TCR_Public/070309.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, March 9, 2007, Vol. 11, No. 58

                             Headlines

750 EAST: Brings In Allan NewDelman as Bankruptcy Counsel
750 EAST: Court Approves Interim Access to Cash Collateral
ADVA-LITE INC: Seeks March 16 Hearing on Asset Sale Procedures
ADVENTURE PARKS: Wants to Hire A&M Securities as Financial Advisor
AFFILIATED COMPUTER: Earns $72.1 Million in Quarter Ended Dec. 31

AFFILIATED COMPUTER: S&P Upgrades Corporate Credit Rating to BB
AMERICAN CELLULAR: S&P Holds B- Rating on $1.05 Billion Facilities
AMERICAN PACIFIC: Revenue Up 112% in Fiscal 2007 First Quarter
AMERICAN REAL: API Board OKs $0.10 Per Unit Quarterly Distribution
APHTON CORP: Court Says Amended Disclosure Statement is Adequate

APHTON CORPORATION: Plan Confirmation Hearing Set for March 29
AQUILA INC: Earns $23.9 Million in Year Ended December 31
ARMSTRONG WORLD: EC Examining Proposed Sale of Desseaux to NPM
ASSOCIATED BRANDS: May Enter Into Going Private Transaction
ATLANTIC PORT: Organizational Meeting Scheduled at March 13

AUDIOVOX CORP: German Unit Buys OEHLBACH Kabel for $6.6 Million
BANKATLANTIC BANCORP: Earns $15.4 Million in Year Ended Dec. 31
BENCHMARK ELECTRONICS: Net Earnings Soar to $111.7 Million in 2006
BIOTECH RESEARCH: Moody's Cuts Rating on Senior Facilities to B2

BLOCKBUSTER INC: Earns $54.7 Million in Year Ended December 31
BOWATER INC: Posts Net Loss of $138 Million in Year Ended Dec. 31
CAL-BAY INT'L: Balks at Fraudulent Statement on Bankruptcy Filing
CALPINE CORP: FERC Approves California Power's $53 Mil. Settlement
CARESTREAM HEALTH: S&P Rates $440 Million 2nd-Lien Loan at B

CELANESE US: S&P Rates $3.628 Billion Senior Facilities at BB
CERADYNE INC: Earns $128.4 Million in Year Ended December 31
CINEMARK USA: Moody's Reviews Ba2 Rating and May Downgrade
CIRRUS LOGIC: David D. French Steps Down as President and CEO
CLARKE AMERICAN: Moody's Cuts Corp. Family Rating to B2 from B1

COMDISCO HOLDING: Earns $5 Million in First Quarter Ended Dec. 31
COMPLETE RETREATS: Court Extends Removal Period to April 20
COMPLETE RETREATS: Panel Provides Update on Ultimate Resort Sale
CONCENTRA OPERATING: Earns $3.3 Million in Quarter Ended Dec. 31
CONSOLIDATED CONTAINER: Moody's Junks Rating on $250 Mil. Loan

CVS CORP: Agrees to Raise Caremark Shareholders' Special Dividend
CVS CORP: Remarks on Express Scripts' Risky Takeover Proposal
DAIMLERCHRYSLER AG: Magna Set to Visit U.S. Unit's Headquarters
DATALOGIC INT'L: Fails to Make Lazarus Master's Interest Payments
DAVITA INC: Earns $289.6 Million for Year Ended December 31

DEAN FOODS: Earns $225.41 Million in Year Ended December 31
DELPHI CORPORATION: Files Registration Statement With SEC
DISTRIBUTED ENERGY: Expects Going Concern Doubt Statement from PwC
DLJ COMMERCIAL: Fitch Lifts Rating on Class B-7 Certs. to B+
DYNEGY HOLDINGS: Moody's Rates $1.25 Billion Sr. Facilities at Ba1

DYNEGY HOLDINGS: S&P Rates Proposed $1 Bil. Sr. Facilities at BB-
ENCORE ACQUISITION: Earns $10.1 Million in FY 2006 Fourth Quarter
ENERNORTH INDUSTRIES: Has 45 Days to Make Proposal Under BIA
ENTERCOM COMMUNICATIONS: Earns $47.98 Mil. in Year Ended Dec. 31
EVANS SYSTEMS: Appoints Frank Moody as CEO

FAIRWAY LOAN: S&P Holds BB- Rating on $32 Mil. Class B-2L Notes
FEDERAL-MOGUL: Court Okays Cranhold Claim Settlement
FINAL ANALYSIS: Expands Sheppard Mullin's Scope of Work
FIRST UNION: Fitch Holds B- Rating on $8.7 Mil. Class M Certs.
FIRST UNION: Fitch Holds B- Rating on $4.1 Mil. Class O Certs.

FORD MOTOR: Mulls Offering Bonuses to Salaried Workers
FORD MOTOR: May Sell Aston Martin to a Consortium
FOSS MANUFACTURING: Court Confirms Committee's Liquidation Plan
FUNCTIONAL RESTORATION: Trustee Taps Ezra Brutzkus as Counsel
GALAXY VIII: S&P Assigns BB Rating on $12.5 Million Class E Notes

GE CAPITAL: Fitch Lifts Rating on $7.5 Mil. Class K Certs. to BB+
GE COMMERCIAL: Moody's Holds B2 Rating on $4MM Class PPL-F Certs.
GMAC COMMERCIAL: Fitch Lifts Rating on Class P Certificates to B-
GULF COAST: Wants Court to Approve Lain Faulkner as Accountant
HANOVER COMPRESSOR: Earns $86.52 Million in Year Ended December 31

HERCULES INC: Earns $238.7 Million in Year Ended December 31
HIGHWOOD PROPERTIES: Earns $20.3 Million in Quarter Ended Dec. 31
HUDSON HIGHLAND: Will Restate 2006 & 2005 Financial Results
INSIGHT MIDWEST: S&P Holds BB- Rating on Revised Credit Facilities
INTENATIONAL PAPER: Earns $1.05 Billion in Year Ended December 31

INTERNAL INTELLIGENCE: Hires Ingber Law Firm as Special Counsel
INTERNAL INTELLIGENCE: Hires Samuel Chuang as Special Counsel
K&F INDUSTRIES: Signs Merger Agreement with Meggitt-USA
K&F INDUSTRIES: Meggitt-USA Offer Cues S&P's Positive CreditWatch
KOMA EQUIPMENT: Case Summary & Five Largest Unsecured Creditors

L-SOFT INT'L: Files for Bankruptcy to Resolve 5-Year Legal Dispute
L-SOFT INTERNATIONAL: Case Summary & 20 Largest Unsec. Creditors
LABRANCHE & CO: Moody's Cuts Senior Debt Rating's to Ba3 from Ba2
LEE TILFORD: Voluntary Chapter 11 Case Summary
LIGAND PHARMA: Appoints Three Individuals to Board of Directors

LODGENET ENT: Acquisition Cues S&P's Stable Outlook
M/I HOMES: Fitch Puts B+ Rating on $100MM Preferred Stock Issuance
M/I HOMES: Moody's Rates $100 Mil. Series A Preferred Stock at B2
MAGNOLIA ENERGY: Wants Cash Collateral Access Extended to Mar. 23
MAGNOLIA ENERGY: Court Extends Plan-Filing Period to May 29

MESABA AVIATION: Walks Away from Metropolitan Airports Lease
MGM MIRAGE: Earns $648.26 Million in Year Ended December 31
MOORE MEDICAL: Court Approves Eide Bailly as Accountant
MOVIE GALLERY: Promotes Thomas Johnson to Chief Financial Officer
MOVIE GALLERY: Acquires MovieBeam for $10 Million

MULBERRY STREET: Fitch Holds BB Rating on $7 Million Class C Notes
NOWAUTO GROUP: Posts Net Loss of $633,785 in Quarter Ended Dec. 31
NATIONSLINK FUNDING: Fitch Holds Junk Rating on $31.1 Mil. Certs.
NATIONWIDE HEALTH: Earns $185.6 Million in Year Ended December 31
NEW CENTURY: Ceases Accepting Loan Requests, Looks for Add'l Funds

NEW CENTURY: Uncertainties in Funding Cues Fitch's Negative Watch
NEW RIVER: Case Summary & 20 Largest Unsecured Creditors
OHIO CASUALTY: Moody's Places Ba2 Rating on Preferred Stock
OUR LADY OF MERCY: Case Summary & 30 Largest Unsecured Creditors
PACIFIC LUMBER: May Continue Using Cash Collateral Until March 16

PACIFIC LUMBER: Scotia Pacific Opposes Transfer of Venue
PACIFIC LUMBER: Scotia Pacific Seeks Release of SAR Funds
PEABODY ENERGY: Moody's Cuts Rating on $675MM Junior Debt to Ba3
PERINI CORP: Earns $41.5 Million in Year Ended December 31
PHILOSOPHY ACQUISITION: Moody's Holds B2 Corporate Family Rating

PHILOSOPHY INC: Moody's Cuts Rating on $260MM Sr. Facilities to B2
PHILOSOPHY INC: Loan Facility Revisions Cue S&P Affirms Ratings
PINNACLE DEVELOPMENT: Founder Accused of Real-Estate Ponzi Scheme
PLAINS EXPLORATION: S&P Holds Corporate Credit Rating at BB
POSADA PORLAMAR: Case Summary & 18 Largest Unsecured Creditors

PRIMUS TELECOM: Dec. 31 Balance Sheet Upside-Down by $468 Million
PSYCHIATRIC SOLUTIONS: Earns $17.5 Million in 2006 Fourth Quarter
PUREBEAUTY INC: Files Disclosure Statement in California
REGAL ENTERTAINMENT: Earns $86.3 Million in Period Ended Dec. 28
RELIANCE STEEL: Earns $354.5 Million in Year Ended December 31

RESMAE MORTGAGE: Wants $1.2 Mil. Sale Related Incentive Approved
RESMAE MORTGAGE: U.S. Trustee Objects to Incentive Payments
SANTA FE MINERALS: General Claims Bar Date Set on April 16
SCHOONER TRUST: Moody's Puts Low-B Ratings on Six Class Certs.
SHAW COMMS: Closes Offering of CDN$400 Mil. of 5.7% Sr. Notes

SORELL INC: Tojen Acquires 75,000,000 Issued & Outstanding Shares
STEVEN RIVERA: Voluntary Chapter 11 Case Summary
STILLWATER MINING: Good Performance Cues S&P's Stable Outlook
TANGER FACTORY: Net Income Soars to $37 Million in Fiscal 2006
TENNECO INC: Earns $51 Million in Year Ended December 31

TRIBUNE COMPANY: Earns $594 Million in Year Ended December 31
US AIRWAYS: Earns $304 Million in Year Ended December 31
US STEEL: CEO Considers China's Plan to Close Plants a "Good Step"
VANGUARD HEALTH: Incurs $118.7 Mil. Net Loss in Qtr. Ended Dec. 31
VISTEON CORP: Posts $163 Million Net Loss in Full Year 2006

WACHOVIA BANK: S&P Rates $29 Million Class N Certificates at BB-
WCI COMMUNITIES: Earns $9.01 Million in Year Ended December 31
WERNER LADDER: 2nd Lien Committee, et al. Oppose Sale Procedures
WERNER LADDER: Seeks July 7 Extension to Remove Civil Actions
WERNER LADDER: Wants to Reject Wells Fargo Equipment Lease

WESTCHESTER COUNTY HEALTH: S&P Lifts Bonds' Rating to BBB- from BB

* Harvey R. Miller to Re-Join Weil, Gotshal & Manges LLP

* BOOK REVIEW: THE ITT WARS: An Insider's View of Hostile
               Takeovers

                             *********

750 EAST: Brings In Allan NewDelman as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona gave 750
East Thunderbird Road Corporation permission to employ Allan D.
NewDelman P.C., as its bankruptcy counsel.

Allan NewDelman is expected to:

     a. give the Debtor legal advise with respect to all matters
        related to this case;

     b. prepare on behalf of the Debtor, as debtors-in-possession
        necessary applications, answers, orders, reports, and
        other legal papers; and

     c. perform all other legal services for the Debtors which may
        be necessary herein.

Documents filed with the Court did not disclose how much the firm
will be paid for this engagement.

To the Debtor's best knowledge the firm does not hold any interest
adverse and is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.

Based in Phoenix, Arizona, 750 East Thunderbird Road Corp. filed
for Chapter 11 protection on Jan. 9, 2007 (Bankr. D. Ariz. Case
No. 07-00089).  Allan D. Newdelman, Esq., represents the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated its assets between $1 million to $100 million and its
debts between $100,000 to $1 million.


750 EAST: Court Approves Interim Access to Cash Collateral
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
750 East Thunderbird Road Corporation to use cash collateral to
pay current real estate taxes, insurance, and utilities.

The cash collateral consists of a $5,000 monthly rent paid by a
doctor in the Debtor's building at 750 E. Thunderbird Road in
Phoenix, Arizona.

SFG Income Fund VI, LLC, a secured creditor, had objected to the
Debtor's use of cash collateral.  SFG Income Fund even asked the
Court to sequester the cash collateral and turn the cash
collateral over to the Fund.

SFG is the holder of a promissory note for $970,000 from the
Debtor.  The note is secured by a deed of trust and assignment of
rents.

The Debtor defaulted on the Note and Deed of Trust by failing to
make regular monthly payments due totaling $10,352.  SFG began
foreclosure proceedings against the property and scheduled a
trustee's sale for Jan. 9, 2007.  SFG noted that the Debtor filed
for bankruptcy 75 minutes before the scheduled trustee's sale.

At the Interim Cash Collateral Hearing, the Debtor's lawyer told
the Court that after the Debtor pays current real estate taxes,
insurance and utilities, the Debtor will turn the balance of the
cash collateral to SFG.

Rex C. Anderson, Esq., who represents SFG Income Fund, did not
object to the Debtor's proposal but asked for a monthly accounting
of expenses.

The Debtor agreed to provide evidence of payment of the utilities
and insurance, and monthly business reports will show taxes as
they become due.  Any remainder of the rent will be tendered to
SFG.

The Court directed the parties to reduce their cash collateral
agreement to writing.  The Court will convene the Final Cash
Collateral Hearing on March 26, 2007, at 11:00 a.m.

Based in Phoenix, Arizona, 750 East Thunderbird Road Corp. filed
for Chapter 11 protection on Jan. 9, 2007 (Bankr. D. Ariz. Case
No. 07-00089).  Allan D. Newdelman, Esq., represents the Debtor.  
When the Debtor filed for protection from its creditors, it
estimated its assets between $1 million to $100 million and its
debts between $100,000 to $1 million.


ADVA-LITE INC: Seeks March 16 Hearing on Asset Sale Procedures
--------------------------------------------------------------
Adva-Lite Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to set a March 16, 2007 hearing
to consider approval of their proposed bidding procedures for the
sale of substantially all of their assets.

As of their bankruptcy filing, the Debtors disclose that they owe
their prepetition lenders these amounts:

     Description             Amount
     -----------             ------
     Revolving Loans      $5.9 million

     Term Loan A          $11.0 million

     Term Loan B          $10.9 million

     Term Loan D-1        $5.0 million

     Term Loan D-3        $10.0 million
     ----------------------------------
     Total                $43.8 million

To maximize value of their operations and preserve other benefits
of stakeholders, the Debtors decided to sell their business as a
going concern.  

In this regard, the Debtors have obtained a commitment from the
Revolving Loan Lenders, the Term Loan A Lenders, and the Term Loan
B Lenders to provide secured postpetition financing to the
Debtors.  The Debtors have filed separate motion seeking approval
of the DIP Credit Facility.

                      Corvest Purchase Offer

The Debtors tell the Court that they received an offer for the
purchase of all of their assets from Corvest SPV LLC, an affiliate
of Ableco Finance LLC, pursuant to an asset purchase agreement
dated Feb. 28, 2007.

Corvest propose to buy the assets in exchange for the:

   a) assumption of the debtor-in-possession obligations to the
      debtor-in-possession financing lenders and certain specified
      contracts, leases, trade creditor obligations;

   b) payment of $500,000 in cash to the Debtors for the
      benefit of their estates, plus $100,000 to fund
      administrative expenses of the estates; and

   c) satisfaction of the claims of the Term D Prepetition Lenders
      through the issuance of 15% of the equity of Corvest up to
      a maximum value of $5,000,000.

                   Proposed Bidding Procedures

To qualify in the auction, competing bidders must, among others,
make a good faith deposit of not less than $1,000,000.

Subsequent bids will be in the increments of $100,000.

The Debtors propose that in the event the winning bidder is not
the stalking horse bidder, and after the payment of the minimum
overbid, the liens and security interests in respect of the
Term D-1 Loan and Term D-3 Loan will attach to 80% of the
remaining sale proceeds with the remaining 20% of the sale
proceeds going to the Debtors' estates.

If the stalking horse bidder submit an overbid and becomes the
winning bidder and the Term D Proceeds that become payable to
Trivest Partners LP are less than $3,000,000, Trivest will
have the right, in its discretion, to take, in lieu of the
Term D Proceeds, a 15% "payment right" in the purchased assets,
in which case the purchase price payable by the stalking
horse bidder at closing will be reduced by an amount equal
to the Term D proceeds.

The Debtors retained the services of Houlihan, Lokey
Howard & Zukin Capital Inc. as their investment banker.

                       About Adva-Lite Inc.

Headquartered in Largo, Fla., Adva-Lite Inc., together with
Corvest Promotional Products Inc., and four other affiliates,
sought chapter 11 protection on February 28, 2007 (Bankr. D. Del.
Case Nos. 07-10264 through 07-10271).  The four affiliates filing
separate chapter 11 petitions are Toppers LLC, CGI Inc., It's All
Greek To Me Inc., and Corvest Group Inc.                        

Adva-Lite, It's All Greek, and Toppers are subsidiaries of Corvest
Promotional.  Adva-Lite manufactures and markets personal lighting
gizmos, writing instruments, beverageware, and tools.  It's All
Greek provides custom plush products.  Toppers offers sports bags,
totes, luggage, caps, and other business accessories.

Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young
Conaway Stargatt & Taylor LLP represent the Debtors in their
restructuring efforts.  No Official Committee of Unsecured
Creditors has been appointed in the Debtors' case to date.  When
Adva-Lite sought protection from its creditors, it listed assets
and debts between $1 million to $100 million.


ADVENTURE PARKS: Wants to Hire A&M Securities as Financial Advisor
------------------------------------------------------------------
Adventure Parks Group, LLC and its debtor-affiliates seek
permission from the U.S. Bankruptcy Court Middle District of
Georgia to employ A&M Securities, LLC as its financial advisor.

A&M Securities will:

   a) provide financial advisory to the company in connection with
      developing and seeking approval for a restructuring plan;

   b) provide financial advisory to the company with the
      structuring of any new securities to be issued under the       
      plan;

   c) provide financial advisory to the company with valuation
      analyses;

   d) assist the company in negotiations with the creditors,
      shareholders and other parties-in-interest; and

   e) participate in hearings before the bankruptcy court on
      matter in which A&M has provided advice, including
      coordinating with the company's counsel.

James D. Decker, Managing Director of A&M Securities, LLC tells
the Court that the Firm's transaction fees are:

   a) Restructuring Transaction Fee -- shall be equal to 1.5% of
      any indebtedness or $800,000;

   b) Financing Transaction Fee -- shall be equal to 1.5% of the
      principal amount of all senior secured notes plus 3% of the
      principal amount of all unsecured debt and equities,
      including convertible securities and preferred stock; and

   c) Sale Transaction Fee -- shall be equal to 2% of Aggregate
      Gross Consideration from the first and all subsequent
      transactions.

Mr. Decker assures the Court that the firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.

                      About Adventure Parks

Based in Valdosta, Georgia, Adventure Parks Group LLC is
the holding company of Wild Adventures and Cypress Gardens.  Wild
Adventures operates an amusement park in Valdosta, Georgia, while
Cypress operates an amusement park in Winter Haven, Florida.

The company, along with Wild Adventures and Cypress Gardens, filed
for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case
Nos. 06-70659 through 06-70661).  George H. McCallum, Esq., James
P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP,
represent the Debtors.  Mark J. Wolfson, Esq., at Foley & Lardner
LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in
Georgia represent the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
estimated assets and debts between $50 million and $100 million.


AFFILIATED COMPUTER: Earns $72.1 Million in Quarter Ended Dec. 31
-----------------------------------------------------------------
Affiliated Computer Services Inc. reported net income of
$72.1 million on revenues of $1.426 billion for the second quarter
of fiscal 2007 ended Dec. 31, 2006, compared with net income of
$102.4 million on revenues of $1.347 billion for the second
quarter of the prior year.  

"I am very pleased with our results this quarter.  We saw
improvements in operating margins in both the Commercial and
Government segments.  Our renewal rates were excellent at
approximately 90% for the second quarter and approximately 95% for
the first six months of the year.  I would like to thank our
clients for their continued confidence in ACS," said Lynn
Blodgett, ACS' President and Chief Executive Officer.

"Internal revenue growth in our Government segment improved to 4%
which is a sign that the steps we started taking 18 months ago to
restructure our sales force have driven the desired results.  We
achieved good cash flow results in the second quarter and reduced
capital expenditures in absolute terms and as a percent of revenue
from the prior year and prior quarter.  All in all this was a good
quarter for ACS.  We could not have achieved these results without
our resilient and dedicated workforce and I appreciate all of
their efforts."
    
Other key highlights from ACS' fiscal 2007 second quarter include:

  -- Total revenue growth for the second quarter was 6% from
     prior year quarter.  Total revenue growth was 10% after
     adjusting for the divestiture of the welfare to workforce
     services ("WWS") business, substantially all of which was
     divested in the second quarter of fiscal 2006 ("WWS
     Divestiture").  Consolidated internal revenue growth
     for the second quarter was 4%.  

  -- Cash flow from operations was approximately $132 million, or
     9% of revenues.  Capital expenditures and additions to
     intangible assets were approximately $75 million, or 5% of
     revenues.  Cash flow results included cash interest paid on
     debt, cash paid related to legal and other costs associated
     with the ongoing stock option investigations and shareholder
     derivative lawsuits, offset by cash interest income, totaling
     $65 million, or 5% of revenues.

  -- During the second quarter, the company acquired Systech
     Integrators Inc. for $65 million, plus contingent payments of
     up to $40 million based upon future performance.  Systech,  
     with trailing twelve months of revenue of approximately
     $61 million, is a premier partner of SAP Americas and will
     expand ACS' existing SAP service offering with consulting and
     systems integration services.

  -- During the quarter, the company signed contracts with
     $166 million of annual recurring revenue and total contract
     value of approximately $1.1 billion.  The company renewed    
     $162 million of annual recurring revenue with total contract
     value of $553 million during the quarter.

At Dec. 31, 2006, the company's balance sheet showed
$5.928 billion in total assets, $4.038 billion in total
liabilities, and $1.89 billion in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ae7

                     About Affiliated Computer

A FORTUNE 500 company, Affiliated Computer Services Inc.,
(NYSE: ACS) -- http://www.acs-inc.com/ -- provides business  
process outsourcing and information technology solutions to world-
class commercial and government clients.  The company has more
than 58,000 employees supporting client operations in nearly 100
countries.


AFFILIATED COMPUTER: S&P Upgrades Corporate Credit Rating to BB
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured ratings on Affiliated Computer Services Inc. to
'BB' from 'B+' and removed the ratings from CreditWatch positive.
The outlook is stable.

"The rating actions reflect the filing of audited financial
reports and the elimination of any triggering events that might
have caused a payment acceleration on the company's $2 billion of
term debt," said Standard & Poor's credit analyst Philip Schrank.

The company has completed its internal investigation into its
historical stock option practices.  In response to the
investigation's findings, the company recognized a noncash,
cumulative pretax restatement for previously unrecognized stock-
based compensation expense of $51.2 million.

The current ratings incorporate the capacity ACS has put in place
to add significantly more debt through both a $1 billion debt
revolver, and uncommitted accordion loans, with very flexible loan
covenants.

"At the 'BB' rating level, our expectation is that ACS will manage
its debt leverage at between 3x-5x times over the intermediate
term, and may pursue further repurchases or acquisitions," said
Mr. Schrank.

ACS has maintained higher margins than many of its IT outsourcing
peers; some competitors have experienced revenue deceleration and
margin contraction.  While ACS faces competitive threats from
larger, more globally positioned IT providers, the company's very
strong position in state and local government outsourcing services
provides a measure of ratings stability.


AMERICAN CELLULAR: S&P Holds B- Rating on $1.05 Billion Facilities
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on American Cellular Corp.'s proposed senior secured
credit facilities, following the company's report that it will
increase the size of the term loan B to $900 million from
$700 million.  

Pro forma for the increased term loan B, the $1.05 billion senior
secured credit facilities will consist of a $75 million revolving
credit facility due in 2012, a $900 million term loan B due in
2014, and a $75 million delayed-draw term loan B due in 2014.

The secured loan rating is 'B-', same as the corporate credit
rating on American Cellular, and the recovery rating is '3', which
indicates Standard & Poor's expectation for meaningful recovery of
principal in the event of a payment default.

Proceeds from the new term loan B will be used to refinance
American Cellular's existing $250 million senior secured credit
facilities and repay a portion of the outstanding $900 million 10%
senior notes due 2011.  Upon closing of the new facility, the 'B+'
bank loan rating and '1' recovery rating on the existing
$250 million senior secured credit facility will be withdrawn.

The proposed $75 million revolving credit facility and $75 million
delayed-draw facility will remain undrawn at closing.


Ratings List:

   * American Cellular Corp.

      -- Corporate Credit Rating, B-/Positive/

Ratings Affirmed:

   * American Cellular Corp.

      -- $1.05 Billion Senior Secured Facilities, B-,
         Recovery Rating: 3


AMERICAN PACIFIC: Revenue Up 112% in Fiscal 2007 First Quarter
--------------------------------------------------------------
American Pacific Corporation reported financial results for its
fiscal 2007 first quarter ended Dec. 31, 2006:

  -- Revenues increased 112% to $34.9 million from $16.5 million    
     in the prior year quarter.
  
  -- Operating income was $4.4 million compared to an operating
     loss of $1.1 million in the prior year quarter.

  -- Net Income of $639 million compared to a net loss of
     $1.3 million in the prior period quarter.

The 112% increase in revenues for the first quarter of fiscal 2007
reflect:

  -- Three months of revenue from the Fine Chemicals segment (AFC)
     in the first quarter fiscal 2007 compared to one month of
     revenue from AFC in the first quarter of fiscal 2006.
         
  -- Increases in Specialty Chemicals revenues driven primarily by     
     higher Grade I AP volume in the first quarter of fiscal 2007.
    
  -- Revenue declines in the Aerospace Equipment and Other         
     Business segments.

Cost of revenues increased $9.9 million, or 81%, to $22 million
for the fiscal 2007 first quarter from $12.1 million for the first
quarter of fiscal 2006.  The gross margin percentage was 37%
compared to 26%.
    
These factors affected consolidated gross margin comparisons:

  -- Specialty Chemicals gross margin dollars and as a percentage
     of revenues improved primarily as a result of the higher
     Grade I AP volume and the related effect on perchlorate gross
     margin percentage that results from better absorption of
     relatively fixed depreciation and amortization that is
     included in cost of sales.
    
  -- AFC gross margins improved due to better production
     efficiency.
    
  -- Aerospace Equipment segment gross margin improved in dollars
     and as a percentage of revenues, despite a decline in    
     revenue.  The improvement is primarily attributed to changes
     in product mix.  The prior year quarter included work
     performed under certain development contracts at lower gross
     margin rates.

  -- Gross margin dollars from our Other Businesses segment is
     consistent with the prior year quarter.
    
Operating expenses increased $3 million, or 56%, in the first
quarter of fiscal 2007 to $8.5 million from $5.5 million in the
first quarter of fiscal 2006.  As a percentage of revenues,
operating expenses were 24% and 33% for the first fiscal quarter
of 2007 and 2006, respectively.  The increases in operating
expenses are substantially due to AFC and reflect:
    
  -- An increase in AFC operating expenses due to the inclusion of
     three months in the first quarter of fiscal 2007 compared to
     one month in the prior year quarter.  AFC operating expenses
     for the first quarter of fiscal 2007 include $300,000 of
     amortization expense related to intangible assets.
  
  -- A reduction in corporate expenses from $3.3 million to
     $2.8 million.

At Dec. 31, 2006, the company's balance sheet showed
$235.1 million in total assets, $162.5 million in total
liabilities and $72.6 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ae4

                  Capital and Liquidity Highlights

Cash flows used by operating activities improved by $1.7 million.
Operating activities used cash of $4 million in the first quarter
of fiscal 2007 compared to a use of cash of $5.7 million in the
prior year quarter.
    
Significant components of the change in cash flow from operating
activities for the first quarter of fiscal 2007 compared to the
first quarter of fiscal 2006 include:

  -- An increase in cash provided by EBITDA of $7 million.
    
  -- An increase in cash used to fund working capital increases of
     $3.9 million.

  -- An increase in cash used for interest payments of
     $2.2 million.

  -- A reduction in cash used for environmental remediation of
     $1.7 million.

  -- Other increases in cash used for operating activities of
     $900,000.

The increase in cash used to fund working capital is primarily
attributed to the Fine Chemicals segment which experienced
increases in inventory during the first quarter of fiscal 2007.
    
As of Dec. 31, 2006, the company had cash balances of
$1.7 million and no amounts drawn against its $10 million
revolving credit line.  

During the first quarter of fiscal 2007, total debt
(including $6 million due to GenCorp under an AFC earnout
obligation which is classified as an accrued liability) decreased
by $6 million from $113.4 million to $107.4 million.  The
reduction in debt reflects principal payments on the first lien
term loan of $7.3 million, offset by the accrual of payment-in-
kind interest on the seller subordinated note.

                      Senior Notes/Refinancing

On Feb. 6, 2007, the company issued and sold $110 million
aggregate principal amount of 9% Senior Notes due Feb. 1, 2015.  
The Senior Notes are guaranteed on a senior unsecured basis by all
of the company's existing and future material U.S. subsidiaries.  

Net proceeds from the issuance of the Senior Notes were used to:

  -- Repay all outstanding principal and interest on the first
     term loan and terminate the related commitment.
    
  -- Repay all outstanding principal and interest, including a
     pre-payment penalty of approximately $400,000, on the second
     lien term loan and terminate the related commitment.

  -- Fund an earnout payment of $6 million due to GenCorp Inc.
     related to the acquisition of AFC.

  -- Fund a negotiated early retirement of a subordinated seller
     note and accrued interest due to GenCorp Inc. at a discount
     from the stated amount of the note.

Concurrent with the issuance of the Senior Notes, the company  
entered into an Amended and Restated Credit Agreement which
provides a secured revolving credit facility in an aggregate
principal amount of up to $20 million (the "Revolving Credit
Facility") with an initial maturity in 5 years.

                    About American Pacific

Based in Las Vegas, Nevada, American Pacific Corp. (Nasdaq: APFC)
-- http://www.apfc.com/-- is a manufacturer of specialty and fine
chemicals, as well as propulsion products sold to defense,
aerospace and pharmaceutical end markets.   Products provide
access to, and movement in, space via solid fuel and propulsion
thrusters and represent the key active ingredient in drug
applications such as HIV, epilepsy and cancer.  The company
produces specialty chemicals utilized in various applications such
as fire extinguishing systems, as well as manufacture water
treatment equipment.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 19, 2007,
Moody's Investor Service upgraded American Pacific Corporation's
corporate family rating to B1 and assigned a B2 rating to its new
$110 million guaranteed senior unsecured notes due 2015.  


AMERICAN REAL: API Board OKs $0.10 Per Unit Quarterly Distribution
------------------------------------------------------------------
American Real Estate Partners, L.P. reported that the board of
directors of its general partner, American Property Investors,
Inc., has approved payment of a quarterly cash distribution of
$0.10 per unit on its depositary units.  The distribution is
payable on March 29, 2007 to depositary unitholders of record at
the close of business on March 14, 2007.  The payment of future
distributions will be determined by API's board.

AREP also reported that it has declared its scheduled annual
preferred unit distribution payable in additional preferred units
at the rate of 5% of the liquidation preference of $10.  The
distribution is payable on March 30, 2007 to holders of record as
of the close of business on March 15, 2007.

                   About American Real Estate

Headquartered in New York City, American Real Estate Partners, LP
(NYSE:ACP) -- http://www.arep.com/-- a master limited  
partnership, is a diversified holding company engaged in a variety
of businesses.  The company's businesses currently include gaming,
oil and gas exploration and production, real estate and home
fashion.  The company is in the process of divesting its Oil and
Gas operating unit and their Atlantic City gaming property.

The company owns a 99% limited partnership interest in American
Real Estate Holdings Limited Partnership.  Substantially all of
the assets and liabilities are owned by AREH and substantially all
of the company's operations are conducted through AREH and its
subsidiaries.  American Property Investors, Inc., or API, owns a
1% general partnership interest in both the company and AREH,
representing an aggregate 1.99% general partnership interest in
the company and AREH.  API is owned and controlled by Mr. Carl C.
Icahn.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 15, 2007,
Standard & Poor's Rating Services affirmed its 'BB+' long-term
counterparty credit rating on American Real Estate Partners L.P.
The outlook is stable.


APHTON CORP: Court Says Amended Disclosure Statement is Adequate
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the Amended Disclosure Statement explaining the Joint Liquidating
Plan proposed by Aphton Corporation and the Official Committee of
Unsecured Creditors.

The Court determined that the Disclosure Statement contained
adequate information for creditors to make an informed decision
about the Plan.

With the approval, the Debtor can now solicit acceptances of that
Plan.

                          Plan Overview

The Plan provides for the liquidation and distribution of the
Debtor's assets to all holders of allowed claims.

The Debtor projects that, as of the Plan Effective Date, it will
have between $100,000 to $250,000 cash on hand available for
distribution to holders of allowed claims.

A plan administrator will be appointed to pursue litigation claims
and avoidance actions, which may result in additional funds for
distribution.  The Debtor transferred $1,119,961 to creditors
other than insiders within the 90 days prior to its bankruptcy
filing.

The Plan Administrator will be authorized to liquidate the
Debtor's remaining assets include intellectual property,
collection of deposits and the return of sums currently escrowed
with third parties, and miscellaneous physical assets.

Allowed Administrative Claims other than Professional Fee Claims
and Allowed Secured Claims will be paid in full.

The Debtor believes there are no secured claims encumbering its
property.

The Debtor estimates that the allowed amount of unsecured priority
claims will ultimately be $47,970 with a maximum possible allowed
amount of $341,228.

The Debtor estimates that unsecured claim holders can recover up
to 62% of their allowed claims.  The Debtor's schedules of assets
and liabilities reflect unsecured non-priority claims totaling
$1,966,385.  The Debtor estimates that the allowed amount of
unsecured non-priority claims will ultimately be $1,870,995, with
a maximum possible allowed amount of $4,051,344.

In the unlikely event that there will be sufficient funds to pay
senior claims in full, holders of allowed subordinated claims will
receive their pro rata share of the remaining assets.

Equity interests will be cancelled.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation
-- http://www.aphton.com/-- is a clinical stage biopharmaceutical  
company focused on developing targeted immunotherapies for cancer.  
Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.
Del. Case No. 06-10510).  Michael G. Busenkell, Esq., at Eckert
Seamans Cherin & Mellot, LLC, represents the Debtor in its
restructuring efforts.  William J. Burnett, Esq., at Flaster
Greenberg, represents the Official Committee of Unsecured
Creditors.  At Dec. 31, 2005, Aphton's balance sheet showed assets
totaling $6,775,858 and debts totaling $11,641,182.


APHTON CORPORATION: Plan Confirmation Hearing Set for March 29
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing at 10:00 a.m. on March 29, 2007, at 10:00 a.m.,
to consider confirmation of the Joint Liquidating Plan proposed by
Aphton Corporation and the Official Committee of Unsecured
Creditors.

Objections to the Plan, if any, must be filed by March 22.

Headquartered in Philadelphia, Pennsylvania, Aphton Corporation
-- http://www.aphton.com/-- is a clinical stage biopharmaceutical  
company focused on developing targeted immunotherapies for cancer.  
Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.
Del. Case No. 06-10510).  Michael G. Busenkell, Esq., at Eckert
Seamans Cherin & Mellot, LLC, represents the Debtor in its
restructuring efforts.  William J. Burnett, Esq., at Flaster
Greenberg, represents the Official Committee of Unsecured
Creditors.  At Dec. 31, 2005, Aphton's balance sheet showed assets
totaling $6,775,858 and debts totaling $11,641,182.


AQUILA INC: Earns $23.9 Million in Year Ended December 31
---------------------------------------------------------
Aquila Inc. reported net income of $23.9 million for the year
ended Dec. 31, 2006, compared to a net loss of $230 million in
2005.  Annual sales were $1.369 billion in 2006 versus
$1.314 billion in 2005.  

"Throughout 2006 Aquila employees kept service and performance in
the forefront, producing positive results in our utility
operations and increasing efficiencies while completing many of
the initiatives associated with our repositioning plan," said
Richard C. Green, Aquila's chairman and chief executive officer.

"During this four-year rebuilding process we have grown our
utility customer service and reliability metrics while reducing
debt by $2.2 billion, selling utility properties worth nearly
$1 billion and eliminating contract liabilities of more than
$1.6 billion.  Completing the recently announced sale transactions
with Great Plains Energy and Black Hills Corporation will create
further value for our shareholders.  These are exceptional
accomplishments and a tribute to all who work at Aquila."

Included in 2006 net income were after-tax gains of $273.8 million
on the sale of Aquila's Michigan, Missouri, and Minnesota gas
utility businesses and its Everest Connections subsidiary, as well
as a $218 million net loss on the exiting of the Elwood tolling
contract and a $17.4 million after-tax loss on the early
retirement and prepayment of debt.  The 2005 net loss was
primarily the result of a $99.7 million after-tax impairment
charge relating to the sale of the Goose Creek and Raccoon Creek
peaking power plants and an $82.3 million loss on the early
conversion of the company's Premium Income Equity Securities.

                    Fourth Quarter 2006 Results

Aquila reported net income of $64.3 million for the quarter ended
Dec. 31, 2006, compared to a net loss of $127.8 million in the
fourth quarter of 2005.  A significant factor in current quarter
net income was a $56.9 million income tax benefit from applying
estimated capital gains on the sale of the company's Minnesota gas
utility business against capital loss carryforwards.  An
additional tax benefit related to the apportionment of state net
operating loss carryforwards was realized in the current quarter
due to the company's refocusing on its core utility businesses.
Sales in the 2006 fourth quarter declined 15 percent to
$339 million, primarily due to lower natural gas prices and warmer
winter weather.

                      Discontinued Operations

Discontinued Operations includes the company's Kansas electric
utility operations; its former Michigan, Minnesota, and Missouri
gas utility operations; its former Everest Connections
telecommunications subsidiary; and its former Goose Creek and
Raccoon Creek merchant peaking plants in Illinois.  The company's
former gas divisions and Kansas electric held-for-sale utility
business reported EBITDA of $327.4 million in 2006, which was a
$182.6 million increase from $144.8 million reported in 2005.
Pretax gains totaling $243.4 million on the sale of the gas
utility operations listed above were the primary cause of the
year-to-year EBITDA increase.  Offsetting the gains on sale was a
$46.6 million EBITDA decrease due to no longer owning the sold gas
utility properties in the months following their respective sales.

The company's former Everest Connections telecommunications
subsidiary reported EBITDA of $30.2 million in 2006, which was an
$18.2 million increase from $12 million reported in 2005.  The
$25.5 million pretax gain on the sale of the subsidiary in June
2006 was partially offset by a $7.2 million EBITDA decrease due to
no longer owning the subsidiary in the second half of 2006.
Impairment charges related to the company's former Illinois
peaking plants were the primary factors in a $.8 million EBITDA
loss in 2006 and a $156.1 million EBITDA loss in 2005.

At Dec. 31, 2006, the company's balance sheet showed
$3.472 billion in total assets, $2.166 in total liabilities, and
$1.306 billion in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1aec

                         About Aquila Inc.

Based in Kansas City, Missouri, Aquila Inc. (NYSE:ILA) --
http://www.aquila.com/-- owns electric power generation and  
operates electric and natural gas transmission and distribution
networks serving nearly 1 million customers in Colorado, Iowa,
Kansas, Missouri and Nebraska.

                           *     *     *

As reported in the Troubled Company Reporter on Feb. 12, 2007,
Standard & Poor's Ratings Services placed its 'B-2' short-term
corporate credit rating on Aquila Inc. on CreditWatch with
positive implications.  


ARMSTRONG WORLD: EC Examining Proposed Sale of Desseaux to NPM
--------------------------------------------------------------
The European Commission is examining NPM Capital N.V.'s proposed
acquisition of carpet producer Tapijtfabriek H. Desseaux N.V.
under the European Union's simplified merger review procedure for
cases that the commission believes do not pose competition
concerns.

The inquiry will continue until March 28, 2007, according to the
European Commission's Web Site, http://www.europa.eu

As reported in the Troubled Company Reporter on Feb. 21, 2007,
Armstrong World Industries Inc. and NPM Capital were in
negotiations on the possible sale of Desseaux N.V. and its
subsidiaries, the principal operating companies in Armstrong's
European Textile and Sports Flooring business segment.

                         About NPM Capital

NPM Capital -- http://www.npm-capital.com/-- focuses on Dutch   
companies in general and in particular on companies that have a
strong growth strategy and that are led by enterprising managers.   
In many instances the companies are either already a market leader
in a certain market or have the potential to attain this position.  
NPM Capital is a division of SHV Holdings.

                         About Armstrong

Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- designs and manufactures floors,   
ceilings and cabinets.  AWI operates 42 plants in 12 countries and
employs approximately 14,200 people worldwide.

The company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. D. Del. Case No. 00-04469).
StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C.Silberglied, Esq., at Richards, Layton & Finger, P.A.,
represented the Debtors in their restructuring efforts.  The
company and its affiliates tapped the Feinberg Group for analysis,
evaluation, and treatment of personal injury asbestos claims.

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

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

(Armstrong Bankruptcy News, Issue No. 108; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                          *     *     *

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


ASSOCIATED BRANDS: May Enter Into Going Private Transaction
-----------------------------------------------------------
Associated Brands Income Fund is in negotiations regarding a
possible transaction that would result in the acquisition of
Associated Brands by a subsidiary of a fund managed by TorQuest
Partners and a cash payment to the Fund's unitholders for their
Fund units.

Although the terms and conditions of the transaction, including
price and transaction structure, have not been finalized, the
range for the possible cash purchase price per Fund unit being
discussed would be at a premium of approximately 32% to the
closing price of the Fund units on the Toronto Stock Exchange on
March 5, 2007 of $0.62 per unit.

If the parties conclude acceptable terms for the transaction, the
transaction would be subject to a number of closing conditions,
including approval by the Fund's unitholders and the receipt of
specified third party consents, including from the lender under
the Associated Brands' credit facility.

The transaction would require the approval of 66-2/3% of the votes
cast at a meeting of the Fund's unitholders, as well as the
approval of the majority of "minority" holders for purposes of
Ontario Securities Commission Rule 61-501 and Regulation Q-27 of
the Autorite des marches financiers du Quebec.  Units held by
TorQuest and its related parties would be excluded from such
minority vote.

There can be no assurance that an agreement with TorQuest Partners
will be reached or that a going private transaction involving
Associated Brands will occur. The entering into of any agreement
regarding the transaction by the Fund would be subject to, among
other things, the approval of the Fund's board of trustees.

Negotiations on behalf of Associated Brands have been conducted by
a special committee of trustees of the Fund and its wholly owned
subsidiary Associated Brands Operating Trust who are independent
of TorQuest Partners.

Based on information provided from TorQuest Partners, funds
managed by TorQuest Partners currently hold approximately
$10.0 million aggregate principal amount of exchangeable
debentures of Associated Brands Holdings Limited Partnership (a
subsidiary of ABOT), which are exchangeable for Fund units at
various exercise prices, and 892,912 Fund units. In addition, one
of the trustees of ABOT is a managing partner of the TorQuest
Funds' general partner.

                About Associated Brands Income Fund

Associated Brands Income Fund (TSX: ABF.UN) --
http://www.associatedbrands.com/-- through its operating  
subsidiaries, is a North American manufacturer and supplier of
private-label dry-blend food products and household products.  
Since beginning operations in 1985, Associated Brands has grown to
become one of the three largest suppliers of a diverse range of
private-label dry-blend food products in North America, producing
over eleven million cases annually across multiple product
categories currently sold to 45 of the 50 largest North American
food retailers.

Associated Brands plans to build unitholder value by leveraging
its solid presence in the U.S. private-label market, expanding its
product offerings to current and new customers and adding
additional contract manufacturing business, and through accretive
acquisitions that meet its strict operating and strategic
criteria.

                           Waiver

As reported in the Troubled Company Reporter on Sept. 29, 2006,
Associated Brands Income Fund reached agreement with its lenders
to amend the terms and conditions governing the Fund's
$43.3 million bank facilities and $11 million in principal amount
of outstanding exchangeable debentures.  Under the terms of the
amended credit agreement with the Fund's bank, the bank will waive
all outstanding defaults and extend the term of the Credit
Agreement from Nov. 15, 2007 to Sept. 23, 2008.  


ATLANTIC PORT: Organizational Meeting Scheduled at March 13
-----------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold
an organizational meeting to appoint an official committee of
unsecured creditors in Atlantic Port Richmond International
Logistics, Inc.'s chapter 11 case at 10:00 a.m., on
March 13, 2007, at the Chapter 11, 341(a) Meeting Room, Suite 501,
Office of the United States Trustee, 833 Chestnut Street, in
Philadelphia, Pennsylvania.

The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtor's cases.  The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code.  However, a representative of the Debtor
will attend and provide background information regarding the
cases.

Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.

Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee.  In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.

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

Atlantic Port Richmond International Logistics, Inc., aka
A.P.R.I.L., Inc., filed for chapter 11 protection on Feb. 16, 2007
(Bankr. E.D. Penn. Case No. 07-11002).  Albert A. Ciardi, III,
Esq., and Shannon D. Leight, Esq., at Ciardi & Ciardi, P.C.,
represent the Debtor.  When the Debtor filed forprotection fromits
creditors, it listed estimated assets between $10,000 to $100,000
and estimated debts between $100,000 and $1 million.


AUDIOVOX CORP: German Unit Buys OEHLBACH Kabel for $6.6 Million
---------------------------------------------------------------
Audiovox Corporation reported that its wholly owned subsidiary,
Audiovox German Holdings GmbH, has completed the acquisition
of OEHLBACH Kabel GmbH, a European market leader in the  
accessories field for $6.6 million, in addition to certain
earn-out payments.

"This acquisition is in keeping with our stated goal to acquire
synergistic businesses and product lines at higher margins than
our core lines" Patrick Lavelle, President and CEO of Audiovox
stated.  The same philosophy exists in our European operation,
which with this acquisition will add high quality accessory
products to their portfolio and will do so at higher margins.  
Oehlback is a recognized leader throughout Europe and has an
impressive distribution network, covering 30 countries."

"Coupled with our acquisitions of Terk Technologies and most
recently Thomson," Lavelle concluded "which includes the RCA,
Acoustic Research, Jensen and Advent brands, we will now have an
accessory division that should post sales upwards of approximately
$200 million over the coming year as well as give us a respectable
share in the accessory marketplace.  We remain active in the M&A
marketplace and continue to look towards additional acquisitions
that will help us grow both our top and bottom lines and enhance
shareholder value."

                        About Audiovox

Audiovox Corp. (Nasdaq: VOXX) -- http://www.audiovox.com/-- is
an international supplier and value added service provider in the
consumer electronics industry.  The company conducts its business
through subsidiaries and markets mobile and consumer electronics
products both domestically and internationally under several of
its own brands.  It also functions as an original equipment
manufacturer supplier to a wide variety of customers, through
several distinct distribution channels.

                        *     *     *

Audiovox Corp. carries Moody's Investors Service's B1 Corporate
Family rating.


BANKATLANTIC BANCORP: Earns $15.4 Million in Year Ended Dec. 31
---------------------------------------------------------------
BankAtlantic Bancorp Inc. reported net income of $15.4 million on
total interest income of $367.2 million for the year ended
Dec. 31, 2006, compared with net income of $59.2 million on total
interest income of $345.9 million in 2005.

Income from continuing operations was $26.9 million for the year
ended Dec. 31, 2006, compared to income from continuing operations
of $42.5 million for the year ended Dec. 31, 2005.  

The decline in income from continuing operations during 2006
compared to 2005 was primarily due to lower earnings at
BankAtlantic, the company's wholly-owned banking subsidiary,
primarily as a result of a substantial increase in BankAtlantic's
non-interest expense, an $8.6 million provision for loan losses
during 2006, and a decline in net interest income.  The above
declines in BankAtlantic's segment net income were partially
offset by an increase in non-interest income associated with
higher revenue from customer service charges and transaction fees
linked to growth in core deposit accounts.
     
The increase in BankAtlantic's non-interest expense resulted from
BankAtlantic's growth initiatives and store expansion program as
well as BankAtlantic's "Florida's Most Convenient Bank" program,
which includes offering free checking, seven-day banking, extended
lobby hours with certain stores open to midnight, and a 24-hour
customer service center.  These initiatives resulted in a
substantial increase in compensation, occupancy and advertising
costs.

The Parent Company segment experienced lower losses during 2006
compared to 2005 as a result of gains realized on the sale of
equity securities from managed funds.  These securities' gains
were partially offset by an increase in interest expense on
borrowings based on higher interest rates during 2006 compared to
2005.
    
Results from discontinued operations relating to the Ryan Beck
segment was a loss of $11.5 million during 2006 compared to
earnings of $16.7 million during the year ended Dec. 31, 2005.   
Ryan Beck's 2006 loss resulted from declining retail brokerage
revenues and a significant slow-down in investment banking
activities.  

At Dec. 31, 2006, the company's balance sheet showed
$6.495 billion in total assets, $5.97 billion in total
liabilities, and $525 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1aef

                             Cash Flows

Cash and cash equivalents at Dec. 31, 2006, was $138.9 million,
compared with $164.9 million at Dec. 31, 2005.

Net cash provided by operating activities was $3.4 million in
2006, compared with net cash provided by operating activities of
$57.3 million in 2005.

Net cash used in investing activities was $205.9 million in 2006,
compared with net cash provided by investing activities of
$132.2 million in 2005.

Net cash provided by financing activities was $174.5 million,
compared with net cash used in financing activities of
$154.4 million.

                     About BankAtlantic Bancorp

Headquartered in Fort Lauderdale, Florida, BankAtlantic Bancorp
Inc. (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a  
Florida-based financial services holding company offering a full
range of products and services through BankAtlantic, its wholly-
owned banking subsidiary.  The company operates through two
primary business segments, BankAtlantic and the Parent Company.

BankAtlantic is one of the largest financial institutions
headquartered in Florida and provides a comprehensive offering of
banking services and products via its broad network of community
stores and its online banking division -- http://BankAtlantic.com/  
BankAtlantic has over 90 stores and operates more than 200
conveniently located ATMs.  

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 9, 2006,
Fitch has affirmed BankAtlantic Bancorp Inc.'s Long-term Issuer
Default Rating at BB+ and short-term issuer rating at B.


BENCHMARK ELECTRONICS: Net Earnings Soar to $111.7 Million in 2006
------------------------------------------------------------------
Benchmark Electronics Inc. reported net income of $111.7 million
on sales of $2.9 billion for the year ended Dec. 31, 2006,
compared to net income of $80.6 million on sales of $2.3 billion
in the previous year.

Excluding restructuring charges, the impact of stock-based
compensation expense and a tax benefit resulting from the closure
of the company's UK facility, the company would have reported net
income of $113.1 million in 2006.

For the fourth quarter of 2006, the company reported net income of  
$28.3 million on sales of $737 million, compared to net income of
$24.7 million on sales of $625 million for the same period in
2005.

"We are pleased with our performance in the fourth quarter.  We
had a solid finish to 2006 and achieved record annual sales and
earnings" stated Benchmark's Chief Executive Officer Cary T. Fu.  
"Our teams have delivered strong revenue growth for the past five
years."

At Dec. 31, 2006, the company's balance sheet showed
$1.406 billion in total assets, $421.1 million in total
liabilities, and $985 million in total equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1af2

Cash and cash equivalents increased to $123.9 million at
Dec. 31, 2006, from $110.8 million at Dec. 31, 2005.

Cash used in operating activities was $80.5 million in 2006.  The
cash used in operations during 2006 consisted primarily of
$111.7 million of net income adjusted for $27.4 million of
depreciation and amortization, offset by a $106 million increase
in accounts receivable, a $58.4 million increase in inventories
and a $36.9 million decrease in accounts payable.

Cash provided by investing activities was $71.3 million for the
year ended Dec. 31, 2006, primarily due to proceeds from sales and
maturities of short-term investments offset by the purchase of
additional property, plant and equipment and short-term
investments.  Capital expenditures of $42.3 million were primarily
concentrated in manufacturing production equipment in Asia and the
Americas to support ongoing business and to expand certain
existing manufacturing operations.

Cash provided by financing activities was $21.3 million for the
year ended Dec. 31, 2006.  During 2006, the company received
$16.1 million from the exercise of stock options and $5.2 million
in federal tax benefits of stock options exercised.

                          Subsequent Event

Effective Jan. 8, 2007, the company acquired Pemstar Inc., a
publicly traded electronics manufacturing services company
headquartered in Rochester, Minnesota.  With the closing of the
merger, Pemstar became a wholly-owned subsidiary of the company.
With the acquisition of Pemstar, the company's global operations
now include 24 facilities in nine countries.  

The aggregate purchase price was $220.9 million, including common
shares valued at $202.5 million, stock options and warrants valued
at $8.7 million, convertible debt valued at $4.8 million and
estimated acquisition costs of $4.9 million.  

                    About Benchmark Electronics

Benchmark Electronics Inc. (NYSE: BHE) -- http://www.bench.com/--
is in the business of manufacturing electronics and provides its
services to original equipment manufacturers of computers and
related products for business enterprises, medical devices,
industrial control equipment, testing and instrumentation
products, and telecommunication equipment.

                           *     *     *

As reported in the Troubled Company Reporter on Nov. 3, 2006,
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating on Angleton, Texas-based Benchmark Electronics Inc.
on CreditWatch with positive implications after the company
announced it will acquire Pemstar Inc. in a stock transaction
valued at about $300 million.

Moody's rates Benchmark's long-term corporate family rating at
Ba3; Bank loan debt at Ba2; and equity linked at B2.  The ratings
were assigned on March 2003.


BIOTECH RESEARCH: Moody's Cuts Rating on Senior Facilities to B2
----------------------------------------------------------------
Moody's Investors Service downgraded Philosophy Inc. and BioTech
Research Laboratories, Inc.'s, as joint and several obligors,
$260 million in first lien senior secured bank credit facilities
to B2 from B1.  

Moody's also affirmed the B2 corporate family rating for the
borrowers' ultimate parent holding company -- Philosophy
Acquisition Company, Inc.  Philosophy Acquisition Company, Inc. is
the parent company of Philosophy, Inc. and BioTech Research
Laboratories, Inc., headquartered in Phoenix, Arizona.  

Moody's notes that while there has been no fundamental
deterioration in Philosophy's overall credit profile, the
downgrade of the credit facility to B2 reflects the change in the
company's capital structure which results in a higher proportion
of first lien debt.  In accordance with Moody's Loss Given Default
Methodology, a B2 rating for the first lien facilities is
appropriate.  The company's downsized $25 million second lien
senior secured term loan being entered into by Philosophy Inc. and
BioTech will remain unrated.

Proceeds from the credit facilities combined with new cash equity
from The Carlyle Group will be used to fund Carlyle's acquisition
of a majority stake and controlling interest in the company.  The
ratings outlook is stable.  Final ratings are subject to review of
documentation and receipt of audited financial statements for
Dec. 31, 2006.

These ratings were downgraded:

   * Philosophy, Inc.

      -- $35 million senior secured revolving credit facility due
         2013 to B2, LGD3, 45% from B1, LGD3 41%; and

      -- $225 million first lien senior secured term loan due 2014
         to B2, LGD3, 45% from B1, LGD3, 41%.

These ratings were affirmed:

Philosophy Acquisition Company, Inc.:

      -- Corporate family rating at B2; and
      -- Probability-of-default rating at B2;

Philosophy, Inc. and BioTech Research Laboratories, Inc. are
co-borrowers under the first lien senior secured credit
facilities.

Philosophy was founded in 1996 and develops, manufactures and
markets premium personal care products under the Philosophy brand.  
The company operates in several personal care categories including
premium skin care, fragrances, bath & body, and to a lesser
extent, color cosmetics. Primary channels of distribution include
direct response television and prestige retailers such as
Nordstrom and Sephora.


BLOCKBUSTER INC: Earns $54.7 Million in Year Ended December 31
--------------------------------------------------------------
Blockbuster Inc. reported net income of $54.7 million for the year
ended Dec. 31, 2006, compared with a net loss of $588.1 million
for 2005.

Excluding the favorable resolution of multi-year tax audits, store
closure and severance costs as well as certain other items,
adjusted net income for the full-year 2006 would have been  $6.3
million, compared with an adjusted net loss of $73.6 million in
2005.

Revenues for 2006 decreased 3.5% to $5.52 billion from
$5.72 billion for 2005 mostly due to the closure of stores
resulting from accelerated actions to optimize the company's asset
portfolio and a 2.1% decrease in worldwide same-store sales.
Worldwide same-store revenues include the favorable impact of a
$105.5 million increase in revenues from Blockbuster's online
rental service resulting from growth in the subscriber base, which
nearly doubled to approximately 2.2 million subscribers, including
approximately 2 million paying subscribers, at the end of 2006.

Operating income for the full-year 2006 totaled $79.1 million, as
compared to an operating loss of $388.0 million for the same
period last year, which included a $341.9 million non-cash charge
to impair goodwill and other long-lived assets.

For the fourth quarter of 2006, net income was $12.9 million as
compared with net income of $18 million for the fourth quarter of
2005.

Revenues for the fourth quarter of 2006 increased 1.4% to
$1.51 billion compared with $1.49 billion for the fourth quarter
of last year primarily due to an increase in worldwide same-store
merchandise sales and favorable foreign exchange rates.  

"2006 was an exciting year for Blockbuster.  We delivered four
consecutive quarters of positive same-store domestic movie rental
revenues.  We also significantly reduced operating costs, sizably
increased our online subscriber base and substantially improved
our profitability and cash flow," said John Antioco, Blockbuster
Chairman and CEO.

At Dec. 31, 2006, the company's balance sheet showed
$3.137 billion in total assets, $2.394 billion in total
liabilities, and $742.4 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1af4  

Cash flow provided by operating activities increased by
$399.9 million to $329.4 million for the full-year 2006 from a
$70.5 million deficit for 2005 driven by improvement in
profitability.  

As of Dec. 31, 2006, no balance was outstanding under the
company's revolving credit facility and the company's borrowing
capacity, which excludes various letters of credit, totaled
approximately $293 million.

                   Divestiture of Non-Core Assets

As part of the ongoing review of its asset portfolio, during 2006
the company completed the divestiture of its MOVIE TRADING CO.(R)
locations and Movie Brands Inc. subsidiary, closed its store
operations in Spain and sold its Taiwan subsidiary, coupled with a
master franchise license, to Webs-TV, the largest broadband TV
operator in the Chinese market.

Most recently, in 2007 the company sold its 72-store, U.S.-based
RHINO VIDEO GAMES(R) chain to GameStop Corp. and in conjunction
with the Blockbuster Brazilian franchisee's sale of its stores to
LOJAS Americanas, the company signed a 20-year licensing agreement
with Lojas, giving the Brazilian retailer rights to the
BLOCKBUSTER brand for the rental and retail sale of video
products.  The company also entered into an agreement to sell its
Australian subsidiary and grant the master franchise rights for
the BLOCKBUSTER system in Australia to Video Ezy, an Australian-
based company with 518 franchised video rental stores.

                         About Blockbuster

Blockbuster Inc. (NYSE: BBI) -- http://www.blockbuster.com/-- is  
a leading global provider of in-home movie and game entertainment,
with over 8,000 stores throughout the Americas, Europe, Asia and
Australia.

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 19, 2006,
Standard & Poor's Ratings Services revised its outlook on video
rental retailer Blockbuster Inc. to stable from negative.  The
ratings on the Dallas-based company, including the 'B-' corporate
credit rating, were affirmed.


BOWATER INC: Posts Net Loss of $138 Million in Year Ended Dec. 31
-----------------------------------------------------------------
Bowater Inc. reported a net loss of $138.3 million for the year
ended Dec. 31, 2006, compared with a net loss of $120.6 million
for 2005.  Sales in 2006 totaled $3.529 billion, up slightly from
2005 sales of $3.483 billion.

Bowater Incorporated reported net income for the fourth quarter of
2006 of $107.2 million on sales of $861.3 million.  These results
compare with a net loss of $101.9 million on sales of
$876.4 million for the fourth quarter of 2005.

"During 2006, we realigned our organization to focus on
operational excellence," said David J. Paterson, Chairman,
President and Chief Executive Officer.  "This realignment,
combined with the addition of several key manufacturing leaders,
has resulted in the beginnings of meaningful operational
improvements.  In addition, we made substantial progress in debt
reduction, reducing net debt by $280 million in 2006.

"Our fourth quarter results were impacted by significant
curtailments in paper production.  However, I am confident with
the changes we have made to our manufacturing base; we have laid
the groundwork for a better 2007.  While we continue to improve
our operations as a standalone company, our recently announced
agreement to merge with Abitibi is a transformational move that
will allow us to generate even greater efficiencies and compete
more effectively."

Fourth quarter 2006 special items, net of tax, consisted of a
$19.5 million gain related to asset sales, $14.1 million charge
related to tax adjustments, $27.1 million gain relating to foreign
currency changes, $101.1 million income from the refund of lumber
duties, $3.2 million severance charge, and $7.8 million impairment
charge.  Excluding these special items, the net loss for the
quarter was $15.4 million, compared with a 2005 fourth quarter net
income before special items of $15.5 million.

During the fourth quarter, the company received a cash refund of
$103.9 million, or 82% of the amount deposited with U.S. Customs,
pertaining to softwood lumber shipments from Canada to the U.S.
The refund consisted of a return of $92.5 million of the duties
paid and $11.4 million of interest due the company.  Since 2002,
the duties have been included in distribution costs and deducted
from operating earnings in the lumber segment.  This cash refund
was applied to debt during the quarter.  Total debt, less cash on
the balance sheet, declined by $93 million during the fourth
quarter and has declined by $279.5 million since Dec. 31, 2005.
During the quarter, the company repurchased $95.3 million face
value of its Series A, 10.625% notes due June 15, 2010, and booked
a net gain of $5.2 million.  The company ended the quarter with
cash on hand of $98.9 million.

Also during the quarter, the company received proceeds of
$35.3 million from the sale of 19,100 acres of timberlands.  Since
the program was announced in the fall of 2005, the company has
received proceeds of approximately $375 million from asset sales.
The company expects to receive an additional $170 million of
proceeds from timberland sales by the end of 2007.

At Dec. 31, 2006, the company's balance sheet showed
$4.645 billion in total assets, $3.754 billion in total
liabilities, $59 million in minority interests in subsidiaries,
and $832.6 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1af5

                           Recent Events

As reported in the Troubled Company Reporter on Jan. 30, 2007,
Bowater and Abitibi-Consolidated have entered into a definitive
agreement to combine in an all-stock merger of equals to create
AbitibiBowater Inc., a new leader in publication papers which
would become the third largest public paper and forest products
company in North America and the eighth largest in the world.  
Under the terms of the transaction, each common share of Abitibi-
Consolidated will be exchanged for 0.06261 common share of
AbitibiBowater, and each Bowater common share will be exchanged
for 0.52 common share of AbitibiBowater.  The exchange ratio will
result in 48% of AbitibiBowater being owned by former Abitibi-
Consolidated shareholders and 52% of AbitibiBowater being owned by
former Bowater shareholders.

                           About Bowater

Headquartered in Greenville, South Carolina, Bowater Inc.
(NYSE: BOW) -- http://www.bowater.com/-- is a leading producer of  
coated and specialty papers and newsprint.  In addition, the
company sells bleached market pulp and lumber products.  Bowater
employs approximately 7,400 people and has 12 pulp and paper mills
in the United States, Canada and South Korea.  In North America,
it also operates a converting facility and owns 10 sawmills.
Bowater's operations are supported by approximately 815,700 acres
of timberlands owned or leased in the United States and Canada and
28 million acres of timber cutting rights in Canada.  Bowater
operates six recycling plants and is one of the world's largest
consumers of recycled newspapers and magazines.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 30, 2007,
Moody's Investors Service affirmed Bowater Incorporated's B1
corporate family, B2 senior unsecured and SGL-2 speculative grade
liquidity ratings but revised the outlook to developing from
stable.


CAL-BAY INT'L: Balks at Fraudulent Statement on Bankruptcy Filing
-----------------------------------------------------------------
Cal-Bay International, Inc. has become the subject of a fraudulent
press release posted on Yahoo Chat Boards claiming the company
filed bankruptcy in Nevada with alleged quotes from the company's
President.

Cal-Bay International's board of directors commented that this
appears to be the work of the same parties who last year posted a
bogus press release claiming ReMax was acquiring Cal-Bay
International.

Cal-Bay's management believes there is a significant short
position in the company's freely tradable shares, and the
publishing of such a fraudulent statement has a significant
downward pressure on the stock the shorts are able to cover at a
significantly less price than the stock was originally sold for in
the short sale.

"Cal-Bay has not filed Bankruptcy nor were the reported comments
in the bogus press release authentic," President & CEO Roger
Pawson stated.  "Cal-Bay will be in contact with the FBI today to
report the crime and will divulge the names to the FBI of the
identified parties from the previous fraudulent press release who
are still under investigation."

                    About Cal-Bay International

Headquartered in Carlsbad, California, Cal-Bay International Inc.
(OTCBB: CBAY) -- http://www.calbayinternational.com/-- is a  
publicly traded real estate development and investment company.
Cal-bay International Inc. acquires, develops, and manages a
diversified portfolio of real estate properties.

                        Going Concern Doubt

Lawrence Scharfman CPA PC expressed substantial doubt about
Cal-Bay's ability to continue as a going concern after auditing
the company's financial statements for the years ended
Dec. 31, 2005, and 2004.  The auditing firm pointed to the
company's need to secure additional working capital for its
planned activity and to service its debt.


CALPINE CORP: FERC Approves California Power's $53 Mil. Settlement
------------------------------------------------------------------
The Federal Energy Regulatory Commission has approved a
comprehensive settlement among APX Inc. and approximately 30
other entities resolving claims arising from the parties'
participation in the California Power Exchange and California
Independent System Operator energy markets from May 1, 2000,
through June 20, 2001, using services provided by APX.

The settlement will be funded largely by an anticipated
payment of approximately $53 million from the CalPX settlement
escrow to APX.

"Commission-related settlements have produced more than
$6 billion for consumers," Commission Chairman Joseph T. Kelliher
said.  "We are committed to resolving the lingering issues from
the Western energy crisis of 2000-2001 and returning money to the
consumers.  Settlements have produced this beneficial result,
prolonged litigation has not.  I encourage the remaining parties
to settle their disputes."

The parties to the settlement participated in the CalPX and
CAISO markets through APX, an independent supplier of market and
energy trading services.

The Commission approved the settlement finding it is fair
and reasonable and in the public interest.  As a condition of the
settlement, the Commission approved the return to Enron Power
Marketing Inc. of approximately $142 million in collateral held
by the CalPX.  These collateral funds will be applied to Enron's
bankruptcy estate for payment to EPMI's creditors.

The settlement also provides that approximately
$14.5 million will be set aside by Enron to protect non-settling
parties in the Enron Settlement Reserve, an account available
to settle the claims of Enron non-settling parties that did not
settle under the Enron-California Parties Settlement filed with
the Commission on August 24, 2005.

The settlement is a final resolution of Commission proceedings and
cases pending before the United States Court of Appeals for the
Ninth Circuit, as they relate to actions and transactions of APX
and its participants.

Parties to the settlement include:

    * APX Inc.;

    * American Electric Power Service Corp.;

    * Avista Energy Inc.;

    * Calpine Energy Services LP;

    * El Paso Marketing LP (f/k/a El Paso Merchant Energy LP);

    * UC Davis Medical Center, owned and operated by the Regents
      of the University of California;

    * Merrill Lynch Capital Services Inc.;

    * BP Energy Co.;

    * Tractebel Energy Marketing Inc. (n/k/a Suez Energy Marketing
      NA Inc.);

    * Aquila Merchant Services Inc.;

    * Salt River Project Agricultural Improvement and Power
      District;

    * Allegheny Energy Supply Company LLC;

    * TransAlta Energy Marketing (US) Inc.;

    * Sempra Energy Solutions LLC;

    * Constellation NewEnergy Inc.;

    * Commonwealth Energy Corporation (n/k/a Commerce Energy
      Inc.);

    * Sacramento Municipal Utility District;

    * Morgan Stanley Capital Group Inc.;

    * Enron Energy Services Inc. (EESI) and Enron Power Marketing
      Inc. (EPMI, and together with Enron Energy Services Inc.,
      Enron or Enron Parties);

    * Sierra Pacific Industries;

    * ACN Power Inc.;

    * Consumer Telcom Inc. (f/k/a Clean Earth Energy Inc.);

    * Duke Energy Shared Services Inc. (f/k/a Cinergy Services
      Inc.);

    * FPL Energy Power Marketing Inc.;

    * Midway Sunset Cogeneration Co.;

    * NRG Power Marketing Inc.;

    * Preferred Energy Services Inc. (d/b/a GoGreen);

    * Powersource Corp.;

    * Torch Operating Co.; and

    * Turlock Irrigation District.

Coral Power LLC, Puget Sound Energy Inc. and Avista are Supporting
Parties.

                    About Calpine Corporation

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

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

The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts.  Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.  The Debtors' exclusive period to file chapter 11
plan of reorganization expires on June 20, 2007.  (Calpine
Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CARESTREAM HEALTH: S&P Rates $440 Million 2nd-Lien Loan at B
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Rochester, New York-based Carestream Health Inc.
     
At the same time, 'B+' bank loan ratings and '2' recovery ratings
were assigned to the company's proposed $150 million revolving
credit facility and $1.5 billion first-lien senior secured term
loan, indicating expectation of substantial recovery of principal
in the event of a default.

In addition, Standard & Poor's assigned its 'B' bank loan rating
and '3' recovery rating to the company's $440 million second-lien
senior secured term loan, indicating meaningful recovery of
principal in the event of a payment default.  The outlook is
stable.

Proceeds will be used to finance a leveraged buyout of Carestream
Health, formerly the Health Group division of Eastman Kodak Co.
Onex Partners has agreed to purchase Carestream for a total
consideration of $2.35 billion excluding transaction costs.  Pro
forma for the transaction, consolidated debt outstanding is
approximately $2.0 billion.

"The ratings on Carestream reflect the firm's highly leveraged
capital structure and business position, operating as a
manufacturer of both traditional film and digital imaging products
in the rapidly changing and challenging diagnostic imaging
industry", said Standard & Poor's credit analyst Anita Ogbara.

Carestream manufactures and sells traditional film, digital x-ray
imaging equipment, and healthcare information systems for medical
and dental applications.  Products include analog film, laser
imagers, digital print films, computed and digital radiography
systems, digital dental imaging systems, dental practice
management software, advanced picture-archiving and communications
systems, and healthcare information systems.


CELANESE US: S&P Rates $3.628 Billion Senior Facilities at BB
-------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Celanese
US Holdings LLC, a subsidiary of Celanese Corp., to positive from
stable.  It also affirmed the 'BB-' corporate credit and 'B'
unsecured debt ratings.  The outlook revision reflects the
potential that Celanese could sustain cash flow protection
measures at improved levels of recent years, because of the
expected continuation of good internal funds generation.

"Anticipated further reduction of debt in the near term bodes well
for the key ratio of funds from operations to total adjusted
debt," said Standard & Poor's credit analyst Wesley E. Chinn.

At the same time, based on preliminary terms and conditions,
Standard & Poor's assigned a 'BB-' senior secured bank loan rating
and a recovery rating of '3' to Celanese US Holdings' pending
$3.628 billion senior secured credit facilities.  

These ratings indicate Standard & Poor's expectation that lenders
would realize meaningful recovery of principal in a payment
default scenario, assuming a fully drawn revolving credit
facility.  Proceeds from the new credit agreement and the February
2007 sale of the oxo products and derivatives businesses, along
with cash, will be used to refinance all senior subordinated
notes, senior discount notes, and existing bank borrowings, and to
fund a $400 million common share repurchase.

The ratings on chemical producer Celanese US Holdings reflect its
still-aggressive debt load, the cyclicality of the company's
businesses, and exposure of operating margins to oil and natural
gas-based raw materials.  Partially offsetting these weaknesses
are the company's investment-grade business risk profile as an
integrated producer of diverse commodity and industrial chemicals
and significant discretionary cash flows that enhance its
flexibility to continue to reduce debt and make bolt-on
acquisitions.

With annual revenues of about $6.0 billion, Celanese ranks among
the larger and more diversified global chemical businesses.
Celanese's status as the No. 1 or No. 2 global manufacturer of
products representing virtually all of its sales, broad product
diversity, balanced end market positions, and an earnings base
distributed across North America, Europe, and Asia inject a
meaningful degree of stability to overall financial performance.

Still, the company's results remain subject to general economic
activity as well as the cyclicality of certain industries it
serves, particularly the automotive, electrical, and construction
industries.  Moreover, Celanese generates about 50% of
consolidated earnings from its acetyls intermediates business,
which consists primarily of products with commodity-like
characteristics.

However, the company's expansion into downstream products
contributes to less cyclicality versus producers of mainstream
commodity chemicals.


CERADYNE INC: Earns $128.4 Million in Year Ended December 31
------------------------------------------------------------
Ceradyne Inc. reported net income of $128.4 million for the year
ended Dec. 31, 2006, compared with net income of $46.8 million for  
the year ended Dec. 31, 2005.  Sales for the year ended
Dec. 31, 2006, increased to a record $662.9 million, up 80% from
$368.3 million in 2005.

Net income for the fourth quarter of 2006 increased 135.1% to  
$37.7 million, from a net income of $16.1 million in the fourth
quarter of 2005.  Sales for the fourth quarter 2006 increased
56.6% to $178.7 million from $114.2 million in the fourth quarter
of 2005.

For the year 2006, new orders were $730.1 million compared to
$443.6 million in 2005.  

Joel P. Moskowitz, Ceradyne chief executive officer, commented:
"We are very pleased with our financial performance in fourth-
quarter 2006 as well as the full year.  The record new bookings in
the fourth quarter of $313.5 million give us additional visibility
into 2007."

Moskowitz further stated, "We continue to implement our strategy
of product diversification on a global scale.  In the fourth
quarter, we further equipped and staffed our Chicoutimi, Quebec,
Canada factory for producing nuclear waste containment components
combining Ceradyne's neutron absorbing boron carbide with
structural aluminum.  We also began construction of our Tianjin,
China factory designed to produce state-of-the-art ceramic
crucibles used in the manufacturing of polycrystalline silicon for
photovoltaic solar cells.  We expect this new 98,000 sq. ft. plant
to be in production this summer."

At Dec. 31, 2006, the company's balance sheet showed
$613.8 million in total assets, $207.2 million in total
liabilities, and $406.6 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ad4

                        About Ceradyne Inc.

Based in Costa Mesa, California, Ceradyne Inc., (Nasdaq: CRDN)
-- http://www.ceradyne.com/-- develops, manufactures and markets    
advanced technical ceramic products and components for defense,
industrial, automotive and consumer applications.

                           *     *     *

Ceradyne's $50 million revolving credit facility due 2009 carries
Standard & Poor's BB- rating.  The Company's credit rating is also
rated BB- by Standard & Poor's.


CINEMARK USA: Moody's Reviews Ba2 Rating and May Downgrade
----------------------------------------------------------
Prompted by the reported tender offer by Cinemark USA, Inc. for
its 9% Senior Subordinated Notes, Moody's Investors Service placed
Cinemark USA's bank rating on review for possible downgrade.  

In accordance with Moody's Loss Given Default Methodology, the
elimination of the junior capital currently provided by the 9%
Senior Subordinated Notes would lead to a one notch downgrade of
the bank debt if all the notes are repaid.

Moody's also affirmed the B1 corporate family rating and positive
outlook for Cinemark, Inc.  Moody's changed the outlook for
Cinemark to positive on Feb. 2.

   * Cinemark, Inc.

      -- B1 Corporate Family Rating Affirmed
      -- Positive Outlook

   * Cinemark USA, Inc.

      -- Senior Secured Bank Credit Facility, Placed on Review for
         Possible Downgrade, currently Ba2

      -- Outlook, Changed To Rating Under Review From Positive

Cinemark, Inc. operates approximately 400 theaters and
4,400 screens in the United States and Latin America.  The third
largest motion picture exhibitors in the United States with annual
revenue of approximately $1.6 billion, the company maintains its
headquarters in Plano, Texas.


CIRRUS LOGIC: David D. French Steps Down as President and CEO
-------------------------------------------------------------
Cirrus  Logic  Inc. disclosed that Mr. David D. French resigned
his position as president and chief executive officer and as a
director of the company on March 5, 2007.

In connection with his resignation, Cirrus and Mr. French entered
into a resignation agreement on March 5, 2007, in which Mr. French
agreed to cancel and not exercise certain option
grants that the Special Committee of the company's Board of
Directors are investigating with regards to stock option granting  
practices identified as having favorable grant dates that were
selected with the participation of company executives.

Mr. French also agreed to re-price certain options and pay the
company the difference between the exercise price paid upon the
exercise of any of his option grants and the exercise price as
determined to be appropriate upon the correct accounting
measurement date as determined in the company's restatement of its
historical financial statements.  

The Resignation Agreement also provides that Mr. French will repay
any bonus or incentive compensation that would not have been
earned had the company's restated financial statements been used
to calculate such bonus or incentive compensation, but in no event
will such payment be in excess of $100,000.  

Mr. French will receive a one-time severance payment of $477,600,
to be paid six months following the date of his resignation.  The
company will also immediately accelerate the vesting of a portion
of certain option grants and he will be provided a post-employment
period to exercise his vested options.

On March 7, 2007, Mr. Michael L. Hackworth was appointed by the
Board of Directors of the company as acting president and chief
executive officer of the company.  He will continue to serve as
chairman of the board -- a position he has held since 1997.

Mr. Hackworth, age 66, who co-founded the company, previously
served as president and chief executive officer from January 1985
to June 1998, and continued to serve as chief executive officer
until February 1999.  

Mr. Hackworth is also the chief executive officer of Tymphany
Corporation, a provider of audio transducers and acoustical
engineering customization services.  He also serves as a director
of Virage Logic Corporation, a provider of semiconductor   
intellectual property platforms and development tools.  

The independent directors of the company have approved a salary
for Mr. Hackworth at an annual rate of $184,320, payable on a bi-
weekly basis for the period that he serves in the role of acting
president and chief executive officer.

                     Stock Option Grants Probe

In a press statement date March 7, 2007, the company disclosed the
principal findings of a Special Committee of the company's Board
of Directors relating to its investigation into the company's
historical stock option granting practices and related accounting,  
the resignation of Mr. French as president and chief executive  
officer and as a director of the company and the appointment of
Mr. Hackworth as acting president and chief executive officer of
the company.

The company believes that the terms and conditions associated
with the one-time severance payment to Mr. French and the  
accelerated vesting of certain of his option grants are more
favorable to the company than the payment and other terms that
would have applied if the company had terminated Mr. French's  
employment without cause under his February 2002 employment  
agreement with the company.  

On March 2, 2007, the Board of Directors concluded that the
accounting measurement dates for certain stock options granted  
between Jan. 1, 1997, and Dec. 31, 2005, differ from the recorded  
measurement dates previously used for such awards.  The company
expects to record material non-cash charges for stock-based
compensation expenses in certain reporting periods and expects to
restate its financial statements for fiscal years 2001 through  
2006 and for the first quarter of fiscal year 2007.  The company
currently estimates that the cumulative additional non-cash
stock-based compensation expense to be recorded is likely to be in
the range of $22 to $24 million.

                     Background of the Review

In September 2006, the company, at the direction of its Audit
Committee, performed an internal review of selected stock option
grants.  In the course of that review, the company discovered
information that raised potential questions about the measurement  
dates used to account for certain stock option grants.  

In October 2006, at the recommendation of the Audit Committee, a
Special Committee of the Board of Directors was formed to
investigate the historical stock option grants, the timing of
those grants and related accounting matters.  During the five
month investigation, the Special Committee reviewed all stock
option grants from 1997 through 2006, encompassing approximately
42.3 million stock options granted to employees and non-employee  
directors on 148 different grant dates.

The Special Committee's legal and accounting advisors identified,
preserved, collected and reviewed over 104 gigabytes of electronic
information, including approximately 1.6 million pages of
electronic and hard copy files, and conducted 25  interviews  of
current and former employees and members of the Board of
Directors.

                       Summary of Findings

The Special Committee has arrived at these principal findings with
respect to the stock option grant practices of the company:

     -- The company's stock plan administrative deficiencies  
        between 1997 and 2006 led to a number of misdated option
        grants.

     -- New hire and other promotion and retention option grants
        were generally  made the first Wednesday of each month
        through the use of unanimous written consents of the
        company's Compensation Committee.  However, prior to 2006,
        many of these monthly  grants were  misdated, as grant
        dates were routinely established before the receipt of  
        all the signed UWCs authorizing those grants.

     -- Many other off-cycle and broad-based annual option grants
        that were granted through Board or Compensation Committee
        resolutions were also misdated due to administrative
        issues in that grant dates were sometimes established       
        before the list of option award recipients had been
        finalized.

     -- Beginning in late 2002, the company formally documented
        and updated its existing  processes and procedures with
        respect to the granting of options.  In 2005, the company
        further refined the process and, in 2006, a formal written
        policy was approved by the Compensation Committee.

     -- Approximately 97% of the potential stock-based
        compensation charges identified as a result of the
        Special Committee investigation resulted from grants
        that were made prior to Dec. 31, 2002.

     -- Prior to 2003, the limited controls and the lack of  
        definitive processes for stock option granting and
        approval allowed for potential abuse, including the use
        of hindsight, in the establishment of more favorable
        grant dates for certain options.

     -- The Special Committee identified three grant dates
        prior to 2003 on which three management-level employees  
        received new-hire option grants on dates other  than when
        they began rendering services to the company.

     -- The grant date for one grant in 2000 is different from
        the date the grant appears to have been approved by
        the Board.  While no definitive evidence has been
        identified to clarify this inconsistency, the selected  
        grant date was at a lower closing stock price than the
        price on the date of apparent board approval.

     -- The Special Committee believes based on the evidence
        developed in the investigation that certain executive  
        officers had knowledge of and participated in the
        selection of three grant dates for broad-based employee  
        option grants in the 2000 through 2002 timeframe, either
        with hindsight or prior to completing the formal approval
        process.

     -- The executive officers involved in the option grant
        process prior to 2003, and in particular the grants
        in the 2000 through 2002 timeframe, are no longer  
        with the company with the exception of David D. French,  
        the company's president and chief executive officer.

     -- The Special Committee believes that Mr. French was
        significantly involved in the grant approval  
        process for certain grants and that he influenced the
        grant process with a view toward the stock price, and  
        therefore the selection of grant dates, through his
        control over how quickly or slowly the process was
        completed.  However, the Special Committee does
        not believe that Mr. French appreciated the  
        significance of the procedural inadequacies or the
        accounting implications of the grant approval process or
        grant date selections, or that he was advised by his
        executive staff of any such inadequacies or implications.

     -- The Special Committee did not find any irregularities  
        associated with any grants to independent directors or
        the company's two broad-based options exchanges during
        the relevant period.

     -- The Special Committee found no documentary or testimonial
        evidence that the company's independent directors were
        aware of any attempts by the company's executive  
        officers to backdate or to otherwise  select
        favorable grant dates, and consequently, had no reason
        to and did not believe that the accounting or other
        disclosures were inaccurate.

Based on the results of its investigation, the Special Committee
has recommended a number of remedial actions.  The company is  
currently reviewing these recommendations and developing and  
implementing a remediation plan associated with historical option  
grants and the grant of future equity awards.  In addition, the
company has informed the staff of the Division of Enforcement of
the Securities and Exchange Commission of the Special Committee's  
investigation and will continue to cooperate fully in the event of
any further inquiry.

                      About Cirrus Logic Inc.

Based in Austin, Tex., Cirrus Logic Inc. -- http://www.cirrus.com
-- engages in the development and supply of high-precision,
analog, and mixed-signal integrated circuits for a range of
consumer and industrial markets in the United States.  Its product
lines comprise mixed-signal audio products, including high-
precision analog and mixed-signal products for consumer,
professional, and automotive entertainment markets; industrial
products, comprising high-precision analog and mixed-signal
components for industrial and medical measurement applications;
and embedded products, which consist of high-precision processors
and software for consumer audio, professional audio, and
industrial applications.  The company sells its products through
direct sales force, as well as through external sales
representatives and distributors worldwide.

                          *     *     *

Cirrus Logic Inc.'s long-term foreign and local issuer credits
carry Standard & Poor's B rating.  The ratings were placed on
Nov. 3, 2006.

In October 1999, Moody's placed Cirrus Logic Inc.'s subordinated
debt, issuer, and long-term corporate family ratings at Caa2, B3,
and B2 respectively.


CLARKE AMERICAN: Moody's Cuts Corp. Family Rating to B2 from B1
---------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family rating
to B2 from B1 of Clarke American Corp., concluding the review for
downgrade initiated on Dec. 21, 2006 in connection with the
proposed $1.7 billion acquisition of the John H. Harland Company
by Clarke's parent company, M&F Worldwide Corp.

Moody's expects the acquisition will close in the summer, subject
to regulatory approval, and that M&F will operate Harland as a
subsidiary of Clarke.  The downgrade reflects the significant
increase in Clarke's debt-to-EBITDA leverage to 6.9x from 4.3x as
a result of funding the acquisition with debt.

Moody's also assigned B1 ratings to Clarke's proposed $100 million
revolver and $1.8 billion term loan B.  The bank facilities will
be supported by $615 million of new junior debt.  Clarke plans to
utilize the proceeds to fund the acquisition of Harland and
refinance the existing debt at Clarke and Harland.  The rating
outlook is stable.

Downgrades:

   * Clarke American Corp.

      -- Corporate Family Rating, Downgraded to B2 from B1
      -- Probability of Default Rating, Downgraded to B2 from B1

Assignments:

   * Clarke American Corp.

      -- New Senior Secured Bank Credit Facility, Assigned B1,
         LGD3, 38

Confirmations:

   * Clarke American Corp.

      -- Senior Secured Bank Credit Facility, Confirmed at Ba3
      -- Senior Unsecured Regular Bond/Debenture, Confirmed at B3
      -- Speculative-Grade Liquidity Rating, Confirmed at SGL-2

Outlook Actions:

   * Clarke American Corp.

      -- Outlook, Changed To Stable From Rating Under Review

The B2 Corporate Family rating reflects the company's high
leverage, significant level of business risk due to declining
check usage, and event risk related to industry consolidation and
acquisitions by M&F.

Favorably, acquiring Harland will significantly increase the
revenue base, enhance the scale of Clarke's check-printing
business (65% of combined 2006 revenue), and provide some revenue
diversity through the addition of Harland's software and Scantron
businesses (24% of revenue).  Moreover, Clarke has an opportunity
to realize significant cost synergies from the acquisition
primarily through combining printing facilities and call centers
and eliminating overlapping corporate functions.

The stable rating outlook reflects Moody's expectation that Clarke
will generate margin improvement through the aforementioned cost
synergies, utilize the bulk of its free cash flow to reduce debt,
and refrain from substantial acquisitions in the near term, such
that debt-to-EBITDA leverage is lowered to a 5.00x -- 5.50x range
by the end of 2008.

The SGL-2 rating reflects Moody's belief that Clarke has good
liquidity.  Moody's expects existing cash, projected free cash
generation and effective availability under the new $100 million
revolver will provide enough liquidity to finance capital
expenditures, working capital, debt amortization of $18 million,
and other integration costs during the twelve months following the
closing.

Moody's confirmed the Ba3 ratings on Clarke's existing senior
secured revolver and term loan and the B3 rating on the company's
existing senior unsecured notes as Clarke has indicated the
instruments will be repaid in conjunction with the acquisition.
Moody's expects to withdraw these existing ratings if the debt is
retired as contemplated.

Clarke American, headquartered in San Antonio, Texas, is a
provider of check and check-related products and services and of
direct marketing services to financial institutions, businesses
and consumers in the United States.  Harland is a provider of
printed products and software and related services to financial
institutions, and data collection and testing products through its
Scantron division.  Combined revenues will approximate
$1.7 billion.


COMDISCO HOLDING: Earns $5 Million in First Quarter Ended Dec. 31
-----------------------------------------------------------------
Comdisco Holding Company, Inc. reported financial results for its
fiscal first quarter ended Dec. 31, 2006.

For the three months ended Dec. 31, 2006, the company reported net
earnings of approximately $5 million, compared with net earnings
of $1 million for the comparable period in 2005.  For the quarter
ended Dec. 31, 2006, total revenue decreased to $5 million from
$7 million for the same period in 2005.

At Dec. 31, 2006, the company's balance sheet showed total assets
of $80 million, total liabilities of $38 million, and total
stockholders' equity of $42 million.

As a result of bankruptcy restructuring transactions, adoption of
fresh-start reporting, and multiple asset sales, the company says
that its financial results are not comparable to those of its
predecessor company, Comdisco, Inc.  

Refer to the company's quarterly report on Form 10-Q filed on
Feb. 14, 2007 for complete financial statements and other
important disclosures, which is available for free at
http://ResearchArchives.com/t/s?1ae1

                About Comdisco Holding Company, Inc.

Comdisco Holding Company, Inc. (OTC BB: CDCO) is formerly known as
Comdisco, Inc.  It emerged from chapter 11 bankruptcy proceedings
on Aug. 12, 2002.  The purpose of reorganized Comdisco is to sell,
collect or otherwise reduce to money in an orderly manner the
remaining assets of the corporation.  

The company filed on August 12, 2004 a Certificate of Dissolution
with the Secretary of State of the State of Delaware to formally
extinguish Comdisco Holding Company, Inc.'s corporate existence
with the State of Delaware except for the purpose of completing
the wind-down contemplated by the Plan.  Pursuant to its plan of
reorganization and restrictions contained in its certificate of
incorporation, Comdisco is specifically prohibited from engaging
in any business activities inconsistent with its limited business
purpose.


COMPLETE RETREATS: Court Extends Removal Period to April 20
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut further
extended Complete Retreats LLC and its debtor-affiliates' deadline
to remove state court proceedings, as well as any others, through
and including April 20, 2007.

As reported in the Troubled Company Reporter on Feb. 19, 2007,
when the Debtors filed for bankruptcy, they were involved in
approximately 21 state court proceedings pending in courts
throughout the country.

According to Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford,
Connecticut, the Debtors have not completed a thorough review of
the Proceedings.

Nevertheless, Mr. Daman noted, the Debtors have focused primarily
on:

   * stabilizing their business;

   * responding to a multitude of creditor inquiries and
     addressing a variety of creditor concerns;

   * working towards negotiating, seeking approval, and closing
     the sale of substantially all of their assets to Ultimate
     Resort, LLC; and

   * formulating and drafting a liquidating plan of
     reorganization and related disclosure statement.

An extension of will afford the Debtors sufficient opportunity to
assess whether the Proceedings can and should be removed, Mr.
Daman says.  The Debtors' adversaries will not be prejudiced by
an extension, as they may not prosecute the Proceedings absent
relief from the automatic stay, Mr. Daman assured the Court.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  

Complete Retreats and its debtor-affiliates filed for chapter 11
protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245).  
Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert
LLP represent the Debtors in their restructuring efforts.  Michael
J. Reilly, Esq., at Bingham McCutchen LP, in Hartford,
Connecticut, serves as counsel to the Official Committee of
Unsecured Creditors.  No estimated assets have been listed in the
Debtors' schedules, however, the Debtors disclosed $308,000,000 in
total debts.

The Court further extended the Debtors' exclusive periods to file
a plan of reorganization through and including April 19, 2007, and
solicit votes on that plan through and including June 18, 2007.


COMPLETE RETREATS: Panel Provides Update on Ultimate Resort Sale
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Complete Retreats LLC and its debtor-
affiliates delivered a report on March 1, 2007, to update
unsecured creditors on the progress toward the closing of the sale
of the Debtors' destination club business to Ultimate Resort, LLC,
and the Committee's ongoing forensic investigation program.

              Sale Transaction with Ultimate Resort

The sale of the Debtors' destination club business to Ultimate
Resort is scheduled to close by March 16, 2007, the Committee
reported.  The parties had originally planned to close the sale at
the end of 2006; however, certain aspects of the sale have caused
a few weeks of unanticipated delay in the closing schedule.

Since the Sale did not close by the end of 2006, Ultimate Resort
has been funding the Debtors' operating expenses since January
2007 pursuant to the parties' Management Agreement.  As of
March 1, 2007, Ultimate Resort has funded approximately
$4,000,000 in company operating expenses, the Committee noted.  
The funding does not reduce the agreed-upon purchase price for
the Business, the Committee clarified.

In addition, Ultimate Resort has agreed to increase the amount of
the purchase price by approximately $250,000 per week for every
week the sale does not close between Feb. 16, 2007, and the
closing date.

The Committee and the Debtors have evaluated that transfer and
other taxes associated with the consummation of the sale, as well
as wind-down costs and expenses for the remaining assets, will be
higher than initially projected.  In addition, the claims
resolution and litigation process will be lengthier and more
expensive than initially projected.  Accordingly, it is difficult
to state the amount of net proceeds, if any, that might be
available for an initial cash distribution to creditors at the
time of the closing of the Sale, the Committee relates.

The Committee continues to work collaboratively with the Debtors
on a plan structure and a process for implementation, the
specific timeline of which is still being developed.

                  Forensic Investigation Program

The Committee's forensic investigation is ongoing.  Both the
Committee and the Debtors have conducted numerous depositions and
other interviews on current and former officers, directors,
shareholders, employees, affiliated parties, contract parties and
vendors, regarding all transactions viewed as questionable, or
which warrant scrutiny.

The Committee is continuing to assess the information it has
gathered, particularly from Robert L. McGrath and Abercrombie &
Kent, Inc.  The Committee is also carrying on its investigation
regarding preference and fraudulent transfer claims of the
Debtors' estates by Larry Langer, Jeffrey Gram, Geoffrey Logue,
Tom Fulton, Larry Andreini, and Lisa Nier-Coulson.

The depositions are still not open to the general public while
the investigations are continuing, the Committee states.  The
Committee and the Debtors, however, will provide a general report
of the findings and recommendations to the Court and creditors at
the appropriate time and forum.

In connection with the sale, the Committee entered into a
covenant with Ultimate Resort not to sue those employees of the
Debtors who are to become the vacation club's employees upon the
closing of the sale, unless the Committee's diligence uncovers
actionable conduct on the employees' part.  Subsequently, the
Committee interviewed and investigated a number of the Debtors'
employees including all of the Debtors' senior management.  The
Committee has elected not to commence suit against any current
employee and to enter into cooperation agreements with Michael
Shelton, Jason Bitsky and Daniel Walworth, who it feels will be
important sources of information and assistance.

The covenant not to sue does not impinge upon the Committee's
ability to continue to investigate those members of the Debtors'
existing senior management who will not be continuing as
employees of Ultimate Resort, including Mr. McGrath, James
Mitchell and Wanda Hairston.  No decisions have yet been reached
regarding the legal status of Mr. Mitchell or Ms. Hairston, the
Committee says.

            Connecticut Attorney General Investigation

The U.S. Attorney's Office for the District of Connecticut has
initiated a criminal investigation into Mr. McGrath and others
connected to the company due to, inter alia, Mr. McGrath's
refusal to answer the Committee's questions under oath in his
deposition, and his invocation of his privileges under the
federal and state constitutions against self-incrimination.

The Committee and the Debtors are fully cooperating with
information requests by the federal and state authorities.  The
Committee and the Debtors are also assisting the Connecticut
Attorney General's office regarding similar matters, with a focus
on civil side consumer fraud allegations.

"These federal and state investigations are in the preliminary
stage, and it is too early to tell how long they will take, or
where they will lead," the Committee said.  The Committee pointed
out that it is not privy to the investigation conducted by the
Connecticut Attorney General's office but it will keep unsecured
creditors informed of events that become publicly available.

At this time, all of the Committee's efforts remain focused on
the closing of the sale transaction with Ultimate Resort, and on
continued cooperation with the Debtors in respect of third party
claims.

A full-text copy of the Committee's Fourth Report is available
for free at http://ResearchArchives.com/t/s?1ae9

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  

Complete Retreats and its debtor-affiliates filed for chapter 11
protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245).  
Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert
LLP represent the Debtors in their restructuring efforts.  Michael
J. Reilly, Esq., at Bingham McCutchen LP, in Hartford,
Connecticut, serves as counsel to the Official Committee of
Unsecured Creditors.  No estimated assets have been listed in the
Debtors' schedules, however, the Debtors disclosed $308,000,000 in
total debts.

The Court further extended the Debtors' exclusive periods to file
a plan of reorganization through and including April 19, 2007, and
solicit votes on that plan through and including June 18, 2007.


CONCENTRA OPERATING: Earns $3.3 Million in Quarter Ended Dec. 31
----------------------------------------------------------------
Concentra Operating Corporation reported results for the fourth
quarter and year ended Dec. 31, 2006.

Net income for the fourth quarter, including discontinued
operations, was $3,362,000 versus $212,000 in the fourth quarter
of 2005.

Revenue for the fourth quarter of 2006 increased 10% to
$328,108,000 from $297,758,000 in the year-earlier period.  Fourth
quarter revenue reflected growth in all areas of the company, but
most notably in the company's Health Services and Network Services
segments.  The company's results for the fourth quarter are
comparable to the year-earlier amounts with respect to Concentra's
2005 acquisition of Beech Street Corporation, which was completed
on Oct. 3, 2005.  In addition, the late October 2005 acquisition
of Occupational Health + Rehabilitation Inc. benefited reported
growth.

Concentra's gross margin for the quarter increased 12% to
$72,144,000 from $64,589,000 in the same period last year.  
Operating income decreased to $15,577,000 as compared to
$19,529,000 in the fourth quarter of last year primarily due to
expenses associated with the settlement of a class action lawsuit
in Louisiana.  Due in part to an increase of $764,000 in interest
expense in the fourth quarter of 2006 and the recognition of a
loss of $6,029,000 in the prior-year period for the early
retirement of debt, the company's loss from continuing operations
totaled $353,000 for the fourth quarter of 2006 versus a loss of
$143,000 in the year-earlier quarter.

As of Dec. 22, 2006, the company sold its First Notice Systems,
Inc. subsidiary for $50 million in cash, of which Concentra
applied approximately $25 million to the repayment of its senior
term indebtedness.  Accordingly, the direct revenue and expenses
associated with the FNS operations have been aggregated, along
with the gain on sale, and are presented as discontinued
operations in the company's financial results for 2006 and 2005.

                        Full Year Results

Net income for 2006, including discontinued operations, was
$32,737,000 versus $53,801,000 for 2005.

Concentra's revenue for the year increased 15% to $1,298,829,000
from $1,133,347,000 for 2005, while gross profit increased 19% to
$305,347,000 for 2006 from $256,740,000 for 2005.  Operating
income declined to $116,580,000 for 2006 from $122,303,000 for
2005, as general and administrative expenses increased to
$183,070,000 in 2006 from $132,439,000 in previous year.  Higher
general and administrative expenses for 2006 were primarily a
result of the settlement of the class action lawsuit in Louisiana;
increases in non-cash equity compensation expense to $9,518,000 in
2006 versus $4,162,000 in 2005; the incurrence of professional and
other related expenses related to a potential transaction that was
evaluated in the second quarter; and increases related to the
acquisitions of OH+R and Beech Street during the fourth quarter of
2005.

Additionally, due to an increase of $10,319,000 in interest
expense in 2006, and considering the recognition of a $19,000,000
income tax benefit in the results for 2005, as well as the prior-
year loss of $6,029,000 on early retirement of debt, income from
continuing operations for 2006 was $28,163,000 versus $52,276,000
in the prior year.

"We are pleased to report that 2006 ended on a strong note for
Concentra," Daniel Thomas, President and Chief Executive Officer,
said.  "Our two largest segments, Health Services and Network
Services, each reported solid revenue growth and gross profit
improvements for the fourth quarter and full year.  In Health
Services, we overcame a slow start to the year and a decrease in
the frequency of workers' compensation injuries to report a 2.3%
increase in same-center revenue per day for the quarter and a 3%
increase for the year.  We credit this achievement to our efforts
to manage our business prudently in the current environment,
diversify our business within the division, and take advantage of
rate increases in key states.

"For the year, our most significant improvement came in our
Network Services segment, which reflected the addition of Beech
Street for the full year as well as the addition of two key new
group health clients," Mr. Thomas said.  "I think it is important
to note that, while we realized the cost and integration synergies
from Beech Street at a pace slightly ahead of our plan, the
increase in revenue has come slower than we expected.  As we
continue to integrate this asset, we expect to see ongoing growth
in this area in 2007, accompanied by additional operational and
cost efficiencies."

                         About Concentra

Headquartered in Addison, Texas, Concentra Operating Corporation
-- http://www.concentra.com/-- is a wholly owned subsidiary of  
Concentra Inc.  The company serves the occupational, auto, and
group healthcare markets.  Concentra provides employers, insurers,
and payors with a series of integrated services that include
employment-related injury and occupational healthcare, in-network
and out-of-network medical claims review and repricing, access to
preferred provider organizations, first notice of loss services,
case management, and other cost containment services.  The company
has 310 health centers located in 40 states.  It also operates the
Beech Street and FOCUS PPO networks.  These networks include
544,000 providers, 52,000 ancillary providers and 4,400 acute-care
hospitals nationwide.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 9, 2006,
in connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the Healthcare Service and Distribution sector,
the rating agency confirmed its B1 Corporate Family Rating for
Concentra Operating Corporation.


CONSOLIDATED CONTAINER: Moody's Junks Rating on $250 Mil. Loan
--------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating of
Consolidated Container Company LLC to B2.  Concurrently, Moody's
assigned a B1 rating to the $390 million PP&E term loan facility
and a Caa1 rating to the $250 million second lien term loan
facility of CCC.

The ratings outlook was affirmed at stable.

On March 5, 2007, CCC reported the issuance of a $740 million
credit facility which consists of a $390 million PP&E term loan
facility, a $250 million second lien term loan facility and a
$100 million asset based revolver.  Proceeds are expected to be
used to refinance all existing rated debt, to fund the Whitmire
Container acquisition and cover tender costs, accrued interest and
related fees and expenses.  The new asset based revolver will not
be rated by Moody's.

The upgrade of the corporate family rating to B2 reflects CCC's
demonstrated ability to generate free cash flow and repay debt
over the last few quarters.  The company has successfully
generated EBITDA improvements through cost reductions and the
successful integration of tuck-in acquisitions.  The upgrade also
acknowledges the new debt structure which extends maturities until
2014 and enhances liquidity.

CCC's national footprint, diverse and stable end markets and long
standing customer relationships with large, brand name companies
also support the ratings and outlook.  The rating is constrained
by a largely commoditized product line, a decline in volumes over
the last few years, customer concentration, and uncertainty
surrounding expiring contracts of top customers in the near term.

Moody's took these rating actions:

   * Assigned $390 million PP&E term loan facility due 2014, rated
     B1, LGD3, 38%

   * Assigned $250 million second lien term loan due 2014, rated
     Caa1, LGD5, 78%

   * Withdrew $45 million senior secured first lien revolver due
     2008, rated Ba3, LGD2, 18%

   * Withdrew $216.2 million senior secured first lien term loan
     due 2008, rated Ba3, LGD2, 18%

   * Affirmed $182 million 10.75% senior secured second lien
     discount PIK notes due 2009, rated B3, LGD4, 53%

   * Affirmed $185 million 10.125% senior subordinated notes due
     2009, rated Caa2, LGD5, 85%

   * The $182 million 10.75% senior secured second lien discount
     PIK notes due 2009 and the $185 million 10.125% senior
     subordinated notes due 2009 will be withdrawn at the close of
     the tender offer.

   * Upgraded corporate family rating, to B2 from B3

   * Upgraded probability of default rating, to B2 from B3

The ratings are subject to the finalization and review of the
credit agreements.

The rating outlook is affirmed at stable.

Consolidated Container Company LLC, with corporate headquarters in
Atlanta, Georgia, is a domestic developer, manufacturer and
marketer of rigid plastic containers for mostly branded consumer
products and beverage companies.  Products are sold to the diary,
water, other beverage, food, household chemical and personal care,
automotive, agricultural, and industrial chemical sectors.
Revenues for the LTM period ended Sept. 30, 2006, were
$874 million.


CVS CORP: Agrees to Raise Caremark Shareholders' Special Dividend
-----------------------------------------------------------------
CVS Corporation disclosed these enhancements to its proposal to
merge with Caremark Rx, Inc.:

   * CVS and Caremark have agreed to increase the special cash
     dividend payable to Caremark shareholders promptly following
     closing of the merger to $7.50 per share.

   * Consistent with (and in lieu of) the accelerated share
     repurchase program, promptly following closing of the merger
     CVS/Caremark will commence a cash tender offer for 150
     million (or about 10%) of its outstanding shares at a fixed
     price of $35 per share.

CVS also stated that the enhanced merger proposal constitutes a
"best and final" offer.  The special meeting of CVS shareholders
to approve the transaction will be held on March 15, 2007 and the
special meeting of Caremark shareholders for the same purpose will
be held on March 16, 2007.

The original terms of the CVS/Caremark merger agreement remain
unchanged.  Caremark shareholders will receive 1.67 shares of
CVS/Caremark stock for each share of Caremark they own.  On a pro
forma basis, CVS stockholders will own 54.5% of CVS/Caremark and
Caremark shareholders will own 45.5%.

In light of this report, CVS urged Caremark shareholders to
recognize the compelling immediate value and long-term benefits of
the CVS transaction.  In that regard, the CVS/Caremark merger will
be solidly accretive to earnings and cash flow in 2008 and the
combined company is expected to retain a solid investment grade
rating.  Also, the $35 per share tender offer price underlines
CVS' confidence in the compelling long-term value proposition of
the CVS/Caremark combination.  Further, the merger will create the
premier pharmacy services provider in the nation with unmatched
ability to drive many of the changes that will reshape the
healthcare industry in the coming years.

In addition, CVS asked Caremark shareholders to consider these as
the March 16 vote approaches:

   * The CVS/Caremark merger has cleared all regulatory hurdles
     (including FTC approval) and will be ready to close in mid-
     March immediately following the approval of both CVS and
     Caremark shareholders.
    
   * If the CVS/Caremark deal were voted down on March 16, the
     Express Scripts, Inc. transaction may never close and would
     certainly encounter substantial delay:

     a) By its own admission, Express Scripts is virtually certain
        to receive a second request from the FTC; accordingly, it
        may never get antitrust approval from the FTC or the 22
        State Attorneys General who are currently investigating
        the anti-competitive effects of the Express Scripts
        transaction.

     b) Express Scripts may never satisfy the many conditions to
        its offer and may simply walk away from the transaction
        leaving Caremark shareholders with a damaged company
        having suffered significant client attrition and missed
        the entire 2007 selling season.

     c) Express Scripts' shareholders would likely vote down this
        ill-conceived takeover attempt when they consider the
        resulting dilution (Express Scripts shareholders would own
        just 43% of the combined company) and the high degree of
        leverage required to complete the transaction (the
        combined company would be a junk credit).

"The Express Scripts' offer for Caremark remains fraught with
risk, challenges and certain loss of shareholder value," Tom Ryan,
Chairman, President and CEO of CVS, said.  "In contrast, our best
and final merger proposal provides Caremark shareholders with real
and deliverable value and is based on a compelling strategic
rationale.  CVS/Caremark will be an investment grade company
uniquely positioned to offer employers and consumers new products
and services that will reduce costs, improve outcomes, accelerate
revenue growth and create substantial shareholder value.  We
remain confident that Caremark shareholders will endorse this view
by voting in favor of the merger on March 16 based on the
intrinsic value of our strategic combination and without regard to
nominal changes in the short-term value of an illusory offer from
Express Scripts."

                         About CVS Corp.

CVS Corp. (NYSE: CVS) -- http://www.cvs.com/-- is America's  
largest retail pharmacy, operating approximately 6,200 retail and
specialty pharmacy stores in 43 states and the District of
Columbia.  With more than 40 years in the retail pharmacy
industry, CVS serves the healthcare needs of all customers through
its CVS/pharmacy stores; its online pharmacy, CVS.com; its retail-
based health clinic subsidiary, MinuteClinic; and its pharmacy
benefit management, mail order and specialty pharmacy subsidiary,
PharmaCare.

                          *     *     *

As reported in the Troubled Company Reporter on March 8, 2007,
Moody's Investors Service confirmed the Ba1 rating of CVS
Corporation's $125 million Series A-2 lease obligations.


CVS CORP: Remarks on Express Scripts' Risky Takeover Proposal
-------------------------------------------------------------
CVS Corporation issued a statement in response to the report by
Express Scripts that it expects to receive a second request for
information from the Federal Trade Commission in connection with
the hostile offer to acquire Caremark Rx, Inc.

The statement by Express Scripts validates the risky and highly
conditional nature of its takeover offer, and serves as a stark
reminder to Caremark shareholders of the substantial deficiencies
in the Express Scripts bid.  Despite repeated claims by Express
Scripts to the contrary and the last minute withdrawal of its
initial Hart-Scott-Rodino filing one month ago, the announcement
confirms that the FTC is in the midst of an exacting investigation
that is nowhere near conclusion.

History has shown that "3 into 2" mergers are often unsuccessful
and almost always substantially delayed and/or challenged by
regulators.  Clearly, the FTC staff, as well as the 22 state
Attorneys General that are reviewing the anti-competitive effects
of this hostile takeover bid, have identified serious antitrust
concerns that, at a minimum, will require in-depth investigation
and may well prevent this transaction from ever moving forward.  
Consequently, Express Scripts' ability to pursue its ill-advised
bid for Caremark will now be delayed for a minimum of several
additional months, leaving Caremark shareholders even more exposed
to ending up with a transaction on substantially reduced terms or
no deal at all.  In stark contrast, the vertical nature of the
CVS/Caremark merger resulted in prompt clearance by the FTC and
state regulatory authorities that identified no significant
antitrust concerns.

"The differences between the proposed CVS/Caremark merger and the
Express Scripts attempted takeover could not be more clear than
they are today," Tom Ryan, Chairman, President and CEO of CVS,
said.  "CVS and Caremark stand poised to begin delivering the many
financial and strategic benefits afforded by our transaction.  Our
offer provides certainty of closure, superior shareholder value
and substantial financial and healthcare benefits that stem from
the unique products and services that only a CVS/Caremark
combination can provide.  Express Scripts has done its best to
distract shareholders from the shortcomings of its highly
conditional offer.  Express Scripts' announcement earlier today
that it had conveniently decided to increase EPS guidance is just
another attempt to mask the substantial anti-trust risk inherent
in its proposal.  Having cleared all regulatory hurdles, we look
forward to obtaining shareholder approval and closing our
transaction in mid-March."

                         About CVS Corp.

CVS Corp. (NYSE: CVS) -- http://www.cvs.com/-- is America's  
largest retail pharmacy, operating approximately 6,200 retail and
specialty pharmacy stores in 43 states and the District of
Columbia.  With more than 40 years in the retail pharmacy
industry, CVS serves the healthcare needs of all customers through
its CVS/pharmacy stores; its online pharmacy, CVS.com; its retail-
based health clinic subsidiary, MinuteClinic; and its pharmacy
benefit management, mail order and specialty pharmacy subsidiary,
PharmaCare.

                          *     *     *

As reported in the Troubled Company Reporter on March 8, 2007,
Moody's Investors Service confirmed the Ba1 rating of CVS
Corporation's $125 million Series A-2 lease obligations.


DAIMLERCHRYSLER AG: Magna Set to Visit U.S. Unit's Headquarters
---------------------------------------------------------------
Magna International Inc., a Canadian auto-parts supplier, is the
next potential buyer to visit the headquarters of DaimlerChrysler
AG's Chrysler Group in Auburn Hills, Mich., Gina Chon of The Wall
Street Journal reports.

Magna executives will go to Chrysler "very soon" to hear
presentations similar to the ones given to private-equity firms
Blackstone Group and Cerberus Capital Management LP, which visited
Chrysler's office this week, WSJ said citing people familiar with
the matter.

According to the report, Magna executives said they are following
Chrysler with great interest because it is a key supplier to the
auto maker and is looking at alternatives to ensure Chrysler's
success.

Magna spokeswoman Tracy Fuerst declined to comment, WSJ said.

DaimlerChrysler will be giving an update on the possible sale of
Chrysler at a general shareholders meeting in Berlin on April 4,
WSJ said, citing people familiar with the matter.

As reported yesterday in the Troubled Company Reporter, the
Journal said that DaimlerChrysler Chief Executive Officer Dieter
Zetsche confirmed his company is talking to General Motors Corp.
about sharing the costs of future sport-utility vehicles, but he
and GM's CEO stayed mum about whether GM could try to buy its
Chrysler arm outright.

According to that report, Mr. Zetsche reiterated that the auto
maker is considering "all options" for Chrysler, including a
possible sale, which move came amid rising investor frustration
over the division's losses.

                       Lower February Sales

As reported in the Troubled Company Reporter on Mar. 2, 2007,
DaimlerChrysler AG's Chrysler Group reported sales for February
2007 of 174,506 units; down 8% compared with February 2006 with
190,367 units.  All sales figures are reported unadjusted.

"In a generally soft market environment in February, the Chrysler
Group had good traffic and solid customer interest especially for
our newly launched, fuel efficient models like the Dodge Avenger,
Dodge Caliber, and Jeep(R) Compass.  Also, the Jeep Wrangler had
its best February ever," Chrysler Group Vice President for Sales
and Field Operations Steven Landry said.

                      About DaimlerChrysler

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

The company's worldwide locations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam and Australia.

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

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

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


DATALOGIC INT'L: Fails to Make Lazarus Master's Interest Payments
-----------------------------------------------------------------
DataLogic International Inc. has failed to make (a) its January
2007 principal payment and February 2007 principal and interest
payments under its Amended and Restated Secured Term Note held
Laurus Master Fund Ltd., and (b) its February 2007 principal and
interest payments under its 10% secured convertible promissory
notes due Oct. 31 2008.

In addition, DataLogic Consulting Inc. has failed to make
scheduled principal and interest payments under it promissory
notes issued to Derek Nguyen and Keith Nguyen.

Derek Nguyen is a former director and executive officer of
DataLogic while Keith Nguyen is the a current member of the
company's Board of Directors, and a former executive officer.

                        Insufficient Funds

The DataLogic International said that its doesn't have sufficient
funds available, and doesn't expect to generate sufficient cash
flow from operations, to meet its ongoing obligations under the
Laurus Secured Term Note or the 10% secured convertible promissory
notes.  

Also, DataLogic Consulting doesn't have sufficient funds
available, and doesn't expect to generate sufficient cash flow
from operations, to meet its ongoing obligations under its
outstanding promissory notes.

DataLogic International has not complied with its obligations to
the holders of the 10% secured convertible promissory notes to
file a registration statement with the Securities and Exchange
Commission covering the resale of the shares of DataLogic common
stock issuable upon conversion of the notes or exercise of certain
outstanding common stock purchase warrants.

Under the terms of the Laurus Secured Term Note, DataLogic
International's 10% secured convertible promissory notes and
DataLogic Consulting's promissory notes, a note holder may
accelerate the entire obligation upon an event of default.

However, the holders of DataLogic International's 10% secured
convertible promissory notes and DataLogic Consulting's promissory
notes have previously agreed to subordinate their note obligations
to DataLogic International's obligations under the Laurus Secured
Term Note and, among other things, not to take any action to
enforce or collect those obligations without Laurus's consent.

At present, Laurus has not sent a notice of acceleration to
DataLogic International, consented to collection action by the
other note holders.  However, there can be no assurance that
Laurus will not take such action in the future.

In the event of any acceleration of these obligations, DataLogic
International will be forced to restructure or to default on it
obligations or to curtail or abandon it business plan, any of
which may devalue or make worthless an investment in DataLogic.

                          About DataLogic

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

                           *     *     *

On Sept. 30, 2006, the company's balance sheet showed a
stockholders deficit of $1,994,902, compared to a deficit of
$508,519 on Sept. 30, 2005.


DAVITA INC: Earns $289.6 Million for Year Ended December 31
-----------------------------------------------------------
DaVita, Inc., reported net income of $289.6 million for the year
ended Dec. 31, 2006, compared to a net income of $228.6 million
for the year ended Dec. 31, 2005.

Net revenues for the year ended Dec. 31, 2006 was $4.8 billion
compared to $2.9 billion for the comparable period in 2005.

Cash and cash equivalents at Dec. 31, 2006, were $310,202,000,
down from $431,811,000 during the prior year.  

At f Dec. 31, 2006, the company's balance sheet showed
$6.4 billion in total assets, $4.2 billion in total liabilities
and $1.2 in shareholders' equity.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ab7

About DaVita, Inc.

Headquartered in El Segundo, California, DaVita, Inc. (NYSE: DVA)
-- http://www.davita.com/-- provides dialysis services for  
patients suffering from chronic kidney failure.  It provides
services at kidney dialysis centers and home peritoneal dialysis
programs domestically in 41 states, as well as Washington, D.C.  
As of Dec. 31, 2006, DaVita operated or managed over 1,300
outpatient facilities serving approximately 103,000 patients.

                           *      *      *

As reported in the Troubled Company Reporter on Feb. 15, 2007,
Fitch Ratings assigned a 'B' rating to DaVita Inc.'s $400 million
6.625% senior unsecured notes due 2013.


DEAN FOODS: Earns $225.41 Million in Year Ended December 31
-----------------------------------------------------------
Dean Foods Company filed its annual financial statements for the
year ended Dec. 31, 2006 with the Securities and Exchange
Commission.

The company reported net income of $225.41 million for the year
ended Dec. 31, 2006, compared with net income of $308.65 million
for 2005.

Net sales decreased to $10.09 billion in 2006 for $10.17 billion
in 2005.  This was primarily due to lower raw milk costs in its
Dairy Group, which was partially offset by volume growth at the
Dairy Group and WhiteWave Foods Company and increased pricing at
WhiteWave Foods Company.  

At Dec. 31, 2006, the company's balance sheet showed $6.77 billion
in total assets, $4.97 billion in total liabilities and
$1.80 billion in total stockholders' equity.

                 Acquisition of Friendship Dairies

In February 2007, the company's Dairy Group entered into an
agreement to acquire Friendship Dairies, Inc., a manufacturer,
marketer, and distributor of cultured dairy products primarily in
the northeastern U.S.  The company expects this transaction to
expand its cultured dairy product capabilities and add a strong
regional brand.  The purchase price will be approximately
$130,000,000 including the costs of the acquisition.  The company
expects to complete the transaction by the second quarter of 2007,
subject to regulatory approval.

                        Management Changes

On Feb. 22, 2007, the company appointed Blaine E. McPeak as its
president for the Horizon Organic division.  Previously, Mr.
McPeak served as president of Kellogg Company's Wholesome Portable
Breakfast and Snacks division.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ac5

                     About Dean Foods Company

Dean Foods Company located in Dallas, Texas, (NYSE: DF) --
http://www.deanfoods.com/-- is a food and beverage company in the  
U.S.  Its Dairy Group division processes and distributes milk and
other dairy products in the country, with products sold under more
than 50 familiar local and regional brands and private labels.  
The company's WhiteWave Foods subsidiary markets and sells dairy
and dairy-related products, such as Silk soymilk, Horizon Organic
milk and other dairy products and International Delight coffee
creamers.  WhiteWave Foods' Rachel's Organic brand is an organic
milk and yogurt brand in the United Kingdom.

                           *     *     *

As reported by the Troubled Company Reporter on March 6, 2007,
Standard & Poor's Ratings Services lowered its ratings on Dean
Foods Co. and its wholly owned subsidiary, Dean Holding Co.,
including its long-term corporate credit rating to 'BB' from
'BB+', following the company's report of a one-time special cash
dividend of $15.00 per share or approximately $2 billion.  A new
$4.8 billion senior secured credit facility will be used to pay
the special dividend.  

As reported by the Troubled Company Reporter on March 5, 2007,
Moody's placed the corporate family and other long-term ratings of
Dean Foods Company on review for possible downgrade following the
company's report of its plans to return approximately $2 billion
to shareholders through a one time special dividend.  At the same
time, Moody's assigned a prospective Ba3 rating to the company's
proposed new $4.8 billion bank credit facility.  The company's
speculative grade liquidity rating of SGL-2 was affirmed.


DELPHI CORPORATION: Files Registration Statement With SEC
---------------------------------------------------------
Delphi Corporation on Wednesday filed a registration statement on
Form S-1 with the U.S. Securities and Exchange Commission relating
to a proposed offering of rights to purchase shares of common
stock of Delphi.

The registration statement was filed in connection with the
previously disclosed Equity Purchase & Commitment Agreement dated
Jan. 18, 2007 that Delphi entered into with its Plan Investors.

The Plan investors are affiliates of Cerberus Capital Management,
L.P., Appaloosa Management L.P., and Harbinger Capital Partners
Master Fund I, Ltd., as well as with Merrill Lynch & Co. and UBS
Securities LLC.

The registration statement relates to the rights and shares of
common stock for which the rights may be exercised.  Although it
has been filed with the SEC, it has not yet become effective.

These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.

The registration statement may be view for free at:

                http://ResearchArchives.com/t/s?1aed

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.  The Debtors' exclusive period to file a chapter
11 plan of reorganization expires on July 31, 2007.  (Delphi
Corporation Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DISTRIBUTED ENERGY: Expects Going Concern Doubt Statement from PwC
------------------------------------------------------------------
Distributed Energy Systems Corp. disclosed that it expects
PricewaterhouseCoopers LLP, its independent registered public
accounting firm, to include a going concern explanatory paragraph
in its audit report for 2006, due to the significant recurring
losses and cash outflows from operations that raise substantial
doubt about its ability to continue as a going concern.  

"The results for the fourth quarter and the full year were well
below our expectations and were clearly unsatisfactory," Ambrose
L. Schwallie, Distributed Energy's chief executive officer, said.  
"We have taken strong and immediate actions to address the
shortfall in both revenue and earnings, including executive
management changes, revised sales and contract objectives to drive
gross margin and top line growth, a more focused approach to our
key markets and approximately a 20% workforce reduction in late
January 2007.  We believe these actions, along with the previously
announced reorganization, will help to streamline the company's
operations, position us for stronger performance in 2007 and
enable us to make increased progress toward our goal of reaching
profitability.

For the fourth quarter ended Dec. 31, 2006, revenues increased to
$13.8 million from $11 million in the same period of 2005.  The
net loss for the fourth quarter was $33.2 million, which includes
approximately $25.6 million in non-cash goodwill and intangible
asset impairment charges, compared with a net loss of $3.4 million
in 2005.

For the full year 2006, Distributed Energy revenues were
$45.6 million, up from $45 million during 2005.  The company's
2006 net loss was $53.4 million, including $25.6 million in
goodwill and intangible asset charges, compared with a 2005 net
loss of $16.2 million.

The non-cash goodwill impairment of approximately $24.2 million
was due to the company's determination that the carrying value of
its Northern Power subsidiary exceeded its fair value.  Fair value
is determined by several factors including projected revenues,
gross margins and related operating cash flows.  The company
previously announced that it is combining the operations of its
Proton and Northern subsidiaries into a single-company structure
and operating under the Distributed Energy Systems Corp. name.  As
a result the company determined that the Northern trade name,
valued at $1.4 million, had been fully impaired.

The company disclosed the combination of two subsidiaries;
Northern Power Systems and Proton Energy Systems, in an effort to
streamline its operations, reduce costs, better position the
company for improved growth and strengthen systems sales,
engineering, production, service and technology development.  This
reorganization is estimated to result in savings of approximately
$4-$5 million, on an annualized basis, beginning in the second
quarter of 2007.

Mr. Schwallie also noted the continuing interest and growing
revenue potential for renewable, electrolytic hydrogen systems
based on the company's proprietary proton exchange membrane
technology.  "Our technology is state-of-the-art, and we achieved
improved gross margins in the fourth quarter on our commercial and
hydrogen technology businesses," Mr. Schwallie said.

"We will now concentrate on leveraging our expertise in power
generation for the oil and gas markets, commercial on-site
hydrogen for power plants, hydrogen electrolysis development,
larger-scale wind projects outside North America, and alternative
energy projects," Mr. Schwallie added.  "All of these are strong
markets where our value added has been demonstrated."

Management will also continue to implement its plan to increase
revenue, increase gross margin, reduce expenses, potentially sell
assets, and may raise additional capital in order to increase its
cash balance.

                About Distributed Energy Systems

Based in Wallingford, Connecticut, Distributed Energy Systems
Corp. (Nasdaq: DESC) -- http://www.distributed-energy.com/--  
creates and delivers products and solutions to the emerging
decentralized energy marketplace, giving users greater control
over their energy cost, quality and reliability.  The company
delivers a combination of practical, ready-today energy solutions
and the solid business platforms for capitalizing on the changing
energy landscape.


DLJ COMMERCIAL: Fitch Lifts Rating on Class B-7 Certs. to B+
------------------------------------------------------------
Fitch Ratings upgrades six classes of DLJ Commercial Mortgage
Corp.'s commercial mortgage pass-through certificates, series
2000-CF1:

   -- $11.1 million class B-2 to 'AAA' from 'AA';
   -- $31 million class B-3 to 'A-' from 'BBB+';
   -- $8.9 million class B-4 to 'BBB+' from 'BBB';
   -- $2.2 million class B-5 to 'BBB' from 'BBB-';
   -- $6.6 million class B-6 to 'BBB-' from 'BB'; and
   -- $8.9 million class B-7 to 'B+' from 'B'.

In addition, Fitch affirms these classes:

   -- $564.9 million class A-1B at 'AAA';
   -- Interest-only class S at 'AAA';
   -- $44.3 million class A-2 at 'AAA';
   -- $37.7 million class A-3 at 'AAA';
   -- $13.3 million class A-4 at 'AAA';
   -- $31 million class B-1 at 'AAA'; and
   -- $8.9 million class B-8 at 'B-'.

Class A-1A has paid in full since Fitch's last rating action.
Fitch does not rate the $8.1 million class C certificates.  Class
D has been reduced to zero due to realized losses.

The upgrades reflect increased credit enhancement levels due to
scheduled amortization and the additional defeasance of seven
loans (13.6%) since Fitch's last rating action.  In total, 34
loans (41.2%) have defeased, including the largest loan (6.8%) and
five of the top 10 loans (11.4%).  As of the February 2007
distribution date, the pool has paid down 12.4% to $776.8 million
from $886.2 million at issuance.


DYNEGY HOLDINGS: Moody's Rates $1.25 Billion Sr. Facilities at Ba1
------------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Dynegy Holdings
Inc.'s new $1.25 billion senior secured credit facilities,
including a $750 million revolver and a $500 million synthetic
letter of credit facility.

In conjunction with the report of the current transaction, Moody's
downgraded the rating on Dynegy's existing Second Priority Notes
to Ba2 from Ba1.  Moody's affirmed Dynegy's other ratings,
including its B1 Corporate Family Rating.  

The outlook remains stable.

A $275 million draw on the revolver will be used to help finance
Dynegy's pending merger with several affiliates of the LS Power
Group.  The balance of the revolver commitment will be available
to support the company's working capital needs.  The synthetic
letter of credit facility will be used to issue letters of credit
to support the obligations of both Dynegy and the LS Power
entities with which it is merging.  The credit facilities are
secured by first priority perfected security interests in and
liens upon substantially all the assets of Dynegy, its parent
guarantors and its subsidiaries, excluding Sithe/Independence
Power Partners, LP and the LS Power entities with which Dynegy is
merging.

In addition to the proceeds of the draw on the revolver, DHI's
parent, Dynegy Inc., will exchange 340 million shares of Class B
stock, valued at approximately $2 billion as of Sept. 15, and
$100 million in cash for 100% of the LS Power Group's equity
interest in LSP Gen Finance, LSP Kendall, LSP Ontelaunee, LSP
Griffith, and Plum Point Power Associates, and a 50% interest in a
generation development joint-venture.  The $2.3 billion in gross
funded project debt at the LSP affiliates will remain in place,
but will be non-recourse to both DHI and DYN.

Moody's previously affirmed Dynegy's ratings following the initial
report of the merger plans.  However, the company now intends to
use its own letter of credit facility to support the LS Power
entities' obligations in lieu of a stand-alone letter of credit
facility as previously proposed.  

In addition, it plans to immediately refinance the Dynegy, Inc.
junior subordinated debentures that are to be issued to the LS
Power Group at financial close with a draw on its revolving credit
facility.  As a result, DHI will have more direct exposure to the
LS Power entities than was originally contemplated.  This is
offset somewhat by the plan to integrate the LS Power entities as
subsidiaries of DHI rather than DYN.

Moody's does not believe that in and of themselves the revisions
to the transaction structure have a significant impact on the
credit of any of the affected entities.  The downgrade of the
second lien secured notes reflects their expected increased
subordination resulting from the proposed draw on the first lien
revolving credit facility.  Though the loss given default
assessment of the notes remains stable at LGD 2, the increase in
the LGD rate to 21% from 19% is sufficient to drive the rating of
the second lien notes downward from Ba1 to Ba2.

The merger will increase the size of Dynegy's portfolio of
generating assets by roughly two-thirds, to approximately 20,000
MW, while improving Dynegy's geographic, fuel and dispatch
diversity.

In addition, Dynegy will have the opportunity to participate in LS
Power's development pipeline, which includes another 10,000 MWs of
greenfield and re-powering projects.  The transaction is expected
to increase Dynegy's operating cash flow while LS Power's existing
hedges and power sales agreements provide a greater degree of
stability to the company's revenues, which are currently largely
unhedged and vulnerable to commodity price volatility.

Nevertheless, the LS Power projects are highly leveraged and
Moody's does not anticipate a substantial improvement in Dynegy's
consolidated financial ratios as a direct result of the proposed
merger.  Moreover, we note that much of the free cash flow
generated by the LS Power projects will be trapped by cash sweep
mechanisms requiring the prepayment of the project debt.

With 2006 generating segment run-rate earnings growth of
$75 million equal to just 50% of previously forecast levels,
Moody's calculates that on a pro forma basis the company's
adjusted FFO/Debt and FFO/Interest were approximately 7.6% and
2.1x, respectively, for the year.  Coupled with the expectation
that the company's financial metrics are not likely to improve
substantially as a direct result of the merger in the near term,
these figures are somewhat narrow for a B1 CFR for a company with
Dynegy's business risk profile.

However, a number of other developments are anticipated to result
in more immediate improvements to financial performance.
Management disclosed that based solely on the projected net
financial impact of the last year's wholesale power auction in
Illinois, where Dynegy's largest coal-fired baseload assets are
located, the company could realize a potential increase of
approximately $100 million in operating margin for 2007 as
compared to 2006.

The auction replaced a portion of a below-market contract with
Ameren that expired at the end of last year with a multi-year
commitment to provide up to 1,400 MWs of capacity on a
load-following basis at the around the clock price of $65/MWh.  
The company will also have the opportunity to realize substantial
upside through the sale into the market of additional capacity
that was previously contracted to Ameren at below-market rates.

Up to another $50 million could be generated through the
restructuring of the power and steam sales agreements for CoGen
Lyondell, which took effect at the beginning of 2007.  Finally,
management anticipates various opportunities to optimize its
existing asset portfolio that should also result in significant
earnings increases.

According to the company's forecast, Moody's calculates that the
combined impact of the merger, the auction, and other on-going
improvements should result in adjusted funds from operation to
debt and FFO to interest ratios in excess of 10% and 2.5x,
respectively, by the end of 2007, which would be more consistent
with the existing B1 Corporate Family Rating.

Moody's notes that there is considerable uncertainty regarding the
company's ability to realize some of these improvements since the
company remains vulnerable to potential volatility in gas prices,
the impact of the proposed merger notwithstanding.  If the
company's financial performance continues to fall materially below
forecasted levels over the next three to six months, downward
pressure on its ratings or outlook could develop.

Dynegy is an independent power producer headquartered in Houston,
Texas, with an approximately 12,000 MW portfolio of assets.

These ratings were affected by this action:

Ratings assigned:

   * Dynegy Holdings, Inc.

      -- senior secured revolving credit facility at Ba1, LGD1,
         9%

      -- senior secured letter of credit facility at Ba1, LGD1,
         9%

Ratings revised:

   * Dynegy Holdings, Inc.

      -- 9.875% second priority senior secured notes due
         July 15, 2010, to Ba2, LGD2, 21% from Ba1, LGD2, 19%

-- senior unsecured notes at B2, LGD4, 63% from LGD4, 61%

      -- multiple seniority shelf at B2 LGD4, 63% from LGD4, 61%

   * Dynegy Danskammer, LLC

   * Dynegy Roseton, LLC

      -- pass-through trust certificates at Ba3, LGD3, 36% from
         LGD3, 35%

Ratings affirmed:

   * Dynegy Holdings, Inc.

      -- corporate family rating at B1
      -- multiple senior shelf at B3, LGD6, 96%

   * NGC Corporation Capital Trust I

      -- subordinated capital income securities due June 1, 2027,
         at B3, LGD6, 96%

   * Dynegy Capital Trust II

      -- trust preferred stock shelf at B3, LGD6, 96%

   * Dynegy Capital Trust III

      -- trust preferred stock shelf at B3, LGD6, 97%

   * Dynegy Inc.

      -- multiple seniority shelf at B3, LGD6, 97%


DYNEGY HOLDINGS: S&P Rates Proposed $1 Bil. Sr. Facilities at BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services its 'BB-' rating to Dynegy
Holdings Inc.'s proposed $1.25 billion senior secured credit
facilities.

The facilities carry a recovery rating of '1', indicating high
expectation of full recovery of principal (100% recovery) in the
event of a payment default.  The rating is on CreditWatch with
developing implications, similar to all ratings in the Dynegy
family, where they were placed on Sept. 18, 2006, following
Dynegy's report that it will acquire the assets of LS Power Group.

The facilities will consist of a five-year, $750 million revolving
credit facility and a six-year, $500 million term letter of credit
facility.  The facilities will replace DHI's existing $470 million
revolving credit facility and $200 million term LOC facility, both
of which are also rated 'BB-' with a recovery rating of '1'.  The
rating on these facilities will be withdrawn upon the closing of
this transaction.  The new facilities will be used primarily for
working capital purposes and for posting collateral and do not
represent funded debt supporting long-term assets.  The facilities
are being upsized in anticipation of higher needs following the
expected closing of Dynegy's purchase of LS Power Group's assets.

"The 'BB-' rating assigned to the facilities is two notches above
DHI's 'B' corporate credit rating," said Standard & Poor's credit
analyst Swami Venkatraraman.

"The higher rating on the facilities reflects the strength of the
security provided by the asset collateral--all of the legacy
assets of DHI, as well as the equity interest of the holding
company that ultimately owns the operating assets of the Sithe
Independence Project and the LS Power companies."

Upon closing, the $500 million LOC facility is expected to be
fully utilized and $275 million will be drawn from the revolver to
pay off the $275 million note issued to LS Power under the
purchase transaction.  This was a deeply subordinated note issued
to a major shareholder of Dynegy, and hence considered to have
some equity-like characteristics.  The use of the senior secured
revolver thus represents a partial use of debt to finance that
transaction.  However, the amount remains small enough relative to
the size of the transaction so as not to be a credit concern. This
amount is expected to substantially paid off in 2007 through the
proceeds of assets sales and operating cash flows.  Assets
urrently intended for sale include the 351 MW Calcasieu facility
in Louisiana, the 576 MW BlueGrass facility in Kentucky, the
614 MW Cogen Lyondell in Texas, and the 539 MW Heard County
facility in Georgia.


ENCORE ACQUISITION: Earns $10.1 Million in FY 2006 Fourth Quarter
-----------------------------------------------------------------
Encore Acquisition Company reported unaudited fourth quarter and
full year 2006 results.

Encore reported net income for the fourth quarter of 2006 of
$10.1 million on oil and natural gas revenues of $116.2 million.  
The company's reported oil and natural gas revenues represent
a 16% decrease from the fourth quarter of 2005 revenues of
$138.5 million.  The company attributed the decrease in revenues
to lower commodity prices.  For the fourth quarter of 2006, cash
flows from operating activities of $63 million decreased from
$88.1 million in the fourth quarter of 2005.

Oil represented 65% and 63% of the company's total production
volumes in the fourth quarters of 2006 and 2005, respectively.

The company's reported oil and natural gas revenues represent an
8% increase over $457.3 million in 2005.  The company attributed
its higher revenues to an 8% increase in production volumes.

Encore reported net income for 2006 of $92.4 million.  Although
increases in expenses in 2006 caused net income to drop from
$103.4 million in 2005, the company was able to realize a
$5.1 million increase in operating cash flows, an increase to
$297.3 million in 2006 from $292.3 million in 2005, reflecting the
current period earnings impact of non-cash stock-based
compensation, derivative fair value gain/loss, deferred taxes, and
depletion, depreciation, and amortization.

"We are looking forward to a good year in 2007," Jon S. Brumley,
Encore's Chief Executive Officer and President, stated.  "Our
recent acquisitions are exciting and have rejuvenated our property
mix with long-life waterflood and tertiary projects that have
upside potential.  The acquisitions fit the expertise we have
developed at Encore, and we are ready to put the fields through
our redevelopment process and witness steady growth of reserves
and production.  Our West Texas JV is shaping up as expected with
four rigs running and good wells coming online.  In addition, we
are pleased with our natural gas development programs in East
Texas and New Mexico.  2007 will be a focused year for Encore with
a disciplined capital budget that will be inside cash flow from
operations and invest in projects that fit what we do best: low
risk exploitation in vintage oil and gas fields.  We are focused
on what has delivered excellent results in the past."

                        Operations Update

Encore finished 2006 with total oil and natural gas related
capital expenditures of $378.6 million.  Encore invested
$29.7 million in property acquisitions for 2006, primarily for
unproved acreage concentrated in the company's core areas.  The
company invested $348.8 million in its drilling and exploration
programs, drilling 271 gross wells.

                        Liquidity Update

At Dec. 31, 2006, the company's long-term debt, net of discount,
was $661.7 million, including $150 million of 6.25% Senior
Subordinated Notes due April 15, 2014, $300 million of 6% Senior
Subordinated Notes due July 15, 2015, $150 million of 7.25% Senior
Subordinated Notes due 2017, and $68 million of bank debt under
the company's existing credit facility.

                       2007 Capital Budget

As a result of the two acquisitions, which will be initially
financed entirely through debt, Encore's Board of Directors has
initially approved a $285 million capital budget for 2007 that
will allow the company to execute a plan to reduce debt levels by
year-end 2007.  The debt reduction plan is expected to include
proceeds from a proposed Master Limited Partnership; the
divestiture of certain properties in Oklahoma; and excess cash
flows from operations.

                    About Encore Acquisition

Headquartered in Fort Worth, Texas, Encore Acquisition Company
(NYSE: EAC) -- http://www.encoreacq.com/-- is an independent   
energy company engaged in the acquisition, development and
exploitation of North American oil and natural gas reserves.
Organized in 1998, Encore's oil and natural gas reserves are in
four core areas: the Cedar Creek Anticline of Montana and North
Dakota; the Permian Basin of West Texas and Southeastern New
Mexico; the Mid Continent area, which includes the Arkoma and
Anadarko Basins of Oklahoma, the North Louisiana Salt Basin, the
East Texas Basin and the Barnett Shale; and the Rocky Mountains.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 30, 2007,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on oil and gas exploration and production company
Encore Acquisition Company.   The outlook is negative.

As reported in the Troubled Company Reporter on Jan. 23, 2007,
Moody's Investors Service placed Encore Acquisition's Ba3
corporate family rating and all other existing ratings on review
for downgrade upon its announced $400 million acquisition of
Anadarko Petroleum's Big Horn Basin (northern Rocky Mountains)
assets.


ENERNORTH INDUSTRIES: Has 45 Days to Make Proposal Under BIA
------------------------------------------------------------
The Superior Court for the Province of Ontario granted EnerNorth
Industries Inc., on March 7, 2007, a 45-day extension to make a
proposal to its creditors under the Bankruptcy and Insolvency Act
(Canada).

EnerNorth Industries Inc. (AMEX: ENY)(FRANKFURT: EPW1) --
http://www.enernorth.com/-- is a junior oil and gas company  
carrying out operations through production, development and
exploration of oil and gas in the Western Sedimentary Basin,
Canada.

There are approximately 4.293 million shares issued and
outstanding in the capital of the company.


ENTERCOM COMMUNICATIONS: Earns $47.98 Mil. in Year Ended Dec. 31
----------------------------------------------------------------
Entercom Communications Corp. reported net income of $47.9 million
on $440.4 million of net revenues for the year ended Dec. 31,
2006, compared to a $78.3 million net income on $432.5 million of
net revenue for 2005.

As Dec. 31, 2006, the company's balance sheet showed $1.7 billion
in total assets, $956.1 million in total liabilities resulting in
a shareholders' equity of $777.0 million.

                    Significant Factors in 2006

The company discloses that its results of operations were affected
by these factors:

  -- Acquisitions

     * on Dec. 29, 2006, the company purchased WKAF-FM, formerly
       WILD-FM, in Boston, Mass., that increased station operating
       expenses in 2006;

     * on Nov. 1, 2006, the company began operating radio stations
       in Austin, Texas; Cincinnati, Ohio; and Memphis, Tenn.,
       that increased net revenues, station operating expenses,
       and time brokerage agreement expense in 2006;

    * on Nov. 1, 2006, the company began operating a radio station
       in Cincinnati, Ohio, that increased net revenues and
       station operating expenses; and

     * on Oct. 7, 2005, the company acquired for $45 million three
       radio stations in Greenville, South Carolina, which in 2006
       increased net revenues, station operating expenses,
       depreciation and amortization, and interest expense.

  -- Dispositions

     * on Oct. 6, 2005, the company sold for $6.7 million three
       radio stations in Greenville, South Carolina, which in 2006
       decreased its net revenues, station operating expense,
       depreciation and amortization and interest expense;

     * on March 31, 2005, the company sold for $2.2 million four
       radio stations in Longview, Washington, which in 2006
       decreased depreciation, amortization and interest expense;
       and

     * on Jan. 21, 2005, the company sold for $6 million a radio
       station in Seattle, Washington, which in 2006 decreased
       depreciation, amortization and interest expense and, in
       2005, increased gains on sale of assets by $5.5 million.

  -- Financing

     * in 2006, the company paid quarterly cash dividends to its
       shareholders in the collective amount of $60.4 million,
       which in 2006 increased its interest expense due to
       increased borrowings and increased borrowing costs under
       its senior credit facility to finance the payment of the
       dividends; and

     * the company repurchased shares of its Class A common stock
       in the amount of $100.5 million in 2006 and in the amount
       of $188.4 million in 2005, which in 2006 increased interest
       expense due to increased borrowings and increased borrowing
       costs under its senior credit facility to finance the
       repurchase of its stock.

  -- Others

     * the company reflected $8.3 million in corporate general and
       administrative expenses related to a settlement with the
       office of the New York Attorney General and a reserve for
       an investigation by the FCC into sponsorship identification
       practices at several media companies; and

     * on Jan. 1, 2006, the company adopted a new accounting
       standard, which required the measurement and recognition of
       compensation expense for all share-based payment awards
       made to employees and directors including employee stock
       options and employee stock purchase plan purchases based on
       estimated fair values, which in 2006 increased station
       operating expenses and corporate general and administrative
       expenses.

                         Credit Facilities

On Dec. 8, 2006, the company entered into a second amendment to
its Bank Revolver with a syndicate of banks that primarily
provided for:

    (1) a modification to one of the Bank Revolver's restrictive
        covenants that increased the maximum permitted Total Debt
        to Operating Cash Flow; and

    (2) an increase in the Bank Revolver to $900 million from
        $800 million.  On Sept. 22, 2006, the company entered into
        a first amendment to its Bank Revolver with a syndicate of
        banks that provided for the elimination of a restrictive
        covenant that would have required the company to enter
        into certain interest rate transactions to hedge a portion
        of its variable rate debt.

As of Dec. 31, 2006, the company had credit available of
$373.2 million under the Bank Revolver, subject to compliance with
the covenants under the Bank Revolver at the time of borrowing.  
Cash and cash equivalents stood at $10.8 million as of Dec. 31,
2006.

The company increased its net outstanding debt by $99 million
during the year ended Dec. 31, 2006, primarily to fund a
repurchase of shares in the amount of $100.5 million, to pay
dividends of $60.4 million to shareholders, and to acquire a radio
station in Boston, Mass., for $30 million in December 2006.  

As of Dec. 31, 2006, the company had $677 million in senior debt
outstanding, including $526 million under its Bank Revolver,
$800,000 in a letter of credit, and $150 million in Senior
Subordinated Notes.  

                       Cash Flows in 2006

Net cash flows provided by operating activities were $101,583,000
for the year ended December 31, 2006, as compared with
$136,552,000 for the year ended Dec. 31, 2005.  Net cash flows
used in investing activities were $45,146,000 for the year ended
December 31, 2006, as compared with $38,618,000 for the year 2005.  
Net cash flows used in financing activities were $61,713,000 and
$93,709,000 for the years ended Dec. 31, 2006 and 2005,
respectively.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1aba

  About Entercom Communications Corp.

Headquartered in Bala Cynwyd, Penn., Entercom Communications
Corp., (NYSE: ETM) -- http://www.entercom.com/-- engages in the  
acquisition, development, and operation of radio broadcast
properties in the U.S.  It broadcasts news, talk, classic rock,
sports, adult contemporary, alternative, oldies and jazz, and
other programs.

                           *     *     *
As reported by the Troubled Company Reporter on Nov. 9, 2006,
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Bala Cynwyd, Pa.-based radio broadcaster Entercom
Communications Corp. to 'BB-' from 'BB'.


EVANS SYSTEMS: Appoints Frank Moody as CEO
------------------------------------------
Evans Systems, Inc. has appointed Frank Moody as its new CEO.

The company disclosed in a regulatory filing with the Securities
and Exchange Commission, that its former Board of Directors
entered into a settlement with Big Apple Consulting USA, Inc.

As part of the settlement, control of Evans Systems, Inc., was
transferred to Frank Moody, former CEO of Homeland Integrated
Security Systems Inc.

A full-text copy of the settlement agreement is available for free
at http://ResearchArchives.com/t/s?1af6

"We are particularly optimistic about the future direction of this
company.  Evans Systems is recovering from a difficult past, but
is currently in the process of developing a strong management
team.  The new focus of this company will include mergers and
acquisitions for significant and stable growth," stated Frank
Moody, CEO, Evans Systems, Inc.

Evans Systems is fully reporting and upon the timely filing of the
next 3 Quarterly Financial Statements, the company will uplift to
the NASDAQ Bulletin Board.

                       About Evans Systems

Evans Systems, Inc. (OTCBB: EVSY), dba MC Star, and its
subsidiaries operated 3 convenience stores selling gasoline,
merchandise and fast food to the motoring public, provided
environmental remediation services in southern Texas and provide
freight deliver services of petroleum products.

The company, between December 2005, and April 11, 2006, sold its
assets, effectively ceased its business activities, and reduced
its debts in an effort to preserve the Company's potential future
value.

The reduction in debt involved a sale of stock to Homeland
Integrated Security Systems, Inc., for $500,000 of which
approximately $175,000 remained unpaid as at Sept. 30, 2006.

As of Dec. 31, 2006, Evans Systems' balance sheet showed total
assets of $141,000 and total liabilities of $1,370,000, resulting
in a stockholders' deficit of $1,229,000.


FAIRWAY LOAN: S&P Holds BB- Rating on $32 Mil. Class B-2L Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' rating
assigned to Fairway Loan Funding Co./Fairway Loan Funding Corp.'s
$32 million class B-2L notes.  The rating has not changed since
issuance.

Due to an administrative error, an incorrect rating was released
for this class when it was first assigned Aug. 2, 2006.  The
rating, as it is affirmed above, is the same as it was when this
transaction was issued.


FEDERAL-MOGUL: Court Okays Cranhold Claim Settlement
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed:

   (a) Cranhold Limited to compromise the Intercompany Obligation,
       thereby compromising an asset of its estate; and

   (b) the compromise of the Intercompany Claim against
       Federa-Mogul Camshafts Limited at zero.

F-M Camshafts and Limited are both U.K. Debtors.  F-M Camshafts
manufactures and sells automotive and other camshafts from a
facility in Elstead, Surrey, England.  Cranhold, a holding
company, is the immediate parent company of F-M Camshafts.

As of June 30, 2006, F-M Camshafts' liabilities exceeded its
assets by approximately GBP3,900,000.  F-M Camshafts' insolvency
stems almost entirely from a GBP6,200,000 Intercompany Obligation
owed to Cranhold, Scotta E. McFarland, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub LLP, in Wilmington, Delaware,
relates.

Federal-Mogul Corporation and its debtor-affiliates believe that
it is highly unlikely for F-M Camshafts to ever repay the
Obligation in its full face amount.

As part of the dismissal of F-M Camshafts' U.K. administration
proceedings on December 1, 2006, the High Court of Justice in
London, England, directed Federal-Mogul Corporation to render F-M
Camshafts solvent on a balance sheet basis.  Thus, to comply with
the U.K. Court's ruling, the Debtors seek to compromise the
amount of the Intercompany Debt between F-M Camshafts and
Cranhold.

Cranhold is willing to compromise the Obligation, according to
Ms. McFarland.

Ms. McFarland assures the Court that the Debtors' request will
have no effect on any third-party creditors.  Cranhold has no
third-party creditors.  Even if Cranhold had creditors, its
claims would be compromised and paid a dividend in accordance
with the terms of the Company Voluntary Arrangements in F-M
Camshaft's & Cranhold's U.K. administration proceedings.

Ms. McFarland adds that since Cranhold is a holding company and
has not conducted any active business operations during its
existence, no current asbestos-related claims were asserted
against it nor is there any plausible prospect for those claims
to emerge in the future.

The Debtors also ask Judge Fitzgerald for permission to modify
F-M Camshafts' books and records to reflect the compromise of the
Intercompany Obligation.

                      About Federal-Mogul

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is an automotive parts company
with worldwide revenue of some $6 billion.  The Company filed for
chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No.
01-10582).  Lawrence J. Nyhan Esq., James F. Conlan Esq., and
Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura
Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, P.C., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities.  Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq.,
at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq.,
Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard
Firm represent the Official Committee of Unsecured Creditors.

On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.  
They submitted a Disclosure Statement explaining that plan on
April 21, 2003.  They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan.  On July 28, 2004, the
District Court approved the Disclosure Statement.  The estimation
hearing began on June 14, 2005.  They then submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007.  The confirmation hearing is set for May 8, 2007.  (Federal-
Mogul Bankruptcy News, Issue No. 129; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


FINAL ANALYSIS: Expands Sheppard Mullin's Scope of Work
-------------------------------------------------------
Final Analysis Communication Services Inc. wants Sheppard Mullin
Richter & Hampton LLP to represent it in a malpractice and breach
of fiduciary duty action against the law firm of Ballard Spahr
Andrews & Ingersoll, LLP.  The case is captioned Final Analysis
Communication Services, Inc. v. Ballard Spahr Andrews & Ingersoll,
et al., Civil Case No. 24-C-04-009146, and it is pending in the
Circuit Court for Baltimore City, Maryland.

As reported in the Troubled Company Reporter on Feb. 1, 2007,
Final Analysis asked the United States Bankruptcy Court for the
District of Maryland for authority to employ Sheppard Mullin as
its special litigation counsel in connection with the Debtor's
litigation with General Dynamics Corporation and General Dynamics
Information Services, Inc., pending in the United States District
Court for the District of Maryland and the United States Court of
Appeals for the Fourth Circuit.

For the Ballard Spahr Litigation, the Debtor proposes a contingent
fee arrangement with Sheppard Mullin.  Specifically, attorneys'
fees will be 25% of any recovery made after the firm has taken any
action whatsoever on behalf of the Debtor and 33% of any recovery
obtained after commencement of jury selection at trial.  If there
is no recovery, there will not be any attorneys' fees.

The Debtor also asks the Court to approve its engagement letter
with Sheppard Mullin recognizing the attorneys' lien of the firm.

The Debtor further asks the Court to confirm that notwithstanding
the assertion of Nader Modanlo and his attorney Ed Tolchin that
they are entitled to control the Debtor, until further Court
order, Sheppard Mullin will take directions from, and communicate
only with, current management of the Debtor through its President,
Christopher Mead, with respect to the Ballard Spahr Litigation.

Michael Ahrens, Esq., a Sheppard Mullin partner, assured the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.

                       About Final Analysis

New York Satellite Industries, LLC, holds a majority interest in
Final Analysis Communication Services, Inc.  Nader Modanlo, who
filed for Chapter 11 protection on July 22, 2005, owns NYSI.

Lanham, Md.-based Final Analysis Communication Services Inc. filed
a voluntary Chapter 11 petition on Dec. 29, 2006 (Bankr. D. Md.
Case No. 06-18520).  J. Daniel Vorsteg, Esq., Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, LLP, represent the Debtor.  No official committee of
unsecured creditors has been appointed in the case at this time.  
When it filed for bankruptcy, the Debtor estimated its assets at
more than $100 million and debts at $1 million to $100 million.


FIRST UNION: Fitch Holds B- Rating on $8.7 Mil. Class M Certs.
--------------------------------------------------------------
First Union National Bank Commercial Mortgage Trust's commercial
mortgage pass-through certificates, series 2000-C1 are upgraded by
Fitch Ratings:

   -- $11.6 million class F to 'AAA' from 'AA+';
   -- $29.1 million class G to 'A-' from 'BBB+';
   -- $7.8 million class H to 'BBB+' from 'BBB'; and
   -- $3.9 million class J to 'BBB' from 'BBB-'.

In addition, Fitch affirms these classes:

   -- $11.1 million class A-1 at 'AAA';
   -- $480.9 million class A-2 at 'AAA';
   -- Interest-only class, IO at 'AAA';
   -- $38.8 million class B at 'AAA';
   -- $34.9 million class C at 'AAA';
   -- $11.6 million class D at 'AAA';
   -- $25.2 million class E at 'AAA';
   -- $7.8 million class K at 'BB+';
   -- $5.8 million class L at 'BB'; and
   -- $8.7 million class M at 'B-'.

The $8.8 million class N is not rated by Fitch.

The rating upgrades are a result of scheduled loan amortization
and additional defeasance (3.1%) since Fitch's last rating action.
Thirty loans (27.9%) have defeased to date, including the second
and third largest loans in the pool.

As of the February 2007 distribution date, the transaction's
aggregate principal balance has decreased 11.6% to $686.2 million
from $776.3 million at issuance.  The transaction remains diverse
geographically and by property type.  There are currently no
delinquent or specially serviced loans in the pool.


FIRST UNION: Fitch Holds B- Rating on $4.1 Mil. Class O Certs.
--------------------------------------------------------------
Fitch Ratings upgrades First Union National Bank Commercial
Mortgage Trust's commercial mortgage pass-through certificates,
series 2001-C3:

   -- $12.3 million class G to 'AAA' from 'AA+'; and
   -- $12.3 million class H to 'AA' from 'AA-'.

Fitch also affirms these classes:

   -- $7.7 million class A-2 at 'AAA';
   -- $435.5 million class A-3 at 'AAA';
   -- $33.8 million class B at 'AAA';
   -- Interest-only class IO-I at 'AAA';
   -- Interest-only class IO-II at 'AAA';
   -- $12.3 million class C at 'AAA';
   -- $23.5 million class D at 'AAA';
   -- $11.3 million class E at 'AAA';
   -- $12.3 million class F at 'AAA';
   -- $18.4 million class J at 'A-';
   -- $14.3 million class K at 'BBB';
   -- $6.1 million class L at 'BBB-';
   -- $4.1 million class M at 'BB+';
   -- $6.1 million class N at 'BB'; and
   -- $4.1 million class O at 'B-'.

Fitch does not rate the $17.5 million class P certificates.  The
class A-1 certificate has been paid in full.

The rating upgrades reflect increased credit enhancement due to
loan payoffs and scheduled amortization, as well as the additional
defeasance of six loans since the last Fitch rating action.  As of
the February 2007 distribution date, the pool's aggregate
certificate balance has decreased 22.9% to $631.7 million from
$818.8 million at issuance.  Thirteen loans (16.5%) in the pool
have defeased to date, including three (7.8%) of the top 10 loans.

Currently, two loans (2.7%) are in special servicing.  The larger
specially serviced loan (1.5%) is a 295,356 sq. ft. office
property in Southfield, Michigan and is 30 days delinquent.  The
loan transferred to special servicing in January 2007 due to
monetary default following the loss of a major tenant in December
2006.  The special servicer has initiated foreclosure proceedings
on this property.

The other specially serviced loan (1.2%) is secured by a 60,000
sq. ft. office property in Troy, Michigan and is 60 days
delinquent.  The loan transferred to special servicing in July
2006 due to a modification request.  The single tenant who had
previously occupied the property vacated in 2004.  The special
servicer is initiating foreclosure.

Fitch projected losses on the specially serviced loans are
expected to be absorbed by nonrated class P.


FORD MOTOR: Mulls Offering Bonuses to Salaried Workers
------------------------------------------------------
Ford Motor Co. has considered paying hourly and salaried workers
bonuses for 2006 to keep up morale amid a difficult turnaround,
Jeffrey McCracken and Terry Kosdrosky of the Wall Street Journal
report.

According to the report, Chief Executive Alan Mulally said, in an
e-mail message sent Thursday to employees in the U.S. and Canada,
that the so-called performance awards have the support of the
company's board, as well as the United Auto Workers and Canadian
Auto Workers unions.

While Ford didn't meet profit and market share goals for 2006, it
did improve its quality and cost savings, Mr. Mulally said in the
email cited by the source.

Hourly and lower-level salaried employees will receive a bonus of
between $300 and $800, while higher-level salaried employees will
receive a higher, "but still modest" award, the Journal said
citing the e-mail message.

Ford spokeswoman Marcey Evans said in the report that more than
120,000 employees will receive the performance awards.  

Last week, Ford estimated $11,182 million in total life-time costs
for restructuring actions.  

Of the total $11,182 million of estimated costs, Ford said that
$9,982 million has been accrued in 2006 and the balance, which is
primarily related to salaried personnel-reduction programs, is
expected to be accrued in the first quarter of 2007.

The company expects a curtailment gain for other postretirement
employee benefit obligations related to hourly personnel
separations that occur in 2007, which gain the company expects to
record in 2007.  Of the estimated costs, those relating to job
bank benefits and personnel-reduction programs also constitute
cash expenditure estimates.

The restructuring cost estimates relate to the automaker's
previously announced commitment to accelerate its restructuring
plan, referred to as Way Forward plan.

The "Way Forward" plan includes closing plants and laying off up
to 45,000 employees.

Ford, which incurred a $12,613 million net loss on $160,123
million of total sales and revenues for the year ended Dec. 31,
2006, said in a regulatory filing with the Securities and Exchange
Commission that its overall market share in the United States has
declined in each of the past five years, from 21.1% in 2002 to
17.1% in 2006.  The decline in overall market share primarily
reflects a decline in the company's retail market share, which
excludes fleet sales, during the past five years from 16.3% in
2002 to 11.8% in 2006, the automaker said.

Ford also reported a $16.9 billion decrease in its stockholders'
equity at Dec. 31, 2006, which, according to the company,
primarily reflected 2006 net losses and recognition of previously
unamortized changes in the funded status of the company's defined
benefit postretirement plans as required by the implementation of
Statement of Financial Accounting Standards No. 158, offset
partially by foreign currency translation adjustments.

                About Navistar International Corp.

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 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 market.  The company also provides
truck and diesel engine parts and service sold under the
International brand.  A wholly owned subsidiary offers financing
services.

                       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.

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'.

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.


FORD MOTOR: May Sell Aston Martin to a Consortium
-------------------------------------------------
Ford Motor Co. is poised to agree the sale of Aston Martin, its
luxury sports car brand, to a consortium of investors including
David Richards -- founder of Prodrive, the group that runs Aston
Martin's racing team -- for close to GBP450 million, John
Griffiths and Peter Smith of Financial Times report.

According to the source, Mr. Richards' consortium is understood to
have held talks with investors from the US and Middle East,
including Egypt's Naeem Capital, although its final make-up is not
yet clear.

US investment bank Jefferies advised the winning consortium, while
UBS auctioned Aston Martin on behalf of its owner, FT said.

As reported in the Troubled Company Reporter on March 7, 2007,
The Wall Street Journal, citing Ford Europe head Lewis Booth, said
that the sale of all or a part of the luxury sports car brand "has
not reached conclusion" but that a sale would conclude sometime
this year.

Ford has explored strategic options for Aston Martin in August
last year, with particular emphasis on a potential sale of all or
a portion of the unit.

Aston Martin is part of the company's Premier Automotive Group --
the organization under which all of Ford's European brands are
grouped.  The group also includes other brands like Volvo, Land
Rover, and Jaguar.  

The sale of Aston Martin is in line with the company's cost
reduction plan, which, according to its chief executive officer
Alan R. Mulally, includes the reduction of the number of vehicle
platforms the company uses around the world and increase in the
number of shared parts.

                       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 TCR-Europe on Dec. 13, 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.


FOSS MANUFACTURING: Court Confirms Committee's Liquidation Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire
approved the Disclosure Statement and confirmed the Plan of
Liquidation proposed by the Official Committee Of Unsecured
Creditors of Felt Manufacturing Company Inc., formerly known as
Foss Manufacturing Company, Inc.

The Court determined that the Plan satisfied the confirmation
requirements under Section 1129(a) of the Bankruptcy Code.

The Plan provides for the continuation of the Debtor post-
confirmation as the Liquidating Debtor, under the direction and
control of a Plan Administrator and an Oversight Committee.  

Lawrence E. Rifken will be appointed as the Plan Administrator.
Mr. Rifken, a member of the law firm of McGuireWoods LLP, served
as Co-Chairman of the Creditor's Committee while sitting on the
Committee as Eastman Chemical Company's designated representative.

The Liquidating Debtor will be responsible for liquidating the
Estate's remaining assets, which are principally causes of action
and certain directors' and officers' liability insurance policies
purchased by and belonging to the Estate covering the Debtor's
Officers and Directors.

The Liquidating Debtor will be responsible for distributing the
net recoveries from those assets, as well as the proceeds of any
other miscellaneous assets belonging to the Debtor's Estate, to
creditors in order of their priority in satisfaction of the
Debtor's obligations.

                       Treatment of Claims

Timely filed administrative expense claims and priority tax claims
will be paid in full.

Holders of secured claims will receive, in full satisfaction of
their claims, either the collateral, any net proceeds from the
sale of the collateral, or cash.

The Plan Administrator will make periodic cash distributions to
holders of Allowed Other Priority Claims and Allowed General
Unsecured Claims until the earlier of that date the claims are
paid in full or all Estate assets have been exhausted.  Allowed
Other Priority Claims will be paid first before Allowed General
Unsecured Claims.

All Preferred Stock Interests and Common Stock Interests will be
cancelled on the Effective Date of the Plan.

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


FUNCTIONAL RESTORATION: Trustee Taps Ezra Brutzkus as Counsel
-------------------------------------------------------------
David K. Gottlieb, Chapter 11 Trustee appointed in the Functional
Restoration Medical Center, Inc.'s chapter 11 case, asks authority
from the U. S. Bankruptcy Court for the Central District of
California to employ Ezra Brutzkus Gubner LLP as his general
bankruptcy counsel.

Ezra Brutzkus will:

   a) prepare and file a motion to convert the Debtor's case to
      Chapter 7;

   b) prosecute any claims and causes of action the Trustee may
      determine; and

   c) assist the Trustee with the expeditious liquidation of the
      Debtor's estate.

Steven T. Gubner, Esq., a member of the Ezra Brutzkus, tells the
Court that the Firm's professionals bill:

   Professional                 Designation      Hourly Rate
   ------------                 -----------      -----------
   Robert Ezra, Esq.            Partner             $475
   Mark D. Brutzkus, Esq.       Partner             $425
   Steven T. Gubner, Esq.       Partner             $475

Mr. Gubner assures the Court that the firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.

               About Functional Restoration Medical

Based in Encino, California, Functional Restoration
Medical Center, Inc., is the second largest owner and operator
of MRI centers in Southern California.  The Debtor filed for
chapter 11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No.
06-10306).  Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.


GALAXY VIII: S&P Assigns BB Rating on $12.5 Million Class E Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Galaxy VIII CLO Ltd./Galaxy VIII CLO Inc.'s
$461.85 million floating-rate notes due 2019.

The preliminary ratings are based on information as of
March 7, 2007.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect:

     -- The expected commensurate level of credit support in the     
        form of subordination to be provided by the notes junior
        to the respective classes;

     -- The cash flow structure, which was subjected to various
        stresses requested by Standard & Poor's;

     -- The experience of the collateral manager; and

     -- The legal structure of the transaction, including the
        bankruptcy remoteness of the issuer.

                   Preliminary Ratings Assigned

                       Galaxy VIII CLO Ltd.
                       Galaxy VIII CLO Inc.
    
           Class*                  Rating         Amount
           ------                  ------         ------
           A                       AAA            $372,500,000
           B                       AA             $33,750,000
           C                       A              $24,400,000
           D                       BBB            $18,700,000
           E                       BB             $12,500,000
           Subordinated notes      NR             $38,150,000
    
    * $5.32 million of class P notes (consisting of $2 million of
      subordinated notes and $3.32 million of Treasury notes) will
      also be issued, but these notes will not be rated by
      Standard & Poor's Ratings Services.

                           NR -- Not rated.


GE CAPITAL: Fitch Lifts Rating on $7.5 Mil. Class K Certs. to BB+
-----------------------------------------------------------------
Fitch Ratings upgrades GE Capital Corp's commercial mortgage
pass-through certificates, series 2001-2:

   -- $18.8 million class F to 'AA+' from 'AA';
   -- $11.3 million class G to 'AA-' from 'A+';
   -- $21.3 million class H to 'A-' from 'BBB+';
   -- $18.8 million class I to 'BBB' from 'BBB-';
   -- $5 million class J to 'BBB-' from 'BB+'; and
   -- $7.5 million class K to 'BB+' from 'BB'.

In addition, Fitch affirms these classes:

   -- $26.1 million class A-2 at 'AAA';
   -- $41.2 million class A-3 at 'AAA';
   -- $519.5 million class A-4 at 'AAA';
   -- $40.1 million class B at 'AAA';
   -- $45.1 million class C at 'AAA';
   -- Interest-only classes X-1 and X-2 at 'AAA';
   -- $12.5 million class D at 'AAA';
   -- $10 million class E at 'AAA'; and
   -- $12.5 million class L at 'B'.

Fitch does not rate the $7.5 million class M and the $5.7 million
class N. Class A-1 has been paid in full.

The rating upgrades reflect the increased credit enhancement
levels from scheduled amortization, three loan payoffs, and the
additional defeasance of three loans (3%) since Fitch's last
rating action.  In total, 19 loans (19.9%) have defeased.

As of the February 2007 distribution date, the pool's aggregate
certificate balance has decreased 19.9% to $803.1 million from
$1,002.9 million at issuance.  There are currently no delinquent
and specially serviced loans.

The largest loan in the pool (5.2%) is backed by Holiday Inn West
57th street, a 596-room full-service hotel located in New York,
New York.  As of Sept. 30, 2006, RevPar was $146.22 with occupancy
at 86%, compared to RevPar of $122.85 with occupancy at 88% at
issuance.


GE COMMERCIAL: Moody's Holds B2 Rating on $4MM Class PPL-F Certs.
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of GE Commercial
Mortgage Corporation, Commercial Mortgage Pass-Through
Certificates, Series 2004-C2:

   -- Class A-1, $43,929,173, Fixed, affirmed at Aaa
   -- Class A-1A, $297,354,063, Fixed, affirmed at Aaa
   -- Class A-2, $125,753,000, Fixed, affirmed at Aaa
   -- Class A-3, $73,388,000, Fixed, affirmed at Aaa
   -- Class A-4, $574,549,000, Fixed, affirmed at Aaa
   -- Class X-1, Notional, affirmed at Aaa
   -- Class X-2, Notional, affirmed at Aaa
   -- Class B, $41,293,000, WAC Cap, affirmed at Aa2
   -- Class C, $17,205,000, WAC Cap, affirmed at Aa3
   -- Class D, $25,807,000, WAC Cap, affirmed at A2
   -- Class E, $15,485,000, WAC Cap, affirmed at A3
   -- Class F, $18,926,000, WAC Cap, affirmed at Baa1
   -- Class G, $17,205,000, WAC Cap, affirmed at Baa2
   -- Class H, $18,925,000, WAC, affirmed at Baa3
   -- Class J, $10,323,000, WAC Cap, affirmed at Ba1
   -- Class K, $8,603,000, WAC Cap, affirmed at Ba2
   -- Class L, $6,882,000, WAC Cap, affirmed at Ba3
   -- Class M, $5,161,000, WAC Cap, affirmed at B1
   -- Class N, $5,162,000, WAC Cap, affirmed at B2
   -- Class O, $3,441,000, WAC Cap, affirmed at B3
   -- Class PPL-A, $3,209,910, Fixed, affirmed at Baa3
   -- Class PPL-B, $3,290,923, Fixed, affirmed at Ba1
   -- Class PPL-C, $4,929,963, Fixed, affirmed at Ba2
   -- Class PPL-D, $6,322,999, Fixed, affirmed at Ba3
   -- Class PPL-E, $3,967,682, Fixed, affirmed at B1
   -- Class PPL-F, $4,805,479, Fixed, affirmed at B2

As of the Feb. 12, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 3.5%
to $1.33 billion from $1.38 billion at securitization.  The
Certificates are collateralized by 119 mortgage loans.  The loans
range in size from less than 1.0% to 7.1% of the pool, with the
top 10 loans representing 36.2% of the pool.

The pool includes four shadow rated loans, representing 16.8% of
the outstanding loan balance.  Three loans, representing 1.5% of
the pool, have defeased and been replaced with U.S. Government
securities.  There have been no loans liquidated from the trust
and no realized losses.  Currently there are two loans,
representing less than 1.0% of the pool, in special servicing.
Moody's is estimating approximately $1.5 million of losses for the
specially serviced loans.  Fourteen loans, representing 9.1% 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 94.5% and 72.2%, respectively, of the
performing loans.  Moody's loan to value ratio for the conduit
component is 92.6%, compared to 94.2% at securitization.

The largest shadow rated loan is the Tysons Corner Center Loan of
$93.8 million (7.1%), which represents a 27.9% pari-passu interest
in a first mortgage loan secured by the borrower's interest in a
2.0 million square foot regional mall located in McClean,
Virginia.  The mall is anchored by Bloomingdale's, 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 second largest shadow rated loan is the Pacific Place Loan of
$84.7 million (6.4%), which is secured by a two-building retail,
office and leased hotel property located in the Union Square
submarket of San Francisco, California.  The two buildings are
referred to as Pac One and Pac Two. Pac One is an eight-story
facility built in 1907 and renovated in 1981 and 1999.  Old Navy
occupies the a portion of the ground floor and all of the basement
and the second and third floors.  Part of the ground floor as well
as floors five through nine are leased to the 200-room Palomor
Hotel through June 2097.  Pac Two is a 16-story building housing
the subject's office component as well as the Container Store on
the two lower levels.  Pac Two was built in 1907 and renovated in
1999. Other major tenants include Old Navy and Macy's.  As of June
2006 occupancy was 100.0%, compared to 99.0% at securitization.
The loan was interest only for the first two years and now
amortizes on a 360-month schedule.  Moody's current shadow rating
is Baa2, the same as at securitization.

The third largest shadow rated loan is the Lake Grove Plaza Loan
of $27.0 million (2.0%), which is secured by a 251,000 square foot
grocery anchored retail center built in 1986 and renovated in 1991
and 2003.  The property is located in Lake Grove, New York,
approximately 40 miles east of New York City.  Major tenants
include Stop & Shop, DSW Shoe Warehouse, Staples and Michaels.  As
of September 2006 occupancy was 100.0%, the same as at
securitization.  The loan is interest for its entire 10-year term.
Moody's current shadow rating is Baa3, the same as at
securitization.

The fourth largest shadow rated loan is the AFR Portfolio Loan of
$17.3 million (1.3%), 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 Group LP.  Moody's current shadow
rating is A1, compared to A2 at securitization.

The three largest conduit exposures represent 12.2% of the pool.
The largest conduit loan is the Prince Building Loan of
$69.7 million (5.2%), which is secured by a 312,570 square foot
office building located in the SoHo submarket of New York City.
Built in 1897 and renovated in 1991, this 12-story, Class B office
building includes 22,335 square feet of street level retail space.
The largest tenant is Scholastic, which occupies 36.9% of the
property's net rentable area through April 2008.  Although Armani
only represents 3.9% of the leasable space, it generates
approximately 25.0% of the property's revenue.  As of June 2006
the property was 99.5% leased, compared to 94.0% at
securitization.  Moody's LTV is 90.7%, compared to 93.2% at
securitization.

The second largest conduit loan is the Princeton Office Loan of
$54.6 million (4.1%), which is secured by six, three-story, Class
A office buildings located in the 10-building College Park
Research Center in Plainsboro Township, New Jersey.  The property
was built in phases between 1976 and 1981.  The property is
encumbered by a ground lease.  The ground lease obligation has
been prepaid through lease termination in 2037.  There are 20
years of options available, which would extend the ground lease
through 2057.  As of December 2006 occupancy was 92.0%, compared
to 85.2% at securitization.  The loan was interest only for its
first two years and now amortizes on a 360-month schedule.  
Moody's LTV is 96.9%, compared to 99.8% at securitization.

The third largest conduit loan is Chino Hills Crossroads
Marketplace Loan of $37.7 million (2.8%), which is secured by a
260,957 square foot component of an anchored retail center located
in Chino Hills, California.  Major tenants include Sports Chalet,
Stein Mart, Best Buy, Bed Bath & Beyond, Off Broadway Shoe,
PetsMart, and Sav-On.  The leases for Sav-On and Bed Bath& Beyond
expire in 2010 and 2011 respectively, while the remaining anchor
leases extend through 2013 and beyond.  Built between 2000 and
2003, the center is located approximately 38 miles southeast of
downtown Los Angeles, California.  As of December 2006 occupancy
was 100.0%, compared to 97.9% at securitization.  Moody's LTV is
89.3%, compared to 94.1% at securitization.

The pool's collateral is a mix of retail (34.9%), multifamily &
manufactured housing (29.2%), office and mixed use (24.9%),
industrial and self storage (9.5%) and U.S. Government securities
(1.5%).  The collateral properties are located in 31 states.  The
highest state concentrations are California (17.4%), Texas
(13.7%), Virginia (13.2%), New York (10.3%) and New Jersey (9.0%).
All of the loans are fixed rate.


GMAC COMMERCIAL: Fitch Lifts Rating on Class P Certificates to B-
-----------------------------------------------------------------
Fitch upgrades GMAC Commercial Mortgage Securities, Inc.'s
mortgage pass-through certificates, series 2001-C2:

   -- $15.1 million class F to 'AAA' from 'AA+';
   -- $10.4 million class G to 'AA+' from 'AA-';
   -- $9.4 million class H to 'AA' from 'A+';
   -- $23.6 million class J to 'A-' from 'BBB';
   -- $5.7 million class K to 'BBB+' from 'BBB-';
   -- $5.7 million class L to 'BBB' from 'BB+';
   -- $11.3 million class M to 'BB+' from 'BB';
   -- $3.8 million class N to 'BB-' from 'B+';
   -- $3.8 million class O to 'B' from 'B-'; and
   -- $3.8 million class P to 'B-' from 'CCC'.

Fitch also affirms these classes:

   -- $54.6 million class A-1 at 'AAA';
   -- $437.7 million class A-2 at 'AAA';
   -- Interest-only class X-1 at 'AAA';
   -- Interest-only class X-2 at 'AAA';
   -- $34 million class B at 'AAA';
   -- $11.3 million class C at 'AAA';
   -- $15.1 million class D at 'AAA'; and
   -- $9.4 million class E at 'AAA'.

Fitch does not rate the $10.4 million class Q.

The rating upgrades reflect increased credit enhancement due to
loan payoffs, amortization, and the additional defeasance of nine
loans (9.6%) since the last Fitch rating action.  As of the
February 2007 distribution date, the pool's aggregate certificate
balance has decreased 11.9% to $665.1 million from $754.9 million
at issuance.  Fifteen loans (16.8%) have fully defeased and one
loan (3.7%) has partially defeased to date.

Currently, there are no loans in special servicing.

Fitch is monitoring the performance of the largest loan (4.7%) in
the pool, an office portfolio collateralized by four office
properties located in various cities in central and southern
Pennsylvania.  The portfolio has experienced a steady decline in
occupancy since 2004 due to the weak suburban Pennsylvania office
market.  The borrower is marketing the properties through a broker
and in-house leasing agents. The consolidated occupancy is 83% as
of September 2006.


GULF COAST: Wants Court to Approve Lain Faulkner as Accountant
--------------------------------------------------------------
Gulf Coast Holdings Inc. asks the U.S. Bankruptcy Court for the
Northern District of Texas for permission to employ Lain Faulkner
& Co., P.C., as its accountant.

The firm will:

     a. prepare the Debtor's federal income tax returns; and

     b. perform accounting and financial consulting services for
        the Debtor, which may be requested during the Debtor's
        Chapter 11 proceeding.

Lain Faulkner's hourly billing rates are:

     Designation                          Hourly Rate
     -----------                          -----------
     Shareholders                         $320 - $360
     Senior & Manager Level Accountants   $210 - $250
     Staff Accountants                    $130 - $195
     Accounting Clerks                     $60 - $80

D. Keith Enger, a shareholder of Lain Faulkner, assures the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.

Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc.,
filed for bankruptcy protection on April 28, 2006 (Bankr. N.D.
Tex. Case No. 06-31695).  Daniel I. Morenoff, Esq., and Jeffrey R.
Fine, Esq., at Hughes & Luce, LLP, represent the Debtor in its
restructuring efforts.  The Debtor has employed David Hull as its
chief restructuring officer.  J. Frasher Murphy, Esq., Jaime
Myers, Esq., and Phillip L. Lamberson, Esq., at Winstead, Sechrest
& Minick represent the Official Committee of Unsecured Creditors.  
In its schedules filed with the Court, the Debtor reported assets
amounting to $18,258,575 and debts totaling $19,553,664.


HANOVER COMPRESSOR: Earns $86.52 Million in Year Ended December 31
------------------------------------------------------------------
Hanover Compressor Co. reported total revenues of $1.67 billion
for the year ended Dec. 31, 2006, as compared with total revenues
of $1.37 billion for the year ended Dec. 31, 2005.  The company
generated a net income of $86.52 million for the year 2006, versus
a net loss of $38.01 million for the previous year.

The company's Dec. 31, 2006, balance sheet showed $3.07 billion
in total assets, $2.04 billion in total liabilities, and
$11.99 million in minority interests, resulting in a $1.01 billion
total stockholders' equity.

The company's unrestricted cash and cash equivalents as of
Dec. 31, 2006, amounted to $73.28 million, up from $48.23 million
a year ago.  Working capital decreased to $326.56 million as of
Dec. 31, 2006, from $351.69 million as of Dec. 31, 2005.

The company had total contractual cash obligations totaling
$2.37 billion as of Dec. 31, 2006, which consisted of $1.37
long-term debt, $594.01 million interests on long-term debt,
$11.87 million minority interest obligations, $385.27 million
in purchase commitments, and $6.37 million in facilities and
other equipment operating leases.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ad0

                 About Hanover Compressor Company

Headquartered in Houston, Texas, Hanover Compressor Company,
(NYSE: HC) -- http://www.hanover-co.com/-- rents and repairs  
compressors and performs natural gas compression services for oil
and gas companies.  The company's subsidiaries also provide
service, fabrication, and equipment for oil and natural gas
processing and transportation applications.  It has locations in
India, China, Indonesia, Japan, Korea, Taiwan, the United Kingdom,
and Vietnam, among others.

                           *     *     *

As reported in the Troubled Company Reporter on Feb. 8, 2007,
Standard & Poor's Ratings Services placed the 'BB-' corporate
credit ratings on oilfield service company Hanover Compressor Co.
and its related entity Hanover Compression L.P. on CreditWatch
with positive implications.


HERCULES INC: Earns $238.7 Million in Year Ended December 31
------------------------------------------------------------
Hercules, Inc. reported net sales of $2.03 billion for the year
ended Dec. 31, 2006,, versus net sales of $2.05 billion for
the year ended Dec. 31, 2005.  The company reported net income of
$238.7 million for the year ended Dec. 31, 2006, compared with a
$41.1 million net loss in 2005.

At Dec. 31, 2006, the company's balance sheet showed $2.8 billion
in total assets, $2.55 billion in total liabilities, $12.7 million
in minority interests, and $242.9 million in stockholders' equity.  
The company had a $24.7 million stockholders' deficit at Dec. 31,
2005.

                       Sources of Liquidity

As of Dec. 31, 2006, the company had a $550 million Senior Credit
Facility with a syndicate of banks.  Under the Senior Credit
Facility, the company has a $150 million revolving credit
agreement, which permits certain additional borrowings.  In
addition, the company has the option to borrow until April 8,
2007, an additional $250 million in the form of a term note under
the Senior Credit Facility.  

As of Dec. 31, 2006, $44.3 million of the $150 million Revolving
Facility was available for use as the company had $105.7 million
of outstanding letters of credit associated with the Revolving
Credit Facility.  In addition, the company had $29.3 million of
foreign lines of credit available and unused.

Approximately $41.3 million of funds remaining in one of the
trusts established in 2004 related to the settlement with insurers
with respect to asbestos claims reverted to the company effective
Jan. 4, 2007.  Those funds are no longer restricted and are
available for general corporate purposes at the Company's
discretion.

                            Refunds

In connection with the comprehensive settlement of tax years 1993
through 2003, the Company anticipates the receipt of refunds and
interest in the range of $230 million during 2007 with
approximately $12 million expected to be received during the first
quarter, $147 million during the second quarter and the remainder
during the third quarter.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ad1

                       About Hercules, Inc.

Headquartered in Wilmington, Delaware, Hercules, Inc., (NYSE: HPC)
-- http://www.herc.com/-- is a global manufacturer and marketer  
of specialty chemicals and related services.  Its principal
products are chemicals for the paper industry, water-soluble
polymers, and specialty resins.  

                           *     *     *

Hercules, Inc. carries Moody's Baa3 Senior Secured Debt and Bank
Loan Debt Ratings, Ba2 Long-term Corporate Family, Senior
Unsecured Debt, and Probability of Default Ratings, and B1 Junior
Subordinated Debt Rating.

The company also carries Standard & Poor's BB Long-term Foreign
and Local Issuer Credit Ratings.


HIGHWOOD PROPERTIES: Earns $20.3 Million in Quarter Ended Dec. 31
-----------------------------------------------------------------
Highwoods Properties, Inc. reported financial and operational
results for the fourth quarter and full year ended Dec. 31, 2006.

For the fourth quarter of 2006, the Company reported net income
available for common stockholders of $20.3 million.  Net income
available for common stockholders for the fourth quarter of 2005
was $1.9 million.

For the twelve months ended Dec. 31, 2006, net income available
for common stockholders was $34.9 million, as compared with net
income available for common stockholders of $30.9 million for full
year 2005.

Funds from operations for the fourth quarter of 2006 were
$44.1 million, as compared with $25.7 million, for the fourth
quarter of 2005.  For the twelve months ended December 31, 2006,
funds from operations were $145.3 million, as compared with
$127.2 million for full year 2005.

Ed Fritsch, company president and chief executive office stated,
"2006 was a year of strong growth for Highwoods on many fronts.
Occupancy increased 90 basis points year-over-year to end the year
at 90 percent.  We started $354 million and completed $110 million
of new development, disposed of $241 million of non-core
properties.

"Between 2005 and 2007, we now expect to have started between
$545 million and $640 million of development, disposed of
$700 million to $750 million of non-core, non-differentiating
properties and sold $75 million to $90 million of non-core land.  
We also expect occupancy at the end of 2007 to be between
91 percent and 92.5%, versus our original December 2004 forecast
of 88% to 90%.

"Our current development pipeline, wholly-owned and joint
ventures, is $444 million and encompasses 20 projects in 10
markets.

"Over the next three years, we expect to commence an additional
$300 million to $600 million of development," Mr. Fritsch, added.

The Company also announced that in January 2007, it closed on the
sale of 42 acres of land in Kansas City for gross proceeds of
$16.5 million and a net gain of $12.4 million.

                 About Highwoods Properties, Inc.

Headquartered in Raleigh, North Carolina, Highwoods Properties,
Inc. (NYSE: HIW) -- http://www.highwoods.com/-- is an integrated,  
self-administered, self-managed equity REIT focused on leasing,
management, development, construction, and other tenant-related
services for its properties and for third parties.

Highwoods operates in Florida, Georgia, Iowa, Kansas, Maryland,
Missouri, North Carolina, South Carolina, Tennessee and Virginia.  
As of Sept. 30, 2006, the company owned or had an interest in 414
in-service properties encompassing approximately 34.9 million
square feet, 798 acres of undeveloped land, and an additional 15
properties under development.

                           *     *     *

The company carries Standard & Poor's BBB- Long-term Foreign
and Local Issuer Credit Ratings.  It also carries Fitch's BBB-
Long-term Issuer Default Rating.


HUDSON HIGHLAND: Will Restate 2006 & 2005 Financial Results
-----------------------------------------------------------
Hudson Highland Group, Inc., said that as a result of a review by
the Securities and Exchange Commission, it will restate its 2006
and 2005 results, reflecting the shift of:

    (1) a charge of $643,000 previously included in 2006 results
        to the applicable periods in 2005, and

    (2) a charge of $923,000 previously included in 2006 results
        related to indeterminate periods to the opening retained
        earnings balance of 2006 in accordance with the SEC's
        Staff Accounting Bulletin No. 108.

These adjustments were previously reported in the company's second
quarter 2006 financial results and reduced reported income for
2006.  As a result of these changes in second quarter results, the
company's previously reported income for 2006 will increase by
approximately $1.6 million.  The company will include these
restatements in its 2006 Form 10-K, which it expects to file on or
before March 16, 2007.

                      About Hudson Highland

Headquartered in New York, New York, Hudson Highland Group, Inc.
(Nasdaq: HHGP)-- http://www.hhgroup.com/-- is a provider of   
permanent recruitment, contract professionals and talent
management services worldwide.  From single placements to total
outsourced solutions, Hudson helps clients achieve greater
organizational performance by assessing, recruiting, developing
and engaging the best and brightest people for their businesses.
The company employs more than 3,600 professionals serving clients
and candidates in more than 20 countries.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 7, 2006,
Moody's Investors Service assigned a Ba2 rating to the company's
$7,500,000 Income Notes Due 2042.


INSIGHT MIDWEST: S&P Holds BB- Rating on Revised Credit Facilities
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its bank loan and
recovery ratings on the $2.45 billion secured facilities of
Insight Midwest Holdings LLC (BB-/Stable/--), which were revised
from an initial $2.58 billion proposed in September 2006.

The 'BB-' bank loan rating is at the same level as the corporate
credit rating, and the '2' recovery rating indicates prospects for
substantial recovery of principal in the event of a payment
default.

The revised credit facilities consist of a $385 million term loan
A due in 2013; a $1.8 billion term loan B due in 2014, including a
$450 million delayed-draw term loan B; and a $260 million
revolving credit facility due in 2012.

The company used proceeds from the bank loans to refinance
borrowings under the existing bank loan, to fully repay $630
million of its 10.5% senior notes and a portion of its 9.75%
senior notes, and for working capital and general corporate
purposes.

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

Ratings List:

   * Insight Midwest Holdings LLC

      -- Corporate Credit Rating, BB-/Stable/

Ratings Affirmed:

   * Insight Midwest Holdings LLC

      -- $2.45 Billion Bank Credit Facilities, BB-,
         Recovery Rating: 2


INTENATIONAL PAPER: Earns $1.05 Billion in Year Ended December 31
-----------------------------------------------------------------
International Paper Co. reported net earnings of $1.05 billion for
the year ended Dec. 31, 2006, compared with net earnings of
$1.10 billion for 2005.

Net sales for 2006 was $21.9 billion compared to net sales of
$21.7 billion for 2005.

At Dec. 31, 2006, the company's balance sheet showed total assets
of $24.03 billion, total liabilities of $16.07 billion and total
shareholders' equity of $7.96 billion.

                    Beverage Packaging Sale

In 2006, the company recorded a gain on sale of forestlands of
$4.78 billion, related to the sales of its Beverage Packaging
business to Carter Holt Harvey Limited for approximately
$500 million, subject to certain adjustments.  

The sale of Beverage Packaging subsequently closed on Jan. 31,
2007, with the sale of the remaining non-U.S. operations expected
to close later in the 2007 first quarter.

                       Lumber Mills Sale

Also during the fourth quarter, the Company entered into separate
agreements for the sale of 13 lumber mills for approximately
$325 million, expected to close in the first quarter of 2007, and
five wood products plants for approximately $237 million, expected
to close in the first half of 2007, both subject to various
adjustments at closing.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ad2

                   About International Paper Co.

Based in Stamford, Connecticut, International Paper Co. (NYSE:
IP) -- http://www.internationalpaper.com/-- is in the forest
products industry for more than 100 years.  The company is
currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the US, Europe, South America and Asia.  Its
South American operations include, among others, facilities in
Argentina, Brazil, Bolivia, and Venezuela.  These businesses are
complemented by an extensive North American merchant distribution
system.  International Paper is committed to environmental,
economic and social sustainability, and has a long-standing policy
of using no wood from endangered forests.

                           *     *     *

Moody's Investors Service assigned a Ba1 senior subordinate
rating and Ba2 Preferred Stock rating on International Paper Co.
on Dec. 5, 2005.


INTERNAL INTELLIGENCE: Hires Ingber Law Firm as Special Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey
authorized Internal Intelligence Service Inc. to employ Ingber Law
Firm, PLLC, as its special counsel.

The Ingber Law Firm will continue to represent the Debtor in
affirmative state court litigation against National Housing Group,
Inc., which is likely to generate a recover for the benefit of the
Debtor's creditors.  The firm had represented the Debtor in the
litigation through the hearing by a referee from Oct. 26, 2006, to
Nov. 2, 2006.

Specifically, the Ingber Law Firm will complete post-hearing
letter brief for delivery to the referee; and perform other legal
services related to the litigation as may be necessary and
appropriate.

The Debtor will pay the firm $305 per hour.  Additionally, the
Ingber Law Firm would expect to receive reimbursement of any
out-of-pocket costs and expenses, subject to further Court order.

Clifford J. Ingber, Esq., the principal of The Ingber Law Firm,
PLLC, assured the Court that his firm is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.

Newark, New Jersey-based Internal Intelligence Service Inc.
provides security and investigative services.  The Debtor filed
for Chapter 11 protection on Dec. 20, 2006 (Bankr. D. N.J.
Case No. 06-22824).  Jonathan I. Rabinowitz, Esq., at Booker,
Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster, P.C.,
represents the Debtor.  No Committee of Unsecured Creditors has
been appointed in the Debtor's case.  When the Debtor filed for
bankruptcy, it estimated its assets and debts at $1 million to
$100 million.


INTERNAL INTELLIGENCE: Hires Samuel Chuang as Special Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
permitted Internal Intelligence Service Inc. to employ The Law
Offices of Samuel Chuang, Esq., as its special tax counsel.

The firm, on the Debtor's behalf, was involved in negotiations
with the Internal Revenue Service respecting proposed treatment of
Debtor's alleged outstanding tax arrearages, and those
negotiations were concluded successfully, but not documented
before the bankruptcy filing.

The Debtor expects that with Samuel Chuang's help, the proposed
resolution with the IRS can be documented and approved soon.

The Debtor will pay the firm $350 per hour.  Additionally, the Law
Offices of Samuel Chuang, Esq., would expect to receive
reimbursement of any out-of-pocket costs and expenses.

Samuel Chuang, Esq., assured the Court that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Newark, New Jersey-based Internal Intelligence Service Inc.
provides security and investigative services.  The Debtor filed
for Chapter 11 protection on Dec. 20, 2006 (Bankr. D. N.J.
Case No. 06-22824)  Jonathan I. Rabinowitz, Esq., at Booker,
Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster, P.C.,
represents the Debtor.  No Committee of Unsecured Creditors has
been appointed in the Debtor's case.  When the Debtor filed for
bankruptcy, it estimated its assets and debts at $1 million to
$100 million.


K&F INDUSTRIES: Signs Merger Agreement with Meggitt-USA
-------------------------------------------------------
K&F Industries Holdings Inc. had entered into a definitive merger
agreement with Meggitt-USA Inc., the wholly owned subsidiary of
Meggitt PLC.  Under the merger agreement, Meggitt has agreed to
acquire K&F for $27 per share in cash.

The transaction has a total equity value of approximately
$1.1 billion on a fully-diluted basis.  Under the terms of the
merger agreement, which was unanimously approved by each company's
Board of Directors, Meggitt will also assume approximately
$700 million of K&F's debt.  Upon completion of the merger, K&F
will become a wholly-owned subsidiary of Meggitt.  The transaction
is expected to close in the second quarter of 2007, subject to
customary closing conditions.

The $27.00 per share in cash purchase price represents a premium
of approximately 10% over K&F's closing price on Monday, Mar. 5,
2007, the last trading day prior to [Tues]day's announcement, and
a premium of approximately 54% over K&F's $17.50 per share initial
public offering in August 2005.

"After thorough and extensive analysis, our Board of Directors
unanimously concluded that this transaction provides significant
cash value to our stockholders and is in the best interests of our
stockholders, customers and employees" Kenneth M. Schwartz,
president and CEO of K&F, said.  "I believe the successful track
record and complementary strengths of our two organizations will
offer a platform for future growth and expanded opportunities for
our employees.  I also believe that the transaction will be of
great benefit to our customers and our suppliers, as it will
enable an enhanced and broader range of products, even higher
service levels, more efficient procurement, manufacturing
efficiencies, enhanced global aftermarket support and larger
engineering resources, all of which will lead to even better
products through the combination of the two companies.  We look
forward to working with the Meggitt team to ensure a rapid and
seamless transition."

Under the merger agreement, K&F and its advisors are permitted and
intend to actively solicit alternative acquisition proposals from
third parties until Mar. 25, 2007, or until a later date in
certain limited circumstances if Meggitt PLC's shareholder meeting
is postponed.  After that date, K&F is not permitted to solicit
alternative acquisition proposals and may only respond to certain
unsolicited proposals prior to K&F stockholder approval.  If K&F's
Board accepts a superior proposal, the merger agreement would be
terminated and K&F would be obligated to pay a break-up fee and
reimburse Meggitt's transaction expenses up to an agreed amount.  
There can be no assurance of any alternative proposal.

Employees and others holding previously awarded stock options
will receive cash payments at closing equal to the sum of the
difference between the per-share option exercise prices of their
respective options and $27 for each share subject to an option.

Goldman, Sachs & Co. acted as financial advisor to K&F and Gibson,
Dunn & Crutcher LLP acted as legal advisor.  NM Rothschild & Sons
acted as financial advisor to Meggitt, Merrill Lynch International
acted as broker and Kaye Scholer LLP and Clifford Chance LLP acted
as legal advisors.

                       About K&F Industries

K & F Industries Holdings Inc. is the parent of K & F Industries,
which was acquired in November 2004 by an affiliate of Aurora
Capital Group in exchange for approximately $1.06 billion in cash
and a note for $14.7 million payable to the previous equity
holders of K & F Industries.  The acquisition was financed with
$795 million of debt and over $300 million of equity.


K&F INDUSTRIES: Meggitt-USA Offer Cues S&P's Positive CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' corporate credit rating, on K&F Industries Inc. on
CreditWatch with positive implications.  About $700 million
of debt is outstanding.

The CreditWatch placement follows the report by K&F Industries
Holdings Inc. that it will be acquired by Meggitt-USA Inc., a
wholly owned unit of United Kingdom-based Meggitt PLC, for about
$1.1 billion plus the assumption of $700 million of debt.

The transaction, to be financed by a combination of debt and
equity, is expected to close in the second quarter of 2007.

Standard & Poor's expects K&F Industries Inc.'s term loan of
approximately $400 million to be repaid, after which the rating
agency would withdraw the 'B+' bank loan and '3' recovery ratings.
The company's $315 million 7.75% subordinated notes due 2014 may
be tendered for or may remain outstanding.

"If the notes are redeemed, we will withdraw our 'B-' rating on
the notes and 'B+' corporate credit rating," said
Standard & Poor's credit analyst Roman Szuper.

If the notes remain outstanding, ratings will more likely be
raised or affirmed than lowered, as Meggitt PLC's credit quality
is believed to be somewhat higher than that of K&F.  

Alternatively, Standard & Poor's may withdraw its rating on
the notes.

White Plains, New York-based K&F is a leading supplier of braking
systems-wheels, steel and carbon brakes, and antiskid systems-to
the aerospace industry, focusing on short-haul, high-cycle
airplanes.  The firm is also the leader in the small global
commercial and military market for flexible bladder aircraft fuel
tanks.

Meggitt is a supplier of components and systems for commercial and
military aircraft.


KOMA EQUIPMENT: Case Summary & Five Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Koma Equipment Leasing Company, LLC
        8800 Glacier Highway, Suite 221
        Juneau, AK 99801

Bankruptcy Case No.: 07-00101

Debtor-affiliate filing separate chapter 11 petition:

      Entity                        Case No.
      ------                        --------
      Koma Sales Company, LLC       07-00103

Chapter 11 Petition Date: March 7, 2007

Court: District of Alaska (Juneau)

Debtor's Counsel: Brock M. Weidner, Esq.
                  P.O. Box 35152
                  Juneau, AK 99803
                  Tel: (907) 790-4434

                           Estimated Assets    Estimated Debts
                           ----------------    ---------------
   Koma Equipment          Less than $10,000   $1 Million to
   Leasing Company, LLC                        $100 Million

   Koma Sales              Less than $10,000   $100,000 to
   Company, LLC                                $1 Million

A. Koma Equipment Leasing Company, LLC's Four Largest Unsecured
   Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Alaska Pacific Bank                Bank Loan             $717,765
2094 Jordan Avenue
Juneau, AK 99801

Huna Totem Corporation                                   $388,000
9301 Glacier
Juneau, AK 99803
Tel: (907) 523-3670

Alaska Pacific Bank                                      $228,882
Advance Me Loan
2094 Jordan Avenue
Juneau, AK 99801

Key Equipment Leasing                                    $133,755
P.O. Box 203901
Houston, TX 77216-3901

B. Koma Sales Company, LLC's Largest Unsecured Creditor:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Huna Totem Corporation                                   $388,000
9301 Glacier
Juneau, AK 99803
Tel: (907) 523-3670


L-SOFT INT'L: Files for Bankruptcy to Resolve 5-Year Legal Dispute
------------------------------------------------------------------
L-Soft International, Inc., yesterday filed a voluntary petition
under Chapter 11 of the U.S. Bankruptcy Code with the United
States Bankruptcy Court for the District of Maryland.

The company discloses that it filed for bankruptcy in order to
help resolve a five-year legal dispute.

Normal business operations and customer service are expected to
continue.  The other companies in the L-Soft group have no plans
to file for Chapter 11 and will also continue to operate normally.

The 'fear of hospitals' phenomenon often keeps companies out of
Chapter 11 until it is too late. But the sooner you file, the more
likely you are to make a prompt and successful recovery.

"In 2002, two mid-sized law firms teamed up to take on a
contingency suit against L-Soft international, Inc.," said L-Soft
CEO and founder Eric Thomas.  "Believing the company to be much
larger than it really is, they thought that I would be in a
position to consider writing them a quick $10,106,045 settlement
check just months after 9/11.  Chapter 11 proceedings will provide
a court-supervised framework through which we can resolve this
conflict in a manner that is fair to both parties."

The dispute centers around a 1995 software distribution agreement.
With the exception of the significant expenses stemming from this
half-decade of litigation, L-Soft international's business
position is healthy and profitable, making it a good candidate for
Chapter 11 reorganization.

"Filing for Chapter 11 feels like finally hitting a forest track
after five years of machete-swinging in the jungle," added Mr.
Thomas.  "Not only does the going get easier, you now have a clear
sense of distance and direction."

"It is important to understand that Chapter 11 is the cure, not
the disease," said Mr. Thomas.  "The 'fear of hospitals'
phenomenon often keeps companies out of Chapter 11 until it is too
late. But the sooner you file, the more likely you are to make a
prompt and successful recovery."

At this point, L-Soft is not discussing the litigation itself
because the case is still pending.

L-Soft International, Inc. -- http://www.lsoft.com/--  offers  
E-mail list and opt-in E-mail marketing software and hosting
services for managing E-mail newsletters, discussion groups and
marketing campaigns.  The company's products serve more than
110 million list subscriptions.


L-SOFT INTERNATIONAL: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: L-Soft International, Inc.
        8100 Corporate Drive, Suite 350
        Landover, MD 20785-2231

Bankruptcy Case No.: 07-12173

Type of Business: The Debtor offers E-mail list and opt-in E-mail
                  marketing software and hosting services for
                  managing E-mail newsletters, discussion groups
                  and marketing campaigns.  The Debtor's products
                  serve more than 110 million list subscriptions.
                  See http://www.lsoft.com/

Chapter 11 Petition Date: March 8, 2007

Court: District of Maryland (Greenbelt)

Judge: Wendelin I. Lipp

Debtor's Counsel: James A. Vidmar, Jr., Esq.
                  Linowes and Blocher LLP
                  7200 Wisconsin Avenue, Suite 800
                  Bethesda, MD 20814-4842
                  Tel: (301) 961-5126
                  Fax: (301) 654-2801

Estimated Assets: $100,000 to $1 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Juan Pizzorno                      Pending Civil       $5,267,000
204 Rachel Carson Way              Action
Ithaca, NY 14850-8402

Hogan and Hartson                                        $538,343
Columbia Square
555 13th Street, Northwest
Washington, DC 20004

L-Soft Sweden AB                                         $235,000
Ostgotagatan 16 7tr
Stockholm, Sweden 116 25

StrongMail                                               $200,000
1300 Island Drive, Suite 200
Redwood Shores, CA 94065

TrialGraphics                                             $75,448
P.O. Box 019747
Miami, FL 33101-9747

Aronson & Company                                         $16,081

KPMG, LLP                                                 $13,096

Deloitte & Touche USA, LLP                                 $7,190

Denis Sibiski                      Vacation Accrual        $5,352

John Harlan                        Vacation Accrual        $4,940

Donna Nichols-Laster               Vacation Accrual        $4,921

Jani Kumpula                       Vacation Accrual        $4,766

Gregory Velichansky                Vacation Accrual        $4,738

Prashanthi Reddy                   Vacation Accrual        $4,624

CAN Insurance                                              $3,607

Timken Company                     Customer Overpayment    $3,325

Illinois State                     Customer Overpayment    $3,125
Department of Transportation

Liam Kelly                         Vacation Accrual        $2,804

Nelson Chen                        Vacation Accrual        $2,772

Pan American Health Org.           Customer Overpayment    $2,600


LABRANCHE & CO: Moody's Cuts Senior Debt Rating's to Ba3 from Ba2
-----------------------------------------------------------------
Moody's Investors Service lowered LaBranche & Co Inc.'s senior
unsecured debt rating to Ba3 from Ba2.  The rating outlook is
stable.

According to Moody's, the primary driver behind today's rating
action is the continuing deterioration in LaBranche's operating
performance and the resultant weakening of its credit metrics.  

In 2006, LaBranche generated $64 million in core operating EBITDA
-- a decline of almost 40% relative to 2005.  The decline has been
a result of low market volatility and the market's structural
changes, specifically - the proliferation of program trading, each
of which has reduced the number of profit-making opportunities for
LaBranche and the other NYSE specialists.  This has had a negative
effect on LaBranche's ability to maintain a credit profile
consistent with its prior rating level.  In 2006, financial
leverage relative to core EBITDA increased substantially to 7.7x,
while interest coverage narrowed to a modest 1.2x.

The rating agency noted that financial leverage is quite high even
for a Ba3 rating. However, the rating continues to be supported by
LaBranche's high quality,liquid balance sheet.  

Furthermore, the Ba3 rating reflects Moody's expectation that the
company will use its excess liquidity to lower its debt burden by
about $220 million in 2007, through repaying its maturing
obligations and calling the full outstanding amount of its
$200 million senior notes which become callable in May of 2007.
Assuming no significant further erosion of its core earnings, this
reduction in debt should lift LaBranche's credit metrics to levels
more consistent with its assigned rating.

In Moody's view, the operating outlook for LaBranche for 2007 and
beyond continues to be uncertain.  The specialist firm is taking
steps to adapt to the increasingly electronic-only platform of the
New York Stock Exchange by replacing floor specialists with
electronic algorithms.  These initiatives will reduce LaBranche's
costs and provide it with a channel for participation in the
Hybrid Market.

On the other hand, this transformation also presents significant
execution and technological challenges for LaBranche, which needs
to ensure that its algorithms capture profit opportunities, while
also properly carrying out the firm's specialist obligations.  
This task is made more difficult by the need to ensure that
LaBranche's electronic systems interface flawlessly with those of
the exchange, which is currently undergoing its own technological
transition to the Hybrid Market.

While the firm continues to be adversely affected by the
increasing scarcity of lucrative block trades -- a trend which is
likely to persist or intensify with the Hybrid Market - LaBranche
has sought to diversify and grow its earnings by expanding into
market-making for options and futures, and is now also the top
specialist in exchange-traded funds.  Moody's views this expansion
as a positive opportunity for LaBranche.

The stable outlook reflects Moody's expectation that LaBranche
will reduce its debt burden by $220 million in 2007.  Furthermore,
Moody's anticipates that the company will deploy a meaningful
portion of its excess liquidity toward calling some or all of its
$260 million notes in 2008.  As a result, Moody's expects that
LaBranche's credit metrics in 2008 will be more aligned with the
Ba3 rating.

What Could Change the Rating -- up

Substantially improved cross-cycle profitability, cash-flow
generation and reduced earnings volatility would exert upward
pressure on the rating.

What Could Change the Rating -- Down

If the company does not call the full amount of the $200 million
senior notes, which become callable in May of 2007, the rating
would likely go on review for downgrade. Deterioration in
operating cash flow or the lack of a meaningful reduction in debt
burden in 2008, resulting in credit metrics that are not
consistent with the Ba3 rating, would also put negative pressure
on the rating.

LaBranche & Co Inc. is a holding company whose LaBranche & Co. LLC
subsidiary is one of the oldest and largest specialist firms on
the New York Stock Exchange.  The company ranks as the NYSE's
#1 specialist by share volume traded and dollar volume traded.
LaBranche is also the parent of LaBranche Structured Holdings,
Inc., whose subsidiaries are specialists and market-makers in
options, exchange-traded funds and futures.  As of Dec. 30, 2006,
LaBranche reported total assets and common equity of $5.4 billion
and $875 million, respectively.


LEE TILFORD: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Lee N. Tilford
        10408 Del Montes
        Yuma, AZ 85364

Bankruptcy Case No.: 07-00096

Chapter 11 Petition Date: March 7, 2007

Court: District of Arizona (Yuma)

Debtor's Counsel: Robert M. Cook, Esq.
                  Missouri Commons, Suite 185
                  1440 East Missouri
                  Phoenix, AZ 85014
                  Tel: (602) 285-0288
                  Fax: (602) 285-0388

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

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


LIGAND PHARMA: Appoints Three Individuals to Board of Directors
---------------------------------------------------------------
Ligand Pharmaceuticals Incorporated appointed John L. Higgins,
David M. Knott, Elizabeth M. Greetham, and Todd C. Davis to its
board of directors.  Effective March 1, the above appointees will
replace:

   -- Irving S. Johnson, Ph.D., a director of Ligand since 1989,

   -- Carl C. Peck, M.D., a director since 1997,

   -- John Groom, a director since 1995,

   -- Daniel S. Loeb, a director since 2005, and

   -- Brigette Roberts, a director since 2005.

In addition, John W. Kozarich, Ph.D., a director since 2003,
was named Chairman of the Board, assuming the position previously
held by Henry F. Blissenbach, who will remain on the board.  Dr.
Kozarich is President and Chairman of ActivX Biosciences, a
subsidiary of Kyorin Pharmaceuticals, and is a professor of
biotechnology at Scripps Research Institute.

"We are pleased to have attracted accomplished industry
professionals with diverse backgrounds and expertise to our
Board, and I look forward to working with them.  The company will
also benefit from the leadership and experience of Dr. Kozarich in
his expanded role as our new Chairman," said John L. Higgins,
President and Chief Executive Officer.  "We believe the Board
is configured to represent the best interest of all of our
shareholders, and we look forward to gaining the new members'
insight as Ligand continues its transformation to a highly focused
R&D and royalty driven pharmaceutical company.  I would also like
to thank those resigning from the Board for their service and
contribution in advancing Ligand to this stage in its
development."

"Now that we have brought outstanding new management and
directors into Ligand, and have successfully repositioned the
company, it is no longer necessary for Third Point to have three
board representatives," stated Daniel Loeb, Chief Executive
Officer of Third Point.  "We will, however, continue to have one
Third Point representative on the Board, and are delighted that
David Knott, Ligand's largest institutional shareholder, is
joining us on the Ligand Board."

David M. Knott, 62, is Chief Investment Manager of Knott Partners
Management and Dorset Management, two related hedge fund entities.
He was previously with Mandrakos Associates. Prior to that, Mr.
Knott was a broker at Donaldson Lufkin & Jenrette (DLJ). He
received a B.A. in Political Science from the University of
ePennsylvania and an M.B.A. in Finance from the University of
Pennsylvania.

Elizabeth M. Greetham, 57, is Chief Executive Officer and
President of ACCL Financial Consultants. Prior to ACCL, Ms.
Greetham served as both CEO and CFO of DrugAbuse Sciences and
was a portfolio manager at Weiss, Peck & Greer.  Ms. Greetham
also serves as a member of the board of directors of publicly
traded King Pharmaceuticals, Inc. Ms. Greetham earned an M.A.
with Honors from the University of Edinburgh in Scotland.

Todd C. Davis, 46, is a Managing Director of Cowen & Company
and a principal and founder of Cowen Healthcare Royalty Partners.  
Previously, Mr. Davis was a partner at Paul Capital Partners,
Apax Partners and an operating executive for Elan Pharmaceuticals
and Abbott Laboratories.  Mr. Davis has served on the boards of
several public and private companies, including most recently
Verus Pharmaceuticals, Prism Pharmaceuticals, Prometheus
Laboratories and SkinMedica.  He holds a B.S. in mathematics
from the U.S. Naval Academy and an M.B.A. from Harvard Business
School.

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND)
-- http://www.ligand.com/-- discovers, develops and markets new   
drugs that address critical unmet medical needs of patients in the
areas of cancer, pain, skin diseases, men's and women's hormone-
related diseases, osteoporosis, metabolic disorders, and
cardiovascular and inflammatory diseases.  Ligand's proprietary
drug discovery and development programs are based on gene
transcription technology, primarily related to intracellular
receptors.

                          *     *     *

At Sept. 30, 2006, Ligand Pharmaceuticals Incorporated's balance
sheet showed stockholders' deficit of $251.1 million compared to a
$238.5 million stockholders' deficit at June 30, 2006.


LODGENET ENT: Acquisition Cues S&P's Stable Outlook
---------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on hotel
interactive-TV entertainment provider LodgeNet Entertainment Corp.
to stable from negative.

At the same time, Standard & Poor's assigned a 'B+' bank loan
rating, at the same level as the corporate credit rating, and a
recovery rating of '2', to the company's proposed $450 million
senior secured credit facility.  The recovery rating indicates
expectation of substantial recovery of principal in the event of a
payment default.  The facility consists of a $50 million revolving
credit facility, a $75 million initial-draw term loan B, and a
$325 million delayed-draw term loan.

"The outlook change is based on moderate improvement in the
company's business profile after it acquires competitor On Command
Corp., though it will have slightly higher debt leverage," said
Standard & Poor's credit analyst Tulip Lim.

The company will use proceeds of the initial-draw term loan to
repay existing indebtedness, and proceeds of the $325 million
delayed-draw term loan to acquire On Command.  The acquisition is
subject to clearance from the U.S. Department of Justice, but if
it is approved, the company expects it to close in the second or
third quarter of 2007.  Pro forma for the acquisition, the company
will have approximately $600 million in debt outstanding.

The ratings reflect LodgeNet's exposure to the cyclical and
seasonal lodging industry, our expectation that the company's
substantial capital spending will continue to limit its
discretionary cash flow, and the limited size and long-term growth
potential of this market niche.  LodgeNet's operating results are
subject to the discretionary nature of traveler purchases and the
unpredictable quality of movies, which generate a majority of room
revenue.

Partially offsetting these risks are the company's leading
position in this market niche, its good EBITDA margins, and the
relative stability that its long-term noncancelable hotel property
contracts provide.


M/I HOMES: Fitch Puts B+ Rating on $100MM Preferred Stock Issuance
------------------------------------------------------------------
Fitch Ratings assigned a 'B+' rating to M/I Homes, Inc.'s
approximately $100 million series A non-cumulative perpetual
preferred stock issuance.  The offering of 4 million depository
shares represent M/I Homes, Inc.'s series A perpetual preferred
stock, with a liquidation value of $25 per depository share.

The proceeds from the perpetual preferred stock offering will be
used to repay the debt outstanding under the company's revolving
credit facility.

Fitch allocated 100% equity credit to the new issuance given the
perpetual term of the preferred stock combined with the non-
cumulative dividend feature.  The preferred stock will not be
convertible into the company's common stock and will be redeemable
at the company's option at the liquidation value of the shares
five years after their issuance.  If the company chooses to
exercise such redemption rights, its intention is to only do so
with the proceeds from the issuance of equally equity-like or
more-equity like securities.  The preferred stock ranks junior to
the company's debt securities, but ranks senior to the common
stock.

According to Fitch's calculations, pro forma Dec. 31, 2006 debt to
capitalization was 42.7% and adjusted debt-to-adjusted total
capital at M/I Homes was 48%.

MHO began its homebuilding activities in 1976 and is one of the
nation's largest single-family homebuilders, operating in the
mid-western region in Ohio and Indiana and along the East Coast.
In 2005, Builder Magazine ranked the company as the 21st largest
U.S. single-family homebuilder.  The company sells to the
first-time, move-up, empty-nester, and luxury home buyer under the
M/I Homes, Showcase Homes and Shamrock Homes names.  MHO delivered
4,109 homes in 2006 with an average sales price of $313,089.  In
2006, corporate revenues totaled $1.36 billion and net income was
$38.88 million.

The company sells homes in 9 markets: Columbus and Cincinnati,
Ohio; Tampa, Orlando, Lake County and West Palm Beach, Florida;
Charlotte and Raleigh, North Carolina; Indianapolis, Indiana; and
the suburbs of Washington D.C.


M/I HOMES: Moody's Rates $100 Mil. Series A Preferred Stock at B2
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to M/I Homes'
planned $100 million Series A Preferred Stock, and assigned an LGD
assessment and rate of LGD 6, 94%.  The proceeds from the sale of
the Preferred Stock will be used to repay amounts outstanding
under the company's $650 million revolving credit facility.  

On Dec. 31, 2006 the outstanding amount under the revolving credit
facility was $410 million.  Moody's believes that the issuance of
the Preferred Stock will not have a significant impact on the
company's capital structure.  Moody's notes that the deal may be
smaller than $100 million in size.

Moody's notes that the B2 rating assignment to the Preferred Stock
reflects its deep subordination to the company's other debt.  The
following features reflect the subordinated nature of the
Preferred Stock.

No Maturity -- Moderate

The preferred stock is perpetual and callable with intent-based
replacement language, which says that, if called, the issuer
intends to replace the securities with the same or more
equity-like securities.  The preferred stock has a change of
control provision, which allows the security to be called if there
is a change of control and the issuer's rating drops below
pre-established break points; if not called, the coupon will step
up by a maximum of 100 bp.  All other senior creditors have
similar change of control protections as will be afforded by any
senior debt issued in the future.

No Ongoing Payments -- Moderate

There is optional deferral and any missed payments are entirely
forgiven.

Loss Absorption -- Strong

This is preferred stock.

Moody's believes that the issuance of the Preferred Stock will not
have a significant impact on the company's capital structure.

Headquartered in Columbus, Ohio and begun in 1976, M/I Homes, Inc.
sells homes under the trade names M/I Homes, Showcase Homes, and
Shamrock Homes, with homebuilding operations located in Columbus
and Cincinnati, Ohio; Indianapolis, Indiana; Tampa, Orlando, and
West Palm Beach, Florida; Charlotte and Raleigh, North Carolina;
Delaware; and the Virginia and Maryland suburbs of Washington,
D.C. Revenues and net income for the fiscal year ended
Dec. 31, 2006 were $1.36 billion and $39 million, respectively.


MAGNOLIA ENERGY: Wants Cash Collateral Access Extended to Mar. 23
-----------------------------------------------------------------
Magnolia Energy L.P. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission
to use the cash collateral securing repayment of its obligations
to a syndicate of commercial banks, through, ABN AMRO Bank N.V.
and Deutsche Bank Trust Company, through and including March 23,
2007.

In October 2001, the Debtors entered into a credit agreement
with ABN AMRO and Deutsche Bank that provides a maximum borrowing
of up to $405 million.  On Dec. 12, 2003, the parties amended and
restated the agreement, allowing maximum borrowings of up to
$362.3 million.  As of the Debtors' bankruptcy filing, the Debtors
have approximately $360 million outstanding under the agreement.

The Debtors will use the cash collateral to continue operations
and maintenance of their facility for the benefit of their
creditors and prepetition lenders.  

The Debtor's obligations are secured by a lien interest on
substantially all of its assets, including, deposit accounts
and cash equivalents; and contract rights.

Headquartered in Ashland, Michigan, Magnolia Energy L.P., and
three of its affiliates filed for chapter 11 protection on
Sept. 29, 2006 (Bankr. D. Del. Case Nos. 06-11069 through
06-11072).  Mark D. Collins, Esq., at Richards Layton & Finger,
represents the Debtors.  When the Debtors filed for protection
from their creditors, they listed estimated assets and debts of
more than $100 million.


MAGNOLIA ENERGY: Court Extends Plan-Filing Period to May 29
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended,
until May 29, 2007, the period within which Magnolia Energy L.P.
and its debtor-affiliates can exclusively file a chapter 11 plan
of reorganization.

As reported in the Troubled Company Reporter on Jan. 10, 2007, the
Debtors disclosed that they needed more time to formulate a plan
proposal as they have started discussing settlement with their
secured lenders who are owed $416 million.

Several banks had commented that the company had no operational
issues to work out in Chapter 11 and that a reorganization was
useless.

Headquartered in Ashland, Michigan, Magnolia Energy L.P., and
three of its affiliates filed for chapter 11 protection on
Sept. 29, 2006 (Bankr. D. Del. Case Nos. 06-11069 through
06-11072).  Mark D. Collins, Esq., at Richards Layton & Finger,
represents the Debtors.  When the Debtors filed for protection
from their creditors, they listed estimated assets and debts of
more than $100 million.


MESABA AVIATION: Walks Away from Metropolitan Airports Lease
------------------------------------------------------------
Mesaba Aviation Inc., dba Mesaba Airlines, obtained authority from
the U.S. Bankruptcy Court for the District of Minnesota to reject
its aircraft hangar facilities lease agreement with Metropolitan
Airports Commission Minneapolis-St. Paul, effective May 1, 2007,
or upon service of unequivocal written notice to Metropolitan
Airports before May 1.

As reported in the Troubled Company Reporter on Feb. 19, 2007,
Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman,
P.A., in Minneapolis, Minnesota, noted that pursuant to the
Metropolitan Lease, the Debtor agreed to lease an aircraft hangar
in Minneapolis for a period of approximately 25 years at base
rent cost of at least $1,328,686 plus annual utilities and
janitorial costs of approximately $240,000.  The Debtor currently
uses the MSP Hangar for aircraft maintenance and related parts
storage and administration.

The Debtor believes that retaining the MSP Hangar is no longer in
the best interests of the company or its estate, and all future
maintenance, storage and administrative requirements currently
performed at the MSP Hangar can, and should, be performed at the
Debtor's other hangar facilities, or other locations currently
possessed by or available to Mesaba, Mr. Tansey asserts.

Mr. Tansey said that to reduce the Debtor's Facilities costs
while ensuring that the Debtor's operations are not adversely
effected by the rejection of the Lease and vacation of the MSP
Hangar, Mesaba has determined that it requires an additional 4000
square feet of space located adjacent to its current location at
the Minneapolis/St. Paul airport.   In addition, the Debtor will
build out space already subleased by Mesaba at its PanAm training
facilities in the Spectrum Center and convert a vehicle storage
garage into work and break areas.  The New Facilities will
accommodate and house most of the MSP Hangar Operations other
than certain heavy maintenance which will be transferred to the
Debtor's Detroit and Wausau hangar facilities which are currently
underutilized.

Mr. Tansey told the Court that relocation to the New Facilities
requires Mesaba to incur a cash outlay of approximately $919,000
-- inclusive of a 15% contingency cost reserve -- in
construction, FFE/tech/relocation costs, redundancy, and capital
expenditures in the immediate future.  The Debtor will also be
obligated to pay rent of approximately $204,000 annually for a
portion of the New Facilities in addition to janitorial, CAM,
utility and related expenses.

Using an 18% discount rate, the approval of the rejection of the
Lease and the New Facilities, together with reduced rents at
Mesaba's Spectrum Center administrative offices, the Debtor
projects savings of $3,429,174 or 33% on all real estate lease
obligations over the next five years, and savings of $5,398,450
or 35% over the next 10 years of operations, Mr. Tansey noted.
The cash outlay of $919,000 is projected to be recovered within
one year of relocation.

In analyzing the financial benefits of rejecting the Lease, the
Debtor has assumed a maximum rejection claim pursuant to Section
502(b)(6) of the Bankruptcy Code, Mr. Tansey said.  However, the
Debtor believes that Metropolitan Airports is positioned to re-
let the MSP Hangar quickly and on favorable terms relative to the
Lease.  The Debtor is optimistic that any rejection claim of
Lessor will be significantly mitigated.

The Debtor believes it will need approximately 10 weeks to
prepare the New Facilities and completely transfer the MSP Hangar
Operations.  To avoid unnecessary May 2007 rent for the MSP
Hangar of approximately $130,000, the Debtor must vacate the MSP
Hangar on or before April 30, 2007.

                    About Mesaba Aviation

Headquartered in Eagan, Minn., 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.  

On Jan. 22, 2007, the Debtor filed a Plan of Reorganization and
subsequently filed a Disclosure Statement explaining that Plan on
Jan. 24, 2007.  On Feb. 27, 2007, the Debtor submitted an Amended
Plan and Disclosure Statement.  The Court approved the Amended
Disclosure Statement on Feb. 28, 2007.  The hearing to consider
confirmation of the Plan is scheduled on April 9, 2007.  (Mesaba
Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)  


MGM MIRAGE: Earns $648.26 Million in Year Ended December 31
-----------------------------------------------------------
MGM Mirage reported net income of $648.26 million on net revenues
of $7.17 billion for the year ended Dec. 31, 2006, versus a net
income of $443.25 million on net revenues of $6.12 billion for the
fiscal year ended Dec. 31, 2005.

Total expenses for the year 2006 increased to $5.67 billion from
$4.95 billion a year earlier.  The company posted operating income
of $1.75 billion and $1.33 billion for the years 2006 and 2005,
respectively.  

The company said that these factors and trends contributed to its
performance in 2006:

     -- the addition of Mandalay's resorts on April 25, 2005,
        which for the year ended Dec. 31, 2006, had net revenue
        from these operations of $2.7 billion and operating income
        of $657 million.  For the eight-month period that the
        company owned the Mandalay resorts in 2005, it had a net
        revenue for these operations of $1.8 billion and operating
        income of $426 million;

     -- the overall positive economic environment in the U.S.  
        since 2004, particularly in the leisure and business
        travel segments, resulted in increases in room pricing and
        increased visitation, particularly at the company's Las
        Vegas Strip resorts;

     -- the labor contract that covered employees at the company's
        Las Vegas Strip resorts since mid-2002, provided for
        annual wage and benefits increases through
        mid-2007;

     -- the company recorded $70 million of additional stock
        compensation expense in 2006 as a result of adopting
        Statement of Financial Accounting Standards 123(R).  Prior
        to Jan. 1, 2006, it did not recognize expense for employee
        stock options;

     -- the closure of Beau Rivage in August 2005 after Hurricane
        Katrina and subsequent reopening in August 2006, resulted
        to an operating income of $104 million, $40 million, and
        $60 million in 2006, 2005 and 2004, respectively.  The
        2006 operating income included income from insurance
        recoveries of $86 million; and

     -- with the closings of condominiums units of Towers 1 and 2,
        the company recognized income of about $102 million
        related to its share of the venture's profits and
        $15 million of deferred profit on land contributed to the
        venture for the year 2006.  These amounts are classified
        in "Income from unconsolidated affiliates" in the
        company's consolidated statements of income.

                 Liquidity and Capital Resources

The company's cash flow consisted of net cash provided by
operations were $1.24 billion and $1.18 billion for the years 2006
and 2005, respectively; net cash used in investing activities were
$1.65 billion and $5.3 billion for the years 2006 and 2005,
respectively; and net cash provided by financing activities were
$510.02 million and $4.06 billion for the years 2006 and 2005,
respectively.  Net increase in cash and cash equivalents for the
year ended Dec. 31, 2006, was $99.54 million, as compared with
$57.19 million net decrease in cash and cash equivalents for the
year ended Dec. 31, 2005.

The company's balance sheet as of Dec. 31, 2006, showed
$22.14 billion in total assets, $18.29 billion in total
liabilities, resulting to $3.84 billion in total stockholders'
equity.

The company's December 31 balance sheet showed strained liquidity
with $1.51 billion in total current assets and $1.64 billion in
total current liabilities.

As of Dec. 31, 2006, the company had outstanding letters of credit
totaling $59 million, of which $50 million support bonds issued by
the Economic Development Corporation of the City of Detroit.  
These bonds are recorded as a liability in its consolidated
balance sheets and were undertaken to secure the company right to
develop a permanent casino in Detroit.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ad8

                         About MGM Mirage

Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM)
-- http://www.mgmmirage.com/-- owns and operates 23 wholly owned  
casino resorts in Nevada, Mississippi and Michigan, and has
investments in three other properties in Nevada, New Jersey and
Illinois.  MGM Mirage has also announced plans to develop Project
CityCenter, a multi-billion dollar mixed-use urban development
project in the heart of Las Vegas, and has a 50% interest in MGM
Grand Macau, a hotel-casino resort currently under construction in
Macau S.A.R.

                           *     *     *

As reported in Troubled Company Reporter on Dec. 22, 2006,
Fitch assigned a rating of 'BB' to the 7.625% $750 million in
senior unsecured notes due 2017 offered by MGM Mirage.  Fitch
also affirmed the company's 'BB' Senior Credit Facility and Senior
Notes' Rating.


MOORE MEDICAL: Court Approves Eide Bailly as Accountant
-------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Oklahoma
gave Moore Medical Center LLC permission to employ Eide Bailly LLP
as its accountants.

The firm is expected to assist the Debtor in the preparation of
its medicare cost report for the year ended Sept. 30, 2006, and a
questionnaire relating to that report.

The firm tells the Court that it will charge the Debtor a flat fee
of $20,000, plus direct out-of-pocket expenses.

The firm's professionals billing rate are:

     Designation                      Hourly Rate
     -----------                      -----------
     Partners                            $250
     Senior Manager                      $225
     Other Professionals & Staff      $90 - $250  

The Debtor discloses that it paid the firm a $5,000 retainer.

Richard D. Wagner, CPA and a partner of the Eide Bailly, assures
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Moore, Oklahoma, Moore Medical Center LLC filed
its Chapter 11 protection on Oct. 28, 2006 (Bankr. W.D. OK. Case
No. 06-12867).  Joseph A. Friedman, Esq., at Kane Russell Coleman
& Logan P.C., represents the Debtor in its restructuring efforts.
Marcus A. Helt, Esq., at Gardere Wynne Sewell LLP represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it estimated assets and debts
of more than $100 million.


MOVIE GALLERY: Promotes Thomas Johnson to Chief Financial Officer
-----------------------------------------------------------------
Movie Gallery, Inc. disclosed on March 1, 2007, that it appointed
Thomas D. Johnson as Executive Vice President and Chief Financial
Officer, effective immediately.

Mr. Johnson has been serving as Movie Gallery's Interim CFO since
June 2006 in addition to fulfilling his responsibilities as Senior
Vice President - Corporate Finance and Business Development.

With this promotion, Mr. Johnson will oversee Movie Gallery's
finance department and will continue to manage the Company's
financial objectives and business development efforts.

"Thomas' strong finance background and extensive knowledge of
Movie Gallery's business make him the best candidate to serve as
our CFO," said Joe Malugen, Chairman, President and Chief
Executive Officer of Movie Gallery.  "He has been instrumental in
improving the Company's financial flexibility and positioning
Movie Gallery to deliver renewed growth and profitability for our
shareholders.  I appreciate the outstanding contributions Thomas
has made to our Company and it is my pleasure to congratulate him
on this well-deserved promotion."

Mr. Johnson, age 43, has nearly twenty years of finance and
business leadership experience.  He joined Movie Gallery in April
2004 from Russell Corporation where he led the company's investor
relations program.  Prior to Russell, Mr. Johnson directed
investor relations for Wolverine Tube, Inc., Blount International,
Inc. and KinderCare Learning Centers, Inc.  In addition to his
investor relations responsibilities, Mr. Johnson was the assistant
treasurer at Wolverine Tube and Director of Marketing and Director
of Financial Planning and Analysis at KinderCare.  Earlier in his
career Mr. Johnson spent four years as a securities analyst with
the Alabama Securities Commission.  He holds a MBA from the
University of Alabama and a B.S. degree in Business Administration
from Auburn University at Montgomery.

                      About Movie Gallery

Based in Dothan, Alabama, Movie Gallery, Inc. (Nasdaq: MOVI) --
http://www.moviegallery.com/-- is a video rental company with   
over 4,600 stores located in all 50 U.S. states and Canada
operating under the brands Movie Gallery, Hollywood Video and Game
Crazy.  The Game Crazy brand represents 643 in-store departments
and 17 free-standing stores serving the game market in urban
locations across the Untied States.  Since Movie Gallery's initial
public offering in August 1994, the company has grown from 97
stores to its present size through acquisitions and new store
openings.

                        *     *     *

As reported in the Troubled Company Reporter on Feb. 22, 2007,
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating, on Gallery Inc. to 'B-' from 'CCC+'.  
The outlook is stable.

As reported in the Troubled Company Reporter on Feb. 21, 2007,
Moody's Investors Service confirmed the corporate family rating of
Movie Gallery Inc. at Caa1 and changed the rating outlook to
positive.


MOVIE GALLERY: Acquires MovieBeam for $10 Million
-------------------------------------------------
Movie Gallery, Inc. has acquired video-on-demand service MovieBeam
for $10 million, Ben Fritz of the Daily Variety reports.

Mr. Fritz relates that Movie Gallery said that expects to spend
less than $10 million in initial acquisition costs and development
expenses in 2007.

"Our acquisition of MovieBeam is the first phase of our long-term
strategic plan to provide digital content to consumers," Mr. Fritz
reports quoting Movie Gallery chairman and CEO, Joe Malugen.

Mr. Fritz relates that MovieBeam was developed by Walt Disney
Company and first launched in 2003 but shut down in 2005.  Disney
incurred write-downs totaling $56 million.

It was re-launched in winter 2006 as an independent company with
Disney and other investors putting in $48.5 million.

                      About Movie Gallery

Based in Dothan, Alabama, Movie Gallery, Inc. (Nasdaq: MOVI) --
http://www.moviegallery.com/-- is a video rental company with   
over 4,600 stores located in all 50 U.S. states and Canada
operating under the brands Movie Gallery, Hollywood Video and Game
Crazy.  The Game Crazy brand represents 643 in-store departments
and 17 free-standing stores serving the game market in urban
locations across the Untied States.  Since Movie Gallery's initial
public offering in August 1994, the company has grown from 97
stores to its present size through acquisitions and new store
openings.

                        *     *     *

As reported in the Troubled Company Reporter on Feb. 22, 2007,
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating, on Gallery Inc. to 'B-' from 'CCC+'.  
The outlook is stable.

As reported in the Troubled Company Reporter on Feb. 21, 2007,
Moody's Investors Service confirmed the corporate family rating of
Movie Gallery Inc. at Caa1 and changed the rating outlook to
positive.


MULBERRY STREET: Fitch Holds BB Rating on $7 Million Class C Notes
------------------------------------------------------------------
Fitch affirms eight classes of notes issued by Mulberry Street CDO
II, Ltd.  These affirmations are the result of Fitch's review
process and are effective immediately:

   -- $195,000,000 class A-1LA notes at 'AAA';
   -- $41,500,000 class A-1LB notes at 'AAA';
   -- $30,000,000 class A-1U notes at 'AAA';
   -- $283,000,000 class A-1W notes at 'AAA';
   -- $73,500,000 class A-2 notes at 'AA';
   -- $4,000,000 class B-F notes at 'BBB';
   -- $38,000,000 class B-V notes at 'BBB'; and
   -- $7,000,000 class C notes at 'BB'.

Mulberry Street II is a collateralized debt obligation managed by
Clinton Group, Inc.  The notes were issued in June 2003 and are
supported by a diversified portfolio of residential
mortgage-backed securities, commercial mortgage-backed securities
and asset-backed securities.

Since the last rating action in March 2006, the portfolio has
exhibited stable performance.  As of January 2007 trustee report
the Fitch weighted average rating factor has increased slightly to
12.2 from 11.2, but remains below its trigger level of 16.  All of
overcollateralization (OC) and interest coverage rations continue
to meet their corresponding covenants.  Assets rated lower than
'BBB-' represented approximately 1.8% of the portfolio balance.

The ratings of the class A-1LA, class A-1LB, class A-1U, class
A-1W and class A-2 notes address the likelihood that investors
will receive full and timely payments of interest, as per the
governing documents, as well as the stated balance of principal by
the legal final maturity date.  The ratings of the class B-F,
class B-V and class C notes address the likelihood that investors
will receive ultimate interest payments, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date.


NOWAUTO GROUP: Posts Net Loss of $633,785 in Quarter Ended Dec. 31
------------------------------------------------------------------
NowAuto Group Inc. reported revenue of $2,230,859 and a net loss
of $633,785 for the quarter ended Dec. 31, 2006, versus revenue of
$1,150,179 and a net loss of $872,583 in the same period last
year.

During the quarter ended Dec. 31, 2006, gross profit more than
doubled to $662,450 and gross margin increased to 29.7%, up from
25.5%.

For the six months ended Dec. 31, 2006, the company reported
revenue of $3,950,629 and a net loss of $387,411, versus revenue
of $5,121,078 and a net loss of $433,556 for the six months ended
Dec. 31, 2005.  Gross profit increased 1.7% over the six months
ended Dec. 31, 2005, while gross margin increased to 37.5%, up
from 28.5%.

The company implemented its stringent underwriting criteria in
December 2006 and believes that while revenue will likely be
reduced due to fewer eligible customers, the contracts that result
should be stronger and less likely to result in charge offs in
future quarters.

During the quarter ended Dec. 31, 2006, the company charged off
approximately $580,700 to bad debt expense.  The larger than
normal charge off was the primary reason for the loss for the
quarter ended Dec. 31, 2006.  The reasons for the larger than
normal charge offs were (i) tighter collection policies that
result in early repossession; and (ii) more stringent underwriting
criteria whereby customers that previously would have been re-
contracted were not allowed to redeem their vehicles.

"We believe we have our focus on the proper place, focusing on
selling quality vehicles with more stringent, but not restrictive,
underwriting requirements.  Increasing the size of our finance
contract portfolio while maintaining proper underwriting and
maintenance policies is paramount to our stability and growth,"
said Scott Miller, Chief Executive Officer.

"While there is always room for improvement, the company has made
great strides in the past year.  Our portfolio is stronger and we
are entering the new season from a better position than ever
before.  I am looking forward to a positive outcome at the end of
the fiscal year," stated Faith Forbis, Chief Financial Officer.

The company expects to announce the location of its fifth buy-
here-pay-here store by the end of the quarter ended March 31,
2007.  The new store is expected to be similar in size and scope
as the company's existing stores.

At Dec. 31, 2006, the company's balance sheet showed $7.5 million
in total assets, $5.5 million in total liabilities, and $2 million
in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ae0

                        Going Concern Doubt

Moore & Associates Chartered, in Las Vegas, Nevada, expressed
substantial doubt about the company's ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended June 30, 2006, and 2005.  The
auditing firm pointed to the company's recurring losses.

                        About NowAuto Group

NowAuto Group Inc. (OTC BB: NAUG.OB) -- http://www.nowauto.com/--  
operates four buy-here-pay-here used vehicle dealerships in
Arizona.  The company manages all of its installment finance
contracts and purchases installment finance contracts from a
select number of other independent used vehicle dealerships.  
Through its subsidiary, NavicomGPS Inc. the company markets GPS
tracking devices, primarily to independent used vehicle
dealerships.


NATIONSLINK FUNDING: Fitch Holds Junk Rating on $31.1 Mil. Certs.
-----------------------------------------------------------------
Fitch Ratings affirms NationsLink Funding Corp.'s commercial
mortgage pass-through certificates, series 1998-1:

   -- $33.1 million class A-3 at 'AAA';
   -- Interest-only class X-1 at 'AAA';
   -- Interest-only class X-2 at 'AAA';
   -- $53.6 million class B at 'AAA';
   -- $56.1 million class C at 'AAA';
   -- $48.5 million class D at 'AAA';
   -- $51.0 million class F at 'BBB';
   -- $10.2 million class G at 'B+'; and
   -- $25.5 million class H remains at 'CC/DR4'.

The $5.6 million class J remains 'C/DR6'.  Fitch does not rate
class E.  The non-rated class K had been reduced to zero as a
result of losses.  Class A-1 and A-2 paid in full.

Although actual credit enhancement has increased, affirmations are
warranted due to increasing loan concentration and significant
expected losses.  As of the February 2007 distribution date, the
pool's aggregate certificate balance has been reduced 69.7% to
$309.2 million from $1.02 billion at issuance.  To date, the trust
has realized $30.9 million in losses.

Two assets (9.8%) are currently in special servicing.  The largest
specially serviced asset (8.9%) is a hotel located in Kissimmee,
FL and is currently real estate owned (REO).  The property is
listed for sale and the special servicer is currently negotiating
a contract with a proposed purchaser.  Upon liquidation,
significant losses are expected to deplete class J and
significantly impact class H.

The second largest specially serviced loan (0.9%) is a retail
property located in Greencastle, Indiana.  The loan transferred to
the special servicer due to delinquent payments as a result of
cash flow issues.  The special servicer has filed for foreclosure.
A minimal loss is expected.


NATIONWIDE HEALTH: Earns $185.6 Million in Year Ended December 31
-----------------------------------------------------------------
Nationwide Health Properties Inc. reported net income of
$185.6 million on total revenues of $261.7 million for the year
ended Dec. 31, 2006, compared with net income of $69.9 million on
total revenues of $196 million a year ago.

Income from continuing operations for 2006 was $75.5 million, a
37.3% increase from income from continuing operations of
$55 million in 2005.

Triple-net lease rental income increased $53 million, or 29%, in
2006 as compared to 2005.  The increase was primarily due to
rental income from 84 facilities acquired in 2006, 64 facilities
acquired during 2005 and rent increases totaling $4 million.
Medical office building rent was generated by the medical office
buildings which was acquired through the company's joint venture
with the Broe Companies during the first quarter of 2006.  

Interest and other income increased $3 million, or 29%, over 2005.
The increase was primarily due to five loans funded during 2006,
two loans funded during 2005 and a lease assumption fee included
in other income, partially offset by loan repayments.

Total expenses increased $45.6 million, or 32.4%, to
$186.6 million in 2006, from $141 million in 2005.  This was
primarily due to increases in interest and amortization of
deferred financing costs, increases in depreciation and
amortization expenses, medical office building operating expenses
of $6.1 million, versus zero in 2005, partly offset by a
$8.6 million loss on extinguishment of debt in 2005.

Interest and amortization of deferred financing costs increased
$23 million, or 34%, in 2006 as compared to 2005.  The increase
was primarily due to increased borrowings to fund acquisitions in
2005 and 2006, including the issuance of $350 million of notes in
July 2006, an increase in the interest rates on the company's  
floating rate debt, the assumption of $134.5 million of secured
debt during 2006 and $70.5 million during 2005 and obtaining a
loan on the medical office building portfolio for $32 million,
partially offset by interest savings from the prepayment of
$41.8 million of secured debt during 2006 and the extinguishment
of $131.8 million of notes in August 2005.  

Depreciation and amortization increased $24 million, or 47%, over
2005.  The increase was primarily due to the acquisition of 84
facilities in 2006 and 64 facilities during 2005, as well as the
amortization of lease related intangible assets in the medical
office building joint venture.  

Medical office building operating expenses relate to the
operations of the medical office building portfolio that was
acquired during the first quarter of 2006.  The medical office
buildings are not triple-net leased like the rest of the company's
portfolio.  

Discontinued operations income increased $95.8 million versus
2005.  Discontinued operations income of $110.1 million for the
year ended Dec. 31, 2006, was comprised of gains on sale of
facilities of $96.8 million, rent revenue of $16.9 million, and
interest and other income of $23,000, partially offset by
depreciation of $3.5 million, asset impairment charges of $83,000
and general and administrative expenses of $79,000.  

The difference in the composition of discontinued operations
income (excluding the gains and impairments) was primarily caused
by the fact that income from facilities sold during 2005 and 2006
is included in discontinued operations in 2005 while only income
from facilities sold in 2006 is included in discontinued
operations in 2006.   

At Dec. 31, 2006, the company's balance sheet showed
$2.704 billion in total assets, $1.459 billion in total
liabilities, $1.3 million in minority interest, and $1.243 billion
in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ae2

                  Liquidity and Capital Resources

Cash provided by operating activities increased $22.5 million, or
15%, in 2006 as compared to 2005.  This was primarily due to
revenue increases from company owned facilities and mortgage loans
as a result of acquisitions and funding of mortgage loans during
2006 and 2005, offset in part by increased interest and general
and administrative expenses.

Net cash used in investing activities increased to $658.3 million
in 2006, compared to net cash used in investing activities of
$144.1 million in 2005, primarily due to acquisition during 2006
of 64 assisted and independent living facilities and 20 skilled
nursing facilities.

Net cash provided by financing activities was $487.6 million in
2006, compared to net cash used in financing activities of
$7.2 million in 2005.  

                      About Nationwide Health

Headquartered in Newport Beach, California, Nationwide Health
Properties Inc. -- http://www.nhp-reit.com-- is a real estate    
investment trust that invests in senior housing and long-term care
facilities.  The Company has investments in 487 facilities in 42
states.

                          *     *     *

Nationwide Health Properties Inc. carries Moody's Investors
Service's 'Ba1' Cumulative Preferred and 'Ba1' Non-cumulative
Preferred ratings.


NEW CENTURY: Ceases Accepting Loan Requests, Looks for Add'l Funds
------------------------------------------------------------------
As a result of its current constrained funding capacity, New
Century Financial Corporation has elected to cease accepting loan
applications from prospective borrowers effective immediately
while the company seeks to obtain additional funding capacity.  
The company expects to resume accepting applications as soon as
practicable, however, there can be no assurance that the company
will be able to resume accepting applications.

One of the company's lenders has extended to the company
$265 million in financing secured by the company's REIT mortgage
loan portfolio and certain residual assets.  The net proceeds from
the financing will be used to refinance or satisfy some of the
company's existing obligations.

The lender has also provided financing to the company to refinance
the remaining balance of approximately $710 million in mortgage
loans currently financed through another lending facility.  The
refinancing was undertaken in response to that lender's notice to
the company exercising its rights to effect a repurchase by the
company of the loans and other assets it had financed for the
company.

The company is also in discussions with lenders and other third
parties regarding a refinancing and other alternatives to obtain
additional liquidity.  No assurance can be given that any of these
discussions will be successful, the company said.

The company has not yet obtained waivers of the net income
covenant from its remaining five financing arrangements since
filing the Form 12b-25 on March 2, 2007.  In addition, the company
has received an aggregate of approximately $150 million of margin
calls, approximately $80 million of which has been satisfied.  The
company has approximately $70 million in outstanding margin calls
from five lenders.

The company has only been able to fund a portion of its loans this
week.  In addition, its capacity to fund new originations is
substantially limited due to its lenders' restrictions or refusals
to allow the company to access their financing arrangements.  

The company has been in frequent discussions with its lenders to
identify ways to address their concerns in order to allow a
greater funding volume in the near term.  However, the company
said, there can be no assurance that these efforts will succeed.

           David Einhorn Resigns from Board of Directors

Effective 7:00 p.m. Eastern Standard Time on Wednesday, March 7,
2007, David Einhorn resigned from New Century's Board of
Directors.

Mr. Einhorn was initially appointed as a director of the company,
effective March 31, 2006, pursuant to the agreement dated
March 14, 2006, between the company, on the one hand, and Mr.
Einhorn and the stockholder group led by Greenlight Capital Inc.,
on the other hand.

Upon Mr. Einhorn's resignation from the company's Board of
Directors, pursuant to the terms of the Greenlight Agreement,
certain "standstill" obligations of the Greenlight Parties
expired.  

                   Delayed Annual Report Filing

As reported in the Troubled Company Reporter on Mar. 7, 2007,
New Century obtained written waivers from various lenders with
respect to the delay in the filing of its financial statements.

The lenders have agreed to give the company until March 15, 2007,
to file its Annual Report on Form 10-K for the year ended Dec. 31,
2006.

The company delayed its Annual Report citing its need to restate
consolidated financial results for the quarters ended March 31,
June 30 and September 30, 2006.

The company said that if it were unable to file the required
financial statements by the March 15 deadline, it would ask for
additional written waivers from its various lenders.

The company also disclosed that 11 of its 16 financing
arrangements require it to report at least $1 of net income for
any rolling two-quarter period.  The company expects that it will
not meet the requirement for the two-quarter period ended Dec. 31,
2006.
  
The company further disclosed that six of the 11 lenders have
executed waivers.  Certain of the waivers however, the company
said, will become effective when the company receives similar
waivers from each of the other lenders having the rolling two-
quarter net income covenant.

In addition, the company said it is also seeking amendments to its
financing arrangements to modify the rolling two-quarter net
income covenant for the remainder of 2007.  Although there can be
no assurance that the company will receive the amendments and
waivers from all of its lenders, the company said it is in active
dialogue with those lenders and has made progress in this regard.

                  KPMG Warns Going Concern Doubt

In the event the company is unable to obtain satisfactory
amendments to or waivers of the covenants in its financing
arrangements from a sufficient number of its lenders, or obtain
alternative funding sources, KPMG informed the Audit Committee
that its report on the company's financial statements will include
an explanatory paragraph indicating that substantial doubt exists
as to the company's ability to continue as a going concern.

                        About New Century

Founded in 1995 and headquartered in Irvine, California, New
Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/
-- is a real estate investment trust, providing mortgage products
to borrowers nationwide through its operating subsidiaries, New
Century Mortgage Corporation and Home123 Corporation.  The company
offers a broad range of mortgage products designed to meet the
needs of all borrowers.


NEW CENTURY: Uncertainties in Funding Cues Fitch's Negative Watch
-----------------------------------------------------------------
Fitch Ratings downgrades New Century Mortgage Corporation's, a
subsidiary of New Century Financial Corp. (NEW), residential
primary servicer rating for subprime product to 'RPS4' from
'RPS3+', and places the rating on Watch Negative.

The rating action reflects uncertainties over NEW's ability to
maintain adequate funding and remain viable over the near term.
The company has stated that if it is unable to obtain satisfactory
amendments to or waivers of the covenants in its financing
arrangements from a sufficient number of its lenders, or obtain
alternative funding sources, NEW's independent auditors will
include an explanatory paragraph indicating that substantial doubt
exists as to the company's ability to continue as a going concern.

Doubts over NEW's access to funding arose due to the company's
inability to timely file its financial statements.  The delay was
caused by the company's need to restate its 2006 interim financing
statements to correct errors the company discovered in its
accounting and financial reporting of loan repurchases as well as
issues pertaining to the Company's valuation of residual interests
in securitizations.  Additionally, a criminal inquiry of NEW was
launched under federal securities laws in connection with trading
in the Company's securities.

Fitch does not rate the credit and financial strength of NEW.
However, a company's financial condition is an important component
of Fitch's servicer rating analysis.  The servicer rating action
reflects Fitch's concern that NCMC will face difficulty, funding
its servicing operation, and maintaining servicing quality, as a
result of the accounting issues facing NEW.

An 'RPS4' rated servicer may not be acceptable for new residential
mortgage-backed security transactions unless additional support or
structural features are incorporated.  The Rating Watch Negative
indicates that further downgrades are possible, depending upon the
stability of the servicer's portfolio and financial condition and
the company's ability to obtain satisfactory amendments to or
waivers of the covenants in its financing arrangements from a
sufficient number of its lenders, or obtain alternative funding.
Fitch will continue to monitor NEW's financial condition and its
impact on loan servicing and operational capabilities.

Fitch has 33 RMBS transactions that are either serviced or master
serviced by NCMC.  The servicer rating downgrade will not have a
direct immediate impact on the ratings of the NCMC serviced
transactions.  All transactions at least one year old have had
rating actions within the last twelve months, with no downgrades
assigned during that time.  Fitch will continue to closely monitor
the performance of the NCMC serviced transactions.


NEW RIVER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: New River Boat Club, Inc.
        dba New River Marina
        3001 State Road 84
        Fort Lauderdale, FL 33312

Bankruptcy Case No.: 07-11531

Chapter 11 Petition Date: March 7, 2007

Court: Southern District of Florida (Fort Lauderdale)

Judge: John K. Olson

Debtor's Counsel: James H. Fierberg, Esq.
                  James H. Fierberg, P.A.
                  200 South Biscayne Boulevard, Suite 1000
                  Miami, FL 33131
                  Tel: (305) 755-9500
                  Fax: (305) 714-4340

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                              Claim Amount
   ------                              ------------
James Wickman                            $1,000,000
916 West Tropical Drive
Plantation, FL 33317

Richard Thompson                         $1,000,000
P.O. Box 621
New Monmouth, NJ 07748

William R. Rollins                       $1,000,000
18320 Mandrian Point Drive
Cornellus, NC 28031

Chris Bailey Tree Lodge                    $625,000
350 Casey's Gap Road
Banner Elk, NC 28604

William Engle                              $371,035
16405 D North Cross Drive
Huntersville, NC 28078

M2 Lease Funds LLC                         $141,558

New River Boating Center                   $134,985

Jeff Gordon                                $131,252

Scott L. Bieber                            $131,252

Brian Naylor Trust                         $113,571

Robert S. Wickman                          $109,601

Mary M. Wickman                            $109,501

Internal Revenue Service                    $97,218

John T. Wickman                             $94,484

Richard Pudsey                              $93,908

Florida Department of Revenue               $92,500

WF Bus Payment Processing                   $75,380

Leons Allan                                 $60,000

Broward County Revenue Collector            $55,350

Gold Coast                                  $51,776


OHIO CASUALTY: Moody's Places Ba2 Rating on Preferred Stock
-----------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to the
recently filed unlimited shelf registration of Ohio Casualty
Corporation.  Future draws under the shelf are expected to be used
for general corporate purposes.  At the same time, Moody's has
withdrawn the ratings on a previous $500 million shelf filed in
May 2003, which has now been replaced by this new shelf.  The
outlook for Ohio Casualty's ratings is positive.

According to Moody's, the Baa3 senior unsecured debt rating on
OCAS and the A3 insurance financial strength ratings on its
operating subsidiaries reflect its established regional presence
in U.S. property and casualty insurance, particularly in niche
markets for contractors; good risk-adjusted capitalization due to
solid reserve strength and historically modest exposure to peak
natural catastrophe perils; lower debt leverage compared to
similarly-rated peers; and ample provisions for liquidity.  

These credit strengths are tempered by a relatively high expense
structure, which makes it difficult for the company to compete
with larger competitors on price alone, weaker product strength in
its personal lines offerings, potential exposure to litigiousness
in the construction industry, and persistently unprofitable
workers' compensation business.

The positive rating outlook recognizes the significant progress
made in restoring and sustaining profitability over the past
several years.

Moody's noted that these factors could lead to an upgrade of
OCAS's ratings:

   -- overall combined ratio in the mid 90s or better;

   -- a stable or declining statutory expense ratio; and

   -- sustained adjusted financial leverage below 20%, including
      debt equivalents for any under funded pension plans and
      operating leases.

The rating agency added that these factors could return OCAS's
rating outlook to stable:

   -- pricing for new or renewal business falls below loss costs
      or new business pricing deviates widely from renewal
      pricing;

   -- emergence of unfavorable legal trends relating to the
      construction industry;

   -- gross underwriting leverage above 4x; and

   -- adjusted financial leverage in excess of 25%.

Moody's last rating action on OCAS took place on May 26, 2006,
when the outlook was changed to positive from stable.

Moody's has assigned these provisional ratings to Ohio Casualty's
shelf registration with a positive outlook:

   * Ohio Casualty Corporation

      -- provisional senior unsecured debt at Baa3, provisional
         subordinated debt at Ba1, provisional preferred stock at     
         Ba2;

   * Ohio Casualty Capital Trust I

      -- provisional preferred securities at Ba1; and

   * Ohio Casualty Capital Trust II

      -- provisional preferred securities at Ba1.

Ohio Casualty Corporation, based in Fairfield, Ohio, is engaged
through its subsidiaries in property and casualty insurance,
including personal, commercial and specialty commercial lines.  
For 2006, OCAS reported net income of $218 million.  As of
Dec. 31, 2006, OCAS had shareholders' equity of approximately
$1.6 billion and statutory surplus at its operating subsidiaries
of approximately $1.1 billion.


OUR LADY OF MERCY: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Our Lady of Mercy Medical Center
        600 East 233rd Street
        Bronx, NY 10466

Bankruptcy Case No.: 07-10609

Debtor-affiliate filing separate chapter 11 petition:

      Entity                             Case No.
      ------                             --------
      O.L.M. Parking Corporation         07-10610

Type of Business: The Debtors provides health care services in the
                  Bronx area, New York.  The medical center is a
                  member of the Montefiore Health System and is a
                  University affiliate of New York Medical
                  College.  See http://www.olmhs.org/

Chapter 11 Petition Date: March 8, 2007

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Debtors' Counsel: Frank A. Oswald, Esq.
                  Togut, Segal & Segal LLP
                  One Penn Plaza
                  New York, NY 10119
                  Tel: (212) 594-5000

                         Estimated Assets    Estimated Debts
                         ----------------    ---------------
     Our Lady of Mercy   More than           More than
     Medical Center      $100 Million        $100 Million

     O.L.M. Parking      $1 Million to       $1 Million to
     Corporation         $100 Million        $100 Million

Consolidated List of the Debtors' 30 Largest Unsecured Creditors:

   Entity                         Nature of Claim    Claim Amount
   ------                         ---------------    ------------
Combined Coordinating             Insurance            $4,430,000
Council, Inc.
c/o David Ezekiel
c/o Terrence L. Kelleher
CCC Insurance Company, Ltd.
Chevron House, 3rd Floor 11
Church Street Hamilton HM 11
Bermuda
Tel: (212) 643-8100 Ext. 15
Fax: (212) 643-8116

Archdiocesan Pension Plan         Employee Benefits    $2,935,980
c/o Art Montegari
30-30 Northern Boulevard
Long Island City, NY 11101
Tel: (212) 371-1000 Ext. 3045
Fax: (212) 935-1025

McKesson General Medical Corp.    Trade                $1,872,157
c/o Andrea Lewis
One Fitzgerald Avenue
Cranbury, NJ 08512
Tel: (866) 430-9891 Ext. 430
Fax: (609) 655-0861

Siemans Health Services Corp.     Trade                $1,420,932
c/o Andrea Lewis
900 Broken Sound Parkway
Boca Raton, FL 33487
Tel: (866) 430-9891 Ext. 87803
Fax: (212) 695-5578

New York Medical College          Affiliation/           $921,167
Affiliation+B38                   Settlement
c/o Karl Adler, M.D.
Administration Building
Cashier's Office
Valhalla, NY 10595
Tel: (914) 594-4600
Fax: (914) 594-4145

AmerisourceBergen Drug Corp.      Trade                  $913,200
c/o Debra Gray
100 Friars Boulevard
Thorofare, NJ 08086
Tel: (800) 562-2526 Ext. 4254
Fax: (856) 384-2194

CIGNA                             Benefits               $736,575
c/o David Giannoni
Accounts Manager
612 Wheeler Farm Road, 2nd Floor
Milford, CT 06461
Tel: (203) 876-4820
Fax: (203) 876-4840

Aramark Healthcare                Trade                  $322,112
Support Services
c/o Ray Cottrell
1057 Solutions Center
Chicago, IL 60677
Tel: (212) 241-6963
Fax: (212) 831-8797

Con Edison                        Utility                $299,932
c/o Jim Roonery
4 Irving Place, 9th Floor
New York, NY 10003
Tel: (212) 780-6761
Fax: (718) 246-3202

National Outpatient               Trade                  $254,893
Resources LLC
Simon Lichtenstein
Tel: (718) 438-1223
Fax: (718) 438-1753

New York Blood                                           $181,198

Beckman Coulter, Inc.             Trade                  $162,059

Metro Blood Service               Trade                  $160,476

Cardinal Health                   Trade                  $123,643

Network Information Services      Trade                  $123,050

Ocean Side Institutional          Trade                  $114,246
Industries, Inc.

Corporate Express Inc.            Trade                  $103,811

Quest Diagnostics                 Lab                     $95,071

Health/ROI                        Trade                   $94,170

Kronos                            Trade                   $91,269

Cananwill, Inc.                   Insurance               $90,173

Boston Scientific Corp.           Trade                   $85,228

Dade Behring                      Trade                   $83,591

KPMG Consulting                   Trade                   $81,330

Medline Industries                Trade                   $77,622

Zimmer, Inc.                      Trade                   $72,149

VHA, Inc.                         Consultant              $72,145

Global Computer Supplies          Trade                   $64,106

Steris Corporation                Trade                   $64,075

Standard Register                 Trade                   $61,348


PACIFIC LUMBER: May Continue Using Cash Collateral Until March 16
-----------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
Texas has authorized Pacific Lumber and its debtor-affiliates to
continue using cash collateral through and including March 16,
2007.

The Debtors have not filed a revised budget with the Court as of
March 5, 2007.

As reported in the Troubled Company Reporter on Feb. 1, 2007, the
Court gave the Debtors authority to use the cash collateral until
Feb. 9, 2007.  

As reported in the Troubled Company Reporter on Feb. 9, 2007,
the Court granted, on an interim basis, Pacific Lumber and its
debtor affiliates, to continue using cash collateral through and
including Feb. 23, 2007, pursuant to a budget that is acceptable
to the Lenders.  The Court also authorized Debtors to use Cash
Collateral to the extent reasonably necessary to pay expenses
incurred to preserve their assets from sudden and catastrophic
loss and to preserve life and property in the event of any fire,
environment incident or other extraordinary event.

The Court orders the Debtors to provide the Lenders and the
Official Committee of Unsecured Creditors, on a weekly basis, a
reconciliation showing actual receipts and actual disbursements
as compared to the Budget, including a reconciliation of accounts
receivable, logger liens, and inventory.

The California State Agencies reserve the right to request copies
of the reporting requirements.

Subject to the Change of Venue Motions, the Court retains
jurisdiction for purposes of enforcing the liens, claims,
security interests and other protections granted to the Lenders
in the Cash Collateral Order.

The Court will convene a hearing on March 13, 2007, to consider
the Debtors' continued use of cash collateral.

Headquartered in Oakland, California, The Pacific Lumber Company
-- http://www.palco.com/-- and its subsidiaries operate in     
several principal areas of the forest products industry,
including the growing and harvesting of redwood and Douglas-fir
timber, the milling of logs into lumber and the manufacture of
lumber into a variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transactions pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel.  Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel.  Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel.  John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.  
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.  The Debtors' exclusive period to file a chapter
11 plan expires on May 18, 2007. (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 7, http://bankrupt.com/newsstand/or  
215/945-7000).


PACIFIC LUMBER: Scotia Pacific Opposes Transfer of Venue
--------------------------------------------------------
Scotia Pacific Lumber LLC asks the United States Bankruptcy Court
for the Southern District of Texas, Corpus Christi Division, to
deny all motions for the transfer of venue in Pacific Lumber
Company and its debtor-affiliates' bankruptcy cases.

The California Resources Agency and five other California State
Agencies asked the Court to transfer the venue of Debtors' cases
to the United States Bankruptcy Court for the Northern District of
California, citing that Debtors manufactured venue through the
formation of Scotia Development LLC as a limited liability company
in Corpus Christi, Texas, and that based on a review of pleadings
filed in the Debtors' cases, Scotia Development has no significant
business activity or purpose.  

The City of Rio Dell in California, to whom Pacific Lumber owes  
$38,000 for prepetition fees and expenses relating to the
annexation of PALCO by Rio Dell, cited that they "have no way of
meaningfully participating in (PALCO's) bankruptcy process if it
remains in Texas."   

The Official Committee of Unsecured Creditors asked the Court to
transfer venue of the Debtors' cases to the U.S. Bankruptcy Court
for the Northern District of California, in the interest of
justice, for the convenience of the parties-in-interest and for
the efficient and economic administration of the Debtors' estate.

LaSalle Bank National Association and LaSalle Business Credit LLC
asserted that the Debtors' cases are properly filed in the
Southern District of Texas, albeit in the wrong division.  LaSalle
cited that the appropriate motion should have been an
intradistrict transfer of the cases to the Houston division of the
Southern District of Texas, as there are significant contacts with
Texas, but in Houston, not Corpus Christi.  

In the Pacific Lumber Company bankruptcy cases, LaSalle and
Marathon Structured Finance Fund LP, are the largest creditors
that financed PALCO's cash collateral use in the bankruptcy
proceedings.  Along with their primary counsel, LaSalle is
located in Chicago, Illinois, and Marathon is located in New
York.
         
The People of the State of California, by and through the
Humboldt County District Attorney's Office, also sought the
Court's permission to join in the California State Agencies'
Motion to Transfer Venue, arguing that the Debtors' actions in
manufacturing venue constitute bad faith and blatant forum
shopping.  

Humboldt County District Attorney Paul V. Gallegos, Esq., related
that the California Parties and the Debtors are parties to an
appeal currently pending before the Court of Appeal of the State
of California, First Appellate District.  

The Appeal arose out of the California Parties' lawsuit against
the Debtors seeking civil penalties and restitution for alleged
misrepresentation of crucial facts in an adjudicative
administrative procedure governed by the California Environmental
Quality Act, as a result of which Debtors were permitted to log
timber at a greater rate than they would otherwise have been
allowed.

                         Debtors' Arguments

Scotia Pacific Company LLC asserts that the Venue Transfer
Motions are unfounded and are based on:

   (a) a misapprehension of the location of Scopac's principal
       place of business; and

   (b) a misplaced focus on the location of Scopac's primary
       assets to the exclusion of all other facts.

John F. Higgins, Esq., at Porter & Hedges LLP, in Houston Texas,
on Scopac's behalf, maintains that the Texas Court was not chosen
to prejudice any creditor or to avoid any particular forum,
contrary to the allegations of the Venue Transfer Movants.

Section 1408 of the Judicial and Judiciary Code states that the
venue of a Chapter 11 case is proper when the case is commenced
in the district in which the debtor is domiciled or maintains its
principal place of business.

Scopac could have properly filed its bankruptcy case, Mr. Higgins
notes, in:

   1. the District of Delaware -- Scopac's domicile,

   2. the Southern District of Texas -- Scopac's principal place
      of business, or

   3. the Northern District of California -- location of Scopac's
      principal assets.

However, after considering each of the alternatives, Scopac
elected to file in the Southern District of Texas, Mr. Higgins
states.

Mr. Higgins contends that venue is proper in the Southern
District of Texas because it is the location of (i) Scopac's
principal place of business, (ii) Scotia Development LLC's
domicile and principal place of business, and (iii) the Board of
Directors of Scopac.

While Scopac's day-to-day operations are handled in California,
the true "nerve center" of its business -- Scopac's Board -- is
located in the Southern District of Texas, Mr. Higgins tells
the Court.  The Scopac Board members, J. Kent Friedman, Jack
M. Webb and Sid C. Weiss, all reside in Texas, Mr. Higgins
relates.

Moreover, Scotia Development has a legitimate business purpose, a
legitimate business existence, and an economic interest -- all
directly related to the Southern District of Texas, Mr. Higgins
maintains.  Scotia Development was created to explore and
facilitate development opportunities with respect to commercial,
industrial and residential properties, particularly in Corpus
Christi, Texas, which boasts some of the least expensive
developable ocean and beachfront property in the coastal United
States and is currently growing at an impressive rate, Mr.
Higgins notes.

The Southern District of Texas is the "most important,
consequential, or influential" place where Scopac conducts its
business, Mr. Higgins maintains.  Therefore, venue is proper in
that district pursuant to Section 1408 of the Judiciary and
Judicial Code.  

The Pacific Lumber Company and its debtor affiliates also assert
that the Southern District of Texas is the proper venue for their
bankruptcy cases because their principal place of business is
within the Texas Court's jurisdiction.

Representing the PALCO Debtors, Shelly A. Jordan, Esq., at
Jordan, Hyden, Womble, Culbreth, & Holzer P.C., in Corpus
Christi, Texas, argues that the Court should deny the Venue
Transfer Motions in light of these facts:

   (a) The California State Agencies have practically no actual
       claims.

   (b) The Official Committee of Unsecured Creditors is
       controlled by entities without any business relationship
       with the Debtors but only active litigation against the
       Debtors, and cannot be representative of the creditors
       holding real claims.

   (c) The U.S. Trustee has to date deferred to appoint "real"
       creditors with a "real" interest in the financial
       reorganization of the Debtors.

"Because these Movants do not represent the interests of
unsecured creditors (or the reorganization process), the Court
should provide little weight to the Movants' misplaced
arguments," Ms. Jordan asserts.

PALCO asserts that the fundamental decisions regarding
reorganization will be made by the Boards of Directors and Boards
of Managers for the Debtors -- and the center of activity of
these Boards is the Southern District of Texas.  With respect to
the creditors, the Debtors' cases are national in scope and the
large bulk of the number of creditors, and the overwhelming
dollar amount of claims, are located outside of California, PALCO
insists.

While there were many proper venues, Ms. Jordan argues, the
choice of the Southern District of Texas was the most appropriate
due to:

   -- it being home to Scotia Development;

   -- its location relative to all of the PALCO Debtors'
      creditors and proximity to the location of most of the
      members of the Debtors' Boards of Managers and Directors;

   -- its proximity to the ultimate equity owner's location;

   -- the economic efficiency with which the case may proceed in
      the venue; and

   -- the venue's ability to meet the overarching goal of the
      companies' successful financial rehabilitation and
      avoidance of liquidation.

The Venue Transfer Movants have the burden of proof to
demonstrate by a preponderance of evidence that the case should
be transferred.  The Debtors' choice of forum is to be accorded
substantial weight and deference, Ms. Jordan says.

         66 Creditors Back PALCO's Stand On Venue Transfer

About 66 trade creditors have signed in their support, as joining
parties, to the Debtors' response and opposition to the Venue
Transfer Motions, Nathaniel Peter Holzer, Esq., at Jordan, Hyden,
Womble, Culbreth & Holzer P.C., in Corpus Christi, Texas,
notifies the Court.

The Joining Parties, most of whom are prepetition unsecured
creditors, are owed by the Debtors $2,171,181 in the aggregate.  
The Joining Parties include John A. Campbell, owed $400,000,
Redcoast Forestry of Redding, owed $217,672, and SHN Consulting
Engineers & Geologists, which is owed $193,791.

A list of all 66 Joining Parties is available for free at:

                http://researcharchives.com/t/s?1ad5

                     Committee Opposes Joinder

The Creditors Committee complains that the Joinders were not
filed by the supposed Joining Parties themselves, but by the
Debtors as part of their concerted effort to undercut the
Committee's stance on the matter.

Accordingly, the Committee asks the Court to strike the purported
Joinders for these reasons:

   (a) The Debtors withheld the Joinders for a full two weeks and
       did not file them until after the deadline on
       Feb. 23, 2007.  Yet, the Joinder were executed almost two   
       weeks earlier, on Feb. 12 and 13;

   (b) The Joinders fail to make clear in several instances the
       names and capacities of the persons signing them, or
       whether or not they were authorized to do so;

   (c) The Joinders were signed in large part by unserved parties
       who never saw the Committee's Venue Transfer Motion, and
       before the Debtors' responses and oppositions were even
       prepared; and

   (d) The Debtors are attempting to use the Joinders to prove
       that the creditors actually disapprove a transfer of
       venue to the California Court, without presenting any
       witnesses at trial for cross-examination.

                        PALCO Talks Back

The Creditors Committee is made up of four members.  However,
only three Committee members hold only contingent, unliquidated
litigation claims against the Debtors, Ms. Jordan notes.  None of
the three Committee members ever had a financial or business
transaction with the Debtors.  Their only involvement has been to
sue the Debtors to stop their timber harvesting operations.

Also, only one Committee member is a trade creditor with a
liquidated claim, Ms. Jordan adds.

Thus, the Debtors sought to add to the Committee additional
unsecured creditors holding non-contingent, liquidated claims.  
The United States Trustee, however, denied the request, and
refused to heed the call of several unsecured creditors seeking
to be added to the Committee, according to Ms. Jordan.  The U.S.
Trustee said it would consider the request only after the Venue
Transfer Motions are ruled upon.

With no alternative recourse, the Debtors and the 66 unsecured
creditors sought immediate Court action by obtaining the Joinders
in opposition to the Venue Transfer Motions, Ms. Jordan tells
Judge Schmidt.

Ms. Jordan argues that the 66 creditors are indisputably among
the real parties-in-interest, who should be consulted and
represented by the Committee, because they:

   (a) are actually interested in the Debtors' financial
       reorganization, and are not engaged in litigation seeking
       to stop the Debtors' operations; and

   (b) hold over $2,000,000 in undisputed, non-contingent
       liquidated general unsecured claims who should be
       consulted and represented by the Committee.

The Motion to Strike the Joinders reveals the Committee's desire
to deprive the 66 unsecured creditors of their right to appear
and have a voice in the Chapter 11 cases, Ms. Jordan contends.

"It is apparent that the Committee has made no effort or attempt
to contact any of these unsecured creditors before seeking to
strike their signed Joinders, likely because if any real
creditors' opinions differ from the litigant-controlled Committee
on venue, the Committee does not want their voice heard," Ms.
Jordan says.

Furthermore, the Motion to Strike does not even attempt to state
any emergency justifying the gross deprivation of the 66
creditors' due process right to notice and hearing, Ms. Jordan
adds.

Accordingly, the Debtors ask the Court to deny the Motion to
Strike the Joinders.

                More Entities Support Venue Transfer

1. Noteholder Committee

The Ad Hoc Committee of Timber Noteholders asserts that Scopac's
case rightfully belongs in the Northern District of California in
view of its unique and unbreakable connections to the California
regulators and communities.

John P. Melko, Esq., at Gardere Wynne Sewell LLP, in Houston,
Texas, emphasizes that Scopac's principal place of business is,
and always has been, in California:

   -- Every previous assertion that Scopac has made from the time
      it was formed until just before it filed its Venue Transfer
      Objection, insisted that its principal place of business
      was in Scotia, California.

   -- Scopac was still referring to Scotia, California, as the
      location of its "headquarters" and its "Principal Executive
      Offices" even after it commenced its bankruptcy case.

   -- The Form 8-K that Scopac filed with the Securities and
      Exchange Commission on Jan. 22, 2007, in which it
      publicly disclosed its Chapter 11 filing, identifies Scotia
      as its principal place of business.

   -- The affidavit of Gary L. Clark, the Debtors' chief
      financial officer, in support of the First Day Motions,
      categorically states that Scotia is where Scopac is
      headquartered, and does not even refer to any Scopac
      executive, operational, timber management, or any other
      management functions being performed in Texas.

   -- Each voluntary petition filed with the Court declared that
      each Debtor's "street address," "mailing address," "county
      of residence," or "principal place of business" is in
      California, without even mentioning Texas other than as the
      place of filing of petitions and location of the signing
      counsel.

   -- The preamble to the Indenture pursuant to which the Timber
      Notes were issued states that Scopac's principal office is
      in California.

   -- Scopac's Venue Transfer Objection admits, "Scopac's day-to-
      day operations are handled in California."

Thus, Scopac is estopped from asserting that its principal place
of business is anywhere other than in California, Mr. Melko
avers.

Moreover, Scopac cannot be located anywhere but in Scotia and the
surrounding Humboldt County "because it is literally rooted in
the land there," Mr. Melko says.

2. U.S. Agencies

The US Fish and Wildlife Service and the National Marine
Fisheries Service are jointly responsible for overseeing
compliance with the Endangered Species Act of 1973.  Accordingly,
the U.S. Agencies issue permits to cover any incidental take of
ESQ-protected species that may result from the Debtors' logging-
related activities in California.

The Debtors have liability to FWS and NMFS for mitigation
measures and violation penalties under the Habitat Conservation
Plan and under the permits.

In light of this, the United States Government assumed an
interest in the Debtors' cases as a regulator as well as a
creditor to the Debtors.

The liability for mitigation measures is partially secured by a
$2,412,715 Certificate of Deposit issued by Bank of America.  
Depending on developments in the bankruptcy cases, the cost of
Debtors' liability for mitigation measures may substantially
exceed this amount, the U.S. Agencies note.

The U.S. Agencies agree with the U.S. Trustee that the Debtors'
should be transferred to the Northern District of California in
the interest of justice and for the convenience of the parties.

"These cases have everything to do with California and almost
nothing to do with Texas," Alan S. Tenenbaum, Esq., at
Environment & Natural Resources Division, in Washington, D.C.,
says.

Accordingly, the U.S. Government, on behalf of FWS and NMFS, asks
the Court to transfer the Debtors' cases to the Northern District
of California.

                Scotia Development Office not Found

Times-Standard reported that a Ralph McFarland checked out the
place Scotia Development supposedly rents in Corpus Christi,
Texas, after reading about the alleged office in the newspaper.

Mr. McFarland related to Times Standard that a front desk
personnel pointed him to an unmarked door but couldn't confirm if
the space was being used.

The Times-Standard tried to reach the landlord, as well as Scotia
Development's Corpus Christi number, but both phone calls have
not been returned.

Headquartered in Oakland, California, The Pacific Lumber Company
-- http://www.palco.com/-- and its subsidiaries operate in     
several principal areas of the forest products industry,
including the growing and harvesting of redwood and Douglas-fir
timber, the milling of logs into lumber and the manufacture of
lumber into a variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transactions pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel.  Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel.  Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel.  John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.  
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.  The Debtors' exclusive period to file a chapter
11 plan expires on May 18, 2007.  (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 7, http://bankrupt.com/newsstand/or     
215/945-7000).


PACIFIC LUMBER: Scotia Pacific Seeks Release of SAR Funds
---------------------------------------------------------
Scotia Pacific Company LLC asks the United States Bankruptcy Court
for the Southern District of Texas, Corpus Christi Division, to:

   (a) direct the Indenture Trustee to release funds in the
       Scheduled Amortization Reserve Account to it pursuant to
       Section 543 of the Bankruptcy Code on an "as needed
       basis," up to $10,000,000, without further Court order; or

   (b) authorize it to use Cash Collateral, including the funds         
       in the SAR Account, up to $10,000,000, pursuant to a
       final order, as long as the Indenture Trustee and all
       entities asserting a lien or interest in the Scopac's
       assets are adequately protected;

   (c) authorize it to use Cash Collateral on a further interim
       basis to allow it sufficient time to obtain a DIP
       postpetition.

As reported in the Troubled Company Reporter on Feb. 28, 2007, the
United States Bankruptcy Court for the Southern District of
Texas, Corpus Christi Division, gave Scotia Pacific Company LLC,
authority, until March 9, 2007, to:

   (a) use cash collateral in which Bank of America National Trust      
       and Savings Association and Bank of New York Trust each
       possess an interest, including funds in the SAR Account;
       and

   (b) provide adequate protection to both banks to the
       extent of any diminution in the value of their interests
       in the Prepetition Collateral.

The Official Committee of Unsecured Creditors asked Judge Richard
S. Schmidt to deny approval of the proposed third Interim Order,
pointing out that:

   (a) the proposed Interim Order does not contemplate
       Scopac sharing budget and other information with the
       Committee in the same fashion as it is to be shared with
       other interested parties; and

   (b) there is no reason why Scopac should pay the Indenture
       Trustee's fees and expenses pending the Court's
       determination that the bondholders are oversecured

As reported in the Troubled Company Reporter on Feb. 14, 2007, the
Committee of Timber Noteholders opposed Scopac's use of cash
collateral because Scopac had not satisfied any of the conditions
of the second interim order.

                   Scopac Argues for SAR Release

Kathryn A. Coleman, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that on Feb. 20, 2007, Scopac, through its
counsel, requested the turnover of funds in the SAR Account based
on the terms of an Indenture dated July 20, 1998, and the
Bankruptcy Code, or in the alternative, consent to use funds in
the SAR Account as cash collateral.

The SAR Account, which consists of cash and cash equivalents, was
established in November 1999 by The Pacific Lumber Company's
contribution to Scopac of $169,000,000 of funds resulting from
the sale of certain timberlands.  The SAR Account is collateral
for the Timber Notes, which Scopac issued pursuant to the July
1998 Indenture.

As of Jan. 18, 2007, approximately $42,400,000 in cash and
cash equivalents was deposited in the SAR Account.

The Indenture Trustee, however, denied Scopac's requests on the
ground that the Indenture is subject to several reasonable
interpretations, and suggested that Scopac seek an order from the
Court.

Ms. Coleman asserts that Scopac is entitled to the turnover of
the funds for these reasons:

   -- The funds held in the SAR Account are property of Scopac's
      bankruptcy estate.  At most, the Indenture Trustee can
      claim a lien on the funds in the SAR Account;

   -- The terms of the Indenture entitle Scopac to receive the
      entire amount of the funds in the SAR Account free and
      clear of liens; and

   -- The Indenture Trustee, as custodian of the funds, is
      required to turn over the funds to Scopac's estate pursuant
      to Section 543 of the Bankruptcy Code, and the Indenture
      Trustee is not entitled to adequate protection.

The Indenture accelerates the Timber Notes on Scopac's bankruptcy
or insolvency, Ms. Coleman adds.  "Moreover, to the extent the
SAR Account exists to support the payment of principal, it is
rational to allow its turnover once a chapter 11 bankruptcy is
filed, given that the commencement of the case puts on hold any
principal or interest payments required by prepetition financing
agreements, and allows such principal to be paid only in the
context of a confirmed plan of reorganization."

The Trust Indenture Act does not prevent release of the SAR
account, Ms. Coleman contends.  The Trust Indenture Act provides
that the obligor of a qualified indenture must provide to the
indenture trustee a certificate or opinion as to the fair value of
collateral that is to be released and that its release will not
impair the security.  Where the anticipated release of collateral
concerns less than 10% of the outstanding amounts due under the
indenture, a certificate as to the fair value of the released
collateral can be made by an officer of the obligor.

At present, approximately $714,000,000 remains outstanding under
the notes.  Thus, under the TIA, Scopac can receive a release of
up to $70,000,000 of collateral based on a certificate or opinion
of a Scopac officer.  At present, Scopac does not anticipate the
aggregate amount of any draw upon the SAR Account, which is also
pledged as collateral under the Indenture, would exceed the
$70,000,000 cap, Ms. Coleman says.

Scopac asserts that the Indenture Trustee and all other parties
asserting a lien or security interest on its property, including
the SAR Account, will be adequately protected based on these
facts:

   1. Scopac's cash forecasts and budgets demonstrate that it
      will be cash positive over the course of the year.

   2. The increase over time in value of the Scopac Timber is
      sufficient to compensate the Indenture Trustee for any
      diminution in the value of its interest in its collateral,
      valued as of the Petition Date, as a result of the use of
      that cash collateral.

Without access to the funds in the SAR Account, or in this case
postpetition financing, Scopac faces the real possibility of
losing valuable employees and a shutdown of operations, Ms.
Coleman emphasizes.

                   Noteholder Committee Responds

John P. Melko, Esq., at Gardere Wynne Sewell, LLP, in Houston,
Texas, argues that in violation of Rule 408 of the Federal Rules
of Evidence, Scopac filed the Supplemental Cash Collateral Motion
and accompanying exhibits, all of which contain confidential,
inadmissible evidence of settlement negotiations.

Thus, the Ad Hoc Committee of Timber Noteholders asks the Court
to strike Scopac's Supplemental Cash Collateral Motion from the
record.

Rule 408 "explicitly excludes evidence of all conduct occurring
and statements made during settlement negotiations," Mr. Melko
states.

In direct contravention of Rule 408, the Supplemental Motion not
only specifically references communications made in compromise
negotiations, but also includes communications as attachments to
the Motion, Mr. Melko points out.  Scopac disclosed certain
communications as alleged evidence that "Scopac's efforts (to
reach a settlement with all parties) have been stymied by and Ad
Hoc Committee of Noteholders."

According to Mr. Melko, the Supplemental Motion also threatens a
priming DIP Financing if the Noteholder Committee does not
knuckle under.

The Noteholder Committee proposes to cut through all of the false
alarm emergencies and files to the Court a proposal for DIP
Financing.

Mr. Melko relates that the Noteholder Committee's DIP Financing
Proposal does not seek to prime Bank of America, only the Timber
Noteholders.  The DIP Financing Proposal does not include any
commitment fees, administrative fees, unused balance fees, or
early termination fees.  The interest rate on the DIP Financing
Proposal is precisely 0%.

A full-text copy of the DIP Financing Proposal, presented in the
form of an order, is available for free at:

                http://researcharchives.com/t/s?1ad7

The Financing Proposal has not been previously presented to
Scopac, the Noteholder Committee says, for the simple reason that
Scopac has demonstrated a callous disregard for Rule 408.  The
Noteholder Committee relates that it cannot trust Scopac to
maintain the confidentiality of settlement proposals.

The Noteholder Committee reserves the right to modify the DIP
Financing Proposal.

Headquartered in Oakland, California, The Pacific Lumber Company
-- http://www.palco.com/-- and its subsidiaries operate in     
several principal areas of the forest products industry,
including the growing and harvesting of redwood and Douglas-fir
timber, the milling of logs into lumber and the manufacture of
lumber into a variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transactions pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel.  Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel.  Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel.  John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.  
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.  The Debtors' exclusive period to file a chapter
11 plan expires on May 18, 2007.  (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 7, http://bankrupt.com/newsstand/or  
215/945-7000).


PEABODY ENERGY: Moody's Cuts Rating on $675MM Junior Debt to Ba3
----------------------------------------------------------------
Moody's Investors Service reported that, after the adoption of
final guidelines for preferred stock and hybrid securities
notching, it downgraded Peabody Energy Corporation's hybrid
instrument to Ba3.  This instrument had been placed on review for
downgrade.  This completes the review for possible downgrade.

Downgrades:

   * Peabody Energy Corporation

      -- $675 million convertible junior subordinated debentures,
         to Ba3 from Ba2, LGD6, 95%

Peabody Energy Corporation, headquartered in St. Louis, Missouri,
is the world's largest private-sector coal company with 2006
revenues of $5.3 billion.


PERINI CORP: Earns $41.5 Million in Year Ended December 31
----------------------------------------------------------
Perini Corp. reported results for the year ended Dec. 31, 2006,
including net income was $41.5 million for the year ended Dec. 31,
2006, as compared with net income of $4 million in 2005.

Net income for the year ended Dec. 31, 2006 was reduced by a
$9.9 million after-tax charge, as a result of stock-based
compensation expense from restricted stock unit awards granted in
2006.

Revenues from construction operations were a record $3 billion for
the year ended Dec. 31, 2006, compared to revenues of $1.7 billion
for the year ended Dec. 31, 2005.  The increase in revenues is due
primarily to the addition of Rudolph and Sletten, and to an
increased volume of work in the building segment's hospitality and
gaming market as a result of the significant new contract awards
received in the latter half of 2005.

For the fourth quarter of 2006, net income was $19.3 million, as
compared to fourth quarter net loss of $13.9 million in 2005.  
Revenues from construction operations were $944.3 million for the
fourth quarter of 2006, compared to revenues of $603.2 million
reported for the fourth quarter of 2005.  The fourth quarter of
2006 results were reduced by a $2.4 million after-tax charge, as a
result of stock-based compensation expense from restricted stock
unit awards granted in 2006.

Robert Band, president and chief operating officer, stated, "We
are pleased to report a record pretax profit for 2006, led by our
building and our management services segments. Our strong backlog
of $7.9 billion entering 2006 converted to revenue as expected
during the year.  

"In addition, we have added new work to our backlog during 2006 at
a faster pace than our revenue burn-off, resulting in an increased
backlog of $8.5 billion at Dec. 31, 2006.  Given the visibility
provided from this backlog, we look forward to what we anticipate
will be a record year in 2007 for revenues and earnings per
share."

The Company's financial condition strengthened during the year
ended Dec. 31, 2006, with working capital increased to
$194 million from $153.3 million at Dec. 31, 2005.

The Company improved its solid base of shareholders' equity to
$243.9 million at Dec. 31, 2006, reflecting the outstanding
operating results achieved over the past five years.  

The Company expects to close in the next few days on a new
$125 million credit facility that can be expanded to $175 million
in the future.  The Company believes its strong financial position
and credit arrangements are more than sufficient to support the
Company's substantial backlog.
                     
                        About Perini Corp.

Headquartered in Framingham, Mass., Perini Corp. (NYSE:PCR) --
http://www.perini.com/-- is a general contractor and construction  
design company that operates three segments, Building, Civil, and
Management Services.  

                           *     *     *

Perini Corp. carries Standard & Poor's BB- Long-term Foreign and
Local Issuer Credit Ratings.


PHILOSOPHY ACQUISITION: Moody's Holds B2 Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service downgraded Philosophy Inc. and BioTech
Research Laboratories, Inc.'s, as joint and several obligors,
$260 million in first lien senior secured bank credit facilities
to B2 from B1.  

Moody's also affirmed the B2 corporate family rating for the
borrowers' ultimate parent holding company -- Philosophy
Acquisition Company, Inc.  Philosophy Acquisition Company, Inc. is
the parent company of Philosophy, Inc. and BioTech Research
Laboratories, Inc., headquartered in Phoenix, Arizona.  

Moody's notes that while there has been no fundamental
deterioration in Philosophy's overall credit profile, the
downgrade of the credit facility to B2 reflects the change in the
company's capital structure which results in a higher proportion
of first lien debt.  In accordance with Moody's Loss Given Default
Methodology, a B2 rating for the first lien facilities is
appropriate.  The company's downsized $25 million second lien
senior secured term loan being entered into by Philosophy Inc. and
BioTech will remain unrated.

Proceeds from the credit facilities combined with new cash equity
from The Carlyle Group will be used to fund Carlyle's acquisition
of a majority stake and controlling interest in the company.  The
ratings outlook is stable.  Final ratings are subject to review of
documentation and receipt of audited financial statements for
Dec. 31, 2006.

These ratings were downgraded:

   * Philosophy, Inc.

      -- $35 million senior secured revolving credit facility due
         2013 to B2, LGD3, 45% from B1, LGD3 41%; and

      -- $225 million first lien senior secured term loan due 2014
         to B2, LGD3, 45% from B1, LGD3, 41%.

These ratings were affirmed:

Philosophy Acquisition Company, Inc.:

      -- Corporate family rating at B2; and
      -- Probability-of-default rating at B2;

Philosophy, Inc. and BioTech Research Laboratories, Inc. are
co-borrowers under the first lien senior secured credit
facilities.

Philosophy was founded in 1996 and develops, manufactures and
markets premium personal care products under the Philosophy brand.  
The company operates in several personal care categories including
premium skin care, fragrances, bath & body, and to a lesser
extent, color cosmetics. Primary channels of distribution include
direct response television and prestige retailers such as
Nordstrom and Sephora.


PHILOSOPHY INC: Moody's Cuts Rating on $260MM Sr. Facilities to B2
------------------------------------------------------------------
Moody's Investors Service downgraded Philosophy Inc. and BioTech
Research Laboratories, Inc.'s, as joint and several obligors,
$260 million in first lien senior secured bank credit facilities
to B2 from B1.  

Moody's also affirmed the B2 corporate family rating for the
borrowers' ultimate parent holding company -- Philosophy
Acquisition Company, Inc.  Philosophy Acquisition Company, Inc. is
the parent company of Philosophy, Inc. and BioTech Research
Laboratories, Inc., headquartered in Phoenix, Arizona.  

Moody's notes that while there has been no fundamental
deterioration in Philosophy's overall credit profile, the
downgrade of the credit facility to B2 reflects the change in the
company's capital structure which results in a higher proportion
of first lien debt.  In accordance with Moody's Loss Given Default
Methodology, a B2 rating for the first lien facilities is
appropriate.  The company's downsized $25 million second lien
senior secured term loan being entered into by Philosophy Inc. and
BioTech will remain unrated.

Proceeds from the credit facilities combined with new cash equity
from The Carlyle Group will be used to fund Carlyle's acquisition
of a majority stake and controlling interest in the company.  The
ratings outlook is stable.  Final ratings are subject to review of
documentation and receipt of audited financial statements for
Dec. 31, 2006.

These ratings were downgraded:

   * Philosophy, Inc.

      -- $35 million senior secured revolving credit facility due
         2013 to B2, LGD3, 45% from B1, LGD3 41%; and

      -- $225 million first lien senior secured term loan due 2014
         to B2, LGD3, 45% from B1, LGD3, 41%.

These ratings were affirmed:

Philosophy Acquisition Company, Inc.:

      -- Corporate family rating at B2; and
      -- Probability-of-default rating at B2;

Philosophy, Inc. and BioTech Research Laboratories, Inc. are
co-borrowers under the first lien senior secured credit
facilities.

Philosophy was founded in 1996 and develops, manufactures and
markets premium personal care products under the Philosophy brand.  
The company operates in several personal care categories including
premium skin care, fragrances, bath & body, and to a lesser
extent, color cosmetics. Primary channels of distribution include
direct response television and prestige retailers such as
Nordstrom and Sephora.


PHILOSOPHY INC: Loan Facility Revisions Cue S&P Affirms Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on Philosophy Inc.'s senior secured first-lien bank
facility, following the report that the company will increase the
first-lien term loan facility by $25 million and reduce the
second-lien term loan facility by the same amount.

Philosophy's $285 million senior secured credit facilities now
consist of a $35 million first-lien revolving credit facility
maturing in 2013, a $225 million first-lien term loan maturing in
2014, and a $25 million second-lien term loan facility due 2015.
The first-lien facilities are rated 'B' with a recovery rating of
'2', indicating an expectation for substantial recovery of
principal in the event of a payment default.

Ratings List:

   * Philosophy Inc.

      -- Corporate Credit Rating, B/Stable/


PINNACLE DEVELOPMENT: Founder Accused of Real-Estate Ponzi Scheme
-----------------------------------------------------------------
Pinnacle Development Partners LLC's founder and principal
executive, Gene A. O'Neal, was charged by prosecutors with
perpetrating a massive Ponzi scheme that bilked investors out of
$69 million, Keith J. Winstein of the Wall Street Journal reports

According to the report, in an indictment handed up earlier this
week, Mr. O'Neal, who claimed to invest in distressed real estate,
was accused on 19 counts of alleged mail and wire fraud.

The indictment, as cited by the Journal, said that the company
collected $69 million from more than 2,000 individual investors,
and paid some of them returns on their money with the cash
invested by later investors.

In addition, WSJ relates, the indictment said that Pinnacle didn't
put any of its own money into the purchases and bought only 21
properties worth $13 million.

                          SEC Litigation

In October 2006, the Securities and Exchange Commission filed a
complaint seeking emergency relief in the United States District
Court for the Northern District of Georgia against Pinnacle
Development and Mr. O'Neal.

The complaint alleged that Mr. O'Neal founded Pinnacle and served
as its managing member.  

The complaint also alleged that, from October 2005 through the
present, Pinnacle and Mr. O'Neal have operated a Ponzi scheme and
raised at least $30 million from more than 2,000 investors located
in thirty-three states and two foreign countries.

Specifically, the complaint said that Pinnacle fraudulently
offered and sold interests in real estate development partnerships
through a nationwide advertising campaign.  Pinnacle also sold
notes to some investors.

According to the complaint, Pinnacle promised investors a 25%
return in 45 (or later 60) days and a second 25% return, and the
return of investor capital, after 90 days.

Pinnacle represented that the profits would be earned by the
respective partnership purchasing foreclosed real estate, making
minor repairs and reselling the property within 45 to 60 days.
In fact, the complaint said, without disclosure to investors,
Pinnacle itself purchased property from third parties and sold it
to its investor partnerships at high mark ups.  The exorbitant
returns promised to investors were generated by the respective
partnership selling the property to other investor partnerships
controlled by Pinnacle.

The Court subsequently entered an order freezing the defendants'
assets, and imposing a preliminary injunction against the
defendants enjoining future violations of the registration and
antifraud provision of the federal securities laws.  

The Court also appointed S. Gregory Hays as receiver for Pinnacle
and investor partnerships controlled by Pinnacle.

Pinnacle is a Georgia limited liability company with its principal
place of business in Atlanta, Georgia.


PLAINS EXPLORATION: S&P Holds Corporate Credit Rating at BB
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB' corporate
credit rating on independent exploration and production firm
Plains Exploration & Production Co. and assigned its 'BB-' rating
to PXP's $300 million in proposed senior unsecured notes maturing
in 2017.  PXP will use the notes to repay outstanding bank debt
and for general corporate purposes.

The one-notch disparity between the corporate credit rating and
the rating on the new senior unsecured notes reflects PXP's
ability to incur secured indebtedness in excess of 15% of current
assets.  Standard & Poor's notes that if PXP were to increase its
current revolver commitments without a corresponding increase in
assets, the notes could be subject to additional downward
notching.

Pro forma for the notes offering, Houston, Texas-based PXP will
have about $300 million in long-term debt.

"The ratings on PXP reflect participation in a volatile and
cyclical industry, a historically acquisitive growth strategy, and
recent strategic repositioning initiatives that have included
sizable cash outlays for hedge restructurings over the past two
years, asset sales (45 million barrels of oil equivalent of proved
reserves in California to Occidental Petroleum Corp. (A-/Stable/A-
2), and two deepwater Gulf of Mexico discoveries and one prospect
to Statoil ASA (A+/Stable/A-1)), and a more ambitious near-term
exploration program in the U.S. Gulf of Mexico,"  said
Standard & Poor's credit analyst Jeffrey Morrison.

"Concerns are nearly offset by a PXP's long-lived and predictable
reserve base in California, manageable debt levels in the current
capital structure, an improved hedge position that has
strengthened cash margins, and an experienced management team,"
Mr. Morrison continued.

The stable outlook reflects Standard & Poor's expectation that an
improved financial risk profile and ample liquidity will yield PXP
additional flexibility with which to fund growth initiatives and
additional rewards to its shareholders.  While the company has
achieved significant financial profile improvement, positive
rating actions will likely be limited until PXP can successfully
improve its business risk profile.  In addition, while current
ratings incorporate some room for additional leverage, ratings
could potentially be threatened if PXP undertakes acquisitions or
additional shareholder initiatives in a substantially more
aggressive manner.


POSADA PORLAMAR: Case Summary & 18 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Posada Porlamar Inc.
        aka La Pared Restaurante
        P.O. Box 3113, La Parguera
        Lajas, PR 00667
        Tel: (787) 899-4015

Bankruptcy Case No.: 07-01063

Type of Business: The Debtor operates a hotel in the coastal town  
                  of La Parguera, Puerto Rico.
                  See http://www.posadaporlamar.info/

Chapter 11 Petition Date: March 1, 2007

Court: District of Puerto Rico (Old San Juan)

Judge: Brian K. Tester

Debtor's Counsel: Victor Gratacos Diaz, Esq.
                  P.O. Box 7571
                  Caguas, PR 00726
                  Tel: (787) 746-4772

Total Assets: $2,345,510

Total Debts:  $2,655,589

Debtor's 18 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Occidental Financial Corp.         Insurance Debt         $64,160
P.O. Box 3289
Mayaguez, PR 00681-3289

Departamento De Hacienda           Tax Debt               $56,917
P.O. Box S-2501
San Juan, PR 00936

Internal Revenue Service           Tax Debt               $45,095
P.O. Box 21126
Philadelphia, PA 19114

Crim                               Taxes Owed for         $42,000
                                   Real Property

                                   Tax Debt                $2,188

Compania De Turismo                Tax Debt               $35,292

Banco Desarrollo Economico         1st Mortgage        $2,325,000
                                   Over Property         Secured:
                                                       $2,300,000
                                                       Unsecured:
                                                          $25,000

R&G Premier Bank                   Credit Card Debt       $24,804

American Express                   Credit Card Debt       $12,434

Muncipio De Lajas                  Tax Debt               $12,192

El Nuevo Dia, Inc.                 Service Debt            $9,725

MAPFRE                             Insurance Debt          $5,131

Triple SSS, Inc.                   Insurance Debt          $3,852

Fondo Del Seguro De Estado         Tax Debt                $3,000

First Medical                      Insurance Debt          $2,685

Rubero Brothers Inc.               Service Debt            $2,657

Department of Labor                Tax Debt                $2,066

Secretario De Hacienda             IVU Tax                 $2,000

Casiano Communication              Service Debt            $1,300


PRIMUS TELECOM: Dec. 31 Balance Sheet Upside-Down by $468 Million
-----------------------------------------------------------------
PRIMUS Telecommunications Group, Inc. reported its results for the
fourth quarter and year ended Dec. 31, 2006.  

The company reported fourth quarter 2006 net revenue of
$241.91 million, down from $284.53 million in the fourth quarter
2005.  The Company reported a net loss for the quarter of
$2.42 million, as compared with net income of $100,000 in the
prior quarter and a net loss of $24.91 million in the fourth
quarter 2005.

The company had continued sequential quarterly improvement in
its operating results, which include $10.22 million income from
operations, $3.89 million cash provided by operating activities,
a $10 million improvement from the prior quarter.

Full year 2006 net revenue was $1.01 billion, down from net
revenues of $1.17 billion in 2005, with the majority of the
decline attributable to low-margin prepaid services and wholesale
revenue.  Full year 2006 net loss declined to $237.95 million as
compared with $154.38 million in 2005.  

Loss from operations in 2006 was $213 million, as compared with
$82 million in 2005, including asset impairment write-down and
loss on sale or disposal of assets charges of $225 million in
2006 and $13 million in 2005.  

There was also year over year improvements in the company's
operating results.  Loss from operations was $212.85 million in
2006, as compared with a loss of $82.17 million in 2005, including
asset impairment write-down and loss on sale or disposal of assets
charges of $225.33 million in 2006 and $13.36 million in 2005.  
Negative free cash flow reduced to $20.14 million in 2006 from
$101.54 million in 2005.

For the fourth quarter, a net $4 million in cash was provided by
operating activities.  Free cash flow for the fourth quarter 2006
was negative $5 million.

As of Dec. 31, 2006, the company's balance sheet listed total
assets of $394.16 million, total liabilities of $862.42 million,
resulting to $468.25 million in total stockholders' deficit.  

The company's December 31 balance sheet also showed strained
liquidity with total current assets of $207.86 million available
to pay $253.41 million in total current liabilities coming due
within the next 12 months.  PRIMUS had cash and cash equivalents
of $64.31 million as of Dec. 31, 2006.

The principal amount of PRIMUS's long-term debt obligations as
of Dec. 31, 2006 was $640 million, down from $641 million at
Sept. 30, 2006 and up from $635 million at Dec. 31, 2005.

"I am pleased to report that PRIMUS management met and exceeded
most of these and the other goals it set in 2006," K. Paul Singh,
chairman and chief executive officer, stated.

"We successfully turned around our United States and European
businesses in 2006 through a combination of "right-sizing,"
shedding unprofitable business lines, and increasing marketing
investment in higher margin services.  Mr. Singh, added.

                  Liquidity Enhancing Initiatives

PRIMUS executed a number of liquidity-enhancing initiatives that
enabled the company to fund both its 2006 and 2007 business plans
and to meet its debt maturity obligations in February 2007.  These
initiatives included these transactions:

     -- the sale of Primus India for $13 million in net cash
        proceeds;

     -- private debt exchanges and issuances involving new
        5% Exchangeable Notes in 2006 that raised $20 million in
        cash without materially increasing the amount of total
        debt;

     -- raising $5 million in equity;

     -- a private sale of $24 million principal amount of new
        Second Lien Notes for cash, and the accompanying private
        exchange of an additional $33 million principal amount of
        Second Lien Notes for $41 million principal amount of
        existing 12.75% Senior Notes;

     -- financing and refinancing arrangements with fiber and
        equipment vendors; and

     -- the sale of a business unit in Australia for
        approximately $6 million in net cash proceeds.

                   Two-Year Transformation Strategy

With the substantial progress in 2005, the company is embarking
into a two-year 'Transformation Strategy' with the following key
elements:

     -- strengthen the balance sheet opportunistically through
        potential de-levering transactions and equity capital
        infusions;

     -- significantly improve the company's non-sales and
        marketing cost structure; improve coordination among
        PRIMUS business units; and maintain an aggressive cost
        management program;

     -- focus on improving sales productivity and margin
        enhancements; and

     -- opportunistically sell non-strategic assets and businesses
        and use the proceeds either to accelerate growth of
        high-margin businesses or to strengthen the balance sheet.

               About PRIMUS Telecommunications Group

Based in McLean, Virginia, PRIMUS Telecommunications Group,
Inc. (NASDAQ: PRTL) -- http://www.primustel.com/-- is an  
integrated communications services provider of international and
domestic voice, voice-over-Internet protocol, Internet, wireless,
and data and hosting services to business and residential retail
customers and other carriers located primarily in the U.S.,
Canada, Australia, the United Kingdom, and western Europe.  

PRIMUS owns and leases a network of transmission facilities,
including approximately 350 points-of-presence throughout the
world, ownership interests in undersea fiber optic cable systems,
16 carrier-grade international gateway and domestic switches, and
a variety of operating relationships that allow it to deliver
traffic worldwide.

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 12, 2006,
Moody's Investors Service downgraded Primus Telecommunications
Group, Inc.'s corporate family rating to Caa3 from Caa1.  Moody's
downgraded the company's Senior Secured Term Loan dues 2011 to
Caa2 and Senior Notes dues 2014 to Caa3.


PSYCHIATRIC SOLUTIONS: Earns $17.5 Million in 2006 Fourth Quarter
-----------------------------------------------------------------
Psychiatric Solutions, Inc. reported that its revenue increased
to a record $280.96 million for the fourth quarter of 2006 from
$221.1 million for the fourth quarter of 2005.  Net income for
2006 fourth quarter was $17.55 million, as compared with net
income of $13.94 million in the same quarter a year ago.

Income from continuing operations was $18.04 million for the
fourth quarter of 2006, up from $13.8 million for the fourth
quarter of 2005.

For the full year 2006, the company reported a net income of
$60.63 million on revenues of $1.02 billion, an increase from full
year net income of $27.15 million on revenues of $715.32 million
in 2005.  

Income from continuing operations was $61.88 million in 2006, up
from $26.81 million in 2005.

As of Dec. 31, 2006, the company listed total assets totaling
$1.58 billion, total liabilities of $953.41 million, resulting to
a total stockholders' equity of $627.77 million.

Joey Jacobs, chairman, president and chief executive officer of
PSI, said, "As our results demonstrate, PSI continued to achieve
strong profitable growth for the fourth quarter, as well as for
the fiscal year."

"We have also continued to build the foundation for our future
organic growth by expanding the number of our inpatient beds, to
more than 8,000 at year end from over 6,400 at the end of 2005.  
Furthermore, we are already well positioned to expand our
inpatient beds during 2007.  

"In December, we signed a definitive agreement to acquire Horizon
Health Corporation, which, among other assets, owns or leases 15
inpatient facilities with over 1,500 beds and provides services
under 115 behavioral health and physical rehabilitation program
management contracts in acute care hospitals," Mr. Jacobs, added.

                 About Psychiatric Solutions, Inc.

Psychiatric Solutions, Inc. (NASDAQ: PSYS) --
http://www.psysolutions.com/-- offers inpatient behavioral health  
care services for children, adolescents, and adults through acute
inpatient behavioral health care facilities and residential
treatment centers in the U.S.  Its headquarter is located in
Franklin, Tenn.

                           *     *    *

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Standard & Poor's Rating Services assigned its preliminary
'B+' senior secured debt, preliminary 'B+' senior unsecured debt,
preliminary 'B-' subordinated debt, and preliminary 'CCC+'
preferred stock ratings to Psychiatric Solutions Inc.'s Rule 415
shelf registration.


PUREBEAUTY INC: Files Disclosure Statement in California
--------------------------------------------------------
PureBeauty Inc. and its debtor-affiliate, Pure Salons Inc., filed
with the U.S. Bankruptcy Court for the Central District of a
Chapter 11 Plan of Reorganization and a Disclosure Statement
explaining that Plan.

                        Treatment of Claims

Under the Plan, Invest Corp. 2, a Secured Claim holder, will
be paid in full.  All funds remaining in the Invest Corp. 2
Segregated Account will be remitted to the General Unsecured Fund.

Holders of Priority Claims, other than Priority Tax Claims, will
also be paid in full.

At the Debtor's option, holders of Other Secured Claims, including
Secured Tax Claims, will receive:

   i. cash in the allowed amount of the holder's Allowed Claim.

  ii. the return of the Collateral securing the claim; or

iii. (a) the cure of any default, other than a default of the
          kind specified in Bankruptcy Code section 365(b)(2)
          that Bankruptcy Code section 1124(2) requires to be
          cured, with respect to the holder's Allowed Claim,
          without recognition of any default rate of interest
          or similar penalty or charge, and upon cure, no default
          shall exist;

      (b) the reinstatement of the maturity of the Allowed Claim
          as the maturity existed before any default, without
          recognition of any default rate of interest or
          similar penalty or charge; and

      (c) its unaltered legal, equitable, and contractual rights
          with respect to the Allowed Claim.  Any defenses,
          counterclaims, rights or offset or recoupment of the
          Debtors with respect to the Claims shall vest in and
          inure to the benefit of the continuing estate.

In Addition, holders of Other Secured Claims will release all
Liens against property of the Debtors, unless option (iii) is
chosen with respect to the Claim on the Effective Date.

Each holders of General Unsecured Claims will receive a pro rata
share of the General Unsecured Fund.

Holders of Other Subordinated Claims and Equity Interests will
receive nothing under the Plan.

A full-text copy of Purebeauty Inc. and Pure Salons Inc.'s
Disclosure Statement is available for a fee at:

http://www.researcharchives.com/bin/download?id=070307225038

PureBeauty, Inc. -- http://www.purebeauty.com/-- operated 48  
retail stores and salons offering professional hair care and
skincare services, featuring a leading assortment of professional
and prestige personal care products.  PureBeauty also operated six
"brand" stores, providing customers with a variety of aspirational
products and services.  PureBeauty Inc. and Pure Salons, Inc., an
affiliate, filed for chapter 11 protection on April 18, 2006
(Bankr. C.D. Calif. Case No. 06-10545).  Stacia A. Neeley, Esq.,
at Klee, Tuchin, Bogdanoff & Stern LLP represented the Debtors.  
The Debtors' Official Committee of Unsecured Creditors selected
Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston
& Strawn, LLP, as its counsel.  When the Debtors filed for
protection from their creditors, they estimated $14 million in
assets and $82 million in debts.


REGAL ENTERTAINMENT: Earns $86.3 Million in Period Ended Dec. 28
----------------------------------------------------------------
Regal Entertainment Group reported net income of $86.3 million on
total revenue of $2.598 billion for the year ended Dec. 28, 2006,
compared with net income of $91.8 million on total revenue of
$2.516 billion for the year ended Dec. 29, 2005.

Total revenue for the year consisted of $1.727 billion of
admissions revenues, $696.7 million from concessions revenues and
$174.3 million of other operating revenues, and represented a 3.2%
increase over total revenues of $2.516 billion for the year ended
Dec. 29, 2005.

Income from operations increased 14.4% to $308.5 million in 2006  
compared to $269.6 million in 2005, primarily attributable to
incremental admissions and concessions revenues, partially offset
by lower other operating revenues and the $42.5 million increase
in operating expenses.

The decrease in net income was primarily due to the $37 million
loss on debt extinguishment recorded in 2006, in connection with
the conversion of a portion of the company's Convertible Senior
Notes, and the $7.9 million increase in net interest expense,
partly offset by the $38.9 million increase in operating income.

The company's balance sheet at Dec. 28, 2006, also showed strained
liquidity with $241 million in total current assets available to
pay $556.3 million in total current liabilities.

At Dec. 31, 2006, the company's balance sheet showed
$2.468 billion in total assets, $2.489 billion in total
liabilities, and $1.9 million in minority interest, resulting in a
$22.2 million total stockholders' deficit.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 28, 2006, are available for
free at http://researcharchives.com/t/s?1acb

                          Credit Agreement

On Oct. 27, 2006, Regal Cinemas entered into a fifth amended and
restated credit agreement with Credit Suisse, Cayman Islands
Branch, as Administrative Agent and the other lenders party
thereto, which consists of a term loan facility in an aggregate
original principal amount of $1.7 billion and a revolving credit
facility in an aggregate principal amount of up to $100 million.
The Revolving Facility has a separate sublimit of $10 million for
short-term loans and a sublimit of $30 million for letters of
credit.

As of Dec. 28, 2006, the company had approximately $1.7 billion  
aggregate principal amount outstanding under the term loan
facility, $123.7 million aggregate principal amount outstanding
under the Convertible Senior Notes due May 15, 2008, and
$51.5 million aggregate principal amount outstanding under the
Regal Cinemas Senior Subordinated Notes due 2012.  At
Dec. 28, 2006, the company had approximately $800,000 outstanding
in letters of credit, leaving approximately $99.2 million
available for drawing under the Revolving Facility.

                  About Regal Entertainment Group

Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/  
-- is the largest motion picture exhibitor in the world.  The
company's theatre circuit, comprising Regal Cinemas, United
Artists Theatres and Edwards Theatres, operates 6,403 screens in
539 locations in 39 states and the District of Columbia.  Regal
operates approximately 18% of all indoor screens in the United
States including theatres in 43 of the top 50 U.S. markets and
growing suburban areas.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 24, 2006,
Moody's Investors Service affirmed Regal Entertainment Group's Ba3
Corporate Family Rating.  Additionally, Moody's revised Regal
Entertainment Group's probability-of-default rating on the
company's 3-3/4% Senior Unsecured Convertible Notes due 2008 from
B3 to B2.


RELIANCE STEEL: Earns $354.5 Million in Year Ended December 31
--------------------------------------------------------------
For the fiscal year ended Dec. 31, 2006, Reliance Steel & Aluminum
Co. reported that its net income amounted to a record
$354.5 million, as compared with net income of $205.43 million for
the same period in 2005.  Sales for the 2006 fiscal year were also
a record at $5.74 billion, an increase compared with 2005 fiscal
year sales of $3.37 billion.

The 2006 financial results include positive contributions to
sales and earnings from the Company's 2006 acquisitions,
primarily Yarde Metals, Inc. that was acquired on Aug. 1, 2006 and
Earle M. Jorgensen Company that was acquired on April 3, 2006.  
The Jorgensen acquisition included the issuance of approximately
nine million shares of Reliance's common stock.

For the 2006 fourth quarter, net income was $74.64 million, as
compared with net income of $60.58 million for the 2005 fourth
quarter.  The 2006 fourth quarter sales were $1.57 billion, as
compared with 2005 fourth quarter sales of $868.64 million.

David H. Hannah, chief executive officer of Reliance said, "We are
very pleased with our fiscal year 2006 results.  All of our end
markets were strong with a very favorable operating environment
throughout our network of facilities.

"We experienced the normal seasonal slowdown during the 2006
fourth quarter.  However, gross profit margins were slightly below
our earlier expectations due to some inventory de-stocking that
resulted in added competitive pressures.

"In November of 2006, we replaced our $700 million credit facility
with a $1.1 billion five-year, unsecured syndicated credit
facility that provides increased availability of funds and more
favorable pricing.  This facility may be increased to up to
$1.6 billion at our request with approval from the lenders.  We
used funds from the increased line to purchase approximately
$250 million of the Jorgensen 9.75% senior secured notes in a
tender offer.  We then issued $600 million of senior unsecured
notes and used the proceeds to pay down the borrowings under our
credit facility.

"We are optimistic regarding 2007 business conditions.  We
generally see continued growth in the markets we serve, but at a
slower rate than in 2006," Mr. Hannah, further stated.

On Feb. 14, 2007, the Board of Directors declared a 33% increase
in the regular quarterly cash dividend to $.08 per share of common
stock.  The 2007 first quarter dividend is payable on March 30,
2007 to shareholders of record March 9, 2007.  The Company has
paid regular quarterly dividend payments for 47 consecutive years.

The balance sheet of the company as of Dec. 31, 2006, had total
assets of $3.61 billion, total liabilities of $1.86 billion, and
minority interests of $1.24 million, resulting to total
stockholders' equity of $1.74 billion.

                About Reliance Steel & Aluminum Co.

Reliance Steel & Aluminum Co., headquartered in Los Angeles,
California, (NYSE:RS) -- http://www.rsac.com/-- is a metals  
service center company in the U.S.  Through a network of more than
180 locations in 37 states and in Belgium, Canada, China and South
Korea, the Company provides value-added metals processing services
and distributes a full line of over 100,000 metal products.  These
products include galvanized, hot-rolled and cold-finished steel;
stainless steel; aluminum; brass; copper; titanium and alloy steel
sold to more than 125,000 customers in various industries.

                           *     *     *

Reliance Steel & Aluminum Co. carries Moody's Baa3 Senior
Unsecured Debt Rating and Standard & Poor's BBB- Long-term Foreign
and Local Issuer Credit Ratings.


RESMAE MORTGAGE: Wants $1.2 Mil. Sale Related Incentive Approved
----------------------------------------------------------------
ResMAE Mortgage Corporation asks the U.S. Bankruptcy Court for the
District of Delaware for authority to distribute sale-related
incentive payments to its senior management.

The Debtor tells the Court that as part of its efforts to complete
the sale of its business, the Debtor's senior management,
including executive officers and directors, were called upon to
take on additional responsibilities and expend significantly more
hours working than contemplated by the normal terms of their
employment.  

To reward their efforts, the Debtor proposes to distribute
$1,245,000 in Sale Related Incentive Payments to its senior
management.

The Sale Related Incentive Program will result in the waiver of
any claims the recipients may have to the 2006 Officer and
Director Annual Bonus Plan which the Debtor failed to pay due to
lack of funds.

Headquartered in Brea, California, ResMAE Mortgage Corp. --
http://www.resmae.com/-- is a subsidiary of ResMAE Financial   
Corp., a specialty finance company engaged in the business
of originating, selling, and servicing subprime residential
mortgage loans.  The company serves the needs of borrowers who do
not conform to traditional "A" credit lending criteria due to
credit history, debt to income ratios, or other factors.  It has
regional processing centers nationwide, including Northern and
Southern California, Texas, New Jersey, Illinois, Florida and
Hawaii.

ResMAE Mortgage filed for chapter 11 protection on February 12,
2007 (Bankr. D. Del. Case No. 07-10177).  Daniel J. DeFranceschi,
Esq. and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed
estimated assets and debts of more than $100 million.


RESMAE MORTGAGE: U.S. Trustee Objects to Incentive Payments
-----------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
wants ResMAE Mortgage Corporation to demonstrate that the sale-
related incentive payments are appropriate under Sec. 503(c) of
the Bankruptcy Code, as amended, and satisfy all of the new
requirements or restrictions imposed under Section 503(c)(1) in
providing justification for its request.

Additionally, the U.S. Trustee notes that Section 503(c)(3) does
not allow "other transfers or obligations that are outside the
ordinary course of business and not justified by the facts and
circumstances of the case, including transfers made to, or
obligations incurred for the benefit of, officers, managers, or
consultants hired after the date of the filing of the petition."

In this regard, the U.S. Trustee tells the U.S. Bankruptcy Court
for the District of Delaware that if the Debtor cannot satisfy the
elements of Section 503(c), then the Debtor's request must be
denied.

The Debtor had asked the Court for permission to distribute the
payments to its senior management.

Headquartered in Brea, California, ResMAE Mortgage Corp. --
http://www.resmae.com/-- is a subsidiary of ResMAE Financial   
Corp., a specialty finance company engaged in the business
of originating, selling, and servicing subprime residential
mortgage loans.  The company serves the needs of borrowers who do
not conform to traditional "A" credit lending criteria due to
credit history, debt to income ratios, or other factors.  It has
regional processing centers nationwide, including Northern and
Southern California, Texas, New Jersey, Illinois, Florida and
Hawaii.

ResMAE Mortgage filed for chapter 11 protection on February 12,
2007 (Bankr. D. Del. Case No. 07-10177).  Daniel J. DeFranceschi,
Esq. and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed
estimated assets and debts of more than $100 million.


SANTA FE MINERALS: General Claims Bar Date Set on April 16
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware established
April 16, 2007, at 4:00 p.m., Eastern Time, as the deadline for
all persons owed money by Santa Fe Minerals Inc. and 15375
Memorial Corporation, its debtor-affiliate, to file proofs of
claim against the Debtors.

Proofs of claim must be sent to:

     Clerk of the U.S. Bankruptcy Court
     824 Market Street, 5th Floor
     Wilmington, Delaware 19801

The Court will not accept proofs of claim sent by facsimile or
telecopy.

                      About Santa Fe Minerals

Headquartered in Houston, Texas, 15375 Memorial Corporation is the
sole shareholder of Santa Fe Mineral, Inc.  Santa Fe Minerals is a
Wyoming based corporation dissolved in 2000.  Under Wyoming law,
creditors of a dissolved corporation can recover their debts from
the dissolved corporation's shareholders, up to the value of the
assets that each shareholder received at the dissolution.

15375 Memorial and Santa Fe Minerals filed for chapter 11
protection on Aug. 16, 2006 (Bankr. D. Del. Case Nos. 06-10859 &
06-10860).  John D. Demmy, Esq., at Stevens & Lee, P.C.,
represents the Debtors.  No Official Committee of Unsecured
Creditors have been appointed in the Debtors' cases.  When the
Debtors filed for protection from their creditors, they estimated
their assets between $100,000 to $500,000 and liabilities of more
than $100 million.


SCHOONER TRUST: Moody's Puts Low-B Ratings on Six Class Certs.
--------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
securities issued by Schooner Trust Commercial Mortgage
Pass-Through Certificates, Series 2007-7, a fixed rate commercial
loan securitization.  The provisional ratings issued on
Feb. 12, 2007, have been replaced with these definitive ratings:

Class Amount Rating:

      -- Class A-1 $167,000,000 Aaa
      -- Class A-2 $214,000,000 Aaa
      -- Class B $9,500,000 Aa2
      -- Class C $8,600,000 A2
      -- Class D $10,834,841 Baa2
      -- Class E $2,137,860 Baa3
      -- Class F $3,206,791 Ba1
      -- Class G $1,603,396 Ba2
      -- Class H $1,603,396 Ba3
      -- Class J $1,068,930 B1
      -- Class K $1,068,931 B2
      -- Class L $1,603,396 B3
      -- Class XP $411,591,421* Aaa
      -- Class XC $427,572,194* Aaa

* Note: Initial Notional Amount


SHAW COMMS: Closes Offering of CDN$400 Mil. of 5.7% Sr. Notes
-------------------------------------------------------------
Shaw Communications Inc. has closed its offering of
CDN$400 million principal amount of 5.70% senior unsecured notes
due 2017.  The senior notes were offered through an underwriting
syndicate led by TD Securities Inc., under Shaw's previously filed
shelf prospectus.

The net proceeds of the offering will be used for debt repayment,
for working capital and for general corporate purposes.

Shaw Communications, Inc. is a cable and satellite operator
headquartered in Calgary, Alberta, Canada.

                          *     *     *

As reported in the Troubled Company Reporter on March 2, 2007,
Moody's Investors Service assigned the existing Ba1 senior
unsecured rating of Shaw Communications Inc. to the company's
CDN$400 million notes offering, proceeds of which are to be used
for debt repayment and general corporate purposes.


SORELL INC: Tojen Acquires 75,000,000 Issued & Outstanding Shares
-----------------------------------------------------------------
Sorell Inc. reported that on Feb. 28, 2007, Tojen Ltd. acquired
75,000,000 of its issued and outstanding shares, representing
approximately 83.1% of the issued and outstanding common stock.

Consequently, shareholders of the company cancelled 21,305,000
shares as part of Tojen's acquisition.

The company said that intends to change its name to Tojen Holdings
Ltd.

                          About Sorell Inc.

Sorell Inc., fka NetMeasure Technology Inc., (OTCBB: SLII)
develops, manufactures, sells consumer electronics, which includes
mobile phones, MP3 players, MP3 CD players, portable media
players, mobile cameras and other devices.  S-Cam Co., Ltd., based
in Korea, is an operating subsidiary of Sorell and a divestiture
from Samsung Electronics.

                        *     *     *

On Sept. 30, 2006, the company's balance sheet showed a
$13,956,582 in total assets and a $25,763,924 in total
liabilities, resulting a stockholders' deficit of $11,807,324.


STEVEN RIVERA: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Steven Q. Rivera
        dba Burrito Bandito
        P.O. Box 43106
        Phoenix, AZ 85080

Bankruptcy Case No.: 07-00974

Chapter 11 Petition Date: March 7, 2007

Court: District of Arizona (Phoenix)

Debtor's Counsel: Dennis J. Wortman, Esq.
                  Dennis J. Wortman, P.C.
                  2700 North Central Avenue, Suite 850
                  Phoenix, AZ 85004-1162
                  Tel: (602) 257-0101
                  Fax: (602) 776-4544

Estimated Assets: $10,000 to $100,000

Estimated Debts:  $1 Million to $100 Million

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


STILLWATER MINING: Good Performance Cues S&P's Stable Outlook
-------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on Billings,
Montana-based Stillwater Mining Co. to stable from negative.  At
the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating and 'BB-' and '1' recovery rating on the palladium
and platinum producer's senior secured credit facility.
    
"The outlook revision reflects the company's improved operating
performance, which has resulted in positive free cash flow and
reversed the company's liquidity burn rate, and the improvement in
its recycling business," said Standard & Poor's credit analyst
Thomas Watters.

"The action also reflects our belief that over time, the company
should benefit from the implementation of its selective mining
technique.  We believe that the selective mining technique should
lower costs and reduce capital expenditures as it becomes fully
implemented over the next several years."

Revenue generated from Stillwater's recycling business increased
significantly to $270 million in 2006--$230 million of which came
in the second half--from $91 million in 2005.

"We expect this business, although seasonally volatile, to grow
and continue to enhance the company's cash flow," Mr. Watters
said.

Standard & Poor's remains concerned about the credit profile and
challenges facing Stillwater's two largest customers, General
Motors Corp. and Ford Motor Co.  The continuing deterioration of
the credit quality of these two entities and reported declines in
auto production raise concerns and uncertainties about the
favorable supply contracts Stillwater has in place with these
companies.  Under the terms of the credit facility, an attempt by
a customer to void these supply contracts would trigger a default
and could lead lenders to accelerate repayment of outstanding
loans.

"We could revise the outlook to negative if Stillwater begins
again to generate negative free cash flow, which could result from
a rising cost profile, unforeseen operating disruptions, or a
decline in its recycling business," Mr. Watters said.

"We are unlikely to revise the outlook to positive, given our
assessment of the company's business profile.  However, an
acquisition to diversify its operating base and increase its size
and scope of operations could result in a positive rating action."


TANGER FACTORY: Net Income Soars to $37 Million in Fiscal 2006
--------------------------------------------------------------
Tanger Factory Outlet Centers, Inc. has filed its 2006 Annual
Report on Form 10-K with the Securities and Exchange Commission.  

The company reported a significantly higher net income for the
year ended Dec. 31, 2006, of $37.31 million, compared with a net
income of $5.08 million for the previous year.  The lower net
income in 2005 was greatly impacted by the loss of $24.04 million
in consolidated joint venture that the company incurred.

                   Operational Results for 2006

For the year ended Dec. 31, 2006, the company had total revenues
of $211.71 million, an increase from $198.76 million for the year
ended Dec. 31, 2005.  The increase in total revenues is due to the
increases in all of the revenue sources of the company, namely
base rentals, percentage rentals, expense reimbursements, and
other income.

Base rentals increased by $7.47 million, to $138.69 million in the
2006 period, as compared with $131.22 million in the 2005 period.  
Percentage rentals were $7.18 million and $6.34 million in the
years 2006 and 2005, respectively.  Expense reimbursements also
increased to $58.52 million in 2006 from $55.41 million in 2005
and other income increased to $7.3 million in 2006 from
$5.77 million in 2005.

Total expenses for the year ended Dec. 31, 2006, totaled
$142.61 million, up from $124.75 million in total expenses for the
prior year.  

As of Dec. 31, 2006, the balance sheet of the company listed
total assets totaling $1.04 billion, total liabilities of
$727.17 million, minority interests in operating partnership of
$39.02 million, resulting to total stockholders' equity of
$274.67 million.

The company held $8.45 million in cash and cash equivalents as of
Dec. 31, 2006, as compared with $2.93 million a year ago.

Currently, the company maintains six unsecured credit facilities
with major national banking institutions, totaling $200 million.
As of Dec. 31, 2006, no amounts were outstanding under these
credit facilities.  As of Feb. 1, 2007, all six credit facilities
will expire in June 2009 or later.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1ae8

                    About Tanger Factory Outlet

Headquarteres in Greensboro, North Carolina, Tanger Factory Outlet
Centers, Inc. (NYSE: SKT) -- http://www.tangeroutlet.com/-- is an  
integrated, self-administered and self-managed publicly traded
REIT.  At Dec. 31, 2006, the company had 30 wholly owned centers
in 21 states totaling 8.4 million square feet of total gross
leasable area, as compared with 31 centers in 22 states totaling
8.3 million square feet of GLA as of December 31, 2005.


TENNECO INC: Earns $51 Million in Year Ended December 31
--------------------------------------------------------
Tenneco, Inc. reported net income of $51 million on total revenues
were $4.68 billion for the year ended Dec. 31, 2006, versus a net
income of $58 million on total revenues of $4.44 billion for the
year ended Dec. 31, 2005.

Excluding the impact of currency and substrate sales, revenue was
down $58 million, driven primarily by lower OE production volumes
in North America, particularly light trucks and SUVs, partially
offset by higher aftermarket sales.

Revenues from the company's North American operations decreased by
$69 million in 2006 compared to the same period last year
reflecting lower sales in OE partially offset by increased
aftermarket sales.  Revenues from the company's European, South
American and Indian segments increased by $252 million in 2006,
compared to last year. Revenues from its Asia Pacific segment,
which includes Australia and Asia, increased to $421 million in
2006, as compared with $360 million for the prior year.

For the year 2006, total costs and expenses were $4.48 billion up
from $4.22 billion for 2005 the increase was primarily driven by
the increase in cost of sales to $3.83 billion for 2006, from
$3.58 billion a year ago.

Income taxes paid were $3 million in 2006, as compared with
$25 million in 2005.  Included in the income taxes paid in 2006
were benefits of $16 million.  The effective tax rate for 2006
including the $16 million of benefits was five percent.  Excluding
these benefits would have increased the company's effective tax
rate by 27 percent.

As of Dec. 31, 2006, the company listed $3.26 billion in total
assets, $3.01 billion in total liabilities, $28 million in
minority interests, resulting in a total shareholders' equity of
$221 million.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1acc.

                        About Tenneco, Inc.

Tenneco, Inc., (NYSE: TEN) -- http://www.tenneco.com/-- is  
headquartered in Lake Forest, Ill.  It manufactures automotive
ride and emissions control products and systems for both the
worldwide original equipment market and aftermarket.  Leading
brands include Monroe(R), Rancho(R), and Fric Rot ride control
products and Walker(R) and Gillet emission control products.

The company has global operations in Argentina, Japan, and
Germany, among others, with its European operations headquartered
in Brussels, Belgium.

                           *     *     *

Tenneco, Inc. carries Moody's Ba3 Senior Secured Rating, B1 Long-
term Corporate Family Rating, Ba1 Bank Loan Debt Rating, B3
Subordinated Debt Rating, and B1 Probability of Default Rating.

Standard & Poor's gave the company a BB- Long-term Foreign and
Local Issuer Credit Rating and a B1- Short-term Foreign and Local
Issuer Credit Rating.

Fitch gave the company a BB- Long-term Issuer Default Rating, a BB
Senior Secured Debt Rating, a BB+ Bank Loan Debt Rating, and a B
Senior Subordinated Debt Rating.


TRIBUNE COMPANY: Earns $594 Million in Year Ended December 31
-------------------------------------------------------------
Tribune Company reported $594 million of net income on
$5.517 billion of total operating revenues for the year ended
Dec. 31, 2006, compared with $534.7 million of net income on
$5.511 of total operating revenues for the year ended
Dec. 31, 2005.

Consolidated operating revenues were essentially flat at
$5.5 billion in 2006 as a decrease in publishing revenues was
offset by an increase in broadcasting and entertainment revenues.

Consolidated operating profit decreased 4%, or $42 million, to
$1.085 billion in 2006, from $1.127 billion in 2005.  

Publishing operating profit decreased 1%, or $11 million, in 2006,
while Broadcasting and entertainment operating profit decreased
6%, or $25 million, primarily due to higher programming and
compensation expenses, partially offset by higher revenues.  
Corporate expenses increased 13%, or $7 million, in 2006 primarily
due to $11 million of stock-based compensation expense, partially
offset by a $7 million gain related to the sale of the corporate
airplane in 2006.

Equity income totaled $81 million in 2006, an increase of
$40 million from 2005.  The increase primarily reflects
improvements at TV Food Network, CareerBuilder and Classified
Ventures and the absence of losses from The WB Network.  In
addition, equity income for 2006 includes the company's $6 million
share of a one-time favorable income tax adjustment at
CareerBuilder.

Interest and dividend income increased to $14 million in 2006,
from $7 million in 2005, due to higher average cash balances,
higher interest rates and an increase in Time Warner dividend
income.

Interest expense increased 76%, or $119 million, in 2006 primarily
due to higher debt levels from financing the share repurchases in
the third quarter of 2006 and higher interest rates.

For the full year 2006, Tribune recorded a pretax non-operating
gain of $103 million, which included a $59 million gain from
restructuring TMCT LLC and TMCT II LLC, a $19 million gain on the
sale of 2.8 million shares of Time Warner stock, a $17 million
gain from the sale of the company's investment in BrassRing, and
an $11 million gain from marking-to-market the derivative
component of the company's PHONES and the related Time Warner
investment.  This compares to a pretax loss of $69.9 million in
2005.

The effective tax rate on income from continuing operations in
2006 was 34.5%, compared with a rate of 52.1% in 2005.  The higher
effective tax rate of 52.1% in 2005 was primarily due to an income
tax expense of $150 million recorded in the third quarter of 2005
related to the Matthew Bender and Mosby tax liabilities.
  
Loss from discontinued operations, net of tax, was $66.8 million
in 2006, compared to income from discontinued operations, net of
tax of $11.9 million in 2005.  The loss from discontinued
operations in 2006 was due to a $48.2 million net pretax loss on
the sale of WATL-TV, WCWN-TV, and WLVI-TV during 2006.

At Dec. 31, 2006, the company's balance sheet showed $13.4 billion
in total assets, $9.081 billion in total liabilities, and
$4.319 billion in total stockholders' equity.

The company's balance sheet at Dec. 31, 2006, also showed strained
liquidity with $1.377 billion in total current assets available to
pay $2.546 billion in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1acf  

                    Discontinued Operations

On June 5, 2006, the company announced the sale of WATL-TV,
Atlanta to Gannett Co. Inc. for $180 million.  The sale closed on
Aug. 7, 2006.  On June 19, 2006, the company announced the sale of
WCWN-TV, Albany to Freedom Communications Inc. for $17 million.
The sale closed on Dec. 6, 2006.  On Sept. 14, 2006, the company
announced the sale of WLVI-TV, Boston, to Sunbeam Television Corp.
for $113.7 million.  The sale closed on Dec. 19, 2006.

                         About Tribune Co.

Based in Chicago, Illinois, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating
businesses in publishing and broadcasting.  In publishing, Tribune
operates 11 daily newspapers including the Los Angeles Times,
Chicago Tribune and Newsday, plus a wide range of targeted
publications.  The company's broadcasting group operates 26
television stations, Superstation WGN on national cable, Chicago's
WGN-AM and the Chicago Cubs baseball team.

                           *     *     *

On Oct. 5, 2006, Standard & Poor's Ratings Services lowered its
ratings on the class A and B units from the $75.795 million
Structured Asset Trust Unit Repackaging Tribune Co. Debenture
Backed Series 2006-1 to 'BB+' from 'BBB-'.  Concurrently, the
ratings were placed on CreditWatch with negative implications.

In September 2006, Fitch Ratings downgraded its ratings for
Tribune Co.'s $3.1 billion of outstanding senior unsecured and
subordinated debt as of June 25, 2006, and subsequently placed
them on Rating Watch Negative.

Affected ratings include the company's Issuer Default Rating
lowered to 'BB+' from 'BBB-', and Senior unsecured revolving
credit facility lowered to 'BB+'from 'BBB-'.


US AIRWAYS: Earns $304 Million in Year Ended December 31
--------------------------------------------------------
US Airways Group, Inc. reported its annual results for the year
ended Dec. 31, 2006, with the Securities and Exchange Commission.

For the years ended Dec. 31, 2006 and 2005, the company generated
total operating revenues of $11.55 billion and $5.06 billion,
respectively.  Total operating expenses for the year 2006 were
$10.99 billion, as compared with $5.28 billion in 2005.

Net income for the full year 2006 was $304 million, as compared
with a net loss of $537 million for the full year 2005.  The net
in 2006 income was largely contributed to the higher operating
revenues generated for the year.

Mainline passenger revenues increased to $7.96 billion in 2006
from $3.69 billion in 2005.  Express passenger revenues also
increased to $2.74 billion in 2006 from $976 million in 2005.  
Cargo and other revenues in 2006 were $153 million and
$694 million, respectively, as compared with $58 million and
$340 million, respectively, in 2005.

For the year 2006, the company paid a tax expense of $101 million.

The company's balance sheet as of Dec. 31, 2006, showed
$7.57 billion in total assets, $6.6 billion in total liabilities,
resulting to $970 million in total stockholders' equity.

                     Merger with America West

Since the effective date of the merger with America West Holdings
on Sept. 27, 2005, the company's operational accomplishments
include the following:
  
     -- completed a $1.25 billion refinancing, which was used to
        replace approximately $1.1 billion of outstanding debt at
        lower interest rates and with an extended amortization
        period;

     -- redeemed approximately $112 million in principal amount of
        America West Holding Corp.'s 7.5% convertible senior notes
        due 2009, for approximately 3.9 million shares of common
        stock, which lowered the company's annual interest expense
        by $8.4 million;

     -- redeemed approximately $70 million in principal amount of
        its 7% senior convertible notes due in 2020 for
        approximately 2.9 million shares of common stock and a
        $17 million premium payment;

     -- ended 2006 with unrestricted and restricted cash, cash
        equivalents and short-term investments totaling
        $3 billion, of which $2.4 billion was unrestricted;

     -- completed the migration of myriad of back office systems
        including general ledger, accounts payable and revenue
        accounting, among others; and

     -- migrated all employees to one healthcare provider, which
        is expected to result in annual savings of over
        $5 million.

As of Dec. 31, 2006, US Airways Group and its subsidiaries were in
compliance with the covenants in their long-term debt agreements.

                         Outlook for 2007

The company is approaching completion of its integration efforts
and plans to take the following steps:
  
     -- migration to a single reservation system by the end of the
        first quarter of 2007; and

     -- completion of the transition plan to merge the airlines
        into one FAA operating certificate during 2007.

Additionally, the company is continuing to negotiate with the
pilot, flight attendant, fleet service, and mechanic labor groups
in hopes of reaching final agreements with these unions.  After
final agreements are reached, the company will make necessary
changes to payroll and other labor-related systems.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1aeb

                         About US Airways

Headquartered in Tempe, Arizona, US Airways Group Inc.'s --
http://www.usairways.com/-- primary business activity is the  
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.

The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date.

                           *     *     *

As reported in Troubled Company Reporter on Feb. 1, 2007, Standard
& Poor's Ratings Services affirmed its ratings on US Airways
Group. and its major operating subsidiaries America West Holdings
Corp., America West Airlines Inc., and US Airways Inc., including
the 'B-' corporate credit ratings.  The ratings were removed from
CreditWatch, where they were placed with developing implications
on Nov. 15, 2006.  The outlook is now positive.


US STEEL: CEO Considers China's Plan to Close Plants a "Good Step"
------------------------------------------------------------------
U.S. Steel Corp.'s chief executive officer, John Surma, said
Thursday that the U.S. steel industry remains concerned about a
rapid rise in imports from China, but welcomes the Chinese
government's announcement that it will close 35 million tonnes of
crude steel production capacity, Doug Palmer of Reuters reports.

"That would be a very good step," Mr. Surma said, as cited by the
source.

According to the report, the steel closure targets are part of a
plan to reduce pig iron capacity at outdated facilities by 100
million tonnes and outdated steel capacity by 55 million tones in
the five years from 2006 and 2010.

China, the report said, has increased its steel production rapidly
in recent years, straining trade ties with the United States and
other steel producers as it has shifted from a net importer to a
substantial net exporter.

Reuters relates that U.S. steel producers are pushing for a change
in U.S. trade remedy laws to allow the United States to impose
countervailing duties on imports from China to offset what they
believe to be extensive government subsidies.

                          About U.S. Steel

Headquartered in Pittsburgh, Pa., United States Steel Corporation,
(NYSE: X) -- http://www.ussteel.com/-- manufactures a wide
variety of steel sheet, tubular and tin products; coke, and
taconite pellets; and has a worldwide annual raw steel capability
of 26.8 million net tons.  U. S. Steel's domestic primary steel
operations are: Gary Works in Gary, Ind.; Great Lakes Works in
Ecorse and River Rouge, Mich.; Mon Valley Works, which includes
the Edgar Thomson and Irvin plants, near Pittsburgh and Fairless
Works near Philadelphia, Pa.; Granite City Works in Granite City,
Ill.; Fairfield Works near Birmingham, Ala.; Midwest Plant in
Portage, Ind.; and East Chicago Tin in East Chicago, Ind.  The
company also operates two seamless tubular mills, Lorain Tubular
Operations in Lorain, Ohio; and Fairfield Tubular Operations near
Birmingham, Ala.

U. S. Steel produces coke at Clairton Works near Pittsburgh, at
Gary Works and Granite City Works.  On Northern Minnesota's Mesabi
Iron Range, U. S. Steel's iron ore mining and taconite pellet
operations, Minnesota Taconite (Minntac) and Keewatin Taconite
(Keetac), support the steelmaking effort, and its subsidiary
ProCoil Company provides steel distribution and processing
services.

Internationally, U.S. Steel has steelmaking subsidiaries in
Kosice, Slovakia (U.S. Steel Kosice, s.r.o.), and in Sabac and
Smederevo, Serbia (U.S. Steel Serbia, d.o.).

In addition to primary steel operations, U. S. Steel participates
in several joint ventures: USS-POSCO Industries, Pittsburg, Ca.;
PRO-TEC Coating Company, Leipsic, Ohio; Worthington Specialty
Processing, Jackson, Mich.; Double Eagle Steel Coating Company,
Dearborn, Mich.; Double G Coating Company, Jackson, Miss.; and
Acero Prime, San Luis Potosi, Mexico.

U. S. Steel is also involved in a number of other businesses,
among them transportation (Transtar, Inc.), real estate
development, and leasing and financial services.

                           *     *     *

As reported in the Troubled Company Reporter on Mar. 1, 2007,
Moody's Investors Service upgraded United States Steel's senior
unsecured ratings to Baa3 from Ba1.  At the same time Moody's
withdrew US Steel's Ba1 corporate family rating, its Ba1
probability of default rating, and its SGL-1 speculative grade
liquidity rating.  The rating outlook is stable.  

As reported in the Troubled Company Reporter on Jan. 19, 2007,
Standard & Poor's Ratings Service raised its corporate credit
rating on Pittsburgh, Pennsylvania-based United States Steel Corp
to 'BB+' from 'BB' and removed all ratings from CreditWatch, where
they had been placed with positive implications on July 27, 2006.
At the same time, Standard & Poor's raised its rating on the
company's senior unsecured debt to 'BB+' from 'BB'.  The outlook
is stable.


VANGUARD HEALTH: Incurs $118.7 Mil. Net Loss in Qtr. Ended Dec. 31
------------------------------------------------------------------
Vanguard Health Systems Inc. reported a net loss of $118.7 million
for the second quarter ended Dec. 31, 2006, compared to net income
of $3.6 million during the prior year quarter.   The significant
decrease was due to the after tax impact of the decrease in
earnings from continuing operations.  

For the quarter ended Dec. 31, 2006, Vanguard reported a loss from
continuing operations of $116.2 million, compared to income from
continuing operations of $5.7 million during the prior year
quarter.  

The decrease was primarily attributable to the $123.8 million
impairment charge recorded during the current year quarter to
write down the goodwill related to Vanguard's Chicago hospitals to
fair value.  

Salaries and benefits increased quarter over quarter due to
additional staffing and orientation costs associated with the
ramp-up of expanded service lines opened during the previous
quarter and the company's investment in increased nurse
recruitment, retention and education programs in order to offset
utilization of contract labor in the future.

Quarter over quarter supplies expense increased due to increased
patient volumes during the current year quarter and continued
inflationary pressures for medical supplies and pharmaceuticals.

The startup of Vanguard's new Medicare Advantage Plan during
January 2006 and higher claims experience at its other existing
plans resulted in quarter over quarter increased medical claims
expense.

Total revenues for the quarter ended Dec. 31, 2006, were
$652.9 million, an increase of $55 million or 9.2% from total
revenues of $597.9 million in the prior year quarter.  Patient
service revenues and health plan premium revenues increased
$43.5 million and $11.5 million, respectively, from the prior year
quarter.  

The quarter over quarter increase in patient service revenues was
attributable to a 2.6% increase in hospital adjusted discharges
from continuing operations and a 7.4% increase in net revenue per
adjusted hospital discharge from continuing operations during the
current year quarter compared to the prior year quarter.  

Patient service revenues growth was negatively affected by a shift
in payer mix from Medicare to Medicaid during the current year
quarter compared to the prior year quarter.  The quarter over
quarter increase in health plan premium revenues was primarily
attributable to the new Medicare Advantage Plan in Arizona that
began operations on Jan. 1, 2006.

The consolidated operating results for the quarter ended
Dec. 31, 2006, reflect a 3.7% increase in discharges from
continuing operations and a 2.6% increase in hospital adjusted
discharges from continuing operations compared to the prior year
quarter.  The increase in quarter over quarter discharges from
continuing operations is primarily attributable to a greater
quantity of lower acuity inpatient cases.  Demand for higher
acuity services and elective procedures in the company's markets
remains weak due to general patient wellness, competitive
pressures and other factors.

At Dec. 31, 2006, the company's balance sheet showed
$2.493 billion in total assets, $1.93 billion in total current
liabilities, and $563.4 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?1ada

                          Asset Impairment

Vanguard performed an impairment test of the long-lived assets,
including goodwill and intangibles, of its Chicago hospitals as of
Dec. 31, 2006, in view of weaker than expected results at those
hospitals, the most significant being payer mix shifts.  
Management believes that these trends may not be temporary in
nature and may not be sufficiently offset by its various
initiatives to improve operating results.  Based upon independent
third party estimates of the fair values of these hospitals,
Vanguard recorded a $123.8 million impairment charge during the
quarter and six months ended Dec. 31, 2006.

                        Sale of Fixed Assets

On Oct. 1, 2006, certain subsidiaries of Vanguard completed the
sale of the fixed assets and a portion of the working capital of
its three hospitals in California to subsidiaries of Prime
Healthcare Services Inc. for net proceeds of approximately
$40 million.  Cash proceeds were approximately $37 million with
the remaining $3 million placed into an escrow account payable to
Vanguard's respective subsidiaries on July 2, 2007.  Vanguard
intends to use the net proceeds of this sale for capital
expenditures and other general corporate purposes.  

The operations of these three hospitals were classified as
discontinued operations for the quarters ended Dec. 31, 2005, and
2006.

                             Cash Flows

Cash flows from operating activities were $8 million for the six
months ended Dec. 31, 2006, a decrease of $37.4 million from the
prior year period.  The decrease was primarily attributable to a
$37.1 million buildup of net accounts receivable from continuing
operations during the first half of fiscal 2007 compared to the
first half of fiscal 2006.

Cash used in investing activities decreased to $31.5 million
during the six months ended Dec. 31, 2006, compared to
$108.4 million during the prior year period.  The period over
period decrease was primarily due to a $34.3 million decrease in
capital expenditures and the $37 million cash proceeds from the
sale of Vanguard's California hospitals in October 2006.

Cash flows from financing activities decreased $150.5 million
period over period as a result of a $175 million term loan
borrowing in September 2005.

"We continue to refine our operating strategies to respond to
current patient demand challenges, payer mix shifts and cost
pressures and to proactively prepare for future challenges that we
expect to face," commented Charles N. Martin, Jr., Chairman and
Chief Executive Officer.  "Our commitment to expanding quality of
care initiatives and becoming the preferred provider of healthcare
services for our patients and for the physicians who practice in
our hospitals continues to negatively impact our operating results
in the short-term, but we are confident that these initiatives
will further our success in the long-term."

                       About Vanguard Health

Vanguard Health Systems Inc. -- http://www.vanguardhealth.com/--
owns and operates 16 acute care hospitals and complementary
facilities and services in Chicago, Illinois; Phoenix, Arizona;
San Antonio, Texas and Massachusetts. Vanguard also owns managed
health plans in Chicago, Illinois and Phoenix, Arizona and two
surgery centers in Orange County, California.  

                           *     *     *

As reported in the Troubled Company Reporter on Oct. 24, 2006,
Moody's Investors Service affirmed its B2 Corporate Family Rating
for Vanguard Health Holding Company I, LLC, and its Caa1 rating on
the company's $216 million senior discount notes due 2015.  
Moody's also assigned an LGD6 rating to those bonds, suggesting
noteholders will experience a 95% loss in the event of a default.


VISTEON CORP: Posts $163 Million Net Loss in Full Year 2006
-----------------------------------------------------------
Visteon Corp. has filed its 2006 annual financial statements on
Form 10-K with the Securities and Exchange Commission.  

The company reported total net sales for full year 2006 totaled
$11.41 billion, including product sales of $10.87 billion and
services sales of $547 million.  It reported total net sales of
$16.97 billion for full year 2005.

Visteon's net loss of $163 million for full year 2006 represents
an improvement of $107 million over 2005's net loss of
$270 million despite lower sales levels.

Contractual obligations as of Dec. 31, 2006 were $4.87 billion.  
The Company has guaranteed approximately $77 million of debt
capacity held by subsidiaries, and $97 million for lifetime lease
payments held by consolidated subsidiaries.  

In addition, the Company has guaranteed Tier 2 suppliers' debt
and lease obligations and other third-party service providers'
obligations of up to $17 million at Dec. 31, 2006 to ensure the
continued supply of essential parts.

Visteon's balance sheet at Dec. 31, 2006, showed total assets of
$6.93 billion and total liabilities of $7.12 billion, resulting in
a total shareholders' deficit of $188 million.  The company's
total shareholders' deficit as of Dec. 31, 2005, stood at
$48 million.

As of Dec. 31, 2006, the company's cash and cash equivalents were
$1.05 billion, as compared with $865 million a year earlier.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1af1

                        About Visteon Corp.

Headquartered in Van Buren Township, Mich., Visteon Corp.
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic, and lighting products for vehicle
manufacturers, and also provides a range of products and
services to aftermarket customers.  With corporate offices in
the Michigan, U.S.; Shanghai, China; and Kerpen, Germany; the
company has more than 170 facilities in 24 countries and employs
around 50,000 people.

                        *     *     *

As reported in the Troubled Company Reporter on Dec. 5, 2006,
Standard & Poor's Ratings Services affirmed its bank loan and
recovery ratings on auto supplier Visteon Corp.'s senior secured
bank facility, following the announcement that the company will
increase its term loan to $1 billion from $800 million.

The secured loan rating is 'B' and the recovery rating is '2',
indicating the expectation for substantial (80%-100%) recovery
of principal in the event of a payment default.

As reported in the Troubled Company Reporter on Nov. 24, 2006,
Moody's Investors Service has downgraded Visteon Corporation's
Corporate Family Rating to B3 from B2, changed the ratings
outlook to stable from under review for possible downgrade and
affirmed the company's liquidity rating of SGL-3.


WACHOVIA BANK: S&P Rates $29 Million Class N Certificates at BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Wachovia Bank Commercial Mortgage Trust's
$7.903 billion commercial mortgage pass-through certificates
series 2007-C30.

The preliminary ratings are based on information as of
March 7, 2007.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans.  Class A-1, A-2, A-3, A-
4, A-PB, A-5, A-1A, A-M, A-J, B, C, D, E, and F are currently
being offered publicly.  Standard & Poor's analysis determined
that, on a weighted average basis, the pool has a debt service
coverage of 1.67x, a beginning LTV of 113.8%, and an ending LTV of
111.3%.
    
                  Preliminary Ratings Assigned

             Wachovia Bank Commercial Mortgage Trust
     
                                                    Recommended
                                     Preliminary    credit
   Class                Rating       amount         support
   -----                ------       -----------    --------  
   A-1                  AAA           $35,195,000   30.00%
   A-2                  AAA          $100,000,000   30.00%
   A-3                  AAA          $908,744,000   30.00%
   A-4                  AAA          $195,542,000   30.00%
   A-PB                 AAA          $126,906,000   30.00%
   A-5                  AAA        $1,876,383,000   30.00%
   A-1A                 AAA        $2,289,679,000   30.00%
   A-M                  AAA          $790,349,000   20.00%
   A-J                  AAA          $671,798,000   11.50%
   B                    AA+           $49,397,000   10.88%
   C                    AA            $79,035,000    9.88%
   D                    AA-           $69,155,000    9.00%
   E                    A+            $59,277,000    8.25%
   F                    A             $69,155,000    7.38%
   G                    A-            $98,794,000    6.13%
   H                    BBB+          $79,035,000    5.13%
   J                    BBB           $88,914,000    4.00%
   K                    BBB-          $79,035,000    3.00%
   L                    BB+           $39,518,000    2.50%
   M                    BB            $19,759,000    2.25%
   N                    BB-           $29,638,000    1.88%
   O                    NR            $19,758,000    1.63%
   P                    NR             $9,880,000    1.50%
   Q                    NR            $19,759,000    1.25%
   S                    NR            $98,793,737    0.00%
   X-P*                 AAA        $1,912,455,500    N/A
   X-C*                 AAA        $1,975,874,684    N/A
   X-W*                 AAA        $5,927,624,052    N/A
    
         * Interest-only class with a notional amount.
                      NR -- Not rated.
                   N/A -- Not applicable.


WCI COMMUNITIES: Earns $9.01 Million in Year Ended December 31
--------------------------------------------------------------
WCI Communities, Inc. reported that its total revenues for the
years ended Dec. 31, 2006, and 2005 were $2.05 billion and
$2.6 billion, respectively.  The company generated a net income of
$9.01 million for the year ended Dec. 31, 2006, as compared with
$186.15 million for the prior year.  Gross margin for the year
2006 was $250.37 million, as compared with $598.71 million for the
year 2005.

Revenues, gross margin and net income for the twelve months ended
2005 were positively impacted by the sale of approximately
500 acres of undeveloped land in Jupiter, Florida for
$100 million.  This transaction produced approximately $77 million
of gross margin.  

The company continued to experience a decline in traditional and
tower homebuilding new unit orders.  The slowdown appears to have
begun in the fourth quarter of 2005 and continued to impact the
company throughout 2006.  For the year ended Dec. 31, 2006, the
aggregate value of combined traditional and tower homebuilding new
orders declined to $653.8 million, as compared with $2.3 billion
in the same period a year ago, while the number of new unit orders
declined to 815 units compared to 2,761 units in 2005.  During
2006, the company used significant incentives and discounts to
sell units.

The effective tax rate for the years ended Dec. 31, 2006 and 2005
was 5.7% and 39.1%, respectively.  The reduction in the company's
effective tax rate for 2006 was primarily due to a recurring
manufacturing tax credit and recognition of approximately
$2.4 million in tax benefits from tax positions asserted in prior
year tax returns on which the statute of limitations has expired.

As of Dec. 31, 2006, the company's balance sheet showed total
assets of $3.83 billion, total liabilities of $2.8 billion, and
minority interests of $36.62 million, resulting to $987 million in
total stockholders' equity.  

Cash and cash equivalents and restricted cash in 2006 were
$41.87 million and $42.03 million, respectively, as compared with
$52.58 million and $107.85 million, respectively, in 2005.

A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1af0

                      About WCI Communities

Headquartered in Bonita Springs, Fl., WCI Communities, Inc.
(NYSE:WCI) -- http://www.wcicommunities.com/-- builds traditional  
and tower residences in communities since 1946.  WCI caters to
primary, retirement, and second-home buyers in Florida, New York,
New Jersey, Connecticut, Maryland, and Virginia.  It offers
traditional and tower home choices.

WCI generates revenues from its Prudential Florida WCI Realty
Division, its mortgage and title businesses, and its recreational
amenities, well as through land sales and joint ventures.  It
currently owns and controls land on which the company plans to
build about 20,000 traditional and tower homes.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 9, 2007,
Standard & Poor's Ratings Services lowered its corporate credit
rating on WCI Communities Inc. to 'B+' from 'BB-'.  Concurrently,
the rating on roughly $650 million of subordinated debt was
lowered to 'B-' from 'B'.  The outlook remains negative.


WERNER LADDER: 2nd Lien Committee, et al. Oppose Sale Procedures
----------------------------------------------------------------
The Ad Hoc Committee of Holders of Second Liens under a
$100,000,000 Senior Secured Credit Facility; the Official
Committee of Unsecured Creditors; and Union Central Life
Insurance separately delivered to the U.S. Bankruptcy Court for
the District of Delaware their objections to the bidding
procedures motion filed by Werner Holding Co. (DE) Inc. aka Werner
Ladder Company and its debtor-affiliates.

As reported in the Troubled Company Reporter on Feb. 13, 2007,
an investor group of lenders consisting of Trust Company of the
West Group, Inc.; Schultze Asset Management, LLC; Milk Street
Investors, LLC; and Levine Leichtman Capital Partners, III, L.P.,
submitted an unsolicited offer to purchase substantially all of
the Debtors' assets for about $175,000,000.  The group formed WH
Acquisition Co. (DE), Inc., a special purpose vehicle, to acquire
the Debtors' assets.

While the Debtors were in negotiations with the Second Lien
Investor Group, the Debtors also received a $255,750,000
unsolicited offer from BDCM Opportunity Fund II, L.P.; BDC
Finance, L.L.C.; and Brencourt Advisors, LLC.

On January 31, 2007, the Debtors and the Black Diamond Group
entered into a non-binding term sheet based on its sale offer.

On February 6, the Second Lien Investor Group increased its
initial offer to $261,750,000 and filed a proposed asset purchase
agreement with the Court.

The Debtors subsequently asked the Court to approve certain
bidding protections and procedures in compliance with the
Preliminary Bidders' requirements to compensate the successful
bidder for the time and money spent in negotiating a stalking
horse purchase agreement.

1) Second Lien Committee

The Second Lien Committee, which consists of holders of majority
in amount of the Second Lien Credit Facility and a substantial
portion of a June 2003 First Lien Credit Facility, asks the Court
to deny the Debtors' request to grant a 2% break-up fee to the
Debtors' selected stalking horse bidder.

Representing the Second Lien Committee, James E. O'Neill, Esq.,
at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in
Wilmington, Delaware, contends that the proposed Break-Up Fee,
which would be approximately $5,000,000, cannot be justified as
an administrative expense in the Debtors' Chapter 11 cases,
because:

   (a) a break-up fee is not required to indicate an initial bid
       in the Debtors' cases, nor is a break-up fee required to
       promote more competitive bidding;

   (b) the Second Lien Bidders' purchase offer does not require
       a break-up fee, while it appears that Black Diamond does;

   (c) a break-up fee is not required under a "bird-in-the-hand"
       theory articulated by the Debtors in the Motion -- the
       Debtors have two very interested and capable "birds-in-
       the-hand," both of which bidders are deeply rooted in the
       Debtors' capital structure;

   (d) a break-up fee is not required to cause competing bids to
       be higher than the stalking horse bid;

   (e) under In re O'Brien Environmental Energy, Inc., 181 F.3d
       527(3d Cir. 1999), a break-up fee should not be approved
       if it serves to advantage a favored purchaser over other
       bidders by increasing the cost of acquisition to other
       bidders;

   (f) if the availability of a break-up fee induced a bidder to
       research the value of the debtor and convert that value
       to a dollar figure on which other bidders could rely, a
       break-up fee would arguably be beneficial; and

   (g) the fact that the size of the break-up fee is within the
       range of the fees approved in other cases is no evidence
       at all that the fee is actually necessary to preserve the
       value of the estate.  

"Where purchasers are willing to bid whether or not break-up fees
are offered, a break-up fee cannot be characterized as necessary
to preserve the estate, and, therefore, should not be approved,"
Mr. O'Neill tells the Honorable Kevin J. Carey.

Mr. O'Neill asserts that the bidding procedures can simply
provide that the initial incremental overbid will be $1,000,000
higher than the stalking horse bid plus the expense
reimbursement, as is more commonly the case in Section 363
bidding procedures, without the need of any break-up fees.

Levine Leichtman Capital Partners III, L.P., which holds more
than $54,000,000 in claims against the Debtors on account of its
ownership of 10% Senior Subordinated Notes due November 15, 2007,
supports the Second Lien Committee's position.

2) Creditors Committee

Dennis A. Meloro, Esq., at Greenberg Traurig, LLP, in Wilmington,
Delaware, states that the Creditors Committee is generally
supportive of a process to sell the Debtors' business as a going
concern, but only if the sale provides a real and tangible
benefit to the unsecured creditors in the Debtors' cases, and is
not simply used by the secured creditors as a way to foreclose on
the Debtors' assets.

Mr. Meloro notes that the Motion indicates that two bids have
been received for the Debtors' assets -- both of which are credit
bids by certain secured lenders.  Thus, he says, no real cash is
being paid to the estates under the current proposals.

A credit bid in Chapter 11 can have significant value to the
secured creditor because the assets are acquired as a going
concern -- they are not simply liquidated piecemeal, Mr. Meloro
states.  Moreover, the secured creditor obtains the assets "free
and clear" of all claims, liens and interests pursuant to bidding
protections under Section 363(f) of the Bankruptcy Code.

On the other hand, Mr. Meloro states, the automatic stay prevents
unsecured creditors from exercising substantially all of their
rights under non-bankruptcy law while the secured creditor takes
control of the assets as a going concern.  Thus, for the
unsecured creditors to receive any benefit in the Debtors' cases,
the bidding procedures must require certain minimum recoveries
and protections for the unsecured creditors as part of any sale
or plan, he asserts.

Mr. Meloro also contends that the Bidding Procedures should
require that all bids include sufficient cash for the Debtors and
the Creditors Committee to administer and wind down the Debtors'
estates, and to pay all administrative expense and priority
claims in cash on the effective date of a plan of reorganization.

Since the Creditors Committee has the express power under the
Bankruptcy Code to participate in the formulation of a plan and
to serve the interests of the estates' unsecured creditors, the
Creditors Committee proposes that the Debtors should be required
to consult with it throughout the sale and bidding process.

The Creditors Committee also believes that other modifications
should be made to the proposed Bidding Procedures, including
those necessary to address its concerns.

A full-text copy of the Creditors Committee's Revised Bidding
Procedures is available at no charge at:

               http://researcharchives.com/t/s?1af3

Furthermore, the Creditors Committee believes that the proposed
Break-Up Fee and expense reimbursement provisions are unnecessary
because the Debtors have already received multiple unsolicited
offers for their assets from their secured creditors.

The Creditors Committee maintains that the Second Lien Investor
Group and the Black Diamond Group are already deeply invested in
the Debtors' capital structure and have a strong incentive to
continue bidding to protect their investments and preserve their
alleged rights to credit bid under Section 363(k).

Accordingly, the Creditors Committee asks Judge Carey to sustain
its objections and approve its Revised Bidding Procedures.

3) Union Central

Union Central complains that the proposed Break-Up Fee is
unnecessary and unwarranted given that two parties are already
willing to proceed prior to approval of a break-up fee.

Union Central contends that if the Break-Up Fee is approved, it
will only add a component to the overbids required by the auction
procedures that is not necessary for the Sale process.

Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg
& Ellers LLP, in Wilmington, Delaware, asserts that by creating
an initial overbid requirement that is $1,000,000 higher than the
Purchase Price plus the Break Up Fee and Expense Reimbursement,
the Break Up Fee actually operates to chill bidding, rather than
encourage it.

Thus, Union Central insists that the Court should recognize that
the Break-Up Fee is not required to promote either the Second
Lien Investor Group or the Black Diamond Group's interest in the
Assets or to proceed with the contemplated Sale.

In addition, Mr. Ward states that the Break-Up Fee and
permissible credit bidding will also impose on any other
potential bidder an enormous disadvantage at the auction.

Union Central believes that the playing field needs to be leveled
in the absence of a compelling reason to favor the Second Lien
Investor Group or the Black Diamond Group over other parties-in
interest.  Mr. Ward affirms that the Debtors certainly have not
offered any justification for the existence of the Break Up Fee
under any circumstances.

Union Central further maintains that the allowance of the Break-
Up Fee should clearly be predicated, if at all, on the Court's
determination that permitting it will confer a benefit on the
estate.

In the absence of any benefit, the Break-Up Fee could only be
deemed a windfall to the stalking horse bidder, Mr. Ward notes.

Moreover, the "benefit" suggested by the Debtors for affording
the Break-Up Fee does not exist, Mr. Ward says.  Since there are
already two competing bidders that are ready, willing and able to
close a sale transaction on similar terms without any break-up
fee, the Debtors cannot demonstrate that the approval of the
Break-Up Fee will promote more competitive bidding, he points
out.

Accordingly, Union Central asks Judge Carey to deny the Debtors'
Motion.

                        Debtors Talk Back

In a separate pleading seeking permission for leave to file a
reply to the Objections, the Debtors tell the Court that it would
be harmful to enter into an agreement containing one or more
substantial conditions with either the Preliminary Bidders, and
risk having that agreement terminated weeks later if the
condition is not met.

The Debtors state that for a bid to be considered as a potential
Stalking Horse Bid, each Bidder must be prepared to enter into
definitive documents without any substantial conditions not later
than March 20, 2007.  Moreover, if both of the Bidders are
prepared to enter into an agreement, the Debtors will (a) select
the bid they believe offers the highest or otherwise best bid to
be the Stalking Horse Bid without a Break-up Fee, and (b) proceed
to conduct an auction having properly set a floor for the value
of the Debtors' business.

Given the current facts, it does not appear that payment of a
Break-Up Fee will be necessary, Robert S. Brady, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, states
on the Debtors' behalf.  However, he says, it is possible that by
March 20, one of the Bidders will drop out of the process or be
unable or unwilling to satisfy or waive certain conditions which
currently exist in their agreements.

If it were to occur and the other Bidder was not willing to
proceed without a Break-Up Fee, it would be both necessary and
appropriate for the Debtors to offer 2% Break-up Fee of up to 2%
of the Purchase Price because at that time, the fee would be a
necessary administrative expense to ensure that the Debtors'
business fetches the highest and best price at auction, Mr. Brady
explains.

With respect to the Creditors Committee's objections to the
Bidding Procedures, Mr. Brady notes that, since the filing of the
Motion, the Debtors have revised the Bidding Procedures to
provide the panel and its professionals with consultation rights
at each critical junction.  He adds that the Debtors have also
accommodated nearly all of the Creditors Committee's requests for
consultation, which revisions allow the panel to discharge its
obligations.

Mr. Brady relates that the Debtors could not accept the Creditors
Committee's request to participate in negotiating confidentiality
agreements with potential purchasers, or to mandate its
participation in negotiations with the bidders.  Pursuant to the
Bidding Procedures, the Debtors are already obligated to provide
the Creditors Committee with information when requested.

Mr. Brady also says that the balance of the Creditors Committee's
proposed revisions to the Bidding Procedures have a chilling
effect on bidding and cannot be accommodated.

The Debtors do not object to the balance of the Creditors
Committee's "seller" requests.  Each bidder, however, should be
permitted to consider the requests and submit the best bid.  The
Debtors, in consultation with the Creditors Committee, will
review all bids to determine which bid as a whole is the highest
or otherwise best.

Moreover, the Debtors and the bidding market understand the
Creditors' Committee's demands and will have to value those
demands appropriately.  If the Committee is dissatisfied with any
proposed sale transaction, nothing in the Bidding Procedures
prejudices its right to object to the Sale.

         Debtors Insist Approval of Bidding Protections

The Debtors insist that the Bidding Protections are necessary to
preserve the full value of their estates, and thus should be
approved.

Mr. Brady states that since neither of the Preliminary Bidders
has agreed to definitive agreement without unacceptable
conditions, the Debtors do not have "two birds-in-the-hand."  
Rather, he points out, the Debtors have "nothing more than two
potential birds-in-the-hand," leaving the Debtors and their
estates without certainty that the investor groups will not walk
away from the negotiating table.

Furthermore, Mr. Brady avers, the current bids have sufficient
conditions to render the bids as free options to purchase the
Debtors' assets.  The Debtors have been working to remove as much
conditionality as possible from the bids.  However, he says, a
key to the Debtors' success may come from their ability to award
the Bidding Protections.

"The Debtors need the Stalking Horse Bid to serve as a baseline
against which other bids will be evaluated," Mr. Brady tells
Judge Carey.  "The Debtors cannot afford the risk of losing a
firm bid.  Without the bird-in-the-hand, the Debtors might lose
the opportunity to adequately shop for the highest and best
available offer for the assets and the downside protection that
will be afforded by the Stalking Horse Purchase Agreement."

Mr. Brady contends that even if the stalking horse bidder is
offered the Break-Up Fee and is ultimately not the successful
bidder, the Debtors will still have benefitted from the higher
floor established by the improved bid and hence increase the
value realized from the sale.

Mr. Brady maintains that the investor groups do not contain the
same sets of conditions; the Debtors must therefore weigh any
requirement for Bidding Protections in the same manner in which
it weighs an offer containing other non-monetary, but
nevertheless costly conditions.

Furthermore, Mr. Brady asserts that the Bidding Protections serve
a necessary benefit for all creditors.  He states that by locking
in a Stalking Horse Bid and awarding the Bidding Protections, the
Debtors are guaranteeing that the lowest possible bid will
provide the estates with the resources to pay all administrative
and priority claims and fund the orderly wind-down of the
estates.

Without that floor, Mr. Brady says, there is no guarantee that
the Debtors will achieve a sufficiently high purchase price at
auction to ensure the result.

Accordingly, the Debtors ask Judge Carey to approve the Bidding
Procedures in their entirety.  The Debtors also seek permission
to award the Break-Up Fee and Expense Reimbursement, subject to
certain terms.

                     About Werner Holding Co.

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.  (Werner Ladder
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service Inc.
http://bankrupt.com/newsstand/or (215/945-7000)

The Debtors have until March 20, 2007, to decide whether to file
plan or pursue sale.  Their $99 Million DIP Facility matures on
Dec. 27, 2007.


WERNER LADDER: Seeks July 7 Extension to Remove Civil Actions
-------------------------------------------------------------
Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its
debtor-affiliates ask the U.S. Bankruptcy Court for the District
of Delaware to further extend until July 7, 2007, the period
within which they may remove various actions that were pending in
multiple state courts as of their bankruptcy filing.

The Debtors also ask the Court to approve their request without
prejudice to:

   (a) any position they may take regarding whether Section 362
       applies to stay any given civil action pending against
       them; and

   (b) their right to seek further extensions of the Removal
       Period.

Kara Hammond Coyle, Esq., at Young, Conaway, Stargatt & Taylor,
LLP in Wilmington, Delaware, relates that since 2007, the Debtors
have focused their efforts on overcoming significant challenges
in their Chapter 11 cases, including the completion of an
operational restructuring in which they (i) closed their facility
in Chicago, Illinois, and (ii) transitioned their operations to
Juarez, Mexico.  The Debtors have also developed a 2007 operating
budget and a long-term business plan.

More recently, Ms. Coyle states, the Debtors have been
negotiating with potential bidders over the terms of the sale of
substantially all of the Debtors' assets, including
implementation of bidding procedures to maximize the value
received for those assets.

As a result, Ms. Coyle says, the Debtors have not yet had an
opportunity to fully investigate all of the State Court Actions
to determine whether removal is appropriate.  Thus, she asserts,
the requested extension is necessary to protect the Debtors'
rights to remove any of the Actions.

The Debtors maintain that granting them additional opportunity to
consider removal of the Actions will assure that their decisions
are fully informed and consistent with the best interest of their
estates.

The Debtors further assure Judge Carey that nothing will
prejudice any party to a proceeding that they may ultimately seek
to remove from seeking the remand of action under 28 U.S.C.
Section 1452(b) at the appropriate time.

The Court will convene a hearing on March 20, 2007, to consider
the Debtors' request.

By application of Rule 9006-2 of the Local Rules of Bankruptcy
Practice and Procedures of the United States Bankruptcy Court for
the District of Delaware, the Debtors' Removal Period is
automatically extended through the conclusion of that hearing.

                     About Werner Holding Co.

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.  (Werner Ladder
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service Inc.
http://bankrupt.com/newsstand/or (215/945-7000)

The Debtors have until March 20, 2007, to decide whether to file
plan or pursue sale.  Their $99 Million DIP Facility matures on
Dec. 27, 2007.


WERNER LADDER: Wants to Reject Wells Fargo Equipment Lease
----------------------------------------------------------
On April 7, 2005, Werner Co. and Wells Fargo Financial Leasing
Inc. entered into a three-year equipment lease for an Ingersoll-
Rand EP250 Rotary Screw Air Compressor; R1250 Variable Capacity
Refrigerated Air Dryer; NLM-1500 Non-Lube Module Pre-Filter; and
1060 Gallon Vertical Air Receiver Tank.

The minimum monthly rent under the Lease is $3,044.  The Lease is
currently set to expire on April 7, 2008.

Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, tells the U.S. Bankruptcy Court for the
District of Delaware that since Werner and its debtor-affiliates
have no current or future need for the equipment, the Debtors
will realize no benefit from the Lease by delaying its rejection.  
Moreover, he says, any delay will likely cause the Debtors to
continue accruing additional and potentially administrative
obligations under the Lease.

The Debtors believe, after unsuccessfully searching for a
potential assignee, that the Lease has no market value.

Accordingly, the Debtors seek the Court's authority to reject the
Lease pursuant to Sections 105(a) and 365(a) of the Bankruptcy
Code, effective as of March 5, 2007.

The Debtors also ask the Court to establish the deadline for
filing claims arising from the Lease rejection as 30 days
following approval of their request.

The Debtors propose that any claimholder who fails to file a
timely proof of claim or before the Rejection Bar Date will be
forever barred from:

   -- asserting a claim against them or their estates; and

   -- sharing in any distribution of their estates or assets
      under any confirmed plan of reorganization in their
      Chapter 11 cases, or any order authorizing distributions
      from their estates.

                     About Werner Holding Co.

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.  (Werner Ladder
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service Inc.
http://bankrupt.com/newsstand/or (215/945-7000)

The Debtors have until March 20, 2007, to decide whether to file
plan or pursue sale.  Their $99 Million DIP Facility matures on
Dec. 27, 2007.


WESTCHESTER COUNTY HEALTH: S&P Lifts Bonds' Rating to BBB- from BB
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on
Westchester County Health Care Corp., New York's senior-lien bonds
two notches, to an investment-grade 'BBB-' from 'BB', based on the
demonstrated support for the corporation at the county and state
levels, coupled with the corporation's continued operational
progress.

At the same time, Standard & Poor's affirmed its 'AAA' rating on
the corporation's subordinate-lien bonds, guaranteed by
Westchester County.

In April 2006, Standard & Poor's raised its rating on the
senior-lien bonds three notches to 'BB' based on increased support
from Westchester County, significant operational improvement, and
stabilization of the management team under a consulting firm.  The
factors that drove the upgrade last year have continued, and are
partially responsible for the additional rating boost now.

"The biggest factor in the upgrade and restoration of an
investment-grade rating level is the fact that New York State
stepped up to improve reimbursement to the corporation by $25
million annually, via Medicaid rates, for a three-year period,"
said Standard & Poor's credit analyst Liz Sweeney.

"The state's support is a vital recognition that the corporation's
support base is more than local and that its public mission
extends well beyond Westchester County."

Although the $25 million package is a three-year agreement
scheduled to sunset in 2009, its passage alone is a key sign of
state support.  In addition, it provides funding at a critical
time in the corporation's fiscal recovery, allowing for enough of
a bottom line to spur the corporation's investment in capital at
an appropriate rate after several lean years.

The rating remains low investment grade because the corporation's
recent history indicates that government support, while
forthcoming when needed to prevent a crisis, is not
institutionalized at a level that guarantees long-term stability
and viability; it is primarily provided on a reactionary basis
during times of fiscal stress.  Exceptions include certain forms
of county support, including the provision of $15 million per year
in services and utilities, at no charge to the corporation, and
certain forms of non-operating county support, including
discretionary annual capital support and its ongoing guarantees of
the subordinate bonds and an $80 million CP program.

The outlook is stable, reflecting the anticipation of continued
operational progress in line with budgeted expectations and a
reduced reliance on onetime sources.  As long as actual results
approximate projections, the drop in liquidity budgeted for 2007
is not cause for rating concern. The potential for a rating
upgrade exists, but would need to be accompanied by a permanent
source of government support that puts the corporation on more
robust financial footing or by a reduced reliance on government
support through continued operational and balance sheet
improvement.  The hiring of a permanent management team will also
be critical to achieving a higher rating.  Factors that could
cause the rating to be lowered include a withdrawal of ongoing
government support sources or operational recidivism that resulted
in a wider operating gap.

The rating action affects $113 million of senior-lien bonds backed
by a revenue pledge of Westchester Medical Center, the
corporation's primary asset.


* Harvey R. Miller to Re-Join Weil, Gotshal & Manges LLP
--------------------------------------------------------
Harvey R. Miller, formerly head of International law firm Weil,
Gotshal & Manges LLP's Business Finance & Restructuring
department, would be rejoining the firm.  Mr. Miller returns to
Weil Gotshal after more than four years at the merchant-banking
firm Greenhill & Co. LLP, where he was a Managing Director and
also served as Vice-Chairman.

During his 32-year tenure at Weil Gotshal, Mr. Miller was an
integral figure in the firm's rise to prominence in the bankruptcy
and restructuring area, building a department whose size and
roster of clients are still unrivaled among major law firms.  Mr.
Miller will return to the department he helped to build, effective
March 12, 2007.

"I am delighted that Harvey has decided to return to our firm,"
Chairman Stephen J. Dannhauser remarked.  "As the country's
leading bankruptcy lawyer, his efforts and talents were the
backbone of our BFR practice for many years.  Many of the leading
practitioners in the Bankruptcy and Restructuring field are at
Weil Gotshal, and he was responsible for mentoring most of them.  
Now yet another generation of young Weil Gotshal BFR attorneys
will have the benefit of Harvey's experience.  Based on my
conversations with Harvey, it's clear that he missed the practice
of law and is looking forward to returning to his role as an
active bankruptcy practitioner."

"I selected Weil Gotshal for a couple of important reasons," Mr.
Miller stated.  "First, I have a high comfort level with the
institution and its leaders.  Second, Weil is where I grew up, and
it's always felt like home to me."

"We welcome Harvey's return, not only because of his standing for
excellence in our practice, but also because of his ability to
teach and mentor young lawyers," BFR Co-heads Martin J.
Bienenstock and Marcia L. Goldstein said.  "Harvey has a true
passion for the law and the bankruptcy practice."

In addition to his law firm and investment banking work, Mr.
Miller is an Adjunct Professor of law at New York University Law
School and a Lecturer in Law at Columbia University School of Law,
from which he graduated.  He also has served as a Visiting
Lecturer at Yale Law School.  He has authored and co-authored many
highly regarded texts and publications on significant legal and
business issues concerning restructurings, including substantive
contributions to the bankruptcy treatise, Collier on Bankruptcy,
and has been awarded virtually every major accolade offered by the
industry, including the Columbia University School of Law
Association Medal for Excellence in 2001 and the 2005
Distinguished Service Award from the American College of
Bankruptcy.

                  About Weil, Gotshal & Manges

Weil, Gotshal & Manges LLP is an international law firm of over
1,100 lawyers, including approximately 300 partners.  Weil Gotshal
is headquartered in New York, with offices in Austin, Boston,
Brussels, Budapest, Dallas, Frankfurt, Houston, London, Miami,
Munich, Paris, Prague, Providence, Shanghai, Silicon Valley,
Singapore, Warsaw, Washington DC and Wilmington.

Comprised of over 100 attorneys, Weil Gotshal's Business Finance
and Restructuring Department ranks with the largest among U.S. law
firms, and has been involved in virtually every major bankruptcy
case over the last decade, including ENRON, Parmalat, WorldCom,
Global Crossing, and many others.  Lawyers in the group have been
recognized by Chambers Global and other leading authorities as the
gold standard in the Bankruptcy field year after year, as has the
practice itself.


* BOOK REVIEW: THE ITT WARS: An Insider's View of Hostile
               Takeovers
---------------------------------------------------------
Author:     Rand Araskog
Publisher:  Beard Books
Paperback:  236 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122387/internetbankrupt

This book was originally published in 1989 when the author was
Chairman and Chief Executive Officer of ITT Corporation, a
$25 billion conglomerate with more than 100,000 employees and
operations spanning the globe with an amazing array of businesses:
insurance, hotels, and industrial, automotive, and forest
products.  ITT owned Sheraton Hotels, Caesars Gaming, one half of
Madison Square Garden and its cable network, and the New York
Knickerbockers basketball and the New York Rangers hockey teams.
The corporation had rebounded from its troubles of the previous
two decades.

Araskog was made CEO in 1978 to make sense of years of wild
acquisition and growth.  Under Harold Greenen, successor to ITT's
founder and champion of "growth as business strategy," ITT's sales
had grown from $930 million in 1961 to $8 billion in 1970 and $22
billion in 1979.  It had made more than 250 acquisitions and had
2,000 working units.  (It once acquired some 20 companies in one
month.)

ITT's troubles began in 1966, when it tried to acquire ABC.
National sentiments against conglomerates became endemic; the
merger became its target and was eventually abandoned.  Next came
a variety of allegations, some true, some false, all well
publicized: funding of Salvador Allende's opponents in Chile's
1970 presidential elections; influence peddling in the Nixon White
House; underwriting the 1972 Republican National Convention.  
ITT's poor handling of several antitrust cases was also making
headlines.

Then came recession in 1973.  ITT's stock plummeted from 60 in
early 1973 to 12 in late 1974.  Geneen found himself under fire
and, in Araskog's words, the "succession wars" among top ITT
officers began.  Geneen was forced out in 1077, and Araskog, head
of ITT's Aerospace, Electronics, Components, and Energy Group,
with more than $1 billion in sales, won the CEO prize a year
later.

Araskog inherited a debt-ridden corporation.  He instituted a plan
of coherent divesting and reorganization of the company into more
manageable segments, but was cut short by one of the first hostile
bids by outside financial interests of the 1980's, by businessmen
Jay Pritzker and Philip Anschutz.  This book is the insider's
story of that bid.

The ITT Wars reads like a "Who's Who" of U.S. corporations in the
1970s and 1980s.  Araskog knew everyone.  His writing reflects his
direct, passionate, and focused management style.  He speaks of
wars, attacks, enemies within, personal loyalty, betrayal, and
love for his company and colleagues.  In the book's closing
sentences, Araskog says, "We fought when the odds are against us.
We won, and ITT remains one of the most exciting companies of the
twentieth century, we hope to keep the wagon train moving into the
twenty-first century and not have to think about making a circle
again.  Once is enough."

Araskog wrote a preface and postlogue for the Beard Books edition,
and provide us with ten years of perspective as well as insights
into what came next.  In 1994, he orchestrated the breakup of ITT
into five publicly traded companies.  Wagon circling began again
in early 1997 when Hilton Hotels made a hostile takeover offer to
ITT Corporation.  Araskog eventually settled for a second-best
victory, negotiating a friendly merger with the Starwood
Corporation, in which ITT shareholders became majority owners of
Starwood and Westin Hotels, with the management of Starwood
assuming management of the merged entity.

Today, Mr. Araskog heads his own investment company in Palm Beach,
Florida.

                             *********

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, Jason A. Nieva,
Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Tara
Marie A. Martin, Frauline S. Abangan, 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 ***