for companies in the automotive, construction,
                  and the medical industries.

Chapter 11 Petition Date: September 20, 2006

Court: Northern District of Ohio (Canton)

Judge: Russ Kendig

Debtors' Counsel: Joseph F. Hutchinson, Jr.
                  Baker & Hostetler, LLP
                  3200 National City Center
                  1900 East Ninth Street
                  Cleveland, OH 44114
                  Tel: (216) 621-0200
                  Fax: (216) 696-0740

Debtors'
Financial
Advisors:         Glass & Associates
                  4571 Stephen Circle Northwest, Suite 130
                  Canton, OH 44718
                  Tel: (330) 494-3252
                  Fax: (330) 494-2420
                  http://www.glass-consulting.com/

Debtors' Claims,
Noticing, and
Balloting Agent:  The BMC Group, Inc.
                  3343 Peachtree Road Northeast, Suite 200
                  Atlanta, GA 30326
                  Tel: (404) 442-2485
                  Fax: (404) 442-2473
                  http://www.bmcgroup.com/

Debtors'
Investment
Bankers:          Giuliani Capital Advisors LLC
                  5 Concourse Parkway, Suite 2750
                  Atlanta, GA 30328
                  Tel: (404) 815-3420
                  Fax: (404) 815-3430
                  http://www.giulianicapitaladvisors.com/

                            Estimated Assets   Estimated Debts
                            ----------------   ---------------
   CEP Holdings, LLC        Less than $50,000  $10 Million to
                                               $50 Million

   Creative Engineered      $10 Million to     $10 Million to
   Polymer Products, LLC    $50 Million        $50 Million

   Thermoplastics           $10 Million to     $1 Million to
   Acquisition, LLC         $50 Million        $10 Million

A. CEP Holdings, LLC has no unsecured creditors who are not
   insiders.

B. Creative Engineered Polymer Products, LLC's 20 largest
   unsecured creditors:

   Entity                              Claim Amount
   ------                              ------------
Washington Penn Plastic Co.              $2,801,913
2080 North Main Street
222 Merchandise Mart
Washington, PA 15301

Du Pont Denemours & Co.                  $1,896,005
PLZ Suite 10-111
Chicago, IL 60654

Du Pont Mexico SA de CV                    $870,792
Homero 206 15
Chapultepec Morales
Mexico DF 11570

Lanxess Corp.                              $668,459
2112 South Hamilton Street
Dalton, GA 30720

Chisso America, Inc.                       $651,695
1920 Thoreau Drive North
Schaumberg, IL 60173

PME Companies                              $632,739
13870 East 11 Mile Road
Warren, MI 48089

Rhodia                                     $511,120
AV. Insurgentes Sur No. 1971
Torres III Piso 6
Colonia Guadalupe Inn
Deleg. Alvarao Obregon, CP 01020

Valeo Electrical Systems                   $501,381
3000 University Drive
Auburn Hills, MI 48326

Innovene USA LLC                           $446,725
13536 Collections Center Drive
Chicago, IL 60693

Prudential                                 $414,050
200 Wood Avenue, South
Iselin, NJ 08830

Entropex                                   $413,090
1271 Logar Street
Sarnia, ON N75 5N5

Brown Corp. of Greenville                  $400,656
Department 77188
P.O. Box 77000
Detroit, MI 48277-0188

Gold Key Processing, Ltd.                  $375,063
14910 Madison Road
Middlefield, OH 44062

Dow-Corning STI                            $374,383
First of Chicago National Bank
P.O. Box 905191
Charlotte, NC 28290-5191

Modern Metal Products Co.                  $337,401
35053 Eagle Way
Chicago, IL 60678-1350

Lavergne Group Inc.                        $322,617
Montcap Financial Corp.
3500 deMaisonneuve Boulevard West
Suite 1510
Montreal, QC H3Z 3C1

Excel Polymers, LLC                        $322,537
MSC-41069351
P.O. Box 415000
Nashville, TN 37241-5000

ARJ Manufacturing LLC                      $317,013
3300 Richrest Road Extended
Jackson, TN 38305

Concours Mold Inc.                         $312,365
3400 St. Etienne Boulevard
Windsor, ON N8W 5E1

E.I. Du Pont de Nemours Co.                $257,856
6324 Fairview Road
Charlotte, NC 28210

C. Thermoplastics Acquisition, LLC did not file a list of its 20
   largest unsecured creditors.


CG MULTIFAMILY: Wants Court to Dismiss Chapter 11 Proceeding
------------------------------------------------------------
CG Multifamily-New Orleans, L.P., asks the U.S. Bankruptcy Court
for the Eastern District of Louisiana to dismiss its chapter 11
case.

The Debtor tells the Court that it has reached an agreement in
principle with Fannie Mae, its secured lender, for modifications
and reinstatement of their loan agreement.

                       Fannie Mae Indebtedness

The Debtor relates that Fannie Mae is the holder of an Amended and
Restated Discount MBS Multifamily Note dated June 14, 2004, in the
amount of $65 million executed by the Debtor in favor of GMAC
Commercial Mortgage Corporation and subsequently assigned to
Fannie.  The Note was amended on Oct. 1, 2005.

The Note is secured by, among other things:

    * an Amended and Restated Multifamily Mortgage, Assignment of
      Rents and Security Agreement dated June 10, 2004, executed
      by the Debtor and the Industrial Development Board of the
      City of New Orleans, Louisiana, Inc., and subsequently
      assigned by GMAC to Fannie Mae; and

    * an Amended and Restated Multifamily Mortgage, Assignment of
      Rents and Security Agreement dated June 10, 2004, executed
      by the Debtor in favor of GMAC and subsequently assigned to
      Fannie Mae.

These two agreements encumber the Debtor's real property known as
the Saulet Apartments.

The Debtor says it filed for bankruptcy when it failed to reach an
agreement with Fannie Mae concerning the use of certain insurance
proceeds belonging to the Debtor but held by Fannie Mae.

                            Agreement

Under the new Agreement:

    a. one or more of the Debtor's partners will make an
       additional equity capital contribution of $2 million to the
       Debtor to be utilized in part to satisfy all of the
       Debtor's prepetition and postpetition obligations; and

    b. Fannie Mae will permit the Debtor to use the insurance
       proceeds it holds and make other financial concessions, so
       that the Debtor can perform necessary repairs to the Saulet
       and allow it to be reopened to the public.

With this development, the Debtor contends that it now has the
ability and intent to satisfy all of its debts and no longer needs
reorganization under Chapter 11 of the Bankruptcy Code.  The
Debtor also argues that dismissal of its case is in the best
interest of its creditors.

              About CG Multifamily-New Orleans

Headquartered in Charleston, South Carolina, CG Multifamily-New
Orleans, L.P. owns the Saulet Apartments in New Orleans,
Louisiana.  The company filed for chapter 11 protection on
June 12, 2006 (Bankr. E.D. La. Case No. 06-10533).  John M.
Landis, Esq. and Michael Q. Walshe, Jr., Esq., at Stone Pigman
Walther Wittman, LLC, represents the Debtors in its restructuring
efforts.  No Official Committee of Unsecured Creditors has been
appointed in the Debtor's bankruptcy proceedings.  When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $50 million and $100 million.


COMPLETE RETREATS: Administaff Wants Debtors Decision on Two Pacts
------------------------------------------------------------------
Administaff Companies II, L.P., asks the U.S. Bankruptcy Court for
the District of Connecticut to compel Complete Retreats LLC and
its debtor-affiliates to assume or reject two client service
agreements the Debtors entered into with Administaff.

Administaff serves as a full-service human resources department
for small and medium-sized businesses throughout the United
States.  Administaff delivers personnel management services by
entering into a co-employment relationship with a client company
and its existing employees.

Before the Debtors' bankruptcy filing, Administaff entered into
two client service agreements with Debtors Preferred Retreats
Design Group, LLC, and Preferred Retreats, LLC.  The Client
Service Agreements were effective as of Jan. 24, 2004, and
Dec. 27, 2003.  The terms of the Agreements are continuous until
either Administaff or the Debtors terminate them in accordance
with their terms.

Pursuant to the Agreements, Administaff:

   -- acts as co-employer of the Debtors' employees;

   -- pays the salaries and wages of the Debtors' employees; and

   -- provides other personnel management services to the
      Debtors.

If the Debtors decided to assume the Service Agreements,
Administaff asks the Court to require the Debtors to provide
adequate assurance of future performance by prepaying all
salaries, wages, and charges in advance of the first pay day of
each payroll period.

Daniel E. Bruso, Esq., at Cantor Colburn LLP, in Bloomfield,
Connecticut, relates that Administaff pays the salaries and wages
of the Debtors' employees in arrears on a bi-weekly basis.  All
payroll checks are drawn on Administaff's account and Administaff
collects its fee to cover wages and other costs for each pay
period by drafting on the Debtors' account when the payroll is
run.  As a result, Administaff incurs financial obligations of
approximately $480,000 per pay period before it is paid by the
Debtors.

Mr. Bruso asserts that Administaff continues to incur liability
to the Debtors' employees but have no adequate assurance that the
Debtors will continue to pay their obligations to Administaff.

              Motion Filing Violates Court Procedures

The Clerk of the Bankruptcy Court notes that Administaff's Motion
was not submitted through the Court's Electronic Filing System
and thus, was filed in violation of the Court's Administrative
Procedures.  Accordingly, the Clerk asserts that the Motion
should be stricken from the Court record.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  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. 8; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


COMPLETE RETREATS: Bingham & Kramer Files Creditors Update Report
-----------------------------------------------------------------
Bingham McCutchen LLP and Kramer Capital Partners LLC, legal and
financial advisors to the Official Committee of Unsecured
Creditors in Complete Retreats LLC and its debtor-affiliates'
Chapter 11 cases, delivered a report to update unsecured
creditors about the Committee's recent efforts as well as certain
emerging events.

Bingham and Kramer have been working on the Committee reports
since Aug. 29, 2006.

In the report, the Committee discloses that it has made
significant progress on a number of fronts in the first few weeks
of the Debtors' Chapter 11 cases.  Among other things, the
Committee has dealt with several critical deadlines that were
established before it was formed, including, among other things:

   * hiring advisors,
   * responding to first day motions,
   * evaluating DIP proposals, and
   * responding to the Debtors' cost reduction initiatives and
     interim revenue enhancement proposals.

The Committee asserts that it is committed to working with the
Debtors to provide an appropriate level of accurate information
to unsecured creditors balanced by the necessity to maintain the
confidentiality of certain information to maximize the value of
the Debtors' estates.

The Committee informs creditors that it is now focusing its
attention on determining the appropriate strategy for maximizing
the value of the Debtors' estates.

The Committee has concluded that a leadership change was required
in order to position the Debtors to move forward in their
restructuring process.

               Evaluation of Strategic Alternatives

The strategic alternatives available to the Debtors include a
stand-alone reorganization, a merger or sale of the Debtors'
assets, and a liquidation of the Debtors' assets.  The Committee's
advisors believe that the recoveries to unsecured creditors could
be severely impaired in a liquidation of the Debtors' assets and
thus, the Debtors should pursue, on a parallel path basis, a stand
alone restructuring and a merger or sale of their assets.

The Debtors have launched a data room and have begun to engage in
due diligence discussions with certain parties interested in
evaluating an acquisition of, or merger with, the Debtors'
businesses pursuant to acceptable confidentiality arrangements.
The Committee advises prospective purchasers to contact Holly
Felder Etlin, the Debtors' chief restructuring officer.

If merger scenarios develop that the Debtors intend to pursue,
the Committee believes that the terms of that transaction will be
substantially finalized by the end of 2006.  If a transaction
were to be completed pursuant to a plan of reorganization, the
Committee expects it to close by early 2007.

                      DIP Facility Timeline

The Debtors anticipate to replace, extend and refinance its
existing secured debt and post-bankruptcy loans so that they will
have credit available through early 2007, the Committee reports.

The Debtors and the Committee are currently considering various
proposals from lenders.  The Committee expects the Debtors to
give a public announcement on those proposals and file a court
motion with detailed terms by the end of September.

                  Forensic Investigation Program

The Committee and the Debtors have begun a forensic investigation
effort concerning prepetition conduct and transactions by the
Debtors, their former officers and directors, and certain other
parties, to determine the extent of their liability to the
estates.

The Committee is committed to pursuing any wrongdoers to the
fullest extent possible through the filing or facilitation of
lawsuits on the Debtors' behalf, according to Michael J. Riley,
Esq., at Bingham McCutchen.

The forensic investigation program will be a coordinated effort
with Xroads Solutions Group LLC and Dechert LLP on behalf of the
Debtors.

The Committee's advisory team for forensic matters will be led
by:

   * Dan McGillycuddy of Bingham McCutchen LLP, a former
     prosecutor in the Frauds Bureau of the New York District
     Attorneys' office; and

   * Michael Hershman, the president and founder of The Fairfax
     Group and a former investigator for the Senate Watergate
     Committee.

                        Section 341 Meeting

The Committee reports that the next "341 Meeting" will be held on
Sept. 28, 2006, at the U.S. Trustee's office, in New Haven,
Connecticut.

In general, a 341 Meeting is a gathering of company
representatives and creditors that wish to attend, whereby the
company representatives are placed under oath and questioned by
the U.S. Trustee about operations, business going forward and
other matters.

The upcoming 341 Meeting is time to coincide with the filing of
the Debtors' Schedules of Assets and Liabilities and the
Statements of Financial Affairs.  Thus, the Committee expects the
U.S. Trustee to focus on financial and claims-related matters at
the upcoming meeting.

A full-text copy of the Committee's Report dated August 2006 is
available for free at:

               http://researcharchives.com/t/s?1219

A full-text copy of the Committee's Report dated September 2006
is available for free at:

               http://researcharchives.com/t/s?121b

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  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. 8; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CONDO 53: Case Summary & Largest Unsecured Creditor
---------------------------------------------------
Debtor: Condo 53, LLC
        44 Grafton Street
        A-1 Hartford, CT 06106

Bankruptcy Case No.: 06-20869

Chapter 11 Petition Date: September 19, 2006

Court: District of Connecticut (Hartford)

Debtor's Counsel: Kevin L. Mason, Esq.
                  Neistat & Mason
                  47 East Cedar Street
                  Newington, CT 06111
                  Tel: (860) 666-6022
                  Fax: (860) 666-6710

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Largest Unsecured Creditor:

   Entity                 Nature of Claim          Claim Amount
   ------                 ---------------          ------------
Northern Source, LLC      Mortgage                   $1,300,000
132 West 31st Street
14th Floor                                    Value: $2,000,000
New York, NY 10001                        Unsecured:   $333,299


CONTINENTAL AIRLINES: Defends DOT China Route Application
---------------------------------------------------------
Continental Airlines, Inc., says its application to serve the
largest U.S.-China market currently without nonstop service - New
York/Newark-Shanghai - should be approved by the U.S. Department
of Transportation because the airline has made the best case for
the route award.

The Company further says that its proposed flight from Newark
Liberty International Airport would conveniently link metropolitan
New York City with China's center for finance and trade.

                     Third Quarter Outlook

For the third quarter, The Company expects the mainline load
factor to be up about 1 point year-over-year on a mainline
capacity increase of 8.4%.  It expects Mainline Domestic load
factor to be up about 1 point year-over-year on 6% more capacity,
with modest year-over-year yield improvements.

The Company expects the Mainline Transatlantic load factor to be
down about 2 points year-over-year on a capacity increase of
14.5%, and Mainline Latin load factor to be up 3 to 4 points year-
over-year on a capacity increase of 12.5%, with strong year-over-
year yield improvements.

The Company expects Pacific load factor to be up about 3 points
year-over-year with capacity up slightly year-over-year and strong
yield improvements.

For Regional Operations, the Company expects the load factor to be
up 1 to 2 points year-over-year on a capacity increase of 12.4%,
with modest year-over-year yield improvements.

The Company disclosed that it has contributed $176 million to the
pension plans to date and estimates that its 2006 pension plan
contributions will total approximately $210 million.

The Company estimates its non-cash pension expense will be
approximately $185 million for the year, which includes year-to-
date settlement charges of $29 million related to lump-sum
distributions from the pilot's frozen defined benefit plan.
Additional settlement charges are expected for the remainder of
2006.

The Company also estimates its 2007 pension plan contributions
will total approximately $200 million.

The Company also disclosed that it expects to record stock option
expense of $6 million for the third quarter and $26 million for
the full year 2006.

Cargo, mail and other revenue are estimated to be approximately
$280 million for the third quarter 2006.

Scheduled debt and capital lease principal payments for the third
quarter 2006 are estimated to be approximately $92 million.

Using petroleum swap contracts, the Company also disclosed that it
has hedged approximately 33% of its projected fuel requirements
for the third quarter with a weighted average swap price of $73.18
per barrel, and 28% of its projected fuel requirements for the
fourth quarter, with a weighted average swap price of $75.20 per
barrel.  The Company is minimally hedged for the first quarter
2007.

The Company expects to record income of approximately $26 million
for the full year 2006 related to the tax sharing agreement with
ExpressJet.

The Company further disclosed that it anticipates ending the third
quarter 2006 with an unrestricted cash and short-term investments
balance of between $2.4 billion and $2.5 billion and that due to
accumulated losses, it has stopped recording income tax benefit on
current and future book losses and does not expect to record a tax
expense or pay cash taxes this year.

Continental Airlines (NYSE: CAL) -- http://continental.com/-- is
the world's fifth largest airline.  Continental, together with
Continental Express and Continental Connection, has more than
3,200 daily departures throughout the Americas, Europe and Asia,
serving 154 domestic and 138 international destinations.  More
than 400 additional points are served via SkyTeam alliance
airlines.  With more than 43,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 61 million passengers
per year.  Continental consistently earns awards and critical
acclaim for both its operation and its corporate culture.

                          *     *     *

As reported in the Troubled Company Reporter on May 29, 2006,
Standard & Poor's Ratings Services assigned its 'AAA' preliminary
rating to Continental Airlines Inc.'s (B/Negative/B-3)
$190 million Class G pass-through certificates, and its 'B+'
preliminary rating to the $130 million Class B pass-through
certificates.

As reported in the Troubled Company Reporter on May 26, 2006,
Moody's Investors Service assigned Aaa rating to the Class G
Certificates and B1 rating to the Class B Certificates of
Continental Airlines, Inc.'s 2006-1 Pass Through Trusts Pass
Through Certificates, Series 2006-1.


DATALOGIC INT'L: Subsidiary Determines Source of $550,000 Deposits
------------------------------------------------------------------
DataLogic International, Inc., has determined that deposits,
totaling $550,000, were advanced on behalf of Derek K. Nguyen,
chief information officer and a member of the board of directors,
and Keith D. Nguyen, chief financial officer and a member of the
board of directors.

As reported in the Troubled Company Reporter on Sept. 5, 2005, the
Company through its wholly owned subsidiary, DataLogic Consulting,
Inc., during the period from Aug. 8, 2006 through Aug. 21, 2006,
received deposits totaling $550,000 into its bank account on terms
and conditions that was not fully determined due to its failure to
maintain an effective system of internal controls.

The funds were used to meet the Company's August 2006 payroll
obligations and Aug. 2006 principal and interest payment to Laurus
Master Fund, Ltd.  DCI required the funding due to unanticipated
delays in its collection of accounts receivable.  DCI is working
to improve the collection of its accounts receivable.

The Company has entered into a promissory note with each of Derek
K. Nguyen and Keith D. Nguyen, in the amount of $250,000 and
$300,000 respectively, to evidence the deposits.  The officer
loans are unsecured, are subordinated to the Company's senior
secured indebtedness, are non-transferable and bear interest at
6% per annum.  All amounts advanced under the officer loans are
due and payable in monthly installments from Oct. 8, 2006 through
Aug. 17, 2007.

             Grant of "most favored nations" Rights

The Company also disclosed that it granted the investors in its
May 2006 private placement of common stock certain "most favored
nations" rights.  Specifically, during the 12-month period after
the closing of the private placement, if the Company or a
subsidiary consummates another financing of common stock, common
stock equivalents or debt securities, the investors have the right
to exchange any remaining shares purchased in the private
placement for the securities offered in the new financing.

The "most favored nations" rights were not extended to the Officer
Loans.  If the Company's entry into the Officer Loans is
determined to have triggered the investors' "most favored nations"
rights, the Company would be obligated to exchange up to 8,125,000
shares of common stock issued in the private placement for up to
$1.625 million in promissory notes with the same terms and
conditions as the Officer Loans.

            Laurus Hold Access to "lockbox" Account

Laurus Master Fund, Ltd., on Sept. 5, 2006, placed a hold on the
access to funds held in the "lockbox" account, through which the
Company receives payment of its accounts receivable.

Approximately $454,000 has been redirected from the "lockbox" to
Laurus and applied as prepayments to the outstanding note.  The
Laurus action was based on the default notice served to the
Company.  Without access to funds in the "lockbox" account, the
Company does not have sufficient funds to meet its payroll
obligations to employees or otherwise support its operations.

The Company and its subsidiaries, on Sept. 15, 2006, began
notifying employees that they would not be able to meet their
payroll obligations.  As of Sept. 15, 2006, the Company and its
subsidiaries owed approximately $480,000 in outstanding payroll
obligations.  The inability to pay the amounts may result in the
employees terminating their relationship with the Company and its
subsidiaries and/or pursuing legal remedies.

A material loss of its employee base may result in the inability
of the Company and its subsidiaries to meet their obligations to
customers, the loss of key customer relationships and revenue, and
claims for breach of contractual obligations.

Based in Irvine, Calif., DataLogic International, Inc.,
(OTCBB: DLGI) -- http://www.dlgi.com/-- is a technology and
professional services company providing a wide range of consulting
services and communication solutions like GPS based mobile asset
tracking, secured mobile communications and VoIP.  The Company
also provides Information Technology outsourcing and private label
communication solutions.  DataLogic's customers include U.S. and
international governmental agencies as well as a variety of
international commercial organizations.

                         Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
Corbin & Company, LLP, raised substantial doubt about DataLogic
International, 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 auditing firm pointed to the
Company's recurring losses and need to establish profitable
operations.

As reported in the Troubled Company Reporter on Sept. 14, 2006
DataLogic International, Inc., received a Default Notice from
Laurus Master Fund, Ltd., relating to the $3,250,000 Secured Term
Note, as amended, between the Company and Laurus dated
Jan. 20, 2006.  Under the terms of the Note, Laurus may accelerate
the entire Note upon an event of default.  The Company discloses
that it is currently reviewing its alternatives.


DELPHI CORP: Computer Patent Seeks Decision on Services Contract
----------------------------------------------------------------
Computer Patent Annuities Limited asks the Honorable Robert D.
Drain of the U.S. Bankruptcy Court for Southern District of New
York to compel Delphi Corporation and its debtor-affiliates to
either assume or reject their Quarterly Patent and Design Patent
Renewal Services contract.

Pursuant to the Contract, Computer Patent arranges for the renewal
of the Debtors' patents through numerous local contractors.  The
Debtors are invoiced quarterly for the patent renewal fees.
Computer Patent, however, is required to pay the local contractors
regardless of when or if the Debtors meet their obligations under
the Contract.

Dorothy H. Marinis-Riggio, Esq., at Clinoff & Katz, LLP, in New
York, points out that absent assumption of the Contract, there is
no protection available to Computer Patent that guarantees it will
be paid for the patents renewed on the Debtors' behalf.

In January 2006, the parties reached agreement whereby Computer
Patent will invoice the Debtors more than 60 days in advance of
each succeeding quarter so that they would have sufficient time to
process the invoice and pay Computer Patent before the renewal
deadline for the quarter.  The agreement was intended to provide
the Debtors with additional time to process the quarterly invoices
while at the same time reduce the financial risk posed to Computer
Patent under the Contract.

Despite the agreement, the Debtors continued to pay the invoices
late.  Ms. Marinis-Riggio states that the Debtors' pattern of
untimely payments forced Computer Patent to advance substantial
renewal payments on the Debtors' behalf.

Ms. Marinis-Riggio asserts that if the Debtors continue to require
its services, they should be required to ensure payment by
assuming the contract.  Computer Patent's continued performance
under the Contract in the absence of assumption imposes an
unreasonable burden.

If the Debtors decide to reject the Contract, Computer Patent asks
the Court to grant administrative expense status for the unpaid
patent renewal fees advanced on the Debtors' behalf.

In the alternative, Computer Patent asks the Court to compel the
Debtors to provide adequate protection payments before the start
of each quarter.

                          About Delphi Corp.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


DORAL FINANCIAL: Agrees to Pay $25 Mil. Civil Penalty to the SEC
----------------------------------------------------------------
Doral Financial Corporation has reached an agreement with the
Securities and Exchange Commission to resolve the Commission's
investigation of the Company in connection with the restatement of
the Company's financial statements for the years 2000 to 2004.

"This agreement is a major step forward in resolving the legal and
regulatory issues facing Doral" Glen Wakeman, Chief Executive
Officer, said.  "We have implemented and will continue
implementing improvements in our accounting, financial reporting
and corporate governance.  We are working vigorously to build the
new Doral."

Under the agreement approved by the Commission, the Company
agreed, without admitting or denying any wrongdoing, to be
enjoined from future violations of certain provisions of the
securities laws.  The Company also agreed to pay a $25 million
civil penalty to the Commission.  The staff of the Commission may
request that the civil penalty be distributed to investors under a
plan of distribution to be established by the Commission, as
authorized under the Sarbanes-Oxley Act of 2002.

                    About Doral Financial Corp.

Doral Financial Corporation (NYSE: DRL) --
http://www.doralfinancial.com/-- a financial holding company, is
the largest residential mortgage lender in Puerto Rico, and the
parent company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency, Inc. and
Doral Bank FSB, a federal savings bank based in New York City.

                           *     *     *

As reported in the Troubled Company Reporter on June 13, 2006,
Standard & Poor's Ratings Services lowered its long-term ratings
on Doral Financial Corp., including the company's long-term
counterparty rating, to 'B+' from 'BB-'.  At the same time,
Doral's outlook remains on CreditWatch with negative implications.


DURA AUTOMOTIVE: Moody's Pares Junked Ratings on $856MM Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service has lowered the ratings of Dura
Operating Corporation, and its direct parent, Dura Automotive
Systems, Inc.  Dura Automotive's Corporate Family Rating has been
lowered to Ca from Caa1.  Moody's also assigned a probability of
default rating of Caa3 to Dura Automotive.  Dura Operating Corp.'s
senior secured second lien ratings were lowered to Caa2 (LGD 3,
35%) from Caa1, the senior unsecured notes were lowered to Ca (LGD
4, 61%) from Caa3; and the senior subordinated notes were lowered
to C (LGD 6, 92%) from Ca.  Dura Automotive Systems Capital
Trust's preferred securities also were lowered to C (LGD 6, 98%)
from Ca.

The lowered ratings reflect the company's ongoing operating
pressures in the automotive supplier sector, which have recently
been exacerbated by the announcement of additional production
declines in the second half of 2006.  Sales to Ford and GM
approximate 23% and 20% of revenue, respectively, with roughly
half of Ford exposure, and 75% of GM exposure derived in the US.

Combined with the company's announced restructuring program and
interest payments on its senior unsecured and senior subordinated
notes in the fourth quarter, the lower expected production in the
second half of 2006 will increase the cash flow pressure on the
company.  The company's Atwood division is expected to be impacted
by non-recurring FEMA sales resulting from hurricane Katrina and
higher fuel cost.  The outlook remains negative reflecting the
continuing industry pressures of lower Big 3 production in North
America, raw material pricing pressures, and published reports
indicating the company has hired restructuring advisors.

These are the ratings:

   * Probability-of-Default rating of Caa3

Ratings lowered:

   *Dura Automotive Systems, Inc.:

    -- Corporate Family Rating to Ca from Caa1;

   * Dura Operating Corp.:

     -- $150 million guaranteed senior secured second-lien
        term loan due May 2011, to Caa2 (LGD 3, 35%) from Caa1;

     -- $75 million guaranteed senior secured second-lien add-on
        term loan due May 2011, to Caa2 (LGD 3, 35%) from Caa1;

     -- $400 million of 8.625% guaranteed senior unsecured notes
        due April 2012 (consisting of $350 million and $50
        million tranches), to Ca (LGD 4, 61%) from Caa3;

     -- $456 million of 9% guaranteed senior subordinated
        notes due May 2009, to C (LGD 6, 92%) from Ca;

     -- EUR100 million of 9% guaranteed senior subordinated
        notes due May 2009, to C (LGD 6, 92%) from Ca;

   * Dura Automotive Systems Capital Trust:

     -- $55.25 million of 7.5% convertible trust preferred
        securities due 2028, to C (LGD 6, 98%) from Ca

Ratings affirmed:

   * SGL-4 Speculative Grade Liquidity Rating

Dura Automotive's $175 million guaranteed senior secured first-
lien asset-based revolving credit is not rated by Moody's.

The last rating action was July 28, 2006 when the ratings were
lowered.

Dura Automotive, headquartered in Rochester Hills, Michigan,
designs and manufactures components and systems primarily for the
global automotive industry including driver control systems,
structural door modules, glass systems, seating control systems,
exterior trim systems, and mobile products.   Annual revenues
approximate $2.3 billion.


DYNEGY INC: LS Power Merger Cues Moody's to Affirm Low-B Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Dynegy Holdings
Inc., including the B1 Corporate Family Rating and the B2 rating
for its senior unsecured debt.  Moody's also affirmed the ratings
of DHI's parent, Dynegy Inc., including the (P)Caa1 rating for its
shelf registration for issuance of senior unsecured debt.  The
rating outlook for DYN and DHI remains stable.

This affirmation follows the announcement that DYN has agreed
to merge with various affiliated companies jointly referred to
as LS Power, a privately owned independent power project developer
and operator.  DYN will exchange 340 million shares
of Class B stock (equal to about 40% of total equity), valued at
approximately $2 billion; $275 million in junior subordinated
notes; and $100 million in cash for 100% of LS Power's equity
interest in its power generation portfolio and a 50% interest in a
generation development joint-venture.  LS Power's $2.4 billion in
funded project debt will remain in place, but will be non-recourse
to Dynegy.  DHI's credit facilities will not be available to the
projects.  As such, the transaction is being accomplished with a
minimal increase in recourse debt.

The merger will increase the size of Dynegy's portfolio of
generating assets by roughly two-thirds, to approximately 20,000
MW, while improving Dynegy's geographic, fuel and dispatch
diversity.  In addition, Dynegy will have the opportunity to
participate in LS Power's development pipeline, which includes
another 10,000 MWs of greenfield and repowering projects.  The
transaction is expected to increase Dynegy's operating cash flow,
and LS Power's hedges and power sales agreements should provide a
greater degree of stability to the company's revenues, which are
currently largely unhedged and vulnerable to commodity price
volatility.  However, the projects are highly leveraged and
Moody's does not anticipate a substantial improvement in Dynegy's
consolidated financial ratios as a direct result of the merger.
Moody's notes that much of the free cash flow generated by the LS
Power projects will be trapped by cash sweep mechanisms requiring
the prepayment of the project debt.

While the near-term impact of the merger may be limited,
management has disclosed that based solely on the projected net
financial impact of the recent wholesale power auction in
Illinois, where Dynegy's largest coal-fired baseload assets are
located, the company could realize a potential increase of
$90-$100 million in operating margin for 2007 as compared to 2006.
The auction will replace a portion of a below-market contract with
Ameren that expires at the end of this year with a multi-year
commitment to provide up to 1,400 MWs of capacity on a load-
following basis at the around the clock price of $65/MWh.  Moody's
expects that the combined impact of the merger, the auction, and
other on-going improvements will result in adjusted funds from
operation to debt and FFO to interest ratios in excess of 10% and
2x respectively by the end of 2007, which would be consistent with
the existing B1 Corporate Family Rating.

Dynegy is an independent power producer headquartered in Houston,
TX, with a 12,820 MW portfolio of assets.


E.DIGITAL CORP: June 30 Balance Sheet Upside Down by $3.5 Million
-----------------------------------------------------------------
e.Digital Corporation's balance sheet at June 30, 2006 showed
total assets of $621,817 and total liabilities of $4,176,523
resulting to a total stockholders' deficit of $3,554,706.  The
Company's total stockholders' deficit as of March 31, 2006 stood
at $2,453,859.

The Company's balance sheet at June 30, 2006 also showed negative
working capital with $571,757 in total current assets and
$4,176,523 in total current liabilities.

For the three months ended June 30, 2006, the Company reported
a $683,685 operating loss from total revenues of $21,105, compared
to a $529,873 operating loss from total revenues of $998,209 in
the three months ended June 30, 2005.

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

               http://researcharchives.com/t/s?120c

With principal executive offices at San Diego, California,
E.Digital Corporation -- http://www.edigital.com/-- designs and
markets digital technology product platforms employing portable
storage media, with the major categories being digital video
recorder/players, digital music recorder/players and related
mobile devices.  It also has experience developing digital
automotive technology platforms and a wireless technology
platforms.


EXIDE TECHNOLOGIES: Seeks Summary Judgment on EPA Response Claims
-----------------------------------------------------------------
Exide Technologies and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to enter a summary
judgment in its favor regarding the U.S. Environmental Protection
Agency's claims.

The U.S. Government, on behalf of the EPA, previously sought
payment for response costs from Exide due to releases of hazardous
substances at, and from, Exide's Price Battery Superfund and
Broomworks Superfund Site in Hamburg, Pennsylvania.

James O'Neill, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub LLP, in Wilmington, Delaware, points out that Exide and
the EPA agreed in a consent order dated June 11, 2003, that the
lead-contaminated sites would be remediated by capping.  Despite
the EPA's approval of the method, however, it decided to conduct
a full-scale removal of the soil.

Mr. O'Neill tells the Court that as a result, the EPA caused
Exide to incur greater expenses than it otherwise would have
incurred to effect the remediation.

Mr. O' Neill argues that the EPA should not be awarded response
costs because the EPA:

    * acted arbitrarily and capriciously, and inconsistently with
      the Superfund National Contingency Plan, when it failed to
      take reasonable steps to determine Exide's ownership of the
      site; and

    * further violated the NCP when it based a warrant application
      for the site on incorrect and misleading statements.

The NCP establishes the procedures and requirements for
responding to hazardous substance sites.

According to Mr. O' Neill, even if some of the costs must be
paid, which Exide contests, the costs cannot be given
administrative priority because the EPA's remediation was
unnecessary and did not benefit the estate.  Rather, the costs
should be treated as a general, unsecured prepetition claim based
on the prepetition deposition of the contamination the EPA sought
to remedy.

                           About Exide

Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.  The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004.  On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.  (Exide Bankruptcy News, Issue No. 91;
Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)


EXIDE TECHNOLOGIES: U.S. Seeks Summary Judgment on Response Costs
-----------------------------------------------------------------
The U.S. Government asks the U.S. Bankruptcy Court for the
District of Delaware for a summary judgment on Exide Technologies'
liability under the Comprehensive Environmental Response,
Compensation, and Liability Act for costs incurred by the U.S.
Government in responding to the release and threat of release of
lead from Exide's Price Battery Superfund and the Broomworks
Superfund sites in Pennsylvania.

Specifically, the U.S. Government asks the Court to:

    * hold the Debtors liable for the response costs; and
    * grant administrative expense status to the costs.

Donna D. Duer, Esq., at the Environmental Enforcement Section of
the U.S. Department of Justice, in Washington, D.C., discloses
that Exide assumed responsibility for cleaning up the sites
pursuant to the June 11, 2003 consent order.

For response costs between the Petition Date and the confirmation
date of the Debtors' Plan of Reorganization, the EPA incurred:

    (1) $177,446 for the Broomworks Site; and
    (2) $240,769 for the Price Battery Site.

Ms. Duer notes that the undisputed facts show that:

    (a) Exide is the owner of the Price Battery Site and the
        Broomworks Site, each of which is a "facility" from which
        there has been a release of lead under the CERCLA;

    (b) the Debtor's affirmative defense is wholly without merit
        and fails as a matter of law because Exide's claim that
        the EPA did not notify its counsel of the EPA's proposed
        removal action is irrelevant to the issue of liability;
        and

    (c) the EPA made significant efforts to determine who owned
        the property, including questioning Exide about its
        ownership of the property and obtaining a valid access
        warrant before entering the property.

Ms. Duer explains that because the undisputed facts show that the
Debtor is liable under Section 107(a) of CERCLA, the U.S.
Government is entitled to summary judgment on the issue of the
Debtor's liability.

The U.S. Government further asks the Court to enter summary
judgment declaring that the $418,216 response costs it is
entitled to recover from Exide are administrative expenses of the
estate.

Ms. Duer tells the Court that no genuine issue of material fact
exists because there is no dispute that:

    (i) the U.S. Government incurred response costs at the sites;
        or

   (ii) the costs are within the categories of recoverable costs
        under the CERCLA.

Furthermore, Ms. Duer asserts that the declarations the U.S.
Government submitted to the Court fully establish the amounts of
the response costs it incurred at, or in connection with, the
Sites between April 15, 2002, and April 21, 2004.

Ms. Duer asserts that Exide cannot demonstrate that the EPA's
choice of response action was inconsistent with the National
Contingency Plan.

                           About Exide

Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.  The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004.  On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.  (Exide Bankruptcy News, Issue No. 91;
Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)


FORD MOTOR: Buying Rover Brand Name From BMW
--------------------------------------------
Ford Motor Co. will exercise its right to purchase the "Rover"
brand name from BMW AG, in order to prevent confusion regarding
the brand among customers, Newratings.com reports.

Ford purchased the Land Rover brand from BMW in 2000 and holds the
option to acquire the Rover brand as part of that deal.  Land
Rover is a unit of Ford's Premier Automotive Group, which includes
other brands like Volvo, Jaguar and Aston Martin.  The segment
incurred a $180 million net loss in Ford's second quarter results.

According to Newratings.com, BMW has agreed to sell the Rover
brand to Shanghai Automotive Industry Corp for GBP11 million if
Ford won't exercise its right.  SAIC had previously acquired the
right to the designs for the Rover cars from BMW.

James Doran, writing for The Times, reports that while Ford does
not intend to roll out the Rover in its original form, the company
is planning to introduce Rover vehicles under the Land Rover
series.

                         About Ford Motor

Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- manufactures and distributes
automobiles in 200 markets across six continents.  With more
than 324,000 employees worldwide, the company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar,
Land Rover, Lincoln, Mazda, Mercury and Volvo.  Its automotive-
related services include Ford Motor Credit Company and The Hertz
Corporation.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 22, 2006,
Dominion Bond Rating Service placed long-term debt rating of
Ford Motor Company Under Review with Negative Implications
following announcement that Ford will sharply reduce its North
American vehicle production in 2006.  DBRS lowered on July 21,
2006, Ford Motor Company's long-term debt rating to B from BB,
and lowered its short-term debt rating to R-3 middle from R-3
high.  DBRS also lowered Ford Motor Credit Company's long-term
debt rating to BB(low) from BB, and confirmed Ford Credit's
short-term debt rating at R-3(high).

Fitch Ratings also downgraded the Issuer Default Rating of Ford
Motor Company and Ford Motor Credit Company to 'B' from 'B+'.
Fitch also lowered the Ford's senior unsecured rating to
'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured
rating to 'BB- /RR2' from 'BB/RR2'.  The Rating Outlook remains
Negative.

Standard & Poor's Ratings Services also placed its 'B+' long-
term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor
Credit Co., and related entities on CreditWatch with negative
implications.

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


FOSS MANUFACTURING: Disclosure Statement Hearing Set for Oct. 10
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire will
convene a hearing at 1:30 p.m., on Oct. 10, 2006, to consider the
adequacy of the Disclosure Statement explaining the Plan Of
Liquidation proposed by the Official Committee of Unsecured
Creditors appointed in Foss Manufacturing Company, Inc.'s
bankruptcy case.

The Committee's Plan is intended to provide a vehicle to realize
upon the remaining assets of the Debtor following the sale of
substantially all of its operating assets on May 5, 2006, to Foss
Manufacturing Company LLC, for approximately $39 million.

The Debtor's remaining assets consist primarily of Causes of
Action, including claims against Company insiders for breach of
fiduciary duty, illegal dividends and corporate waste, and
avoidance claims under sections 544(b), 547 and 548 of the
Bankruptcy Code.

On the effective date of the Plan, the Debtor's remaining assets
will vest into the Liquidating Debtor.  Under the direction and
control of the Plan Administrator and the Oversight Committee, the
Liquidating Debtor will be responsible for the liquidation
(through prosecution, settlement or other disposition) of the
Causes of Action, as well as any miscellaneous assets of the
Debtor, and the distribution of the proceeds to creditors.

The Committee has selected Lawrence E. Rifken, Esq., at
McGuireWoods LLP, as Plan Administrator.

                       Treatment of Claims

The Plan designates three Classes of Claims and two Classes of
Interests, which include all Claims against, and Interests in, the
Debtor.  Because creditor recoveries will depend primarily upon
recoveries from the Causes of Action, no estimate can be provided
as to how much can be recovered by creditors in each Class.

The Committee is currently not aware of any remaining secured
claim against the estate except for the purported claim asserted
by the Pension Benefit Guaranty Corporation.  The Committee
maintains that the PBGC's collateral was sold to the Buyer and
that, as a result, the PBGC is no longer a secured creditor.  Any
allowed secured claim will receive either the collateral securing
its claim or the net proceeds from the sale of the collateral, up
to the allowed amount of the claim.

On the effective date, Holders of Priority Claims other than
Priority Tax Claims, estimated to total $3 million, will get a pro
rata portion of available cash after the payment of allowed
Administrative claims and the establishment of appropriate Plan
Reserve Accounts.  The Plan Administrator will make additional
periodic cash distributions from available cash on a pro rata
basis until the earlier of the date that the claims are paid in
full or all estate assets have been exhausted.

General Unsecured Claimholders , estimated at between $23 million
to $35 million, will receive a pro rata portion of available cash
on the effective date after the payment of Allowed Administrative
Expense Claims, Allowed Priority Tax Claims and Allowed Other
Priority Claims and the establishment of appropriate Plan Reserve
Accounts.  General unsecured creditors are also entitled to
periodic cash distributions from available cash on a pro rata
basis until the earlier of the date that their claims are fully
paid or estate assets are exhausted.

Holders of the Debtors' Preferred and Common Stock will get
nothing under the Plan and their interests will be cancelled on
the effective date.

A copy of the Disclosure Statement is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060921213543

A copy of the Disclosure Statement and Plan of Liquidation may
also be obtained by sending a written request to the local counsel
for the Committee at:

            McLane, Graf, Raulerson & Middleton PA
            Attn: Joseph A. Foster, Esq.
            P.O. Box 326, 900 Elm Street
            Manchester, NH 03105-0326

Objections to the Disclosure Statement must be filed with the
Court on or before 4:30 p.m., on Oct. 3, 2006.

                   About Foss Manufacturing

Headquartered in Hampton, New Hampshire, Foss Manufacturing
Company, Inc. -- http://www.fossmfg.com/-- is a producer of
engineered, non-woven fabrics and specialty synthetic fibers, for
a variety of applications and markets.  The Company filed for
chapter 11 protection on Sept. 16, 2005 (Bankr. D. N.H. Case No.
05-13724).  Andrew Z. Schwartz, Esq., at Foley Hoag LLP
represented the Debtor.  Beth E. Levine, Esq., at Pachlski, Stang,
Zieh, Young, Jones & Weintraub represents the Official Committee
of Unsecured Creditors.  The Court appointed Patrick J. O'Malley
as the Debtor's Chapter 11 Trustee and lawyers from Hanify & King,
Perkins, Smith & Cohen, LLP, and Mintz, Levin, Cohn, Ferris
represent the Chapter 11 Trustee.  When the Debtor filed for
protection from its creditors, it listed $49,846,456 in assets and
$53,419,673 in debts.


FRIENDLYWAY C0RP: Posts $3.5M Net Loss in 3rd Qtr. Ended July 31
----------------------------------------------------------------
friendlyway Corporation, now known as PSI Corp, filed its
financial statements for the third fiscal quarter ended
July 31, 2006, with the Securities and Exchange Commission on
Sept. 15, 2006.

The Company reported a $3,538,187 net loss on $164,740 of total
revenues for the three months ended July 31, 2006, compared with
an $807,921 net loss on $548,126 of total revenues for the same
period in 2005.

At July 31, 2006, the Company's balance sheet showed $1,270,779 in
total assets and $3,739,471 in total liabilities, resulting in a
$2,468,692 stockholders' deficit.

The Company's balance sheet also showed strained liquidity with
$936,788 in total current assets available to pay $1,434,471 in
total current liabilities coming due within the next 12 months.

Full-text copies of the Company's third fiscal quarter are
available for free at http://ResearchArchives.com/t/s?121f

                        Recent Acquisitions

On May 2, 2006, friendlyway Corp. acquired Pantel Systems Inc. and
Pantel Financial Centers in exchange for 20,000,000 shares of its
common stock for all the outstanding shares of Pantel.

In August 2006, the Company purchased the assets of Ignition Media
Group for a $2.5 million purchase price consisting of $1 million
in cash and 1.5 million in stock.  The Company believes this
acquisition will enable it to successfully access the digital
advertising forum as well as the national media network.

In August 2006, the Company purchased the assets of Big Fish
Marketing Inc. for a $1.5 million purchase price, of which
$150,000 in cash is payable over six months and the balance in
stock.  The Company believes this acquisition will give them
entrance to media advertising and content development fields.

                        Going Concern Doubt

Lopez, Blevins, Bork & Associates, LLP, in Houston, Tex., raised
substantial doubt about friendlyway Corp.'s ability to continue as
a going concern after auditing their consolidated financial
statements for the year ended Oct. 31, 2005.  The auditor pointed
to the Company's operating losses, accumulated deficiencies, and
need for additional working capital to develop its business or
additional financing necessary to support its working capital
requirements.

                         About friendlyway

Headquartered in Colorado Springs, Colo., friendlyway Corporation
nka PSI Corp. (OTCBB: FDWY) -- http://www.friendlywayinc.com/--  
is a self-service provider of customer-facing public access self-
service systems primarily in the United States of America.  PSI
Corp. has developed an e-Banking kiosk, which is a stand alone,
full function financial center for customers who desire ATM cash
transactions, check cashing, money order purchasing, money
transfers, prepaid debit card transactions, bill payment, and
bilingual text and audio response.


FTS GROUP: Earns $1.6 Million for the Period Ended June 30
----------------------------------------------------------
FTS Group, Inc., reported a net loss of $56,867 on revenues of
$1,633,392 for the three months ended June 30, 2006.

At June 30, 2006, the Company's balance sheet showed $7,196,971 in
total assets, $5,352,419 in total liabilities and $1,844,552 in
stockholders' equity.

The Company's June 30 balance sheet also showed strained liquidity
with $1,239,377 in total current assets available to pay
$3,850,749 in total current liabilities coming due within the next
12 months.

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

              http://ResearchArchives.com/t/s?120d

                      Going Concern Doubt

Withum Smith & Brown, P.C., in Princeton, New Jersey, raised
substantial doubt about FTS Group, 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 and working capital deficits.

                       About FTS Group

FTS Group, Inc., develops and acquires businesses primarily
in the wireless industry.  Through FTS Wireless, Inc., a
wholly-owned subsidiary, acquires and develops a chain of
retail wireless locations in the Gulf Coast market of Florida.
As of March 1, 2006, the Company operates nine retail wireless
locations in Florida.


G+G RETAIL: Assigns More than 400 Leases to Max Rave
----------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York authorized G+G Retail Inc. to assume
over 400 leases of non-residential real property and assign these
leases to Max Rave, LLC.

Early this year, Max Rave, and Guggenheim Corporate Funding LLC,
won the auction of substantially all of the Debtor's assets.  GCF
provided equity and loan commitments for Max Rave to:

     * fund the purchase of the company,
     * provide fresh inventory for stores, and
     * provide operating working capital for operations.

Max Rave paid the Debtor $35 million in cash plus the assumption
of certain leases, payment of gift certificate liability and
inventory purchased postpetition.  Max Rave also agreed to pay the
cure amounts for the assigned leases.

A list of the assumed and assigned leases is available for free
at http://researcharchives.com/t/s?1218

Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G.  The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152).  William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts.  Scott L.
Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C.,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protection from its creditors, it estimated
assets of more than $100 million and debts between $10 million to
$50 million.


GENERAL MOTORS: Talks with Nissan and Renault Enter Final Phase
---------------------------------------------------------------
Talks on the planned collaboration between General Motors
Corporation and the Nissan Motor Company-Renault SA alliance have
entered the final stage as the Oct. 15, 2006 preliminary deadline
for the parties to complete a review on the potential benefits of
the tie-up approaches, The Yomiuri Shimbun reveals.

According to the Yomiuri, General Motors' interest in the deal has
waned, especially over the idea of forming a capital alliance.
Consequently, the nature of the tie-up may turn out to be much
less comprehensive than the Nissan-Renault bloc had initially
planned.

In July, the three carmakers agreed to conduct a 90-day study of
the potential benefits of an alliance that could create an
automobile giant with a combined annual production of 15 million
vehicles, The Associated Press reports.  The study came after GM
shareholder Kirk Kerkorian, who owns a 9.9% stake in the company
through his investment firm Tracinda Corp., called for the
carmakers to pursue an alliance.

Carlos Ghosn, the chief executive of Renault and Nissan, has said
the benefits from an alliance would be similar to the gains from
the Renault-Nissan alliance, which have included cost savings from
joint purchases of auto parts, AP relates.

Renault SA has named BNP Paribas to advise on a possible three-way
alliance with General Motors Corp. and Nissan Motor Co.  According
to AFX, the French carmaker has also drawn up a shortlist of
around eight British and US banks from which it will choose a
second adviser.

If the firms reach a comprehensive tie-up deal with capital
involvement, the alliance would create a giant that produces 25%
of all automobiles in the world, the Yomiuri says.  General
Motors, however, has been cautious since the talks began, whereas
the Nissan-Renault side has been consistently positive over the
prospective deal.

The opposition of the United Auto Workers' Union may be a factor
behind General Motors' reluctance, according to the Yomiuri.
Alarmed by Mr. Ghosn's past record on aggressive corporate
restructuring, union head Ron Gettelfinger has publicly said he
wants talks on the three-way alliance to be put away forever.
With the rise of such resistance in the United States, Mr. Ghosn
now seems to have backed down from his initial goal of acquiring a
capital stake in General Motors to maximize the synergy effect of
the alliance, and has said a capital tie-up is not a precondition
to the deal.

                      About General Motors

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

                           *     *     *

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

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

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

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


GEORGIA GULF: Fitch Assigns B Rating to Proposed Sr. Sub. Notes
---------------------------------------------------------------
Fitch Ratings assigned a 'BB-' rating to Georgia Gulf
Corporation's proposed senior unsecured notes due 2014 and a 'B'
rating to the company's proposed senior subordinated notes due
2016.  These ratings affect approximately $750 million of new
notes.

The Issuer Default Rating would be downgraded to 'BB-' from 'BB'
upon the closing of Georgia Gulf's acquisition of Royal Group
Technologies and the Rating Outlook would be Negative.

Fitch previously assigned a 'BB+' rating to the proposed senior
secured credit facility in August.  Georgia Gulf's current credit
ratings remain on Rating Watch Negative pending the closing of the
acquisition.

An IDR of 'BB-' incorporates:

   * the benefit of greater integration in the vinyls chain;

   * the potential for greater earnings and cash flow with less
     volatility; and

   * some success in realizing cost synergies.

However, the rating is tempered by concerns regarding high
leverage, particularly as the PVC resin market is expected to
loosen and residential construction activity may be slowing.

Moreover, target integration risk may be higher due to ongoing
legal and regulatory investigations at Royal Group, and Georgia
Gulf's lack of direct experience integrating a sizeable downstream
target.

The proposed 'BB-' rating on the senior notes, both new and
existing, reflects their unsecured position relative to a
significant amount of secured debt.  Upon closing of the
acquisition-related financing, Fitch estimates that secured debt
of $1.175 billion with perfected liens and the $165 million
accounts receivable securitization program could have priority
interest in the assets of the company before the senior unsecured
and senior subordinated notes.

Assuming the senior unsecured notes are contractually senior in
right of payment to the subordinated notes, the subordinated notes
will be rated 'B', two notches lower than the IDR and senior
unsecured notes, to reflect their junior position and expected
lower principal recovery in bankruptcy.

Fitch previously assigned a 'BB+' rating to the proposed senior
secured credit facility in August 2006.  The rating reflects the
superior collateral position of the term loan and revolver based
on preliminary terms and conditions.  The rating also considers
the high likelihood of principal recovery in a liquidation
scenario.

The ratings could change if the final terms of the new credit
agreement, senior notes, and senior subordinated notes differ
materially from the preliminary terms and conditions considered
for the ratings.

Based in Atlanta, Georgia Gulf is a commodity chemicals producer.
Its product portfolio includes VCM, PVC resin, vinyl compounds,
cumene, acetone, and phenol.  Georgia Gulf earned approximately
$279 million of EBITDA on sales of $2.2 billion for the latest 12-
month period ended June 30, 2006.


GLOBAL EMPIRE: Chapter 11 Trustee Hires Hughes Watters as Counsel
-----------------------------------------------------------------
The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the
Southern District of Texas in Houston authorized David Askanase,
the Chapter 11 Trustee for the estate of Global Empire Investments
and Holdings, LLC, to retain Hughes, Watters & Askanase LLP as his
counsel.

Hughes Watters will:

     a) file pleadings with the court in which representation of
        the Chapter 11 Trustee would be appropriate, particularly
        related to any Disclosure Statement and Plan of
        Reorganization, and to represent the estate's interest
        with regard to any adversaries or contested matters
        pending before the Court, particularly with the estate's
        interest in property;

     b) analyze, institute and prosecute actions regarding
        determination and recovery of property of the estate,
        including the investigation and prosecution of avoidance
        litigation, as well as collection of assets of the estate
        wherever they may be found, to the extent these activities
        would be economically beneficial to the estate;

     c) prepare for, institute and prosecute any examination under
        Bankruptcy Rule 2004 and, if necessary, institute and
        prosecute motions to compel attendance and removal of
        persons for examination under Bankruptcy Rule 2005;

     d) institute and prosecute proceedings for extraordinary
        relief, analyze, institute and prosecute actions regarding
        insider transactions and third party dealings, including
        instituting or joining other parties-in-interest or
        creditors in related adversary litigation ;

     e) represent the Chapter 11 trustee where necessary to
        negotiate and consummate non-routine sales of estate
        assets and institute any necessary related proceedings;

     f) analyze institute and prosecute or defend actions
        regarding liens and set-offs asserted against the property
        of the estate, including any liens and set-offs
        previously asserted by any of the Debtor's affiliated
        business entities against each other;

     g) institute non-routine objection to claims asserted against
        the estate and prosecute all contested objections to
        proofs of claim asserted against the estate;

     h) aid in the representation of the Trustee in any litigation
        by or against the Trustee and coordinate with any special
        litigation counsel subsequently employed by the Trustee to
        represent him in any bankruptcy or non-bankruptcy
        litigation or other legal matter which may be found to be
        an asset of the estate;

     i) coordinate with the Chapter 11 Trustee's accountants and
        tax advisors and take actions appropriate in representing
        the estate with regard to tax matters; and

     j) take action regarding information in the hands of the
        Debtors' business financial and legal advisors as is
        allowed under the Bankruptcy Code and other applicable
        law.

The current hourly rates for Hughes Watters' professionals are:

        Designation                       Hourly Rate
        -----------                       -----------
        Partners/Senior Associates       $235 to $380
        Junior Associates                $150 to $215
        Legal Assistants                  $60 to $110

Wayne Kitchens, Esq., at Hughes Watters, will act as the Chapter
11 Trustee's lead counsel.

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

The Court named Mr. Askanase as the Debtor's Chapter 11 Trustee in
July 2006 upon the recommendation of Richard W. Simmons, the
former U.S. Trustee for Region 7.

Headquartered in Houston, Texas, Global Empire Investments &
Holdings, LLC, filed for chapter 11 protection on Dec. 6, 2005
(Bankr. S.D. Tex. Case No. 05-95389).  Richard L. Fuqua, II, Esq.,
at Fuqua & Keim, represents the Debtor in its restructuring
efforts.  David J. Askanase serves as Chapter 11 Trustee for the
Debtor's estate.  When the Debtor filed for protection from its
creditors, it estimated assets and debts between $10 million to
$50 million.


GMAC COMMERCIAL: S&P Upgrades Three Cert. Classes' Low-B Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on eight
classes of commercial mortgage pass-through certificates from GMAC
Commercial Mortgage Securities Inc.'s series 2000-C2.

Concurrently, the ratings on the remaining classes were affirmed.

The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios, as
well as the defeasance of 31% of the collateral in the trust.

As of the Aug. 16, 2006, remittance report, the trust balance
was $617 million, down from $773.7 million at issuance.  As of
the August remittance, the collateral consisted of 114 loans
and a Freddie Mac Multifamily Gold Participation Certificate.
The Freddie Mac PC represents an undivided beneficial ownership
interest in a pool of two loans that were secured by five
multifamily properties until they were defeased in 2005.

Despite the defeasance, the Freddie Mac guaranty remained in
place.  Excluding the Freddie Mac PC, the pool of 114 loans has an
aggregate outstanding balance of $530.8 million, $134 million of
which has been defeased.  The master servicer, Capmark Finance
Inc., reported primarily year-end 2005 financial information for
100% of the pool, excluding the defeased loans.

Based on this information, Standard & Poor's calculated a weighted
average debt service coverage of 1.31x for the pool, compared with
1.35x at issuance.  All of the loans in the pool are current
except for one that is 90-plus-days delinquent and with the
special servicer, also Capmark.

One appraisal reduction amount totaling $4.1 million is in effect
related to the aforementioned delinquent loan.  To date, the trust
has experienced eight losses totaling $10.3 million.

The top 10 exposures in the pool secured by real estate had an
aggregate outstanding balance of $140.8 million (23%) and a
weighted average DSC of 1.15x for year-end 2005, down from 1.29x
at issuance.  The decrease in the DSC resulted primarily from a
25% or more decline in net cash flow since issuance for four of
the top 10 loans.  Seven of the top 10 loans are on the master
servicer's watchlist.

Standard & Poor's reviewed property inspections provided by
Capmark for all of the assets underlying the top 10 exposures, and
all were characterized as "good" or "excellent," with the
exception of one property that was characterized as "poor."

Capmark reported a watchlist of 37 loans with an aggregate
outstanding balance of $176 million (29%), with seven of the top
10 loans representing approximately 51% ($89.6 million) of the
loans on the watchlist. Details concerning seven of the top 10
loans on the watchlist are:

     -- The largest loan on the watchlist is the Rialto Building
        ($25.9 million, 4%), which is also the largest loan in the
        pool.  This loan is secured by a 140,206-sq.-ft. office
        building in San Francisco, California, that was built in
        1901 and renovated in 2000.  The DSC for this loan has
        declined 34% since issuance because of a decrease in
        occupancy caused when one of the largest tenants vacated
        due to bankruptcy.  The year-end 2005 DSC was 0.84x and
        occupancy was 85%.

     -- Rochester Village Apartments ($15.4 million, 2.5%), the
        fourth-largest loan in the pool, is secured by a 412-unit

        class B apartment complex in Rochester, Minnesota.  The
        property was built between 1972 and 1975 and renovated in
        1997.  The loan was placed on the watchlist due to a 57%
        decline in DSC since issuance.  Despite a reported 92%
        occupancy at year-end 2005, the DSC was 0.62x.

     -- The Roanoke portfolio secures the fifth-largest loan
        ($11.0 million, 2%) and consists of three flex office
        buildings in Roanoke, Virginia, totaling 149,247 sq. ft.
        The buildings were built between 1993 and 1999.  The loan
        was placed on the watchlist due to a decline in occupancy.
        The year-end 2005 occupancy was 73% and the DSC was 1.17x.

     -- The Sheraton Four Points Hotel is the sixth-largest loan
        with an unpaid principal balance of $10.6 million (2%).
        A 153-room full-service hotel in Emeryville, California,
        secures the loan.  The loan was placed on the watchlist
        due to a decline in DSC.  The year-end 2005 DSCR was 1.11x
        and occupancy was 79%.  For the six months ending June 30,
        2005, the DSC had improved to 1.29x.

     -- The seventh-largest loan, the O'Herron portfolio, is
        secured by five supermarket-anchored retail properties
        comprising 239,324 sq. ft.  Four of the properties are
        located in North Carolina and one is in Virginia.  The
        combined year-end 2005 DSC was 0.97x and occupancy was
        88%.  The decline in the loan's DSC and occupancy are
        attributable to reduced occupancy at the property in
        Virginia, which no longer has Winn Dixie as a tenant.
        After Winn Dixie vacated, the property's occupancy dropped
        to 34%, and leasing efforts to date have not been
        successful.

     -- Partridge Run Apartments is the ninth-largest loan with
        an unpaid principal balance of $8.5 million (1.4%) and is
        secured by a 247-unit apartment complex in Parsippany,
        New Jersey.  The apartment complex was built in 1965 and
        renovated in 1999.  A May 2, 2006, property inspection
        characterized the underlying asset as "poor" due to
        substantial deferred maintenance.  The year-end 2005 DSC
        was 0.80x and occupancy was 83%.  The borrower and
        property manager are currently addressing the deferred
        maintenance.

     -- Eastlake Commons is the 10th-largest loan with an unpaid
        principal balance of $8.5 million (1%) and is secured by
        a 99,205-sq.-ft. retail center in Sterling Heights,
        Michigan, built in 1988 and renovated in 1998.  The
        supermarket anchor, Farmer Jacks, has vacated the property
        but continues to pay rent under its lease obligations,
        which remain in effect until January 2009.  The year-end
        2005 DSCR was 1.02x and physical occupancy was 60%.

The Meriden Parkade Shopping Center, which is secured by a
188,981-sq.-ft. retail center in Meriden, Connecticut, has an
unpaid principal balance of $7.5 million and is the only asset
with the special servicer.  Including advances, the total loan
exposure is $9.3 million.  An ARA of $4.1 million is effect.

The property was built in 1961 and renovated in 1987.  The asset
was transferred to the special servicer due to delinquent payments
after the anchor tenant vacated the property.  Capmark has
commenced foreclosure and is also proceeding with a discounted
payoff.  The highest offer was $7.05 million received from the
borrower, and the sale is expected to occur in mid-September.

Standard & Poor's stressed various loans in the transaction,
paying closer attention to the asset with the special servicer and
those on the watchlist.  The resultant credit enhancement levels
support the raised and affirmed ratings.

Ratings Raised:

            GMAC Commercial Mortgage Securities Inc.
  Commercial mortgage pass-through certificates series 2000-C2

         Class     To        From    Credit enhancement
         -----     --        ----    ------------------
           B       AAA       AA+           19.85%
           C       AA+       A             15.31%
           D       AA        A-            13.58%
           E       A-        BBB           10.45%
           F       BBB+      BBB-           8.88%
           G       BB+       BB             4.80%
           H       BB        BB-            3.86%
           J       B+        B              2.92%

Ratings Affirmed:

            GMAC Commercial Mortgage Securities Inc.
  Commercial mortgage pass-through certificates series 2000-C2

             Class     Rating     Credit enhancement
             -----     ------     ------------------
              A-2       AAA            24.87%
               K        CCC             1.51%
               L        CCC-            0.88%
               X        AAA              N/A

                     N/A -- Not applicable.


GRAFTON PROPERTIES: Case Summary & Two Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Grafton Properties, LLC
        Suite A-1 44 Grafton Street
        Hartford, CT 06106

Bankruptcy Case No.: 06-20868

Chapter 11 Petition Date: September 19, 2006

Court: District of Connecticut (Hartford)

Debtor's Counsel: Kevin L. Mason, Esq.
                  Neistat & Mason
                  47 East Cedar Street
                  Newington, CT 06111
                  Tel: (860) 666-6022
                  Fax: (860) 666-6710

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Two Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Cl&P                             Utility Bills           $6,852
Credit & Collection
P.O. Box 2919
Hartford, CT 06104

MDC                              Utility Bills           $1,500
555 Main Street, P.O. Box 800
Hartford, CT 06142


INFORMATION ARCHITECTS: IFGT-SI Submits Replacement Asset
---------------------------------------------------------
Information Architects disclosed that as a result of the
cancellation of the agreement with Petroleum Communication
Holdings, Inc., International Funding Group Trust - Synergistic
Investments has submitted a replacement asset, which may serve as
a substitute value, to complete its original deal with IFGT-SI.

On Aug. 1, 2006, Earnest Phillips, president of PTLC, sent a
letter to the Company canceling the agreement between PTLC and the
Company, as a result of extenuating circumstances between the
Company and IFGT-SI.  The initial agreement dated Oct. 14, 2005,
between PTLC and the Company involved property that was the
subject of the agreement between the Company and IFGT-SI.

For the benefit of their shareholders the Company's board of
directors have taken actions beginning Sept. 15, 2006, until
verification can be completed as to the actual dollar value of the
potential asset offered by IFGT-SI.

The Company disclosed that its Board of Directors anticipates
working through the information provided by IFGT-SI regarding the
replacement asset.  Its Board needs to ensure that the asset has
real immediate value, which can be utilized by the Company.  As
suggested by legal Council, its Board of Directors has placed a
soft deadline date of Oct. 15, 2006, to decide on the resolution.
Its Board however, based on legal advice, is prepared to promptly
act as soon as the investigation is complete, and until the
decision is made, the transfer agent is instructed to place a
Total NON-TRANSFER NO LEGEND RELEASE on all shares listed within
the contract between PTLC, IFGT-SI and the Company.  The Company's
Board is also compelled to investigate a reset of the clock on all
shares relevant to the agreement.

The Company also disclosed that additional concerns have been
raised regarding the legal issues that constituted the
cancellation by PTLC and the Company's Board feels obligated to
investigate all the relevant issues regarding the business event
to ensure a positive outcome for its shareholders.

The Company's proper officers were authorized to execute all
instruments, documents, forms and certificates and to take all
further actions necessary in connection with the resolutions.

A text copy of the Acquisition Agreement between the Company and
PTLC may be viewed at no charge at:

              http://ResearchArchives.com/t/s?1216

Headquartered in Ft. Lauderdale, Florida, Information Architects
Corporation (OTCBB: IACH) -- http://www.ia.com/-- provides
employment screening and background investigations software
application.

The Company's balance sheet at June 30, 2006 showed total assets
of $1.87 million and total liabilities of $4.24 million resulting
in a total shareholders' deficit of $2.37 million.


INFORMATION ARCHITECTS: Inks Merger Agreement with Global Triad
---------------------------------------------------------------
Information Architects has signed a merger agreement with Global
Triad, Inc., including Global TV, Inc., Global Wifi Plus, Inc. and
Global Marine System, Inc.

The Company disclosed that new board members and officers will be
appointed to Global Triad, Inc.

                       About Global Triad

Headquartered in Ft. Lauderdale, Florida, Global Triad
Incorporated owns and operates three subsidiaries, Global WiFi
Plus, Inc., Global TV, Inc. and Global WiFi Marine, Inc., all
Florida Corporations.

                     About Global Wifi Plus

Global Wifi Plus is the aggregation and delivery of a wholesale,
end-to-end wireless digital communications system utilizing both
Internet Protocols and proprietary digital devices.  The company
will offer, over wireless high-speed networks, a "Triple Play"
consisting of Voice over Internet telephony, high-speed Internet
data delivery and true Video-On-Demand.  Both the Internet and VOD
will be accessible through the consumer's television.

                      About Global TV Inc.

Global TV, Inc. offers a full production facility, which produces
ABA Basketball events while the main focus of activity for Global
WiFi Marine, Inc., is the installation of high speed broadband to
the marine industry.

                  About Information Architects

Headquartered in Ft. Lauderdale, Florida, Information Architects
Corporation (OTCBB: IACH) -- http://www.ia.com/-- provides
employment screening and background investigations software
application.

The Company's balance sheet at June 30, 2006 showed total assets
of $1.87 million and total liabilities of $4.24 million resulting
in a total shareholders' deficit of $2.37 million.


INSIGHT MIDWEST: S&P Rates New $2.57 Bil. Debt Facilities at BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB-' rating to
Insight Midwest Holdings LLC's proposed $2.575 billion of bank
credit facilities.  Standard & Poor's also assigned a '2' recovery
rating, indicating expectations for substantial (80%-100%)
recovery of principal in a default or bankruptcy.

At the same time, the rating agency affirmed the ratings on
New York City-based cable TV operator Insight Midwest L.P., and
its intermediate holding company Insight Midwest Holdings LLC,
including the 'BB-' corporate credit ratings.

Proceeds from this new bank financing will be used to refinance
borrowings under the current bank facility, as well as fully repay
the $630 million of 10.5% notes due 2010, and a portion of the
9.75% notes due 2009.

"The ratings on Insight Midwest reflect the company's high
leverage and the challenges it faces from direct-to-home
competitors, as well as from AT&T Inc. in the longer term as that
company rolls out video services," said Standard & Poor's credit
analyst Catherine Cosentino.

The company is the dominant provider of cable TV service in its
Midwestern markets, with about 1.3 million basic subscribers.
Despite its dominant position, it has experienced competitive
losses over the past few years from DTH competitors, and over the
next few years it faces potential threats from AT&T Inc. with its
expected introduction of Internet-protocol TV services in selected
markets, as well as some overbuild threat in certain markets,
primarily by WideOpen West.


INVESTOOLS INC: Inks $340 Million Merger Deal with thinkorswim
--------------------------------------------------------------
INVESTools Inc. (NASDAQ:IEDU) and thinkorswim Group Inc. have
signed a definitive agreement to merge in a transaction valued at
approximately $340 million.

                              Merger

   -- The combination of INVESTools' education capabilities
      with thinkorswim's best-in-class trading platform creates
      a unique business model with the ability to offer
      differentiated product offerings for the retail investor;

   -- INVESTools' continuing education offerings, which represent
      more than 80% of its sales, are principally based on
      options, complementing thinkorswim's award-winning options-
      oriented execution platform;

   -- The combination of two leading technology-based companies
      will create operating leverage in product innovation
      resulting in increased lifetime value and recurring revenue
      from each student.

"INVESTools has been committed to educating investors since 1983"
said Lee K. Barba, Chairman and CEO of INVESTools.  "With over 80%
of our sales transaction volume originating from the purchase of
our continuing education products, our students have become among
the most confident, active and knowledgeable individual investors
in the market.  With the majority of our continuing education
programs based on options strategies, our students have been
demanding a seamless education to the execution learning
experience in both stock and options securities.  This merger
creates that student experience for the first time."

                    Terms of the Transaction

   -- thinkorswim shareholders will receive 50% of merger
      consideration in cash, and 50% in stock, representing
      approximately $170 million in cash and 19.1 million IEDU
      common shares;

   -- JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc.
      will provide INVESTools a senior secured term loan of
      $125 million to fund a portion of the cash transaction and
      will also provide an unfunded committed senior secured
      revolving credit facility of $25 million;

   -- Following the transaction, thinkorswim shareholders will
      have a 30% ownership stake in INVESTools;

   -- thinkorswim will receive two seats on an expanded eight-
      member INVESTools' Board of Directors;

   -- thinkorswim employees will be eligible to receive a
      $20 million retention pool that will be paid over 3 years
      and 2.2 million INVESTools options vesting over 4 years, of
      which 50% will be at the market price at transaction
      closing, and 50% will be at 150% of the market price at
      closing.

                        About INVESTools

INVESTools Inc. -- http://www.investools.com -- offers and
provides educational products and services.

                        *     *     *

At June 30, 2006, the Company's balance sheet showed $54,242,000
in stockholders' deficit compared to a $23,739,000 stockholders'
deficit at December 31, 2005.


IRIDIUM SATELLITE: Names Matthew J. Desch as New CEO
----------------------------------------------------
Iridium Satellite LLC has named Matthew J. Desch as Chairman and
Chief Executive Officer of the company.

"We are delighted to have Matt join as our new CEO," said Dan
Colussy, Chairman of Iridium Holdings LLC.  "He brings more than
26 years of directly relevant wireless and telecom experience to
our company, providing the ideal background to oversee our
continued double-digit growth, multiple new product and service
introductions, and the development of our next-generation
constellation."

Mr. Colussy said that Desch will replace him as CEO of Iridium
Satellite.  Additionally, Mr. Desch will become CEO of Iridium
Holdings, the parent of Iridium Satellite, while Mr. Colussy will
remain Chairman of Iridium Holdings.

"I am excited to lead the Iridium team as it unleashes the full
potential of this unique global network," Mr. Desch said.
"Iridium's evolution from a handheld voice service to a full suite
of voice and data solutions has impressed upon me the potential to
become the world's most robust, pervasive and fully-integrated
global communications network.  I look forward to leading Iridium
to that level."

Mr. Desch was most recently CEO of New Jersey-based Telcordia
Technologies, Inc., a supplier of software and services to the
telecommunications industry.  He was instrumental in moving
Telcordia into new wireless and international markets, and
spinning off the company to private equity from SAIC, Inc.

Prior to Telcordia, Mr. Desch spent 13 years at Nortel Networks,
leaving in 2000 as President, Global Service Providers and
responsible for Nortel's business in Europe and Asia.  Active in
the wireless industry with Nortel since 1990, he was President of
Nortel's fast growing Wireless Networks division from 1995 to
1999, leading its growth from $2 billion to more than $4.5 billion
in annual revenue.

Mr. Desch has served on the boards of several industry
associations including the International Association For The
Wireless Telecommunications Industry and the Personal
Communications Industry Association.  He served as Chairman of the
Wireless Foundation and was a member of the executive board of The
Alliance for Telecommunications Industry Solutions.

An active industry executive, Mr. Desch is Chairman of the Board
of Airspan Networks and is a board member of Starent Networks.  He
previously served on the boards of Flarion Technologies and SAIC,
as well as numerous other private and public companies.

Mr. Desch began his career in software development with Bell
Laboratories, which became Lucent Technologies.  He has a BS in
Computer Science from The Ohio State University and an MBA from
University of Chicago.

                        About Iridium

Iridium Satellite LLC -- http://www.iridium.com/-- is the only
provider of truly global satellite voice and data solutions with
complete coverage of the earth (including oceans, airways and
Polar Regions).  Iridium delivers essential communications
services to and from remote areas where no other form of
communication is available.  The Iridium constellation consists of
66 low-earth orbiting, cross-linked satellites and has multiple
in-orbit spares.  The constellation operates as a fully meshed
network and is the largest commercial satellite constellation in
the world.  The company also designs, builds and sells its
services, products and solutions through a worldwide network of
more than 100 partners.

                         *     *     *

As reported in the Troubled Company Reporter on July 31, 2006,
Standard & Poor's Ratings Services assigned its bank loan and
recovery ratings to the $210 million secured bank financing of
Iridium (B-/Negative/--).  The Company's $170 million first-lien
loan is rated 'B-', the same as the corporate credit rating on
Iridium, with a recovery rating of '3', indicating an expectation
for meaningful (50%-80%) recovery of principal following a payment
default.

The $40 million second-lien term loan is rated 'CCC', with a
recovery rating of '5', indicating the expectation for negligible
(0%-25%) recovery of principal following a payment default.

As reported in the Troubled Company Reporter on June 22, 2006,
Moody's Investors Service assigned a B3 Corporate Family Rating
and SGL-2 speculative grade liquidity to Iridium Satellite.  As
well, Moody's assigned a B3 first priority senior secured and a
Caa1 second priority senior secured rating to the company's
prospective bank facility, subject to review of final
documentation.  This is the first time ratings have been assigned
to Iridium.  The outlook is stable.


ISLE OF CAPRI: Earns $9 Million for the Quarter Ended July 30
-------------------------------------------------------------
Isle of Capri Casinos, Inc., has filed its financial report,
reflecting the consolidated operations of all its subsidiaries,
for the quarter ended July 30, 2006 on Form 10-Q with the
Securities and Exchange Commission.

Results for the Isle-Vicksburg and the Isle-Bossier City have been
classified as discontinued operations.

Gross revenues for the fiscal quarter ended July 30, 2006 were
$332 million, compared to gross revenues for the fiscal quarter
ended July 24, 2005 of $292.3 million.

The Company's net income for the quarter ended July 30, 2006 was
$9 million, versus net income of $4 million for the comparable
quarter in 2005.

Casino revenue increased by $33.3 million, or 13.6 %, compared to
the fiscal quarter ended July 24, 2005, with a large increase in
revenues from Isle-Biloxi due to the limited competition in the
market.  Isle-Natchez showed an increase in revenues due to
population shifts from eastern Louisiana.

Room revenue increased $4.4 million, or 42.8%, compared to the
fiscal quarter ended July 24, 2005, primarily resulting from the
increased capacity at Isle-Biloxi, Colorado Central Station and
Isle-Boonville.

Pari-mutuel commissions earned at Pompano Park in Florida for the
fiscal quarter were down a total of $200,000, or 4.1%.

Food, beverage and other revenues increased by $2.2 million, or
6.7%, primarily attributable to an increase at Isle-Biloxi.

Total current assets at July 30, 2006 stood at $471 million, with
total current liabilities of $228 million, of which current
maturities of long term debt was $8 million and accounts payable
was $45 million.

Cash and cash equivalents and marketable securities, at
July 30, 2006 was $116 million compared to $138.9 million at
April 30, 2006, the end of its last fiscal year.  In addition, as
of July 30, 2006, the Company had $317.8 million of capacity under
lines of credit and available term debt which consisted of
$292.2 million in unused credit capacity under the revolving loan
commitment on its senior secured credit facility, $21.6 million of
unused credit capacity under the Isle-Black Hawk's senior secured
credit facility and $4 million under other lines of credit and
available term debt.  During the three months ended July 30, 2006,
net borrowings on the Company's senior secured credit facility was
$41.6 million and the Isle-Black Hawk made net borrowings
$3.3 million under the Isle-Black Hawk's senior secured credit
facility.

                      Investing Activities

The Company made $80.7 million in cash expenditures for property
and equipment during the three months ended July 30, 2006,
including $27.7 million in construction costs related to the Isle-
Biloxi casino reconstruction following Hurricane Katrina.

The Company signed a development agreement with the City of
Bettendorf pursuant to which it will construct a new 250-room Isle
hotel, additional parking, a Kitt's Kitchen restaurant, and an
expansion of the existing buffet.  The City of Bettendorf agreed
to construct a 50,000 square foot convention center adjacent to
the Company's facility, which will be managed by Isle-Bettendorf.
The cost of the project is approximately $45 million and the new
hotel is scheduled to open in the late spring of 2007.

The Company agreed, in June 2005, to a $43 million project with
the City of Davenport to build a 180-room hotel and rooftop
restaurant, and the City of Davenport will be constructing a
500 plus space parking ramp and provide funding to realign the
Company's casino with the new hotel facility.  The project is
scheduled to open 18-20 months after all permits and approvals are
received.

The Company is also constructing a slot machine and entertainment
area at Pompano Park adjacent to the existing grandstand at a cost
of $155.5 million with slot machine gaming anticipated to commence
in early 2007.  The statute authorizes Pompano Park to install and
operate up to 1,500 slot machines at its facility 365 days per
year, 16 hours per day.

The Company also disclosed construction of a 35,000 square foot
single level casino with 1,300 gaming positions, three
restaurants, a 200-room hotel and 1,000 parking spaces in
Waterloo, Iowa, which it expects to open in late spring of 2007 at
a total cost of approximately $139.5 million.

The Company further disclosed plans for an $85 million expansion
project at our Kansas City, Missouri property.  As of
July 30, 2006, $1.4 million was spent on the project.

The Company entered into an agreement to develop and operate an
Isle of Capri-themed casino in a commercial leisure complex
currently under development in Coventry, England.  Total project
costs are estimated to be $55 million.  As of fiscal quarter end
of July 30, 2006, $32.7 million was spent on the Coventry project.
Completion of the casino at the RICOHTM Arena Coventry is
estimated to be in early 2007.

The Company signed a casino management and related development and
option agreements with resort developer Eighth Wonder to manage
the casino included in Eighth Wonder's proposal for a new
integrated resort complex in Singapore.  Subsequent to the end of
the first quarter of fiscal year 2007, it expensed $2 million
related to the agreements.

Based in Biloxi, Miss., Isle of Capri Casinos, Inc. (Nasdaq: ISLE)
-- http://www.islecorp.com/-- a developer and owner of gaming and
entertainment facilities, operates 16 casinos in 14 locations. The
Company owns and operates riverboat and dockside casinos in
Biloxi, Vicksburg, Lula and Natchez, Miss.; Bossier City and Lake
Charles (two riverboats), La.; Bettendorf, Davenport and
Marquette, Iowa; and Kansas City and Boonville, Mo.  The Company
also owns a 57% interest in and operates land-based casinos in
Black Hawk (two casinos) and Cripple Creek, Colorado.  Isle of
Capri's international gaming interests include a casino that it
operates in Freeport, Grand Bahama, and a 2/3 ownership interest
in casinos in Dudley, Walsal and Wolverhampton, England.  The
company also owns and operates Pompano Park Harness Racing Track
in Pompano Beach, Fla.

                         *     *     *

Moody's Investors Service confirmed, effective Feb. 14, 2006, Isle
of Capri, Inc.'s Corporate family rating at Ba3; $400 million
senior secured revolver due 2010 at Ba2; $300 million senior
secured term loan due 2011 at Ba2; $500 million 7% senior
subordinated debt due 2014 at B2; and $200 million 9% senior
subordinated debt due 2012 at B2.  Moody's assigned a negative
ratings outlook.

Standard & Poor's Ratings Services, effective Dec. 22, 2005,
affirmed its ratings on Isle of Capri Casinos Inc., including its
'BB-' corporate credit rating. At the same time, all ratings were
removed from CreditWatch with negative implications where they
were placed on Sept. 1, 2005. S&P said the outlook is negative.


IVOW INC: Net Loss Increases to $589,248 in Quarter Ended June 30
-----------------------------------------------------------------
iVOW, Inc.'s net loss for the three months ended June 30, 2006
increased to $589,248 from net loss of $484,947 in the same
quarter last year.

Revenues for the current quarter increased to $746,110 compared to
revenues of $252,916 in the three months ended June 30, 2005.

The Company's balance sheet at June 30, 2006 showed total assets
of $4,284,191, total liabilities of $1,173,351, and total
stockholders' equity of $3,110,840.

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

               http://researcharchives.com/t/s?120e

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 12, 2006,
J.H. Cohn LLP in San Diego, California, expressed substantial
doubt about iVOW, Inc.'s ability to continue as a going concern
after auditing its financial statements for the fiscal year ended
Dec. 31, 2005.  The auditing firm pointed the Company's recurring
net losses and negative net cash flows from operating activities
since inception.

Based in San Diego, California, iVow, Inc. (NASDAQ: IVOW) --
http://www.ivow.com/-- provides program management, healthcare
services, operational consulting and clinical training services to
employers, payors, physicians and hospitals involved in the
medical and surgical treatment of the chronic and morbidly obese.
The Company also provides specialized vitamins to patients who
have undergone obesity surgery.


J.P. MORGAN: S&P Puts Class B-5 Loan's B Rating on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' rating on class
B-5 from J.P. Morgan Mortgage Trust 2005-S1 on CreditWatch with
negative implications.

At the same time, the remaining ratings from this series, and
from three other J.P. Morgan Mortgage Trust transactions, were
affirmed.

The CreditWatch placement of the rating on class B-5 from
J.P. Morgan Mortgage Trust 2005-S1 reflects Standard & Poor's
expectations that additional losses may result from the delinquent
mortgage loans.

As of the August 2006 distribution, total delinquencies for series
2005-S1 were 4.93%, with 2.10% categorized as severely delinquent
(90-plus days, foreclosure, and REO).

The affirmations were based on credit support percentages that are
sufficient to maintain the current ratings.  Credit support for
these transactions is provided by subordination.

Standard & Poor's will continue to closely monitor the performance
of class B-5 from J.P. Morgan Mortgage Trust 2005-S1.  If
delinquent loans translate into realized losses, the rating agency
will downgrade the class.  In contrast, if delinquencies decrease
without causing significant additional losses, the rating agency
will affirm the rating and remove it from CreditWatch negative.

As of the August 2006 remittance date, total delinquencies ranged
from 0.30% (series 2004-A5) to 4.93% (series 2005-S1).  None of
the pools have experienced any losses.  The outstanding pool
balances ranged from 63.34% (series 2005-S1) to 78.88% (series
2005-A1) of their original sizes.

The collateral for these transactions consists of prime
adjustable-rate and conventional mortgage loans secured by first
liens on primarily one- to four-family residential properties.

Rating Placed on Creditwatch Negative:

                   J.P. Morgan Mortgage Trust

            Series     Class        To          From
            ------     -----        --          ----
            2005-S1     B-5     B/Watch Neg.     B

Ratings Affirmed:

                   J.P. Morgan Mortgage Trust

   Series   Class                                       Rating
   ------   -----                                       ------
   2004-A5  1A1,1A2,1A3,2A1,2A2,2A3,2A4,3A1,4A1,4A2     AAA
   2004-A5  4A3,4A4,4A5,4A6,5A1                         AAA
   2004-A5  B1                                          AA
   2004-A5  B2                                          A
   2004-A5  B3                                          BBB
   2004-A5  B4                                          BB
   2004-A5  B5                                          B
   2005-A1  1A1,2A1,2A2,2A3,2A4,3A1,3A2,3A3             AAA
   2005-A1  3A4,3A5,3A6                                 AAA
   2005-A1  4A1,4A2,5A1,5A2,5A3,6T1                     AAA
   2005-A1  1B1,TB1                                     AA
   2005-A1  1B2,TB2                                     A
   2005-A1  1B3,TB3                                     BBB
   2005-A1  1B4,TB4                                     BB
   2005-A1  1B5,TB5                                     B
   2005-A2  1A1,1A2,2A1,2A2,3A1,3A2,3A3,3A4,4A1         AAA
   2005-A2  5A1,5A2,5A3,6A1,6A2,7CB1,7CB2,8A1,9A1       AAA
   2005-A2  1B1                                         AA
   2005-A2  1B2                                         A
   2005-A2  1B3                                         BBB
   2005-A2  1B4                                         BB
   2005-A2   1B5                                        B
   2005-S1   1A1,1A2,1AX,2A1,2A2,2A3,2A4                AAA
   2005-S1   2A5,2A6,2A7,2A8,AP                         AAA
   2005-S1   B1                                         AA
   2005-S1   B2                                         A
   2005-S1   B3                                         BBB
   2005-S1   B4                                         BB
   2005-S1   B5                                         B


JAMES VANN: Case Summary & Six Largest Unsecured Creditors
----------------------------------------------------------
Debtor: James H. Vann
        18 Laguna Madre Drive
        Laguna Vista, TX 78578

Bankruptcy Case No.: 06-10606

Chapter 11 Petition Date: September 19, 2006

Court: Southern District of Texas (Brownsville)

Judge: Richard S. Schmidt

Debtor's Counsel: Christopher Lee Phillippe, Esq.
                  Phillippe Law Firm, P.C.
                  806 Morgan Boulevard, Suite J
                  Harlingen, TX 78550
                  Tel: (956) 440-0061
                  Fax: (956) 440-0884

Total Assets:   $550,000

Total Debts:  $2,074,144

Debtor's Six Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Randall Crane                    Potential Lawsuit     $640,000
201 South Sam Houston
San Benito, TX 78586

Michael J. Rogers,               Lawsuit               $412,000
Richard A. Oats, et. al.
c/o Daniel G. Rios
2724 West Canton
Edinburg, TX 78539

Robert Sheline                   Lawsuit               $240,000
Martinez, Barrera and            #2006-06-2877-D
Martinez, LP
1201 East Van Buren Street
Brownsville, TX 78520

Harveys Tahoe Management         Loss                  $150,000
Harrah's Casino Hotel
Lake Tahoe
Lake Tahoe, NV

BMW Financial Services           Purchase Money         $80,000
P.O. Box 3608
Dublin, OH 43016

Frost Bank Personal              Line of Credit         $51,000
Line of Credit
100 West Houston Street
San Antonio, TX 78205


LASELL COLLEGE: Moody's Affirms Ba1 Rating on $9.6 Million Bonds
----------------------------------------------------------------
Moody's Investors Service affirms Lasell College's Ba1 long-term
rating.  The outlook for the rating remains stable.  The rating
applies to $9.6 million of Series A bonds issued through the
Massachusetts Health and Educational Facilities Authority.
Moody's review is in conjunction with the planned issuance of the
Series 2006 bonds, which will be supported by a letter of credit
and will not carry a rating based on Lasell's underlying credit
quality.  The Series 2006 bonds will refund all or portions of the
Series 2001 and 2004 bonds, as well as a small mortgage note.  The
Series 2006 bonds will provide approximately $8.3 million in new
money funds for the construction of a residence hall.

                    Interest Rate Derivatives

During 2004 Lasell entered into an interest rate swap agreement in
the amount of $4 million related to the Series 2004 bonds and
expiring in 2007.  The College is a fixed rate payor under the
agreement and receives a variable rate.  The College also expects
to enter into an additional swap agreement in relation to the
Series 2006 bonds to be issued within the next several weeks under
which it will pay a fixed rate in exchange for variable rate
payments based on a percentage of LIBOR, except for a small
portion of the 2001 refunding which will be based on BMA.

Strengths:

   * Continued growth in enrollment (1,230 FTE in fall 2006) and
     student demand (63.5% selectivity), demonstrating further
     progress in solidifying the College's role in an attractive
     suburban Boston environment; enrollment is expected to grow
     more modestly in the future as capacity for residential
     students is limited

   * Strong improvements in operating performance (average
     operating margin FY03-05 of 5.7%), stemming from healthy
     growth in net tuition per student ($10,386 based on draft
     FY2006 financial statements), and prudent budgeting
     practices

    *Although still limited, liquidity is expected to show
     substantial improvement with the recent announcement of a
     $5 million bequest ($4.7 million in expendable financial
     resources in FY2005).

Challenges:

   * Limited financial resources relative to debt obligations
     (expendable financial resources to debt of 0.38 based on
     draft FY2006 and with pro-forma debt after 2006 issue)

   * Strong relationship with Lasell Village, a continuing care
     retirement community, including shared corporate parent and
     a management agreement under which Lasell College operates
     Lasell Village; Lasell Village, despite strong occupancy,
     represents a much higher risk enterprise than the College,
     somewhat limiting the credit rating of the College,
     especially given the approximately $21 million of debt of
     the Village, which Moody's treats as an indirect debt of the
     College; the College has no legal obligation to pay the debt
     of Lasell Village

Lasell announced earlier this year the receipt of a $5 million
bequest. The funds will be used for capital improvements, but will
likely relieve other funds from being spent in this area, allowing
for substantial improvement in the limited liquidity of the
College.

Despite the relatively high occupancy of Lasell Village, Moody's
treats the Village and its debt as indirectly associated with the
College.  Moody's treatment of the debt as indirect debt of the
College is based upon:

   -- the ongoing management agreement whereby the College
      operates the Village,

   -- the shared corporate parent of both organizations,

   -- the shared, although limited, overlap of trustee members,
      and,

   -- the high degree of integration between the mission and
      niche of both organizations, including the strong presence
      of elder and geriatric programs at the College and the
      educational requirement for residency at the Village.

                             Outlook

Moody's stable outlook reflects the continued strengthening of the
College's market position, operating performance and liquidity,
restrained by a competitive market environment and
the relationship with a much higher risk organization (Lasell
Village).  If the College is able to sustain liquidity growth
and strong operating performance, there is potential for an
improving outlook over the next several years.

What could change the rating - up

   * substantial growth in financial resources;
   * sustained strong cash flow margins; and
   * limited additional debt.

What could change the rating - down

   * rapid decline in liquidity; and
   * need or decision to directly support Lasell Village.

Key data and ratios (Fiscal year 2005 financial data, fall 2006
enrollment data)

     -- Total Enrollment: 1,230 full-time equivalent students
     -- Selectivity: 63.5%
     -- Matriculation: 23.3%
     -- Total Financial Resources: $9.5 million
     -- Total Pro-Forma Direct Debt: $27.9 million
     -- Total Comprehensive Debt: $49.6 million
     -- Expendable Resources to Direct Debt: 0.17x
     -- Expendable Resources to Operations: 0.21x
     -- Three-Year Average Operating Margin: 5.7%
     -- Operating Cash Flow Margin: 20.9%


LONDON FOG: DJM & Hilco Joint Venture to Facilitate Sale of Leases
------------------------------------------------------------------
The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada in Reno authorized the London Fog Group, Inc.,
nka PTI Holding Corp., and its debtor-affiliates to employ a joint
venture comprising of DJM Asset Management, LLC, and Hilco Real
Esate, LLC, to facilitate the sale and assignment of certain
leases.

The Debtors have sold a substantial portion of their assets
including the inventory that is currently located in their factory
outlet stores.  Although the Debtors want to utilize certain
leases, many of the factory outlet store leases will serve no
useful purpose to the Debtors once assets are sold and related
operations wind down.

The joint venture will:

   a. develop and design a marketing program for the sale,
      assignment, or termination of the leases including
      soliciting offers from prospective purchasers and advising
      the Debtors whether to accept certain offers or settlements;

   b. coordinate and organize the bidding procedures and sale
      process and provide any other services necessary in
      connection with any transactions; and

   c. negotiate, for the benefit of the Debtors, waivers or
      reductions of prepetition cure amounts, postpetition claims,
      and claims under Section 502(b)(6) of the Bankruptcy Code
      with respect to the leases.

The Debtors' Real Estate Consulting Agreement with the joint
venture will not constitute an assumption or assignment of any
lease.  In the event, however, that a landlord consents to the
transaction, that transaction may be accomplished by stipulation
of the landlord, the Debtors, the Committee, and the secured
creditors without further notice to any other party.  Should a
party object to the transaction, the Debtors will move the Court
for the transaction after notice and hearing.

Under the Real Estate Consulting Agreement, DJM, Hilco, and the
Debtors agree that:

   a. the joint venture will post a $50,000 letter of credit for
      the benefit of the Debtors;

   b. the LC may be drawn upon by the Debtors if the aggregate net
      proceeds from the sale, assignment, or termination,
      negotiated rejection, or other disposition of the leases,
      including the sale of designation rights does not equal or
      exceed $50,000 after the disposition of all leases;

   c. any drawing from the LC will be equal to the amount by which
      the aggregate net proceeds after the final disposition of
      all the leases is less than $50,000 up to the full amount of
      the LC.  The Debtors recognize that the joint venture has
      not guaranteed any recovery on the disposition of the leases
      other than as provided by the ability of the Debtors to draw
      upon the LC; and

   d. at a time when the aggregate net proceeds exceed $50,000,
      the Debtors will release the LC, and it will be terminated.
      The joint venture and the Debtors will be entitled to
      payment of the excess amount.

The Debtors have agreed to pay the joint venture on:

   a. sale of leaseholds

      1. The Debtors will retain the first $50,000 of aggregate
         net proceeds;

      2. The joint venture will get 10% of the aggregate net
         proceeds between $50,000 and $500,000;

      3. The joint venture will get 20% of the aggregate net
         proceeds between $500,000 and $1,000,000; and

      4. The joint venture will get 30% of the aggregate net
         proceeds over $1,000,000;

   b. reduction in bankruptcy claims

      1. The joint venture will earn 4% of the reduced or waived
         cure amount for any lease assumed by the Debtors; and

      2. The joint venture will earn 4% of the savings that would
         have been payable to the landlord for any lease rejected
         by the Debtors;

   c. additional consulting services

      The joint venture will bill $300 per hour for additional
      consulting services performed at the Debtors' specific
      written requests that are not provided in the Real Estate
      Consulting Agreement;

   d. expenses and disbursements

      1. The joint venture will not be responsible for any costs
         and legal expenses incurred by the Debtors in connection
         with their retention of the joint venture; and

      2. The joint venture will bear all marketing and
         out-of-pocket expenses incurred in connection with its
         services;

   e. exclusivity

      The joint venture will have the sole and exclusive authority
      to perform all services outlined and deal with the
      disposition of all the leases.  All inquiries regarding the
      leases will be directed to the joint venture.

To the best of the Debtors' knowledge, DJM and Hilco do not have
any connection with the Debtors, creditors, and any other parties-
in-interest.

                         About London Fog

Headquartered in Seattle, Washington, London Fog Group, Inc.
-- http://londonfog.com/-- nka PTI Holding Corp. designs and
retails the latest styles in jackets and other professional
apparel.  The company and six of its affiliates filed for chapter
11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-
50146).  Stephen R. Harris, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtors in their restructuring efforts.
Avalon Group, Ltd., serves as the Debtors' financial advisor.
Aron M. Oliner, Esq., at Buchalter Nemer, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $50 million to $100 million.

In a filing with the U.S. Securities and Exchange Commission,
Iconix Brand Group, Inc., disclosed that on Aug. 28, 2006, it
completed the acquisition of the London Fog trademarks and certain
related intellectual property assets from London Fog Group Inc.
for $30.5 million in cash and 482,423 shares of the Registrant's
common stock.


LONDON FOG: Panel Taps McDonald Carano as Substitute Nev. Counsel
-----------------------------------------------------------------
The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada in Reno authorized the Official Committee of
Unsecured Creditors in London Fog Group, Inc., nka PTI Holding
Corp.'s bankruptcy case to retain McDonald Carano Wilson LLP as
its Nevada and conflicts counsel, nunc pro tunc to Sept. 6, 2006.

The Court approved the Committee's request to retain Beckley
Singleton, Chartered, as its Nevada and conflicts counsel on
March 28, 2006.  Kaaran Thomas, Esq., the lead counsel for Beckley
Singleton transferred to McDonald Carano on April 14, 2006.

McDonald Carano will divide responsibilities with Buchalter Nemer,
PC, the Committee's lead bankruptcy counsel to avoid duplication
of services.

McDonald Carano will:

   a. advise the Committee with respect to its powers and duties
      with special emphasis on local rules and procedures;

   b. attend meetings and negotiate with representatives of the
      Debtor, creditors, and other parties-in-interest and advise
      and consult on the conduct of the case, including all of the
      legal and administrative requirements of operating in
      chapter 11;

   c. take all necessary action to protect and preserve the
      interests of the creditors of the Debtor's estate, including
      the prosecution of actions on their behalf, the defense of
      any actions commenced against those estates, negotiations
      concerning all litigation in which the Debtor may be
      involved, and objections to claims filed against the estate;

   d. prepare, on behalf of the Committee, all motions,
      applications, answers, orders, reports, and papers necessary
      to the administration of the estates;

   e. appear before the Bankruptcy Court and any appellate courts
      and protect the interest of the Committee and its
      constituents before such courts; and

   f. perform all other necessary legal services and provide all
      other necessary legal advise to the Committee in connection
      with the Debtor's bankruptcy case.

Ms. Thomas, a partner at McDonald Carano, disclosed that she has
agreed to reduce her hourly rate to $400 for this engagement.  The
other professionals who will work on this case are:

   Professional                Designation      Hourly Rate
   ------------                -----------      -----------
   Sylvia Harrison, Esq.       Partner              $350
   Michael A.T. Pagni, Esq.    Partner              $325
   Ryan Bellows, Esq.          Associate            $185
   Ericka Maiss                Paralegal            $130

Ms. Thomas assured the Court that McDonald Carano does not hold
nor represent any interest materially adverse to the Debtors and
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.

                         About London Fog

Headquartered in Seattle, Washington, London Fog Group, Inc.
-- http://londonfog.com/-- nka PTI Holding Corp. designs and
retails the latest styles in jackets and other professional
apparel.  The company and six of its affiliates filed for chapter
11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-
50146).  Stephen R. Harris, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtors in their restructuring efforts.
Avalon Group, Ltd., serves as the Debtors' financial advisor.
Aron M. Oliner, Esq., at Buchalter Nemer, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $50 million to $100 million.

In a filing with the U.S. Securities and Exchange Commission,
Iconix Brand Group, Inc., disclosed that on Aug. 28, 2006, it
completed the acquisition of the London Fog trademarks and certain
related intellectual property assets from London Fog Group Inc.
for $30.5 million in cash and 482,423 shares of the Registrant's
common stock.


MCCOMBS REALTY: Posts $112,000 Net Loss in Quarter Ended June 30
----------------------------------------------------------------
McCombs Realty Partners incurred a $112,000 net loss for the three
months ended June 30, 2006, as compared to net loss of $162,000
for the same period in the prior year.

For the six months ended June 30, 2006, the Partnership incurred a
net loss of $245,000, as compared to a $268,000 loss for the six
months ended June 30, 2005.   The decrease in net loss for both
periods is due to an increase in total revenues partially offset
by an increase in total expenses.

The Partnership generated $379,000 of total revenues for the
quarter ended June 30, 2006, compared to $298,000 generated for
the same period in the prior year.  Total revenues increased in
the three months ended June 30, 2006 due to increases in rental
and other income.

The Partnership's balance sheet at June 30 showed $2,139,000 in
total assets and $6,616,000 in total liabilities, resulting in a
$4,477,000 partners' deficit.

At June 30, 2006, the Partnership had cash and cash equivalents of
approximately $44,000 as compared to approximately $152,000 at
June 30, 2005.  The increase in cash and cash equivalents of
approximately $28,000, from Dec. 31, 2005, is due to approximately
$64,000 and $54,000 of cash provided by financing and operating
activities, respectively, partially offset by approximately
$90,000 of cash used in investing activities.

A full-text copy of the Partnership's quarterly report is
available for free at http://researcharchives.com/t/s?1210

                      Going Concern Doubt

Ernst & Young, LLP, expressed substantial doubt about McCombs'
ability to continue as a going concern after auditing the
Partnership's financial statements for the year ended
Dec. 31, 2005.  The auditing firm pointed to the Company's
inadequate liquidity and recurring operating losses.

McCombs Realty Partners' investment property consists of one
apartment complex located at Lakewood at Pelham, in Greenville,
South Carolina.


MICHAEL EZZO: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Michael Ezzo
        36 Cheyenne Crescent
        Whitesboro, NY 13492

Bankruptcy Case No.: 06-62288

Chapter 11 Petition Date: September 20, 2006

Court: Northern District of New York (Utica)

Debtor's Counsel: Richard L. Weisz, Esq.
                  Hodgson Russ LLP
                  677 Broadway
                  Albany, NY 12207
                  Tel: (518) 465-2333

Total Assets: $2,137,653

Total Debts:  $1,759,380

Debtor's 15 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
NYS Department Taxation &                               $450,000
Finance                                                ($200,000
Sales Tax Compliance Div.                               Secured)
P.O. Box 22021
Albany, NY 12201

Internal Revenue Service      Personal Income Tax;      $180,000
Department of the Treasury    Withholding Tax
Andover, MA 05501

Bridge Street Enterprises,                               $67,491
Inc.
c/o R. John Clark, Esq.
Hancock & Estabrook, LLP
1500 Mony Tower I
P.O. Box 4976
Syracuse, NY 13221

Internal Revenue Service                                 $57,000
Department of the Treasury                            (1,000,000
Andover, MA 05501                                       secured)

Great Lakes Borrower          Student Loan               $22,000
Services
P.O. Box 3059
Milwaukee, WI 53201

Sears Gold Master Card                                   $13,540
P.O. Box 183082
Columbus, OH 43218

Discover Card                                            $12,297
P.O. Box 15192
Wilmington, DE 19850

MBNA                                                     $10,820
P.O. Box 15137
Wilmington, DE 19850

American Express                                          $6,736
P.O. Box 360001
Ft. Lauderdale, FL 33336

J.C. Penney                                               $6,265
P.O. Box 961425
El Paso, TX 79998

Chase                                                     $5,472
P.O. Box 100044
Kennesaw, GA 30156

Wells Fargo Card Services,                                $1,785
Inc.
Payment Remittance Center
P.O. Box 6426
Carol Stream, IL 60197

Kaufmans/Macy's                                             $832
P.O. Box 689195
Des Moines, IA 50368

Dept. of MED SVC GRP                                        $748
c/o Medbest MGMT.
P.O. Box 4848
Syracuse, NY 13221

Onondaga Healthcare                                         $318
Recoveries
447 E. Washington St.
Syracuse, NY 13202


MIRANT CORP: Mirant Delta & Vogt-NEM Want Claims Dispute Resolved
-----------------------------------------------------------------
New Mirant asks The Honorable D. Michael Lynn of the U.S.
Bankruptcy Court for the Northern District of Texas to approve a
Settlement Agreement and Release between Mirant Delta and
Vogt-NEM.

The salient terms of the Settlement Agreement and Release are:

    (a) Vogt-NEM will have an allowed administrative claim for
        $1,063,060 pursuant to Section 503 of the Bankruptcy
        Code, which is comprised of:

        (1) $844,000 for the purchase of the SCR Catalyst;

        (2) $60,000 for storage of the SCR Catalyst through
            July 31, 2006;

        (3) $137,060 for the purchase of the CO Catalyst; and

        (4) $21,500 for storage of the CO Catalyst through
            July 31, 2006;

    (b) All of Vogt-Nem's claims against any of the Debtors,
        except for the Allowed Administrative Claim and the
        Allowed Prepetition Claim, are disallowed in their
        entirety;

    (c) Vogt-NEM acknowledges that the Purchase & Sale Agreement
        has been assumed pursuant to Section 365 of the
        Bankruptcy Code, and there were no defaults, which must
        be cured as a condition to the assumption of the Purchase
        & Sale Agreement.  Vogt-NEM waives all arguments and
        objections to the assumption of the Purchase & Sale
        Agreement;

    (d) Vogt-NEM agrees to the assignment of the Purchase & Sale
        Agreement to PG&E in connection with the sale of the
        Contra Costa Plant; and

    (e) Vogt-NEM will continue to store the Equipment for the
        benefit of PG&E at a rate of $3,000 per month for storage
        of the SCR Catalyst and $1,150 monthly for the CO
        Catalyst.  Vogt-NEM agrees that PG&E will be solely
        liable for all storage fees arising subsequent to the
        assignment of the Purchase & Sale Agreement.

Mirant Delta, LLC, as successor-in-interest to Mirant Bay
Area Procurement, LLC, formerly known as Bay Area Power Services,
LLC, and Vogt-NEM, Inc., want to resolve their disputes over
certain prepetition claims and an administrative claim arising
from an Agreement for the Purchase and Sale of Equipment dated
Oct. 1, 2000.

Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida,
relates that under the Purchase and Sale Agreement, Vogt-NEM
agreed to deliver between January and May 2002 certain equipment
-- SCR Catalyst and CO Catalyst -- to Mirant Delta for the
construction of the Debtor's Contra Costa power facility in
Antioch, California.

The delivery of the equipment was stalled when Mirant Delta
issued Change Order No. 12 to the Purchase & Sale Agreement,
which delayed the delivery until November 2004 and extended the
warranty period, Mr. Averch says.

Pursuant to the Debtors' Plan of Reorganization, the New Mirant
Entities assumed the Purchase & Sale Agreement with a $0 cure
amount.  Vogt-NEM did not object to the assumption or to the cure
amount, Mr. Averch notes.

On Jan. 24, 2006, Vogt-NEM filed an administrative expense
claim for $997,961 arising from the Purchase & Sale Agreement.
New Mirant objected to Vogt-NEM's administrative claim on the
grounds that the Claimant failed to provide supporting evidence
for its claim.

In February 2006, Vogt-NEM provided the Debtors with additional
information to support the administrative claim.

Mr. Averch informs Judge Lynn that Mirant Delta is currently
negotiating the sale of the Contra Costa Plant to a third party
purchaser, Pacific Gas & Electric Company.  Mirant Delta
anticipates that the sale will be finalized in September or
October 2006.

According to Mr. Averch, PG&E has asked Vogt-NEM to:

    * assign the Purchase & Sale Agreement to it in connection
      with the sale of the Contra Costa Plant; and

    * continue to store the Equipment until the Purchaser
      requests its delivery.

PG&E has agreed to reimburse Mirant Delta for the remaining cost
of the Equipment.

Mr. Averch adds that prior to the filing of the administrative
expense claim, Vogt-NEM asserted Claim Nos. 7313, 7314, 7315,
7316, 8042 and 8043 against various of the Debtors, but none of
which related to the Purchase & Sale Agreement.

On February 6, 2006, New Mirant and Vogt-Nem stipulated to
resolve the Prepetition Claims, which granted the Claimant an
allowed Mirant Debtor Class 3 Unsecured claim against:

     (i) Mirant Sugar Creek, LLC, for $277,000; and
    (ii) Mirant Las Vegas, LLC, for $306,000.

A full-text copy of the Settlement Agreement and Release is
available for free at:

             http://ResearchArchives.com/t/s?11f1

                           About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006.  (Mirant
Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

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

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

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

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

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

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


MIZAC PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: MiZac Properties, LP
        7532 Courtney Circle
        Sachse, TX 75048

Bankruptcy Case No.: 06-41537

Debtor-affiliate filing separate chapter 11 petition:

      Entity                       Case No.
      ------                       --------
      Jeffrey Hambrice DDS PA      06-41536

Chapter 11 Petition Date: September 20, 2006

Court: Eastern District of Texas (Sherman)

Judge: Brenda T. Rhoades

Debtor's Counsel: Eric A. Liepins, Esq.
                  Eric A. Liepins, P.C.
                  12770 Coit Road, Suite 1100
                  Dallas, TX 75251
                  Tel: (972) 991-5591
                  Fax: (972) 991-5788

                              Estimated Assets    Estimated Debts
                              ----------------    ---------------

   MiZac Properties, LP       $1 Million to       $1 Million to
                              $10 Million         $10 Million

   Jeffrey Hambrice DDS PA    Less than $50,000   $100,000 to
                                                  $500,000

The Debtors did not file a list of their 20 largest unsecured
creditors.


MORTGAGE ASSISTANCE: June 30 Equity Deficit Increased to $1.6 Mil.
------------------------------------------------------------------
Mortgage Assistance Center Corporation's balance sheet at June 30,
2006 showed $2,701,962 in total assets and $4,317,420 in total
liabilities, resulting to a total stockholders' deficit of
$1,615,458.  The Company's stockholders' deficit at Dec. 31, 2005
stood at $1,219,524.

The Company's balance sheet at June 30, 2006 also showed negative
working capital with total current assets of $2,566,558 and total
current liabilities of $3,676,669.

For the three months ended June 30, 2006, the Company incurred an
$87,445 net loss on $279,822 in net operating revenues, compared
to the $234,219 net loss on net operating revenues of $189,919 in
the three months ended June 30, 2005.

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

               http://researcharchives.com/t/s?11fc

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 25, 2006,
Sutton Robinson Freeman & Co. P.C. in Tulsa, Oklahoma, raised
substantial doubt about Mortgage Assistance Center Corporation'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, and working capital and stockholders'
deficiencies.

Mortgage Assistance Center Corporation fka Safe Alternatives
Corporation of America Inc. buys, sells and manages distressed
real estate and non-performing mortgages secured by real estate in
the secondary market in the United States through its subsidiary,
Mortgage Assistance Corporation.  MAC purchases non-performing,
charged-off, sub-prime first and second lien mortgages.  Those
mortgages are secured by real estate, and are typically 90 days to
two years past due at the time MAC buys them.  Those mortgages are
purchased in pools or portfolios of assets from lending
institutions and usually at discounts to the outstanding principal
balance.


NANOBAC PHARMACEUTICALS: Posts $835,460 Net Loss in Second Quarter
------------------------------------------------------------------
Nanobac Pharmaceuticals, Inc., incurred a $835,460 net loss on
$37,565 of net revenues for the three months ended June 30, 2006,
compared to a $643,769 net loss on $167,988 of revenues in 2005,
the Company disclosed in its second quarter financial statements
on Form-10QSB filed with the Securities and Exchange Commission.

As of June 30, 2006, the Company's accumulated deficit widened to
$19.7 million from a $17.3 million deficit at Dec. 31, 2005.

At June 30, 2006, the Company's balance sheet showed $338,054 in
total current assets and $5.1 million in total current debts,
resulting in a working capital deficit of $4.8 million, as
compared to a working capital deficit of $3.4 million at
Dec. 31, 2005.

The $4 million of the $4.8 million working capital deficit is
attributable to related party loans from the Company's affiliated
entities.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1215

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 21, 2006,
Aidman, Piser & Company, P.A., expressed substantial doubt about
Nanobac Pharmaceuticals Inc.'s ability to continue as a going
concern after it audited the Company's financial statements for
the year ended Dec. 31, 2005.  The auditing firm pointed to the
company's recurring losses from operations, working capital and
net capital deficiencies and its dependent upon continued
financing from stockholders and outside investors.

Headquartered in Tampa, Florida, Nanobac Pharmaceuticals, Inc.,
fka American Enterprise.Com, Corporation and its subsidiaries --
http://www.nanobaclabs.com/-- is a research-based lifescience
company.  The Company's primary business is the study and
development of therapeutic and diagnostic technologies related to
calcifying nano-particles.


NATIONAL ENERGY: Court Allows Lehman's Claim No. 699 for $7.2 Mil.
------------------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
Middle District of Maryland denied National Energy & Gas
Transmission, Inc.'s objection and allows Lehman Brothers, Inc.'s
Claim No. 699 for $7,217,000.

NEGT argues that the Letter Agreement dated Nov. 25, 2002 is
subject to rescission as one made under a mutual mistake, and
cites the ruling of Gould v. Board of Ed. of the Sewanhaka
Central High School Dist., 616 N.E. 2d 142, 146-147 (NY 1993), to
support its argument.

"But that case has no application here and the court cannot find
that the contract is subject to rescission in part because of a
mutual mistake of law," Judge Mannes says.  He notes that it was
only after Lehman substantially performed its work under the
Agreement that NEGT looked elsewhere and hired another investment
banker, which means that there was an anticipatory breach of
contract by NEGT.

Although Lehman failed to provide NEGT with a list of entities
contacted with respect to any transaction contemplated by the
Agreement, the Court finds that NEGT had actual knowledge of the
five bids received as a result of Lehman's efforts and that the
ultimate purchaser, TransCanada Corp., was among the high
bidders.  The Court concludes that Lehman's failure to deliver a
list did not amount to a forfeiture of its rights to compensation
as the delivery of the list was not a condition precedent, but
the purpose of the list's delivery was to protect Lehman.

The Court also notes that under the Agreement, NEGT agreed that
Lehman would be paid for its work on the Gas Transmission
Northwest Corporation equity stock sale process if NEGT
terminated the engagement with Lehman and then announced the sale
of GTN within 12 months of the termination to a purchaser which
had initially been brought to NEGT's attention by Lehman.

Lehman filed Claim No. 14 on September 3, 2003, as a contingent
and unliquidated claim based upon services performed and for
damages arising out of Agreement's rejection.  On February 24,
2004, Lehman filed Claim No. 699 for $7,217,000 as an amended
claim and a liquidated damages claim under the "tail" provision
of the Agreement, but NEGT had raised objections to the Claims.

NEGT argues that the "tail provision" does not apply because the
Agreement to perform services after filing of the bankruptcy case
could never be approved by the Court.  But the Court notes that
the issue for decision is whether Lehman belongs in the pool of
creditors paid pro rata for services rendered prior to the filing
of a bankruptcy case.

The Court says that the effect of rejection of an executory
contract under Section 365(g) of the Bankruptcy Code is that of a
breach of a contract and a claim arising from the breach is
allowed or disallowed as if the claim had arisen immediately
before the Petition Date.  The fact that the Agreement was no
longer in effect is of no significance to the allowance of Claim
No. 14, the contingent claim originally filed by Lehman, Judge
Mannes says.  Claim No. 14 was contingent, because no money was
due Lehman unless within 12 months of a termination, an
applicable transaction was announced.

NEGT also argues that the "tail provision" never became operative
because Lehman failed to show that NEGT elected to terminate the
Agreement, a condition precedent to its efficacy.  NEGT cites In
re Alongi, 272 BR 148 (B.C. MD 2001).

But the Court notes that, while the Alongi ruling states
"rejection of an executory contract, because it constitutes a
breach, does not terminate the contract," the ruling also states
"the rights and obligations of the parties remain intact because
rejection does not change the substantive rights of the parties,
while personal service contracts may not be assumed by the
trustee under Section 365(c)(1), the party rejecting the
agreement remains burdened with the contract obligations."

Accordingly, the Court finds that NEGT has not established a
valid defense to Lehman's proof of claim as amended.

Lehman's Claim relates to an investment banking agreement it
entered into with NEGT before NEGT's bankruptcy filing.

Under the Investment Banking Agreement, Lehman provided advisory
services concerning the potential sale of some of NEGT's assets.

As a result of Lehman's statutory conflict and its legal
inability to perform under the Agreement, the Debtors had to
replace Lehman.

On NEGT's bankruptcy filing, the Debtors filed, and subsequently
obtained Court approval of, an application under Sections 327(a)
and 328(a) of the Bankruptcy Code to employ Lazard Freres and
Co., LLC, as their financial advisor and investment banker.

In November 2003, Lazard initiated a competitive sale process for
the sale of NEGT's equity stock in Gas Transmission Northwest
Corporation, formerly known as PG&E Gas Transmission Northwest
Corporation.

On Feb. 24, 2004, NEGT and TransCanada Corporation entered
into a purchase and sale agreement, pursuant to which TransCanada
agreed to purchase all of the issued and outstanding shares of
capital stock of GTNC for $1,203,000,000 in cash and the
assumption of $500,000,000 in debt.

On March 2, 2005, the Court granted Lazard's application for
allowance of $10,830,593 in fees, including a $9,787,375 success
fee for its efforts in the GTNC sale.

After the announcement of the sale of GTNC, Lehman pursued claims
against the Debtors.  Lehman filed Claim No. 14 asserting an
unliquidated claim for services performed and for damages arising
out of the Debtors' rejection of the Agreement.

Lehman also timely filed Claim No. 699 for $7,217,000 as a
rejection damages claim under the "tail" provision of the
Agreement.  This sum allegedly represents the success fee owed to
Lehman for the sale of GTNC to TransCanada.  Lehman claims that
it had contacted TransCanada and introduced it to NEGT for the
purpose of facilitating discussions about the purchase of GTNC.

                      About National Energy

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

NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT
Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT
Energy Trading - Power, L.P., Energy Services Ventures, Inc., and
Quantum Ventures -- filed their First Amended Plan and Disclosure
Statement on March 3, 2005, which was confirmed on Apr. 19, 2005.
Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie
Farr & Gallagher LLP represent the ET Debtors.  (PG&E National
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NATIONAL ENERGY: ET Debtors Say Littleton's Claim Was Filed Late
----------------------------------------------------------------
NEGT Energy Trading - Power, L.P., and NEGT Energy Trading
Holdings Corporation assert that Littleton Electric Light
Department's Claims should be barred because they were filed on
May 27, 2005, more than 14 months after the Jan. 9, 2004 claims
bar date.

Dennis J. Shaffer, Esq., at Whiteford Taylor & Preston, LLP, in
Baltimore, Maryland, says that Littleton attempts to justify its
untimely filing by characterizing its Claims as claims for
rejection damages, which may arise only from executory contracts.

Littleton's claims, however, cannot relate to rejection damages
because the relevant contracts were not executory, in that they
automatically terminated by their own terms immediately before
the ET Debtors' bankruptcy filing, Mr. Shaffer contends.

Mr. Shaffer explains that, as safe-harbor contracts, the
prepetition Electricity Contracts terminated by their own terms
upon the ET Debtors' bankruptcy filing, and the parties did not
have executory obligations under the contracts as of the Petition
Date.

Mr. Shaffer argues that the terminated contracts were not
rejected by the ET Debtors' Plan, and Littleton's claims for
termination damages do not relate to rejection.  The termination
damages are prepetition claims for which Littleton should have
filed proofs of claim on or before the Bar Date.  Moreover,
Littleton has significantly inflated its damages claims as
compared to what is reflected on the ET Debtors' books and
records.

                      About National Energy

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

NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT
Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT
Energy Trading - Power, L.P., Energy Services Ventures, Inc., and
Quantum Ventures, the "ET Debtors" -- filed their First Amended
Plan and Disclosure Statement on March 3, 2005, which was
confirmed on Apr. 19, 2005.  Steven Wilamowsky, Esq., and Jessica
S. Etra, Esq., at Willkie Farr & Gallagher LLP represent the ET
Debtors.  (PG&E National Bankruptcy News, Issue No. 65; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)


NELNET INC: Moody's Rates $200 Mil. Sub. Debt Securities at Ba1
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the
$200 million launch amount of subordinated debt securities being
issued by Nelnet, Inc.  The rating outlook is stable.

The rating considers Nelnet's underlying Baa2 senior unsecured
rating, the relative priority of claim of the Securities within
the company's capital structure, and certain structural features
of the Securities such as optional only interest deferral and the
non-cash cumulative nature of interest deferral.

The Securities will, in Moody's view, have sufficient equity-like
features to allow it to receive basket "D" treatment, i.e. 75%
equity and 25% debt, for financial leverage purposes.  This basket
designation will shift from "D" to "C" in 5 years, will be basket
"C" for the next 20 years, then will shift to basket "B" for the
next 10 years, and then Basket A for the remaining
20 years.  The basket allocation is based on these rankings for
the three dimensions of equity:

   * No maturity: Strong

The Securities will have a Scheduled Maturity of 30 years and a
Final Repayment Date of 55 years, and will be callable by the
issuer at their option at par in year 5.

The Securities will also have a legally enforceable Capital
Replacement Covenant (Covenant), which obligates Nelnet not to
redeem or repurchase the Securities unless it has previously
issued qualifying securities, consisting of common stock, rights
to acquire common stock, "mandatorily convertible preferred
stock", "debt exchangeable into equity", and "qualifying capital
securities".

This Covenant initially runs in favor of a specified series of
Nelnet's indebtedness, other than the Securities.  The Covenant
includes provisions requiring Nelnet to redesignate a new series
of indebtedness if the Initial Covered Debt approaches maturity,
becomes subject to a redemption notice or is reduced to less than
$100 million in outstanding principal amount, subject to
additional procedures.

In addition, the replacement security is clearly defined to have
equal or greater equity-like characteristics as the Securities at
the time of redemption.  Given the relatively short maturity of
the Initial Covered Debt, Moody's notes that the Capital
Replacement Covenant could go away much sooner than expected
unless Nelnet issues longer-dated securities.  Moody's notes
further that Nelnet has stated its intention to replace the
Initial Covered Debt with a longer dated instrument prior to the
maturity of the 5.125% Senior Notes.  Nelnet will receive an
acceptable opinion from outside counsel regarding the
enforceability of this Covenant in accordance with the laws of New
York.

   * No ongoing payments: Moderate

The Securities contain an optional deferral feature for up to 10
years.  As an ongoing concern: If deferred, distributions must be
settled with cash generated from the sale of common equity or
qualifying preferred stock, which is defined as non-cumulative
perpetual preferred stock, callable subject to a Covenant.

Any deferred distributions must be settled the earlier of: 1) when
cash payments are resumed or 2) 5 years from the beginning of the
deferral period.  There is a lifetime cap on the common equity of
2% of shares outstanding and a 25% cap on the issuance of the non-
cumulative perpetual preferred stock.

Any distributions in relation to the limited deferral period in
excess of these caps will be permanently cancelled at the 10-year
anniversary of the commencement of the limited deferral period.

In bankruptcy: Any distributions that have not been settled
through the sale of warrants for common equity or qualifying
preferred stock will be limited to 2 years.

   * Loss absorption: Moderate

The Securities are subordinated to all existing and future debt
with limited rights and limited ability to cause acceleration.

Nelnet is headquartered in Lincoln, Nebraska, and reported net
student loan assets of $22.4 billion as of June 30, 2006.


NETWORK INSTALLATION: June 30 Balance Sheet Upside Down by $47,839
------------------------------------------------------------------
At June 30, 2006, Network Installation Corp.'s balance sheet
showed a $47,839 stockholders' deficit from total assets of
$12,709,271 and total liabilities of $12,757,110.

For the three months ended June 30, 2006, the Company incurred
a $607,111 net loss on sales of $4,939,067.  In the comparable
period last year, the Company reported a $975,459 net loss on
zero sales.

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

               http://researcharchives.com/t/s?11fd

Headquartered in Irvine, California, Network Installation Corp.
-- http://www.networkinstallationcorp.net/-- through its wholly
owned subsidiaries, Com Services and Kelley Technologies, provides
communications infrastructure services, specializing in the
design, installation, deployment and integration of specialty
systems and computer networks.


NORTH AMERICAN: Restructures $25.5 Million of Debts
---------------------------------------------------
North American Technologies Group, Inc., has restructured
$25.5 million of its debt and debentures.

Under the terms of the new agreement, the amortization of
principal for the $14 million of senior debt was deferred until
July 1, 2008.  Additionally, the maturity date of $11.5 million in
convertible debentures was extended from Dec. 31, 2006 to
July 1, 2008.  All of the debts will be reclassified as long-term
liabilities in the company's financial statements.

"NATK debt and debenture holders recognized the current market
opportunity and renewed financial discipline of the company," Neal
Kaufman, chief executive officer, said.  "This restructuring gives
NATK additional time to focus on growth and driving to
profitability, and will maximize value for our customers and
shareholders."

North American Technologies Group, Inc., (OTCBB: NATK)
-- http://www.natk.com/-- through its TieTek subsidiary
manufactures and sells composite railroad crosstie known as
TieTek(TM) made from recycled composite materials that is a direct
substitute for wood crossties, but with a longer life and with
several environmental advantages.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on June 5, 2006, Ham,
Langston & Brezina, LLP, in Houston, Texas, raised substantial
doubt about North American Technologies Group, 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 and debt service and working capital
requirements that reach beyond its current available cash.


NORTHWEST AIRLINES: Flight Attendants Declare Talks at Impasse
--------------------------------------------------------------
Northwest Airlines' flight attendants, represented by the
Association of Flight Attendants-CWA ask the National Mediation
Board to release them from further talks with the airlines'
management.  Northwest attendants union says contract talks with
the airline are at an impasse, according to the AFA's website.

"The NMB was created to protect employees, not strip away their
rights as the courts have done," said Mollie Reiley, Interim
Master Executive Council President.  "Management has no motivation
to negotiate.  They have already taken over $200 million a year
from us and the district court has prevented us from striking.  If
Northwest is allowed to get away with destroying our careers, you
can be sure that this practice will soon spread and other
companies will use this as a method to destroy the lives and the
professions of thousands of employees.  The right to strike is the
only tool working women and men have to counter the greed of
management that is eroding corporations across America.  It's the
one thing that forces management to negotiate fairly."

The NMB is a federal agency that enforces the Railway Labor Act,
which protects workers' rights to organize unions and engage in
free and fair collective bargaining in the US aviation and
railroad industries.  Under the collective bargaining process,
when a company and a union reach an impasse in negotiations, the
NMB can determine that further mediation will not help the parties
reach a consensual agreement.  The NMB then offers to submit the
dispute to arbitration. If either side rejects arbitration a 30-
day cooling-off period commences.  If no agreement is reached by
the end of the cooling-off period, the workers may choose to
exercise their right to strike.  A status conference between AFA-
CWA and company management has been requested by the NMB for
Tuesday, Sept. 26, 2006.

"When management unilaterally cut flight attendant pay, benefits
and work rules, they mocked the integrity of the NMB's role in
promoting consensual resolution of labor disputes," said Patricia
Friend, AFA-CWA International President.  "Northwest management
has made every attempt to stall negotiations and hang on to the
concessions that they forcibly took in bankruptcy court.  For the
future of Northwest flight attendants, as well as the countless
employees who will follow in their footsteps unless this culture
of greed is reversed, we urge the NMB to declare an impasse and
allow the Northwest flight attendants to exercise their own self
help in the wake of management's imposed working conditions."

                             About AFA

For over 60 years, the Association of Flight Attendants --
http://www.afanet.org/-- has been serving as the voice for flight
attendants in the workplace, in the aviation industry, in the
media and on Capitol Hill.  More than 55,000 flight attendants at
20 airlines come together to form AFA-CWA, the world's largest
flight attendant union.  AFA is part of the 700,000-member strong
Communications Workers of America, AFL-CIO.

                     About Northwest Airlines

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


NOTIFY TECHNOLOGY: Inks Amendments to Terms of Issued Warrants
--------------------------------------------------------------
Notify Technology Corporation entered into amendments to:

   (1) its Series A Warrants issued in connection with its
       July 2001 Preferred Stock Offering with Commonwealth
       Associates, L.P., and other holders of Warrants holding in
       the aggregate 54% of the outstanding Series A Warrants;

   (2) the Commitment Warrant to Purchase 118,151 Shares of Common
       Stock dated as of May 16, 2001 with ComVest Venture
       Partners, L.P.; and

   (3) the Unit Purchase Option issued to Commonwealth in
       connection with the July 2001 Preferred Stock Offering.

Each of the amendments amend the terms to limit the maximum number
of additional common shares subject to issuance as a result of
penalties provided for in Section 10 of each Agreement for certain
defaults by the Company described in Section 10 of the Agreements
to the number of additional common shares determined if the
Company remained in default for five consecutive thirty day
periods.  The provision subjected the Company to adverse
accounting treatment with respect to the Amendments under Emerging
Issues Task Force guidance EITF 00-19 "Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, A
Company's Own Stock".

Each of the amendments is intended to amend the terms that made
the Agreements subject to EITF 00-19 and allow them to be
reclassified as equity at a value calculated using the Black-
Scholes option-pricing model as of Sept. 12, 2006.  Because
approximately 63% of its outstanding Unit Purchase Options have
not been amended, however, the Company could be required to
recognize additional non-cash charges if the conditions of EITF
00-19 are met with respect to the Unit Purchase Options and the
underlying shares.

"Due to the mechanics of EITF 00-19, Notify has recorded non cash
losses of $457,919 identified as Loss on the Valuation of Warrants
in fiscal 2006 as the value of our common stock increased," Paul
DePond, president, said.  "We believe these amendments should
avoid any further material near-term non cash negative impact on
our income statement as a result of EITF 00-19. "

Headquartered in San Jose, California, Notify Technology
Corporation (OTC: NTFY) -- http://www.notifycorp.com/ -- is a
software company that develops mobility products for organizations
of all sizes.  Notify's wireless solutions provide secure
synchronized email and PIM access and management to any size
organization on a variety of wireless 2-way devices and networks.
Notify sells its wireless products directly and through authorized
resellers internationally.

Notify Technology Corp.'s balance sheet showed shareholders'
deficit of $1.08 million at June 30, 2006, compared to a deficit
of $778,888 at Sept. 30, 2005

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 15, 2006
Standard & Poor's Rating Services assigned its 'BB' rating to
Peabody Energy Corp.'s proposed $2.75 billion of senior unsecured
credit facilities, consisting of a $1.8 billion revolving credit
facility and $950 million Term Loan A.  The rating outlook is
stable.

As reported in the Troubled Company Reporter on Sept. 14, 2006
Moody's Investors Service assigned a Ba1 senior unsecured rating
to Peabody Energy Corporation's $1.8 billion Revolving Credit
Facility and $950 million Term Loan A.  At the same time, Moody's
raised the senior unsecured rating on the company's existing
senior unsecured notes to Ba1 from Ba2.  Moody's also affirmed
Peabody's Ba1 corporate family rating and its SGL-1 Speculative
Grade Liquidity rating.  The rating outlook remains negative.


NUNET INC: Debtor Did Not Assume Liability for Claimant's Loans
---------------------------------------------------------------
Rudolph Geist, Edward Geist, Edward J. Geist, Jr., Stacey Geist
and Josephine Geist filed five separate proofs of claim against
NuNET, INC., dba NuNet Fiber Technologies, in its chapter 11 case.
All five claims relate back to a purchase agreement signed in
March 1999, whereby NuNet purchased all of the existing shares of
U.S. Netway, Inc., in exchange for, inter alia, the assumption of
certain liabilities of U.S. Netway.  The Geist Claims have four
components:

   $100,000 -- amount paid to D & L Realty (the Assignee of
               a Small Business Administration Loan) in
               settlement of confession of judgement
               proceedings in the Court of Common Pleas,
               Luzerne County, Pennsylvania (No. 2542-C-2003)

    $27,000 -- Payment of Federal Tax liabilities by
               Edward J. Geist, Jr.

    $81,456 -- Outstanding principal and interest owed,
               as of March 1, 2006, on loans by
               Rudolph J. Geist

    $95,869 -- Attorneys' fees incurred in pursuit of legal
               claims against NuNet and in defense of the
               D & L judgment proceedings
   --------
   $304,325
   ========

On Sept. 14, 2005, NuNET filed its Amended Plan of Reorganization.
By Order dated Dec. 1, 2005, the Court confirmed the Debtor's
Amended Plan of Reorganization.

On Oct. 18, 2005, the Debtor objected to the Geist Claims.  A
hearing was held on Nov. 17, 2005.  Neither the Geist Claimants
nor their attorney attended the hearing.  An Order was entered
sustaining the objections and awarding the Geist Claimants a
collective general unsecured claim in the amount of $100,000.

On Dec. 5, 2005, the Geist Claimants filed a Motion to Reconsider
the Nov. 17, 2005 Order.  The Debtor filed a response on
Dec. 21, 2005.  A hearing was held on the Motion to Reconsider on
Dec. 22, 2005.  On Jan. 27, 2006, the court entered an order
granting the Geist Claimants's Motion to Reconsider, which stated
that a hearing would be held "on the merits of the Debtor's
Objections to the various Geist Claims."  On March 15, 2006, the
Honorable Eric L. Frank held a hearing on the Debtor's claim
objections.

Examining the underlying purchase agreement under Pennsylvania
law, Judge Frank concludes in a decision published at 2006 WL
2501436 that the Debtor is responsible for payment of the $100,000
loan and the Geist's legal fees.  NuNET has no liability for the
prepetition loans made by Rudolph J. Geist.  Although there was no
doubt that the claimant gave the company money as part of an
effort to salvage the company, the transaction lacked formality,
and the loans were not in active repayment status at the time of
the agreement's execution, nor were they listed as an existing
indebtedness of the company, Judge Frank explains.  Further, Judge
Frank rules, NuNET has no liability for the Geist's tax bills.

Based in Allentown, Pa., NuNet, Inc., dba NuNet Fiber Technologies
-- <http://www.nunetfiber.com/>http://www.nunetfiber.com/--  
provides Internet dial-up access, web hosting, full e-mail
service, bandwidth connections and customer service.  NuNet filed
for chapter 11 protection (Bankr. E.D. Pa. Case No. 05-21633) on
March 24, 2005, reporting less than $1 million in assets and $1
million to $10 million in liabilities.  Aris J. Karalis, Esq., and
Robert W. Seitzer, Esq., at Ciardi, Maschmeyer & Karalis, P.C.,
represented the Debtor in its successful chapter 11 restructuring.


PARMALAT: Hermes et al., Balk at Credit Suisse's Motion to Dismiss
------------------------------------------------------------------
Hermes Focus Asset Management Europe Limited; Cattolica
Partecipazioni S.p.A.; Solotrat; Societe Moderne des Terrassements
Parisiens; and Capital & Finance Asset Management, S.A., ask the
Honorable Lewis A. Kaplan of the U.S. District Court for the
Southern District of New York to deny separate motions filed by
Grant Thornton LLP and Credit Suisse to dismiss their Third
Amended Consolidated Class Action Complaint.

Representing the Lead Plaintiffs, Diane Zilka, Esq., at Grant &
Eisenhofer, P.A., in New York, contends that GT-US's Motion to
Dismiss is a waste of time and resources, as all of the arguments
that the firm presents have already been rejected by the District
Court.

The Third Amended Complaint asserts a claim against GT-US under
Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.
Section 78j(b), and Rule 10b-5 promulgated thereunder on the
theory that Grant Thornton-Italy was the agent for Grant Thornton
International and that GTI was the agent for GT-US.  The Third
Amended Complaint also alleges a control person claim against
GT-US under Section 20(a) of the Exchange Act, 15 U.S.C. Section
78t(a), on the theory that GT-US controlled GTI and is,
therefore, liable for GTI's violations of Sections 10(b) and
20(a).

GT-US has argued that a principal cannot be held liable for the
Rule 10b-5(b) violations of its agents unless the agent's
statements are specifically attributed to the principal.  GT-US
also asserted that an agency theory cannot be invoked to hold it
liable for the liabilities of GTI unless the corporate veil is
pierced and the Court finds that GTI is the alter ego of GT-US.

GT-US also pointed out that the Third Amended Complaint adds only
a handful of new allegations regarding the relationship between
GT-US and GTI.

According to Ms. Zilka, the District Court's prior rulings
provide everything needed to demonstrate that the claims in the
Third Amended Complaint against GT-US are sufficient.  Ms. Zilka
notes that the District Court has already held that:

   (a) the allegations in Dr. Bondi's amended complaint against,
       among others, the Grant Thornton entities -- which in all
       respects relevant to GT-US are now contained in the Lead
       Plaintiffs' Third Amended Complaint -- are sufficient to
       allege that GTI acted in connection with the Parmalat
       audits as the agent for GT-US;

   (b) the Lead Plaintiffs have stated a Section 10(b) claim
       against GTI on the basis that GT-Italy was the agent for
       GTI;

   (c) the Lead Plaintiffs have stated a Section 20(a) claim
       against GTI on the basis that GTI controlled GT-Italy;

   (d) allegations that a firm that is a member of an
       international auditing complex acted as an agent for
       another are also sufficient to allege a control person
       claim under Section 20(a); and

   (e) the U.S. member firm of a worldwide auditing complex can
       be held liable for audit work performed by a "sister"
       member firm in Italy on the theory that the U.S. firm
       controlled the worldwide umbrella firm, which in turn
       controlled the member firm in Italy.

The Third Amended Complaint names Credit Suisse as successor-in-
interest to the previously named defendant, Credit Suisse First
Boston.

CSFB served as the investment banking and asset management arm of
Credit Suisse Group until it merged in May 2005 with CSG's
private banking division -- formerly named Credit Suisse -- to
become the new Credit Suisse.

Credit Suisse has argued that the Third Amended Complaint fails
to state a claim under Section 10(b) because the Lead Plaintiffs
have not adequately alleged a fraudulent act or scienter, and
that the Lead Plaintiffs' allegations are too vague under
Rule 9(b) of the Federal Rules of Civil Procedure.

Credit Suisse also pointed out that the Third Amended Complaint
fails to adequately allege a claim under Section 20(a) because
the claim is predicated solely on its status as the parent
corporation of two affiliate defendants, (i) Credit Suisse First
Boston International, now known as Credit Suisse International,
and (ii) Credit Suisse First Boston Europe Limited, now known as
Credit Suisse Securities (Europe) Limited.

Ms. Zilka tells Judge Kaplan that to the contrary, the Third
Amended Complaint alleges with particularity the specific
fraudulent acts and conduct of Credit Suisse in connection with
the issuance of convertible bonds by Parmalat's Brazilian
subsidiary and the underwriting of notes issued by another
Parmalat subsidiary to artificially inflate Parmalat's assets on
its financial statements.  "These allegations are more detailed
than those alleged with respect to CSFB," Ms. Zilka says.

Ms. Zilka also asserts that the Third Amended Complaint alleges
that CSFB controlled CSFBi and Credit Suisse Europe through (i)
CSFB's ownership of these subsidiaries, and (ii) their common
directors, employees and places of business.

According to Ms. Zilka, Credit Suisse cannot dispute that it is
CSFB's successor-in-interest nor can it credibly argue that it
had no notice of a claim it has been litigating since 2004.

The Troubled Company Reporter on Sept. 6, 2006 relates that in its
request --  which Grant Thornton supported -- Credit Suisse
argued that since filing their first amended consolidated
complaint, the investors have taken 20 months to specify which
Credit Suisse entities they seek to sue despite this deficiency
having been brought to their attention.

In Credit Suisse's behalf, Michael S. Feldberg, Esq., at Allen &
Overly LLP, in New York, told the Court that in the Third Amended
Complaint, the investors alleged, among others, that Credit
Suisse, Credit Suisse International, and Credit Suisse Securities
(Europe), Limited, structured and participated in a transaction to
provide financing to the Brazilian subsidiary of Parmalat, knowing
that Parmalat would use it to conceal debt on its financial
statements.

According to Mr. Feldberg, Credit Suisse stands on a different
footing with Credit Suisse International and Credit Suisse
Securities.

Mr. Feldberg contended that the Third Amended Complaint is devoid
of any facts that detail with specificity Credit Suisse's role in
the challenged transaction.  Credit Suisse believes that the
Complaint fails adequately to plead a primary violation of the
securities laws under the particularity requirements of Rule 9(b)
of the Federal Rules of Civil Procedure.

There is no allegation in the Third Amended Complaint that Credit
Suisse committed a deceptive or manipulative act, Mr. Feldberg
pointed out.  Instead, he continues, investors meld Credit Suisse
into the umbrella term "Credit Suisse Entities" without detailing
the nature of its participation in the alleged fraudulent scheme.

Credit Suisse also believes that the investors' references to it
as the corporate parent of Credit Suisse International and Credit
Suisse Securities do not advance their position.  Mere allegation
of a status as a corporate parent of alleged wrongdoers does not
suffice, Mr. Feldberg said.

Mr. Feldberg also noted that the investors did not allege that
Credit Suisse acted scienter with particularity, as required by
the Reform Act and Second Circuit decisional law.  To plead
scienter, the plaintiff must allege a purpose to harm by
intentionally deceiving, manipulating or defrauding, Mr. Feldberg
explained, citing Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193,
96 S. Ct. 1375, 1381 (1976).

The Third Amended Complaint adds a new claim for controlling
person liability against Credit Suisse.  However, Credit Suisse
says the claim is deficient.

Mr. Feldberg argued that the Third Amended Complaint's
allegations of control "do not show that Credit Suisse had actual
control over the transaction at issue."

"No amendment could cure the deficiencies identified in the third
amended complaint," Mr. Feldberg maintained.  "Credit Suisse
simply had no involvement in the Parmalat matters at issue . . .
and there are no facts that could support the legal conclusion of
[it's participation] in the alleged fraudulent scheme or actively
controlled the . . . entities which are alleged to have
participated."

                          About Parmalat

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)


PARMALAT USA: Court Okays Pact on George's Suit Against Farmland
----------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved a stipulation between
Arthur George, Farmland Dairies LLC, and the Farmland Dairies LLC
Unsecured Creditors' Trust modifying the plan injunction.

In the settlement agreement published in the Troubled Company
Reporter on Sept. 5, 2006, Farmland and Mr. George agreed to the
modification of the Plan injunction to allow the parties to
prosecute and defend against Mr. George's personal injury suit
pending before the Supreme Court of the State of New York, County
of Bronx.

However, Mr. George will not be entitled to recover any property
of or from the Debtors or their estates, Reorganized Farmland, or
the Trust.  He will have recourse solely against any available
insurance proceeds.

Mr. George's suit relates to the injuries he sustained while
unloading milk crates inside a truck owned and maintained by
Sunnydale Farms, Inc., a business unit of Farmland.  Mr. George
seeks $900,000 in damages in the Action.

At the time of the accident, Farmland maintained a general
liability insurance policy with Royal & SunAlliance.

Mr. George agrees that payment of any judgment awarded against
the U.S. Debtors' insurers, if any, will be reduced by the lesser
of the payment or the amount of the Policy's deductible that the
U.S. Debtors, Reorganized Farmland or the Trust might otherwise
be liable for.

Mr. George's Lift Stay Motion is withdrawn, with prejudice.
Mr. George releases the U.S. Debtors, Reorganized Farmland and the
Trust from all claims and causes of action.

                          About Parmalat

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)


PEP BOYS: $120 Mil. Facility Increase Cues S&P to Affirm B+ Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' rating on
Philadelphia-based Pep Boys-Manny, Moe & Jack's term loan after
the company announced plans to increase the size of the facility
by $120 million to $320 million.  Proceeds from the additional
$120 million term loan will be used to refinance its convertible
notes which mature in June 2007.

The recovery rating was revised to '1' from '1+'.  At the same
time, the rating on the $357.5 million asset-based revolver was
raised to 'B+' from 'B' to properly realign its ratings with the
term loan and to reflect Standard & Poor's increased comfort with
the collateral and terms securing this facility.

The 'B-' corporate credit and other ratings were affirmed; the
outlook remains negative.

"The ratings on Pep Boys-Manny, Joe & Jack reflect weak operating
trends, the risks of operating in the highly competitive and
consolidating auto parts retail sector, a highly leveraged capital
structure, and somewhat limited financial flexibility," said
Standard & Poor's credit analyst Stella Kapur.

The company faces considerable challenges and needs to turn around
its service segment and reinvest capital in its store base.

Progress in turning around the company's operating performance
continues to be limited.  Same-store sales at the auto parts
retailer for the first half of 2006 decreased 0.3%, following a
1.3% decline for all of 2005.  However, EBITDA improved
marginally, growing 10% to $57 million in the first half of 2006,
and operating cash flow generation increased significantly to $86
million from $19 million in the first half of 2005.

The higher operating cash flow primarily reflected better working
capital management.  This, combined with much lower capital
spending, enabled the company to reduce its outstanding debt to
$526 million at July 29, 2006, from $587 million at the end of
2005.


PITTSFIELD WEAVING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Pittsfield Weaving Company
        55 Barnstead Road
        Pittsfield, NH 03263

Bankruptcy Case No.: 06-11214

Type of Business: The Debtor is a full service, global provider of
                  brand identification to the apparel and soft
                  goods industries, and manufactures woven and
                  printed labels and RFID/EAS solutions.
                  See http://www.pwcolabel.com/

Chapter 11 Petition Date: September 20, 2006

Court: District of New Hampshire (Manchester)

Judge: Mark W. Vaughn

Debtor's Counsel: William S. Gannon, Esq.
                  William S. Gannon PLLC
                  889 Elm Street, 4th Floor
                  Manchester, NH 03101
                  Tel: (603) 621-0833
                  Fax: (603) 621-0830

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
CES Designs                        Services              $241,615
2613 Cambridge Road
Burlington, NC 27215

Public Service of NH               Utility               $221,306
P.O. Box 330
Manchester, NH 03105-0330

Nixon Peabody                      Legal Fees            $105,246
900 Elm Street
Manchester, NH 03101

The Israeli Processing Co., Ltd.   Services               $87,855
P.O. Box 33
Yavne, Israel

Checkpoint Systems                 Services               $42,692
P.O. Box 8538-0379
Philadelphia, PA 19171-0379

Town of Pittsfield                 Taxes                  $33,970

American Express Delta             Credit Card            $33,414

Cigna Healthcare                   Insurance              $29,962

Global Fiber & Yarns               Supplies               $29,291

Ogilvy Renault                     Services               $20,467

Rosenthal & Rosenthal, Inc.        Services               $18,008

American Express                   Credit Card            $16,452

Vaupal Americas, Inc.              Services               $13,101

United Parcel Service              Trade Debt             $12,907

Bornstein & Sweatt P.C.            Services               $12,519

Spang Management Co., Inc.         Services               $10,950

First Bankcard                     Credit Card            $10,414

Memic Indemnity Co.                Insurance               $9,418

Amerigas Propane LP                Vendor                  $8,433

JB Yarn                            Supplies                $6,997


PORTRAIT CORP: Hires BSI as Claims and Balloting Agent
------------------------------------------------------
The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court
for the Southern District of New York authorized Portrait
Corporation of America, Inc., and its debtor-affiliates, on an
interim basis, to retain Bankruptcy Services LLC as their
noticing, claims and balloting agent.

In this engagement, BSI will:

     a) prepare and serve required notices in these chapter 11
        cases, including:

             * a notice of the commencement of the chapter 11
               cases and the initial meeting of creditors under
               section 341(a) of the Bankruptcy Code;

             * a notice of the claims bar date;

             * notices of objections to claims;

             * notices of any hearings on a disclosure statement
               and confirmation of a plan or plans of
               reorganization; and

             * other miscellaneous notices as the Debtors or
               Court may deem necessary or appropriate for an
               orderly administration of the chapter 11 cases;

      b) within three business days after the service of a
         particular notice, prepare for filing with the Clerk of
         the Court a certificate or affidavit of service that
         includes:

             * an alphabetical list of persons on whom the notice
               was served, along with their addresses, and

             * the date and manner of service;

      c) maintain copies of all proofs of claim and proofs of
         interest filed in these chapter 11 cases;

      d) maintain official claims registers in these chapter 11
         cases by docketing all proofs of claim and proofs of
         interest in a claims database that includes these
         information for each claim or interest asserted:

             * the name and address of the claimant or interest
               holder and any agent, if the proof of claim or
               proof of interest was filed by an agent;

             * the date the proof of claim or proof of interest
               was received by BSI and/or the Court;

             * the claim number assigned to the proof of claim or
               proof of interest; and

             * the asserted amount and classification of the
               claim;

      e) implement necessary security measures to ensure the
         completeness and integrity of the claims registers;

      f) transmit to the Clerk of the Court a copy of the claims
         registers on a weekly basis unless requested more or less
         frequently by the Clerk's Office;

      g) maintain an up-to-date mailing list for all entities that
         have filed proofs of claim or proofs of interest and make
         this list available upon request to the Clerk of the
         Court or any party in interest;

      h) provide access to the public for examination of copies of
         the proofs of claim or proofs of interest filed in the
         Debtors' chapter 11 cases without charge during regular
         business hours;

      i) record all transfers of claims pursuant to Bankruptcy
         Rule 3001(e) and, if directed to do so by the Court,
         provide notice of these 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;

      l) promptly comply with further conditions and requirements
         as the Clerk of the Court or the Court may at any time
         prescribe;

      m) provide other claims processing, noticing, balloting, and
         related administrative services as may be requested from
         time to time by the Debtors;

      n) act as balloting agent

      o) at the close of the case, box and transport all original
         documents in proper format, as provided by the Clerk's
         office, to the Federal and Record Administration;

The current hourly rates for BSI's professionals are:

         Designation                       Hourly Rate
         -----------                       -----------
         Senior Bankruptcy Counsel         $225 - $295
         Bankruptcy Consultant              185 - 225
         IT Programming Consultant          140 - 190
         Case Managers                      125 - 175
         Clerical                            40 - 60

James Katchadurian, a vice-president at BSI, assures the Court
that his firm does not hold any interest adverse to the Debtors'
estate and is a disinterested person as that term is defined in
Section 101(14) of the Bankruptcy Code.

A copy of the bankruptcy services agreement between BSI and the
Debtors is available for free at:

              http://researcharchives.com/t/s?1217

                    About Portrait Corporation

Portrait Corporation of America, Inc. -- http://pcaintl.com/--  
provides professional portrait photography products and services
in North America.  The Company operates portrait studios within
Wal-Mart stores and Supercenters in the United States, Canada,
Mexico, Germany and the United Kingdom.  The Company also operates
a modular traveling business providing portrait photography
services in additional retail locations and to church
congregations and other institutions.

Portrait Corporation and its debtor-affiliates filed for Chapter
11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No.
06-22541).  John H. Bae, Esq., at Cadwalader Wickersham & Taft
LLP, represents the Debtors in their restructuring efforts.
Berenson & Company LLC serves as the Debtors' Financial Advisor
and Investment Banker.  At June 30, 2006, the Debtor had total
assets of $153,205,000 and liabilities of $372,124,000.


PREMIER ENTERTAINMENT: Chapter 11 Filing Cues S&P's Default Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and first mortgage note debt ratings on Premier Entertainment
Biloxi LLC to 'D' from 'CCC'.

The downgrade follows the announcement by Biloxi-based Premier
Entertainment that it has filed for voluntary Chapter 11
reorganization in the U.S. Bankruptcy Court.


PROTECTION ONE: Has $71.4 Million Stockholders' Deficit at June 30
------------------------------------------------------------------
Protection One Inc.'s balance sheet at June 30, 2006, showed
$437,828,000 in total assets and $509,239,000 in total
liabilities, resulting in a stockholders' deficit of $71,411,000.

The Company's balance sheet at June 30, 2006 also showed strained
liquidity with total current assets of $59,476,000 and total
current liabilities of $66,346,000.

For the three months ended June 30, 2006, the Company incurred
a $6,663,000 net loss on total revenues of $67,150,000, compared
to a $7,891,000 net loss on total revenue of $65,441,000 for the
same period last year.

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

               http://researcharchives.com/t/s?11ff

Headquartered in Wichita, Kansas, Protection One --
http://www.protectionone.com/-- provides installation,
maintenance and monitoring of fire and burglar alarm systems.
Network Multifamily, the Company's wholly owned subsidiary, is a
security provider to the multifamily housing market.  Protection
One's 2,300 professionals serve its customers from more than 64
branch offices and three monitoring facilities.


RADNOR HOLDINGS: Committee Taps Greenberg Traurig as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Radnor Holdings
Corporation and its debtor-affiliates asks the U.S. Bankruptcy
Court for the District of Delaware for permission to retain
Greenberg Traurig, LLP, as its bankruptcy counsel, nunc pro tunc
as of Aug. 30, 2006.

Greenberg Traurig will:

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

    (b) prepare all necessary applications, answers, responses,
        objections, orders, reports and other legal papers;

    (c) represent the Committee in any and all matters arising in
        the Debtors' bankruptcy proceedings including any dispute
        or issue with the Debtors, any alleged secured creditors
        or any other creditors or third parties;

    (d) assist the Committee in its investigation and analysis of
        the Debtors, including but not limited to, the review and
        analysis of all pleadings, claims or plans of
        reorganization that may be filed in the Debtors' chapter
        11 cases and any negotiations or litigation that may arise
        out of or in connection with such matters, operations and
        financial affairs;

    (e) represent the Committee in all aspects of confirmation
        proceedings; and

    (f) perform all other legal services for the Committee that
        may be necessary or desirable in these proceedings.

Victoria Watson Counihan, Esq., a shareholder at Greenberg
Traurig, tells the Court that she will bill $440 per hour for this
engagement.  Ms. Counihan tells the Court that other professionals
who will render services bill:

         Professional                           Hourly Rate
         ------------                           -----------
         Nancy A. Mitchell, Esq.                    $615
         Nancy A. Peterman, Esq.                    $545
         Donald J. Detweiler, Esq.                  $490
         Monica L. Loftin, Esq.                     $470
         Dennis A. Meloro, Esq.                     $300
         Elizabeth C. Thomas                        $170

         Designation                            Hourly Rate
         -----------                            -----------
         Shareholders                           $235 - $750
         Associates                             $130 - $480
         Legal Assistants/Paralegals             $65 - $230

Ms. Counihan assures the Court that her firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Ms. Counihan can be reached at:

         Victoria Watson Counihan, Esq.
         Greenberg Traurig, LLP
         The Nemours Building, 1007 North Orange Street
         Suite 1200
         Wilmington, DE 19801
         Tel: (302) 661-7000
         Fax: (302) 661-7360

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.


RALPH STRUCHTEMEYER: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Ralph Earl Struchtemeyer
        Marilyn Sue Struchtemeyer
        dba J2M Farm
        7325 Southshore Drive
        Hartsburg, MO 65039

Bankruptcy Case No.: 06-20989

Chapter 11 Petition Date: September 19, 2006

Court: Western District of Missouri (Jefferson City)

Debtors' Counsel: Gwendolyn Froeschner Hart, Esq.
                  Shurtleff, Froeschner & Bunn LLC
                  25 North 9th Street
                  Columbia, MO 65201
                  Tel: (573) 449-3874
                  Fax: (573) 875-5055

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

The Debtors did not file a list of their 20 largest unsecured
creditors.


REAL ESTATE: Reports $217,000 Net Loss in Quarter Ended June 30
---------------------------------------------------------------
Real Estate Associates Limited VII incurred a $217,000 net loss on
revenues of $28,000 for the quarter ended June 30, 2006, compared
to a $238,000 net loss on $17,000 of revenues for the same period
in the prior year.

The Partnership's balance sheet at June 30, 2006, showed total
assets of $2,125,000 and total liabilities of $20,567,000,
resulting in a $18,442,000 stockholders' deficit.

A full-text copy of the Partnership's quarterly report is
available for fee at http://researcharchives.com/t/s?1206

                        Going Concern Doubt

Ernst & Young LLP expressed substantial doubt about Real Estate
Associates' ability to continue as a going concern after auditing
the Partnership's financial statements for the year ended
Dec. 31, 2005.  The auditing firm pointed to the Partnership's
recurring operating losses and default on approximately
$20,231,000 of notes payable and related accrued interest.

Ten of the Partnership's twenty-three investments involved
purchases of partnership interests from partners who subsequently
withdrew from the operating partnership.  The Partnership is
obligated for non-recourse notes payable of approximately
$6,840,000 to the sellers of the partnership interests, bearing
interest at 9.5 to 10 percent.

Accrued interest is approximately $13,708,000 as of June 30, 2006.
These obligations and the related interest are collaterized by the
Partnership's investment in the local limited partnerships and are
payable only out of cash distributions from the Local Limited
Partnerships, as defined in the notes.  Unpaid interest was due at
maturity of the notes.  All notes payable have matured and remain
unpaid at June 30, 2006.

Real Estate Associates Limited VII is a limited partnership formed
under the laws of the State of California on May 24, 1983.  The
general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II.


ROCKPORT HEALTHCARE: June 30 Balance Sheet Upside-Down by $1.9MM
----------------------------------------------------------------
Rockport Healthcare Group, Inc., incurred a $87,319 net loss on
$704,907 of net revenues for the three months ended June 30, 2006,
compared to a $143,128 net loss on $848,584 of revenues for the
same period in 2005.

At June 30, 2006, the Company's balance sheet showed $1,055,121 in
total assets and $3,015,754 in total liabilities, resulting in a
$1,960,633 stockholders' deficit.

The Company's June 30 balance sheet also showed strained liquidity
with $675,581 in total current assets available to pay
$2.5 million in total current liabilities coming due within the
next 12 months.

                    New Independent Accountants

On Aug. 13, 2006, the Company's board of directors approved a
change in the Company's independent accountants.  The Company
engaged Thomas Leger & Co., L.L.P., as the Company's independent
accountants to audit the Company's consolidated financial
statements for the year ending March 31, 2007.

Thomas Leger will also perform a review of the unaudited condensed
quarterly financial statements to be included in the Company's
quarterly reports on form 10-QSB beginning with the June 30, 2006
form 10-QSB.

During the two-year period ended March 31, 2006, and the
subsequent interim period preceding such dismissal, the Company
said it did not have any disagreements with its previous
independent auditor, Hein & Associates LLP, on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1211

                       Going Concern Doubt

Hein & Associates raised substantial doubt about Rockport
Healthcare'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 and its stockholders' equity deficit.

                     About Rockport Healthcare

Headquartered in Houston, Texas, Rockport Healthcare Group, Inc. -
- http://www.pennoctane.com/-- develops, operates, and manages
networks consisting of healthcare providers and medical suppliers
that serve employees with work-related injuries and illnesses in
the United States.  It offers access to a healthcare network at a
local, state, or national level for its clients and their
customers.  The company contracts with physicians, hospitals, and
ancillary healthcare providers and offers healthcare services to
its clients.  Its clients include property and casualty insurance
companies, employers, bill review/medical cost containment
companies, managed care organizations, software/bill review
companies, and third-party administrators.


RONALD STAHL: Case Summary & 4 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Ronald W. Stahl
        7579 Firebird Lane
        Manlius, NY 13104

Bankruptcy Case No.: 06-62276

Chapter 11 Petition Date: September 20, 2006

Court: Northern District of New York (Utica)

Judge: Stephen D. Gerling

Debtor's Counsel: Lee E. Woodard, Esq.
                  Harris Beach LLP
                  One Park Place
                  300 S. State Street
                  Syracuse, NY 13202
                  Tel: (315) 423-7100
                  Fax: (315) 214-2101

Total Assets: $446,570

Total Debts: $2,023,763

Debtor's 4 Largest Unsecured Creditors:

   Entity                               Claim Amount
   ------                               ------------
407 University Realty Associates Inc.     $1,331,416
c/o Pyramid Brokerage Co. Inc.
P.O. Box 3
Dewitt, NY 13214

HPSC, Inc.                                   $20,000
Attn: Michael Powell
One Beacon St., 2nd Fl.
Boston, MA 02108

Washington Mutual Visa Card                  $10,000
P.O. Box 660487
Dallas, TX 75266

American Express                              $2,900
P.O. Box 1270
Newark, NJ 07101


ROWE COS: Receives Court Approval of First-Day Motions
------------------------------------------------------
The Rowe Companies received approval of first-day motions
presented to the U.S. Bankruptcy Court in the Eastern District of
Virginia.  During hearings held yesterday before the Honorable
Stephen S. Mitchell, Rowe received interim approval of a
$50 million Secured Super Priority Debtor-in-Possession Facility
provided by General Electric Capital Corporation.  The DIP
Facility includes the payment or "roll up" of GECC's pre-petition
secured loans to Rowe.  The facility, among other things, requires
Rowe to conform to a budget and for the sale or liquidation of the
Storehouse chain.  A hearing to approve the DIP Facility on a
final basis will be held on Oct. 13, 2006.

In addition, Rowe obtained approval to pay pre-petition and
ongoing employee wages and to continue various employee benefit
programs.  The Court also authorized Rowe to honor certain pre-
petition customer deposits and continue many of its customer
service programs.  In addition, Rowe obtained approval to continue
the use of its pre-petition bank accounts and current cash
management system.  The first-day orders will enable Rowe to
continue normal business operations without interruption as it
completes its ongoing restructuring plans and initiatives.

"We are very pleased with the Court's approval of the DIP
financing and the rest of the first day motions presented by
Rowe," said Gerald Birnbach, President and CEO of Rowe.  "Having
secured DIP financing, we will be able to move forward with
business operations and continue providing our customers with
quality products.  In addition, we are optimistic that the DIP
financing will offer assurance to our vendors and suppliers that
they will be timely paid for post-petition services as we complete
our restructuring process.  The Court's approval of the first day
motions will also enable Rowe to honor critical employee and
customer obligations, while continuing normal business operations
without interruption."

On Sept. 18, 2006, The Rowe Companies, along with its two
operating subsidiaries, Rowe Furniture, Inc. and Storehouse, Inc.,
filed voluntary petitions under chapter 11 of the U.S. Bankruptcy
Code in the Eastern District of Virginia.  Business and operations
will continue as usual while Rowe pursues various restructuring
options.

Consumer customers and Storehouse vendors may call 1-866-907-6499.
Rowe Furniture vendors may call 1-877-684-3578.

Headquartered in McLean, Virginia, The Rowe Companies --
http://www.therowecompanies.com/-- manufactures upholstered
retail home and office furniture, interior decorations, tableware,
lighting fixtures, and other interior design accessories.  The
Company owns 100% of stock of manufacturing and retail
subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/--  
and Storehouse, Inc. -- http://www.storehousefurniture.com/

The Company and its two of its debtor-affiliates filed for chapter
11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142
to 06-11144).  Dylan G. Trache, Esq., H. Jason Gold, Esq., and
Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent
the Debtors.  When the Debtors filed for protection from their
creditors, The Rowe Companies listed total assets of $130,779,655
and total debts of $93,262,974; Rowe Furniture estimated assets
between $50 million and $100 million and debts between $10 million
and $50 million; and Storehouse, Inc. estimated assets and debts
between $10 million and $50 million.


SECUNDA INTERNATIONAL: S&P Holds B- Corp. Credit & Debt Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services' 'B-' long-term corporate
credit and senior secured debt ratings on offshore support vessel
provider Secunda International Ltd. remained on CreditWatch with
positive implications, where they were placed Sept. 29, 2005.

The continued CreditWatch listing was the result of the company's
ongoing efforts to complete its IPO, in which it plans to sell
common stock.  In conjunction with the IPO, Secunda also extended
its tender offer for its senior secured notes.

In June 2006, Nova Scotia-based Secunda concurrently discontinued
its IPO registration process with the U.S. SEC and opted to file
in Canada.

Net proceeds will be used to:

   * fund the acquisition of an additional vessel;
   * repay existing indebtedness; and
   * for general corporate purposes.

The funds from the offering should provide the company with
additional liquidity, as well as added flexibility from the
company's access to the equity market.  Furthermore, the equity
offering should afford Secunda the ability to expand and improve
its fleet, without any incremental negative effects on its
financial profile.

The preliminary prospectus filed in June 2006 included Secunda's
financial results for the quarter ended March 31, 2006, with the
company reporting an improvement in both revenues and internal
cash flow generation, compared with the previous year.

"We expect that Secunda will complete the IPO before the end of
2006, which should allow the company to reduce its leverage, as
well as gain added flexibility and liquidity," said Standard &
Poor's credit analyst Jamie Koutsoukis.

"This, combined with the continued improvement in its financial
profile as a result higher-than-historical utilization and day
rates, should result in Secunda's overall credit profile
strengthening," Ms. Koutsoukis added.

The extent of any positive rating action will depend on Standard &
Poor's analysis of Secunda's prospective business and financial
plans, including its planned uses of the proceeds and amount of
debt reduction following the offering.

Based on Standard & Poor's preliminary assessment, an upgrade
higher than one notch is unlikely.  Standard & Poor's will resolve
the CreditWatch action after further consultation with Secunda's
management and the successful completion of the IPO.


SIERRA PACIFIC: Fitch Lifts Issuer Default Rating to BB- from B+
----------------------------------------------------------------
Fitch upgraded the ratings of Sierra Pacific Resources and its
utility subsidiaries, Nevada Power Co. and Sierra Pacific Power
Co.  The Rating Outlook is Stable.

The rating upgrade reflects:

   * continuing evidence of a more supportive regulatory
     environment in Nevada;

   * reduced litigation exposure;

   * improved financial flexibility;

   * adequate liquidity; and

   * ongoing efforts to diminish reliance on the wholesale energy
     markets.

The upgrade also reflects recent positive developments, including
a Nevada Supreme Court decision that reversed a $180 million 2002
deferred energy disallowance by the Public Utilities Commission of
Nevada, as well as SRP's recent $280 million equity issuance.

The Stable Rating Outlook assumes the continuation of constructive
regulatory orders in Nevada and the issuance of adequate amounts
of equity to support the company's large capital spending plans.

If the PUCN approves the company's pending integrated resource
plan filing, Fitch expects the credit ratios of SRP and its
subsidiaries to weaken over the next several years as the company
makes significant capital investments in the $3.7 billion Ely
Energy Center and the expansion of its fast growing transmission
and distribution system.  Substantial external financing will be
required beginning in 2008 for the Center's construction, and the
first unit would not be operational until 2011, with the second
coming on line in 2014.

The anticipated lag in regulatory recovery of these investments
and other projects is expected to result in the deterioration of
the company's financial profile over the intermediate term.

However, Fitch recognizes that these expenditures are in line with
the company's strategy to diversify its generation portfolio and
reduce exposure to the wholesale energy markets.  SRP is expected
to finance these expenditures with a balanced mix of debt and
equity to support credit quality.

Approximately $200 million from SRP's August 2006 equity offering
was contributed to NPC to reduce outstanding debt.  Moreover, if
the sale of its 50% interest in the Tuscarora Gas Transmission Co.
is completed, proceeds may be used to reduce system debt or fund
capital expenditures.

Regulatory support for the recovery of deferred energy costs and
capital investments at the utilities will remain critical going
forward.  A change to the pattern of constructive regulatory
orders demonstrated by the PUCN over the last several years would
have negative rating implications for the company.

During 2006, SRP's utility subsidiaries have continued to
demonstrate access to capital markets.  Several debt financings
have pushed out maturities and lowered interest expense.  In
response to elevated commodity prices, both NPC and SPPC increased
the capacity of each of their revolving credit facilities by $100
million to $600 million and $350 million, respectively.

As of July 28, 2006, NPC had $217 million in facility availability
while SPPC had $340 million of facility capacity.  Current
liquidity is believed to be stronger, since these figures were
prior to SRP's $280 million equity issuance and the historically
robust late summer cash flow at the utilities.

SRP's ratings reflect its consolidated financial profile and
structural subordination.  Although the holding company's
liquidity has improved, the parent relies on dividends from its
subsidiaries to meet its obligations and certain limitations have
been put in place.

Currently, the most restrictive dividend limitation is from a
February 2006 PUCN financing order that restricts the combined
dividends from NPC and SPPC to the amount of SRP's debt service.

Fitch believes that permitted dividends will be sufficient to meet
parent needs over the next several years, but any further
deterioration of the subsidiaries' financial results would affect
parent cash flow.  SRP also intends to hold $30 million in cash at
the parent level.

Fitch upgraded these ratings:

  Sierra Pacific Resources:

    -- Issuer Default Rating to 'BB-' from 'B+'
    -- Senior unsecured debt to 'BB-' from 'B+/RR4'
    -- Rating Outlook Stable

  Nevada Power Co.:

    -- IDR to 'BB' from 'BB-'
    -- General and refunding mortgage bonds to 'BBB-' from 'BB+'
    -- Secured revolving bank facility rated to 'BBB-' from 'BB+'
    -- Senior unsecured debt to 'BB' from 'BB-'
    -- Rating Outlook Stable

  Sierra Pacific Power Co.:

    -- IDR to 'BB' from 'BB-'
    -- First mortgage bonds to 'BBB-' from 'BB+'
    -- General and refunding mortgage bonds to 'BBB-' from 'BB+'
    -- Secured revolving bank facility to 'BBB-' from 'BB+'
    -- Rating Outlook Stable


SILICON GRAPHICS: Delays Filing of 2006 Annual Report
-----------------------------------------------------
Barry Weinert, vice president and general counsel of Silicon
Graphics, Inc., informs the Securities and Exchange Commission
that due to the company's Chapter 11 filing; the ongoing
assessment of the company's long-lived assets for potential
impairment; and the dismissal of Ernst & Young as the company's
independent registered public accounting firm, Silicon's annual
report on Form 10-K has not been completed by the due date.

Silicon needs more time to finalize its audited financial
statements and related internal control assessment for the year
ended June 30, 2006, Mr. Weinert explains.

Mr. Weinert says the company expects to file its Form 10-K as soon
as practicable.  Financial statements to be included in the filing
will reflect any potential adjustments that may be required as the
result of an asset impairment evaluation as well as any other
necessary adjustments and disclosures that must be included in
order for those financial statements to be stated in accordance
with U.S. generally accepted accounting principles.

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.  Judge Lifland confirms the Debtors' Plan
of Reorganization on Sept. 19, 2006.  When the Debtors filed for
protection from their creditors, they listed total assets of
$369,416,815 and total debts of $664,268,602.  (Silicon Graphics
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SILICON GRAPHICS: Enters Into $115 Mil. Commitment Letter
---------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York authorized Silicon Graphics,
Inc., and its debtor-affiliates to:

    -- enter into a commitment letter with Morgan Stanley Senior
       Funding, Inc., and one or more of its affiliates, and
       General Electric Capital Corporation, and one or more of
       its affiliates, in connection with a proposed several, not
       joint, commitment for a senior secured facility of up to
       $115,000,000; and

    -- pay the fees related to the Senior Secured Facility Letter.

As reported in the Troubled Company Reporter on Sept. 7, 2006, the
Debtors need an exit financing facility to:

    (a) repay their existing indebtedness under their DIP
        Financing Facility;

    (b) fund payments required to be made under the Plan on the
        effective date; and

    (c) meet the working capital and other corporate needs of the
        Reorganized Debtors.

Under the Court-approved Plan, the Debtors' exit financing
facility will consist of two facilities -- a revolving line of
credit and a term loan facility.

A full-text copy of the Commitment Letter is available for free
at http://researcharchives.com/t/s?112f

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.  Judge Lifland confirms the Debtors' Plan
of Reorganization on Sept. 19, 2006.  When the Debtors filed for
protection from their creditors, they listed total assets of
$369,416,815 and total debts of $664,268,602.  (Silicon Graphics
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SINGING MACHINE: Incurs $1.1 Mil. Net Loss in 2006 Second Quarter
-----------------------------------------------------------------
The Singing Machine Company, Inc., incurred a $1.1 million net
loss on $1 million of net revenues for the three months ended June
30, 2006, compared to a $1.9 million net loss on $2.7 million of
revenues in 2005.

At June 30, 2006, the Company's balance sheet showed $4,039,723 in
total assets and $5,799,917 in total liabilities, resulting in a
$1,760,194 stockholders' deficit.

The Company's June 30 balance sheet also showed strained liquidity
with $3.4 million in total current assets available to pay $5.7
million in total current liabilities coming due within the next 12
months.

As of June 30, 2006, the Company had cash on hand of $168,635, as
compared to cash on hand of $233,345 and restricted cash of
$872,645 as of June 30, 2005.

The Company has a factoring agreement with Crestmark Bank,
pursuant to which the Company may borrow 70% of eligible accounts
receivable up to approximately $2.5 million.  The agreement
stipulates that the Company  is only allowed to factor sales
originating from its warehouses in the United States.  The
factoring company determines the eligible receivables based on
their own credit standard, and the accounts' aging.  As of June
30, 2006, the credit availability under this agreement is
$118,119.

As of June 30, 2006, the Company's unrestricted cash on hand was
$168,635.  The Company had an average monthly general and
administrative expenses are approximately $350,000.  The Company
expects that it will require approximately $1.05 million for
working capital during the next three-month period.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1213

                        Going Concern Doubt

As reported in the Troubled Company Reporter on July 12, 2006,
Berkovits, Lago & Company, LLP, expressed substantial doubt about
The Singing Machine Company, Inc.'s ability to continue as a going
concern after it audited the Company's financial statements for
the fiscal year ended March 31, 2005.   The auditor points to the
Company's inability to obtain outside long term financing,
increasing stockholders' deficit and recurring losses from
operations.

                 About The Singing Machine Company

Based in Coconut Creek, Florida, The Singing Machine Company
(AMEX: SMD) -- http://www.singingmachine.com/-- develops and
distributes a full line of consumer-oriented karaoke machines and
music as well as other products under The Singing Machine(TM),
Motown(TM), MTV(TM), Nickelodeon(TM), Hi-5(TM) and other brand
names.  The first to provide karaoke systems for home
entertainment in the United States, The Singing Machine sells its
products in North America, Europe and Asia.


STANFIELD ARBITRAGE: Moody's Reviews Low-B Ratings on $32MM Notes
-----------------------------------------------------------------
Moody's Investors Service placed on watch for possible upgrade the
ratings on these notes issued in 2001 by Stanfield Arbitrage CDO,
Ltd, a managed high yield structured finance collateralized loan
obligation issuer:

   * The $53,000,000 Class B-1 Floating Rate Notes Due 2016

     -- Prior Rating: A3
     -- Current Rating: A3, on watch for possible upgrade

   * The $23,000,000 Class B-2 Fixed Rate Notes Due 2016

     -- Prior Rating: A3
     -- Current Rating: A3, on watch for possible upgrade

Moody's also placed on watch for possible downgrade the ratings on
the notes issued by Stanfield Arbitrage CDO, Ltd:

   * The $9,000,000 Class D-1 Floating Rate Notes Due 2016

     -- Prior Rating: Ba2
     -- Current Rating: Ba2, on watch for possible downgrade

   * The $20,000,000 Class D-2 Fixed Rate Notes Due 2016

     -- Prior Rating: Ba2
     -- Current Rating: Ba2, on watch for possible downgrade

   * The $3,000,000 Class D-3 Floating Rate Notes Due 2016

     -- Prior Rating: Ba2
     -- Current Rating: Ba2, on watch for possible downgrade

According to Moody's, the rating actions with respect to the Class
B notes reflect the delevering of the transaction which more than
offset the deterioration of the transaction's performance.  As
reported in the August 2006 trustee report, the Class B Par Value
Test was 112%, versus trigger level of 107%.

Moody's also noted that the rating actions with respect to the
Class D notes reflect the occurrence of previous asset defaults
and par losses in the bond bucket of the CDO.


STERLING FINANCIAL: Fitch Affirms C Individual Rating
-----------------------------------------------------
Fitch affirmed Sterling Financial Corporation
(Nasdaq: STSA):

   -- Issuer Default Rating 'BBB-'
   -- Short-term 'F3'
   -- Individual 'C'

The Rating outlook remains Stable.

STSA recently announced it has entered into a definitive agreement
to purchase Northern Empire Bancshares , a $1.3 billion asset bank
headquartered in Santa Rosa, California, in a deal valued at $355
million.

Northern has strong asset quality, good profitability metrics and
accelerates STSA's entry into the Northern California market by
adding 12 branches.  Importantly, the deal is structured to
modestly strengthen capital metrics.  Upon completion STSA will
have pro-forma assets of approximately $11.2 billion and deposits
of $7.3 billion.

With the Northern acquisition representing the third purchase
announced by STSA during 2006, Fitch will monitor the management
of integration and operational risk.

Fitch affirmed these ratings with a Stable Rating Outlook:

    -- Long-term Issuer Default Rating 'BBB-'
    -- Short-term 'F3'
    -- Individual 'C'
    -- Support '5'

  Sterling Savings Bank:

    -- Long-term IDR 'BBB-'
    -- Long-term deposits 'BBB'
    -- Short-term 'F3'
    -- Short-term deposits 'F3'
    -- Individual 'C'
    -- Support '5'


SUPERB SOUND: Court Dismisses Case, Okays Kimco Lease Assumption
----------------------------------------------------------------
At Superb Sound Inc.' request, the U.S. Bankruptcy Court for the
Southern District of Indiana in Indianapolis dismissed the
Debtor's chapter 11 case.

The Court dismisses the Debtor's case in conjunction with its
order permitting the Debtor to assume the "Net Ground Lease" dated
Aug. 15, 1989, between Kimco North Trust II, as successor in
interest, and Passive Investors of Indiana Inc., as landlord,
relating to real estate located at 8802 South U.S. 31 in
Indianapolis, Indiana.

In its request, the Debtor told the Honorable Frank J. Otte that
it has no remaining unencumbered assets and recoverable
preferences from fraudulent conveyance or other actions.

The Debtor has sold its retail stores including inventory,
fixtures and equipment, and general intangibles and has assumed
and assigned executory contracts and leases.  Accordingly, the
Debtor's active retail sales operation has ceased.

The Debtor's remaining assets include deferred consideration and
royalty payments due from purchases of the Debtor's assets
relating to the Store Sales and equity in a lease and sub-lease
arrangement related to one of the Debtor's former retail store
locations.

                      Net Ground Lease

The Debtor is a tenant under the "Net Ground Lease".

The Debtor incurred the cost of constructing a retail store on the
Greenwood Real Estate.  With Kimco's consent, the Debtor made
additional improvements to the Greenwood Real Estate for the
purpose of entering into a sublease.

The Debtor is a sublessor with respect to the Greenwood Real
Estate under a "Sublease" with AT & T Wireless PCS LLC dba AT & T
Wireless as subtenant.  The monthly payments due the Debtor from
AT & T under the Sublease exceed the monthly payments due Kimco
under the Lease.

Pursuant to the Court's Final DIP Order, the "equity" in the
Sublease relating to the Greenwood Real Estate is collateral for
the DIP Loan.

The Debtor wanted to assume the Lease and Sublease to preserve the
"equity" in the Sublease, with the payments collaterally assigned
to the Bank.

Headquartered in Indianapolis, Indiana, Superb Sound Inc. dba
Ovation, Ovation Audio/Video and Ovation Home --
http://www.ovation-av.com/-- is an audio, video and mobile
electronics specialist.  The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137).
William J. Tucker, Esq., and Jeffrey M. Hester, Esq., at William
J. Tucker & Associates LLC represent the Debtor in its
restructuring efforts.  Ben T. Caughey, Esq., and Jeffrey A.
Hokanson, Esq., at Ice Miller LLP represent the Official Committee
of Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $9,416,642 in assets and $14,546,796 in
debts.


TERWIN MORTGAGE: Moody's Rates Cl. I-B-5 & I-B-6 Certs. at Low-B
----------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
notes and a (P)Aaa rating to the class I-G certificates issued by
Terwin Mortgage Trust 2006-8 and ratings ranging from Aa2 to Ba2
to the subordinate notes in the deal.

The securitization is backed by fixed-rate, closed-end second lien
mortgages (92.27%) and adjustable rate home equity
lines-of-credit (7.73%) originated by various mortgage lenders and
acquired by Terwin Securitization LLC.  The rating on the senior
notes is based primarily on the note insurance policy provided by
Financial Guaranty Insurance Company, whose insurance financial
strength is rated Aaa.  The ratings on the subordinate notes and
the class I-G certificates are based primarily on the credit
quality of the loans and the protection against credit losses
provided by subordination, excess spread, and
overcollateralization.  Moody's expects collateral losses to range
from 7.05% to 7.55%.

Specialized Loan Servicing LLC and GreenPoint Mortgage Funding,
Inc. will service the loans. Moody's has assigned SLS its servicer
quality rating of SQ3 as a servicer of second lien mortgage loans.

These are the ratings:

                  Terwin Mortgage Trust 2006-8
             Asset-Backed Securities, Series 2006-8

                   Class I-A-1, Assigned Aaa
                   Class I-A-2, Assigned Aaa
                   Class I-M-1, Assigned Aa2
                   Class I-M-2, Assigned Aa3
                   Class I-M-3, Assigned A2
                   Class I-B-1, Assigned A3
                   Class I-B-2, Assigned Baa1
                   Class I-B-3, Assigned Baa2
                   Class I-B-4, Assigned Baa3
                   Class I-B-5, Assigned Ba1
                   Class I-B-6, Assigned Ba2
                   Class I-G, Assigned (P)Aaa

The notes were sold in privately negotiated transactions without
registration under the Securities Act of 1933 under circumstances
reasonably designed to preclude a distribution thereof in
violation of the Act.  The issuance has been designed to permit
resale under Rule 144A.


TOWER RECORDS: Committee Taps McGuireWoods as Bankruptcy Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of MTS Incorporated,
dba Tower Records, and its debtor-affiliates, asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain McGuirewoods LLP as its lead bankruptcy counsel.

McGuirewoods will:

    a. advise the Committee with respect to its powers and duties
       under Section 1103 of the Bankruptcy Code;

    b. advise the Committee with respect to its efforts to
       interview, select, and retain a financial advisor to
       provide the Committee with financial advisory, forensic
       accounting, investment banking, and other related services
       in connection with the Debtors' bankruptcy cases, in
       general, and the Debtors' proposed sale of their
       businesses;

    c. advise and represent the Committee with respect to the
       Debtors' efforts to obtain postpetition secured financing;

    d. advise and represent the Committee with respect to its
       review and analysis of the relief requested in the Debtors'
       various bankruptcy pleading and its negotiation of, or
       formal objection tom requested relief as when necessary to
       preserve the rights of the Debtors' unsecured creditors and
       to maintain the value of the Debtors' assets;

    e. advise and represent the Committee in connection with its
       performance of the necessary due diligence and analysis to
       ensure that the Debtors conduct a fully vetted and
       meaningful investment banking and sale process in the
       Debtors' bankruptcy cases in order to maximize the value of
       the sale proceeds;

    f. advise and represent the Committee in its role to evaluate
       and negotiate the terms and conditions of any offer to
       purchase the Debtors' businesses or assets so as to
       maximize the sale proceeds that will be allocated and
       preserved for subsequent distribution to the Debtors'
       unsecured creditors;

    g. advise and represent the Committee with respect to its
       investigation into the Debtors' businesses and prior
       transactions in order to determine the viability of any
       theories of recovery against any parties;

    h. take all necessary action to preserve, protect, and
       maximize the value of the Debtors' estates for the benefit
       of the Debtors' unsecured creditors, including but not
       limited to, investigating the acts, conduct, assets,
       liabilities, and financial condition of the Debtors, the
       operation of the Debtors' businesses and the desirability
       of the continuance of such businesses, and any other
       matters relevant to these chapter 11 cases or to the
       formulation of a plan;

    i. advise and represent the Committee in connection with the
       formulation of a plan that is in the best interests of the
       Committee and the unsecured creditors of the Debtors'
       estates;

    j. appear before the Court, any appellate courts, and the U.S.
       Trustee to protect the interests of the Committee and the
       value of the Debtors' estates before the courts and the
       U.S. Trustee;

    k. consult with the Debtors' professional on behalf of the
       Committee regarding various tax, intellectual property,
       labor and employment, real estate, corporate, and
       litigation matters involving the Debtors or their estates,
       as well as the Debtors' general business or operational
       issues;

    l. prepare and prosecute any and all motions, applications,
       objections, replies, orders, complaints, answers, reports,
       and other papers on behalf of the Committee that may be
       necessary to assert or preserve the Committee's interest in
       the Debtors; chapter 11 cases; and

    m. perform all other necessary legal services and provide all
       other necessary legal advice to the Committee in connection
       with the Debtors' chapter 11 cases.

Lawrence E. Rifken, Esq., a partner at McGuireWoods, tells the
Court that the firm's professionals bill:

         Professional                  Hourly Rate
         ------------                  -----------
         Partners                      $275 - $700
         Associates                    $200 - $405
         Paralegals                     $80 - $235

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

Mr. Rifken can be reached at:

         Lawrence E. Rifken, Esq.
         McGuirewoods LLP
         1750 Tysons Boulevard, Suite 1800
         McLean, VA 22102-4215
         Tel: (703) 712-5000
         Fax: (703) 712-5050
         http://www.mcguirewoods.com/

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.


TRANS ENERGY: Has $2.1 Million Working Capital Deficit at June 30
-----------------------------------------------------------------
Trans Energy, Inc., earned $821,239 of net income on $812,107 of
net revenues for the three months ended June 30, 2006, in contrast
to a $525,857 net loss on $861,468 of revenues in 2005, the
Company disclosed in its second quarter financial statements on
Form-10QSB to the Securities and Exchange Commission.

At June 30, 2006, the Company's balance sheet showed $4,402,813 in
total assets and $5,290,877 in total liabilities, resulting in a
$888,064 stockholders' deficit.

The Company's June 30 balance sheet also showed strained liquidity
with $1.5 million in total current assets available to pay
$3.7 million in total current liabilities coming due within the
next 12 months.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1212

                      Going Concern Doubt

HJ & Associates, LLC, in Salt Lake City, Utah, raised substantial
doubt about Trans Energy 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 losses from operations, accumulated deficit and
working capital deficit.

Trans Energy, Inc., -- http://www.transenergy.com-- has been in
the business of production, transportation, transmission, sales
and marketing of oil and natural gas in the Appalachian and Powder
River basins since 1993.  With interests in West Virginia, Ohio,
Pennsylvania, Virginia, Kentucky, New York, and Wyoming; Trans
Energy and its subsidiaries own and operate oil and gas wells, gas
transmission lines, transportation systems and well construction
equipment and services.


TRANSAX INT'L: June 30 Balance Sheet Upside-Down by $3.7 Million
----------------------------------------------------------------
Transax International Limited's balance sheet at June 30, 2006
showed a $3,717,316 total stockholders' deficit from total assets
of $2,196,551 and total liabilities of $5,913,867.

The Company's balance sheet at June 30, 2006 also showed negative
working capital with $1,085,530 in total current assets and
$4,943,668 in total current liabilities.

Net loss for the three months ended June 30, 2006, rose to
$1,302,259, from net loss of $167,041 in the three months ended
June 30, 2005.

Revenues also increased to $1,034,844 in the current quarter
compared to revenues of $861,023 in the same period last year.

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

               http://researcharchives.com/t/s?1201

Based in Miami, Florida, Transax International Limited (OTCBB:
TNSX) -- http://www.transax.com/-- provides health information
management systems to hospitals, physicians and health insurance
companies.  The Company's subsidiaries, TDS Telecommunication Data
Systems LTDA provides services in Brazil; Transax Australia Pty
Ltd. operates in Australia; and Medlink Technologies Inc.
initiates research and development.


TRIBUNE CO: Forms Special Panel to Enhance Shareholders' Value
--------------------------------------------------------------
Tribune Company's board of directors has established an
independent special committee to oversee management's exploration
of alternatives for creating additional value for shareholders.
This process is expected to conclude by the end of 2006.

"In pursuing the leveraged recapitalization that was launched in
June, we emphasized that it would not preclude us from pursuing
other value-creating initiatives in the future," Dennis
FitzSimons, Tribune chairman and chief executive officer said.
"[This]day's actions, along with our performance improvement plan,
are consistent with our overall objective to generate the most
value for all Tribune shareholders."

Named to the special committee of the board were Enrique
Hernandez, Jr., Betsy D. Holden, Robert S. Morrison, William A.
Osborn, J. Christopher Reyes, Dudley S. Taft, and Miles D. White.

"Management and the board have been working together to determine
the best course of action for creating shareholder value.  The
board unanimously agrees with this approach, and we will work
expeditiously to complete the process," Mr. Osborn, Tribune's lead
independent director, said.

                 Restructuring of Two Partnerships

The company also announced the restructuring of two partnerships
known as TMCT, LLC (TMCT I) and TMCT II, LLC (TMCT II), which it
inherited six years ago in its acquisition of Times Mirror.  In a
unanimous vote, with Chandler family representatives abstaining
due to their interests in the partnerships, Tribune's board
approved the terms of the transaction.

The two partnerships currently own all of Tribune's preferred
stock, 51.3 million shares of Tribune common stock, real estate
used by the Los Angeles Times, Newsday, Baltimore Sun and Hartford
Courant, and various other investments.

Under the terms of the restructuring, Tribune will receive
distributions of all of the Tribune preferred stock and
approximately 39.5 million shares of the Tribune common stock held
by the partnerships.  Tribune also will receive the right to
acquire the real estate owned by the partnerships in January 2008
for $175 million.  Additionally, Tribune will retain a 5% interest
in the partnerships.

The Chandler Trusts will retain a 95% interest in the
partnerships.  The two partnerships will distribute within 30 days
the 11.8 million shares of Tribune common stock remaining in the
partnerships to the Chandler Trusts.  As a result, the Chandler
Trusts will increase their holdings of Tribune common stock to
approximately 48.7 million shares from approximately 36.9 million.
The Chandler Trusts have agreed to vote these additional
11.8 million shares in the same proportion as all other shares are
voted on any matter requiring a shareholder vote for a period of
12 months from the date of this distribution.

As a result of the distributions, the number of shares of Tribune
common stock outstanding will increase by 1.6 million.  The reason
for this increase is that the 39.5 million shares of common stock
Tribune is receiving is less than the 80% of the common stock in
the partnerships that Tribune currently treats as treasury stock
for financial reporting purposes.  Tribune's earnings per share
will not be affected by the restructuring because the impact of
the increase in shares outstanding will be offset by the
elimination of the preferred stock dividends.  The company expects
to record a one-time gain of approximately $45 million as a result
of the transaction.

"The Chandler Trusts are pleased that we reached an agreement that
serves the interests of all Tribune shareholders.  We will now
work collaboratively with management and the board to build value
for all shareholders," Warren B. Williamson, chairman of the
Chandler Trusts, said.

"The restructuring of these partnerships frees the Company to move
quickly to pursue strategic alternatives to further enhance
shareholder value," Mr. FitzSimons said.  "Under these terms, all
shareholders benefit."

In other business, the Tribune board of directors approved the
sale of WLVI-TV (channel 56), Boston, to Sunbeam Television Corp.
for $113.7 million.  The sale was announced on Sept. 14, 2006,
contingent upon board approval.  The transaction will close upon
regulatory approval.

The sale of WLVI is part of Tribune's performance improvement plan
announced May 30.  The plan includes at least $500 million in
asset sales and approximately $420 million have been identified so
far.  On Aug. 7, Tribune completed the sale of WATL-TV in Atlanta
for $180 million in cash.  In July, Tribune sold 2.8 million
shares of Time Warner common stock for net proceeds of
approximately $46 million.  In June, the company announced the
sale of WCWN-TV in Albany for $17 million.

                            About Tribune

Headquartered in Chicago, Illinois, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating
businesses in publishing and broadcasting.  In publishing, Tribune
operates 11 leading daily newspapers including the Los Angeles
Times, Chicago Tribune and Newsday, plus a wide range of targeted
publications.  The company's broadcasting group operates 26
television stations, Superstation WGN on national cable, Chicago's
WGN-AM and the Chicago Cubs baseball team.

                           *     *     *

As reported in the Troubled Company Reporter on June 19, 2006,
Moody's Investors Service downgraded Tribune Company's senior
unsecured debt rating to Ba1 from Baa3 and downgraded its short-
term commercial paper rating to Not Prime from Prime-3 concluding
the review for downgrade initiated on May 30, 2006.  Moody's
assigned a Ba1 Corporate Family Rating to The Tribune Company.
Moody's said the outlook is stable.


TRIBUNE CO: Shareholder Files Suit Against Eight Directors
----------------------------------------------------------
Frank Garamella, commenced a lawsuit against eight directors of
Tribune Company on Sept. 19 at the U.S. District Court in Chicago.

Mr. Garamella, a shareholder of the company, named Dennis
Fitzsimons, Tribune chairman and chief executive officer, as one
of the defendants.

The suit alleges that the Tribune directors breached their
fiduciary duty to the company when they snubbed offers to buy The
Los Angeles Times.

                            About Tribune

Headquartered in Chicago, Illinois, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating
businesses in publishing and broadcasting.  In publishing, Tribune
operates 11 leading daily newspapers including the Los Angeles
Times, Chicago Tribune and Newsday, plus a wide range of targeted
publications.  The company's broadcasting group operates 26
television stations, Superstation WGN on national cable, Chicago's
WGN-AM and the Chicago Cubs baseball team.

                           *     *     *

As reported in the Troubled Company Reporter on June 19, 2006,
Moody's Investors Service downgraded Tribune Company's senior
unsecured debt rating to Ba1 from Baa3 and downgraded its short-
term commercial paper rating to Not Prime from Prime-3 concluding
the review for downgrade initiated on May 30, 2006.  Moody's
assigned a Ba1 Corporate Family Rating to The Tribune Company.
Moody's said the outlook is stable.


TRM CORPORATION: S&P Holds CCC Ratings on Developing Watch
----------------------------------------------------------
Standard & Poor's Ratings Services' 'CCC' ratings on
Portland, Oregon-based TRM Corporation remained on CreditWatch
with developing implications, where they were placed on
March 21, 2006, reflecting continued operating uncertainties
since the CreditWatch placement.

"While the company was successful in refinancing its defaulted
credit agreement, operational trends continue to be negative, the
company is highly leveraged, and cash flow remains weak," said
Standard & Poor's credit analyst Martha Toll-Reed.

ATM revenues declined 10% in the first six months of 2006, mostly
because of ATM attrition.  TRM expects continued erosion of its
ATM portfolio through 2006, although at a decelerating pace.
Profitability has declined sharply, with EBITDA margins at 14% for
the first half of 2006, down from about 31% in the year earlier
period.  Vault cash expense, unfavorable foreign exchange and
higher processing expenses contributed to the decline in
profitability.

Cash flow remains under pressure because of declining profit
levels combined with required upgrades of about 60% of TRM's ATM
portfolio to comply with industry encryption standards.

Standard & Poor's will monitor the company's progress in reversing
current operating trends and evaluate its new credit agreements to
determine the final impact on the rating.  Upside rating potential
is predicated on confirmation of acceptable profitability and cash
flow trends.  If the company is unable to reverse negative
operating trends, the rating could be lowered.


UNION STAMPING: Involuntary Chapter 11 Case Summary
---------------------------------------------------
Alleged Debtor: Union Stamping & Assembly, Inc.
                3201 Enterprise Parkway, Suite 490
                Cleveland, OH 44122

Case Number: 06-20586

Involuntary Petition Date: September 20, 2006

Chapter: 11

Court: Southern District of West Virginia (Charleston)

Petitioners' Counsel: Scott Edward Barnette, Esq.
                      Jackson Kelly PLLC
                      1600 Laidley Tower
                      P.O. Box 553
                      Charleston, WV 25322
                      Tel: (304) 340-1020
                      Fax: (304) 340-1080

   Petitioners                    Nature of Claim    Claim Amount
   -----------                    ---------------    ------------
Park Corporation                  Lease Obligations      $150,000
6200 Riverside Drive
Cleveland, OH 44135

Dynamic Graphics                  Trade Debt               $2,100
306 MacCorkle Avenue, Southwest
South Charleston, WV 25303


URANIUM RESOURCES: 2nd Quarter 2006 Net Loss Decreases to $2.1MM
----------------------------------------------------------------
For the three months ended June 30, 2006, Uranium Resources Inc.'s
net loss decreased to $2,116,097 from a net loss of $10,081,642 in
the three months ended June 30, 2005.

The Company's total revenues increased to $1,844,770 for the
current quarter from total revenues of $1,060,451 in the same
quarter last year.

At June 30, 2006, the Company's balance sheet showed total assets
of $51,920,507, total liabilities of $8,317,339 and shareholders'
equity of $43,603,168 -- a 21% recovery from a stockholders'
deficit of $35,990,370 in Dec. 31, 2005.

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

               http://researcharchives.com/t/s?1204

As reported in the Troubled Company Reporter on May 9, 2006, Hein
& Associates LLP expressed substantial doubt about Uranium
Resources Inc.'s ability to continue as a going concern after it
audited the Company's financial statements for the year ended
Dec. 31, 2005.  The auditing firm pointed to the Company's
recurring losses from operations and its stockholders' deficit at
Dec. 31, 2005.

Headquartered in Dallas, Texas, Uranium Resources Inc. --
http://www.uraniumresources.com/-- specializes in in-situ
mining solution and holds mineralized uranium materials in South
Texas and New Mexico.  Since 1988, the Company has produced about
6.1 million pounds of uranium from two South Texas properties,
3.5 million pounds from Kingsville Dome and 2.6 million pounds
from Rosita.  Additional mineralized uranium materials exist at
the Kingsville Dome and Rosita properties.  In 1999, the Company
shut down its production due to depressed uranium prices, and from
the first quarter of 2000 until December 2004, it had no source of
revenue and had to rely on equity infusions to remain in business.


USGEN NEW ENGLAND: Braskan Claim Hearing Scheduled on Sept. 26
--------------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
Middle District of Maryland will conduct a hearing on
Sept. 26, 2006 to consider USGen New England Inc.'s objection to
Brascan Energy Marketing Inc.'s claim.

The Court will address these issues at the trial:

   (a) whether Brascan is entitled to go forward with evidence
       in connection with establishing the validity and amount of
       Claim No. 418;

   (b) whether Claim No. 418 was timely filed and relates back
       to Claim No. 327;

   (c) whether the rejection damages should be determined and
       calculated as of immediately prior to the Petition Date or
       some later date;

   (d) whether Brascan's calculation of damages appropriately
       takes into account mitigation; and

   (e) the appropriate discount rate to apply to future damages.

The Court, on Nov. 20, 2003, authorized USGen to reject its 30-
year power purchase agreement dated July 26, 1985, with Pontook
Operating Limited Partnership.

On Jan. 28, 2004, Brascan Energy, now known as Brookfield Energy
Marketing Inc., as agent of Pontook, filed Claim No. 327 asserting
$240,947 owed under the Pontook Agreement and $10,162,400 for
damages arising from the rejection of the Agreement.

On May 6, 2005, Brascan filed Claim No. 418, amending its prior
claim, to assert rejection damages of $24,934,700.

USGen does not dispute the $240,947 prepetition claim.  However,
USGen wants the rejection claims disallowed or reduced.

                   Parties' Pre-Trial Briefs

(1) Brascan

Holly E. Loiseau, Esq., at Weil, Gotshal & Manges LLP, in
Washington, D.C., notes that Rule 3001(f) of the Federal Rules of
Bankruptcy provides that a proof of claim constitutes prima facie
evidence of the validity and amount of the claim.  If the
objecting party comes forward with evidence sufficient to rebut
that presumption, the burden of proof remains with the claimant
to establish the validity and amount of its claim.

Hence, Ms. Loiseau asserts, Brookfield is entitled to go forward
and present its evidence at the trial to establish its claim.

On the other hand, according to Ms. Loiseau, USGen bears the
burden of proof with regard to mitigation, which is an
affirmative defense that must be pleaded and proved by the
breaching party.

Ms. Loiseau maintains that Claim No. 418 is an amendment to Claim
No. 327.  The rejection damages in the amended claim are of the
same nature as that asserted in the original claim and were
calculated using the same methodology.  The damages calculated in
Claim No. 418 more accurately reflect the market conditions as of
the date immediately prior to the Petition Date, she explains.

Brascan denounces USGen's argument that its shareholder, NEGT,
will be prejudiced by Brascan's ability to amend Claim No. 327 by
a dollar-for-dollar reduction on its equity return.

Ms. Loiseau notes that NEGT, as a shareholder, is not entitled to
recover anything until creditors are paid in full.  In addition,
since the USGen Plan is essentially an absolute priority plan,
Claim No. 418 is covered under Section 726(a)(3), which provides
that tardily filed claims are entitled to distributions prior to
any distribution to equity holders.

The rejection damages should be measured as of the date
immediately prior to USGen's Petition Date and are to be measured
using data known available as of that date, Ms. Loiseau asserts,
citing rulings in In re American HomePatient, Inc., 414 F.3d 614
(6th Cir. 2005), cert. denied, 126 S. Ct. 1571 (2006) and In re
Enron Corp., 330 B.R. 387 (Bankr. S.D.N.Y. 2005), aff'd, In re
Enron Corp., 05 Civ. 10164, slip op. (S.D.N.Y. Aug. 23, 2006).

Ms. Loiseau also notes that under Section 365(g)(1) of the
Bankruptcy Code, a debtor's rejection of an executory contract
constitutes a breach of the contract as of immediately prior to
its commencement of its bankruptcy case.  Even though the
contract rejection occurs postpetition, Section 502(g) makes
clear that a rejection claim will be determined and allowed just
as if the claim had arisen immediately preceding the commencement
of the case.

Both Claim No. 418 and the expert report of Kurt G. Strunk valued
Brascan's rejection damages using information known and available
as of July 7, 2003, the date immediately prior to the Petition
Date, Ms. Loiseau notes.

Brascan's calculation of rejection damages appropriately takes
into account mitigation, Ms. Loiseau relates.  Brascan measured
its damages by evaluating the difference between:

   (i) the revenues that Brascan would have received under the
       Pontook Agreement but for USGen's breach; and

  (ii) the revenues that Brascan could have obtained, as of the
       date of the breach, by selling the entire net electric
       output of Pontook's hydroelectric power facility located
       in Dummer, New Hampshire, to another buyer under a
       comparable long-term, fixed-price contract.

Brascan disputes USGen's contentions that mitigation must be
measured by determining revenues that may be earned by hourly
sales into the volatile spot market for power from 2003 through
2017.  Brascan maintains that it is entitled to the value of
USGen's promise to pay a fixed price for power over the 14 years
since the rejection of the Pontook Agreement.

The appropriate discount rate for the rejection claims unmatured
as of the Petition Date is the rate that most accurately
determines the present value of a future amount, Ms. Loiseau
states.  Accordingly, the risk-free rate as of July 7, 2003 is
the discount rate that should be applied to Brascan's future
damages, she asserts citing, Kucin v. Devan, 251 B.R. 269 (D. Md.
2000) In re Highland Superstores, Inc., 154 F.3d 573, 579 (6th
Cir. 1998).

If the Court chooses not to apply the risk-free rate, another
reasonable, conservative discount rate to be applied to future
damages would be Pontook's cost of equity capital as of July 7,
2003, Ms. Loiseau says.

(2) USGen

Thomas P. Preston, Esq., at Blank Rome LLP, in Wilmington,
Delaware, asserts that it is state, not federal law, which
determines the amount and validity of Brascan's rejection claims.
Once calculated under applicable state law, the claims are then
subject to the allowance and disallowance provisions of Section
502 of the Bankruptcy Code.

Under the Commonwealth of Massachusetts' common law, the
fundamental goal in measuring damages for breach of contract is
to place the injured party in as good a position as it would have
been in, had the contract been performed.  A plaintiff in a
breach of contract action must prove "actual" loss, and
speculative and hypothetical losses are not compensable under
Massachusetts law.

Brascan can prove no damages under Massachusetts common law
because it has sold and likely will continue to sell the Pontook
Facility's output at average spot-market rates in excess of the
rate provided in the Pontook Agreement, Mr. Preston asserts.

The Court, Mr. Preston adds, should also disallow and expunge the
Claims for Rejection Damages in the exercise of its equitable
powers or under Section 105(a).  Equitable considerations
include:

   -- Brascan has no actual damages and, in fact, has benefited
      and will continue to benefit handsomely from the rejection
      of the Pontook Agreement;

   -- The rejection of the Pontook Agreement was an express
      condition to the purchase of Pontook;

   -- Brascan purported to increase the amount of its rejection
      damages by 145%, on the eve of confirmation of the USGen
      Plan, when it was clear that general unsecured creditors
      would receive full distributions plus interest; and

   -- The allowance of any claim for rejection damages would:

       (i) treat Brascan much more favorably than other general
           unsecured creditors and

      (ii) be decidedly unfair to the creditors in the bankruptcy
           case of NEGT, which creditors are now the ultimate
           beneficiaries of the USGen estate.

Mr. Preston also notes that Claim No. 418, which was filed after
the Jan. 9, 2004 claims bar date, can only be considered timely
filed only if it is fairly characterized as an amendment of a
timely filed proof of claim.  Mr. Preston argues that Claim
No. 418 is no mere "amendment" of Claim No. 327.  Claim No. 481
was calculated using completely different methodologies and
increased the amount of Claim No. 327 by almost $15,000,000.

Consequently, USGen asks the Court to disallow Brascan's claims
for rejection damages.

(3) NEGT

National Energy & Gas Transmission, Inc., as USGen's indirect
parent and ultimate equity holder, supports USGen's objections to
Brascan's rejection claims.

Matthew A. Feldman, Esq., at Willkie Farr & Gallagher LLP, in New
York, argues that Brascan cannot use American HomePatient and
Enron, which served to reduce creditors' claims in those cases,
to increase its claims against USGen's estate.  He notes that
Brascan's claim under state law is already lower than what the
Enron court would otherwise consider the maximum allowable amount
of Brascan's claims under the Bankruptcy Code.

Regardless of when measured, Pontook suffered no damages by
USGen's rejection of the Pontook Agreement, Mr. Feldman asserts.
He notes that Pontook was obligated to secure rejection of the
Pontook Agreement as a condition of closing to its sale agreement
with Brascan.  If the Debtor had not rejected the Pontook
Agreement when it did, Pontook would have had to move to compel
rejection shortly thereafter to enable it to close its deal with
Brookfield.

Thus, Pontook was not put in a worse position by virtue of
USGen's rejection of the Pontook Agreement, Mr. Feldman argues.
"Without any harm, there can be no claim," he says, citing In re
Fleishman, 138 B.R. 641, 648 (Bankr. D. Mass. 1992).

NEGT further asserts that Claim No. 481 cannot be viewed as an
amendment to Claim No. 327.  Mr. Feldman notes, among others,
that bankruptcy courts in the District of Maryland have ruled
that "for a subsequent claim to be considered an amendment of a
timely filed claim, rather than a new claim, the second claim
should not only be of the same nature as the first but also
within the amount to which the first claim provided notice."
Claim No. 481, asserting $24,934,700 in rejection damages, is not
"reasonably within the amount" of Claim No. 327, which sought
$10,162,400, he points out.

Mr. Feldman adds that the 14-month delay in filing the "amended"
claim is unreasonable, especially given the fact that Pontook,
which assigned any claims related to the rejection of the Pontook
Agreement to Brascan, had notice of the Bar Date.

                        Expert Reports

Brascan will present Kurt G. Strunk, a Senior Consultant at
National Economic Research Associates, Inc., as its expert, at
the trial.  Mr. Strunk will provide testimony related to, among
others, the present value of rejection damages incurred by
Pontook as a result of the rejection of the Pontook Agreement.

On the other hand, USGen retained the services of Robert B.
Stoddard, vice president of CRA International, to provide expert
opinion as to the amount of damages, if any, caused by the
rejection of the Pontook Agreement.

In his initial report, Mr. Strunk calculated the rejection
damages to be in the range of $15,290,000 to $19,650,000,
depending on the choice of valuation date and discount rate.
Mr. Strunk used discount rates ranging from 4.37% to 7.23%.

Mr. Strunk's calculations do not corroborate with any amounts
asserted in Brascan's rejection claims, USGen's counsel,
Mr. Preston, points out.  He notes, "Brascan has attempted to
characterize Mr. Strunk's analysis as a "conservative estimate"
and maintains that it is entitled to the full amount of the
Second Rejection Damages Claim, notwithstanding that [the] amount
is not supported by its own expert."

Mr. Preston also notes that Mr. Strunk, like Brascan, gave no
consideration to actual sales of the Pontook Facility's output
since the Rejection Date and ignored the best evidence of
anticipated future sales.

On the other hand, Mr. Stoddard says, there are no aggregate
damages associated with the rejection of the Pontook Agreement,
and instead, as a result of increased energy prices, the
rejection of the Agreement will result in a net benefit of
$2,300,000.

Mr. Stoddard calculated damages by comparing the annual revenues
that would have been received under the Pontook Agreement to the
annual revenues that have been and will in the future be
generated through spot-market sales.

Mr. Stoddard's findings provide that revenues generated from
sales of Pontook Operating Limited Partnership Facility's output
in the ISO New England, Inc., spot markets since the November 18,
2003 rejection date of the Agreement have, in the aggregate
exceeded the revenues that would have been earned during that
same period under the Pontook Agreement.  In addition, future
sales of the Pontook Facility's output in the ISO-NE spot markets
likely will continue to generate more aggregate revenues than
would have been earned under the Pontook Agreement.

Mr. Stoddard applied a 10% annual discount rate to determine the
net present value of the past-period and future-period damages
and benefits.  In Mr. Stoddard's opinion, a 10% discount rate is
appropriate because Brascan itself used a range of discount rates
of 9.5% to 11% to assess the cash flows associated with the
Pontook Facility during due diligence for the sale of the
Facility.

Mr. Strunk, in his rebuttal report provided an analysis similar
to Mr. Stoddard's analysis.  Specifically, Mr. Strunk concluded
that rejection damages, when based on actual spot-market sales
and up-to-date projections, are $1,340,000 to $1,820,000,
depending on the discount rate.  However, according to
Mr. Preston, Mr. Strunk overstated these amounts by, among other
things, using a hypothetical $5.29/MWh Product Discount and
discount rates of 4.65% and 7.06%.

                  Motions to Exclude Evidence

(i) Brascan

Pursuant to Rule 26(a)(2)(C) of the Federal Rule of Civil
Procedure, Brascan asks the Court to exclude from the trial the
proposed supplemental report by Mr. Stoddard, as well as any
testimony of his that is outside the scope of his written reports
produced during the course of the pre-trial discovery period.

Ms. Loiseau says that Mr. Stoddard had conveyed his intention to
submit a new opinion of damages shortly before the start of the
trial.  However, as of August 31, 2006, Brascan has not seen the
supplemental report, and it does not have a clear understanding
of what his opinions will be under oath at the trial.

Brascan will be highly prejudiced if the Court allows USGen to
submit late-filed supplemental expert reports and testimonies,
Ms. Loiseau says.

(ii) USGen

USGen tells Judge Mannes that Brascan has proposed to present at
the trial e-mails related to purported quotes of UBS AG and
Constellation Global Commodities for a hypothetical "product"
that purportedly would be similar to the Pontook Agreement.

Mr. Preston notes that UBS and Constellation are not parties to
the dispute between USGen and Brascan, nor have their employees
been identified by Brascan as witnesses.

Mr. Preston argues, among others, that any reference to the
Hypothetical Quotes is inadmissible hearsay under Rules 801 and
802 of the Federal Rules Of Evidence, which states "a statement,
other than one made by the declarant while testifying at the
trial or hearing, offered in evidence to prove the truth of the
matter stated, is inadmissible evidence."

                     About USGen New England

Headquartered in Bethesda, Maryland, USGen New England Inc., an
affiliate of PG&E Generating Energy Group LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale.  The Company filed for Chapter 11 protection on July
8, 2003 (Bankr. D. Md. Case No. 03-30465).  Marc Richards, Esq.,
at Blank Rome LLP represents USGen New England in its
restructuring efforts.  When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.  The Debtor filed its Second Amended
Plan of Liquidation and Disclosure Statement on March 24, 2005.
The Plan was confirmed on May 13, 2005.  (PG&E National Bankruptcy
News, Issue No. 65; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


USGEN NEW ENGLAND: Wants Tennessee Gas' Claim Reduced to $1.2 Mil.
------------------------------------------------------------------
On Oct. 15, 2003, Tennessee Gas Pipeline Company filed Claim
No. 410 for $45,705,529 asserting damages arising from USGen New
England, Inc.'s rejection of two Gas Transportation Agreements.
On Sept. 22, 2004, TGP filed an amended claim for $41,349,873 to
account for mitigation of its damages to that date.

Following discovery, the Honorable Paul Mannes of the U.S.
Bankruptcy Court for the Middle District of Maryland held a six-
day trial starting July 18, 2006 regarding four issues:

   (1) whether USGen should receive mitigation credit for five
       disputed contracts;

   (2) whether USGen should receive mitigation credit based on
       speculative future sales;

   (3) whether USGen should receive mitigation credit against its
       Throughput Commitment based on volumes transported for
       mitigating shippers; and

   (4) the net present value of TGP's damages.

The parties have submitted their post-trial briefs in connection
with the issues heard at the trial.

                       Post-Trial Briefs

A. TGP

Kenneth W. Irvin, Esq., at McDermott Will & Emery LLP, in
Washington, D.C., notes that USGen presented no fact witnesses
and a lone expert witness, Thomas Norris.  On the other hand, TGP
presented three fact witnesses -- Susan Argue, James Eckert, and
Jay Dickerson -- and two experts -- Andrea Wolfman and William
Gwozd.

Mr. Irvin says that TGP is entitled to just compensation for
damages sustained by USGen's rejection of the Agreements, which
constituted breach of contract.

As of July 31, 2006, TGP's gross damages resulting from rejection
of the Agreements total $33,912,713, net of $11,792,812 in
mitigation credit.  Applying a 6.376% discount rate as of
July 31, 2006, TGP's damages total $28,767,857:

                                                Net Present Value
                         Historical Losses      Net of Mitigation
                        Rejection to 7/31/06   8/1/06 to 10/31/13
                        --------------------   ------------------
Contract Demand
  Revenues                     $3,300,507            $15,697,455
Throughput Guarantee           $5,420,253                      -
Surcharges                     $3,335,256             $1,014,386
                              -----------            -----------
   Amount Owed to TGP         $12,056,016            $16,711,841

The record proves that the nearly $12,000,000 credit given USGen
reasonably and appropriately satisfies TGP's duty of mitigation,
and that USGen has no right to any additional mitigation credit,
Mr. Irvin states.

Based on testimonies by Mr. Norris and Mr. Dickerson, there is no
basis to award USGen more mitigation credit or to deny TGP
recovery of damages for the unsold portions of the capacity
formerly reserved under the Agreements, Mr. Irvin asserts.

TGP's experts affirmed that TGP made reasonable but unsuccessful
efforts to mitigate its losses with respect to the remaining
capacity, Mr. Irvin notes.  Mr. Dickerson testified that TGP has
not, despite reasonable efforts, mitigated all of its damages to
date, and that TGP has not sold any of the turned-back USGen
capacity beyond 2009.

Moreover, because USGen elected not to avail itself of a unique
and potentially better opportunity to mitigate damages by
releasing its capacity to other shippers instead of rejecting the
Agreements, USGen has no right to complain about TGP's efforts or
to receive any benefit of doubt, Mr. Irvin states.

USGen's expert and its cross-examination of TGP's witnesses
adduced no credible basis for awarding USGen any further
mitigation credit, Mr. Irvin maintains.  He notes that the
witness testimony and exhibits demonstrate:

    -- USGen's rejection of the Agreements did not cause any
       incremental revenues from the five disputed contracts;

    -- No credible basis exists for reducing USGen's liability
       based on assumed future sales -- USGen's claims about the
       future rest upon speculation and abstractions that strain
       credulity, and establish no basis for believing any future
       sale is reasonably ascertainable; and

    -- USGen has no right under the plain terms of the parties'
       contract to offset its Throughput Commitment based on the
       volumes transported for mitigating shippers;

    -- The proper and equitable means for determining the net
       present value of TGP's claim uses TGP's cost of funds as
       the discount factor (6.376%) and calculates future damages
       as of trial.

TGP satisfied the Federal Energy Regulatory Commission and Texas
requirements for mitigation and acted prudently and in good faith
to mitigate the damages resulting from rejection of the
Agreements, Mr. Irvin adds.  He notes that every fact witness
testified that TGP dealt with the USGen capacity in the ordinary
course and that no action was taken or not taken to increase
TGP's claim against the USGen estate.

Through its reasonable efforts, TGP has resold portions of the
capacity rejected by USGen and has credited those amounts to
USGen as mitigation, Mr. Irvin points out.  However, USGen wants
TGP's claim reduced by $5,000,000 for mitigation credits for five
contracts entered into by TGP.

According to Mr. Irvin, evidence adduced at trial establishes
that no cause exists for awarding USGen mitigation credit for the
Hess Stagecoach to Mendon, Hess Dracut to White Plains and Select
contracts because the USGen capacity was not the key in any of
those contracts to unlocking access from Zone 5 to Zone 6.  In
each case, the shippers used the USGen capacity merely to
transport gas within Zone 6, and TGP did not earn incremental
revenue from that intra-zonal transportation.  The undisputed
record evidence establishes that TGP could have earned the same
revenues associated with these contracts, even if USGen had not
turned back its capacity, Mr. Irvin avers.

In addition, Mr. Irvin says, no cause exists for mitigation
credit for the last five months of TGP's contracts with
Connecticut Natural Gas and Southern Connecticut Natural Gas.
Pursuant to the contracts, TGP agreed to deliver gas from Dracut,
Massachusetts to Bloomfield, Connecticut, from November 1, 2004
to March 31, 2006.

Under the Gas Transportation Agreements, USGen owed TGP $295,800
per month for the reservation charge.  For the last five months
of the Connecticut Contracts, TGP's damages were fully mitigated,
and TGP recognized the full $295,800 per month as mitigation
credit.

For the last five months of the Connecticut Contracts, there are
no damages for which to apply mitigation because the USGen
capacity was fully resold, Mr. Irvin contends.  He says that
USGen's claim to mitigation credit for the last five months of
these contracts seeks to gain a benefit in breach that USGen did
not enjoy outside of bankruptcy -- an offset to its liability
from sales of capacity other than the USGen capacity.

Moreover, no cause exists for granting USGen any mitigation
credit based on assumed future sales, Mr. Irvin maintains.  The
fact that TGP was successful in reselling the capacity in 2006
does not mean TGP will be successful in selling the capacity
every month through October 2013.  The record shows TGP has not
entered into any contracts to utilize the USGen capacity through
the entire term of the Agreements, which expire Oct. 31, 2013,
and no shipper stands ready, willing, and able to contract for
the USGen capacity beyond 2009.

USGen's claim for mitigation credit against its Throughput
Commitment for the volumes transported for mitigating shippers
lacks any valid basis because the requirement of the Agreements
for allowing the offset do not exist here, Mr. Irvin contends.

The Throughput Commitment was a special promise given by USGen in
consideration for TGP's agreement to convert from the NET rate
schedule to the less expense FT-A rate schedule.  USGen
personally promised to transport 90% of its 60,000 Dth/day
reservation volume, measured over three 12-month periods and one
six-month period.  TGP would not have agreed to allow USGen to
convert from the NET rate schedule to the FT-A rate schedule
without this consideration, and TGP has not received a similar
promise from any of the shippers utilizing the USGen capacity.
As such, this special promise is not mitigatable, Mr. Irvin says.

Throughput Commitment would be satisfied based only on volumes
transported for USGen or a "Replacement Shipper."  However,
according to Mr. Irvin, the shippers who contracted for the USGen
turned-back capacity do not meet the requirements of the
"Replacement Shipper" definition.  USGen was required to take
certain steps to find replacement shippers, and it did not.  None
of those shippers succeeded to 100% of USGen's obligations, and
USGen does not stand as guarantor.

Accordingly, TGP asks the Court to enter judgment allowing TGP's
claim for $28,767,857, and directing USGen to pay that claim
forthwith in cash and release of the $902,292, plus interest,
deposit held by TGP.

In addition, under Section 38.001 of the Texas Civil Practice &
Remedies Code, USGen is liable to TGP for attorneys' fees,
Mr. Irvin relates.  Accordingly, the Court should further allow
TGP to establish the amount necessary to cover its attorneys' fees
after decision on the merits, he asserts.

B. USGen

"This is a case of a claimant attempting to use the bankruptcy
process to recover damages beyond what it would receive outside
of bankruptcy," Gordon A. Coffee, Esq., at Winston & Strawn LLP,
Washington, D.C., asserts.

Mr. Coffee maintains that evidence at the trial demonstrated that
TGP has been tremendously successful in reselling the gas
pipeline capacity formerly reserved by USGen under the Gas
Transportation Agreements.

Since USGen's rejection of the Agreements in September 2003, TGP
has been able to resell most, and in many months all, of the
60,000 dekatherms of capacity that USGen had reserved from
Wright, New York, to Mendon, Massachusetts, Mr. Coffee relates.

Moreover, by selling the USGen capacity in segments, TGP has
realized revenues in recent months well in excess of what USGen
would have paid under the Contracts, Mr. Coffee says.

Invoking principles never adopted by any Texas or bankruptcy
court, TGP has refused to credit all of the revenues derived from
resale of the USGen capacity against its claim, Mr. Coffee points
out.

TGP reiterated it would not give mitigation credit for three
contracts because it could have provided a different delivery
point for those shippers using other capacity and realized the
same revenues.  However, according to Mr. Coffee, under this
theory, giving the customer a delivery point that required use of
the USGen capacity did not generate incremental revenue; thus,
TGP was not required to credit any revenues from the contract as
mitigation.  At no time either before or after trial, however,
did TGP cite any legal authority for its novel "incremental
revenue" theory, he notes.

The theory adopted by TGP to justify its refusal to give full
credit for the two other contracts was equally unsupported by any
law, Mr. Coffee argues.  While agreeing that the contracts did
generate revenues it must recognize even under its incremental
revenue theory, TGP refuses to give credit for the last five
months of the contracts, on the grounds that it already reached
full mitigation in those months.  TGP's unilateral capping of
mitigation credit in those months, and its attendant refusal to
credit the gains in those months against losses in earlier
months, flies in the face of well-established contract damages
principles, Mr. Coffee says.

TGP further has no legal leg on which to stand regarding its
claim to recover as damages the full amount of the guarantee
USGen made regarding commodity charges, Mr. Coffee contends.

Mr. Coffee notes that USGen guaranteed that gas either would flow
at a 90% rate through Jan. 31, 2006 or that it would compensate
TGP for the commodity charges associated with any shortfall.  As
shown at trial, shippers who purchased the USGen turnback capacity
have flowed a substantial amount of gas.  TGP has refused,
however, to credit any of the gas flowed by those shippers against
USGen's guarantee.

By refusing to credit the revenues it received in the wake of
USGen's rejection of the Agreements, TGP essentially is seeking
to transform a contractual guarantee into a liquidated damages
provision, in violation of Texas law and the Bankruptcy Code,
Mr. Coffee avers.

TGP's effort to reap a windfall from USGen's bankruptcy is even
more blatant with respect to future years, Mr. Coffee says.  He
notes that, although TGP has sold all of the USGen turnback
capacity from late 2005 through early 2007 and lesser amounts
through early 2009, TGP has refused to assume any further sales
between April 1, 2007 and Oct. 31, 2013, on the grounds that
making projections of future sales would be speculative.

Mr. Coffee asserts that TGP bears the burden of proving future
damages.  He notes that under prevailing Texas and bankruptcy
law, a plaintiff seeking damages for the unexpired term of a
contract is required to account for, and subtract from its damage
claim, the present market value of the property during that term.

While TGP relied throughout trial on the presumed validity of its
proof of claim, the claim was facially deficient because it was
inflated, contained factual inaccuracies, and was not accompanied
by any supporting documentation, Mr. Coffee points out.

Rather than meet its burden of showing future damages by
demonstrating the value of the remaining USGen capacity, TGP
relied on a legal fiction -- that if the future is uncertain, TGP
is entitled to collect the full contract amount without
subtracting for any future predicted sales, Mr. Coffee notes.

Courts uniformly have recognized, however, that the
reasonableness of the projection, not the mathematical certainty
with which it can be made, is the relevant standard for assessing
the future, Mr. Coffee notes.  He adds that Texas courts have
declined to award damages to plaintiffs who demand the remaining
face amount due under a long-term contract without attempting to
determine the present value of expected future resales.

Accordingly, USGen maintains that TGP is legally entitled only to
minimal damages, depending on which of Mr. Norris's scenarios the
Court adopts for future years and the discount rate used.  The
discount rate that the Court should use in this case is 18%, as
set by Texas statute.

In addition, TGP's 11th-hour effort to collect legal fees is
equally unwarranted, Mr. Coffee argues.  TGP never requested
legal fees in its initial or amended claim.  In addition, TGP has
no entitlement under the Texas statute it invokes because it
failed to follow the procedural requirements set forth in the
statute.

USGen asks the Court to award TGP damages of $1,280,873 and
disallow the remainder of its claims.

                     About USGen New England

Headquartered in Bethesda, Maryland, USGen New England Inc., an
affiliate of PG&E Generating Energy Group LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale.  The Company filed for Chapter 11 protection on July
8, 2003 (Bankr. D. Md. Case No. 03-30465).  Marc Richards, Esq.,
at Blank Rome LLP represents USGen New England in its
restructuring efforts.  When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.  The Debtor filed its Second Amended
Plan of Liquidation and Disclosure Statement on March 24, 2005.
The Plan was confirmed on May 13, 2005.  (PG&E National Bankruptcy
News, Issue No. 65; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


UTILITY CRAFT: Wants Hale Resources as Bankruptcy Consultant
------------------------------------------------------------
Utility Craft, Inc., dba Wood Armfield Furniture, asks the U.S.
Bankruptcy Court for the Middle District of North Carolina to
employ Hale Resources, Inc., as its bankruptcy consultant, nunc
pro tunc o July 20, 2006.

Hale is expected to:

     a) prepare the Debtor's schedules of assets and liabilities;

     b) prepare the Debtor's statement of financial affairs;

     c) prepare the Debtor's cash collateral budget;

     d) prepare the Debtor's monthly reports; and

     e) other matters related to the financial condition and
        financial reporting requirements of the Debtor during
        this bankruptcy proceeding.

The firm will bill $1,730.99 per week on a bi-weekly basis for
this engagement.

In addition, the firm will receive a 5% bonus in the event the
holding company holds an income of zero or more for the period
April 1, 2006 to March 31, 2007 and a 15% bonus if the North
Carolina and the Virginia companies hold an income of zero or more
for the period April 1, 2006 to March 31, 2007.

Robert A. Hale assures the Court that the firm does not hold any
interest adverse to the Debtor's estate.

Mr. Hale can be reached at:

     Robert A. Hale
     3504 Willow Grove Court
     Greensboro, NC 27410

Headquartered in High Point, North Carolina, Utility Craft, Inc.,
dba Wood Armfield Furniture, specializes in manufacturing high
quality furniture and accessories.  The Company filed for chapter
11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06-
10816).  When the Debtor filed for protection from its creditors,
it estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.


VERIDIEN CORP: June 30 Balance Sheet Upside-Down by $6.3 Million
----------------------------------------------------------------
At June 30, 2006, Veridien Corporation's balance sheet showed
$1,661,796 in total assets and $7,907,781 in total liabilities,
resulting in a shareholders' deficit of $6,315,432.

The Company's balance sheet at June 30, 2006 also showed negative
working capital with total current assets of $875,639 and total
current liabilities of $6,010,749.

Net loss for the three months ended June 30, 2006 decreased to
$422,828 from net loss of $490,872 in the three months ended
June 30, 2006.

Revenues for the current quarter increased to $265,054 from
revenues of $153,339 in the same period last year.

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

               http://researcharchives.com/t/s?1207

Headquartered in Pinellas Park, Florida, Veridien Corporation --
http://www.vrde.com/-- is a life sciences company, engaged in the
development, manufacture, distribution, and sale of disinfectants,
antiseptics, and sterilants in the United States and Canada.


VESCOR DEVELOPMENT: Taps Lionel Sawyer as Bankruptcy Counsel
------------------------------------------------------------
Vescor Development 3 LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Nevada for permission to
employ Lionel Sawyer & Collins as its bankruptcy counsel.

Lionel Sawyer will:

    (1) advise the Debtors of their rights and obligations and
        performance of their duties during administration of their
        bankruptcy cases;

    (2) represent the Debtors in all proceedings before this Court
        or before other courts with jurisdiction over these cases;

    (3) assist the Debtors in the performance of its duties as set
        forth in Section 1107 of Title 11 of the U.S. Code;

    (4) assist the Debtors in developing legal positions and
        strategies with respect to all facets of these
        proceedings; and

    (5) provide other counsel and advice as the debtors may
        require in connection with their chapter 11 cases.

The Debtor tells the Court that the firm's professionals bill:

        Professional                 Hourly Rate
        ------------                 -----------
        Shareholders                 $275 - $550
        Associates                   $160 - $235
        Paralegals                   $150 - $170

Laurel E. Davis, Esq., a shareholder at Lionel Sawyer, assures the
Court that her firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.

Ms. Davis can be reached at:

         Laurel E. Davis, Esq.
         Lionel Sawyer & Collins
         300 South 4th Street #1700
         Las Vegas, NV 89101
         Tel: (702) 383-8866
         Fax: (702) 383-8845
         http://www.lionelsawyer.com/

Headquartered in Henderson, Nevada, Vescor Development 3 LLC is a
real estate developer.  The Company and two of its affiliates
filed for chapter 11 protection on Aug. 16, 2006 (Bankr. D. Nev.
Case No. 06-12094.  When Vescor filed for protection from its
creditors, it listed total assets of $109,570,385 and total debts
of $63,290,195.


VESTA INSURANCE: Court Grants Injunction Against Utility Companies
------------------------------------------------------------------
The Hon. Thomas B. Bennett of the U.S. Bankruptcy Court for the
Northern District of Alabama granted J. Gordon Gaines Inc.'s
request for injunction against several utility companies.  Judge
Bennett ruled that upon timely receipt of an Adequate Assurance
Request, J. Gordon Gaines Inc. will have 20 days -- not 60 days
as initially requested -- to file a Motion for Determination of
Adequate Assurance of Payment.

According to Judge Bennett, the Utility Order will not apply to
Alabama Power.

The Debtor and Alabama Power are engaged in discussions regarding
a different form of adequate assurance of payment for Utility
Services to be provided by Alabama Power.  Alabama Power has
represented, through counsel, that it will not terminate Utility
Services to the Debtor pending negotiations on the terms of
adequate assurance of payment, unless those negotiations do not
result in an agreement mutually acceptable to the parties on or
before September 5, 2006.

In that event, the Court will convene a hearing on September 6,
2006, at 10:00 a.m., regarding the Utility Motion as it relates to
Alabama Power.  Pending the Court's ruling on the Motion, Alabama
Power will be prohibited from terminating any Utility Services.

As reported in the Troubled Company Reporter on Sept. 6, 2006, the
Debtor, an affiliate of Vesta Insurance Group, Inc., asked the
U.S. Bankruptcy Court for the Northern District of Alabama to:

    (a) deem utilities adequately assured of payment for
        postpetition services;

    (b) prohibit utilities from altering, refusing or
        discontinuing services to the Debtor on account of the
        commencement of its Chapter 11 case or the nonpayment of
        prepetition invoices;

    (c) authorize it to pay prepetition utility invoices in its
        discretion; and

    (d) establish uniform procedures for resolving disputes
        regarding the adequate assurance of payment it provides.

J. Gordon uses various utilities essential to the continued
operation of its business, including:

    Vendor                         Type of Service
    ------                         ---------------
    Alabama Power                  Power
    Alabama Gas Corp.              Gas and gas generator
    Bell South                     Long distance, Internet, and
                                   club service

The Debtor is highly computerized and extremely reliant on
electrical services for its continued operation.  In addition to
back office operations including record keeping and accounting,
the Debtor uses computers to provide critical services and
processing for delivering services to various insurance
subsidiaries and VIG.  Moreover, the Debtor conducts most of its
day-to-day communications and financial reporting via electronic
mail.  Thus, the Debtor is also dependent on Internet and
telephone service to maintain its ability to send and receive
electronic communications and records.

"Any disruption in either telephone or electric service could
seriously hamper the Debtor's ability to conduct its business and
communicate with vendors and other critical third parties, and
could cause the loss of important computerized records and
information," C. Edward Dobbs, Esq., at Parker, Hudson, Rainer &
Dobbs, LLP, in Atlanta, Georgia, told the Court.

Section 366 of the Bankruptcy Code protects a debtor against
termination of its utility service upon the commencement of its
Chapter 11 case, and simultaneously requires the debtor to
furnish utility companies with adequate assurance of payment for
postpetition utility service within 20 days from the Petition
Date.

According to Mr. Dobbs, prior to the Petition Date, the Debtor
generally was current and timely with respect to its invoices for
Utility Services.  Any amounts the Debtor owes each Utility
Company for prepetition services are reflected in the schedules
of liabilities to be filed by the Debtor.

J. Gordon Gaines asserted that the Utility Companies are
adequately assured of future payment because:

    (a) the Debtor should have sufficient liquidity to pay
        postpetition utility invoices from the proceeds of its
        business operations; and

    (b) of the Debtor's provision of additional deposits with each
        Utility Company in an amount equal to the average invoice
        amount for the six months immediately preceding the
        Petition Date, adjusted to account for the decrease in the
        Debtor's demand for Utility Services as a result of the
        scaling back of its operations since its bankruptcy
        filing.

In the event a Utility Company asks for additional assurance, the
Debtor proposed to implement these procedures:

    (a) Any Utility Company seeking adequate assurance from the
        Debtor in the form of a deposit or other security must
        make a request in writing, setting forth the location for
        which utility services were provided.  The Request must be
        received by the Debtor's counsel no later than 20 days
        after the Court approves the Utility Motion:

        Parker, Hudson, Rainer & Dobbs, LLP
        1500 Marquis Two Tower
        285 Peachtree Center Avenue, N.E.
        Atlanta, GA 30303
        Attention: Rufus T. Dorsey, IV, Esq.

    (b) Upon timely receipt of the Request, the Debtor will have
        60 days to file a Motion for Determination of Adequate
        Assurance of Payment, and will seek a hearing on that
        motion within 20 days after the filing of the
        Determination Motion, unless another hearing date is
        agreed to by the parties or ordered by the Court.

    (c) Any Request received by the Debtor after the Request
        Deadline, or that is otherwise defective, will be deemed
        as untimely and invalid, and that Utility Company will be
        deemed adequately assured of payment by the terms of the
        Order granting the Utility Motion.

    (d) If a Determination Hearing is scheduled, the utility
        provider will be deemed adequately assured of payment
        until an Order is entered in connection with that
        Determination Hearing.

                      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).


VESTA INSURANCE: Court Lets Gaines Reject Four Property Leases
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
permitted J. Gordon Gaines Inc. to reject four unexpired
non-residential real property leases effective Aug. 31, 2006 --
not August 17 as initially requested.

Any party to a Lease who seeks to recover rejection damages is
required to file a Proof of Claim with the Clerk of Court on or
before December 11, 2006.

As reported in the Troubled Company Reporter on Aug. 28, 2006,
the Debtor asked the Court for authority to reject the leases,
effective Aug. 17, 2006.

The Leases relate to locations at which the Debtor ceased
operations prior to its bankruptcy filing and has vacated or
intends to vacate as soon as possible:

   Premises             Lease Description   Counterparty
   --------             -----------------   ------------
   Pacific Plaza        Office Building     A-P Knight, LP
   14100 San Pedro      Lease dated May 2,  (landlord)
   Avenue, Suite 510    2005
   San Antonio, TX                          MSB Pacific Plaza LP
                                            (assignee of
                                            landlord)

   5788 Widewaters      Office Lease        5788 Widewaters
   Parkway              dated April 28,     Company (landlord)
   DeWitt, NY 13214     2005
                                            Hub Properties Trust
                                            (assignee of
                                            landlord)

   One South Wacker     Office Lease        Metropolitan Life
   Drive, Suite 2710    dated February 1,   Insurance Company
   Chicago, IL 60606    2002                (landlord)

                        Sublease            Discover Re
                        Agreement dated     Managers, Inc.
                        December 22, 2003   (tenant)

By rejecting the Leases, Gaines expects to reduce postpetition
administrative costs.  According to Gaines, the Leases are costly
to maintain and unnecessary to its operations and business.
Gaines tells the Court that it has reviewed each of the Leases and
has determined that those Leases do not have any net value to its
estate.

                      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).


VIASYSTEMS INC: Earns $202.5 Mil. in Quarter Ended June 30, 2006
----------------------------------------------------------------
For the three months ended June 30, 2006, Viasystems Inc. earned
$202,546,000 of net income, in contrast to net loss of $27,344,000
in the same quarter last year.

Net sales for the current quarter rose to $187,799,000 from net
sales of $171,932,000 in the three months ended June 30, 2005.

The Company's balance sheet at June 30, 2006 showed total assets
of $640,571,000, total liabilities of $438,006,000, and total
stockholder's equity of $202,565,000.

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

               http://researcharchives.com/t/s?1209

Headquartered in St. Louis, Missouri, Viasystems Inc. --
http://www.viasystems.com/-- a subsidiary of Viasystems Group
Inc., provides electronics manufacturing services to original
equipment manufacturers, primarily in the telecommunications,
networking, automotive, consumer, industrial and computer
industries.

                           *     *     *

Viasystems Inc.'s senior subordinate debt, bank loan, and long-
term corporate family rating carry Moody's Caa2, B2, and B3
ratings with a stable outlook.  The Company's long-term local and
foreign issuer credits also carry Standard & Poor's B ratings with
a positive outlook.


VIOQUEST PHARMACEUTICALS: Posts $1.8MM Loss in 2006 2nd Quarter
---------------------------------------------------------------
VioQuest Pharmaceuticals, Inc., reported a net loss of
$1.8 million for the second quarter ended June 30, 2006, compared
to a net loss of $1.1 million for the same quarter in 2005.

For the six months ended June 30, 2006, the net loss was
$3.7 million, compared to $2.5 million for the same period in
2005.

The net loss was primarily attributed to higher research and
development expenses as the Company advanced its clinical
development programs, in addition to increased selling, general
and administrative expenses.  VioQuest expects to continue to
incur losses associated to increased expenses from further
advancing its clinical programs and expansions of its corporate
infrastructure.

"VioQuest made excellent progress during the second quarter.  As
our drug candidates move into the clinic, we continue to establish
ourselves as a leader in targeted cancer therapeutics.  We believe
targeted therapeutics are essential to the advancement of cancer
treatments and improved patient outcomes.  We look forward to
bringing our drug candidates through the clinical process," said
Daniel Greenleaf, VioQuest's President and CEO.

The Company's balance sheet at June 30, 2006, showed $5,158,582 in
total assets, $1,948,187 in total liabilities, and total
stockholders' equity  of $3,210,395.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?120f

                     Going Concern Doubt

J.H. Cohn LLP, in Roseland, New Jersey, raised substantial doubt
about VioQuest Pharmaceuticals' 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 net loss, cash burn and accumulated deficit.

VioQuest Pharmaceuticals, Inc., has two distinct business units --
Drug Development and Chiral Products and Services.  The Company's
drug development business focuses on acquiring, developing and
eventually commercializing human therapeutics in the areas of
oncology, and antiviral diseases and disorders for which there are
current unmet medical needs.  The Company currently has the
exclusive rights to develop and commercialize two oncology drug
candidates.  Its chiral business, which it operates through its
wholly owned subsidiary, Chiral Quest, Inc., provides innovative
chiral products, technology and custom synthesis development
services to pharmaceutical and fine chemical companies in all
stages of a products' lifecycle.


WELLINGTON APARTMENT: Bankr. Ct. Awards Debtor $2.5 Mil. Judgment
-----------------------------------------------------------------
On June 1, 2005, Wellington Apartment, LLC, sued Charles
Clotworthy, Richard Merel, Esq., Steven Byers, the law firm of
Garfield & Merel, Ltd., WP New Orleans, L.L.C., and WPN, L.L.C.
(Bankr. E.D. Va. Adv. Pro. No. 05-5029) to force a ruling on one
ultimate question: did the defendants deprive the debtor of assets
by fraudulently eliminating the debtor's interest in real property
located in New Orleans, Louisiana?

Wellington's lawsuit contends that former business associates of
its principal, the attorney and law firm that represented the
principal in connection with certain loan transactions, and two
limited liability companies crafted and executed a scheme to
appropriate its assets.  The lawsuit asserts claims for, inter
alia, business conspiracy, fraudulent transfer, unauthorized
postpetition transfers of debtor's property, automatic stay
violation, unjust enrichment, and professional negligence.

In a decision published at 2006 WL 2422758, the Honorable David H.
Adams (observing that the dispute is very fact specific and
commenting that the facts underpinning Wellington's 11-count
complaint are quite convoluted) answers Wellington's question in
the affirmative.

Judge Adams finds that Wellington has met its burden of proof that
(i) an actual fraudulent transfer of the debtor's assets occurred
at the hands of the defendants, (ii) a constructive fraudulent
transfer of the debtor's assets has occurred at the hands of the
defendants and (iii) the defendants effectuated a post-petition
transfer of the debtor's assets.  Therefore, Judge Adams rules,
"the defendants are jointly and severally liable to the debtor and
are ordered to pay to the debtor a total amount of $2,546,174.59."

Judge Adams also finds that Mr. Merel and/or his law firm "engaged
in inappropriate activities outside of an attorney-client
relationship, which may be sanctionable under Illinois law."

Wellington Apartments, LLC (with an s in its name) filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code in the District of Connecticut, Bridgeport Division, on
November 13, 2002.  The case was converted to one under Chapter 7
of the Code on January 23, 2003, and was transferred to the
Eastern District of Virginia, Newport News Division, on December
10, 2004, at the request of First Bank & Trust Company of
Illinois, an alleged creditor in that case.  On January 5, 2004,
Wellington Apartment, LLC (without an s in its name) filed for
relief under Chapter 11 of the Code in the District of
Connecticut, Bridgeport Division, and its case was transferred to
the Eastern District of Virginia, Newport News Division, on
February 3, 2004 (Bankr. E.D. Va. Case No. 04-50301).  Wellington
Apartment, LLC, owned a 152-unit apartment complex located in
Newport News, Virginia, which was sold pursuant to an order of the
bankruptcy court.


WEST VIRGINIA: Hires Joseph Caldwell as Legal Counsel
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of West
Virginia allowed West Virginia Consumers for Justice to employ
Joseph W. Caldwell, Esq., Jennifer P. Taylor, Esq.,  Marshall C.
Spradling, Esq., and Henry E. Wood, III, Esq. As its legal
counsel, nunc pro tunc to Aug. 10, 2006.

The attorneys are expected to:

     a) give the Debtors legal advice with respect to its powers
        and duties as debtor-in-possession.

     b) prepare on behalf of the Debtor necessary applications,
        answers, orders, reports and other legal papers.

     c) review pending litigation and to file an application to
        remove an action pending in the Circuit Court of Fairfax
        County, Virginia, through the U.S. Bankruptcy Court for
        the Southern District of West Virginia.

     d) prepare a disclosure statement and plan of
        reorganization.

     e) perform all other legal services for the Debtor which may
        become necessary.

The Debtor tells the Court that it has paid the firm $2,500 as
retainer.

The firm's attorneys standard billing rates are:

     Designation                       Hourly Rates
     -----------                       ------------
     Joseph W. Caldwell, Esq.              $240
     Marshall C. Spradling, Esq.           $240
     Jennifer P. Taylor, Esq.              $200
     Henry E. Wood, III, Esq.              $200

Joseph W. Caldwell, Esq., assures the Court that his firm
does not hold any interest adverse to the Debtor and is a
"disinterested person" as that term defined in Section 101(14)
of the Bankruptcy Code.

Mr. Caldwell can be reached at:

     Joseph W. Caldwell, Esq.
     Marshall C. Spradling, Esq.
     Jennifer P. Taylor, Esq.
     Henry E. Wood, III, Esq.
     W.V. Bar No. 586
     P.O. Box 4427
     Charleston, WV 25364
     Tel: (304) 925-2100

Headquartered in Charleston, West Virginia, West Virginia
Consumers for Justice filed for chapter 11 protection on
Aug. 10, 2006 (Bankr. S.D. W. Va. Case No 06-20478).  Joseph
W. Caldwell, Esq., at Caldwell & Riffee represents the Debtor
in its restructuring efforts.  West Virginia estimated its
assets at $1,534 debts at $300,062,129 when it filed for
protection from its creditors.


WORLDGATE COMMS: Second Quarter 2006 Net Loss Increases to $5 Mil.
------------------------------------------------------------------
For the three months ended June 30, 2006, Worldgate Communications
Inc.'s net loss increased to $5,091,000, compared to net loss of
$366,000 in the same quarter last year.

Revenues for the current quarter decreased to $186,000 from
revenues of $1,399,000 in the three months ended June 30, 2005.

The Company's balance sheet at June 30, 2006 showed total assets
of $12,063,000, total liabilities of $5,179,000, and total
stockholders' equity of $6,884,000.

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

               http://researcharchives.com/t/s?120b

                      Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Marcum & Kliegman LLP expressed substantial doubt about WorldGate
Communications, Inc.'s ability to continue as a going concern.
The accounting firm pointed to the Company's recurring losses from
operations and accumulated deficit of $229 million after auditing
its financial statements for the year ended Dec. 31, 2005.

Headquartered in Trevose, Pennsylvania, WorldGate Communications
Inc. -- http://www.wgate.com/-- designs, manufactures, and
distributes personal video phones.  WorldGate's products is
marketed to consumers through cable, DSL, VoIP and satellite
service providers as well as through retail stores worldwide under
the Ojo brand name.  WorldGate is traded on NASDAQ under the
symbol WGAT.


WILLOWBEND NURSERY: Case Summary & 16 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Willowbend Nursery, Inc.
        4654 Davis Road
        Perry, OH 44081-9867

Bankruptcy Case No.: 06-14353

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                     Case No.
      ------                     --------
      Pilgrim Holdings, LLC      06-14355
      Hydrangea Farms LP         06-14356
      Nursery Lands LP           06-14357

Type of Business: The Debtors own and operate a nursery and grow
                  quality bareroot plants & shrubs.
                  See http://www.willowbendnursery.com/

Chapter 11 Petition Date: September 20, 2006

Court: Northern District of Ohio (Cleveland)

Judge: Arthur I. Harris

Debtor's Counsel: Kenneth J. Freeman, Esq.
                  Kenneth J. Freeman Co., LPA
                  515 Leader Building
                  526 Superior Avenue
                  Cleveland, OH 44114-1903
                  Tel: (216) 771-9980
                  Fax: (216) 771-9978

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $10 Million to $50 Million

A. Willowbend Nursery, Inc.'s 13 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Fifth Third Bank                 Checking Account,    $20,472,190
Fifth Third Center               Acct. Receivables,
600 Superior Avenue East         Office Equipment,       Secured:
Cleveland, OH 44114              Machinery, Trucks,    $8,300,480
                                 Inventory, Employee
                                 Loan, Embezzled Funds

Kohrman Jackson & Krantz, PLL    Attorney Fees           $129,176
1375 East Ninth Street
Suite 2000
Cleveland, OH 44114-1793

Management Advisory Services     Consulting Services     $107,881
8 North State Street, Suite 200
Painesville, OH 44077

Stark & Stark                    Professional Services    $43,219
8 North State Street, Suite 200
Painesville, OH 44077

Spring Meadow Nursery            Supplier                 $30,503
12601 120th Avenue
Grand Haven, MI 49179

Meilland Star Roses              Supplier                 $28,571

W.S. Yoe Nurseries               Supplier                 $21,855

The Parkland Group, Inc.         Consulting Services      $21,710

Perry Coal & Feed Co.            Supplier                 $14,509

Krauth NSY                       Supplier                 $11,927

Stropkey Nursery                 Supplier                 $10,885

Ohio Cat                         Supplier                  $9,311

Mackenzie Nursery Supply         Supplier                  $5,815

B. Pilgrim Holdings, LLC's Largest Unsecured Creditor:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Fifth Third Bank                 100% Ownership of    $17,774,022
Fifth Third Center               Willowbend Nursery,
600 Superior Avenue East         Ridge Manor Nursery
Cleveland, OH 44114              LLC, and Ridge Manor
                                 Nursery Lands, LLC

                                 Guarantor             $2,432,951

C. Hydrangea Farms LP's Largest Unsecured Creditor:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Fifth Third Bank                 Debtor's Real        $20,472,190
Fifth Third Center               Estate
600 Superior Avenue East                                 Secured:
Cleveland, OH 44114                                    $5,500,000

D. Nursery Lands LP's Largest Unsecured Creditor:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Fifth Third Bank                 Debtor's Real        $20,472,190
Fifth Third Center               Estate
600 Superior Avenue East                                 Secured:
Cleveland, OH 44114                                    $2,500,000


WINN-DIXIE: Four Parties Want Leesburg & Edgewood Taxes Attached
----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates want to sell
their Leesburg Outparcel to the State of Florida Department of
Transportation and the Edgewood Outparcel to AJDC LLC or to a
party submitting a higher or better offer.

The Duval County Tax Collector and the Lake County Tax Collector
assert that their liens for ad valorem real estate taxes for
fiscal 2006 and subsequent years are included as permitted
encumbrances attached to the sale of the Leesburg and Edgewood
Outparcels.

Brian T. FitzGerald, Esq., at the Hillsborough County Attorney's
Office, in Tampa, Florida, relates that the 2004 and 2005 ad
valorem real estate taxes for the Edgewood Outparcel are due and
have not been paid.  Winn-Dixie Stores, Inc., and its debtor-
affiliates' total amount of outstanding, delinquent 2004 and 2005
ad valorem real estate taxes if paid in September 2006 is $23,221.

The full amount of the outstanding real estate taxes, with
statutory interest, should be paid at the closing of the Edgewood
Outparcel sale in accordance with state law and customary
business practice or, alternatively, Duval County's statutory
liens will be attached to the proceeds of the sale,
Mr. FitzGerald states.

Lake County says that the Debtors' real estate taxes are paid
through 2005 on the Leesburg Outparcel.  The lien for the 2006
real estate taxes, however, arose on Jan. 1, 2006, and the
liquidated amount of the taxes will not be known until
Nov. 1, 2006.

In addition, the Florida Administrative Code requires that taxes
be paid when property is acquired by any government unit and
requires current taxes to be prorated and placed in escrow with
the Lake County Tax Collector at closing, according to
Mr. FitzGerald.

Since the proposed purchaser of the Leesburg Outparcel is the
Florida Department of Transportation, the Debtors should be
ordered to pay the taxes at closing or the Tax Collector's lien
will be attached to the sale proceeds, Mr. FitzGerald says.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi.  The Company,
along with 23 of its U.S. subsidiaries, filed for chapter 11
protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840).  D.J. Baker, Esq., at Skadden
Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders,
Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.
Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 52; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


WINN-DIXIE: Panel Hires Spencer Stuart to Search for Directors
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized the Official Committee of Unsecured Creditors in Winn-
Dixie Stores, Inc., and its debtor-affiliates' bankruptcy cases to
retain Spencer Stuart as director retention consultant effective
as of July 10, 2006.

As reported in the Troubled Company Reporter on Aug. 18, 2006,
under the Debtors' Joint Plan of Reorganization, the Creditors
Committee will select seven individuals to serve on the board of
directors of reorganized Winn-Dixie Stores.

The Creditors Committee is seeking the assistance of Spencer
Stuart in conducting an efficient and expedient search for new
directors.

Spencer Stuart has nearly 50 years of experience in the executive
search field and is one of the leading executive search firms in
the United States.  Spencer Stuart also has extensive experience
in assisting companies in selecting board candidates.

Spencer Stuart will:

   (1) meet with the Creditors Committee to develop background
       information on the significant issues and creditor
       expectations before approaching and meeting with
       candidates;

   (2) work with the Creditors Committee to develop detailed
       position specifications;

   (3) construct a search strategy for the positions to define
       and prioritize potential candidate locations, position
       levels and other elements of the search focus to ensure a
       comprehensive search assignment;

   (4) conduct an intensive search utilizing its retail networks
       and knowledge of the marketplace to yield qualified
       individuals for the Creditors Committee to compare and
       evaluate;

   (5) thoroughly interview qualified candidates to obtain a
       realistic understanding of their experience,
       accomplishments, capabilities, and potential, as well as
       prepare and present a comprehensive resume for review of
       each candidate recommended for interview;

   (6) present the best qualified and interested individuals for
       selection interviews;

   (7) assist as necessary in developing and negotiating the
       final compensation package and other terms of employment
       for the directors;

   (8) conduct reference checks of successful candidates;

   (9) conduct periodic progress reviews with the Creditors
       Committee to discuss individuals contacted, candidate
       interest, recruiting issues, and any other matters related
       to the search; and

  (10) perform other search-related services as may be required
       by the Creditors Committee.

Spencer Stuart will be retained until the completion of the
assignment unless terminated beforehand in accordance with the
provisions of the engagement letter dated July 10, 2006.

The Debtors have agreed that they will be solely responsible for
the payment of all fees and expenses incurred by Spencer Stuart.

Spencer Stuart's retainer fee will be up to $525,000, which will
be billed in three equal installments for up to seven board
member placements at $75,000 per each placement.  Installments
are to be paid by the Debtors on Aug. 15, 2006; Sept. 15, 2006;
and Oct. 16, 2006.

In addition to its retainer fee, Spencer Stuart also charges
monthly for search-related expenses at 10% of each installment.
Spencer Stuart will also be reimbursed for direct, out-of-pocket
expenses.

Thomas J. Snyder, a consultant at Spencer Stuart, assured the
Court that his firm is disinterested as defined by Section 101(14)
of the Bankruptcy Code.  Mr. Snyder said his firm holds no adverse
interest to the Debtors.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi.  The Company,
along with 23 of its U.S. subsidiaries, filed for chapter 11
protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840).  D.J. Baker, Esq., at Skadden
Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders,
Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.
Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 52; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


YOUTHSTREAM MEDIA: Earns $459,180 in Quarter Ended June 30
----------------------------------------------------------
YouthStream Media Networks, Inc., filed its financial statements
for the third fiscal quarter ended June 30, 2006, with the
Securities and Exchange Commission on Sept. 15, 2006.

The Company's net sales figure for the three months ended
June 30, 2006, was $34,284,157 compared with $29,127,566 for the
three months ended June 30, 2005.  The increase in net sales for
the current period as compared with 2005 reflects a general
improvement in the steel industry as well as the Company's
decision to focus on selling higher margin products.

The Company reported $459,180 of net income for the three months
ended June 30, 2006, as compared with a net loss of $1,837,129 for
the three months ended June 30, 2005.

At June 30, 2006, the Company's balance sheet showed $39,038,960
and $117,533,730 in total liabilities, resulting in a $78,494,770
stockholders' deficit.  The Company had a $79,600,350 deficit at
Sept. 30, 2005.

The Company's June 30 balance sheet also showed strained liquidity
with $33,556,710 in total current assets available to pay
$39,005,853 in total current liabilities coming due within the
next 12 months.

          Investment in Planet Hollywood (Alabama), LLC

In August 2006, YouthStream invested $75,000 to acquire an 8.82%
membership interest in Planet Hollywood (Alabama), LLC, to pursue
a licensing and merchandising arrangement with Planet Hollywood
International, Inc., or one or more of its subsidiaries.

Planet Hollywood (Alabama) was assigned certain rights held by PHI
in connection with PHI's role in the development of a charitable
bingo facility, restaurant, and entertainment venue in Shorter,
Alabama, with Lucky Palace, LLC, a subsidiary of Lucky Palace,
Inc.  Libra Securities Holdings, LLC, is also involved in this
business enterprise.

                   Renegotiated Debt Agreements

On Aug. 29, 2006, the loan and security agreement with General
Electric Capital Corp. was amended and restated to extend its
maturity date to March 24, 2010.  The extension allows the payment
of principal on the Company's subordinated secured promissory
notes, subject to compliance with various agreements and
covenants, with all other terms and conditions remaining
substantially the same.

On Aug. 29, 2006, the subordinated secured promissory notes were
amended and restated to extend their maturity date to March 31,
2010, with all other terms and conditions remaining substantially
the same.

Full-text copies of the Company's third fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?121c

                        Going Concern Doubt

As reported in the Troubled Company Reporter on July 5, 2006
Weinberg & Company, P.A., in Los Angeles, Calif., raised
substantial doubt about YouthStream Media Networks, Inc.'s ability
to continue as a going concern after auditing the Company's
consolidated financial statements for the years ended Sept. 30,
2005, and 2004.  The auditor pointed to the Company's losses;
negative cash flow from operations; negative working capital; and
accumulated and stockholders' deficiencies.

                 About YouthStream Media Networks

YouthStream Media Networks, Inc., (OTC: YSTM) owns and operates
Kentucky Electric Steel.  It is a steel mini-mill located in
Ashland, Kentucky.


* BOOK REVIEW: Grounded: Frank Lorenzo and the Destruction of
               Eastern Airlines
-------------------------------------------------------------
Author:     Aaron Bernstein
Publisher:  Beard Books
Paperback:  272 Pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122131/internetbankrupt

Barbara Walters once referred to Frank Lorenzo as "the most hated
man in America."  Since 1990, when this work was first published
and Eastern Airlines' troubles were front-page news, there had
been many worthy contenders for the title.  Nonetheless, readers
sensitive to labor-management concerns, particularly in the
context of corporate restructuring, will find in this book much to
support Barbara Walters' characterization.

To recap: For a few brief and discordant years, Frank Lorenzo was
boss of the biggest airline conglomerate in the free world
(Aeroloft was larger), combining Eastern Continental, Frontier,
and People Express into Texas Air Corporation, financing his
empire with junk bonds.  TAC ultimately comprised a fleet of
452 planes and 50,000 employees, with revenues of $7 billion.

But Lorenzo was lousy on people issues, famously saying, "I'm not
paid to be a candy ass."  The mid-1980's were a bad time to take
that approach.  Those were the years when the so-called Japanese
model of management, which emphasized cooperation between
management and labor, was creating a stir.  The Lorenzo model was
old school: If the unions give you any trouble, break 'em.

That strategy had worked for him at Continental, where he'd filed
Chapter 11 despite the airline's $60 million in cash reserves, in
order to exploit a provision in the Bankruptcy Code allowing him
to abrogate his contracts with the unions.  But Congress plugged
that Loophole by the time Lorenzo went to the mat with Charles
Bryan, IAM chapter president.  Lorenzo might have succeeded in
breaking the machinists alone, but when flight attendants and
pilots honored the picket line, he should have known it was time
to deal.  He didn't.

Instead he tried again for a strategic advantage through the
bankruptcy courts, by filing Chapter 11 in the Southern District
of New York where bankruptcy judges were believed to be more
favorably disposed toward management than in Miami where Eastern
is headquartered, Eastern had to hide behind the skirts of its
subsidiary, Ionosphere clubs, Inc., a New York Corporation, in
order to get into SDNY.  Six minutes later, Eastern itself filed
in the same court as a related proceeding.

The case was assigned to Judge Burton Lifland, whom Eastern's
bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was
mistaken if he believed that serendipitous lottery assignment
would be his salvation.  Judge Lifland a year later declared
Lorenzo unfit to run the airline and appointed Martin Shugrue as
trustee.

Most hated man or not, one wonders whether the debacle was all
Lorenzo's fault.  Eastern unions, in particular the notoriously
militant machinist, were perpetual malcontents, and Charlie Bryan
was an anti-management zealot, to the point of exasperating even
other IAM officers.

The book provides a detailed account of the three-and-a-half
period between Lorenzo's acquisition of Eastern in the autumn of
1986 and Judge Lifland's appointment of the trustee in April 1990.
It includes the history of Eastern's pre-Lorenzo management, from
World War I flying ace Eddie Rickenbacker to astronaut Frank
Borman.

                             *********

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, Melvin C. Tabao, 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.

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