TCR_Public/061114.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Tuesday, November 14, 2006, Vol. 10, No. 271

                             Headlines

3971 EAST BIJOU: Involuntary Chapter 11 Case Summary
ACE SECURITIES: Moody's Rates Class M-11 Certificates at Ba2
AINSWORTH LUMBER: S&P Pares Credit Ratings & Puts Negative Watch
AMERICAN TOWER: Special Committee Reports Stock Grants Findings
ARMSTRONG WORLD: Earns $39.2 Million in 2006 Third Quarter

BEACON POWER: Posts $3.1 Million Net Loss in 2006 Third Quarter
BRAVO! FOODS: Restates 2005 Results to Account for Derivatives
CABELA'S CREDIT: S&P Rates $11.25 Million Class D Notes at BB
CALPINE CORP: Wants Investigation Deadline Extended to May 15
CALPINE CORP: Wants to Release PG&E, CEOB & CAISO Claims

CATHOLIC CHURCH: Court Reschedules Portland's Estimation Hearing
CATHOLIC CHURCH: Davenport Fixes February 6 as Claims Bar Date
CELL THERAPEUTICS: Sept. 30 Balance Sheet Upside-Down by $85.1MM
CELSIA TECH: Posts $2.17 Million Net Loss in 2006 Third Quarter
CENTRAL VERMONT: Settles 2005 Refueling Costs Request with DPS

CHIQUITA BRANDS: High Debt Leverage Cues S&P to Affirm Ratings
CITIZENS COMMS: Earns $128.5 Million in 2006 Third Quarter
COMM 2001-J2: Moody's Holds Low-B Ratings on 3 Certificate Classes
COMMUNICATIONS CORP: Wants Plan-Filing Period Stretched to Feb. 28
COMPASS MINERALS: Sept. 30 Balance Sheet Upside-Down by $74.2 Mil.

CRC HEALTH: Earns $400,000 in Third Quarter of 2006
CREDIT SUISSE: S&P Holds Low-B Ratings on Six Certificate Classes
DEUTSCHE ALT-A: Moody's Rates Class I-M-10 Certificates at Ba2
EDDIE BAUER: Inks Merger Deal With Equity Firms for $614 Million
EDDIE BAUER: Sun Capital & Golden Gate Pact Cues S&P's Neg. Watch

EMMIS COMMS: Earns $110 Million in Fiscal Quarter Ended Aug. 31
ENERGYTEC INC: Posts $1.16 Million Net Loss in 2006 Second Quarter
EXTENDICARE HEALTH: S&P Withdraws 'BB-' Corporate Credit Rating
FINOVA GROUP: Earns $4.63 Million in 2006 Third Quarter
FIRST FRANKLIN: Moody's Rates Class B1 Certificates at Ba1

FOAMEX INTERNATIONAL: Gets Okay to Pay All Rating Agency Fees
FOAMEX INTERNATIONAL: Wants Hepbron Settlement Agreement Approved
FREMONT HOME: Moody's Rates Class M10 Certificates at Ba1
GENERAL MOTORS: Plans $1.5 Billion Secured Loan by Year-End 2006
GENERAL MOTORS: Moody's Rates Proposed $1.5 Billion Loan at Ba3

GREENWICH CAPITAL: Moody's Holds Low-B Ratings on 6 Cert. Classes
GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2
GSAMP TRUST: Moody's Rates Class B-2 Certificates  at Ba1
GSMPS MORTGAGE: Moody's Reviews Ratings and May Downgrade
GULFMARK OFFSHORE: Earns $39.8 Million in 2006 Third Quarter

HARBORVIEW MORTGAGE: Moody's Rates Class M-7 Certificates at Ba1
HARRAH'S ENT: Adjusts Conversion Price for $375-Million Notes
HOVNANIAN ENT: S&P Holds Ratings and Revises Outlook to Stable
ICOS CORPORATION: Sept. 30 Balance Sheet Upside-Down by $17.6 Mil.
INLAND FIBER: Court Confirms Chapter 11 Reorganization Plan

INLAND FIBER: June 30 Stockholders' Deficit Rose to $180.3 Million
KIRKLAND KNIGHTBRIDGE: Brings In Sugarman as Special Accountants
KB HOME: Bondholders Agree to Waive Certain Defaults
KB HOME: CEO Resigns After Stock Options Investigation
LENOX GROUP: Likely Liquidity Strain Cues Moody's to Lower Ratings

LUCENT TECHNOLOGIES: U.S. Congress to Probe Alcatel Merger Today
MESABA AVIATION: Committee Wants Court to Void Dividend Transfers
MESABA AVIATION: Wants Amended Agreements with Unions Approved
METAMORPHIX INC: June 30 Balance Sheet Upside-Down by $46.3 Mil.
METROMEDIA INT'L: Delays Filing of Third Quarter 2006 Results

MICHELEX CORP: Seligson & Giannattasio Raises Going Concern Doubt
MOSAIC COMPANY: Weak Phosphate Sales Cue S&P's Negative Outlook
MUSICLAND HOLDING: Files Second Amended Joint Plan of Liquidation
MUSICLAND HOLDING: Iowa Revenue Opposes Second Amended Plan
NOMURA HOME: Moody's Rates Class B-2 Certificates at Ba2

OPTION ONE: Moody's Rates Class M-11 Certificates at Ba2
PANTHER RE: Moody's Rates $144 Million Mezzanine Term Loans at Ba2
PARKWAY HOSPITAL: Wants Until January 31 to Remove Civil Actions
PERFORMANCE TRANSPORTATION: Files Amended Reorganization Plan
PERFORMANCE TRANSPORTATION: Court Okays Changes to DIP Loan Pact

PRIDE INT'L: Acquires Deepwater Semisubmersibles for $215 Million
RALI: Moody's Rates Class M-6 Mezzanine Certificates at Ba1
RAMP SERIES: Moody's Rates Class B Certificates at Ba2
REPERFORMING LOAN: Moody's Puts Three Certs.' Ratings Under Review
RESIDENTIAL ACCREDIT: Moody's Cuts Rating on Class M-3 Certificate

SACO I: Moody's Rates Class B-4 Subordinate Certificates at Ba1
SALON MEDIA: Amendment Lowers Year 2005 Net Loss to $1.3 Million
SBA CMBS: Moody's Puts Low-B Ratings on Four Certificate Classes
SECURITIZED ASSET: Moody's Rates Class B-4 Certificates at Ba1
SMARTIRE SYSTEMS: Posts $28.8 Million Net Loss in Fiscal Year 2006

SOLUTIA INC: Court Extends Removal Deadline to February 5
SOLUTIA INC: Has Until April 30 to Decide on Leases
SOMODY MERCHANDISING: Sells Minnesota Headquarters Building
SG MORTGAGE: Moody's Puts Two Certificates' Ratings Under Review
STRUCTURED ASSET: Moody's Rates Class B2 Certificates at Ba2

TENET HEALTHCARE: Third Quarter Net Loss Lowers to $89 Million
TERWIN MORTGAGE: Moody's Rates Class B-6 Notes at Ba2
VALEANT PHARMA: Investigated for Backdating of Stock Options
VIRAGEN INTERNATIONAL: Ernst & Young Raises Going Concern Doubt
WASHINGTON MUTUAL: Moody's Rates Class B-4 Certificates at Ba3

WILLIAMS COMPANIES: Earns $106.2 Million in 2006 Third Quarter
ZULTYS TECHNOLOGIES: Comes Out of Bankruptcy Under New Management

* Large Companies with Insolvent Balance Sheets

                             *********

3971 EAST BIJOU: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: 3971 East Bijou Associates
                aka El Dorado Apartments
                c/o National Tax Credit Mgmt Corp. I
                6100 Center Drive, Suite 800
                Los Angeles, CA

Involuntary Petition Date: 06-18226

Case Number: November 9, 2006

Chapter: 11

Court: District of Colorado (Denver)

Judge: Sidney B. Brooks

Petitioners' Counsel: Daniel J. Garfield, Esq.
                      Brownstein Hyatt & Farber, P.C.
                      410 Seventeenth St., 22nd Floor
                      Denver, CO 80202
                      Tel: (303) 223-1100
         
   Petitioners                   Claim Amount     Nature of Claim
   -----------                   ------------     ---------------
National Tax Credit              General Partner          Unknown
Management Corp. I
c/o Peter Stoughton
Senior Vice President and
Associate Counsel
6100 Center Drive, Suite 800
Los Angeles, CA 90045


ACE SECURITIES: Moody's Rates Class M-11 Certificates at Ba2
------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by ACE Securities Corp. Home Equity Loan
Trust, Series 2006-OP2 and a ratings ranging from Aa1 to Ba2 to
the subordinate certificates in the deal.

The securitization is backed by Option One Mortgage Corporation
originated, adjustable-rate and fixed-rate, subprime mortgage
loans acquired by DB Structured Products.  

The ratings are based primarily on the credit quality of the loans
and on protection against credit losses by subordination, excess
spread, and overcollateralization.  The ratings also benefit from
an interest-rate swap agreement provided by The Royal Bank of
Scotland.

Moody's expects collateral losses to range from 5.45% to 5.95%.

Option One Mortgage Corporation will service the mortgage loans
and Wells Fargo Bank, National Association will act as master
servicer.

Moody's has assigned Option One its servicer quality rating of SQ1
as a servicer of subprime mortgage loans.  Moody's has assigned
Wells Fargo its servicer quality rating of SQ1 as a master
servicer of mortgage loans.

These are the rating actions:


   * ACE Securities Corp. Home Equity Loan Trust, Series 2006-OP2

   * Asset Backed Pass-Through Certificates

                    Cl. A-1, Assigned Aaa
                    Cl. A-2A, Assigned Aaa
                    Cl. A-2B, Assigned Aaa
                    Cl. A-2C, Assigned Aaa
                    Cl. A-2D, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A2
                    Cl. M-6, Assigned A3
                    Cl. M-7, Assigned A3
                    Cl. M-8, Assigned Baa1
                    Cl. M-9, Assigned Baa2
                    Cl. M-10, Assigned Baa3
                    Cl. M-11, Assigned Ba2


AINSWORTH LUMBER: S&P Pares Credit Ratings & Puts Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Vancouver, British
Columbia-based Ainsworth Lumber Co. Ltd. to 'B' from 'B+', and
placed the ratings on CreditWatch with negative implications.

"Ainsworth's fourth-quarter cash flow is expected to remain weak
along with the sharp drop in prices for oriented strand board
(OSB), and the company is increasingly dependent on an improvement
in weak industry conditions to preserve its liquidity," said
Standard & Poor's credit analyst Donald Marleau.

"Furthermore, the company's cost profile faces continued pressure
from its heavy exposure to the persistent strength of the Canadian
dollar, high wood costs that have contributed to the shutdown of
its Minnesota mills, and high raw materials and transportation
costs that affect all of its operations," Mr.
Marleau added.

The CreditWatch on the ratings reflects the near-term risk that
the company's negative free cash flow could impair its currently
adequate liquidity.  Ainsworth had CDN$222 million in cash and
short-term investments at Sept. 30, 2006, which was stable
relative to the second quarter, but only because of a seasonal
CDN$57 million swing in working capital and CDN$84 million of new
borrowings.  

The company added CDN$60.1 million of secured debt in the third
quarter related to equipment purchases for the Grande Prairie,
Alta., expansion, and is holding CDN$42 million of restricted cash
to prefund the associated capital expenditures.

Ainsworth's operating income turned negative in the third quarter
as OSB prices continued their sharp decline while the Canadian
dollar remained strong, thus continuing to pressure the cost
position and profitability of its Canadian mills.  The company's
deteriorating financial performance is compounded by OSB prices
that have fallen even further in the fourth quarter, and currently
stand at about US$150/msf, or about 25% below the "trend" price
and 50% below the average price for 2005.

Ainsworth's cash burn rate could increase in the next several
quarters after accounting for probably negative operating income
in the fourth quarter, heavy capital spending for the Grande
Prairie expansion, interest costs of about CDN$20 million per
quarter, and seasonal investments in working capital in the next
two quarters.  The company will not face any significant debt
maturities until 2010, and its CDN$100 million revolving credit
facility is undrawn, although the availability might become
constrained with lower inventory valuations and receivables
balances.

Standard & Poor's believes that further downward pressure on OSB
prices is limited, because numerous mills are EBITDA negative in
the fourth quarter, and several producers have already temporarily
shut capacity.  Conversely, OSB prices have little catalyst to
move up strongly, as the combination of slowing residential
construction activity and the sectorwide increase in supply will
cause a supply glut in 2007.  

In the short term, supply will be affected by distressed industry
behavior, whereby some competitors continue operating despite
generating cash losses to protect their markets or to avoid even
larger cash outlays for mill closure.  High-cost plywood capacity
might continue to be shut down as builders substitute products,
some, but not all, OSB oversupply issues.

Resolution of the CreditWatch will hinge on the company's ability
to maintain adequate liquidity through difficult industry
conditions and a phase of increased capital requirements.  
Although Ainsworth has a modern asset base that requires only
modest maintenance capital expenditures, it is currently about
halfway through the expansion at its Grande Prairie OSB mill.  OSB
mill ramp-ups can be operationally difficult, and often contribute
to higher operating costs and sometimes require additional
capital.  On the other hand, Ainsworth has a good operational
track record, and the Grande Prairie expansion is substantially
the same as its existing assets.


AMERICAN TOWER: Special Committee Reports Stock Grants Findings
---------------------------------------------------------------
American Tower Corporation reported total revenues increased 26%
to $333.5 million and rental and management segment revenues
increased 25% to $326.4 million, of which $113.2 million was
attributable to SpectraSite.

Rental and Management Segment Gross Margin increased 26% to
$245.4 million, of which $79.4 million was attributable to
SpectraSite.  Services Segment revenue and Gross Margin increased
to $7.1 million and $4.1 million, respectively.

Total selling, general, administrative and development expense was
$42.4 million for the quarter ended Sept. 30, 2006.  The Company's
selling, general, administrative and development expense for the
quarter includes estimated stock-based compensation expense of
$10.7 million and $8.2 million of additional costs related to the
review of stock option granting practices and related legal and
governmental proceedings.

Free Cash Flow was $148.9 million, of which $47.5 million was
attributable to SpectraSite.  The Company also disclosed the
completion of the construction of 38 towers and the installation
of 3 in-building systems during the quarter.

The financial results for the third quarter ended Sept. 30, 2006,
due to its internal stock option review, only includes selected
financial results.  The Company says it will release full
financial results for the third quarter and financial reports for
prior periods after it finalizes its financial statements with
respect to the Special Committee's findings.

                Stock Option Grant Investigation

As reported in the Troubled Company Reporter on Sept. 22, 2006,
the special committee of the Company's Board of Directors is
investigating its stock option grants and the Company has
determined that it will need to restate its financial statements.  

On Nov. 6, 2006, the Special Committee reported to the Company's
Board of Directors regarding its findings.

The Special Committee's key findings are:

   -- The grant dates reported by the Company for accounting and
      financial reporting purposes for most stock option grants
      during the period from June 1998 and into 2005 were
      incorrect because they did not reflect the dates on which
      the grants were legally effective.

   -- From June 1998 through 2004, for certain large annual grants
      and many other individual grants, certain members of
      management chose past dates as grant dates so as to use a
      lower exercise price.

   -- The option grants involving lookbacks were inconsistent with
      the Company's disclosures that option grants were made at
      fair market value, were not accounted for properly and, to
      the extent they involved incentive stock options, violated
      the requirement under the Company's 1997 Stock Option Plan
      that they be at fair market value.

   -- Stock options were granted by management pursuant to
      authority they believed had been delegated by the
      Compensation Committee, but that delegation was not
      adequately documented, and therefore the necessary legal
      approval of some grants did not occur until they were
      subsequently approved by the Compensation Committee.

   -- The process by which members of the Compensation Committee
      formally approved option grants involved the signing of
      unanimous written consents that included schedules of option
      grants approved by management for the preceding quarter.
      The Company used the date in the schedules as the option
      grant date.  However, all necessary corporate action had not
      been taken until the written consents were actually signed
      by all committee members, which did not happen until later.

   -- The Company's flawed option practices began with past
      management.  The evidence does not indicate that management
      at the time in question was aware that the Company was
      failing to take necessary accounting charges or acting
      contrary to the Company's disclosures.  However, certain
      members of past management who initiated and were involved
      with the option practices should have been aware of the
      accounting or legal issues or sought legal and accounting
      advice as to the practice.

   -- Current management's efforts to improve and formalize
      procedures for option grants eliminating the practice of
      lookbacks.  In addition, the evidence does not indicate
      intentional misconduct by any member of current management.

   -- One or more outside lawyers for the Company were told of the
      lookback practice and did not advise the Company of the
      accounting and legal problems with the practice.

   -- The Board of Directors and the Compensation Committee failed
      to adopt adequate procedures to ensure that Compensation
      Committee members understood the Company's 1997 Stock Option
      Plan and that it was properly administered.

   -- From 1998 through 2005, the Company's processes, procedures
      and controls were inadequate.

   -- The Company also had inadequate controls relating to, and
      failed to account properly for, certain modifications of
      outstanding stock option rights.

The Special Committee will recommend to the Company's Board of
Directors a remediation plan to address the issues raised by its
findings.

                    Financing Highlights

The Company further disclosed that it has temporarily suspended
its stock repurchase program while the review of its stock option
granting practices is ongoing.  Prior to the suspension of the
stock repurchase program, the Company had repurchased a total of
11.8 million shares of its Class A common stock for approximately
$358.4 million.

During the quarter ended September 30, 2006, the Company
repurchased a total of $15.5 million principal amount of its 7.25%
Senior Subordinated Notes due 2011 for approximately
$15.9 million.  In addition, the Company repurchased a total of
$23.5 million principal amount of its 5% Convertible Notes due
2007 for approximately $23.4 million.  Subsequent to the end of
the quarter, the Company repurchased an additional $8.6 million
principal amount of its 7.25% Notes for approximately $9 million.

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.


ARMSTRONG WORLD: Earns $39.2 Million in 2006 Third Quarter
----------------------------------------------------------
Armstrong World Industries Inc. reported a $39.2 million net
income on $973.6 million of net sales for the third quarter ended
Sept. 30, 2006, compared with a $46.1 million net income on
$937.0 million of net sales for the same period in 2005.

At Sept. 30, 2006, the company's balance sheet showed
$4,720.8 million in total assets and $5,910.3 million in total
liabilities, resulting in a stockholders' deficit of
$1,189.5 million.

The company's balance sheet at Sept. 30, 2006, also showed  
$1,567.8 million in total current assets available to pay
$425.6 million in total current liabilities.

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

               http://researcharchives.com/t/s?148d

                            *   *   *
    
Based in Lancaster, Pennsylvania, Armstrong World Industries,
Inc.-- http://www.armstrong.com/-- the major operating subsidiary  
of Armstrong Holdings, Inc., designs, manufactures and sells
interior floor coverings and ceiling systems, around the world.
                                     
The company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin,
Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied,
Esq., at Richards, Layton & Finger, P.A., represent the Debtors in
their restructuring efforts.  The company and its affiliates
tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.

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

The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003.  The
District Court Judge Robreno confirmed AWI's Modified Plan on Aug.
14, 2006.  The Clerk entered the formal written confirmation order
on Aug. 18, 2006.  The company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.


BEACON POWER: Posts $3.1 Million Net Loss in 2006 Third Quarter
---------------------------------------------------------------
Beacon Power Corp. posted a $3,165,005 net loss on $277,343 of
revenues for the third quarter ended Sept. 30, 2006, compared with
a $2,143,442 net loss on $304,064 of revenues for the same period
in 2005.

At Sept. 30. 2006, the company's balance sheet showed $9,341,923
in total assets, $3,042,871 in total liabilities, and $6,299,052
in total stockholders' equity.

The company's balance sheet at Sept. 30, 2006, also showed
$8,840,516 in total current assets available to pay $3,042,871 in
total current liabilities.

Full-text copies of the company's financial statements for the
quarter ended Sept. 30, 2006 are available for free at:  
                
              http://researcharchives.com/t/s?148b

                      Going Concern Doubt

Miller Wachman, LLP, expressed substantial doubt Beacon Power
Corp.'s ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2005 and 2004.  The auditing firm pointed to the
company's recurring losses from operations and negative cash
flows.
                  
                       About Beacon Power
                         
Headquartered in Wilmington, Massachusetts, Beacon Power
Corporation -- http://www.beaconpower.com/-- designs      
sustainable energy storage and power conversion solutions that  
would provide reliable electric power for the utility, renewable  
energy, and distributed generation markets.  Beacon's Smart Energy  
Matrix is a design concept for a megawatt-level, utility-grade  
flywheel-based energy storage solution that would provide  
sustainable power quality services for frequency regulation, and  
support the demand for reliable, distributed electrical power.   
Beacon is a publicly traded company with its research, development  
and manufacturing facility in the U.S.


BRAVO! FOODS: Restates 2005 Results to Account for Derivatives
--------------------------------------------------------------
Bravo! Foods International Corp. has submitted an amended annual
report for the year ended Dec. 31, 2005, with the Securities and
Exchange Commission to reflect the restatement of its consolidated
financial statements for the years ended Dec. 31, 2005 and 2004
and the quarterly periods for these years.

The Company restates its consolidated financial statements to:

    a) properly account for certain derivative financial
       instruments embedded in its notes payable, convertible
       notes payable and redeemable preferred stock;  

    b) properly account for other derivative financial instruments
      (principally warrants) that were issued in connection with
       its financing and other business arrangements; and

    c) reclassify and properly account for redeemable preferred
       stock.

The Company reported a net loss for the year ended Dec. 31, 2005
of $79,528,653 compared with a net loss of $11,517,620 in 2004.

Revenues for the year ended Dec. 31, 2005 were $11,948,921, an
increase of $8,604,222, or 257%, compared to revenues of
$3,344,699 in 2004.  The company attributes the increase in
revenues to the entry of a significant new customer, Coca Cola
Enterprises, during the third fiscal quarter with sales generation
commencing in the fourth fiscal quarter.

At Dec. 31, 2005, the Company's restated balance sheet showed
$28,358,120 in total assets, $48,749,254 in total liabilities and
$2,104,500 in redeemable preferred stock, resulting in a
stockholders' deficit of $22,495,634.

A full-text copy of the amended annual report is available for
free at http://researcharchives.com/t/s?14d9
    
                        Going Concern Doubt

Lazar Levine & Felix LLP expressed substantial doubt about Bravo!
Foods' 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 net losses,
working capital deficiency at Dec. 31, 2005, and delinquency in
the payment of certain debts.

Bravo! Foods International Corp. -- http://www.bravobrands.com/--   
develops, brands, markets, distributes and sells flavored milk
products throughout the 50 United States, Great Britain and
various Middle Eastern countries.


CABELA'S CREDIT: S&P Rates $11.25 Million Class D Notes at BB
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Cabela's Credit Card Master Note Trust's $500 million
fixed- and floating-rate asset-backed notes series 2006-III.

The preliminary ratings are based on information as of Nov. 10,
2006.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
   
The preliminary ratings reflect the sufficient credit enhancement
levels for each of the assigned rating categories, the credit risk
associated with the overall quality of the collateral pool, the
historical portfolio performance, the effectiveness of the single
waterfall payment structure, and a sound legal structure.
     
                   Preliminary Ratings Assigned

              Cabela's Credit Card Master Note Trust
   
             Class           Rating               Amount
             -----           ------               ------
             A-1             AAA               $250,000,000
             A-2             AAA               $182,500,000
             B               A                  $35,000,000
             C               BBB                $21,250,000
             D               BB                 $11,250,000


CALPINE CORP: Wants Investigation Deadline Extended to May 15
-------------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend the
deadline to assert any claims or defenses related to the Debtors'
obligations to the holders of the Debtors' first and second lien
debt until May 15, 2007, but only with respect to claims that
liens in the Collateral Trust Agreement on their fixtures were not
properly perfected.

The Official Committee of Unsecured Creditors appointed in the
Debtors' bankruptcy cases also ask the Court to extend the
Investigation Termination Date pertaining to the alleged security
interests granted to the First Lien Trustee for the benefit of the
First Lien Noteholders until the date on which the Debtors and the
Creditors' Committee are required to answer in the Adversary
Proceeding initiated by the First Lien Trustee.

As reported in the Troubled Company Reporter on Nov. 7, 2006, the
Debtors and the Creditors' Committee have until Nov. 15, 2006, to
assert any claims or defenses related to the Debtors' obligations
to the holders of the Debtors' first and second lien debt.  Any
claims or defenses not asserted by that date are waived.

The Debtors argue that asserting the Perfection Claims now, to
avoid the preclusive effect of the Investigation Termination
Date, would require them to expend significant time and resources
on litigation, distracting them from their reorganization
efforts.

The Debtors add that a reasonable extension will provide the
parties an opportunity to attempt to resolve consensually the
Perfection Claims.

The First Lien Trustee and an ad hoc committee of Second Lien
Noteholders consent to the Debtors' extension request.

The Creditors' Committee asserts it would be an undue waste of
the Court's time and resources if it initiates litigation
regarding the validity of the First Lien Noteholders' security
interests when Law Debenture Trust Company of New York, the
trustee for the First Lien Noteholders, has already sought
declarative relief regarding the issue in an adversary
proceeding.

                       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.  (Calpine Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


CALPINE CORP: Wants to Release PG&E, CEOB & CAISO Claims
--------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to approve claim
releases under a Settlement Agreement with Pacific Gas and
Electric Company, the California Independent System Operator
Corporation and California Electricity Oversight Board.

The Debtors are parties to various "reliability-must-run"
contracts with the California Independent System Operator
Corporation.  The CAISO designates particular power plants as RMR
plants annually to meet particular local reliability needs.  RMR
contracts typically run for one year.

David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York,
relates that the Debtors are currently parties to certain refund
proceedings before the Federal Energy Regulatory Commission in
connection with disputes concerning rates for RMR service.  The
California Public Utilities Commission, PG&E, the CEOB, and the
CAISO have intervened in the Refund Proceedings.

The Refund Proceedings include rate disputes regarding:

   (1) a RMR contract related to the Delta Energy Center for the
       period from Feb. 10, 2003, through Dec. 31, 2005; and

   (2) a RMR contract with Geysers Power Company from 2002
       through mid-2003.

In addition, PG&E and the CAISO have also asserted various other
claims against the Debtors and certain non-Debtor affiliates,
including, but not limited to, claims asserted by PG&E related to
alleged overpayment of certain scheduling coordinator credits.

As a result of several months of negotiations, the Debtors, PG&E,
CEOB, and the CAISO entered into a settlement resolving the
issues raised in the Refund Proceedings, the Scheduling
Coordinator Claims, and certain other claims.  The Settlement
Agreement relates primarily to the pricing of the current and
future contracts between the Parties.

The Settlement Agreement is within the ordinary course of the
Debtors' business, Mr. Seligman contends.

The Settlement Agreement is subject to the FERC's independent
review and approval, and the parties have submitted it to the
FERC on Oct. 19, 2006.  Mr. Seligman says the parties will
work to obtain all necessary regulatory approvals,

The core economic pricing terms at issue in the Settlement
Agreement will be subject to the FERC's approval, Mr. Seligman
notes.  Thus, the Debtors do not seek Court approval of the
pricing terms.  Instead, the Debtors ask the Court to approve
certain claim releases among the parties under the Settlement
Agreement.

The Settlement Agreement provides, among others, that:

   (a) All claims by and against each Party arising under or with
       respect to each Calpine Entity's RMR Rates for all Contract
       Years and periods ending on or before Dec. 31, 2006, and
       all claims with respect to amounts invoiced under each
       Calpine Entity's RMR Agreement for service months before
       Aug. 1, 2006, are deemed settled and fully resolved;

   (b) Each Party waives and releases any reservation of rights
       it may have under any other agreement to challenge or seek
       refunds with respect to a Calpine Entity's RMR Rates that
       are settled and resolved pursuant to the Agreement; and

   (c) The Parties will exchange mutual releases and discharges
       of all claims and liabilities arising under the RMR Rates
       or RMR Agreements.

A full-text copy of the PG&E Settlement is available for free
at http://ResearchArchives.com/t/s?14df

Mr. Seligman points out that the Settlement Agreement resolves
significant litigation between the parties that has been ongoing
for several years and resolves approximately $200,000,000 in
claims filed by PGE and CAISO against the Debtors and certain
ambiguities associated with the performance obligations of the
relevant parties under RMR contracts.  The Settlement Agreement
also gives the Debtors greater certainty regarding future
revenues under applicable contracts.

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.  (Calpine Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


CATHOLIC CHURCH: Court Reschedules Portland's Estimation Hearing
----------------------------------------------------------------
At the request of the Archdiocese of Portland in Oregon and the
Official Committee of Tort Claimants, the U.S. Bankruptcy Court
for the District of Oregon rescheduled the hearing on the
estimation of the present child sex abuse tort claimants for
Feb. 27 and 28, 2007, at 9:30 a.m. each day.

Judge Elizabeth L. Perris conducted a status conference on the
Archdiocese's request to estimate unresolved present child sex
abuse tort claims on Nov. 6, 2006.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers.  David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case.  In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.  (Catholic Church Bankruptcy News,
Issue No. 72; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CATHOLIC CHURCH: Davenport Fixes February 6 as Claims Bar Date
--------------------------------------------------------------
Mary M. Weibel, Clerk of the U.S. Bankruptcy Court for the  
Southern District of Iowa, advises parties-in-interest that all  
creditors, except governmental units, are required to file proofs  
of claim in the Diocese of Davenport's chapter 11 case on or
before Feb. 6, 2007.

Claim forms should be mailed to the Bankruptcy Clerk's office at:

           United States Courthouse
           P.O. Box 9264
           131 E. 4th Street
           Davenport, IA 52801

The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006.  Richard
A. Davidson, Esq., at Lane & Waterman LLP, represents the
Davenport Diocese in its restructuring efforts.  In its Schedules
of Assets and Liabilities filed with the Court, the Davenport
Diocese reports $4,492,809 in assets and $1,650,439 in
liabilities.  (Catholic Church Bankruptcy News, Issue No. 72;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CELL THERAPEUTICS: Sept. 30 Balance Sheet Upside-Down by $85.1MM
----------------------------------------------------------------
Cell Therapeutics, Inc., reported net loss for the quarter ended
Sept. 30, 2006 totaled $28.2 million, compared to a net loss of
$8.5 million for the same quarter in 2005.

For the nine months ended Sept. 30, 2006, the Company posted a net
loss of $102.4 million, compared to $83.8 million for the nine
months ended Sept. 30, 2005.  The net loss for both the quarter
and nine months ended Sept. 30, 2005, included a $30.5 million
gain related to its divestiture of TRISENOX in July 2005.  The
Company ended the quarter with approximately $68.1 million in cash
and cash equivalents, securities available-for-sale, and interest
receivable.

"We have continued to streamline our operating expenses and focus
our resources on those nearest term product opportunities with the
highest probability for success," James A. Bianco, M.D., president
and chief executive officer, said.  "Ending the quarter with
$68 million coupled with the additional $15 million investment
from Novartis, we have strengthened our balance sheet as well."

For the three months ended Sept. 30, 2006 the Company reported
total revenues of $20,000, versus total revenues of $1.2 million
for the same period in 2005.

For the nine months ended Sept. 30, 2006 total revenues were
$60,000, compared to $14.8 million of total revenues for the
comparable period in 2005.

At Sept. 30, 2006 the Company reported total assets of
$120.9 million, total convertible debt of $168.4 million and a
shareholders' deficit of $85.1 million.  Shareholders' deficit at
Dec. 31, 2005 stood at $107 million.

Based in Seattle, Washington, Cell Therapeutics, Inc.,
(NASDAQ and MTAX: CTIC) -- http://www.cticseattle.com/--  
develops, acquires, and commercializes treatments for cancer.  The
company was co-founded by James A. Bianco, Louis A. Bianco, and
Jack W. Singer in 1991.


CELSIA TECH: Posts $2.17 Million Net Loss in 2006 Third Quarter
---------------------------------------------------------------
Celsia Technologies, Inc., fka iCurie, Inc., reported a $2,179,480
net loss on $32,854 of revenues for the third quarter ended
Sept. 30, 2006, compared to a net loss of $2,316,113 on zero
revenues for the same period in 2005. .

At Sept. 30, 2006, the company's balance sheet showed $3,090,109
in total assets, $1,896,304 in total liabilities and $1,193,805 in
total stockholders' equity.  Additionally, at Sept. 30, 2006, the
company's accumulated deficit has reached $22,220,832.

The company and its subsidiaries have only recently commenced
limited revenue producing operations.  During the third quarter
ended Sept. 30, 2006, the company received product test orders,
which have led to several related test product deliveries, as well
as limited commercial orders.  

Full-text copies of the company's third quarter financial
statements are available for free at:
                                 
http://researcharchives.com/t/s?149b

Going Concern Doubt

As reported in the Troubled Company Reporter on Aug. 8, 2006, PKF,
P.C., in New York, raised substantial doubt about iCurie,
Inc.'s ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Dec. 31, 2005.  The auditor pointed to the company's accumulated
deficit and commencement of limited revenue producing operations.

About Celsia Technologies

Headquartered in Miami, Fla., Celsia Technologies, Inc. designs,
develops, researches, manufactures, sells, and markets heat
management products or next generation cooling solutions for the
PC, flat panel display, and LED-lighting industries.  The
company's subsidiaries consist of Celsia Technologies UK Limited,
a United Kingdom company formerly known as iCurie Lab Holdings
Limited, and Celsia Technologies Korea, Inc., a Korean company
formerly known as iCurie Lab, Inc.


CENTRAL VERMONT: Settles 2005 Refueling Costs Request with DPS
--------------------------------------------------------------
Central Vermont Public Service Corporation and the Vermont
Department of Public Service on Nov. 6, 2006, filed an agreement
with the Vermont Public Service Board to recover incremental
replacement power costs associated with a scheduled Vermont Yankee
refueling outage in 2005.

The Company disclosed that the settlement will result in a rate
increase of 0.34% in addition to the 3.73% increase previously
agreed upon through a Memorandum of Understanding with the DPS.  
Both the MOU and the settlement are subject to PSB approval, which
is expected by mid-December.  If approved, the net rate increase,
effective Jan. 1, 2007, will be 4.07%, equivalent to an additional
$10.8 million in rates next year.

Due to Hurricanes Katrina and Rita, the price that the Company
paid for replacement power during the fourth-quarter 2005 Vermont
Yankee scheduled refueling outage was significantly higher than
what was being recovered in its retail rates.  On Dec. 23, 2005,
it filed a request for an Accounting Order from the PSB to defer
$3.6 million for recovery in its next rate proceeding.  The
request included $4.7 million for net incremental replacement
power costs above those already embedded in retail rates, and the
application of a $1.1 million credit associated with a federal tax
refund it received through Vermont Yankee Nuclear Power Corp.
power bills in 2005 to reduce the deferral.

In its testimony filed with the PSB on April 14, 2006, the DPS
calculated that the actual net incremental replacement power costs
associated with Hurricanes Katrina and Rita was $1,493,000, which
amount after-tax was not considered material enough to warrant the
issuance of an Accounting Order.  The DPS recommended that the
$1.1 million credit associated with the federal tax refund, plus
unrelated savings expected from increased deliveries under the
Hydro-Quebec contract, be recorded as regulatory liabilities for
return to ratepayers.

The Company, on Sept. 11, 2006, reached a settlement agreement
with the DPS on its rate increase request, reducing the rate
request to 3.73%.  The agreement did not resolve the Accounting
Order request, but it included application of the $1.1 million
credit associated with the federal tax refund the Company received
through VYNPC power bills in 2005.

Under terms of the Accounting Order settlement, which must be
approved by the PSB, the Company will:

     i) establish a regulatory asset of $1,493,000, pre-tax,
        representing the deferral of incremental replacement power
        costs incurred in 2005;

    ii) recover and amortize the costs over 24 months, beginning
        with rates effective Jan. 1, 2007; and

   iii) include the regulatory asset in rate base.

A full text-copy of the First Amendment to Memorandum of
Understanding may be viewed at no charge at:

               http://ResearchArchives.com/t/s?14c3

Founded in 1929, Central Vermont Public Service (NYSE: CV) is
Vermont's largest electric utility.  Central Vermont's
non-regulated subsidiary, Eversant Corporation, sells and rents
electric water heaters through a subsidiary, SmartEnergy Water
Heating Services.

Deloitte & Touche LLP in Boston, Massachusetts, issued an adverse
opinion on the effectiveness of Central Vermont Public Service
Corporation's internal control over financial reporting because of
material weaknesses.

                        *     *     *

As reported in the Troubled Company reporter on Aug. 4, 2006,
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating and 'BBB' senior secured bond rating on electric
utility Central Vermont Public Service Corp.

At the same time, the preferred stock rating was lowered to 'B+'
from 'BB-'.  The outlook is stable.


CHIQUITA BRANDS: High Debt Leverage Cues S&P to Affirm Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on Cincinnati, Ohio-based Chiquita
Brands International Inc. and Chiquita Brands LLC.  The ratings
were removed from CreditWatch with negative implications where
they were placed on Sept. 26, 2006, after the company's
report that third quarter operating performance was expected to be
weak.

Ratings were subsequently lowered by one notch on Nov. 3, 2006.  
Chiquita recently received an amendment to its credit facility to
relax covenants over multiple quarters.  As indicated in our
CreditWatch update on Nov. 3, 2006, ratings would be affirmed and
withdrawn from CreditWatch upon receipt of such an amendment.

The outlook is negative.  Total debt outstanding at the company
was about $990 million as of Sept. 30, 2006.

"The ratings on Chiquita reflect the company's high debt leverage,
weak credit measures, and its product concentration in bananas,"
said Standard & Poor's credit analyst Alison Sullivan.

Also, the company competes in the mature fruit and vegetable
industry, which faces uncontrollable factors such as global
supply, world trade policies, political risk, currency swings,
weather, and disease.

Chiquita is a leading producer, marketer, and distributor of
bananas and other fresh and processed foods sold under the
Chiquita brand name and other brand names.  The company has the
No.1 banana market position in Europe and the No. 2 position in
North America.

In addition to bananas, the company's fresh products include
tropical fruits such as mangoes, pineapples, melons, and kiwi
fruits.  The June 2005 acquisition of Fresh Express added packaged
salad products.


CITIZENS COMMS: Earns $128.5 Million in 2006 Third Quarter
----------------------------------------------------------
Citizens Communications reported third quarter 2006 revenues of
$507.2 million, operating income of $160.7 million, and net income
of $128.5 million.

The Company disclosed that the sale of Electric Lightwave, LLC for
$247 million, including  $243 million in cash, closed on
July 31, 2006, and that excluding the after-tax gain on the sale,
net income would have been $56.4 million.

Third quarter 2006 revenue was $507.2 million, compared to
$501.2 million in the third quarter of 2005.

Citizens Communications also disclosed that it experienced growth
in the third quarter of 2006 in data and internet services
revenue, higher access service revenues, including subsidy
payments received from federal and state agencies, and enhanced
services/features revenues.  Third quarter 2006 data and internet
services revenue increased 29.7%, compared to the third quarter of
2005.  Revenues were negatively impacted in the third quarter of
2006 as compared to 2005 by a decline in local, long distance and
equipment sales.

The company further disclosed that it added approximately 12,300
high-speed internet customers during the quarter and had more than
362,000 high-speed data subscribers at Sept. 30, 2006.  The number
of the company's high-speed internet subscribers has increased by
more than 72,000 or 25% since Sept. 30, 2005.

Operating income for the third quarter of 2006 was $160.7 million
and operating income margin was 31.7%, compared to $136.9 million
and 27.3% in the third quarter of 2005.  Capital expenditures were
$65.1 million for the third quarter of 2006 and $163.4 million for
the first nine months of 2006.

Free cash flow for the third quarter increased 3% to
$127.6 million compared to the third quarter of 2005.  The
company's dividend represents a payout of 56.6% of free cash flow
for the first nine months of 2006.

Headquartered in Stamford, Connecticut, Citizens Communications
fka Citizens Utilities (NYSE: CZN) -- http://www.czn.net/--  
provides phone, TV, and Internet services to more than two million
access lines in parts of 23 states, primarily in rural and
suburban markets, where it is the incumbent local-exchange carrier
operating under the Frontier brand.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 20, 2006,
Fitch Ratings affirmed Citizens Communications Company's Issuer
Default Rating rating at 'BB'.  The Rating Outlook is Stable.

As reported in the Troubled Company Reporter on Sept. 20, 2006,
Moody's Investors Service upgraded the corporate family rating of
Citizens Communications to Ba2 from Ba3 and also assigned a Ba2
probability of default rating to the company.  The ratings on the
senior unsecured revolver and the senior unsecured notes and
debentures were also upgraded to Ba2 from Ba3.  The instrument
ratings reflect both the overall Ba2 probability of default of the
company, and a loss given default of LGD 4.  The ratings on the
preferred EPPICS were upgraded to B1 from B2, and assigned an LGD6
assessment.  The outlook is stable.


COMM 2001-J2: Moody's Holds Low-B Ratings on 3 Certificate Classes
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes
and affirmed the ratings of 13 classes of COMM 2001-J2, Commercial
Mortgage Pass-Through Certificates:

   -- Class A-1, $226,285,588, Fixed, affirmed at Aaa

   -- Class A-1F, $23,146,757, Floating, affirmed at Aaa

   -- Class A-2, $405,000,000, Fixed, affirmed at Aaa

   -- Class A-2F, $420,000,000, Floating, affirmed at Aaa

   -- Class X, Notional, affirmed at Aaa

   -- Class XC, Notional, affirmed at Aaa

   -- Class XP, Notional, affirmed at Aaa

   -- Class B, $91,840,000, Fixed, upgraded to Aaa from Aa2

   -- Class C, $115,910,000, Fixed, upgraded to A2 from Baa1

   -- Class D, $31,636,000, Other Non-Fixed, upgraded to Baa1
      from Baa2

   -- Class E, $27,639,000, Other Non-Fixed, affirmed at Baa3

   -- Class E-CS, $10,000,000, Fixed, affirmed at Baa3

   -- Class E-IO, Notional, affirmed at Baa3

   -- Class F, $13,550,000, Other Non-Fixed, affirmed at Ba1

   -- Class G, $33,201,000, Other Non-Fixed, affirmed at Ba3

   -- Class H, $11,969,332, Fixed, affirmed at B1

The Certificates are collateralized by 10 fixed rate mortgage
loans secured by 13 properties.  As of the Oct. 15, 2006
distribution date, the transaction's aggregate certificate balance
has decreased by approximately 6.4% to $1.42 billion from $1.51
billion at securitization as a result of scheduled loan
amortization.

Moody's is upgrading Classes B, C, and D due to improved
collateral performance for nine of the 10 loans in the
transaction.  The performance of the Guardian Life Building Loan
remained the same as at last review.

The Citigroup Center Loan ($319.2 million - 22.6%) is secured by
Citigroup Center, a 1.6 million square foot Class A office
building located in New York City.  The building is currently
99.7% leased, compared to 99.9% at securitization.  The largest
tenant is Citibank, N.A., (Moody's LT issuer rating Aaa; stable
outlook) which leases approximately 34.0% of the building.  The
borrower is an affiliate of Boston Properties, Inc. Moody's
considers in-place rent to be in-line with current market rates.
This fixed rate loan matures in May 2011.  The loan amortizes on a
30-year schedule and has amortized by approximately 6.8% since
securitization.

Moody's loan to value ratio is 49.6%, compared to 52.7% at Moody's
last full review in June 2005 and compared to 58.0% at
securitization.  Moody's current shadow rating is Aa2, compared to
A1 at last review.

The AT&T Building Loan ($214.2 million - 15.2%) is secured by a
Class B office and telecommunications building located at 32
Avenue of the Americas in lower Manhattan.  The building was
approximately 90.1% occupied as of December 2005, compared 79.2%
as of Feb. 2005 and compared to 83.6% at securitization. Prior to
June 2003 the loan was in special servicing for a loan
modification. Principal payments were deferred through March 2006,
although amortization on a 25-year schedule has commenced.
Existing tenants include AT&T Corp., Qwest Communications
International, Inc. and MCI Communications Corporation.  Increases
in vacancy and operating costs resulted in declining cash flow in
calendar years 2003 and 2004 although the rebound in occupancy
will improve cash flow going forward.  The borrower is an
affiliate of Rudin Family Holdings.

Moody's LTV is 83.5%, compared to 78.8% at securitization. Moody's
current shadow rating is B2, compared to Baa2 at securitization.

The Willowbrook Mall Loan is secured by approximately
496,600 square feet of mall shop space in Willowbrook Mall, a
1.5 million square foot super-regional mall located in Wayne, New
Jersey. Willowbrook Mall, considered one of the top malls in the
region, is anchored by Macy's, Bloomingdale's, Lord & Taylor and
Sears.  Mall shop occupancy was 89.9% as of March 2006 and
calendar year 2005 comparable mall shop sales were $563 per square
foot.  The borrower is an affiliate of General Growth Properties,
Inc.  Moody's LTV is 51.2%, compared to 64.6% at last review and
compared to 68.5% at securitization.  

Moody's current shadow rating is Aaa, compared to Baa2 at last
review.

The Wyndham Anatole Hotel Loan is secured by a 1,614-room
convention hotel located in the Market Center area of Dallas,
Texas.  The hotel features more than 333,000 square feet of
meeting/function space.   RevPAR for calendar year 2005 was
$77.90, compared to $87.16 at securitization.  Food & beverage and
other income have improved significantly more than offsetting the
decline in room revenue.

Moody's current LTV is 53%, compared to 65.9% at last review and
compared to 66.3% at securitization.  Moody's current shadow
rating is Aa3, compared to Baa1 at last review.

The Guardian Life Building Loan is secured by three properties
located in the financial district of New York City--Seven Hanover
Square, 46 Water Street and 78 Pearl Street.  As of March 2006 the
properties were 99% leased, compared to 100% at securitization.  
The largest tenant, occupying approximately 88.0% of the total
area, is The Guardian Life Insurance Company of America.  Guardian
Life, which has its headquarters in the building, contributes
approximately 93.4% of total base rental revenue with leases
expiring in September 2019. The loan sponsor is the Milstein
family.  The loan amortizes on a 30-year schedule and has
amortized by approximately 5.4% since securitization.

Moody's LTV is 78%, compared to 77.9% at last review.  Moody's
current shadow rating is Baa2, the same as at last review.


COMMUNICATIONS CORP: Wants Plan-Filing Period Stretched to Feb. 28
------------------------------------------------------------------
Communications Corporation of America and its debtor-affiliates,
and White Knight Holdings Inc. and its debtor-affiliates has
modified their motion to extend their exclusive periods to file a
Chapter 11 Plan of reorganization and solicit acceptances for the
Plan.

As reported in the Troubled Company Reporter on Oct. 20, 2006, the
Debtors had asked the U.S. Bankruptcy Court for the Western
District of Louisiana to extend until Jan. 15, 2007, the period
within which they have the exclusive right to file a chapter 11
plan of reorganization.

The Debtors now want the Court to extend their exclusive plan-
filing period to Feb. 28, 2007.  The Debtors also ask for a
corresponding extension of their period to obtain plan
acceptances.

William H. Patrick, III, at Heller, Draper, Hayden, Patrick &
Horn, LLC, tells the Court that the February 28 extension is
warranted because:

     a) the Debtors have spent weeks in litigation over the use of
        cash collateral and their initial request for an extension
        of exclusivity.  The protracted litigation has negatively
        affected the Debtors' ability to develop a plan.

     b) the Debtor anticipates obtaining more information about
        its efforts to secure offers for certain selected assets.  
        This information is expected to inform the Debtors'
        strategy and help the court guide the plan process; and

     c) the extension will give the Debtors sufficient time, free
        of the diversion of discovery and litigation, to
        concentrate on a reorganization plan.

                       About White Knight

Headquartered in Lafayette, Louisiana, White Knight Holdings,
Inc., is a media, television and broadcasting company.

White Knight entered into commercial inventory agreements, joint
sales agreements, and shared services agreements with
Communications Corporation of America.  However, both entities are
independent companies and are not affiliates of each other.  Along
with Communications Corp., White Knight operates around 23 TV
stations.

White Knight and five of its affiliates filed for chapter 11
protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50422
through 06-50427).  R. Patrick Vance, Esq., and Matthew T. Brown,
Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
LLP, represents White Knight and its debtor-affiliates in their
restructuring efforts.  White Knight and its debtor-affiliates'
chapter 11 cases are jointly administered under Communication
Corporation of America's chapter 11 case.

When White Knight and its debtor-affiliates filed for protection
from their creditor, they estimated less than $50,000 in assets
and estimated debts between $100,000 and $500,000.

             About Communications Corp. of America

Headquartered in Lafayette, Louisiana, Communications Corporation
of America, is a media and broadcasting company.  Along with media
company White Knight Holdings, Inc., it owns and operates around
23 TV stations in Indiana, Texas and Louisiana.  Communications
Corporation and 10 of its affiliates filed for bankruptcy
protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410
through 06-50421).  Douglas S. Draper, Esq., William H. Patrick
III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,
Patrick & Horn, LLC, represents Communications Corporation and its
debtor-affiliates.  When Communications Corporation and its
debtor-affiliates filed for protection from their creditors, they
estimated assets and debts of more than $100 million.


COMPASS MINERALS: Sept. 30 Balance Sheet Upside-Down by $74.2 Mil.
------------------------------------------------------------------
Compass Minerals International, Inc., reported a $2.3 million net
income on $123.6 million of revenues for the third quarter ended
Sept. 30, 2006, compared with a net loss of $4.4 million on
$107.5 million of revenues for the same period in 2005.

At Sept. 30, 2006, the company's balance sheet showed
$670.6 million in total assets, and $744.8 million in total
liabilities, resulting in a $74.2 million stockholders' deficit.  

The company's balance sheet at Sept. 30, 2006, also showed $248.4
million in total current assets available to pay $103.2 million in
total current liabilities.

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

              http://researcharchives.com/t/s?148c

                     About Compass Minerals

Based in the Kansas City metropolitan area, Compass Minerals
International, Inc. -- http://www.compassminerals.com/-- is the
second-leading salt producer in North America and the largest in
the United Kingdom.  The company operates ten production and
packaging facilities, including the largest rock salt mine in the
world in Goderich, Ontario.  The company's product lines include
salt for highway deicing, consumer deicing, water conditioning,
consumer and industrial food preparation, agriculture and
industrial applications.  In addition, Compass Minerals is North
America's leading producer of sulfate of potash, which is used in
the production of specialty fertilizers for high-value crops and
turf, and magnesium chloride, which is a premium deicing and dust
control agent.


CRC HEALTH: Earns $400,000 in Third Quarter of 2006
---------------------------------------------------
CRC Health Corporation reported results for the third quarter and
nine months ended Sept. 30, 2006, reflecting contributions from
its 2006 acquisitions, its acquisition of Sierra Tucson in May
2005 and other acquisitions in 2005 and continued organic growth.  
CRC completed three acquisitions during the third quarter of 2006.

             Bain Capital Partners' acquisition of CRC

Investment funds managed by Bain Capital Partners LLC completed on
Feb. 6, 2006, the acquisition of CRC for approximately
$723 million.

As part of the transaction, certain members of the CRC management
team partnered with Bain by retaining an equity stake in CRC.  The
acquisition resulted in several large expenses for merger-related
costs in the nine months ended Sept. 30, 2006.

The date of the Bain acquisition was Feb. 6, 2006, but for
accounting purposes and to coincide with its normal financial
closing, CRC has utilized Jan. 31, 2006, as the effective date of
the Bain acquisition.

As a result, CRC has reported operating results and financial
position for all periods presented prior to Jan. 31, 2006, as
those of the Predecessor Company and for all periods from and
after Feb. 1, 2006, as those of the Successor Company due to the
resulting change in the basis of accounting.

CRC's operating results for the nine months ended Sept. 30, 2006,
are presented as the mathematical addition of CRC's operating
results for the month ended Jan. 31, 2006, to the operating
results for the eight months ended Sept. 30, 2006.

This approach is not consistent with accounting principles
generally accepted in the United States of America and may yield
results that are not strictly comparable on a period-to-period
basis primarily due to the impact of purchase accounting entries
recorded as a result of the Transactions.

However, CRC's management believes that it is a meaningful way to
present CRC's results of operations for the nine months ended
Sept. 30, 2006.

In addition, due to differences in the basis of accounting,
results for the nine months ended Sept. 30, 2006, are not
comparable to results of the nine months ended Sept. 30, 2005.

                   Historical Financial Results

   -- Net revenue for the third quarter of 2006 increased by
      $9.6 million, or 17.2%, to $65.5 million as compared with
      $55.9 million in the third quarter of 2005.

      The net revenue growth was driven by net revenue increases
      of $7.9 million, or 22.9% and $1.7 million, or 8.1%, in
      CRC's residential and opiate treatment segments,
      respectively.  The net revenue growth in the residential and
      opiate treatment segments was mainly driven by same-facility
      revenue increases of 11.8% and 3.9%, respectively, which was
      the result of increases in average daily census and net
      revenue per patient day.  

      In addition, $3.9 million and $500,000 of the residential
      and opiate treatment segments' revenue growth, respectively,
      is attributable to the 2005-2006 acquisitions that were not
      included in the third quarter of 2005.

   -- Net revenue for the nine months ended Sept. 30, 2006,
      increased by $35 million, or 23.2%, to $186.1 million as
      compared with $151.1 million in the nine months ended
      Sept. 30, 2005.

      The net revenue growth was driven by net revenue increases
      of $30.1 million, or 33.9% and $4.6 million, or 7.5%, in
      CRC's residential and opiate treatment segments,
      respectively.

      The residential treatment segment revenue growth was mainly
      driven by 2005-2006 acquisitions growth of $20.8 million and
      partially due to the same-facility increase of $9.1 million,
      which was the result of increases in average daily census
      and net revenue per patient day.

      The opiate treatment segment revenue growth was mainly
      driven by same-facility revenue increase of $3 million,
      which was the result of increases in average daily census
      and net revenue per patient day.

   -- CRC's operating margins declined to 21.2% during the third
      quarter of 2006 compared with 24.7% in the third quarter of
      2005.

      The decline was due primarily to an increase of $1.2 million
      in depreciation and amortization expense resulting from an
      increase in the fair value of CRC's assets recorded in
      connection with the Transactions and a non-cash charge of
      $1 million relating to option-based employee compensation
      expense.

      On a same-facility basis, CRC's operating margins increased
      to 38.4% during the third quarter of 2006, as compared with
      36.5% in the third quarter of 2005.

   -- CRC's operating margins declined to -1.8% in the nine months
      ended Sept. 30, 2006, as compared with 23.7% in the same
      period of 2005.

      The decline was due primarily to one-time expenses of
      $43.7 million related to the Transactions, and to a lesser
      extent, from the increase of $3.9 million in depreciation
      and amortization expense resulting from an increase in the
      fair value of CRC's assets recorded in connection with the
      Transactions and a non-cash charge of $2.6 million relating
      to option-based employee compensation expense.

      On a same-facility basis, CRC's operating margins increased
      to 35.9% during the nine months ended Sept. 30, 2006, as
      compared with 35.2% in the same period of 2005.

   -- Net income for the third quarter of 2006 was $400,000
      compared with $6 million in the third quarter of 2005.

      The net income decline was mainly due to a $5.5 million
      increase in interest expense resulting from the issuance of
      new senior and subordinated debt related to the
      Transactions.

      In addition, interest and other (expense) income includes a
      loss of $1.5 million in fair value of interest rate swap
      agreement compared with a gain of $1.4 million in the third
      quarter of 2005.

   -- Net loss for the nine months ended Sept. 30, 2006, was
      $35.8 million compared with net income of $13.1 million in
      the nine months ended Sept. 30, 2005.

      The net loss was mainly due to one-time transaction expenses
      of $43.7 million incurred in connection with the
      Transactions and a $25.3 million increase in interest and
      other financing expense resulting from the issuance of new
      senior and subordinated debt related to the Transactions.

      In addition, interest and other income includes a loss of
      $1.5 million in fair value of interest rate swap agreement
      compared with a gain of $1.2 million in the nine months
      ended Sept. 30, 2005.

                    Pro Forma Financial Results

Adjusted pro forma EBITDA was $18.5 million for the quarter ended
Sept. 30, 2006, compared with $16.9 million for the quarter ended
Sept. 30, 2005, an increase of $1.6 million, or 9.2%.

Adjusted pro forma EBITDA was $55.9 million for the nine months
ended Sept. 30, 2006, compared with $49.5 million for the nine
months ended Sept. 30, 2005, an increase of $6.4 million, or 13%.

Cupertino, Calif.-based CRC Health Corporation owns and operates
drug and alcohol rehabilitation facilities and clinics
specializing in the treatment of chemical dependency and mental
health disorders through a network of more than 100 facilities
across 23 states.

                           *     *     *

Moody's Investors Service confirmed CRC Health Corporation's B2
Corporate Family Rating in connection with the rating agency's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology.


CREDIT SUISSE: S&P Holds Low-B Ratings on Six Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on six
classes of commercial mortgage pass-through certificates from
Credit Suisse First Boston Mortgage Securities Corp.'s series
2003-C5.

Concurrently, ratings are affirmed on all other classes from
the same series.

The raised and affirmed ratings on the pooled certificates reflect
credit enhancement levels that provide adequate support through
various stress scenarios.  The upgrades of several senior
certificates reflect the defeasance of $99.4 million (8%) of the
pool's collateral since issuance.

As of the Oct. 17, 2006, remittance report, the collateral pool
consisted of 152 loans with an aggregate trust balance of
$1.19 billion, compared with 153 loans with a $1.26 billion
balance at issuance.  The master servicer, Midland Loan Services
Inc., reported primarily full-year 2005 financial information for
98% of the pool, which excludes the defeased collateral.  Based
on this information and excluding the defeased collateral,  
Standard & Poor's calculated a weighted average debt service
coverage of 1.82x, compared with 1.75x at issuance.

All of the loans in the pool are current, except for one that is
90-plus-days delinquent and is the only asset with the special
servicer, ING Clarion Partners LLC.  To date, the trust has not
experienced a loss.

The top 10 loans secured by real estate have an aggregate
outstanding balance of $462.9 million (39%) and a weighted average
DSC of 2.19x, up from 2.08x at issuance.  The ninth-largest loan
is on the watchlist and is discussed below.  Standard & Poor's
reviewed property inspections provided by the master servicer for
all of the assets underlying the top
10 loans.  One property was characterized as "excellent," while
the remaining collateral was characterized as "good."

Credit characteristics for five of the top 10 loans in the pool
remain consistent with those of investment-grade obligations.

These are the details:

The largest loan in the pool, the Mall at Fairfield Commons, has a
trust balance of $82.1 million and a whole-loan balance of
$109.6 million.  A $27.5 million pari passu portion is not
included in the trust and backs the certificates in another
transaction.  The loan is secured by 856,780 sq. ft. of a
1,046,726-sq.-ft. enclosed regional mall built in 1993 in
Beavercreek, Ohio.  Occupancy was 100% as of year-end 2005.
Standard & Poor's adjusted net cash flow is similar to its level
at issuance.

Stanford Shopping Center, the second-largest loan in the pool, has
a trust balance of $75.0 million (6%) and a whole-loan balance of
$165 million.  A $90 million pari passu portion is not included in
the trust and supports certificates in another transaction.  In
addition, $55 million in mezzanine financing is in place.  The
loan is secured by 534,013 sq. ft. of a 1,367,351-sq.-ft. open-air
regional mall in Stanford, CA.  The property is subject to ground
leases from Stanford University. The sponsor of the loan and
manager of the property is Simon Property Group Inc.
(A-/Stable/--).  Standard & Poor's adjusted NCF is 13% above its
level at issuance.

The third-largest loan, the Mayfair Mall and Office Complex, has a
trust balance of $74.8 million and whole-loan balance of $186.4
million.  In addition to the trust balance, there are three pari
passu pieces totaling $112.10 million that support certificates in
two other transactions.  The loan is secured by 858,165 sq. ft. of
the 1,068,879-sq.-ft. Mayfair Mall and four office properties
totaling 419,318 sq. ft.  All of the properties are located in the
Milwaukee suburb of Wauwatosa, Wis.  The sponsor of the loan and
manager of the property is General Growth Properties Inc.
(BBB-/Negative/--).  Standard & Poor's adjusted NCF is 12% above
its level at issuance.
    
Paramount Plaza is the fourth-largest loan, with a trust and
whole-loan balance of $43.4 million (4%).  The loan is secured by
two 20-story office towers in Los Angeles totaling 911,900 sq. ft.  
Year-end 2005 occupancy was 87%. Standard & Poor's adjusted NCF is
10% above its level at issuance.

Eastbridge Landing is the seventh-largest loan, with a trust
balance of $32.5 million and a whole-loan balance of
$78.7 million.  A $46.2 million subordinate mortgage is held
outside of the trust.  The loan is secured by a 210-unit
multifamily property at 33rd Street and First Avenue in Manhattan,
one block away from the NYU Medical Center.  Occupancy was 88% as
of year-end 2005.  Standard & Poor's adjusted NCF is comparable to
its level at issuance.

Midland reported a watchlist of 24 loans with an aggregate
outstanding balance of $134.8 million (11%), which includes one of
the top 10 loans in the pool.  Janss Court, which is the ninth-
largest loan in the pool, is secured by a 125,709-sq.-ft. mixed-
use property in Santa Monica, Ca., comprising 58,282 sq. ft. of
office space, 34,121 sq. ft. of retail space, and 32 multifamily
units.  The loan is on the watchlist because of a
decline in DSC to 1.04x at year-end 2005 from 1.38x at issuance.

The Morris Manor Apartment loan ($850,827, 0.07%) is 90-plus-days
delinquent and was transferred to the special servicer in October
of this year.  The loan is secured by a 54-unit multifamily
property built in 1931 and renovated in 2001 in Buffalo, NY.  The
property, which has 30 vacant units, has been in receivership with
the city of Buffalo since May 2006 due to numerous code violations
and was in the process of being condemned when the
loan was transferred to the special servicer.  The city court
recently approved the special servicer's recommended replacement
receiver/property manager.

There are also potential environmental and security issues with
the property.  An appraisal has been requested and is expected
later this month. Standard & Poor's expects a loss upon the
disposition of this asset based on the information provided.
     
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
     
         Credit Suisse First Boston Mortgage Securities Corp.
    Commercial Mortgage Pass-Through Certificates Series 2003-C5
    
                         Rating
                         ------
            Class     To      From     Credit enhancement(%)
            -----     --      ----     ---------------------
            B         AA+     AA               13.63
            C         AA      AA-              12.30
            D         AA-     A                 9.66
            E         A       A-                8.20
            F         A-      BBB+              6.75
            G         BBB+    BBB               5.56

                        Ratings Affirmed
     
         Credit Suisse First Boston Mortgage Securities Corp.
     Commercial Mortgage Pass-Through Certificates Series 2003-C5

          Class    Rating         Credit enhancement(%)
          -----    ------         ----------------------
          A-1      AAA                    16.93
          A-2      AAA                    16.93
          A-3      AAA                    16.93
          A-4      AAA                    16.93
          A-1A     AAA                    16.93
          H        BBB-                    4.37
          J        BB+                     3.57
          K        BB                      3.04
          L        BB-                     2.51
          M        B+                      1.85
          N        B                       1.72
          O        B-                      1.32
          A-X      AAA                      N/A
          A-SP     AAA                      N/A

                      N/A - Not applicable.


DEUTSCHE ALT-A: Moody's Rates Class I-M-10 Certificates at Ba2
--------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to senior
certificates issued by Deutsche Alt-A Securities Mortgage Loan
Trust, Series 2006-AR5, and ratings ranging from Aa1 to Ba2 to
some subordinate certificates in the deal.

The securitization is backed by two groups of collateral. Group I
is backed by IndyMac Bank F.S.B (21.1%), American Home Mortgage
(20.9%), GreenPoint Mortgage Funding, Inc. (17.7%) and other
mortgage lenders (40.3%, none individually originating over 10% of
the Group I) originated, adjustable-rate, Alt-A mortgage loans
acquired by DB Structured Products, Inc.

The ratings are based primarily on the credit quality of the loans
and on the protection against credit losses provided by
subordination, excess spread, and overcollateralization.

The ratings also benefit from interest-rate swap and cap
agreements provided by Deutsche Bank and The Bank of New York,
respectively.

Moody's expects collateral losses of the Group I to range from
1.25% to 1.45%.

Meanwhile, Group II collateral is backed by GreenPoint Mortgage
Funding, Inc. (31.5%) and other mortgage lenders originated,
fixed-rate, Alt-A mortgage loans acquired by DB Structured
Products, Inc.

Moody's ratings are based primarily on the credit quality of the
loans and on the protection against credit losses provided by
subordination.

Moody's expects collateral losses of the Group II to range from
0.55% to 0.75%.

GMAC Mortgage, LLC, Indymac Bank, F.S.B., GreenPoint Mortgage
Funding, Inc. and other mortgage servicers will service the loans,
and Wells Fargo Bank, N.A. will act as master servicer. Moody's
has assigned Wells Fargo its top servicer quality rating of SQ1 as
a master servicer of mortgage loans.

These are the rating actions:

   * Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-
     AR5

   * Mortgage Pass-Through Certificates

                    Class I-A-1, Assigned Aaa
                    Class I-A-2, Assigned Aaa
                    Class I-A-3, Assigned Aaa
                    Class I-A-4, Assigned Aaa
                    Class II-1A, Assigned Aaa
                    Class II-2A, Assigned Aaa
                    Class II-3A, Assigned Aaa
                    Class II-X1, Assigned Aaa
                    Class II-X2, Assigned Aaa
                    Class II-PO, Assigned Aaa
                    Class I-M-1, Assigned Aa1
                    Class I-M-2, Assigned Aa2
                    Class I-M-3, Assigned Aa3
                    Class I-M-4, Assigned A1
                    Class I-M-5, Assigned A2
                    Class I-M-6, Assigned A3
                    Class I-M-7, Assigned Baa1
                    Class I-M-8, Assigned Baa2
                    Class I-M-9, Assigned Baa3
                    Class I-M-10, Assigned Ba2


EDDIE BAUER: Inks Merger Deal With Equity Firms for $614 Million
----------------------------------------------------------------
Eddie Bauer Holdings Inc. and Eddie B Holding Corp., a company
owned by affiliates of Sun Capital Partners Inc. and Golden Gate
Capital, have entered into a definitive agreement under which
Eddie B Holding Corp. has agreed to acquire Eddie Bauer for
$9.25 per share in cash.

The per share consideration represents an approximate 12% premium
to the prior four weeks' average closing price of Eddie Bauer's
common stock.

The total transaction value is approximately $614 million,
including debt to be repaid of approximately $328 million, as of
Sept. 30, 2006.

The sale is the culmination of an exploration of strategic
alternatives initiated by Eddie Bauer in May 2006.

Fabian Mansson, chief executive officer of Eddie Bauer, commented,
"Following a comprehensive review process, our Board of Directors
has unanimously determined that the transaction announced
[yester]day is in the best interests of our Company and its
stockholders.

"We believe that the transaction will provide Eddie Bauer with new
resources and the time necessary to execute our turnaround
strategy.

"We look forward to partnering with Sun Capital and Golden Gate,
who bring extensive experience in the retail and catalog sectors,
to take our Company to the next level and to capitalize on the
potential of the Eddie Bauer brand."

Gary Talarico, managing director of Sun Capital Partners Inc.
added, "We are pleased to join with Golden Gate Capital in signing
this definitive agreement to acquire one of the best known brands
in the apparel industry.

"We are particularly excited about the combination of the
considerable experience of our respective firms in retailing,
apparel, and direct marketing and look forward to working with the
management of Eddie Bauer to continue the success and growth of
the brand."

Stefan Kaluzny, managing director at Golden Gate Capital said, "We
are very pleased to have reached an agreement with the Eddie Bauer
Board of Directors, and we look forward to working with the
Company to continue to serve its customers with outstanding
products consistent with the Eddie Bauer heritage."

Affiliates of Sun Capital Partners Inc. and Golden Gate Capital
are active investors in the retail and consumer products
industries.

Among Sun Capital's current affiliated portfolio companies are
Mervyn's, Shopko Stores, Lillian Vernon, Marsh Supermarkets,
Anchor Blue Retail Group, Dim Branded Apparel, and Most.

Among Golden Gate Capital's current investments is Catalog
Holdings, a $1.1 billion revenue direct marketer of women's
apparel whose brands include Spiegel, Newport News, Appleseed's,
Norm Thompson, Drapers and Damons, Venus, and Haband, among other
titles.  Other consumer products investments include Herbalife,
Eye Care Centers of America, Neways, and Leiner Health Products.

The transaction, which is anticipated to close in the first
quarter of 2007, is subject to the approval of Eddie Bauer
stockholders and other customary closing conditions, including
Hart-Scott-Rodino antitrust review.  The transaction is not
subject to a financing condition.

The Board of Directors of Eddie Bauer has unanimously approved the
merger agreement and recommends that Eddie Bauer's stockholders
vote to approve the agreement.

The Company expects to file its preliminary proxy statement with
respect to the transaction within 10 days.  

A full-text copy of the merger agreement is available for free at:

               http://ResearchArchives.com/t/s?14f4

Goldman Sachs & Co. served as Eddie Bauer's financial advisor in
connection with the transaction and Goldman Sachs & Co. and
William Blair & Company each rendered separate fairness opinions
to the Eddie Bauer Board of Directors as to the fairness, from a
financial point of view, of the consideration to be received by
Eddie Bauer's stockholders in the merger.

                    About Sun Capital Partners

Sun Capital Partners Inc. is a private investment firm focused on
leveraged buyouts, equity, debt, and other investments in
companies that can benefit from its in-house operating
professionals and experience.  Sun Capital affiliates have
invested in and managed more than 135 companies worldwide with
combined sales in excess of $30 billion since Sun Capital's
inception in 1995.  Sun Capital has offices in Boca Raton, Los
Angeles, New York, London, and Shenzhen.

                     About Golden Gate Capital

Golden Gate Capital -- http://www.goldengatecap.com/-- is a  
private equity firm with over $2.6 billion of capital under
management dedicated to investing in change-intensive
opportunities.  The firm's charter is to partner with world-class
management teams to make equity investments in situations where
there is a demonstrable opportunity to significantly enhance a
company's value.  The principals of Golden Gate Capital have a
long and successful history of investing with management partners
across a wide range of industries and transaction types.

                    About Eddie Bauer Holdings

Headquartered in Redmond, Washington, Eddie Bauer Holdings Inc.
(NASDAQ: EBHI) -- http://www.eddiebauer.com/-- is a specialty  
retailer that sells casual sportswear and accessories for the
"modern outdoor lifestyle."  Established in 1920 in Seattle, Eddie
Bauer products are available at approximately 380 stores
throughout the United States and Canada, through catalog sales and
online at http://www.eddiebaueroutlet.com/ The Company also  
participates in joint venture partnerships in Japan and Germany
and has licensing agreements across a variety of product
categories.  Eddie Bauer employs approximately 10,000 part-time
and full-time associates in the United States and Canada.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 13, 2006,
Moody's Investors Service confirmed Eddie Bauer Inc.'s B2
Corporate Family Rating and B2 rating on the Company's $300
million term loan in connection with the rating agency's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology.


EDDIE BAUER: Sun Capital & Golden Gate Pact Cues S&P's Neg. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its Credit Watch
listing on specialty apparel retailer Eddie Bauer Holdings Inc. to
negative from developing.  

The rating action was after the company's disclosure that it has
entered into an agreement to be acquired by affiliates of Sun
Capital Partners Inc. and Golden Gate Capital for about
$286 million in cash and the assumption of about $328 in debt.

"We believe that this transaction could increase debt leverage and
weaken credit protection measures due to the potential for
additional debt to fund the acquisition," said Standard & Poor's
credit analyst Ana Lai.

The Redmond, Washington-based Eddie Bauer announced in May 2006
that it intended to explore strategic alternatives to increase
shareholder value, including a possible sale of the company.
Ratings on Eddie Bauer were initially placed on CreditWatch with
developing implications on May 26, 2006.

Operating performance for the quarter ended July 1, 2006, was
disappointing, with comparable-store sales decreasing 5.9% and
gross margin declining to 37.7% from 43.1% a year earlier.
Negative sales, lower gross margin, and higher operating expenses
resulted in operating losses of $2.8 million in the quarter,
compared to operating income of $21 million a year earlier.  Due
to the weak performance, total debt to EBITDA exceeded 6x for the
12 months ended July 1, 2006.


EMMIS COMMS: Earns $110 Million in Fiscal Quarter Ended Aug. 31
---------------------------------------------------------------
Emmis Communications Corporation reported results for its second
fiscal quarter ended Aug. 31, 2006.

"Similar to our competitors, we continue to face challenges in our
largest radio markets.  However, several recent actions suggest
that the innovative team at Emmis is leading a resurgence in these
markets," Emmis chairman and chief executive officer Jeff Smulyan
said.

"I'm particularly excited by the early response to our new morning
show at Q101 in Chicago and the Movin 93.9 format in Los Angeles,
as well as our rebound at Power 106.  We remain focused on our
operations, particularly in our largest radio markets, and on
delivering value to our shareholders."

For the second fiscal quarter, reported net revenue was
$99.9 million, compared with $104.7 million for the same quarter
of the prior year, a decrease of 4.6%.  The decrease related to
weakness in the New York and Los Angeles radio markets.

For the second quarter, reported radio net revenues decreased
5.6%, while publishing net revenues were flat.

For the three months ended Aug. 31, 2006, the Company reported a
$110.036 million of net income available to common shareholders
compared with $6.184 million of net income in the comparable
period of 2005.

For the second quarter, operating income was $22 million compared
with $27.6 million for the same quarter of the prior year.  
Included in operating income in the second quarter of the current
year is $2.4 million of costs incurred by Emmis to evaluate a
proposal from Mr. Smulyan to acquire all of the outstanding common
stock of the company.

These costs are reflected in corporate expenses.  Emmis' station
operating income for the second quarter was $34.4 million,
compared with $40.8 million for the same quarter of the prior
year.

International radio net revenues and station operating expenses
for the quarter ended Aug. 31, 2006, were $9.3 million and
$5.4 million, respectively.

In May 2005, Emmis announced its intention to sell its 16-station
television group.  To date, 14 stations have been sold.  WVUE-TV
(New Orleans) and KGMB-TV (Honolulu) remain in the portfolio.

                           ECC Proposal

On May 8, 2006, Emmis announced that ECC Acquisition Inc., a
corporation wholly owned by Jeff Smulyan, the chairman, chief
executive officer and controlling shareholder of the Company, had
made a non-binding proposal to acquire the outstanding publicly
held shares of Emmis for $15.25 per share in cash.

In response to the proposal, the Board of Directors of Emmis
formed a special committee of three independent directors to
consider the proposal.  

On Aug. 4, 2006, the Company received a letter from ECC
Acquisition Inc. withdrawing the proposal.  While subsequent
discussion of reinstituting an offer took place between Smulyan
and representatives of the special committee, those discussions
ceased on Aug. 31, 2006, without a new offer being made.

                            Assets Sale

On July 7, 2006, Emmis closed on its sale of WBPG-TV in Mobile,
Ala./Pensacola, Fla. to LIN Television Corporation for $3 million
in cash.

LIN Television Corporation had been operating WBPG-TV under a
Local Programming and Marketing Agreement since Nov. 30, 2005.  
Emmis used the proceeds to repay outstanding debt obligations.

On July 11, 2006, Emmis closed on its sale of KKFR-FM in Phoenix
to Bonneville International Corporation for $77.5 million in cash
and also sold certain tangible assets to Riviera Broadcast Group
LLC for $100,000 in cash.  Emmis used the proceeds to repay
outstanding debt obligations.

On Aug. 31, 2006, Emmis closed on its sale of WKCF-TV in Orlando
to Hearst-Argyle Television Inc. for $217.5 million in cash.  
Emmis used a portion of the proceeds to repay outstanding debt
obligations.

                             Dividend

Subsequent to the quarter end, the company's Board of Directors
announced that it had authorized Emmis management to take the
necessary steps to enable the Board to declare a special cash
dividend of $4 per share payable pro rata to all holders of the
Company's common stock.

To facilitate the dividend, Emmis expects to enter into an amended
and restated credit facility and formally commenced that process
with a bank meeting on Oct. 11, 2006.  Emmis expects to complete
these transactions by the end of its quarter ending Nov. 30, 2006.

                           Tender Offer

Emmis also announced after quarter end that Emmis Operating
Company had completed an offer to purchase, at par, $339.6 million
of the outstanding 6-7/8% Senior Subordinated Notes due in 2012
pursuant to an asset sale offer required under the indenture for a
portion of the Notes and a separate tender offer for the balance
of the notes.

The payment of the special dividend will not be conditioned on the
results of the offers or the consent solicitation.  

On a pro forma basis, the Company expects its radio net revenues
for its quarter ending Nov. 30, 2006, to decline by low double
digits and its radio station operating expenses to increase by low
single digits as compared to the same period of the prior year.

Also, the Company expects its corporate expenses in the quarter
ending Nov. 30, 2006, to reflect approximately $2 million of costs
associated with its special $4 per share dividend.

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

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 16, 2006,
Moody's Investors Service downgraded Emmis Communications Corp.'s
Corporate Family rating from Ba3 to B1 and assigned a B1 rating to
the $600 million senior secured credit facilities of Emmis'
subsidiary, Emmis Operating Company.

As reported in the Troubled Company Reporter on Oct. 16, 2006,
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Emmis Communications Corp. and subsidiary Emmis
Operating Co. by one notch, to 'B' and S&P assigned its 'B' bank
loan rating to Emmis Operating's $600 million secured credit
facility.


ENERGYTEC INC: Posts $1.16 Million Net Loss in 2006 Second Quarter
------------------------------------------------------------------
Energy Tec Inc. reported a $1,169,054 net loss on $2,641,814 of
total revenues for the second quarter ended June 30, 2006,
compared with a $1,007,895 net income on $4,444,041 of total
revenues for the same period in 2005.

The company's oil and gas revenues increased by 241% in the second
quarter compared to the same period in 2005.  There were no gains,
however, from sales of working interests for the second quarter of
2006, unlike in the second quarter of 2005 when the company
reported a gain of $2,753,520.  This accounts for the decrease in
total revenues reported in the second quarter.   

At June 30, 2006, the company's balance sheet showed $53.5 million
in total assets, $22 million in total liabilities, and
$31.5 million in stockholders' equity.

The company's balance sheet at June 30, 2006, also showed strained
liquidity with $6,015,914 in total current assets available to pay
$18,168,967 in total current liabilities.

Full-text copies of the company's consolidated financial
statements are available for free at:

               http://researcharchives.com/t/s?14bc

                       Going Concern Doubt

As reported in the Troubled Company Reporter on July 27, 2006,
Turner Stone & Company, L.L.P., in Dallas, Texas, raised
substantial doubt about Energytec's ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2005 and 2004.  The
auditor pointed to the company's:

   -- need to have cash reserves sufficient to meet its capital
      and operational expenditure budget of approximately
      $15,000,000 for the year ending Dec. 31, 2006, and

   -- belief that it may have potential liability for rescission
      or damages to investors in the working interest programs and
      purchasers of the company's common stock in private
      placements.

                        About Energytec

Energytec, Inc. -- http://www.energytec.com/-- acquires oil and   
gas properties that have previously been the object of exploration
or producing activity, but which are no longer producing or
operating due to abandonment or neglect.  The company owns working
interests in 62,466 acres of oil and gas leases in Texas and
Wyoming that include 187 gross producing wells and 348 gross non-
producing wells.

The company also owns a gas pipeline of approximately 63 miles in
Texas and a well service business operated through its subsidiary,
Comanche Well Service Corporation.  On April 22, 2006, the company
formed two new wholly owned subsidiaries, Comanche Rig Services
Corporation, which provides contract drilling services to third
parties through the utilization of the drilling rigs owned by
Comanche Well Service; and Comanche Supply Corporation, which
sells and markets enhanced oil recovery chemicals and materials
related to well operation services.

Comanche Well Service Corporation became the operator of all the
properties owned by Energytec on April 1, 2006, by posting a cash
bond of $250,000 with the Texas Railroad Commission.


EXTENDICARE HEALTH: S&P Withdraws 'BB-' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all its ratings on
Extendicare Health Services and Extendicare Inc., including the
'BB-' corporate credit rating, after removing them from
CreditWatch.  The company today completed its conversion into a
Canadian real estate investment trust.  All of Extendicare's prior
debt has been refinanced.


FINOVA GROUP: Earns $4.63 Million in 2006 Third Quarter
-------------------------------------------------------
The Finova Group Inc. reported a $4.63 million net income on
$12.21 million of revenues for the quarter ended Sept. 30, 2006,
compared with a $37.16 million net loss on $22.77 million of
revenues for the same period in 2005.

At Sept. 30, 2006, the Company's balance sheet showed
$473.55 million in total assets and $1,076.45 million in total
liabilities, resulting in a $602.90 million stockholders' deficit.

Full-text copies of the Company's third quarter financial
statements are available for free at:
                
              http://researcharchives.com/t/s?148e

                         Going Concern

As reported in the Troubled Company Reporter on May 16, 2006,
Ernst & Young LLP expressed substantial doubt about The Finova
Group Inc.'s ability to continue as a going concern after auditing
the company's financial statements for the year ended Dec. 31,
2005.  The auditing firm pointed to the company's negative net
worth as of Dec. 31, 2005 as well as its limited sources of
liquidity to satisfy its obligations.
                                
                            About Finova

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Pachulski, Stang, Ziehl, Young &
Jones P.C. and Wachtell, Lipton, Rosen & Katz represent the
Official Committee of Unsecured Creditors.  Daniel J.
DeFranceschi, Esq., at Richards, Layton & Finger, P.A., represents
the Debtors.  FINOVA has since emerged from Chapter 11 bankruptcy.
Financial giants Berkshire Hathaway and Leucadia National
Corporation (together doing business as Berkadia) own FINOVA
through the almost $6 billion lent to the commercial finance
company.  Finova is winding up its affairs.


FIRST FRANKLIN: Moody's Rates Class B1 Certificates at Ba1
----------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by First Franklin Mortgage Loan Trust 2006-
FFA, and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.

The securitization is backed by First Franklin-originated fixed-
rate closed end second mortgage loans acquired by Lehman Brothers
Holdings Inc. and First Franklin Financial Corporation.  The
ratings are based primarily on the credit quality of the loans and
on the protection offered by subordination, overcollateralization,
and excess spread.  The ratings also benefit from an interest rate
swap and a rate cap between the trust and Wachovia Bank, N.A.

Moody's expects collateral losses to range from 9.25% to 9.75%.

National City Home Loan Services, Inc. will service the loans.
Aurora Loan Services LLC will act as master servicer.

Moody's has assigned National City Home Loan Services, Inc. its
servicer quality rating of SQ2 as a primary servicer of second
lien mortgage loans.  Moody's has assigned Aurora Loan Services,
LLC its servicer quality rating of SQ1- as a master servicer of
mortgage loans.

These are the rating actions:

   * First Franklin Mortgage Loan Trust 2006-FFA

   * Mortgage Pass-Through Certificates, Series 2006-FFA

                    Cl. A1, Assigned Aaa
                    Cl. A2, Assigned Aaa
                    Cl. A3, Assigned Aaa
                    Cl. A4, Assigned Aaa
                    Cl. M1, Assigned Aa1
                    Cl. M2, Assigned Aa2
                    Cl. M3, Assigned Aa3
                    Cl. M4, Assigned A1
                    Cl. M5, Assigned A2
                    Cl. M6, Assigned A3
                    Cl. M7, Assigned Baa1
                    Cl. M8, Assigned Baa2
                    Cl. M9, Assigned Baa3
                    Cl. B1, Assigned Ba1


FOAMEX INTERNATIONAL: Gets Okay to Pay All Rating Agency Fees
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes
Foamex International Inc. and its debtor-affiliates to pay all
rating agency fees and enter into any documentation with Standard
& Poor's, a division of The McCraw Companies, Inc., and Moody's
Investor Service, Inc., incidental to it.

Judge Walsh permits the Debtors to file the Fee Letter under seal,
which will not be made available to anyone except redacted copies
will be provided to:

   (a) the counsel to the Official Committee of Unsecured
       Creditors;

   (b) the counsel to the Ad Hoc Committee of Senior Secured
       Noteholders;

   (c) the counsel to the U.S. Trustee; and

   (d) the Rating Agencies.

The Court adjourns the hearing with respect to the remainder of
the Debtors' request on Nov. 21, 2006.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FOAMEX INTERNATIONAL: Wants Hepbron Settlement Agreement Approved
-----------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to approve the
Settlement Agreement with Hepbron Vending and Food Services Inc.

Foamex International, Inc., and Hepbron Vending and Food
Services, Inc., were parties to a two-year self-renewing
Exclusive Location Agreement dated Jan. 11, 2001, pursuant to
which, Hepbron will supply vending machines to the Debtors to
provide food and beverages to their employees.

In October 2004, Hepbron commenced a civil action against Foamex
in the Court of Common Pleas of Delaware County, Pennsylvania,
seeking damages of $50,000 in connection with a dispute arising
due to the cancellation of the Contract.

On December 7, 2005, Hepbron filed Claim No. 833 for $6,000 in the
Debtors' Chapter 11 cases.  The Claim represented the amount of
damages Hebron was seeking pursuant to the lawsuit.

On August 23, 2006, the Debtors, in an objection, asked the Court
to deem Claim No. 833 as unliquidated.  The Court sustained the
objection.

The parties have agreed to resolve the issues between them with
respect to the Civil Action and Claim No. 833.

In a settlement agreement, the parties agree that:

   (a) Foamex will allow Hepbron a general unsecured claim for
       $2,500, which liquidates Claim No. 833; and

   (b) the parties will mutually release each other from any and
       all claims or actions in connection with the Civil Action
       or the Claim.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FREMONT HOME: Moody's Rates Class M10 Certificates at Ba1
---------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by Fremont Home Loan Trust 2006-D and ratings
ranging from Aa1 to Ba1 to the subordinate certificates in the
deal.

The securitization is backed by Fremont Investment & Loan
originated, adjustable-rate and fixed-rate, subprime mortgage
loans acquired by Fremont Mortgage Securities Corporation.  

The ratings are based primarily on the credit quality of the loans
and on protection against credit losses provided by subordination,
excess spread, and overcollateralization.  The ratings also
benefit from an interest-rate swap agreement provided by Deutsche
Bank AG, New York Branch.

Moody's expects collateral losses to range from 5.05% to 5.55%.

Fremont Investment & Loan will service the mortgage loans and
Wells Fargo Bank, National Association will act as master
servicer.  Moody's has assigned Fremont its servicer quality
rating of SQ3+ as a servicer of subprime mortgage loans.

Moody's has assigned Wells Fargo its top servicer quality rating
of SQ1 as a master servicer of mortgage loans.

These are the rating actions:

   * Fremont Home Loan Trust 2006-D

   * Mortgage-Backed Certificates, Series 2006-D

                    Cl. 1-A1, Assigned Aaa
                    Cl. 2-A1, Assigned Aaa
                    Cl. 2-A2, Assigned Aaa
                    Cl. 2-A3, Assigned Aaa
                    Cl. 2-A4, Assigned Aaa
                    Cl. M1, Assigned Aa1
                    Cl. M2, Assigned Aa2
                    Cl. M3, Assigned Aa3
                    Cl. M4, Assigned A1
                    Cl. M5, Assigned A2
                    Cl. M6, Assigned A3
                    Cl. M7, Assigned Baa1
                    Cl. M8, Assigned Baa2
                    Cl. M9, Assigned Baa3
                    Cl. M10, Assigned Ba1


GENERAL MOTORS: Plans $1.5 Billion Secured Loan by Year-End 2006
----------------------------------------------------------------
General Motors Corp. plans to execute a $1.5 billion senior
secured term loan facility with a seven-year maturity.  

The facility is intended to further enhance GM's liquidity
position and take advantage of robust market conditions.  GM's
ability under some of its existing bond indentures to pledge U.S.
property, plant and equipment is likely to be affected in the
future by new rules applicable to pension and OPEB accounting,
which could cause GM's shareholders' equity in its year-end 2006
financial statements to be negative.  

Under the proposed terms, the lenders under the facility will
receive a first priority security interest in machinery and
equipment and special tools located at GM's U.S. manufacturing
facilities.

J.P. Morgan Securities Inc. and Credit Suisse Securities (USA) LLC
are the arrangers of the facility, and JPMorgan Chase Bank, N.A.
is the administrative agent.

GM anticipates that the execution of this facility will be
completed by year-end.  Completion of the transaction is subject
to final documentation and other conditions, and there is no
assurance regarding timing or successful completion of the
transaction.  

                       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.


GENERAL MOTORS: Moody's Rates Proposed $1.5 Billion Loan at Ba3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
proposed $1.5 Billion secured term loan of General Motors
Corporation.  The term loan is expected to be secured by a first
priority perfected security interest in all of the US machinery
and equipment, and special tools of GM and Saturn Corporation.

The rating reflects the favorable asset protection and recovery
potential that would be afforded to this instrument relative to
the company's unsecured obligations, as reflected in the LGD1
assessment, and LGD rate of 9%.

Moody's expects that the proceeds will be retained by GM and used
to enhance its liquidity position.  Bruce Clark, Senior Vice
President with Moody's said, "GM is going to need considerable
liquidity in order to fund the large cash requirements resulting
from its aggressive employee buy-out program, its participation in
any resolution of the Delphi reorganization, the operating losses
that will continue until its restructuring program takes hold, and
challenges posed by the 2007 UAW negotiations.  The company also
has to be prepared for any potential slowdown in the US economy."

"GM clearly recognizes the importance of maintaining sound
liquidity and it's making notable progress in this area. The
company currently has about $20 billion in cash, it recently
closed on a $4.5 billion secured revolving credit facility, and
the term loan would give it an additional $1.5 billion. A more
significant boost to its liquidity would be the $10 billion
expected from the GMAC sale which GM expects to complete by year
end," Clark added.

GM's B3 Corporate family rating, Ba3, LGD1, 9% secured revolving
credit facility rating, Caa1, LGD4, 59% senior unsecured rating,
SGL-3 Speculative Grade Liquidity rating, and negative outlook
remain unchanged.

Despite GM's continuing progress in establishing a sizable
liquidity cushion, the company continues to face daunting
operational and competitive challenges.  The increasingly
competitive position of Asian manufacturers and the shift in
consumer preference toward more fuel efficient vehicles will
continue to severely pressure the company's share position.  

This share pressure could limit GM's ability to generate
meaningful intermediate-term improvement in key credit metrics
despite its aggressive initiatives to reduce capacity and lower
costs.  As a result, the rating outlook remains negative.

General Motors Corporation, headquartered in Detroit, Michigan, is
the world's largest automotive manufacturer.


GREENWICH CAPITAL: Moody's Holds Low-B Ratings on 6 Cert. Classes
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of seven classes
and affirmed the ratings of 13 classes of Greenwich Capital
Commercial Funding Corp., Commercial Mortgage Pass-Through
Certificates, Series 2003-C1:

   Class A-1, $103,932,040, Fixed, affirmed at Aaa
   Class A-2, $264,045,000, Fixed, affirmed at Aaa
   Class A-3, $115,792,000, Fixed, affirmed at Aaa
   Class A-4, $442,352,000, Fixed, affirmed at Aaa
   Class B, $41,007,000, Fixed, upgraded to Aaa from Aa2
   Class C, $15,188,000, Fixed, upgraded to Aaa from Aa3
   Class D, $18,225,000, Fixed, upgraded to Aaa from A1
   Class E, $18,226,000, Fixed, upgraded to Aa2 from A2
   Class F, $10,631,000, Fixed, upgraded to Aa3 from A3
   Class G, $15,188,000, Fixed, upgraded to A2 from Baa1
   Class H, $19,744,000, Fixed, upgraded to Baa1 from Baa2
   Class J, $18,225,000, Fixed, affirmed at Baa3
   Class K, $15,188,000, Fixed, affirmed at Ba1
   Class L, $15,188,000, Fixed, affirmed at Ba2
   Class M, $7,594,000, Fixed, affirmed at Ba3
   Class N, $6,075,000, Fixed, affirmed at B1
   Class O, $9,113,000, Fixed, affirmed at B2
   Class P, $6,075,000, Fixed, affirmed at B3
   Class XP, Notional, affirmed at Aaa
   Class XC, Notional, affirmed at Aaa

As of the Nov. 7, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4% to
$1.17 billion from $1.22 billion at securitization.  The
Certificates are collateralized by 73 mortgage loans.  The loans
range in size from less than 1.0% to 7.5% of the pool, with the
top 10 loans representing 46.7% of the pool.  Six loans,
representing 21.2% of the pool, have defeased and have been
replaced with U.S. Government securities.

Included among the defeased loans are the second and third largest
loans Central Park and Waverly Village and 311 South Wacker Drive.  
There have not been any loans liquidated from the pool.  There are
currently two loans in special servicing, representing 0.5% of the
pool.  No losses are expected from these loans at the present
time.

Moody's was provided with calendar year 2005 operating results for
100.0% of the performing loans.  Moody's loan to value ratio is
88.1%, compared to 89.4% at securitization.  Moody's is upgrading
Classes B, C, D, E, F, G, and H due to defeasance and increased
subordination levels.

The top three remaining conduit loans represent 17.2% of the
outstanding pool balance.  

The largest conduit loan is the Puente Hills Mall Loan, which is
secured by a 749,274 square foot portion of a 1.2 million square
foot regional mall located approximately 20 miles east of Los
Angeles, in City of Industry, California.  

Built in 1974, the mall was significantly renovated and
repositioned in 1996.  The mall is anchored by Sears and
Robinson's May.  As of Aug. 2006 overall mall occupancy was 92.0%,
compared to 94.0% at securitization.  In-line occupancy was 87.0%,
compared to 92.0% at securitization.  The majority of the site is
owned as a fee simple interest; however a nine acre portion of the
site is held as a leasehold interest.  The ground lease extends
through 2059.

Moody's LTV is 96.2%, the same as at securitization.

The second largest conduit loan is the Oxmoor Center Mall Loan,
which is secured by a leasehold interest on a 517,000 square foot
portion of a 929,000 square foot regional mall located in
Louisville, Kentucky.  The ground lease extends through 2097.  The
mall is anchored by Sears, Macy's and Von Maur.  Built in 1971,
the mall was substantially renovated and expanded in 1998. As of
June 2006 overall mall occupancy was 92.0% compared to 94.0% at
securitization.  In-line occupancy was 74.0%, compared to 86.0% at
securitization.

Moody's LTV is 89.3%, compared to 89.6% at securitization.

The third largest conduit loan is the Harlem USA Loan, which is
secured by a leasehold interest in a five-story, 234,000 square
foot urban retail center located at the intersection of West 125th
Street and Frederick Douglass Boulevard in the Harlem submarket of
New York City.  The ground lease extends through 2097.  Key
tenants include Magic Johnson Theaters, Old Navy, K&G Men's
Company and New York Sports Club. Current occupancy is 87.0%
compared to 85% at securitization.

Moody's LTV is 75.9%, compared to 80.3% at securitization.


GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2
------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by GSAA Home Equity Trust 2006-17, and ratings
ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.

The securitization is backed by Countrywide Home Loans, Inc.
(29.36%), Goldman Sachs Mortgage Company (22.94%), SunTrust
Mortgage, Inc. (22.29%), GreenPoint Mortgage Funding, Inc.
(13.43%), and IndyMac Bank, F.S.B. (11.97%) originated adjustable-
rate Alt-A mortgage loans.

The ratings are based primarily on the credit quality of the loans
and on the protection from subordination, overcollateralization,
excess spread, and an interest rate swap agreement.

Moody's expects collateral losses to range from 1.20% to 1.40%.

Avelo Mortgage, LLC, Countrywide Home Loans Servicing LP,
GreenPoint Mortgage Funding, Inc., IndyMac Bank, F.S.B., and
SunTrust Mortgage, Inc. will service the loans. Wells Fargo Bank,
N.A. will act as master servicer. Moody's has assigned IndyMac
Bank, F.S.B. its servicer quality rating of SQ2 as a primary
servicer of prime mortgage loans and SunTrust Mortgage, Inc. its
servicer quality rating of SQ2+ as a primary servicer of prime
mortgage loans.

Furthermore, Moody's has assigned Wells Fargo Bank N.A. its top
servicer quality rating of SQ1 as a master servicer of mortgage
loans.

These are the rating actions:

   * GSAA Home Equity Trust 2006-17

   * Asset-Backed Certificates, Series 2006-17

                    Cl. A-1, Assigned Aaa
                    Cl. A-2, Assigned Aaa
                    Cl. A-3A, Assigned Aaa
                    Cl. A-3B, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A2
                    Cl. M-6, Assigned A3
                    Cl. B-1, Assigned Baa2
                    Cl. B-2, Assigned Baa3
                    Cl. B-3, Assigned Ba2


GSAMP TRUST: Moody's Rates Class B-2 Certificates  at Ba1
---------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by GSAMP Trust 2006-HE7, and ratings ranging
from Aa1 to Ba1 to the subordinate certificates in the deal.

The securitization is backed by fixed-rate and adjustable-rate
subprime mortgage loans acquired by SouthStar Funding, LLC, Aames
Capital Corporation, and NovaStar Mortgage, Inc.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
overcollateralization, and an interest rate swap agreement.

Moody's expects collateral losses to range from 5.05% to 5.55%.

Litton Loan Servicing LP, and Avelo Mortgage, L.L.C. will service
the loans. Wells Fargo Bank, N.A. will act as master servicer.

Moody's has assigned Litton its top servicer quality rating of SQ1
as primary servicer of subprime loans.

Furthermore, Moody's has assigned Wells Fargo its top servicer
quality rating of SQ1 as a master servicer.

These are the rating actions:

   * GSAMP Trust 2006-HE7

   * Mortgage Pass-Through Certificates, Series 2006-HE7

                    Cl. A-1, Assigned Aaa
                    Cl. A-2A, Assigned Aaa
                    Cl. A-2B, Assigned Aaa
                    Cl. A-2C, Assigned Aaa
                    Cl. A-2D, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A2
                    Cl. M-6, Assigned A2
                    Cl. M-7, Assigned A3
                    Cl. M-8, Assigned Baa1
                    Cl. M-9, Assigned Baa2
                    Cl. B-1, Assigned Baa3
                    Cl. B-2, Assigned Ba1


GSMPS MORTGAGE: Moody's Reviews Ratings and May Downgrade
---------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade three certificates from a GSMPS Mortgage deal, issued in
2003.  The transactions consist of securitizations of FHA insured
and VA guaranteed re-performing loans virtually all of which were
repurchased from GNMA pools.  The insurance covers a large percent
of any losses incurred as a result of borrower defaults.

The three most subordinate certificates from the GSMPS 2003-1
transaction have been placed on review for possible downgrade
because existing credit enhancement levels are low given the
current projected losses on the underlying pools.  Severities
appear to be high for FHA VA collateral causing erosion in credit
support.  Currently there is only a small amount of credit
enhancement the form a subordinate bond.

These are the rating actions:

   * Issuer: GSMPS Mortgage Loan Trust

   * Review for downgrade:

     -- Series 2003-1; Class B3, current rating Baa2, under
        review for possible downgrade;

     -- Series 2003-1; Class B4, current rating Ba2, under review
        for possible downgrade;

     -- Series 2003-1; Class B5, current rating B2, under review
        for possible downgrade.


GULFMARK OFFSHORE: Earns $39.8 Million in 2006 Third Quarter
------------------------------------------------------------
Gulfmark Offshore, Inc. reported a $39.8 million net income on
$75.8 million of revenues for the third quarter ended Sept. 30,
2006, compared with a $13 million net income on $53 million of
revenues for the same period in 2005.  

The increase in revenue compared to the third quarter a year ago
was primarily the result of increased day rates in all regions and
increased utilization in the company's North Sea and Southeast
Asia regions.  The company disclosed  that the third quarter's net
income and revenues figures represent the highest quarterly net
income and revenue in the history of the company.

At Sept. 30, 2006, the company's balance sheet showed
$699.5 million in total assets, $287.1 million in total
liabilities, and $412.4 million in total stockholders' equity.

Full-text copies of Gulfmark Offshore's third quarter financial
statements are available for free at:

               http://researcharchives.com/t/s?14ae
               
Headquartered in Houston, Texas, Gulfmark Offshore Inc. --
http://www.gulfmark.com/ -- together with its subsidiaries,   
provides offshore marine services primarily to companies involved
in offshore exploration and production of oil and natural gas.
The majority of the company's operations are in the North Sea with
the balance offshore Southeast Asia and the Americas.

                          *      *      *  

As reported in the Troubled Company Reporter on Oct. 2, 2006,
Standard & Poor's Ratings Services lowered the corporate credit
rating on Gulfmark Offshore Inc. to 'B+' from 'BB- and the
company's senior unsecured rating to 'B' from 'B+'.  Outlook was
revised to stable from negative.


HARBORVIEW MORTGAGE: Moody's Rates Class M-7 Certificates at Ba1
----------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by HarborView Mortgage Loan Trust 2006-SB1,
and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.

The securitization is backed by Secured Bankers Mortgage Company
originated, adjustable-rate, negative amortization mortgage loans.

The ratings are based primarily on the protection against credit
losses from subordination, excess spread, overcollateralization
and the yield maintenance agreement provided by the Bank of New
York.

Moody's expects collateral losses to range from 0.95% to 1.15%.

GMAC Mortgage, LLC will service the loans.

These are the rating actions:

   * Issuer: HarborView Mortgage Loan Trust 2006-SB1

   * Mortgage Loan Pass-Through Certificates, Series 2006-SB1

                    Cl. A-1A, Assigned Aaa
                    Cl. A-1B, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa1
                    Cl. M-3, Assigned Aa2
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A3
                    Cl. M-6, Assigned Baa2
                    Cl. M-7, Assigned Ba1


HARRAH'S ENT: Adjusts Conversion Price for $375-Million Notes
-------------------------------------------------------------
Harrah's Operating Company Inc., a subsidiary of Harrah's
Entertainment Inc., disclosed that the conversion price under its
outstanding $375 million Floating Rate Contingent Convertible
Senior Notes due 2024 has been adjusted to $66.47 from $66.83,
subject to further adjustment as provided for in the governing
indenture.  The adjustment has been made pursuant to the terms of
the indenture as a result of the cash dividend of $0.40 per share
of Harrah's Entertainment common stock that was declared on
Oct. 19, 2006, and which will be payable Nov. 22, 2006, to
Harrah's Entertainment stockholders of record as of the close of
business on Nov. 8, 2006.

                         About Harrah's

Headquartered in Las Vegas, Nevada, Harrah's Entertainment, Inc.
(NYSE:HET) -- http://www.harrahs.com/--  is a gaming corporation  
that owns and operates casinos, hotels, and five golf courses
under several brands.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 3, 2006,
Standard & Poor's Ratings Services lowered its ratings on Harrah's
Entertainment and its subsidiary Harrah's Operating Co. Inc.,
including its long- and short-term corporate credit ratings to
'BB+' from 'BBB-' and to 'B' from 'A-3', respectively.  In
addition, these ratings were placed on CreditWatch with negative
implications.  This company had about $10.8 billion of reported
debt outstanding as of June 30, 2006.

As reported in the Troubled Company Reporter on Oct. 3, 2006,
Fitch Ratings downgraded the debt ratings of Harrah's
Entertainment Inc. and its principal operating subsidiary Harrah's
Operating Co.  Harrah's Entertainment's Issuer Default Rating was
lowered to 'BB+' from 'BBB-'.  Harrah's Operating Co.'s Issuer
Default Rating was also downgraded to 'BB+' from 'BBB-'.  Other
affected Harrah's Operating ratings include: Bank Credit Facility
to 'BB+' from 'BBB-', Senior Unsecured Notes to 'BB+' from 'BBB-'
and Subordinated notes to 'BB-' from 'BB+'.


HOVNANIAN ENT: S&P Holds Ratings and Revises Outlook to Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Hovnanian Enterprises Inc. to stable from positive.  At the same
time, the 'BB' corporate credit rating and all outstanding debt
ratings are affirmed.

The rating actions affect $2.2 billion of rated securities.

"The outlook revision reflects the persistently challenging
homebuilding environment, which will contribute to material
inventory-related noncash charges in the fourth quarter of fiscal
year 2006," explained Standard & Poor's credit analyst George
Skoufis.

"The ratings, however, continue to be supported by HOV's solid
liquidity, moderate leverage, and good product diversity."

HOV's good liquidity and management's commitment to maintaining a
moderately leveraged balance sheet should support the ratings
through the currently challenging housing environment.

Furthermore, HOV retains a sizable backlog of homes that should
also contribute to respectable performance in fiscal 2007.
Positive near-term ratings momentum is unlikely due to the current
market conditions.  A revision of the outlook to negative or a
downgrade would be warranted if management were to pursue highly
leveraged acquisitions, or if materially weaker-than-expected
operating results resulted in a more aggressive financial profile.


ICOS CORPORATION: Sept. 30 Balance Sheet Upside-Down by $17.6 Mil.
------------------------------------------------------------------
ICOS Corp. reported a $9.7 million net income on $20.6 million of
revenues for the third quarter ended Sept. 30. 2006, compared with
a $11.5 million net loss on $20.8 million of revenues for the same
period in 2005.  

The net income is attributed to the increase in the Company's
share of Lilly Icos' net income, which amounted to $40.0 million
in the current quarter, compared with only $10.0 million for the
same period in 2005.

At Sept. 30, 2006, the Company's balance sheet showed
$284.6 million in total assets and $302.3 million in total
liabilities, resulting in a $17.6 million stockholders' deficit.

Full-text copies of the Company's consolidated financial
statements for the third quarter ended Sept. 30, 2006 are
available for free at http://researcharchives.com/t/s?14b2

                       About ICOS Corp

Headquartered in Bothell, Washington, ICOS Corp., is a
biotechnology company developing treatments for erectile
dysfunction, benign prostatic hyperplasia, pulmonary arterial
hypertension, cancer and inflammatory diseases.

ICOS Corp., through Lilly ICOS LLC, markets Cialis (tadalafil), in
North America and Europe, for the treatment of erectile
dysfunction.


INLAND FIBER: Court Confirms Chapter 11 Reorganization Plan
-----------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankrupt Court for the
District of Delaware signed a confirmation order for Inland Fiber
Group, LLC, and its debtor-affiliates' chapter 11 plan of
reorganization, the Associated Press reports.

Peg Brickley, writing for AP, states that Oregon businessman
Richard L. Wendt, a chairman of the door and window producer Jeld-
Wen, would pay $152 million for assets now in the hands of Inland
Fiber or American Forest Resources LLC, a related company.

According to Mr. Brickley, Inland Fiber chairman John M. Rudey
managed the Company and American Forest.  Transfers of timber
rights between the companies were the target of a lawsuit in
Delaware's Court of Chancery that is being settled by way of the
Chapter 11 Plan, Mr. Brickley adds.

Under the Plan, bondholders who sued in 2003 will get a recovery
of 68.57 cents on the dollar of their debt.  Insurers will make
total cash payment of $154.3 million to holders of the Company's
9.625% senior notes due in 2007.

About 70% of the bondholders supported the "prepackaged" plan when
it was filed on August along with the Company's bankruptcy
petition.  Glenn E. Siegal, Esq., at Dechert LLP, said in Court
that holders of $188.8 million worth of bonds voted for the plan,
and those with $175,000 worth of bonds didn't vote.

Headquartered in Klamath Falls, Oregon, Inland Fiber Group LLC,
aka U.S. Timberlands Klamath Falls LLC, and its affiliate Fiber
Finance Corp., grow trees and sell logs, standing timber, and
timberland.  The Debtors filed a chapter 11 petition on Aug. 18,
2006 (Bankr. D. Del. Case Nos. 06-10884 & 06-10885).  William P.
Bowden, Esq. at Ashby & Geddes P. A. and Glenn E. Siegel, Esq. at
Dechert LLP represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, Inland
Fiber reported $81,890,311 in total assets and $264,433,754 in
total liabilities while its debtor-affiliate,  Fiber Finance,
disclosed $1,048 in total assets and $263,074,983 in total debts.


INLAND FIBER: June 30 Stockholders' Deficit Rose to $180.3 Million
------------------------------------------------------------------
At June 30, 2006, Inland Fiber Group LLC's consolidated balance
sheet showed $82,211,000 in total assets and $262,532,000 in total
current liabilities resulting in a $180,321,000 million members'
deficit.  The Company had a $168,696,000 deficit at Dec. 31, 2005.

Revenues for the quarter ended June 30, 2006, were $2,651,000, a
decrease of $1,368,000 or 34% from revenues of $4,019,000 for the
same period in 2005.  The decrease in revenues during the second
quarter of 2006 was caused primarily by lower log sales of
$1.1 million.

Timber deed sales for the second quarter of 2006 were $200,000 on
1.3 million board feet, as compared with the same period in 2005,
when timber deed sales were $500,000 on 2.9 MMBF.  The average
timber deed price was $185 per thousand board feet during the
second quarter of 2006, as compared with $177 per MBF for the same
period in 2005.

Log sales for the quarter ended June 30, 2006, were $2.2 million
on volume of 4.5 MMBF, a decrease of $1.1 million as compared with
the same period in 2005 when log sales were $3.3 million on 9.6
MMBF.  The average sales price was $483 per MBF for the second
quarter of 2006, as compared with an average $341 per MBF for the
same period in 2005.

For the three months ended June 30, 2006, the Company reported a
$6,573,000 net loss compared with an $8,782,000 net loss in the
comparable quarter of 2005.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?14dd

Headquartered in Klamath Falls, Oregon, Inland Fiber Group LLC,
aka U.S. Timberlands Klamath Falls LLC, and its affiliate Fiber
Finance Corp., grow trees and sell logs, standing timber, and
timberland.  The Debtors filed a chapter 11 petition on Aug. 18,
2006 (Bankr. D. Del. Case Nos. 06-10884 & 06-10885).  William P.
Bowden, Esq. at Ashby & Geddes P. A. and Glenn E. Siegal, Esq. at
Dechert LLP represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, Inland
Fiber reported $81,890,311 in total assets and $264,433,754 in
total liabilities while its debtor-affiliate,  Fiber Finance,
disclosed $1,048 in total assets and $263,074,983 in total debts.


KIRKLAND KNIGHTBRIDGE: Brings In Sugarman as Special Accountants
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
gave Kirkland Knightbridge LLC authority to employ Sugarman & Co.
LLP as special accountant.

As reported in the Troubled Company Reporter on Nov. 9, 2006,
Sugarman will:

     a) perform certain forensic accountancy services in
        connection with the Debtor's various disputes with 360
        Global Wine Company Inc. and its affiliates; and

     b) perform other accountancy services for the estate as may
        be necessary.

                        Compensation Terms

The Debtors agreed to provide Sugarman a $5,000 interim retainer.

Sugarman's professionals and their hourly rates are:

           Position                  Hourly Rate
           --------                  -----------
           Partner                   $250 - $400
           Manager                   $225 - $325
           Administrative             $50 - $100

Randy Sugarman, a principal at Sugarman & Co. LLP, assured the
Court that his firm does not hold any interest adverse to the
estate.

                    About Kirland Knightbridge

Kirkland Knightsbridge LLC dba Kirkland Ranch Winery --
http://www.kirklandranchwinery.com/-- operates vineyards and
wineries in the Napa Valley region and breeds cattle for
commercial consumption.  The company and its affiliates, Kirkland
Cattle Company, filed for chapter 11 protection on Sept. 21, 2006
(Bankr. N.D. Calif. Case Nos. 06-10628 & 06-10630).

John H. MacConaghy, Esq. at MacConaghy and Barnier, PLC represents
the Debtors in their restructuring efforts.  When the Debtors
sought protection from their creditors, they listed assets and
debts between $10 million to $100 million.


KB HOME: Bondholders Agree to Waive Certain Defaults
----------------------------------------------------
The Associated Press reports that shares of KB Home rose 4%
Friday, following the bondholders' agreement to waive certain
defaults governing its $1.65 billion of outstanding senior notes.

According to AP, the Company was in danger of defaulting on the
bonds after it failed to file its third-quarter report with
Securities and Exchange Commission on time.  The bondholders
agreed to grant KB Home a filing extension until Feb. 23, 2007.

KB asserted that it wouldn't meet the filing deadline for the
quarter ended Aug. 31, 2006, because it needed enough time to
finish a review of its history of granting stock options, after a
committee uncovered evidence of improper accounting.  KB Home
previously received default notices for its 7.25% senior notes due
2018, as well as for its 6.25% senior notes due 2015.

Without securing the waivers, KB Home would have had to cure the
default within 60 days of notice, or else holders could hasten the
debt's maturity.  The Company, AP says, offered to pay cash to
bondholders in order to buy more time to complete its filing.

Reports show bondholder Whitebox Advisors said it assembled a
group to withold consent to KB Home's proposal to change the rules
governing its outstanding bonds.  Whitebox added KB Home's
proposal "significantly undervalues the contractual rights that
bondholders would be giving up," and that other companies in
similar circumstances have offered better terms.

Headquartered in Los Angeles, California, KB Home (NYSE: KBH)
-- http://www.kbhome.com/-- is a homebuilder with domestic  
operating divisions in some of the fastest-growing regions and
states: West Coast-California; Southwest-Arizona, Nevada and New
Mexico; Central-Colorado, Illinois, Indiana and Texas; and
Southeast-Florida, Georgia, North Carolina and South Carolina.
Kaufman & Broad S.A., the Company's publicly traded French
subsidiary, a homebuilding company in France.  It also operates KB
Home Mortgage Company, a full-service mortgage company for
the convenience of its buyers.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 27, 2006,
Standard & Poor's Ratings Services placed its BB+ corporate
credit, BB+ senior unsecured, and BB- senior subordinated debt
ratings on KB Home on CreditWatch with negative implications.  The
CreditWatch listings affect $1.65 billion of senior notes and
$750 million of senior subordinated notes.

As reported in the Troubled Company Reporter on Sept. 15, 2006,
Fitch Ratings affirmed and revised the Rating Outlook to Stable
from Positive for KB Home's Issuer Default Rating 'BB+', Senior
unsecured debt and revolving credit facility 'BB+' and Senior
subordinated debt 'BB-'.

As reported in the Troubled Company Reporter on July 14, 2006,
Moody's Investors Service affirmed all of the ratings of KB Home,
including its Corporate Family Rating of Ba1, senior debt rating
of Ba1, and senior subordinated debt rating of Ba2.  The rating
outlook is revised to stable, from positive.


KB HOME: CEO Resigns After Stock Options Investigation
------------------------------------------------------
KB Home reported the results of its options investigation and a
series of changes in its executive leadership.  These actions are
being taken in connection with the substantial completion of an
independent investigation into the Company's past stock option
granting practices.  The investigation has been led by members of
the Audit and Compliance Committee of the Company's Board of
Directors, in conjunction with independent legal counsel from
Irell & Manella LLP and accounting assistance from FTI Consulting.

The investigation has concluded that the Company used incorrect
measurement dates for financial reporting purposes for annual
stock option grants during the period from 1998 to 2005.  The
Company expects that the incremental non-cash compensation expense
arising from these errors is not likely to exceed an aggregate of
$50 million, spread over the vesting periods of the options in
question.  The errors may also require an increased tax provision.
The Company is evaluating, with its independent auditors, whether
a restatement of certain previously filed financial statements
will be required.

The Company has cooperated and will continue to cooperate with the
inquiry of the Securities and Exchange Commission and other
government agencies.

                       Leadership Transition

Bruce Karatz has retired as Chairman of the Board, Director and
Chief Executive Officer, effective immediately.  Mr. Karatz has
served the Company for 34 years and had been the Company's only
chief executive officer during its existence as a public company.
The Board expressed its appreciation for Mr. Karatz's
contributions to the Company and the value he has helped to create
for shareholders, employees and customers of KB Home.  During the
decade from 1995 to 2005, KB Home increased total revenue from
approximately $1.4 billion to more than $9.4 billion annually, and
the number of housing units produced by the Company increased from
7,857 per year to 37,140 per year.

Mr. Karatz has voluntarily agreed to pay the Company the
difference between the initial strike price and the closing price
on the new measurement date for options he has exercised that were
incorrectly priced.  In addition, with respect to unexercised
options Mr. Karatz has agreed that each new strike price will be
the closing price on the new measurement date.  This is expected
to involve an aggregate voluntary value transfer from Mr. Karatz
to the Company of approximately $13 million.  The Company and Mr.
Karatz have not agreed upon the other terms of his departure from
the Company and have entered into an agreement under which both
parties reserve all rights.

The Board has elected Jeffrey T. Mezger to succeed Mr. Karatz as
President, Chief Executive Officer and a Director.  Mr. Mezger
joined the Company in 1993 and has been the Company's Executive
Vice President and Chief Operating Officer since 1999. In this
capacity Mr. Mezger has been responsible for U.S. homebuilding
operations.

The Board has created the position of independent non-executive
chairman of the KB Home Board and will conduct a search to fill
this position.  In the interim until this position is filled, the
Board created the position of Lead Director and elected Kenneth M.
Jastrow II, a director of KB Home since 2001 and Chairman and
Chief Executive Officer of Temple-Inland Inc., to serve as Lead
Director.

"Jeff Mezger has been instrumental in KB Home's growth and success
as the Company's Chief Operating Officer," said Mr. Jastrow on
behalf of the Board.  "Jeff's broad-based expertise in all facets
of the business, together with his outstanding management and
leadership skills, are invaluable assets that will serve our
Company well.  The Board has full confidence in the Company under
Jeff's leadership."

"I am extremely proud of everything that the entire KB team and I
have accomplished over the past 20-plus years as a public
company," said Mr. Karatz.  "We have grown to be one of the
leading homebuilders in the world and one of the most respected
companies in the industry.  I wish Jeff Mezger and the team
continued success with this outstanding company."

The Board has terminated the employment of Gary A. Ray, the
Company's head of Human Resources.

Richard B. Hirst has resigned as Executive Vice President and
Chief Legal Officer, effective immediately.

Based on the report of the investigative committee, the Board of
Directors concluded that Mr. Karatz and Mr. Ray selected grant
dates under the Company's stock option plans.  Additionally, the
investigative committee concluded that the Board of Directors,
Mr. Mezger and the other current senior executives of the Company
had no role in establishing incorrect grant dates.

                             Compliance

The Board also acted to create the positions of Chief Compliance
Officer and Risk Assessment Officer.  These officers will report
within the management team and will also have reporting
obligations to the Audit and Compliance Committee of the Board.
The Company will conduct a search to fill these positions.

Headquartered in Los Angeles, California, KB Home (NYSE: KBH)
-- http://www.kbhome.com/-- is a homebuilder with domestic  
operating divisions in some of the fastest-growing regions and
states: West Coast-California; Southwest-Arizona, Nevada and New
Mexico; Central-Colorado, Illinois, Indiana and Texas; and
Southeast-Florida, Georgia, North Carolina and South Carolina.
Kaufman & Broad S.A., the Company's publicly traded French
subsidiary, a homebuilding company in France.  It also operates KB
Home Mortgage Company, a full-service mortgage company for
the convenience of its buyers.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 27, 2006,
Standard & Poor's Ratings Services placed its BB+ corporate
credit, BB+ senior unsecured, and BB- senior subordinated debt
ratings on KB Home on CreditWatch with negative implications.  The
CreditWatch listings affect $1.65 billion of senior notes and
$750 million of senior subordinated notes.

As reported in the Troubled Company Reporter on Sept. 15, 2006,
Fitch Ratings affirmed and revised the Rating Outlook to Stable
from Positive for KB Home's Issuer Default Rating 'BB+', Senior
unsecured debt and revolving credit facility 'BB+' and Senior
subordinated debt 'BB-'.

As reported in the Troubled Company Reporter on July 14, 2006,
Moody's Investors Service affirmed all of the ratings of KB Home,
including its Corporate Family Rating of Ba1, senior debt rating
of Ba1, and senior subordinated debt rating of Ba2.  The rating
outlook is revised to stable, from positive.


LENOX GROUP: Likely Liquidity Strain Cues Moody's to Lower Ratings
------------------------------------------------------------------
Moody's Investors Service lowered the debt ratings of Lenox Group,
Inc.  The rating outlook remains negative.

Concurrently, Moody's lowered Lenox Group's Speculative Grade
Liquidity Rating to SGL-4 from SGL-3 to reflect weakened near-term
liquidity.

The downgrade reflects Moody's concern that Lenox Group's
liquidity may be strained over the near term absent further
meaningful debt reduction in the fourth quarter either from
seasonal cash inflows or asset sales.  Lenox Group has reported
weaker-than-expected earnings and cash flow year-to-date, largely
due to higher production, delivery and distribution costs,
inventory management issues, and integration costs associated with
the acquisition of Lenox.  Ongoing challenges in the wholesale
gift and specialty channel also continue to hurt profitability.

Given the company's weak operating performance to date, it is
unlikely that it will be able to meet the target credit metrics
Moody's had set out in May 2006 in order for it to maintain its
prior rating.  Moody's recognizes that the company is taking steps
to improve its performance, including simplifying its supply
chain, reducing the number of SKUs by 30%, freezing its pension
plan, consolidating office space and selling assets.  The company
has reduced term debt by about $17 million year-to-date due to
planned asset sales.

Lenox Group's B2 corporate family rating is driven by its weakened
liquidity position, which resulted in a downgrade of its
Speculative Grade Liquidity Rating to SGL-4 and reflects its poor
operating performance year-to-date.  The company continues to
experience revenue declines related to customer attrition in the
gift and specialty channel of Department 56, which exacerbates the
risks associated with the highly seasonal nature of its business.

Lenox Group's ratings will face additional downward pressure if
liquidity erodes any further, such as any covenant violations, or
if it fails to further reduce debt through asset sales and season
cash inflows.  The ratings will be downgraded if free cash flow to
debt turns negative.

A rating upgrade is not likely at this time.  

However, stabilization of the outlook would occur if the company
maintains adequate cushion under financial covenants,
significantly reduces debt, and maintains positive free cash flow.

These are the rating actions:

   * Lenox Group, Inc.

     -- Corporate Family Rating to B2 from B1

   * D56, Inc.

     -- $175 million revolving credit facility to B1, LGD 3, 32%
        from Ba2, LGD2, 18%

     -- $100 million term loan to B2, LGD3, 46% from B1, LGD3,
        30%

     -- The Speculative Grade Liquidity Rating to SGL-4 from SGL-
        3

     -- Probability of default rating was affirmed at B2.

The rating outlook remains negative.


LUCENT TECHNOLOGIES: U.S. Congress to Probe Alcatel Merger Today
----------------------------------------------------------------
Duncan Hunter, Chairman of the U.S. House Armed Services
Committee, will call Alcatel S.A. and Lucent Technologies Inc.
today to probe into the implication of the companies'
$10.6-billion merger deal on national security, The Financial
Times says.

The hearing will also include a testimony from government
officials who are reviewing the merger deal, FT adds.  The
Committee on Foreign Investment in the U.S., which scrutinizes
foreign takeovers, is wrapping up its review on the deal.

According to FT, the hearing, which could lead to a wider vet or a
backlash similar to against Dubai Ports World's failed takeover of
five port terminals this year, would pressure both the deal and
White House officials.

Alcatel and Lucent, FT relates, tried earlier to prevent a
congressional probe into the deal by:

   -- launching a lobbying campaign; and

   -- submitting a plan to isolate Lucent's sensitive government
      contracts from Alcatel's operations by forming a separate
      unit -- which would be supervised by three Clinton
      administration defense and intelligence officials.

                         About Alcatel

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

                   About Lucent Technologies

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

Lucent also operates in Austria, Belgium, China, Czech republic,
Denmark, France, Germany, India, Ireland, Japan, Korean, Brazil,
CIS, the Netherlands, Poland, Slovak Republic, Spain, Sweden,
Switzerland, Russia, and the United Kingdom.

                           *     *     *

In November 2006, Standard & Poor's Ratings Services said that its
'BB' long-term corporate credit rating on France-based Alcatel and
its 'B' long-term corporate credit rating on U.S.-based Lucent
Technologies Inc. remain on CreditWatch with negative and positive
implications, respectively, where they were placed on March 24 on
news of the two telecoms equipment makers' plans to merge.

The ratings will remain on CreditWatch until completion of the
merger and clarification of the ranking and support mechanisms for
the various debt classes within the merged group's capital
structure.  The ratings on the individual debt issues of each
company will be clarified at that time.

Standard & Poor's 'B' and 'B-1' short-term corporate ratings on
Alcatel and Lucent, respectively, are not on CreditWatch and
remain unchanged.

In April 2006, Moody's Investors Service placed Lucent's B1
corporate family rating, B1 senior unsecured rating, B3
subordinated rating, and B3 trust preferred rating under review
for possible upgrade following the company's announcement of a
definitive merger agreement with Alcatel.


MESABA AVIATION: Committee Wants Court to Void Dividend Transfers
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Mesaba Aviation,
Inc.'s chapter 11 proceedings asks the U.S. Bankruptcy Court for
the District of Minnesota to void the $10.9 million prepetition
dividend transfers and other administrative payments to MAIR
Holdings, Inc., and to direct MAIR Holdings to return these
transfers to the Debtor's estate.

                  Improper Dividend Transfers

Since its appointment in the Debtor's bankruptcy case, the
Creditors' Committee has repeatedly alleged that MAIR Holdings is
the recipient of improper payments and dividends from the Debtor.

Kenric D. Kattner, Esq., at Haynes and Boone, LLP, in Houston,
Texas, asserted that every payment and dividend that MAIR received
from the Debtor was appropriate under applicable law, and occurred
in the ordinary course of the Debtor's business.
Moreover, the Debtor was solvent at the time it made each payment
and dividend, and it remained solvent and able to pay its
obligations after each payment or dividend to MAIR.

Mr. Kattner related that in accordance with Minnesota law, the
Debtor declared and paid these prepetition dividends to its sole
shareholder, MAIR:

           Date          Dividend
           ----          --------
         04/30/02      $54,250,000
         11/30/02       28,956,000
         08/31/03       10,000,000
         08/18/04       13,000,000
         11/30/04        5,000,000
                       -----------
         Total        $111,206,000
                       ===========

Mr. Kattner noted that before making each Dividend, the Debtor's
Board of Directors considered whether a Dividend was appropriate
in light of the Debtor's operations and its cash needs, and that
the Debtor could make the Dividend and still pay its debts in the
ordinary course of business.

                  Management Services Agreement

On June 30, 2003, MAIR and the Debtor entered into a management
services agreement pursuant to which MAIR provides to the Debtor
financial and administrative services and incurs expenses on
behalf of, and for the Debtor's benefit.

In exchange for the services provided, and in reimbursement for
the costs incurred, by MAIR, the MSA provides for the Debtor to:

   (a) pay MAIR an annual management fee; and

   (b) reimburse all fees and expenses incurred by MAIR in
       providing the services contemplated under the MSA,
       including the fees and expenses of attorneys, accountants,
       and other consultants and professionals.

Before the Petition Date and in accordance with the terms of the
MSA, the Debtor paid these "MSA Transfers" to MAIR:

           Date            Amount
           ----            ------
         06/27/03         $885,000
         09/18/03          885,000
         10/01/03          885,000
         01/05/04          885,000
         04/05/04          885,000
         06/11/04          250,000
         07/05/04        1,135,000
         10/05/04        1,135,000
         01/03/05        1,135,000
         04/01/05        1,135,000
         06/17/05          302,500
         07/11/05        1,437,500
                        ----------
         Total         $10,955,000
                        ==========

Mr. Kattner asserted that the Debtor was solvent on the date each
payment under the MSA was made, and the Debtor never became
insolvent as a result of the payments.

Since the Petition Date, the Debtor has not paid MSA Transfers to
MAIR.  As of Oct. 5, 2006, the Debtor has not assumed or
rejected the MSA.

                   Case of Actual Controversy

On Dec. 7, 2005, the Creditors Committee obtained a Court order
authorizing it to conduct discovery against MAIR under Rule 2004
of the Federal Rules of Bankruptcy Procedure.  Pursuant to a
Stipulation and Protective Order, MAIR has produced a significant
number of documents to the Creditors Committee, and the Creditors
Committee conducted examinations of MAIR's chief financial officer
and chief executive officer.

On Aug. 24, 2006, the Creditors Committee asked the Court to
approve its stipulation with the Debtor authorizing the Creditors
Committee to prosecute unspecified claims against MAIR.  On
Sept. 26, the Court authorized the Creditors Committee to
prosecute undefined "Insider Claims" against MAIR.

Through the Stipulation and the Rule 2004 discovery that preceded
the Sept. 26, 2006, ruling, the Creditors Committee has
threatened litigation against MAIR in a manner that presents a
real, substantive controversy between the parties with adverse
legal interests, Mr. Kattner tells Judge Kishel.

MAIR submitted that the case presents a case of actual controversy
that is ripe for consideration.  Accordingly, MAIR asked the Court
to declare that:

    (1) The Debtor's estate is barred from challenging the
        Dividends that occurred on April 30, November 30, and
        Aug. 31, 2002, based on the expiration of limitations,
        and the estate cannot recover these Dividends from, or
        assert an action against MAIR;

    (2) The Dividends were permitted distributions under
        governing Minnesota law, and the estate cannot recover
        these Dividends from, or assert an action against MAIR;
        and

    (3) The Dividends and the MSA Transfers are not subject to
        avoidance under Sections 544 and 548 of the Bankruptcy
        Code.

                   Creditors Committee Responds

Representing the Creditors Committee, Thomas J. Lallier, Esq., at
Foley & Mansfield, P.L.L.P., in Minneapolis, Minnesota, reminds
the Court that MAIR filed a proof of claim against the Debtor for
an amount in excess of $55,000,000, which seeks to:

   (1) return of an approximately $31,700,000 contribution to the
       Debtor pursuant to the terms of an Aug. 29, 2005,
       agreement between MAIR and Northwest entered into in
       connection with the parties' Airline Services Agreement;

   (2) approximately $17,500,000 for payments on a guaranty of
       the Debtor's lease obligations at the Cincinnati/Northern
       Kentucky International Airport;

   (3) $2,875,000 for two unpaid quarterly payments under the
       MSA; and

   (4) approximately $3,000,000 purportedly due under a tax
       allocation agreement between the Debtor and MAIR.

Mr. Lallier asserts that MAIR has improperly benefited from its
dominance over Mesaba to the detriment of the Debtor, its
bankruptcy estate, and its creditors.  Moreover, MAIR received
tens of millions of dollars of transfers from Mesaba during a
period of unprecedented turmoil in the airline industry, all
while leaving Mesaba and its creditors vulnerable to a Northwest
bankruptcy filing or other disruption to Mesaba's business, he
adds.

Accordingly, the Creditors Committee asks the Court to rule that:

    (a) MAIR takes nothing by way of the complaint, and that the
        complaint be dismissed, with prejudice to re-filing, and
        with all costs to be borne by MAIR;

    (b) The MSA Transfers totaling $10,955,000 that the Debtor
        paid to MAIR, are voided.  MAIR is directed to repay
        those transfers or the value of the transfers to the
        Debtor's estate;

    (c) All MAIR's claims against the Debtor are disallowed
        unless and until MAIR has turned over to the Debtor's
        estate the property transferred under avoidable
        transfers, or has paid the Debtor the value of the
        property;

    (d) All MAIR's claims that have been or may be asserted
        against the Debtor are subordinated -- MAIR's claims are
        not paid ahead of any other creditor.  MAIR is directed
        to transfer to the Debtor any liens securing the
        subordinated claims; and

    (e) The Creditors Committee is awarded all additional relief
        to which it may be entitled at law or in equity,
        including interest, costs, and reasonable attorneys'
        fees.

Furthermore, the Creditors Committee asks the Court to issue a
judgment declaring that MAIR is not entitled to recover:

   * the $31,700,000 contribution it made to the Debtor under
     the terms of the MAIR-Northwest Agreement, except to the
     extent the contribution is considered an equity investment
     by MAIR and is so recoverable under applicable priority
     provisions of the Bankruptcy Code; and

   * any amounts from the Debtor under the MSA or to assert any
     rights against the Debtor under the MSA for
     indemnification, missed payments, or otherwise.

Mr. Lallier tells the Court that the Creditors Committee,
acting on behalf of the Debtor's estate, admits that it has real
controversies with MAIR and that those controversies are suitable
for declaratory judgment.  However:

   -- MAIR's complaint fails to state a claim on which relief
      can be granted;

   -- MAIR's claims are barred by the doctrines of waiver and
      estoppel;

   -- To the extent that any of MAIR's claims depend on concepts
      of equity or good faith, the claims are barred by the
      doctrine of unclean hands;

   -- MAIR failed to perform conditions to the alleged
      obligations of the Debtor under the MSA;

   -- Some or all the Debtor's actions concerning transfers to
      MAIR were ultra vires;

   -- MAIR and the Debtor failed to observe proper corporate
      formalities, in that some or all of the transactions
      between them do not represent effective transfers between
      putatively independent legal entities; and

   -- The Debtor's estate is entitled to return of the transfer
      and has both a claim and defense against MAIR for
      avoidance, set-off, and recoupment for all transfers by
      the Debtor that were not authorized and legally
      permissible.

                     About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


MESABA AVIATION: Wants Amended Agreements with Unions Approved
--------------------------------------------------------------
Pursuant to Section 1113 (c) of the Bankruptcy Code and Rule 9019
of the Federal Rules of Bankruptcy Procedure, Mesaba Aviation,
Inc. asks the Honorable Gregory F. Kishel of the U.S. Bankruptcy
Court for the District of Minnesota to issue an order:

    (a) authorizing compromise of the dispute raised by its
        request to reject its collective bargaining agreements
        with the Air Line Pilots Association, International, the
        Association of Flight Attendants-CWA, AFL-CIO, and the
        Aircraft Mechanics Fraternal Association; and

    (b) approving consensual letters of agreement modifying its
        CBAs with the Unions, provided those agreements are
        ratified by the vote of the members of each union.

Should any or all of the Unions fail to ratify and sign the
amended agreements, the Debtor does not seek authorization to
compromise the terms which Judge Kishel has authorized it to
impose, Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath &
Nauman, in Minneapolis, Minnesota, says.

According to Mr. Meyer, the tentative agreements between the
Debtor and the unions' negotiating committees were presented to
each union's Master Executive Council, and were sent out for
member ratification.  The ratification process is presently
underway.

Mr. Meyer notes that the Restructuring Agreements provide
comprehensive terms for wage reductions, work rule changes and
other terms.

                       The ALPA Agreement

Under the ALPA Agreement, the Debtor and ALPA agreed to a 5% wage
rate reduction to be applied across-the-board to all pay scales
except the scale for the 60-69 seat jet captain scale, and a 5.5%
wage rate reduction to be applied across-the board to the 60-69
seat jet captain scale.  ALPA agreed to forego its scheduled pay
increases and replace them with these terms:

    (i) If the Debtor's fleet is less than 79 aircraft as of
        Dec. 1, 2010, there will be:

           -- a 2.5% increase on Dec. 1, 2007, and 2008; and
           -- a 1.0% increase on Dec. 1, 2009.

        On Dec. 1, 2010, the scales will be increased by
        1.5%.  There will be 1.5% increases on each subsequent
        December 1, until a new CBA is reached;

   (ii) If the Debtor's fleet is 79 or more aircraft as of Dec.
        1, 2010, there will be:

           -- a 2.5% increase on Dec. 1, 2007, and 2008;
           -- a 1.0% increase on Dec. 1, 2009;
           -- a 3.0% increase on Dec. 1, 2010; and
           -- a 2.0% increase on Dec. 1, 2011.

        On Dec. 1, 2012, the scales will be increased by
        1.5%.  There will be 1.5% increases on each subsequent
        December 1, until a new CBA is reached;

  (iii) The 60-69 seat jet scale will be expanded to 60-76 seats
        and a 19th and 20th year pay level will be added;

   (iv) Additional pay increases will be triggered by greater
        fleet growth; and

    (v) A turboprop aircraft with 56-74 seats will be paid at
        the 50 seat jet rate.

Modifications to expense provisions and work rules, include:

    (1) Per diem will be frozen at $1.55 per hour until Dec. 1,
        2010, at which time it will be restored to $1.65;

    (2) Uniform allowance will be suspended for 2006 and 2007,
        and raised to $50 for 2008; $75 for 2009; and restored to
        $235 for 2010 and thereafter;

    (3) A pilot with two or more weeks of vacation in 2007 will
        forego one week for calendar year 2007;

    (4) A pilot who is entitled to a hotel room for long term
        training may forego the hotel room and will be paid one-
        half of the actual savings to the company for not
        incurring the expense of the room; and

    (5) For a period of four years the company is not obligated
        to provide two weeks of hotel expense for a pilot who is
        making a voluntary base move.

The parties further reached agreement on a second Multi-class bid
savings, the implementation of computer bidding system, a revised
furlough recall procedure, increased training freezes, reduced
payment for short and long term disability payments, and lifting
restrictions to continuous duty trips for one year.

Mr. Meyer notes that in addition to the cost savings realized,
the ALPA Restructuring Agreement memorializes other important
agreements between the Debtor and ALPA, including:

    (a) the Profit Sharing Plan, the effective date of which is
        Dec. 1, 2006;

    (b) certain restrictions pertaining to the Debtor's right to
        seek additional relief pursuant to Section 1113;

    (c) ALPA will have an allowed general unsecured prepetition
        claim for $14,200,000 in the Debtor's Chapter 11 case in
        respect of the concessions made by the ALPA.  The Mesaba
        Executive Council of ALPA will have the authority to
        determine the manner of distribution of that claim.  The
        ALPA Claim will not be allowed for voting purposes.
        Except for the unsettled grievance claims, which are the
        subject of a filed proof of claim dated Feb. 27, 2006,
        and the ALPA Claim, no other claims will arise in
        connection with, or related to, any agreement with ALPA;

    (d) The Debtor will indemnify ALPA in connection with the
        implementation and negotiation of the ALPA Restructuring
        Agreement and certain other agreements entered into
        between the Debtor and ALPA.  The Debtor's plan of
        reorganization will include certain provisions for
        exculpation or release of ALPA;

    (e) Any plan of reorganization for the Debtor will provide
        for assumption of the ALPA Restructuring Agreement and
        the Debtor agrees that it will not file, sponsor or
        support confirmation of a Plan that does not provide for
        assumption of the ALPA Restructuring Agreement, to the
        extent the ALPA Restructuring Agreement has not been
        rejected; and

    (f) The Debtor will not to file or support any request
        seeking rejection or modification of, or relief or
        interim relief from, the ALPA CBA as modified by the ALPA
        Restructuring Agreement and to actively oppose any
        request if filed by another party, unless there is a
        material deterioration in the financial condition or
        financial prospects projected in the Debtor's current
        business plan or if the actions are essential to prevent
        imminent cessation of operations or liquidation.

The ALPA Restructuring Agreement will not become effective until
the occurrence of these events:

    * Mesaba implementing through binding agreement revisions to
      (a) the labor contracts of the Debtor's other unionized
      employees, and (b) the wages, benefits and working
      conditions of the Debtor's non-union employees so that each
      group's revisions are reasonably projected to produce a
      comparable percentage reduction in payroll costs over a
      comparable period;

    * ALPA membership ratification of the 2006 Amended Pilot CBA
      under ALPA's Constitution and By-Laws, and execution by
      ALPA's President;

    * Approval by Mesaba's Board of Directors, if required; and

    * Approval by the Bankruptcy Court of the 2006 Amended Pilot
      CBA and entry of a ruling authorizing the Debtor's entry
      into the 2006 Amended Pilot CBA.

The ALPA Restructuring Agreement has an amendable date of
December 1, 2010, if the Debtor has fewer than 79 aircraft in
service at that time, or June 1, 2012, if the Debtor has 79 or
more aircraft in service on November 20, 2010.

                        The AFA Agreement

The Debtor and AFA agreed to a 2.7% across-the-board pay
reduction and an adjustment in longevity pay accrual from 1:1 to
1:2 for a four-year period commencing Dec. 1, 2006.  Pay
increases are:

    (i) If the Debtor's fleet is less than 79 aircraft as of
        Dec. 1, 2010, there will be a 1.0% increase on Dec. 1,
        2008, and 2009.  On Dec. 1, 2010, the scales will be
        increased by 1.5%.  There will be 1.5% increases on each
        subsequent December 1, until a new CBA is reached;

   (ii) If the Debtor's fleet is 79 or more aircraft as of
        Dec. 1, 2010, there will be a:

           -- 1.0% increase on Dec. 1, 2008, and 2009;
           -- 3.0% increase on Dec. 1, 2010; and
           -- 2.0% increase on Dec. 1, 2011.

        On Dec. 1, 2012, the scales will be increased by 1.5%.
        There will be 1.5% increases on each subsequent Dec. 1,
        until a new CBA is reached; and

  (iii) Additional pay increases will be triggered by greater
        fleet growth.

Likewise, the Debtor and AFA agreed to various modifications to
expenses provisions and work rules, including:

    (a) Deletion of holiday pay;

    (b) Reduction of per diem to $1.35 for four years then
        restored to $1.50;

    (c) Reduction of uniform expense from $220 to $200;

    (d) Scheduling restriction of 30 hours in 7 days lifted;

    (e) Elimination of unproductive Continuous Duty Overnights;

    (f) Vacation credit revised;

    (g) Recall from furlough expedited; and

    (h) Short term disability waiting period was extended and
        amount of benefit payment reduced to 60%.

The AFA Restructuring Agreement also memorializes other important
agreements between the Debtor and AFA, which are comparable to
those in the ALPA Restructuring Agreement, except that the amount
of the AFA Claim is $3,300,000.

                        The AMFA Agreement

The Debtor and AMFA agreed to a 8.5% across-the-board reduction
to base pay and premiums.  Pay increases are:

    (i) If the Debtor's fleet is less than 79 aircraft as of
        December 1, 2010, there will be a:

           -- 1.0% increase on Dec. 1, 2007, and 2008; and
           -- 1.0% increase on Dec. 1, 2009.

        On Dec. 1, 2010, the scales will be increased by
        1.5%. There will be 1.5% increases on each subsequent
        December 1, until a new CBA is reached;

   (ii) If Mesaba's fleet is 79 or more aircraft as of Dec. 1,
        2010, there will be a:

           -- 1.0% increase on Dec. 1, 2007, 2008, and 2009;
           -- 3.0% increase on Dec. 1, 2010; and
           -- 2.0% increase on Dec. 1, 2011.

        On Dec. 1, 2012, the scales will be increased by
        1.5%.  There will be 1.5% increases on each subsequent
        December 1, until a new CBA is reached; and

  (iii) Additional pay increases will be triggered by greater
        fleet growth.

The modifications to expenses and work rules are:

    -- Reduction in holiday pay;
    -- Elimination of 4-hour call-in pay;
    -- Reduction of sick leave accrual for four years;
    -- Reduction in sick leave pay for four years;
    -- Reduction in vacation accrual for four years;
    -- Short term disability waiting period extended; and
    -- Elimination of holiday pay and vacation from the
       calculation of overtime with vacation being restored in
       four years.

The AMFA Restructuring Agreement likewise memorializes other
important agreements between the Debtor and AMFA, which are
comparable to those in the ALPA Restructuring Agreement, except
that the amount of the AMFA Claim is $4,800,000.

                   Agreements Must be Approved

Mr. Meyer submits that each of the ALPA, AFA and AMFA
Restructuring Agreements provide comprehensive terms for wage
reductions, work rule changes and other terms that will provide
approximately 15.8% in average annual cost savings for the Debtor
over the first four years of their term.

Moreover, in each of the Restructuring Agreements, the consensual
reductions in wages and work rules, as well as other cost savings
associated with healthcare (a) meet the Debtor's reduction
requirements from each union, (b) are consistent with the
assumptions of the Debtor's business plan, and (c) will put the
Debtor's cost structure with respect to those types of its
employees on competitive terms with other regional carrier.

John Spanjers, Mesaba Airlines president and COO, said in a press
release that despite the challenging process, Mesaba appreciates
"ALPA's efforts in working toward a solution."  Mr. Spanjers is
likewise pleased that the Company was able to reach a solution
that addresses Mesaba's needs and the mechanics' interests."

"After a long battle, we are glad to reach an agreement that will
allow flight attendants to continue to work at Mesaba," said Tim
Evenson, Mesaba AFA Master Executive Council President.  "We
fought to ensure that flight attendants would not bear the full
burden of our airline's recovery, but we are willing to do what
it takes to make sure that our company is successful once again."

As of Nov. 7, 2006, the final versions of the ALPA, AFA and
AMFA Restructuring Agreements were not available for filing, Mr.
Meyer explains.

Unless a response in opposition is filed not later than Nov. 22,
2006, the Court may grant the Debtor's request without a hearing.

                     About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


METAMORPHIX INC: June 30 Balance Sheet Upside-Down by $46.3 Mil.
----------------------------------------------------------------
MetaMorphix, Inc. reported a $4.9 million net loss on $864,810 of
revenues for the second quarter ended June 30, 2006, compared with
a $6 million net loss on $621,951 of revenues for the same period
in 2005.

Net loss decreased $1.1 million, or 19.1%, for the three months
ended June 30, 2006 from the three months ended June 30, 2005, due
to an increase in revenues combined with the decrease in the
company's research and development and general and administrative
operating costs.

At June 30, 2006, the Company's balance sheet showed $10.9 million
in total assets and $57.1 million in total liabilities, resulting
in a $46.3 million stockholders' deficit.  Additionally,
accumulated deficit at June 30, 2006, stood at $185.1 million.

The Company's balance sheet at June 30, 2006, also showed strained
liquidity with $372,931 in total current assets available to pay
$25.6 million in total current liabilities.

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

                http://researcharchives.com/t/s?14cb

                        Going Concern Doubt

As reported in the Troubled Company Reporter on Oct 6, 2006,
Deloitte & Touche LLP, expressed substantial doubt about
MetaMorphix, Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Dec. 31, 2005 and 2004.  The auditing firm pointed to
the company's recurring losses and negative cash flows from
operations, working capital deficiency and significant accumulated
deficit at Dec. 31, 2005.

                         About MetaMorphix

Headquartered in Beltsville, Maryland, MetaMorphix, Inc. --
http://www.metamorphixinc.com/-- is developing a pipeline of   
innovative products addressing all major livestock sectors
including cattle, swine, poultry and aquaculture, as well as
developing products that enhance the health of companion animals.


METROMEDIA INT'L: Delays Filing of Third Quarter 2006 Results
-------------------------------------------------------------
Metromedia International Group Inc. is unable to timely file its
Quarterly Report on Form 10-Q for the fiscal quarter ended

Sept. 30, 2006 with the United States Securities and Exchange
Commission.

The filing with the SEC of the Company's:

   -- Annual Report on Form 10-K for the fiscal year ended
      Dec. 31, 2004;

   -- Quarterly Report on Form 10-Q for the fiscal quarters
      ended March 31, June 30, and Sept. 30, 2005;

   -- Annual Report on Form 10-K for the fiscal year ended
      Dec. 31, 2005;

   -- Quarterly Report on Form 10-Q for the fiscal quarters
      ended March 31 and June 30, 2006; and

   -- completion of its work effort for compliance with
      Section 404, "Management Assessment of Internal Controls"
      of the Sarbanes-Oxley Act of 2002 with respect to the
      filing of its 2005 Form 10-K, are prerequisite for the
      filing of the 2006 their quarter Form 10-Q.

At present, the Company cannot predict with confidence when it
will file the Periodic Reports and thus its 2006 Q3 Form 10-Q.

                        About Metromedia

Based in Charlotte, North Carolina, Metromedia International
Group (PINK SHEETS: MTRM-Common Stock and MTRMP-Preferred Stock)
-- http://www.metromedia-group.com/-- through its subsidiary,
Metromedia International Telecommunications, owns interests in
telecom and cable TV operations in Russia, Georgia, and
elsewhere in Eastern Europe.

The Company's core businesses includes Magticom, Ltd., the leading
mobile telephony operator in Tbilisi, Georgia, and Telecom
Georgia, a well-positioned Georgian long distance telephone
operator.

                          *     *     *

In October 2006, Metromedia said it is filing a Chapter 11 Plan in
the U.S. after receiving a binding offer to acquire all of the
Company's business interests in Georgia for a cash price of
$480 million from an investment group comprised of:

   -- Istithmar, an alternative investment house based in Dubai,
      United Arab Emirates;

   -- Salford Georgia, the Georgian office of Salford Capital
      Partners Inc., a private equity and investment management
      company which manages investments in the CIS and Central &
      Eastern Europe; and

   -- Emergent Telecom Ventures, a communications merchant bank
      focused on pursuing telecommunications opportunities in
      the Emerging Markets.

Upon the approval of the plan, all of the preferred and common
equity interests in the Company will be converted into the right
to receive the cash remaining after payment of all allowed
claims and the costs and expenses associated with the sale and
the Wind-Up.

Moody's Investors Service has placed Metromedia's subordinated
debt rating at B3 and junior subordinated debt rating at B2.


MICHELEX CORP: Seligson & Giannattasio Raises Going Concern Doubt
-----------------------------------------------------------------
Seligson & Giannattasio, LLP expressed substantial doubt about
Michelex Corp.'s ability to continue as a going concern after
auditing the Company's financial statements for the year ended
Dec. 31, 2005.  

The auditing firm pointed to the Company's significant recurring
losses and the Company's dependence on its ability to meet its
future needs and the success of its future operations on the
realization of a major portion of its assets.

Michelex Corp. reported a $3,905,234 net loss on $5,518,025 of net
sales for the year ended Dec. 31, 2005, compared with a $4,944,998
net loss on $14,884,498 of net sales for 2004. The Company
attributed the decrease in revenues in 2005 as a result of Wells
Fargo's cancellation of the company's line of credit and demanding
full payment of the term loan totaling approximately $3.9 million.

At Dec. 31, 2005, the Company's balance sheet showed $7,528,403 in
total assets and $11,386,209 in total liabilities, resulting in a
$3,857,806 stockholders' deficit.  Accumulated deficit at Dec. 31,
2005, stood at $6,245,206.

The Company's balance sheet at Dec. 31, 2005, also showed strained
liquidity with $1,729,837 in total current assets available to pay
$7,059,375 in total current liabilities.

Full-text copies of the Company's financial statements for the
year ended Dec. 31, 2005, are available for free at:

                http://researcharchives.com/t/s?14ba
                                  
                        About Michelex Corp.

Michelex Corp. provides precision products manufactured with
state-of-the-art equipment.  Michelex Division manufactures,
imports and distributes Optical Media Packaging products.  It also
produces, imports, and distributes a complete line of plastic
injection molded multimedia packaging products.  Michele Audio
Division replicates services for the spoken words industry.  It
also owns a large catalogue of music which the company intends to
market.


MOSAIC COMPANY: Weak Phosphate Sales Cue S&P's Negative Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on The
Mosaic Co. to negative from stable.  Standard & Poor's affirmed
its 'BB' long-term and 'B-1' short-term corporate credit ratings
on the company.

"The outlook revision follows indications that phosphates volumes
have weakened because of sluggish export sales and a slow start to
the fall fertilizer season.  This has prompted management to make
a significant downward revision to its phosphates sales volume
forecasts for the fiscal year ending May 31, 2007," said Standard
& Poor's credit analyst Cynthia Werneth.

"As a result, cash flow generation is likely to be weaker than
expected during the next few quarters, reducing the company's
ability to lower debt."

Mosaic is highly leveraged.  At Aug. 31, 2006, debt totaled about
$3.2 billion, with total adjusted debt to EBITDA of 4.8x.  Given
Mosaic's high leverage relative to the ratings expectations, any
additional negative developments such as a prolonged period of
weak sales volumes, a spike in natural gas costs, or poor weather
could lead to a downgrade.

At the same time, based on preliminary terms and conditions, the
rating agency assigned a 'BB' senior secured bank loan rating and
a recovery rating of '2' to Mosaic's proposed $250 million five-
year term loan A-1 and $800 million seven-year term loan B. These
ratings indicate our expectation that lenders would recover a
substantial portion of principal in a payment default scenario,
assuming a fully drawn revolving credit facility.

Standard & Poor's placed the ratings on Mosaic's existing
$450 million revolving credit facility and $47 million term loan A
on CreditWatch with negative implications.  If the transaction
closes as currently contemplated, the ratings on these portions of
the existing facilities that are expected to remain in
place will be lowered to recognize the meaningful increase to
secured debt in the capital structure.  The bank loan rating will
be lowered to 'BB' and the recovery rating to '2'.
   
Standard & Poor's also assigned a 'BB-' senior unsecured debt
rating to Mosaic's proposed $475 million notes due 2014 and
$475 million notes due 2016.  These instruments will be guaranteed
on a senior unsecured basis by certain of the company's domestic
and foreign wholly owned subsidiaries.

In addition, the rating agency affirmed its 'B+' senior unsecured
debt rating on the existing senior unsecured obligations that are
not guaranteed and are expected to remain in place.

Proceeds of the new bank loan tranches and the new notes will be
used to refinance existing debt, thereby extending maturities.  
S&P will withdraw its ratings on the debt that is being refinanced
upon closing of the transaction.

The ratings on Plymouth, Minn.-based Mosaic reflect its aggressive
financial profile, mitigated by its satisfactory business risk
profile as a leading global phosphate and potash fertilizer and
feed producer with annual sales of more than
$5 billion.


MUSICLAND HOLDING: Files Second Amended Joint Plan of Liquidation
-----------------------------------------------------------------
Musicland Holding Corp. and its 14 debtor-affiliates delivered a
Second Amended Joint Plan of Liquidation and accompanying
Disclosure Statement, reflecting changes taken up at the Oct. 12,
2006, Disclosure Statement hearing.

The Revised Plan documents were filed as an attachment to a letter
James A. Stempel, Esq., at Kirkland & Ellis, LLP, the Debtors'
counsel, sent to Judge Bernstein on Oct. 13, 2006.

The Plan contains immaterial modifications and reflects the
Court-approved Voting Record Date, Voting Deadline, Confirmation
Objection Deadline and Confirmation Hearing Date.

The Court previously approved the Revised Disclosure Statement as
containing adequate information pursuant to Section 1125 of the
Bankruptcy Code.

A blacklined copy of Musicland's Second Amended Joint Plan of
Liquidation is available for free at

               http://researcharchives.com/t/s?14e3

A blacklined copy of the Disclosure Statement explaining
Musicland's Second Amended Plan is available for free at:

               http://researcharchives.com/t/s?14e4

On Nov. 8, 2006, Musicland filed supplements to the 2nd
Amended Plan.

A. Administrative Budget

   Musicland proposed a budget as of November 1, 2006, to cover
   the period from January 2007 to 2008.

                       Musicland Holding Corp.
                       Administrative Budget
                            2007 to 2008          

      Consulting (former employees)               $85,000

      Professionals
         Kirkland & Ellis                          25,000
         Paul Weiss                               120,000
         BMC                                      215,000
         Walker Truesdell                         285,000
                                              -----------
                                                  645,000

      Other Fees/Costs
         US Trustee                                40,000
         Rent/Occupancy                             5,000
         Offsite Storage/Documents                 15,000
         Miscellaneous                             75,000
                                              -----------
                                                  135,000

      Taxes
         Withdrawal Fees                           15,000
         All other taxes                          120,000
                                              -----------
                                                  135,000

         Worst Case                            $1,000,000
         Less: Adjustments for
               Best Case Reduction in Costs      (250,000)
                                              -----------
         Best Case                               $750,000

      A full-text copy of Musicland's 2007-2008 Administrative
      Budget is available for free at:

        http://researcharchives.com/t/s?14e5

B. Post-Effective Date Agreement

   Musicland will enter into a Post-Effective Date Agreement with
   Hobart G. Truesdell to provide for the appointment of Mr.
   Truesdell as the Responsible Person, as the term is defined in
   the 2nd Amended Plan, and as the sole officer and sole
   director of Reorganized Musicland.

   The Responsible Person will cause Reorganized Musicland to pay
   all Allowed Claims in accordance with the terms and conditions
   of the Plan, the Post-Effective Date Agreement and orders of
   the Court.

   In his capacity as the Responsible Person, Mr. Truesdell will,
   among others:

      (a) invest the Debtors' Cash, including, but not limited
          to, the Cash held in the Reserves;

      (b) calculate and pay all distributions to be made under
          the Plan, the Agreement and other orders of the Court
          to holders of Allowed Administrative Claims, Allowed
          Priority Tax Claims, Allowed Other Priority Claims,
          Allowed Other Secured Claims, Allowed Secured Trade
          Claims and Allowed Unsecured Claims;

      (c) employ, supervise and reasonably compensate
          professionals retained to represent the interests,
          and serve on behalf, of Reorganized Musicland;
          provided, however, the Responsible Person will attempt
          to negotiate with his or her selected counsel the
          prosecution of Unsecured Transferred Actions on a
          contingency fee or reduced blended fee arrangement;

      (d) make and file tax returns for the Debtors or
          Reorganized Musicland;

      (e) object to Claims or Interests filed against the
          Debtors' Estate on any appropriate basis;

      (f) seek estimation of contingent or unliquidated claims
          under Section 502(c) of the Bankruptcy Code;

      (g) seek determination of tax liability under Section 505
          of the Bankruptcy Code;

      (h) except as provided under the Plan, prosecute avoidance
          actions under Sections 544, 545, 547, 548, 549 and 553
          of the Bankruptcy Code;

      (i) except as provided under the Plan, prosecute turnover
          actions under Sections 542 and 543;

      (j) except as provided under the Plan, prosecute any other
          Claims or Causes of Action of the Debtors or
          Reorganized Musicland;

      (k) dissolve Reorganized Musicland;

      (l) exercise all powers and rights, and take all actions,
          contemplated by the Agreement;

      (m) appoint and reasonably compensate any agents or
          representatives to carry out the duties of the
          Responsible Person; and

      (n) take any and all other actions necessary or appropriate
          to implement or consummate the Plan and the provisions
          of the Agreement.

   Mr. Truesdell will be entitled to receive as compensation for
   services performed in connection with the Agreement an hourly
   rate of $300, plus reasonable, documented out-of-pocket
   expenses.  He will also be paid an incentive fee of 5% of
   amounts distributed to holders of Secured Trade Claims in
   excess of $50,000,000.

   Mr. Truesdell will pay an 2% incentive fee of amounts
   distributed to holders of Secured Trade Claims in excess of
   $42,000,000 to Craig G. Wassenaar and Vladmir Bogdanov for
   services rendered and to be rendered by them.

   In addition, other personnel of Walker, Truesdell, Radick &
   Associates made available by the Responsible Persion will be
   entitled to receive compensation at these hourly rates:

            Personnel                 Compensation
            ---------                 ------------
            Principals                    $300
            Associates                    $275
            Junior Associates             $250
            Paraprofessionals             $75

   The Agreement will terminate on the later of:

      (i) 30 days after the exhaustion of the assets of the
          Estate and Reorganized Musicland; and

     (ii) the filing of a certificate of termination with the
          Court.

   The Certificate will not be filed until all distributions
   required to be made pursuant to the Plan and the Agreement
   have been made.

   A full-text copy of Post-Effective Date Agreement with
   Truesdell is available for free at:

     http://researcharchives.com/t/s?14e6

C. Members of the Plan Committee

   The Plan provides that a Plan Committee will be formed
   consisting of two Persons designated by the Official Committee
   of Unsecured Creditors and two Persons designated by the
   Informal Committee of Secured Trade Vendors.

   As of Nov. 8, 2006, the Creditors Committee has designated
   Ron Tucker of Simon Property Group, LP, to serve on the Plan
   Committee.  The Informal Committee of Secured Trade Vendors
   has designated Nick DeLeonardis of UBS Willow Fund, LLC, to
   serve on the Plan Committee.

   The Committees will supplement the disclosure on or before the
   Confirmation Hearing.

D. Schedule of Avoidance Actions

   Musicland lists current and potential defendants to Avoidance
   Actions which have or may be commenced by Mr. Truesdell, on
   behalf of the Debtors, or the Plan Committee pursuant to the
   2nd Amended Plan.

   The Defendants received transfers totaling more than $200,000,
   in the aggregate.

   A list of the Avoidance Action Defendants is available for
   free at http://researcharchives.com/t/s?14e7

E. Security Bond

   Pursuant to the terms of the Plan, Mr. Truesdell will obtain a
   $5,000,000 bond to secure the funds to be disbursed under the
   Plan.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


MUSICLAND HOLDING: Iowa Revenue Opposes Second Amended Plan
-----------------------------------------------------------
The Iowa Department of Revenue asserts that Musicland Holding
Corp. and its debtor-affiliates' 2nd Amended Plan of Liquidation
failed to comply with Section 1129(a)(9)(c) of the Bankruptcy
Code.

Section 1129(a)(9)(c) provides that priority tax claimants will
receive regular installment payments equal to the allowed amount
of their claim over a period ending not later than five years
after the date of the order for relief.  Present value is achieved
by adding an appropriate interest rate to any deferred payment.

Iowa has filed proofs of claim for unpaid prepetition corporation
income taxes for $328,586, including priority claims under
Section 507(a)(8)(A) of the Bankruptcy Code totaling $298,803,
John Waters, Esq., in Des Moines, Iowa, relates.

Mr. Waters argues that the Amended Plan fails to comply with
Section 1129(a)(9)(c) because it does not provide:

   -- an appropriate rate of interest; and

   -- any interest during the time between the effective date and
      allowance of the claim.

Pursuant to Section 421.7 of the Iowa Code and Iowa Administrative
Rule 701-10.2(25), the current statutory rate for unpaid taxes is
8% per year.  Beginning Jan. 1, 2007, the Iowa statutory rate will
be increased to 10% per year.

Mr. Waters contends that the Plan must be amended to provide for
interest at the statutory rate in effect during the month when the
Plan is to be confirmed.

The Plan provides for options for the repayment of priority
creditors in cash, and in quarterly payments with interest from
the effective date until the claim is paid.  "Regardless of the
payment option selected by the Debtors, priority tax creditors
with unresolved claims will have their payments deferred but will
not receive the interest required by Section 1129(a)(9)(C)," Mr.
Waters points out.

Iowa asks the U.S. Bankruptcy Court for the Southern District of
New York to deny confirmation of the Debtors' Plan.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NOMURA HOME: Moody's Rates Class B-2 Certificates at Ba2
--------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Nomura Home Equity Loan, Inc., Home Equity
Loan Trust, Series 2006-FM2 and ratings ranging from Aa1 to Ba2 to
the subordinate certificates in the deal.

The securitization is backed by Fremont Investment & Loan
originated, adjustable-rate and fixed-rate, subprime mortgage
loans acquired by Nomura Credit & Capital, Inc.  The ratings are
based primarily on the credit quality of the loans and on
protection against credit losses provided by subordination, excess
spread, and overcollateralization.  The ratings also benefit from
an interest-rate swap agreement and an interest-rate cap agreement
provided by HSBC Bank USA, National Association.

Moody's expects collateral losses to range from 5.65% to 6.15%.

Equity One, Inc. will service the mortgage loans and Wells Fargo
Bank, National Association will act as master servicer.

Moody's has assigned Equity One its servicer quality rating of
SQ2- as a servicer of subprime mortgage loans.  Also, the rating
agency has assigned Wells Fargo its top servicer quality rating of
SQ1 as a master servicer of mortgage loans.

These are the rating actions:

   * Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
     Series 2006-FM2

   * Asset-Backed Certificates, Series 2006-FM2

                    Cl. I-A-1, Assigned Aaa
                    Cl. II-A-1, Assigned Aaa
                    Cl. II-A-2, Assigned Aaa
                    Cl. II-A-3, Assigned Aaa
                    Cl. II-A-4, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A2
                    Cl. M-6, Assigned A3
                    Cl. M-7, Assigned Baa1
                    Cl. M-8, Assigned Baa2
                    Cl. M-9, Assigned Baa3
                    Cl. B-1, Assigned Ba1
                    Cl. B-2, Assigned Ba2

The Class B-1 and B-2 certificates 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.


OPTION ONE: Moody's Rates Class M-11 Certificates at Ba2
--------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by Option One Mortgage Loan Trust 2006-3 and
ratings ranging from Aa1 to Ba2 to the subordinate certificates in
the deal.

The securitization is backed by Option One Mortgage Corporation
originated, adjustable-rate (96%) and fixed-rate (4%), subprime
mortgage loans acquired by Option One Mortgage Acceptance
Corporation.

The ratings are based primarily on the credit quality of the loans
and on protection against credit losses by the primary mortgage
insurance policy provided by Mortgage Guaranty Insurance
Corporation.  The ratings also benefit from subordination, excess
spread, overcollateralization, and the interest-rate swap
agreement provided by Bear Stearns Financial Products, Inc.

After taking into account the benefit from the mortgage insurance
Moody's expects collateral losses to range from 5.1% to 5.6%.

Option One Mortgage Corporation will service the mortgage loans.
Moody's has assigned Option One its servicer quality rating of SQ1
as a servicer of subprime mortgage loans.

These are the rating actions:

   * Option One Mortgage Loan Trust 2006-3

   * Asset-Backed Certificates, Series 2006-3

                    Cl. I-A-1, Assigned Aaa
                    Cl. II-A-1, Assigned Aaa
                    Cl. II-A-2, Assigned Aaa
                    Cl. II-A-3, Assigned Aaa
                    Cl. II-A-4, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A1
                    Cl. M-5, Assigned A2
                    Cl. M-6, Assigned A3
                    Cl. M-7, Assigned Baa1
                    Cl. M-8, Assigned Baa1
                    Cl. M-9, Assigned Baa2
                    Cl. M-10, Assigned Ba1
                    Cl. M-11, Assigned Ba2


PANTHER RE: Moody's Rates $144 Million Mezzanine Term Loans at Ba2
------------------------------------------------------------------
Moody's Investors Service assigned a provisional Baa3 rating to
the $72 million senior loans and a provisional Ba2 rating to the
$144 million mezzanine loans of Bermuda-domiciled Panther Re
Bermuda Limited.  Moody's has also assigned a provisional A3
insurance financial strength rating to Panther Re.

The outlook for the ratings is stable.

The rating agency expects to remove the provisional status and
assign definitive ratings at the same level upon review of final
executed documentation, provided the documentation is consistent
with the terms and conditions specified as of Nov. 8, 2006 that
underlie these provisional ratings.

Both term loan facilities will mature in Nov. 2010 and will be
held by financial institutions and other institutional lenders.
The facilities are secured by the capital stock of Panther Re. The
loans are non-amortizing, but allow for voluntary prepayments and
require mandatory prepayments under certain circumstances. Under
the terms of the facilities, Panther Re's debt obligations are
contractually subordinated to the claims of its client.

Panther Re is a limited-life, newly-formed Class 3 Bermuda
reinsurer that will enter into a collateralized quota share
reinsurance treaty with its sole client, Lloyd's Syndicate 33, as
managed and underwritten by Hiscox Syndicates Limited.

Syndicate 33 will cede -- and Panther Re will assume -- 40% of the
gross written premiums and losses of Syndicate 33's global
property catastrophe excess-of-loss reinsurance book in
underwriting year 2007 and up to 50% of the said book in
underwriting year 2008.  The transaction requires final approval
from Lloyd's of London.

Initial capitalization for Panther Re is expected to be
$360 million, comprised of the $72 million senior term loans, $144
million mezzanine term loans, and $144 million of common equity.  
Panther Re will post its total paid-in capital, net of transaction
expenses, as cash and securities into a security trust established
for the benefit of Syndicate 33.

Further, Panther Re's share of premiums will be held by Syndicate
33 in its Lloyd's Premium Trust Fund, on Panther Re's behalf,
consistent with Lloyd's practices.  Claims will initially be paid
out of the Lloyd's Premium Trust Funds from funds withheld on
Panther Re's share of premiums, and then from funds transferred
from the security trust.

Panther Re's ratings reflect an analysis of the structural and
contractual features of the Panther Re vehicle, as well as
probabilistic analysis to determine both the probability of loss
and expected severity of loss to Panther Re's senior and mezzanine
debt holders and to its sole client, Syndicate 33.

The ratings for the term loans are supported by Panther Re's level
of capitalization relative to its catastrophe exposure, certain
structural characteristics -- particularly as they relate to
dividend payouts and return of capital -- that serve to better
align the interests of equity and debt investors, and Syndicate
33's good but volatile historical loss experience, which was an
important consideration when calibrating Panther Re's catastrophe
probability curves.

These positive factors are tempered by four elements of the
transaction.

   -- First, the minimum collateral test, as it is currently
      structured, heightens the possibility of missed interest    
      payments owing to the meaningful amounts of assets which    
      need to be kept in the trust to provide Syndicate 33 with a
      safeguard against potential adverse loss reserve
      development.  Moody's placed particular emphasis on the
      minimum collateral test, given that the interests of equity
      holders, debt holders, and the reinsured are partly aligned
      through that structural feature.

   -- Secondly, debt holders are exposed to uncertainty    
      surrounding the exact amount of liabilities that are owed     
      to Syndicate 33 when the liabilities are commuted.

   -- Thirdly, subsequent reinsurance purchased by Syndicate 33
      will not inure to the benefit of Panther Re, although
      Syndicate 33 is obligated to share with Panther Re
      information relating to Syndicate 33's reinsurance
      purchases.  If Panther Re decides not to purchase similar
      reinsurance, this raises the possibility that Panther Re's
      financial results will not mirror those of Syndicate 33's
      relevant book of business.

   -- Lastly, Panther Re is liable for its proportionate share of
      unanticipated losses and expenses that arise from any
      "excess of policy limits awards" or "extra contractual
      obligations", as well as additional levies imposed by
      Lloyd's, underscoring the "follow the fortunes" nature of
      this reinsurance agreement.

Moody's assessment was also impacted by the vehicle's high debt
leverage and parameter risk in the modeling assumptions that form
the basis of the company's capitalization.

The Ba2 rating for the mezzanine loans reflects their more junior
position in the cash waterfall, as borne out by the modeling
results.

Panther Re's A3 insurance financial strength rating reflects the
creditworthiness of Panther Re with respect to its ability to meet
policyholder obligations, which is enhanced by the establishment
of a collateral trust for the benefit of its sole client.

The ratings contemplate a maximum underwriting period of two years
and assume no additional debt above the $216 million term loan
facilities.

Going forward, the ratings will reflect updated analysis of the
cumulative performance of the company, its future overall risk-
adjusted capitalization level, and updated probabilistic analysis
of its reinsurance portfolio.  The current ratings do not
anticipate any potential amendments that may be made to the
agreements.  Any future amendments will be evaluated at that point
in time and Moody's will assess the impact on the ratings, if any.

These provisional ratings have been assigned:

   * Panther Re Bermuda Limited

     -- $72 million senior term loans due November 2010 at Baa3.

   * Panther Re Bermuda Limited

     -- $144 million mezzanine term loans due November 2010 at
        Ba2.

   * Panther Re Bermuda Limited.

     -- insurance financial strength at A3.

Panther Re Bermuda Limited, based in Bermuda, is a licensed Class
3 reinsurer that will enter into a collateralized quota share
reinsurance treaty with its sole client, Lloyd's Syndicate 33, as
managed and underwritten by Hiscox Syndicates Limited.


PARKWAY HOSPITAL: Wants Until January 31 to Remove Civil Actions
----------------------------------------------------------------
The Parkway Hospital Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York in Manhattan for permission to
extend until Jan. 31, 2007, to file notices of removal on pending
civil actions.

The Debtor informs the Court that it had devoted its time on a
successful reorganization and negotiated a consensual plan of
reorganization with the Committee.  As a result, the Debtor has
not been in a full opportunity to review the prepetition actions.

The extension, the Debtor says, will afford it more time to make
fully-informed decisions concerning removal of each action and
will assure that the Debtor does not forfeit valuable rights under
Section 1452 of the Bankruptcy Code.

The Parkway Hospital, Inc., operates a 251-bed proprietary, acute
care community hospital located in Forest Hills, New York.  The
Company filed for chapter 11 protection on July 1, 2005 (Bankr.
S.D.N.Y. Case No. 05-14876).  Timothy W. Walsh, Esq., at DLA Piper
Rudnick Gray Cary US LLP, represents the Debtor in its
restructuring efforts.  The firm of Alston & Bird LLP serves as
substitute bankruptcy counsel to the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $28,859,000 in total assets and
$47,566,000 in total debts.


PERFORMANCE TRANSPORTATION: Files Amended Reorganization Plan
-------------------------------------------------------------
Performance Logistics Group Inc. and its 13 debtor-affiliates
delivered a first amendment to their Joint Plan of Reorganization
and Disclosure Statement with the U.S. Bankruptcy Court for the
Western District of New York on Nov. 10, 2006, to clarify certain
provisions and revise the definition of certain terms.

The Amended Plan clarifies that DIP Facility Claim will also
receive payoff in Cash.

The Amended Plan provides that Yucaipa holds an Allowed
superpriority Administrative Claim with respect to the Junior DIP
Facility, which claim is entitled to payment from, among other
things, the proceeds of Avoidance Actions.  Yucaipa will not be
obligated to file any proof of claim with respect to any
Administrative Claim arising out of or related to the Junior DIP
Facility.

In addition, the Junior DIP Lenders will have the option, in their
sole discretion, to convert the Junior DIP Facility Obligations
into New PLG Common Stock or seek payment of the Junior DIP
Facility Obligations from the proceeds of Avoidance Action.

The Amended Plan also provides that Yucaipa will select the
Liquidating Trustee.

Holders of the First Lien Claims as of the Effective Date will
have Allowed Claims aggregating not less than $________ under the
Amended Plan.   In full satisfaction of the Allowed Claims, on the
Effective Date, the Reorganized Debtors or a Disbursing Agent
chosen by the Reorganized Debtors will pay in full in Cash all of
the First Lien Claims to the First Lien Agent on behalf of the
claimholders.

The Amended Plan further clarifies that the assumption of
indemnification provisions will only apply to directors, officers
and employees of the Debtors who remain in their capacity as
directors, officers and employees for at least two weeks following
the first meeting of the Initial Board of the Reorganized Debtors
-- Assumption Date.

The Reorganized Debtors will obtain tail coverage under directors'
and officers' insurance policy for their current officers and
directors who remain in those capacities as of the Assumption Date
in an amount to be determined subject to Yucaipa's reasonable
consent.

The Amended Disclosure Statement provides that the Debtors are
parties in approximately 30 personal injury actions that were
brought against them on account of the alleged negligence of the
drivers of their vehicle carrier tractor-trailer units.  In
conducting their operations, the Debtors are required to maintain
a certain amount of automotive liability insurance to cover any
damages awarded against the Debtors on account of the actions.  
Prior to April 1, 2006, the Debtors maintained automotive
liability insurance with Discover Property & Casualty Insurance
Company.  Discover provided the Debtors with insurance on an
annual basis with the insurance being renewed at the end of each
policy year.

Under their automotive insurance policies with Discover, the
Debtors were subject, depending upon the policy year, to a
$500,000 or $1 million self-funded retention.  Under the self-
funded retentions, in personal injury actions brought against the
Debtors or their drivers, the Debtors are liable for the first
$500,000 or $1 million of defense costs and judgments rendered
against the Debtors before insurance would provide any coverage.  
If the Debtors are unable to pay the first $500,000 or $1 million
of any judgment awarded against them a personal injury litigant
would be entitled to seek payment from Discover under the Debtors'
automotive liability insurance policy.

After satisfying any judgment, Discover would be able to draw on
the letter of credit.  The self-funded retentions on the Debtors'
automotive liability insurance policies with Discover are secured
by an approximately $41.4 million letter of credit the Debtors
maintain with Credit Suisse, Cayman Islands Branch.

In April 2006, the Debtors entered into a new six-month insurance
program with National Union. Under this insurance program, the
Debtors obtained automotive liability insurance with a self-
funded retention of $500,000.  In October 2006, the Debtors
renewed such insurance for another six months.  The self-funded
retention on the Debtors current insurance, renewed in October
2006, is $500,000.  The self-funded retentions on the Debtors'
automotive liability insurance with National Union are secured by
an approximately $12 million letter of credit the Debtors maintain
with Credit Suisse.  The letter of credit covers any personal
injury liabilities in connection with vehicle accidents involving
the Debtors that occur in the period April 1, 2006 to
April 1, 2007.

The Debtors also disclose about Frank Pietroniro's tort claims
against the estate.  To the extent it becomes an Allowed Claim,
Mr. Pietroniro's cause of action will be covered under the letter
of credit.

The Debtors also delivered an amended liquidation analysis
indicating a slight increase in the book value of several assets.
This increases the gross liquidation value and the total proceeds
available for distribution to $57,786,575:
                                                      Estimated
                             Book Value    Estimated  Liquidation
   Liquidation of Assets     at 09/30/06   Recovery   Value
   ---------------------    -----------   ---------  -----------
   Cash & cash equivalents   $12,700,000      100.0%  $12,700,000
   Restricted cash             3,535,000        0.0%            -
   Accounts receivable        19,000,000       79.5%   15,105,000
   Inventory                   2,582,000        0.0%            -
   Prepaid & Other Current
      Assets                   5,000,000        0.0%            -
   Fixed Assets - Excluding
      Land                    48,544,000       60.7%   29,483,471
   Land                        4,269,000       91.1%    3,890,000
   Other Assets                  550,000        0.0%            -
                                                      -----------
      GROSS LIQUIDATION VALUE                         $61,178,471

    ESTIMATED LIQUIDATING EXPENSES
    Chapter 7 Trustee Fees                             $1,454,354
    Collection, selling & broker costs                  1,937,543
                                                      -----------
       Total                                           $3,391,897
                                                      -----------
    TOTAL PROCEEDS AVAILABLE
       FOR DISTRIBUTION                               $57,786,575
                                                      ===========

Based on the Debtors' amended Liquidation Analysis, only holders
of DIP Credit Facility Claims and Claims under the DIP Carve-Out
will receive distribution in a Chapter 7 liquidation.  No proceeds
will be available for First Lien Secured Claims, Second Lien
Secured Claims, Administrative Claims, and General Unsecured
Claims.

The estimates of DIP Credit Facility Claims are still the same
except for its recovery percentage that is now up to 94.3%.

The Debtors lowered their estimate of the Claims under the DIP
Carve-Out to $750,000. Holders will still recover 100% of their
Claims under the amended Liquidation Analysis.

A full-text copy of the First Amended Plan is available at no
charge at http://researcharchives.com/t/s?14ee

A full-text copy of the First Amended Disclosure Statement is
available at no charge at http://researcharchives.com/t/s?14ef

A full-text copy of the three-year financial projections is
available at no charge at http://researcharchives.com/t/s?14f0

A full-text copy of the amended liquidation analysis is available
at no charge at http://researcharchives.com/t/s?14f1

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest   
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


PERFORMANCE TRANSPORTATION: Court Okays Changes to DIP Loan Pact
----------------------------------------------------------------
The Hon. Michael J. Kaplan of the U.S. Bankruptcy Court for the
Western District of New York authorized Performance Transportation
Services Inc. and its debtor-affiliates to enter into and perform
under a third amendment to their debtor-in-possession credit
agreement with Credit Suisse, Cayman Islands Branch, and pay any
related fees.

As reported in the Troubled Company Reporter on Nov. 2, 2006, the
Debtors sought to amend the DIP Credit Agreement to obtain an
increase in the maximum credit allowance for certain insurance.  

The salient terms of the Third Amendment are:

    (a) the Revolving Credit Commitments are increased to
        $25,262,328;

    (b) the Revolving Letter of Credit Sublimit is increased in
        two increments to provide additional availability for
        letters of credit under the Revolving Credit Facility in
        an amount not to exceed $8,700,000 in the aggregate;

    (c) the Lenders consent to the incurrence of $7,000,000 of
        Junior DIP financing;

    (d) certain covenants and default provisions are added to the
        Facility as set forth in the Third Amendment; and

    (e) the Debtors will request the issuance of letters of credit
        for their own account up to the amount of the Revolving
        L/C Sublimit.

A full-text copy of Amendment No. 3 to the Debtors' DIP Credit
Agreement with Credit Suisse is available at no charge at:

            http://researcharchives.com/t/s?144f  

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest   
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


PRIDE INT'L: Acquires Deepwater Semisubmersibles for $215 Million
-----------------------------------------------------------------
Pride International Inc. has disclosed the acquisition of its
partner's interest in the joint venture companies that own the two
deepwater semisubmersibles Pride Rio de Janeiro and Pride
Portland.  The transaction increases the Company's interest in
these two units from 30% to 100%.

Constructed in 2004, the Pride Rio de Janeiro and the Pride
Portland are both dynamically positioned and capable of operating
in water depths of up to 5,600 feet.  Currently, both units are
operating in Brazil under contracts that expire in 2010.

Total cash consideration of $215 million was paid with cash on
hand and funds available under the Company's existing credit
facility.  In addition, the transaction contemplates contingent
payments commencing during the six-year period after the current
contracts are completed, but only to the extent of 30% of the
portion of future dayrates on these rigs in excess of the current
leading edge rates, adjusted for cost increases and certain
capital additions.

As a result of the transaction, the operation, which is currently
accounted for as an equity investment, will be consolidated in the
Company's financial statements, resulting in the addition of
approximately $283 million of debt (representing 100% of the joint
venture's debt) to the Company's consolidated balance sheet. The
debt, which is guaranteed by the U.S. Maritime Administration,
matures in 2012 and is prepayable, in whole or in part, at any
time.  The Company expects the transaction to be slightly
accretive to its 2007 earnings, before considering potential
purchase accounting adjustments still under review relating to the
valuation of the existing below-market contracts, which could
result in further increases in expected accretion and could be
material.

In a related transaction, the Company also reached agreement for
the cancellation of future obligations under certain existing
agency relationships related to five offshore rigs the Company
operates in Brazil, including the two joint venture rigs.  The
agreement provided for the payment of $15 million in cash, which
the Company expects to expense during the fourth quarter 2006.

Louis A. Raspino, President and Chief Executive Officer,
commented, "This acquisition represents an important step in
executing our stated strategy to increase our exposure in
deepwater and to take advantage of close-in acquisition
opportunities.  With this transaction, we were able to grow our
deepwater fleet in a core market, without additional construction
or operational risk, at a significant discount to estimated
replacement cost, and at an attractive rate of return.  In
addition, we are exposed to significant upside leverage to
increased dayrates when the current below-market contracts on
these two rigs expire.  We continue to expect prospects in the
deepwater market to remain strong well into the next decade, and
we intend to pursue additional opportunities to expand our
presence in deepwater."

                   About Pride International

Headquartered in Houston, Texas, Pride International Inc.,
(NYSE: PDE)  -- http://www.prideinternational.com/-- provides  
onshore and offshore contract drilling and related services to oil
and gas companies worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 5, 2006
Moody's Investors Service, in connection with the implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology for the oilfield service and refining and marketing
sectors, confirmed its Ba1 Corporate Family Rating for Pride
International Inc.


RALI: Moody's Rates Class M-6 Mezzanine Certificates at Ba1
-----------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by RALI Series 2006-QA9 Trust, and ratings
ranging from Aa2 to Ba1 to the mezzanine certificates in the deal.

The securitization is backed by PHH Mortgage Corporation,
Homecomings Financial, LLC, GMAC Mortgage, LLC, and various other
originators originated adjustable-rate Alt-A mortgage loans
acquired by Residential Funding.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization and excess spread, and an interest rate swap
agreement.

Moody's expects collateral losses to range from 0.95% to 1.15%.

Primary servicing will be provided by PHH Mortgage Corporation,
Homecomings Financial, LLC, and GMAC Mortgage, LLC.

Residential Funding Company, LLC will act as master servicer.

Moody's has assigned Homecomings its top servicer quality rating
of SQ1 as a primary servicer of prime loans and a SQ2+ rating as a
primary servicer of subprime loans.

Furthermore, Moody's has assigned GMAC-RFC its top servicer
quality rating of SQ1 as master servicer.

These are the rating actions:

   * RALI Series 2006-QA9 Trust

   * Mortgage Asset-Backed Pass-Through Certificates, Series
     2006-QA9

                     Cl. A-1, Assigned Aaa
                     Cl. A-2, Assigned Aaa
                     Cl. M-1, Assigned Aa2
                     Cl. M-2, Assigned A2
                     Cl. M-3, Assigned Baa1
                     Cl. M-4, Assigned Baa2
                     Cl. M-5, Assigned Baa3
                     Cl. M-6, Assigned Ba1


RAMP SERIES: Moody's Rates Class B Certificates at Ba2
------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by RAMP Series 2006-RS6 Trust, and ratings
ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.

The securitization is backed by Homecomings Financial, LLC
(67.4%), GMAC Mortgage, LLC (17.3%), and various originators
originated adjustable-rate and fixed-rate mortgage loans.  The
loans are acquired through RFC's Negotiated Conduit Asset Program,
which was established for the acquisition of loans that do not
comply with some of the criteria of RFC's standard programs.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization, excess spread, and a swap agreement.

Moody's expects collateral losses to range from 2.9% to 3.4%.

Primary servicing will be provided by Homecomings Financial, LLC,
and GMAC Mortgage, LLC. Residential Funding Company, LLC  will act
as master servicer.

Moody's has assigned Homecomings its top servicer quality rating
of SQ1 as a primary servicer of prime loans and a servicer quality
rating of SQ2+ as a primary servicer of subprime loans.

Furthermore, Moody's has assigned GMAC-RFC its top servicer
quality rating of SQ1 as master servicer.

These are the rating actions:

   * RAMP Series 2006-RS6 Trust

   * Mortgage Asset-Backed Pass-Through Certificates, Series
     2006-RS6

                     Cl. A-1, Assigned Aaa
                     Cl. A-2, Assigned Aaa
                     Cl. A-3, Assigned Aaa
                     Cl. A-4, Assigned Aaa
                     Cl. M-1, Assigned Aa1
                     Cl. M-2, Assigned Aa2
                     Cl. M-3, Assigned Aa3
                     Cl. M-4, Assigned A1
                     Cl. M-5, Assigned A2
                     Cl. M-6, Assigned A3
                     Cl. M-7, Assigned Baa1
                     Cl. M-8, Assigned Baa2
                     Cl. M-9, Assigned Baa3
                     Cl. B, Assigned Ba2


REPERFORMING LOAN: Moody's Puts Three Certs.' Ratings Under Review
------------------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade three certificates from a Reperforming Loan REMIC Trust
Certificates deal, issued in 2003.

The transaction consists of securitizations of FHA insured and VA
guaranteed re-performing loans virtually all of which were
repurchased from GNMA pools.  The insurance covers a large percent
of any losses incurred as a result of borrower defaults.

The three most subordinate certificates from the Reperforming Loan
REMIC Trust Certificates, Series 2003-R4 transaction have been
placed on review for possible downgrade because existing credit
enhancement levels are low given the current projected losses on
the underlying pools.  Severities appear to be very high for FHA
VA collateral causing erosion in credit support. Currently there
is only a small amount of credit enhancement n the form a
subordinate bond.

These are the rating actions:

   * Issuer: Reperforming Loan REMIC Trust Certificates

     -- Series 2003-R4; Class B-2, current rating Baa2, under
        review for possible downgrade;

     -- Series 2003-R4; Class B-3, current rating Ba2, under
        review for possible downgrade;

     -- Series 2003-R4; Class B-4, current rating B2, under
        review for possible downgrade.


RESIDENTIAL ACCREDIT: Moody's Cuts Rating on Class M-3 Certificate
------------------------------------------------------------------
Moody's Investors Service has downgraded one tranche issued by
Residential Accredit Loans Inc. 2004-QA2.  The underlying
collateral consists of ALT-A, first-lien, adjustable-rate
residential mortgage loans.

This certificate has been downgraded based on the relatively low
credit enhancement levels compared to the current loss
projections.  The excess spread has significantly declined due to
the high percentage of hybrid collateral.  Most of these hybrid
loans are paying at a very low fixed rate while the certificate's
interest rate continues to increase.  The Yield Maintenance
Agreement is currently protecting the deal against basis risk
shortfalls, but does not provide protection against credit losses
nor does it replenish the overcollateralization amount.  As a
result, the deteriorating overcollateralization amount is causing
the subordinate tranches to be more vulnerable to defaults.

These are the rating actions:

   * Issuer: Residential Accredit Loans Inc. 2004-QA2

     -- Class M-3, Downgraded from Baa2 to Ba1.


SACO I: Moody's Rates Class B-4 Subordinate Certificates at Ba1
---------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by SACO I Trust 2006-10, and ratings ranging
from Aa1 to Ba1 to the mezzanine and subordinate certificates in
the deal.

The securitization is backed by fixed-rate, closed-end, subprime
and Alt-A mortgage loans acquired by EMC Mortgage Corporation. The
collateral was originated by Aames Capital Corporation, Silver
State Financial Services, Inc., Opteum Financial Services, LLC,
SouthStar Funding, LLC and various other originators, none of
which originated more than 10% of the mortgage loans.

The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization, excess spread, and a swap agreement.

Moody's expects collateral losses to range from 7.7% to 8.2%.

GMAC Mortgage, LLC will service the loans, and LaSalle Bank
National Association will act as master servicer.

These are the rating actions:

   * SACO I Trust 2006-10

   * Mortgage-Backed Certificates, Series 2006-10

                      Cl. A, Assigned Aaa
                      Cl. M-1, Assigned Aa1
                      Cl. M-2, Assigned Aa2
                      Cl. M-3, Assigned Aa3
                      Cl. M-4, Assigned Aa3
                      Cl. M-5, Assigned A1
                      Cl. M-6, Assigned A2
                      Cl. B-1, Assigned A3
                      Cl. B-2, Assigned Baa2
                      Cl. B-3, Assigned Baa3
                      Cl. B-4, Assigned Ba1


SALON MEDIA: Amendment Lowers Year 2005 Net Loss to $1.3 Million
----------------------------------------------------------------
Salon Media Group, Inc., filed an amended annual report for the
its fiscal year ended March 31, 2006, with the Securities and
Exchange Commission on Oct. 31, 2006.  

The amendment corrects the accounting for the value of the
beneficial conversion feature of the Company's Series C preferred
stock issued on Feb. 10, 2004 and the shares of Series D preferred
stock issued on Dec. 21, 2005.

The values of the beneficial conversion feature were recorded as
preferred deemed dividends in the statement of operations.  The
results of the re-calculations were reductions in charges for
preferred deemed dividends from $2,615,000 to $936,000 for the
year ended March 31, 2004 and from $1,040,000 to $227,000 for the
year ended March 31, 2006. These corrections had the effect of:

     a) Reducing the net loss attributable to common stockholders
        for the year ended March 31, 2006 from $2,162,000 to
        $1,349,000;

     b) Reducing the basic and diluted net loss per share
        attributable to common stockholders for the year ended
        March 31, 2006 from ($0.13) to ($0.08);

     c) Reducing the net loss attributable to common stockholders
        for the year ended March 31, 2004 from $8,661,000 to
        $6,982,000;

     d) Reducing the basic and diluted net loss per share
        attributable to common stockholders for the year ended
        March 31, 2004 from ($0.61) to ($0.50).

As a result of management's internal review, Salon Media
identified material weaknesses in its internal control over
financial reporting, including controls over the accounting for
issuances of preferred stock.  The company says it is actively
engaged in the implementation of remediation efforts to address
these material weaknesses.

A full-text copy of the amended annual report is available for
free at http://researcharchives.com/t/s?14d8

                      Going Concern Doubt

As reported in the Troubled Company Reporter on July 5, 2006,
Burr, Pilger & Mayer LLP expressed substantial doubt about Salon
Media Group, Inc.'s ability to continue as a going concern after
auditing the Company's financial statements for the fiscal year
ended March 31, 2006.  The auditor pointed to the Company's
recurring losses, negative cash flows from operations and
accumulated deficit.

                       About Salon Media

Founded in 1995, Salon Media Group, Inc. (SALN.OB) --
http://www.salon.com/-- is an Internet publishing company.  Salon  
Media combines original investigative stories and personal essays
along with commentary and staff-written Web logs about politics,
technology, culture, and entertainment.


SBA CMBS: Moody's Puts Low-B Ratings on Four Certificate Classes
----------------------------------------------------------------
Moody's Investors Service has assigned ratings to nine classes of
certificates issued by SBA CMBS Trust.

These are the rating actions:

   * Issuer: SBA CMBS Trust

   * Assumed Final Distribution Date: Nov. 2011

   * Rated Final Distribution Date: Nov. 2036

     -- $439,420,000 Million 5.314% Class A Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Aaa

     -- $106,680,000 Million 5.451% Class B Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Aa2

     -- $106,680,000 Million 5.559% Class C Series 2006-1
        Commercial Mortgage Pass-Through Certificates, A2

     -- $106,680,000 Million 5.852% Class D Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Baa2

     -- $36,540,000 Million 6.174% Class E Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Baa3

     -- $81,000,000 Million 6.709% Class F Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Ba1

     -- $121,000,000 Million 6.904% Class G Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Ba2

     -- $81,000,000 Million 7.389% Class H Series 2006-1
        Commercial Mortgage Pass-Through Certificates, Ba3

     -- $71,000,000 Million 7.825% Class J Series 2006-1
        Commercial Mortgage Pass-Through Certificates, B1

SBA Communications Corporation is a large wireless communications
tower owner with a presence in the United States, Puerto Rico and
the U.S. Virgin Islands.  

The firm has two distinct business segments consisting of site
leasing and site development; in 2005, SBA Communications derived
62% of its revenues from site leasing operations and the remainder
from site development activities.

On Nov. 18, 2005 SBA CMBS Trust issued a series of certificates
consisting of five subclasses in the amount of $405,000,000.

On April 27, 2006, an indirect subsidiary of SBA Communications
Corporation acquired 100% of the outstanding common stock of AAT
Communications Corp. from AAT Holdings, LLC II.  At the time of
the AAT Acquisition, AAT owned 1,850 wireless communication sites
in the United States.

SBA Communications Corporation included the majority of the
acquired AAT sites as well as sites it has acquired or were not
included in the initial securitization to raise an additional
$1.150 billion, the proceeds of which were used to repay the
bridge loan that financed a significant portion of the AAT
acquisition as well as debt tender offers and certain other
acquisition related expenses.

Moody's ratings on this transaction are derived from the rating
ageny's projected net cash that the pool will generate from
leasing the tower sites, the structural enhancement including the
subordinate tranches, and the legal structure.

Moody's ratings address only the credit risks associated with the
transaction. Other non-credit risks, such as those associated with
the timing of principal prepayments and the payment of prepayment
penalties, have not been addressed and may have a significant
effect on yield to investors.


SECURITIZED ASSET: Moody's Rates Class B-4 Certificates at Ba1
--------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Securitized Asset Backed Receivables LLC
Trust 2006-WM2 and ratings ranging from Aa1 to Ba1 to the
subordinate certificates in the deal.

The securitization is backed by WMC Mortgage Corp originated
adjustable-rate and fixed-rate subprime mortgage loans.  The
ratings are based primarily on the credit quality of the loans,
and on the protection from subordination, overcollateralization,
excess spread, an interest rate swap agreement, and an interest
rate cap agreement.

Moody's expects collateral losses to range from 4.6% to 5.1%.

HomEq Servicing Corporation will service the loans.  Moody's has
assigned HomEq Servicing Corporation its servicer quality rating
of SQ1- as a servicer of subprime mortgage loans.

These are the rating actions:

   * Securitized Asset Backed Receivables LLC Trust 2006-WM2

   * Mortgage Pass-Through Certificates, Series 2006-WM2

                    Cl. A-1, Assigned Aaa
                    Cl. A-2A, Assigned Aaa
                    Cl. A-2B, Assigned Aaa
                    Cl. A-2C, Assigned Aaa
                    Cl. A-2D, Assigned Aaa
                    Cl. M-1, Assigned Aa1
                    Cl. M-2, Assigned Aa2
                    Cl. M-3, Assigned Aa3
                    Cl. M-4, Assigned A2
                    Cl. M-5, Assigned A3
                    Cl. B-1, Assigned Baa1
                    Cl. B-2, Assigned Baa2
                    Cl. B-3, Assigned Baa3
                    Cl. B-4, Assigned Ba1

Class A-1 and Class B-4 have been sold in a privately negotiated
transaction 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.


SMARTIRE SYSTEMS: Posts $28.8 Million Net Loss in Fiscal Year 2006
------------------------------------------------------------------
SmarTire Systems Inc. reported a $28,829,105 net loss on
$3,455,649 of revenues for the fiscal year ended July 31, 2006,
compared with a $16,120,218 net loss on $1,463,460 of revenues for
the fiscal year ended July 31, 2005.

The Company's net loss ballooned to $28,829,105, in spite of the
rise in revenues in fiscal year 2006, mainly due to the increase
in net interest and financing expenses to $24,262,542 in fiscal
year 2006 which in previous year amounted to only $3,779,151.

The Company's balance sheet at July 31, 2006, showed $7,554,325 in
total assets and $35,579,978 in total liabilities, resulting in a
stockholders' deficit of $28,025,653.

At July 31, 2006, the Company's balance sheet also showed
$5,006,917 in total current assets available to pay $3,871,049 in
total current liabilities.

Full-text copies of the Company's financial statements for the
fiscal year ended July 31, 2006, are available for free at:
  
http://researcharchives.com/t/s?1495

Headquartered in Richmond, British Columbia, Canada,
SmarTire Systems Inc. develops and markets technically advanced
tire pressure monitoring systems for the transportation and
automotive industries that monitor tire pressure and tire
temperature.  Its TPMSs are designed for improved vehicle safety,
performance, reliability and fuel efficiency.  The company has
three wholly owned subsidiaries: SmarTire Technologies Inc.,
SmarTire USA Inc. and SmarTire Europe Limited.


SOLUTIA INC: Court Extends Removal Deadline to February 5
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the deadline of Solutia Inc. and its debtor-affiliates to  
file notices of removal of civil actions and other proceedings
through and including Feb. 5, 2007.

Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
explains that due to the continuing review of files and records
of their numerous civil actions, the Debtors require more time
before considering the removal of these actions.

Mr. Henes assures the Court that the rights of any party to the  
civil actions will not be prejudiced by the extension since the  
parties can seek to have the actions remanded.

The Debtors reserve their right to seek further extensions of
their Removal Deadline.

Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- with its subsidiaries, make and sell  
a variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y.
Case No. 03-17949).  When the Debtors filed for protection from
their creditors, they listed US$2,854,000,000 in assets and
US$3,223,000,000 in debts.  Solutia is represented by Richard M.
Cieri, Esq., at Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S.
Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. (Solutia Bankruptcy News, Issue No. 72; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


SOLUTIA INC: Has Until April 30 to Decide on Leases
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the time within which the Debtors may assume, assume and
assign, or reject unexpired nonresidential real property leases
until April 30, 2007.

As of Oct. 17, 2006, the Debtors are parties to approximately
30 unexpired nonresidential real property leases.  Jonathan S.
Henes, Esq., at Kirkland & Ellis LLP, in New York, asserts that
these unexpired leases are valuable assets of the Debtors'
estates and are essential to the continued operation of the
Debtors' businesses.  He adds that the Debtors use these assets
in their business operations throughout the world.

Mr. Henes relates that the Debtors are reviewing the unexpired
leases and are currently not in the position to assume or reject
these leases.  However, he assures the Court that pursuant to
their Plan of Reorganization, the Debtors will inform the
counterparties to the leases at least 10 days prior to the
Confirmation Hearing of the Debtors' intent to assume to assume
any of the leases.  To the extent an unexpired lease is not
assumed under the Plan, that lease will be rejected.  The
assumption or rejection of an unexpired lease, as applicable,
will be effective on the Plan effective date.

"At this stage of these Chapter 11 cases, an improvident or
premature rejection of the Unexpired Leases may harm the Debtors'
estates by resulting in the loss of one or more of the Unexpired
Leases that may be essential to the Debtors' business operations
and reorganization.  Likewise, the premature assumption of any
Unexpired Leases outside the Plan may harm the estates by
requiring the Debtors to cure prepetition claims, thereby paying
landlord unsecured claims prior to the time when an informed
decision can be made to assume an Unexpired Lease," Mr. Henes
maintains.

Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- with its subsidiaries, make and sell  
a variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y.
Case No. 03-17949).  When the Debtors filed for protection from
their creditors, they listed US$2,854,000,000 in assets and
US$3,223,000,000 in debts.  Solutia is represented by Richard M.
Cieri, Esq., at Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S.
Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice.  (Solutia Bankruptcy News, Issue No. 72; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


SOMODY MERCHANDISING: Sells Minnesota Headquarters Building
-----------------------------------------------------------
Somody Merchandising Inc. has sold its former headquarters
building in Willmar, Minnesota.

The company hired Atlas Partners LLC to serve as its real estate
advisor.

Somody Merchandising Inc. together with its parent company BMK
Inc. and other subsidiaries filed for chapter 11 protection on
December 3, 2001 (U.S. Bankr. C.D. Calif. Case No. 01-45961)
Lawrence Peitzman, Esq. at Peitzman, Glassman & Weg LLP
represented the Debtors.  The case was subsequently converted into
a chapter 7 proceeding.  Claybrook & Associates in Wilmington,
Delaware served as chapter 7 trustee.

Based in Carrollton, Texas, BMK Inc. is a full-service distributor
of goods to major supermarket and drugstore chains throughout the
US.  BMK offers some 10,000 retailers more than 27,000 SKUs of
cosmetics, health and beauty products, pet supplies, toys, and
more.  Founded in 1960, BMK was acquired by private investment
firm Sun Capital Partners in 2002.

Somody is a southern Minnesota subsidiary, which focuses on
specialty products.


SG MORTGAGE: Moody's Puts Two Certificates' Ratings Under Review
----------------------------------------------------------------
Moody's Investors Service placed under review for possible
downgrade two certificates from a transaction issued by SG
Mortgage Securities Trust 2006-FRE1.  The transaction consists of
subprime first-lien adjustable- and fixed-rate loans.  The loans
are originated by Fremont Investment and Loan.

The two most subordinate certificates from the transaction have
been placed on review for possible downgrade because existing
credit enhancement levels may be low given the current projected
losses on the underlying pools.  The transaction closed in May
2006 and has built up a large delinquency pipeline of
approximately 6% of the pool balance in foreclosure and REO.

These are the rating actions:

   * Issuer: SG Mortgage Securities Trust

   * Review for Possible Downgrade:

     -- Series 2006-FRE1, Class M-10, current rating Ba1, under
        review for possible downgrade;

     -- Series 2006-FRE1, Class M-11, current rating Ba2, under
        review for possible downgrade;


STRUCTURED ASSET: Moody's Rates Class B2 Certificates at Ba2
------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Structured Asset Securities Corporation
2006-BC3 and a ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.

The securitization is backed by Fieldstone Mortgage Company (31%),
Countrywide Home Loans, Inc., BNC Mortgage, Inc., Lehman Brothers
Bank, FSB, and other mortgage lenders originated, adjustable-rate
and fixed-rate, subprime mortgage loans acquired by Lehman
Brothers Holdings Inc.  

The ratings are based primarily on the credit quality of the loans
and on protection against credit losses by a subordination, excess
spread, and overcollateralization.

The ratings also benefit from interest-rate swap and interest-rate
cap agreements provided by ABN AMRO Bank, N.V.  After taking into
account the benefit from the mortgage insurance, Moody's expects
collateral losses to range from 4.65% to 5.15%.

Countrywide Home Loans Servicing LP, Option One Mortgage
Corporation, Wells Fargo Bank, N.A., Aurora Loan Services LLC, and
JPMorgan Chase Bank, National Association will service the loans
and Wells Fargo Bank, N.A. will act as master servicer.

Moody's has assigned Option One, Wells Fargo, and JPMorgan its
servicer quality rating of SQ1 as servicers of subprime mortgage
loans.

Moody's has assigned Wells Fargo its servicer quality rating of
SQ1 as a master servicer of mortgage loans.

These are the rating actions:

   * Structured Asset Securities Corporation

   * Mortgage Pass-Through Certificates, Series 2006-BC3

                    Cl. A1, Assigned Aaa
                    Cl. A2, Assigned Aaa
                    Cl. A3, Assigned Aaa
                    Cl. A4, Assigned Aaa
                    Cl. M1, Assigned Aa1
                    Cl. M2, Assigned Aa2
                    Cl. M3, Assigned Aa3
                    Cl. M4, Assigned A1
                    Cl. M5, Assigned A2
                    Cl. M6, Assigned A3
                    Cl. M7, Assigned Baa1
                    Cl. M8, Assigned Baa2
                    Cl. M9, Assigned Baa3
                    Cl. B1, Assigned Ba1
                    Cl. B2, Assigned Ba2


TENET HEALTHCARE: Third Quarter Net Loss Lowers to $89 Million
--------------------------------------------------------------
Tenet Healthcare Corporation filed its financial statements for
the third quarter ended Sept. 30, 2006, with the Securities and
Exchange Commission on Nov. 7, 2006.

For the three months ended Sept. 30, 2006, the Company reported an
$89 million net loss on $2.117 billion of net revenues, compared
with a $401 million net loss on $2.150 billion of net revenues in
the comparable quarter of 2005.

The Company's results of operations for this quarter compared with
the same quarter of the prior year reflects the progress it has
made in restructuring its operations to focus on a smaller group
of general hospitals.

The Company's turnaround timeframe is influenced by industry
trends like bad debt levels and a company-specific volume
challenge that continues to negatively affect its revenue growth
and operating expenses.

The Company's future profitability depends on volume growth,
adequate reimbursement levels, and cost control.

                       Financial Highlights

   -- Net inpatient revenue per patient day and per admission
      increased by 4.1% and 2.0%, respectively, due primarily to
      the effect of newly negotiated levels of reimbursement from
      its managed care contracts.  Patient days were down 5.2% and
      admissions were down 3.3%.

   -- Net outpatient revenue per visit increased 2.1%, while
      outpatient visits declined 4.1%.  The increase in revenue
      per visit is due primarily to higher emergency room volume
      relative to total visits and the effect of newly negotiated
      levels of reimbursement from its managed care contracts.

   -- Unfavorable net adjustments for prior-year cost reports and
      related valuation allowances, primarily related to Medicare
      and Medicaid, of $9 million in the current quarter compared
      with similar adjustments in the prior-year quarter that
      netted to a favorable $8 million.

At Sept. 30, 2006, the Company's balance sheet showed
$9.042 billion in total assets, $8.411 billion in total
liabilities and $631 million in total shareholders' equity.

                      Turnaround Strategies

During 2006, the Company continues to focus on the execution of
its turnaround strategies.  It is dedicated to improving its
patients', shareholders'' and other stakeholders' confidence in
the Company.  It believes that the Company will do that by
providing quality care and generating positive growth and earnings
at its hospitals.

Key developments include:

   -- On Oct. 31, 2006, the Company announced that Audrey T.
      Andrews has been named chief compliance officer, effective
      Nov. 15, 2006.  She will also supervise the Company's ethics
      program and will report directly to the quality, compliance,
      and ethics committee of our board of directors.  Audrey
      Andrews will succeed Steven W. Ortquist, who will depart
      later this year.

   -- On Oct. 27, 2006, the Company announced that it had signed a
      definitive agreement to sell Alvarado Hospital Medical
      Center in San Diego, Calif., which it agreed to sell or
      close as part of its May 2006 civil settlement with the
      U.S. Attorney in San Diego, for estimated pre-tax proceeds
      of approximately $36.5 million.

   -- On Oct. 26, 2006, the Company received a Revenue Agent's
      Report related to the recently completed Internal Revenue
      Service audit of its tax returns for fiscal years ended
      May 31, 1998, through the seven-month transition period
      ended Dec. 31, 2002.  The RAR proposes to assess an
      aggregate tax deficiency of $207 million plus interest
      ($50 million as of Sept. 30, 2006).  Of the $207 million
      proposed assessment, approximately $125 million, plus
      interest of $22 million as of Sept. 30, 2006, is
      attributable to issues that are not in dispute.  The Company
      adjusted its tax accounts accordingly, resulting in a
      benefit of $35 million recorded in the three months ended
      Sept. 30, 2006.

   -- On Oct. 12, 2006, the Company announced that it had signed a
      definitive agreement to sell Hollywood Medical Center in
      Hollywood, Fla., one of the 10 hospitals it identified for   
      divestiture in June 2006, for estimated pre-tax proceeds of
      approximately $32 million.

   -- On Oct. 11, 2006, the Company announced that it had signed a
      definitive agreement to sell Parkway Regional Medical Center
      in North Miami Beach, Fla., one of the 10 hospitals it
      identified for divestiture in June 2006, for estimated
      pre-tax proceeds of approximately $35 million.

   -- At the end of September 2006, the Company completed the sale
      of three hospitals in Louisiana and one in Florida, all of
      which it identified for divestiture in June 2006.  The three
      Louisiana hospitals sold were Kenner Regional Medical Center
      in Kenner, Meadowcrest Hospital in Gretna, and Memorial
      Medical Center in New Orleans.  Pre-tax proceeds are
      estimated to be approximately $48.5 million.  In addition,
      the buyer has agreed to reimburse the Company approximately
      $8 million for its costs related to the reconstruction of
      the New Orleans Surgical and Heart Institute on the campus
      of Memorial Medical Center.  The Company's sale to a
      different buyer of its 51% partnership interest in the
      Cleveland Clinic Hospital in Weston, Fla., generated
      pre-tax proceeds, including the repayment of partnership
      loans, of approximately $90 million.

   -- On Sept. 27, 2006, the Company entered into a five-year
      corporate integrity agreement with the Office of Inspector
      General of the U.S. Department of Health and Human Services.
      The CIA requires the Company to maintain its quality
      initiatives, compliance program and code of conduct, as well
      as formalize in writing its policies and procedures in the
      areas of billing and reimbursement, federal anti-kickback
      and Stark laws, and clinical quality.  It also establishes
      general and specialized training requirements and compliance
      reviews by independent organizations in the areas of
      Medicare outlier payments, diagnosis-related group claims,
      unallowable costs, physician financial arrangements and
      clinical quality systems.  The CIA had been anticipated
      since its global civil settlement in June 2006 with the
      U.S. Department of Justice.  Because of the many changes and
      enhancements it had made in the past three years, it already
      has in place many of the procedures and systems called for
      by the CIA, including the self-reporting of possible
      violations of laws, overpayments by the government and
      clinical quality issues; therefore, compliance with this
      agreement is anticipated not to create a significant burden
      or have a material effect on its results of operations or
      cash flows.

   -- On Sept. 27, 2006, the Company accepted a commitment from a
      group of banks for a five-year, $800 million senior secured
      revolving credit facility, which it expects to close in
      November 2006.  The credit facility will be collateralized
      by patient accounts receivable, and could be increased to
      $1 billion depending on the amount of eligible receivables
      outstanding.  Existing letters of credit will be rolled into
      the senior secured revolving credit facility, thereby
      lifting the restriction on $263 million of cash pledged
      under its letter of credit agreement.  Final terms and
      closing of the new credit facility are subject to customary
      covenants and documentation requirements.

   -- On Sept. 7, 2006, the Company announced that Cathy Kusaka
      Fraser would become its senior vice president of human
      resources effective Sept. 29, 2006.  She previously worked
      as a management consultant with McKinsey & Co. Inc., a vice
      president of Sabre Holdings Inc., and a manager and analyst
      for AMR Corp.

   -- On Aug. 25, 2006, Metrocrest Hospital Authority announced
      that another company was selected to manage RHD Memorial
      Medical Center in Farmers Branch, Texas, and Trinity Medical
      Center in Carrollton, Texas, following the expiration of the
      Company's operating lease.  The results of these hospitals
      will be included in continuing operations until the lease
      expires in August 2007.  As of Sept. 30, 2006, the Company's
      investment in the collateralized bonds issued by the local
      hospital authority was $95 million.  Of this amount,
      $31 million matures in 2007 and $64 million matures in 2010.

                   Corporate Integrity Agreement

In June 2006, the Company entered into a broad civil settlement
agreement with the U.S. Department of Justice and other federal
agencies that concluded several governmental investigations,
including inquiries into its receipt of certain Medicare outlier
payments before 2003, physician financial arrangements and
Medicare coding issues.

In accordance with the terms of the settlement, the Company
entered into a five-year corporate integrity agreement in
September 2006.  The CIA establishes annual training requirements
and compliance reviews by independent organizations in specific
areas.

In particular, the CIA requires, among other things, that the
Company:

   -- maintain its existing company-wide quality initiatives in
      the areas of evidence-based medicine, standards of clinical
      excellence, and quality measurements;

   -- maintain its existing company-wide compliance program and
      code of conduct;

   -- formalize in writing its policies and procedures in the
      areas of billing and reimbursement, compliance with the
      federal anti-kickback statute and Stark laws, and clinical
      quality, almost all of which are already in place and the
      remainder of which will be in place shortly;

   -- provide a variety of general and specialized compliance
      training to its employees, contractors and physicians it
      employ or who serve as medical directors and/or serve on
      its hospitals' governing boards; and

   -- engage independent outside entities to provide reviews of
      compliance and effectiveness in five areas, including
      Medicare outlier payments, DRG claims, unallowable costs,
      physician financial arrangements and clinical quality
      systems.

Further, the CIA requires the Company to maintain or establish
performance standards and incentives that link compensation and
incentive awards directly to clinical quality measures and
compliance program effectiveness measures.

The CIA also establishes a number of specific requirements for the
Quality, Compliance, and Ethics Committee of the Company's board
of directors.

Notably, the Committee must (1) retain an independent compliance
expert, and (2) assess our compliance program, including arranging
for the performance of a review of the effectiveness of the
program.

Based on this work, the Committee must then adopt a resolution
regarding its conclusions as to whether the Company has
implemented an effective compliance program.

Full-text copies of the Company's third quarter financials are
available for free at http://ResearchArchives.com/t/s?14de

                      About Tenet Healthcare

Tenet Healthcare Corporation -- http://www.tenethealth.com/--   
through its subsidiaries, owns and operates acute care hospitals
and related health care services.  Tenet's hospitals aim to
provide the best possible care to every patient who comes through
their doors, with a clear focus on quality and service.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 6, 2006,
Standard & Poor's Ratings Services assigned its 'BB-' loan and
recovery ratings to Tenet Healthcare Corp.'s $800 million senior
secured revolving credit facility due 2011.  The corporate credit
rating on Tenet is B/Stable/B-3.  

As reported in the Troubled Company Reporter on Oct. 2, 2006,
Moody's Investors Service affirmed the B3 Corporate Family Rating
of Tenet Healthcare Corporation.  Moody's also assigned a Ba3
rating to the $800 million secured credit facility and downgraded
the ratings on the company's existing unsecured notes to Caa1 from
B3.


TERWIN MORTGAGE: Moody's Rates Class B-6 Notes at Ba2
-----------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
notes and the Class G certificates issued by Terwin Mortgage Trust
2006-10SL 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 and adjustable-rate home equity lines-of-credit
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 Security Assurance, Inc.,
whose insurance financial strength is rated Aaa.  The ratings on
the subordinate notes and the Class 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 6.95% to 7.45%.

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 rating actions:

   * Terwin Mortgage Trust 2006-10SL

   * Asset-Backed Securities, Series 2006-10SL

                    Cl. A-1, Assigned Aaa
                    Cl. A-2, Assigned Aaa
                    Cl. M-1, Assigned Aa2
                    Cl. M-2, Assigned Aa3
                    Cl. M-3, Assigned A2
                    Cl. B-1, Assigned A3
                    Cl. B-2, Assigned Baa1
                    Cl. B-3, Assigned Baa2
                    Cl. B-4, Assigned Baa3
                    Cl. B-5, Assigned Ba1
                    Cl. B-6, Assigned Ba2
                    Cl. G, Assigned 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.


VALEANT PHARMA: Investigated for Backdating of Stock Options
------------------------------------------------------------
Keller Rohrback L.L.P. commenced an investigation of Valeant
Pharmaceuticals International and current and former Company
executive officers and directors for potential violations related
to the backdating of stock options.  

On Sept. 11, 2006, Valeant disclosed that it was conducting an
internal review of its historical stock option grant practices and
was cooperating with the SEC's informal inquiry regarding stock
options granted by the Company since Jan. 1, 2000.

On Oct. 20, 2006, Valeant's Board of Directors concluded that,
based on the preliminary report of the special committee
conducting the internal review, options granted in 1997 and
"subsequent years" reflected incorrect measurement dates and that
correcting these measurement dates would result in restatement of
the Company's financial statements for undetermined periods from
1997 to the present.  The Company further stated that the special
committee's review of Valeant's stock option grant practices and
its analysis regarding the magnitude of financial restatements is
ongoing.

Keller Rohrback's investigation focuses on the extent that the
Company's stock option grant dates and exercise prices of stock
options were manipulated by Valeant's executive officers and
directors in order to boost their value to those who received
them.  Specifically, Keller is looking at whether potential
defendants have breached their fiduciary duties and colluded with
one another to:

   (1) improperly backdate grants of Valeant's stock options to
       various executive officers and directors in violation of
       the Company's shareholder-approved stock option plans;

   (2) improperly record and account for the backdated stock
       options in violation of GAAP;

   (3) improperly take tax deductions based on the backdated stock
       options in violation of the Tax Code; and

   (4) produce and disseminate to the Company's shareholders false
       financial statements and other SEC filings that improperly
       recorded and accounted for the backdated option grants
       thereby concealing the improper backdating of stock
       options.

Current shareholders of Valeant stock may contact paralegal
Jennifer Tuato'o or attorneys Juli Farris, Elizabeth Leland, Cari
Campen Laufenberg, Lynn Sarko or Gary Gotto by telephone, toll-
free at 1-800-776-6044.

To date, more than 100 companies are being investigated by the
U.S. Department of Justice, the Securities and Exchange
Commission, and U.S. Attorney's offices across the country,
resulting in civil and even criminal charges.

                      About Keller Rohrback

Keller Rohrback L.L.P. is a law firm headquartered in Seattle that
has successfully represented shareholders and consumers in class
action cases for over two decades.  Its trial lawyers have
obtained judgments and settlements on behalf of clients in excess
of seven billion dollars.

   CONTACT:  Keller Rohrback L.L.P.
             Jennifer Tuato'o
             Paralegal
             (800) 776-6044
          
                          About Valeant

Headquartered in Costa Mesa, California, Valeant Pharmaceuticals
International (NYSE:VRX) -- http://www.valeant.com/is a research-  
based specialty pharmaceutical company that discovers, develops,
manufactures and markets products primarily in the areas of
neurology, infectious disease and dermatology.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 26, 2006,
Standard & Poor's Ratings Services placed its ratings on Costa
Mesa, California-based Valeant Pharmaceuticals International,
including Valeant's 'BB-' corporate credit rating, on CreditWatch
with negative implications.


VIRAGEN INTERNATIONAL: Ernst & Young Raises Going Concern Doubt
---------------------------------------------------------------
Ernst & Young LLP, raised substantial doubt about Viragen
International, Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
fiscal years ending June 30, 2006 and 2005.  The auditing firm
pointed to the company's recurring operating losses and
accumulated deficit and stockholders' deficit as of June 30, 2006,
as well as the company's ability to raise adequate capital to fund
necessary product commercialization and development activities.

Viragen International reported a $8.5 million net loss on $391,213
of revenues for the fiscal year ended June 30, 2006, compared with
a $15.6 million net loss on $278,784 of revenues in fiscal year
2005.

At June 30, 2006, the Company's balance sheet showed $12.7 million
in total assets and $28.9 million in total liabilities, resulting
in a $16.2 million stockholders' deficit.

Full-text copies of the Company's consolidated financial
statements for the fiscal year ended June 30, 2006, are available
for free at http://researcharchives.com/t/s?14ce

                    About Viragen International

Headquartered in Plantation, Florida, Viragen International Inc.
is engaged in the research, development, manufacture and sale of a
natural human alpha interferon product for treatment of viral and
malignant diseases.  The company is a subsidiary of Viragen Inc.

The company operates from three locations: Plantation, Florida,
which contains the company's administrative offices and support;
Viragen (Scotland) Ltd., located outside Edinburgh, Scotland,
which conducts research and development activities; and
ViraNative, located in Sweden, which houses the company's human
alpha interferon manufacturing facilities.

The company has not yet developed a pharmaceutical product and
gained regulatory approvals such that it can be widely marketed in
an international competitive environment.


WASHINGTON MUTUAL: Moody's Rates Class B-4 Certificates at Ba3
--------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Washington Mutual Mortgage Pass-Through
Certificates WMALT Series 2006-9 Trust, and ratings ranging from
Aa2 to Ba3 to the subordinate certificates in the deal.

The securitization is backed by M&T Mortgage Corporation (45.2%),
First Magnus Financial Corporation (14.3%), and various others
originated fixed-rate Alt-A mortgage loans.

The ratings are based primarily on the credit quality of the loans
and on protection from subordination, overcollateralization, and
excess spread.

Moody's expects collateral losses to range from 1.05% to 1.25%.

Washington Mutual Bank will service the loans and Washington
Mutual Mortgage Securities Corp. will act as master servicer.
Moody's has assigned Washington Mutual Mortgage Securities Corp
its servicer quality rating of SQ2+ as a master servicer of
mortgage loans.

These are the rating actions:

   * Washington Mutual Mortgage Pass-Through Certificates WMALT
     Series 2006-9 Trust

   * Washington Mutual Mortgage Pass-Through Certificates, WMALT
     Series 2006-9

                    Cl. A-1A, Assigned Aaa
                    Cl. A-1B, Assigned Aaa
                    Cl. A-2, Assigned Aaa
                    Cl. A-3, Assigned Aaa
                    Cl. A-4, Assigned Aaa
                    Cl. A-5, Assigned Aaa
                    Cl. A-6, Assigned Aaa
                    Cl. A-7, Assigned Aaa
                    Cl. A-8, Assigned Aaa
                    Cl. M-1, Assigned Aa2
                    Cl. M-2, Assigned A1
                    Cl. M-3, Assigned A2
                    Cl. M-4, Assigned A3
                    Cl. B-1, Assigned Baa1
                    Cl. B-2, Assigned Baa2
                    Cl. B-3, Assigned Baa3
                    Cl. R, Assigned Aaa
                    Cl. PPP, Assigned Aaa
                    Cl. B-4, Assigned Ba3

The Class B-4 certificates 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.


WILLIAMS COMPANIES: Earns $106.2 Million in 2006 Third Quarter  
--------------------------------------------------------------
The Williams Companies, Inc. reported a $106.2 million net income
on $3.3 billion of revenues for the third quarter ended Sept. 30,
2006, compared with a $4.4 million net income on $3.1 billion of
revenues for the same period in 2005.

At Sept. 30, 2006, the Company's balance sheet showed
$24.8 billion in total assets, $6.1 billion in total liabilities,
$438.4 million in minority interests in consolidated subsidiaries,
and $6.1 billion in stockholders' equity.  Additionally,
accumulated deficit at Sept. 30, 2006 stood at $1.1 billion.

The increase in revenues is largely due to increased crude
marketing revenues, increased natural gas liquid volumes and
prices, increased olefins revenues, and increased NGL marketing
revenues at the Midstream Gas and Liquids segment. Additionally,
revenues from the Exploration & Production segment increased
primarily due to increased production.  Partially offsetting these
increases are decreased realized revenues at the Power segment
associated with decreased power sales volumes and lower natural
gas sales prices.

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

              http://researcharchives.com/t/s?14ad
                
Headquartered in Tulsa, Oklahoma, Williams Companies, Inc.
(NYSE:WMB) -- http://www.williams.com/ -- through its  
subsidiaries, primarily finds, produces, gathers, processes and
transports natural gas.  The company also manages a wholesale
power business.  Williams' operations are concentrated in the
Pacific Northwest, Rocky Mountains, Gulf Coast, Southern
California and Eastern Seaboard.

                         *      *      *

As reported in the Troubled Company Reporter on Oct. 17, 2006,
Moody's Investors Service affirmed its Ba2 corporate family rating
on The Williams Companies, Inc., in connection with the
implementation of its new Probability-of-Default and Loss-Given-
Default ratings.


ZULTYS TECHNOLOGIES: Comes Out of Bankruptcy Under New Management
-----------------------------------------------------------------
Zultys Technologies has emerged from bankruptcy as a newly
reorganization company under new management following the
$2.65 million sale of its assets, TMCnet reports.

Judge Arthur S. Weissbrodt of U.S. Bankruptcy Court for the
Northern District of California approved the sale transaction with
Pivot VoIP.

Robert Liu, TMCnet executive editor, relates that Pivot VoIP,
which was formed and supported by Israeli-based Private Branch
Exchange manufacturer Telrad Connegy, completed its acquisition of
the Company's key assets including intellectual property, online
and offline brands; and would adopt the full identity of the
Company to ensure smooth business continuity.

Pivot VoIP, as a result of the deal, will cease to exist and move
its Mountain View, California headquarters to Zulty's Sunnyvale,
California operations.  Telrad Connergy owner and chairman Avi
Weinrib would assume the role of president and CEO of the newly
reorganized Zultys, Mr. Liu adds.

Zultys VP Vladimir Movshovich, in a phone interview, told TMCnet
that the immediate priorities are to rebuild confidence within the
reseller community that Zultys has every intention to continue to
support its existing product line.

Headquartered in Sunnyvale, California, Zultys Technologies
-- http://www.zultys.com/-- designs and manufactures products   
that converge telecommunications and data communications for
businesses.  The Company filed for chapter 11 protection on
Sept. 8, 2006 (Bankr. N.D. Calif. Case No. 06-51764).  Julie H.
Rome-Banks, Esq., Michael W. Malter, Esq., and Robert G. Harris,
Esq., at the Law Offices of Binder and Malter, represent the
Debtor.  When the Debtor filed for protection from its creditors,
it listed total assets of $1,804,276 and total debts of
$45,040,725.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  

                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
AMR Corp.               AMR        (514)       30,128   (1,202)
Clorox Co.              CLX         (55)        3,539      (20)


                             *********

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, Ronald C. Sy, Jason A.
Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A.
Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***