TCR_Public/070112.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, January 12, 2007, Vol. 11, No. 10

                             Headlines

311 HOLDING: Case Summary & 10 Largest Unsecured Creditors
750 EAST: Case Summary & Largest Unsecured Creditor
ACTUANT CORP: Earns $25.1 Million in First Quarter Ended Nov. 30
ADLER COLEMAN: Trustee Discloses Undelivered and Uncashed Claims
ADVANCED MARKETING: Hachette Book Objects to DIP Financing Plea

ADVANCED MEDICAL: IntraLase Deal Cues Moody's Ratings Review
AHERN RENTALS: Moody's Holds Corporate Family Rating at B2
AHERN RENTALS: S&P Lifts Corporate Credit Rating to B+ from B
AIRTRAN AIRWAYS: Commences Exchange Offer for Midwest Air's Shares
ALGOMA STEEL: DBRS Affirms Issuer Rating at BB (low)

ALLIANCE ATLANTIS: Planned Buyout Cues S&P's Negative CreditWatch
ALLIED HOLDINGS: 3 Parties Oppose Appointment of Equity Committee
ALLIED HOLDINGS: Ricardo Malave Allowed to Pursue State Court Suit
ALLIS-CHALMERS: S&P Lifts Corporate Credit Rating to B from B-
AMCAST INDUSTRIAL: Files Amended Plan and Disclosure Statement

AMERICAN CAMSHAFT: U.S. Trustee Appoints 7-Member Creditors' Panel
AMERICAN CAMSHAFT: Meeting of Creditors Scheduled on January 16
AMERIQUEST MORTGAGE: Fitch Junks Rating on Class M4 Debt
AZTAR CORP: Moody's Holds Rating on $475 Mil. Senior Notes at Ba3
BALDOR ELECTRIC: To Make $900 Million Notes and Stock Offerings

BALDOR ELECTRIC: Moody's Places Corporate Family Rating at B1
CALPINE CORP: Wants Holland & Hart as Special Counsel
CALPINE CORP: Wants to Hire AP Services as Crisis Managers
CANWEST MEDIAWORKS: Plan Acquisition Cues DBRS to Review Ratings
CATHOLIC CHURCH: Spokane, et al., File Joint Reorganization Plan

CENTRAL GARDEN: Compensation Committee OKs $1.28 Mil. Execs. Bonus
CDC MORTGAGE: Fitch Junks Rating on Class B1 and B2 Certificates
CHAPARRAL ENERGY: Commences Private Placement of $275 Mil. Notes
CHAPARRAL ENERGY: Moody's Puts Caa1 Rating on $275MM Notes Offer
CHAPARRAL ENERGY: S&P Junks Rating on $275 Million Senior Notes

COLLINS & AIKMAN: Closing Five Plants in North America by March
COLLINS & AIKMAN: Wants Lowell Lease Claims Agreement Approved
CONSOLIDATED CONTAINER: William Bell Resigns as Holdings' Director
CONSTELLATION BRANDS: Earns $107.8 Million in Qtr. Ended Nov. 30
CREATIVE FOODS: Section 341(a) Meeting Slated for February 23

CWABS ASSET: Moody's Rates Class B Certificates at Ba1
DAIMLERCHRYSLER AG: CEO Expresses Support for Chrysler Group Chief
DANA CORP: Ct. Approves Pact Allowing Jan. Pension Funding Payment
DANA CORP: Ct. Sets Deadlines for Sec. 1113/1114 Scheduling Plan
DELPHI CORP: Wants Excl. Plan-Filing Period Extended to July 31

DELPHI CORPORATION: Retains W.Y. Campbell to Sell Mounts Business
DELPHI CORP: Highland Proposes Alternative Framework Agreements
DELTA AIR: In Talks with Northwest Airlines on Possible Merger
DURA AUTOMOTIVE: Section 341(a) Meeting Adjourned Sine Die
DURA AUTOMOTIVE: Inks Pact with American Electric and NITCo

EASTMAN KODAK: Closing Logistics and Warehousing Facilities
EASTMAN KODAK: Fitch Holds Rating on Senior Unsecured Debt at B-
ED ROGERS: Case Summary & Eight Largest Unsecured Creditors
ELEUTERIO SILES: Voluntary Chapter 11 Case Summary
EMMIS COMMUNICATIONS: Earns $3.1 Million in Quarter Ended Nov. 30

EMTA HOLDINGS: Acquires Dyson Properties for $2.1 Million
FIRST FRANKLIN: S&P Cuts Rating on Class M-3 Loan to B from BBB
FIRST FRANKLIN: S&P Holds Rating on Class B-1 Certs. at BB+
FONIX CORP: Posts $10.8 Mil. Net Loss in 3rd Qtr. Ended Sept. 30
FORD MOTOR: CEO Alan Mulally Considers Selling Jaguar Brand

FORUM HEALTH: S&P Cuts Rating on Mahoning County Bonds to BB
FREEDOM PIPELINE: Involuntary Chapter 11 Case Summary
FRESH DEL MONTE: S&P Pares Corporate Credit Rating to BB- from BB
GLOBAL GEOPHYSICAL: Moody's Junks Rating on $40 Mil. Senior Loan
GOLD KIST: Pilgrim's Pride Completes Acquisition

GOLDEN KNIGHTS: Case Summary & 2 Largest Unsecured Creditors
GOODYEAR TIRE: Moody's Holds Corporate Family Rating at B1
GP INVESTMENTS: Fitch Rates Proposed $150 Million Notes at B
GSAA HOME: Moody's Rates Class I-B-1 Certificates at Ba1
IRON MOUNTAIN: S&P Rates Proposed EUR175 Mil. Senior Notes at B

JP MORGAN: Fitch Holds Low-B Ratings on 4 Certificate Classes
KARA HOMES: Court Approves Sale of Four New Jersey Projects
KNOLOGY INC: PrairieWave Buyout Cues Moody's Developing Outlook
KNOLOGY INC: Stock Purchase Cues S&P to Hold Credit Rating at B
MALDEN MILLS: Organizational Meeting Scheduled on January 19

MALDEN MILLS: Chrysalis Expresses Continued Interest in Assets
MARCAL PAPER: Brings-In Cole Schotz as Bankruptcy Counsel
MARCAL PAPER: U.S. Trustee Picks Seven-Member Creditors Committee
MARIA STAUB: Voluntary Chapter 11 Case Summary
MARINA OF NORTH CAROLINA: Involuntary Chapter 11 Case Summary

MASTR ASSET: Moody's Rates Class M-11 Certificates at Ba2
MCJUNKIN CORP: Moody's Places Corporate Family Rating at B1
MCJUNKIN CORP: S&P Places Corporate Credit Rating at B+
MEDINA FORWARDING: Involuntary Chapter 11 Case Summary
NASDAQ STOCK: Extends Final Offers for LSE Until January 26

NATURADE INC: Court Says Disclosure Statement is Adequate
NAVISTAR INT'L: Fitch Rates Proposed $1.3 Billion Facility at BB-
NEFF CORP: Good Performance Prompts S&P's Stable Outlook
NEWPAGE CORP: Good Financial Profile Cues S&P's Positive Outlook
NICHOLAS-APPLEGATE: Moody's Junks Rating on $10 Mil. Class D Notes

NORTHWEST AIRLINES: In Talks with Delta Air on Possible Merger
NORTHWEST AIRLINES: Seeks Court's Approval on New IAM Agreement
OWENS CORNING: Judge Fitzgerald Okays $2 Mil. Louisiana Accord
OWENS CORNING: Bemis Want $939,000 Admin. Claim Held as Valid
OWNIT MORTGAGE: Section 341(a) Meeting Slated for January 23

OWNIT MORTGAGE: Wants to Walk Away from Unexpired Leases
PERFORMANCE TRANSPORTATION: Can Close Curtis Bay Terminal
PERFORMANCE TRANSPORTATION: Wants Union's Claim Set as Prepetition
PILGRIM'S PRIDE: Completes Acquisition of Gold Kist
PILGRIM'S PRIDE: Plans Offering of $450 Million Unsecured Notes

PIMA COUNTY: S&P Pares Rating on Revenue Bonds to BB from BB+
PROPEX INC: S&P Pares Corporate Credit Rating to B- from B+
RAMBO IMAGING: Case Summary & Largest Unsecured Creditor
REDPRAIRIE CORP: S&P Holds Corporate Credit Rating at B
RIGEL CORP: Court Approves $6.4 Mil. Asset Sale to WKS Restaurant

ROGERS COMMS: Moody's Lifts Corp. Family Rating to Ba1 from Ba2
RONALD JOHNSON: Voluntary Chapter 11 Case Summary
ROYAL YACHT: Wants Buddy Ford as Bankruptcy Attorney
ROYAL YACHT: Section 341(a) Meeting Scheduled on January 24
SANKATY HIGH: Fitch Holds Low-B Rating on $33.5 Million of Notes

STAGE ONE: Case Summary & 17 Largest Unsecured Creditors
STALLION OILFIELD: Moody's Places Corporate Family Rating at B2
STRUCTURED ADJUSTABLE: Fitch Junks Rating on Class B5 Certificates
STRUCTURED ASSET: Fitch Junks Rating on Class B4 Certificates
STRUCTURED ASSET: Expected Losses Prompt Fitch's Ratings Downgrade

STT LAND: U.S. Trustee will Meet Creditors on January 31
SUPERVALU INC: Earns $113 Million in Fiscal Quarter Ended Dec. 2
TERWIN MORTGAGE: Fitch Junks Rating on Class B-5 Certificates
TOTES ISOTONER: S&P Places Corporate Credit Rating at B
TOWER AUTOMOTIVE: Equity Rights Offering Terminated

TRANSDIGM GROUP: Moody's Places B1 Corp. Family Rating on Review
UNITED SURGICAL: S&P Pares Corp. Credit Rating to B+ from BB-
UNION ACCEPTANCE: Court Enters Final Decree & Closes Chap. 11 Case
UNIVERSAL BEHAVIORAL: Involuntary Chapter 11 Case Summary
VAXGEN INC: James Panek Replaces Lance Gordon as President and CEO

VESCOR DEV'T: Files Amended Disclosure Statement on Chap. 11 Plan
WEEKS LANDING: Hires Gerard McHale as Chief Restructuring Officer
WERNER LADDER: Judge Carey Appoints Warren Smith as Fee Auditor
WERNER LADDER: Court Approves Mercer as Human Resources Consultant

* BOOK REVIEW: Working Together: 12 Principles for Achieving
               Excellence in Managing Projects, Teams, and
               Organizations

                             *********

311 HOLDING: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: 311 Holding Co., Inc.
             940 Pan Drive
             Hope Mills, NC 28348

Bankruptcy Case No.: 07-50035

Debtor affiliate filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      The New 311 Motorspeedway, Inc.            07-50034

Chapter 11 Petition Date: January 9, 2007

Court: Middle District of North Carolina (Winston-Salem)

Judge: Thomas W. Waldrep

Debtors' Counsel: Gene B. Tarr, Esq.
                  Blanco Tackabery Combs & Matamoros, P.A.
                  110 South Stratford Road, Suite 500
                  P.O. Drawer 25008
                  Winston-Salem, NC 27114-5008
                  Tel: (336) 761-1250

                            Estimated Assets     Estimated Debts
                            ----------------     ---------------
311 Holding Co., Inc.       $1 Million to        $100,000 to
                            $100 Million         $1 Million

The New 311 Motorspeedway,  $10,000 to $100,000  $100,000 to
  Inc.                                           $1 Million

List of 10 Largest Unsecured Creditors of:

         -- 311 Holding Co., Inc.
         -- The New 311 Motorspeedway, Inc.

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Goodyear Tire & Rubber Co.                                $7,035
c/o Larry Robinson
Enterprises Inc.
P.O. Box 142758
Fayetteville, GA 30214

Clear Channel                 Trade debt                  $5,670
P.O. Box 402520
Atlanta, GA 30384

Contingency Connection        Trade debt                  $1,800
21585 Campground Road
Bristol, VA 24202

WBRF-FM                       Trade debt                    $728

News & Record                 Trade debt                    $633

The Messenger                 Trade debt                    $522

WBLO-AM Sports Talk           Trade debt                    $400

Racing News                   Trade debt                    $300

Whee/WMVA/WYAT                Trade debt                    $264

Full House                    Trade debt                    $100


750 EAST: Case Summary & Largest Unsecured Creditor
---------------------------------------------------
Debtor: 750 East Thunderbird Road Corp.
        750 East Thunderbird Road, Suite 4
        Phoenix, AZ 85022

Bankruptcy Case No.: 07-00089

Chapter 11 Petition Date: January 9, 2007

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtor's Counsel: Allan D. Newdelman, Esq.
                  Allan D. Newdelman PC
                  80 East Columbus Avenue
                  Phoenix, AZ 85012
                  Tel: (602) 264-4550
                  Fax: (602) 277-0144

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

Debtor's Largest Unsecured Creditor:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
   Lynn Pirie                 Loan                      $180,000
   14835 North 15th Avenue
   Phoenix, AZ 85023


ACTUANT CORP: Earns $25.1 Million in First Quarter Ended Nov. 30
----------------------------------------------------------------
Actuant Corporation reported first quarter fiscal 2007 net
earnings of $25.1 million, which compares favorably with net
earnings of $21.3 million for the first quarter of fiscal 2006.

First quarter sales increased to $343 million from $284 million in
the prior year, driven by strong base business growth and
approximately $25 million of sales from acquired businesses.
Excluding foreign currency exchange rate changes and sales from
acquired businesses, first quarter fiscal 2007 sales increased
approximately 9% from the comparable prior year period.  This
increase was driven by growth in all four reportable segments,
including strong growth in the Industrial and Actuation Systems
segments.

At Nov. 30, 2006, the company's balance sheet showed $1.2 billion
in total assets, $845.8 million in total liabilities, and
$397 million in total stockholders' equity.

Net debt was $455 million, unchanged from the beginning of the
quarter.  Consistent with prior years, Actuant's first quarter
cash flow was impacted by seasonal trends including working
capital growth and employee incentive compensation payments for
the prior year.

Robert C. Arzbaecher, president and chief executive officer of
Actuant, commented, "Actuant is off to a solid start in fiscal
2007 with 9% core sales growth, which was slightly ahead of our
expectations.  Additionally, first quarter EPS increased
approximately 16% from last year, driven by higher sales and the
benefit of prior year acquisitions."

Mr. Arzbaecher continued, "We were especially pleased with the
performance of our Industrial segment, which generated strong
increases in both core sales and profit margins.  Our overall
profit margins were down year-over-year as a result of unfavorable
sales mix and lower Actuation System and Electrical segment
profitability.  Our previously announced European Electrical
restructuring activities continue on plan, although there was
limited financial impact this quarter."

He added, "We are also pleased with our acquisition progress, both
in integrating previously announced acquisitions and in
identifying new acquisition opportunities.  We've had success in
supplementing our core revenue growth with acquisitions, and this
combination has helped Actuant double its sales over the last
three years."

Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?1856

Headquartered in Butler, Wisconsin, Actuant Corp. (NYSE: ATU)
-- http://www.actuant.com/-- is a diversified industrial   
company with operations in more than 30 countries, including
Austria, Hungary, Poland, Italy, Spain, the Netherlands, France,
Russia, Turkey, Germany, and the United Kingdom.  The Actuant
businesses are market leaders in highly engineered position and
motion control systems and branded hydraulic and electrical
tools and supplies.  Since its creation through a spin-off in
2000, Actuant has grown its sales from US$482 million to over
US$1 billion and its market capitalization from US$113
million to over US$1.4 billion.  The company employs a
workforce of more than 6,300 worldwide.  

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Oct. 24,
Moody's Investors Service affirmed its Ba2 corporate family
rating for Actuant Corp.


ADLER COLEMAN: Trustee Discloses Undelivered and Uncashed Claims
----------------------------------------------------------------
Edwin B. Mishkin, Trustee for Adler, Coleman Clearing Corp., has
attempted to transfer customer property in the form of securities
or cash to customers and to make general creditor distributions to
these individuals and entities, but those transfers and
distributions have either been returned as undeliverable or were
never cashed:

           Abdullah Al-Dossary
           Acker Wolman Securities Corp.
           Advance Consulting Services, Inc.
           Aimee Potoker
           Ash and Co., Inc.
           AT&T Easylink Services
           AT&T Master Pension Trust
           Automoatic Data Processing
           Axis of New York
           Bankers Trust Services Tennessee
           Barnesville Ltd.
           Barbara DeAngelo
           Benton & Co.
           Berkshire Securities Corp.
           Betty Joseph Revocable Trust
           Biltmore Securities Inc.
           B. Laterman Co.
           BRG Securities Corp.
           Bridge Market Data, Inc.
           Charles Zalis
           Christopher Wheaton
           Claribel Romero
           C. Minnaar Ltd.
           Coast Options, Inc.
           Cohen, Cohn, Duffy & Cranmer
           Cross Temps Inc.
           CT Corporation System
           David Cotcher
           David Laskey
           David Ostman
           Denise Washington
           Domenick Caria
           Donald Doty
           Dudley Devine
           EHG National Health Services
           Elizabeth Guilfucci
           Empire Executive Car & Limousine Service Inc.
           Estere Kunis
           Eugenia Gitelmaker
           Eugenia Tropena
           Executive Conference Call Services
           FLA Overseas Partners, LP
           Forensic Accountants, Inc.
           Gary Posner
           Gayle P. Williams
           G.E.G.U. Inc. d/b/a Marino's Restaurant
           Georgios and Maria Kapsalls
           GHM Inc.
           Gilda R. Dulce
           Greenway Capital Corp.
           Harold Levine
           Harry Argeson
           Hasbrouck, Thistle & Co.
           Helix Securities
           Horace Bryant
           Irene Salamon
           Jamie Kessler
           Janet Antioco
           Joanne Fadalici
           Joel Jacobs
           John Joyce
           John L. Nappi, Esq.
           John J. Pallace
           Joseph Heard
           JP Morgan Services, Inc.
           Justin Magruder
           Karen Schiff
           Kevin Glazier
           Khalid Manely
           Lancaster Leeds & Co., Inc.
           Lawrence Goldberg
           Lek Securities Corp.
           Leona Seidlitz
           Liberatore Services
           Lisa Ann Donoso
           Luv-A-Cup Coffee Service, Ltd.
           MA Schapiro & Co.
           Mactaren Securities Inc.
           Margot Solodartillis
           Mark Kalas
           Mark Sweeney Associates, Inc.
           Mark Weber
           Marvin Nelson
           Melvin Securities Corp.
           Merrill Lynch Specialists, Inc.
           Metrocall Inc.
           Michael Lauletti
           Michael Poiselli
           Michael S. Smith
           Mike Gelles
           Milan Inter Corporation d/b/a Pierino
           Monroe Parker Securities, Inc.
           Muriel M. Newman
           Murphy, Marselles, Smith, Nammack Inc.
           National Financial Services
           Need It Now Delivery Service
           Norman and Patricia Long
           Pacific Capital Management
           Patrick O'Rourke
           Poco Inc.
           Productivity Systems, Inc.
           R. Adrian & Co.
           Raymond Kralovic
           Rita Jacobs
           Robert Foise IRA Account
           Robert G. Terranova
           Rush-Presbyterian St. Luke's
           Scholl & Levin Corp.
           Securities Industry Daily
           Shared Technologies Inc.
           Sharia Kordes
           Signal House Corp.
           Spry Communications, Inc.
           Stern Bros.
           Steven Anzalone
           Strategic Risk Management
           Symbola Corp.
           Tele-Pro Corporation
           Thomas Pearce
           Vector Index Investors
           Veera Capital
           Verizon Communications
           Victor H. King
           William Giarusso
           Yenith Castellano
           Yigal Schwartzberg
           Yorkship Business Supply
           Zoom Messenger Service

To receive property or distribution from the Trustee, customers
and creditors must contact Maria Ostrovsky at Cleary Gotilieb, One
Liberty Plaza, in New York City, and provide her with current
address and other contact information until Jan. 30, 2007.

If information is not provided to Cleary Gotlieb within the given
period, customer property or general creditor distributions owed
to such individuals or entities will be treated as unclaimed
property.

Adler, Coleman Clearing Corp. is a clearing house.  Small
brokerage firms "clear" their transactions (process their trades
and other paperwork) through a "clearing house".  The company
filed for Chapter 11 protection in February 1995 after the closure
of Hanover Sterling & Co. due to the exhaustion of Adler Coleman's
net capital.  Hanover is one of the micro-cap brokerage firms,
which Adler clears for.


ADVANCED MARKETING: Hachette Book Objects to DIP Financing Plea
---------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware authorized Advanced Marketing Services,
Inc., and its debtor-affiliates, on an interim basis, to dip their
hands into the DIP financing facility arranged by Wells Fargo
Foothill, the Troubled Company Reporter disclosed on Jan. 10,
2007.

The Debtors had sought the Court's authority to obtain from
Foothill and the Senior Lenders, though the DIP Loan Facility,
cash advances and other extensions of credit in an aggregate
principal amount of up to $75,000,000.

                     Hachette & Quarto Object

Hachette Book Group USA, Inc., formerly known as Time Warner Book
Group, has been a supplier of books to Advanced Marketing
Services, Inc., over the past 20 years.  The Debtors have listed
Hachette Book as their fourth largest unsecured creditor, holding
an unsecured claim for $22,569,624.

Jeffrey A. Marks, Esq., at Squire, Sanders & Dempsey L.L.P, in
Cincinnati, Ohio, says that during the 45 days before the Debtors
filed for bankruptcy, Hachette Book sold books to AMS for which it
has not yet been paid.  Accordingly, Hachette Book has the right
to reclaim the books sold to AMS during that period under Section
546(c) of the Bankruptcy Code, and to an administrative expense
claim for those books sold to AMS during the 20-day period before
the Petition Date under Section 503(b)(9).

To that end, on Dec. 29, 2006, Hachette Book sent an initial
reclamation demand to Mark D. Collins, Esq. of Richards, Layton &
Finger, P.A., the Debtors' proposed local counsel, demanding
reclamation and reserving its rights to supplement and amend its
reclamation demand upon further review of its books and records.

Hachette Book complain that pursuant to the DIP Loan Facility,
the Borrowers have obligated themselves, via an affirmative
covenant in the DIP Loan Agreement, to comply with the Qualified
Transaction Timeline providing, among other things, that:

   (i) within 10 days after the Petition Date, the Borrowers must
       file a motion to sell all or substantially all of their
       assets, or refinance or recapitalize so as to pay the
       Lenders in full; and

  (ii) within 50 days after filing the Sale Motion, the Borrowers
       must have received cash proceeds from a sale or other
       transaction sufficient to pay the Lenders in full.

Mr. Marks notes that this obligation under the DIP Loan Facility
will fundamentally and irrevocably dictate the course of conduct
of the Debtors' bankruptcy case.  However, the Court, creditors
and other parties-in-interest simply have not been provided
sufficient information or opportunity to determine whether a sale
or other transaction, under the time frame stipulated, is an
appropriate resolution of the bankruptcy case, and is otherwise
in the best interests of the Debtors' estate and creditors.

Mr. Marks also asserts that:

   (a) The request fails to specify a proposed maximum borrowing
       for the period before the Final Hearing;

   (b) The proposed time frame within which to investigate and,
       if appropriate, challenge, the position of the
       Lender/Senior Lender is too short and is overbroad in
       certain respects;

   (c) Certain provisions relating to the Professional Fee Carve-
       Out Expenses are unclear, specifically, the distinction
       between the $2,000,000 carve-out that is proposed to be in
       effect before a Payoff Event and the $3,000,000 carve-out
       after a Payoff Event; and

   (d) The procedure for approval of a Non-Material Amendment is
       inappropriate to the extent that it permits an abbreviated
       approval process for an amendment that may in fact be
       material.  The definition of Non-Material Amendment
       encompasses provisions as any new, subsequent, modified,
       restated or amended covenants or conditions acceptable or
       required by the Lenders.  The covenants or conditions
       could very well include material provisions.

Accordingly, Hachette Book asks the Court to deny the Debtors'
request.

Quarto, Inc.; Quarto Publishing, PLC; Book Sales, Inc.; Creative
Publishing International, Inc.; Walter Foster, Inc.; and Design
Eye Limited, agree with Hachette's arguments.

The Quarto Entities assert claims exceeding $3,200,000 against
the Debtors.

The Quarto Entities also contend that the $2,400,000 extension
fee paid on July 31, 2006, to the Lenders under the Debtors' Loan
and Security Agreement with Wells Fargo Foothill, Inc., as well
as the $750,000 closing fee under the DIP Facility are excessive
and should be subject to close examination and disallowance.

The Quarto Entities are represented in the Debtors' cases by
Victor A. Sahn, Esq., at Sulmeyer Kupetz, in Los Angeles,
California.

                  About Advanced Marketing

Based in San Diego, California, Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,  
wholesaling, distribution and publishing services, currently
primarily to the book industry.  The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.

The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482).  Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., and Alexandra B. Feldman, Esq., at O'Melveny & Myers, LLP,
represent the Debtors.  Chun I. Jang, Esq., Mark D. Collins, Esq.,
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., are
the Debtors' local counsel.  When the Debtors filed for protection
from their creditors, they listed estimated assets and debts of
more than $100 million.  The Debtors' exclusive period to file a
chapter 11 plan expires on Apr. 28, 2007.  (Advanced Marketing
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ADVANCED MEDICAL: IntraLase Deal Cues Moody's Ratings Review
------------------------------------------------------------
Moody's Investors Service placed the ratings of Advanced Medical
Optics Inc. on review for possible downgrade after the company's
disclosure that it has entered into a definitive agreement to
acquire IntraLase Corp. in an all-debt financing for approximately
$808 million, which translates to $25 per share of IntraLase
stock.

The proposed transaction is outside of Moody's expectations that
was outlined in its last rating action in June 2006.

Closing of the transaction is expected to occur in the second
quarter of 2007 and will be subject to the receipt of IntraLase
stockholder approval as well as regulatory approvals and other
customary closing conditions.  The Boards of Directors of both
companies have approved the transaction.  AMO is currently in the
process of arranging a final financing package in order to close
the transaction.

The review for possible downgrade is triggered by the significance
of the intended all-debt financing of the acquisition which would
pressure on AMO's credit metrics resulting in the expectation that
the combined entity's pro forma lease-adjusted debt to EBITDA will
rise to above 7.x which is considerably higher than AMO's current
lease-adjusted debt to EBITDA of 4.3x for the twelve months ended
Sept. 30, 2006.  

For the same period, EBIT to interest expense will likely tighten
which would put pressure on the outcome under the Medical Device
Rating Methodology.  Additionally, the proposed transaction will
not be cash flow accretive over the intermediate term.  With the
stretched pro forma credit metrics, there is concern that AMO will
further engage in debt-financed acquisitions.  The review will
also consider AMO's expectations for pro forma free cash flow, its
intention and timeframe to reduce the amount of incremental pro
forma debt and the specific debt financing structure that will be
used at closing.

These ratings were placed on review for downgrade:

   -- $300 million senior secured revolving credit facility due
      2009 at Ba1, LGD1, 7%;

   -- $251 million convertible senior subordinated notes due 2024
      at B2, LGD4, 66%;

   -- Corporate Family Rating at B1; and,

   -- Probability of Default Rating at B1.

Advanced Medical Optics, Inc., headquartered in Santa Ana,
California, develops, manufactures and markets ophthalmic surgical
and contact lens care products.  For the twelve months ended Sept.
29, 2006, AMO generated slightly over $1 billion in revenues.

IntraLase Corp., headquartered in Irvine, California, designs,
develops and manufactures an ultra-fast laser that is used in
refractive and corneal surgery by creating safe and more precise
corneal incisions.  For the twelve months ended Sept. 30, 2006,
IntraLase generated approximately $122 million in revenues.


AHERN RENTALS: Moody's Holds Corporate Family Rating at B2
----------------------------------------------------------
Moody's Investors Service affirmed the ratings of Ahern Rentals,
Inc. after the company's recent report that it is increasing the
size of its second priority senior secured notes to $275 million
from $200 million.  Proceeds from the upsized note issuance will
be used to reduce outstandings under the company's $250 million
revolving credit facility.  

The ratings affirmed include:

   -- corporate family rating at B2;
   -- second priority senior secured notes at B3, LGD5, 73%; and
   -- Speculative Grade Liquidity Rating at SGL-3.

The rating outlook remains stable.

"Even though the terming out of some revolver outstandings will
improve Ahern's funding structure and enhance liquidity, the
company's leverage remains high and continues to support a B2
corporate family rating.  The strong cyclical recovery in the non-
residential construction sector, and the resulting improvement in
Ahern's operating performance, should result in Ahern becoming
more solidly positioned within the current rating level," said
Moody's analyst Peter Doyle.

Ahern is increasing its second priority senior secured notes to
$275 million from $200 million.  Proceeds will be used to reduce
outstandings under the company's $250 million revolving credit
facility to $95 million from $170 million based on September 2006
results.  

On a proforma basis for LTM September 2006, key credit metrics
should not differ significantly from actual results:

   -- Debt/EBITDA stood at 3.5x reflecting the normal seasonal
      build of the company's equipment purchases;

   -- EBIT/Interest Expense of 1.8x; and,

   -- Debt/Revenues of 163%.

Moody's said that Ahern's operating efficiencies have resulted in
strong margins and contributed to EBITDA margins in the mid-40%
range.  These positive factors are mitigated by modest cash flow
generation relative to the leverage employed in Ahern's capital
structure.  Retained Cash Flow/Debt was 18.3% and Free Cash
Flow/Debt was negative 20% through LTM September 2006.  The
company has significantly increased CAPEX in order to expand its
equipment fleet and meet rising demand in the rapidly growing Las
Vegas non-residential construction market.  These metrics could
improve as the company reduces its growth capital expenditures
reflecting moderation in revenue growth.

The stable outlook reflects Moody's belief that Ahern's debt
protection measures should improve over the intermediate term and
strongly position the company within the B2 rating.  The key risk
Ahern will continue to face is the cyclicality of non-residential
construction market, which is the main driver for equipment rental
industry.

Nevertheless, Ahern should be able to weather future cyclical
downturns due to improved internal operating efficiencies, its
well established network within the company's home territory of
Las Vegas, and a commitment to maintain ample liquidity.

The B3 rating of the $275 million second priority senior secured
notes reflects an LGD5, 73% loss given default assessment and is
one notch below the corporate family rating.  The second priority
senior secured notes are subordinate in claims to the company's
$250 million asset based revolver credit facility, which is not
rated by Moody's, and are secured by a second priority pledge on
substantially all of the company's domestic assets.

The SGL-3 Rating reflects Moody's belief that the company will
maintain an adequate liquidity profile over the next 12-month
period.  The rating anticipates that availability under the
company's first priority senior secured credit facility should be
sufficient to fund the company's required operational needs.  The
SGL rating is constrained, however, by the level of negative free
cash flow during the seasonal build of the company's equipment
purchases and by the fact that substantially all of the company's
assets are encumbered to secure its bank borrowings.

Ratings affirmed:

   -- Corporate family rating B2;

   -- Probability-of-default rating B2;

   -- $275 million second priority senior secured notes due 2013
      at B3, LGD5, 73%;

Speculative Grade Liquidity at SGL-3.

Ahern Rentals, headquartered in Las Vegas, Nevada, is a regional
equipment supplier with 35 branches predominately in the Mid-West
and West Coast regions.  Original equipment cost was $516 million
at Sept. 30, 2006.


AHERN RENTALS: S&P Lifts Corporate Credit Rating to B+ from B
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Ahern
Rentals Inc., including its corporate credit rating to 'B+' from
'B'.

Standard & Poor's also assigned a 'B' rating and '3' recovery
rating to the company's proposed $75 million second-priority
senior secured notes due 2013.  The offering is identical to the
existing $200 million 9.25% second priority senior secured notes
due 2013.  The '3' recovery rating indicates meaningful recovery
of principal in the event of a default, after recovery of the
first lien facilities.

The outlook is stable.

"The rating action results from the improved operating performance
and credit profile, which Ahern has demonstrated, and the current
favorable industry conditions," said Standard & Poor's credit
analyst John R. Sico.


AIRTRAN AIRWAYS: Commences Exchange Offer for Midwest Air's Shares
------------------------------------------------------------------
AirTran Holdings, Inc., the parent company of AirTran Airways, has
commenced an exchange offer for all of Midwest Air Group's
outstanding shares, for $13.25 per Midwest share, based on the
closing price of AirTran common stock on Jan. 8, 2007.  The offer
consists of $6.625 in cash and 0.5884 shares of AirTran common
stock for each Midwest share.  The total equity value of the
exchange offer is $345 million.  

The offer, which is being made through Galena Acquisition Corp., a
wholly owned subsidiary of AirTran, represents a premium of 61%
over the thirty day average closing price of Midwest common stock
at the time of AirTran's initial proposal to acquire all of
Midwest's common stock at a price of $11.25 per share on
Oct. 20, 2006, and an approximately 46% premium over the closing
price the day prior to Dec. 13, 2006, the date on which AirTran
disclosed its Oct. 20, 2006, offer.

"We are committed to bringing these two great airlines together to
form an even better airline based on our conviction that it is in
the best interests of Midwest and AirTran shareholders, the
employees of both companies and the communities the air carriers
serve," said Joe Leonard, AirTran Airways' chairman and chief
executive officer.  "Together, we will be in a stronger position
to compete in the changing airline marketplace, to grow
underserved cities like Milwaukee and Kansas City, increase
employment and advancement opportunities, and to provide our
customers with the high quality service they value."

"While we would have wished to enter into negotiations with
Midwest's Board and management to consummate a definitive merger
agreement, it is clear that they had no intention of doing so.  
Largely due to the overwhelming support we have received for the
combination from Midwest shareholders, employees, customers and
the communities Midwest serves, after the disclosure of our
October 20th proposal, we decided to bring our offer directly to
Midwest's investors," he added.

"It is clear to most stakeholders that AirTran Airways can grow
Midwest Airlines, expand the Milwaukee market and add more
destinations and service beyond what Midwest can achieve
independently. With our fleet commonality, comparable corporate
cultures, commitments to quality service and complementary route
networks, we are an ideal partner for Midwest," Mr. Leonard added.

"We feel so strongly about the merits of this combination that we
are enhancing the value in our actual exchange offer despite the
already attractive premium and the fact that Midwest has denied
our request to review non-public financial and other information.  
Even with the increase in the price we are offering, we still
expect the transaction to be accretive to earnings by the end of
the first full year following the close of the transaction and
significantly accretive thereafter," Mr. Leonard concluded.

AirTran is offering to acquire all of the outstanding shares of
Midwest through its newly formed subsidiary, Galena Acquisition
Corp., which was organized in connection with this offer.  This
exchange offer is the first step in AirTran's plan to acquire all
of the outstanding shares of Midwest common stock.  AirTran
intends, promptly after completion of the offer, for Midwest to
consummate a second-step merger whereby Midwest common stock would
be converted into the right to receive the same number of shares
of AirTran common stock and the same amount in cash per Midwest
share as paid in the exchange offer.

The exchange offer will be subject to customary conditions,
including the tender of a majority of Midwest shares, calculated
on a fully diluted basis; redemption of the Midwest rights under
its Rights Agreement, commonly known as a poison pill, certain
actions to ensure that the Wisconsin control share acquisition
statute and business combination statute are not applicable to
AirTran following the exchange offer; the expiration or
termination of the applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act and certain other regulatory
approvals.

The exchange offer is scheduled to expire at 12:00 midnight, New
York City time, on Feb. 8, 2007, unless the exchange offer is
extended.

Morgan Stanley and Credit Suisse are serving as AirTran's
financial advisors and the dealer managers and Smith, Gambrell &
Russell, LLP, is serving as AirTran's legal advisor.  Innisfree
M&A Incorporated is serving as its Information Agent.
  
                        About Midwest Air

Midwest Air Group (AMEX: MEH), the parent company of Midwest
Airlines, features nonstop jet service to major destinations
throughout the United States.  Midwest Connect offers connections
to Midwest Airlines flights, as well as point-to-point service
between select markets on regional jet and turboprop aircraft.

                          About AirTran

AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/--    
operates over 600 daily flights to 50 destinations.  The airline's
hub is at Hartsfield-Jackson Atlanta International Airport, where
it is the second largest carrier.  AirTran Airways recently added
the fuel-efficient Boeing 737-700 aircraft to create America's
youngest all-Boeing fleet.  The airline is also the first carrier
to install XM Satellite Radio on a commercial aircraft and the
only airline with Business Class and XM Satellite Radio on every
flight.

                            *    *    *

As reported in the Troubled Company Reporter on Nov. 23, 2006,
Moody's Investors Service confirmed its B3 Corporate Family Rating
for AirTran Holdings Inc. and its Caa1 rating on the company's
7.0% Guaranteed Convertible Notes Due July 1, 2023, in connection
with 's implementation of its Probability-of-Default and Loss-
Given-Default rating methodology for the Transportation sector.  
Moody's also assigned an LGD6 rating to those loans, suggesting
noteholders will experience a 91% loss in the event of a default.


ALGOMA STEEL: DBRS Affirms Issuer Rating at BB (low)
----------------------------------------------------
Dominion Bond Rating Service confirmed the Issuer Rating of Algoma
Steel Inc. at BB (low).  The trend remains Stable, as the rating
is not expected to change over the near term.  Algoma generated
higher-than-expected earnings and cash flow in 2006, and repaid
all long-term indebtedness.

However, despite the company's very strong credit metrics, the
rating continues to be largely underpinned by the relatively high
business and event risk facing Algoma.

Algoma's earnings and cash flow are highly sensitive to steel
price fluctuations, given its large proportion of spot market
sales and product mix heavily weighted to more commoditized hot-
rolled steel.  The company has significantly benefited from
favourable steel prices since late 2004.  However, the direction
of steel prices, particularly over the medium to longer term,
remains highly uncertain.

Importantly, the potential for higher imports into the United
States remains a key risk.  In addition, Algoma will enter
negotiations for a new union contract in 2007, which creates
further uncertainty.  Labour-friendly initiatives launched by the
Company provide no assurance of an expeditious agreement.  The
challenges faced by Algoma in previous steel cycles have also been
factored into the rating, although notable improvements, including
efficiency gains under its Margin Improvement Plan, have been made
in recent years.

The company faces event risk related to the likelihood that it
will be acquired over the medium to longer term, as the trend of
steel industry consolidation is expected to continue.  Based
mainly on its small relative production capacity, favourable
balance sheet and low-cost/high-quality Direct Strip Production
Complex steel making facility, the Company is a likely target.

Algoma is also currently exploring strategic investments
that could include increasing existing capacity, downstream
processing/product line expansion  and acquisitions.
Diversification into higher-value-added steel products would
likely help reduce Algoma's longer-term earnings volatility.  
Based on the company's debt-to-capital target of 25%, future
investments are expected to be manageable.

Additional flexibility is provided by its favourable cash position
and current debt-free status.  However, aggressive capital
spending for new projects could increase Algoma's risk profile,
particularly in a weakened steel industry environment.

Algoma's earnings and cash flow are expected to decline in 2007
but remain favourable.  Average steel prices are expected to
moderate, with the impact of high inventories and slowing, albeit
reasonable economic growth partly offset by industry production
curtailments.  In addition, high input costs and Canadian dollar
strength are expected to constrain Algoma's margins.


ALLIANCE ATLANTIS: Planned Buyout Cues S&P's Negative CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services reported that the ratings on
Alliance Atlantis Communications Inc., including the 'BB' long-
term corporate credit rating, remain on CreditWatch.  

The implications, however, have been revised to negative from
developing.  The ratings were first placed on CreditWatch with
developing implications Dec. 20, 2006, after Alliance Atlantis'
disclosure that it is exploring strategic alternatives, namely the
possible sale of the entire company.

At the same time, Standard & Poor's placed its ratings, including
its 'B+' long-term corporate credit rating, on CanWest MediaWorks
Inc. on CreditWatch with negative implications.

The rating actions comes after the report by Alliance Atlantis and
CanWest Global Communications Corp., the latter of which is the
parent of CanWest MediaWorks, that the companies have entered into
exclusive discussions regarding the possible purchase of Alliance
Atlantis by CanWest and private equity firm Goldman Sachs Capital
Partners.

It is likely that the debt used to finance CanWest's ownership
portion of the potential acquisition will reside at CanWest
MediaWorks.

"Further details of a potential transaction, including the method
of financing, asset deployment, closing conditions, and estimated
closing date, are unavailable at this time," said Standard &
Poor's credit analyst Lori Harris.

"Still, the possible debt-financed purchase of Alliance Atlantis
by a financially weaker and lower rated entity has resulted in the
negative direction of the CreditWatch placement for both
companies," Ms. Harris added.

Upon a change of control of Alliance Atlantis, however, the loan
would be, at the option of the lenders, due and payable.

Standard & Poor's will evaluate the impact of a potential
transaction on the companies' credit quality when additional
information is obtained.


ALLIED HOLDINGS: 3 Parties Oppose Appointment of Equity Committee
-----------------------------------------------------------------
Three parties-in-interests in Allied Holdings Inc. and its debtor-
affiliates' chapter 11 cases have supported the Debtors' motion
asking the U.S. Bankruptcy Court for the Northern District of
Georgia to deny the Ad Hoc Equity Holders Committee's motion to
appoint an Official Committee of Equity Security Holders.

They are:

   a. Yucaipa American Alliance Fund I LP and Yucaipa American
      Alliance (Parallel) Fund I LP;

   b. Official Committee of Unsecured Creditors; and

   c. the U.S. Trustee.

As reported in the Troubled Company Reporter on Dec. 5, 2006, the
Debtors had asked the Court to deny the ad hoc committee of equity
holders of approximately 25.2% of outstanding Allied Holdings
common stock's renewed request for an appointment of an official
committee of equity security holders of AHI.  The Debtors do not
believe that the Ad Equity Hoc Committee will be able to prove
that they are not "hopelessly insolvent."

Jeffrey W. Kelley, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, explained that the Debtors are still negotiating with the
International Brotherhood of Teamsters their proposal to reduce
labor costs under their collective bargaining agreements with
Teamsters-represented employees in the United States.  Pending
resolution of the labor issue, it is impossible to determine
credibly whether the Debtors are "hopelessly insolvent,"
Mr. Kelley asserted.

Nonetheless, even if the Court were to find that the Debtors are
not "hopelessly insolvent," an official equity committee should
not be appointed because the Ad Hoc Equity Committee cannot meet
their burden of proof with regard to adequacy of representation of
AHI's shareholders, Mr. Kelley explained.

Mr. Kelley pointed out that there is no evidence that the Debtors'
Board of Directors, whose members collectively hold 39% of AHI's
outstanding shares, has not provided, and will not continue to
provide, adequate representation of the equity holders' interests.

                            Objections

(A) Yucaipa

Yucaipa American Alliance Fund I LP and Yucaipa American Alliance
(Parallel) Fund I LP, support the Debtors' request that the
Court:

   (1) quash the subpoenas issued by the ad hoc committee of
       holders of approximately 25.2% of outstanding Allied
       Holdings, Inc., common stock; and

   (2) issue a protective order with respect to the notices of
       deposition sent to AHI and Yucaipa.

Robert A. Klyman, Esq., at Latham & Watkins, LLP, in Los Angeles,
California, relates that the information the Ad Hoc Equity
Committee seeks concerning union negotiations and strategies
constitutes confidential commercial information and trade secrets.  
The use of the information would reasonably be expected to disrupt
negotiations with the International Brotherhood of Teamsters at a
critical stage of the Debtors' bankruptcy case, Mr. Klyman adds.

According to Mr. Klyman, Yucaipa also joins the Debtors in
opposing the appointment of an official equity committee because:

     * shareholders are adequately represented by the Debtors'
       board of directors, management, and advisors;

     * the Ad Hoc Equity Committee are well-financed funds
       capable of representing their interests; and

     * holders of old equity failed to demonstrate that the
       Debtors do not appear to be "hopelessly insolvent."  

The appointment of an official equity committee "should be the
rare exception" and one should not be appointed unless equity
holders establish that (i) there is a substantial likelihood that
they will receive a meaningful distribution in the case under a
strict application of the absolute priority rule; and (ii) they
are unable to represent their interests in the bankruptcy case
without an official committee," Ms Klyman asserts, citing In re
Exide Technologies, 2002 U.S. Dist. LEXIS 27210 at 4(D. Del.
2002); and In re Northwestern Corp., 2004 Bankr. LEXIS 635 at
5(Bankr. D. Del. 2004).

Yucaipa reserves all of its rights at law or in equity, including
the right to file additional pleadings prior to any hearing on
the Equity Committee Motion.

(B) Creditors Committee

The Official Committee of Unsecured Creditors asks the Court to
deny the Ad Hoc Equity Committee's renewed motion as it fails to
satisfy the standard for the appointment of an official committee
of equity security holders.

Considering the Debtors' unstable financial condition, the
uncertainty of the enterprise value until union negotiations are
completed, and the adequate representation of the interests of
equity holders by current management and directors, imposing the
costs and administrative burdens of an additional official
committee on the Debtors' estates is ill-advised and unwarranted,
Jonathan B. Alter, Esq., at Bingham McCutchen LLP, in Atlanta,
Georgia, says.

The Creditors Committee is optimistic that the Debtors and the
Teamsters are conducting good-faith substantive negotiations
toward the end of completing the collective bargaining process in
the next few weeks.

Mr. Alter tells the Court that the Ad Hoc Committee's vision of a
Yucaipa-controlled Committee is inaccurate because, among other
things, Yucaipa does not:

     * occupy a seat on the Committee;
     * share information;
     * receive confidential information; and
     * hold sway over the actions of the Committee.

As with its prior request, the Ad Hoc Committee makes numerous
assertions regarding valuation of the Debtors that fail to
withstand scrutiny, Mr. Alter points out.  The Ad Hoc Committee
again incorrectly neglects to consider the seasonality of the
Debtors' business and proceeds to draw unsupported conclusions
regarding key financial indicators and ratios, he asserts.

The Creditors Committee also notes that the Ad Hoc Committee is
misstating certain financial information and selecting information
in advancing their argument.  While any of its assertions that it
had made significant contributions to the renewed debtor-in-
possession financing and the return of cash collateral in respect
of the insurance programs is erroneous, the Ad Hoc Committee
demonstrates that they have been able to secure adequate
representation and to remain adequately informed of the bankruptcy
proceedings without an Official Equity Committee, Mr. Alter
explains.

The Creditors Committee believes that a hearing on the Renewed
Motion prior to the resolution of collective bargaining
negotiations would needlessly occupy the Court's time with
speculative analysis and would divert the Debtors' attention and
resources at a crucial time in the reorganization process.

(C) U.S. Trustee

Section 1102(a)(1) of the Bankruptcy Code authorizes the U.S.
Trustee to appoint additional committees, including a committee of
equity security holders.  If the U.S. Trustee declines to exercise
the discretion to appoint a supernumerary committee, the Court may
order the U.S. Trustee to appoint an additional committee.

William T. Neary, the U.S. Trustee for Region 6, reminds the Court
that on Feb. 28, 2006, the Honorable Homer Drake Jr. of the U.S.
Bankruptcy Court for the Northern District of Georgia denied the
ad hoc equity committee's original request for appointment of an
equity committee because they failed to establish that the Debtors
were not "hopelessly insolvent" or that their interests were not
being adequately represented.

Hence, the U.S. Trustee asks the Court to deny the renewed motion
on grounds that the Ad Hoc Equity Committee has failed to
demonstrate a substantive change in circumstances that warrant the
appointment of an official equity committee since the February
2006 Order.

                       About Allied Holdings

Based in Decatur, Georgia, Allied Holdings Inc. --
http://www.alliedholdings.com/-- and its affiliates provide   
short-haul services for original equipment manufacturers and
provide logistical services.  The company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.  (Allied Holdings Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)


ALLIED HOLDINGS: Ricardo Malave Allowed to Pursue State Court Suit
------------------------------------------------------------------
The Honorable Ray Mullins of the U.S. Bankruptcy Court for the
Northern District of Georgia allows Ricardo Malave, a personal
injury claimant, to continue his State Court Action against Allied
Holdings, Inc., with respect to tort claims asserted against the
Debtor.

The Debtors stipulated that the proper defendant in the state
court action is Allied Systems.

Judge Mullins signed a consent order modifying the automatic stay  
solely to permit Mr. Malave to:

   (i) continue the state court action against Allied in respect
       of the personal injury tort claims to proceed to final
       judgment upon, or settlement of, the Claims; and

  (ii) attempt to recover any liquidated final judgment upon, or
       settlement of, the Claims from the Debtors' available
       insurance, if any, related to the Claims.

Mr. Malave, for himself and on behalf of his minor child,
Sandy Malave, filed a personal injury action against George
Morgan II, Allied Holdings, Inc., and Axis Group Inc. in the
Circuit Court of the 13th Judicial Circuit in and for Hillsborough
County, Florida, on July 27, 2005.  Mr. Malave's claims arose from
a prepetition incident that occurred in Florida.  Mr. Malave had
asked the Court to lift the automatic stay to proceed with his
State Court Action, liquidate his claim, and pursue collection
from any applicable insurance company.

Dennis J. LeVine, Esq., in Tampa, Florida, explained that relief
from stay should be granted because, among others, the Bankruptcy
Court does not have jurisdiction to liquidate the Claim since the
state court action involves issues of fact and law that are
solely within the state tort law's scope; and the Debtors will
not be prejudiced by the Action in that they have insurance
coverage.

                        Debtors' Objection

The Debtors did not oppose Ricardo Malave's request for relief
from stay provided that the relief is limited to the entities
whom Mr. Malave has asserted claims.

Vivieon E. Kelley, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, noted that the proper party defendant in Mr. Malave's
state court action is Allied Systems Ltd. (L.P.).  Mr. Malave's
claims are scheduled as unsecured claims against Allied Systems
only.

Ms. Kelley pointed out that Mr. Malave has articulated no basis
for requesting relief as to Allied Holdings Inc. and Axis
Group Inc. against whom he has not asserted claims.  To allow
him blanket relief to file and prosecute his claims against the
Debtors is unnecessary and will be disruptive of the
reorganization process, Ms. Kelley asserted.

                       About Allied Holdings

Based in Decatur, Georgia, Allied Holdings Inc. --
http://www.alliedholdings.com/-- and its affiliates provide   
short-haul services for original equipment manufacturers and
provide logistical services.  The company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor.  Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.  (Allied Holdings Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)


ALLIS-CHALMERS: S&P Lifts Corporate Credit Rating to B from B-
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on oilfield services company Allis-Chalmers Energy Inc. to
'B' from 'B-'.

At the same time, Standard & Poor's assigned its 'B' rating to the
company's proposed $225 million senior notes due 2017.  The
outlook is stable.  Pro forma for the notes issuance, Houston,
Texas-based Allis-Chalmers has $497 million in debt.

"The upgrade reflects good operating performance, adherence to
stated financial policy, and meaningful improvements in the
company's scale and product offerings over the past year," said
Standard & Poor's credit analyst David Lundberg.     

The company has made a series of acquisitions and increased pro
forma EBITDA to $158 million for the 12 months ended
Sept. 30, 2006, as compared with $37 million when first rated by
Standard & Poor's in January 2006.   The acquisitions have
strengthened the company's position in the rental tool business in
particular, and have expanded the company's presence in the
offshore Gulf of Mexico and into Argentina.

Management has also displayed a willingness to maintain financial
leverage in the 3x debt to EBITDA area.   With the equity offering
planned for later this month, Allis will have issued common stock
in the secondary markets twice during the past 12 months, in
addition to providing some amount of common stock to sellers in
all five of its acquisitions in 2006.

The proposed notes, along with a concurrent equity offering, will
repay the amount outstanding under a $300 million bridge loan that
Allis used to finance its acquisition of Oil & Gas Rental Services
Inc. in December 2006.

The outlook is stable.

Standard & Poor's recognizes that industry trends for oilfield
services should remain favorable in the near term and that Allis'
cash flows should remain relatively strong in 2007, absent a sharp
decline in commodity prices.

Standard & Poor's expects the company to continue to be
acquisitive and maintain a debt to EBITDA ratio of around 3x.  Any
further positive rating actions are contingent on Allis' ability
to meet financial targets and integrate acquired properties
successfully.  Worse-than-expected financial results, whether due
to deteriorating industry fundamentals or company-specific issues,
could result in a negative rating action.  Any leveraging
acquisitions could also pressure ratings.


AMCAST INDUSTRIAL: Files Amended Plan and Disclosure Statement
--------------------------------------------------------------
Amcast Industrial Corp. and Amcast Automotive of Indiana Inc.
filed with the U.S. Bankruptcy Court for the Southern District of
Indiana an Amended Disclosure Statement explaining their Amended
Joint Plan of Reorganization.

                   Overview of the Amended Plan

The Amended Plan incorporates and constitutes a settlement and
compromise of any and all claims by and between the Debtors, the
Debtors' Estates and the Official Committee of Unsecured Creditors
on the one hand, and the Lenders on the other.

As part of the Settlement, cash on hand, which the Lenders claim a
lien on, will be distributed as:

    * $7 million to the Term B Lenders,

    * $2 million to the General Unsecured Creditors, excluding any
      Allowed Unsecured Claims of the Lenders and General Motors
      Corp., and

    * $2 million to fund prosecution of the Estates' claims
      against GM.

Any amount remaining from the cash on hand will be used to pay:

    -- Allowed Administrative Expense Claims, including any
       Allowed Administrative Claims under Section 503(b)(9) of
       the Bankruptcy Code;

    -- Allowed Priority Claims;

    -- Allowed Priority Tax Claims;

    -- the fees and expenses incurred in winding down the Estates
       post-confirmation and pursuing the GM Causes of Action and
       any other claims of the Estates against third parties,
       including Chapter 5 Causes of Action; and

    -- payment of GM's Allowed Class 6 and 7 Claims, if any, to
       the extent the Claim is Allowed and not otherwise subject
       to setoff.

                        Treatment of Claims

Under the Amended Plan, Administrative Claims, Priority Tax
Claims, and Priority Claims will be paid in full using the
Debtors' cash on hand.

The Debtors disclose that the Secured Claim of the Revolving
Lenders and Secured Claims of Term Loan A Lenders have been paid
in full.  The Plan and Settlement will discharge, waive and enjoin
any claims or rights to seek disgorgement of any of those
payments.

The Allowed Claims of the Term Loan B Lenders will be allowed in
the amount of $52,907,107.23.  NexBank, SSB, as administrative
agent for the Term Loan B Lenders, will receive these monies to be
applied in accordance with the Credit Agreement an initial
distribution on the effective date of $7 million from Cash on Hand
plus the Net Proceeds from sale or collection of all remaining
assets of the Estates including:

         -- outstanding pre-petition accounts receivable,
            including prepetition accounts receivable owed to the
            Estates from GM,

         -- tooling assets and tooling receivables,

         -- inventory on hand not yet converted to Cash as of the
            effective date,

         -- Stowe, Pennsylvania real property,

         -- Cedarburg real property,

         -- Net Proceeds from Estates' Third Party Litigation
            Claims, and Net Proceeds from Chapter 5 Causes of
            Action, and

         -- all Cash remaining after prosecution of all Claims of
            and against the Estate.

Holders of Allowed Unsecured Claims, excluding any Allowed
Unsecured Claims of GM and Lenders, will receive their pro rata
portion of the $2 million from cash on hand.  Provided, however,
if the Plan Proponents are unsuccessful in objecting to GM's Re-
Pricing Claim, the amount will be reduced to $1.75 million.

The Debtors tell the Court that "unsuccessful" is defined as a
determination by the Court, and not through settlement, that:

    (a) GM has an Allowed Re-Pricing Claim and;

    (b) the Estates are ordered to pay funds to GM on account of
        GM's Allowed Re-Pricing Claim over and above any asserted
        offsets the Estates may claim against the Re-Pricing
        Claim.

Other Secured Claims will be paid in full using proceeds from the
sale of their Collateral or the return of their Collateral.  Under
the Plan, Intercompany Claims will be extinguished.

Equity Interestholders will not receive any distribution on
account of their Equity Interests unless and until all other
classes are paid in full.  Any assets remaining after payment in
full of all other claims will be distributed pro rata to the
Equity Interestholders.  The Equity Interests will be canceled
upon dissolution of the Debtors.

                            GM's Claims

To the extent Allowed, and not subordinated, GM's Claim for re-
pricing and Allowed will be repaid in the same percentage as
Allowed Unsecured Claims unless GM's Allowed Re-Pricing Claim, if
any, is determined to be of a higher or lower priority.  In this
case, the claim will be repaid in the same percentage as similar
level Claimants from these sources in this order:

    * as an offset to pre-petition accounts receivable owed to the
      Estates from GM, estimated to be approximately $4.3 million;

    * as an offset against postpetition accounts receivable owed
      to the Estates from GM, estimated to be approximately
      $2 million;

    * as an offset against tooling accounts receivable owed to the
      Estates from GM, estimated to be approximately $3 million;

    * as an offset against GM Causes of Action; and

    * to the extent GM's Allowed Re-Pricing Claim exceeds all of
      the foregoing, from cash on hand.

To the extent Allowed and not subordinated, GM's Allowed Unsecured
Claim will receive same percentage of distribution as Unsecured
Claim Holders payable:

    * as an offset to prepetition accounts receivable owed to the
      Estates from GM, estimated to be approximately $4.3 million;

    * as an offset against postpetition accounts receivable owed
      to the Estates from GM, estimated to be approximately
      $2 million;

    * as an offset against tooling accounts receivable owed to the
      Estates from GM, estimated to be approximately $3 million;

    * as an offset against GM Causes of Action; and

    * to the extent GM's Pro Rata Distribution exceeds all of
      the foregoing, from cash on hand.

                      About Amcast Industrial

Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry.  The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004.  The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005.  The
Debtors emerged from bankruptcy on Aug. 4, 2005.

Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for their second chapter 11 petitions on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322).  David H. Kleiman,
Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman,
P.C., represent the Debtors in their restructuring efforts.  Henry
A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors.  Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor.  The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC.  When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.


AMERICAN CAMSHAFT: U.S. Trustee Appoints 7-Member Creditors' Panel
------------------------------------------------------------------
The U.S. Trustee for Region 9 appointed seven creditors to serve
on the Official Committee of Unsecured Creditors in American
Camshaft Specialties Inc. and its debtor-affiliates' chapter 11
cases:

    1. Stefan J. Prociv
       MACSTEEL
       One Jackson Square, Suite 500
       Jackson, MI 49201
       Tel: (517) 782-0415
       Fax: (517) 782-8735

    2. Phil Stankewicz
       Federal Mogul Corp.
       26555 Northwestern Highway
       Southfield, MI 48033
       Tel: (248) 354-9892
       Fax: (248) 354-8159

    3. Hideki Matsukawa
       Asahi Diamond America, Inc.
       9872 Windisch Road
       West Chester, OH 45069
       Tel: (513) 759-5222
       Fax: (513) 759-2885

    4. Todd Lloyd
       C.B. De Korne, Inc.
       2 Sweet Street Northeast
       Grand Rapids, MI 49505
       Tel: (616) 363-4866
       Fax: (616) 363-6663

    5. David Lynch
       Super Steel Treating Co.
       6227 Rinke
       Warren, MI 48091
       Tel: (586) 755-9140 ext. 112
       Fax: (586) 759-6419

    6. Gary Merchant
       Nucor Steel
       P.O. Box 309
       Norfolk, NE 68702-0309
       Tel: (402) 644-0320
       Fax: (402) 644-0329

    7. Lorrae Danzig
       AccuServe Corporation
       2081 Pine Ridge Drive
       Jenison, MI 49428
       Tel: (616) 669-2222 ext. 31
       Fax: (616) 669-8413

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

                      About American Camshaft

American Camshaft Specialties Inc. is located at the southwest
corner of M-45 and U.S. 31, includes two plants -- ACS Grand
Haven, which is solely owned by Asimco Technologies, and a joint
venture between Nippon Piston Ring and ACS Inc.  Asimco
Technologies -- http://www.asimco.com/-- is headquartered in  
Beijing, China, and produces a wide range of power train, chassis
and diesel fuel injection products for light duty and commercial
vehicle applications.  Asimco assembles semi-fully finished cast,
steel and assembled camshafts.  Aside from its U.S. operations,
Asimco has 18 manufacturing facilities and 52 sales offices in
China and one regional office in Europe and Japan.  Asimco's major
customers are automotive-based, such as DaimlerChrysler, Ford, GM,
Cummins, and CAT.

American Camshaft and three other U.S. affiliates filed for
chapter 11 protection on Dec. 9, 2006 (Bankr. E.D. Mich. Lead Case
No. 06-58298).  Christopher A. Grosman, Esq., and Robert A.
Weisberg, Esq., at Carson Fischer, P.L.C., represent the Debtors.  
When the Debtors filed for protection from their creditors they
listed estimated assets and debts between $10 million and
$50 million.


AMERICAN CAMSHAFT: Meeting of Creditors Scheduled on January 16
---------------------------------------------------------------
The U.S. Trustee for Region 9 will convene a meeting of American
Camshaft Specialties Inc. and its debtor-affiliates' creditors at
11:00 a.m., on Jan. 16, 2007, at Room 315 E, 211 West Fort, Suite
700 in Detroit, Michigan.

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

                     About American Camshaft

American Camshaft Specialties Inc. is located at the southwest
corner of M-45 and U.S. 31, includes two plants - ACS Grand Haven,
which is solely owned by Asimco Technologies, and a joint venture
between Nippon Piston Ring and ACS Inc.  Asimco Technologies --
http://www.asimco.com/-- is headquartered in Beijing, China, and  
produces a wide range of power train, chassis and diesel fuel
injection products for light duty and commercial vehicle
applications.  Asimco assembles semi-fully finished cast, steel
and assembled camshafts.  Aside from its U.S. operations, Asimco
has 18 manufacturing facilities and 52 sales offices in China and
one regional office in Europe and Japan.  Asimco's major customers
are automotive-based, such as DaimlerChrysler, Ford, GM, Cummins
and CAT.

American Camshaft and three other U.S. affiliates filed for
chapter 11 protection on Dec. 9, 2006 (Bankr. E.D. Mich. Lead Case
No. 06-58298).  Christopher A. Grosman, Esq., and Robert A.
Weisberg, Esq., at Carson Fischer, P.L.C., represent the Debtors.  
When the Debtors filed for protection from their creditors they
listed estimated assets and debts between $10 million and
$50 million.


AMERIQUEST MORTGAGE: Fitch Junks Rating on Class M4 Debt
--------------------------------------------------------
Fitch has taken rating actions on Ameriquest Mortgage Securities
Inc.'s home equity issues:

AMSI, series 2003-2:

   -- Class M1 affirmed at 'AA';
   -- Class M2 affirmed at 'A';
   -- Class M3 downgraded to 'BB-' from 'BBB-'; and
   -- Class M4 downgraded to 'CCC/DR5' from 'BB'.

AMSI, series 2004-R4:

   -- Class A affirmed at 'AAA';
   -- Class M1 affirmed at 'AA';
   -- Class M2 affirmed at 'A';
   -- Class M3 affirmed at 'A-';
   -- Class M4 rated 'BBB+' placed on Rating Watch Negative;
   -- Class M5 downgraded to 'BBB-' from 'BBB'; and
   -- Class M6 downgraded to 'BB-' from 'BBB-'

AMSI, series 2004-R12:

   -- Class A affirmed at 'AAA';
   -- Class M1 affirmed at 'AA+';
   -- Class M2 affirmed at 'AA';
   -- Class M3 affirmed at 'AA-';
   -- Class M4 affirmed at 'A+';
   -- Class M5 affirmed at 'A';
   -- Class M6 affirmed at 'A-';
   -- Class M7 affirmed at 'BBB+';
   -- Class M8 affirmed at 'BBB';
   -- Class M9 affirmed at 'BBB-'; and
   -- Class M10 affirmed at 'BB+'

The affirmations, affecting approximately $833.7 million of the
outstanding balances, are taken due to a satisfactory relationship
of credit enhancement to expected losses.

In AMSI series 2003-2, classes M3 and M4 are downgraded due to
monthly losses exceeding the available excess spread in recent
months, which has caused deterioration in the
overcollateralization amount.  

As of the December 2006 distribution, the OC amount of
$1.1 million is below the target amount of $2 million.  Monthly
losses have exceeded excess spread by an average of $135,000 over
the last six months and based on this projection, Fitch estimates
approximately eight months before class M4 starts to be written
down.  As of the cut-off date, the collateral for series 2003-2
had a weighted average original loan-to-value of 80.82%, and
virtually all of the loans from the trust were for the purpose of
refinance.  The balance of collateral in states which have
averaged annual home price appreciation below the national average
has increased from 35% of current balance at origination to 60% of
current balance in December.

In AMSI series 2004-R4, class M4 is placed on Rating Watch
Negative and classes M5 and M6 are downgraded due to monthly
losses exceeding the available excess spread in recent months,
which has caused deterioration in the OC amount.  

As of the December 2006 distribution, the OC amount of
$9.6 million is below the target amount of $13 million.  As of the
cut-off date, the collateral for series 2004-R4 had a weighted
average OLTV of 79%, and all of the loans from the trust were for
the purpose of refinance.  The balance of collateral in states
which have averaged annual home price appreciation below the
national average has increased from 35% of current balance at
origination to 57% of current balance in December.

For all three transactions, the underlying collateral consists of
fully amortizing 15- to 30-year fixed- and adjustable-rate
mortgages secured by first liens extended to subprime borrowers.
As of the December distribution date, the transactions listed
above are seasoned from 26 to 45 months.  The pool factors  range
approximately from 12% to 42%.

The Ameriquest Securities loans, the retail sector for Ameriquest
Mortgage Securities Inc., were either originated or acquired by
Ameriquest Mortgage Company.  Ameriquest Mortgage Company serves
as the servicer for the loans and is rated 'RPS2+' by Fitch.


AZTAR CORP: Moody's Holds Rating on $475 Mil. Senior Notes at Ba3
-----------------------------------------------------------------
Moody's Investors Service has confirmed the ratings of Aztar
Corporation's notes, assigned a stable ratings outlook to stable,
and withdrew the corporate family rating.

On Jan. 3, 2007, Aztar Corporation was acquired by entities of
Wimar Tahoe Corporation, dba Columbia Entertainment, and became a
subsidiary of Wimar Opco LLC, dba Tropicana Entertainment.
Tropicana has pre-funded via an irrevocable deposit with the bond
trustees sufficient cash to discharge its principal and interest
obligations on Aztar's notes and the trustee has been given
irrevocable instructions to redeem the notes on Feb. 2, 2007.

Moody's will withdraw the ratings and outlook of Aztar Corporation
when the notes are redeemed on Feb. 2, 2007.

Ratings Changed:

   -- Corporate Family Rating of Ba2 withdrawn

Ratings Confirmed:

   -- $175 million 9% senior subordinate notes due 2011 at
      Ba3 LGD5, 80%

   -- $300 million 8.875% senior subordinate notes due 2014 at
      Ba3 LGD5, 80%

Aztar Corporation owned and operated the Tropicana Casino and
Resort in Atlantic City, New Jersey; Tropicana Resort and Casino
in Las Vegas, Nevada; Ramada Express Hotel and Casino in Laughlin,
Nevada; and Casino Aztar in Evansville, Indiana.  On Jan. 3, 2007
Aztar Corporation was acquired by entities of Wimar Tahoe
Corporation d/b/a Columbia Entertainment, and became a subsidiary
of Wimar Opco LLC.


BALDOR ELECTRIC: To Make $900 Million Notes and Stock Offerings
---------------------------------------------------------------
Baldor Electric Company plans to make concurrent public offerings
of approximately $200 million of common stock, $150 million of
mandatorily convertible preferred stock and $550 million of
unsecured senior notes.

The proceeds from the offerings, along with borrowings under a new
senior secured credit facility and the issuance of common stock to
Rockwell Automation, Inc. will be used to finance the acquisition
of the Reliance Electric industrial motors and Dodge mechanical
power transmission businesses of Rockwell Automation, Inc, repay
substantially all of the Company's indebtedness and pay related
fees and expenses.

The offerings are subject to market and other conditions and are
conditioned on the concurrent closing of the acquisition.  In
addition, the company expects to grant the underwriters a
customary 15% over- allotment option to purchase additional shares
of common and preferred stock.  The waiting period under the Hart-
Scott-Rodino Antitrust Improvement Act has expired, and the
company expects to complete the offerings and the acquisition on
Jan. 31, 2007.

UBS Investment Bank is acting as sole book-running manager for the
common stock offering, UBS Investment Bank and Bear, Stearns & Co.
Inc. are acting as joint book-running managers for the mandatorily
convertible preferred stock offering and BNP Paribas Securities
Corp. and Lehman Brothers Inc. are acting as joint book-running
managers for the senior notes offering.

The offerings will be made under the company's shelf registration
statement filed with the Securities and Exchange Commission on
Jan. 8, 2007.

Fort Smith, Arkansas-based Baldor Electric Company (NYSE: BEZ)
markets, designs, and manufactures industrial electric motors,
drives and generators.  Baldor has approximately 3,950 employees
and 13 manufacturing facilities.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 9, 2007,
Standard & Poor's Rating Services assigned its 'BB-' corporate
credit rating to Fort Smith, Arkansas-based Baldor Electric Co.

At the same time, Standard & Poor's assigned its 'BB' bank loan
ratings and recovery ratings of '1' to the company's proposed
$1 billion seven-year, senior secured term loan and $200 million
five-year revolving credit facility, indicating the expectation of
full recovery of principal in the event of a payment default.


BALDOR ELECTRIC: Moody's Places Corporate Family Rating at B1
-------------------------------------------------------------
Moody's Investors Service has assigned a first-time B1 corporate
family rating to Baldor Electric Company along with Ba3 ratings
for the proposed senior secured credit facilities and B3 ratings
for the $550 million senior unsecured notes and $150 million of
mandatorily convertible preferred stock.

The ratings assigned to the instruments reflect both the overall
probability of default of the company, to which Moody's assigns a
B1, and a loss given default of LGD3 for the senior secured credit
facilities, LGD5 for the senior unsecured notes and LGD6 for the
preferred stock.

The rating outlook is stable.  These first-time ratings are
subject to final documentation.

Proceeds from the newly rated debt together with proceeds from the
issuances of common stock will be used to fund the $1.8 billion
acquisition of the Power System businesses of Rockwell Automation,
Inc., refinance existing debt and pay transaction fees.  The
transaction is expected to be completed in the first quarter of
2007.

Ratings assigned with a stable outlook:

   -- B1 corporate family rating,

   -- B1 probability of default rating, LGD4-50% loss given
      default assessment,

   -- Ba3, LGD3, 34% for the $1 billion senior secured term loan
      maturing in 2014,

   -- Ba3, LGD3, 34% for the $200 million senior secured
      revolving credit facility maturing in 2012,

   -- B3, LGD5, 86% for the $550 million senior unsecured notes,

   -- B3, LGD6, 98% for the $150 million mandatorily convertible
      preferred stock,

   -- SGL-1 speculative grade liquidity rating

The initial B1 corporate family rating reflects the high levels of
debt required to consummate the acquisition of the Power Systems
businesses, modest free cash flow expected in 2007 and significant
reliance on and susceptibility to downturns in the North American
industrial sector.  The ratings acknowledge Baldor's enhanced
competitive position, particularly in the North American
industrial electric motors market, strong brand recognition,
reputation for quality products and strong operating margins.

Further, the rating agency believes the Power System businesses
fit nicely with the existing Baldor business resulting in a
company capable of providing end to end solutions through the
power conversion cycle.  Despite the relative size of the
transaction, Moody's believes integration risk will be low and
that cost synergies will be modest in the next two years.  Upward
rating momentum will be dependent on the company's ability to
generate strong cash flows and reduce the acquisition related
debt.

The stable outlook reflects Moody's view that the combined company
will grow organically throughout the assimilation process over the
12 to 18 month period following the acquisition and that modest
free cash flow generation will be used to de-leverage.  The
outlook incorporates an expectation that the global motor market
will continue to expand and that the company will expand
internationally as a result.

The Ba3 rating and LGD3 loss given default assessment for the
senior secured facilities reflect benefits and limitations of the
collateral.  The B3 ratings for the senior unsecured notes and
preferred stock reflect the effective subordination to the secured
facilities.  Moody's notes that despite the same ratings, the
senior unsecured notes' LGD5 assessment implies higher recovery
levels then that of the preferred stock with a LGD6 assessment.  
Also, in calculating leverage, the preferred stock was given E
basket treatment.

The SGL-1 Speculative Grade Liquidity rating reflects Baldor's
solid liquidity position, which is supported by $25 to $75 million
of cash on the balance sheet at Dec. 31, 2006 and a $200 million
five-year senior secured revolving credit agreement, maturing in
2012.  The credit facility is not expected to be used to finance
the Power Systems acquisition and should be fully available at
close.  Moody's anticipates that cash on hand, the company's
ability to generate positive cash flows during 2007 and unused
availability under the credit facility will be more than
sufficient to meet investment and dividend requirements as well as
nominal debt maturities over the next twelve months.  Moody's
notes that all tangible and intangible assets are secured under
the credit facilities resulting in a low level of alternate
liquidity.

The senior secured credit facilities and senior unsecured notes
are expected to be guaranteed by all direct and indirect material
subsidiaries of Baldor.  Borrowings under the facilities will be
secured by a first lien priority interest in all tangible and
intangible assets of Baldor and its subsidiaries.  The credit
facilities are likely to include three financial covenants,
maximum total debt-to-EBITDA ratio, a maximum senior secured debt-
to-EBITDA ratio and a minimum fixed charge coverage ratio. The
term loan shall be repayable 1% per annum in years one through
six, with the balance payable in year seven.  The credit facility
allows for same day borrowings, has a $20 million sub-limit for
letters of credit, requires a MAC representation before each
borrowing and mandates that 75% of excess cash be used to retire
the term loan until total debt-to-EBITDA is less than 4.0x.

Baldor Electric Company is a manufacturer of industrial electric
motors, drives and generators.  Baldor is headquartered in Fort
Smith.  Power Systems is a provider of Dodge power transmission
products, including mounted bearings and enclosed gearing, and
Reliance Electric industrial motors, including large AC and
custom, variable speed and specialty, and small and medium AC
motors.  After this transaction, the motor business will represent
64% of sales, Dodge 28%, motion control and drives 7% and
generators 2%.  Pro forma revenue for 2006 will likely exceed
$1.8 billion.


CALPINE CORP: Wants Holland & Hart as Special Counsel
-----------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ Holland & Hart, LLP, as their special counsel pursuant
to Section 327(e) and 328 of the Bankruptcy Code.

David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York,
relates that throughout the Debtors' Chapter 11 cases, Holland &
Hart, among other things, has advised the Debtors with respect to
certain tribal law matters.  Holland & Hart has represented
Debtor CPN Cascade, Inc., in a prepetition litigation pending in
the U.S. Court of Federal Claims against Bonneville Power
Administration -- the Telephone Flat Litigation.  In the Federal
Claims Action, CPN Cascade alleged that the Bonneville Power, an
agency of the United States Department of Energy, breached a
settlement agreement by refusing to pay $9,000,000 pursuant to
the terms of the settlement.  The Debtors say the Federal Claims
Action may result in a substantial recovery for CPN Cascade's
bankruptcy estate.

As special counsel, Holland & Hart will:

   (a) continue to represent the Debtors with respect to the
       Telephone Flat Project Litigation;

   (b) represent the Debtors in In re Save Medicine Lake
       Coalition et al. v. Bureau of Land Management, Calpine
       Corporation et al., an action pending in the U.S. District
       Court for the Eastern District of California;

   (c) represent the Debtors in In re Pit River Tribe et al. v.
       Bureau of Land Management, Calpine Corporation et al.,
       also pending in the U.S. District Court for the Eastern
       District of California; and

   (d) continue to advise the Debtors with respect to the
       development of energy resources and issues arising out of
       their operations, like real estate matters in Colorado and
       other states, labor and employment matters and commercial
       litigation matters.

The Debtors will pay Holland & Hart according to its hourly rate:

      Professional                        Hourly Rates
      ------------                        ------------
      Partners                            $245 to $550
      Associates                          $145 to $425
      Paraprofessionals                   $100 to $175

The Debtors expect these Holland & Hart professionals to have
primary responsibility in providing them legal services:

      Professional                        Hourly Rates
      ------------                        ------------
      Rick D. Bailey, Esq.                    $365
      Kelly A. Johnson                        $405
      Ryan T. Bergsieker                      $235
      Murray Feldman                          $325
      Karol Kahalley                          $295

The Debtors will also reimburse Holland & Hart for any necessary
out-of-pocket expenses.

Rick D. Bailey, Esq., a partner at Holland & Hart, assures the
Court that his firm does not represent any interest adverse to the
Debtors and their estates, and is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.

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
ower plant engineering, construction and maintenance and
operational services.

The company previously produced a portion of its fuel consumption
requirements from its own natural gas reserves.  However, in July
2005, the company sold substantially all of its remaining domestic
oil and gas assets to Rosetta Resources Inc.

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


CALPINE CORP: Wants to Hire AP Services as Crisis Managers
----------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ and compensate Lisa J. Donahue and AP Services LLC as their
crisis managers, pursuant to the terms of the Amended Services
Agreement, nunc pro tunc to Nov. 3, 2006, pursuant to Section 363
of the Bankruptcy Code.

In the past months, the Debtors have focused on developing a
long-term business plan that will form the core of their plan of
reorganization.  Recognizing the challenges they will encounter
in developing the business plan, the Debtors determined that they
need Scott J. Davido to focus primarily on his duties as chief
restructuring officer, including:

   -- bringing the business plan to completion,
   -- supervising the development of a plan,
   -- negotiating key aspects of the business plan, and
   -- focusing on strategic planning and risk management issues.

To allow Mr. Davido to focus on those duties, the Debtors
named Lisa J. Donahue as interim chief financial officer.  To
memorialize the changes in their employment statuses, the Debtors
amended their Services Agreement with AP Services, LLC, in
November 2006.

The salient terms of the APS Amended Services Agreement are:

   (a) Ms. Donahue will continue to be assisted by the same APS
       Employees that have been working with the Debtors since
       November 2005;

   (b) The Debtors will continue to compensate APS in accordance
       with the terms of the Final Retention Order;

   (c) APS will be eligible to receive an "Emergence Incentive
       Bonus" of up to $6,000,000, to be earned upon the
       consummation of a confirmed plan.  Robert P. May, the
       Debtors' chief executive officer, has the sole discretion
       to reduce the Emergence Incentive Bonus below $6,000,000.

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
ower plant engineering, construction and maintenance and
operational services.

The company previously produced a portion of its fuel consumption
requirements from its own natural gas reserves.  However, in July
2005, the company sold substantially all of its remaining domestic
oil and gas assets to Rosetta Resources Inc.

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


CANWEST MEDIAWORKS: Plan Acquisition Cues DBRS to Review Ratings
----------------------------------------------------------------
Dominion Bond Rating Service changed the ratings of CanWest
MediaWorks Inc.'s issuer rating at BB and senior subordinated
notes rating at B (high) to Under Review with Developing
Implications from Under Review with Negative Implications
following the company's announcement that it intends to acquire
Alliance Atlantis Communications Inc. for approximately
$2.3 billion through a new acquisition company in conjunction with
GS Capital Partners, a private equity affiliate of Goldman Sachs &
Co.

DBRS will maintain the Under Review with Developing Implications
status until there is further clarity regarding the structure and
terms of the proposed acquisition.  DBRS expects the proposed
acquisition entity will likely be structured to require a small
initial investment from CanWest, financed from cash on hand.

DBRS notes the acquisition could provide the company with
strategic benefits, including:

   1) strengthened broadcast mix with strong specialty channels
      and conventional programming;

   2) increased focus in the company's core Canadian market; and

   3) potential synergies arising from the acquisition.

DBRS had placed the company's ratings Under Review with Negative
Implications on July 11, 2006, mainly as a result of the potential
for a breach of the company's bank covenants.  Since that time,
DBRS has gained comfort following an amendment to CanWest's bank
covenants that a breach of covenant is unlikely in the near term.

The acquisition is subject to regulatory approval and is expected
to close in the spring of 2007.


CATHOLIC CHURCH: Spokane, et al., File Joint Reorganization Plan
----------------------------------------------------------------
The Honorable Gregg W. Zive of the United States Bankruptcy Court
for the District of Nevada reported that the mediation in the
bankruptcy case of the Catholic Diocese of Spokane, Washington,
which has been pending before him since July 2006, has resulted in
a successful resolution of the material issues in the case.

Judge Zive said, "This has been a long and difficult process.
The parties and counsel involved in this case have worked
diligently to ensure that an equitable resolution of the case
could be reached.  It has been a complex and often emotional
process, but one that was essential to avoid protracted,
debilitating, risky and expensive legal disputes."

The global settlement is represented in a consensual Plan of
Reorganization that will be filed with the United States
Bankruptcy Court for the Eastern District of Washington in
Spokane.  The parties participating in the mediation and
settlement process were the Catholic Diocese of Spokane, the Tort
Litigants Committee, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes.

The Plan will go through the normal confirmation process before
the Honorable Patricia C. Williams, United States Bankruptcy Judge
for the Eastern District of Washington.  The Plan will be reviewed
and submitted to creditors for voting consistent with the United
States Bankruptcy Code.

Judge Zive explained, "The economic portion of the global
settlement totals at least $48 million and provides a mechanism
for the payment of future claims.  In addition to the sale of
Diocesan assets, contributions of more than $20 million from six
insurance carriers, and contributions from various Catholic
entities in the Diocese, the Parishes will be responsible for
raising $10 million.  As important as the economic terms of the
Plan are, the Plan contains numerous non-monetary, provisions that
are as critical as the monetary provisions of the Plan.
These non-economic terms were absolutely essential to arriving at
a consensual plan.  It is hoped that the resolution of this case
will help provide the survivors with some measure of closure and
allow them to move forward and continue the healing process.  At
the same time, the settlement will allow the Catholic Diocese of
Spokane to continue its ministry and to begin its own journey of
renewal, healing and hope."

             Classification of Claims Under the Plan

Under the Joint Plan of Reorganization, all Claims against
Spokane, other than Administrative Claims and Priority Tax
Claims, are divided into eight separate classes:

         Class          Description
         -----          ------------
          N/A           Administrative
          N/A           Priority Tax Claims
           1            Priority Employee Unsecured Claims
           2            Priority Unsecured Claims
           3            Secured Claims
           4            General Unsecured Convenience Claims
           5            Deposit and Loan Claims and Other
                          Parish and Catholic Entity
                          Secured and Unsecured Claims
           6            General Unsecured Claims
           7            Tort Claims
           8            Priest Retirement Claims

The Claims in Classes 5, 6 and 7 are impaired, while those in
Classes 1, 2, 3, 4 and 8 are unimpaired.

The Diocese will deliver to the Court a Disclosure Statement
explaining the Plan on February 1, 2007, Spokane's lawyers told
The Associated Press.  The Disclosure Statement will include
proposals for specific payments to individual creditors as well as
how much of the $48 million pool will be available to them, the AP
added.

The AP noted that still to be resolved are millions of dollars in
attorneys fees, which will be paid before any of the victims are
compensated.  The victims would then vote whether to accept or
reject the proposed payouts.

According to the AP, during the two-hour telephone hearing held in
January 5, 2007, Judge Williams set the confirmation hearing to
April 24 and 25, and said, "Even though it will take another three
to four months for a final resolution, that is time well spent
because the parties have collectively controlled their own
destiny, rather than have an appellate court control their
destiny."

                   Spokane to Emerge by May 31

The Plan provides that all conditions to the Effective Date must
be satisfied or waived no later than May 31, 2007.  If the
Effective Date has not occurred by May 31, the Confirmation Order
will be vacated automatically unless all of the Proponents and the
Official Committee of Tort Litigants agree in writing to extend
the deadline.

                      Insurance Settlements

The Plan further provides that to the extent not previously
approved by the Bankruptcy Court, the insurance settlements with
the six insurers, and the agreements providing for the settlements
will be approved upon entry of, and as a part of, the order
confirming the Joint Plan.

A schedule of the settlement amounts is available for free at
http://researcharchives.com/t/s?1862

On the effective date of the Plan, the Parishes and the Catholic
Entities, except Morning Star Boy's Ranch, will release their
claims to coverage under the insurance policies covered by the
Insurance Settlements in consideration of entry of the Permanent
Injunction and receipt of Releases of Claims from each holder of a
Tort Claim who elects to receive funds paid for the Releases of
Claims.

                     Non-monetary Obligations

The Diocese will undertake these non-monetary obligations within
30 days after the Plan Effective Date, unless otherwise noted:

   1. For not less than nine years after the Effective Date, the
      Diocese will post on the Diocesan Web site the names of all
      known Spokane diocesan clergy who are admitted, proven or
      credibly accused perpetrators.  For deceased perpetrators,
      the name will be posted only if the abused person wants
      the deceased priest's name be publicized.  The Diocese will
      maintain the posting for any longer period of time if
      recommended by the U.S. Conference of Catholic Bishops.

   2. The Diocese will continue publication on the Web site of
      the postings of admitted, proven or credibly accused
      perpetrators which have been posted since 2002 for a period
      of not less than nine years after the Effective Date.

   3. Within one year after the Effective Date, Bishop Skylstad
      will go to every parish in which any children were abused
      or where perpetrators served and read from the pulpit a
      statement identifying all perpetrators that have served in
      the parish and urge people to come forward and contact law
      enforcement, the diocesan Victim's Assistance Coordinator
      or any survivor group or organization felt appropriate by
      the person wishing to make a report of abuse.

   4. The Diocese will publish in the Inland Register four times
      per year for five years after the Effective Date and once
      per year for 20 years, a prominent statement urging persons
      sexually abused by priests to come forward and contact law
      enforcement, and the diocesan Victim's Assistance
      Coordinator or any survivor group or organization felt
      appropriate by the person wishing to make a report of
      abuse.

   5. Bishop Skylstad will publicly support a complete
      elimination of all criminal statutes of limitation for
      child sexual abuse.

   6. For two years after the Effective Date, the Diocese will
      allow any person holding an Allowed Tort Claim to speak
      publicly in the parish where they were Abused at a time
      mutually agreed upon by the person holding the Allowed
      Tort Claim, the Diocese and the parish pastor or
      administrator.  A person holding an Allowed Tort Claim who
      wishes to so speak publicly in the parish where they were
      abused will be entitled to speak on no more than one
      occasion per Tort Claimant, and reasonable notice of the
      occasion, time and place of his or her presentation will
      be given by the Diocese or the parish to parish members.

   7. The Diocese will make available reasonable space but not
      more than one full page in each issue of the Inland
      Register for two years after the Effective Date to allow
      Tort Claimants to tell their stories of abuse by priests if
      they desire to publish their stories.

   8. The Diocese, and its representatives, will not refer either
      verbally or in print to the Claims of Tort Claimants as
      "alleged" Claims.

   9. Within a reasonable time after the allowance of any Tort
      Claim, Bishop Skylstad will send letters of apology to the
      Tort Claimant and, if requested by the Tort Claimant, his
      or her immediate family.

Spokane Bishop William Skylstad has already instituted some of the
provisions as part of Spokane's sex abuse prevention and reporting
campaign, the AP said.

A full-text copy of Spokane's Joint Plan of Reorganization is
available for free at http://researcharchives.com/t/s?1863

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts.  (Catholic Church Bankruptcy News,
Issue No. 76; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CENTRAL GARDEN: Compensation Committee OKs $1.28 Mil. Execs. Bonus
------------------------------------------------------------------
The Compensation Committee of Central Garden & Pet Company's board
of directors approved $1,282,750 in fiscal 2006 bonuses to six
executives:

           Executive Officer           FY 2006 Bonus   
           -----------------           -------------    
           Glenn W. Novotny               $500,000
           President and
           Chief Executive Officer

           William E. Brown               $226,500
           Chairman   

           James V. Heim                  $150,000
           President
           Pet Products Division   

           Stuart W. Booth                $155,000
           Executive Vice President and
           Chief Financial Officer    

           Bradley P. Johnson
           President, Garden Division     $206,250  

           Brooks M. Pennington III       $200,000
           Director, Special Projects    

The company disclosed that Mr. Johnson's bonus does not include a
transition fee of $250,000 he received upon commencement of
employment with the company.

Mr. Pennington resigned as president and chief executive officer
of Pennington Seed Inc. effective Oct. 1, 2006, the company
further disclosed.

Headquartered in Walnut Creek, California, Central Garden & Pet
Company (NASDAQ: CENT) -- http://www.central.com/-- markets and  
produces branded products for the lawn & garden and pet supplies
markets.  Products are sold to specialty independent and mass
retailers.  The company also provides a host of other regional and
application-specific garden and pet brands and supplies.  The
company has approximately 5,000 employees, primarily in North
America and Europe.

                           *     *     *

As reported in the Troubled Company Reporter on Sept. 28, 2006,
Moody's Investors Service affirmed its Ba3 corporate family rating
for Central Garden and Pet Company.  Additionally, Moody's held
its Ba2 probability-of-default rating on the company's
$350 million senior secured revolver.


CDC MORTGAGE: Fitch Junks Rating on Class B1 and B2 Certificates
----------------------------------------------------------------
Fitch has taken rating actions on CDC's mortgage pass-through
certificates:

CDC Mortgage Capital Trust, series 2002-HE3:

   -- Class M1 affirmed at 'AA';

   -- Class M2 downgraded to 'BBB' from 'A';

   -- Class B1 downgraded to 'CC' from 'B+' and assigned
      distressed recovery rating of 'DR3'; and

   -- Class B2 remains at 'C/DR6.'

CDC Mortgage Capital Trust, series 2003-HE1:

   --Class M1 affirmed at 'AA';

   --Class M2 affirmed at 'A+';

   --Class M3 downgraded to 'BBB+' from 'A';

   --Class B1 downgraded to 'B+' from 'BB+'; and

   --Class B2 downgraded to 'C' from 'B+' and assigned DR rating
     of 'DR6'.

CDC Mortgage Capital Trust, series 2003-HE2:

   -- Class M1 affirmed at 'AA';
   -- Class M2 affirmed at 'A';
   -- Class M3 affirmed at 'A-';
   -- Class B1 affirmed at 'BBB';
   -- Class B2 downgraded to 'BB' from 'BB+'; and
   -- Class B3 downgraded to 'B+' from 'BB-'.

The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $124 million of outstanding certificates, as of the
Dec. 26, 2006 distribution date.

The negative rating actions, affecting approximately $22 million
of outstanding certificates, reflect the deterioration of CE
relative to expected future losses.

As of the December 2006 distribution, series 2002-HE3 has suffered
a cumulative loss of 2.47% of its original balance.  The
overcollateralization has been eroded completely and the B-2 bond
has suffered a write down of $469,770 to date.  The average
monthly excess spread for the past three months has been
approximately $56,611 and the average monthly losses for the same
period have been $421,896.  This has led to an average monthly
reduction in credit enhancement of $365,285 for the past three
months.  The 90+ delinquencies represent 27.51% of the current
mortgage pool balance.  This number includes foreclosures and real
estate owned of 7.34% and 4.69%, respectively.

The cumulative loss for the 2003-HE1 transaction is 1.61% of its
original balance.  The OC is $810,336 versus a target of
$3,302,846 and is expected to get reduced further in the coming
months as losses exceed available excess spread.  The average
monthly excess spread for the past three months has been
approximately $85,221 and the average monthly losses for the same
period have been $435,831.  This has led to an average monthly
reduction in credit enhancement of $350,610 for the past three
months.  As a result, OC is expected to be fully exhausted in the
next three months and the B-2 bond is then expected to start
taking losses.  The 90+ delinquencies represent 21.81% of the
current mortgage pool balance.  Included in this number are
foreclosures and REO of 4.19% and 6.60%, respectively.

The cumulative loss for the series 2003-HE2 is 1.21% of its
original balance.  The OC is currently at $2,627,637 versus a
target of $3,428,136 and is expected to shrink further as losses
exceed excess spread in the coming months.  The B-3 bond  
currently benefits from 3.52% CE in the form of OC.  The average
monthly excess spread for the past three months has been
approximately $108,712 and the average monthly losses for the same
period have been $360,995.  This has led to an average monthly
reduction in credit enhancement of $252,283 for the past three
months.  The 90+ delinquencies represent 28.83% of the current
mortgage pool balance.  Included in this number are foreclosures
and REO of 6.98% and 5.46%, respectively.

The underlying collateral for the transactions listed above
consists of 30 year fixed- and adjustable-rate mortgage loans
secured by first and second liens on one- to four-family
residential properties extended to subprime borrowers.  As of the
December 2006 distribution, the pools are seasoned from a range of
43 months to 49 months.  The pool factors for series 2002-HE3,
2003-HE1 and 2003-HE2 are 7.31%, 8.76% and 10.9%, respectively.
The servicer for series 2002-HE3 is Select Portfolio Servicing,
Inc. and the servicer for the series 2003-HE1 and 2003-HE2 is
Ocwen Loan Servicing, LLC.

All of the mortgage loans were purchased by Morgan Stanley ABS
Capital I Inc., the depositor, from CDC Mortgage Capital Inc., who
previously acquired the mortgage loans from various other
corporations.


CHAPARRAL ENERGY: Commences Private Placement of $275 Mil. Notes
----------------------------------------------------------------
Chaparral Energy Inc. commenced a private placement offering of
$275 million of Senior Notes due 2017.

The company intends to use the net proceeds of the proposed
offering to reduce outstanding indebtedness under its senior
secured credit facility.

Chaparral disclosed that it may reborrow under the credit
facility, subject to its borrowing base, to fund future capital
expenditures (including acquisitions) and for general working
capital purposes.

The notes have not been registered under the Securities Act of
1933 or applicable state securities laws and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and applicable state laws.

Headquartered in Oklahoma City, Oklahoma, Chaparral Energy, Inc.
-- http://www.chaparralenergy.com/-- is an oil and natural gas  
production and exploitation company.   The company also drills in
Texas and the Gulf Coast.  In 2006 the company agreed to acquire
Calumet Oil for about $510 million.


CHAPARRAL ENERGY: Moody's Puts Caa1 Rating on $275MM Notes Offer
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Chaparral
Energy, Inc., concluding the ratings review initiated in September
2006 after Chaparral's reported acquisition of Calumet Oil Company
and certain affiliates.  

Ratings downgraded include Chaparral's corporate family and
probability of default ratings, both to B3 from B2, and
Chaparral's existing 8.5% sr. notes due 2015 to Caa1, LGD5, 75%
from B3, LGD4, 69%.

Moody's also assigned a Caa1 rating to Chaparral's proposed
offering of $275 million of senior notes due 2017.  Proceeds from
the note offering will be used to repay credit facility
borrowings.

The rating outlook is stable.

The downgrade reflects the significant increase in leverage
resulting from the Calumet acquisition.  Moody's continues to
believe that the acquired properties are a good fit for Chaparral
geographically and in terms of opportunities for enhanced
recovery; however, by not issuing any additional common equity in
connection with the transaction, Chaparral's leverage is high. Pro
forma for the acquisition as of Sept. 30, 2006, Chaparral's debt-
to-PD reserves is approximately $8.63/Boe will, which corresponds
to the "Caa" rating category under Moody's E&P rating methodology.

Also as of Sept. 30, 2006, Chaparral's pro forma debt-to-book
capitalization is nearly 85%.  On a debt-to-daily production
basis, Chaparral's leverage exceeds $50,000, which is among the
highest of all of the E&P companies that Moody's rates.

Chaparral's high leverage relative to its production base also is
demonstrated by interest expense of approximately $10.85/Boe on a
pro forma basis for the nine months ended Sept. 30, 2006.  The
downgrade also reflects Moody's concerns regarding Chaparral's
lack of focus as demonstrated by the accumulation of minor
interests outside of its core operating areas and the potential
for non-E&P investments.

Chaparral hired outside engineers to prepare estimates of
Calumet's proved reserves as of Sept. 30, 2006.  The results of
that study indicate the acquired properties have total proved
reserves of 68.3 MMBoe, which is higher than the initial
internally engineered estimate of 51.5 MMBoe; however, nearly all
of the increase was in the proved undeveloped category.  Proved
developed reserves as of Sept. 30, 2006 for Calumet were
approximately 39.0 MMBoe.  The revised acquisition cost is
approximately $7.32/Boe; including future capital of $400 million
results in a fully developed acquisition cost of $13.17/Boe.  Both
acquisition cost figures are below current industry averages;
however, it should be noted that these properties have a much
lower present value per Boe than industry averages due to high
lease operating expenses and production taxes and the long-lived
nature of the reserves.  On a price per daily flowing Boe basis,
the acquisition cost is over $106,000, which, based on Moody's
evaluation, is much higher than current industry averages and
indicates a full valuation on the acquired properties. Current
production on the acquired properties is approximately 4,700
Boe/d, which increased Chaparral's production to approximately
18,900 Boe/d.

Moody's estimates that as of Dec. 31, 2005 assuming the Calumet
acquisition took place on that date, Chaparral's 3-year average
finding and development were approximately $12.04/Boe on a fully
developed basis.  While Chaparral's F&D costs appear competitive
relative to similarly rated peers, again these costs reflect a
number of acquisitions of low PV properties.  Information
regarding Chaparral capital productivity for the year ended
Dec. 31, 2006 is not available at this time.  Of note is that
Chaparral's long-lived reserves were evaluated last year using a
much higher natural gas price than what will be used for the
evaluation as of the end of 2006.  Accordingly, negative price-
related revisions to Chaparral's natural gas reserves are
possible.

Chaparral Energy, Inc. is headquartered in Oklahoma City,
Oklahoma.


CHAPARRAL ENERGY: S&P Junks Rating on $275 Million Senior Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and 'CCC+' senior unsecured ratings on exploration
and production company Chaparral Energy Inc. after the report that
Chaparral is issuing $275 million senior notes due 2017.  The
notes are rated 'CCC+'.  

At the same time, the outlook was revised to stable from negative.

Pro forma the planned offering, Oklahoma City, Oklahoma-based
Chaparral is expected to have around $1 billion of debt.

"The stable outlook reflects the improved liquidity that will
result from the offering after Chaparral applies proceeds toward
repaying outstanding borrowings from its credit facility," said
Standard & Poor's credit analyst Paul Harvey.

The company incurred much of the debt to be repaid after its
acquisition of Calumet Oil Co. in late 2006.  Standard & Poor's
had been concerned that Chaparral would be unable to lower
outstanding debt on its credit facility prior to scheduled
reductions in its borrowing base.  Further supporting improved
liquidity is the expectation that near-term oil-and-gas-related
capital expenditures, not including acquisitions, will remain
within cash flows.   
      
"The ratings on Chaparral reflect concerns associated with its
aggressive growth strategy, high debt leverage, elevated cost
structure, and small reserve base," Mr. Harvey said.

"These concerns are only partially mitigated by Chaparral's solid
reserve life, high operatorship of its properties, and extensive
hedging program," he continued.


COLLINS & AIKMAN: Closing Five Plants in North America by March
---------------------------------------------------------------
Collins & Aikman Corp. will close five plants in North America and
cut more than 1,100 jobs by March 28, 2007.

According to C&A spokesperson David Youngman, the affected plants,
which have been deemed less likely to be sold, are located in
Americus, Georgia; Dover and Farmington, New Hampshire; and
Scarborough and Gananoque, Ontario.

C&A must negotiate severance packages with the union-represented
workers in some of the affected plants, which packages are subject
to the Court's approval, Bloomberg News reports.

The company's soft-trim business is being sold through a Court-
monitored auction.  The chosen lead bidder is undisclosed, and no
auction date has been set.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit  
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts.  (Collins & Aikman Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


COLLINS & AIKMAN: Wants Lowell Lease Claims Agreement Approved
--------------------------------------------------------------  
Collins & Aikman Corp. and its debtor-affiliates ask the Honorable
Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern
District of Michigan to approve a stipulation between the Debtors
and BVP Lowell LLC formerly known as Vespera Lowell LLC involving
a real property.

The Debtors leased real property located at 122 Western Avenue,
Lowell, Massachusetts, from BVP Lowell LLC, formerly known as
Vespera Lowell LLC, pursuant to a lease to which the Debtors
agreed to pay certain expenses associated with the property.

Pursuant to Section 365 of the Bankruptcy Code, effective as of
Oct. 30, 2006, the Debtors filed a notice on Oct. 19, 2006,
rejecting the Lease.  By correspondence dated Dec. 4, 2006,
Lowell asserted its claim of approximately $2,198,273 under the
Lease, consisting predominantly of postpetition expenses related
to maintenance, repair and taxes associated with the Lease
Property.

Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, New
York, tells the Court that during extensive, arm's length
negotiations to resolve the Lease Claim, the parties identified
fundamental disagreements regarding the expenses Lowell was
entitled to recover from the Debtors pursuant to the Lease and
the Rejection.

The Debtors analyzed the Lease Claim and concluded that the
probable range of outcomes in litigation was significant; and in
light of the time, expense and uncertainty of litigation, they
believe that a settlement is in the best interest of their
estates and creditors.

Pursuant to a stipulation, the Debtors agree to pay Lowell
$125,000 on or before Jan. 31, 2007, in full and final
settlement of all disputes associated with the Lease Claim and
Lease Property.

Upon Court approval of the stipulation, and bank clearance of the
Settlement Amount, the parties will release each other from any
and all claims, damages, actions, rights or allegations arising
from or related to the Lease, the Lease Claim, the Rejection or
the Rejection Notice.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit  
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts.  (Collins & Aikman Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CONSOLIDATED CONTAINER: William Bell Resigns as Holdings' Director
------------------------------------------------------------------
William G. Bell resigned, effective Dec. 31, 2006, from the
management committee of Consolidated Container Holdings LLC, the
sole member and manager of Consolidated Container Company LLC.  

In addition, Mr. Bell resigned from the board of directors of two
of Holdings' subsidiaries, Consolidated Container Capital Inc. and
STC Plastics Inc.  No replacement has yet been appointed.

Also effective Dec. 31, 2006, Stephen E. Macadam, former chief
executive officer of Holdings, resigned from Holdings' Management
Committee after completing a 15 month transitional period to
facilitate the change of chief executive officer from Mr. Macadam
to Jeffery M. Greene in October 2005.  Mr. Macadam also resigned
from the Board of four of Holdings' subsidiaries, Capital, STC,
Reid Mexico S.A. de C.V., and Consolidated Plastics S. de R. L. de
C.V.

The Management Committee of Holdings appointed on Dec. 1, 2006,
Thomas G. McGonagle to the Management and the Audit Committees.  
The appointment was made in anticipation of the resignation of Mr.
Macadam.  Pursuant to the terms of Holdings' operating agreement,
Vestar Capital Partners, III L.P., the majority owner of the
common stock of Holdings, made the appointment.

Mr. McGonagle served as the senior vice president and chief
financial officer of Vistar Corporation, a national food
distribution company, from 2003 to 2006.  From 2001 until 2003, he
was the co-head of the U.S. Merchant Banking for Babcock & Brown
LP.  Before that time, Mr. McGonagle spent 14 years at Donaldson,
Lufkin & Jenrette / Credit Suisse First Boston most recently
serving as Managing Director of the Financial Sponsors Group.  

Mr. McGonagle received a B.A. from Dartmouth College and an M.B.A.
from the Amos Tuck School of Business Administration.
Additionally, Mr. McGonagle serves on the boards of The Children's
Hospital Foundation, The United States Ski & Snowboard Team
Foundation, and the Kent Denver School.

Headquartered in Atlanta, Georgia, Consolidated Container Company
LLC -- http://www.cccllc.com/-- develops, manufactures and  
markets rigid plastic containers for many of the largest branded
consumer products and beverage companies in the world.  The
company has a network of 55 strategically located manufacturing
facilities and a research, development and engineering center
located in Atlanta, Georgia.  In addition, the company has three
international manufacturing facilities in Canada and Mexico.  The
company sells containers to the dairy, water, juice & other
beverage, household chemicals & personal care, agricultural &
industrial, food and automotive sectors.  The company's container
product line ranges in size from two-ounce to six-gallon
containers and consists of single and multi-layer containers made
from a variety of plastic resins, including high-density
polyethylene, polycarbonate, polypropylene, and polyethylene
terephthalate.

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 6, 2006,
Standard & Poor's Ratings Services affirmed its ratings on
Consolidated Container and removed all ratings from CreditWatch
with negative implications, where they were placed on
Aug. 23, 2006.  The corporate credit rating on Consolidated
Container is 'B-'.


CONSTELLATION BRANDS: Earns $107.8 Million in Qtr. Ended Nov. 30
----------------------------------------------------------------
Constellation Brands reported $107.8 million of net income on net
sales of $1.5 billion for the third quarter ended Nov. 30, 2006,
compared with $109 million of net income on net sales of
$1.3 billion in the same period in 2005.  

Net sales were up 18% over the prior year, primarily due to the
June 5, 2006, acquisition of Vincor International Inc., and from
growth in the base business.  Branded business net sales grew 18
percent.  This increase was due to the addition of Vincor and four
percent growth for branded business organic net sales on a
constant currency basis.

"Strong imported beer performance, growth from branded wine in
North America, and the addition of Vincor generated solid results
for the quarter," Constellation Brands chairman and chief
executive officer Richard Sands said.  

"We continue to be very optimistic about our portfolio's long-term
growth potential, although our third quarter results reflect
ongoing softness in our U.K. branded wine business as very
challenging market conditions persist."

For the third quarter of 2007, operating income increased
primarily due to the acquisition of Vincor, as well as growth in
the base business.  The company incurred $4.4 million of stock-
based compensation expense for third quarter 2007 related to the
company's Mar. 1, 2006, adoption of Statement of Financial
Accounting Standards No. 123(R), "Share- Based Payment" ("SFAS
123(R)").  

The recognition of stock compensation expense reduced operating
income growth by approximately two percentage points.  For the
quarter, the company also recorded approximately $1 million for
its share of start-up and transition expenses related to building
out the infrastructure in the eastern United States for Crown
Imports LLC joint venture.

Wines segment operating margin decreased 70 basis points.  This is
primarily due to competitive U.K. market conditions that have made
it difficult for the company to pass along the annual duty
increase and the impact of lower U.K. sales on fixed cost
absorption.  The impact of these factors was somewhat offset by
synergies and mix benefit from the Vincor acquisition.  Beers and
spirits segment operating margin declined 140 basis points for the
quarter, primarily due to higher transportation costs for imported
beers, increased material costs for spirits and higher spending
behind premium spirits.

Interest expense increased 52% to $73.1 million for third quarter
2007, primarily due to the financing of the Vincor acquisition and
higher average interest rates.  

At Nov. 30, 2006, the company's balance sheet showed $9.8 billion
in total assets, $6.5 billion in total liabilities, and
$3.3 billion in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?1851

                         Stock Repurchases

During third quarter 2007, the company purchased approximately
652,000 shares of its class A common stock at an aggregate cost of
$18 million, or at an average cost of $27.65 per share. This
completes purchases under the company's previously announced
$100 million share repurchase program.

                    About Constellation Brands

Based in Fairport, New York, Constellation Brands, Inc.
(NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/ -- produces and   
markets beverage alcohol brands with a broad portfolio across the
wine, spirits and imported beer categories.  Well-known brands in
Constellation's portfolio include: Almaden, Arbor Mist, Vendange,
Woodbridge by Robert Mondavi, Hardys, Groundrey, Nobilo, Kim
Crawford, Alice White, Ruffino, Kumala, Robert Mondavi Private
Selection, Rex Goliath, Toasted Head, Blackstone, Ravenswood,
Estancia, Franciscan Oakville Estate, Inniskillin, Jackson-Triggs,
Simi, Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet,
Mr. Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi-
Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona
Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St.
Pauli Girl, Tsingtao.

                           *     *     *

As reported in the Troubled Company Reporter on Sept. 26, 2006,
Moody's Investors Service's affirmed its Ba2 Corporate Family
Rating for Constellation Brands Inc., and downgraded its Ba3
probability-of-default rating to B1.  The rating agency also
assigned its LGD6 loss-given-default ratings on the Company's $250
million 8.125% Senior Subordinated Notes due Jan. 15, 2012,
suggesting noteholders will experience a 95% loss in the event of
default.


CREATIVE FOODS: Section 341(a) Meeting Slated for February 23
-------------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting of
Creative Foods, LLC's creditors at 1:00 p.m., on Feb. 23, 2007, at
the Jonesboro First Meeting Room in Arkansas.

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

Based in Osceola, Arkansas, Creative Foods, LLC, manufactures and
exports natural and imitation margarine.  The company and its
affiliate, Osceola Foods, Inc., filed for chapter 11 protection on
Jan. 3, 2007 (Bankr. E.D. Ark. Case Nos. 07-10043 & 07-10044).  
Michael Patrick Coury, Esq., at Farris, Mathews, Branan, Bobango,
Hellen & Dunlap PLC, represents the Debtors.  When the Debtors
filed for protection from their creditors, they listed estimated
assets and debts between $1 million and $100 million.


CWABS ASSET: Moody's Rates Class B Certificates at Ba1
------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by CWABS Asset-Backed Certificates Trust 2006-
23 and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.

The securitization is backed by Countrywide Home Loans, Inc.
originated, adjustable-rate and fixed-rate, subprime mortgage
loans acquired by Countrywide Financial Corporation.

The ratings are based primarily on the credit quality of the loans
and on protection against credit losses by mortgage insurance
provided by United Guaranty Mortgage Indemnity Company, Mortgage
Guaranty Insurance Corporation and Republic Mortgage Insurance
Company.  The ratings also benefit from subordination, excess
spread, and overcollateralization and an interest-rate swap
agreement provided by Bear Stearns Financial Products Inc.  After
taking into consideration the coverage of the primary mortgage
insurance, Moody's expects collateral losses to range from 3.10 %
to 3.60%.

Countrywide Home Loans Servicing LP will act as master servicer.

   * CWABS Asset-Backed Certificates Trust 2006-23

   * Asset-Backed Certificates, Series 2006-23

                   Class 1-A,   Assigned Aaa
                   Class 2-A-1, Assigned Aaa
                   Class 2-A-2, Assigned Aaa
                   Class 2-A-3, Assigned Aaa
                   Class 2-A-4, Assigned Aaa
                   Class A-R, Assigned Aaa
                   Class M-1, Assigned Aa1
                   Class M-2, Assigned Aa1
                   Class M-3, Assigned Aa2
                   Class M-4, Assigned Aa3
                   Class M-5, Assigned A1
                   Class M-6, Assigned A2
                   Class M-7, Assigned A3
                   Class M-8, Assigned Baa2
                   Class M-9, Assigned Baa3
                   Class B,   Assigned Ba1

The Class B 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.


DAIMLERCHRYSLER AG: CEO Expresses Support for Chrysler Group Chief
------------------------------------------------------------------
Dieter Zetsche, chief executive of DaimlerChrysler AG, said he and
the company's supervisory board supports Chrysler head Tom LaSorda
in his effort to return the ailing U.S. unit to profitability,
Bloomberg News reports.

"I have given him advice to not read too many news clips," Mr.
Zetsche told Bloomberg News.  "He is doing a good job in a
difficult environment."

Bloomberg News suggests that Mr. Zetsche's comments may clarify
speculations that Mr. LaSorda may lose his job.  Mr. LaSorda
succeeded Mr. Zetsche as Chrysler's chief.

Chrysler, which posted $1.5 billion net loss in third quarter
2006, is forecasting a deficit for 2006.  The division recently
disclosed of plans to return to profitability in February.

"They need to bite the bullet, close some plants and restructure,"
said Erich Merkle, an analyst at IRN Inc.  "They are not going to
be able to sell themselves out of this.  The economy is slowing
down."

                       About DaimlerChrysler

Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,  
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.

The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names.  It also sells parts and
accessories under the MOPAR brand.

The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles.  At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant  price concessions.  In addition, increased interest
rates caused higher sales & marketing expenses.

In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.


DANA CORP: Ct. Approves Pact Allowing Jan. Pension Funding Payment
------------------------------------------------------------------
The Honorable Burton R. Lifland the U.S. Bankruptcy Court for the
Southern District of New York approved a stipulation between Dana
Corp. and its debtor-affiliates and the Official Committee of
Unsecured Creditors allowing the January 13 pension funding
payment.

The Debtors periodically make contributions to their defined
benefit pension plans in connection with their collective
bargaining agreements and benefit programs for certain non-union
employees.

As required by the Internal Revenue Code and the Employee
Retirement Income Security Act, the next pension contribution,
amounting to $7,601,000, will be on Jan. 13, 2007.

The Debtors want to make the January 13 Contribution.  The
Official Committee of Unsecured Creditors asserts that
postpetition contributions to the Pension Plans on account of
prepetition services are not required by the Bankruptcy Code.

The Debtors and the Creditors Committee have agreed to resolve
their dispute solely with respect to the January 13 Contribution.

Accordingly, the parties stipulate that the Debtors will make the
January 13 Contribution with the consent of the DIP Lenders.

The Debtors and the Committee agree that neither the making of
the January 13 Contribution nor any party's consent to it is
intended to waive the right of any party to challenge the
Debtors' ability to make any future Pension Contributions.

                          About Dana Corp.

Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in
28 countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  

The company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.

Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors.  Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker.  Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.  

Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  Fried,
Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the
Official Committee of Equity Security Holders.  Stahl Cowen
Crowley, LLC serves as counsel to the Official Committee of
Non-Union Retirees.  

The Debtors' exclusive period to file a plan expires on Sept. 3,
2007.  They have until Nov. 2, 2007, to solicit acceptances to
that plan.  (Dana Corporation Bankruptcy News, Issue No. 29 & 30;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


DANA CORP: Ct. Sets Deadlines for Sec. 1113/1114 Scheduling Plan
----------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York establishes these deadlines to
govern the briefing, discovery, hearing and adjudication of the
Debtors' Section 1113/1114 Process:

   January 29, 2007  -- Deadline for Debtors to file witness list

                     -- Deadline for Debtors to file Section
                        1113/1114 Motion

   February 5, 2007  -- Deadline for Debtors to produce
                        supporting documents to all other parties

   February 9, 2007  -- Deadline for Official Committee of Non-
                        Union Retirees and the International
                        Union, United Automobile, Aerospace and
                        Agricultural Implement Workers of
                        America, the United Steel, Paper and
                        Forestry, Rubber, Manufacturing, Energy,
                        Allied Industrial and Service Workers
                        International Union and International
                        Association of Machinists and Aerospace
                        Workers to file preliminary witness list

   February 20, 2007 -- Deadline to respond or objection to
                        Section 1113/1114 Motion

   February 22, 2007 -- Deadline for Retiree Committee and the
                        Unions to file final witness list

                     -- Deadline for all other parties to produce
                        supporting documents to Debtors

   February 26, 2007 -- Deadline for filing of declarations and
                        affidavits to be used for testimony

       March 1, 2007 -- Completion of discovery

       March 2, 2007 -- Deadline to respond to objections to
                        Section 1113/1114 Motion

       March 6, 2007 -- Pre-trial Conference

      April 30, 2007 -- Target date for the Court to render a
                        decision on the Section 1113/1114 Motion

                            Objections

1. UAW and USW

The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America and the United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union argued that the
1113/1114 Scheduling Motion is another misstep in the Debtors'
postpetition relationship with their employees, which only
reinforces the ill-will generated since their announcement of the
plan to eliminate jobs, cut labor costs, and terminate retirees'
health care.

The Unions assert that the Scheduling Motion is premature.  The
Section 1113 and Section 1114 proposals have been tendered to the
Unions only very recently and there have been very few meetings
with the Debtors regarding those proposals.  

Babette A. Ceccotti, Esq., at Cohen, Weiss and Simon, LLP, in New
York, pointed out that the proposed schedule leaves very little
time for the work that would be required to address the issues in
the comprehensive bargaining process that the Unions have told the
Debtors would be required given the scope of what is at stake.

The Debtors' notion that they can continue to negotiate during
the frenetically paced litigation activity they envision over the
next six weeks may be a boon to their litigators but, in the real
world, will mean that negotiations will not progress very far
given the enormous distraction that the proposed litigation
schedule poses for the Unions, Ms. Ceccotti added.

In addition, the Unions noted that the process contemplated by the
Scheduling Motion strongly suggests that the Debtors are merely
"going through the motions" in their effort to demonstrate
compliance with the requirements of Section 1113 and Section
1114.  In sharp contrast to the litigation-driven process
proposed by the company, Sections 1113 and 1114 were enacted to
promote negotiation and bargaining as the focus of the process,
with litigation intended only as a last resort, Ms. Ceccotti
contended.

"The proposed schedule is also excessive, unduly burdensome and
poorly constructed," Ms. Ceccotti said.

Thus, the Unions asked the Court to deny the Scheduling Motion.

2. Retiree Committee

The Official Committee of Non-Union Retirees asked the Court to
deny the Scheduling Motion for several reasons:

    (a) The Debtors themselves do not yet have sufficient
        information to engage in good faith negotiations with the
        Retiree Committee;

    (b) The overly aggressive hearing schedule sought by the
        Debtors will unnecessarily and materially increase
        professional fees;

    (c) The anticipated flow of information from the Debtors
        pursuant to Section 1114 will not provide sufficient time
        for examination and good faith negotiations; and

    (d) Even if the Debtors' proposed hearing dates were not
        overruled, aspects of the Debtors' discovery and related
        pre-trial schedule is patently unreasonable.

The Retiree Committee has long been interested in obtaining the
Debtors' financial forecasts for 2007 but the Debtors have and
continue to assert that the information is not yet available.
The Retiree Committee believed that the Debtors' game plan has
been to "hide the ball" and delay it for as long as possible from
any necessary analysis.

The Retiree Committee added that the Debtors' intention to
eliminate all retiree benefits while trying to pass out millions
to their Senior Executives exhibits bad faith.

The Retiree Committee, thus, asked the Court to direct the Debtors
to promptly respond to its outstanding information requests; and
renegotiate with it in good faith and report to the Court the
progress of their negotiations.

If the Court grants any portion of the Scheduling Motion, the
Retiree Committee asked the Court to move the schedules to:

    February 1, 2007   -- Service of written discovery to Section
                          1113/1114 Parties

    February 13, 2007  -- Deadline for Debtors to file a list of
                          expert witnesses

    February 19, 2007  -- Deadline for Debtors to file a Section
                          1113/1114 Motion

                       -- Deadline for all other Section
                          1113/1114 Parties to file list of
                          expert witnesses

    February 26, 2007  -- Exchange of expert reports among Section
                          1113/1114 Parties

    March 5, 2007      -- Deadline for responses on written
                          discovery and responses to Section
                          1113/1114 Motion

                       -- Completion of all discovery and
                          conclusion of all depositions

    March 9, 2007      -- Exchange of rebuttal expert reports
                          among Section 1113/1114 Parties

    March 8, 2007      -- Deadline for Debtors to file response to
                          objections to Section 1113/1114 Motion

    March 12, 2007     -- Debtors' Section 1113/1114 Process will
                          be trial ready

    March 12, 13 & 14  -- Trial dates

3. IAMAW

The International Association of Machinists and Aerospace Workers
is party to postpetition labor agreements representing four
bargaining units in the Debtors' facilities in Churubusco
Indiana; Manchester, Missouri; Robinson, Illinois; and
McConnelsville, Ohio.

The IAWMAW asserted that since the four CBAs were entered and
amended postpetition, they are not subject to Section 1113
proceedings.  The IAWMAW added that modifications of the
Churubusco, Manchester, and McConnelsville CBAs will have no
impact to the Debtors' reorganization since they will be sold as
part of the Engine Products Business.

Marianne Goldstein Robbins, Esq., at Previant, Goldberg, Uelmen,
Gratz, Miller & Bruggeman, S.C., in Milwaukee, Wisconsin,
said the Debtors and the IAMAW can negotiate on any modifications
of the Robinson CBA in the ordinary course of business without
the expense of an 1113/1114 process.

The IAWMAW also pointed out that the Scheduling Motion proposes an
aggressive discovery schedule that will prevent any meaningful
negotiation of the CBAs.

Furthermore, the IAMAW said it did not receive any prerequisites
for an 1113/1114 motion, no proposal nor information with which
to evaluate the proposals.

Accordingly, the IAMAW asked the Court to deny the Scheduling
Motion.

                          About Dana Corp.

Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in
28 countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  

The company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.

Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors.  Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker.  Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.  

Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  Fried,
Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the
Official Committee of Equity Security Holders.  Stahl Cowen
Crowley, LLC serves as counsel to the Official Committee of
Non-Union Retirees.  

The Debtors' exclusive period to file a plan expires on Sept. 3,
2007.  They have until Nov. 2, 2007, to solicit acceptances to
that plan.  (Dana Corporation Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).


DELPHI CORP: Wants Excl. Plan-Filing Period Extended to July 31
---------------------------------------------------------------
Delphi Corp. and its debtor-affiliates ask the Honorable Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to further extend their:

   (a) exclusive period to file a plan of reorganization through
       July 31, 2007; and

   (b) exclusive period to solicit acceptances of that plan
       through Sept. 30, 2007.

After intensive negotiations with their statutory committees,
General Motors Corporation, and potential plan investors since
June 2006, the Debtors were successful in negotiating a framework
for a potential reorganization plan and securing a commitment
from an investor group to invest substantial sums in the
reorganized Debtors, John Wm. Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates.

The Framework Agreements represent a major milestone in the
Debtors' reorganization, illustrate the Debtors' continuing
commitment to a consensual resolution of the principal issues in
their restructuring, and signify demonstrable progress toward a
plan of reorganization, Mr. Butler asserts.

The Debtors, however, require more time to conduct further
negotiations contemplated by the Framework Agreements, as well as
to formulate and submit a disclosure statement and plan of
reorganization that conform to the requirements of the Framework
Agreements, Mr. Butler says.  The Debtors hope to submit a
consensual reorganization plan during the first quarter of 2007,
according to Mr. Butler.

Mr. Butler notes that the Debtors have continued discussions with
their six U.S. labor unions to achieve the goals of their
Transformation Plan.  The Debtors have also made significant
strides in the claims reconciliation process.  As of Dec. 8, 2006,
the debtors have objected to approximately 8,300 claims, totaling
approximately $8,900,000,000.

In addition, Mr. Butler states, since the Debtors last sought an
extension of the Exclusive Periods, they have:

   -- undertaken and consummated the sale of substantially all of
      the assets of MobileAria, Inc.;

   -- completed the sale of their New Brunswick, New Jersey
      battery manufacturing facility to Johnson Controls, Inc.;

   -- entered into an agreement with Electronic Data Systems
      Corporation and EDS Information Services, LLC for the
      outsourcing of global desktops, service desk, and mainframe
      systems hosting; and an agreement with Hewlett Packard
      Company, which provides for the outsourcing of server
      systems hosting;

   -- settled certain claims and allegations asserted by the
      Securities and Exchange Commission;

   -- entered into attrition plans with the Debtors' unions under
      which approximately 83% of the eligible IUE-CWA workforce
      elected to participate; and

   -- sought approval to enter into a replacement financing
      facility, which would result in an estimated financing
      costs savings of approximately $8,000,000 per month.

Nevertheless, the Debtors' cases are large and the multi-
dimensional scope of actions that must be taken to address
Delphi's restructuring requirements are exceedingly complex, Mr.
Butler notes.

The Debtors still have significant tasks to complete before
proposing a plan of reorganization, Mr. Butler points out.  
Unresolved contingencies still exist.  Under the Plan Framework
Support Agreement, the Debtors must reach agreements with a number
of parties and constituencies, including reaching agreements on
new or amended CBAs with each of their U.S. labor unions and
agreements resolving the Debtors' many significant GM-related
issues.

Thus, under these circumstances, the Debtors' requested extension
of the Exclusive Periods is justified, Mr. Butler emphasizes.

                             Responses

1. Creditors Committee

The Official Committee of Unsecured Creditors believes that a
six-month extension of the Exclusive Periods is inappropriate.

The Debtors already have received two six-month extensions of the
Exclusive Periods and still have not achieved a plan framework
that is acceptable to most of their major stakeholders, Robert J.
Rosenberg, Esq., at Latham & Watkins LLP, in New York, points
out.

The Debtors' proposal to enter into framework agreements with
Appaloosa Management L.P. and other third party plan investors
have been contested by, among others, the Creditors Committee,
the Equity Committee, some of the U.S. labor unions, the U.S.
Trustee, and Highland Capital Management, LP, Mr. Rosenberg
notes.  Other parties may file objections in the future.

The Creditors Committee, however, consents to a 60-day extension
of the Periods for these reasons:

   -- GM already has obligated itself to support the Appaloosa
      Framework Agreements until April 2, 2007; and

   -- The terms of the Agreements are still capable of being
      revised so as to be acceptable to the Creditors Committee.

2. Equity Committee

The Official Committee of Equity Security Holders shares many of
the reservations expressed by the Creditors Committee, Debra M.
Torres, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, in
New York, tells the Court.  The Equity Committee, however, does
not object to the Debtors' request at this time.

"It is of critical importance to the Equity Committee that any
plan of reorganization be the result of a fair and open process
in which potential bidders or plan investors are able to compete
on a level playing field, and which ensures that the highest and
best offer is obtained by the Debtors to maximize value for all
constituencies," Ms. Torres relates.  "If exclusivity is
extended, the Debtors must proceed with an open and fair process
designed to maximize value that does not favor any party, and
does not involve any special provisions, side agreements, extra-
contractual understandings or other terms that would have the
effect of chilling the bidding and thus precluding the Debtors
from obtaining maximum value for all of their constituencies."

3. Highland Capital

Highland Capital objects to an extension of the Exclusive Periods
to the extent it is intended to give the Appaloosa Plan Investors
an advantage over and possibly scare off other potential suitors
for the Debtors by making it appear that the Appaloosa Framework
Agreements are the sole structure for a plan of reorganization
available to and being considered by the Debtors.

Highland Capital has delivered a commitment letter to Delphi
Corporation's board of directors outlining its proposal and
commitment to invest up to $4,700,000,000 in new common stock of
reorganized Delphi in a transaction similar to that being
proposed by the Appaloosa Plan Investors.  Since submitting its
proposal to the Debtors, Highland has attempted to negotiate a
confidentiality agreement with the Debtors that protects the
legitimate needs of the Debtors, but enables Highland Capital to
take the steps necessary to effectuate the transaction set forth
in the Highland Commitment Letter, including working with the
various creditor and equity constituencies in the Debtors' cases
and working with potential investors, Judith Elkin, Esq., at
Haynes and Boone, LLP, in New York, relates.

The Debtors have indicated that they are willing to sign a
confidentiality agreement with Highland Capital only if Highland
is prevented from or severely restricted in its ability to speak
substantively with potential investors and other parties-in-
interest in these cases, Ms. Elkin informs the Court.  "The
Debtors are using the stick of a chilling confidentiality
agreement as a way to block dialogue with parties who may need to
be involved in the restructuring of the Debtors, other than
through the Appaloosa Framework Agreements."

Most major creditor and equity constituencies in the Debtors'
cases, including all statutory committees, have objected to the
Appaloosa Framework Agreements, Ms. Elkin notes.  If exclusivity
is extended solely for the purpose of allowing the Debtors to
attempt to effectuate a plan based on the Appaloosa Framework
Agreements, the Debtors will have wasted valuable time if the
Agreements deteriorate or are terminated, Ms. Elkin says.

Accordingly, Highland Capital asks the Court to deny the Debtors'
request.

In the alternative, Highland Capital asks the Court to require
the Debtors to:

   (a) cooperate with other potential plan sponsors so that they
       can enter into a reasonable confidentiality agreement in
       order to enable them to receive information, speak with
       potential investors and speak with the other stakeholders;

   (b) negotiate potential plan structures with parties-in-
       interest other than the Appaloosa Plan Investors; and

   (c) consider plan structures other than that contained in the
       Appaloosa Framework Agreements.

Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/--  
is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Corporation Bankruptcy News, Issue No. 53;
Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DELPHI CORPORATION: Retains W.Y. Campbell to Sell Mounts Business
-----------------------------------------------------------------
Delphi Corporation has retained W.Y. Campbell & Company to explore
sale opportunities for Delphi's Powertrain and Suspension Mounts
business, company officials disclosed Thursday.

Delphi's Powertrain and Suspension Mounts business is the largest
supplier of mount systems in North America, and the second largest
globally, with estimated 2006 revenue of $160 million.  The
business line is a proven technology leader, known for providing
engineered solutions for engine vibration, torque management and
other road induced Noise, Vibration and Harshness to a broad
customer base.

Delphi's Powertrain and Suspension Mounts business has more than
700 employees globally throughout five manufacturing and assembly
facilities, including Dayton, Ohio; Ponte de SAr, Portugal; Noida,
India; Oshawa, Canada; and Chihuahua, Mexico.

Delphi will keep its customers, unions and other stakeholders
fully apprised of the transaction and will carefully manage
transition needs.  Also, the disposition of any U.S. operations
would be accomplished in accordance with the requirements of the
U.S. Bankruptcy Court for the Southern District of New York.  The
company would also continue consultations with the European Works
Council in accordance with applicable laws.

Troy, Mich.-based Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single largest global supplier  
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology.  The
company's technology and products are present in more than 75
million vehicles on the road worldwide.  The company filed for
chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case
No. 05-44481).  John Wm. Butler Jr., Esq., John K. Lyons, Esq.,
and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtor in its restructuring efforts.  Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors.  As of Aug. 31, 2005, the Debtor's balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts.  Delphi's exclusive period to file a chapter 11
plan expires on Feb. 1, 2007.  Its exclusive period to solicit
acceptance of that plan expires on Apr. 2, 2007.  Delphi's
$4.4 billion DIP Financing Facility expires on Dec. 31, 2007.


DELPHI CORP: Highland Proposes Alternative Framework Agreements
---------------------------------------------------------------
Highland Capital Management LP asks the U.S. Bankruptcy Court for
the Southern District of New York to deny Delphi Corp. and its
debtor-affiliates' request to enter into an Equity Purchase &
Commitment Agreement and a Plan Framework Support Agreement or, in
the alternative, reschedule the Motion's hearing on or before
Jan. 22, 2006, to allow Delphi's board of directors adequate time
to review the Highland Commitment.

Judith Elkin, Esq., at Haynes and Boone, LLP, in New York,
contends that the Appaloosa Framework Agreements are
fundamentally unfair to the common stockholders of Delphi
Corporation and are not in Delphi's best interests for these
reasons:

   -- The Appaloosa Plan Investors will receive a 1.75%
      Commitment Fee worth $20,000,000 to purchase Preferred
      Stock that they are only offering to themselves;

   -- The Appaloosa Plan Investors' exclusive right to acquire
      Preferred Stock gives them disproportionate control of the
      board of directors and exclusive approval rights over
      future business decisions of the reorganized Company;

   -- Under the Appaloosa Framework Agreements, unsecured
      creditors will be overpaid by approximately $232,200,000
      and junior creditors will be overpaid by approximately
      $129,000,000 since common stock will be used to partially
      pay creditor claims at lower than market values;

   -- The Plan Investors require Delphi to pay a $100,000,000
      Break-up Fee; and

   -- The Debtors filed their motion to enter into the Appaloosa
      Framework Agreements on December 18, 2006.

The Motion should not be heard on an expedited basis especially
when its review and consideration is set to occur during and
shortly after a holiday period when many financial and other
necessary parties are unavailable or have limited availability,
Ms. Elkin argues.

Consequently, Highland Capital Management, LP, informs the Court
that it delivered a commitment letter to Delphi's board of
directors on Dec. 21, 2006.  Under its Commitment Letter,
Highland proposes to invest up to $4,700,000,000 in new Common
Stock of reorganized Delphi in a transaction similar to the
proposed Appaloosa Framework Agreements, but consistent with the
principles of fairness embodied in the Bankruptcy Code, Ms. Elkin
informs the Court.  The Highland Commitment Letter also specifies
the terms of and support for a plan of reorganization that is
based on Highland Capital's investment in the Delphi Common
Stock.

According to Ms. Elkin, the Highland Commitment will provide
these benefits:

   -- The ability of the present board of directors to submit a
      proposal to the Court that is consistent with its fiduciary
      duties to all of its stakeholders and should garner the
      support of the Official Committee of Equity Security
      Holders.

   -- Delphi's ability to obtain $4,700,000,000 of capital
      without offering a $1,200,000,000 preferred stock deal to
      the Appaloosa Plan Investors that significantly dilutes the
      existing stockholders, allows the Appaloosa Plan Investors
      to take control of the Company through its preferential
      acquisition of almost 30% of the Delphi's equity and grants
      special veto rights to the Appaloosa Plan Investors on
      significant Delphi transactions in the future.

   -- The ability to proceed with a rights offering that does not
      guarantee an allocation of 6,300,000 shares to the
      Appaloosa Plan Investors.

   -- The ability to endorse the management of the Company, as
      announced on December 18, 2006, while at the same time
      ensuring that the management will report to an independent
      board of directors that is not subject to the whims of and
      controlled by the Appaloosa Plan Investors.

   -- A transaction that accepts the negotiated deal between the
      Company and General Motors Corporation, which should be
      equally supported by GM and the statutory committees.

   -- A transaction that offers existing stockholders the ability
      to capture the economic value of the enterprise, rather
      than allowing the Appaloosa Plan Investors to take that
      value in violation of the spirit and letter of the
      Bankruptcy Code.

   -- A transaction that will be embraced by the market because
      it is reflective of, and enhances, the current value of the
      Company.

The market recognizes the inherent fairness of the Highland
Commitment because common shares are trading 30% higher after the
Highland Commitment was announced, Ms. Elkins says.

                          More Objections

1. U.S. Trustee

The United States Trustee opposes the Equity Purchase and
Commitment Agreement and the Plan Framework Support Agreement on
two grounds:

   (i) The EPCA calls for the payment of millions of dollars of
       fees and expenses, as allowed administrative claims under
       Section 503(b)(1) of the Bankruptcy Code, to non-retained
       professionals for the entities that will fund the Debtors'
       emergence from bankruptcy.  Those fees and expenses will
       be paid with no oversight by the statutory committees, the
       Fee Committee, the U.S. Trustee or the Bankruptcy Court,
       Alicia M. Leonhard, Esq., in New York, points out.

  (ii) The PSA appears to be a sub rosa plan of reorganization
       that circumvents the disclosure statement and plan
       confirmation approval process set forth in Section 1123,
       1125 and 1129 of the Bankruptcy Code.  The PSA also
       restricts the rights of creditors and parties-in-interest
       to meaningfully participate in plan negotiations.  "The
       [PSA] is no more than a term sheet for a plan that has yet
       to be filed.  It should only be considered in the context
       of continued plan negotiations," Ms. Leonhard contends.

As administrative claimants, the professionals of the Plan
Investors should file applications under Section 503, rather than
obtain blanket approval of retroactive and prospective fees and
expenses without any review by parties-in-interest or the Court,
Ms. Leonhard asserts.

With respect to all of the professionals except Appaloosa
Management L.P., without more information, the U.S. Trustee
cannot determine whether the fees and expenses are reasonable,
"actual and necessary," subject to Section 503(b)(4), or a
reasonable exercise of the Debtors' business judgment, Ms.
Leonhard emphasizes.  Moreover, Appaloosa must demonstrate that
it made a substantial contribution to the Debtors' cases in
representing an Ad Hoc committee of Equity Security Holders under
Section 503(b)(4), Ms. Leonhard adds.

Thus, the U.S. Trustee asks the Court to order the Plan
Investors' professionals to file applications under Section 503
for review and approval under the appropriate standard prior to
any payment of fees and expenses under the EPCA.

Ms. Leonhard notes that the PSA dictates many of the terms of the
plan.  It determines the maximum aggregate of allowed unsecured
claims.  It codifies a settlement of General Motors' claim
apparently without the agreement of the Official Committee of
Unsecured Creditors or the Official Committee of Equity Security
Holders.

Under the PSA, the parties have determined the value of the
shares of stock for plan distribution purposes.  The parties have
also decided how much is needed to resolve the pension
obligations in an agreement that does not include the Pension
Benefit Guaranty Corporation.  However, there has been no
disclosure as to the how the terms were derived or opportunity
for those affected to vote, Ms. Leonhard cites.

Accordingly, the U.S. Trustee asks the Court to disapprove the
PSA as a sub rosa plan.

2. IUOE Locals

The terms of the EPCA and the PSA and the rights afforded the
Plan Investors will have a substantial impact on employee claims
and the Section 1113 and 1114 proceedings, Barbara S. Mehlsack,
Esq., at Gorlick, Kravitz & Listhaus, P.C., in New York, avers.

Accordingly, the International Union of Operating Engineers Local
Union Nos. 18S, 101S and 832S seek to protect the claims of their
members and their rights under their collective bargaining
agreements.

The IUOE Locals represent 21 employees in three facilities of
Delphi, located in Rochester, New York; Olathe, Kansas; and
Columbus, Ohio.

The IUOE Locals complain that the payment of $76,000,000 in
Commitment Fees and $13,000,000 in Transaction Expenses under the
EPCA is justified solely on the bare bones recital that the
Investors would not otherwise have entered into the terms of the
EPCA.

Under the EPCA, the Plan Investors' obligation to consummate the
contemplated transactions are conditioned on the Debtors reaching
consensual agreements with its major labor union by January 31,
2007, including terms and conditions affecting plant closings,
asset dispositions and resolution of union claims.

"In view of [Delphi's] insistence on 'pattern bargaining' with
the IUOE Locals, seeking to bind them to the terms of the major
union contracts, for all practical purposes the fate of the IUOE
Locals' agreements are in the hands of the Plan Investors," Ms.
Mehlsack asserts.

The IUOE Locals have sought to negotiate with Delphi a spin off
of assets and liabilities attributable to IUOE represented plan
participants to a well-funded multi-employer plan but have been
stone walled by the Debtors, according to Ms. Mehlsack.  The PSA,
however, provides that Delphi will do a spin off of plan assets
and liabilities without regard to Delphi's collective bargaining
obligations regarding the Pension Plan for Hourly Employees, Ms.
Mehlsack notes.

The PSA also provides that all employee-related obligations are
flow through claims that will be unimpaired but excludes
collective bargaining-related employee claims from flow though
status, Ms. Mehlsack argues.

Thus, the IUOE Locals ask the Court to deny the Debtors' Motion
as currently proposed.

3. IBEW and IAMAW

The International Brotherhood of Electrical Works Local 663 and
International Association of Machinists and Aerospace Workers
District 10 do not oppose the introduction of new equity through
an appropriate equity purchase agreement.  IBEW and IAM, however,
complain that the EPCA and the PSA, as drafted, inappropriately
interfere with Section 1113 and 1114 negotiations.

"The Agreements, in their present form, inappropriately
predetermine the plan of reorganization to the detriment of
employees represented by the IBEW and IAM in comparison to
unrepresented employees, while providing exorbitant fees to Plan
Investors, and specified recoveries to, without specified
commitment by, General Motors," Marianne Goldstein Robbins, Esq.,
at Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C.,
in Milwaukee, Wisconsin, argues.

IBEW and IAM complain that the $76,000,000 in Commitment Fees and
the $100,000,000 Alternative Transaction Fee under the ECPA are
exorbitant and utilize resources, which could otherwise be
funding the Debtors' contractual obligations to their employees.

The Alternate Transaction Fee will also prevent appropriate
consideration of alternate sources of equity, Ms. Robbins
asserts.  From the filing of objecting parties, it appears that
there are alternative sources of equity, which should be
considered before exorbitant fees are incurred, Ms. Robbins
notes.

Moreover, since Debtors have insisted that the IBEW and IAM agree
to provisions negotiated with the UAW, the authority for
negotiating agreements between the Debtors and the IBEW and IAM
is transferred to the UAW and the Investors, in violation of the
provisions of Sections 1113 and 1114 of the Bankruptcy Code.

The PSA defines what general unsecured creditors will receive --
claims will be limited to $1,700,000,000.  However, the amount of
general unsecured claims has not been determined and these may
include claims of union represented employees and retirees, Ms.
Robbins points out.

            Appaloosa, et al., Join In Debtors' Request

Appaloosa Management L.P., A-D Acquisition Holdings, LLC,
Harbinger Capital Partners, LLC, Harbinger Del-Auto Investments
Company, Ltd., and the rest of the Appaloosa Plan Investors
support the Debtors' request and assert that the Appaloosa
Framework Agreements are in the best interests of the Debtors and
their estates.

Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/--  
is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Corporation Bankruptcy News, Issue No. 53;
Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DELTA AIR: In Talks with Northwest Airlines on Possible Merger
--------------------------------------------------------------
Northwest Airlines Corp. and Delta Air Lines Inc. have been in
recurring talks regarding a possible link-up following their
respective emergence from bankruptcy protection later this year,
The Wall Street Journal reports citing people familiar with the
issue.

WSJ relates that these meetings, between executives at various
levels as well as their respective advisers, have helped Delta's
creditors recognize that a combination with Northwest is a better
alternative to US Airways Group Inc.'s takeover.

On Wednesday, US Airways revised its upped its offer to
$10.2 billion.  

Delta had previously rejected U.S. Airways' $8.4 billion bid and
filed a stand-alone plan with the U.S. Bankruptcy Court for the
Southern District of New York.  Delta said that the offer would
result in substantially inferior value for creditors compared with
its standalone Plan.  Delta's financial adviser, The Blackstone
Group, estimated the carrier's equity value to be approximately
around $9.4 billion to $12 billion.  Delta's Official Committee of
Unsecured Creditors supported the standalone plan.

With US Airways' new offer, Delta's creditors, who met Wednesday,
are taking the improved offer seriously, WSJ cites a person
familiar with the matter.  Delta's creditors also intend to
pressure the carrier into opening its books.

WSJ further relates that there has also been contacts by UAL
Corp.'s United Airlines with Delta but it wasn't clear if Delta
has officially investigated an alternative deal with either
Northwest or United.

                     About Northwest Airlines

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  The Debtors' exclusive period
to file a chapter 11 plan expires on Jan. 16, 2007.

                          About Delta Air

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

The Debtors filed their Chapter 11 Plan and Disclosure Statement
on Dec. 19, 2006.  A hearing to consider the adequacy of the
Disclosure Statement is set on Feb. 7, 2007.


DURA AUTOMOTIVE: Section 341(a) Meeting Adjourned Sine Die
----------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
has adjourned sine die the meeting of creditors of Dura Automotive
Systems Inc. and its debtor-affiliates required under Section
341(a).  The U.S. Trustee had convened the Meeting of Creditors on
Dec. 7, 2006.

The Meeting of Creditors was continued pending the Debtors'
filing of their schedules of assets and liabilities, schedules of
current income and expenditures, and statements of financial
affairs.  The Debtors are expected to file their Schedules in
January 2007.

The Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent   
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry.  The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries.  DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.

The Debtors filed for chapter 11 petition on October 30, 2006
(Bankr. District of Delaware Case No. 06-11202).  Richard M.
Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq.,
and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead
counsel for the Debtors' bankruptcy proceedings.  Mark D. Collins,
Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel.  Baker & McKenzie acts as the Debtors' special
counsel.  Togut, Segal & Segal LLP is the Debtors' conflicts
counsel.  Miller Buckfire & Co., LLC is the Debtors' investment
banker.  Glass & Associates Inc., gives financial advice to the
Debtor.  Kurtzman Carson Consultants LLC handles the notice,
claims and balloting for the Debtors and Brunswick Group LLC acts
as their Corporate Communications Consultants for the Debtors.  As
of July 2, 2006, the Debtor had $1,993,178,000 in total assets and
$1,730,758,000 in total liabilities.  (Dura Automotive Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DURA AUTOMOTIVE: Inks Pact with American Electric and NITCo
-----------------------------------------------------------
DURA Automotive Systems Inc. and its debtor affiliates entered
into agreements with American Electric Power, et al., and Northern
Indiana Trading Co. to resolve the utility companies' objections
to the Debtors' adequate assurance procedures.

As reported in the Troubled Company Reporter on Jan. 5, 2007,
Quest Energy, LLC, Northern Indiana Trading Co., American
Electric, et al., Lawrenceburg Utility and Upper Cumberland
Electric filed their objections to the adequate assurance
procedures of DURA Automotive Systems Inc. and its debtor
affiliates.

                 Stipulations with Utilities

(a) AEP, et al.

As previously reported, American Electric Power, Duke Energy
Indiana, Inc., Exelon Energy Company, The Detroit Edison Company,
and the Michigan Consolidated Gas Company objected to the Debtors'
Utility Motion.  After negotiations, the parties have reached an
agreement.

Pursuant to a Court approved stipulation, the Debtors will pay AEP
and Exelon a one-month payment in advance each month under these
terms and conditions:

    a. Commencing in December 2006, the Debtors will tender these       
       payments to AEP and Exelon on or before the first business
       day of each month:

          i. AEP -- $175,000

         ii. Exelon -- $63,000, consisting $37,000 for electric
             and $26,000 for gas.

    b. If payment is not timely received by AEP and Exelon, they
       can terminate service to the Debtors after providing the
       Debtors and their counsel with email and facsimile notice
       of the default and 5 days to cure the default.

The Debtors, and Duke and Detroit Edison/MCG agree that:

   (1) The Debtors will pay Duke a one-month deposit for $10,000
       as adequate assurance of payment.  As Duke has received a
       $6,525 deposit payment from the Debtors, Duke can apply
       the $6,525 toward the $10,000 deposit and the Debtors have
       to pay the remaining $3,475 on or before November 22,
       2006;

   (2) The Debtors will pay Detroit Edison/MCG a one-month
       deposit in the amount of $31,000.  As Detroit Edison/MC0
       has received a $11,250 deposit payment from the Debtors,
       Detroit Edison/MCG can apply the $11,250 to the $31,000
       deposit.  The Debtors have to pay the remaining $19,750 on
       or before November 22, 2006; and

   (3) The Debtors will pay all future bills from Duke and
       Detroit Edison/MCG by the applicable due date.

The Utilities agree to promptly provide the Debtors with the
amounts of their prepetition claims once they have those figures.

(b) NITCo

On Nov. 19, 1991, Northern Indiana Trading Company entered into a
contract regarding the purchase of natural gas on behalf of Dura
Automotive Systems, Inc., and Universal Tool & Stamping for their
Sutler, Indiana, facility.

Pursuant to the Contract, NITCo is obligated to attempt to
purchase, at Universal's request and as Universal's agent, natural
gas from natural gas producers on Universal's behalf.  Following
the purchase, NITCo arranges for the transportation of purchased
natural gas to Universal's plant in Butler, Indiana, Each month,
NITCo arranges, on Universal's behalf, for the sale of any excess
gas purchased by Universal.

As compensation for these services, Universal pays NITCo an
"agency fee" each month.

To provide adequate assurance of payment to NITCo for the Debtors'
continued use of its services, the parties had agreed to these
terms:

    1. On or before 4:00 p.m. (Eastern Time) on Dec. 1, 2006,
       the Debtors will pay NITCo, via wire transfer, these
       amounts:

          i. a security deposit of $11,734 for postpetition
             services; and

         ii. charges for postpetition utility services that have
             accrued but have not been paid as of December 1,
             2006, in an amount to be identified in writing by
             NITCo by the close of business on November 30, 2006,
             and agreed upon by the Debtors;

    2. Commencing on Dec. 10, 2006, on or before 4:00 p.m.
       (Eastern Time) and continuing monthly on the 10th day of
       each calendar month, NITCo will send the Debtors, via
       facsimile, an invoice for the Debtors' estimated usage for
       the following month based upon Debtors' historical usage
       for that month;

    3. Commencing on Dec. 20, 2006, on or before 4:00 p.m.
       (Eastern Time) and continuing monthly on the 20th day of
       each calendar month, the Debtors will pay NITCo the
       Prepayment Amount, via wire transfer, as payment in
       advance for service to be rendered during the following
       month; and

    4. If the Debtors fail to make any of the agreed payments
       when due, NITCo may provide notice of default to the
       Debtors.  If the Debtors fail to cure the specified
       default within five days after the effective date of the
       notice, NITCo will be authorized to suspend or terminate
       all services as of the close of business on the last day
       of the month in which the default occurs.

Rochester Hills, Mich.-based DURA Automotive Systems, Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent  
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry.  The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries.  DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.

The Debtors filed for chapter 11 petition on October 30, 2006
(Bankr. District of Delaware Case No. 06-11202).  Richard M.
Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq.,
and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead
counsel for the Debtors' bankruptcy proceedings.  Mark D. Collins,
Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel.  Baker & McKenzie acts as the Debtors' special
counsel.  Togut, Segal & Segal LLP is the Debtors' conflicts
counsel.  Miller Buckfire & Co., LLC is the Debtors' investment
banker.  Glass & Associates Inc., gives financial advice to the
Debtor.  Kurtzman Carson Consultants LLC handles the notice,
claims and balloting for the Debtors and Brunswick Group LLC acts
as their Corporate Communications Consultants for the Debtors.  As
of July 2, 2006, the Debtor had $1,993,178,000 in total assets and
$1,730,758,000 in total liabilities.  (Dura Automotive Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


EASTMAN KODAK: Closing Logistics and Warehousing Facilities
-----------------------------------------------------------
Eastman Kodak Company reported that a logistics center and a
materials management operation at Kodak Park in Rochester, New
York, will close later this year, along with a manufacturing
operation that produces specialized solvent-coated products for
various lines of business.

The closure of the logistics and warehousing facilities will
impact about 400 employees.  The company disclosed that some of
the operations will be relocated to other Kodak facilities, both
in and outside Rochester.  Kodak noted that the closure of the
logistics center is part of the company's digital transformation
and will help align the supply chain and logistics function to the
digitally oriented operating model of the company's business
units.

Kodak also disclosed that the Solvent Coating manufacturing
operation at Kodak Park would close during the second quarter of
2007, impacting about 85 employees.  The company said that
declining demand for products manufactured at the facility,
combined with available production capacity at other Kodak
facilities, led to the closure decision.  The facility is housed
in Bldg. 329 in a section of Kodak Park south of Ridge Road and
west of Mount Read Boulevard, adjacent to the Koda-Vista
Neighborhood in the Town of Greece.

Kodak emphasized that neither closure decision was related to the
performance of employees.  All impacted employees will be eligible
to receive termination benefits that include up to a year's pay,
continuation of health, dental and life insurance benefits for
four months, a retraining allowance and outplacement counseling.

In association with the actions, Kodak will take a $65 million
restructuring charge in the first quarter of 2007 to cover costs
including asset write-offs and employee terminations.

                      About Kodak Park South

The product logistics center that will close is housed in
Bldg. 605 at Kodak Park, and a materials receiving warehouse that
will also close is located in Bldg. 502.  Both facilities are in
Kodak Park South, a section of the site that is largely in the
Town of Greece, south of Ridgeway Avenue and west of Mount Read
Boulevard, and also bounded by Lexington Avenue and Lee Road.

KPS has only four out of more than 125 major buildings currently
at Kodak Park, but contains 328 acres of industrial-zoned land.  
The land and buildings will be put up for sale as a single parcel,
with availability by the end of 2007.  Bldg. 605 is a 2.1 million
square feet edifice with modern climate-controlled warehouse.

                      About Eastman Kodak Co.

Headquartered in Rochester, New York, Eastman Kodak Co. (NYSE: EK)
-- http://www.kodak.com/-- develops, manufactures, and markets  
digital and traditional imaging products, services, and solutions
to consumers, businesses, the graphic communications market, the
entertainment industry, professionals, healthcare providers, and
other customers.


EASTMAN KODAK: Fitch Holds Rating on Senior Unsecured Debt at B-
----------------------------------------------------------------
Fitch views the proposed sale of Eastman Kodak Company's Health
Group for $2.35 billion as potentially having modest positive
credit implications for the company's senior unsecured debt based
on recovery, as Kodak plans to use $1.15 billion of the proceeds
to fully repay its outstanding secured term debt.

Fitch's current rating:

--Issuer Default Rating 'B';
--Secured credit facilities 'BB/RR1';
--Senior unsecured debt 'B-/RR5'.

The Outlook is Negative.

Fitch believes the 'B-' senior unsecured debt could potentially be
upgraded one notch based on the prospects for higher recovery
rates as a result of the proposed reduction of secured debt in the
capital structure.  However, in the absence of further material
improvement in digital revenue growth and profitability, the IDR
of 'B' is likely to remain unchanged in the near term as the
decline in total debt is offset by the loss of profits and
business diversification benefits provided by the Health Group
following its divestiture.  Fitch will reevaluate Kodak's ratings
subsequent to the closing of the transaction, which is expected to
occur in the first half of 2007, subject to regulatory and other
approvals.

The current recovery ratings and notching reflect Fitch's recovery
expectations under a distressed scenario.  Fitch believes that the
enterprise value of the company, and thus, recovery rates for its
creditors, will be maximized in a restructuring scenario rather
than a liquidation scenario.  

Fitch applies a significant discount to Kodak's EBITDA and
utilizes a 4x distressed EBITDA multiple, which considers Kodak's
current multiple and multiples paid for prior acquisitions,
assuming that a stress event would indicate business model
difficulties, resulting in multiple contraction under a stressed
scenario.  The current 'RR1' recovery rating for Kodak's secured
bank facility reflects Fitch's belief that 100% recovery is
realistic.  As is standard with Fitch's recovery analysis, the
revolver is fully drawn and cash balances fully depleted to
reflect a stress event.  The current 'RR5' Recovery Rating for the
senior unsecured debt reflects Fitch's estimate that a recovery of
only 10%-30% would be achievable.

Fitch estimates the Health Group generated $2.5 billion of revenue
for the latest 12 months ended Sept. 30, 2006 and operating EBITDA
of approximately $475 million-$500 million, or approximately 30%
of Kodak's total operating EBITDA in the period.  The Health Group
is Kodak's second most profitable business segment after the
steadily declining Film and Photofinishing Systems Group,
accounting for $286 million, or approximately 51%, of total
segment operating profit in the LTM ended Sept. 30, 2006 based on
Fitch's estimates.

Pro forma for the divestiture of the Health Group, Fitch expects
Kodak's total liquidity will increase to approximately
$3.1 billion-$3.6 billion from $2.1 billion as of Sept. 30, 2006
due to the seasonally strong fourth quarter and net proceeds after
debt reduction from the sale of the Health Group.  Fitch will
monitor the outcome of Kodak's ongoing review of potential uses
for the remaining proceeds from the divesture.  Further liquidity
is provided by an undrawn $1 billion secured revolving credit
facility due October 2010.

Fitch estimates pro forma total debt will decline to $1.6 billion
from $2.8 billion as of Dec. 31, 2006, including estimated secured
debt reduction of $550 million in the fourth quarter of 2006.  
Fitch estimates full-year 2006 net debt reduction of approximately
$740 million, indicating that Kodak is likely to achieve its full-
year debt reduction goal of $800 million.  

Fitch believes the decline in total debt offset by the divesture
of the Health Group will decrease pro forma leverage to 1.6x
compared with approximately 2.2x at Sept. 30, 2006 and 1.8x at
Dec. 31, 2006.  Pro forma interest coverage is expected to improve
to approximately 12x from nearly 6x for the LTM ended Sept. 30,
2006 due to the redemption of variable-rate secured debt, which
carries a higher interest rate than the remaining fixed-rate debt
on the balance sheet.  Fitch believes the company's near-term debt
maturities are manageable, as the next material debt maturity is
not until 2008, when $274 million of debt matures.


ED ROGERS: Case Summary & Eight Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Ed Rogers, Incorporated
             aka Ed Rogers, Inc.
             521 East 25th Street
             Baltimore, MD 21218-5404

Bankruptcy Case No.: 07-10278

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Edwin S. Rogers, Jr. & Harriet R. Rogers   07-10279

Type of Business: Edwin S. Rogers, Jr., is the president and
                  Chairman of the Board of Directors of Ed Rogers,
                  Incorporated.

Chapter 11 Petition Date: January 9, 2007

Court: District of Maryland (Baltimore)

Judge: Robert A. Gordon

Debtors' Counsel: Dale Kerbin Cathell, Esq.
                  Richard M. Kremen, Esq.
                  DLA Piper US LLP
                  The Marbury Building
                  6225 Smith Avenue
                  Baltimore, MD 21209-3600
                  Tel: (410) 580-3000
                  Fax: (410) 580-3001

                       --- and ---

                  Gary R. Greenblatt, Esq.
                  Mehlman, Greenblatt & Hare, LLC
                  723 South Charles Street, Suite LL3
                  Baltimore, MD 21230
                  Tel: (410) 547-0300
                  Fax: (410) 547-7474

                             Estimated Assets    Estimated Debts
                             ----------------    ---------------
Ed Rogers, Incorporated      $100,000 to         $1 Million to
                             $1 Million          $100 Million

Edwin S. Rogers, Jr. &       $1 Million to       $1 Million to
  Harriet R. Rogers          $100 Million        $100 Million


A. Ed Rogers, Incorporated's Five Largest Unsecured Creditors:

   Entity                                           Claim Amount
   ------                                           ------------
   Chesapeake Bank of Maryland                        $1,114,740
   201 East Joppa Road                                  Secured:
   Baltimore, MD 21234                                  $722,503
                                                      Unsecured:
                                                        $392,236

   United States Treasury                                $15,000
   Internal Revenue Service
   31 Hopkins Plaza
   Baltimore, MD 21202

   Alperstein & Stelmack LLC, CPA                         $4,500
   530 East Joppa Road
   Baltimore, MD 21286

   Kraft & Jacobson, P.A.                                 $4,112
   606 Baltimore Avenue
   Suite 401
   Towson, MD 21204

   Comptroller of the Treasury                           Unknown
   Compliance Division, Room 409
   301 West Preston Street
   Baltimore, Maryland 21201


B. Edwin S. Rogers, Jr. & Harriet R. Rogers's Three Largest
   Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Chesapeake Bank of Maryland   2317 Shaded Brook       $1,114,740
201 East Joppa Road           Drive, Owings Mills,      Secured:
Parkville, MD 21234           MD 21117 and              $850,000
                              533 East 25th           Unsecured:
                              Street, Baltimore,        $261,385
                              MD 21218

Bank of America               Visa account               $16,803
P.O. Box 37279
Baltimore, MD 21297-3279

Internal Revenue Service      Withholding taxes          $15,000
Centralized Insolvency        owed on account
Office                        Ed Rogers, Inc.
P.O. Box 21126
Philadelphia, PA 19114


ELEUTERIO SILES: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Eleuterio Siles
        518 South Adams Street
        Arlington, VA 22204

Bankruptcy Case No.: 06-11819

Chapter 11 Petition Date: December 27, 2006

Court: Eastern District of Virginia (Alexandria)

Judge: Stephen S. Mitchell

Debtor's Counsel: Henry S. FitzGerald, Esq.
                  2200 Wilson Boulevard, Suite 800
                  Arlington, VA 22201
                  Tel: (703) 525-8753

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

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


EMMIS COMMUNICATIONS: Earns $3.1 Million in Quarter Ended Nov. 30
-----------------------------------------------------------------
Emmis Communications Corp. reported $3.1 million of net income on
$91.2 million of net revenues for the third quarter ended
Nov. 30, 2006, compared with $200 million of net income on
$98 million of net revenues for the same period in 2005.  

The significant decrease in net income is because the fiscal 2005
quarter included income from operations of the company's
television division, radio stations in Phoenix, and one radio
station in St. Louis which have been classified as discontinued
operations of $8.6 million, and a $189.5 million gain on sale.  In
contrast, the current quarter reported only $4.4 million income
from discontinued operations.

The decrease in net revenues related primarily to revenue declines
at Emmis' New York and Los Angeles radio stations.

For the third quarter, reported radio net revenues decreased 9.2%,
while publishing net revenues were flat.

For the third quarter, operating income was $17.5 million,
compared to $24.4 million for the same quarter of the prior year,
a decrease of 28.4%.  Emmis' station operating income for the
third quarter was $30.2 million, compared to $37.1 million for the
same quarter of the prior year, a decrease of 18.8%.

"While we have been disappointed with the continued softness in
our New York and Los Angeles markets, we are beginning to see
signs that the worst is behind us.  I'm confident that programming
and management actions taken in recent months are beginning to
deliver and point to better results in 2007," Emmis Chairman and
CEO Jeff Smulyan said.

At Nov. 30, 2006, the company reported $1.2 billion in total
assets, $831.6 million in total liabilities, and $248.4 million in
total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?1852

                    Redemption of Notes Due 2012

On Sept. 21, 2006, Emmis disclosed that Emmis Operating Company
had commenced an offer to purchase, at par, $339.6 million of the
outstanding 6-7/8% Senior Subordinated Notes due 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.  On Oct. 20, 2006, approximately $374.9 million of the
$375 million outstanding Notes were redeemed at par plus accrued
and unpaid interest.  The redemption was financed with available
cash on hand from the sale of WKCF-TV in August of 2006, coupled
with additional borrowings under the company's senior credit
facility.  On Dec. 29, 2006, Emmis redeemed the remaining $100,000
of outstanding notes.

                   Amendment of Revolving Credit

On Nov. 2, 2006, Emmis Operating Company amended and restated its
Revolving Credit and Term Loan Agreement to provide for total
borrowings of up to $600 million, including a $455 million term
loan and a $145 million revolver, of which $50 million may be used
for letters of credit.  The credit facility also provides for the
ability to have incremental facilities of up to $450 million, a
portion of which may be allocated to a revolver.

In connection with the redemption of substantially all of the
Notes and the amendment and restatement of the credit facility,
the company recorded a loss on debt extinguishment of $10 million,
which is recorded in its quarter ended Nov. 30, 2006.

Subsequent to quarter end, the company increased its ownership in
Radio Fresh! in Bulgaria.  Emmis moved from minority to majority
shareholder in the highly-rated national CHR station.

                    About Emmis Communications

Based in Indianapolis, Indiana, 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 21 FM and 2 AM domestic radio
stations serving New York, Los Angeles and Chicago as well as St.
Louis, Austin, Indianapolis and Terre Haute, Ind.  In addition,
Emmis owns a radio network, international radio interests, two
television stations, regional and specialty magazines, an
interactive business and ancillary businesses in broadcast sales.

                           *     *     *

As reported in the Troubled Company Reporter on Sept. 28, 2006,
Moody's Investors Service revised its Caa1 rating on Emmis
Communications Corporation's series A cumulative convertible
preferred to B2 and assigned an LGD6 rating to these debts,
suggesting creditors will experience a 99% loss in the event of
defaults.  Emmis Communications also carries Moody's Ba3 PDR
rating.


EMTA HOLDINGS: Acquires Dyson Properties for $2.1 Million
---------------------------------------------------------
EMTA Holdings Inc. acquired Dyson Properties Inc. for an aggregate
purchase price is $2,100,000, to be paid in cash and stock.  
Durant, Okla.-based Dyson manufactures and sells automotive racing
and performance oils and lubricants under the name Synergyn
Racing.

On Jan. 5, 2007, EMTA entered into an agreement with Sandra Dyson
for the purchase of all of the issued and outstanding stock of
Dyson.  Under the terms of the agreement, the company assumed
control of Dyson's business effective as of Jan. 1, 2007.  
Completion of the transaction is scheduled to take place on
Feb. 28, 2007.

The initial payment of $100,000 was made on Jan. 9, 2007.  An
additional $50,000 will be paid on the closing date.  The balance
of $474,000 will be paid six months after the closing date.  

In addition, on the closing date, the company will issue a number
of shares of common stock valued at $1,476,000 based on the
weighted average trading price of the Common Stock during the five
trading days prior to the closing date.  In addition, Ms. Dyson
will be entitled to a royalty for all sales of the Synergyn
products for five years at a rate of $0.10 per gallon or $0.10 per
pound as the case may be, paid quarterly.

Dyson's assets include 5.8 acres of industrial land, 58,000 square
feet of industrial and office space and storage and blending and
bottling equipment.

Michael Dyson, president of Dyson Properties, will remain as
president of the EMTA Synergyn subsidiary.

The Synergyn line, established in 1992, complements the XenTx line
and gives EMTA manufacturing and distribution capabilities from
the Synergyn plant in Durant.

Synergyn offers the latest in synthetic motor lubricants.  
Synergyn products are blended for use in the latest NASCAR and
NHRA racing engines as well as in personal cars and pickup trucks.  
Synergyn also supplies lubrication technology for commercial,
industrial and farming use.  It offers 37 products including oils,
oil treatments, fuel supplements, grease and gear lubricants,
hydraulic fluids and transmission and tractor fluids.

"We expect to expand distribution of both product lines through
the cross marketing of each other's products," Edmond L. Lonergan,
EMTA CEO and President, stated.  "XenTx has been sold primarily
through retail and automotive outlets and Synergyn has been sold
primarily to the racing community and industry through custom
automotive shops and distributors."

Mr. Lonergan added, "We are pleased that Michael Dyson will remain
as President of our Synergyn subsidiary, adding both management
experience and technical support to EMTA."

                            About EMTA

Headquartered in Scottsdale, Arizona, EMTA Holdings Inc.
(PINKSHEETS: EMHD) is a holding company currently engaged in
providing innovative solutions to conserve energy usage,
particularly for petroleum-based fuels.  The company makes the
XenTx line of automotive energy conservation products.  The
company has developed unique products that are sold to industrial
and commercial customers as well as to retail consumers.  In
addition, the company is currently developing three new
lubrication products and is interested in identifying future
merger opportunities.

                         *     *     *

At Sept. 30, 2006, EMTA Holdings' balance sheet showed a
stockholders' deficit of $2,141,769, compared with a deficit of
$774,090 at March 31, 2006.


FIRST FRANKLIN: S&P Cuts Rating on Class M-3 Loan to B from BBB
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
M-3 from First Franklin Mortgage Loan Trust 2001-FF2 to 'B' from
'BBB'.

In addition, the rating on this class remains on CreditWatch with
negative implications, where it was placed Dec. 15, 2006.

At the same time, the rating on class M-2 was placed on
CreditWatch with negative implications.  Additionally, the ratings
on three other classes were affirmed.

The lowered rating and CreditWatch placements reflect pool
performance that has allowed credit support to begin to erode.
Monthly realized losses in this transaction have exceeded monthly
excess interest for most of the past six months.  This has caused
overcollateralization to fall below its target of 0.25%.

Currently, the O/C amount is $506,000, or 0.11% of the original
pool balance.  Over the past three months, monthly realized losses
have averaged approximately $177,000, causing the level of O/C to
decline by 41.43%.  Cumulative losses amount to 1.36% of the
original pool balance, and 90-plus-day delinquencies total 22.67%
of the current pool balance.  

In addition, projected losses, based upon the delinquency
pipeline, suggest that this trend could continue.

Standard & Poor's will closely monitor the performance of the
ratings on CreditWatch.  If monthly losses decline to a point at
which they no longer outpace monthly excess interest, and the
level of O/C has not been further eroded, Standard & Poor's will
affirm the ratings and remove them from CreditWatch.

Conversely, if losses continue to outpace excess interest, and O/C
continues to decline, further negative rating actions can be
expected.

The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings.  Credit support for
this transaction is provided by a combination of excess spread,
O/C, and subordination.

The underlying collateral in this transaction is composed of
fixed-and adjustable-rate mortgage loans secured by first and
second liens on one- to four-family residential properties.  These
mortgages were originated or purchased by First Franklin Financial
Corp. in accordance with guidelines that target borrowers with
less-than-perfect credit histories.  The guidelines are intended
to assess both the borrower's ability to repay the loan and the
adequacy of the value of the property securing the mortgage.
     
       Rating Lowered And Remaining On Creditwatch Negative
    
           First Franklin Mortgage Loan Trust 2001-FF2

                                Rating
                                ------
                Class    To                From
                -----    --                -----
                M-3      B/Watch Neg       BBB/Watch Neg
    
              Rating Placed On Creditwatch Negative
      
           First Franklin Mortgage Loan Trust 2001-FF2

                                Rating
                                ------
                Class    To                From
                -----    --                ----
                M-2      A+/Watch Neg      A+
     
                        Ratings Affirmed
    
           First Franklin Mortgage Loan Trust 2001-FF2

                  Class               Rating
                  -----               ------
                  A-1, A-2, M-1       AAA


FIRST FRANKLIN: S&P Holds Rating on Class B-1 Certs. at BB+
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
34 classes of certificates from three series issued by First
Franklin Mortgage Loan Trust.

The affirmations reflect credit support percentages that are
sufficient to support the current ratings for all three
transactions as of the December 2006 reporting period.  Loss
protection is provided by overcollateralization, subordination,
and limited amounts of excess interest.  Although O/C for series
2004-FF3 was $611,885 below its target during the December 2006
remittance period, excess interest covered losses and brought O/C
closer to its current target during this period.  

Additionally, current credit support percentages for series 2004-
FF3 remain higher than the original percentages at all rating
levels.  O/C is at its target for the remaining series, and all
three deals are passing their delinquency and cumulative loss
triggers.

Cumulative losses for series 2004-FF3 are $8.37 million, and
serious delinquencies are 12.52% of the current pool balance.
Cumulative losses are relatively low for series 2005-FF11 at
$352,537, and series 2006-FF6 has experienced no losses.  Serious
delinquencies for both pools are below 2% of their respective pool
balances.

The underlying collateral consists of subprime and Alt-A, fixed-
and adjustable-rate, first- and second-lien mortgage loans.

                        Ratings Affirmed

                First Franklin Mortgage Loan Trust

       Series      Class                             Rating
       ------      -----                             ------
       2004-FF3    A-1                               AAA
       2004-FF3    M-1                               AA+
       2004-FF3    M-2                               A+
       2004-FF3    M-3                               A
       2004-FF3    M-4                               A-
       2004-FF3    B-1                               BBB+
       2004-FF3    B-2                               BBB
       2004-FF3    B-3                               BB+
       2005-FF11   A-1, A-2A, A-2B, A-2C, A-2D       AAA
       2005-FF11   M-1, M-2                          AA+
       2005-FF11   M-3                               AA
       2005-FF11   M-4                               AA-
       2005-FF11   M-5                               A+
       2005-FF11   M-6                               A
       2005-FF11   B-1, B-2                          A-
       2005-FF11   B-3                               BBB+
       2006-FF6    A-1, A-2, A-3, A-4, M-1           AAA
       2006-FF6    M-2                               AA+
       2006-FF6    M-3, M-4                          AA
       2006-FF6    M-5                               A+
       2006-FF6    M-6                               BBB+
       2006-FF6    M-7                               BBB
       2006-FF6    B-1                               BB+


FONIX CORP: Posts $10.8 Mil. Net Loss in 3rd Qtr. Ended Sept. 30
----------------------------------------------------------------
Fonix Corp. reported a $10.8 million net loss on $386,000 of
revenues for the third quarter ended Sept. 30, 2006, compared with
a $6.5 million net loss on $258,000 of revenues for the same
period in 2005.

The increase in net loss is mainly due to a $1.8 million loss on
derivative liability in the current quarter, absent in the 2005
quarter, and the $3.8 million increase in net loss from
discontinued operations, partly offset by the $1.5 million decease
in operating expenses.  

At Sept. 30, 2006, the company's balance sheet showed $3 million
in total assets and $54.5 million in total liabilities, resulting
in a $51.5 million total stockholders' deficit.

Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?1857

                        Going Concern Doubt

Hansen, Barnett & Maxwell, the company's auditor, expressed
substantial doubt about the company'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 significant losses, negative cash flows from
operating activities for three years, and negative working
capital.

                         About Fonix Corp.

Based in Salt Lake City, Utah, Fonix Corporation (OTC BB: FNIX) --
http://www.fonix.com/-- is speech recognition and text-to-speech  
technology company that provides speech solutions through its
wholly owned subsidiary, Fonix Speech, Inc., currently offering
voice solutions for mobile/wireless devices, interactive video
games, toys and appliances, computer telephony systems, the
assistive market and automotive telematics.


FORD MOTOR: CEO Alan Mulally Considers Selling Jaguar Brand
-----------------------------------------------------------
Ford Motor Co. CEO Alan Mulally revealed that he might consider
selling the company's Jaguar brand, threatening about 8,000 car
workers' jobs, The Scotsman reports.

The company launched "Way Forward," a turnaround plan that
includes the sale of Aston Martin, in an effort to stem multi-
billion-pound losses, states The Scotsman.  Ford has explored
strategic options for its Aston Martin sports-car unit in August,
with particular emphasis on a potential sale of all or a portion
of the unit.

"All good businesses continually review their portfolio, and we
will continue to evaluate our portfolio going forward," Mr.
Mulally said.  "I feel more confident now than when I arrived that
we can create a viable Ford."  However, he noted that it was a
"critical time" for the whole car industry.

As reported in the Troubled Company Reporter on Aug. 30, 2006, Sir
Anthony Bamford, JC Bamford Excavators Ltd.'s chairman of the
board, was looking at the possibility of buying the Jaguar brand
from Ford.

However, Mr. Bamford subsequently disclosed that he has abandoned
plans of buying the Jaguar brand from Ford after executives from
Ford Europe and the Premier Automotive Group, revealed that it has
no intentions of selling the brand at the moment.  According to
Mr. Bamford, cited in the Financial Times, Ford was only
interested in selling the Jaguar brand together with the
profitable Land Rover operations.

JC Bamford is a U.K.-based construction-machinery company.  Mr.
Bamford said that the brand has potential although Jaguar needs
to cut ties with Land Rover for him to consider his plans
further.

Jaguar is part of the Premier Automotive Group -- the
organization under which all of Ford's European brands are
grouped -- which includes other brands like Volvo, Land Rover,
and Aston Martin.  In Ford's second quarter results, the segment
incurred a $180 million net loss.  The company's management said
the decline in earnings in the PAG segment primarily reflected
unfavorable currency exchange related to the expiration of
favorable hedges, adjustments to warranty accruals for prior
model-year vehicles, mainly at Land Rover and Jaguar, and lower
market share at Volvo associated with new model changeovers,
offset partially by favorable product and market mix and lower
overhead costs.

                         About Ford Motor

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

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services affirmed its 'B' bank loan and
'2' recovery ratings on Ford Motor Co. after the company increased
the size of its proposed senior secured credit facilities to
between $17.5 billion and $18.5 billion, up from $15 billion.

As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of
both the secured facilities and the senior unsecured convertible
notes being offered.

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's US$3 billion of senior convertible notes due
2036.


FORUM HEALTH: S&P Cuts Rating on Mahoning County Bonds to BB
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Mahoning
County, Ohio, bonds issued for Forum Health, two notches to 'BB'
from 'BBB-', reflecting a financial profile that, while slightly
improving compared with the prior two fiscal years, is no longer
reflective of the investment-grade rating level.

At the same time, Standard & Poor's removed its rating on the
bonds from CreditWatch with negative implications, on which it was
placed Aug. 25, 2006.

The outlook is negative.

"While Forum Health has improved operationally and exhibited
relatively stable cash balances, there are still questions
regarding the turnaround sustainability, uncertainty surrounding
the union contract negotiations, and how increased competition
will affect Forum's volume," said Standard & Poor's credit analyst
Antionette Maxwell.

"Furthermore, given the momentous hurdles facing the organization,
there is potential for a lower rating level."

A lower rating was precluded during the last review and Forum
Health was placed on CreditWatch with negative implications due
primarily to the potential sale of Forum Health's assets to
Community Health Systems.  The sale of Forum Health to CHS is no
longer being actively considered.

Forum Health's deteriorated financial profile is due to several
factors, including a higher-than-average wage and benefits cost
structure, requiring the need to renegotiate new contracts with
organized labor, which Standard & Poor's considers key to the
long-term viability of the organization.  The union contract
negotiations are underway, but it is a slow process by its
nature.

Additionally, while the turnaround plan is being implemented, the
ultimate success and sustainability of improved results need to be
demonstrated.  Also, Forum will experience heavy competition from
the expected opening of a new hospital late in fiscal 2007 that
will pull admissions from the Northside Medical Center facility,
which has continued to struggle financially during the turnaround.  

Additional credit factors include Forum Health's continued
negative operating performance through the 11 months ended
Nov. 30, 2006, although operating losses have subsided from the
sizeable fiscal 2005 levels; mixed balance sheet characteristics
with increasing leverage due to an erosion of unrestricted net
assets; challenging collective bargaining negotiations, which are
critical to the success of Forum Health's turnaround program;
financial covenant violations requiring waivers and forbearance
agreements with credit providers; and overall level of competition
in the service area and growing competition in its Southern
Mahoning market.

Factors supporting the rating include the success in obtaining
forbearance agreements from the credit providers through
March 31, 2007, the success to date of the interim new senior
management team, and the implementation of an aggressive
turnaround program for Forum Health.


FREEDOM PIPELINE: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Freedom Pipeline, LLC
                1046 Texan Trail
                Grapevine, TX 76051

Involuntary Petition Date: December 27, 2006

Case Number: 06-20797

Chapter: 11

Court: Southern District of Texas (Corpus Christi)

Judge: Richard S. Schmidt

Debtors' Counsel: Nathaniel Peter Holzer, Esq.
                  Jordan Hyden Womble
                  Culbreth & Holzer P.C.
                  500 North Shoreline Drive, Suite 900
                  Corpus Christi, TX 78471
                  Tel: (361) 884-5678
                  Fax: (361) 888-5555

Petitioners'
Counsel:          Patrick D. Devine, Esq.
                  Patrick D. Devine, P.C.
                  4615 Southwest Freeway, Suite 405
                  Houston, TX 77027
                  Tel: (832) 251-2722
                  Fax: (832) 251-2724
         
   Petitioners                   Nature of Claim   Claim Amount
   -----------                   ---------------   ------------
Ironhorse Pipeline               Trade Debt            $117,969
Inspection, LLC
P.O. Box 1747
Aledo, TX 76008

MW Fab Ltd.                      Trade Debt             $57,256
P.O. Box 1183
Mineral Wells, TX 76068

Western Supplies, Inc.           Trade Debt             $17,413
3601 Central Freeway
Wichita Falls, TX 76306

Fence Me In, Inc.                                       Unknown
Fort Worth, TX

Miller Oilfield Repair, Inc.                            Unknown
Edna, TX


FRESH DEL MONTE: S&P Pares Corporate Credit Rating to BB- from BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Cayman
Islands-based Fresh Del Monte Produce Inc.  The corporate credit
rating was lowered to 'BB-' from 'BB'.

The ratings were removed from CreditWatch, where they were placed
with negative implications on Nov. 1, 2006, after the company's
third-quarter earnings release and continued weak operating
performance.

The rating outlook is negative.  About $399 million of total debt
was outstanding at Sept. 29, 2006.

"The downgrade reflects Fresh Del Monte's ongoing weak performance
and significantly higher-than-expected leverage," explained
Standard & Poor's credit analyst Alison Sullivan.

"The company has been negatively affected by difficult industry
conditions, including competitive pressures and higher fuel
and production costs, and we expect these challenges will continue
into 2007.  On Dec. 27, 2006, Fresh Del Monte received its second
amendment in 2006 to relax its leverage covenant on its secured
bank facilities."

The 'BB-' rating reflects Fresh Del Monte's participation in the
highly variable, commodity-oriented fresh fruit and vegetable
industry, which is affected by uncontrollable factors such as
global supply, political risk, weather, and disease.  Mitigating
these concerns are the company's leading positions in the
production, marketing, and distribution of fresh produce.

Product concentration remains a rating concern due to the high
sales and earnings concentration from bananas and pineapples.  
However, Fresh Del Monte is looking for ways to diversify within
the produce industry, for example, by expanding into branded
fresh-cut fruit and vegetables, and growing internationally.  
Sales outside North America represented about 52% of 2005
consolidated sales.

Standard & Poor's  expect Fresh Del Monte to continue investing in
diversification without adding significant debt.

For the nine months ending Sept. 29, 2006, sales declined
slightly, yet adjusted EBITDA declined 54% because of difficulties
in the company's prepared food business, competitive pressures in
the European banana market, and lower profitability in the other
fresh produce segment because of adverse weather conditions.  
Higher costs related to fuel, raw materials, packaging, labor, and
transportation also hurt financial results.

As a result, credit measures have weakened further than Standard &
Poor's had expected.  Lease- and pension-adjusted debt to EBITDA
increased to 4.8x for the 12 months ended Sept. 29, 2006 from
about 2.3x at Dec. 31, 2005.  

Although the company has implemented cost saving initiatives,
given expected ongoing difficult industry conditions,
Standard & Poor's believes Fresh Del Monte will be challenged
to improve performance in the near term.


GLOBAL GEOPHYSICAL: Moody's Junks Rating on $40 Mil. Senior Loan
----------------------------------------------------------------
Moody's Investors Service assigned a first-time B3 corporate
family rating to Global Geophysical Services and a B3 probability
of default rating.  

Based on the LGD notching methodology, Moody's assigned a B1,
LGD2, 28% rating to Global's senior secured $30 million revolving
facility and a $60 million first-lien term loan facility and a
Caa1, LGD5, 76% rating to Global's $40 million second-lien senior
secured term loan facility.

Proceeds from the two new term loans in conjunction with a
$140 million investment from Kelso & Company will fund
approximately $80 million of capex plans for 2007, refinance
$56 million of existing debt, the tender of up to $90 million of
existing preferred stock, redemption of $9.5 million of common
stock, and about $5 million of fees.  The Kelso investment is
coming in stages, with $50 million already funded to cover the
common stock redemption and capex and the remaining $90 million is
come on a dollar for dollar basis only as the tendered preferred
shares are redeemed.  Assuming the full $90 million preferred
equity tendered for is redeemed, Kelso will effectively own about
46.7%, with management owning about 33%.

The B3 CFR reflects Global's small size and its market position
compared to its B-rated peers and the inherent volatility in the
seismic business as a result of cyclical exploration and
production activity and the short operating track record which
provides a higher than normal degree of uncertainty regarding
downcycle performance.  Partially offsetting this limited
operating history is the seasoned management team most of which
possesses more than 20 years of experience in the seismic business
at some of the larger seismic companies.

The B3 CFR also reflects relatively higher geographic
diversification than some of the B3 and B2 rated oilfield services
peers as it has and continues to operate in multiple basins around
the world but low diversity in its product line which is solely
seismic data acquisition.  In terms of leverage, Global's pro
forma leverage with Debt/EBITDA of about 5.0x and Debt/Book
Capitalization of approximately 60.71% for the new financing makes
it comparable to its B rated peers and its return on assets of
about 10.99%.  This is in the Ba rating range during the current
upcycle.

The B1 rating of the first lien senior secured term loan and
revolver reflects an LGD 2 loss given default assessment as these
facilities are secured by a pledge of all of the company's assets
and there is a significant amount of junior debt.  The Caa1 rating
of the $40 million 2nd lien term loan reflects an LGD5 loss given
default assessment given that it is contractually subordinated to
the first lien facilities.

The stable outlook reflects Moody's expectation that leverage will
decline from its pro forma level of about 5.0x over the next six
to twelve months to at least within 2.5x during the upcycle.
Moody's believes that lower leverage would better position the
company in the event of a slow down in exploration and production
activity which typically impacts seismic companies
disproportionately.

The outlook anticipates that any additional capex plans beyond
current expectations are funded with either cash flow or equity
and that debt reduction is ongoing.  However, the outlook or
ratings could be pressured if the company does not meet its
projected earnings, cashflow, and leverage levels over the course
of 2007.

A positive outlook would require the company to continue to
establish its track record as a stand alone seismic company, that
management has exceeded its projected earnings and cashflows, and
continues to increase its scale to levels more compatible to its
B3 rated peers while maintaining leverage within the 2x level.

Moody's believes that in 2007, Global will have adequate liquidity
to fund approximately $94 million of planned capital expenditures,
an estimated $10 million in interest expense and approximately $10
million of working capital needs.  However, as a small and rapidly
growing company, Global is prone to increase leverage that is
needed for the necessary growth investment and in the event of a
downturn, if earnings do not meet expectations, Global could face
a potential liquidity problem.

Global is headquartered in Houston, Texas and is worldwide land,
transition zone, and shallow marine seismic data acquisition
services provider.


GOLD KIST: Pilgrim's Pride Completes Acquisition
------------------------------------------------
Pilgrim's Pride Corporation completed its acquisition of Gold Kist
Inc., following its recently completed successful tender offer,
which created the world's leading chicken company.

"We are extremely pleased that the final step in our successful
acquisition of Gold Kist has now been completed," said Lonnie "Bo"
Pilgrim, chairman of Pilgrim's Pride.  "We begin 2007 as the
preeminent player in the chicken industry, positioned for long-
term growth, leadership and value creation for our customers and
stockholders."

"We believe the acquisition of Gold Kist will be a transforming
event for Pilgrim's Pride, not only by creating the industry
leader but by making us a stronger and even more efficient
company," O.B. Goolsby, Jr., Pilgrim's Pride president and chief
executive officer, added.  "This acquisition will further enhance
our long-standing reputation for providing outstanding customer
service and product innovation, delivering greater value to our
stockholders, employees and other constituencies.  The integration
process is already well under way and we are committed to ensuring
a smooth transition of ownership and integration for our
customers."

As a result of the transaction, Gold Kist is now a wholly owned
subsidiary of Pilgrim's Pride.  All remaining outstanding shares
of Gold Kist have been converted into the right to receive $21 per
share in cash.

                       About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the United
States, Mexico and in Puerto Rico.  Pilgrim's Pride employs
approximately 40,000 people and has major operations in Texas,
Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina,
Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and
Puerto Rico, with other facilities in Arizona, Florida, Iowa,
Mississippi and Utah.

                          About Gold Kist

Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS)
-- http://www.goldkist.com/-- operates a fully integrated chicken
production, processing and marketing business.  Gold Kist's
production operations include nine divisions located in Alabama,
Florida, Georgia, North Carolina and South Carolina

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Standard & Poor's Ratings Services reported that its 'B+'
corporate credit rating and other ratings on poultry processor
Gold Kist Inc. remain on CreditWatch with positive implications,
where they were originally placed Aug. 21, 2006.


GOLDEN KNIGHTS: Case Summary & 2 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Golden Knights, Inc.
        7109 Staples Mill Road
        Richmond, VA 23228

Bankruptcy Case No.: 06-33725

Chapter 11 Petition Date: December 21, 2006

Court: Eastern District of Virginia (Richmond)

Judge: Douglas O. Tice Jr.

Debtor's Counsel: Robert V. Roussos, Esq.
                  Harbour Law, P.L.C.
                  P.O. Box 3127
                  Norfolk, VA 23514
                  Tel: (757) 622-9005
                  Fax: (757) 623-8413

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 2 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
TMH, Inc.                     Note                      $300,000
1005 Richmond Road
Williamsburg, VA 23188

Marvin and Mary Lou           Note                      $250,000
Scoggins
701 Frans Drive
Abingdon, MD 21009


GOODYEAR TIRE: Moody's Holds Corporate Family Rating at B1
----------------------------------------------------------
Moody's Investors Service has affirmed Goodyear Tire & Rubber
Company's Corporate Family Rating of B1.  

Ratings on Goodyear's existing secured and unsecured obligations
were also affirmed as was the company's Speculative Grade
Liquidity rating of SGL-2.  The outlook has reverted to stable
from negative.

The actions comes after the resolution of Goodyear's organized
labor contract with the USW in North America and more detailed
disclosure of the settlement's applicable terms and benefits.
Moody's would expect the company over time to achieve significant
efficiencies from the new contract and other restructuring
actions.  Collectively, those developments will position the
company's metrics in the B1 rating category.  In the near-term,
however, debt could peak at higher levels from the ramp-up of
production, re-structuring expenditures from announced plant
closures, and funding the contribution to a new VEBA account.

Although improvement in Goodyear's performance is weighted towards
2008 and beyond, Moody's is comfortable that the company has
sufficient liquidity to weather an interim period, and,
thereafter, its coverage and leverage ratios would be on a
recovery path from an enhanced cost structure, increased
productivity, lower legacy costs and stream-lined manufacturing
footprint.

Ratings affirmed:

   * Goodyear Tire & Rubber Company

      -- Corporate Family Rating, B1
      -- Probability of Default, B1
      -- first lien credit facility, Ba1, LGD 2, 10%
      -- second lien term loan, Ba3, LGD 3, 35%
      -- third lien secured term loan, B2, LGD 4, 63%
      -- 11% senior secured notes, B2, LGD 4, 63%
      -- floating rate senior secured notes, B2, LGD 4, 63%
      -- 9% senior notes, B2, LGD 4, 63%
      -- 8 5/8 % senior unsecured notes due 2011, B2, LGD-4, 63%
      -- floating rate unsecured note due 2009, B2, LGD-4, 63%
      -- 8 1/2% senior notes, B3, LGD 6, 94%
      -- 6 3/8% senior notes, B3, LGD 6, 94%
      -- 7 6/7% senior notes, B3, LGD 6, 94%
      -- 7% senior notes, B3, LGD 6, 94%
      -- senior unsecured convertible notes, B3, LGD 6, 94%
      -- Speculative Grade Liquidity rating, SGL-2

   * Goodyear Dunlop Tyres Europe

      -- Euro revolving credit facilities, Ba1, LGD 2, 10%
      -- Euro secured term loan, Ba1, LGD 2, 10%

The last rating action was on Nov. 16, 2006 at which time ratings
on the company's $1.0 billion of unsecured notes with maturities
in 2009 and 2011 were assigned.

Goodyear has stated that the terms of the new labor contract along
with other actions reported during 2006 and early January 2007
will enable it to surpass its goals of reducing high cost tire
manufacturing capacity and achieving a more competitive cost
structure in its North American operations.

Collectively, the actions at USW plants in North America are
expected to generate annual savings of $300 million in 2009, which
represents more than 3% of that segments sales.  Savings from
actions at its Valleyfield, Quebec plant and its Moroccan
operations would be supplemental to that figure.  The Tyler, Texas
plant will operate through 2007, and Valleyfield, Quebec will
continue tire production through the first half of this year.  The
bulk of the savings will not be realized until 2008 and beyond.  
In order to achieve those savings, some "up-front" expenditure
will be required.  These could lead to an increase in indebtedness
during 2007 as working capital requirements are affected by the
ramp of domestic production, contributions are made to the VEBA,
cash restructuring costs for Valleyfield and Tyler, Texas in early
2008 are incurred, and any supplemental retirement "buy-outs"
envisioned under the new USW agreement are considered.  
Potentially offsetting those requirements would be prospective
proceeds from asset sales and/or an equity offering which the
company is evaluating.

Goodyear's Corporate Family rating of B1 continues to recognize
strong scores for several factors in Moody's Automotive Supplier
Methodology.  These factors include the company's substantial
scale, global brands with refreshed product offerings, leading
market share, diversified geographic markets, and improved debt
maturity and liquidity profiles.  Scores for those qualitative
attributes would normally track to a higher Corporate Family
rating.  However, the B1 rating considers Goodyear's relatively
weak quantitative scores including leverage, which has stepped-up
from recent borrowings and could increase further in the near-
term, low EBIT returns and weak FCF/debt ratios.  Contributions to
pension plans will remain substantial for another year before
declining in 2008.  Scores from those quantitative factors counter
qualitative strengths.  The company faces challenges in restoring
its balance sheet, and contending with various contingent
liabilities.  Debt levels should crest during 2007 and leverage
measurements retreat as savings begin to be realized from the
terms in its North American labor settlement and other actions.  
Realization of those efficiencies will require successful
execution.

The stable outlook considers the prospective benefits Goodyear is
likely to achieve from the new labor contract and other
restructuring actions that will ultimately lead to improved
financial performance and lower leverage statistics.  Existing
cash and access to a sizable committed revolving credit facility
provide sufficient resources to manage through what could be a
choppy interim period during which demand in North American
replacement tire markets may not experience any material growth
and raw material costs remain volatile.  While metrics for
trailing periods covering the strike and its lingering effects in
early 2007 may suggest lower rating categories, leverage and
coverage measurements are expected to improve as savings are
realized and demand stabilizes.  

Moody's also anticipates Goodyear's year-end balance sheet will
confirm lower under-funded pension liabilities.  The company is
positioned with good liquidity and faces minimal debt maturities
until 2009.

A positive outlook or higher ratings could develop could develop
if debt/EBITDA were to fall to 4x or below and EBIT/interest were
to be sustained above 2 times while generating positive free cash
flow.  Application of proceeds from prospective asset sales or
material equity issuance to reduce leverage could also facilitate
stronger ratings.  Downward pressure on the rating or a negative
outlook could develop if replacement tire demand in North America
were to weaken and produce lower margins.  Similarly, higher raw
material costs, which were not recovered from pricing actions or
productivity gains, or an inability to realize savings associated
with the new USW labor contract could also lead to lower
profitability.  Evidence of this could come from negative free
cash flow, EBIT/interest declining below 1.25x, or debt/EBITDA
metrics maintained at or above 5x beyond 2007.

The SGL-2 liquidity rating represents good liquidity over the
coming year.  This stems from continuing extensive cash resources,
which were supplemented by a $1 billion note offering in November,
and access to a committed $1 billion revolving credit.  Moody's
would anticipate that a portion of cash resources will be utilized
for funding a new VEBA trust, working capital requirements
generated from the ramp of production in North America as well as
the cash portion of restructuring costs at Tyler, Texas and
Valleyfield, Quebec.  Repayment of revolving credit borrowings in
early January restored external liquidity, and the company
continues with adequate cushion under its financial covenants.  
Terms of its bank credit agreement provide flexibility on the use
of any potential asset sale proceeds and provide some source for
alternate liquidity to develop.

Goodyear Tire & Rubber Company, based in Akron, Ohio, is one of
the world's largest tire companies with more than 100 facilities
in 29 countries around the world.  Products include tires,
engineered rubber products, and chemicals.  Revenues in 2005 were
approximately $20 billion.


GP INVESTMENTS: Fitch Rates Proposed $150 Million Notes at B
------------------------------------------------------------
Fitch rates GP Investments Ltd as:

   -- Foreign currency Issuer Default rating 'B'; and

   -- Intended issue of $150 million of perpetual notes
      'B/RR4'.

The Rating Outlook is Stable.

GP's ratings are supported by conservative leverage levels, the
franchise of the company and the experience of the management team
which bodes well for positive prospects going forward.  The
ratings are constrained, however, by the highly concentrated
nature of the intended investment portfolio, the negative cash
flow implied by recurring fixed expenses versus recurring income,
and the uncertainty related to the maturation period of the
investment portfolio and GP's ability to realize investment gains.

GP is a Bermuda exempted company that consolidates the activities
of a private equity business and an asset management business in
Brazil.  The company's activities started in 1993 as an asset
manager dedicated to private equity activities, managed by
partners with substantial experience in the Brazilian market.  A
major corporate reorganization was completed in 2005 in
preparation to an IPO of the company during year 2006.  The
company is listed on the Luxembourg Stock Exchange and also has a
BDS program on the Brazilian Stock Market.

Since 1993, GP has built up a successful track record in the
Brazilian private equity market, having invested more than USD 1.4
billion in 40 companies in Brazil as of December 2006.  Over time
the company has refined its investment strategies.  It currently
looks to acquire investments only with control or joint control
positions, with a preference for larger companies, and will not
invest in start-ups and green field projects; while some limits
regarding maximum exposures by company or sector are in place,
GP's investment portfolio is, and will remain, highly
concentrated.  

As of end September 2006, GP managed a portfolio of two
investments and has reported the subscription of 4 additional
investments.  The significant reduction in the size of the
investment portfolio down to $83,000,000 at end-September 2006, is
the result of the reorganization process completed in 2006, where
the company spun off the bulk of its previous investments in three
other private equity funds and also completed the subscription of
$308,000,000 in new capital through the successful IPO in the
Brazilian and Luxembourg stock market.  The proceeds are expected
to be used to fund new investments in the private equity business.

In addition to its private equity business, the company through
its subsidiary GP Asset offers services focused on creating and
managing alternative fixed-income, equity and multi-asset funds to
institutional clients, financial intermediaries, private clients
and investment vehicles in Brazil.  

This business provides an important portion of the recurring
income of the company, though historically total recurring income
has not been sufficient to cover operating expenses, which have
been funded through the income generated by the positive results
of the valuation and exits in the investment portfolio and the
maintenance of liquidity on hand for these purposes.  

Given the unpredictable nature of the results and timing of
capital gains in the investment portfolio or of the possible
positive results in future exits of those investments and the
concentration of the portfolio, Fitch Ratings believes that a more
ample array of recurring income would be needed to sustain current
operating expenses, which will include debt service after the
issue, and enhance the risk profile of the company.

The perpetual notes will have no fixed final maturity date and
will be repaid only in the event that the Issuer redeems the notes
or upon acceleration due to an event of default.  The notes will
be general unsubordinated obligations of the Issuer and will rank
'pari passu' with the issuer's unsubordinated indebtedness.  The
obligations of the Issuer under the notes will be secured by a
first priority pledge by the Issuer of shares representing 100% of
the currently outstanding shares of GP Private Equity Ltd., and
liquidity will be supported by an 18 month coupon payment reserve
which will be deposited in a trustee.  

The rating of the issuance recognizes the liquidity implicit in
the coupon reserve, augmented by substantial cash currently on
hand, nevertheless, the concern is that the latter is intended to
be used for investments, and its availability at any point during
the life of the debt instrument is difficult to predict.


GSAA HOME: Moody's Rates Class I-B-1 Certificates at Ba1
--------------------------------------------------------
Moody's Investors Service has assigned a rating of Aaa to the
senior certificates issued by GSAA Home Equity Trust 2006-S1, and
ratings ranging from Aa1 to Ba1 to the mezzanine certificates in
the deal.

The securitization is backed fixed-rate, second lien mortgage
loans.  The collateral for Group I was acquired by M&T Mortgage
Corporation, DHI Mortgage Company, Ltd., Residential Funding
Company, LLC, SouthStar Funding LLC, Quicken Loans, Inc., and
Alliance Bancorp.  The collateral for Group II was originated by
First Franklin Financial Corporation and acquired by National City
Bank.  The ratings are based primarily on the credit quality of
the loans, and on the protection from subordination,
overcollateralization, and excess spread.  Group II also receives
protection from an interest rate cap and swap agreement between
the trust and Goldman Sachs Mitsui Marine Derivative Products,
L.P.

Moody's expects collateral losses to range from 11.30% to 11.80%
for Group I, and collateral losses to range from 7.10% to 7.60%
for Group II.

Ocwen Loan Servicing, LLC, Avelo Mortgage, L.L.C., and National
City Home Loan Services, Inc., will service the loans.  Wells
Fargo Bank, N.A. will act as master servicer.  Moody's has
assigned Ocwen Loan Servicing, LLC its servicer quality rating of
SQ2- as a primary servicer of subprime loans.

Furthermore, Moody's has also assigned National City Home Loan
Services, Inc. its servicer quality rating of SQ2 as primary
servicer of Second Lien loans and Wells Fargo its top servicer
quality rating of SQ1 as master servicer.

These are the rating actions:

   * GSAA Home Equity Trust 2006-S1

   * Mortgage Pass-Through Certificates, Series 2006-S1

                  Class I-A-IO,Assigned Aaa
                  Class I-A-1, Assigned Aaa
                  Class I-M-1, Assigned Aa1
                  Class I-M-2, Assigned Aa2
                  Class I-M-3, Assigned A1
                  Class I-M-4, Assigned A2
                  Class I-M-5, Assigned Baa1
                  Class I-M-6, Assigned Baa2
                  Class I-M-7, Assigned Baa3
                  Class I-B-1, Assigned Ba1
                  Class II-A-1, Assigned Aaa
                  Class II-M-1, Assigned Aa2
                  Class II-M-2, Assigned A2
                  Class II-M-3, Assigned A3
                  Class II-M-4, Assigned Baa2
                  Class II-M-5, Assigned Baa3


IRON MOUNTAIN: S&P Rates Proposed EUR175 Mil. Senior Notes at B
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to Iron
Mountain Inc.'s proposed EUR175 million 6.75% senior subordinated
notes due 2018.  

Proceeds from the proposed debt issuance will be used to repay
other debt, including borrowings under Iron Mountain Inc.'s senior
credit facilities, and for general corporate purposes.

Standard & Poor's affirmed all existing ratings, including the
'BB-' corporate credit rating.

The outlook is stable.

Boston-based Iron Mountain had about $2.6 billion of debt
outstanding as of Sept. 30, 2006.

"The ratings reflect Iron Mountain's relatively high debt
leverage, limited debt capacity for large acquisitions, and
aggressive financial policies supporting its growth strategies,"
said Standard & Poor's credit analyst Andy Liu.

"These factors are only partially offset by the company's leading
position as the world's largest records management company and its
reasonably stable growth from existing and new customer accounts."

Iron Mountain provides warehouse storage for paper-based files,
management of digital files, and other, complementary services.


JP MORGAN: Fitch Holds Low-B Ratings on 4 Certificate Classes
-------------------------------------------------------------
Fitch Ratings has affirmed these J.P Morgan Mortgage Trust issues:

Series 2003-A1:

   -- Class A affirmed at 'AAA';
   -- Class B-1 affirmed at 'AA';
   -- Class B-2 affirmed at 'A';
   -- Class B-3 affirmed at 'BBB';
   -- Class B-4 affirmed at 'BB'; and
   -- Class B-5 affirmed at 'B'.

Series 2003-A2:

   -- Class A affirmed at 'AAA';
   -- Class B-1 affirmed at 'AA';
   -- Class B-2 affirmed at 'A';
   -- Class B-3 affirmed at 'BBB';
   -- Class B-4 affirmed at 'BB'; and
   -- Class B-5 affirmed at 'B'.

J.P. Morgan Acceptance Corporation I, a special purpose
corporation, acquired the loans from various originators and
deposited the loans in the trusts which issued the certificates.
The mortgage loans in the series 2003-A1 transaction were
originated by Cendant Mortgage Corporation.  The mortgage loans in
the series 2003-A2 transaction were originated by Countrywide Home
Loans, Inc., Cendant Mortgage Corporation, and Wells Fargo Home
Mortgage, Inc. The mortgage loans consist primarily of
conventional, adjustable rate, fully amortizing, first-lien
residential mortgage loans extended to prime borrowers.

The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $351.8 million of outstanding certificates.  As of
the December 2006 remittance period, series 2003-A1 is 38 months
seasoned, and series 2003-A2 transaction is 37 months seasoned.
The current pool factors are approximately 70% and 59% for series
2003-A1 and 2003-A2 transactions, respectively.

All of the mortgage loans in the series 2003-A1 transaction are
serviced by PHH Mortgage Corporation, which is rated 'RPS1-' by
Fitch.  The mortgage loans in the series 2003-A2 transaction are
serviced by Countrywide Home Loans, Inc., PHH Mortgage
Corporation, and Wells Fargo Home Mortgage, Inc.  The master
servicer for the series 2003-A2 transaction is Wells Fargo Bank
Minnesota, National Association, rated 'RMS1' by Fitch.


KARA HOMES: Court Approves Sale of Four New Jersey Projects
-----------------------------------------------------------
Kara Homes Inc. and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the District of New Jersey to sell
four of its projects at an auction slated for Feb. 15, GlobeSt.com
reports.  The sale will allow the Debtor to pay its $9 million
debt to Magyar Bank.

The four New Jersey projects are:

    * Dayna Estates in Toms River;
    * Hartley Estates in Toms River;
    * Sterling Acres in Monroe Twp.; and
    * Prospect Ridge in Stafford Twp.

GlobeSt.com relates that in giving his approval, the Hon. Michael
Kaplan said that the projects are unlikely to be profitable and
the sale would attract a new developer to complete them.

GlobeSt.com reports that Magyar has already placed an initial bid
and quotes the bank's officials as saying that Magyar will
essentially erase the debts owed and pay the Debtors $300,000 for
the properties.

Headquartered in East Brunswick, New Jersey, Kara Homes, Inc., aka
Kara Homes Development LLC, builds single-family homes,
condominiums, town homes, and active-adult communities.  The
Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D.
N.J. Case No. 06-19626).  David L. Bruck, Esq., at Greenbaum,
Rowe, Smith, et al., represents the Debtor.  When the Debtor filed
for protection from its creditors, it listed total assets of
$350,179,841 and total debts of $296,840,591.

On Oct. 9, 2006, nine affiliates filed separate chapter 11
petitions in the same Bankruptcy Court.  On Oct. 10, 2006, 12 more
affiliates filed chapter 11 petitions.


KNOLOGY INC: PrairieWave Buyout Cues Moody's Developing Outlook
---------------------------------------------------------------
Moody's Investors Service changed Knology, Inc.'s outlook to
developing after the company's disclosure of its $255 million cash
acquisition of PrairieWave.

PraireWave is a voice, video and high-speed Internet broadband
services provider, like Knology, which should provide greater
geographical diversification and potential for margin improvement.  
While the ultimate capital structure has not yet been determined,
in Moody's view, Knology's corporate family rating could withstand
an increase in leverage up to mid 5x range; however, the ratings
of individual debt instruments could change.  Once the details of
the financing have been reported, Moody's expects to resolve the
outlook and individual debt instrument ratings.  Moody's does not
anticipate a negative outlook as a result of this transaction.

Knology's B2 corporate family rating reflects the company's lack
of scale, financial risk, and concerns over competition, offset by
the company's upgraded network, high penetration of multiple
services, and reasonable diversification of cash flow among its
markets relative to other companies of similar size.

These are the rating actions:

   * Knology, Inc

   * Affirm

      -- B2 Corporate Family Rating
      -- B2 Probability of Default Rating
      -- Ba3, LGD3, 30% Senior Secured First Lien
      -- Caa1, LGD5, 82% Senior Secured Second Lien

   * Change

      -- Outlook Changed to Developing from Positive

Knology, Inc. is a provider of video, Internet and telephony
services via its broadband network.  The company also provides
traditional telephony services through its incumbent local
exchange carrier subsidiary.  The company maintains its
headquarters in West Point, Georgia.


KNOLOGY INC: Stock Purchase Cues S&P to Hold Credit Rating at B
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating, for West Point, Georgia-based
cable overbuilder Knology Inc.

This comes after Knology's disclosure that it signed a definitive
agreement to acquire the stock of unrated PrairieWave
Communications for $255 million in cash.  Standard & Poor's expect
the transaction to close during the second quarter of 2007.

The outlook remains stable.  Total debt was $273 million as of
Sept. 30, 2006.

"Although the amount of new debt to fund the acquisition has yet
to be determined, our affirmation reflects that Knology can
support a modest increase in leverage at the current rating
level," said Standard & Poor's credit analyst Allyn Arden.

"We base this opinion on the company's recent operating
performance and our expectations that prospects for discretionary
cash flow generation will remain good over the next couple of
years."

With the purchase of PrairieWave, which is also a cable
overbuilder, Knology will gain about 56,000 residential and
7,200 commercial customers in South Dakota, as well as portions of
Minnesota and Iowa.


MALDEN MILLS: Organizational Meeting Scheduled on January 19
------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in
Malden Mills Industries, Inc. and its debtor-affiliates' chapter
11 cases at 10:00 a.m., on, Jan. 19, 2007, at Office of the United
States Trustee, Room 2112, J. Caleb Boggs Federal Building, 844
North King Street in Wilmington, Delaware.

The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.  The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code.  However, a representative of the Debtors
will attend and provide background information regarding the
cases.

Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.

Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee.  In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.

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

Headquartered in Lawrence, Massachusetts, Malden Mills Industries,
Inc. -- http://www.polartec.com/-- develops, manufactures, and  
markets Polartec(R) performance fabrics.  Polartec(R) products
range from lightweight wicking base layers to insulation to
extreme weather protection and are utilized by the best clothing
brands in the world.  In addition, Polartec(R) fabrics are used
extensively by all branches of the United States military
including the Army, Navy, Marine Corps, Air Force, and Special
Operations Forces.  The company also has operations in Germany,
Spain, France and the U.K.

The company and four of its affiliates filed for chapter 11
protection on Jan. 10, 2007 (Bankr. D. Del. Case Nos. 07-10048
through 07-10052).  Laura Davis Jones, Esq., and Michael Seidl,
Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, PC,
represent the Debtors.  When the Debtors filed for protection from
their creditors, they listed estimated assets between $1 million
to $100 million and estimated debts of more than $100 million.  
The Debtors' exclusive period to file a chapter 11 plan expires on
May 10, 2007.


MALDEN MILLS: Chrysalis Expresses Continued Interest in Assets
--------------------------------------------------------------
Malden Mills Industries, Inc. and its debtor-affiliates filed for
protection under Chapter 11 of the Bankruptcy Code with the U.S.
Bankruptcy Court for the District of Delaware on Wednesday.

As reported in yesterdays Troubled Company Reporter, the Debtors
disclosed that its board of directors had unanimously voted to
approve the sale of Malden Mills to Gordon Brothers Group of
Boston, Massachusetts, for $44 million.  The sale is planned to be
implemented under chapter 11.  

Chrysalis Capital Partners confirms however that the sale is not
complete and that Chrysalis continues to be interested in
purchasing the assets of Malden Mills and operating the company.

Chrysalis has submitted a similar offer to the owners of
Malden Mills and is looking forward to participating in the
auction.

                  About Chrysalis Capital

Chrysalis Capital Partners -- http://www.ccpfund.com/-- is a  
Philadelphia-based private equity firm with $300 million in
capital under management.  Chrysalis focuses on 'special
situation' investing such as divestitures, buyouts, turnarounds,
financial restructurings, reorganizations, and recapitalizations
in middle-market companies across a wide range of industries
throughout the United States.

                     About Malden Mills

Headquartered in Lawrence, Massachusetts, Malden Mills Industries,
Inc. -- http://www.polartec.com/-- develops, manufactures, and  
markets Polartec(R) performance fabrics.  Polartec(R) products
range from lightweight wicking base layers to insulation to
extreme weather protection and are utilized by the best clothing
brands in the world.  In addition, Polartec(R) fabrics are used
extensively by all branches of the United States military
including the Army, Navy, Marine Corps, Air Force, and Special
Operations Forces.  The company also has operations in Germany,
Spain, France and the U.K.

The company and four of its affiliates filed for chapter 11
protection on Jan. 10, 2007 (Bankr. D. Del. Case Nos. 07-10048
through 07-10052).  Laura Davis Jones, Esq., and Michael Seidl,
Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, PC,
represent the Debtors.  When the Debtors filed for protection from
their creditors, they listed estimated assets between $1 million
to $100 million and estimated debts of more than $100 million.  
The Debtors' exclusive period to file a chapter 11 plan expires on
May 10, 2007.


MARCAL PAPER: Brings-In Cole Schotz as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
gave Marcal Paper Mills Inc. authority to employ Cole, Schotz,
Meisel, Forman & Leonard as its bankruptcy counsel.

Cole Schotz will:

   (a) advise the Debtor of its rights, powers, and duties as a
       Debtor-in-Possession in continuing to operate and manage
       its assets;

   (b) advise the Debtor concerning, and assisting in the
       negotiation of and documentation of, the use of cash
       collateral or post-petition financing, debt restructuring
       and related transactions;

   (c) review the nature and validity of agreements relating to
       the Debtor's business and property and advise the Debtor;

   (d) review the nature and validity of liens, if any, asserted
       against the Debtor and advise as to the enforceability of
       that liens;

   (e) advise the Debtor concerning the actions it might take to
       collect and recover property for the benefit of its estate;

   (f) prepare on the Debtor's behalf all necessary and
       appropriate applications, motions, pleadings, orders,
       notices, petitions, schedules, and other documents, and
       review all financial and other reports to be filed in the
       Debtor's Chapter 11 case;

   (g) advise the Debtor concerning, and preparing responses to,
       applications, motions, pleadings, notices, and other papers
       which may be filed in the Debtor's Chapter 11 case;

   (h) counsel the Debtor in connection with formulation,
       negotiation and promulgation of a plan of reorganization
       and related documents; and

   (i) perform all other legal services for and on behalf of the
       Debtor which may be necessary or appropriate in the
       administration of its Chapter 11 case and the Debtor's
       business and property, including advising and assisting the
       Debtor with respect to debt restructuring, asset
       dispositions, corporate, tax, finance, real estate and
       litigation matters.

Michael D. Sirota, Esq., a Cole Schotz shareholder, will bill the
Debtor $550 per hour for his work.  Mr. Sirota discloses that the
firm's other professionals bill:

    Professional                 Designation      Hourly Rate
    ------------                 -----------      -----------
    Laurence May, Esq.           Partner             $550
    Gerald H. Gline, Esq.        Partner             $525
    Stuart Komrower, Esq.        Partner             $450
    Leo V. Leyva, Esq.           Partner             $460
    Ilana Volkov, Esq.           Partner             $400
    Warren A. Usatine, Esq.      Partner             $390
    Kenneth L. Baum              Partner             $360
    Mark J. Politan, Esq.        Associate           $280
    Felice R. Yudkin, Esq.       Associate           $185
    Eric Stein, Esq.             Associate           $180
    Frances Pisano               Paralegal           $170
    Cynthia Braden               Paralegal           $165
    Mary Manetas                 Paralegal           $145

Mr. Sirota assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Elmwood Park, NJ, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of   
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories.  Marcal, founded in
1932, is a privately-held, fourth generation family business.  It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.

The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886).  Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor.  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.


MARCAL PAPER: U.S. Trustee Picks Seven-Member Creditors Committee
-----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed
seven creditors to serve on an Official Committee of Unsecured
Creditors in Marcal Paper Mills Inc.'s chapter 11 case:

     1. David Hudson, Jr., Chairperson
        Dixie Pulp & Paper, Inc.
        P.O. Box 20204
        Tuscaloosa, AL 35402
        Tel: (205) 759-2600
        Fax: (205) 759-2606

     2. David R. Jury, Esq.
        United Steelworkers
        Five Gateway Center, Room 807
        Pittsburgh, PA 15222
        Tel: (412) 562-2545
        Fax: (412) 562-2429

     3. Gregory A. Hadley, Esq.
        NewPage Corporation
        Courthouse Plaza, N.E.
        Dayton, OH 45463
        Tel: (937) 242-9339
        Fax: (937) 242-9324

     4. Suzanne M. Klar, Esq.
        PSE&G
        80 Park Plaza, T50
        Newark, NJ 07102
        Tel: (973) 430-6483
        Fax: (973) 645-1103

     5. Sheila Sedgwick
        Southern Container Corp.
        P.O. Box 9049
        Smithtown, NY 11787
        Tel: (631) 231-0400
        Fax: (631) 231-0409

     6. James T. Nicholson
        Ashland Inc.
        5200 Blazer Parkway
        Dublin, OH 43017
        Tel: (614) 790-3009
        Fax: (614) 790-4054

     7. Cosimo Tristani
        Rapid Processing, LLC
        860 Humboldt Street
        Brooklyn, NY 11222
        Tel: (718) 349-0500
        Fax: (718) 349-8494

The Committee has selected Lowenstein Sandler PC as its counsel.

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

Headquartered in Elmwood Park, NJ, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of   
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories.  Marcal, founded in
1932, is a privately-held, fourth generation family business.  It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.

The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886).  Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor.  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.


MARIA STAUB: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Maria Staub
        555 Northeast 15th Street, Suite 20A
        Miami, FL 33132

Bankruptcy Case No.: 07-10134

Chapter 11 Petition Date: January 10, 2007

Court: Southern District of Florida (Miami)

Judge: Robert A. Mark

Debtor's Counsel: Jordan E. Bublick, Esq.
                  Jordan E. Bublick, P.A.
                  11645 Biscayne Boulevard, Suite 305A
                  North Miami, FL 33181
                  Tel: (305) 891-4055
                  Fax: (305) 891-4038

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

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


MARINA OF NORTH CAROLINA: Involuntary Chapter 11 Case Summary
-------------------------------------------------------------
Alleged Debtor: Marina of North Carolina, LLC
                dba Days Inn Motel Airport
                3101 Scott Futrell Drive
                Charlotte, NC 28208

Involuntary Petition Date: January 9, 2007

Case Number: 07-30042

Chapter: 11

Court: Western District of North Carolina (Charlotte)

Judge: J. Craig Whitley

Petitioners' Counsel: Richard M. Mitchell, Esq.
                      Mitchell & Culp, PLLC
                      1001 Morehead Square Drive, Suite 330
                      Charlotte, NC 28203
                      Tel: (704) 333-0630
                      Fax: (704) 333-4975
         
   Petitioners                   Nature of Claim    Claim Amount
   -----------                   ---------------    ------------
Adel Michael                     Member/Manager          Unknown
74 West Rock Road
Greenbrook, NJ 08812

Peggy Velez                      Member/Manager          Unknown
74 West Rock Road
Greenbrook, NJ 08812


MASTR ASSET: Moody's Rates Class M-11 Certificates at Ba2
---------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by MASTR Asset Backed Securities Trust 2006-
HE5 and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.

The securitization is backed by New Century Mortgage Corporation,
EquiFirst Corporation, Decision One Mortgage Company, LLC, and
First NLC Financial Services, LLC originated, adjustable-rate and
fixed-rate, subprime mortgage loans acquired by UBS Real Estate
Securities 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 both the interest-rate swap and
interest-rate cap agreements, both provided by UBS AG.

Moody's expects collateral losses to range from 4.75% to 5.25%.

Barclays Capital Real Estate Inc., dba HomEq Servicing, will
service the mortgage loans and Wells Fargo Bank, N.A. will act as
master servicer to the mortgage loans.

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

These are the rating actions:

   * MASTR Asset Backed Securities Trust 2006-HE5

   * Mortgage Pass Through Certificates, Series 2006-HE5

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

The Class M-11 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.


MCJUNKIN CORP: Moody's Places Corporate Family Rating at B1
-----------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating to
McJunkin Corporation, a Ba1 rating to McJunkin's proposed
$200 million senior secured asset-based revolving credit facility,
and a B2 rating to the proposed $575 million senior secured term
loan facility.

With approximately $241 million in equity from Goldman Sachs
Capital Partners, the net proceeds from the notes will be used to
fund the buyout of the company, repay substantially all of the
existing indebtedness of McJunkin, and pay transaction fees and
expenses.  This is the first time Moody's has assigned ratings to
McJunkin and the ratings remain subject to Moody's review of final
documentation.

Ratings assigned:

   -- Corporate family rating at B1;

   -- Probability of default rating at B1;

   -- $200 million Asset Based Revolving Credit Facility at Ba1,
      LGD2, 19%; and

   -- $575 million Term Loan Facility at B2, LGD4, 61%

The B1 corporate family rating reflects McJunkin's high leverage,
modest operating margins typical of metal distributors, exposure
to the volatile energy sector, weak tangible asset coverage, and
the potential for acquisitions.

At the same time, the ratings recognize the company's generally
stable operating margins and cash flow primarily due to McJunkin's
margin based and cost-plus customer contracts, the countercyclical
nature of working capital, and modest capital expenditures.  This
enables McJunkin to service debt in an up or down cycle as well as
pursue organic growth opportunities.  Further, the ratings
incorporate McJunkin's moderate size, favorable market position,
adequate liquidity, and a sense of balance between centralized and
de-centralized management controls.

Two other important factors influencing the ratings are Goldman
Sachs Capital Partners' sponsorship of McJunkin and the fact that
the company is operating in a highly levered environment for the
first time.  Moody's will continue to track how the owner's
financial, operational, and exit strategies impact debt holders as
well as whether it opts for special dividends or stock buybacks
from McJunkin.

The stable outlook reflects Moody's view that key rating factors
are not likely to change over the near term.  However, if the
company sustains its volume levels and achieves expected cost
savings, McJunkin could improve its credit metrics on a
sustainable basis by reducing current debt levels.

Specifically, if the company improves its credit metrics on a
sustainable basis over the next 12 to 18 months by lowering its
leverage ratio on an adjusted basis to 3.5x, generating
significant free cash flow, and maintaining adequate liquidity,
the ratings would likely improve.  Factors that could negatively
impact the ratings include a deterioration in liquidity, a
weakening of working capital metrics, or additional debt-financed
acquisitions.

McJunkin Corporation, headquartered in Charleston, West Virginia,
is a relatively large distributor of pipes, valves, and fittings,
serving the five major end markets in the process industry:
petroleum refinery, chemical processing, gas distribution and
transmission, natural gas and oil exploration and production.


MCJUNKIN CORP: S&P Places Corporate Credit Rating at B+
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to McJunkin Corp., a distributor of pipes, valves
and fittings to the energy and processing industries.  

At the same time, Standard & Poor's assigned a 'BB' rating and '1'
recovery rating to McJunkin's proposed $200 million asset-backed
revolving credit facility, and a 'B+' rating and '3' recovery
rating to its proposed $575 million secured term loan.

The '1' and '3' recovery ratings, respectively, indicate the
expectation of full and meaningful recovery of principal in the
event of a payment default.

The outlook is stable.

Pro forma for the expected bank debt issuances, Charleston, West
Virginia-based McJunkin is expected to have $654 million in debt
outstanding.  Goldman Sachs Capital Partners will use the proceeds
to partially fund its purchase of McJunkin.

"The ratings on McJunkin reflect the highly fragmented and
competitive industry in which the company operates, cyclical end-
markets, aggressive financial leverage, the risk that volatile
steel prices may negatively affect profitability, and relatively
slow stock inventory turns," said Standard & Poor's credit analyst
David Lundberg.

"These weaknesses are only partially offset by the company's long-
term customer relations, geographic and customer diversity, a
highly variable cost structure, contracts that generally allow
the company to pass along price increases to the customer, low
capital expenditure requirements, and countercyclical cash flow
from working capital," Mr. Lundberg continued.

The outlook is stable.

Standard & Poor's expects McJunkin's maintenance, repairs, and
operations segment to continue to generate stable cash flow, and
that new project opportunities will be sufficiently robust in the
near term, given the outlook for exploration and production and
refining capital spending.  A significant drop in steel prices or
a leveraging acquisition could result in a negative ratings
action, although this is not expected in the near term.  A
cyclical downturn in the E&P, refining, or chemicals industries
could also pressure ratings.  A positive ratings action would be
contingent on improvement in operating performance and financial
measures.


MEDINA FORWARDING: Involuntary Chapter 11 Case Summary
------------------------------------------------------
Alleged Debtor: Medina Forwarding Corp.
                c/o Ernesto Medina Flores
                Registered Agent
                4640 Mar Street
                Brownsville, TX 78520

Involuntary Petition Date: December 29, 2006

Case Number: 06-10878

Chapter: 11

Court: Southern District of Texas (Brownsville)

Judge: Richard S. Schmidt

Petitioner's Counsel: Guillermo Vega, Jr., Esq.
                      302 Kings Highway, Suite 105
                      Brownsville, TX 78521
                      Tel: (956) 546-5573
                      Fax: (956) 542-1977
         
   Petitioner                   Nature of Claim    Claim Amount
   -----------                  ---------------    ------------
Carlos Gonzalez Valladares      Debt                 $2,252,974
5 Palo Verde, Apartment 1
Brownsville, TX 78520


NASDAQ STOCK: Extends Final Offers for LSE Until January 26
-----------------------------------------------------------
The Board of The Nasdaq Stock Market Inc. extended its Final
Offers for London Stock Exchange Group plc and will remain open
for acceptance until 3.00 p.m. (London time) on Jan. 26, 2007.

Nightingale Acquisition Limited, a wholly owned subsidiary of
NASDAQ, owns 61,291,389 LSE Ordinary Shares, representing
approximately 28.75%. of the existing issued ordinary share
capital of LSE.

As of Jan. 11, 2007, 3.00 p.m. (London time), being the First
Closing Date, valid acceptances had been received by NAL in
respect of a total of 1,307,978 LSE Ordinary Shares, representing
approximately 0.61%. of the existing issued ordinary share capital
of LSE and 33,931 LSE B Shares, representing approximately 0.43%.
of the existing issued B share capital of LSE.

Accordingly NAL owns, or has received valid acceptances in respect
of, a total of 62,599,367 LSE Ordinary Shares representing
approximately 29.36 per cent. of the existing issued ordinary
share capital of LSE.

Save as disclosed in the Offer Document and above, neither NAL,
NASDAQ, nor, so far as NAL and NASDAQ are aware, any person acting
in concert with either of them, is interested in or has any rights
to subscribe for any LSE Shares, nor does any such person have any
short position or any arrangement in relation to LSE Shares.

LSE Shareholders who have not yet accepted the Final Offers and
who hold LSE Shares in certificated form (that is, not through
CREST) should complete, sign and return the relevant Form(s) of
Acceptance in accordance with the instructions thereon and the
instructions in the Offer Document as soon as possible and, in any
event, so as to be received no later than 3.00 p.m. (London time)
on Jan. 26, 2007.

LSE Shareholders who have not yet accepted the Final Offers and
who hold LSE Shares in uncertificated form (that is, through
CREST), should submit a TTE instruction in accordance with the
instructions in the Offer Document for settlement as soon as
possible and, in any event, by no later than 3.00 p.m. (London
time) on Jan. 26, 2007.

Copies of the Offer Document, the Response Document and Forms of
Acceptance are available for collection (during normal business
hours only) from:

        Capita Registrars
        The Registry
        34 Beckenham Road, Beckenham,
        Kent BR3 4TU, United Kingdom

                 -- and --

        Greenhill & Co. International LLP
        Lansdowne House
        57 Berkeley Square
        London W1J 6ER, United Kingdom.

The Offer Document and the Response Document are also available on
NASDAQ's website.

The Final Offers will not be revised except that NAL reserves the
right to revise the Final Offers:

   (i) upon the recommendation of the LSE Board; or

  (ii) if a firm intention to make a competing offer for LSE is
announced, whether or not subject to any preconditions.

The Nasdaq Stock Market Inc. -- http://www.nasdaq.com/-- is the    
largest electronic equity securities market in the United States
with approximately 3,200 companies.

                           *     *     *

In December 2006, Standard & Poor's Rating Services lowered its
long-term counterparty credit rating on The Nasdaq Stock Market
Inc. to 'BB' from 'BB+'.  The 'BB+' rating on Nasdaq's existing
bank loan facility, which financed the initial 29% stake in the
London Stock Exchange, is affirmed, while the Recovery Rating is
revised to '1' from '2'.  The ratings were removed from
CreditWatch Negative where they were placed on Nov. 20, 2006.  
S&P said the outlook is stable.

At the same time, Standard & Poor's has assigned its 'BB+' bank
loan rating to $750 million senior secured Term Loan B, $2 billion
senior secured Term Loan C, and $75 million revolver issued by
Nasdaq, as well as the $500 million senior secured Term Loan C
issued by Nightingale Acquisition Ltd., a U.K.-based subsidiary of
Nasdaq.

The rating agency has assigned a Recovery Rating of '1', which
indicates full recovery of principal in the event of default.

In addition, Standard & Poor's has assigned its 'B+' rating to
$1.75 billion senior unsecured bridge loan issued by Nasdaq and
NAL.

Moody's Investors Service assigned in April 2006 ratings to
three bank facilities of The Nasdaq Stock Market Inc.: a
$750 million Senior Secured Term Loan B, a $1.1 billion Secured
Term Loan C, and a $75 million Senior Secured Revolving Credit
Facility.  Moody's said each facility is rated Ba3 with a negative
outlook.


NATURADE INC: Court Says Disclosure Statement is Adequate
---------------------------------------------------------
Naturade, Inc. said that its Disclosure Statement under Chapter 11
of the Bankruptcy Code was approved by the U.S. Bankruptcy Court
for the Central District of California, Santa Ana Division.  

The Company had sought Chapter 11 protection to reorganize on
Aug. 31, 2006 and is on track to emerge from Chapter 11 before the
end of February 2007 as a reorganized and recapitalized company.

Naturade has the support of its lender and the Official Creditors
Committee for its Plan of Reorganization and fully expects that it
will be approved by the Court in February.

"Naturade has a strong legacy of product excellence and innovation
in consumer nutritional supplements and was in the health food
industry long before the term 'health food industry' was even
invented," according to Naturade's CEO Richard Munro, referring to
Naturade's establishment in 1926.  Mr. Munro, an experienced
turnaround and reorganization specialist, has managed Naturade
during the reorganization process and has overseen the
implementation of its reorganization plan.

"During the Chapter 11 process, Naturade has managed to preserve
its reputation as a premier supplier of natural nutritional
supplements and wellness products and the support of its customer
base," stated Mr. Munro.  "The substantial capital infusion that
Naturade will receive as part of its reorganization plan, is
expected to give Naturade the financial strength and appropriate
structure to grow and continue to build upon its 80-year history."

Mr. Munro added that, "Naturade has an experienced management
team, strong sales, great products and loyal customers.  We have
plans to launch innovative new products in 2007 and beyond to
continue to build on our consumer brand strengths and highly
valued retailer relationships."

                     Overview of the Plan

As reported in the Troubled Company Reporter on Dec. 14, 2006, the
Debtor's financial projections indicate that it will have enough
resources to meet all of its obligations under the Plan as well as
pay the cost of its ongoing business operations after the
effective date.

The Debtor estimates that it will have approximately $1.4 million
in cash to pay approximately $1.1 million of its obligations on
the effective date.  Payments due on the effective date include
administrative claims, allowed priority unsecured claims, cure
claims and Plan Agent fees.  Ongoing payments to certain secured
creditors and the General Unsecured Creditor class under the Plan
will be funded from the Debtor's operations.     

                         Treatment of Claims

The Debtor's plan groups claims against the estate into eight
creditor classes and one equity class.  With the exception of
Allowed Priority Unsecured Claims, all classes are impaired under
the Plan.

Laurus Master Fund, LP, asserts a secured claim of approximately
$2.7 million against the Debtor on account of a Revolving Note and
a Term Note.  

On the effective date, the Debtor will deliver to Laurus an
amended and restated promissory note for obligations owed under
the Revolving Note.  The post-confirmation revolving note will
mature on Jan. 1, 2010.

In full satisfaction of Laurus' secured claim as evidenced by the
Term Note, the Debtor will also issue an amended and restated
promissory note.  The Debtor will pay to Laurus equal monthly
installments of principal and interest under the post confirmation
term note beginning on the first full month after the effective
date and continuing until January 2010.

Health Holdings' approximately $1.3 million claim will be
bifurcated into a $900,000 allowed secured claim and a $400,000
deficiency claim.  

In satisfaction of the $900,000 allowed secured portion, Health
Holdings will receive from 33% up to 100% of the Reorganized
Debtor's issued and outstanding common stock.  The amount of
common stock to be issued to Health Holdings will depend on
operative provisions embodied in the Debtor's Plan.

Howard Shao's secured claim will be paid in monthly installments
of principal and interest beginning on the first full month
following the effective date and continuing until Dec 2009.  Any
unpaid claim will become due and payable on Jan. 1, 2010.  Mr.
Shao's claim will bear interest at 10.5% per annum.

Redux Holdings, Inc. has agreed to waive and release its $161,030
secured claim in exchange for interests in the Reorganized Debtor
in accordance with provisions of the Plan.  

Allowed Priority Unsecured Claims totaling approximately $77,041
will be paid in full, in cash, on the effective date of the Plan.

The Debtor estimates that no less than $5.5 million of General
Unsecured Claims will be asserted in its bankruptcy case.  
Pursuant to the Plan, if the treatment of General Unsecured Claims
provided by Section 6.7.1.1 is applicable, unsecured creditors
will receive on each distribution date, their pro rata interest in
essentially 50% of the Reorganized Debtor's net cash flow.  The
Debtor estimates that unsecured creditors will recover, over the
three-year term of the Plan, approximately 15.8% of their allowed
claims.

Headquartered in Brea, California, Naturade Inc. (OTC BB:NRDCE.OB)
-- http://www.naturade.com/-- distributes nutraceutical   
supplements.  The Company filed for chapter 11 protection on
Aug. 31, 2006 (Bankr. C.D. Calif. Case No. 06-11493).  Richard H.
Golubow, Esq., Robert E. Opera, Esq. and Sean A. O'Keefe, Esq., at
Winthrop Couchot P.C., in Newport Beach, California, represent the
Debtor.  When the Debtor filed for protection from its creditors,
it listed assets of $10,255,402 and debts of $18,427,161.


NAVISTAR INT'L: Fitch Rates Proposed $1.3 Billion Facility at BB-
-----------------------------------------------------------------
Fitch has assigned a 'BB-' rating to Navistar International
Corp.'s proposed $1.3 billion senior unsecured credit facility.

Fitch also withdraws the 'BB-' rating on NAV's senior unsecured
notes, the 'B' rating on NAV's senior subordinated debt, and the
senior unsecured debt rating at Navistar Financial Corp., all of
which have been substantially retired.  Fitch expects to withdraw
the 'BB-' rating on NAV's existing credit facility upon the
closing of the new $1.3 billion facility.  

These are Fitch's existing ratings on NAV and Navistar Financial
Corp.:

Navistar International Corp.:

   -- Issuer default rating 'BB-'; and
   -- Senior unsecured bank facility 'BB-'.

Navistar Financial Corp.:

   -- IDR 'BB-'; and
   -- Senior unsecured bank lines 'BB-';

All of NAV's and NFC's ratings remain on Rating Watch Negative.
The ratings cover approximately $2.5 billion in debt.  Resolution
of the Watch status will be contingent on the filing of audited
financial statements and the outcome of the ongoing SEC
investigation.  Further material delays in filing, material
restatements of financial position or worse-than-expected
operating results could lead to a review of the rating for a
downgrade.

NAV's ratings reflect the company's extended delayed filings of
audited financial statements, the scale and uncertainty of any
adjustments that may be required to the historical financials from
fiscal years 2002 through 2004 and for the first nine months of
fiscal 2005, and the potential for limited access to external
capital that is aggravated by the potential delisting of NAV's
stock from the New York Stock Exchange.  A variety of accounting
issues will be addressed with the re-filings.  In 2006, NAV
changed auditors, extending the timetable for the resolution of
the restatements.

Navistar's new $1.3 billion credit facilities will consist of a
$1.1 billion term loan and a $200 million synthetic revolving
credit facility, which will be fully drawn upon closing.  The
transaction is expected to close the week of Jan. 15, and the
proceeds will be used to repay the remaining amount outstanding
under the existing loan facility.  The new facilities will reduce
interest payments slightly and will extend the maturity to 2012,
which will give NAV funding through the next emission requirement
in 2010.

Navistar's truck shipments increased 13.7%, or 17,801 units, in
fiscal year 2006, but its engine shipments were off slightly due
to slowing Ford F series truck sales.  NAV's un-audited year-end
2006 cash balance was $1.2 billion, positioning the company well
for the heavy duty truck downturn that is expected this year.
Navistar has indicated that capital expenditures in 2007 will be
between $250 million-$300 million and that cash flow from
operations will be stronger than in 2004, when it was
$315 million.  Free cash flow in 2007 could be negative due to the
downturn, continued competitive pricing pressures and high
commodity costs, but liquidity remains adequate to finance modest
negative cash flow prior to an anticipated rebound in end-demand.

Navistar's underfunded pension position will continue to be a
meaningful claim on cash flow over the intermediate term.  Higher
required contributions in later years could coincide with a
cyclical decline in operating cash flows, potentially limiting
Navistar's capacity to produce free cash flow.


NEFF CORP: Good Performance Prompts S&P's Stable Outlook
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Miami-
based equipment rental company Neff Corp., including its 'B+'
corporate credit rating.  

In addition, Standard & Poor's removed all ratings from
CreditWatch where they were placed with positive implications on
May 31, 2006.

The outlook is stable.
      
"The action reflects the decreased likelihood that Neff will
complete an IPO that it filed in May 2006 in the near term," said
Standard & Poor's credit analyst John R. Sico.  

The CreditWatch had reflected that proceeds from an IPO used for
debt repayment, concurrent with the improved operating
performance, would enhance the company's credit profile and
possibly lead to a modest upgrade.

Neff is currently demonstrating improved operating performance, as
should be expected during the cyclical upswing in the industry.  
Absent the IPO, upside to the ratings is limited as the company
does not generate sufficient free cash flow to materially reduce
high debt levels as a consequence of the 2005 recapitalization.  

Additionally, if the company pursued a more aggressive financial
policy, specifically acquisitions or dividends, it would risk a
downgrade or outlook revision to negative.


NEWPAGE CORP: Good Financial Profile Cues S&P's Positive Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Dayton, Ohio-based NewPage Corp. and removed all
ratings from CreditWatch, where they had been placed with positive
implications on April 20, 2006, in connection with the company's
planned IPO.

The outlook is positive.

"The rating action reflects an improving financial risk profile,
which could produce credit metrics appropriate for a higher
rating," said Standard & Poor's credit analyst John Kennedy.

"Despite delaying its proposed IPO, the company has reduced its
debt by about $215 million since year-end 2005, primarily using
proceeds from asset sales.  Furthermore, we expect to raise
NewPage's corporate credit rating to 'B+' if an IPO and additional
debt reduction are completed on terms substantially similar to
those currently indicated by the company, resulting in leverage of
5x or less."

At the same time, Standard & Poor's said it raised its ratings on
the company's existing $750 million senior secured first-lien term
loan to 'B+' from 'B', the $571 million of second-lien secured
notes to 'B-' from 'CCC+', the recovery ratings on the first-lien
facilities to '1' from '2', and the second-lien secured notes to
'3' from '5'.  The '1' recovery rating indicates the high
expectation of full recovery of principal in the event of a
payment default or bankruptcy; while the '3' indicates meaningful
recovery of principal in the event of payment default or
bankruptcy.  These actions reflect the reduction in first-lien
debt, which has improved recovery prospects for both these debt
tranches.

"Reasonable near-term prospects for coated-paper markets should
allow NewPage to generate free cash flow," Mr. Kennedy said.

"We could raise the ratings if NewPage's capital structure becomes
less aggressive.  We could revise the outlook to stable if a
significant industry downturn or rising costs result in a material
deterioration in NewPage's credit measures."


NICHOLAS-APPLEGATE: Moody's Junks Rating on $10 Mil. Class D Notes
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings on these classes
of notes issued by Nicholas-Applegate CBO I Limited:

   * $12,830,000 Class C Participating Notes, Due 2012

      -- Prior Rating: Baa3, on watch for possible downgrade
      -- Current Rating: Ba3

   * $10,690,000 Class D Floating Rate Notes, Due 2012

      -- Prior Rating: B1, on watch for possible downgrade
      -- Current Rating: Caa3

Moody's has also confirmed the ratings on these classes of notes
issued by Nicholas-Applegate CBO I Limited:

   * $23,700,000 Class B-1 Floating Rate Notes, Due 2012

      -- Prior Rating: A3, on watch for possible downgrade
      -- Current Rating: A3

   * $2,500,000 Class B-2 Fixed Rate Notes, Due 2012

      -- Prior Rating: A3, on watch for possible downgrade
      -- Current Rating: A3

Moody's noted that the rating action was primarily due to
deterioration in the transaction's credit quality as measured by
the weighted average rating factor and decline in the weighted
average coupon , as well as the higher than covenanted
concentration of securities rated Caa1 or below by Moody's.
Furthermore, the transaction's underhedged position poses interest
rate risk that could possibly have a negative impact on the
transaction's performance in the future.


NORTHWEST AIRLINES: In Talks with Delta Air on Possible Merger
--------------------------------------------------------------
Northwest Airlines Corp. and Delta Air Lines Inc. has been in
recurring talks regarding a possible link-up following their
respective emergence from bankruptcy protection later this year,
The Wall Street Journal reports citing people familiar with the
issue.

WSJ relates that these meetings, between executives at various
levels as well as their respective advisers, have helped Delta's
creditors recognize that a combination with Northwest is a better
alternative to US Airways Group Inc.'s takeover.

On Wednesday, US Airways revised its upped its offer to
$10.2 billion.  

Delta had previously rejected U.S. Airways' $8.4 billion bid and
filed a stand-alone plan with the U.S. Bankruptcy Court for the
Southern District of New York.  Delta said that the offer would
result in substantially inferior value for creditors compared with
its standalone Plan.  Delta's financial adviser, The Blackstone
Group, estimated the carrier's equity value to be approximately
around $9.4 billion to $12 billion.  Delta's Official Committee of
Unsecured Creditors supported the standalone plan.

With US Airways' new offer, Delta's creditors, who met Wednesday,
are taking the improved offer seriously, WSJ cites a person
familiar with the matter.  Delta's creditors also intend to
pressure the carrier into opening its books.

WSJ also relates that there has also been contacts by UAL Corp.'s
United Airlines with Delta but it wasn't clear if Delta has
officially investigated an alternative deal with either Northwest
or United.

                         About Delta Air

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

The Debtors filed their Chapter 11 Plan and Disclosure Statement
on Dec. 19, 2006.  A hearing to consider the adequacy of the
Disclosure Statement is set on Feb. 7, 2007.

                     About Northwest Airlines

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

The Debtors' exclusive period to file a chapter 11 plan expires on
Jan. 16, 2007.


NORTHWEST AIRLINES: Seeks Court's Approval on New IAM Agreement
---------------------------------------------------------------
Northwest Airlines Inc. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's approval
of, and consent to enter into, the Letter of Agreement and Claim
Sale Agreement with the International Association of Machinists
and Aerospace Workers, District 143.

The Court previously approved a compromise and settlement between
the Debtors and the IAM and authorized the Debtors to enter into
the IAM Letters of Agreement.

The Letters of Agreement provide, among other things, that on the
effective date of (i) any Chapter 11 plan for the Debtors, and
(ii) the IAM Restructuring Agreements, IAM will have an allowed,
general unsecured, non-voting, prepetition claim in the Debtors'
Chapter 11 cases for $181,000,000 in respect of the concessions
the union made.

IAM sought amendments to the Letters of Agreement to facilitate
the sale of 20% of the IAM Claim to a third party, so that the
Debtors' IAM-represented employees who so elect may receive
consideration on account of the purchased claim earlier than
contemplated in the Letters of Agreement.

In light of the benefits that will inure to the Debtors' IAM-
represented employees, the Debtors have agreed to modify the
Letters of Agreement by a new Letter of Agreement dated as of
December 28, 2006.  The Debtors have also agreed to enter into a
Claim Sale Agreement with IAM and a purchaser of a portion of the
IAM Claim to effectuate the transaction.

                          New Agreements

Pursuant to the New Letter of Agreement, the parties have agreed,
among other things, that:

   (1) On the effective date of (i) any Plan for the Debtors; and
       (ii) any plan of agreement between IAM and the Debtors,
       IAM will have an allowed general unsecured prepetition
       non-voting claim in the Debtors' Chapter 11 cases for
       $181,000,000 in respect of the concessions made by IAM;

   (2) The IAM Claim may not be assigned or transferred in any
       way, nor is IAM permitted to grant any direct or indirect
       participation in the IAM Claim until after the effective
       date of the Debtors' Plan;

   (3) To provide the Debtors' IAM-represented employees with the
       opportunity to receive proceeds from a portion of the IAM
       Claim, the Debtors will make the Purchased Claim available
       to IAM for assignment or transfer under the terms of the
       Claim Sale Agreement upon Court approval of the New Letter
       of Agreement;

   (4) The Debtors will distribute the proceeds of the sale
       directly to individual IAM-represented employees net of
       all applicable income tax withholdings and payroll taxes,
       which will be withheld by the Debtors and remitted to the
       appropriate taxing authorities; and

   (5) Neither the IAM Claim, nor the Purchased Claim, will be
       allowed for voting purposes.

The Debtors note that upon the effectiveness of the New Letter of
Agreement, the IAM Claim will be reduced by the Purchased Claim,
and the Purchased Claim will be allowed as general unsecured
prepetition non-voting claim in the Debtors' cases for
$36,200,000.

The New Letter of Agreement also provides certain restrictions on
ownership of common equity of the Debtors to be consistent with
the terms of the Court order regarding the trading of the
Debtors' claims and equity securities.

IAM said on its Web site that the unsecured claim will be sold
for 86.5 cents on the dollar.  The union is currently reviewing
the most equitable way to distribute the payment of the unsecured
claims.

The IAM says its economic advisor will calculate the amount each
IAM-represented employee is due based on the amount of actual
wage concession each employee has made, before Northwest makes
the distributions.

The Claim Sale Agreement provides a mechanism by which the
Purchaser, through the Debtors, will pay to the Debtors' IAM-
represented employees, to the extent they are eligible to
participate, the value received by the Debtors on account of the
sale of the Purchased Claim.

Under the Claim Sale Agreement, the Purchaser will acquire all
right, title and interest to the consideration that would
otherwise be distributed to IAM and the Debtors' IAM-represented
employees under the Debtors' Plan in consideration of the
Purchased Claim.

The Claim Sale Agreement also provides that each Purchaser, and
any person who acquires any portion of the Purchased Claim from
the Purchaser, agrees that they will be subject in all respects
to the provisions of the Court order regarding trading of the
Debtors' claims and equity securities.

                     About Northwest Airlines

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

The Debtors' exclusive period to file a chapter 11 plan will
expire on Jan. 16, 2007.  

(Northwest Airlines Bankruptcy News, Issue No. 51; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


OWENS CORNING: Judge Fitzgerald Okays $2 Mil. Louisiana Accord
--------------------------------------------------------------
The Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware approved Reorganized Owens Corning and
its debtors-affiliates' $2 million settlement agreement with the
state of Louisiana.

As reported in the Troubled Company Reporter on Nov. 23, 2006, the
Reorganized Debtors sought Judge Fitzgerald's approval of their
settlement agreement with the state of Louisiana.

The Settlement Agreement relates to Louisiana's Claim No. 7827,
which was asserted against Owens Corning in April 2002 on account
of certain alleged asbestos-related property damage, Kathleen P.
Makowski, Esq., at Saul Ewing LLP, in Wilmington, Delaware, notes.

The Settlement Agreement will result in a substantial reduction of
the claim amount from approximately $582,000,000 to $2,000,000,
Ms. Makowski tells the Court.

Headquartered in Toledo, Ohio, Owens Corning (OTC: OWENQ.OB)
-- http://www.owenscorning.com/-- manufactures fiberglass  
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The company filed for chapter
11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).  
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.

The Honorable John P. Fullam, Sr., of the U.S. District Court for
the Eastern District of Pennsylvania affirmed on Sept. 28, 2006,
the order of the Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware, confirming Owens
Corning's Sixth Amended Plan of Reorganization.  The Plan took
effect on Oct. 31, 2006, marking the company's emergence from
Chapter 11.

(Owens Corning Bankruptcy News, Issue No. 147; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


OWENS CORNING: Bemis Want $939,000 Admin. Claim Held as Valid
-------------------------------------------------------------
Bemis Co. Inc. asks the U.S. Bankruptcy Court for the District of
Delaware to (i) establish that it holds a valid postpetition claim
against Reorganized Owens Corning and its debtor affiliates for
$939,897 net of credits, (ii) allow its claim as an administrative
expense, and (iii) direct the Reorganized Debtors' estates to
immediately pay the claim.

James C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington,
Delaware, says Bemis will withdraw its request in the event the
Reorganized Debtors pay the invoices that are the basis for the
claim, as well as other postpetition and pre-Effective Date
amounts, prior to the hearing on Bemis' request.

Bemis, supplied polyethylene single wrappers to Owens Corning
before the Reorganized Debtors' filing for bankruptcy and while
the company was under bankruptcy protection.  The Debtors paid for
the goods purchased postpetition in the regular course of their
business.

According to Mr. Carignan, as of Dec. 14, 2006, certain
postpetition and pre-Effective Date invoices for goods purchased
by the Debtors, aggregating $939,894 net of credits, remain
unpaid.

Bemis expects the Reorganized Debtors to satisfy the unpaid
invoices via ordinary payment practices.  In an abundance of
caution and given the deadline for submitting administrative
claims, Bemis has filed a request for payment of its
administrative claim merely to preserve its rights to recover on
the invoices in the event that the invoices are not satisfied
prior to a hearing on the claims it asserted.

Headquartered in Toledo, Ohio, Owens Corning (OTC: OWENQ.OB)
-- http://www.owenscorning.com/-- manufactures fiberglass  
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The company filed for chapter
11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).  
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.

The Honorable John P. Fullam, Sr., of the U.S. District Court for
the Eastern District of Pennsylvania affirmed on Sept. 28, 2006,
the order of the Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware, confirming Owens
Corning's Sixth Amended Plan of Reorganization.  The Plan took
effect on Oct. 31, 2006, marking the company's emergence from
Chapter 11.

(Owens Corning Bankruptcy News, Issue No. 148; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


OWNIT MORTGAGE: Section 341(a) Meeting Slated for January 23
------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of Ownit
Mortgage Solutions, Inc.'s creditors at 1:00 p.m., on
Jan. 23, 2007, at Room 105, 21051 Warner Center Lane, in Woodland
Hills, California.

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

Headquartered in Agoura Hills, California, Ownit Mortgage
Solutions, Inc. is a subprime mortgage lender, which specializes
in making loans to borrowers with poor credit or limited incomes.  
The Debtor filed for chapter 11 protection on Dec. 28, 2006
(Bankr. C.D. Calif. Case No. 06-12579).  Linda F. Cantor, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub represents the
Debtor in its restructuring efforts.  No Committee of Unsecured
Creditors has been appointed in the Debtor's case.  When the
Debtor filed for bankruptcy, it estimated assets between
$1 million to $50 million and debts with more than $100 million.


OWNIT MORTGAGE: Wants to Walk Away from Unexpired Leases
--------------------------------------------------------
Ownit Mortgage Solutions Inc. asks the U.S. Bankruptcy Court for
the Central District of California for authority to reject
unexpired nonresidential real property leases, including all of
the its leases and subleases, except for:

   a) the sublease for the Debtor's headquarters facility in
      Agoura Hills, California;

   b) the now expired lease for the Debtor's former branch
      at 6925 Union Park Center, Suite 345, in Midvale, Utah; and

   c) the former, terminated lease for the Debtor's former branch
      at 123 North Lake Avenue, in Pasadena, California.

The Debtor informs the Court that they have been in talks with the
sublandlord under the Agoura Sublease in connection with the
Debtor's continued, limited use of the facility during the
bankruptcy.  The Debtor says that the Utah Lease expired effective
Dec. 31, 2006.  Prior to the bankruptcy filing, the Pasadena Lease
has been terminated and the Debtor has surrendered the location to
the landlord.

According to the Debtor, it has ceased all operations at the
leased locations, as well as in the Utah and Pasadena locations.  
It has vacated these locations except for certain remaining
personal property.

The Debtor believes that these leases will not obtain any material
value to its estate and rejecting them would minimize
administrative rent obligations.

A full-text list of the contracts and leases can be accessed for
free at http://researcharchives.com/t/s?1858

Headquartered in Agoura Hills, California, Ownit Mortgage
Solutions, Inc. is a subprime mortgage lender, which specializes
in making loans to borrowers with poor credit or limited incomes.  
The Debtor filed for chapter 11 protection on Dec. 28, 2006
(Bankr. C.D. Calif. Case No. 06-12579).  Linda F. Cantor, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub represents the
Debtor in its restructuring efforts.  No Committee of Unsecured
Creditors has been appointed in the Debtor's case.  When the
Debtor filed for bankruptcy, it estimated assets between
$1 million to $50 million and debts with more than $100 million.


PERFORMANCE TRANSPORTATION: Can Close Curtis Bay Terminal
---------------------------------------------------------
The Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for
the Western District of New York authorized Performance
Transportation Inc. and its debtor-affiliates to close their
vehicle distribution terminal located at Curtis Bay, Maryland.

In addition to authorizing the Debtors to close the terminal,
Judge Kaplan rules that any person or entity that may hold or
assert a claim arising from or related to the closing of the
Curtis Bay Terminal, including the Local 557 Plan and New York
Teamsters Council Health and Hospital Fund, for withdrawal
liability or unpaid contributions, must file a proof of claim on
or before Jan. 16, 2007, or the claim will be discharged in
its entirety as against the Debtors, the Reorganized Debtors and
their estates.

                   Terminal's Negative Earnings

To efficiently conduct their vehicle-hauling operations, the
Debtors maintain 32 vehicle distribution terminals throughout the
United States and Canada wherein they receive shipments of new
vehicles from their customers, Garry M. Graber, Esq., at Hodgson
Russ LLP in Buffalo, New York, related.

During their Chapter 11 cases, the Debtors have analyzed the
viability of each of the Terminals, and have determined that the
terminal located at Curtis Bay, Maryland, is unprofitable because:

    (a) it had negative earnings of approximately $400,000 in
        2005;

    (b) it will have estimated negative earnings of approximately
        $125,000 for 2006; and

    (c) it is believed to continue experiencing annual losses of
        approximately $125,000.

Mr. Graber further noted that the Debtors have been unable to
increase their earnings from the Curtis Bay Terminal since they
provide vehicle-hauling services to only one customer.

The Debtors believe that closing the Curtis Bay Terminal will
provide them with significant cost-savings because, among others:

    (a) the Debtors maintain 18 vehicle-hauling tractor trailer
        units at the Terminal.  As the Rigs depreciate, the
        Debtors will incur greater costs to maintain and operate
        the Rigs; and

    (b) the Debtors incur approximately $2,000,000 in annual
        employee-related expenses on account of their operations
        at the Terminal.  Upon closure of the Terminal, the
        employees will no longer be employed by the Debtors.

The Debtors believe that closing the Curtis Bay Terminal is in
the ordinary course of business and that they are authorized to
close the Terminal under Section 363(c) of the Bankruptcy Code
without seeking Court approval.  Out of an abundance of caution,
however, the Debtors asked the Court to enter a ruling authorizing
them to close the Curtis Bay Terminal.

The closure of the Curtis Bay Terminal will also mean the
termination of 15 union employees, which in turn, eliminates the
Debtors' obligation to make contributions to a Freight Drivers
and Helpers Local Union No. 557 Pension Plan, Mr. Graber said.
The Debtors are expected to incur withdrawal liability to the
Local 557 Plan as a result of their complete cessation of
contributions to the Local 557 Plan.

                 About Performance Transportation

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

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


PERFORMANCE TRANSPORTATION: Wants Union's Claim Set as Prepetition
------------------------------------------------------------------
Performance Transportation Inc. and its debtor-affiliates ask the
Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for the
Western District of New York to determine that the Local 557
Plan's Withdrawal Liability Claim is a prepetition unsecured
claim, and is not entitled to any administrative expense or
priority status under the Bankruptcy Code.

In connection with the closure of their terminal located in
Curtis Bay, Maryland, and the termination of 15 employees who are
members of a local union affiliated with the International
Brotherhood of Teamsters, the Debtors anticipate that Freight
Drivers and Helpers Local Union No. 557 Pension Plan will file a
proof of claim for withdrawal liability pursuant to Section 4201
of the Employee Retirement Income Security Act of 1974.

Garry M. Graber, Esq., at Hodgson Russ LLP in Buffalo, New York,
relates that the Debtors are otherwise current with respect to
their payments to the Local 557 Plan and, therefore, only seek
estimation of the Withdrawal Liability Claim.

The Debtors estimate that the amount of the Local 557 Plan's
Withdrawal Liability Claim will be approximately $6,000,000.  The
Debtors believe that the Withdrawal Liability Claim is a
prepetition unsecured claim properly classified as a Class 5
Claim in their confirmed Plan of Reorganization.

However, Mr. Graber says, the Debtors anticipate that the Local
557 Plan may disagree with the classification.  To the extent
that some or all the claim is allowed as an administrative
expense or priority claim, the claim may impair the Debtors'
ability to obtain the requisite financing necessary to emerge
from their Chapter 11 cases.

The Withdrawal Liability Claim is not entitled to priority status
under the Bankruptcy Code, Mr. Graber reminds the Court.  If the
Withdrawal Liability Claim is deemed an administrative expense or
priority claim, the Debtors will be required to fully satisfy the
$6,000,000 claim -- the payment of which may significantly impair
the Debtors' ability to maintain the level of earnings and
liquidity required by the lenders under the Debtors' proposed
exit financing.

If the lenders of the Debtors' proposed exit financing are not
certain of the Debtors' ability to maintain the requisite level
of earnings and cash flow, the lenders may not be willing to
finalize the terms of the financing.  Without the financing,
Debtors will not be able to consummate their confirmed Plan of
Reorganization, Mr. Graber tells Judge Kaplan.

                 About Performance Transportation

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

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


PILGRIM'S PRIDE: Completes Acquisition of Gold Kist
---------------------------------------------------
Pilgrim's Pride Corporation completed its acquisition of Gold Kist
Inc., following its recently completed successful tender offer,
which created the world's leading chicken company.

"We are extremely pleased that the final step in our successful
acquisition of Gold Kist has now been completed," said Lonnie "Bo"
Pilgrim, chairman of Pilgrim's Pride.  "We begin 2007 as the
preeminent player in the chicken industry, positioned for long-
term growth, leadership and value creation for our customers and
stockholders."

"We believe the acquisition of Gold Kist will be a transforming
event for Pilgrim's Pride, not only by creating the industry
leader but by making us a stronger and even more efficient
company," O.B. Goolsby, Jr., Pilgrim's Pride president and chief
executive officer, added.  "This acquisition will further enhance
our long-standing reputation for providing outstanding customer
service and product innovation, delivering greater value to our
stockholders, employees and other constituencies.  The integration
process is already well under way and we are committed to ensuring
a smooth transition of ownership and integration for our
customers."

As a result of the transaction, Gold Kist is now a wholly owned
subsidiary of Pilgrim's Pride.  All remaining outstanding shares
of Gold Kist have been converted into the right to receive $21 per
share in cash.

                          About Gold Kist

Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS)
-- http://www.goldkist.com/-- operates a fully integrated chicken
production, processing and marketing business.  Gold Kist's
production operations include nine divisions located in Alabama,
Florida, Georgia, North Carolina and South Carolina.

                       About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the United
States, Mexico and in Puerto Rico.  Pilgrim's Pride employs
approximately 40,000 people and has major operations in Texas,
Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina,
Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and
Puerto Rico, with other facilities in Arizona, Florida, Iowa,
Mississippi and Utah.

                           *     *     *

Moody's Investors Service's held its Ba2 Corporate Family Rating
for Pilgrim's Pride Corp.  In addition, Moody's revised or held
its probability-of-default ratings and assigned loss-given-default
ratings on the company's note issues, including an LGD6 rating on
its $100 million 9.25% Sr. Sub. Global Notes Due Nov. 15, 2013,
suggesting noteholders will experience a 95% loss in the event of
a default.

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Standard & Poor's Ratings Services reported that its 'BB'
corporate credit rating and other ratings on the second-largest
U.S. poultry processor, Pilgrim's Pride Corp., remain on
CreditWatch with negative implications, where they were originally
placed Aug. 21, 2006.


PILGRIM'S PRIDE: Plans Offering of $450 Million Unsecured Notes
---------------------------------------------------------------
Pilgrim's Pride Corporation intends to offer, subject to market
and other conditions, an aggregate of approximately $450 million
of its unsecured notes.

Pilgrim's Pride will use the net proceeds of the offering to
refinance indebtedness incurred in connection with the acquisition
of Gold Kist Inc.

A definitive agreement relating to the proposed offering of the
notes has not been entered into by Pilgrim's Pride and there can
be no assurances that the notes offering will be consummated.

If and when issued, the notes will be issued under a shelf
registration statement, which has been filed with, and declared
effective by, the Securities and Exchange Commission.

                       About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the United
States, Mexico and in Puerto Rico.  Pilgrim's Pride employs
approximately 40,000 people and has major operations in Texas,
Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina,
Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and
Puerto Rico, with other facilities in Arizona, Florida, Iowa,
Mississippi and Utah.

                           *     *     *

Moody's Investors Service's held its Ba2 Corporate Family Rating
for Pilgrim's Pride Corp.  In addition, Moody's revised or held
its probability-of-default ratings and assigned loss-given-default
ratings on the company's note issues, including an LGD6 rating on
its $100 million 9.25% Sr. Sub. Global Notes Due Nov. 15, 2013,
suggesting noteholders will experience a 95% loss in the event of
a default.

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Standard & Poor's Ratings Services reported that its 'BB'
corporate credit rating and other ratings on the second-largest
U.S. poultry processor, Pilgrim's Pride Corp., remain on
CreditWatch with negative implications, where they were originally
placed Aug. 21, 2006.


PIMA COUNTY: S&P Pares Rating on Revenue Bonds to BB from BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Pima
County Industrial Development Authority, Arizona's series 2003A
and 2006 education revenue bonds, supported by Paragon Management
Inc., to 'BB' from 'BB+'.

The outlook is negative.

The downgrade is based on the school's poor management of its
funds, which has led to a decline in cash and unrestricted net
assets and the violation of the bond covenant related to a minimum
fund balance.

The negative outlook reflects uncertainty and challenges related
to the implementation of the proposed action plan and the return
to a stable financial condition.

Fiscal 2006 results indicate an operating deficit of roughly
$475,000--mainly due to a lack of expenditure controls.  
Unrestricted net assets at the end of fiscal 2006 totaled a paltry
$7,292, which is significantly below the estimated $700,000
required by the bond covenants.  Lax expenditure controls, coupled
with a concentration of budgetary power, resulted in excessive
nonbudgeted expenditures, including the hiring of nonbudgeted
personnel and expenditures related to a possible school expansion.

The trustee, however, has agreed to waive its right to accelerate
loan payments.  As a result, there have been noteworthy changes
made to the bylaws of the school--specifically related to
financial reporting and expenditure approvals.  

In addition, the CEO, who was also chairman of the board of
directors, has resigned his position.  An action plan has been
drafted by school management and adopted by the board.  The plan
is projected to have a positive budgetary impact of roughly
$275,000 for fiscal 2007, with future savings of roughly $865,000
annually.

Should financial difficulties continue and reserve levels not
rebound to an adequate and required level, the rating could be
lowered further.  In addition, while the possible expansion of the
school to include a high school has apparently been put on hold,
the current rating reflects the uncertainty regarding the
potential expansion's size and the school's ability to increase
enrollment to a level that would produce adequate debt service
coverage related to the issuance of additional bonds--particularly
if the new expansion is situated at a separate location from its
current site.  The addition of a substantial amount of debt in a
relatively short period would pose challenges
related to facility and growth management.

For fiscal 2007, management is projecting a surplus of roughly
$260,000.  To assist with cash flow needs during the fiscal year,
however, a short-term loan has been obtained in the amount of
$600,000, payable within 18 months.


PROPEX INC: S&P Pares Corporate Credit Rating to B- from B+
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Propex
Inc., including its corporate credit rating to 'B-' from 'B+'.

The outlook is stable.

The downgrade reflects concerns that difficult operating
conditions are likely to forestall Propex's ability to
meaningfully improve its highly leveraged financial profile during
the next couple of years.  The potential for lower-than-expected
residential construction activity and the possibility for further
declines in the domestic housing markets could cause earnings and
cash flow to be weaker than previously expected.

"While Propex's liquidity position is satisfactory and supportive
of credit quality, we believe the current level of uncertainty in
operating trends raises the potential for financial covenant
violations during the next several quarters," said
Standard & Poor's credit analyst David Bird.

"We expect that Propex will successfully negotiate relief as
necessary, but ratings will be constrained until the company's
operating performance results in improved measures of credit
quality."

The ratings on Propex reflect the company's vulnerable business
position as a niche producer of primary and secondary carpet
backing and geosynthetic and industrial fibers for mature and
competitive end markets, and a highly leveraged financial profile.

Chattanooga, Tennessee-based Propex is a leading producer of
polypropylene fabrics and fibers used in primary and secondary
carpet backing, geosynthetic and industrial applications, and
concrete fiber reinforcement, with about $750 million in annual
sales and $458 million of total debt outstanding.


RAMBO IMAGING: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: Rambo Imaging, LLP
        6000 South Mopac Expressway
        Austin, TX 78749-1113

Bankruptcy Case No.: 07-10041

Chapter 11 Petition Date: January 8, 2007

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtor's Counsel: Joseph D. Martinec, Esq.
                  Martinec, Winn, Vickers & McElroy, P.C.
                  600 Congress Avenue, Suite 500
                  Austin, TX 78701
                  Tel: (512) 476-0750
                  Fax: (512) 476-0753

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's Largest Unsecured Creditor:

      Entity                        Claim Amount
      ------                        ------------
   Strasburger & Price, LLP             $238,124
   P.O. Box 849037
   Dallas, TX 75284-9037


REDPRAIRIE CORP: S&P Holds Corporate Credit Rating at B
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Waukesha, Wisconsin-based RedPrairie Corp.

The outlook is stable.

Standard & Poor's also affirmed the existing ratings on the senior
secured first-lien and second-lien bank loans, including the
$20 million term loan B added to the facility, to provide for the
acquisition of StorePerform Technologies.

The ratings on RedPrairie reflect its narrow product focus within
a highly competitive and consolidating marketplace, moderately
acquisitive growth strategy, and high debt leverage.  These are
only partly offset by a largely recurring revenue base, supported
by a broad customer base and relatively stable operating margins.

RedPrairie is a global provider of supply chain execution software
and services for warehouse, labor and transportation management
activities, coordinating interaction between manufacturers,
distributors, wholesalers and retailers.  Pro forma for the
proposed bank facilities, RedPrairie will have approximately
$215 million of operating lease-adjusted total debt.

The market for supply chain execution software is highly
fragmented, with no clear market leader.  In addition to competing
with other supply chain specialist vendors such as Manhattan
Associates, RedPrairie also competes with tier-one players such as
Oracle and SAP, each of whom possesses greater scale and broader
product breadth, in addition to being much better capitalized.  A
relatively broad and diverse customer base, along with retention
rates in the high-90% area, support revenue visibility over the
intermediate term; however, a continued focus on improving product
functionality and servicing capabilities will be a key to
RedPrairie maintaining, or improving, its competitive position
over the longer term.

"The acquisition of StorePerform Technologies bolsters
RedPrairie's presence on the front end of the supply chain
process, namely within the retail store, providing functionality
around such activities as workforce management," said Standard &
Poor's credit analyst Stephanie Crane Mergenthaler.

"RedPrairie has been acquisitive over the past few years,
growing revenues from about $70 million in 2003 to a pro forma
revenue base expected to exceed $200 million in 2006.  However,
RedPrairie's acquisitions have been less frequent than some of its
peers, and integration success is more apparent."

While the rating incorporates our expectation for continued
moderate acquisition activity in this rapidly consolidating
market, Standard & Poor's expects acquisitions to be modestly
sized over the next several quarters.

Despite a very narrow product focus and exposure to a highly
competitive and consolidating marketplace, a broad and diverse
customer base, along with relatively stable operating margins
provide ratings stability.  A revision of the outlook to negative
could follow increased acquisition activity or any shareholder
initiatives, while a revision of the outlook to positive would
likely be a function of substantial, and sustained, improvement to
the company's debt leverage profile, likely the result of
successful integration of BlueCube and continued progress in
growing the customer base.


RIGEL CORP: Court Approves $6.4 Mil. Asset Sale to WKS Restaurant
-----------------------------------------------------------------
Anthony H. Mason, the chapter 7 trustee appointed in Rigel
Corporation's bankruptcy case, obtained permission from the
U.S. Bankruptcy Court for the District of Arizona to sell 11
restaurants, free and clear of liens and encumbrances, to WKS
Restaurant Corporation for $6.4 million.

The 11 restaurants are:

    Store Name          Location                Purchase Price
    ----------          --------                --------------
    Arizona Mills       Tempe, Arizona                $862,500

    Peoria              Peoria, Arizona               $100,000

    Scottsdale          Scottsdale, Arizona           $662,500

    Avondale            Avondale, Arizona             $762,500

    El Con              Tucson, Arizona               $812,500

    Auto Mall           Tucson, California            $812,500

    Superstition        Mesa, Arizona                 $100,000

    Agua Fria           Phoenix, Arizona              $762,500

    Albuquerque         Albuquerque, New Mexico       $862,500

    Albuquerque         Albuquerque, New Mexico       $562,500

    Albuquerque         Albuquerque, New Mexico       $100,000

The assets to be sold consist of the estate's interest in certain
commercial real estate leasehold agreements, specifically all
equipment, supplies, inventory, furniture and furnishings, and all
other personal property located at each location.

Upon execution of an Asset Purchase Agreement between the trustee
and WKS, $50,000 will be paid and an additional $75,000 will be
deposited upon entry of a final order approving the sale.  The
$6.275 million will be paid at closing.

A full-text copy of the Asset Purchase Agreement is available for
free at http://ResearchArchives.com/t/s?185d

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

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


ROGERS COMMS: Moody's Lifts Corp. Family Rating to Ba1 from Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating and
Probability of Default rating of Rogers Communications Inc. as
well as the Senior Secured ratings of Rogers Cable Inc. and Rogers
Wireless Inc. to Ba1 from Ba2, and upgraded the Senior
Subordinated rating of Wireless to Ba2 from B1.  Related LGD
ratings remain unchanged.  These ratings have also been placed
under review for further possible upgrade.

This action is based upon Moody's expectation that RCI's EBITDA in
fiscal 2008 will be approximately $600 million higher than the
level expected by Moody's in 2006, and the company will generate
nearly $1.5 billion of free cash flow over the next two years, the
combination of which could reduce Debt/EBITDA to approximately 2x
should all cash flow be dedicated to debt reduction.

Moody's, however, expects the company to manage to a target
leverage ratio that is somewhat higher.  RCI is competitively very
well positioned, as it owns both the largest wireless operator as
well as the largest cable operator in the protected, oligopolistic
Canadian market, augmented by the additional diversification of a
valuable media subsidiary.  Strong growth will continue from the
wireless, cable telephony and digital video products, although
telephony video product and incumbent telephony deregulation will
both pose threats.  The risk also remains that RCI may redirect
more cash flow than expected to some combination of capital
expenditures, acquisitions, or buybacks/dividends.

The review will focus on management's intent regarding its target
capital structure and its views regarding any possible re-
leveraging of the company in the future for shareholder benefits,
a strategic acquisition or capital investment opportunities.  The
review will also consider the risks and opportunities facing the
company over the next few years as the cable and telephony
industries converge and compete with each other more vigorously in
the same product suite accompanied by reduced government
regulation.

Ratings affected by this action:

Upgraded

   *  Rogers Communications Inc.

      -- Corporate Family Rating, upgraded to Ba1 from Ba2
      -- Probablility of Default Rating, upgraded to Ba1 from Ba2

   * Rogers Wireless Inc.

      -- Senior Secured Rating, upgraded to Ba1 from Ba2
      -- Senior Subordinated Rating, upgraded to Ba2 from B1

   * Rogers Cable Inc.

      -- Senior Secured Rating, upgraded to Ba1 from Ba2

Outlook Actions:

   * Rogers Communications Inc.

      -- Changed to Rating under Review for possible upgrade,
         from Positive Outlook

   * Rogers Wireless Inc.

      -- Changed to Rating under Review for possible upgrade,
         from Positive Outlook

   * Rogers Cable Inc.

      -- Changed to Rating under Review for possible upgrade,
         from Positive Outlook

Rogers Communications Inc. is a communications company that owns
all of Rogers Cable Inc., Canada's largest cable company, Rogers
Wireless Inc., Canada's largest wireless operator, and Rogers
Media Inc., which owns radio, TV, sports and publishing assets.
All companies are headquartered in Toronto, Ontario, Canada.


RONALD JOHNSON: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Ronald W. Johnson
        P.O. Box 791
        Dillon, MT 59725

Bankruptcy Case No.: 07-60017

Chapter 11 Petition Date: January 9, 2007

Court: District of Montana (Butte)

Judge: Ralph B. Kirscher

Debtor's Counsel: Gary S. Deschenes, Esq.
                  Deschenes & Sullivan
                  P.O. Box 3466
                  Great Falls, MT 59403-3466
                  Tel: (406) 761-6112

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

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


ROYAL YACHT: Wants Buddy Ford as Bankruptcy Attorney
----------------------------------------------------
Royal Yacht Club LLC asks the U.S Bankruptcy Court for the Middle
District of Florida for permission to employ Buddy D. Ford, P.A.,
as its attorney.

Buddy Ford will:

     a) give the Debtor legal advice with respect to its powers
        and duties as Debtor and debtor-in-possession in the
        continued operation of its business and management of its    
        property; if appropriate;

     b) prepare, on the behalf of the Debtor, necessary
        applications, answers, orders, reports, complaints, and
        other legal papers and appear at hearings thereon; and

     c) perform all other legal services for the Debtor as
        debtor-in-possession which may be necessary herein, and
        it is necessary for the Debtor as debtor-in-possession to
        employ this attorney for the professional services.

The Debtor tells the Court that the firm will be employed under a
general retainer agreement of $15,000 and cost retainer of $1,039.

Buddy D. Ford, Esq., president of the firm, will bill $250 per
hour for this engagement.

To the best of the Debtor's knowledge the firm does not hold any
interest adverse to the Debtor's estate and is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Mr. Ford can be reached at:
      
     Buddy D. Ford, Esq.
     President     
     Buddy D. Ford, P.A.
     115 North MacDill Avenue
     Tampa, FL 33609
     Tel: (813) 877-4669
     Fax: (727) 733-8994
     http://www.tampaesq.com/

Headquartered in Saint Petersburg, Florida, Royal Yacht Club
LLC owns a an 86-unit condo hotel resort on the Intercoastal
waterway overlooking Clearwater Bay.  The company filed for
chapter 11 protection on Dec. 21, 2006 (Bankr. M.D. Fl. Case No.
06-07320).  Buddy D. Ford, Esq., at Buddy D. Ford, P.A.,
represents the Debtor in its restructuring efforts.  No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's bankruptcy proceedings.  When the Debtor filed for
protection from its creditors, it estimated assets of $19,175,000
and debts of $7,218,000.


ROYAL YACHT: Section 341(a) Meeting Scheduled on January 24
-----------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of Royal
Yacht Club LLC's creditors, at 1:30 p.m., on Jan. 24, 2007, at 501
E. Polk Street, Timber Annex in Room 100-B, Tampa in Florida.  
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.

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

Headquartered in Saint Petersburg, Florida, Royal Yacht Club
LLC owns a an 86-unit condo hotel resort on the Intercoastal
waterway overlooking Clearwater Bay.  The company filed for
chapter 11 protection on Dec. 21, 2006 (Bankr. M.D. Fl. Case No.
06-07320).  Buddy D. Ford, Esq., at Buddy D. Ford, P.A.,
represents the Debtor in its restructuring efforts.  No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's bankruptcy proceedings.  When the Debtor filed for
protection from its creditors, it estimated assets of $19,175,000
and debts of $7,218,000.


SANKATY HIGH: Fitch Holds Low-B Rating on $33.5 Million of Notes
----------------------------------------------------------------
Fitch affirms all classes of notes issued by Sankaty High Yield
Partners III, L.P.

These affirmations are the result of Fitch's review process and
are based on trustee information as of Nov. 30, 2006.

These rating actions are effective immediately:

   --$95,000,000 class A-1A first senior secured variable-funding
     notes affirmed at 'AAA';

   --$105,000,000 equivalent class A-1B first second senior
     secured variable-funding multi-currency notes affirmed at
     'AAA';

   --$35,000,000 class A-1C first senior secured variable-funding
     swingline notes affirmed at 'AAA';

   --$220,000,000 class A-1 first senior secured floating-rate
     notes affirmed at 'AAA';

   -- $22,500,000 second senior loans affirmed at 'AA';

   -- $14,000,000 class A-2 second senior secured floating-rate
      notes affirmed at 'AA';

   -- $29,500,000 class B third senior secured fixed-rate notes
      affirmed at 'A';

   -- $11,000,000 class B third senior secured floating-rate
      notes affirmed at 'A';

   -- $7,500,000 class C senior subordinated secured fixed-rate
      notes affirmed at 'BBB';

   -- $43,000,000 class C senior subordinated secured floating-
      rate notes affirmed at 'BBB';

   -- $3,500,000 class D subordinated secured fixed-rate notes
      affirmed at 'BB';

   -- $17,500,000 class D subordinated secured floating-rate   
      notes affirmed at 'BB'; and,
   
   -- $12,500,000 class E junior subordinated secured floating-
      rate notes affirmed at 'B'

Sankaty High Yield Partners III L.P. is structured as a market
value collateralized debt obligation, which invests the proceeds
of its note issuance in a diverse portfolio of bank loans, high
yield securities, and mezzanine and special situation investments.  
Founded in 1998, Sankaty Advisors, LLC is the credit affiliate of
Bain Capital Inc.

The ratings are based upon the asset pool, the advance rates
applicable to those assets and the credit enhancement provided to
the various rated classes of debt through subordination and
unrated equity capital.  The ratings assigned to all classes of
notes address the likelihood that the investors will receive
timely payment of interest and ultimate payment of principal.


STAGE ONE: Case Summary & 17 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Stage One, Inc.
        P.O. Box 2597
        Chattanooga, TN 37409

Bankruptcy Case No.: 06-14567

Type of Business: The Debtor provides lighting equipment services.

Chapter 11 Petition Date: December 29, 2006

Court: Eastern District of Tennessee (Chattanooga)

Judge: John C. Cook

Debtor's Counsel: Bruce C. Bailey, Esq.
                  Chambliss, Bahner and Stophel
                  Two Union Square, Suite 1000
                  Chattanooga, TN 37402
                  Tel: (423) 756-3000
                  Fax: (423) 265-9574

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

Debtor's 17 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Cornerstone Bank              Equipment and             $557,000
6401 Lee Highway, Suite B     Accounts
Chattanooga, TN 37421

Ben & Katie Jumper            Equipment                 $259,756
c/o Miller & Martin, PLLC
832 Georgia Avenue
Suite 1000
Chattanooga, TN 37402

Right Way Logistics                                      $28,000
P. O. Box 11422
Murfreesboro, TN 37129

Safeway Services, Inc.                                   $18,757
1124 Lance Road
Norfolk, VA 23502

Tip Trailer Leasing                                      $15,123
75 Remittance Drive
Suite 1333
Chicago, IL 60654

Steeldeck N.Y., Inc.                                      $7,871
143-145 Banker Street
Brooklyn, NY 11222

Ansur America                                             $7,385
1 Mutual Avenue
Frankenmuth, MI 48787

Enterprise Truck Rental                                   $6,643
209 Seaboard Lane
Franklin, TN 37067

Touring Resources                                         $6,586
P.O. Box 5510
Atlanta, GA 31107

Lesco, Inc.                                               $5,721
c/o Jeffrey L. Cleary, PLLC
801 Broad Street, Suite 503
Chattanooga, TN 37402

American Express                                          $4,976
P.O. Box 53852
Phoenix, AZ 85072

TMB                                                       $2,500
100 Asia Place
Carlstadt, NJ 07072

Tomcat Truss                                              $1,430
2160 Commerce Drive
Midland, TX 79703

Ferrellgas                                                  $824
One Liberty Plaza, MD 40
Liberty, MO 64068

Staples                                                     $410
P.O. Box 639020
Des Moines, IA 50368

Allied Waste                                                $314
1018 E. 38th Street
Chattanooga, TN 37407

Office Depot                                                 $62
c/o Certegy Payment
Recovery Services
11601 Roosevelt Blvd.
Saint Petersburg, FL 33716


STALLION OILFIELD: Moody's Places Corporate Family Rating at B2
---------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating  
and probability of default rating to Stallion Oilfield Services
Ltd.

Moody's also assigned a B3, LGD4, 63% rating to Stallion's
proposed offering of $300 million senior unsecured notes due 2015
and a Ba2, LGD1, 9% rating to its $125 million senior secured
revolver.

The outlook is stable.

Proceeds from the notes will be used to retire a term B loan and
revolver borrowings outstanding under the existing senior secured
credit facility and to fund acquisitions.  Simultaneously with the
closing of the notes offering, Stallion will amend and restate the
credit facility to increase the senior secured revolver capacity
from $70 million to $125 million.

"Stallion's B2 corporate family rating reflects the substantial
valuation and performance risks inherent in its rapid acquisition
pace during top of the cycle market conditions and resulting high
leverage, partially offset by the company's strong niche market
position," Pete Speer, Moody's Vice-President/Senior Analyst
commented.

Including the 4th quarter 2006 acquisitions and $45 million equity
contribution, Stallion had total pro forma assets of approximately
$450 million at Sept. 30, 2006, compared to much larger and better
capitalized oilfield services competitors like National Oilwell
Varco, Inc. and Superior Energy Services, Inc., and national
rental equipment companies like the equipment rental operations of
Hertz Corporation.

Moody's estimates that the book value of property, plant and
equipment is approximately $220 million and tangible net worth
will be approximately $40 million, providing limited tangible
asset cover for the notes considering the senior secured
facilities priority claim.  The book value of PP&E reflects recent
acquisition valuations and those assets would likely decline in
value in the event of a market downturn.

Stallion will have high leverage following the $300 million notes
offering on estimated pro forma EBITDA generated in strong market
conditions.  

At Sep. 30, 2006, pro forma Debt/Capitalization was 67% and pro
forma Debt/LTM EBITDA was 3.9x.  The ratings are also restrained
by Stallion's short operating history that makes it difficult to
predict how the business will perform in a downturn; its
aggressive growth strategy and the inherent challenges and risks
of integrating over ten acquisitions that have more than tripled
the company's size within the past twelve months; and the cyclical
nature of Stallion's business, which is directly linked to the
volatile U.S. onshore drilling cycle.

The ratings are supported by the strength of Stallion's market
position in the basins in which it operates, particularly its
largest business line, workforce accommodations, where the company
believes it currently has a 30% share of the overall onshore
drilling market in the United States and is more than twice as
large as its nearest competitor.

Stallion holds a dominant position in the Gulf Coast and Rocky
Mountain workforce accommodations market and is further expanding
its position in the Permian basin in a pending acquisition.  The
company has an experienced management team with a history of
successfully closing and integrating acquisitions within the
oilfield services sector.

Stallion is controlled by funds managed by Riverstone Holdings LLC
and The Carlyle Group, private equity firms with extensive energy
industry investment experience.  Carlyle/Riverstone has designated
a portion of their investment funds for additional equity
investments in Stallion to fund acquisitions, albeit at
Carlyle/Riverstone's discretion.

The stable outlook is supported by Moody's expectation that market
conditions will remain supportive but no longer as buoyant as the
past two years.  The recent decline in natural gas prices may
reduce the growth in drilling activity or even result in a
moderate decline from recent levels.  

Moody's also expects Stallion to meet its 2007 projections for
earnings and cash flows and continue to make acquisitions to
strengthen its market position or add further geographic
diversification in the U.S. in its existing service lines and to
use meaningful equity funding in large acquisitions.

A positive outlook is possible if Stallion materially increases
its scale and strengthens the durability of its business through
strategically consistent and reasonably priced acquisitions
combined with effective de-leveraging through equity funding that
lowers its Debt/EBITDA and Debt/Capitalization below 2.5x and 60%
in strong market conditions.

Ratings could be pressured if Stallion were to materially increase
its present leverage through debt funded acquisitions, aggressive
growth capital expenditures and/or distributions to equity
holders.  

Also, a significant or prolonged deterioration in onshore U.S.
drilling activity resulting from lower commodity prices  could
dramatically decrease EBITDA and cash flows for Stallion.  Under
that scenario, Stallion could possibly violate senior secured
credit facility debt covenants and face other difficulties that
could result in a negative outlook or rating downgrade.

Stallion Oilfield Services Ltd., a private company headquartered
in Houston, Texas, is a provider of wellsite support and
construction and logistic services to E&P companies and drillers
throughout the United States and offshore Gulf of Mexico.


STRUCTURED ADJUSTABLE: Fitch Junks Rating on Class B5 Certificates
------------------------------------------------------------------
Fitch Ratings has upgraded two, downgraded one and affirmed three
classes of Structured Adjustable Rate Mortgage Loan Trust
residential mortgage-backed certificates:

Series 2004-11:

   -- Class A affirmed at 'AAA';

   -- Class B1 upgraded to 'AAA' from 'AA+';

   -- Class B2 upgraded to 'AA' from 'A+';

   -- Class B3 affirmed at 'BBB';

   -- Class B4 affirmed at 'BB'; and

   -- Class B5 downgraded to 'CC/DR3' from 'B' and removed from
      Rating Watch Negative.

The affirmations on the above classes reflect adequate
relationships of credit enhancement to future loss expectations
and affect approximately $29.78 million of certificates.  The
negative rating action taken on class B5 affects $788,686 of
outstanding certificates and reflects deterioration in the
relationship between CE and expected losses.  The upgrades reflect
an improvement in the relationship between CE and future loss
expectations and affects approximately $4.88 million of
outstanding certificates.  The upgraded classes have experienced
growth of at least 3x their initial CE levels since the closing
date.

December 2006 remittance information indicates that 3.27% of the
pool is currently over 90 days delinquent of which 1.43% is
currently in REO and 1.27% in Foreclosure.  Preliminary data from
the servicer regarding expected liquidation values of the loans in
FC and REO indicate that much, if not all, of the remaining CE for
class B5 will be eliminated.  Class B5 currently has 0.47% of
credit support remaining.  Monthly losses have averaged $16,359
for the past three months.  Cumulative losses as a percent of the
original collateral balance are 0.06%.

The mortgage loans were originated by various banks and other
mortgage lending institutions.  The largest percentage of
originations were those made by Aurora Loan Services Inc.  The
mortgage loans were acquired by Lehman Brothers Holdings Inc.  The
transaction consists of adjustable rate, conventional, fully
amortizing mortgage loans, substantially all of which have
original terms to stated maturity of 30 years.  The mortgage loans
provide for an interest rate adjustment of every six-month or one-
month period, based on the six-month LIBOR index or the one-month
LIBOR index.  

Approximately 93.66% of the mortgage loans at closing provide for
interest-only payments and have an interest-only period for the
first five to 10 years after origination.  The mortgage loans are
master serviced by Aurora Loan Services, Inc., which is rated
'RMS1-' by Fitch.

SARM 2004-11 is seasoned 29 months and the pool factor is 15%.


STRUCTURED ASSET: Fitch Junks Rating on Class B4 Certificates
-------------------------------------------------------------
Fitch Ratings has taken rating actions on Structured Asset
Security Corp.'s residential mortgage-backed certificates:

Series 2005-S1:

   -- Class A2 affirmed at 'AAA';

   -- Class M1 affirmed at 'AA+';

   -- Class M2 affirmed at 'AA+';

   -- Class M3 affirmed at 'AA';

   -- Class M4 affirmed at 'A+';

   -- Class M5 affirmed at 'A';

   -- Class M6 affirmed at 'A';

   -- Class M7 affirmed at 'A-';

   -- Class M8 affirmed at 'BBB+';

   -- Class B1 affirmed at 'BBB';

   -- Class B2 affirmed at 'BBB-';

   -- Class B3 rated 'BBB-' is placed on Rating Watch Negative;
      and

   -- Class B4 downgraded to 'C/DR5' from 'CC/DR4'.

Series 2005-S2:

   -- Class A2 affirmed at 'AAA';

   -- Class M1 affirmed at 'AA+';

   -- Class M2 affirmed at 'AA';

   -- Class M3 affirmed at 'AA-';

   -- Class M4 affirmed at 'A+';

   -- Class M5 affirmed at 'A';

   -- Class M6 affirmed at 'A-';

   -- Class M7 affirmed at 'BBB+';

   -- Class M8 affirmed at 'BBB+';

   -- Class M9 affirmed at 'BBB';

   -- Class M10 affirmed at 'BBB-';

   -- Class B1 affirmed at 'BB+'; and

   -- Class B2 downgraded to 'B' from 'BB' and removed from
      Rating Watch Negative.

The affirmations reflect adequate relationships of credit
enhancement to future loss expectations and affect approximately
$320.82 million of outstanding certificates.  CE is in the form of
subordination, overcollateralization and excess spread.  The
negative rating actions, affecting approximately $21.86 million of
outstanding certificates, reflect deterioration in the
relationship between CE and expected losses.

Approximately 7.5% of the pool for series 2005-S1 is more than
60 days delinquent.  The OC amount is currently $0 or roughly
$10 million below its target amount.  In five of the past six
months, the excess spread has not been sufficient to cover the
monthly losses incurred and as a result, class B4 has defaulted.
Monthly losses have averaged $749,572 for the past three months.
Cumulative losses as a percent of the original collateral balance
are 2.3%.

For series 2005-S2, approximately 7.8% of the pool is more than 60
days delinquent.  The OC amount is currently $7,784,106, or
approx. $4.8 million below its target amount.  In four of the past
six months, the excess spread has not been sufficient to cover the
monthly losses incurred.  Monthly losses have averaged $636,205
for the past three months.  Cumulative losses as a percent of the
original collateral balance are 2.65%.

The transactions are seasoned from a range of 20 to 21  months and
the pool factors range from approximately 37% to 42%.

The mortgage pools consist of conventional, fixed rate, fully-
amortizing and balloon, second lien residential mortgage loans.
The mortgage loans were acquired by Lehman Brothers Holdings Inc.
from various banks and other mortgage lending institutions and are
master serviced by Aurora Loan Services, Inc., which is rated
'RMS1-' by Fitch.


STRUCTURED ASSET: Expected Losses Prompt Fitch's Ratings Downgrade
------------------------------------------------------------------
Fitch Ratings has taken rating actions on Structured Asset
Investment Loan Trust's residential mortgage-backed certificates:

Series 2003-BC8:

   -- Classes 2A, 3A2, 3A3, AIO affirmed at 'AAA';
   -- Class M1 affirmed at 'AA';
   -- Class M2 affirmed at 'A';
   -- Class M3 affirmed at 'A-';
   -- Class M4 downgraded to 'BBB' from 'BBB+';
   -- Class M5 downgraded to 'BB' from 'BBB'; and
   -- Class B downgraded to 'BB-' from 'BBB-'.

Series 2003-BC12:

   -- Classes 1A, 2A, 3A affirmed at 'AAA';
   -- Class M1 affirmed at 'AA';
   -- Class M2 affirmed at 'A';
   -- Class M3 affirmed at 'A-';
   -- Class M4 downgraded to 'BBB' from 'BBB+';
   -- Class M5 downgraded to 'BB+' from 'BBB';
   -- Class M6 downgraded to 'BB+' from 'BBB-'; and
   -- Class B downgraded to 'B' from 'BB'.

The affirmations reflect adequate relationships of credit
enhancement to future loss expectations and affect approximately
$297.11 million of outstanding certificates.  CE is in the form of
subordination, overcollateralization and excess spread.  The
negative rating actions, affecting approximately $28.72 million of
outstanding certificates, reflect deterioration in the
relationship between CE and expected losses due to higher than
expected delinquencies and losses as well as OC below its target
amount.

Approximately 20.8% of the pool for series 2003-BC8 is more than
60 days delinquent.  The OC amount is currently $1,827,672 below
its target amount of $5,417,847. In five of the past six months,
the excess spread has not been sufficient to cover the monthly
losses incurred.  Monthly losses have averaged $395,332 for the
past 3 months.  Cumulative losses as a percent of the original
collateral balance are 0.92%.

Approximately 17.6% of the pool for series 2003-BC12 is more than
60 days delinquent.  The OC amount is currently $2,125,396 below
its target amount of $5,337,788. For the past six months, the
excess spread has not been sufficient to cover the monthly losses
incurred.  Monthly losses have averaged $574,932 for the three
months.  Cumulative losses as a percent of the original collateral
balance are 0.96%.

Series 2003-BC8 is seasoned 40 months and the pool factor is 16%.
Series 2003-BC12 is seasoned 37 months and the pool factor is 17%.

The mortgage pools consist of fixed- and adjustable-rate, fully-
amortizing and balloon, first and second lien conventional
residential mortgage loans having an original term of no more than
30 years.  The mortgage loans were originated or acquired by
various originators or their correspondents in accordance with
such originator's respective underwriting standards and guidelines
and are master serviced by Aurora Loan Services, Inc., which is
rated 'RMS1-' by Fitch.


STT LAND: U.S. Trustee will Meet Creditors on January 31
--------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of STT Land
LLC's creditors at 2:00 p.m., on Jan. 31, 2007, at Room 1-159, 411
West Fourth Street, in Santa Ana, California.

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

Headquartered in Newport Beach, California, STT Land LLC invests
in stock and real estate property.  The Debtor filed for chapter
11 protection on Dec. 26, 2006 (Bankr. C.D. Calif. Case No. 06-
12444).  Alan J. Friedman, Esq., at Irell & Manella represents the
Debtor in its restructuring efforts.  When the Debtor filed for
bankruptcy, it listed assets of $12,829,800 and debts of
$6,386,619.


SUPERVALU INC: Earns $113 Million in Fiscal Quarter Ended Dec. 2
----------------------------------------------------------------
Supervalu Inc.'s net earnings for the third fiscal quarter ended
Dec. 2, 2006, increased to $113 million from $75 million in the
same fiscal quarter in 2005.

Operating earnings for the third fiscal quarter ended Dec. 2,
2006, were $367 million, compared with $142 million for the third
fiscal quarter ended Dec. 3, 2005.

Net sales for the quarter was $10.7 billion, compared with
$4.7 billion for the comparable quarter last year.

The company's balance sheet at Dec. 2, 2006, showed strained
liquidity with total current assets of $4.8 billion and total
current liabilities of $5 billion.  Total stockholders' equity
stood at $5.2 billion.

Jeff Noddle, chairman and chief executive officer, said, "Our
reported third quarter earnings per share of $0.54 was in line
with our guidance and represents another strong quarter as a
retail powerhouse.  

"We are seeing great progress on many fronts, including double-
digit earnings per share growth when adjusted for charges.  When
including the acquired operations, we also saw improvement in our
identical store sales in the quarter and progress in our
remodeling program.  In addition, we are pleased to announce the
fiscal 2008 capital program of approximately $1.2 billion,
supporting our commitment to invest heavily in Supervalu's retail
fleet primarily through new stores and remodels, bringing
innovative new features to many of our stores across the country."

                          Segment Results

Retail Food Segment - Third quarter retail net sales were
$8.4 billion, compared with $2.5 billion in the prior year
quarter.  The sales increase primarily reflects the acquisition of
Albertson's premier retail properties.  

Identical store sales growth on a combined basis increased 60
basis points in the third quarter.  The acquired stores identical
store sales growth in the quarter increased 1.1%.  Identical store
sales growth, for stores in existence prior to the acquisition,
was a negative 1.3%.

Reported retail operating earnings for the third quarter was
$327 million compared to $104 million last year's third quarter.

As of the end of the third quarter, the company's retail store
network of 2,499 stores includes approximately 928 combination
stores, 393 food stores, and 1,178 limited assortment grocery
stores.  Included in the total store counts are 120 fuel centers
and 856 licensed limited assortment food stores.

Supply Chain Services Segment - Third quarter net sales for supply
chain services were $2.2 billion, an increase of approximately
1.2% from last year.

Reported supply chain services operating earnings for the third
quarter were $70 million compared with $54 million in last year's
third quarter.  Reported operating earnings as a percent of sales
were 3.1% compared to 2.4% in last year's third quarter.  The
increase is primarily from contract cancellation fees related to
exited supply arrangements and sales leverage.

                            Other Items

General corporate expense for the third quarter was $30 million
compared with $16 million last year primarily reflecting pre-tax
one-time transaction costs of approximately $16 million and
$1 million pre-tax of expense from the adoption of FAS 123R
related to stock option expensing.  One-time transaction costs
primarily include retention bonuses and consultant fees.

Net interest expense for the third quarter was $183 million
compared to $23 million last year reflecting the assumption of
debt and new borrowings from the acquisition.

Total debt to capital was approximately 65% at the end of the
third quarter compared with approximately 37% at fiscal 2006 year-
end.

In the quarter, approximately 3 million shares were repurchased at
an average price of $30.82 under the company's share repurchase
programs.  As of Dec. 2, 2006, the company had 207 million shares
outstanding.

                          About Supervalu

Headquartered in Eden Prairie, Minnesota, Supervalu Inc.,
(NYSE:SVU) is a supermarket chain, with more than 2,500 stores,
including the core supermarket operations of Albertson's, Inc.,
acquired on June 2, 2006.  Supervalu also has a food distribution
business serving more than 5,000 grocery stores.

                           *     *     *

On Oct 25, 2006, Moody's Investors Service assigned a rating of B1
and a Loss-Given-Default assessment of LGD4 (60%) to Supervalu
Inc.'s $500 million senior unsecured notes.  The outlook remains
stable.


TERWIN MORTGAGE: Fitch Junks Rating on Class B-5 Certificates
-------------------------------------------------------------
Fitch Ratings has taken various rating actions on Terwin RMBS
Trust's issues:

Series 2005-5SL:

   -- Class A affirmed at 'AAA';

   -- Class M-1a affirmed at 'AA';

   -- Class M-1b affirmed at 'AA';

   -- Class M-2 affirmed at 'A';

   -- Class M-3 affirmed at 'A-';

   -- Class B-1 affirmed at 'BBB+';

   -- Class B-2 affirmed at 'BBB';

   -- Class B-3 affirmed at 'BBB-';

   -- Class B-4 affirmed at 'BB+'; and

   -- Class B-5 downgraded to 'CCC' from 'BB', assigned 'DR2' and
      removed from Rating Watch Negative.

Series 2005-7SL:

   -- Class A affirmed at 'AAA';

   -- Class M-1 affirmed at 'AA';

   -- Class M-2 affirmed at 'AA';

   -- Class M-3 affirmed at 'A+';

   -- Class B-1 affirmed at 'A';

   -- Class B-2 affirmed at 'A-';

   -- Class B-3 affirmed at 'BBB+';

   -- Class B-4 affirmed at 'BBB';

   -- Class B-5 affirmed at 'BBB-';

   -- Class B-6, rated 'BB+', placed on Rating Watch Negative;
      and

   -- Class B-7PI downgraded to 'B' from 'BB'.

The mortgage loans consist of fixed-rate subprime mortgage loans
secured entirely by second-lien mortgages on residential
properties.  The mortgage loans have various originators, which
include Ameriquest Mortgage Company and Impac Funding Corporation.  
Chase Home Finance, LLC is the master servicer and Specialized
Loan Servicing, LLC is the servicer for all of the mortgage loans.

The affirmations affect approximately $417.54 million in
outstanding certificates.  The downgrades of class B-5 of series
2005-5SL and class B-7PI of series 2005-7SL affect approximately
$23.89 million of the outstanding certificates.  Class B-6 of
series 2005-7SL is placed on Rating Watch Negative, affecting
approximately $5.85 million of the outstanding certificates.

The negative actions on the classes of the above transactions are
due to a decline in the overcollateralization amount.  The OC
deterioration is a result of losses associated with the mortgage
pools as well as a reduction in the dollar amount of excess spread
due to much faster-than-expected prepayments and rising interest
rates.  Based on the performance to date, it is expected that the
OC of these transactions will not reach their target amounts.  The
low OC balances increase the credit risk of the subordinate bonds,
as indicated by the downgrades and Rating Watch Negative status.

The OC of series 2005-5SL currently equals 0.45% of the original
collateral balance, as compared to a target level of 4% of the
original collateral balance.  Monthly losses have exceeded XS in
recent months causing the OC to decline significantly from
$6.17 million to $2.95 million.  The six-month average loss net of
XS is approximately $340,000, which would result in the depletion
of the OC within the next eight months.  The current OC of $2.95
million equates to 1.18% of the current collateral balance.  The
target OC of $26 million equates to 10.42% of the current
collateral balance.   The cumulative loss is $12.56 million or
1.93% of the original collateral balance.  The transaction is
seasoned 19 months and has a pool factor of 38%.

The OC of series 2005-7SL currently equals 1.28% of the original
collateral balance, as compared to a target level of 4% of the
original collateral balance.  Monthly losses have exceeded XS in
the last three months causing the OC to decline from $7.42 million
to $5.74 million.  The six-month average loss net of XS is
approximately $434,000, which would result in the depletion of the
OC within the next 13 months.  The current OC of $5.74 million
equates to 2.77% of the current collateral balance.  The target OC
of $18 million equates to 8.7% of the current collateral balance.  
The cumulative loss is $9.09 million or 2.02% of the original
collateral balance.  The transaction is seasoned 17 months and has
a pool factor of 46%.


TOTES ISOTONER: S&P Places Corporate Credit Rating at B
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Cincinnati, Ohio-based umbrellas, gloves,
rainwear and other weather-related accessories distributor totes
Isotoner Corp.

The rating outlook is negative.

At the same time, Standard & Poor's assigned its loan and recovery
ratings to totes' proposed secured bank financing, which consists
of a $125 million first-lien term loan due 2012 and a $65 million
second-lien term loan due 2013.  The first-lien facility is rated
'B' with a recovery rating of '2', indicating the expectation for
substantial recovery of principal in the event of a payment
default.  The second-lien loan is rated 'CCC+' with a recovery
rating of '5', indicating the expectation for negligible recovery
of principal in the event of a default.  These ratings are based
on preliminary offering statements and are subject to review upon
final documentation.

Proceeds from the proposed bank loan, along with borrowings from a
proposed $85 million asset-based revolving credit facility, will
be used by the equity sponsor, MidOcean Partners, to finance the
acquisition of totes.  

Standard & Poor's estimate that totes will have about $194 million
in total debt outstanding upon the closing of the transaction.

totes is a designer, distributor, and marketer of men's, women's,
and children's branded accessory  and apparel items.  The company
sells mainly to mass merchants, department stores, and national
chain store retailers in the U.S., Canada, and Europe.  Products
are sold under the totes, Isotoner, Raines, and ESNY brand names.
Pro forma for the acquisition of ESNY in October 2006, the
company's sales are about $317 million.

"The 'B' rating reflects totes' participation in the mature
accessories segment of the highly fragmented and competitive
apparel industry, its narrow product portfolio, the very seasonal
and weather dependence nature of its sales, customer
concentration, and a highly leveraged financial profile," said
Standard & Poor's credit analyst Susan Ding.

"These factors are somewhat mitigated by the well-known totes and
Isotoner brands.  We assign a high degree of business risk to the
apparel manufacturing industry because of intense competition, low
barriers to entry, and the commodity nature of certain items, such
as umbrellas and gloves."


TOWER AUTOMOTIVE: Equity Rights Offering Terminated
---------------------------------------------------
Tower Automotive  disclosed that on Jan. 10, 2007, investment
funds managed by Strategic Value Partners LLC, Wayzata Investment
Partners LLC and Stark Investments notified Tower that they
terminated their Dec. 19, 2006 Commitment Letter to underwrite an
equity rights offering.

Tower has received other proposals from interested investors and
continues to evaluate those proposals with the goal of completing
its restructuring process in the first half of 2007.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
(OTC Bulletin Board: TWRAQ) -- http://www.towerautomotive.com/--  
is a global designer and producer of vehicle structural components
and assemblies used by every major automotive original equipment
manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM,
Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo.  
Products include body structures and assemblies, lower vehicle
frames and structures, chassis modules and systems, and suspension
components.  The Company and 25 of its debtor-affiliates filed
voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.
Case No. 05-10576 through 05-10601).  James H.M. Sprayregen, Esq.,
Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts.  Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they listed $787,948,000 in
total assets and $1,306,949,000 in total debts.  The Debtors'
exclusive period to file a chapter 11 plan expires on Feb. 2,
2007.  Their exclusive period to solicit acceptances of that plan
expires on Mar. 30, 2007.


TRANSDIGM GROUP: Moody's Places B1 Corp. Family Rating on Review
----------------------------------------------------------------
Moody's Investors Service has placed the ratings of TransDigm,
Inc. on review for possible downgrade.

This action was prompted by the company's disclosure that it had
entered into a definitive agreement to purchase Aviation
Technologies Inc. for approximately $430 million in cash.

TransDigm expects to finance this acquisition primarily through
issuance of senior and subordinated debt.  This acquisition is
expected to close in February 2007.

The ATI transaction represents a large, levered acquisition that
could potentially increase the company's risk profile and
leverage.  By far the company's largest acquisition over recent
years, the $430 million price is approximately equal to total
expenditures on acquisitions over the last nine years and is
estimated to increase TransDigm's revenue base by about 25%.

Moody's believes that, at about 11 times pro forma trailing
EBITDA, the ATI acquisition is fully-priced, although ratios like
this have become common in the commercial aerospace sector.

Moreover, since the company plans to finance the transaction
entirely through use of additional debt, Moody's estimates that
pro forma leverage will likely exceed 5.5X, which is high relative
to the company's current B1 Corporate Family Rating.

The review will focus on the ultimate leverage that will ensue due
to the financing of this acquisition and the likelihood of rapid
and substantial de-levering through use of operating cash flows,
as well as an assessment of the strategic rationale behind the
acquisition.  The review will also take into account the structure
of the acquisition financing and the effects that it will have on
the ratings of individual debt instruments.  In addition, Moody's
will consider the risk associated with the integration of ATI's
operations relative to developments in the commercial aircraft
supplier aftermarket segment.

Headquartered in Cleveland, Ohio, TransDigm Inc. is a manufacturer
of highly engineered aerospace components to commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the U.S. Government.  The company had FY
2006 revenues of $435 million.


UNITED SURGICAL: S&P Pares Corp. Credit Rating to B+ from BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Addison, Texas-based surgical facilities owner and
operator United Surgical Partners International Inc. to 'B+' from
'BB-'.  At the same time, the rating was placed on CreditWatch
with negative implications, after the report that the company has
agreed to be acquired by UNCN Acquisition Corp., an affiliate of
Welsh, Carson, Anderson & Stowe.  

The transaction is valued at about $1.8 billion.

"We expect that the transaction will include the issuance of a
significant amount of new debt," said Standard & Poor's credit
analyst David Peknay.

"The corporate credit rating may be lowered further because we
believe the company's financial profile will be substantially
weakened."  

The existing bank debt is expected to be replaced.  The ratings on
this debt will be withdrawn at that time.

Standard & Poor's expects to review the financing plans before
resolving the CreditWatch listing.  USPI owns and operates about
140 surgical facilities.


UNION ACCEPTANCE: Court Enters Final Decree & Closes Chap. 11 Case
------------------------------------------------------------------
White River Capital, Inc. disclosed that its Union Acceptance
Company LLC subsidiary has "fully administered" its Chapter 11
plan of reorganization and the U.S. Bankruptcy Court for the
Southern District of Indiana issued a final decree and closed
UAC's Chapter 11 bankruptcy case on Jan. 5, 2007.

Mark Ruh, President and Chief Operating Officer, stated, "We are
very pleased to have UAC reach this milestone.  We achieved a
great deal during the restructuring and reorganization of UAC."

Martin Szumski, Chief Financial Officer, commented, "For as long
as the loan portfolio of UAC continues to run off, we believe we
have positioned this subsidiary to significantly contribute to the
consolidated earnings of White River."

                    About White River Capital

White River Capital, Inc. (Pink Sheets:WRVC) is the holding
company for Coastal Credit LLC and Union Acceptance Company LLC.

                        About Coastal Credit

Coastal Credit LLC is a specialized subprime auto finance company,
headquartered in Virginia Beach, Virginia, engaged primarily in
acquiring retail installment sales contracts from both franchised
and independent automobile dealers which have entered into
contracts with purchasers of used and, to a much lesser extent,
new cars and light trucks, and servicing the contract portfolio.  
Coastal Credit commenced operations in Virginia in 1987 and
conducts business in twenty one states - Alaska, Arizona,
California, Colorado, Delaware, Florida, Georgia, Hawaii, Kansas,
Louisiana, Maryland, Mississippi, Nevada, North Carolina, Ohio,
Oklahoma, Pennsylvania, Tennessee, Texas, Virginia and Washington
- through its seventeen branch locations.  The Coastal Credit
receivables portfolio, net of unearned finance charges, was
$97.0 million at September 30, 2006.

                       About Union Acceptance

Union Acceptance Company LLC is a specialized auto finance
company, based in Indianapolis, Indiana, which holds and oversees
its portfolio of approximately $84.8 million in non-prime auto
receivables, as of September 30, 2006.

Union Acceptance filed a petition for reorganization under Chapter
11 of the Bankruptcy Code in the Southern District of Indiana,
Indianapolis Division of the U.S. Bankruptcy Court on October 31,
2002 to facilitate a financial restructuring.  On August 8, 2003,
the Court confirmed UAC's Second Amended Plan of Reorganization.  
UAC emerged from bankruptcy on the effective date of the Plan,
September 8, 2003.

The confirmed Plan prescribes that available cash resources and
cash flows released over time from the retained interest be used
to repay creditors in their order of priority.  Holders of senior
and senior subordinated notes received new limited-recourse
restructured notes reflecting these rights.  For convenience,
holders of smaller unsecured claims were entitled to elect a
discounted repayment in exchange for early payout.

As reported in the Troubled Company Reporter on March 12, 2005, as
a result of the revaluation of retained interest and the
associated impact on future cash flows, UAC has estimated that
approximately $65 million of liabilities confirmed in the Plan
will not likely be paid.


UNIVERSAL BEHAVIORAL: Involuntary Chapter 11 Case Summary
---------------------------------------------------------
Alleged Debtor: Universal Behavioral Services Community Mental
                Health Center, Indianapolis, Inc.
                aka Universal Behavorial Services
                CMHC Indianapolis, Inc.
                3950 North Meridian Street
                Indianapolis, IN 46208

Case Number: 07-00186

Involuntary Petition Date: January 10, 2007

Chapter: 11

Court: Southern District of Indiana (Indianapolis)

Petitioners' Counsel: Jennifer L. Graham, Esq.
                      1111 East 54th Street, Suite 138
                      Indianapolis, IN 46220
                      Tel: (317) 257-7641
         
   Petitioners                   Nature of Claim   Claim Amount
   -----------                   ---------------   ------------
Stacia Hill                      Wages                   $4,779
11763 Kittery Drive
Fishers, IN 46037

Dan Prober                       Wages                   $4,112
920 East 62nd Street, Suite M-4
Indianapolis, IN 46220

Randy Ballinger                  Wages                   $2,540
825 Stewart Road
Anderson, IN 46012

Derek Baume                      Wages                   $3,322
961 3rd Avenue Northwest
Carmel, IN 46032

Angel Martin                     Wages                   $2,478
6713 Winnock Drive
Indianapolis, IN 46220

Carol Naylor                     Wages                   $2,455
1451 North Drexel Avenue
Indianapolis, IN 46201

Herb Troyer                      Wages                   $1,924
112 Glenwood Lane
Fishers, IN 46038

Jennifer L. Graham, Esq.         Legal Fees              $7,490
1111 East 54th Street
Suite 138
Indianapolis, IN 46220
Tel: (317) 257-7641


VAXGEN INC: James Panek Replaces Lance Gordon as President and CEO
------------------------------------------------------------------
VaxGen Inc. has restructured to significantly reduce operating
costs and is actively pursuing avenues to enhance shareholder
value through a strategic transaction.  
  
Additionally, the company announced that Lance K. Gordon, Ph.D.,
has resigned as VaxGen's president, chief executive officer, and
executive director.  He will remain as an adviser to the company.

VaxGen's Board of Directors unanimously appointed James P. Panek,
VaxGen's executive vice president, as its new president and CEO
and appointed him to fill the board vacancy left by Dr. Gordon.
  
"Lance Gordon was the architect of VaxGen's strategy to become a
leader in biodefense and to develop its now significant
capabilities in process development and GMP biopharmaceutical
manufacturing," VaxGen board chairman Randall L-W. Caudill said.

"In addition, under his leadership, VaxGen played a pivotal role
in the establishment of Celltrion, an undertaking which recently
culminated in the realization of substantial financial benefit
through the sale of VaxGen's holdings in Celltrion.  The entire
board thanks him for his contributions and wishes him the best in
his future endeavors."
  
Mr. Caudill continued: "I know I also speak for the board in
expressing our strong confidence in Jim Panek.  Jim joined VaxGen
nearly five years ago and has repeatedly demonstrated superb
leadership, a broad knowledge of biopharmaceutical drug
development, and a thorough understanding and tireless pursuit of
VaxGen's strategic objectives.  I look forward to working closely
with him as we assess our options for maximizing shareholder value
and pursue a new direction for the company."

                      Strategic Alternatives
  
VaxGen has retained Lazard to advise the company in exploring
strategic alternatives.  The process is being overseen by Mr.
Caudill, former co-head of Investment Banking for Prudential
Securities, and will entail a broad evaluation of potential M&A
opportunities.  Mr. Caudill will be joined in this effort by
Franklin M. Berger, CFA, a VaxGen director and former Managing
Director, Equity Research, and Senior Biotechnology Analyst at
J.P. Morgan Securities, Inc.
  
"In addition to the $96.6 million in cash, cash equivalents and
short-term securities that VaxGen held as of Dec. 31, 2006, the
company has a number of significant assets of potential value to
an acquirer or merger partner," Mr. Caudill said.

"We are already in early-stage discussions with several potential
strategic partners and intend to aggressively pursue our
opportunities to develop and realize the full value of all our
capabilities and assets."
  
                      51% Workforce Reduction

As a result of the restructuring, VaxGen estimates that the
company's workforce will decrease by approximately 51% and its
monthly net cash expenditures will be halved to less than
$3 million.

The company will incur a one-time cash restructuring cost of
approximately $3 million related to employee separation expenses.
The restructuring follows a decision by the Department of Health
and Human Services on Dec. 19, 2006, to cancel VaxGen's Strategic
National Stockpile contract to provide 75 million doses of its
recombinant anthrax vaccine for civilian biodefense.  VaxGen is
also pursuing remedies to eliminate the potential liability
associated with the U.S. government's termination for default of
the company's SNS contract.

VaxGen owns a recombinant protein manufacturing facility in South
San Francisco capable of producing proteins in either microbial or
mammalian cell systems.  The 1,000-liter facility is currently
used to manufacture the recombinant bulk protein antigen for
VaxGen's anthrax vaccine candidate.

As part of the restructuring plan, VaxGen has substantially
downsized its Manufacturing and Quality Assurance/Quality Control
functions, but has retained the resources needed to develop,
manufacture, test and release cGMP product at commercial scale,
albeit at a reduced throughput.  The company will also retain
capabilities necessary should it transfer its anthrax vaccine
technology.
  
"We remain confident in the eventual success of our anthrax
vaccine candidate, and believe it has substantial value to
companies with the resources and expertise to pursue its further
development," Mr. Panek said.  
  
The restructuring also preserves the functions associated with the
preparation and filing of VaxGen's outstanding financial
statements with the Securities and Exchange Commission and the
anticipated relisting of its common stock.
  
Mr. Panek has more than 25 years of experience in the
biotechnology and pharmaceutical industries.  He joined VaxGen in
February 2002 as Senior Vice President of Manufacturing Operations
and was promoted to Executive Vice President in June 2006.

Before joining VaxGen, Mr. Panek was Senior Vice President of
Product Operations at Genentech Inc.  During his tenure at
Genentech, he led the development of one of the world's largest
biotechnology manufacturing operations, and played pivotal roles
in the FDA approval and launch of recombinant products to treat
pediatric growth hormone deficiency (Nutropin(R) and Protropin(R),
heart attack (Activase(R) and TNKase(RM), non-Hodgkin's lymphoma
(Rituxan(R) and breast cancer (Herceptin(R).  

VaxGen (Pink Sheets: VXGN.PK) -- http://www.vaxgen.com/-- is a  
biopharmaceutical company based in Brisbane, California.


VESCOR DEV'T: Files Amended Disclosure Statement on Chap. 11 Plan
-----------------------------------------------------------------
Vescor Development 3 LLC and its debtor-affiliates, BDL 2 LLC and
EDL 5 LLC, delivered their first amended disclosure statement
accompanying their Joint Plan of Reorganization to the United
States Bankruptcy Court for the District of Nevada.

                        Treatment of Claims

Under the Amended Plan, the Class 1 Claims of Apex Holding Company
LLC totaling $53,800,939 will receive a $5,754,535 cure payment
and payment of actual damages established at the confirmation
hearing on the Plan.

The Class 2 Claims of Apex Utility Holding Company LLC totaling
$1,546,650 will receive $231,980 cure payment and payment of
actual damages will also be established at the confirmation
hearing on the Plan.

Class 3 Miscellaneous Secured Claims and Classes 5,6, and 7
General Unsecured Claims, if any such claims are filed, will be
paid in full with interest.

BDL 2's Sale/Leaseback Claims are entitled to a payment on the
effective date of the Plan and pursuant to the Promissory Note for
each of the four claimants.

Any default in the Intercompany Claims among the Debtors will be
cured and the claims will be reinstated.  

All equity interests in the Debtors will be retained.

                        About Vescor

Headquartered in Henderson, Nevada, Vescor Development 3 LLC is a
real estate developer.  The company and two of its affiliates
filed for chapter 11 protection on Aug. 16, 2006 (Bankr. D. Nev.
Case No. 06-12094.  Laurel E. Davis, Esq., at Lionel Sawyer &
Collins serves as the Debtors counsel.  No Official Committee of
Unsecured Creditors has been appointed in this case.  When Vescor
filed for protection from its creditors, it listed total assets of
$109,570,385 and total debts of $63,290,195.


WEEKS LANDING: Hires Gerard McHale as Chief Restructuring Officer
-----------------------------------------------------------------
Weeks Landing LLC and its debtor-affiliates obtained permission
from the U.S. Bankruptcy Court for the Middle District of Florida
in Fort Myers to employ Gerard A. McHale and the firm Gerard A.
McHale, P.A., as their chief restructuring officer.

Gerard McHale will:

   a. evaluate the liquidity needs of each of the companies and
      negotiate, if appropriate, the terms of additional DIP
      financing;

   b. evaluate each of the investment properties and assist in the
      development of a specific marketing plan with regard to
      each;

   c. negotiate with and verify the financial capacity of all
      potential buyers and transaction partners, including RCMP
      Enterprises, LLC;

   d. represent the companies in dealings and negotiations with
      creditors;

   e. advise the Debtors in managing and complying with
      requirements of the Chapter 11 case;

   f. perform financial analysis of development plans for any of
      the properties and assist the debtor in negotiating with
      lenders, securing additional financing, and meeting
      custodial and reporting requirements prospectively; and

   g. assist in the development and implementation of a
      transaction.

Mr. McHale will bill $275 per hour for his work.

In addition, if the Debtors completes a transaction via a plan of
reorganization, sale, or other transaction resulting in the full
payment to the holders of allowed administrative, priority,
secured, and general unsecured claims, Michele Pessin, the
principal of the Debtors, will also pay Mr. McHale a success fee,
if:

   1) a transaction is completed on or before April 1, 2007, the
      success fee will equal 20% of the value of any cash or non-
      cash distribution received from the equity security holders
      of the company under the transaction;

   2) a transaction is completed on or before June 1, 2007, the
      success fee will equal 15% of the value of any cash or non-
      cash distribution received from the equity security holders
      of the company under the transaction;

   3) a transaction is completed on or before Aug. 1, 2007, the
      success fee will equal 10% of the value of any cash or non-
      cash distribution received from the equity security holders
      of the company under the transaction.

To the best of the Debtor's knowledge, Mr. McHale is a
"disinterested person" as that phrase is defined in Section
101(14) of the U.S. Bankruptcy Code.

Headquartered in Bonita Springs, Florida, Weeks Landing, LLC, owns
the Weeks Fish Camp.  The Debtor and three of its affiliates filed
for chapter 11 protection on Apr. 14, 2006 (Bankr. M.D. Fla. Case
No. 06-01721).  Jordi Guso, Esq., at Berger Singerman, P.A.,
represents the Debtors in their restructuring efforts.  No
Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.  When the Debtors filed for protection from
their creditors, they estimated assets and debts between
$10 million and $50 million.


WERNER LADDER: Judge Carey Appoints Warren Smith as Fee Auditor
---------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware has appointed Warren H. Smith & Associates
P.C. as fee auditor to act as special consultant to the Court for
professional fee and expense review and analysis.

Specifically, Warren Smith will:

   (1) review quarterly interim and final fee applications filed
       with the Court;

   (2) discuss with the applicant certain questions, issues,
       or disputes concerning an Interim Fee Application within
       30 days after the later of the due date of a quarterly
       Interim Fee Application, or service on the auditor of the
       Fee Application;

   (3) file with the Court a final report for each quarterly
       Interim Fee Application within 30 days after filing an
       initial report, or 20 days after receipt of an Applicant's
       response to the Initial Report;

   (4) serve a Final Report to the affected Applicant in a
       format designed to opine whether the Applicant's proposed
       fees meet the applicable standards of Section 330; and

   (5) always be available for deposition and cross-examination
       by the Debtors, the Official Committee of Unsecured
       Creditors, the U.S. Trustee, and other interested
       parties.

Warren Smith's fees and expenses will be subject to review
pursuant to Rule 706(b), and will be paid from Werner Holding Co.
(DE) Inc. aka Werner Ladder Company and its debtor-affiliates'
estate as an administrative expense under Section 503(b)(2) of
the Bankruptcy Code.

The Court directs all applicants filing monthly and quarterly fee
applications to send to Warren Smith the Application, including
the fee detail containing the time entries, within Jan. 25, 2006.

The Order does not limit the statutory rights and obligations of
interested parties in the Debtors' cases, including the rights of
parties-in-interest to object to Monthly, Quarterly Interim, or
Final Fee Applications.

Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc.
aka Werner Ladder Co. -- http://www.wernerladder.com/--  
manufactures and distributes ladders, climbing equipment and
ladder accessories.  The company and three of its affiliates filed
for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case
No. 06-10578).  The Debtors are represented by the firm of Willkie
Farr & Gallagher LLP as lead counsel and the firm of Young,
Conaway, Stargatt & Taylor LLP as co-counsel.  Rothschild Inc. is
the Debtors' financial advisor.  The Official Committee of
Unsecured Creditors is represented by the firm of Winston & Strawn
LLP as lead counsel and the firm of Greenberg Traurig LLP as co-
counsel.  Jefferies & Company serves as the Creditor Committee's
financial advisor.  At March 31, 2006, the Debtors reported total
assets of $201,042,000 and total debts of $473,447,000.  The
Debtors's exclusive period to file a plan expires on Jan. 15,
2007.  (Werner Ladder Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


WERNER LADDER: Court Approves Mercer as Human Resources Consultant
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Werner
Holding Co. (DE) Inc., aka Werner Ladder Company, and its debtor-
affiliates permission to employ Mercer Human Resources Consulting
Inc., in connection with the review of their compensation and
benefits program in their Chapter 11 cases, nunc pro tunc to
Aug. 10, 2006.

Specifically, Mercer will:

   (a) conduct a review of the Debtors' existing compensation and
       benefits programs and assist the Debtors in developing
       revised programs;

   (b) provide expert testimony, to the extent necessary, with
       regard to compensation benefits matters;

   (c) provide other services as agreed upon by the Debtors
       and Mercer.

Mercer will be paid on an hourly basis.  The rates charged by
Mercer's personnel range from $150 to $700 per hour.

Mercer will also seek reimbursement for reasonable travel and
out-of-pocket expenses that originate with outside vendors and
legal counsel retained by Mercer.

The Debtors will indemnify Mercer from any litigation costs
associated with actual or threatened actions, proceedings or
investigations relating to or arising out of its services
provided to the Debtors, except for the firm's gross negligence,
bad faith or willful misconduct.

As reported in the Troubled Company Reporter on Oct. 3, 2006,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
asserted that one of the most critical elements of the Debtors'
ability to successfully reorganize is a proper incentive program
for their employees.

With Mercer's assistance, the Debtors will be able to conform
their compensation programs to current market trends and thereby
develop an appropriate program at a reasonable cost, Mr. Brady
said.  He noted that the Debtors have filed two motions to
continue their employee compensation programs.  After extensive
discovery and two hearings, the Debtors only were able to obtain
partial relief on their request to make payments under their
Business Optimization Bonus plan.

The Debtors believe that it is important to hire Mercer in order
to:

   (a) evaluate, develop, and revise compensation and benefits
       programs designed to meet market standards and the
       Debtors' important goal of adequately compensating
       employees;

   (b) enable them to inform parties-in-interest, including the
       Creditors Committee, of market comparables; and

   (c) provide evidence to the Court, if necessary, as to the
       reasonableness of any program.

John Dempsey, a principal with Mercer, assured the Court that the
firm is a "disinterested person" pursuant to Sections 101(14) and
1107(b) of the Bankruptcy Code.

Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc.
aka Werner Ladder Co. -- http://www.wernerladder.com/--  
manufactures and distributes ladders, climbing equipment and
ladder accessories.  The company and three of its affiliates filed
for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case
No. 06-10578).  The Debtors are represented by the firm of Willkie
Farr & Gallagher LLP as lead counsel and the firm of Young,
Conaway, Stargatt & Taylor LLP as co-counsel.  Rothschild Inc. is
the Debtors' financial advisor.  The Official Committee of
Unsecured Creditors is represented by the firm of Winston & Strawn
LLP as lead counsel and the firm of Greenberg Traurig LLP as co-
counsel.  Jefferies & Company serves as the Creditor Committee's
financial advisor.  At March 31, 2006, the Debtors reported total
assets of $201,042,000 and total debts of $473,447,000.  The
Debtors's exclusive period to file a plan expires on Jan. 15,
2007.  (Werner Ladder Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or  
215/945-7000)


* BOOK REVIEW: Working Together: 12 Principles for Achieving
               Excellence in Managing Projects, Teams, and
               Organizations
------------------------------------------------------------
Author:     James P. Lewis
Publisher:  Beard Books
Paperback:  208 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/158798279X/internetbankrupt


Henry Berry of Turnarounds & Workouts said in December 2006:
Working Together is about the passionate implementation of a set
of management principles that were instrumental in the development
of new airplanes at the Boeing Company and, in particular, the
groundbreaking Boeing 777 aircraft.

The chief engineer of the Boeing 777 program when it was
undertaken in the early 1980s was Alan Mulally.  He was soon
promoted to general manager of the project and, in 1986, was named
president of Commercial Airplanes.  Mr. Mulally remained with
Boeing for 37 years, eventually leading Boeing Commercial
Airplanes to a turnaround that began in 1996.  

And if the name sounds more than familiar, it should: in September
2006, Ford Motor Company named Mr. Mulally as its new President
and CEO, citing his record of success during his long tenure at
Boeing.  Through all of those years, Mr. Mulally made the "working
together" principles and practices his gospel.  He has been a
vocal advocate of both the principles and this book by James Lewis
even during his highly visible transition to Ford.

Working Together chronicles the application of Mulally's
leadership principles during his years at Boeing, especially
during the execution of the 777 project.  The 12 principles
espoused in "working together" comprise a management philosophy
that enabled Boeing "to dramatically increase production on all of
our airplanes, improve our entire production system, and develop a
number of new airplanes all simultaneously," as Mr. Mulally notes
in the Foreword to the book.

The value and effectiveness of working together is conveyed in a
dramatic way by the author.  Mr. Lewis introduces the high stakes
that Boeing faced in developing the 777.  At first, the company
bit off more than it could chew.  Fired by the enthusiasms and
passions of employees exemplified by Mr. Mulally, Boeing pursued
an ideal that exceeded its capacity to meet.  At one point, Boeing
had to "stop global production for lack of parts."  Boeing was
losing money, risking its future, and disappointing its customers,
investors, and employees.

But the roots of its problems were basically a lack of proper
preparedness and organization.  With Mr. Mulally in charge,
operations were revised according to the model of working
together.  Work processes were reinforced, reinvigorated, and
closely monitored.  Practices such as focused agendas for
meetings, clear assignments, communication among disparate
employee segments, solicitation of input, and keeping a project on
track, were implemented.  

Boeing underwent a transformation from a company in danger of
permanently damaging its reputation and competence, to a company
that reaffirmed its preeminence in the field of airplane design
and production.  

As he took over the reins at Ford, Mr. Mulally observed that many
of the challenges he addressed in commercial airline manufacturing
are analogous to the issues he will now face at the car
manufacturing giant.  He stated, "I'm looking forward to working
closely with Bill [Ford] in the ongoing turnaround of this great
company.  I'm also eager to begin engagement with the leadership
team.  I believe strongly in teamwork and I fully expect that our
efforts will be a productive collaboration."

James P. Lewis is President of Lewis Institute, Inc., a training
and consulting company specializing in project management, which
he founded in 1981. He also teaches seminars on the subject in the
United States, England, and Asia.

                             *********

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 2007.  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 $775 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 ***