TCR_Public/070126.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 26, 2007, Vol. 11, No. 22

                             Headlines

A PARTNERS: Scripps GSB Wants Case Converted to Chapter 7
A PARTNERS: Wants Chapter 11 Case Dismissed
ACCELLENT INC: Moody's Cuts Rating to B3 & Says Outlook is Stable
ACTUANT CORP: Acquires Injectaseal Deutschland for $13 Million
ADELPHIA COMMS: Court Directs Bondholders to Post $3 Billion Bond

ADVANCED VENDING: Hires Aurora Management as Financial Advisors
AFFILIATED COMPUTER: Earns $61.4 Million in Quarter Ended Sept. 30
AFFINION GROUP: Parent Upsize Senior Loan Facility to $350 Million
AFFINION GROUP: Planned Add-on Cues Moody's to Lift Notes' Rating
AIRTRAN HOLDINGS: Offer is Opportunistic, Says Midwest Board

AQUA SOCIETY: Amisano Hanson Expresses Going Concern Doubt
B&G FOODS: COWC to Buy Cream of Wheat & Rice Brands from Kraft
B&G FOODS: Kraft Food Deal Prompts S&P's Negative CreditWatch
BEAR STEARNS: DBRS Puts Low-B Ratings on 4 Certificate Classes
BELL MICROPRODUCTS: Preliminary Results Show Increase in Revenue

CENTEX CORP: Third Fiscal Quarter Revenues Decrease to $3.28 Bil.
CHAPARRAL ENERGY: Completes Issuance & Sale of $325 Million Notes
CHARITABLE LEADERSHIP: Moody's Holds Watch on $55MM Bonds' Rating
CKE RESTAURANTS: Increases Credit Facility by $100 Million
CKE RESTAURANTS: Credit Add-on Cues S&P to Hold BB- Credit Rating

COMM 2004-LNB3: Moody's Holds Low-B Ratings on Six Cert. Classes
COPELANDS' ENTERPRISES: Wants March 15 Admin Claim Filing Deadline
COUNTRYSIDE POWER: Confirms Cash Distribution for December 2006
CREDIT SUISSE: Moody's Holds Low-B Ratings on Class J to O Certs.
CUPOLOS SPORTS: Asset Engineering to Liquidate Entire Inventory

DELPHI CORP: Talks With Unions May Go Beyond January 31 Deadline
DELPHI CORP: Has Until July 31 to File Chapter 11 Plan
DELPHI CORP: Inks Amended Equity Purchase and Commitment Agreement
DURA AUTOMOTIVE: Court Approves AlixPartners as Financial Advisors
DURA AUTOMOTIVE: Judge Carey Okays Ernst & Young as Tax Advisors

DURA AUTOMOTIVE: Brunswick Hired as Communications Consultants
EDDIE BAUER: Reports $365 Mil. Total Sales in Qtr. Ended Dec. 30
ERICO INTERNATIONAL: S&P Withdraws Rating on Company's Request
FIRST UNION: Moody's Holds B3 Rating on $37 Million Class G Certs.
FLYI INC: U.S. Bank & QVT Want Class 7 Votes Disallowed

FORD MOTOR: 2006 Net Loss Increases to $12.75 Billion
GARY INDEPENDENT: Moody's Upgrades Rating on Outstanding Debt
GENERAL MOTORS: May Shift Responsibility of Retiree Benefits
GENERAL MOTORS: Delays Filing of 2006 4th Qtr. & Annual Reports
HUNTSMAN CORP: Unit Completes Sale of HPL to SABIC Petrochemicals

JERNBERG INDUSTRIES: Court Sets March 30 as Admin. Claims Bar Date
LAGUARDIA ASSOCIATES: U.S. Bank Files Plan for Field Hotel
MAAX CORP: Moody's Junk Ratings on $150 Million Senior Notes
MASTR ALTERNATIVE: S&P Junks Ratings on Class B-5 Transaction
MATTRESS HOLDING: S&P Rates $210 Million Credit Facilities at B

MERRILL LYNCH: Moody's Affirms B2 Rating on Class F Certificates
MESABA AVIATION: Wants to Sell $145 Million Northwest Claim
MORTGAGE ASSET: Fitch Rates Series 2005 Class M-10 Certs. at BB+
MORTGAGE ASSET: Fitch Holds Class B-5 Certificates' B Rating
NASDAQ STOCK: LSE Fails to Provide Options to Increase Liquidity

NAVISTAR INTERNATIONAL: Inks New $1.5 Billion Senior Facility
NEWCOMM WIRELESS: Hires Sonnenschein Nath as Bankruptcy Counsel
NEWCOMM WIRELESS: Hires Conde & Associates as Co-Counsel
NEWCOMM WIRELESS: U.S. Trustee Appoints Five-Member Committee
NORTEL NETWORKS: Declares Preferred Share Dividends

NORTHWEST AIRLINES: Equity Holders Want Own Committee Formed
NORTHWEST AIRLINES: Objects to AFA's Claim Nos. 11283 & 11295
NOVA CHEMICALS: Poor Performance Cues S&P to Slice Rating to B+
PGS INC: S&P Rates Proposed $280 Mil. Senior Bank Facility at BB-
PINNACLE ENT: Board Okays Increase of CEO's Salary to $1 Million

PRESIDENT CASINOS INC: Earns $10 Million in Quarter Ended Nov. 30
PROPEX INC: Asking Waiver for Possible Covenant Non-Compliance
REDPRAIRIE CORP: Narrow Product Focus Cues S&P to Affirm Ratings
REPRO MED: Nov. 30 Balance Sheet Upside-Down by $698,539
RIVIERA TOOL: Posts $362,827 Net Loss in Quarter Ended Nov. 30

SASCO ARC: S&P Cuts Rating on Class D Certificates to CCC from BB
SBARRO INC: Loan Add-on Prompts S&P to Affirm Ratings
SOLUTIA INC: Completes Upsizing $1.225 Billion DIP Financing
TEKNI-PLEX: Operating Improvements Cue Moody's Stable Outlook
TERRA CAPITAL: Moody's Rates Proposed $330 Mil. Sr. Notes at B1

TERWIN MORTGAGE: S&P Lowers Ratings on Class B-7 Certs. to CCC
TITAN INTERNATIONAL: Registers Senior Convertible Notes Due 2009
TNS INC: Rejects McDonnell Group's $16 Per Share Acquisition Offer
TNS INC: Rejected Acquisition Offer Cues S&P to Hold BB- Rating
TRANSNATIONAL AUTO: Posts $2.7 Million Net Loss in Third Quarter

USEC INC: Expects Full-year Revenue of Approximately $1.85 Billion
USEC INC: Names J. Trady Mey as Chief Accounting Officer
VALEANT PHARMA: Moody's Affirms Ba3 Rating on $300 Mil. Sr. Notes
W.R. GRACE: Judge Fitzgerald Says ZAI Poses No Unreasonable Risk
W.R. GRACE: ZAI Claimants Seek Leave to File Appeal

W.R. GRACE: Wants More Time to Respond to ZAI Claimants' Plea
WASHINGTON MUTUAL: Fitch Holds Low-B Ratings on Four Class Certs.
WAVEFORM ENERGY: Closes $4 Mil. Financing and Restructures Debt
WAVEFORM ENERGY: D. Anderson and D. Eagleton Resigns as Directors
WERNER LADDER: Evaluating $175 Million Acquisition Offer

WHOLE AUTO: S&P Raises Rating on Class D Notes to A from BB-
WHX CORP.: Dismisses PricewaterhouseCoopers as Public Accountant
WINN-DIXIE STORES: Deregisters $700 Million of Debt Securities
XEROX CORP: Total Revenue Rises to $4.4 Billion in Fourth Quarter

* Fitch Ratings Named Rating Agency of the Year by ISR

* BOOK REVIEW: Health Plan: The Practical Solution to the Soaring
               Cost of Medical Care

                             *********

A PARTNERS: Scripps GSB Wants Case Converted to Chapter 7
---------------------------------------------------------
Scripps GSB II, LLC, a creditor, asks the Honorable W. Richard Lee
of the United States Bankruptcy Court for the Eastern District of
California to convert A Partners LLC's chapter 11 case to a
chapter 7 liquidation proceeding.

Scripps GSB argues that the Debtor has violated its duties imposed
in Section 1106 of the Bankruptcy Code, specifically, it has
grossly mismanaged its estate and has failed to file accurate
reports and statements with the Court.

Scripps GSB further argues that the Debtor hasn't filed monthly
operating reports since Sept. 19, 2006.

Scripps GSB notes that although the Debtor filed its statement of
financial affairs on Feb. 17, 2006, it stated "none" in section
10A of that document.  Scripps GSB says that the Debtor failed to
disclose all transfers within two years of its bankruptcy filing,
The Debtor had transferred $239,000 to Mr. Robert Allison less
than two years prior to its chapter 11 filing.

According to Scripps GSB, converting the case will preserve
avoidable transfers that the Debtor has refused to disclose or
pursue in its chapter 11 case.  If the Court grants the
conversion, an independent trustee will be appointed to
investigate all of the Debtor's prepetition conduct and evaluate
whether the $239,000 transfer is recoverable.

The Court will convene a hearing at 10:00 a.m., on Feb. 12, 2007,
to consider the Debtor's request.

Headquartered in Fresno, California, A Partners LLC --
http://www.apartnersllc.com/and http://www.apartnersllc.com/--  
owns the Helm Building, a 10-story building with over 55,000
square feet of office space available for rent.  The Debtor
filed for chapter 11 protection on Oct. 28, 2005 (Bankr. E.D.
Calif. Case No. 05-62656).  That case was dismissed because the
Debtor failed to timely file its Schedules and Statements.

The company filed its second bankruptcy on Jan. 26, 2006 (Bankr.
E.D. Calif. Case No. 06-10069).  Estela O. Pino, Esq., at Pino &
Associates represent the Debtor in its restructuring efforts.
When the Debtor filed its second bankruptcy, it reported estimated
assets and debts between $10 million to $50 million.

A rents receiver, Hal Kisller, was appointed by the Superior Court
of California in and for the County of Fresco to operate the
Guarantee Savings Building, which houses the Debtor's fuel cells
and other energy generating equipment.  The receiver was appointed
in connection with a judicial foreclosure originally commenced
against AB Parking Facilities by Capital Source Finance, LLC.


A PARTNERS: Wants Chapter 11 Case Dismissed
-------------------------------------------
A Partners LLC asks the Honorable W. Richard Lee of the United
States Bankruptcy Court for the Eastern District of California to
dismiss its Chapter 11 case.

Estela O. Pino, Esq., at Pino & Associates, tells the Court that
Ronald Allison, the Debtor's managing member, has been working to
lease the Helm Building as part of its redevelopment.  In
addition, Mr. Allison is working towards a financing of the tenant
improvements that would be required to prepare the Helm Building
for the lease if the State of California accepts the company's
proposal to lease the second and third floors of that building
which is approximately 12,500 square feet.

Mr. Pino stresses that Mr. Allison is negotiating with several
lenders, including Protek Lending LLC, to obtain a construction
loan to finance payment to Mauldin Dorfmeier Construction Inc. and
to St. Paul Fire and Marine Insurance Company.  Mr. Allison has
also been working with the building regarding tentative
improvements and the continued redevelopment of the Helm Building.

According to Mr. Allison, the feasibility of entering into one or
more leases with the State of California will be enhanced and
obtaining new financing will be better if the Debtor is not a
debtor-in-possession.

Moreover, the ability to repay creditors, which have not already
been paid with the refinancing, will be improved.  The case
dismissal will not prejudice the remaining creditors, says Mr.
Pino.

Mr. Pino relates that the case dismissal would be conditioned on
payment of quarterly fees for the 2006 fourth quarter.  The Debtor
is current on the quarterly fees due and payable to the Office of
the U.S. Trustee through the third quarter, Mr. Pino adds.

The Court will convene a hearing at 10:00 a.m., on Feb. 12, 2007,
to consider the Debtor's request.

Headquartered in Fresno, California, A Partners LLC --
http://www.apartnersllc.com/and http://www.apartnersllc.com/--  
owns the Helm Building, a 10-story building with over 55,000
square feet of office space available for rent.  The Debtor
filed for chapter 11 protection on Oct. 28, 2005 (Bankr. E.D.
Calif. Case No. 05-62656).  That case was dismissed because the
Debtor failed to timely file its Schedules and Statements.

The company filed its second bankruptcy on Jan. 26, 2006 (Bankr.
E.D. Calif. Case No. 06-10069).  Estela O. Pino, Esq., at Pino &
Associates represent the Debtor in its restructuring efforts.
When the Debtor filed its second bankruptcy, it reported estimated
assets and debts between $10 million to $50 million.

A rents receiver, Hal Kisller, was appointed by the Superior Court
of California in and for the County of Fresco to operate the
Guarantee Savings Building, which houses the Debtor's fuel cells
and other energy generating equipment.  The receiver was appointed
in connection with a judicial foreclosure originally commenced
against AB Parking Facilities by Capital Source Finance, LLC.


ACCELLENT INC: Moody's Cuts Rating to B3 & Says Outlook is Stable
-----------------------------------------------------------------
Moody's Investors Service downgraded Accellent Inc.'s corporate
family rating to B3 from B2 and assigned a stable outlook.  There
was no change to Accellent's speculative grade liquidity rating of
SGL-3.

Moody's downgrade reflects:

   (1) lack of meaningful free cash flow generation, which has
       been significantly lower than anticipated when the B2
       rating was initially assigned;

   (2) very high financial leverage;

   (3) weaker than anticipated top-line growth due to softness in
       underlying customer markets; and,

   (4) the recent unanticipated departure of senior management.

Moody's believes that given significant capital investment needs
relative to cash flow, free cash flow will continue to be
pressured.

"Accellent has fallen short of our expectations, due in part to a
slow down in some of their end-user markets.  Given the uncertain
rate of recovery of these markets, we believe Accellent will face
ongoing challenges going forward and that a downgrade is warranted
at this time," commented Diana Lee, Moody's analyst.

The stable ratings outlook assumes the company will not engage in
any material debt-financed acquisitions.  It further favorably
reflects the general viability of Accellent's underlying business
model, which should allow the company to maintain adequate
liquidity and should not result in material deterioration in its
current cash flow or financial strength and financial policy
ratios during the near term.

Moody's took these actions:

   * Accellent Inc.

   * Ratings downgraded:

      -- Corporate family rating to B3 from B2

      -- PDR to B3 from B2

      -- Secured revolver to B1, LGD2, 29% from Ba3, LGD2, 29%

      -- Secured term loan to B1, LGD2, 29% from Ba3, LGD2, 29%

      -- Sr. subordinated notes to Caa2, LGD5, 83% from Caa1
         LGD5, 83%

Accellent Inc., headquartered in Wilmington, Massachusetts, is an
outsource manufacturer of medical products, primarily serving the
cardiology, endoscopy, and orthopedic markets.  The company
generated revenues of $487 million for the twelve months ended
Sept. 30, 2006.


ACTUANT CORP: Acquires Injectaseal Deutschland for $13 Million
--------------------------------------------------------------
Actuant Corp. has purchased the outstanding stock of Injectaseal
Deutschland GmbH for approximately $13 million in cash.  Funding
for the transaction came from the company's revolving credit
facility.

Injectaseal will operate within Hydratight, which is included in
Actuant's Industrial Segment.

"Injectaseal is a logical extension of Hydratight's joint
integrity platform" Mark Goldstein, Executive Vice President of
Actuant, stated.  "The addition of Injectaseal's leak management
and testing services will enable Hydratight to broaden its product
and service offering to existing customers worldwide.  Injectaseal
also provides Hydratight with service personnel and long standing
relationships with utilities and companies in Germany and The
Netherlands that can benefit from Hydratight's other joint
integrity products and services."

                    About Actuant Corporation

Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/--  
manufactures and markets a broad range of industrial products and
systems, organized into two business segments, Tools & Supplies
and Engineered Solutions.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 23, 2006,
Moody's Investors Service affirmed its Ba2 corporate family rating
for Actuant Corp.


ADELPHIA COMMS: Court Directs Bondholders to Post $3 Billion Bond
-----------------------------------------------------------------
In light of Adelphia Communications Corp. and its debtor-
affiliates' concerns with the stay of their First Modified Fifth
Amended Joint Chapter 11 Plan, the Honorable Shira Scheindlin of
the U.S. District Court for the Southern District of New York
directs the ACC Bondholders to post a $3,000,000,000 bond, with
10% to be posted by Jan. 25, 2007, and the remainder by
January 27.  The bond will be used to cover damages suffered by
ACOM creditors from the delay in implementing the Plan, in case if
the ACC Bondholders lose their appeal.

                  Irreparable Harm to Bondholders

In a 72-page opinion, the Judge Scheindlin ruled that the ACC
Bondholders will suffer irreparable harm in the absence of a stay.
Once the Plan will take effect and substantially
consummated, any appeal of the Confirmation Order will be
dismissed as moot, she notes.

Judge Scheindlin also grants the ACC Bondholders' request for an
expedited appeal and establishes a briefing schedule:

   (a) the ACC Bondholders' brief is due Feb. 7, 2007;

   (b) the ACOM Debtors' brief is due 14 days after the service
       of the ACC Bondholders' brief; and

   (c) the ACC Bondholders' reply brief is due seven days after
       the service of the ACOM Debtors' brief.

Judge Scheindlin states that, even assuming that the appeal is
expedited, it is very likely that full appellate review will not
be complete until September 2007 at the earliest.

                     The $1.3 Billion Bond

The ACOM Debtors enumerated a host of harms that could befall all
parties-in-interest if the Plan is stayed in the interim.
According to the ACOM Debtors, a potential harm to the non-moving
parties-in-interest is value-erosion resulting in decreased
distribution.

In response to the ACOM Debtors' motion, the ACC Bondholders
offered to post a $10,000,000 bond, Bloomberg News reported.

According to Judge Scheindlin, because of the condition of the
stay on the posting of the Bond, the potential financial harm to
the non-moving parties-in-interest does not weight against a
stay.

Judge Scheindlin finds that there are several claims on which the
ACC Bondholders have shown a substantial possibility of success
on appeal, including the claims that:

   (a) the Bankruptcy Court erroneously approved an invalid
       settlement and erroneously permitted its inclusion in the
       Plan;

   (b) the Bankruptcy Court erroneously approved an improper
       substantive consolidation and unfairly treated the
       intercompany claims;

   (c) the Plan unfairly discriminates in violation of Section
       1123(a)(4) of the Bankruptcy Code; and

   (d) the Bankruptcy Court erroneously found that the Plan was
       in the best interest of the objecting creditors.

A full-text copy of Judge Scheindlin's 72-page Opinion is
available for free at http://researcharchives.com/t/s?1911

                   About Adelphia Communications

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

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

As reported in the Troubled Company Reporter on Jan. 9, 2007, the
Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York has entered an order confirming the
first modified fifth amended joint Chapter 11 plan of
reorganization of Adelphia Communications Corporation and Certain
Affiliated Debtors.


ADVANCED VENDING: Hires Aurora Management as Financial Advisors
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee,
Southern Division, allowed Advanced Vending Systems Inc. to employ
Aurora Management Partners Inc. as its financial advisors.

Aurora Management will:

   a) analyze the Debtor's recent financial performance and
      financial condition;

   b) review the operating environment and challenges facing the
      Debtor;

   c) review overhead and spending levels and develop
      recommendations related to conservation of cash and
      borrowing capacity;

   d) evaluate the Debtor's asset values and development of
      conclusions and recommendations on a strategy to deal with
      the Debtor's near-term as well as longer-term cash needs;

   e) evaluate the liquidation values of the Debtor's assets and
      coordinate with other financial and legal advisors to
      identify assets for disposal or re-deployment;

   f) analyze the current and near-term trade and non-trade
      obligations and the Debtor's ability to deal with the cash
      flow implications of those obligations; and

   g) provide any other work items as agreed between the parties.

David Houseman, a principal at Aurora Management, will bill the
Debtor $250 per hour for his services.  Mr. Houseman discloses
that the firm's other professionals bill:

       Professional           Designation          Hourly Rate
       ------------           -----------          -----------
       Charlie A. Soule       Chairman                 $400
       Ronald H. Turcotte     Managing Partner         $400
       David M. Baker         Managing Director        $400
       William A. Barbee      Director                 $300
       David E. Houseman      Director                 $250
       P. Michael Kain        Director                 $250
       Lynn A. Huras          Consultant               $250
       Richard C. Kennedy     Consultant               $225
       John P. Leiti          Consultant               $220
       Steven R. Smerjac      Analyst                  $200

The firm will receive a $12,500 retainer.

Mr. Houseman 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 Ringgold, Georgia, Advanced Vending Systems, Inc.
-- http://www.avsvend.com/-- operates snack food vending
machines.  The Company filed for chapter 11 protection on
Aug. 7, 2006 (Bankr. E.D. Tenn. Case No. 06-12523).  Richard C
Kennedy, Esq., at Kennedy, Koontz & Farinash, and Thomas L. N.
Knight, Esq., at Grisham, Knight and Hooper, represent the Debtor
in its restructuring efforts.  No Official Committee of Unsecured
Creditors has been appointed in this case to date.  When the
Debtor filed for protection from its creditors, it estimated less
than $50,000 in assets and estimated debts between $10 million and
$50 million.


AFFILIATED COMPUTER: Earns $61.4 Million in Quarter Ended Sept. 30
------------------------------------------------------------------
Affiliated Computer Services Inc. reported $61.4 million of net
income on $1.4 billion of revenues for the first quarter ended
Sept. 30, 2006, compared with $93.4 million of net income on
$1.3 billion of revenues for the same period in 2005.

Internal revenue growth for the first quarter of fiscal year 2007
was 4% and the remainder of the revenue growth was related to
acquisitions.  Excluding revenues related to divested operations,
revenues increased $127.6 million, or 10% from the first quarter
of fiscal year 2006.

The Commercial segment, which represents 61% of consolidated
revenue for the first quarter of fiscal year 2007, increased
$75.7 million, or 10%, to $841.7 million in the first quarter of
fiscal year 2007.  Internal revenue growth was 6%.

Revenue in the Government segment, which represents 39% of
consolidated revenue for the first quarter of fiscal year 2007,
decreased $1.2 million, to $543.7 million in the first quarter of
fiscal year 2007 compared to the same period last year.  Revenue
growth from acquisitions was 9% primarily due to the Transport
Revenue acquisition completed in the second quarter of fiscal year
2006.  Excluding revenues related to divested operations, revenues
increased $51.9 million, or 10% from the first quarter of fiscal
year 2006.  Internal revenue growth was 1%.

Operating income decreased $13.3 million, or 8.7% in the first
quarter of fiscal year 2007 compared to the prior year.  Interest
expense increased $33.3 million, to $46 million primarily due to
interest expense on cash borrowed to finance the company's share
repurchase programs.  Interest expense also includes $2.6 million
in charges related to a waiver fee on the company's Credit
Facility in the first quarter of fiscal year 2007.

At Sept. 30, 2006, the company's balance sheet showed $5.6 billion
in total assets, $3.8 billion in total liabilities, and
$1.8 billion in total stockholders' equity.

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?18fb

                      Restructuring Activities

During the first quarter of fiscal year 2007, the company executed
certain restructuring activities to further support its
competitive position.  As of Sept. 30, 2006, approximately 2,000
employees have been involuntarily terminated.

                             Cash Flows

Cash flow from operations was approximately $173 million, or 12%
of revenues.  Capital expenditures and additions to intangible
assets were approximately $110 million, or 8% of revenues.

                            Acquisitions

During the first quarter of fiscal year 2007, the company acquired
Primax Recoveries Inc. for $40 million, plus contingent payments
of up to $10 million based on future performance.  Primax is one
of the oldest and largest health care recovery firms.

Subsequent to Sept. 30, 2006, the company acquired Systech
Integrators Inc. for $65 million, plus contingent payments of up
to $40 million based upon future performance.  Systech is an
information technology solutions company offering an array of SAP
software services.

                     About Affiliated Computer

Headquartered in Dallas, Texas, Affiliated Computer Services,
Inc., (NYSE: ACS) -- http://www.acs-inc.com/ -- provides business
process outsourcing and information technology solutions to
commercial and government clients.

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 29, 2006,
Standard & Poor's Ratings Services kept its ratings for Affiliated
Computer Services Inc. including the 'B+' corporate credit rating,
on CreditWatch, where they were placed with negative implications
on Sept. 29, 2006.


AFFINION GROUP: Parent Upsize Senior Loan Facility to $350 Million
------------------------------------------------------------------
Affinion Group, Inc.'s parent, Affinion Group Holdings, Inc., has
increased the size of and priced its five-year senior unsecured
term loan facility with:

   * Deutsche Bank Trust Company Americas, Bank of America, N.A.,
     and certain other banks as the initial lenders,

   * Deutsche Bank Securities Inc. and Banc of America Securities
     LLC as the joint lead arrangers and book-running managers,

   * Deutsche Bank as administrative agent, and BAS as syndication
     agent.

The principal amount of the Holdings Loan Agreement was increased
from the proposed $300 million principal amount to $350 million
principal amount.  Loans under the Holdings Loan Agreement will
initially accrue cash interest at the rate of six month LIBOR plus
6.25%, but the interest rate is subject to additional increases
over time and further increases if, in lieu of paying cash
interest, the interest is paid by adding such interest to the
principal amount of the loans.

The closing of the Holdings Loan Agreement is expected to occur on
or about Jan. 31, 2007, subject to the satisfaction of certain
conditions.

Holdings intends to use the proceeds from the Holdings Loan
Agreement to redeem approximately $106 million liquidation
preference of its preferred stock and to pay a dividend to its
stockholders.  Affinion and its subsidiaries will not be a party
to the Holdings Loan Agreement.

                         About Affinion

Headquartered in Norwalk, Connecticut, Affinion Group Inc. --
http://www.affinion.com/-- markets value-added membership,
insurance and package enhancement programs and services to
consumers, with over 30 years of experience.  Affinion currently
offers its programs and services worldwide through over 4,500
affinity partners.


AFFINION GROUP: Planned Add-on Cues Moody's to Lift Notes' Rating
-----------------------------------------------------------------
Moody's Investors Service changed Affinion Group, Inc.'s rating on
its $304 million senior unsecured notes due 2013 to B2 from B3
after the upsizing of Affinion Group Holdings, Inc. proposed
senior unsecured term loan to $350 million from $300 million.  The
remaining ratings, including the Caa1 rating on Affinion's upsized
term loan, are unchanged.

Proceeds from the upsized senior unsecured term loan will be used
to fund a one-time $241 million dividend, repurchase approximately
$92 million in Affinion preferred stock held by former owner
Cendant, and fees.  Apollo Management V, L.P. holds 97% of
Affinion's common stock.

The transaction is expected to close by January 31, 2007, subject
to customary closing conditions.

The change of Affinion Opco's rating on the $304 million senior
unsecured notes due 2013 reflect the addition of structurally
subordinated debt in the form of the proposed upsized
$350 million senior unsecured term loan issued by its parent,
Affinion.

Additionally, the Loss Given Default assessments of Affinion
Opco's senior secured revolver/term loan and senior subordinated
notes modestly improved to LGD2, 18% and LGD5, 78%, respectively,
from LGD2, 19% and LGD5, 80%.  Similarly, Affinion's proposed
senior unsecured term loan improved to LGD6, 92% from LGD6, 93%.

This rating was changed:

   * Affinion Group, Inc.

      -- $304 million senior unsecured note rating to B2,
         LGD4, 57% from B3,LGD4, 59%.

These ratings were unchanged:

   * Affinion Group, Inc.

      -- $100 million senior secured revolver rating at Ba2,
         LGD2, 18% from LGD2, 19%;

      -- $780 million senior secured term loan rating at Ba2,
         LGD2, 18% from LGD2, 19%;

      -- $355 million senior subordinated note rating at Caa1,
         LGD5, 78% from LGD5, 80%;

   * Affinion Group Holdings, Inc.

      -- $350 million senior unsecured term loan rating at Caa1
         LGD6, 92% from LGD6, 93%;

      -- B2 Probability of Default Rating;

      -- SGL-1 Speculative Grade Liquidity Rating;

      -- B2 Corporate Family Rating; and,

      -- Stable ratings outlook.

Headquartered in Norwalk, Connecticut, Affinion is a leading
direct marketer of membership, insurance and package enhancement
programs and services to consumers.  For the twelve months ended
Sept. 30, 2006, the company generated adjusted EBITDA of
approximately $273 million on revenues of approximately
$1.3 billion.


AIRTRAN HOLDINGS: Offer is Opportunistic, Says Midwest Board
------------------------------------------------------------
The board of directors of Midwest Air Group Inc., parent company
of Midwest Airlines, has unanimously recommended that Midwest's
shareholders reject AirTran Holdings Inc.'s unsolicited offer to
acquire all outstanding shares of Midwest for a combination of
$6.625 in cash and 0.5884 of a share of AirTran common stock and
not tender their shares to AirTran.

The board, with its legal and financial advisors, reached its
conclusion after careful consideration -- which included a
thorough review of the AirTran offer, the various alternatives
available to Midwest and Midwest's strategic plan.

"Our board determined that AirTran's offer is opportunistic and
undervalues Midwest," explained Timothy E. Hoeksema, chairman and
chief executive officer.  "The board believes that Midwest and its
shareholders are poised to realize the benefits of Midwest's long-
term strategic plan, and that today's earnings announcement
indicates that those efforts are driving growth for the company."

Mr. Hoeksema pointed out that the company made a series of
investments in equipment and service during the airline industry's
recent down cycle, and also noted that the industry is in recovery
mode.  The board believes the market will continue to improve and
that neither market conditions nor Midwest's growth prospects are
fully reflected in Midwest's current stock price, reinforcing the
opportunistic timing of AirTran's offer.

Midwest filed a Schedule 14D-9 with the Securities and Exchange
Commission on Jan. 25, 2007, which sets forth the reasons for the
board's recommendation and related information.  These reasons
include:

   * AirTran's unsolicited offer does not fully reflect the long-
     term value of Midwest's strategic plan, including its strong
     market position and future growth prospects.

     -- The board believes that Midwest's strong operating
        performance in 2006 provides clear evidence of the
        strength of the strategic plan.  Achievements in 2006
        include traffic growth of 21.5%, unit revenue growth of
        12.5% and yield improvement of 5.4%.  This strong revenue
        performance, combined with Midwest's successful cost-
        reduction efforts, generated a $66 million improvement in
        operating income for 2006 compared with 2005.

     -- The board noted that the performance of the price of
        Midwest shares was further evidence of the success of
        Midwest's strategy, as the stock increased by 61% in 2006
        prior to the public disclosure of the AirTran proposal.

     -- The board noted Midwest's recent initiatives will provide
        the foundation for profitable growth in 2007 and beyond.
        These include the establishment of a new regional flying
        agreement with SkyWest, the decision to put two additional
        MD-80s into service in mid-2007, and the decision to hedge
        substantially all of the unhedged balance of Midwest's
        2007 fuel requirements.

     -- The board considered Midwest's attractive near-term
        prospects, including Midwest's forecast regarding 2007
        operating performance.

   * The board believes that the timing of AirTran's offer is
     opportunistic and is disadvantageous to Midwest's
     shareholders. In particular, the board believes that:

     -- The offer is timed to take advantage of the significant
        initiatives undertaken and investments made by Midwest
        during the recent down cycle in the airline industry.  The
        board believes that industry market conditions will
        continue to improve and increasingly favor high-quality
        carriers like Midwest, and that AirTran timed the offer to
        acquire Midwest before these factors are fully reflected
        in Midwest's share price.

     -- AirTran's offer anticipates using Midwest's cash to
        finance substantially all of the cash portion of the
        offer.  As of Dec. 31, 2006, Midwest had approximately
        $158 million of cash, representing more than $6 per share.
        The cash portion of the offer is approximately
        $171 million.

     -- If the synergies AirTran claims will result from the
        proposed combination are realized as AirTran projects, the
        resulting benefit to the combined company is not reflected
        in the value of the consideration that would be received
        by Midwest's shareholders under the offer.

     -- As of Dec. 31, 2006, Midwest had approximately $23 million
        in net operating loss tax benefit.  A change in control of
        Midwest could diminish or delay the realization of this
        benefit.

   * The value of the consideration being offered by AirTran is
     uncertain and highly dependent on the value of AirTran's
     common stock.

     -- The value of the consideration to be received by Midwest
        shareholders under the offer is uncertain and will depend
        on the value of AirTran's common stock at the time of the
        consummation of the offer.  The value of the consideration
        received by Midwest shareholders will decline as the
        market price of AirTran common stock declines.

     -- In assessing the potential consideration to be received
        under the offer, the board noted the recent operating,
        financial and stock price performance of AirTran.
        Specifically, in the fourth quarter of 2006 AirTran's load
        factor declined by 2.5 percentage points to 69% compared
        with the fourth quarter of 2005, while unit revenues are
        estimated to have declined by 7%.  AirTran expects to
        report a loss in the fourth quarter of 2006,
        notwithstanding the overall improvement in the airline
        sector revenue and fuel cost environment during the past
        year.  Finally, during the past 12 months, AirTran's stock
        price has declined by 28% compared with an increase in
        Midwest's stock price of 167% and an increase in an index
        of network carrier stock prices (which consists of AMR
        Corp., UAL Corp., Alaska Airlines, Continental Airlines
        and US Airways) of approximately 65%.

     -- The board also took note of the comments made by Joe
        Leonard, AirTran's chairman and chief executive officer,
        during his conversation with Mr. Hoeksema on Oct. 11,
        2006, during which Mr. Leonard expressed concerns
        regarding AirTran's business and investor beliefs about
        AirTran's uncertain prospects and the impact of those
        concerns on the future value of AirTran's common stock.

   * Under Wisconsin law and Midwest's Articles of Incorporation,
     the board is authorized to consider the interests of
     stakeholders of Midwest other than its shareholders --
     including employees, suppliers, customers and the communities
     in which it operates -- when considering an offer of this
     type.

     -- The board believes that the lack of a clear plan by
        AirTran to serve the interests of constituencies other
        than shareholders creates uncertainty about how such
        interests would actually be served by the combined
        company.

The board believes that AirTran's offer is inadequate because it
does not fully reflect the long-term value of Midwest's strategic
plan, and recommends that Midwest shareholders reject AirTran's
offer and not tender their shares to AirTran.

Goldman, Sachs & Co. is acting as financial advisor, Godfrey &
Kahn, S.C. and Sidley Austin LLC are acting as legal advisors, and
MacKenzie Partners are acting as proxy advisors to Midwest.

                         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 Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its ratings on AirTran
Holdings Inc. and its primary operating subsidiary, AirTran
Airways Inc., including the 'B-' corporate credit rating on
AirTran Holdings.

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.


AQUA SOCIETY: Amisano Hanson Expresses Going Concern Doubt
----------------------------------------------------------
Amisano Hanson, Chartered Accountants in Vancouver, Canada,
expressed substantial doubt about Aqua Society Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the fiscal years ended
Sept. 30, 2006, and 2005.  The auditing firm pointed to the
company's need to raise capital from stockholders or other sources
to sustain operations.

At Sept. 30, 2006, the company's balance sheet showed $1,113,790
in total assets and $2,914,370 in total liabilities, resulting in
a $1,800,580 stockholders' deficit.  The company had $463,306 in
stockholder's equity at Sept. 30, 2005.

The company's Sept. 30 balance sheet also showed strained
liquidity with $854,960 in total current assets available to
pay $2.9 million in total liabilities.

For the 12-month period ended Sept 2006, the company recorded
$4,576,214 net loss on $2,203,763 of sales, compared with
$25,697,964 net loss on $896,535 of sales for the same period in
2005.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1901

                      Management Agreements

The company entered on Dec. 28, 2006, into management consulting
services agreements with Robert Terberg, the company's current
chief executive officer, president, chief financial officer,
treasurer, secretary, and director; and Hugo van der Zee, the
company's current chairman of the board.

Mr. Terberg will be paid a consulting fee of EUR10,000
(approximately $12,700) per month from Jan. 1, 2007, to Sept. 30,
2007.

Mr. Terberg will also be paid a lump sum of EUR40,000
(approximately $50,800) as consideration for services he provided
from Oct. 1, 2006, to Dec. 31, 2006.

The company will pay Mr. van der Zee a consulting fee of EUR4,000
(approximately $5,000) per month for the period from Jan. 1, 2007,
to Sept. 30, 2007.

The company will also pay Mr. van der Zee a lump sum of EUR16,000
(approximately $20,300) as consideration for services he provided
from Oct. 1, 2006, to Dec. 31, 2006.

Headquartered in Herten, Germany, Aqua Society Inc., designs and
develops applied technologies and provides consulting services
in the areas of heating, ventilation, air conditioning,
refrigeration, water purification, waste water treatment, and
energy.


B&G FOODS: COWC to Buy Cream of Wheat & Rice Brands from Kraft
--------------------------------------------------------------
B&G Foods, Inc. disclosed that on Jan. 22, 2007, along with its
newly-formed, indirect, wholly owned subsidiary COWC Acquisition
Corp., it entered into an asset purchase agreement with Kraft
Foods Global, Inc.

Pursuant to the terms of the asset purchase agreement, COWC has
agreed to purchase certain assets, including the  Cream of Wheat
and Cream of Rice brands, from Kraft Foods for a purchase price of
$200 million in cash, subject to a post-closing adjustment based
upon inventory of the business at closing.  B&G Foods has provided
to Kraft Foods a guarantee of COWC's obligations under the asset
purchase agreement.

The asset purchase agreement contains customary representations,
warranties, covenants and indemnification provisions.  Subject to
regulatory approval and the satisfaction of customary closing
conditions set forth in the asset purchase agreement, B&G Foods
expects the acquisition of the Cream of Wheat and Cream of Rice
brands to close in the first quarter of fiscal 2007.

B&G Foods expects to fund the acquisition with additional debt,
and in order to complete the acquisition, B&G Foods has received
financing commitments for senior secured debt financing from
Lehman Brothers Inc. and Credit Suisse in an amount sufficient to
fund the purchase price.  Fees and expenses related to the
acquisition and financing, which are not expected to exceed
$5 million, will be paid by B&G Foods from cash on hand.

A full-text copy of the Asset Purchase Agreement, dated as of
Jan. 22, 2007, among COWC Acquisition Corp., B&G Foods, Inc. and
Kraft Foods Global, Inc., is available for free at:

                 http://ResearchArchives.com/t/s?1906

                       About Kraft Foods

Kraft Foods (NYSE:KFT) -- http://www.kraft.com/-- is one of the
world's largest food and beverage companies.   Kraft Foods markets
many of the world's leading food brands, including Kraft cheeses,
dinners and dressings; Oscar Mayer meats, DiGiorno pizzas, Oreo
cookies, Ritz crackers and chips, Philadelphia cream cheese, Milka
and Cote d'Or chocolates, Planters nuts, Honey Bunches of Oats
cereals, Jacobs, Gevalia and Maxwell House coffees; Capri Sun,
Crystal Light and Tang refreshment beverages; and a growing range
of South Beach Diet and better-for-you Sensible Solution options.

                        About B&G Foods

B&G Foods (AMEX: BGF) -- http://www.bgfoods.com/-- and its
subsidiaries manufacture, sell and distribute a diversified
portfolio of high-quality, shelf-stable foods across the United
States, Canada and Puerto Rico.  B&G Foods' products include jams,
jellies and fruit spreads, canned meats and beans, spices,
seasonings, marinades, hot sauces, wine vinegar, maple syrup,
molasses, salad dressings, Mexican-style sauces, taco shells and
kits, salsas, pickles and peppers and other specialty food
products.  B&G Foods competes in the retail grocery, food service,
specialty store, private label, club and mass merchandiser
channels of distribution.  Based in Parsippany, New Jersey, B&G
Foods' products are marketed under many recognized brands,
including Ac'cent, B&G, B&M, Brer Rabbit, Emeril's, Grandma's
Molasses, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont,
Ortega, Polaner, Red Devil, Regina, San Del, Ac'cent Sa-Son,
Trappey's, Underwood, Vermont Maid and Wright's.


B&G FOODS: Kraft Food Deal Prompts S&P's Negative CreditWatch
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its existing 'B'
corporate credit rating on Parsippany, New Jersey-based B&G Foods
Holding Corp.  S&P's 'BB-' loan and '1' recovery ratings, and the
'CCC+' subordinated debt rating on the company were also
affirmed.

At the same time, S&P's senior unsecured debt rating for B&G was
placed on CreditWatch with negative implications comes after the
company's report that it has entered into an agreement to acquire
the Cream of Wheat and Cream of Rice hot cereal brands from Kraft
Food Global, Inc., for approximately $200 million and expectations
that the transaction will be financed with senior secured bank
debt.

"The CreditWatch placement reflects the likelihood that the
senior unsecured debt rating could be lowered up to two notches as
a result of an increase in priority obligations," said Standard &
Poor's credit analyst Christopher Johnson.

Accordingly, Standard & Poor's has also placed its preliminary
senior unsecured shelf debt rating on CreditWatch with negative
implications for the same reasons.

The affirmation of B&G's existing corporate credit rating reflects
Standard & Poor's belief that the acquisition is consistent with
the company's existing financial profile. However, following this
transaction, B&G will have limited capacity at the current ratings
for additional moderate to large size acquisitions.

The outlook remains negative.

The ratings on B&G continue to reflect its high debt levels
resulting from the company's acquisitive growth strategy and its
enhanced income securities capital structure.

B&G is a manufacturer, marketer, and distributor of a diversified
portfolio of food products, including branded pickles, peppers,
taco shells, salsa, hot sauces, maple syrup, salad dressing, and
other specialty food products.  B&G's acquisition strategy
includes buying solid yet small niche brands that possess either
No. 1 or No. 2 positions within their categories.

Since 1998, the company has spent more than $410 million on mostly
debt-financed acquisitions.  Most recently, the January 2006
acquisition of Grandma's Molasses bolstered the company's existing
molasses business.


BEAR STEARNS: DBRS Puts Low-B Ratings on 4 Certificate Classes
--------------------------------------------------------------
Dominion Bond Rating Service assigned these ratings to the NIM
Notes, Series 2007-N1-IV and 2007-N1-V issued by Bear Stearns
Structured Products Inc. NIM Trust 2007-N1.

   -- $15 million Class IV-A-1 rated at A (low)
   -- $4.1 million Class IV-A-2 rated at BBB (low)
   -- $1.6 million Class IV-A-3 rated at BB (high)
   -- $7.9 million Class IV-A-4 rated at B
   -- $7.5 million Class V-A-1 rated at A (low)
   -- $1.7 million Class V-A-2 rated at BBB (low)
   -- $0.64 million Class V-A-3 rated at BB (high)
   -- $3.4 million Class V-A-4 rated at B

The NIM Notes, Series 2007-N1-IV and NIM Notes, Series 2007-N1-V
are backed by 100% interest in the Class C Certificates issued
by the underlying BSMF Trust 2006-SL6 and SACO 1 Trust 2007-1,
respectively.  The underlying Class C Certificates will be
entitled to receive the excess cash flows and prepayment charges,
if any, generated by the mortgage loans each month after payment
of all the required distributions.  The NIM Notes, Series
2007-N1-IV and NIM Notes, Series 2007-N1-V will also be entitled
to the benefits of underlying swap agreements with Bear Stearns
Financial Products Inc.

Payments on the NIM Series 2007-N1-IV Notes will be made on the
first business day after the distribution date of the underlying
certificates, commencing in January 2007.  Payments on the NIM
Notes, Series 2007-N1-V will be made on the second business day
after the distribution date of the underlying certificates,
commencing in January 2007.

In the case of NIM Notes, Series 2007-N1-IV, the distribution of
interest will be made sequentially to noteholders of Classes
IV-A-1 through IV-A-3.  Principal will be made sequentially to
noteholders of Classes IV-A-1 through IV-A-4 until the principal
balance of each such class has been paid to zero.  Any remaining
amounts will be paid in full to the holders of the Class IV-C
Notes issued by the NIM Trust.

In the case of NIM Notes, Series 2007-N1-V, the distribution
of interest and principal will also be made sequentially to
noteholders of Classes V-A-1 through V-A-4 until the principal
balance of each such class has been paid to zero.  Any remaining
amounts will be paid in full to the noteholders of the Class V-C
issued by the NIM Trust.

The Classes I-C, II-C, III-C, IV-C, V-C, VI-C, VII-C, and VIII-C
Notes, as well as the NIM Notes, Series 2007-N1-I, NIM Notes,
Series 2007-N1-II, NIM Notes, Series 2007-N1-III, NIM Notes,
Series 2006-24-VI, NIM Notes, Series 2007-N1-VII, and NIM Notes,
Series 2007-N1-VIII, are not rated by DBRS.

Approximately 78.83% of the mortgage loans in the BSMF Trust
2006-SL6 were purchased by EMC Mortgage Corporation from various
originators through the conduit correspondent channel and the
remaining 21.17% were originated by Bear Stearns Residential
Mortgage Corporation.  The loans from the BSMF Trust 2006-SL6 are
fixed-rate, second-lien mortgage loans, which are subordinate to
the senior-lien mortgage loans on the respective properties.

The mortgage loans in the SACO I Trust 2007-1 were primarily
originated by SouthStar Funding, LLC, Opteum Financial Services,
LLC, and HomeBanc Mortgage Corp.  The loans from the SACO I Trust
2007-1 trust are also fixed-rate, second-lien mortgage loans,
which are subordinate to the senior-lien mortgage loans on the
respective properties.


BELL MICROPRODUCTS: Preliminary Results Show Increase in Revenue
----------------------------------------------------------------
Bell Microproducts Inc. disclosed preliminary fourth quarter 2006
revenue range of $1.0 billion to $1.015 billion, an increase of
approximately 20% over the $842 million reported in the fourth
quarter of 2005, and 28% as compared to third quarter of 2006.

These preliminary results exceeded management's previous fourth
quarter 2006 guidance of $920 million to $970 million.

Sales for the full year 2006 are expected to be in excess of
$3.4 billion, up approximately 8% over 2005.

"We are pleased with our strong revenue growth this quarter. Our
European operations performed strongly this quarter with revenues
for the combined European group increasing approximately 21%
compared with the fourth quarter of 2005," W. Donald Bell,
President and Chief Executive Officer of Bell Microproducts said.
"In the Americas we had substantial revenue growth in our higher
margin Industrial sales channel, Canada, and our Latin America
group, as well as in our Total Tec and Rorke enterprise units.
This was partially offset by revenue decreases in our US
Commercial sales channel as we continue to focus on more
profitable products and customers.  Our recent strategic
acquisition of ProSys Information Systems generated revenue
consistent with expectations for the quarter.  Furthermore, based
on preliminary information, gross margins from operations were
generally in line with expectations.  As we enter 2007, we believe
we are strategically positioned for continued growth going
forward."

The Solutions category of product and services sales were 52% of
sales in the fourth quarter, as compared to 52% in fourth quarter
2005, and 50% for the full year due to strong sales in this
category.  Solution sales grew by 21% as compared to fourth
quarter 2005.

The Components and Peripherals product segment also experienced
strong growth in fourth quarter and the year.  Components and
Peripherals were 48% of sales in fourth quarter 2006, as compared
to 48% in fourth quarter 2005 and 50% for the full year.
Components and Peripheral sales grew, by 20% in fourth quarter as
compared to fourth quarter 2005.  Disk drive revenue was also
strong during the quarter, increasing 35% from fourth quarter of
last year, and representing 31% of sales in the quarter.  Disk
drive sales increased 20% for the 2006 full year as compared to
2005 and were 30% of sales for the full year.

                        Restatement Update

The company is unable at this time to provide additional
quantitative information regarding its quarterly results or any
further comparison of such results to fourth quarter 2005 until
the restatement of its financial statements for certain prior
periods and the review of its historical stock option grants has
been completed.

A special committee of the board of directors has been appointed
to conduct an evaluation of the company's stock option practices
with the assistance of independent counsel and independent
accounting consultants.  The company expects that accounting
adjustments may be necessary but is unable to quantify the
magnitude of any such charges until the independent review is
completed.

                   About Bell Microproducts

Headquartered in San Jose, California, Bell Microproducts Inc.
(Nasdaq: BELM) -- http://www.bellmicro.com/-- is an
international, value-added distributor of high-tech products,
solutions and services, including storage systems, servers,
software, computer components and peripherals, as well as
maintenance and professional services.  Bell is a Fortune 1000
company that has operations in Argentina, Brazil, Chile and
Mexico.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 3, 2007,
Holders of $109,475,000 aggregate principal amount of the
outstanding 3-3/4% Convertible Subordinated Notes have consented
to a waiver of defaults arising from the failure to file all
reports and other information and documents which it is required
to file with the SEC and the trustee.

Further, these holders have agreed to amend the indenture to
eliminate any provision that would trigger a default for the
failure to file or deliver any reports required to be filed with
the SEC or the trustee, and to add a provision for a special
interest payment to holders of Notes if an eligible tender offer
for the outstanding Notes is not completed prior to Feb. 1, 2007.


CENTEX CORP: Third Fiscal Quarter Revenues Decrease to $3.28 Bil.
-----------------------------------------------------------------
Centex Corporation has reported financial results for its third
fiscal quarter ended Dec. 31, 2006.

Highlights include:

   -- Total revenues decreased 7% to $3.28 billion,
   -- Home closings decreased 12% to 8,360,
   -- Housing gross margin decreased 990 bp to 19.7%,
   -- Unit backlog declined 32% on a decrease in orders of 24%.

"This was certainly a challenging quarter.  But our aggressiveness
in responding to the current housing environment is showing
positive tangible results in our operations," Centex Corporation
chairman and chief executive officer Tim Eller said.

"In the quarter we produced positive cash flow while making
reductions in lots owned and controlled.  Moving forward, we're
focused on generating cash, reducing costs and strengthening our
balance sheet so we are well positioned when market conditions
improve."

                           Home Building

Fiscal 2007's third quarter revenues were $2.59 billion, 14% lower
than the same quarter last year.  Home building reported an
operating loss of $292 million for the quarter, after the write
off of $138 million of option deposits and land pre-acquisition
costs and $297 million of land valuation adjustments, including
$97 million from joint ventures.

Housing operating earnings (housing revenues less housing cost of
sales and SG&A) were $76 million, driven lower by a 12% decrease
in closings to 8,360 homes and increased sales incentives. The
margin from housing operations was 3.0% in this year's third
quarter.  The home building-operating margin for the quarter, as
reported, was a negative 11.3%, primarily a result of the land
valuation adjustments.

For the current nine months, revenues were $7.90 billion, 5% lower
than the same period last year.  Reported home building operating
earnings were $114 million for the nine-month period this year,
91% below the year-ago period.

                        Financial Services

Operating earnings from Financial Services totaled $16 million for
the third quarter of fiscal 2007, 21% lower than the same quarter
a year ago.

CTX Mortgage originated loans for 80% of Centex Homes' buyers
during the third quarter, up 5 percentage points versus last
year's third quarter.

Centex's Financial Services operations provide Centex homebuyers
with a streamlined home closing and settlement process, key to
ensuring customer satisfaction and quality.

                       Construction Services

Operating earnings from Construction Services were $11 million for
the third quarter this year, resulting in an operating margin of
1.8%, up 20 basis points from last year's third quarter.

New contracts for the quarter were approximately $585 million, up
5% from last year's third quarter, increasing the backlog of
uncompleted construction contracts at Dec. 31, 2006, to
$2.94 billion.

                              Outlook

Taking into consideration its current backlog and the uncertainty
of the current housing market conditions, Centex's full fiscal
year 2007 earnings guidance is now approximately $0.25 per fully
diluted share from continuing operations.

This guidance is inclusive of about $3.50 per share of land
inventory adjustments and option walk-away costs as well as an
approximately $0.50 per share increase in the company's tax
reserve.

Centex's guidance for its fourth fiscal quarter ending March 31,
2007, is for approximately break-even earnings from continuing
operations.  This guidance includes an estimate that there will be
approximately $0.65 per share of option walk-away costs.

Headquartered in Dallas, Texas, Centex Corp. (NYSE: CTX) --
http://www.centex.com/-- is a home building company that operates
in major U.S. markets in 25 states.  In addition to its home
building operations, the Company's related business lines include
mortgage and financial services, home services and commercial
construction.

                           *     *     *

Centex Corp.'s preferred stock carries Moody's Investors Service's
Ba1 rating.


CHAPARRAL ENERGY: Completes Issuance & Sale of $325 Million Notes
-----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Chaparral Energy, Inc. completed the issuance and sale
of $325 million aggregate principal amount of its Notes.

The Notes were issued pursuant to an indenture, dated as of
Jan. 18, 2007, by and among the company, the guarantors party and
Wells Fargo Bank, National Association, as trustee.

The Notes are guaranteed on a senior basis by certain of the
company's subsidiaries who are Guarantors.  The Notes and the
Guarantees were offered and sold in private transactions in
accordance with Rule 144A and Regulation S under the Securities
Act of 1933, as amended.  The Notes and the Guarantees have not
been registered under the Securities Act 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.

The company intends to use net proceeds from the sale of the Notes
to reduce outstanding indebtedness under its senior secured credit
facility.  The company relates that it may reborrow under this
credit facility, subject to its borrowing base, to fund future
capital expenditures (including acquisitions) and for general
working capital purposes.

A full-text copy of the Indenture dated Jan. 18, 2007, among
Chaparral Energy, Inc., the guarantors party, and Wells Fargo
Bank, National Association, as trustee, is available for free at:

             http://ResearchArchives.com/t/s?18fc

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.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 12, 2007,
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.

As reported in the Troubled Company Reporter on Jan. 12, 2007,
Moody's Investors Service downgraded 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%.


CHARITABLE LEADERSHIP: Moody's Holds Watch on $55MM Bonds' Rating
-----------------------------------------------------------------
Moody's Investors Service is maintaining the rating of Charitable
Leadership Foundation's $55 million of Series 2002A bonds on
watchlist for downgrade.  The bonds are currently rated Ba2.

The bonds were issued through the City of Albany Industrial
Development Agency in order to finance construction of a
biomedical research facility.

Moody's expects to conclude its next review of the rating within
the next few weeks.

Rated Debt:

   * Series 2002A Civic Facility Revenue Bonds: Ba2, on watchlist
     for downgrade


CKE RESTAURANTS: Increases Credit Facility by $100 Million
----------------------------------------------------------
CKE Restaurants, Inc., amended its credit facility, increasing the
aggregate amount that the company is permitted to expend for stock
repurchases and dividend payments by $130 million, and increasing
the total amount available to the Company for revolving loans
under the credit facility by $100 million to $250 million.

The Company also said that, as a result of the increased capacity
for stock repurchases under the credit facility, its Board of
Directors has authorized a further expansion of its stock
repurchase program, raising the company's repurchase authority
under its stock repurchase program by an additional $50 million,
for a new limit of $200 million.

The company's stock repurchase program was initially put into
effect on Apr. 13, 2004, with a limit of $20 million, which the
Board increased to $50 million on July 24, 2006, to $100 million
on Oct. 11, 2006 and to $150 million on Jan. 10, 2007.  The
company has currently utilized approximately $90.2 million under
this program, leaving a balance available for future repurchases
of approximately $109.8 million.

Repurchases may be made from time to time by the Company pursuant
to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended,
in the open market or in privately negotiated transactions in
compliance with Securities and Exchange Commission guidelines.

"The increase to our revolving credit facility and in the basket
size for share repurchases is clear evidence of our lenders'
continued confidence in our overall financial position. It also
demonstrates their support as we expand and execute on our stock
repurchase program," stated Andrew F. Puzder, the Company's
president and chief executive officer.  "We continue to believe
that the repurchase of our shares represents an attractive
investment opportunity.  The expanded capacity for repurchases
under both our credit facility and our stock repurchase program
allows us to take advantage of repurchase opportunities as they
present themselves."

Headquartered in Carpinteria, California, CKE Restaurants Inc.
(NYSE: CKR) -- http://www.ckr.com-- through its subsidiaries,
franchisees and licensees, operates some of the most popular U.S.
regional brands in quick-service and fast-casual dining, including
the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R)
and Green Burrito(R) restaurant brands.  The CKE system includes
more than 3,200 locations in 43 states and in 13 countries.


CKE RESTAURANTS: Credit Add-on Cues S&P to Hold BB- Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on CKE Restaurants Inc.'s senior secured first-lien bank
facility, following the disclosure that the company will add
$100 million to its $150 million revolving credit facility.

Pro forma for the add-on, the facility will consist of a
$250 million revolver due in 2007 and $70 million first-lien term
loan due to 2010.

The secured loan is rated 'BB' and the recovery rating is '1',
indicating the expectation for full recovery of principal in the
event of a payment default.

The loans are secured by all the assets of CKE's subsidiaries.

Although the revolver has increased by $100 million, the term loan
has decreased from $230 million in 2005 to $70 million.

Ratings List

   * CKE Restaurants Inc.

      -- Corporate credit rating, BB-, Stable
      -- Senior secured debt, BB


COMM 2004-LNB3: Moody's Holds Low-B Ratings on Six Cert. Classes
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 20 classes of
COMM 2004-LNB3, Commercial Mortgage Pass-Through Certificates:

   -- Class A-1, $22,698,085, Fixed, affirmed at Aaa
   -- Class A-2, $97,029,000, Fixed, affirmed at Aaa
   -- Class A-3, $104,606,000, Net WAC Cap, affirmed at Aaa
   -- Class A-4, $114,956,000, Net WAC Cap, affirmed at Aaa
   -- Class A-5, $502,796,000, WAC, affirmed at Aaa
   -- Class A-1A, $258,548,488, Net WAC Cap, affirmed at Aaa
   -- Class X, Notional, affirmed at Aaa
   -- Class B, $40,063,000, WAC, affirmed at Aa2
   -- Class C, $16,692,000, WAC, affirmed at Aa3
   -- Class D, $28,378,000, WAC, affirmed at A2
   -- Class E, $25,039,000, WAC, affirmed at A3
   -- Class F, $15,023,000, WAC, affirmed at Baa1
   -- Class G, $13,354,000, WAC, affirmed at Baa2
   -- Class H, $11,685,000, WAC, affirmed at Baa3
   -- Class J, $11,685,000, Net WAC Cap, affirmed at Ba1
   -- Class K, $6,677,000, Net WAC Cap, affirmed at Ba2
   -- Class L, $3,339,000, Net WAC Cap, affirmed at Ba3
   -- Class M, $5,008,000, Net WAC Cap, affirmed at B1
   -- Class N, $5,007,000, Net WAC Cap, affirmed at B2
   -- Class O, $5,008,000, Net WAC Cap, affirmed at B3

As of the Jan. 10, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 2.3%
to $1.30 billion from $1.34 billion at securitization.  The
Certificates are collateralized by 96 mortgage loans ranging in
size from less than 1% to 10% of the pool with the top 10 loans
representing 54.2% of the pool.  The pool includes five shadow
rated loans, representing 31% of the pool.  Twenty two loans,
representing 10% of the current outstanding pool balance, have
defeased and are collateralized by U.S. Government securities.

The trust has not experienced any realized losses since
securitization.  Currently two loans representing less than 1% of
the pool are in special servicing.  Moody's is projecting minimal
losses from these loans.  Thirty five loans, representing 21.3% of
the pool, are on the master servicer's watchlist.

Moody's was provided with full-year 2005 and partial-year 2006
operating results for 96.7% and 70.7%, respectively, of the
performing loans.  Moody's loan to value ratio for the conduit
component is 94.4%, compared to 96.5% at securitization.

The largest shadow rated loan is the Westfield Shoppingtown Garden
State Plaza Loan, which represents a 25% pari-passu interest in a
first mortgage loan.  The loan is secured by the borrower's
interest in a 2 million square foot super-regional mall located in
Paramus, New Jersey.  The mall is anchored by Macy's, Nordstrom,
J.C. Penney, Neiman Marcus and Lord and Taylor.  The in-line space
is 98.5% occupied, compared to 95.1% at securitization.  Average
in-line sales for calendar year 2005 were $534 per square foot,
the same as at securitization.  The loan is interest only for its
entire 10-year term.  The loan sponsors are Westfield America
Inc., a publicly traded REIT, and affiliates of Prudential
Assurance Co. Ltd. Moody's current shadow rating is A2, the same
as at securitization.

The second shadow rated loan is the 731 Lexington Avenue Loan,
which represents 39.8% pari-passu interest in a first mortgage
loan secured by a 694,000 square foot office condominium.  The
collateral is part of a 1.4 million square foot complex located in
midtown Manhattan on Lexington Avenue between 58th and 59th
Streets.  Built in 2004, the condominium is 100% leased to
Bloomberg, LP through March 2029.  The loan sponsor is Vornado
Realty Trust.  Moody's current shadow rating is A3, the same as at
securitization.

The third shadow rated loan is the DDR Portfolio Loan, which
represents a 34.9% pari-passu interest in a first mortgage loan
that is secured by a portfolio of 20 retail properties totaling
3.3 million square feet.  The properties are located in New York,
Minnesota, Pennsylvania, Arizona, North Carolina and Tennessee.
The properties were built between 1972 and 2004 and are leased to
approximately 230 tenants.  The portfolio's financial performance
has been impacted by a decline in net cash flow.  The loan is
interest only for its entire 10-year term.  Moody's current shadow
rating is Ba2, compared to Baa2 at securitization.

The fourth shadow rated loan is the Tysons Corner Center Loan,
which represents a 18.4% pari-passu interest in a first mortgage
loan secured by the borrower's interest in a 2 million square foot
regional mall located in McClean, Virginia.  The mall is anchored
by Bloomingdales, Macy's, Nordstrom and Lord & Taylor.  The
property's financial performance has improved since securitization
due to additional rental income from a 365,000 square foot
renovation/expansion that was recently completed.  Moody's current
shadow rating is Aa1, compared to Aa3 at securitization.

The fifth shadow rated loan is the AFR Portfolio Loan, which
represents a 5.9% pari-passu interest in a first mortgage loan
secured by 132 properties located in 17 states.  The properties
consist of office, operation centers and retail bank branches
totaling 6.5 million square feet.  Bank of America Corporation,
currently leases approximately 76.8% of the collateral.  At
securitization the loan was secured by 152 properties totaling
7.7 million square feet, however six properties have been released
from the pool and 14 properties defeased.  Due to property
releases, defeasance and loan amortization the loan amount has
decreased by approximately 20.4% since securitization.  The loan
sponsors are American Financial Realty Trust and First States Goup
LP.  Moody's current shadow rating is A1, compared to A2 at
securitization.

The top three non-defeased conduit loans represent 12.3% of the
pool.  The largest conduit loan is the Centreville Square Loan,
which is secured by a 312,000 square foot grocery store anchored
retail center located in suburban Washington D.C. in Centreville,
Virginia.  The center is 97% occupied as of June 2006 and is
anchored by Shoppers Food-Grand Mart and Legacy Furniture.  The
loan is interest only for the first 36 months.  Moody's LTV is
93.3%, compared to 91.8% at securitization.

The second largest conduit loan is the Equity Industrial Portfolio
Loan, which is secured by five industrial/warehouse properties
totaling 2 million square feet and located in Massachusetts and
Connecticut.  As of December 2006 the portfolio was 100% occupied,
compared to 84% at securitization.  Anchor tenants include Home
Depot and Staples.  The portfolio's financial performance has been
impacted by increased operating expenses.  In addition Moody's
anticipates near-term disruption in the property's rental income
due to several upcoming lease expirations.  Moody's LTV is in
excess of 100%, compared to 98.3% at securitization.

The third largest conduit loan is the International Jewelry Center
Loan, which is secured by a 370,000 square foot office building
located in the Jewelry District in downtown Los Angeles.  The
tenant base consists primarily of small sized jewelry firms.  As
of August 2006 the property was 96.9% occupied, compared to 98% at
securitization.  Moody's LTV is 73.4%, compared to 75.2% at
securitization.

The pool's collateral is a mix of retail, office and mixed use,
multifamily, U.S. Government securities and industrial and self
storage.  The collateral properties are located in 35 states.  The
top five state concentrations are New York, New Jersey, Virginia,
California and Texas.  All the loans are fixed rate.


COPELANDS' ENTERPRISES: Wants March 15 Admin Claim Filing Deadline
------------------------------------------------------------------
Copelands' Enterprises Inc. asks the Hon. Mary F. Walrath of the
U.S. Bankruptcy Court for the District of Delaware to establish
March 15, 2007, as the last day by which creditors may file
administrative expense claims arising in or during the Debtor's
chapter 11 case, through and including Dec. 31, 2006.

The Debtor anticipates filing a joint plan of liquidation shortly.
In connection with its Plan filing, the Debtor and its Official
Committee of Unsecured Creditors must have a clear understanding
of the Debtor's liabilities, including any administrative expense
liabilities for which full payment will be asserted as a condition
of confirmation.

The Court will convene a hearing at 2:00 p.m. on Feb. 5, 2007, to
consider the Debtor's request.  Objections to the motion are due
on Jan. 29, 2007.

Based in San Luis Obispo, California, Copelands' Enterprises Inc.
dba Copelands' Sports -- http://www.copelandsports.com/--  
operates specialty sporting goods stores.  The company filed for
chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No.
06-10853).  James E. O'Neill, Esq., and Laura Davis Jones, Esq.,
at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub LLP, in Los
Angeles, California, represent the Debtor.  Adam G. Landis, Esq.,
at Landis Rath & Cobb LLP represents the Official Committee of
Unsecured Creditors.  Clear Thinking Group serves as the Debtor's
financial advisor.  When the Debtor filed for protection from its
creditors, it estimated assets and debts between $50 million and
$100 million.


COUNTRYSIDE POWER: Confirms Cash Distribution for December 2006
---------------------------------------------------------------
Countryside Power Income Fund has confirmed its previously
declared distribution of $0.0860 per unit payable on
Jan. 31, 2007, to unitholders of record as of Dec. 29, 2006.

The Fund confirms the December 2006 distribution following
approval by the U.S. Bankruptcy Court for the Southern District of
New York of a $3 million payment to be made on or before Jan. 31,
2007, by U.S. Energy Biogas Corp. to the Fund.  The Fund also has
received permission from its syndicate of lenders to make the
distribution to unitholders.

Along with the approved payment from USEB, the Court has set
Feb. 1, 2007, as the hearing date to make a final ruling on the
settlement agreement reached, through mediation, among the Fund's
subsidiary, Countryside Canada Power Inc., USEB and its parent,
U.S. Energy Systems, Inc., on Jan. 13, 2007, that seeks to resolve
all outstanding issues between the parties.  In addition to the
Court approval, the USEB Settlement Agreement is also subject to
approval by the Fund's syndicate of lenders.  The respective
boards have approved the USEB Settlement Agreement.

"We are encouraged by the swift progress that has been made to
recoup our investment in USEB," said Goran Mornhed, President and
Chief Executive Officer of Countryside Ventures LLC.  "As we move
forward, we will look to expedite the monetization of our secured
claim and make a decision on the resulting use of proceeds in the
best interest of unitholders."

The Fund is currently in discussions with its lenders regarding an
extension of its existing waiver.  The objective is to have the
USEB Settlement Agreement reflected in a long-term financing
solution that will provide the Fund with greater financial
flexibility to support ongoing distributions and to meet its
growth commitments, including the construction of the new London
cogeneration facility scheduled to be completed in 2008.

                       About U.S. Energy

Based in Avon, Connecticut, U.S. Energy Biogas Corp., a subsidiary
of U.S. Energy Systems Corp. (NasdaqCM:USEY) --
http://www.usenergysystems.com/-- develops landfill gas projects
in the United States.  Formerly known as Zahren Alternative Power
Corporation or ZAPCO, the company was formed in May 2001 after
ZAPCO's acquisition by U.S. Energy Systems, Inc.  Currently, the
Debtor owns and operates 23 LFG to energy projects with 52
megawatts of generating capacity.  The Debtor and 31 of its
affiliates filed separate voluntary chapter 11 petitions on
Nov. 29, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12827 through 06-
12857).  Joseph J. Saltarelli, Esq., at Hunton & Williams
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million.

                         About the Fund

Based in London, Ontario, Countryside Power Income Fund
(TSX: COU.UN) -- http://www.countrysidepowerfund.com/-- has
investments in two district energy systems in Canada, with a
combined thermal and electric generation capacity of approximately
122 megawatts, and two gas-fired cogeneration plants in California
with a combined power generation capacity of 94 megawatts.  In
addition, the Fund has an indirect investment in 22 renewable
power and energy projects located in the United States, which
currently have approximately 51 megawatts of electric generation
capacity and sold approximately 710,000 MMBtus of boiler fuel in
2005.  The Fund's investment in the projects consists of loans to,
and a convertible royalty interest in, U.S. Energy Biogas Corp.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 11, 2006,
U.S. Energy Biogas Corp.'s delinquent reporting of its financial
statements and its subsequent bankruptcy filing constituted a
default under Countryside Power Income Fund's CDN102 million
Credit Facility with USEB.

Prior to USEB's filing for bankruptcy, the Fund had suggested a
reorganization of USEB's Credit Facility.  USEB, however, chose to
file for chapter 11 protection, asserting, among other things,
that its business is "operationally healthy" and that the "flawed"
Loan impairs its current capital structure.

The Fund is seeking to secure payment of all amounts pursuant to
the agreements governing the USEB Loan.  The Loan default,
if not waived, could prevent the Fund from making distributions to
its unitholders, in whole or in part.


CREDIT SUISSE: Moody's Holds Low-B Ratings on Class J to O Certs.
-----------------------------------------------------------------
Moody's Investors Service upgraded the rating of one class and
affirmed the ratings of 19 classes of Credit Suisse First Boston
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2004-C1:

   -- Class A-1, $19,026,141,  Fixed, affirmed at Aaa
   -- Class A-2, $260,312,000, Fixed, affirmed at Aaa
   -- Class A-3, $156,544,000, Fixed, affirmed at Aaa
   -- Class A-4, $885,151,000, Fixed, affirmed at Aaa
   -- Class A-SP, Notional, affirmed at Aaa
   -- Class A-X, Notional,  affirmed at Aaa
   -- Class A-Y, Notional,  affirmed at Aaa
   -- Class B, $44,586,000, Fixed, upgraded to Aa1 from Aa2
   -- Class C, $18,240,000, Fixed, affirmed at Aa3
   -- Class D, $36,480,000, Fixed, affirmed at A2
   -- Class E, $18,240,000, Fixed, affirmed at A3
   -- Class F, $22,293,000, Fixed, affirmed at Baa1
   -- Class G, $16,213,000, Fixed, affirmed at Baa2
   -- Class H, $18,240,000, WAC,   affirmed at Baa3
   -- Class J, $8,107,000,  Fixed, affirmed at Ba1
   -- Class K, $8,106,000,  Fixed, affirmed at Ba2
   -- Class L, $6,080,000,  Fixed, affirmed at Ba3
   -- Class M, $10,134,000, Fixed, affirmed at B1
   -- Class N, $4,053,000,  Fixed, affirmed at B2
   -- Class O, $4,053,000,  Fixed, affirmed at B3

As of the Jan. 18, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4% to
$1.56 billion from $1.62 billion at securitization.  The
Certificates are collateralized by 261 mortgage loans.  The loans
range in size from less than 1% to 8.7% of the pool, with the top
10 loans representing 34.8% of the pool.  Eleven loans,
representing 6.1% of the pool, have defeased and been replaced
with U.S. Government securities.  The balance of the pool consists
of four shadow rated loans, a group of shadow rated residential
co-op loans and a conduit component.  There have been no loans
liquidated from the pool, however, there are three loans,
representing 0.5% of the pool, currently in special servicing.
Thirty-three loans, representing 11.4% of the pool, are on the
master servicer's watchlist.

Moody's was provided with year-end 2005 borrower financials for
91.8% of the performing loans and partial year 2006 borrower
financials for 77.1% of the performing loans. Moody's loan to
value ratio for the conduit component is 90.7%, compared to 89.0%
at securitization.  Moody's is upgrading Class B due to the
improved performance of the shadow rated loans and defeasance.

The largest shadow rated loan is the Bay Plaza Community Center
Loan, which is secured by a mixed use development including a
385,000 square foot retail component and a 125,000 square foot
office building component.  Built in 1988 and renovated in 2003,
the property is located in The Bronx, New York.  The center
includes Pathmark, AMC Theatres, Linens-n-Things and Levitz
Furniture.  Key office tenants include Cablevision and Montefiore
Medical Center.  The center was 91.7% occupied as of May 2006,
compared to 94.4% at securitization.  Moody's current shadow
rating is Baa2, compared to Baa3 at securitization.

The second largest shadow rated loan is the Beverly Center
Loan which represents a 32.6% participation interest in a
$303.2 million first mortgage loan.  There is also $41 million
of subordinate debt held outside the transaction.  The loan is
secured by a leasehold interest in an eight-story, 855,000 square
foot regional mall located in Los Angeles, California.  The ground
lease extends until 2054. Built in 1982 and renovated in 2003, the
mall is anchored by Bloomingdale's, Macy's, and Macy's Men.  As of
July 2006 the mall's in-line occupancy was 98.9%, compared to
98.8% at securitization.  The loan's net cash flow has been
stable. The sponsor is Taubman Centers, Inc.  Moody's current
shadow rating is Baa2, the same as at securitization.

The third largest shadow rated loan is the Stanford Shopping
Center Loan which represents a 54.4% participation interest in a
$165 million first mortgage loan.  There is also $55 million of
mezzanine debt held outside the transaction.  The loan is secured
by a leasehold interest in a 1.38 million square foot open-air
regional mall located in Palo Alto, California.  Built in 1957 and
renovated in 2001, the mall is anchored by Bloomingdale's, Macy's,
Nordstrom and Neiman Marcus.  As of June 2006, the mall's in-line
occupancy was 98.3%, the same as at securitization.  The loan's
net cash flow has increased due to rent increases.  The loan is
interest only for its entire term, which ends in 2008.  The loan
sponsor is Simon Property Group, L.P.  Moody's current shadow
rating is A3, compared to Baa1 at securitization.

The fourth largest shadow rated loan is the Mayfair Mall
Loan, which represents a 35.4% participation interest in a
$183.5 million first mortgage loan.  There is also a $2.3 million
B Note held outside this transaction.  The loan is secured by a
1.3 million square foot mixed-use property that consists of an
858,000 square foot regional mall and a 419,000 square foot office
complex.  The property is located approximately seven miles
northwest of Milwaukee in Wauwatosa, Wisconsin.  The mall is
anchored by Macy's and the Boston Store and is the dominant mall
in its trade area.  The in-line retail space and the office spare
are 97.3% and 80.8% occupied respectively, compared to 95% and 86%
at last review.  The loan sponsor is General Growth Properties.
Moody's current shadow rating is Aa3, compared to A3 at
securitization.

The top three conduit loans represent 5.1% of the pool.  The
Northfield Square Mall Loan, is secured by the borrower's interest
in a 558,000 square foot regional mall located in Bourbonnais,
Illinois.  Moody's LTV is 88.5%, compared to 89.9% at
securitization.  The TVO Portfolio Loan, is secured by five
multifamily properties containing a total of 1,038 units.  The
units are located in Texas, Missouri and Tennessee.  Moody's LTV
is 93.1%, compared to 93.9% at securitization.  The West Coast
Portfolio Loan, is secured by four full service Red Lion Hotels
located in Washington, Utah and California.  Two of the hotels,
located in Pasco and Richland, Washington are on the master
servicer's watchlist for low debt service coverage.  Occupancy
suffered as a result of units being taken off-line for room
refurbishments.  Moody's LTV is 99%, compared to 81.2% at
securitization.

The pool's collateral is a mix of retail, multifamily and
manufactured housing, office and mixed use, residential
cooperative, U.S. Government securities, industrial and self
storage and lodging.  The collateral properties are located in
37 states.  The top five state concentrations are New York,
California, Texas, Wisconsin and Ohio.  All of the loans are fixed
rate.


CUPOLOS SPORTS: Asset Engineering to Liquidate Entire Inventory
---------------------------------------------------------------
Cupolos Sports, located at 5510 Ferry Street, Niagara Falls,
Canada, is bankrupt.

Asset Engineering Corporation, a Toronto based liquidator, under
the direction of Shiner Kideckel Zweig Inc., Receiver Manager,
Trustee in Bankruptcy, will liquidate the entire inventory.  Once
the inventory has been sold, the doors will be closed forever.

Family owned for more than eight decades, Cupolos Sports was first
established in the early 1920's by the Cupolos family.  The store
carried a broad spectrum of sporting goods, proudly supported
local teams and had a huge following for skate sharpening.
Players from beginners to adults regularly visited the store to
have their skates sharpened.  Many players have grown up coming to
this store.

Cupolos Sports is a sporting goods retailer and long time fixture
in downtown Niagara Falls in Canada.


DELPHI CORP: Talks With Unions May Go Beyond January 31 Deadline
----------------------------------------------------------------
Delphi Corp. and its unions are likely continue discussions
relating to wage-and-benefit reduction agreement beyond the
Jan. 31, 2007 deadline as long as there is continuing progress,
the Associated Press reports citing a Delphi spokesman.

AP reports that Appaloosa Management LP, Cerberus Capital
Management LP and Harbinger Capital Partners Master Fund I, the
three private equity investors, along with Merrill Lynch & Co. and
UBS Securities LLC have agreed to invest $1.4 billion to
$3.4 billion in a restructured Delphi.

However, the deal is dependent upon Delphi reaching an agreement
with its unions.

The investors and Delphi, AP notes, have the right to end the deal
by Jan. 31, 2007 if the company fails to reach a pact with its
unions and a parts supply deal with General Motors Corp.

Citing Delphi spokesman Lindsey Williams, AP relates that the
parties would continue efforts to reach consensual pacts through
February as long as sufficient progress is being made.

Troy, Mich.-based Delphi Corporation (OTC: 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 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 CORP: Has Until July 31 to File Chapter 11 Plan
------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York further extended Delphi Corp. and
its debtor-affiliates':

   (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.

As reported in the Troubled Company Reporter on Jan. 12, 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.

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.

Troy, Mich.-based Delphi Corporation (OTC: 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 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. 55; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DELPHI CORP: Inks Amended Equity Purchase and Commitment Agreement
------------------------------------------------------------------
In a regulatory filing with the United States Securities and
Exchange Commission, Delphi Corporation Vice President and Chief
Restructuring Officer John D. Sheehan reports that on Jan. 18,
2007, the Debtors, the Plan Investors, and other parties-in-
interest, with the approval of the U.S. Bankruptcy Court for the
Southern District of New York, entered into an amended
Equity Purchase and Commitment Agreement and a supplement to the
EPCA.

The Plan Investors are:

   -- A-D Acquisition Holdings LLC, an affiliate of Appaloosa
      Management L.P.;

   -- Harbinger Del-Auto Investment Co. Ltd., an affiliate of
      Harbinger Capital Partners Master Fund I, Ltd.;

   -- Dolce Investments LLC, an affiliate of Cerberus Capital
      Management, L.P.;

   -- Merrill Lynch, Pierce, Fenner & Smith Incorporated; and

   -- UBS Securities LLC.

A full-text copy of the Amended EPCA is available for free at the
SEC at http://ResearchArchives.com/t/s?1907

A full-text copy of the amended Supplement to the EPCA is
available for free at http://ResearchArchives.com/t/s?1908

The parties also entered into an Amendment and Supplement to the
Plan Framework Support Agreement, which among other things:

   (i) provides that the Delphi and the Plan Investors will not
       take the position that trade claims are not entitled to
       postpetition interest at a rate to be determined by the
       Court and that all allowed accrued postpetition interest
       on trade and unsecured claims is to be excluded in
       calculating the established cap under the PSA for allowed
       trade and unsecured claims;

  (ii) provides that the right to terminate the PSA after
       April 1, 2007, for any reason or no reason is not
       exercisable by Delphi or the Plan Investors after the
       Disclosure Statement Approval Date as defined in the PSA;
       and

(iii) grants the Official Committee of Unsecured Creditors
       certain rights.

A full-text copy of Amended PSA is available for free at the SEC
http://ResearchArchives.com/t/s?1909

Troy, Mich.-based Delphi Corporation (OTC: 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 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. 55; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DURA AUTOMOTIVE: Court Approves AlixPartners as Financial Advisors
------------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Dura Automotive Systems Inc. and
its debtor-affiliates to employ AlixPartners LLP as their
financial advisors, nunc pro tunc to Nov. 7, 2006.

Keith Marchiando, chief financial officer of Dura Automotive
Systems, Inc., related that AlixPartners has a wealth of
experience in providing financial advisory services in
restructurings and reorganizations.

Since its inception in 1981, AlixPartners, its predecessor
entities, and its affiliate, AP Services, have provided
restructuring services in numerous large cases, including most
recently, the Chapter 11 cases of Dana Corp., Calpine Corp.,
Anchor Glass, Atkins Nutritionals, Refco Inc., among others.

Pursuant to an Engagement Letter dated as of Nov. 6, 2006,
AlixPartners agreed to:

   (a) assist in developing one or more financial models that
       will enable Dura Automotive to better predict its future
       cash flows as well as to model the impact of a number of
       restructuring alternatives under consideration, including
       operational changes that will alter the company's
       operating model;

   (b) assist management with the development of Dura
       Automotive's revised 2007 business plan and forecast, and
       other forecasts as may be required;

   (c) assist management in evaluating profitability on a
       part/product line basis;

   (d) assist management in complying with and administering the
       relief granted by certain "first day" orders relating to
       the payment of prepetition obligations, including, but not
       limited to, those of certain "critical trade," "shipping,"
       and "tooling" claimants;

   (e) assist management in negotiations with Dura Automotive's
       various constituents, including customers, vendors and
       debt holders;

   (f) assist Dura Automotive in managing its bankruptcy process
       including working with and coordinating the efforts of
       other professionals representing various stakeholders of
       the Dura;

   (g) assist Dura Automotive, counsel and other advisors in
       fulfilling financial reporting requirements, including but
       not limited to, development of schedules and statements
       and monthly operating reports in any potential Chapter 11
       restructuring;

   (h) assist and provide other support to counsel in the
       preparation of any Chapter 11 plan of reorganization,
       related disclosure statement or other offering memorandum;

   (i) assist in obtaining and presenting information required by
       parties-in-interest in Dura Automotive's bankruptcy case
       including official committees appointed by the by the
       Court and the Court itself;

   (j) assist management in reviewing and enhancing current cost
       reduction initiatives;

   (k) assist as requested in tasks like reconciling, managing
       and negotiating claims, determining preferences and
       collection of same and the like;

   (l) assist Dura Automotive's investment banker in obtaining
       and compiling information that is needed to present the
       Dura or one or more business units to prospective
       purchasers or investors and to further, support those
       efforts assisting with matters such as due diligence and
       obtaining or preparing supplemental information that may
       be needed to obtain maximum value for its stakeholders;

   (m) assist Dura Automotive in developing a liquidation
       analysis;

   (n) assist the Debtors and their investment banker, Miller
       Buckfire & Co., LLC, in the determination of Dura
       Automotive's valuation;

   (o) assist and provide other support to counsel in the
       preparation of any Chapter 11 plan of reorganization,
       related disclosure statement or other offering memorandum;

   (p) assist Dura Automotive in maintaining a 13-week cash
       receipts and disbursements forecasting tool designed to
       provide on-time information related to its liquidity;

   (q) assist Dura Automotive in developing an actual to forecast
       variance reporting mechanism including written
       explanations of key differences;

   (r) work with Dura Automotive's treasury group and management
       of the its foreign operations in facilitating cash
       management and repatriation of cash; and

   (s) assist with other matters as may be requested that fall
       within AlixPartners' expertise and that are mutually
       agreeable.

The standard hourly rates, subject to periodic adjustments,
charged by AlixPartners' professionals are:

           Managing Directors                     $590 to $750
           Directors                              $440 to $550
           Vice Presidents                        $330 to $430
           Associates                             $260 to $300
           Analysts                               $190 to $220

In addition to hourly compensation, the Debtors will pay a
success fee to AlixPartners upon entry of an order by the
Court confirming a Chapter 11 plan of reorganization.  The
Success Fee will be $3,000,000 if the Confirmation Order is
entered on or before Sept. 30, 2007, provided, however, that,
if the Confirmation Order is not entered prior to Oct. 31,
2007, the Success Fee will decrease by $300,000, and will
likewise decrease by $300,000 on the last day of each succeeding
month through and including Dec. 31, 2007, if the Confirmation
Order is not entered during that month; provided, further, that
the Success Fee will not be less than $2,100,000.

Any payments on account of the Success Fee will be subject to a
separate application to the Court.  The parties request that the
Court set a future hearing date for approval of the terms of the
Success Fee.

Moreover, AlixPartners will seek reimbursement for reasonable and
necessary expenses incurred in connection with the Debtors'
Reorganization Cases, including transportation costs, lodging,
food, telephone, copying, and messenger services.

The indemnification provisions contained in the Engagement Letter
are waived pursuant to AlixPartners' Protocol with the U.S.
Trustee.

Anthony C. Flanagan, managing director at AlixPartners, assured
the Court that, except as disclosed, the firm:

   (a) has no connection with the Debtors, their creditors, or
       other parties-in-interest in the Debtors' Chapter 11
       cases,

   (b) does not hold any interest adverse to the Debtors'
       estates, and

   (c) is a "disinterested person" as defined by section 101(14)
       of the Bankruptcy Code.

                 About DURA Automotive Systems Inc.

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


DURA AUTOMOTIVE: Judge Carey Okays Ernst & Young as Tax Advisors
----------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Dura Automotive Systems Inc. and
its debtor-affiliates to employ Ernst & Young as tax advisory and
risk advisory services providers, nunc pro tunc to Oct. 30, 2006.

As reported in the Troubled Company Reporter on Jan. 2, 2007, the
Debtors engaged on May 6, 2005, Ernst & Young to provide internal
audit services, services with respect to compliance with Section
404 of the Sarbanes-Oxley Act of 2002, and loaned staff services.

The services of Ernst & Young are necessary to enable the Debtors
to maximize the value of their estates and to reorganize
successfully.

The firm is expected to provide tax advisory services to the
Debtors:

   (1) FIN 48 implementation services, which include assisting
       the Debtors in assessing their current controls and
       processes employed in the financial reporting of uncertain
       tax positions, and in making appropriate revisions to meet
       the requirements under Sarbanes-Oxley Section 404 and
       other financial reports;

   (2) international compliance review services, including a
       review of information to be filed with the U.S. Internal
       Revenue Service and all related calculations the Debtors
       have identified as material, or that may need managerial
       review; and

   (3) routine on-call tax advisory services.

The risk advisory services the firm will provide are:

   (a) internal audit reaming services, including risk
       assessment, audit plan and execution;

   (b) business risk services ongoing assistance related to
       Section 404 of the Sarbanes-Oxley Act of 2002, including
       the preparation of the Debtors' documentation, testing and
       evaluation of internal controls over financial reporting
       for their significant accounts and processes;

   (c) tax risk advisory services ongoing assistance related to
       Section 404 of the Sarbanes-Oxley Act of 2002, including
       assistance to management in the preparation of its
       documentation, testing, and evaluation of internal
       controls over financial reporting for the Company's state
       and federal tax income tax provision;

   (d) loan staff discrete projects in conjunction with share
       service center projects including designing a centralized
       check disbursement process and the creation of a cash
       disbursements journal on a "loaned staff" basis; and

   (e) technology and security risk services and information
       technology services, including assisting Dura Internal
       Audit with testing IT general and application controls in
       both the North American and European regions.

Ernst & Young will coordinate any services performed at the
Debtors' request with the Debtors' other professionals to avoid
duplication of effort.

The Debtors will pay Ernst & Young based on its standard hourly
rates:
                                                   Loaned Staff
   Level             BRS     TSRS/IT       Tax       Services
   -----             ---     -------       ---       --------
   Partner          $340       $359       $595          N/A
   Senior Manager    242        328        464          N/A
   Manager           196        291        323         $196
   Senior            132        223        226          132
   Staff             113        162        226          113

The Debtors requested a single "global" retention, whereby the
vast international resources of Ernst & Young could be brought to
meet the Debtors' needs, including non-Debtor foreign affiliates,
while maintaining clarity that all duties are owed to the Debtors.

The Engagement Letter provides that in rendering services to the
Debtors, the firm may subcontract a portion of the services to
certain other Ernst & Young affiliates, including other member
firms of Ernst & Young Global Limited or its affiliates.

Ernst & Young intends to pay EYGL member firms directly for their
services and apply for reimbursement by the Debtors of any
payments made any Ernst & Young to the EYGL Member Firms.

The Debtors will indemnify Ernst & Young for any claim arising
from, related to or in connection with its performance of
services to the Debtors.  The Debtors will have no obligation to
indemnify any person, or provide contribution or reimbursement
for any claim or expense arising from gross negligence or willful
misconduct.

Randall J. Miller, the coordinating principal for Ernst & Young,
assured the Court that the firm is a disinterested person, as
defined in Section 101(14) of the Bankruptcy Code.

                 About DURA Automotive Systems Inc.

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


DURA AUTOMOTIVE: Brunswick Hired as Communications Consultants
--------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Dura Automotive Systems Inc. and
its debtor-affiliates to employ Brunswick Group LLC as their
corporate communications consultants, effective as of Oct. 30,
2006.

As reported in the Troubled Company Reporter on Dec. 7, 2006,
Brunswick is expected to:

    (a) prepare materials to be distributed to the Debtors'
        employees explaining the impact of the Reorganization
        Cases,

    (b) draft correspondence to creditors, vendors, employees and
        other interested parties regarding the Reorganization
        Cases,

    (c) prepare written guidelines for head office and location
        managers to assist them in addressing employee and
        customer concerns,

    (d) prepare news releases for dissemination to the media for
        distribution,

    (e) interface and coordinate media reports to contain the
        correct facts and the Debtors' perspective as an ongoing
        business,

    (f) assist the Debtors in maintaining their public image as a
        viable business and going concern during the Chapter 11
        reorganization process,

    (g) assist the Debtors, and develop internal systems, in
        handling inquiries,

    (h) coordinate public relations services with a third party
        making an investment in the Debtors,

    (i) perform other strategic communications consulting services
        as may be required by the Debtors in the Reorganization
        Cases, and

    (j) provide additional public relations services appropriate
        and necessary to the benefit of the Debtors' estates.

The Debtors will pay Brunswick based on the firm's hourly rates:

             Partner             $700
             Director            $550
             Associate           $450
             AD                  $325
             Exec                $225

The Debtors will also reimburse Brunswick for its actual and
necessary out-of-pocket expenses.  Production-related
expenditures -- e.g., photography, printing, etc. -- will be
charged to the Debtors at cost.

The Debtors have made prepetition payments totaling $227,917 to
Brunswick in the year preceding the Petition Date.

The payments have been applied to outstanding invoices and on
account of fees and expenses incurred in providing services to
the Debtors in connection with the restructuring activities.

The payments received include:

    (a) $91,495 for fees and expenses incurred for periods before
        October 13, 2006, and

    (b) $136,422 on October 24, 2006.

The Debtors do not owe Brunswick any amount for services
performed or expenses incurred prior to the Petition Date and
thus Brunswick is not a prepetition creditor of the Debtors.

Robert Mead, a partner at Brunswick, assured the Court that his
firm is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, and it does not hold nor
represent any interest adverse to the Debtors or their estates.

                 About DURA Automotive Systems Inc.

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


EDDIE BAUER: Reports $365 Mil. Total Sales in Qtr. Ended Dec. 30
----------------------------------------------------------------
Eddie Bauer Holdings, Inc., disclosed preliminary sales results
for the fourth quarter and full year 2006.

For the fourth quarter ended Dec. 30, 2006, net merchandise sales
totaled $365 million, compared to $361 million in the fourth
quarter of 2005.  Net merchandise sales include sales from the
Company's retail and outlet stores and its direct channel, which
includes its catalogs and websites, but does not include licensing
revenue or revenue generated by the Company's joint ventures.

Comparable store sales for the fourth quarter of 2006 increased
4.6% from the fourth quarter of 2005.  Comparable store sales in
the fourth quarter of 2005 had declined 7.1% from the same period
in 2004.  Sales from the company's direct channel, which includes
sales from its catalogs and websites, increased by 0.1% from the
fourth quarter of 2005.

For the fiscal year ended Dec. 30, 2006, net merchandise sales
declined 4.5%, totaling $957 million in 2006 compared to $1.002
billion in fiscal 2005.  Comparable store sales for fiscal 2006
declined 2.0% from fiscal 2005, which compares to a 2.2% decrease
in comparable store sales in fiscal 2005 from fiscal 2004.  Sales
from the company's direct channel, which includes sales from its
catalogs and Websites, decreased by 4.4% from fiscal 2005.

"Our fourth quarter sales results were moderately below our
expectations," William End, Chairman of the Board of Directors of
Eddie Bauer, said.  "Our Board of Directors continues to
unanimously believe that the sale to Sun Capital and Golden Gate
represents the best opportunity to maximize stockholder value.
The transaction will provide stockholders with fair and certain
value as well as an immediate cash return."

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

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 13, 2006,
Moody's Investors Service confirmed Eddie Bauer Inc.'s B2
Corporate Family Rating.  Moody's also confirmed its B2 rating on
the company's 300 million term loan.


ERICO INTERNATIONAL: S&P Withdraws Rating on Company's Request
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB-' corporate
credit rating on ERICO International Corp. at the company's
request.  At the same time, all ratings were removed from
CreditWatch with negative implications.

The rating withdrawal follows completion of the company's tender
offer for its senior subordinated notes due 2012.  The tender
offer was completed in conjunction with ERICO's plans to
recapitalize the company in a transaction valued at approximately
$675 million.


FIRST UNION: Moody's Holds B3 Rating on $37 Million Class G Certs.
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes
and affirmed the ratings of five classes of First Union Commercial
Mortgage Securities, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-C1:

   -- Class A-2, $543,800,869, Fixed, affirmed at Aaa
   -- Class IO-1, Notional, affirmed at Aaa
   -- Class B, $58,273,000, Fixed, affirmed at Aaa
   -- Class C, $61,186,000, WAC, affirmed at Aaa
   -- Class D, $67,014,000, WAC, upgraded to Aaa from Aa1
   -- Class E, $17,482,000, WAC, upgraded to Aa2 from Aa3
   -- Class F, $52,445,000, Fixed, upgraded to Ba1 from Ba2
   -- Class G, $37,877,000, Fixed, affirmed at B3

As of the Jan. 18, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 25.9%
to $862.6 million from $1.2 billion at securitization.  The
Certificates are collateralized by 210 loans ranging from less
than 1% to 4.9% of the pool, with the top 10 loan exposures
representing 23.2% of the pool.  The pool includes a credit tenant
lease component, which represents 10.3% of the pool's current
outstanding balance.  Fifty-five loans, representing 38.7% of the
pool, have defeased and are collateralized by U.S. Government
securities.

Fifteen loans have been liquidated from the pool, resulting in
aggregate realized losses of approximately $13.6 million.

Currently there are four loans, representing 1% of the pool, in
special servicing.  Moody's is not projecting any losses from
these loans.  Twenty six loans, representing 11.7% of the pool,
are on the master servicer's watchlist.

Moody's was provided with full year 2005 and partial year 2006
operating results for 98% and 67%, respectively, of the performing
loans.  Moody's conduit portion weighted average loan to value
ratio is 77.3%, compared to 82.5% at Moody's last full review in
October 2005 and compared to 91.1% at securitization.  Moody's is
upgrading Classes D, E and F due to defeasance, improved overall
pool performance and increase subordination levels.  Classes D and
E were upgraded on Dec. 8, 2006 based on a Q tool based portfolio
review.

The top three non-defeased conduit loans represent 9.6% of the
outstanding pool balance.  The largest loan is the One Capital
City Plaza Loan, which is secured by a 406,000 square foot office
building located in Atlanta, Georgia.  The property is 99.4%
occupied, compared to 94.0% at last review.  The largest tenant is
Blue Cross/Blue Shield of Georgia which occupies 67% of the
premises under a lease expiring in June 2014.  Moody's LTV is
82.2%, compared to 85.3% at last review.

The second largest loan is the Prince George's Metro Center Loan,
which is secured by a 375,000 square foot office building located
in Hyattsville, Maryland.  The property is currently 58% leased,
essentially the same as last review.  Occupancy at securitization
was 91%.  The decline in occupancy since securitization is due to
a major tenant vacating at lease expiration in 2002.  The borrower
is negotiating with a prospective tenant for approximately 23.7%
of the premises.  The loan is on the master servicer's watchlist
due to low debt service coverage.  Moody's LTV is 94.7%, the same
as at last review.

The third largest loan is the Clarinbridge Loan, which is secured
by a 306-unit multifamily property located approximately 26 miles
northwest of Atlanta in Kennesaw, Georgia.  As of October 2006 the
property was 98.7% occupied, compared to 92% at last review.
Moody's LTV is 86.9%, compared to 88.3% at last review.

The CTL component includes 31 loans secured by properties under
bondable leases.  The largest exposures are Rite Aid Corporation,
Lowe's Companies, Inc., Motel 6/Accor SA and Walgreen Co.

The pool's collateral is a mix of U.S. Government securities,
multifamily, CTL, office, retail, lodging, healthcare and
industrial and self storage.  The collateral properties are
located in 30 states and the District of Columbia.  The highest
state concentrations are Georgia, Florida, California, Virginia
and North Carolina.  All of the loans are fixed rate.


FLYI INC: U.S. Bank & QVT Want Class 7 Votes Disallowed
-------------------------------------------------------
U.S. Bank National Association, as indenture trustee, under the
Indenture dated February 25, 2005 for the $125,000,000 6%
Convertible Notes due 2034 issued by FLYi, Inc., and QVT
Financial LP, a holder of approximately 60% of the Notes, seek
entry of an order deeming Class 7, comprising of the $285,500,000
intercompany claim held by FLYi against Independence Air, Inc.,
to have rejected the Plan, or in the alternative, disallow the
vote of the Intercompany Claim.

FLYi, Inc., and its debtor-affiliates filed their first Plan of
Reorganization and related Disclosure Statement on August 15,
2006, with the U.S. Bankruptcy Court for the District of Delaware.
U.S. Bank and QVT Financial challenged, among other things, the
treatment of the Intercompany Claim.

On November 13, 2006, the Debtors filed the First Amended Joint
Plan of Liquidation and revised Disclosure Statement, in which
the Debtors made no substantive change to the economic treatment
of the Intercompany Claim, but provided that instead of being
"deemed" to accept the Plan, the Intercompany Claim is now
entitled to vote on the Plan, Francis A. Monaco, Jr., Esq., at
Monzack and Monaco, PA, in Wilmington, Delaware, notes.

The Debtors have stated that FLYi will, in fact, vote the
Intercompany Claim in favor of the Plan.  The structuring of
Class 7 and the announcement that it will be voted in favor of
the Plan is simply the latest in the Debtors' several "blatant
efforts at gerrymandering the vote" on the Plan, which belies the
Debtors' confidence in its good faith and confirmability,
Mr. Monaco asserts.

Mr. Monaco recounts that, initially, all FLYi unsecured creditors
and all Independence Air unsecured creditors were lumped together
with the Joint Claimants' claims in each estate, thereby ensuring
that a Plan that unduly favored the Joint Claimants would be
governed by their vote.

The amended Plan reclassifies the holders of FLYi's Notes as
Class 3B, while continuing to lump all other FLYi-only creditors
together with the Joint Claimants, and all Independence-only
unsecured creditors -- Class 4 -- with the Joint Claimants, again
ensuring that Joint Claimants will outweigh the votes of non-
Noteholder FLYi-only and Independence-only creditors, ensuring an
accepting impaired class, Mr. Monaco points out.

"The separation of the Intercompany Claim from other creditors,
and the decision to vote it in favor of the Plan is intended to
bolster this Court's impression that the Plan is supported by
creditors generally: this impression is a sham and should be
discounted," Mr. Monaco argues.

Mr. Monaco asserts, even if the Intercompany Claim is voted in
favor of the Plan, the vote would amount to a mere technicality
with no substantive effect.  Because the Plan denies FLYi's
creditors any distribution on account of the $285,000,000
Intercompany Claim, Class 7's deemed rejection of the Plan is not
optional, it is mandated by Section 1126(g) of the Bankruptcy
Code, he asserts.

The Debtors have argued that they are giving FLYi a greater share
of the UAL Claim Proceeds than would otherwise be entitled to in
exchange for wiping out any value for the Intercompany Claim.
However, there is no valid connection between the allocation of
the UAL Proceeds and the elimination of the Intercompany Claim,
Mr. Monaco argues.

FLYi and Independence were both parties to various contracts
underlying the settlement agreement with United Air Lines.  The
Debtors filed joint proofs of claim in UAL's bankruptcy case, and
obtained an allowed claim for rejection damages.  U.S. Bank and
QVT Financial believe that FLYi is legally entitled to half of
the UAL Claim Proceeds, no more than what it was already due.

Mr. Monaco tells the Court that the Debtors fail to establish
that the FLYi Board of Directors has, acting in good faith with
due consideration to its fiduciary duties to all FLYi's
creditors, determined to vote in favor of a Plan that
unjustifiably eliminates significant value for FLYi-only
creditors.

Class 7 should be designated as not in good faith, pursuant to
Section 1126(e), and disallowed, Mr. Monaco tells the Court.  The
original House Bill, H.R. 8200, 95th Cong., 1st Sess. (1977)
enumerates "conflict of interest" as an example of bad faith.

The FLYi Board is under a fiduciary duty to do what is in the
best interests of FLYi and all of its creditors, and, to the
extent the Plan purports to resolve inter-debtor disputes in
favor of Joint Claimants and Independence-only creditors, the
FLYi Board must, at best, remain neutral.  However, rather than
remain neutral, the FLYi Board has come forward in support of a
Plan whose structure grossly and disproportionately favors other
groups of creditors to the detriment of FLYi-only creditors,
Mr. Monaco points out.

The Debtors' declared intention to vote the Intercompany Claim in
favor of the Plan simply cannot be reconciled with the FLYi
Board's fiduciary duties to FLYi-only creditors, Mr. Monaco
insists.

Headquartered in Dulles, Virginia, FLYi Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


FORD MOTOR: 2006 Net Loss Increases to $12.75 Billion
-----------------------------------------------------
Ford Motor Co. released its preliminary financial results for the
year and quarter ended Dec. 31, 2006.

Ford posted $12.75 billion in losses against $160.1 billion in
revenues for the full year 2006, compared with $1.4 billion in net
profit against $176.9 billion in revenues for 2005.

Ford also posted $5.76 billion in net loss against $40.3 billion
in revenues for the fourth quarter of 2006, compared with
$74 million in net loss against $46.3 billion in revenues for the
same period in 2005.

"We began aggressive actions in 2006 to restructure our automotive
business so we can operate profitably at lower volumes and with a
product mix that better reflects consumer demand for smaller, more
fuel efficient vehicles," Alan Mulally, Ford's president and chief
executive, said.  "We fully recognize our business reality and are
dealing with it.  We have a plan and we are on track to deliver."

                        Results by Sector

Automotive Sector

For 2006, Ford's worldwide Automotive sector reported a pre-tax
loss of $5.2 billion, compared to a pre-tax loss of $993 million a
year ago.  The decline primarily reflected unfavorable volume and
mix, unfavorable net pricing and currency exchange, partially
offset by favorable cost performance and higher interest income.

For the fourth quarter, Ford's worldwide Automotive sector
reported a pre-tax loss of $2.5 billion, compared to a pre-tax
loss of $109 million a year earlier.  The decline primarily
reflected adverse volume and mix and higher incentives in North
America.

Worldwide Automotive revenue for 2006 was $143.3 billion, compared
to $153.5 billion a year ago.  Total fourth-quarter Automotive
revenue was $36 billion, a decrease from
$40.7 billion a year ago.

Total company vehicle wholesales in 2006 were 6,597,000, a
decrease from 6,767,000 in 2005.  Fourth-quarter vehicle
wholesales totaled 1,568,000, compared to 1,737,000 units a year
ago.

Automotive cash at Dec. 31, 2006, totaled $33.9 billion of cash,
net marketable securities, loaned securities and short-term
Voluntary Employee Benefits Association (VEBA) assets.

Financial Services Sector

For 2006, the Financial Services sector earned a pre-tax profit of
more than $1.9 billion, compared to $3.5 billion the prior year.
For the fourth quarter, the Financial Services sector earned a
pre-tax profit of $416 million, compared to
$626 million the prior year.

Ford Motor Credit Company reported net income of $1.3 billion in
2006, down $621 million from earnings of $1.9 billion a year
earlier.  On a pre-tax basis from continuing operations, Ford
Motor Credit earned more than $1.9 billion in 2006, down
$970 million from 2005.  The decrease in full-year earnings
primarily reflected higher borrowing costs, higher depreciation
expense and the impact of lower average receivable levels.  These
were partially offset by market valuations primarily related to
non-designated derivatives and reduced operating costs.

In the fourth quarter of 2006, Ford Motor Credit's net income was
$279 million, down $26 million from a year earlier.  On a pre-tax
basis, Ford Motor Credit earned $406 million in the fourth
quarter, compared to $482 million in the previous year.  The
decrease primarily reflected higher borrowing costs and higher
depreciation expense, partially offset by market valuations
primarily related to non-designated derivatives.

                       Cash and Liquidity

The company ended 2006 with total Automotive cash, net marketable
securities, loaned securities and short-term Voluntary Employee
Beneficiary Association (VEBA) assets at
Dec. 31, 2006 of $33.9 billion, an increase from $23.6 billion at
the end of the previous quarter.  Total Automotive liquidity at
Dec. 31, 2006 was $46 billion including credit facilities. The
company's Automotive operating-related cash flow was
$1.8 billion negative for the fourth quarter.

"We're pleased the financial markets expressed confidence in our
turnaround plan by providing us with the additional liquidity we
will need to fund our operations as we restructure to deliver
sustainable profitability," Mr. Mulally said.  "We will deploy
this capital wisely to ensure we earn returns for our shareholders
and deliver products our customers prefer."

                          2007 Outlook

The company shared its financial outlook for 2007 and, consistent
with previous guidance, expects market share and most earnings
comparisons to remain challenging for the next two to three
quarters.

   -- U.S. market share is expected to be down through the third
      quarter of 2007, primarily due to lower fleet sales;

   -- production is expected to be down through the first half
      of 2007, but is expected to increase on a year-over-year
      basis in the second half of the year;

   -- year-over-year third quarter comparisons will be impacted
      by the non-recurrence of tax-related interest income in
      2006;

   -- essentially no tax offsets to losses will be recognized --
      negatively impacting the first nine months of comparisons.

   -- the company's structural cost reductions will continue to
      grow during the year as personnel are separated, plants
      are idled and capacity is reduced;

   -- as previously stated, from 2007 through 2009 cumulative
      Automotive operating-related cash outflows will be about
      $10 billion, and cumulative restructuring expenditures
      will be about $7 billion.  The company expects more than
      half of this $17 billion outflow will occur in 2007.
      These outflows also reflect plans to invest in new
      products at levels comparable to previous years, or about
      $7 billion annually.

   -- special charges in 2007 are expected to be significantly
      lower than in 2006.

"While challenges lie ahead for us in 2007, we're focused on
making continuous improvements to our plan, so we can capitalize
on opportunities to create and sell more products and save more
costs," Mr. Mulally said.  "Our priorities, combined with our
sense of urgency, will continue to transform Ford Motor Company."

                           Deep Trouble

Analysts, however, are skeptical that Ford's products are strong
enough to turn the company around, AFX News relays.

"There is no question that Ford is in deep trouble -- probably the
worst trouble they have been in since the Depression," Gerald
Meyers, a University of Michigan business professor and former
chief executive of American Motors Corp, told Bloomberg News.  "It
is going to be a while before it gets out."

"The basic story of Ford's stunning collapse in its home-market
profitability remains the same," David Healy, Burnham Securities
analyst, told Reuters.  "Ford's finances were wrecked by the
collapse in volume and pricing of its most profitable truck
models."

Ford's losses are likely to have huge impact on its Credit-default
swaps -- financial instruments based on bonds and loans that are
used to speculate on a company's ability to repay debt, Mark
Altherr, a Credit Suisse Group analyst in New York, said.

Credit-default swap prices for Ford debt will continue to tighten
"unless there are big negative surprises to the downside, in this
market," Mr. Altherr stressed.

Full-text copies of Ford Motor Co.'s 2006 results are available at
no charge at: http://researcharchives.com/t/s?190d

                       About Ford Motor Co.

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, the company's core and affiliated automotive
brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln,
Mazda, Mercury and Volvo.  Its automotive-related services include
Ford Motor Credit Company and The Hertz
Corporation.

                           *     *     *

As reported in the Troubled Company Reporter on 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 $3 billion of senior convertible notes due
2036.


GARY INDEPENDENT: Moody's Upgrades Rating on Outstanding Debt
-------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to Gary
Independent School District $6.8 million Unlimited Tax School
Building and Refunding Bonds, Series 2007.  Prime credit quality
is provided by a guarantee of the Texas Permanent School Fund for
timely payment of principal and interest in the event that the
school district is unable to meet debt service requirements.
Sizable PSF assets and conservative program regulations provide
strong bondholder protection.  Moody's believes the limitations
placed upon the PSF's actual leverage remain conservative and
consistent with this highest of ratings.

State statutes provide for the advancement of revenues by the PSF
from their cash reserves, prior to default, sufficient to meet a
school district's debt service obligations should the district be
unable to make timely payment.  These funds will, in turn, be
intercepted from the District's next state aid allocation until
full repayment, as either a lump sum or installment payment, to
the PSF.

In addition to the enhanced rating, Moody's has assigned a Baa3
underlying rating to the current issue and upgraded the District's
outstanding debt to Baa3 from Ba1.  Including the current sale,
the rating affects $6.9 million.  The Bonds are secured by an ad
valorem tax pledge, unlimited as to rate or amount.  Current
proceeds will be used to construct school facilities and to refund
a portion of outstanding debt.  The Baa3 rating reflects a tax
base heavily concentrated among petro-chemical companies; improved
finances, with recent increases in reserves; and a manageable,
albeit above-average debt burden.

Gary ISD serves a small community in northeast Texas, located in
Panola County, near the Louisiana border.  The District's tax
base is concentrated substantially among a small number of
petro-chemical companies-particularly Devon Energy comprising
almost 28% of the base and Conoco Phillips at about 11% of the
District's assessed value.  Overall, the top ten taxpayers made up
over 68% of the District's base.  The potential exposure to
volatile oil and gas mineral values remains a concern.

However, despite 8% dips in value in fiscal years 2001 and 2004,
the overall growth trend has been strong over the past decade,
with assessed values growing from only $55 million in 1998 to over
$191 million for fiscal 2007.  Gas prices drove values up more
than 39% between fiscal years 2006 and 2007.  Almost all of the
increased value was due to mineral prices.  The AV has grown at a
rapid average annual rate of 16.7% over the past five years.  The
District's population was only 1,674 in 2000, and its per capita
income is a modest 71% of the United States.

After three years of deficit spending, preliminary audits for
fiscal year 2006 indicate a $153,256 General Fund surplus,
increasing the ending balance to $553,617, or 21.9% of General
Fund revenues.  The increased reserves were attributable to higher
than anticipated property tax revenues.  For fiscal year 2007,
management expects to add about $200,000 to fund balance and their
long-term goal is to maintain three months of operations in
reserves.  In accordance with HB 1 school finance reform, the
District compressed its maintenance and operations tax rate by 11%
and added back the optional $0.40 per $1,000 of AV.  After the
adjustments, the fiscal year 2007 M&O rate decreased from $12.73
per $1,000 of AV in fiscal 2006 to $11.68.  Despite the reduced
rate, increased AV will allow for an increased levy.  A potential
challenge posed by the rapid AV growth is the impact on wealth-
per-student. For fiscal year 2008, the District will reach Chapter
41 status, subject to wealth recapture payments.  Management
indicates that the state's HB 1 hold-harmless provisions will
prevent a net loss in revenue in fiscal year 2008.  In future
budget cycles, the financial impact of recapture payments will
depend on the state legislature's, longer term approach to school
finance.

The current issue includes the full $5.4 million authorization
approved by voters on Nov. 7, 2006.  The new money proceeds will
be use to build a ten-classroom high school and gym.  The
District's small enrollment of approximately 315 has grown by
5-20 students annually since 2003.  Management has no plans for
additional borrowing, as current capacity is more than sufficient
for the foreseeable future.  Direct and overall debt as a percent
of AV are 3.6% and 3.7% respectively, adjusted for state debt
assistance.  Payout is slow, with only 24.6% of principal retired
in ten years.  Moody's believes the debt burden will remain
manageable, given limited capital needs and current AV levels.

Key Statistics

   -- Population: 1,674
   -- 2007 full value: $191.4 million
   -- Full value per capita: $114,335
   -- Per capita income: $15,428
   -- Direct debt burden: 3.6%
   -- Overall debt burden: 3.7%
   -- Principal payout: 24.6%
   -- FY 2005 General Fund balance: $400,361
   -- FY 2006 unaudited General Fund balance: $553,617
   -- Post-sale debt outstanding: $6.9 million


GENERAL MOTORS: May Shift Responsibility of Retiree Benefits
------------------------------------------------------------
General Motors Corp., Ford Motor Corp., and the United Auto
Workers union are discussing a plan to transfer billions of
dollars of retiree healthcare obligations to the union, The Wall
Street Journal reports, citing people familiar with the matter.

The parties are determined to restructure the automotive industry
without the need for the automakers to file for bankruptcy, WSJ
says.

According to Reuters, GM hired the advisers who worked on a deal
between Goodyear Tire & Rubber Co. and the United Steelworkers
union.

                     About General Motors Corp.

General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931.  Founded in 1908, GM employs about 284,000
people around the world.  It has manufacturing operations in
33 countries and its vehicles are sold in 200 countries.  GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006.  S&P said the outlook is
negative.

As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
proposed $1.5 billion secured term loan of General Motors Corp.
The term loan is expected to be secured by a first priority
perfected security interest in all of the US machinery and
equipment, and special tools of General Motors and Saturn Corp.


GENERAL MOTORS: Delays Filing of 2006 4th Qtr. & Annual Reports
---------------------------------------------------------------
General Motors will be delaying the announcement of its 2006 year-
end and fourth quarter financial results but expects to report
improved performance in its automotive business, including record
fourth quarter revenue in 2006.  The company also said that it
will restate its financial statements, primarily due to pre-2002
tax accounting adjustments.

GM indicated that its deferred tax liabilities, as previously
disclosed in its results for the third quarter of 2006 and prior
periods, were overstated due to errors that originally occurred
primarily before 2002.  While these errors do not impact cash flow
or previously reported cash balances, retained earnings as of
Dec. 31, 2001, and subsequent periods were understated by a range
of $450 million to $600 million as a result.

In light of recent focus on accounting under Statement of
Financial Accounting Standard 133, Accounting for Derivative
Instruments and Hedging Activities, GM is reviewing its accounting
in this area.  While this review is still ongoing, GM currently
anticipates that it will make accounting restatements in this
area, and the completed review may result in additional
restatements that could be material.  GM also is assessing various
other miscellaneous adjustments for 2002 through 2006, and
believes these adjustments, individually and collectively, will
not be material on a consolidated basis.

As a result of these anticipated adjustments related to the
deferred tax liabilities, hedging activities and other
miscellaneous items, GM will be restating its financial statements
for 2002 through the third quarter of 2006.  GM does not expect
any material impact on cash flow.

In addition, GMAC has informed GM that it continues to finalize
its financial statements for 2006 and its balance sheet as of
Nov. 30, the date of the sale of 51% of the equity of GMAC.  As a
result, GMAC advised GM that it is not yet able to provide the
financial information needed to complete GM's fourth quarter
financial results.

Based on these factors, GM will delay the announcement of its 2006
year-end and fourth quarter financial results, previously planned
for Jan. 30, 2007, pending resolution of outstanding accounting
issues and final GMAC financial results.

GM intends to provide further information on the progress of its
financial reporting during the week of Feb. 5.  The Corporation
currently anticipates that it will file its annual report on Form
10-K by its due date of March 1, 2007.

Separately, in terms of operations, GM continued to demonstrate
improved performance in its automotive business, with record
fourth quarter revenue in 2006.  The company expects to be
profitable on a reported consolidated basis in the 2006 fourth
quarter, and net income is expected to improve significantly over
the fourth quarter of 2005.  GM also further improved its
liquidity position, ending the year with approximately
$26.4 billion in cash and equivalents (including $2.5 billion of
readily available VEBA assets), an increase of about $5.9 billion
over year-end 2005.

GM reportedly implemented Statement of Financial Accounting
Standards 158, a new accounting standard for pension and other
post-retirement benefits effective Dec. 31, 2006.  Adoption of
this standard will result in negative stockholders' equity on a
book value basis.  For the third straight year, the company's U.S.
pension funds performed strongly, with asset returns of 15% for
2006.  As a result, including the impact of significant employee
attrition in 2006, GM's U.S. hourly and salary plans (as measured
by Statement of Financial Accounting Standards 87) ended the 2006
calendar year over-funded by $17 billion.

                     About General Motors Corp.

General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931.  Founded in 1908, GM employs about 284,000
people around the world.  It has manufacturing operations in
33 countries and its vehicles are sold in 200 countries.  GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006.  S&P said the outlook is
negative.

As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
proposed $1.5 billion secured term loan of General Motors Corp.
The term loan is expected to be secured by a first priority
perfected security interest in all of the US machinery and
equipment, and special tools of General Motors and Saturn Corp.


HUNTSMAN CORP: Unit Completes Sale of HPL to SABIC Petrochemicals
-----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Huntsman Corp. disclosed that Huntsman Petrochemicals
(UK) Holdings, as seller, and Huntsman International LLC, as
guarantor, completed a sale on Dec. 29, 2006, to SABIC (UK)
Petrochemicals Holdings Limited, as purchaser, and SABIC Europe
B.V., as guarantor, of all the outstanding equity interests of
Huntsman Petrochemicals (UK) Limited for an aggregate purchase
price of $685 million in cash plus the assumption by the purchaser
of approximately $126 million in unfunded pension liabilities.

The final purchase price is subject to adjustments relating to
working capital, investment in Huntsman's LDPE plant currently
under construction in Wilton and unfunded pension liabilities.

Each of Huntsman Petrochemicals (UK) Limited, Huntsman
Petrochemicals (UK) Holdings and Huntsman International LLC is a
wholly-owned subsidiary of Huntsman Corporation.  As a result of
this transaction, SABIC has acquired Huntsman's European base
chemicals and polymers business.  The transaction did not include
Huntsman's Teesside-based Pigments division or the Wilton-based
aniline and nitrobenzene operations of its Polyurethanes division.

                        About Huntsman

Huntsman Corp. -- http://www.huntsman.com/-- manufactures and
markets differentiated and commodity chemicals.  Its operating
companies manufacture products for a variety of global industries
including chemicals, plastics, automotive, aviation, textiles,
footwear, paints and coatings, construction, technology,
agriculture, health care,  detergent, personal care, furniture,
appliances and packaging.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 15, 2007,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating and other ratings on Salt Lake City, Utah-based
chemicals producer Huntsman Corp. and its subsidiary Huntsman
International LLC.


JERNBERG INDUSTRIES: Court Sets March 30 as Admin. Claims Bar Date
------------------------------------------------------------------
The Honorable John H. Squires of the U.S. Bankruptcy Court for the
Northern District of Illinois set March 30, 2007, as the last day
for creditors to file requests for allowance and payment of any
administrative claims against JII Liquidating, Inc., fka Jernberg
Industries, Inc., during the period from June 29, 2005, to Oct. 9,
2005.

Copies of written proofs of claim must be filed with the Court on
or before the March 30 Bar Date to:

     Clerk of the U.S. Bankruptcy Court
     Northern District of Illinois
     219 S. Dearborn Street, Room 710
     Chicago, Illinois 60604

and must be served to:

     Michael M. Schmahl, Esq,
     McGuireWoods LLP
     77 W. Wacker Drive, Suite 4100
     Chicago, Illinois 60601

Headquartered in Chicago, Illinois, Jernberg Industries, Inc. (nka
JII Liquidating, Inc.) was a press forging company that
manufactured formed and machined products.  The Company and its
debtor-affiliates filed for chapter 11 protection on June 29, 2005
(Bankr. N.D. Ill. Case No. 05-25909).  Jerry L. Switzer, Jr.,
Esq., at Jenner & Block LLP represented the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts of $50 million to $100 million.  The chapter 11
case was converted to a chapter 7 liquidation proceeding on
Oct. 10, 2005, after KPS Special Situations Fund II completed the
acquisition of substantially all of the company's assets.  Michael
M. Schmahl, Esq., and Patricia Smoots, Esq., at McGuireWoods LLP,
and represent Richard J. Mason, who serves as the Chapter 7
Trustee.


LAGUARDIA ASSOCIATES: U.S. Bank Files Plan for Field Hotel
----------------------------------------------------------
U.S. Bank National Association, as successor in interest to
SunTrust Bank, filed with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania a Disclosure Statement explaining
a Plan of Liquidation for Field Hotel Associates LP, a debtor-
affiliate of LaGuardia Associates LP.

SunTrust Bank, fka United States Trust Company, is the successor
indenture trustee to a Sept. 1, 1998 guaranty and security
agreement entered into by the Debtor to secure the Debtor's
obligations to make rental payments under its lease agreement with
the New York City Industrial Development Agency.

                        Treatment of Claims

Under its Plan, U.S. Bank proposes to pay Class 1 Other Priority
Claims in full on the effective date.

Class 3 Secured Tax Claims and the Class 2 Secured Claim of U.S.
Bank will be paid using all of the net sales proceeds resulting
from the sale of the Debtor's property.

Holders of Class 4 Other Secured Claims will receive in full
satisfaction of their claims either:

   a) payment in full of the  Allowed Other Secured Claim in Cash
      from the distribution fund on the effective date of the
      Plan; or

   b) the Debtor will abandon the property that secures the
      Allowed Other Secured Claim to the holder of the Allowed
      Other Secured Claim.

Each holder of Class 5 General Unsecured Claims will, in full
satisfaction of their Allowed General Unsecured Claim, receive one
or more distributions from the distribution fund in an amount
equal to its pro rata share of the distribution fund.

Class 5 Claims are also entitled to have a first priority right to
receive the first $200,000 of cash proceeds from the sale of the
Key Man Insurance Policy.

The Class 6 Deficiency Claim of U.S. Bank will be calculated by
adding together:

   i) any portion of the Allowed U.S. Bank Secured Claim that is
      determined by the Court or agreed to be an Allowed Unsecured
      Claim;

  ii) all sums guaranteed, carved out, or advanced by U.S. Bank
      for the payment of creditors under the Plan, including,
      without limitation the bondholders unsecured contribution
      and the Class 5 Guaranty Amount; and

iii) the derivative claims fees.

The Secured Claim of the estate of Joseph Selig under Class 7
is entitled to one or more distributions in cash from the
distribution fund after all claims in the previous classes are
paid in full.  As of the closing date, the liens, if any, of Selig
on the Debtor's property will be extinguished and released.

Mr. Selig holds a $12,539,947 mortgage on the Debtor's property.

Class 8 Affiliated Unsecured Claim Holders will receive one or
more distributions from the distribution fund in an amount equal
to its pro rata share of the distribution fund after all claims in
the previous classes are paid in full.

Holders of interest in the Debtor will be paid any amount
remaining in the distribution fund after payment in full of all
claims in prior classes, in accordance with the holder's
respective ownership interest in the Debtor.

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

   http://www.researcharchives.com/bin/download?id=070123221629

Headquartered in King of Prussia, Pennsylvania, LaGuardia
Associates, L.P., owns and operates the 358-room Crowne Plaza
Hotel located at 104-04 Ditmars Boulevard in East Elmhurst,
New York.  The Company and its debtor-affiliate filed for chapter
11 protection on October 29, 2004 (Bankr. E.D. Pa. Case No.
04-34514).  Martin J. Weis, Esq., at Dilworth Paxon LLP represent
the Debtors in their restructuring.  Ashely M. Chan, Esq., and
Myron Alvin Bloom, Esq., at Hangley Aronchick Segal & Pudlin
represent the Official Committee of Unsecured Creditors.  When the
Company filed for protection from its creditors, it estimated
assets and liabilities of $10 to $50 million.


MAAX CORP: Moody's Junk Ratings on $150 Million Senior Notes
------------------------------------------------------------
Moody's Investors Service downgraded MAAX Holdings, Inc.'s and
MAAX Corporation's corporate family, senior unsecured discount
notes due 2012, and senior subordinated notes due 2012 to Caa2,
Caa3 and Caa3 from B3, Caa1 and Caa1, respectively.

The downgrade reflects Moody's negative outlook for the
residential remodeling and homebuilding industries in North
America, and the difficulties this is likely to pose for MAAX as
it attempts to improve its profitability, cash flows and comply
with debt covenants.

Moody's outlook for the rating was changed to negative from
stable.

On Jan. 9, 2007, MAAX entered into a Credit and Guaranty Agreement
with Brookfield Bridge Lending Fund for a $175 million term loan
and a $40 million revolving credit facility.  This debt, which is
unrated by Moody's, replaces its previous facilities.

Accordingly, Moody's withdraws those ratings.

The New Credit Agreement contains a minimum monthly LTM adjusted
EBITDA requirement and fixed charge coverage ratio, which will
require monthly compliance.  Moody's believes MAAX will be
challenged to maintain compliance with the monthly minimum EBITDA
requirement of $36 million in this weak environment.

Moody's ratings also reflect MAAX's high leverage, $487 million,
and its weak debt protection metrics.  The ratings also reflect
weak coverage of the debt in relation to the company's tangible
assets, estimated to be less than 50% of total obligations in a
distress situation.

Downgrades:

   * MAAX Holdings, Inc.

      -- Corporate Family Rating to Caa2 from B3

      -- Probability of Default Rating to Caa2 from B2

      -- 11.57% Senior Unsecured Discount notes due 2012 to Caa3,
         LGD6, 93% from Caa1

   * MAAX Corporation

      -- $150 million, 9.75% Sr Sub notes due 2012 to Caa3, LGD5,
         75% from Caa1

Outlook Actions:

   * MAAX Holdings, Inc.

      -- Outlook, Changed to Negative from Stable

   * MAAX Corporation

      -- Outlook, Changed to Negative from Stable

Confirmations:

   * MAAX Holdings, Inc.

      -- Speculative Grade Liquidity Rating, confirmed at SGL-4

Moody's previous rating action for MAAX was on June 21, 2006, when
the Speculative Grade Liquidity Rating was lowered to SGL-4 from
SGL-3.  On Jan. 6, 2006, MAAX's corporate family rating was
lowered to B3 from B2.

MAAX Holdings, Inc. headquartered in Quebec, Canada, is a
manufacturer of gel coated and acrylic bath and spa products.


MASTR ALTERNATIVE: S&P Junks Ratings on Class B-5 Transaction
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 10
classes from four transactions issued by MASTR Alternative Loan
Trust.

Concurrently, the rating on class B-5 from MASTR Alternative Loan
Trust 2004-10 was lowered and removed from CreditWatch with
negative implications, where it was placed Dec. 21, 2006.  At the
same time, the ratings on 614 other classes from 31 MASTR
Alternative Loan Trust series were affirmed.

The raised ratings reflect increases in the actual and projected
credit support percentages for the respective classes, with
relatively low total delinquencies and cumulative realized losses.
Cumulative losses for these transactions range from 0.02% to 0.18%
of the original pool balances, and severe delinquencies are
between 6.63% and 0.43% of the current pool balances.

The higher credit support percentages are due to the shifting
interest structure of the transactions, which benefit from the
relatively fast principal prepayments experienced by the
collateral.

The lowered rating on class B-5 from MASTR Alternative Loan Trust
2004-10 and its removal from CreditWatch reflects the liquidation
of one loan that experienced a loss during the December 2006
remittance period.  The loss occurred after a New Orleans property
was severely damaged due to flooding.  The insurance company did
not deem the property a total loss because the damages are
primarily flood related and this property did not require flood
insurance.

Additionally, because the deal did not have a special hazard
carve-out, the loss was not covered.  This deal utilizes a senior-
subordinate structure; consequently, class B-5 is supported by the
unrated B-6 class, which is also receiving principal due to normal
amortization.  While the $41,146 loss  was absorbed by the
available subordination, current credit support for class B-5 has
been reduced to $197,544 because of losses and because the pool is
paying down.  As of the November remittance period, three loans
totaling $1.23 million were in foreclosure or were REO.  Upon
further analysis of the delinquent loans, Standard & Poor's found
that the value of the underlying properties associated with these
loans had declined by approximately $225,000.  Consequently,
current and projected credit support is not sufficient, and
Standard & Poor's will continue to monitor this deal.

Credit support for the transactions is primarily provided by
subordination.  The underlying collateral backing the certificates
consists primarily of fixed-rate, first-lien mortgage loans
secured by one- to four-family residential properties.

                         Ratings Raised

                  MASTR Alternative Loan Trust

                                            Rating
                                            ------
       Series       Class                 To      From
       ------       -----                 --      ----
       2002-1       B-2                   AAA     AA+
       2002-1       B-3                   AA+     A+
       2002-2       B-2                   AAA     AA+
       2002-2       B-3                   AA      A+
       2003-2       B-1                   AAA     AA
       2003-2       B-2                   AA      A
       2003-2       B-3                   A       BBB
       2003-3       B-2                   AAA     AA
       2003-3       B-3                   AA-     A
       2003-3       B-4                   BBB     BB+

      Rating Lowered And Removed On Creditwatch Negative

                 MASTR Alternative Loan Trust

                                            Rating
                                            ------
       Series       Class                 To      From
       ------       -----                 --      ----
       2004-10      B-2                   CCC     B/Watch Neg

                       Ratings Affirmed

                 MASTR Alternative Loan Trust
           Residential mortgage backed certificates

    Series   Class                                      Rating
    ------   -----                                      ------
    2002-1   A-1, A-2, A-5, A-PO, A-X, B-1              AAA
    2002-2   1-A-1, 2-A-1, 3-A-1, 4-A-1, A-X-1, PO-1    AAA
    2002-2   5-A-1, A-X-2, PO-2, B-1                    AAA
    2002-3   A-6, A-7, A-IO                             AAA
    2002-3   M-1                                        AA
    2002-3   M-2                                        A
    2002-3   B                                          BBB
    2003-2   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2003-2   6-A-2, 6-A-3, 6-A-4, 6-A-IO, 6-A-PO        AAA
    2003-2   7-A-1, 15-A-X, 15-PO, 30-A-X, 30-PO        AAA
    2003-2   B-4                                        BB
    2003-2   B-5                                        B
    2003-3   1-A-1, 2-A-1, 2-A-2, 2-A-5, 2-PO, B-1      AAA
    2003-3   B-5                                        B
    2003-4   1-A-1, 2-A-1, 3-A-1, 4-A-1, 4-A-2, 4-A-3   AAA
    2003-4   5-A-1, 15-A-X, 15-PO, 30-A-X, 30-PO        AAA
    2003-4   B-1                                        AA
    2003-4   B-2                                        A
    2003-4   B-3                                        BBB
    2003-4   B-4                                        BB
    2003-4   B-5                                        B
    2003-5   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2003-5   7-A-1, 8-A-1, 15-PO, 15-AX, 30-PO, 30-AX   AAA
    2003-5   15-B-1, 30-B-1                             AA
    2003-5   15-B-2, 30-B-2                             A
    2003-5   15-B-3, 30-B-3                             BBB
    2003-5   15-B-4, 30-B-4                             BB
    2003-5   15-B-5, 30-B-5                             B
    2003-6   1-A-1, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 4-A-1   AAA
    2003-6   15-A-X, 30-A-X, 15-PO, 30-PO               AAA
    2003-6   B-1                                        AA
    2003-6   B-2                                        A
    2003-6   B-3                                        BBB
    2003-6   B-4                                        BB
    2003-6   B-5                                        B
    2003-7   1-A-1, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4   AAA
    2003-7   3-A-5, 4-A-1, 4-A-2, 4-A-3, 5-A-1, 6-A-1   AAA
    2003-7   7-A-1, 7-A-2, 7-A-3, 7-A-4, 7-A-5          AAA
    2003-7   7-A-10                                     AAA
    2003-7   15-PO, 30-PO                               AAA
    2003-7   7-A-17, 7-A-18, 8-A-1, 15-A-X, 30-A-X      AAA
    2003-7   B-1                                        AA
    2003-7   B-2                                        A
    2003-7   B-3                                        BBB
    2003-7   B-4                                        BB
    2003-7   B-5                                        B
    2003-8   1-A-1, 2-A-1, 3-A-1, 3-A-2, 3-A-3, 3-A-4   AAA
    2003-8   4-A-1, 5-A-1, 6-A-1, 7-A-1, 15-PO          AAA
    2003-8   30-PO, 15-A-X, 30-A-X1, 30-A-X2            AAA
    2003-8   B-1                                        AA
    2003-8   B-2                                        A
    2003-8   B-3                                        BBB
    2003-8   B-4                                        BB
    2003-8   B-5                                        B
    2003-9   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 5-A-2   AAA
    2003-9   6-A-1, 7-A-1, 7-A-2, 8-A-1, 8-A-2, 15-PO   AAA
    2003-9   30-PO, 15-AX-1, 15-AX-2, 30-A-X            AAA
    2003-9   B-1                                        AA
    2003-9   B-2                                        A
    2003-9   B-3                                        BBB
    2003-9   B-4                                        BB
    2003-9   B-5                                        B
    2004-1   1-A-1, 1-A-2, 2-A-1, 3-A-1, 4-A-1, 15-P0   AAA
    2004-1   30-PO, 15-AX, 30-AX                        AAA
    2004-1   B-1                                        AA
    2004-1   B-2                                        A
    2004-1   B-3                                        BBB
    2004-1   B-4                                        BB
    2004-1   B-5                                        B
    2004-2   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2004-2   7-A-1, 8-A-1, 8-A-2, 8-A-3, 8-A-4, 8-A-5   AAA
    2004-2   15-PO, 30-PO, 1-A-X, 2-A-X, 3-A-X, C-A-X   AAA
    2004-2   7-A-X, 8-A-X                               AAA
    2004-2   B-1                                        AA
    2004-2   B-2                                        A
    2004-2   B-3                                        BBB
    2004-2   B-4                                        BB
    2004-2   B-5, B-I-5                                 B
    2004-3   1-A-1, 2-A-1, 3-A-1, 4-A-1, 15-AX          AAA
    2004-3   30-AX-1, 15-PO, 30-PO, 5-A-1, 6-A-1        AAA
    2004-3   7-A-1, 8-A-1, 30-AX-2, 15-PO, 30-PO        AAA
    2004-3   B-I-1                                      AA-
    2004-3   B-1                                        AA
    2004-3   B-I-2                                      A-
    2004-3   B-2                                        A
    2004-3   B-I-3                                      BBB-
    2004-3   B-3                                        BBB
    2004-3   B-I-4, B-4                                 BB
    2004-3   B-I-5, B-5                                 B
    2004-4   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2004-4   7-A-1, 8-A-1, 9-A-1, 10-A-1, 10-A-2        AAA
    2004-4   11-A-1, 15-PO, 30-PO, 15-AX-1, 15-AX-2     AAA
    2004-4   30-AX-1, 30-AX-2                           AAA
    2004-4   B-1                                        AA
    2004-4   B-I-1                                      AA-
    2004-4   B-2                                        A
    2004-4   B-I-2                                      A-
    2004-4   B-3                                        BBB
    2004-4   B-I-3                                      BBB-
    2004-4   B-4, B-I-4                                 BB
    2004-4   B-5, B-I-5                                 B
    2004-5   1-A-1, 2-A-1, 3-A-1, 4-A-1, 15-A-X         AAA
    2004-5   30-AX-1, 15-PO, 30-PO, 5-A-1, 6-A-1        AAA
    2004-5   7-A-1, 30-AX-2, A-LR, A-UR                 AAA
    2004-5   B-1                                        AA-
    2004-5   B-2                                        A-
    2004-5   B-3                                        BBB
    2004-5   B-4                                        BB
    2004-5   B-5                                        B
    2004-6   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2004-6   7-A-1, 8-A-1, 9-A-1, 10-A-1, 1-A-2         AAA
    2004-6   15-PO, 30-PO, 15-A-X                       AAA
    2004-6   30-AX-1, 30-AX-2, A-LR, A-R                AAA
    2004-6   B-1                                        AA
    2004-6   B-2                                        A
    2004-6   B-3                                        BBB
    2004-6   B-4                                        BB
    2004-6   B-5                                        B
    2004-8   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1   AAA
    2004-8   7-A-1, 8-A-1, 4-A-2, 4-A-3                 AAA
    2004-8   PO, 15-AX, 30-AX-1, 30-AX-2, A-LR, A-R     AAA
    2004-8   B-1                                        AA
    2004-8   B-2                                        A
    2004-8   B-3                                        BBB
    2004-8   B-I-3                                      BBB-
    2004-8   B-4                                        BB
    2004-8   B-5, B-I-5                                 B
    2004-9   A-1, A-2, A-3, A-4, A-5, A-6               AAA
    2004-9   M-1                                        AA+
    2004-9   M-2                                        A+
    2004-9   M-3                                        BBB+
    2004-10  1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 5-A-2   AAA
    2004-10  5-A-3, 5-A-4, 5-A-5, 5-A-6, 5-A-7          AAA
    2004-10  15-PO, 30-PO, 15-A-X-1, 15-A-X-2           AAA
    2004-10  30-AX                                      AAA
    2004-10  B-1                                        AA
    2004-10  B-2                                        A
    2004-10  B-3                                        BBB
    2004-10  B-4                                        BB
    2004-11  1-A-1, 2-A-1, 3-A-1, 5-A-1, 6-A-1, 7-A-1   AAA
    2004-11  8-A-1, 8-A-2, 8-A-3, 4-A-1, 9-A-1, 9-A-2   AAA
    2004-11  15-PO, 30-PO, 15-AX, 20-AX                 AAA
    2004-11  30-AX, A-LR, A-R                           AAA
    2004-11  B-1                                        AA
    2004-11  B-2                                        A
    2004-11  B-3                                        BBB
    2004-11  B-3                                        BB
    2004-11  B-5, B-I-5                                 B
    2004-12  1-A-1, 5-A-1, 5-A-2, 5-A-3, 5-A-4, 5-A-5   AAA
    2004-12  5-A-6, 6-A-1, 6-A-2, 6-A-3, 6-A-4          AAA
    2004-12  PO, 1-A-X, A-X, 2-A-1, 3-A-1, 4-A-1        AAA
    2004-12  2-A-X, A-LR, A-UR, 2-A-1, 3-A-1       AAA
    2004-12  3-A-X, 4-A-X                               AAA
    2004-12  B-1                                        AA
    2004-12  B-I-1                                      AA-
    2004-12  B-2                                        A
    2004-12  B-I-2                                      A-
    2004-12  B-3                                        BBB
    2004-12  B-I-3                                      BBB-
    2004-12  B-4, B-I-4                                 BB
    2004-12  B-5, B-I-5                                 B
    2004-13  1-A-1, 2-A-1, 3-A-1, 3-A-2, 4-A-1, 5-A-1   AAA
    2004-13  6-A-1, 7-A-1, 8-A-1, 9-A-1, 9-A-2, 9-A-3   AAA
    2004-13  10-A-1, 10-A-2, 10-A-3, 10-A-4             AAA
    2004-13  11-A-1, 12-A-1, A-LR                       AAA
    2004-13  A-UR, 15-PO, 30-PO, 15-A-X, 10-A-X         AAA
    2004-13  30-X-1, 30-X-2                             AAA
    2004-13  B-1                                        AA
    2004-13  B-2                                        A
    2004-13  B-3                                        BBB
    2004-13  B-4                                        BB
    2004-13  B-5, B-I-5                                 B
    2005-1   1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1          AAA
    2005-1   6-A-1, 6-A-2, 6-A-3, 6-A-4, 6-A-5, 7-A-1   AAA
    2005-1   7-A-2, 15-PO, 30-PO, 30-X-2, 15-A-X        AAA
    2005-1   30-X-1, A-LR, A-UR                         AAA
    2005-1   B-1                                        AA
    2005-1   B-I-1                                      AA-
    2005-1   B-2                                        A
    2005-1   B-I-2                                      A-
    2005-1   B-3                                        BBB
    2005-1   B-4                                        BB
    2005-1   B-5, B-I-5                                 B
    2005-2   1-A-1, 1-A-2, 1-A-3, 1-A-4                 AAA
    2005-2   2-A-1, 3-A-1, 5-A-1, 6-A-1                 AAA
    2005-2   4-A-1, 4-A-2, 4-A-3, 4-A-4, 4-A-5          AAA
    2005-2   A-LR, A-UR, A-X-1, A-X-2, PO               AAA
    2005-2   B-1                                        AA-
    2005-2   B-2                                        A
    2005-2   B-3                                        BBB
    2005-2   B-4                                        BB
    2005-2   B-5                                        B
    2005-3   1-A-1, 1-A-2, 1-A-3, 1-A-4                 AAA
    2005-3   2-A-1, 3-A-1, 4-A-1, 5-A-1, 5-A-2          AAA
    2005-3   6-A-1, 6-A-2, 6-A-3, 6-A-4, 7-A-1          AAA
    2005-3   A-LR, A-UR, A-X-1, A-X-2, 15-PO, 30-PO     AAA
    2005-3   B-1                                        AA
    2005-3   B-2                                        A
    2005-3   B-3                                        BBB
    2005-3   B-4                                        BB
    2005-3   B-5                                        B
    2005-4   1-A-1, 1-LR, A-X-2                         AAA
    2005-4   2-A-1, 3-A-1, 4-A-1, 5-A-1                 AAA
    2005-4   A-UR, A-X-1, 15-PO, 30-PO                  AAA
    2005-4   B-1                                        AA
    2005-4   B-2                                        A+
    2005-4   B-3                                        BBB+
    2005-4   B-4                                        BB+
    2005-4   B-5                                        B
    2005-5   1-A-1, A-LR, A-UR, 15-A-X                  AAA
    2005-5   2-A-1, 2-A-2, 2-A-3, 20-A-X, 30-A-X        AAA
    2005-5   3-A-1, 3-A-2, 4-A-1, 5-A-1, 5-A-2          AAA
    2005-5   15-PO, 30-PO                               AAA
    2005-5   B-1                                        AA
    2005-5   B-2                                        A
    2005-5   B-3                                        BBB
    2005-5   B-4                                        BB
    2005-5   B-5                                        B
    2005-6   1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6   AAA
    2005-6   2-A-1, 2-A-2, 3-A-1, 3-A-2                 AAA
    2005-6   A-LR, A-UR, A-X, 15-PO, 30-PO              AAA
    2005-6   B-1                                        AA
    2005-6   B-2                                        A
    2005-6   B-3                                        BBB
    2005-6   B-4                                        BB
    2005-6   B-5                                        B
    2006-1   A-1, A-2, A-3, A-4, A-5, A-6               AAA
    2006-1   A-LR, R-UR, A-X, PO                        AAA
    2006-1   B-1                                        AA
    2006-1   B-2                                        A
    2006-1   B-3                                        BBB
    2006-1   B-4                                        BB
    2006-1   B-5                                        B
    2006-2   1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5          AAA
    2006-2   2-A-1, 2-A-2, 2-A-3, 2-A-4                 AAA
    2006-2   A-LR, A-UR, A-X, PO                        AAA
    2006-2   B-1                                        AA
    2006-2   B-2                                        A
    2006-2   B-3                                        BBB
    2006-2   B-4                                        BB
    2006-2   B-5                                        B


MATTRESS HOLDING: S&P Rates $210 Million Credit Facilities at B
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Houston, Texas-based Mattress Holding Corp.

The outlook is negative.

Standard & Poor's also assigned a 'B' rating to the company's
proposed $210 million senior secured credit facilities, consisting
of a $185 million term loan B due 2014 and a $25 million revolving
credit facility, expected to be undrawn at closing.  This rating
and the '2' recovery rating indicate Standard & Poor's expectation
for substantial recovery of principal in the event of a payment
default.

"The ratings reflect Mattress Holding's weak business risk profile
due to the company's participation in the highly competitive and
fragmented mattress retail market, a highly leveraged capital
structure that results in thin cash flow protection, and an
aggressive financial policy," said Standard & Poor's credit
analyst John Thieroff.

Proceeds of the term loan will partially fund private equity
sponsor JW Childs Associates L.P.'s $450 million acquisition of
Mattress Holding, holding company for the specialty mattress
retailer operating under the name Mattress Firm.  The facilities
are guaranteed by all operating subsidiaries of Mattress Holding,
and secured by all assets of these entities.

Mattress Holding owns and operates 295 stores and franchises an
additional 54, all under the Mattress Firm name, in 19 states
predominantly in the Southeast and Southwest.  The company
participates in the stable, mature mattress industry, which has
about $13 billion in annual sales.  Although the industry is
relatively mature, robust demand for premium and specialty
mattresses has provided the impetus for strong industry-wide
revenue growth, expected to exceed 8% for 2006.  In addition,
industry participants benefit from a steady need for mattress
replacement; about 80% of mattress sales are considered
replacement sales.

A highly fragmented group of retailers serves the mattress
industry; the largest has less than 6% market share.  Mattress
Firm is the third-largest bedding retailer in the U.S. with a 2.5%
market share based on 2005 sales, although the company's somewhat
broader product offering and strong position within its core
operating areas provide a measure of differentiation from most of
its peers.

Mattress Holding has grown considerably over the past two years,
the result of a handful of acquisitions and significant store
opening activity, primarily within core operating areas.


MERRILL LYNCH: Moody's Affirms B2 Rating on Class F Certificates
----------------------------------------------------------------
Moody's Investors Service upgraded the rating of one class and
affirmed the ratings of seven classes of Merrill Lynch Mortgage
Loans, Inc., Commercial Mortgage Pass-Through Certificates,
Series 1999-Canada 2:

   -- Class A-2, $95,570,493, Fixed, affirmed at Aaa
   -- Class X-1, Notional, affirmed at Aaa
   -- Class X-2, Notional, affirmed at Aaa
   -- Class B, $8,028,000, Fixed, affirmed at Aaa
   -- Class C, $9,098,000, Fixed, affirmed at Aaa
   -- Class D, $10,169,000,Fixed, upgraded to A2 from A3
   -- Class E, $9,848,000, Fixed, affirmed at Ba2
   -- Class F, $5,566,000, Fixed, affirmed at B2

As of the Jan. 18, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 33.1%
to $143.2 million from $214.1 million at securitization.  The
Certificates are collateralized by 34 mortgage loans ranging in
size from less than 1% to 8.8% of the pool, with the top 10 loans
representing 59.4% of the pool.  One loan, representing 5.3% of
the pool, has defeased and is secured by Canadian government
securities.

The pool has not experienced any losses since securitization.
Currently there are two loans, representing 1.7% of the pool, in
special servicing.  Moody's is not projecting any losses from
these loans.  Eight loans, representing 26.8% of the pool, are on
the master servicer's watchlist.

Moody's was provided with year-end 2005 borrower financials for
69.7% of the pool.  Moody's loan to value ratio is 67.7%, compared
to 68.1% at Moody's last full review in January 2005 and compared
to 76.8% at securitization.  Moody's is upgrading Class D due
to increased subordination levels and stable overall pool
performance.  Classes C and D were upgraded on Dec. 8, 2006 based
on a Q tool based portfolio review.

The top three loans represent 23.8% of the pool.  The largest loan
is the Greenwood Village Mobile Home Park Loan, which is secured
by a 475-pad mobile home park located in Calgary, Alberta.  The
property has benefited from increased rental income and is 100%
occupied, the same as at securitization.  Moody's LTV is 65.9%,
compared to 70.4% at last review.

The second largest loan is the Gateway Park Loan, which is secured
by a 83,000 square foot retail center located approximately 40
miles southwest of Toronto in Kitchener, Ontario.  The property is
100% occupied, the same as at securitization.  Moody's LTV is
70.4%, compared to 77.1% at last review.

The third largest loan is the Portage Place Shopping Center Loan,
which represents a 44.1% pari passu interest in a $23.1 million
first mortgage loan.  The loan is secured by a leasehold interest
in a 294,000 square foot mixed use complex located in downtown
Winnipeg, Manitoba.  The property consists of a two-level retail
component, an entertainment complex and 36,000 square feet of
office space.  As of November 2006 the property was 95.1%
occupied.  Moody's LTV is in excess of 100%, similar to last
review.

The pool collateral consists of retail, multifamily and
manufactured housing, industrial and self storage, lodging, office
and mixed use and Canadian government securities.  The collateral
properties are located in six Canadian provinces.  The top three
province concentrations are Ontario, Alberta and Manitoba.  All of
the loans are fixed rate.  Approximately 29.3% of the pool is
partial or full recourse to the respective borrowers.


MESABA AVIATION: Wants to Sell $145 Million Northwest Claim
-----------------------------------------------------------
Northwest Airlines, Inc., Mesaba Aviation, Inc., MAIR Holdings,
Inc., and the Official Committee of Unsecured Creditors
professionals held discussions regarding the potential acquisition
of the Debtor by Northwest through the Debtor's Reorganization
Plan.  The negotiations led to the substantial completion of a
stock purchase and reorganization agreement with no material
issues remaining, approved by Northwest, MAIR, the Committee and
the Debtor.

In addition to providing for the acquisition of all issued and
outstanding shares in the Debtor by Northwest, the Northwest
Transaction liquidates the claim of Mesaba against Northwest for
the breach or rejection of the existing Airline Service
Agreements for $145,000,000.

According to Will R. Tansey, Esq., at Ravich Meyer Kirkman
McGrath & Nauman, P.A., in Minneapolis, Minnesota, the Debtor
seeks to sell the Claim, whether or not the Northwest Transaction
is consummated, to the highest and best bidder at an auction.
The Debtor intends to sell the Claim in whole to a single buyer,
or in parts to multiple buyers, free and clear of interests
pursuant to Section 363(f) of the Bankruptcy Code.

The Claim is subject to the lien of Marathon Structured Finance
Fund LP, the Debtor's debtor-in-possession lender.  The Debtor
has not yet drawn on its postpetition financing.

MAIR, the Debtor, and the Creditors Committee and its financial
advisors, Imperial Capital LLC, have agreed to the bidding
procedures, Mr. Tansey says.

The Bidding Procedures provide, among other things, that:

    (a) the Debtor will sell the Mesaba Claim to the bidder
        presenting the highest and best sealed Qualified Bid or,
        if the Debtor deems it appropriate, the Debtor may conduct
        an auction involving the bidders who presented sealed
        Qualified Bids;

    (b) if the Auction is conducted, only bids for the entire
        Claim amount that meet a minimum increment above the
        highest and best sealed bid will be considered; and

    (c) if the Auction is to be conducted, notice will be filed
        with the Court and served on Qualified Bidders no later
        than January 26, 2007.  The Auction will commence at noon
        on January 29th and will be concluded before the
        January 30 Sale Hearing.  The Auction may be conducted by
        telephone calls between the parties or by live auction.

All Qualified Bids must be submitted to Imperial so as to be
received not later than January 26, 2007.  On January 29, the
Debtor will either:

    -- file a notice with the Court that identifies the sale price
       and the party or parties that presented the highest and
       best Qualified Bids; or

    -- advise the Court that the Auction has not been completed.

The rights of the Committee and MAIR to object to any
determination at the Sale Hearing are specifically preserved.
However, bidders will not have any right to object to any
determination of the Debtor in connection with the Bid Procedures
or otherwise relating to the sale of the Mesaba Claim.

There will be no break-up fee or expense reimbursement paid to
any bidder.

The Debtor believes that a sealed bid procedure without an
Auction or with a limited Auction is the best procedure for
maximizing the sale proceeds under the circumstances, Mr. Tansey
relates.  The highest and best offer will be determined by the
Debtor, in consultation with the Creditors Committee and MAIR as
described in the Bidding Procedures.

Mr. Tansey notes that parties actively interested in purchasing
claims against Northwest have had notice of the Mesaba Claim
since it was filed in August 2006.  The Debtor, MAIR and the
Creditors Committee or Imperial have been contacted by numerous
parties interested in purchasing the Claim.  The Debtor also
believes there will be limited due diligence required by
potential bidders.  The Debtor does not believe a significant
amount of time is necessary to maximize potential offers for the
Claim.

The claims against Northwest are currently trading at
approximately 95% of the face value of the claim, Mr. Tansey
further notes.  Given the current uncertainty in Northwest's
operations and plan of reorganization, the Debtor believes that
the market for claims of Northwest may fluctuate as additional
events occur or fail to occur.

"There appears to be a limited upside to delaying the sale and
potentially significant downside," Mr. Tansey says.

After consulting with MAIR and the Creditors Committee, the
Debtor believes selling the Claim immediately is appropriate to
avoid any unnecessary risk associated with the market for the
Claim.

Against this backdrop, Debtor asks the U.S. Bankruptcy Court for
the District of Minnesota to enter a ruling:

    (a) approving the sale of the Claim free and clear of
        interests in an expedited manner;

    (b) approving the Bidding Procedures;

    (c) authorizing the Debtor to take all actions necessary to
        consummate the sale transaction; and

    (d) granting Marathon a replacement lien in the proceeds of
        the sale.

Unless a response opposing the request is filed before
January 30, 2007, the Court may grant the request without a
hearing.

                        About Mesaba Aviation

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


MORTGAGE ASSET: Fitch Rates Series 2005 Class M-10 Certs. at BB+
----------------------------------------------------------------
Fitch has taken rating actions on Mortgage Asset Securitization
Transactions' Asset Back Securities Trust mortgage pass-through
certificates:

Series 2002-NC1

   --Class M-2 upgraded to 'AAA' from 'AA-';
   --Class M-3 upgraded to 'A+' from 'A-';
   --Class M-4 affirmed at 'BBB-'.

Series 2002-OPT1

   --Class M-1 affirmed at 'AAA';
   --Class M-2 upgraded to 'AAA' from 'AA+';
   --Class M-3 upgraded to 'AA' from 'AA-';
   --Class M-4 upgraded to 'A+' from 'A-';
   --Class M-5 affirmed at 'BBB';
   --Class M-6 affirmed at 'BBB-'.

Series 2003-NC1

   --Class M-2 upgraded to 'AAA' from 'AA';
   --Class M-3 upgraded to 'AA' from 'AA-';
   --Class M-4 upgraded to 'AA-' from 'A+';
   --Class M-5 upgraded to 'A+' from 'A-';
   --Class M-6 upgraded to 'BBB+' from 'BBB-'.

Series 2003-OPT1

   --Class M-1 upgraded to 'AAA' from 'AA+';
   --Class M-2 upgraded to 'AA' from 'AA-';
   --Class M-3 upgraded to 'AA-' from 'A+';
   --Class M-4 affirmed at 'BBB';
   --Classes MF-5 & MV-5 affirmed at 'BBB-'.

Series 2003-OPT2

   --Class M-1 upgraded to 'AAA' from 'AA';
   --Class M-2 upgraded to 'AA-' from 'A';
   --Class M-3 upgraded to 'A-' from 'BBB+'
   --Class M-4 affirmed at 'BBB';
   --Class M-5 affirmed at 'BBB-'.

Series 2003-WMC2

   --Class M-1 upgraded to 'AA+' from 'AA';
   --Class M-2 affirmed at 'A';
   --Class M-3 affirmed at 'A-';
   --Class M-4 affirmed at 'BBB+'
   --Class M-5 affirmed at 'BBB';
   --Class M-6 affirmed at 'BBB-'.

Series 2004-FRE1

   --Class M-1 upgraded to 'AAA' from 'AA+';
   --Class M-2 upgraded to 'AAA' from 'AA';
   --Class M-3 upgraded to 'AAA' from 'AA-';
   --Class M-4 upgraded to 'AA-' from 'A+';
   --Class M-5 upgraded to 'A+' from 'A';
   --Class M-6 upgraded to 'A' from 'A-';
   --Class M-7 upgraded to 'A-' from 'BBB+';
   --Class M-8 affirmed at 'BBB';
   --Class M-9 affirmed at 'BBB-'.

Series 2004-HE1

   --Classes A-1 & A-4 affirmed at 'AAA';
   --Class M-1 upgraded to 'AAA' from 'AA+';
   --Class M-2 upgraded to 'AAA' from 'AA+';
   --Class M-3 affirmed at 'AA+';
   --Class M-4 upgraded to 'AA+' from 'AA';
   --Class M-5 affirmed at 'AA';
   --Class M-6 affirmed at 'AA-';
   --Class M-7 affirmed at 'A+';
   --Class M-8 affirmed at 'A';
   --Class M-9 affirmed at 'BBB+';
   --Class M-10 affirmed at 'BBB';
   --Class M-11 affirmed at 'BBB-'.

Series 2004-OPT1

   --Classes A-1 through A-3 affirmed at 'AAA';
   --Class M-1 upgraded to 'AAA' from 'AA';
   --Class M-2 affirmed at 'A';
   --Class M-3 affirmed at 'A-';
   --Class M-4 affirmed at 'BBB+';
   --Class M-5 affirmed at 'BBB';
   --Class M-6 affirmed at 'BBB-';
   --Class M-7 affirmed at 'BB+'.

Series 2004-OPT2

   --Classes A-1 & A-2 affirmed at 'AAA';
   --Class M-1 affirmed at 'AA+';
   --Class M-2 affirmed at 'AA+';
   --Class M-3 affirmed at 'AA';
   --Class M-4 affirmed at 'AA-';
   --Class M-5 affirmed at 'AA-';
   --Class M-6 affirmed at 'A+';
   --Class M-7 affirmed at 'A'.

Series 2004-WMC1

   --Class M-1 affirmed at 'AA';
   --Class M-2 affirmed at 'A';
   --Class M-3 affirmed at 'A-';
   --Class M-4 affirmed at 'BBB+';
   --Class M-5 affirmed at 'BBB'.

Series 2004-WMC2

   --Class M-1 affirmed at 'AA';
   --Class M-2 affirmed at 'A';
   --Class M-3 affirmed at 'A-';
   --Class M-4 affirmed at 'BBB+';
   --Class M-5 affirmed at 'BBB'.

Series 2005-FRE1

   --Classes A-1 through A-5 affirmed at 'AAA';
   --Class M-1 affirmed at 'AA+';
   --Class M-2 affirmed at 'AA';
   --Class M-3 affirmed at 'AA-';
   --Class M-4 affirmed at 'A+';
   --Class M-5 affirmed at 'A';
   --Class M-6 affirmed at 'A-';
   --Class M-7 affirmed at 'BBB+';
   --Class M-8 affirmed at 'BBB';
   --Class M-9 affirmed at 'BBB-';
   --Class M-10 rated 'BB+', placed on Rating Watch Negative.

The affirmations, affecting approximately $1.5 billion of the
outstanding certificates, are taken as a result of a stable
relationship between credit enhancement and expected loss.  The
upgrades, affecting approximately $541.1 million of the
outstanding certificates, are taken as a result of an improvement
in the relationship between CE and expected loss.  The Rating
Watch Negative affects approximately $8.4 million of the
outstanding certificates.

All of the above 2002 and 2003 vintage transactions and series
2004-FRE1 were structured with a fixed 60+ delinquency trigger of
either 16% or 16.5%.  All of these deals are failing the
delinquency trigger and Fitch believes they will continue to fail
for life.  As a result, with the exception of series 2003-WMC2 and
2004-FRE1, the overcolleralization will not step down, which keeps
the CE relatively high.  This allows for upgrades of the more
senior classes.  The OC of series 2003-WMC2 and 2004-FRE1 stepped
down when the class A paid off.  Series 2005-FRE1 is currently
pass both the delinquency and loss triggers.

Series 2005-FRE1, class M-10 is placed on Rating Watch Negative
because of current trends in the relationship between serious
delinquency and credit enhancement.  This transaction has 7.51% of
the current collateral balance in foreclosure and REO.  In
addition, the 60+ DQ is 11.5% of the current collateral balance,
which is relatively high compared to the subprime industry
average.  The OC is currently at target and providing 2.52% in
credit enhancement to class M-10.  In addition, the annualized
excess spread currently available to absorb losses is 1.79%.

The collateral of the above transactions primarily consists of
conforming and non-conforming, fixed-rate and adjustable-rate
subprime mortgage loans secured by first and second liens on
residential properties.  At issuance over 60% of the mortgages in
series 2003-OPT1, 2003-OPT2, and 2004-OPT2 are covered by deep
mortgage insurance policies provided by Radian Guaranty Inc.  In
addition, at issuance over 68% of the mortgages in series 2004-HE1
are covered by deep mortgage insurance policies provided by
Mortgage Guaranty Insurance Corp.

The mortgages underlying the 'NC' transactions were originated or
acquired by New Century Mortgage Corp. and are serviced by Ocwen
Financial Corp.  The mortgages underlying the 'OPT' transactions
were originated or acquired by Option One Mortgage Corp. and are
serviced by Option One Mortgage Corp.

The mortgages underlying the 'WMC' transactions were originated or
acquired by WMC, a mortgage banking company incorporated in the
State of California.  The mortgages in series 2003-WMC2 are
serviced by Chase Home Finance, LLC and in series 2004-WMC1 and
2004-WMC2 are serviced by HomEq Servicing Corp.

The mortgages underlying the 'FRE' transactions were originated or
acquired by Fremont Investment and Loan and are also serviced
HomEq Servicing Corp.  The mortgages underlying series 2004-HE1
were originated or acquired by Accredited Home Lenders, Inc.,
Encore Credit Corp., First Street Financial, Inc., Mandalay
Mortgage, National City Mortgage, and New Century Mortgage
Corporation.  The transaction is master serviced by Wells Fargo
Home Mortgage, Inc.

The pool factors for the above transactions range from 9% to 69%.
The seasoning ranges from 13 months to 50 months.


MORTGAGE ASSET: Fitch Holds Class B-5 Certificates' B Rating
------------------------------------------------------------
Fitch has affirmed Mortgage Asset Securitization Transactions'
Adjustable Rate Mortgages Trust mortgage pass-through
certificates:

Series 2004-10

   --Class A at 'AAA';
   --Class B-1 at 'AA-';
   --Class B-2 at 'A-';
   --Class B-3 at 'BBB-'.

Series 2004-12

   --Class A at 'AAA';
   --Class B-1 at 'AA-'.

Series 2004-15

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

The affirmations, affecting approximately $568 million of the
outstanding certificates, are taken as a result of a stable
relationship between credit enhancementand expected loss.  All of
the above transactions have experienced a growth in CE of at least
1.75 times the original levels.

The collateral of the above MARM deals consists of conventional,
fully amortizing, 30-year fixed-rate and adjustable-rate, prime
mortgage loans secured by first liens on one- to four-family
residential properties.  The loans were acquired by UBS from
various originators.  The transactions are master serviced by
Wells Fargo Bank, N.A.

The pool factor for series 2004-10 is 47%, for series 2004-12 is
56%, and series 2004-15 is 50%.  Series 2004-10 is seasoned 27
months, series 2004-12 is seasoned 26 months, and series 2004-15
is seasoned 25 months.


NASDAQ STOCK: LSE Fails to Provide Options to Increase Liquidity
----------------------------------------------------------------
The Board of The Nasdaq Stock Market, Inc. noted the publication
of a new document by London Stock Exchange Group plc on Jan. 18,
2006.

NASDAQ would draw LSE shareholders' attention to the fact that
LSE:

  * failed to provide a long-term strategic vision;

  * disclosed a marginal return of capital;

  * showed renewed complacency with respect to Project Turquoise;

  * on Nasdaq's analysis, failed to take adequate account of the
    impact of competition on future SETS volumes; and

  * failed to provide any new visibility on its cost base and
    deployed weak arguments on standalone value.

Accordingly, LSE failed to present any information, which changed
NASDAQ's belief that without NASDAQ, LSE Shares would be worth far
less.

                        Lack of Strategy

LSE again failed to provide a long-term strategic vision for the
business and focuses purely on short-term reactive initiatives.
Despite considerable press speculation about a potential strategic
alternative to a combination with NASDAQ, the Board noted that LSE
remains unable (or unwilling) to identify, let alone consummate,
an alternative transaction which would increase liquidity, provide
synergies and diversify the business.

                   Marginal Return of Capital

The LSE share buyback proved that LSE would rather weaken its
strategic position through reactive tactics than set out a clear
vision for the business.  The amount proposed was less than half
that given to shareholders in the defence to the Macquarie bid,
which valued ordinary shares at 36% of NASDAQ's Ordinary Offer.
The Board would also draw LSE Shareholders' attention to the fact
that LSE only returns capital when it needs their support,
including the amount reported at 76% of LSE's distributions over
the last three years was in direct response to unsolicited bids.

                 Renewed Evidence of Complacency

LSE characterizes Project Turquoise, an alternative equity market
platform backed by seven investment banks, as "the ninth new UK
equity trading platform in the last seven years".  The Board
regard this as clear evidence of LSE's failure to recognize the
significance of the initiative -- have any of the previous rivals
been established and owned by parties responsible for 50% of the
trading volume on LSE?

              Impact of Competition on SETS Volumes

NASDAQ believes that LSE failed to take adequate account of the
impact of competition on future SETS volumes.  The Board
anticipates that LSE would argue that its projections are robust
based on the outperformance of historic targets.  LSE's
projections can only be proven through the passage of time, but
one fact is irrefutable -- in its announcements this week LSE has
introduced trading fee reductions, which are certain to have a
negative impact on its revenue and profitability whilst promising
volume increases whose counterbalancing impact is uncertain.  In
combination, these factors dramatically increase the risk profile
for LSE Shareholders.

The negative impact of pricing cuts on the LSE value case further
strengthens NASDAQ's belief that 1,243 pence per Ordinary Share is
a full and fair price and highlights the downside risk to the LSE
share price were NASDAQ's offers to lapse and the share to revert
to a valuation based on fundamental drivers.

              No New Arguments on Standalone Value

LSE failed to provide any new visibility on its cost base or
indeed any of its other business drivers.  Instead LSE again
argues that it should be compared to a global exchange sector
including a diverse set of peers.  This methodology is sustained
by reference to the fairness opinions provided in transactions
where the target -- the Sydney Futures Exchange, Euronext, the New
York Board of Trade and the Chicago Board of Trade -- is either a
pure or hybrid derivatives exchange, businesses which are subject
to completely different growth drivers to LSE, a pure cash
equities business.  The fact that European exchanges represent the
appropriate peer group is acknowledged by the vast majority of
analysts, including the analyst at LSE's lead financial adviser
Merrill Lynch.

NASDAQ continues to believe that 1,243 pence per Ordinary Share
represents a full and fair price for your LSE shares.

                        OFT Announcement

The Office of Fair Trading has decided not to refer NASDAQ's offer
for LSE to the Competition Commission.  The decision is consistent
with NASDAQ's view that a combination will yield benefits to LSE
stakeholders.

"The only significant new information from LSE this week is its
plan to cut trading revenues through price reductions," NASDAQ
President and CEO Robert Greifeld said.  "This belated nod at its
customers is likely to be the first of many such reductions.
These tariff cuts will be wrung out of LSE through customer
pressure and competitive action and will have a profound impact on
LSE profitability and on the value of an LSE share."

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.


NAVISTAR INTERNATIONAL: Inks New $1.5 Billion Senior Facility
-------------------------------------------------------------
Navistar International Corp. signed a definitive loan agreement
relating to its reported five-year senior unsecured term loan
facility and synthetic revolving facility in the aggregate
principle amount of $1.5 billion on Friday, Jan. 19, 2007.

The facilities were arranged by J.P. Morgan Chase Bank and a group
of lenders that includes Credit Suisse, Banc of America Securities
and Citigroup Global Markets.  The facilities are guaranteed by
International Truck and Engine Corporation, the principal
operating subsidiary of Navistar.

The company disclosed on Jan. 4, 2007 that it had received a
commitment for a five-year senior unsecured $1.1 billion term loan
facility and a $200 million synthetic revolving facility totaling
$1.3 billion.  The synthetic revolving credit facility was
subsequently increased by $200 million to an aggregate amount of
$400 million, due in part to strong lender demand.

The new loan facilities, which expire in January 2012, will
replace the company's existing senior unsecured $1.5 billion
Credit Agreement.  All borrowings under the new loan facilities
will accrue interest at a rate equal to a base rate or an adjusted
LIBOR rate plus a spread. The spread, which will be based on the
company's credit rating in effect from time to time, ranges from
300 basis points to 400 basis points.  Based on the company's
current credit rating, the spread for LIBOR borrowings is 325
basis points.

On Dec. 29, 2006, Navistar voluntarily repaid $200 million of
the existing senior unsecured $1.5 billion loan facility.  On Jan.
19, 2007 Navistar borrowed an aggregate principle amount
of $1.33 billion under the new loan facilities.  The proceeds
of this borrowing were used to repay the remaining amounts
outstanding and due under the existing loan facility and for other
refinancing-related expenses.

                         About Navistar

Based in Warrenville, Illinois, Navistar International Corp.
(NYSE:NAV) -- http://www.nav-international.com/-- is the parent
company of Navistar Financial Corp. and International Truck and
Engine Corp.  The company produces International(R) brand
commercial trucks, mid-range diesel engines and IC brand school
buses, Workhorse brand chassis for motor homes and step vans, and
is a private label designer and manufacturer of diesel engines for
the pickup truck, van and SUV markets.  The company also provides
truck and diesel engine parts and service sold under the
International(R) brand.  A wholly owned subsidiary offers
financing services.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 12, 2006,
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 the company's senior
unsecured notes, the 'B' rating on company'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 company's existing credit
facility upon the closing of the new $1.3 billion facility.

As reported in the Troubled Company Reporter on Dec. 13, 2006,
Standard & Poor's Ratings Services reported that its 'BB-'
corporate credit ratings on Navistar International Corp., and
Navistar's subsidiary, Navistar Financial Corp., remain on
CreditWatch with negative implications where they were placed on
Jan. 17, 2006.


NEWCOMM WIRELESS: Hires Sonnenschein Nath as Bankruptcy Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico puts its
stamp of approval on Newcomm Wireless Services, Inc.'s request to
employ Sonnnenschein Nath & Rosenthal LLP as its general
reorganization and bankruptcy counsel.

The Debtor told the Court it chose Sonnenschein Nath because of
its extensive experience in handling troubled companies in the
telecom industry.

Sonnenschein Nath will:

   a) provide legal advice with respect to the Debtor's powers and
      duties as a debtor-in-possession in the continued operation
      or liquidation of its business and management or disposition
      its property;

   b) take all necessary action to protect and preserve the
      Debtor's estate, including the prosecution of actions on
      behalf of the Debtor, the defense of any actions commenced
      against the Debtor, negotiations concerning all litigation
      in which the Debtor is involved, and the objection to claims
      filed against the Debtor's estate;

   c) prepare on behalf of the Debtor all necessary motions,
      answers, orders, reports and other legal papers in
      connection with the administration of its estate;

   d) perform any and all other legal services for the Debtor in
      connection with this chapter 11 case and with the
      formulation and implementation of the Debtor's plan of
      reorganization;

   e) advise and assist the Debtor regarding all aspects of the
      plan confirmation process, including, but not limited to,
      securing the approval of a disclosure statement by the
      Bankruptcy Court and the confirmation of a plan at the
      earliest possible date; and

   f) provide other legal services that may necessary in this
      case.

Peter D. Wolfson, Esq., will be the lead counsel for Newcomm's
case.  He will bill an hourly rate of $780.  Mr. Wolfson disclosed
his firm's professionals hourly rates are:

         Partners      $450 - $885
         Associates    $260 - $500
         Paralegals    $165 - $265

The firm has received a $150,000 retainer from Newcomm.

Mr. Wolfson assured the Court of his disinterestedness as that
term is defined in Section 101(14) of the Bankrutpcy Code.

The Debtor's counsel can be reached at:

    Peter D. Wolfson, Esq.
    Sonnenschein Nath & Rosenthal LLP
    Cook County
    Chicago, Illinois
    Tel: (212) 768-6840

Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc.
is a PCS company that provides wireless service to the Puerto
Rico market.  The company is a joint venture between ClearComm,
L.P. and Telefonica Larga Distancia.  The company filed for
chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No.
06-04755).  Carmen D. Conde Torres, Esq., at C. Conde & Assoc.
and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal
LLP represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its  creditors, it reported
assets and liabilities of more than $100 million.


NEWCOMM WIRELESS: Hires Conde & Associates as Co-Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico approved
the retention of Carmen D. Conde, Esq., at C. Conde & Associates,
as Newcomm Wireless Services Inc.'s chapter 11 counsel.

Ms. Torres will:

    a. advise debtor with respect to its duties, powers and
       responsibilities in this case under the laws of the United
       States and Puerto Rico in which the debtor in possession
       conducts its operations, do business, or is involved in
       litigation;

    b. advise debtor in connection with a determination whether a
       reorganization is feasible and, if not, helping debtor in
       the orderly liquidation of its assets;

    c. assist the debtor with respect to negotiations with
       creditors for the purpose of arranging the orderly
       liquidation of assets and/or for proposing a viable plan of
       reorganization;

    d. prepare on behalf of the debtor the necessary complaints,
       answers, orders, reports, memoranda of law and/or any other
       legal papers or documents e. appear before the bankruptcy
       court, or any court in which debtors assert a claim
       interest or defense directly or indirectly related to this
       bankruptcy case;

    f. perform such other legal services for debtor as may be
       required in these proceedings or in connection with the
       operation of/and involvement with debtor's business,
       including but not limited to notarial services;

    g. employ other professional services, if necessary.

Newcomm Wireless will pay Ms. Torres $250 per hour for her
services.  The legal representative disclosed that her firm's
associates are paid $225 per hour, junior lawyers get $150 an hour
and paralegals are paid $75 per hour.  She also declared that her
firm received a $45,000 retainer.

Ms. Torres assured the Court that she's disinterested as that term
is defined in Section 101(14) of the Bankruptcy Code.

Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc.
is a PCS company that provides wireless service to the Puerto
Rico market.  The company is a joint venture between ClearComm,
L.P. and Telefonica Larga Distancia.  The company filed for
chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No.
06-04755).  Carmen D. Conde Torres, Esq., at C. Conde & Assoc.
and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal
LLP represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its  creditors, it reported
assets and liabilities of more than $100 million.


NEWCOMM WIRELESS: U.S. Trustee Appoints Five-Member Committee
-------------------------------------------------------------
Felicia S. Tumer, the U.S. Trustee for Region 21, appoints five
creditors to serve on the Official Committee of Unsecured
Creditors in Newcomm Wireless Services, Inc.'s Chapter 11 case:

    a. Magnetics International, Inc.
       c/o Robert Menler, President
       500 Bayview Drive, #1030
       Sunny Isles Beach, Florida 33160
       Tel: (305) 825-6527
       Fax: (305) 825-6122

    b. TLD de Puerto Rico, Inc.
       c/o Joanna Franyie Romano, Legal Director
       1111 Brickell Avenue, 10th Floor
       Miami, Florida 33131
       Tel: (786) 552-1356
       Fax: (786) 552-1443

    c. Caribbean American Property Insurance Co.
       c/o Luis Manrara
       Plaza Scotiabank
       273 Ponce de Leon Avenue, Suite 1300
       San Juan, P.R. 00917-1838
       Tel: (787) 282-5205
       Fax: (787) 282-5209

    d. Syniverse Technologies, Inc.
       c/o Mr. Ed Bewley
       8125 Highwoods Palm Way
       Tampa, Florida 33647
       Tel: (813) 637-5030
       Fax: (813) 637-5884

    e. Mu¤oz Metro Office
       c/o Mr. Jose Vazquez, Vice President of
         Finance & Administration
       P.O. Box 363148
       San Juan, P.R. 00936-3148
       Tel: (787) 729-0050
       Fax: (787) 725-6187

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.

Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc.
is a PCS company that provides wireless service to the Puerto
Rico market.  The company is a joint venture between ClearComm,
L.P. and Telefonica Larga Distancia.  The company filed for
chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No.
06-04755).  Carmen D. Conde Torres, Esq., at C. Conde & Assoc.
and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal
LLP represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its  creditors, it reported
assets and liabilities of more than $100 million.


NORTEL NETWORKS: Declares Preferred Share Dividends
---------------------------------------------------
The Board of Directors of Nortel Networks Limited declared a
dividend in respect of each of the months of January and February
2007 on each of the outstanding Cumulative Redeemable Class A
Preferred Shares Series 5 and the outstanding Non-cumulative
Redeemable Class A Preferred Shares Series 7.

The dividend amount for each series is calculated in accordance
with the terms and conditions applicable to each respective
series, as set out in the company's articles.  The annual dividend
rate for each series floats in relation to changes in the average
of the prime rate of Royal Bank of Canada and The Toronto-Dominion
Bank during the preceding month and is adjusted upwards or
downwards on a monthly basis by an adjustment factor which is
based on the weighted average daily trading price of each of the
series for the preceding month, respectively.  The maximum monthly
adjustment for changes in the weighted average daily trading price
of each of the series will be plus or minus 4.0% of Prime.  The
annual floating dividend rate applicable for a month will in no
event be less than 50% of Prime or greater than Prime.

The dividend on each series in respect of the month of January is
payable on Feb. 12, 2007 to shareholders of record of such series
at the close of business on Jan. 31, 2007.  The dividend on each
series in respect of the month of February is payable on
March 12, 2007 to shareholders of record of such series at the
close of business on Feb. 28, 2007.

                     About Nortel Networks

Based in Ontario, Canada, Nortel Networks Corp. (NYSE/TSX: NT) --
http://www.nortel.com/-- is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information.  Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries, including Mexico
in Latin America.

                        *    *    *

As reported in the Troubled Company Reporter on Oct. 5, 2006,
Moody's Investors Service upgraded its B3 Corporate Family
Rating for Nortel Networks Corp. to B2.

Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks
Corporation, and Nortel Networks Limited at B (low) along with
the preferred share ratings of Nortel Networks Limited at Pfd-5
(low).  DBRS says all trends are stable.

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


NORTHWEST AIRLINES: Equity Holders Want Own Committee Formed
------------------------------------------------------------
The Ad Hoc Committee of Equity Security Holders asks the United
States Bankruptcy Court for the Southern District of New York to
compel Acting U.S. Trustee for Region 2 Diana G. Adams to appoint
an official committee of equity security holders in Northwest
Airlines Corp.'s bankruptcy cases.

Ms. Adams has previously denied a request to appoint a Northwest
Equity Committee in December 2006.

The Ad Hoc Committee is comprised of 11 entities, which together
hold nearly 18.55% of the outstanding shares of Northwest
Airlines Corp. common stock.

Daniel P. Goldberg, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, asserts that a Northwest Equity Committee is
necessary since the Debtors have real value, are far from
hopelessly insolvent, and equity holders have a meaningful chance
of receiving distribution.

Even without current earnings before interest and tax,
depreciation, amortization and restructuring costs (EBITDAR)
guidance reflecting the necessary changes to Northwest's
projections and even with the "overhang" of its Chapter 11 Plan
of Reorganization status, Northwest's public equity is currently
worth more than $480,000,000, Mr. Goldberg says.

Mr. Goldberg adds that based on the Ad Hoc Committee's
investigation, solely based on public information and independent
analyst reports, Northwest's equity may currently worth
$1,500,000,000 or more.

Mr. Goldberg further asserts that stockholders are not and will
not be represented absent an official committee.

"Though in theory Northwest's board may have some interest in
ensuring that stockholders are treated fairly, that is not true
here as a practical matter," Mr. Goldberg says.  The Northwest
board of directors and officers, according to Mr. Goldberg, owe a
duty of care and loyalty to creditors that takes precedence over
their traditional obligations to stockholders.

Mr. Goldberg also says that while there are always concerns about
costs of official committee representation, equity holders have
the greatest incentive to minimize administrative expenses and
limit activity and costs to maximize results for their benefit
because they are last in the priority chain.

In Northwest's case, the benefits of official committee
representation of equity holders far outweigh any additional
costs to the Debtors' estates.

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 53; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NORTHWEST AIRLINES: Objects to AFA's Claim Nos. 11283 & 11295
-------------------------------------------------------------
Northwest Airlines, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to disallow
The Association of Flight Attendants - CWA, AFL-CIO's Claim
Nos. 11283 and 11295.

AFA's filed claims are based on the rejection of the flight
attendant collective bargaining agreement pursuant to Section 1113
of the Bankruptcy Code, and on several other grounds.

Specifically, AFA asserts:

   (i) a $1,078,333,333 claim for an assumed five years of wages
       and benefits allegedly lost as a result of the
       Court-approved rejection of its collective bargaining
       agreement with Northwest Airlines, Inc.;

  (ii) an $83,250,000 claim resulting from the interim reduction
       in wages and benefits pursuant to Section 1113(e);

(iii) a $30,600,00 claim based on an assumed value of $75,000
       for each pending grievance;

  (iv) an unspecified amount of damages for contributions it
       asserts are due pension plans in which AFA members
       participate; and

   (v) a contingent, unliquidated claim for other "compensation
       or benefits," including wages, expenses, sick and personal
       leave, insurance and retirement benefits, and grievances
       that occurred prior to September 14, 2005.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, argues that Northwest never breached the collective
bargaining agreement.

When the Court granted Northwest authority to reject under
Section 1113, the CBA was amendable, as a matter of contract, and
the rejection order excused Northwest from its Railway Labor Act
obligation to maintain the contract status quo, to the extent
permitted by the Section 1113 Order, Mr. Petrick relates.

Mr. Petrick maintains that there exists no provision in the
Bankruptcy Code that permits the allowance of a claim for
rejection of a collective bargaining agreement pursuant to
Section 1113.

The damages sought by AFA are too speculative to be allowed,
Mr. Petrick says.  AFA's claim rests entirely on the assumption
that:

   (a) its collective bargaining agreement would remain in place
       without modification for five years; and

   (b) the Debtors would remain operating without the necessary
       relief from its labor contracts.

The assumptions are directly contradicted by the Court's finding
that:

    -- rejection of the collective bargaining agreement was
       necessary to the Debtors' reorganization; and

    -- the Debtors were likely to cease operations absent a
       rejection.

Mr. Petrick also points out that since the contract is amendable,
its terms and conditions for flight attendants would likely have
been modified during the next five years, even if Section 1113
relief were not obtained.

Mr. Petrick notes that AFA's request to be compensated for the
interim relief implemented under Section 1113(e) lacks any legal
foundation.  He asserts that:

     * AFA's claim related to the interim relief is not
       predicated on a breach of the collective bargaining
       agreement; and

     * no provision of the Bankruptcy Code provides for allowance
       of a claim based on relief under Section 1113(e).

Mr. Petrick argues that AFA provides no support to the
calculation of its claims for grievance damages.  The historical
level of grievance awards and grievance settlements is far less
than AFA's assumed average of $75,000 per grievance, he contends.

AFA's claim for contributions allegedly owed to pension plans has
been unequivocally eliminated by the recently enacted Pension
Protection Act of 2006, Mr. Petrick asserts.

AFA's contingent claim is devoid of any content supporting
allowance of a claim in any specific amount, Mr. Petrick
maintains.

Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 53; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NOVA CHEMICALS: Poor Performance Cues S&P to Slice Rating to B+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings, including
its long-term corporate credit rating, on Nova Chemicals Corp. to
'B+' from 'BB-'.

The outlook is stable.

"The downgrade stems from the chronically poor performance of its
styrenics segment and our expectation that profitability in Nova's
crucial olefins segment is declining," said Standard & Poor's
credit analyst Donald Marleau.

The company is undertaking a significant restructuring of the
styrenics business, reducing capacity and costs, designating about
80% of it noncore, and evaluating various options for sale or
joint venture.  The elimination of the cash drag from styrenics
could be a mild credit positive if Nova can separate itself from a
loss-making division it has supported for more than a decade, but
the company's debt burden has increased to a point where the
volatile earnings from olefins only support a 'B' category rating.

Nova's profitability and cash flow are almost entirely reliant on
its solid-performing olefins division, and Standard & Poor's
expects that cash flow from this segment is declining after record
quarterly EBITDA in the second and third quarters of 2006, as
lower prices for ethylene and polyethylene combine with the
expectation that the company's "Alberta Advantage" will revert to
more normal levels from record highs in mid-2006.  Nevertheless,
the Alberta Advantage remains one of Nova's most important
competitive strengths.

The outlook is stable.

Nova's profitable, yet volatile, olefins segment is currently the
only support for its large debt burden, and Standard & Poor's
expects that profitability in this segment will weaken from peak
levels in 2006 as prices decline and the company's Alberta
Advantage returns to historical levels.  Meanwhile, the styrenics
business is expected to continue consuming small amounts of cash,
and pressure on the ratings or outlook is likely if the inability
to resolve the poor performance of this division in the near
future contributes to more debt.


PGS INC: S&P Rates Proposed $280 Mil. Senior Bank Facility at BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Arlington, Virginia-based PGS Inc.

At the same time, Standard & Poor's assigned its 'BB-' rating,
with a recovery rating of '1', to PGS' proposed $280 million in
senior secured bank facility, which will consist of a
$40 million, five-year senior secured revolving credit facility,
and a $240 million, six-year senior secured term loan B.

Standard & Poor's also assigned its 'B-' rating to the company's
proposed $190 million, eight-year senior subordinated notes.

The senior secured debt rating, one notch above the corporate
credit rating, along with the recovery rating, reflect our
expectation of full recovery of principal by lenders in the event
of a payment default.  Proceeds from the debt facilities, along
with a small draw on the revolving credit facility and a
$190 million equity investment, will be used to finance the
acquisition of PGS by the private equity firm Veritas Capital for
$600 million.

"The ratings on PGS reflect a highly leveraged financial profile
and a concentrated customer base, offset somewhat by the firm's
established niche market position and a fairly stable revenue
base," said Standard & Poor's credit analyst Philip Schrank.  As a
result of the transaction, PGS' total funded debt to EBITDA will
exceed 6x.

However, Standard & Poor's expects leverage to decline somewhat in
the near term as improving free cash flows are used to pay down
bank debt.  Operating margins are in the low-double digits,
largely because of the nature of the company's contracts.  Modest
free cash flow should be generated due to limited working capital
requirements needed to support the business, as well as a
favorable tax structure.  Capital expenditures represent
only about 2% of revenues.


PINNACLE ENT: Board Okays Increase of CEO's Salary to $1 Million
----------------------------------------------------------------
The Board of Directors of Pinnacle Entertainment Inc.'s
Compensation Committee approved an increase in annual base salary
of Daniel R. Lee, Chief Executive Officer, to $1,000,000 per year,
effective Jan. 1, 2007.

In addition, the Compensation Committee approved 2006 cash
and deferred bonuses for Mr. Lee of $656,250 and $656,250,
respectively.  The bonuses were based on achievement of
previously-established objective performance goals pursuant
to the 2005 Equity and Incentive Performance Plan.

The deferred bonus is paid in three equal annual installments
beginning January 2008, and no interest is accrued or paid on such
deferred amount.  The deferred bonus is also payable upon
termination in certain circumstances and forfeited under certain
other circumstances.  The cash bonus was paid on Jan. 18, 2007.

Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc.
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos
in Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in the
Los Angeles metropolitan area, has been licensed to operate a
small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged casino
previously operated in Biloxi, Mississippi.  Pinnacle opened a
major casino resort in Lake Charles, Louisiana in May 2005 and a
new replacement casino in Neuquen, Argentina in July 2005.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 4, 2006,
Moody's Investors Service's confirmed Pinnacle Entertainment
Inc.'s B2 Corporate Family Rating.

At the same time, Standard & Poor's Ratings Services affirmed
its 'BB-' rating and '1' recovery rating following Pinnacle
Entertainment Inc.'s $250 million senior secured bank facility
add-on.


PRESIDENT CASINOS INC: Earns $10 Million in Quarter Ended Nov. 30
-----------------------------------------------------------------
President Casinos Inc. reported $10 million of net income for the
third quarter ended Nov. 30, 2006, compared with $1.7 million of
net income for the same period in 2005.

As of Nov. 30, 2006, the company had sold it Biloxi operations and
had entered into a purchase agreement for the sale of the
company's St. Louis operations which was approved by the United
States Bankruptcy Court for the Eastern District of Missouri.  As
such, all revenues are classified in discontinued operations.

The increase in net income is mainly attributable to income from
reorganization items the company incurred of $10 million during
the quarter ended Nov. 30, 2006, compared to an expense of less
than $100,000 during the quarter ended Nov. 30, 2005, as a result
of the settlement agreement the company and President Missouri
entered into with Pinnacle, the Official Committee and Mr.
Wirginis on Oct. 10, 2006.

At Nov. 30, 2006, the company's balance sheet showed $65.6 million
in total assets, $62.3 million in total liabilities, and
$3.3 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?18f0

                        Settlement Agreement

The settlement agreement provides that the reorganization plan
filed by President Missouri will be amended in various respects,
including a reduction in the amount to be paid to the holders of
the Notes under the plan by $5 million which will be permanently
waived.  An additional $5 million under the Notes has been
deferred, and will be payable only if proceeds from certain
pending litigation and tax refund claims exceed $5 million.  In
the event that an amount in excess of $5 million is recovered from
such contingencies, one-half of such future amounts will be paid
by the company up to $5 million pursuant to the terms of the
settlement agreement.

                          Subsequent Event

As reported in the Troubled Company Reporter on Dec. 22, 2006,
President Casinos Inc. had completed the sale of the capital stock
of its St. Louis casino operations, President Riverboat Casino-
Missouri, Inc. to Pinnacle Entertainment, Inc. for approximately
$31.5 million in cash, subject to certain post-closing
adjustments.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on June 14, 2006,
Deloitte & Touche LLP, in St. Louis, Missouri, raised substantial
doubt about President Casinos, Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Feb. 28, 2006.  The auditor pointed
to the company's recurring losses from operations, negative
working capital and stockholders' capital deficiency.

                      About President Casinos

Headquartered in St. Louis, Missouri, President Casinos Inc.
(OTC:PREZQ.OB) -- http://www.presidentcasino.com/ -- currently
owns and operates a dockside gaming casino in St. Louis, Missouri
through its wholly owned subsidiary, President Missouri.  The
Debtor filed for chapter 11 protection on June 20, 2002 (Bankr.
S.D. Miss. Case No. 02-53055).  On July 11, 2002, substantially
all of Debtor's other operating subsidiaries filed for chapter 11
protection in the same Court.  The Honorable Judge Edward Gaines
ordered the transfer of President Casino's chapter 11 cases from
Mississippi to Missouri.  The case was reopened on Nov. 5, 2002
(Bankr. E.D. Mo. Case No. 02-53005).  Brian Wade Hockett, Esq., at
Hockett Thompson Coburn LLP, represents the Debtors in their
restructuring efforts.  David A. Warfield, Esq., at Blackwell
Sanders Peper Martin LLP, represents the Official Committee of
Unsecured Creditors.  Thomas  E. Patterson, Esq., and Ronn S.
Davids, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP and E.
Rebecca Case, Esq., and Howard S. Smotkin, Esq., at Stone, Leyton
& Gershman, P.C., represent the Official Committee of Equity
Security Holders.


PROPEX INC: Asking Waiver for Possible Covenant Non-Compliance
--------------------------------------------------------------
Propex Inc. has determined that it is likely that, for the quarter
ended Dec. 31, 2006, it was not in compliance with one or more of
the financial covenants contained in the Credit Agreement, dated
as of Jan. 31, 2006, as amended, among the company, the lenders,
and BNP Paribas, as Administrative Agent.

These covenants require the company to maintain certain minimum
coverage, earnings and leverage ratios.  Final calculations
demonstrating compliance or non-compliance with these financial
covenants are expected to be completed in February 2007.  The
company has notified the Administrative Agent under the Credit
Agreement of the probable non-compliance and has requested that
the Administrative Agent approach the lenders with a proposed
waiver of this possible event of default and a proposed amendment
to the financial covenants in the Credit Agreement for future
periods, which the Administrative Agent has agreed to do.

Although non-compliance with one or more of these covenants gives
the lenders under the Credit Agreement the right to declare the
outstanding principal and accrued interest on any outstanding
loans under the Credit Agreement to be immediately due and
payable, the Administrative Agent has agreed to approach the
lenders with a proposed waiver with regard to non-compliance of
these financial covenants.  While no assurance of a successful
resolution of these matters can be given at this time, the company
expects to resolve the matter before it develops into an event of
default under the indenture governing the Company's 10% senior
notes due 2012.

As of Dec. 31, 2006, the company had $239.2 million of borrowings
outstanding under the Credit Agreement.

Propex Inc. -- http://www.propexinc.com/-- manufactures primary
and secondary carpet backing.  The company also manufactures and
markets woven and nonwoven polypropylene fabrics and fibers used
in geosynthetic and a variety of other industrial applications.

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 16, 2007,
Moody's Investors Service changed the outlook on Propex Inc.'s
long term debt ratings to negative from stable.  Moody's affirmed
these ratings: the Ba3 LGD3, 30% rating on the senior secured
credit facilities consisting of a $50 million revolver due 2011,
and the original $260 million term loan due 2012; the Caa1, LGD5,
82% rating on the $150 million senior unsecured due 2012; the B2
Corporate Family Rating; and the B2 Probability of Default Rating.


REDPRAIRIE CORP: Narrow Product Focus Cues S&P to Affirm Ratings
----------------------------------------------------------------
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
proposed $25 million add-on to the existing second-lien
facility, to provide a dividend to the equity sponsors.  While
there is capacity within the rating for the dividend, it limits
the company's ability to pursue further growth from acquisitions
without impacting credit quality.

"The ratings on RedPrairie reflect its narrow product focus within
a highly competitive and consolidating marketplace, moderately
acquisitive growth strategy, and high debt leverage," said
Standard & Poor's credit analyst Stephanie Crane Mergenthaler.

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 add-on to the second lien term loan, RedPrairie will have
approximately $240 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.


REPRO MED: Nov. 30 Balance Sheet Upside-Down by $698,539
--------------------------------------------------------
Repro Med Systems Inc.'s balance sheet at Nov. 30, 2006, showed
$1 million in total assets and $1.7 million in total liabilities,
resulting in a $698,539 total stockholders' deficit.

Repro Med Systems Inc. reported a $67,695 net loss on $457,991 of
net sales for the third quarter ended Nov. 30, 2006, compared with
$70,422 of net income on $528,194 of net sales for the same period
in 2005.  The net loss is mainly attributable to lower sales and
the $86,840 increase in other financing costs.

Sales of the Freedom60 and accessories experienced a net increase
of 79.4% quarter over quarter ended Nov. 30, 2006, due to several
major new accounts added primarily in the use IgG administrations
for treatment of Primary Immune Deficiency.

However, due to the one-time emergency government purchase of
RES-Q-VAC in the summer of 2005 in the aftermath of Hurricane
Katrina, sales of the RES-Q-VAC declined 39% during the quarter
ended Nov. 30, 2006, as these sales did not repeat.  As a result,
total sales declined.

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?18ec

                        Going Concern Doubt

Meyler & Company, LLC, Middletown, New Jersey, expressed
substantial doubt about Repro Med Systems Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Feb. 28,
2006, and 2005.  The auditing firm pointed to the company's
cumulative losses of $3,164,290 and existing uncertain conditions
the company faces to its ability to obtain capital and operate
successfully.

                      About Repro Med Systems

Headquartered in Chester, New York, Repro Med Systems Inc. (OTC
BB: REPR.OB) -- http://www.repro-med.com/-- engages in the design
and manufacture of medical devices for medical respiratory
products and infusion therapy worldwide.  Repro Med manufactures
medical devices for a variety of markets including emergency-care,
hospital, and home-care.  The company's primary products are RES-
Q-VAC and FREEDOM 60.


RIVIERA TOOL: Posts $362,827 Net Loss in Quarter Ended Nov. 30
--------------------------------------------------------------
Riviera Tool Company reported a $362,827 net loss on $4.3 million
of sales for the first quarter ended Nov. 30, 2006, compared with
a $441,350 net loss on $6.1 million of sales for the same period
in 2005.

This decrease in sales was a result of the company having a lower
contract backlog at the start of the first quarter ended
Nov. 30, 2006, as compared to the same period in 2005.

Cost of goods sold decreased from $5.5 million for the first
quarter of fiscal 2006 to $3.6 million for the first quarter of
fiscal 2007.  Gross margin increased to 15%.

Selling and administrative expense increased from $566,000 for the
first quarter of fiscal 2006 to $593,000 for the first quarter of
fiscal 2007.

Interest expense decreased from $465,000 in the first quarter of
fiscal 2006 to $436,000 in the first quarter of fiscal 2007.

At Nov. 30, 2006, the company's balance sheet showed $20.4 million
in total assets, $18.2 million in total assets, and $2.2 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?18f9

                        Going Concern Doubt

BDO Seidman LLP expressed substantial doubt about Riviera Tool
Company's ability to continue as a going concern after auditing
the company's consolidated financial statements for the year ended
Aug. 31, 2006.  The auditing firm pointed to the company's
recurring losses from operations and retained deficit.

                        About Riviera Tool

Riviera Tool Company (ASE: RTC) -- http://www.rivieratool.com/--  
designs and manufactures die systems for the production of
underbody panels, inter-structural panels, outer body panels, and
bumper systems.  A majority of the company's sales are to
DaimlerChrysler, General Motors Corporation, Mercedes-Benz, BMW
and their tier one suppliers of sheet metal stamped parts and
assemblies.


SASCO ARC: S&P Cuts Rating on Class D Certificates to CCC from BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
22 classes from 12 series of net interest margin notes issued by
SASCO ARC Co. and placed them on CreditWatch with negative
implications.  At the same time, the rating on class D from SASCO
ARC Co.'s series 2003-BC2 was lowered to 'CCC' from 'BB'.

The downgrades and negative CreditWatch placements reflect the
current and projected performance of the NIMS and their respective
underlying transactions.  These NIMS transactions have not
received excess interest cash flows from the underlying
transactions for a number of months, as the excess interest has
been used to cover losses and/or rebuild the overcollateralization
amount on the underlying transactions.

However, the NIMS have been receiving cash flows from prepayment
penalty fees, although at a diminishing rate.  Based on the
current performance of the underlying transactions, cash flow
projections indicate that it is unlikely that the outstanding
principal balances of the NIMS will be fully repaid.

Standard & Poor's will continue to closely monitor the performance
of the NIMS and their respective underlying transactions.  If the
NIMS begin to consistently receive excess interest from their
respective underlying transactions, Standard & Poor's will affirm
the ratings and remove them from CreditWatch.

Conversely, if the NIMS continue to receive no excess interest
cash flows, Standard & Poor's will take further negative rating
actions on the classes.

The collateral of the underlying transactions consist of subprime,
fixed- or adjustable-rate, first or second lien mortgage loans,
secured by residential properties.

          Ratings Lowered And Placed On Creditwatch Negative

                          SASCO ARC Co.
                    Net Interest Margin Notes

                                       Rating
                                       ------
            Series    Class      To               From
            ------    -----      --               ----
            2003-3    A          BB/Watch Neg     BBB
            2003-6    A          BB/Watch Neg     BBB
            2003-6    B          BB-/Watch Neg    BBB-
            2003-7    A          BB/Watch Neg     BBB
            2003-7    B          B/Watch Neg      BB
            2003-8    A          BB/Watch Neg     BBB
            2003-8    B          B/Watch Neg      BB
            2003-9    A          BB/Watch Neg     BBB
            2003-9    B          B/Watch Neg      BB
            2003-10   A          BB/Watch Neg     BBB
            2003-10   B          BB-/Watch Neg    BBB-
            2003-10   C          B/Watch Neg      BB
            2003-11   B          B/Watch Neg      BB
            2003-12   A          BB/Watch Neg     BBB
            2003-12   B          B/Watch Neg      BB
            2003-BC2  A, B, C    BB-/Watch Neg    BBB-
            2004-2    A          BB/Watch Neg     BBB
            2004-2    B          B/Watch Neg      BB+
            2003-3XS  Notes      BB/Watch Neg     A-
            2003-36XS Notes      BB/Watch Neg     A+

                        Ratings Lowered

                         SASCO ARC Co.
                  Net interest margin notes

                                         Rating
                                         ------
        Series       Class          To             From
        ------       -----          --             ----
        2003-BC2     D              CCC            BB


SBARRO INC: Loan Add-on Prompts S&P to Affirm Ratings
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its bank loan and
recovery ratings on Sbarro Inc.'s bank facility, after the report
that the company will increase the size of the loan to
$208 million from $175 million.

Pro forma for the add-on, the facility will consist of a
$25 million revolving facility due 2013 and a $183 million
first-lien term loan due 2014.  Both facilities are rated 'B', one
notch above the corporate credit rating.  This and the recovery
rating of '1', indicate our expectation of full recovery of
principal in the event of payment default.

The proceeds from the $33 million add-on to the term loan will be
used to redeem all of the preferred equity retained by the Sbarro
family in connection to the acquisition of the company by MidOcean
Partners.

Ratings List:

   * Sbarro Inc.

      -- Corporate credit rating affirmed B-
      -- $25 million revolver due 2013 affirmed at B
      -- $183 million term loan due 2014 affirmed B


SOLUTIA INC: Completes Upsizing $1.225 Billion DIP Financing
------------------------------------------------------------
Solutia Inc. has completed the extension and upsizing of its
debtor-in-possession credit facility at a reduced interest rate.
Solutia's $1.225 billion amended DIP credit facility matures
March 31, 2008.  This represents a $400 million increase and a
one-year extension over Solutia's prior DIP financing.

The interest rate for the $975 million term loan portion of the
DIP credit facility is LIBOR plus 300 basis points, a 50 basis
point reduction from the rate on the previous $650 million of term
loans.  The interest rate for the $250 million revolver portion of
the DIP credit facility is unchanged from the rate of LIBOR plus
225 basis points that applied to the previous $175 million
revolver.

The increased availability under the DIP financing provides
Solutia with further liquidity for operations and the ability to
fund mandatory pension payments that come due in 2007.  Up to
$150 million of the increased availability will be used to
facilitate the purchase of Akzo Nobel's stake in its 50%/50%
rubber chemicals joint venture with Solutia, known as Flexsys.
The DIP credit facility can be repaid by Solutia at any time
without prepayment penalties. Citigroup acted as lead arranger in
the successful syndication of the financing.

Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide.  The company
and 15 debtor-affiliates filed for chapter 11 protection on
Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).  When the
Debtors filed for protection from their creditors, they listed
$2,854,000,000 in assets and $3,223,000,000 in debts.

Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore
& Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn &
Crutcher, LLP.  Trumbull Group LLC is the Debtor's claims and
noticing agent.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.


TEKNI-PLEX: Operating Improvements Cue Moody's Stable Outlook
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Tekni-Plex, Inc.
and changed the outlook to stable reflecting operating
improvements and favorable developments in what remains a
challenging business environment.  The company's ratings remain
constrained by substantial financial leverage, insufficient
interest coverage, and negative free cash flow.

Moody's affirmed these ratings:

   -- $275 million 8.75% sr. secured notes due 2013, rated Caa1,
      LGD3, 45%;

   -- $150 million 10.87% sr. secured notes due 2012, rated B1,
      LGD2, 15%;

   -- $275 million 12-3/4% sr. subordinated notes due 2010, rated
      Caa3, LGD5, 85%;

   -- $40 million 12-3/4% sr. subordinated notes due 2010, rated
      Caa3, LGD5, 85%;

   -- Caa1 Corporate Family Rating; and

   -- Caa1 Probability of Default Rating.

The change in outlook to stable reflects the operating
improvements over the last few quarters and the likelihood that
Tekni-Plex will be able to meet its near-term interest payments.
Gross margin, EBITDA margin, and EBIT margin have all improved
several hundred basis points since the fiscal year ended June 30,
2005.

In addition, while the company's financial profile remains
strained, leverage and interest coverage metrics have begun to
improve.  Tekni-Plex's cash balances and availability under its
revolving credit facility provide comfort that the company will
meet its upcoming interest payments due in February, May, and June
of 2007.

Headquartered in Somerville, New Jersey, Tekni-Plex, Inc. is a
diversified manufacturer of packaging products and materials for
the consumer products, healthcare, and food industries.


TERRA CAPITAL: Moody's Rates Proposed $330 Mil. Sr. Notes at B1
---------------------------------------------------------------
Moody's Investors Service upgraded the corporate family ratings
of Terra Industries Inc. to Ba3 from B1 and rated Terra Capital
Inc.'s proposed $330 million of senior unsecured notes B1.

The proceeds of the notes will be used, along with cash, to fund
the offer to purchase the senior secured notes due 2008 and the
second priority senior secured notes due 2010.  The upgrades
reflect a number of positive actions taken by management to
strengthen the capital structure along with expected improvements
in operating performance that, when combined, will result in
improved cash flow and meaningful improvement in credit metrics.
The rating outlook was revised to stable from positive.

Ratings upgraded:

   * Terra Industries Inc.

      -- Corporate family rating: raised to Ba3 from B1

   * Terra Capital, Inc.

      -- Guaranteed senior secured notes due 2008: raised to Ba2
         from Ba3**

      -- Guaranteed second priority senior secured notes due
         2010: raised to B1 from B2**

Ratings assigned:

   * Terra Capital, Inc.

      -- Proposed $330 million of guaranteed senior unsecured
         notes due 2017: B1, LGD4, 65%

** Ratings are expected to be withdrawn upon the success of the
   refinancing efforts.

The rating upgrades take into account the company's leading
domestic shares within its nitrogen products segments, the
diversity of its customer base, the strategic locations of its
domestic plants, favorable near-term industry pricing
fundamentals, and its strong liquidity.

The ratings also recognize improvements in Terra's capital
structure as a large portion of its outstanding debt will now be
senior unsecured and yet carry a meaningfully lower interest rate.
The ratings also reflect Terra's earnings volatility as evidenced
by its record of net losses and weak interest coverage in the
early 2000s.  Factors that continue to contribute to Terra's
volatility include its focus on a single major product category,
nitrogen, sensitivity to fluctuations in natural gas prices, and
agricultural market risks, including the impact of seasonality,
government subsidies, weather, farm income, and corn and wheat
production.

The ratings also reflect the high cost position of North American
nitrogen producers relative to global producers with access to
lower cost sources of natural gas.  Terra announced in late 2005
that it had suspended ammonia production at its Billingham and
Yazoo City facilities due to high natural gas costs and to
complete an extended maintenance turnaround at the Yazoo City
facility.

During the outages, the company made sales from its own
inventories and used purchased ammonia as a feedstock to produce
and sell upgraded products.  By March 1, 2006, decreases in
natural gas costs made it more economical for Terra to produce,
rather than continue to purchase, ammonia to meet Billingham and
Yazoo City customer demands so the plants were restarted.

Moody's previous rating action on Terra occurred in May of 2005
when the CFR was raised to B1 from B3.

Terra Industries, Inc., headquartered in Sioux City, Iowa,
produces nitrogen fertilizer products.  The company's LTM revenues
for the period ending Sept. 30, 2006 were $1.9 billion.


TERWIN MORTGAGE: S&P Lowers Ratings on Class B-7 Certs. to CCC
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
B-6 and B-7 from Terwin Mortgage Trust 2006-2HGS.  Concurrently,
the ratings on classes B-5 and B-6 were placed on CreditWatch with
negative implications.

At the same time, the ratings on the remaining classes from this
transaction were affirmed.

While the deal is only 10 months seasoned, the lowered ratings and
negative CreditWatch placements reflect recent performance that
has eroded the available credit support for this transaction.

The deal was structured so that the overcollateralization would
eventually build to its target of $15.9 million, 3.70% of the
original pool balance.  During the September 2006 through December
2006 remittance periods, the O/C began to decline as the deal
incurred early monthly losses that greatly outpaced the monthly
excess interest amount.  O/C has not recovered during this time,
but it has decreased to a low level of $396,000.

Based on the three-month average, the deal is incurring
approximately $1.37 million in losses while generating $355,279 in
excess interest every month.  As of the December 2006 distribution
report, total delinquencies were $18.27 million, while serious
delinquencies were $8.03 million of the current pool balance.
Cumulative losses are $4.82 million to date; the pool has paid
down to 73.18% of its original pool balance.

Standard & Poor's will continue to closely monitor the performance
of both classes with ratings on CreditWatch.  If the delinquent
loans cure to a point at which the credit support projections are
equal to or greater than the original credit support percentages,
Standard & Poor's  will affirm the ratings and remove them from
CreditWatch.

Conversely, if delinquencies continue to translate into
substantial realized losses in the coming months and significantly
erode available credit enhancement, Standard & Poor's  will take
further negative rating actions on these classes.

The collateral consists of fixed-rate closed-end second-lien
mortgage loans and home equity line of credit mortgage loans.

               Rating Placed On Creditwatch Negative

               Terwin Mortgage Loan Trust 2006-2HGS

                                 Rating
                                 ------
                 Class     To               From
                 -----     --               ----
                 B-5       BB+/Watch Neg    BB+

        Rating Lowered And Placed On Creditwatch Negative

               Terwin Mortgage Loan Trust 2006-2HGS

                                 Rating
                                 ------
                 Class     To               From
                 -----     --               ----
                 B-6       B/Watch Neg      BB

                          Rating Lowered

              Terwin Mortgage Loan Trust 2006-2HGS

                                Rating
                                ------
                Class     To               From
                -----     --               ----
                B-7       CCC              BB

                        Ratings Affirmed

              Terwin Mortgage Loan Trust 2006-2HGS

               Class                     Rating
               -----                     ------
               A-1, A-2, A-X, G          AAA


TITAN INTERNATIONAL: Registers Senior Convertible Notes Due 2009
----------------------------------------------------------------
Titan International Inc. filed a registration statement
relating to its senior convertible notes due 2009.  Prior to this
report, on Dec. 28, 2006, Titan completed a $200 million senior
unsecured five-year bond that allowed Titan to pay off its
revolving credit facility.

In the past year, the company acquired Goodyear's North American
farm tire assets and Continental Tire North America's off-the-road
earthmover tire assets.  Titan spent approximately
$153 million on these combined acquisitions.  The 2005 revenue
of Goodyear's farm tire business was over $200 million and
Continental's Bryan OTR business was over $100 million.  With
these two businesses, the company has climbed to the top of the
specialty tire, wheel and assembly business in North America.

When compared with 2005, the 2006 farm business will be down at
least $75 million.  However, the purchase of Continental's Bryan
OTR business will compensate for some of agriculture's shortfall
in 2006.  In October 2006, Titan determined that its Freeport,
Illinois, facility has the basic equipment to produce OTR tires up
to 35 inches.  This means that Titan can expand capacity by adding
building drums and molds and implementing modifications. The
company's goal is to implement these changes in fourth quarter
2006 and the first part of 2007.  A steel radial
17.5R-25 is in production now and production on another size
is expected within two weeks.  The company believes that the
Freeport plant can produce in excess of $60 million in OTR
tires in 2007.

Due to capacity constraints at Titan's Bryan, Ohio, OTR tire
facility, the company is adding OTR tire capacity at its Freeport,
Illinois, and Des Moines, Iowa, tire facilities.

Titan is aligning synergies, which includes retooling, retraining
personnel and movement of equipment at the Bryan, Freeport and Des
Moines facilities.  This may cause the company's gross margin to
be negative for the fourth quarter of 2006 as labor costs that are
normally dedicated to making products were instead used for
retooling, retraining and movement of equipment.

"Last fall, Titan set 2007 management sales goals at $800-825
million for the year, and we still believe this is an achievable
objective," said Titan Chairman and CEO Maurice M. Taylor.  "We
have already seen strong demand for January and February.  If this
continues, 2007 will be Titan's best year ever."

"Titan is the only company in the world manufacturing OTR and farm
tires and wheels," said Taylor.  "If you look at the equipment
used by mining companies, construction firms or farmers, you will
see that they have been neglected when it comes to new wheel and
tire designs for their equipment.  An old John Wayne movie shows a
construction loader with 25-inch wheels and now, 62 years later,
the same 25-inch wheel is still used.  Now Titan can improve
equipment performance with custom engineered wheel and tire
assemblies in this OTR market."

"We have stayed focused on our mission to grow our business and to
be the best in the world in supplying engineered products to the
agricultural, earthmoving, construction, mining and specialty
markets."

                    About Titan International

Titan International, Inc. (NYSE:TWI)
-- http://www.titan-intl.com/-- is a holding company that
owns subsidiaries that supply wheels, tires and assemblies for
off-highway equipment used in agricultural, earthmoving/
construction and consumer applications.

                        *     *     *

As reported in Troubled Company Reporter on Dec. 27, 2006,
Standard & Poor's Rating Services assigned its 'B+' corporate
credit rating to Quincy, Illinois-based Titan International Inc.

At the same time, Standard & Poor's assigned its 'B' ratings to
the company's proposed $200 million five-year senior unsecured
notes.


TNS INC: Rejects McDonnell Group's $16 Per Share Acquisition Offer
------------------------------------------------------------------
TNS, Inc. disclosed Tuesday that it had rejected a proposal
received on January 22 from a group led by John J. McDonnell, Jr.
to acquire the Company for $16 per share.

In response to an unsolicited proposal to purchase the Company
made by the McDonnell group on December 20, 2006, the Board of
Directors provided the group confidential access to financial and
other information and required the group to submit a best and
final offer to the company by late January.  The company also
provided confidential access to financial and other information to
two other potential bidders, each of whom declined to submit an
offer.

After full consideration of the company's business and prospects,
the Board of Directors concluded that the $16 proposal was
inadequate as it substantially undervalued the company.  Further,
in view of the extended time and effort devoted to the process of
receiving and evaluating offers for the company and the related
distraction from the company's business, the Board of Directors
determined that it is in the best interests of the company and its
stockholders to terminate the current bid process.

"We were surprised that the McDonnell group reduced its proposed
offer so dramatically and apparently took such a pessimistic view
of the Company's prospects," commented Henry Graham, TNS' Chief
Executive Officer.   "Now that this process has concluded, we can
return our focus to executing on the company-wide initiatives we
previously implemented.  We continue to be very optimistic about
TNS' future."

                   Preliminary 2007 Financial Outlook

In reviewing the McDonnell group's proposal, the Board of
Directors evaluated, among other things, the company's preliminary
outlook for 2007, which is:

    * Total revenue of $312-$320 million for the year ending
      Dec. 31, 2007.

    * Adjusted earnings per share of $0.97-$1.07 for the year
      ending Dec. 31, 2007.

TNS will provide additional information related to the outlook for
2007 in its fourth quarter 2006 earnings call.

For fiscal year 2006, TNS continues to anticipate total revenue of
$280-$285 million and adjusted earnings per share of $0.75-$0.80,
excluding non-recurring items.

               Board Evaluating Capital Structure

Finally, the Board of Directors said that it was evaluating the
Company's capital structure with a view toward seeking ways to
enhance shareholder value.  The outlook for 2007 announced in this
release does not take into account any possible impact of changes
in the Company's capital structure.

                             About TNS

TNS Inc. (NYSE: TNS) -- http://www.tnsi.com/-- provides business-
critical, cost-effective data communications services for
transaction-oriented applications and operates through its wholly
owned subsidiary Transaction Network Services, Inc.  TNS provides
rapid, reliable and secure transaction delivery platforms to
enable transaction authorization and processing across several
vertical markets and trading communities.

Since its inception in 1990, TNS has designed and implemented
multiple data networks, each designed specifically for the
transport of transaction-oriented data.  TNS' networks support a
variety of widely accepted communications protocols and are
designed to be scalable and accessible by multiple methods.  TNS'
network technologies have been deployed in the United States and
internationally, and TNS' networks have become preferred networks
servicing the trading community, wireless and wireline carriers,
and the card processing and dial-up automated teller machine
markets.


TNS INC: Rejected Acquisition Offer Cues S&P to Hold BB- Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit and senior secured debt ratings on Reston, Virginia-based
TNS Inc.

At the same time, Standard & Poor's removed its ratings on TNS
from CreditWatch, where they were placed with negative
implications on Dec. 22, 2006, following reports that the
company had received an unsolicited offer from an investor group
including its former CEO John McDonnell, Jr., to acquire the
outstanding shares of TNS for a cash price of $20.00 per share, or
approximately $482 million.

The outlook is stable.

"The ratings affirmation reflects the announcement that TNS' board
of directors has rejected the acquisition proposal, which was
revised to $16.00 per share by the investor group after it was
given confidential access to financial and other information, and
concluded that the proposal was inadequate and substantially
undervalued the company," said Standard & Poor's credit analyst
David Tsui.

Standard & Poor's rating affirmation and stable outlook reflect
the board's determination that it terminated the current bid
process and can return to executing its business initiatives.
Currently strong credit metrics provide a cushion against business
risks in the point-of-sale division, as well as room for moderate
potential future returns to shareholders.

The ratings on TNS Inc. reflect its narrow addressed market,
declining domestic POS business, significant customer
concentrations, and weakened profitability.  These factors partly
are offset by a solid market position in its addressed niche,
prospects for continued international expansion, and currently
strong credit metrics for the rating.

TNS provides data communications services for transaction-oriented
applications globally, call signaling and database access services
to the telecommunication industry, and secure data and voice
network services to the financial services industry.  The company
had approximately $156 million of operating-lease adjusted debt as
of Sept. 30, 2006.


TRANSNATIONAL AUTO: Posts $2.7 Million Net Loss in Third Quarter
----------------------------------------------------------------
Transnational Automotive Group Inc. reported a $2.7 million net
loss on $179,396 of revenues for the third quarter ended
Nov. 30, 2006, compared with a $246,483 net loss on zero revenues
for the same period in 2005.

The increase in revenues over the prior comparative period was
attributed to the commencement of the company's city bus
operations in late September 2006.

The increase in net loss is primarily due to increases in general
and administrative expenses, in sales and marketing expenses, and
in other expenses, partly offset by earnings in minority interest
of subsidiary.

The increase in operating expenses in the current period was
primarily attributed to costs associated with the pre-launch of
the LeCar operations and the launch of LeBus during the current
quarter.  These activities resulted in an increase in payroll,
travel, office administration and professional and consulting
fees.

Interest expense and financing costs for the quarter ended
Nov. 30, 2006, consisted primarily of interest expense of $199,648
on capital lease obligations, notes payable and convertible
debentures.  Other financing costs included $323,012 from the
amortization of deferred financing costs from the issuance of
warrants and $704,231 of debt discount associated with the
beneficial conversion feature of the company's convertible
debentures.

At Nov. 30, 2006, the company's balance sheet showed $4.8 million
in total assets, $5.2 million in total liabilities, and $271,064
in minority interest, resulting in a $694,053 total stockholders'
deficit.

The company's balance sheet at Nov. 30, 2006, also showed strained
liquidity with $1.6 million in total current assets available to
pay $5.2 million in total current liabilities.

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?18e9

                    Going Concern Doubt

Pannell Kerr Forster, Chartered Accountants, in Vancouver, Canada,
expressed substantial doubt about Transnational Group Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Feb. 28, 2006, and 2005.  The auditing firm cited that the company
has no revenues and limited capital.

                   About Transnational Automotive

Based in Los Angeles, California, Transnational Automotive Group
Inc. (OTC BB: TAMG.OB) -- http://transauto-group.com/-- is a
public transportation company with operating entities in Cameroon.
Current business efforts focus on establishing and operating mass
transit systems in the two major cities in Cameroon: Yaound,, the
capital city, and Douala.  The company officially launched its
LeBus city bus operations on Sept. 25, 2006, with 17 city buses
that were purchased from a manufacturer in China in May 2006.


USEC INC: Expects Full-year Revenue of Approximately $1.85 Billion
------------------------------------------------------------------
USEC expects full-year revenue to total approximately
$1.85 billion and a gross profit margin of approximately 18%.

Net income for 2006 is expected to be approximately
$105 million.

The main drivers for the improvement in earnings compared to
previous guidance are higher uranium prices realized in contracts
with market price adjustments; higher gross margin for SWU, as the
average price billed to customers was higher and cost of sales was
lower than expected; and the timing of expenditures for the
American Centrifuge project.  This net income reflects expense for
the American Centrifuge project in 2006 of approximately
$103 million.

USEC ended the year with a cash balance of approximately
$170 million.  The company had no short-term borrowing on its bank
credit facility beyond letters of credit for financial assurance
requirements.

"Our strong 2006 financial results reflect improving market
conditions for nuclear fuel and cost-cutting actions taken by USEC
management in recent years," said John K. Welch, USEC president
and chief executive officer.

"Nonetheless, we know that only a few months of the substantial
increase in our electric power costs in 2006 are now reflected in
our cost of sales, and we face tremendous financial challenges in
2007 and beyond.  We are taking steps to attempt to partially
mitigate the higher power costs, but we know our profit margins
will be under significant pressure in upcoming quarters," Mr.
Welch said.

USEC expects to release its fourth quarter and full-year 2006
earnings in late February, and the company will provide earnings
and cash flow guidance for 2007 at that time.

                          About USEC Inc.

USEC Inc. (NYSE:USU) supplies enriched uranium fuel for commercial
nuclear power plants.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 23, 2006,
Moody's Investors Service affirmed its B1 Corporate Family Rating
for USEC Inc. and its B3 rating on the company's $150 million
issue of 6.75% senior unsecured notes due 2009.  Moody's also
assigned an LGD5 rating to those loans, suggesting noteholders
will experience a 75% loss in the event of a default.


USEC INC: Names J. Trady Mey as Chief Accounting Officer
--------------------------------------------------------
The Board of Directors of USEC Inc. has named J. Tracy Mey as the
company's controller and chief accounting officer.  Mr. Mey will
continue to report to John C. Barpoulis, senior vice president,
chief financial officer and treasurer.

Mr. Mey's promotion to this new position recognizes his
contribution to strengthening USEC's accounting policies and
meeting the requirements of Sarbanes-Oxley regulations.  Mr. Mey,
46, joined USEC as controller in June 2005 and is responsible for
all aspects of the company's accounting functions and financial
reporting.

"I am pleased to announce Tracy's well-deserved promotion.  He has
demonstrated strong leadership in his management of the accounting
group and his oversight of our financial reporting," Mr. Barpoulis
said.  "We value the expertise he has brought to USEC and look
forward to his continued contributions in this important role as
chief accounting officer."

Mr. Mey has 25 years of business experience in finance, accounting
and project management.  Prior to joining USEC, he was controller
and chief accounting officer for Power Services Company, a
national energy company and former subsidiary of PG&E Corporation.
He was responsible for corporate accounting functions, accounting
operations, taxation and financial reporting including SEC
compliance, budgeting, forecasting and management reporting.
Prior to that, he served in positions of increasing responsibility
at an international telecommunications company and a public
accounting firm.

Mr. Mey has a bachelor of science degree in accounting from the
University of Maryland and received his master's degree in
business administration from The George Washington University.  He
is a Certified Public Accountant and a Certified Managerial
Accountant.

                          About USEC Inc.

USEC Inc. (NYSE:USU) supplies enriched uranium fuel for commercial
nuclear power plants.

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 23, 2006,
Moody's Investors Service affirmed its B1 Corporate Family Rating
for USEC Inc. and its B3 rating on the company's $150 million
issue of 6.75% senior unsecured notes due 2009.  Moody's also
assigned an LGD5 rating to those loans, suggesting noteholders
will experience a 75% loss in the event of a default.


VALEANT PHARMA: Moody's Affirms Ba3 Rating on $300 Mil. Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service confirmed the ratings of Valeant
Pharmaceuticals International, including the B2 Corporate Family
Rating, and concluded the rating review for possible downgrade
first initiated on Oct. 23, 2006.

Valeant's rating outlook is now stable.

The rating action comes after the company's recent filing of its
Form 10-Q for the period ended Sept. 30, 2006, and its amended
Form 10-K for the period ended Dec. 31, 2005.  The restatement
follows Valeant's review of its stock option granting practices.

In Moody's view, Valeant's restated financial statements had
minimal to no effect on previously reported revenue, cash flow,
cash balances, or debt.  Valeant's filing of its delinquent Form
10-Q alleviates Moody's concern about potential debt acceleration
that might have happened had Valeant not filed its statements
within 60 days of the trustees' declaration of a notice of
default.

Valeant's B2 Corporate Family Rating reflects its relatively small
scale as a specialty pharmaceutical manufacturer along with its
concentrated focus among three therapeutic categories --
Dermatology, Infectious Diseases, and Neurology.  Valeant's scale,
based on revenue, maps to the "B" category according to Moody's
Global Pharmaceutical Rating Methodology.

Moody's anticipates that the company's cash flow to debt ratios
for the next several years will remain reflective of a "B2" rating
based on the ranges specified in our Global Pharmaceutical Rating
Methodology.

Although Valeant launched two new products in 2006, Moody's
believes that an improvement in cash flow to debt could be delayed
by:

   (1) setbacks in the Viramidine clinical development program;

   (2) boosting sales of newly-launched products, such as Zelapar
       and Cesamet, without a substantial increase in promotional
       spending; and

   (3) finding suitable external partners in which the company
       can enter co-development agreements for several late-stage
       pipeline products.

To consider a ratings upgrade, Moody's would expect CFO/Debt
sustained at approximately 15% and FCF/Debt at approximately 10%;
these levels represent the high ends of the "B" category outlined
in Moody's methodology.  Successful approval and launch of
Viramidine may be necessary for Valeant to achieve these ratios.

Although not expected, downward rating pressure could result under
these scenarios:

   (1) a decline in CFO/Debt to below 5%;

   (2) a significant negative development in the Viramadine
       clinical development program; or

   (3) a sizeable cash-financed acquisition that pressures the
       company's cash coverage of debt and cash flow to debt
       ratios.

Ratings confirmed:

   -- B2 Corporate Family Rating

   -- B1 Probability of default rating

   -- Ba3, LGD3, 39% senior unsecured notes of $300 million due
      2011

Moody's does not rate Valeant's 3% convertible subordinated notes
of $240 million due 2010 or its 4% convertible subordinated notes
of $240 million due 2013.

Headquartered in Aliso Viejo, California, Valeant Pharmaceuticals
International (NYSE: VRX) is a global specialty pharmaceutical
company.  Valeant reported approximately $650 million of net
product sales for the nine months ended Sept. 30, 2006.


W.R. GRACE: Judge Fitzgerald Says ZAI Poses No Unreasonable Risk
----------------------------------------------------------------
The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware finds that the Zonolite Attic Insulation
produced and sold by W.R. Grace & Co. and its debtor affiliates
poses no harmful health risks to homeowners if left undisturbed.
Judge Fitzgerald adds that contamination and release of ZAI alone
are not enough, but that fibers released from ZAI must be at
levels that pose unreasonable risk of harm to human health.

Judge Fitzgerald notes that the U.S. Environmental Protection
Agency and the Agency for Toxic Substances and Disease Registry
have acknowledge that studies have failed to establish a
scientific basis to show a relationship between ZAI and health
risks.

Judge Fitzgerald says that establishing contamination and release
is not all the ZAI Claimants must prove.  The ZAI Claimants must
also establish unreasonable risk of harm to support consumer
protection claims.  Under a typical consumer protection claim,
claimants must prove:

   -- an unfair or deceptive act or practice;
   -- in the conduct of trade or commerce;
   -- that has an impact on the public interest;
   -- injury to the plaintiff in their business of property; and
   -- a casual link between the unfair or deceptive act and the
      injury suffered.

The ZAI Claimants, however, have not produced any evidence of a
casual link between any deceptive act, assuming there was one,
and any injury; thus, they have not met their burden of proof to
a preponderance of the evidence that there is any unreasonable
risk of harm from ZAI.

Without any showing of unreasonable risk of harm to human health,
the ZAI Claimants' assertion most closely resembles a stigma-
based property damage claims and, according to Judge Fitzgerald,
courts have been reluctant to accept stigma claims because they
are too remote and speculative.

Ambient air tests were conducted in 12 homes by the ZAI Claimants
and 18 air sample stations running in the living areas of the
tested homes produced only one single fiber when analyzed using
EPA's Asbestos Hazard Emergency Response Act protocol.  Thus,
Judge Fitzgerald notes, the Court is faced with an assertion that
the mere presence of ZAI in attics poses an unreasonable risk of
harm but with no evidence to support that contention.  The
evidence shows an absence of asbestos fibers in the living areas
of homes with ZAI attic insulation.

Without evidence of the presence of asbestos fibers, Judge
Fitzgerald points out that the mere potential for contamination
and release alone is insufficient to substantiate that there is
any unreasonable risk of harm.  Judge Fitzgerald adds that attics
are not completely isolated in all homes; some homeowners may
enter the attic to make renovations like adding ceiling light
fixtures or fans.

Because of the potential for limited exposure, the Court examined
the parties' submissions of epidemiological studies, risk
assessment and regulatory standards and finds that:

   (a) ZAI Claimants' use of individual case studies was not
       sound methodology, the assumptions made were not
       scientifically or factually valid and the ZAI Expert's
       analysis is unreliable;

   (b) the ZAI Claimants must establish causation by a 2.0
       relative risk rate, as suggested by W.R. Grace & Co., but
       that the Claimants have not met that burden of proof;

   (c) there is a lack of an epidemiological link between ZAI and
       asbestos disease.  ZAI has been in use in homes for more
       than 80 years and the EPA warning surrounding the
       Vermiculite Attic Insulation, which includes ZAI, was
       published more than 20 years ago.  More than a million
       homes had ZAI installed into their attics and so facts to
       establish causation should be available but no such
       evidence has been produced; and

   (d) both the Occupational Safety and Health Administration and
       EPA risk assessment studies requires a measurement of
       asbestos exposure levels for individuals.  ZAI Claimants
       failed to include the protocol used to conduct the
       testing, sampling and analysis as required by Daubert and
       its progeny.

Judge Fitzgerald says the evidence established that the risk of
exposure from ZAI in the home "is less than that of dying in a
bicycle accident, by drowning or from food poisoning."

Accordingly, without any scientifically reliable evidence
indicating that ZAI poses an unreasonable risk of harm, the Court
grants Grace's motion for summary judgment in part and denies the
ZAI Claimant's motion for summary judgment in part, limited to
the threshold issue of unreasonable risk of harm as it pertains
to all proofs of claim.

While the determination made may prove to be fatal to the
property damage claims, Judge Fitzgerald says several different
theories of liability were proposed in the individual proofs of
claim and may still need to be addressed.

A status conference is scheduled on January 22, 2007, to discuss
the form of an order regarding disposition of the proofs of
claim; that is, which are subject to dismissal based on these
findings and what claims, if any, may still remain.  If any claim
remains, the status conference will address the need for class
treatment of any claims going forward.

                        About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.

PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  The Debtors' exclusive
period to file a chapter 11 plan expires on July 23, 2007.  (W.R.
Grace Bankruptcy News, Issue No. 120; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


W.R. GRACE: ZAI Claimants Seek Leave to File Appeal
---------------------------------------------------
The Zonolite Attic Insulation Property Damage Claimants assert
that the Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware's Memorandum of Opinion and Order should
be reviewed immediately because it may seriously affect the
evaluation of the ZAI Claims at a critical juncture of the W.R.
Grace & Co. and its debtor affiliates' bankruptcy cases and impede
their reorganization if appeal is delayed.

William D. Sullivan, Esq., in Wilmington, Delaware, points out
that the Memorandum of Opinion and Order depart from 20 years of
asbestos property damage precedent in ruling that an asbestos
property contamination claim requires elements of proof of
personal injury, like epidemiological evidence of asbestos
disease from Zonolite Attic Insulation in homes, a doubling dose
of exposure, or asbestos air levels exceeding the occupational
time-weighted averages of the Occupational Safety and Health
Administration.

No evidences have been required by numerous state and federal
courts sitting in diversity that have tried many asbestos
property damage cases in the last two decades, Mr. Sullivan says.
Rather those courts recognize that the issue in an asbestos
property damage case is whether the property has been
contaminated by asbestos, as typically shown by scientific
testing that the asbestos material can release fibers and that
the release fibers have contaminated some portion of the
building.

The ZAI Claimants are a significant aspect of the Debtors'
bankruptcy, Mr. Sullivan avers.  To the extent the Memorandum of
Opinion and Order may be read to undermine the viability of some
aspects of the ZAI Claimants, Mr. Sullivan contends that it may
impede any progress toward achieving consensual resolution among
the Debtors' key constituencies.

As noted in the open court, the ZAI Claimants, other PD Claimants
and the PI Claimants have reached an agreement on an allocation
of the available funds in the Debtors' reorganization.  Mr.
Sullivan says these asbestos constituencies are presently seeking
to have the Debtors' exclusivity period terminated.

Mr. Sullivan adds that the Memorandum of Opinion and Order
contain findings that rely on a selective reading of the record
and misinterpret the record or ignore contrary evidence, all in
violation of the established summary judgment standard.

Thus, the ZAI Claimants ask the U.S. District Court for the
District of Delaware to grant them leave to appeal the Memorandum
of Opinion and Order.

              ZAI Claimants to Appeal Decision

The ZAI Claimants notify the Bankruptcy that they will appeal to
the United States District Court for the District of Delaware
Judge Fitzgerald's order finding that Zonolite Attic Insulation
produced by the Debtors poses no unreasonable risk if left
undisturbed.

The ZAI Claimants want the District Court to determine if the
Bankruptcy Court erred:

   -- in granting summary judgment when there were conflicting
      issues of material facts and inferences to be drawn from
      those material facts, and whether the Bankruptcy Court made
      factual findings as to disputed issues by improperly
      favoring evidence supporting the Debtors' position;

   -- by failing to apply the substantive state laws governing
      the product liability claims of the ZAI Claimants;

   -- by failing to apply the substantive state laws governing
      the consumer protection claims of the ZAI Claimants;

   -- by superimposing an unprecedented, federal "unreasonably
      dangerous" test on all of the ZAI Claimants' legal claims;

   -- by imposing "risk of disease" as a prerequisite to
      cognizable harm compensable under applicable consumer
      protection statutes;

   -- by imposing "risk of disease" as a prerequisite to
      cognizable tort-based property damage claims;

   -- by holding that no facts permit the conclusion that ZAI is
      "unreasonably dangerous;"

   -- by failing to evaluate "unreasonably dangerous" under
      applicable risk/utility or consumer expectation analyses;

   -- by imposing a strict liability "unreasonably dangerous"
      test on all tort-based claims for property damage;

   -- in equating ZAI property damage claims to so-called
      "stigma" claims; and

   -- in relying on so-called "comparative risk" evidence.

                        About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.

PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  The Debtors' exclusive
period to file a chapter 11 plan expires on July 23, 2007.  (W.R.
Grace Bankruptcy News, Issue No. 122; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


W.R. GRACE: Wants More Time to Respond to ZAI Claimants' Plea
-------------------------------------------------------------
W.R. Grace & Co. and its debtor affiliates U.S. Bankruptcy Court
for the District of Delaware to extend the time for them to
respond to ZAI Claimants' Motion for Leave to Appeal.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub, LLP, in Wilmington, Delaware, asserts that without the
extension, the Debtors would be prejudiced because they would be
required to respond to the Interlocutory Appeal Motion within a
brief period of time.

Ms. Jones maintains that the brief extension will not unduly
delay the disposition of the Interlocutory Appeal Motion.

The ZAI Claimants have advised the Debtors that they do not
oppose to an extension, according to Ms. Jones.

The ZAI Claimants have asked that the status conference with
respect to the remainder of the motions for summary judgment be
delayed until late February 2007.

                        About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  The Debtors hired
Blackstone Group, L.P., for financial advice.

PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.  The Debtors' exclusive
period to file a chapter 11 plan expires on July 23, 2007.  (W.R.
Grace Bankruptcy News, Issue No. 122; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WASHINGTON MUTUAL: Fitch Holds Low-B Ratings on Four Class Certs.
-----------------------------------------------------------------
Fitch Ratings has taken the rating actions on Washington Mutual's
residential mortgage-backed, pass-through certificates:

WAMU Series 2000-1

   -- Class A affirmed at 'AAA';
   -- Class M-1 affirmed at 'AAA';
   -- Class M-2 affirmed at 'AAA';
   -- Class M-3 affirmed at 'AA';
   -- Class B-1 affirmed at 'A+';
   -- Class B-2 affirmed at 'A-'.

WAMU Series 2003-AR10

   -- 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';
   -- Class B-5 affirmed at 'B'.

Washington Mutual Mortgage Series 2003-MS9

   -- Class A affirmed at 'AAA'.

WAMU Series 2003-S13

   -- Class A affirmed at 'AAA'.

WAMU Series 2004-AR14

   -- Class A affirmed at 'AAA'.

Washington Mutual Mortgage  Series 2004-RA2

   -- Class A affirmed at 'AAA'.

Washington Mutual Mortgage  Series 2004-RA3

   -- Class A affirmed at 'AAA'.

Washington Mutual Mortgage  Series 2004-RA4

   --Class A affirmed at 'AAA'.

WAMU, Mortgage Pass-Through Certificates, WMALT Series 2005-1

   -- 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'.

WAMU, Mortgage Pass-Through Certificates, WMALT Series 2005-2

   -- 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'.

WAMU Series 2005-AR3

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR5

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR7

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR10

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR12

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR14

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR16

   -- Class A affirmed at 'AAA'.

WAMU Series 2005-AR18

   -- Class A affirmed at 'AAA'.

The affirmations, affecting approximately $9.765 billion of the
outstanding certificates, are due to credit enhancement consistent
with future loss expectations.

The collateral for the above WAMU, WAMMS, and WMALT deals
primarily consists of 15- to 30-year fixed-rate mortgages secured
by first liens on one- to four-family residential properties.  All
of the above deals are master serviced by Washington Mutual
Mortgage Securities Corp., which is rated 'RMS2+' except WMALT,
which is rated 'RPS2+' by Fitch.

The pool factors for these deals range from 10% to 90%.


WAVEFORM ENERGY: Closes $4 Mil. Financing and Restructures Debt
---------------------------------------------------------------
WaveForm Energy Ltd. has completed its $4 million brokered private
placement of 32,000,000 Units.

Each Unit is comprised of one Class A Share of the company and one
Class A Share Purchase Warrant.  The Units, which had been
previously priced at a Unit price of $0.15 per Unit, had been
repriced by the company and its agent, Blackmont Capital Inc., in
the context of the market to $0.125 per Unit.

The private placement was fully subscribed for $4 million and the
company issued 32,000,000 Shares and 32,000,000 Warrants.  Each
Warrant is exercisable into one Class A Share at $0.125 per share
until March 31, 2007, thereafter at $0.20 per share until June 30,
2007, thereafter at $0.30 per share until Dec. 31, 2007 and
thereafter at $0.40 per share until expiry on Dec. 31, 2008.

The agent was paid a cash commission of 3.5% of the gross proceeds
of the Offering and broker warrants equal to 5% of the Units
raised on the Offering, on the same terms as the Offering.  The
Units issued pursuant to the Offering will be subject to a four
month hold period from the date of closing of the Offering.

The amount of $2 million from the proceeds of the Offering was
applied to reduce the company's $10 million senior secured bridge
facility with Brookfield Bridge Lending Fund Inc. to $8 million.
In conjunction with the reduction of the principal amount under
the Facility, Brookfield also agreed to amend and restate the
repayment date for the balance of the funds under the Facility to
April 30, 2007.

The balance of the funds from the Offering will be utilized for
exploration and development on the company's properties primarily
in the Rowley and Ferrier areas of Alberta.  In addition to its
financing fees to amend and restructure the Facility, Brookfield
will also receive 3,500,000 Class A Share bonus warrants of the
Company exercisable into Class A Shares of the Company at $0.125
per share prior to the repayment of the Brookfield's facility and
$0.175 per share after full payment of the Brookfield facility
until the expiry date which is two years from the date of closing.

Following completion of the Offering, the company has 64,118,631
Class A Shares, 935,616 Class B Shares and 37,100,000 Class A
Share Purchase Warrants issued and outstanding.  Options to
purchase 5,300,000 Class A Shares were issued by the company with
an exercise price of $0.20 per share.  The options are for a term
of five years with standard vesting provisions.

In addition, the company has disclosed that Dan Anderson and Don
Eagleton have resigned as directors of the company.  The company
has also added four new directors including Donald E. Foulkes,
Dinesh Dattani and Ross O. Drysdale of Calgary and David M.
Macdonald of Toronto.  Stacey Holliday has been appointed as
Corporate Secretary of the company.

The company also disclosed that the Board of Directors approved
the granting of stock options to the new management and directors
of the company.

                     About WaveForm Energy

Headquartered in Alberta, Canada, WaveForm Energy Ltd. (TSX
Venture: WE.A, WE.B) -- http://www.waveformenergy.com/-- is a
newly recapitalized junior oil and gas company focused on
exploration and development of oil and natural gas in Alberta and
Saskatchewan.

                         *     *     *

As indicated in the going concern paragraph in its financial
statements for the quarterly period ended Sept. 30, 2006, the
company has an accumulated deficit of $25,816,179, and has
experienced recurring losses from operations.  Additionally, the
company will be required to repay existing loans payable by
Dec. 31, 2006.  Continuing operations are dependant upon the
ability of the company to access adequate funding to meet debt
repayment obligations and continue its exploration and development
program, and achieve profitable operations.


WAVEFORM ENERGY: D. Anderson and D. Eagleton Resigns as Directors
-----------------------------------------------------------------
WaveForm Energy Ltd. disclosed that Dan Anderson and Don Eagleton
have resigned as directors of the company.  The company has also
added four new directors including Donald E. Foulkes, Dinesh
Dattani and Ross O. Drysdale of Calgary and David M. Macdonald of
Toronto.  Stacey Holliday has been appointed as Corporate
Secretary of the company.

The company further disclosed that the Board of Directors approved
the granting of stock options to the new management and directors
of the company.

                     About WaveForm Energy

Headquartered in Alberta, Canada, WaveForm Energy Ltd. (TSX
Venture: WE.A, WE.B) -- http://www.waveformenergy.com/-- is a
newly recapitalized junior oil and gas company focused on
exploration and development of oil and natural gas in Alberta and
Saskatchewan.

                         *     *     *

As indicated in the going concern paragraph in its financial
statements for the quarterly period ended Sept. 30, 2006, the
company has an accumulated deficit of $25,816,179, and has
experienced recurring losses from operations.  Additionally, the
company will be required to repay existing loans payable by
Dec. 31, 2006.  Continuing operations are dependant upon the
ability of the company to access adequate funding to meet debt
repayment obligations and continue its exploration and development
program, and achieve profitable operations.


WERNER LADDER: Evaluating $175 Million Acquisition Offer
--------------------------------------------------------
As part of its overall restructuring plans, Werner Holding Co.
(DE) Inc. aka Werner Ladder Company is evaluating an offer to
purchase the company for $175 million from an investor group.
This offer validates the company's strategy to emerge from Chapter
11 during 2007.  As part of its strategy, Werner is planning to
seek bankruptcy court approval to formalize its emergence
strategy.

"We intend to select a transaction that maximizes value for all
stakeholders and allows Werner to emerge from bankruptcy as
quickly as possible with stronger operations and a deleveraged
capital structure," Mr. Loughlin commented.  "We are pleased that
we've already received an unsolicited bid for $175 million from a
consortium of investors.  We are currently evaluating the offer,
however, what is clear is the offer supports the company's
expectation that it will emerge from Chapter 11 as a going
concern.  Our goal is simple -- to maximize value through a fair
process."

Werner has access to all the funds necessary to operate its
business and to complete its operational and financial
restructuring.  In addition to its significant current cash
position, Werner has the continuing support of Black Diamond
Commercial Finance, which is the provider of the company's
$99 million debtor-in-possession financing.  Werner will continue
to satisfy its post-petition obligations to customers, suppliers,
employees and other stakeholders in the normal course of business.

Werner and Black Diamond have reached a second forbearance
agreement, subject to bankruptcy court approval, to ensure
Werner's continued access to financing throughout the expected
completion of the financial restructuring process.

"We are grateful to our customers, suppliers and employees for
their continued support," James J. Loughlin, Jr., CEO of Werner
Co., said.  "We are committed to honoring our commitments to our
business partners who are critical to our success in the future.
We expect to generate dramatically improved operating results in
2007 and despite our recent challenges, our cash position is
strong and our revolving line of credit is undrawn -- an important
accomplishment."

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.


WHOLE AUTO: S&P Raises Rating on Class D Notes to A from BB-
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on four
classes of notes issued by Whole Auto Loan Trust series 2003-1 and
2004-1 and removed them from CreditWatch, where they were placed
with positive implications Nov. 30, 2006.

At the same time, the 'AAA' ratings on three senior classes of
notes from the same transactions were affirmed.

The upgrades primarily reflect the lower-than-expected cumulative
net losses due to the strong performance of the underlying
collateral of prime vehicle loan receivables originated by
DaimlerChrysler Services North America, Ford Motor Credit Co., and
General Motors Acceptance Corp.

As of the December 2006 distribution date, WALT 2003-1 had a pool
factor of 10.11%, 40 months of seasoning, and current cumulative
net losses of 1.19%; WALT 2004-1 had a pool factor of 25.28%, 27
months of seasoning, and current cumulative net losses of 1.18%.
Loans that are 60-plus days delinquent make up 1.86% of the
current pool balance for WALT 2003-1 and 0.95% of the current
pool balance for WALT 2004-1, while cumulative recovery rates were
higher than expected at approximately 55% for both transactions.

Overcollateralization for both transactions is at its required
level of 1% of the initial adjusted pool balance and is
nonamortizing, continuing to grow as a percent of the current pool
balance.  Because the O/C is nonamortizing, the principal cash
flow allocable to the originator's O/C interest in the pool is
used to fast-pay the notes in reverse order of seniority, causing
the most subordinate notes to be retired first.  Both
transactions are structured with yield-supplement O/C in order to
supplement shortfalls in yield, which can be attributed to the
inclusion of underwater contracts in the collateral pool.

Standard & Poor's expects the remaining credit support to be
sufficient to support the notes at the raised and affirmed rating
levels.

       Ratings Raised And Removed From Creditwatch Positive

                   Whole Auto Loan Trust 2003-1

                                 Rating
                                 ------
                  Class     To             From
                  -----     --             ----
                  B         AAA            AA+/Watch Pos

                   Whole Auto Loan Trust 2004-1

                                 Rating
                                 ------
                  Class     To             From
                  -----     --             ----
                  B         AAA            A/Watch Pos
                  C         AA             BBB/Watch Pos
                  D         A              BB-/Watch Pos

                        Ratings Affirmed

                   Whole Auto Loan Trust 2003-1

                       Class      Rating
                       -----      ------
                       A-4         AAA

                   Whole Auto Loan Trust 2004-1

                        Class       Rating
                        -----       ------
                        A-3         AAA
                        A-4         AAA


WHX CORP.: Dismisses PricewaterhouseCoopers as Public Accountant
----------------------------------------------------------------
WHX Corp. dismissed PricewaterhouseCoopers LLP as its independent
registered public accounting firm, effective upon the completion
by PwC of its procedures regarding:

   i) the company's 2004 Annual Report on Form 10-K; and

  ii) the financial statements of the Company as of March 31,
      2005 and for the quarter then ended, the financial
      statements of the company as of June 30, 2005 and for the
      quarter and six-month periods then ended and the financial
      statements of the company as of Sept. 30, 2005 and for the
      quarter and nine-month periods then ended and the Forms
      10-Q for 2005 in which each of the above described
      financial statements will be included.

The decision to dismiss PwC was approved by the company's Audit
Committee.

The reports of PwC on the financial statements of the company
for the fiscal years ended Dec. 31, 2005 and 2004 did not
contain any adverse opinion or disclaimer of opinion and were
not qualified  or modified as to uncertainty, audit scope or
accounting  principle, except for an  explanatory paragraph
disclosing  substantial doubt about the company's ability to
continue as a going concern.

The company is currently late in filing its Form 10-K for the
fiscal year ended Dec. 31, 2004, although it does anticipate
filing such Form 10-K shortly.  The company anticipates that PwC's
report on the consolidated financial statements as of and for the
years ended Dec. 31, 2004 and 2003; and for each of the three
years in the period ended Dec. 31, 2004 will contain an
explanatory paragraph disclosing substantial doubt about the
company's ability to continue as a going concern.

During the fiscal years ended Dec. 31, 2005 and 2004; and through
Jan. 17, 2007, there were no disagreements with PwC on any matter
of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved
to the satisfaction of PwC, would have caused them to make
reference thereto in their reports on the  financial statements
for such years.

Headquartered in New York City, New York, WHX Corporation
(Pink Sheets: WXCP.PK) -- http://www.whxcorp.com/-- is a holding
company structured to acquire and operate a diverse group of
businesses on a decentralized basis.  WHX's primary business is
Handy & Harman, an industrial manufacturing company servicing the
electronic materials, specialty wire and tubing, specialty
fasteners and fittings, and precious metals fabrication markets.
The Company filed for chapter 11 protection on March 7, 2005
(Bankr. S.D.N.Y. Case No. 05-11444).  When the Debtor filed
for protection from its creditors, it reported total assets of
$406,875,000 and total debts of $352,852,000.

                      Going Concern Doubt

PricewaterhouseCoopers LLP expressed substantial doubt about WHX
Corp.'s ability to continue as a going concern after auditing the
company's financial statements for the years ended Dec. 31, 2005
and 2004.  The auditing firm cited that the company is a holding
company with no bank facility of its own and since emerging
from bankruptcy has not had access to dividends from its only
operating subsidiary, Handy & Harman.

The auditing firm also cited that Handy & Harman has experienced
certain liquidity issues and its credit facility matures on
Mar. 31, 2007.  Additionally, the auditing firm cited that WHX
Corp. has significant cash requirements including the funding of
the WHX pension plan and certain other administrative costs.


WINN-DIXIE STORES: Deregisters $700 Million of Debt Securities
--------------------------------------------------------------
Reorganized Winn-Dixie Stores, Inc., and certain of its
subsidiaries have amended the registration statement they filed
with the U.S. Securities and Exchange Commission to deregister
$700,000,000 in aggregate principal amount of debt securities.

The debt securities, which were originally registered under the
Securities Act of 1933 for issuance in one or more offerings,
remain unsold.

Winn-Dixie has also reported that seven of its subsidiaries,
which were listed as registrants in the original registration
statement, have been dissolved or merged into other subsidiaries.
These entities were Astor Products, Inc.; Crackin' Good, Inc.;
Dixie Packers, Inc.; Monterey Canning Co.; Winn-Dixie Charlotte,
Inc.; and Winn-Dixie Louisiana, Inc.

The Winn-Dixie subsidiaries that are co-registrants under the
amended registration statement were Deep South Products, Inc.;
Winn-Dixie Logistics, Inc.; Winn-Dixie Montgomery, Inc.; Winn-
Dixie Procurement, Inc.; and Winn-Dixie Raleigh, Inc.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi.  The Company,
along with 23 of its U.S. subsidiaries, filed for chapter 11
protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840).  D.J. Baker, Esq., at Skadden
Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders,
Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.
Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  The Honorable Jerry A. Funk
confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9,
2006.  Winn-Dixie emerged from bankruptcy on Nov. 21, 2006.


XEROX CORP: Total Revenue Rises to $4.4 Billion in Fourth Quarter
-----------------------------------------------------------------
Xerox Corporation reported that total revenue of $4.4 billion grew
3% in the fourth quarter.  Post-sale and financing revenue, which
represents about 70% of Xerox's total revenue, increased 5%,
largely driven by 7% post-sale growth from digital systems.  Both
total revenue and post-sale revenue included a currency benefit of
3 percentage points.

"Xerox delivered solid performance in the fourth quarter,
contributing to another year of double-digit earnings growth,"
said Anne M. Mulcahy, Xerox chairman and chief executive officer.

"It was a year of steady improvements across the board," she
added.  "We grew revenue through stronger annuity and expanded our
industry-leading portfolio of products and services.  We acquired
companies that broaden our share of the fast-growing document
management and production color printing markets.  We generated
$1.6 billion of operating cash flow, returned to investment grade
and bought back $1.1 billion of Xerox shares.  As important, we
managed our operations efficiently, giving us the flexibility to
compete effectively while delivering value for shareholders."

Color now accounts for about 37% of Xerox's total revenue, up 3
points from the fourth quarter of 2005.  The number of pages
printed on Xerox color systems grew 36% in the fourth quarter.
And, color now represents 10 percent of total pages, a year-over-
year increase of 2 points.

Equipment sale revenue was down 1% in the fourth quarter including
a 3 point benefit from currency.  However, strong install growth
of key products is expected to drive future gains in the company's
post-sale revenue.  Xerox's investment in innovation led to the
launch of 14 products in 2006 that together earned 208 industry
awards.  The company expects to more than double its number of
product announcements this year.  About two-thirds of Xerox's
equipment sales come from products launched in the past two years.

Xerox's production business provides commercial printers and
document-intensive industries with high-speed digital printing and
services that enable on-demand, personalized printing.  Total
production revenue increased 3% in the fourth quarter including a
4 point currency benefit.  Installs of production black-and-white
systems declined 6 percent with growth in light production only
partially offsetting declines in higher-end production printing.
Production color installs grew 40%, reflecting accelerated
activity for the Xerox iGen3(R) Digital Production Press and
continued strong demand for the DocuColor(R) 5000 as well as the
DocuColor 240/250 multifunction system.

Xerox's office business provides document technology and services
for businesses of any size.  Total office revenue was up 1% in the
fourth quarter including a 3 point currency benefit.  Installs of
office black-and-white systems were up 13% driven by 13% growth
from Xerox's desktop devices like the WorkCentre(R) 4150, and 11
percent growth in its mid-range line of multifunction devices.  In
office color, installs of multifunction systems were up 39%
reflecting strong demand for the color WorkCentre family.  In
November, Xerox launched three more products for small businesses
including the Phaser(R) 6110, its most affordable desktop color
laser printer at a starting price of $249.  Xerox said it will
launch several more office color systems next month.

The company also cited continued improvement in its developing
markets operations. Total revenue grew 8% in DMO.

Gross margins were 41.1%, about flat from fourth quarter of 2005.
Selling, administrative and general expenses were 23.3% of
revenue, a year-over-year improvement of 1.3 points and the lowest
percentage of revenue in more than 15 years.

Xerox generated operating cash flow of $720 million in the fourth
quarter and ended the year with $1.5 billion in cash and
short-term investments.  Also during the fourth quarter, Xerox
closed on the $54 million cash acquisition of XMPie, the leading
provider of software for personalized, multimedia marketing
campaigns.

Since launching its stock buyback program in October 2005, the
company to date has repurchased about 100 million shares, totaling
$1.5 billion of its $2 billion program.

Xerox also reported full-year 2006 results:

    * Net income of $1.2 billion

    * Total revenue of $15.9 billion, an increase of $194 million
      or 1% from full-year 2005

    * Operating cash flow of $1.6 billion

    * Year-end cash and short-term investments balance of
      $1.5 billion

                         About Xerox Corp.

Headquartered in Stamford, Connecticut, Xerox Corporation
(NYSE: XRX) -- http://www.xerox.com/-- develops, manufactures and
markets document processing systems and related supplies and
provides consulting and outsourcing document management services.

                           *     *     *

As Reported in The Troubled Company Reporter on Dec. 1, 2006,
Moody's Investors Service raised the ratings of Xerox Corporation
and supported subsidiaries, upgrading Xerox's Subordinated shelf
registration to (P) Ba1 from (P) Ba2 and Preferred shelf
registration to (P) Ba1 from (P) Ba2.


* Fitch Ratings Named Rating Agency of the Year by ISR
------------------------------------------------------
Fitch Ratings has again been named Rating Agency of the Year by
International Securitisation Report.  This is the fifth
consecutive year that the agency has been received the accolade
and the seventh time in eight years.

Collecting the award at a ceremony in London last night, Huxley
Somerville, Head of Structured Finance EMEA, said that 2006 had
been a landmark year for the rating agency's structured finance
business and paid tribute to the agency's structured finance team.

"2006 saw Fitch launch an unprecedented number of new products and
services for the structured finance market, while the agency's
reputation for superior credit analysis was maintained," said
Somerville.

"The award reflects the outstanding work of the team globally over
the past twelve months coupled with the agency's unwavering
commitment to market leadership."

Launched in October, Fitch subsidiary Derivative Fitch is the
first rating agency to be dedicated exclusively to the credit
derivatives market.  Addressing the unique risks of the market
with ratings, research, analytics and evaluation services,
Derivative Fitch's leadership in structured credit is believed to
be an important factor in the award win.

Other innovation in 2006 included the launch of Fitch's European
Structured Finance Index of Rating Change, Distressed Recovery
Ratings, ABS Performance Update Reports and Vector ABS/ABCP
models, which represent the first time a Monte Carlo simulation
has been applied to consumer ABS and ABCP.

Held annually the ISR awards are recognised as a key event in the
structured finance calendar.


* BOOK REVIEW: Health Plan: The Practical Solution to the Soaring
               Cost of Medical Care
-----------------------------------------------------------------
Author:     Alain C. Enthoven
Publisher:  Beard Books
Paperback:  196 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981238/internetbankrupt


Since this book was first published in 1980, the problem it
tackles -- the high cost of medical care in this country -- has
become an even more vexing national problem.  No one is more
qualified to take on this subject than the author.

In 1997, the governor of California appointed Mr. Enthoven to be
chairman of the state's Managed Health Care Improvement Task
Force.  Mr. Enthoven also consults for the leading healthcare
provider Kaiser Permanente, and holds leadership positions in
several private and public healthcare organizations.

The main causes of runaway medical costs, which were identified by
Mr. Enthoven in 1980, continue today.  Among the causes are the
growth of medical technology, an aging population, and the
proliferation of physician specialists.  Lax cost controls by
health maintenance organizations and government health agencies
are another cause.

Unlike many other critics, Mr. Enthoven does not advocate free-
market practices in the healthcare field.  He offers an approach
that is more knowledgeable, nuanced, and practical.

The author searches for the elusive goal of formulating a health
plan that takes into account the altruistic desires of U.S.
society to address the needs of all its members, while also
accepting the reality of government regulation, a profit-driven
industry, and a population with varied healthcare needs and
objectives.

Mr. Enthoven names his comprehensive health plan the Consumer
Choice Health Plan.  The Consumer Choice Health Plan is ambitious
and far-reaching, especially considering the inertia of the
present healthcare system and its layers upon layers of vested
interests.

Nonetheless, the author states that his plan is within reach and
sustainable because it "function[s] with existing institutions
operating in new ways."

While healthcare delivery would be kept fully in the private
sector, the government would have a formative role by managing the
enrollment of organizations and companies in the plan on the basis
of compliance with "a system of rules designed to foster socially
desirable competition."  Government would also help individuals
take part in such a plan by offering tax credits and vouchers
"based on both financial need and predicted medical need."

As the book progresses, one begins to see how the Consumer Choice
Health Plan synthesizes and employs in novel ways parts of the
healthcare system as it presently operates.  Besides the formative
role of government, the plan would involve "fair economic
competition, multiple choice, [and] private underwriting and
management."

Mr. Enthoven's Consumer Choice Health Plan is not radical.  It
calls for altering relationships among existing components of the
health system, giving them new roles and purposes.

The plan does propose one sweeping, though not radical, change,
which is to "shift the basis for healthcare financing from
experience-related insurance serving employee groups to community-
rated financing and delivery plans open to all eligible persons in
a market area."

By shifting the financing of healthcare, providers and consumers
are brought into close, and often direct, contact.  To protect
consumers from fraudulent and inferior health plans, the
government would play a primary role in establishing enrollment
standards and policies.

The different health plans would compete among the respective
consumer groups according to the main qualification that they be
engaged in "socially desirable competition."  Thus, the health
plans that would be available in any market would operate much
like branches of today's corporate health providers.

The government's role, then, would primarily lie in exercising
oversight and enforcement responsibilities.  The result would be a
field of screened health providers offering health plans in a
defined community/market.  The most successful providers would be
those offering the best services and prices.

As reasonable as Mr. Enthoven's recommendations are, he realizes
that they cannot be applied immediately.  Consequently, the author
also offers a series of steps, some of which are options that
assist in fully implementing the plan.

Among these steps are requiring employers to provide employees
choices in medical plans, allowing tax credits for employers and
employees for those plans offering good basic care (rather than
more costly health plans), and working with influential government
officials to reach the goal of the Consumer Choice Health Plan.

Some of Mr. Enthoven's recommendations have been introduced to
areas of the healthcare system, and have achieved demonstrable,
though limited, improvements.

Many of his recommendations have been embraced by legislators and
policymakers as requisites for a workable national health plan.
Anyone wishing to have a relevant, productive role in devising
such a plan will want to take this book to heart.

Alain C. Enthoven's career spans more than 40 years in the public
and private sectors, where he has held many top positions.
During this time, he has been chairman and director of major
healthcare organizations, and he continues to work to bring
positive changes to the healthcare system.

                             *********

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, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Rizande B. Delos
Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Melvin C. Tabao,
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 ***