TCR_Public/070515.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Tuesday, May 15, 2007, Vol. 11, No. 114

                             Headlines

1031 TAX GROUP: Files for Chapter 11 Protection in New York
1031 TAX GROUP: Case Summary & 21 Largest Unsecured Creditors
1301-1307 NORTH CLYBORN: Voluntary Chapter 11 Case Summary
178 KNEELAND: Case Summary & Three Largest Unsecured Creditors
ABENGOA BIOENERGY: S&P Cuts Rating on $90 Million Facility to B-

AEROFLEX INC: Moody's Puts B2 Corporate Family Rating
AJ PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
ALLIED HOLDINGS: Wants to Restructure $315-Mil. Goldman Sachs Loan
AMERIRESOURCE TECH: De Joya Griffith Raises Concern Doubt
AQUILA INC: Posts $24.3 Million Net Loss in Quarter Ended March 31

ASBURY AUTOMOTIVE: Net Income Lowers to $433,000 in 1st Qtr 2007
BELL MIRCROPRODUCTS: Revenues Up to $1 Billion in First Qtr. 2007
BILL GILES: Case Summary & 20 Largest Unsecured Creditors
BNC MORTGAGE: Moody's Puts Low-B Ratings to Class B Certificates
CARDTRONICS INC: March 31 Balance Sheet Upside-Down by $42.2 Mil.

CITADEL BROADCASTING: Earns $6.7 Million in Quarter Ended March 31
CITADEL BROADCASTING: S&P Puts Corporate Credit Rating at B
COMPUDYE INC: Case Summary & 20 Largest Unsecured Creditors
COX ENT: Discovery Channel Deal Cues S&P's Positive Outlook
CWABS ASSET-BACKED: Moody's Rates Class B Certificates at Ba1

DAIMLERCHRYSLER: Cerberus Takes Over Majority Interest in Chrysler
DUKE FUNDING: Fitch Affirms BB+ Rating on $32 Million Notes
EPICOR SOFTWARE: Completes Offering with $230MM Total Notes Issued
FAIRFAX FINANCIAL: S&P Rates Proposed $464.2MM Senior Notes at BB
GEOKINETICS INC: Prices Public Offering of 4.5 Mil. Common Stock

GTP ACQUISITION: Moody's Rates $129.9 Million Notes at Low-B
HANCOCK FABRICS: Equity Panel Organizational Meeting Set on May 22
HANOVER COMPRESSOR: Calls For Redemption of $8MM Convertible Notes
HEALTH MANAGEMENT: Earns $65 Million in Quarter Ended March 31
INNUITY INC: Posts $1.6 Million Net Loss in Quarter Ended March 31

INTERACT HOLDINGS: Gruber & Company Raises Concern Doubt
ION MEDIA: W. Lawrence Patrick to Resign from Board of Directors
ISP CHEMCO: Shareholder Cash Distribution Cues S&P to Cut Ratings
JAMES RIVER: Increasing Leverage Prompts S&P to Junk Credit Rating
JARDEN CORPORATION: Earns $1.4 Million in First Quarter 2007

JER CRE: Moody's Puts Low-B Ratings to Class F & G Obligations
JOAN FABRICS: Proposes Bidding Procedures for Sale of Assets
KNOLL INC: First Quarter 2007 Net Income Increases to $14.8 Mil.
LEGENDS GAMING: Weak Performance Prompts S&P's Stable Outlook
MAGNA ENTERTAINMENT: Unit Completes Credit Refinancing

MASTR ASSET: Moody's Puts Low-B Ratings on Two Cert. Classes
MORGAN STANLEY: Moody's Lifts Ratings on Class H Certificates
MUELLER WATER: Plans Offering of $350 Million of Senior Notes
MUELLER WATER: Earns $17.9 Million in Quarter Ended March 31
MUELLER WATER: S&P Rates Proposed $1.1 Billion Facilities at BB

NEOMEDIA TECH: Posts $11.5 Million Net Loss in Qtr Ended March 31
NEW CENTURY: Wants to Hire Manatt Phelps as Securitization Counsel
NEW CENTURY: Taps Sheppard Mulling as Special Litigation Counsel
NEW CENTURY: Gets Court Okay to Hire Lazard as Financial Advisor
PEOPLE'S CHOICE: RFC Selling 1,029 Res'l. Mortgage Loans on May 22

PETROL OIL: Weaver & Martin Raises Going Concern Doubt
POLYPORE INC: Earns $6.2 Million in Quarter Ended March 31
POLYPORE INC: S&P Rates Proposed $470MM Credit Facilities at B+
PRO-BUILD: S&P Places All Ratings Under Negative CreditWatch
REDDY ICE: Incurs $10.2 Million Net Loss in First Quarter 2007

RELIANCE INSURANCE: Supplemental Claims Resolution Procedures OK'd
REMINGTON ARMS: S&P Removes Watch and Lifts Credit Rating to B-
RFSC SERIES 2004-RP1: Moody's Cuts Two Tranches to Low-B
RITE AID: Fitch Rates Proposed $1.22 Billion Notes at CCC+
ROSEDALE CLO: S&P Rates $12.5 Million Class E Notes at BB

ROTECH HEALTHCARE: Posts $21.8 Mil. Net Loss in Qtr Ended March 31
SHARP HOLDINGS: Loan Add-On Prompts S&P to Revise Rating to B-
SHIFT NETWORKS: Obtains CCAA Protection in Alberta
SINCLAIR BROADCAST: Affiliate to Redeem $300 Million of 2012 Notes
SINCLAIR BROADCAST: Closes $300MM Convertible Sr. Notes Offering

SMARTIRE SYSTEMS: Declares Changes in Board & Leadership Structure
STARBOUND RE: S&P Rates Proposed $66.5 Million Bank Loan at BB
STRATUS SERVICES: Posts $85,982 Net Loss in Quarter Ended March 31
TALCOTT NOTCH: S&P Puts Class A-4 Notes' Rating under Pos. Watch
TOUSA INC: Posts $66 Million Net Loss in Quarter Ended March 31

UNIGENE LABORATORIES: Restructures $15.7 Million Credit Balance
UNION PLANTERS: Fitch Affirms BB Ratings on Class B5 Certificates
UNIVERSAL HOSPITAL: March 31 Balance Sheet Upside-Down by $89.3MM
UNIVERSAL HOSPITAL: UHS Merger Plans to Offer $230MM Senior Notes
UNIVERSAL HOSPITAL: S&P Holds B+ Rating and Removes Negative Watch

UNIVISION COMMUNICATIONS: Fitch Cuts Issuer Default Rating to B
VALHI INC: Earns $26.1 Million 2007 First Quarter
VALHI INC: Rhode Island Litigation Cues S&P to Cut Rating to B+
WARNER MUSIC: To Cut 400 Jobs to Realign Workforce
WEST CORP: March 31 Balance Sheet Upside-Down by $2.1 Billion

WEST CORP: S&P Holds B+ Rating on $135 Million Loan Add-On
WEST PENN: Fitch Lifts Rating on $735 Million Revenue Bonds to BB
WESTAR ENERGY: Prices Public Offering of 2047 Mortgage Bonds
WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr Ended March 31

* Fried Frank Adds John Sorkin as Partner in New York
* Hunton & Williams Names Two Attorneys as Washington Counsel
* King & Spalding Adds Two Senior Counsel in Houston Office

* Large Companies with Insolvent Balance Sheets

                             *********

1031 TAX GROUP: Files for Chapter 11 Protection in New York
-----------------------------------------------------------
The 1031 Tax Group, LLC and 16 its affiliates filed for Chapter 11
protection with the U.S. Bankruptcy Court for the Southern
District of New York in order to obtain necessary time to
reorganize their affairs.

The Debtors cited liquidity issues in the decision to file,
including the actions taken by several financial institutions in
blocking access to 1031 Tax Group's funds.

The Debtors estimate on a balance sheet basis that their assets
exceed their obligations to customers and others.  Prior to the
filing, the owner of 1031 Tax Group, Edward H. Okun, personally
signed a guaranty for repayment of notes owed to the Debtors by
entities controlled by him.  Mr. Okun has agreed in principal to
collateralize his personal guarantee with a collateral package in
order to facilitate repayment of creditors' claims.  The Debtors
anticipate that the proposed collateral package will be agreed to
and documented within a short period of time.

Paul Traub, Esq. and Norman N. Kinel, Esq., co-chairs of Dreier
LLP's Bankruptcy & Corporate Reorganization Department, represent
the Debtors in their restructuring efforts.

In addition, the Debtors have named James M. Lukenda of Huron
Consulting Group as Chief Restructuring Officer.  The Huron team
led by Mr. Lukenda replaces five 1031 TG executives who recently
left the company.

"Huron is moving forward with the full support of The 1031 Tax
Group to address the companies' business and liquidity issues in
an orderly way," stated Mr. Lukenda.

1031 Tax Group, LLC is a "roll-up" of several qualified
intermediaries created to service real property exchanges under
Section 1031 of the Internal Revenue Code.


1031 TAX GROUP: Case Summary & 21 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: The 1031 Tax Group, L.L.C.
             10800 Midlothian Turnpike 300
             Richmond, VA 23235

Bankruptcy Case No.: 07-11448

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Security 1031 Services, L.L.C.             07-11447
      1031 Advance 132, L.L.C.                   07-11449
      1031 Advance, Inc.                         07-11450
      1031 TG Oak Harbor, L.L.C.                 07-11451
      Atlantic Exchange Company, Inc.            07-11452
      Atlantic Exchange Company, L.L.C.          07-11453
      Exchange Management, L.L.C.                07-11454
      Investment Exchange Group, L.L.C.          07-11455
      National Exchange Accommodators, L.L.C.    07-11456
      National Exchange Services Q.I., Ltd.      07-11457
      National Intermediary, Ltd.                07-11458
      NRC 1031, L.L.C.                           07-11459
      Real Estate Exchange Services, Inc.        07-11460
      Rutherford Investment, L.L.C.              07-11461
      Shamrock Holdings Group, L.L.C.            07-11462

Type of Business: The Debtor is a privately held consolidated
                  group of qualified intermediaries created to
                  service real property exchanges under Section
                  1031 of the Internal Revenue Code.  See
                  http://www.ixg1031.com/

Chapter 11 Petition Date: May 14, 2007

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtors' Counsel: Norman N. Kinel, Esq.
                  Dreier L.L.P.
                  499 Park Avenue
                  New York, NY 10022
                  Tel: (212) 328-6100
                  Fax: (212) 328-3801

Estimated Assets: Over $100 Million

Estimated Debts:  Over $100 Million

Debtors' Consolidated List of 21 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Dr. and Mrs. Bordoni             trade debt         $10,645,330
478 Sequoia Way
Los Altos, CA 94024

Capitol Aggregates, Ltd.         trade debt          $8,115,800
c/o Gaydos, J.
P.O. Box 33240
San Antonio, TX 78265

Newton Bayard Limited            trade debt          $4,358,266
Partnership
75 Second Avenue
Needham, MA 02494

Siox Realty Corp.                trade debt          $3,945,904
212-07 33rd Road
Bayside, NY 11361

William Newton                   trade debt          $3,362,955
405 Country Lane
San Antonio, TX 78209

Red Bird Ranch, Ltd.;            trade debt          $3,354,494
Reeves Hollimon
c/o Hollimon, R.
300 Austin Highway,
Suite 200
San Antonio, TX 78209

409 Sherman Way, L.L.C.          trade debt          $3,325,778
c/o Ms. Candace Graham
1 Applewood Lane
Portolo Valley, CA 94028

L.J. Ambassador, Ltd.            trade debt          $3,175,439
c/o Mr. Andy Hull
P.O. Box 6051
San Antonio, TX 78209

L.J. 904 West Avenue, Ltd.,      trade debt          $3,052,463
L.J. Castle Hill Ventures,
Ltd. and L.J. Villa Marquis,
Ltd.
c/o Hull, Andy
P.O. Box 6051
San Antonia, TX 78209

Joyce Green                      trade debt          $2,842,424
86 Beach Lane
Westhampton Beach, NY 11979

Mr. and Mrs. DonKonics           trade debt          $2,817,123
926 Deer Creek Road
Martinez, CA 94553

N.P. 1300, L.L.C.                trade debt          $2,481,027
76 South Orange Avenue
South Orange, NJ 07079

Vista Enclave, Ltd.              trade debt          $2,365,496
1117 Eldridge Parkway
Houston, TX 77077

Huber, G./CellTex                trade debt          $2,139,316
c/o Huber, Greg
2230 Pipestone Drive
San Antonio, TX 78232

Quirk Infiniti, Inc.             trade debt          $2,077,438
442 Quincy Avenue
Braintree, MA 02184

Charles & Maria Sourmaidas       trade debt          $1,970,200
P.O. Box 351
Adamsville, RI 02801

James Collins                    trade debt          $1,919,653
5602 Grape Street
Houston, TX 77096

Ward Enterprises, L.L.C.         trade debt          $1,900,029
c/o Peter Gosch
32 Dawn Heath Drive
Littleton, CO 80127

Cody Dutton, Trustee             trade debt          $1,772,384
Cody Dutton Testamentary
Trust
1499 South Main Street
Boeme, TX 78006

Myane, G.                        trade debt          $1,649,822
c/o Myane, Geoffrey
P.O. Box 1876
Uvalde, TX 78820

Garson                           trade debt          $1,647,545
c/o Nona A. Garson
51 Bisell Road
Lebanon, NJ 08833


1301-1307 NORTH CLYBORN: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: 1301-1307 North Clyborn, L.L.C.
        405 North Wabash, Suite 3504
        Chicago, IL 60611

Bankruptcy Case No.: 07-08728

Chapter 11 Petition Date: May 13, 2007

Court: Northern District of Illinois (Chicago)

Judge: Jack B. Schmetterer

Debtor's Counsel: Paul M. Bach, Esq.
                  1955 Shermer Road, Suite 150
                  Northbrook, IL 60062
                  Tel: (847) 564-0808
                  Fax: (847) 564-0985

Total Assets: $2,600,600

Total Debts:  $2,022,000

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


178 KNEELAND: Case Summary & Three Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: 178 Kneeland Street Realty, L.L.C.
        229 Berekley Street
        Boston, MA 02116

Bankruptcy Case No.: 07-12959

Type of Business: The Debtor owns real estate.

Chapter 11 Petition Date: May 11, 2007

Court: District of Massachusetts (Boston)

Judge: William C. Hillman

Debtor's Counsel: Stewart F. Grossman, Esq.
                  Looney & Grossman, L.L.P.
                  101 Arch Street
                  Boston, MA 02110
                  Tel: (617) 951-2800

Estimated Assets: $1 Million to $100 Million

Estimated Debts: $1 Million to $100 Million

Debtor's XX Largest Unsecured Creditors:

   Entity                                          Claim Amount
   ------                                          ------------
Pheonix Mortgage                                       $362,784
c/o Madoff & Khoury, L.L.P.
Pine Brooks Office Park
Foxboro, MA 02035

Jon Burke                                              $350,000
Steven Ross, Esq.
376 Boylston Street
Boston, MA 02116

City of Boston                                           $7,000
P.O. Box 1626
Boston, MA 02105


ABENGOA BIOENERGY: S&P Cuts Rating on $90 Million Facility to B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Abengoa
Bioenergy of Nebraska LLC's $90 million senior secured credit
facility to 'B-' from 'B'.  The rating remains on CreditWatch.

At the same time, Standard & Poor's revised the CreditWatch
implications to developing from negative.

ABNE is constructing and will operate an 88-million gallon-per-
year dry-mill ethanol plant in Ravenna, Neb.

"The downgrade is a result of longer delays in the construction of
the facility and, subsequently, increasing concerns regarding
ABNE's ability to service its debt prior to construction
completion," said Standard & Poor's credit analyst Arthur
Simonson.

The CreditWatch implications were revised to developing to reflect
the uncertainty surrounding the rating if or when the project
achieves substantial completion and can start producing cash flow.

The CreditWatch listing will be resolved upon substantial
completion of the plant.


AEROFLEX INC: Moody's Puts B2 Corporate Family Rating
-----------------------------------------------------
Moody's Investors Service assigned first-time long-term ratings to
Aeroflex Inc. (corporate family rating of B2) and a stable ratings
outlook.

A newly formed entity, Acquisition Co., will acquire all of the
outstanding shares of Aeroflex, a publicly traded microelectronics
and test and measurement provider that will continue as the
surviving company.

Net proceeds from the $475 million first lien term loan and
$245 million second lien term loan together with the $60 million
first priority revolver (undrawn at closing) will be used to
finance Aeroflex's $1.2 billion buyout (including fees and
expenses) in a highly leveraged transaction.  The buyout, which is
subject to shareholder approval, also consists of a
$423 million cash equity investment from private equity sponsors,
General Atlantic LLC and Francisco Partners.

The B2 corporate family rating (CFR) reflects the company's:

     (i) very high financial leverage and weak credit protection
         measures following the leveraged buyout;

    (ii) limited asset protection from a very small base of pro
         forma tangible assets;

   (iii) potentially increasing competition longer-term from
         larger and well capitalized companies;

    (iv) exposure to aerospace and defense electronics end
         markets, which could experience changes in procurement
         policies or the types of products sourced by the
         government; and

     (v) money losing radar unit and break even synthetic test
         business.

The rating takes into account Moody's Basket D hybrid security
treatment for the $390 million of sponsor preferred equity in
which 25% of the preferred stock is treated as debt-like and 75%
is treated as equity-like.  As such, Moody's adjustments
incorporate the concomitant increase in debt, equity and interest
expense on Aeroflex's balance sheet and income statement.

The rating also considers Aeroflex's leading market position as
the primary or sole source provider in niche markets, strong
intellectual property portfolio with proprietary technology,
highly visible and diversified revenue base with no defense
platform exposures, relatively stable competitive landscape,
mission-critical nature of its products with high switching costs
resulting in stable gross margins approaching 50% and consistent
operating profitability and positive free cash flow generation.  
The B2 CFR also considers Moody's expectation that Aeroflex's
operating performance will benefit from a broadening of
applications from existing technologies, the secular outsourcing
trend from primary contractors and increasing dollar content as
the company moves up the value chain in the satellite and medical
platforms.

Although Aeroflex is expected to be free cash flow positive over
the near term, Moody's does not expect the company to
substantially repay debt over the next 12 months.  Hence, the
stable outlook reflects the company's prospects for modest
improvement in financial leverage and interest coverage metrics.  
This is anticipated to be driven by Aeroflex's strong market
position, relatively stable operating cash flows even during
recessionary episodes and attractive industry dynamics, offset by
the money losing radar business and potentially increasing
competition.

The following first time ratings were assigned:

   * Corporate Family Rating -- B2

   * Probability of Default Rating -- B2

   * $60 Million Senior Secured First Priority Revolver due
     2013 -- Ba3 (LGD3, 32%)

   * $375 Million Senior Secured First Priority Term Loan (US
     Tranche) due 2014 -- Ba3 (LGD3, 32%)

   * $100 Million Senior Secured First Priority Term Loan (UK
     Tranche) due 2014 -- Ba3 (LGD3, 32%)

   * $245 Million Senior Secured Second Priority Term Loan due
     2015 -- Caa1 (LGD5, 84%)

The ratings outlook is stable.

Headquartered in Plainview, NY, Aeroflex Inc. is a specialty
provider of microelectronics and test and measurement products to
the aerospace, defense, wireless, broadband and medical markets.
For the twelve months ended March 31, 2007, revenues were
$577 million.


AJ PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: A.J. Properties, Inc.
        P.O. Box 324
        Goffstown, NH 03045

Bankruptcy Case No.: 07-10983

Type of Business: The Debtor owns a country club.

Chapter 11 Petition Date: May 13, 2007

Court: District of New Hampshire (Manchester)

Debtor's Counsel: Eleanor Wm. Dahar, Esq.
                  Victor W. Dahar Professional Association
                  20 Merrimack Street
                  Manchester, NH 03101
                  Tel: (603) 622-6595

Total Assets: $6,251,165

Total Debts:  $4,269,317

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Brian and Judy Streeter                                 $97,390
143 Cambridge
Bedford, NH 03110

Hitch a Flag, L.L.C.             promissory             $34,000
161 Gorham Pond Road             note
Goffstown, NH 03045

Bank of America Business Loan    161 Gorham Pond        $28,691
P.O. Box 15026                   Road
Wilmington, DE 19850-5026        Goffstown, NH 03045

New Hampshire Department         back taxes             $22,188
of Revenue

Lesco, Inc.                                             $22,109

Verizon Yellow Pages Co.                                $12,509

V.F. Imagewear                                           $8,319

Precision Temperature                                    $7,834
Control

R&R Products, Inc.                                       $6,402

Callaway Golf                                            $6,305

Advanta Business Card                                    $6,091

Connor & Associates, P.C.                                $5,775

Law Offices of Rodney L.                                 $5,557
Stark

Favorite Foods, Inc.                                     $5,508

Agar Supply Co.                                          $5,393

U.S. Bancorp.                                            $5,049

Capital One, F.S.B.                                      $4,822

Grigg Brothers                                           $4,736

Cutter & Buck                                            $4,083

Affiliated H.V.A.C. Service,                             $3,978
L.L.C.


ALLIED HOLDINGS: Wants to Restructure $315-Mil. Goldman Sachs Loan
------------------------------------------------------------------
Allied Holdings Inc. and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Northern District of Georgia to
restructure a $315,000,000 senior secured bank financing arranged
by Goldman Sachs Credit Partners L.P.

As reported in the Troubled Company Reporter on May 7, 2007, the
Court entered a final order authorizing the Debtors to enter and
execute the Goldman Sachs financing commitment letter.  Pursuant
to a commitment letter, Goldman Sachs agreed to arrange the
refinancing of the Debtors' $260,000,000 debtor-in-possession
credit facility with General Electric Capital Corp., Morgan
Stanley Senior Funding, Inc., and Marathon Structured Finance
Fund.

Pursuant to a Secured Super-Priority Debtor In Possession and
Exit Credit and Guaranty Agreement entered into on March 30, 2007,
Goldman Sachs, acting as lead arranger and syndication agent and
The CIT Group/Business Credit, Inc., acting as administrative
agent and collateral agent, and a syndicate of financial
institutions agreed to provide the Debtors first priority credit
facilities in the aggregate principal amount of up to $315,000,000
to, among others, refinance the GECC DIP Facility.

The Final Order approved the Goldman Sachs Credit Agreement and
other related documents, including a fee letter dated March 16,
2007.  Pursuant to the Fee Letter, the First Lien Syndication
Agent was permitted to change the terms, conditions, pricing or
structure of the Credit Agreement within certain narrow parameters
if the changes are reasonably necessary to facilitate successful
syndication.

Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, relates that the Debtors and the First Lien Lenders have
negotiated a restructuring of the facilities to achieve a
successful syndication of the Financing.

In particular, the Debtors want to:

    (a) restructure the Goldman Sachs Financing into:

         -- first lien credit facilities in an aggregate
            principal amount of $265,000,000 under an Amended and
            Restated First Lien Secured Super-Priority Debtor in
            Possession and Exit Credit and Guaranty Agreement;
            and

         -- a second lien credit facility in an aggregate
            principal amount of $50,000,000, under a Second Lien
            Secured Super-Priority Debtor in Possession and Exit
            Credit and Guaranty Agreement; and

    (b) grant liens and superpriority claims.

AHI and certain of its debtor subsidiaries are the named
Borrowers, and each Borrower and each subsidiary of AHI other
than Haul Insurance Limited is a Guarantor under the Agreements.

Goldman Sachs will serve as Syndication Agent, and The CIT
Group/Business Credit, Inc., will serve as Administrative Agent
and as Collateral Agent under the First Lien Agreement.  Goldman
Sachs will serve as Lead Arranger and Syndication Agent,
Administrative Agent and Collateral Agent under the Second Lien
Agreement.

       Terms and Conditions of the Restructured Financing

Pursuant to the Original Credit Agreement, the Debtors obtained
$315,000,000 senior secured bank financing consisting of:

   (a) a $230,000,000 senior secured term-loan facility;

   (b) a $50,000,000 senior secured synthetic letter-of-credit
       facility; and

   (c) a $35,000,000 senior secured revolving credit facility.

The restructuring of the Financing contemplates that the
Borrowers will borrow funds from, and incur debt to, the Second
Lien Lenders in accordance with the terms and conditions of the
Second Lien Credit Documents up to the aggregate amount of
$50,000,000, and the Guarantors will guaranty the borrowings
under the Second Lien Credit Documents.

Specifically, the Borrowers have requested and the Second Lien
Lenders have agreed to extend to the Borrowers a term loan
facility in an aggregate amount not to exceed $50,000,000 to be
used to repay a portion of the loans under the First Lien Credit
Facilities on the Closing Date.

As a result of the repayment, the loans due under the First Lien
Credit Facilities will not exceed $265,000,000.

The obligations of the Borrowers under the Second Lien Credit
Documents and the obligations of the Guarantor Subsidiaries under
the Second Lien Subsidiary Guaranty will be secured on a second
priority basis by liens on substantially all the assets of the
Borrowers and the Guarantor Subsidiaries.

Mr. Winsberg notes that the weighed average interest rate
chargeable under the First Lien Credit Documents and the Second
Lien Credit Documents is within the range of rates previously
approved by the Court in connection with the Goldman Sachs
Financing and otherwise complies with the narrow parameters for
changes to terms, conditions, pricing and structure set forth in
the Fee Letter approved by the Court.

Importantly, Mr. Winsberg relates, the contemplated Financing
restructuring retains the option of the Debtors to convert the
Financing into exit financing.  Further, he says, no new fees
will be charged in association with the restructuring of the
Financing.

         Lenders to Stop Funding Absent Restructuring

Since entry of the Final Order, Goldman Sachs has been actively
syndicating the $315,000,000 first-lien refinancing.  Goldman
Sachs has identified a sufficient number of financial institutions
to fully and successfully syndicate the loan.

Many of the financial institutions, however, have indicated that
if the $315,000,000 financing is not quickly restructured and
syndicated, they will cease setting funds aside and will no
longer be interested in participating, Mr. Winsberg tells the
Court.

At the Debtors' behest, the Court held an emergency hearing to
consider approval of the restructuring of the $315,000,000
financing.

The Court has entered an interim order authorizing the Debtors to
amend the Goldman Sachs Financing, and borrow funds from, and
incur debt to, the Second Lien Lenders up to the aggregate amount
of $50,000,000.

                      About Allied Holdings

Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other
OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services.  The company and 22
of its affiliates filed for chapter 11 protection on July 31, 2005
(Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537).  Jeffrey W.
Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in
their restructuring efforts.  Henry S. Miller at Miller Buckfire &
Co., LLC, serves as the Debtors' financial advisor.  Anthony J.
Smits, Esq., at Bingham McCutchen LLP, provides the Official
Committee of Unsecured Creditors with legal advice and Russell A.
Belinsky at Chanin Capital Partners, LLC, provides financial
advisory services to the Committee.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Allied Holdings Bankruptcy News,
Issue No. 48; Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/newsstand/or 215/945-7000)

                            Plan Update

The Court confirmed the Debtors' Joint Plan of Reorganization with
the Yucaipa Entities and Teamsters National Automobile
Transportation Industry Negotiating Committee on May 12, 2007.  
The Plan Proponents expect their Joint Plan to become effective on
June 1, 2007.


AMERIRESOURCE TECH: De Joya Griffith Raises Concern Doubt
---------------------------------------------------------
De Joya Griffith & Company LLP, of Las Vegas, Nevada, expressed
substantial doubt on AmeriResource Technologies Inc.'s ability to
continue as a going concern after auditing the company's financial
statement for the years ended Dec. 31, 2006, and 2005.  De Joya
reported that the company has suffered recurring losses from
operations, negative working capital, and negative cash flows from
operations.

For the year ended Dec. 31, 2006, the company posted a net loss of
$2,331,532, as compared with a net loss of $2,037,576 in the
previous year.  The company's revenues grew to $892,424 from
$149,321 in the prior year, while operating loss increased to
$3,567,229 from $2,586,936 in the prior year.

The company reported increased expenses for the year ended
Dec. 31, 2006: consulting expenses grew to $2,150,882 from
$1,273,475 in the prior year; general and administrative expenses
grew to $687,792 from $490,446 in the prior year; and expenses
from employees' salaries increased to $506,584 from $100,000 in
the prior year.

At Dec. 31, 2006, the company suffered an uneven balance sheet
with a negative working capital brought about by total current
assets of $207,045 and total current liabilities of $1,834,115.  
The company also reported $1,383,739 in stockholders' deficit from
total assets of $1,096,947 and total liabilities of $2,480,686.

For the year ended Dec. 31, 2006, the company's account payables
were $208,242.  The company had notes payable to other parties in
the amount of $1,464,608, and notes payable to related parties of  
$350,157, inclusive of accrued interest totaling $83,998.

The company plans to decrease its liabilities and increase its
assets by acquiring additional income producing companies in
exchange for its securities, as well as attempting to settle
additional payables with equity.  The company intends to continue
to improve shareholder equity by acquiring income-producing
assets, which are generating profits.

A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1efd

                       About AmeriResource

The Las Vegas, Nevada-based AmeriResource Technologies, Inc. -
(OTC BB: AMREE) -- http://www.ameriresourcetechnologies.com/--  
operates online auction drop-off locations that provide the
general public to sell items on eBay.  It provides software design
and product development for businesses that sells items on eBay.  
AmeriResource also offers software and hardware system, and self-
serve system called Point of Sales, which offers integrated
system, including restaurant management tools/menus that offer
various reports for inventory and labor control.  The company was
incorporated in 1989 as KLH Engineering Group, Inc. and changed
its name to AmeriResource Technologies Inc. in 1996.


AQUILA INC: Posts $24.3 Million Net Loss in Quarter Ended March 31
------------------------------------------------------------------
Aquila, Inc. reported a net loss of $24.3 million for the quarter
ended March 31, 2007, compared to a net loss of $1.1 million in
2006.  Sales for the quarter were $444 million in 2007 versus
$431 million in 2006.

"Earnings in the first quarter of 2007 were reduced because of
lower earnings from discontinued operations relating to our former
gas utilities that were sold in 2006 and increased fuel and
purchased power costs in Aquila's electric utility businesses due
to a number of significant unplanned outages at some area coal-
fired generating facilities during a colder than normal February,"
said Richard C. Green, Aquila's chairman and chief executive
officer.  "While service to customers was unaffected due to our
ability to call on other resources, the change in power supply
came at an increased and unexpected cost."

The impact to Aquila from the unavailable resources totaled over
600 megawatts.  Specific units included the company's Sibley #3
power plant along with Kansas City Power & Light's Iatan facility,
Westar's Jeffrey Energy Center and a purchase power contract with
Nebraska Public Power District.

                         Segment EBITDA

Continuing electric utility operations in Missouri and Colorado
and natural gas utility operations in Iowa, Kansas, Nebraska and
Colorado reported 2007 EBITDA of $35.3 million, down $13.4 million
from $48.7 million reported in 2006.  Electric Utilities EBITDA
decreased $17.4 million from 2006, while Gas Utilities reported an
EBITDA increase of $4 million.  Merchant Services loss before
interest, taxes, depreciation and amortization of $4.1 million was
$3.3 million less than the loss of $7.4 million reported in 2006,
and the Corporate and Other loss of $10.3 million in 2007 was
$4.7 million greater than the $5.6 million loss in 2006.

                       Electric Utilities

Gross profit was $56.3 million in 2007, a decrease of $15.7
million from 2006.  This decrease resulted primarily from an
increase in the net cost of fuel and purchased power, including
the unfavorable settlement of price hedges on natural gas used as
fuel for generation.  The increases in fuel and purchased power
costs were driven by unplanned or extended plant outages and
curtailed delivery under a purchased power contract due to
transmission constraints at plants noted previously and a surge in
wholesale power prices.  Partially offsetting these factors was a
rate settlement in Missouri in early 2006.

In addition to the decrease in gross profit, the company
experienced higher operating and maintenance expenses.  Higher
labor and benefit costs and increased maintenance costs related to
the plant outages caused Electric Utilities operation and
maintenance expenses to increase over 2006.  Partially offsetting
the decreased gross profit and increased operation and maintenance
expense was increased other income.

Other income increased $4 million primarily due to the receipt of
a $3.2 million breakup fee on the termination of the Aries
purchase and increased Allowance for Funds Used During
Construction associated with the construction of Iatan 2.

                           Gas Utilities

Gross profit was $63.7 million in 2007, $7.7 million higher than
2006 due to favorable weather and other volume increases compared
to 2006 and an interim rate increase in Nebraska.  Partially
offsetting the increase in gross profit were increased operation
and maintenance expenses related to outside services, labor and
other operating costs.

                         Merchant Services

Merchant Services reported a gross loss of $3.4 million in 2007,
compared to a gross loss of $11.2 million a year earlier.  The
improvement in gross loss from 2006 was a result of exiting the
Elwood tolling contract in June 2006, which eliminated
$9.6 million of capacity payments for the quarter.  The decreased
gross loss was offset in part by an increase in operation and
maintenance expenses primarily due to the 2006 reversal of
allowances for bad debts.

                        Corporate and Other

Corporate and Other reported a 2007 EBITDA loss of $10.3 million,
compared to a $5.6 million loss in 2006.  First quarter 2007
results include fees associated with the pending merger with a
subsidiary of Great Plains Energy Incorporated.

                       Discontinued Operations

Discontinued Operations includes the company's former Kansas
electric utility operations; its former Michigan, Minnesota, and
Missouri gas utility operations; its former Merchant Services
peaking plants in Illinois; and its former Everest Connections
telecommunications business.  The company's discontinued
operations reported EBITDA of $8.8 million in 2007, which was a
$35.4 million decrease from $44.2 million reported in 2006.  The
EBITDA decrease was due primarily to the sale of the gas utility
properties and Everest Connections.

Full-text copies of the company's financial statements for the
quarter ended March 31, 2007 is available for free at:

             http://ResearchArchives.com/t/s?1f0e

                         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 over 900,000 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.  


ASBURY AUTOMOTIVE: Net Income Lowers to $433,000 in 1st Qtr 2007
----------------------------------------------------------------
Asbury Automotive Group Inc. reported a net income of $433,000 on
total revenues of $1.4 billion for the first quarter ended
March 31, 2007.  The company had a net income of $12.6 million for
the first quarter ended March 31, 2006.

Income from continuing operations for the first quarter ended
March 31, 2007, was $2.4 million.  These results include an after-
tax charge of $11.1 million related to a debt refinancing and
after-tax charges of $1.8 million, related to the planned
retirement next month of current chief executive officer, Kenneth
B. Gilman.

Summary financial information for the first quarter of 2007, as
compared to last year's first quarter, included:

      -- Total revenue for the quarter increased $49.8 million to
         $1.4 billion.  Total gross profit was $224.1 million,
         up 7%.

      -- Same-store retail revenue and gross profit increased 4%
         and 7%, respectively.

      -- New vehicle retail revenue and gross profit increased 2%
         and 4%, respectively.  New retail unit sales were up 1%.  
         Total new unit sales were up 2%.

      -- Used vehicle retail revenue and gross profit both
         increased 11%.  Used retail unit sales were up 9%.

      -- Parts, service and collision repair revenue increased 3%,
         and gross profit rose 6%.

      -- Net finance and insurance revenue increased 10% and
         dealership-generated F&I per vehicle retailed rose 9%.

      -- Selling, general and administrative expenses as a
         percentage of gross profit were 78.7% for the quarter.  
         Adjusted for the charge related to the retirement of the
         current CEO, SG&A expenses were 77.4% of gross profit for
         the quarter, an 80 basis-point improvement compared to
         78.2% a year ago.

The company had total assets of about $2 billion, total
liabilities of about $1.4 billion, and total stockholders' equity
of about $569.4 billion at March 31, 2007.

Full-text copies of the company's 2007 first quarter results are
available for free at http://ResearchArchives.com/t/s?1f0f

Charles R. Oglesby, who will succeed Mr. Gilman as president and
CEO on May 4, said, "The results for the first quarter again
demonstrate the strength of Asbury's well-balanced business model.  
As the numbers reveal, it's the depth and breadth of the
performance that's most impressive.  All four-business lines had
record first quarter gross profit results, with two of them, fixed
operations and used vehicles, having all-time record quarters.  
Overall, our gross profit margin improved to 15.8%, the highest in
the Company's history. And, equally as important, our strong
performance was not confined to any one geographic region, as each
of our four regions delivered record first quarter results."

J. Gordon Smith, senior vice president and chief financial
officer, said, "This quarter was Asbury's tenth in a row of
adjusted SG&A expense leverage improvement.  That ratio improved
another 80 basis points in the first quarter versus the prior year
quarter, and we still see additional opportunity to continue to
leverage our expense structure."

Mr. Smith continued, "Other highlights of the quarter surrounded
the refinancing of our 9% senior subordinated notes.  We completed
the tender offer for these notes in March, accepting
$238.1 million of tendered notes, and refinanced them with a
successful private placement of $150 million in 7.625% senior
subordinated notes and $115 million in 3% convertible notes.  The
combination of these transactions is expected to reduce our annual
debt service by $6.5 million. In addition, concurrently with the
convertible notes offering, we repurchased 1.3 million shares of
common stock, fully utilizing the capacity under our stock
repurchase program which was designed to off-set dilution related
to stock-based compensation."

                   About Asbury Automotive Group

Asbury Automotive Group Inc., headquartered in New York City, is
an automobile retailer in the U.S.  Asbury operates through nine
geographically concentrated, individually branded "platforms."
These platforms currently operate 100 retail auto stores,
encompassing 140 franchises for the sale and servicing of 35
different brands of American, European and Asian automobiles.
The company offers customers an extensive range of automotive
products and services, including new and used vehicle sales and
related financing and insurance, vehicle maintenance and repair
services, replacement parts and service contracts.

                          *     *     *

As reported in the Troubled Company Reporter on Mar. 14, 2007,
Moody's Investors Service assigned a B3 rating to Asbury
Automotive Group's proposed $150 million senior subordinated notes
and affirmed existing ratings.  The outlook has been revised to
positive from stable.


BELL MIRCROPRODUCTS: Revenues Up to $1 Billion in First Qtr. 2007
-----------------------------------------------------------------
Bell Microproducts Inc. reported its preliminary first quarter
2007 revenue in a range of $990 million to $1 billion, an increase
of 14% to 16% from first quarter 2006 revenue of $867 million.

The company's European operations posted solid revenue growth of
about 13% and represented roughly 44% of the company's total first
quarter revenue.  In Latin America, revenues increased about 14%
and represented 14% of total revenue in the quarter.  North
American revenue increased more than 20% and generated
approximately 42% of the quarter's revenue.

The Solutions category of product and services sales grew 27% to
53% of total sales in the first quarter, as compared to 48% in
first quarter 2006, driven primarily by strong computer platform
and storage systems sales and the acquisition of ProSys.  The
Components and Peripherals category grew approximately 6% and
represented 47% of sales in the first quarter, as compared to
52% in first quarter 2006.  Disk drive revenue increased about 20%
year over year, increased slightly from fourth quarter 2006
levels, and represented about 30% of total revenue.

Commenting on the preliminary first quarter results, W. Donald
Bell, president and chief executive officer of Bell Microproducts,
said, "We are pleased with our strong revenue growth again this
quarter.  Our international businesses in Europe and Latin America
performed well in the first quarter and both generated double-
digit revenue growth.  In our North American operations, we
experienced substantial revenue growth in our higher margin
Industrial and Enterprise sales channels.  This was partially
offset by revenue decreases in our US commercial sales channel as
we continue to focus on more profitable products and customers.  
In its second quarter of results as part of Bell Microproducts,
ProSys Information Systems generated revenue in line with our
expectations.  Our solid start to the new year gives us confidence
that we are well positioned for continued growth for the balance
of 2007 and beyond."

Bell Microproducts has also received a written notification from
the Nasdaq Listing and Hearing Review Council that the Listing
Council has stayed the previously disclosed Feb. 21, 2007,
delisting decision of the Nasdaq Listing Qualifications Panel,
which gave the company until May 22, 2007, to become current in
its SEC periodic reports and file any required restatements.  The
Listing Council has taken review of the Qualification Panel's
prior decision and has given the company until June 29, 2007, to
submit additional information for the Listing Council to consider
in its review.

The company said it is unable at this time to provide additional
quantitative information regarding its quarterly results or any
further comparison of such results to first quarter 2006 until the
previously announced restatement of its financial statements for
certain prior periods, the review of its historical stock option
grants, and the impact on the 2006 audit has been completed.  A
special committee of the board of directors has been appointed to
conduct an evaluation of the company's stock option practices with
the assistance of independent counsel and independent accounting
consultants.  The accounting adjustments expected as a result of
the review cannot be quantified until completion of the
independent review.

                     About Bell Microproducts

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

                          *     *     *

In March 2007, the company received a Nasdaq Staff Determination
notice because the company did not file its Annual Report 10-K for
the period ended Dec. 31, 2006.  The Nasdaq Listing and Hearing
Review Council expects a response to why the company failed to
file its annual report.  Nasdaq Listing Qualifications Panel
extended until May 22, 2007, the company's request for continued
listing.

In addition, the company received waivers in relation to the
delivery of certain of its quarterly information and documentation
until May 31, 2007, under credit agreements with Wachovia Capital
Finance Corp., Wachovia Bank, National Association, and the
Teachers' Retirement Systems of Alabama.


BILL GILES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Bill Giles Motor Co., Inc.
        dba Bill Giles Chevrolet
        750 Goldfield Avenue
        Yerington, NV 89447

Bankruptcy Case No.: 07-50574

Type of Business: The Debtor is a dealer of Chevrolet vehicles.  
                  See http://www.billgileschevrolet.com/

Chapter 11 Petition Date: May 12, 2007

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtor's Counsel: Alan R. Smith, Esq.
                  505 Ridge Street
                  Reno, NV 89501
                  Tel: (775) 786-4579

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Nevada Department of Taxation    sales tax             $750,000
555 East Washington Avenue,
Suite 1300
Las Vegas, NV 89101

Anna Giles                       loan                  $125,000
951 Belmont Place
Pittsburg, CA 94565

Internal Revenue Service         federal               $100,000
Stop 5028LVG                     withholding
110 City Parkway                 tax
Las Vegas, NV 89106

Kristina Nelson                  loan                   $92,000

Maurice Simon                    goods and services     $42,000

Terry Mercurio                   loan                   $20,000

Pacificare                       insurance premium       $6,385

Nevada State Bank                loan                    $6,000

Lyon County Treasurer            tax                     $5,000

Chase                                                    $4,000

Deals & Wheels                   goods and services      $3,300

Yerington Auto Parts             goods and services      $2,600

Plaza Auto Parts                 goods and services      $2,500

Best Deals                       goods and services      $2,500

Jones West Ford                  goods and services      $2,387

Local Pages                      goods and services        $661

Sparks Auto Wrecking             goods and services        $650

Saturn of Reno                   goods and services        $354

Reno Dodge                       goods and services         $70

Giles' Goldfield, L.L.C.         lease on business           $1
                                 premises


BNC MORTGAGE: Moody's Puts Low-B Ratings to Class B Certificates
----------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by BNC Mortgage Loan Trust 2007-2 and ratings
ranging from Aa1 to Ba2 to the subordinate certificates in the
deal.

The securitization is backed by adjustable-rate and fixed-rate
subprime mortgage loans acquired by BNC Mortgage, Inc.  The
ratings are based primarily on the credit quality of the loans and
on the protection from subordination, overcollateralization,
excess spread, an interest rate swap and an interest rate cap
agreement. Moody's expects collateral losses to range from 5.15%
to 5.65%.

JPMorgan Chase Bank, National Association will service the loans,
and Aurora Loan Services LLC will act as master servicer.  Moody's
has assigned JPMorgan Chase Bank, National Association its top
servicer quality rating of SQ1 as a primary servicer of subprime
mortgage loans.  Furthermore, Moody's has assigned Aurora Loan
Services LLC its servicer quality rating of SQ1- as master
servicer.

The complete rating actions are:

BNC Mortgage Loan Trust 2007-2

   -- Mortgage Pass-Through Certificates, Series 2007-2

      * Class A1, Assigned Aaa
      * Class A2, Assigned Aaa
      * Class A3, Assigned Aaa
      * Class A4, Assigned Aaa
      * Class A5, Assigned Aaa
      * Class M1, Assigned Aa1
      * Class M2, Assigned Aa2
      * Class M3, Assigned Aa3
      * Class M4, Assigned A1
      * Class M5, Assigned A2
      * Class M6, Assigned A3
      * Class M7, Assigned Baa1
      * Class M8, Assigned Baa1
      * Class M9, Assigned Baa2
      * Class B1, Assigned Ba1
      * Class B2, Assigned Ba2


CARDTRONICS INC: March 31 Balance Sheet Upside-Down by $42.2 Mil.
-----------------------------------------------------------------
Cardtronics Inc. recorded $363.6 million in total assets,
$329.1 million in total liabilities, $76.7 million in redeemable
preferred stock, and $42.2 million in total stockholders' deficit
at March 31, 2007.

The company had a negative working capital of $15.9 million at
March 31, 2007, with total current assets of $30.7 million and
total current liabilities of $46.6 million at March 31, 2007.

The company had a net loss for the first quarter of 2007 of
$3.4 million, which compares to a net loss of $3.1 million for the
same period in 2006.  The 2007 net loss amount reflects the
aforementioned incremental selling, general, and administrative
costs, as well as higher depreciation expense amounts associated
with the company's ongoing Triple-DES ATM upgrade and replacement
program.  The 2006 net loss amount includes a $2.8 million
impairment charge related to a previously acquired domestic ATM
portfolio.

For the quarter ended March 31, 2007, its revenues totaled
$74.5 million, representing a 7.8% increase over the $69.1 million
in revenues recorded during the first quarter of 2006.

The year-over-year increase in revenues was primarily attributable
to an increase in ATM operating revenues from the company's United
Kingdom operations as a result of additional ATM deployments and
higher withdrawal transactions per ATM when compared to the same
period in 2006.  Also contributing to the increase was an increase
in ATM operating revenues associated with the company's Mexico
operations, which also resulted from additional ATM deployments.

                         Key Statistics

Average transacting ATMs for the first quarter of 2007 totaled
25,228, representing a decrease of 3.7% when compared to the
26,188 average transacting ATMs during the same period in 2006.

Average cash withdrawal transactions per ATM per month during the
first quarter of 2007 increased 7.9% to 412 from 382 during the
same period in 2006.  Capital expenditures during the quarter
totaled $13.9 million.

"Our first quarter results were generally where we expected them
to be," commented Jack Antonini, chief executive officer of
Cardtronics.  "As previously communicated, we expect 2007 to be a
year of significant investment for Cardtronics as we look to take
advantage of what we believe are favorable trends in our key
markets.  On the domestic front, we have already converted over
3,100 existing company-owned ATMs to our in-house transaction-
processing switch during 2007.  This conversion effort, which is
currently ahead of schedule, will ultimately allow us to offer
advanced functionality and services on all of our domestic
company-owned ATMs, and is critical to our strategic initiative to
offer additional ATM solutions to financial institutions
throughout the United States.  Internationally, we deployed over
300 ATMs in high-volume retail locations in the United Kingdom and
Mexico during the quarter, further building on the strong
foundations that we have created in those markets."

Recent highlights include:

     -- The conversion of over 3,100 company-owned ATMs to the
        company's in-house transaction processing switch during
        2007.

     -- Net growth during the quarter of over 130 machines, or
        9.5%, in the company's high-volume U.K. ATM fleet.  This
        represents a substantial increase in our growth rate in
        this important market.

     -- The successful rollout of approximately 190 additional
        ATMs in Mexico, the majority of which were deployed under
        the company's long-term agreements with OXXO and FRAGUA.

     -- The signing of a multi-year bank branding agreement with
        Guaranty Bank to brand 24 ATMs in CVS/pharmacy locations
        across the Minneapolis, Minnesota area.

     -- The announcement of the planned expansion of the company's
        Allpoint surcharge-free network to include the company's
        ATMs located in the U.K.

     -- The recent amendment of our credit facility, which, among
        other things, reduced the interest rate charged on amounts
        outstanding under the facility and increased the amount of
        capital expenditures that the company can incur on an
        annual basis.

                        Guidance for 2007

The company continues to expect revenues of $310 million to
$325 million, gross profits of $79 million to $83 million, and
adjusted EBITDA of $53 million to $57 million for the year ending
Dec. 31, 2007.  Furthermore, the company continues to expect
capital expenditures to total about $55 million in 2007, net of
minority interest.

                        About Cardtronics

Headquartered in Houston, Texas, Cardtronics Inc.--
http://www.cardtronics.com/-- is a non-bank owner/operator of  
ATMs with more than 25,000 locations.  The company operates in
every major U.S. market, at about 1,500 locations throughout the
U.K. and over 500 locations in Mexico.

                          *     *     *

Cardtronics Inc.'s 9-1/4% Senior Subordinated Notes due 2013 carry
Moody's Investors Service's 'B3' rating and Standard & Poor's 'B-'
rating.


CITADEL BROADCASTING: Earns $6.7 Million in Quarter Ended March 31
------------------------------------------------------------------
Citadel Broadcasting Corp. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q for the
quarter ended March 31, 2007.

For the quarter ended March 31, 2007, the company reported net
income of $6,762,000 down from $9,525,000 for the quarter ended
March 31, 2006.  Broadcasting revenue for the quarter was
$92,920,000 down from $93,999,000 a year ago.

At March 31, 2007, the company's balance sheet showed $2.15
billion in total assets and $1.06 billion in total liabilities.

                         Merger Agreement

On Feb. 6, 2006, the company and Alphabet Acquisition Corp., a
wholly-owned subsidiary, entered into an Agreement and Plan of
Merger with The Walt Disney Company and ABC Radio Holdings, Inc.,
formerly known as ABC Chicago FM Radio, Inc., a Delaware
corporation and wholly-owned subsidiary of Walt Disney.  The
Agreement and Plan of Merger was subsequently amended as of
November 19, 2006.

Pursuant to and subject to the terms and conditions contained in
the ABC Radio Merger Agreement, the company will combine its
business with ABC Radio, which includes 22 radio stations and the
ABC Radio Network.  The combination is structured as a reverse
Morris Trust transaction.  Prior to the Merger, Walt Disney will
distribute ownership of ABC Radio to Walt Disney shareholders in a
spin-off transaction.  As of Nov. 19, 2006, the transaction was
expected to be valued at approximately $2.6 billion, which was
comprised of $1.5 billion in Company common stock to be received
by Walt Disney shareholders and cash to be retained by TWD

On March 22, 2007, the Federal Communications Commission adopted
an Order granting the transfers of control of the ABC radio
stations and renewal applications, which Order became effective on
April 4, 2007.  In granting its approval of the Merger, the FCC
has required the company to divest up to eleven stations in seven
markets and place the stations in trust immediately upon closing.

The company does not believe these divestitures will be material
to its ongoing business.  On April 17, 2006, Citadel and ABC Radio
Holdings, Inc. received from the Federal Trade Commission notice
of early termination of the waiting period under the Hart-Scott-
Rodino Act.

On May 4, 2007, the IRS issued to Walt Disney the necessary ruling
for the Merger to be completed as a reverse Morris Trust
transaction.  The parties expect that ABC Radio Holdings, Inc.
will also receive a ruling from the IRS that is substantially
similar in all material respects to the ruling provided to Walt
Disney; however, the ruling to ABC Radio Holdings, Inc. has not
been issued yet by the IRS.

A full-text copy of the company's Form 10-Q for the quarter ended
March 31, 2007, is available for free at:

               http://ResearchArchives.com/t/s?1f03

                    About Citadel Broadcasting

Citadel Broadcasting Corp. -- http://www.citadelbroadcasting.com/
-- (NYSE:CDL) is a radio broadcaster focused primarily on
acquiring, developing and operating radio stations throughout the
United States.  The company owns and operates 165 FM and 58 AM
radio stations in 46 markets, located in 24 states across the
United States.


CITADEL BROADCASTING: S&P Puts Corporate Credit Rating at B
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Las Vegas-based Citadel Broadcasting Corp.

The outlook is positive.

At the same time, Standard & Poor's assigned its bank loan and
recovery rating to Citadel's proposed $2.65 billion senior secured
credit facilities.  The credit facilities are rated 'B+', at the
same level as the corporate credit rating on the company.  The
recovery rating of '3', indicates the expectation of/or meaningful
(50%-80%) recovery in the event of a payment default.

The facilities consist of a $200 million revolving credit facility
and a $600 million term loan A (both due 2013) and a $1.85 billion
term loan B due 2014, of which approximately $1.53 billion is
expected to be borrowed at closing.  Prior to closing, Citadel
could decide to use the remaining balance on term loan B to
refinance its existing convertible subordinated notes due 2011;
however, upon closing this excess capacity will no longer be
available.

Proceeds from the transaction will be used to finance the
acquisition of the ABC Radio Business, refinance Citadel's
existing debt, and issue a special distributution to pre-merger
Citadel shareholders.  Pro forma for the proposed transaction,
total debt outstanding as of Dec. 31, 2006, was $2.458 billion.

"If Citadel continues to generate good discretionary cash flow,"
said
Standard & Poor's credit analyst Michael Altberg, "and reduces its
consolidated debt to EBITDA ratio to a level closer to 6x while
maintaining sufficient liquidity, we could raise the rating."


COMPUDYE INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Compudye, Inc.
        44-22 54th Avenue
        Maspeth, NY 11378

Bankruptcy Case No.: 07-42579

Type of Business: The Debtor is engaged in dyeing cotton
                  broadwoven fabrics, manmade fiber & silk
                  broadwoven fabric, and raw stock, yarn & narrow
                  fabric.

Chapter 11 Petition Date: May 13, 2007

Court: Eastern District of New York (Brooklyn)

Debtor's Counsel: Wayne M. Greenwald, Esq.
                  99 Park Avenue, Suite 800
                  New York, NY 10016
                  Tel: (212) 983-1922
                  Fax: (212) 973-9494

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Joseph Catalano                  loans                 $600,000
52-35 240th Street
Douglaston Hills, NY

Paul Shafran                     loans                 $600,000
69-81 Lions Head Road
Boca Raton, FL 33496

N.Y.C. Water Board               water                 $308,005
P.O. Box 410
Church Street Stration
New York, NY 10008-0410

44 Maspeth Associates, L.P.      rent                  $157,149

Keyspan Energy Delivery                                $119,209

Igor Korsunsky                   loan                   $80,000

Lyntech Industries, Inc.         materials              $71,302

Morlot Color & Chemical          materials              $62,415

Independent Chemical Corp.       materials              $54,950

T.M. Mechanical Corp.            services               $35,000

President Container, Inc.        supplies               $18,676

Schoenberg Sales Company         material                $7,998

B.I.S. Trucking, Inc.            services                $3,918

Apple Printing, Inc.                                     $3,481

Cinncinati Laundry Equipment     supplies                $3,218

Burton Plumbing Supply           supplies                $2,359

Rome Machine & Foundry           supplies                $2,241

Key Material Handling            equipment lease         $1,734
Equipment

Group Research Corp.             supplies                $1,160

Barstan Sales Co.                materials               $1,065


COX ENT: Discovery Channel Deal Cues S&P's Positive Outlook
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Atlanta,
Georgia-based diversified media company Cox Enterprises Inc. and
its subsidiaries to positive from stable.

S&P also affirmed the 'BBB-' corporate credit and all other
ratings, including the 'BB+' senior unsecured debt rating on CEI.
Total debt outstanding was about $15.1 billion as of Dec. 31,
2006.

"The outlook revision reflects our expectations for improving
credit measures," said Standard & Poor's credit analyst Allyn
Arden. This follows CEI's announcement that it is exchanging its
25% stake in the Discovery Channel for a new entity, which will
include the Travel Channel, and $1.275 billion in cash.  S&P
expects the cash proceeds to be applied to debt reduction.

As such, total debt to EBITDA on an operating lease-adjusted basis
and including unfunded pensions and other postemployment benefit
obligations should decline to the low-3x area from about 3.8x at
year-end 2006.

The outlook revision also recognizes CEI's healthy operating
performance, most notably at cable operating subsidiary Cox
Communications Inc. and at its automobile auction business
Manheim.  These two entities account for about 70% and 14% of
EBITDA, respectively.  During 2006, consolidated revenue increased
9% while EBITDA grew 15%, partially due to strong cable industry
trends, which S&P expects will continue in the foreseeable future
as telephony and advanced services continue to grow.

The ratings on CEI and its subsidiaries continue to reflect the
company's diversified portfolio of cable TV systems, auto
auctions, and media businesses, which have solid operating margins
and healthy free cash flow generating characteristics; the strong
investment-grade characteristics of the cable TV unit, which is
the third-largest operator in the U.S.; improving credit measures;
and significant asset value.  Tempering factors include weaker
industry trends in advertising-dependent businesses, particularly
newspapers, capital spending requirements in the cable business,
and longer-term competitive threats from local telephone companies
in the cable segment.  S&P view the credit profile of CEI and its
subsidiaries on a consolidated basis, given the economic and
strategic importance of the units to the parent.


CWABS ASSET-BACKED: Moody's Rates Class B Certificates at Ba1
-------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by CWABS Asset-Backed Certificates Trust 2007-
BC2 and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.

The securitization is backed by Quick Loan Funding Inc. (25%),
Wilmington Finance Incorporated (30%), and other mortgage lenders
(45%) originated, adjustable-rate (70%) and fixed-rate (30%)
subprime residential mortgage loans acquired or originated by
Countrywide Home Loans, Inc.

The ratings are based primarily on the credit quality of the loans
and on the protection against credit losses provided by
subordination, excess spread, overcollateralization, and an
interest-rate swap agreement.  Moody's expects collateral losses
to range from 4.75% to 5.25%.

Countrywide Home Loans Servicing LP will act as servicer and
master servicer.

The complete rating actions are:

   -- CWABS Asset-Backed Certificates Trust 2007-BC2

      * Class 1-A, Assigned Aaa
      * Class 2-A-1, Assigned Aaa
      * Class 2-A-2, Assigned Aaa
      * Class 2-A-3, Assigned Aaa
      * Class 2-A-4, Assigned Aaa
      * Class A-R, Assigned Aaa
      * Class M-1, Assigned Aa1
      * Class M-2, Assigned Aa2
      * Class M-3, Assigned Aa3
      * Class M-4, Assigned A1
      * Class M-5, Assigned A2
      * Class M-6, Assigned A3
      * Class M-7, Assigned Baa1
      * Class M-8, Assigned Baa1
      * Class M-9, Assigned Baa2
      * Class B, Assigned Ba1


DAIMLERCHRYSLER: Cerberus Takes Over Majority Interest in Chrysler
------------------------------------------------------------------
The Board of Management of DaimlerChrysler AG has decided, subject
to the approval of the Supervisory Board and the relevant
authorities, on the future concept for the Chrysler Group and the
realignment of DaimlerChrysler AG.  Completion of the transaction
is subject to the satisfaction of customary closing conditions,
including the receipt of regulatory approvals and Cerberus
financing arrangements.

                   Structure of the Transaction

An affiliate of private equity firm Cerberus Capital Management,
L.P., New York, will make a capital contribution of $7.4 billion
in return for an 80.1 percent equity interest in the future new
company, Chrysler Holding LLC.

DaimlerChrysler will hold a 19.9 percent equity interest in the
new company.  Chrysler Holding LLC will hold 100 percent each of
the future Chrysler Corporation LLC, which produces and sells
Chrysler, Dodge and Jeep(R) vehicles, and the future Chrysler
Financial Services LLC, which provides financial services for
these vehicles in the NAFTA region.

Of the total capital contribution of $7.4 billion, $5.0 billion
will flow into the industrial business (Chrysler Corporation LLC)
and $1.05 billion will flow into the financial services business
in order to strengthen the equity base of both businesses.

DaimlerChrysler will receive the balance of $ 1.35 billion.  In
addition, DaimlerChrysler will grant a loan of $0.4 billion to
Chrysler Corporation LLC.

According to the agreement, upon the closing of the transaction,
DaimlerChrysler will transfer the industrial business of the
Chrysler Group completely free of debt.  Due to the Chrysler
Group's anticipated negative cash flow until closing in connection
with its restructuring plan, the transaction will give rise to a
cash outflow of $1.6 billion for DaimlerChrysler.  The overall net
cash outflow resulting from the transaction will therefore be
$0.65 billion.

In addition, DaimlerChrysler will have to discharge long-term
liabilities of the Chrysler Group in connection with the
transaction.  This will result in prepayment compensation of
approximately $878 million, to be borne by DaimlerChrysler.  The
usual transaction costs will also be incurred.

The Chrysler Group's financial obligations for pension and
healthcare benefits towards its employees and the employees of the
financial services business related to the Chrysler Group will be
retained by the Chrysler companies.  The pension plans are
significantly over-funded at present.

                      Effects on Key Figures

The transaction will have these effects on DaimlerChrysler AG:

   * In total, current estimates indicate that net profit    
     according to IFRS in 2007 will be reduced by
     $4.1-5.4 billion;

   * Due to the deconsolidation of the Chrysler companies and the
     resulting reduction in the balance-sheet total, the equity
     ratio of DaimlerChrysler's industrial business is expected to
     increase to more than 40 percent by the beginning of 2008;

   * There will be no changes relating to the bonds issued and
     guaranteed by DaimlerChrysler AG.  In the financial services
     business for the Chrysler, Jeep and Dodge brands, Cerberus
     will take over the financing previously provided by
     DaimlerChrysler AG;

   * The 19.9 percent equity interest held by DaimlerChrysler AG
     in the new company Chrysler Holding LLC will be included
     after closing at equity in the Van, Bus, Others segment; and

   * The closing of the transaction is expected to take place in     
     the third quarter of 2007.

Commenting on the transaction, Dr. Dieter Zetsche, Chairman of the
Board of Management of DaimlerChrysler AG and Head of the Mercedes
Car Group, said, "We're confident that we've found the solution
that will create the greatest overall value - both for Daimler and
Chrysler.  With the transaction, we have created the right
conditions for a new start for Chrysler and Daimler."

Ron Gettelfinger, President of the United Autoworkers said, "The
transaction with Cerberus is in the best interests of our UAW
members, the Chrysler Group and Daimler.  We are pleased that this
decision has been made. Because our members and the management can
now focus entirely on the development and manufacture of quality
products for the future of the Chrysler Group."

John W. Snow, Chairman of Cerberus Capital Management, L.P.,
stated that, "We welcome Chrysler into the Cerberus family of
companies and believe Cerberus will be a good home for Chrysler.
Cerberus believes in the inherent strength of U.S. manufacturing
and of the U.S. auto industry.  Most importantly, we believe in
Chrysler."

Mr. Snow continued, "We would like to thank DaimlerChrysler for
their good stewardship of this American icon over the last decade.
We are aware that Chrysler faces significant challenges, but we
are confident that they can and will be overcome.  A private
investment firm like Cerberus will provide management with the
opportunity to focus on their long-term plans rather than the
pressures of short-term earnings expectations."

                         Business Progress

According to the automaker, in nearly 10 years as DaimlerChrysler,
a lot has been done to move the businesses forward.  The synergies
possible between Mercedes-Benz and Chrysler have been fully
utilized.  Additional potential for collaboration is limited
between two businesses operating in such different market
segments.  The strong volatility and pressure on margins in the
Chrysler Group's North American core market have an increasingly
negative impact on DaimlerChrysler's overall profitability and
share-price development.

The Chrysler Group has made substantial progress in recent years.
For example, production hours per vehicle have fallen from 48
hours in 2001 to just over 30 at present.  Quality has improved by
more than 40 percent over the past six years.  Since 2002, more
than $10 billion has been invested in new production facilities
and technologies. And with 34 new models since 2001, Chrysler has
one of the youngest product lines in the industry.

"As a result, Chrysler today is structurally more sound than its
North American based competitors. And with Cerberus as a partner,
Chrysler will have the best chances of utilizing its full
potential," Mr. Zetsche said.

                       Ongoing Collaboration

The company says that existing projects with the Mercedes Car
Group will be continued, for example in the development of
conventional and alternative drive systems, purchasing, and sales
and financial services outside the NAFTA region.  Furthermore, the
company discloses that a Joint Automotive Council will be
established in which representatives of both sides will assess and
decide on the potential of new and current projects.  The Council
will be led by board-level members from each company.

"We very much look forward to our continued cooperation as
business partners, as we want to continue to reap the mutual
benefits of working together.  That's one of the reasons why we're
retaining a 19.9 percent equity position in Chrysler," Mr. Zetsche
noted.

                          New Daimler AG

Due to the new corporate structure, the name of DaimlerChrysler AG
is to be changed to Daimler AG.  A decision on this is to be taken
by the shareholders at an Extraordinary Shareholders' Meeting
probably in fall 2007.

The Board of Management of the new company will be reduced to six
members.  Tom LaSorda, Eric Ridenour and Tom Sidlik will leave the
Board of Management with the Group's sincere thanks.

There will no longer be a separate board position for procurement
in the new Daimler AG.  In the future, all procurement activities
will be directly coordinated between the divisions.  Within the
Board of Management, Bodo Uebber will additionally assume overall
responsibility for procurement.

The leadership teams of the Mercedes Car Group, the Truck Group
and Financial Services will remain unchanged, as will the teams in
the vans and buses businesses.

"We've done our homework in our corporate functions and in all of
our divisions.  As a result of our strategic review, we have a
well-defined roadmap to lead us into a good future," Mr. Zetsche
relates.

The Mercedes Car Group will generate a return on sales of at least
7 percent this year, with higher rates to follow in the coming
years.

The Truck Group will achieve an average return on sales of 7
percent over the cycle as of 2008.  This represents a return on
net assets of approximately 30 percent.

DaimlerChrysler is also a world leader and profitability benchmark
for buses.  And in the vans business, which is performing very
well, the new Sprinter will continue the success story of its
predecessor.

The Financial Services division aims to earn a return on equity of
more than 14 percent.

                       Growth Perspectives

"We have a strong starting position.  We have an above-average
financial power.  And our future prospects are promising," Mr.
Zetsche said.

According to Mr. Zetsche, the Group has defined these main areas
for continued growth:

   -- Further expansion in the core business, which means in the
      traditional segments that are the most profitable and have
      the highest growth rates, as well as exploiting new market
      opportunities on a regional basis;

   -- Continued development of innovative, customer-oriented and
      tailor-made services and activities, pursuing opportunities
      both up and down the value chain; and

   -- Strengthening leadership in sustainable, responsible and
      environmentally friendly technologies.

By focusing on these three areas, Daimler's full potential is to
be exploited and enterprise value is to be increased further
through profitable and sustainable growth.  Daimler intends to do
this on its own, while continuing to benefit from opportunities of
scale with Chrysler.

About Daimler's goals, Mr. Zetsche said, "We will be the leading
manufacturer of premium products and a provider of premium
services in every market segment we serve worldwide.  And we will
pursue our commitment to excellence based on a common culture, a
great heritage of innovation and pioneering achievements and -
with Mercedes-Benz - the strongest automotive brand in the world."

                      Tom LaSorda's Statement

Commenting on the sale transaction, Tom LaSorda, Chrysler
Corporation's president and chief executive officer, said in a
press statement that, "We are confident that this transaction will
create a standalone Chrysler that is financially stronger, with a
winning combination of people, industry know-how, operational
expertise and spirit of innovation that will accelerate the
company's recovery, and help us regain our position as a
competitive industry leader.

Cerberus is the right strategic buyer for Chrysler, with a long-
term commitment to Chrysler's growth and success. They are
committed to working constructively with both union leadership and
Chrysler's management team to help Chrysler realize its full
potential.  There are no new job cuts planned in connection with
[the] transaction[. . .] .

As a private company, Chrysler will be better positioned to focus
on its long-term plan for recovery, rather than just short-term
results.  It will allow Chrysler to renew its focus on what has
always made us special - our passion, creativity and commitment to
delivering exciting Chrysler, Jeep and Dodge vehicles and quality
Mopar parts to our customers, along with unparalleled customer
service.

With strong backing from Cerberus and a continued relationship
with Daimler, Chrysler must demonstrate once and for all that we
can win in this global marketplace.  It is ours to win.  And
Chrysler has it in its DNA to do just that."  

Shearman & Sterling served as DaimlerChrysler AG's lead counsel in
the transaction.  Shearman & Sterling attorneys who rendered
services for DaimlerChrysler are: Georg F. Thoma (partner,
Corporate/M&A, Dusseldorf); John Madden and Jeffrey Lawrence (both
partners, Corporate/M&A, New York; Kenneth Laverriere (partner,
Executive Compensation, New York); Peter Blessing (partner, Tax,
New York); and Fredric Sosnick (partner, Corporate, New York).

Shearman & Sterling -- http://www.shearman.com/-- has been  
advising many of the world's leading corporations and financial
institutions, governments and governmental organizations for more
than 130 years.

                 About Cerberus Capital Management

Cerberus Capital Management, L.P., New York, is one of the largest
private investment firms in the world, with approximately
$23.5 billion under management in funds and accounts.  Founded in
1992, Cerberus currently has significant investments in more than
50 companies that, in aggregate, generate more than $60 billion in
annual revenues worldwide.

                      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 has locations in Canada, Mexico, United States,
Argentina, Brazil, Venezuela, China, India, Indonesia, Japan,
Thailand, Vietnam and Australia.

DaimlerChrysler lowered its operating profit forecast for full-
year 2006 to be in the magnitude of EUR5 billion (US$6.4
billion) based on an expected full-year operating loss of
approximately EUR1 billion (US$1.2 billion) for its Chrysler
Group.

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.  Chrysler Group
will take additional production cuts in the third and fourth
quarters to reduce dealer inventories and make way for its
current product offensive.


DUKE FUNDING: Fitch Affirms BB+ Rating on $32 Million Notes
-----------------------------------------------------------
Fitch Ratings affirms ten classes of notes issued by Duke Funding
High Grade III Ltd.  These affirmations are the result of Fitch's
review process and are effective immediately:

     -- $443,500,000 Class A-1A notes affirmed at 'AAA';
     -- $1,306,500,000 Class A-1B1 notes affirmed at 'AAA';
     -- $1,306,500,000 Class A-1B2 notes affirmed at 'AAA';
     -- $102,000,000 Class A-2 notes affirmed at 'AAA';
     -- $8,000,000 Class B-1 notes affirmed at 'AA+';
     -- $8,000,000 Class B-2 notes affirmed at 'AA-';
     -- $44,000,000 Class C-1 notes affirmed at 'A+';
     -- $44,000,000 Class C-2 notes affirmed at 'A-';
     -- $12,000,000 Class D notes affirmed at 'BBB';
     -- $32,000,000 Subordinated notes affirmed at 'BB+'.

Duke High Grade III is a collateralized debt obligation, which
closed Aug. 3, 2005, and is managed by Duke Funding Management,
LLC.  Duke High Grade III is a revolving transaction and will exit
its reinvestment period in August 2009.  The portfolio is composed
of residential mortgage-backed securities and commercial mortgage-
backed securities.

Since the last review on Feb. 24, 2006, the transaction has been
actively managed through the collateral quality and coverage tests
which have changed very little.  The weighted average rating
factor has remained stable at 1.22 ('AA-/A+') from 1.24 ('AA-
/A+').  The class A/B overcollateralization (OC) ratio, class C OC
ratio, and class D OC ratio are currently at 107.07%, 102.26% and
101.63%, respectively; from 107.08%, 102.26% and 101.64% at the
last review. Additionally, there has been only positive rating
migration within the portfolio and trading gains have caused
credit enhancement levels to increase.  There are no defaulted
assets, and only 0.25% of the assets are rated lower than 'A-'.

The ratings of the class A-1A notes, class A-1B1 notes, class A-2
notes, class B-1 notes, and class B-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 C-1 notes, class C-2 notes, and class D notes address the
likelihood that investors will receive ultimate and compensating
interest payments, as per the governing documents, as well as the
stated balance of principal by the legal final maturity date.  The
rating of the class A-1B2 notes addresses the likelihood that
investors will receive only full and timely payments of interest
as per the governing documents.  The rating of the Subordinated
Notes addresses the likelihood that investors will receive only
the ultimate payment of principal by the stated maturity date.


EPICOR SOFTWARE: Completes Offering with $230MM Total Notes Issued
------------------------------------------------------------------
Epicor Software Corporation disclosed that the underwriters of its
offering of $200 million in aggregate principal amount of 2.38%
convertible senior notes due in 2027 have exercised in full their
overallotment option to purchase $30 million of additional notes,
bringing the total amount of the notes issued to $230 million.  
The issuance of the additional notes closed Tuesday, May 8, 2007.
    
The notes will pay interest semiannually at a rate of 2.38% per
annum until May 15, 2027.  The notes will be convertible, under
certain circumstances, into cash or, at the company's option, cash
and shares of the company's common stock, at an initial conversion
rate of 55.26 shares of common stock per $1,000 principal amount
of notes, which is equivalent to an initial conversion price of
approximately $18.10 per share.  The initial conversion price
represents a 30% premium over the last reported sale price of the
company's common stock on May 2, 2007, which was $13.92 per share.
    
Epicor estimates that the net proceeds from this offering will be
approximately $222.3 million after deducting discounts,  
commissions and estimated expenses associated with the offering.
Epicor expects the offering to be accretive to its fiscal 2007
earnings per diluted share.  

On May 8, 2007, Epicor used approximately $94 million of the net
proceeds to repay in full the company's term loan outstanding
under its credit facility.  

The balance of the net proceeds will be used for:

   a) working capital;

   b) capital expenditures;

   c) other general corporate purposes, which may include funding
      acquisitions of businesses, technologies or product lines,
      although, Epicor currently has no commitments or agreements
      for any such specific acquisition; and  

   d) the repurchase of outstanding shares of its common stock,
      through the remaining net proceeds.
   
                 About Epicor Software Corporation

Headquartered in Irvine, California, Epicor Software Corporation
(Nasdaq: EPIC) -- http://www.epicor.com/-- is dedicated to
providing integrated enterprise resource planning, customer
relationship management and supply chain management software
solutions to midmarket companies around the world.  Founded in
1984, the company serves over 20,000 customers in more than
140 countries, providing solutions in over 30 languages.  The
company leverages innovative technologies like Web services in
developing end-to-end, industry-specific solutions for
manufacturing, distribution, enterprise service automation, retail
and hospitality that enable companies to immediately drive
efficiency throughout business operations and build competitive
advantage.  With the scalability and flexibility to support long-
term growth, Epicor's solutions are complemented by a full range
of services, providing a single point of accountability to promote
rapid return on investment and low total cost of ownership.

Epicor is a registered trademark of Epicor Software Corporation.
Other trademarks referenced are the property of their respective
owners.

                          *     *     *

As reported in the Troubled Company Reporter on April 23, 2007,
Standard & Poor's Rating Services raised its corporate credit
rating on Irvine, California-based Epicor Software Corp., to 'BB-'
from 'B+'.  The outlook is stable.


FAIRFAX FINANCIAL: S&P Rates Proposed $464.2MM Senior Notes at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' senior debt
rating to Fairfax Financial Holdings Ltd.'s (BB/Negative/--)
proposed $464.2 million, 7.75% senior notes due in 2022.

At the same time, Standard & Poor's assigned its preliminary 'BB'
senior unsecured debt, 'B+' subordinated debt, and 'B' preferred
stock ratings to FFH's $750 million universal shelf, from which
this issue is a drawdown.

The new debt issuance is expected to be exchanged for the existing
senior notes outstanding of $464.2 million due in 2012, and
therefore leverage figures are expected to be stable with zero
incremental debt.  The interest rate on the existing notes is
7.75%

"The ratings on FFH and its related core entities reflect the
negative views of qualitative areas of governance, risk controls,
and enterprise risk management, which contribute to the negative
outlook," noted Standard & Poor's credit analyst Damien Magarelli.  
"In contrast to these negative factors are the company's good
competitive position, improving earnings, good and improving
capitalization, and strong liquidity."  Reserves, recoverables,
and financial leverage have all improved in the past few years and
are not viewed as significant negatives to the rating.

                      About Fairfax Financial

Based in Toronto, Ontario, Fairfax Financial Holdings Ltd.  
(TSX: FFH;NYSE: FFH) -- http://www.fairfax.ca/-- is a financial  
services holding company which, through its subsidiaries, is
engaged in property and casualty insurance and reinsurance,
investment management and insurance claims management.

The company's U.S. subsidiary, Crum & Forster --
http://www.cfins.com/-- is based in Morristown, New Jersey.  Crum  
& Forster is a commercial property and casualty insurance company
that writes a broad range of commercial coverages.  Its subsidiary
Seneca Insurance provides property and casualty insurance to small
businesses and certain specialty coverages.  The company also has
subsidiaries in Hong Kong through Falcon Insurance and Singapore
through First Capital.

Cunningham Lindsey Group Inc. --
http://www.cunninghamlindseygroup.com/-- of which Fairfax has an  
81% interest in provides a wide range of independent insurance
claims services, including claims adjusting, appraisal and claims
and risk management services, through a worldwide network of
branches in Canada, the United States, the United Kingdom,
continental Europe, the Far East, Latin America and the Middle
East.


GEOKINETICS INC: Prices Public Offering of 4.5 Mil. Common Stock
----------------------------------------------------------------
Geokinetics Inc. has priced its underwritten public offering of
4.5 million shares of its common stock, par value $.01 per share,
at a public offering price of $28 per share, before underwriting
discounts and commissions.

The shares are offered by Geokinetics.  Geokinetics and one
existing stockholder have granted the underwriters a 30-day option
to purchase up to an additional 675,000 shares of common stock to
cover over-allotments, if any.
    
Geokinetics will use the net proceeds from this offering:

   a) to redeem the $110 million aggregate principal amount of
      Second Priority Senior Secured Floating Rate Notes due 2012
      it issued in December 2006, including principal, premium and
      accrued interest; and

   b) to repay a portion of its revolving credit facility.
    
The joint book-running managers for the public offering are RBC
Capital Markets Corporation and UBS Investment Bank.

Raymond James & Associates Inc. and Howard Weil are co-managers
for the offering.
    
A registration statement relating to these securities has been
filed with, and declared effective by, the Securities and Exchange
Commission on May 10, 2007.  The offering of these securities was
made only by means of a written prospectus, copies of which may be
obtained by contacting:

   -- RBC Capital Markets Corporation
      17th Floor
      No. 60 South
      6th Street
      Minneapolis, MN 55402
      Tel: (612) 371-2818
      Fax: (612) 371-2837

   -- UBS Investment Bank
      Attn: Clint Lauriston,
      299 Park Avenue
      New York, NY 10171
      Tel: (888) 827-7275
    
                      About Geokinetics Inc.

Based in Houston, Texas, Geokinetics Inc. (Amex: GOK) --
http://www.geokineticsinc.com/-- is a global provider
of seismic acquisition and high-end seismic data processing
services to the oil and gas industry.  Geokinetics has an
operating presence in North America and is focused on key markets
internationally.  Geokinetics operates in some of the most
challenging locations in the world from the Arctic to
mountainous jungles to the transition zone environments.

                          *     *     *

Moody's Investor's Services has placed a 'B3' rating on Geokinetic
Inc.'s long term corporate family rating and probability of
default.

Standard and Poor's rated 'B-' the company's long-term foreign and
local issuer credit.


GTP ACQUISITION: Moody's Rates $129.9 Million Notes at Low-B
------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
eight classes of notes to be issued by GTP Acquisition
Partners I, LLC.  There are 2,074 towers on sites that are owned,
leased or managed by subsidiaries of the issuer and which will be
the primary collateral from which the cash flow stream for
repayment of the notes is derived.  

Issuer: GTP Acquisition Partners I, LLC
Issue: Mortgage-Backed Notes, Global Tower Series 2007-1
Anticipated Repayment Date: May 15, 2012
Rated Final Payment Date: May 15, 2037

   -- $197,750,000 (total*) Class A-FX and Class A-FL Notes,
      (P)Aaa

   -- $45,200,000, Class B Notes, (P)Aa2

   -- $45,200,000, Class C Notes, (P)A2

   -- $45,200,000, Class D Notes, (P) Baa2

   -- $16,950,000, Class E Notes, (P)Baa3

   -- $56,500,000, Class F Notes, (P) Ba2

   -- $73,450,000, Class F Notes, (P) B2

    * Allocation of issuance between Class A-FX and Class A-FL
      to be determined at pricing.

The notes are being offered in privately negotiated transactions
without registration under the 1933 Act.  The issuance was
designed to permit resale under Rule 144A.


HANCOCK FABRICS: Equity Panel Organizational Meeting Set on May 22
------------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold
an organizational meeting for Hancock Fabric, Inc. and its debtor-
affiliates' equity security holders at 1:30 p.m., on May 22, 2007,
at the J. Caleb Boggs Federal Building, Room 5209, 844 King
Street, in Wilmington, Delaware.

The sole purpose of the meeting will be to form a committee of
equity security holders in the Debtor's cases.  A committee of
equity security holders ordinarily consists of entities, willing
to serve, that hold the seven largest amounts of equity securities
of the debtor.

Official creditors' committees and equity security holders
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 and equity holders 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 creditors' or equity holders'
committee may ask the Bankruptcy Court to replace management
with an independent trustee.  If either committee concludes that
the reorganization of the Debtors is impossible, the respective
committee will urge the Bankruptcy Court to convert the Chapter 11
cases to a liquidation proceeding.

                      About Hancock Fabrics

Based in Baldwyn, Mississippi, Hancock Fabrics Inc.
(OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty
retailer of a wide selection of fashion and home decorating
textiles, sewing accessories, needlecraft supplies and sewing
machines.  Hancock Fabrics is one of the largest fabric retailers
in the United States, currently operating approximately 400 retail
stores in approximately 40 states.  The company employs
approximately 7,500 people on a full-time and part-time basis.
Most of the company's employees work in its retail stores, or in
field management to support its retail stores.

The company and 6 of its debtor-affiliates filed for chapter 11
protection on March 21, 2007 (Bankr. D. Del. Lead Case No.
07-10353).  Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell, represent the Debtors.  When the Debtors filed for
protection from their creditors, they listed $241,873,900 in total
assets and 161,412,000 in total liabilities.

The Debtors exclusive period to file a chapter 11 plan expires on
July 19, 2007.


HANOVER COMPRESSOR: Calls For Redemption of $8MM Convertible Notes
------------------------------------------------------------------
Hanover Compressor Company called for redemption on May 30, 2007,
of $8,121,050 aggregate principal amount of the Convertible Junior
Subordinated Debentures Due 2029, which represents the remaining
outstanding principal amount.

All of the debentures are owned by Hanover Compressor Capital
Trust and the Trust is required to use the proceeds received from
such redemption to redeem $7,873,500 aggregate liquidation amount
of its 7-1/4% Convertible Preferred Securities (CUSIP NO. 41076M3
02) and $247,550 aggregate liquidation amount of its 7-1/4%
Convertible Common Securities.  Hanover Compressor owns all of the
Common Securities of the Trust.

Prior to 5:00 p.m., Eastern Time, on May 29, 2007, holders may
convert their Preferred Securities called for redemption on the
basis of one Preferred Security per $50 principal amount of
Debentures which will then be immediately converted into shares of
Hanover Compressor common stock at a price of $17.875 per share,
or 2.7972 shares of Hanover Compressor common stock per $50
principal amount.  Cash will be paid in lieu of fractional shares.

Alternatively, holders may have their Preferred Securities that
have been called for redemption, redeemed on May 30, 2007.  Upon
redemption, holders will receive $50 for each of their Preferred
Securities, plus accrued and unpaid distributions thereon from
March 15, 2006 up to but not including May 30, 2007.  Any of the
Preferred Securities called for redemption and not converted on or
before 5:00 p.m., Eastern Time, on May 29, 2007, will be
automatically redeemed on May 30, 2007 and no further
distributions will accrue.

Holders of the Preferred Securities should complete the
appropriate instruction form for redemption or conversion, as
applicable, pursuant to The Depository Trust Company's book-entry
system and follow such other directions as instructed by The
Depository Trust Company.

                 About Hanover Compressor Company

Headquartered in Houston, Texas, Hanover Compressor Company
(NYSE:HC) -- http://www.hanover-co.com/-- is in full service  
natural gas compression and provider of service, fabrication and
equipment for oil and natural gas production, processing and
transportation applications.  Hanover sells and rents this
equipment and provides complete operation and maintenance
services, including run-time guarantees for both customer-owned
equipment and its fleet of rental equipment.  Founded in 1990 and
a public company since 1997, Hanover's customers include both
major and independent oil and gas producers and distributors as
well as national oil and gas companies.  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.


HEALTH MANAGEMENT: Earns $65 Million in Quarter Ended March 31
--------------------------------------------------------------
Health Management Associates Inc. reported net operating revenue
of $1.1 billion, a net income of $65 million, and an income from
continuing operations of $65.6 million for the first quarter ended
March 31, 2007.  In the comparable quarter of 2006, the company
reported net operating revenue of $1 billion and a net income of
$87.2 million, and an income from continuing operations of
$86.7 million.

Net operating revenue from continuing operations increased 13.3%,
total admissions from continuing operations grew 2.6%, and
adjusted admissions from continuing operations grew 4.8% in the
first quarter as compared to the same quarter a year ago,
reflecting the admissions contribution from hospitals acquired by
HMA during the year ended Dec. 31, 2006, as well as HMA's de novo
acute care hospital, which opened during the first quarter.

Commencing in February 2007, HMA began discounting its gross
charges for non-elective services by 60% for uninsured patients.
Uninsured discounts for the quarter ended March 31, 2007
approximated $117.7 million.

During the first quarter of 2007, HMA also revised its
charity/indigent care policy such that beginning in January 2007,
only those uninsured accounts for which the patient meets poverty
guidelines are being written off as charity/indigent.  
Charity/indigent care write-offs for the first quarter ended March
31, 2007 were $26.2 million compared to $142.4 million for the
same quarter a year ago.

Days sales outstanding from continuing operations were 52 days at
March 31, 2007, compared to 53 days at Dec. 31, 2006, and 66 days
at March 31, 2006.

The company paid special dividend on March 1, 2007, and its common
stock started trading on an ex-dividend basis beginning on March
2, 2007, in accordance with NYSE rules.  In light of the $10 per
share dividend, HMA's regular dividend has been suspended
indefinitely, reflecting HMA's strategic reallocation of cash flow
to fund future operational objectives and to de-leverage its
balance sheet.

At March 31, 2007, the company's total assets were $4.6 billion,
total liabilities were $4.5 billion, minority interests in
consolidated entities were $63.8 million, and its total
stockholders' equity was $71 million.  The company held
$98.6 million in cash and cash equivalents and $20.5 million in
restricted funds at March 31, 2007.  

At the end of the first quarter 2007, the company's retained
earnings decreased significantly to $16.9 million, from
$2.3 billion at Dec. 31, 2006.

Full-text copies of the company's 2007 first quarter report are
available for free at http://ResearchArchives.com/t/s?1f04

                       Projections for 2007

Instead of an anticipated $250 million reduction in operating net
revenue and corresponding bad debt expense, HMA now expects that
for the balance of fiscal 2007 the implementation of these
policies will reduce net operating revenue and bad debt expense by
only $100 to $150 million.  Therefore, HMA is revising its fiscal
2007 objectives to include between $4.1 billion to $4.3 billion in
net operating revenue and 7.5% to 8.5% in bad debt expense as a
percent of net operating revenue, respectively.  All remaining
fiscal year 2007 objectives previously announced on February 22,
2007 remain unchanged.

                   Joint Ownership at Riverview

On Jan. 23, 2007, HMA completed a transaction giving local
physicians and HMA joint ownership of Riverview Regional Medical
Center, HMA's 281-bed hospital located in Gadsden, Alabama.  About
58 physicians now own an interest in the hospital and participate
in its governance.  HMA continues to own a majority interest in
the hospital and to manage its day-to-day operations.  This
transaction arose in furtherance of HMA's core operating objective
to enhance its relationships with physicians, which HMA is doing
by collaborating operationally and in some select cases
financially, to the mutual benefit of physicians, patients,
communities, and its hospitals.

                     Medical Center in Naples

On Feb. 5, 2007, HMA's new 100-bed Physicians Regional Medical
Center -- Collier Boulevard, located in Naples, Florida, opened
its doors and began treating patients.  This state-of-the-art de
novo hospital provides general acute care hospital services to the
residents of East Naples and southern Collier County, and includes
all private rooms, spacious surgical suites, a 64-slice CT scanner
and a separate 14-bed women's center.  Combined with the existing
Physicians Regional Medical Center -- Pine Ridge, the two
hospitals form the Physicians Regional Health System, and are
delivering high quality health care to all of Collier County and
the surrounding region.

                            About HMA

Health Management Associates Inc. (NYSE: HMA) --
http://www.hma-corp.com/-- owns and operates general acute care  
hospitals in non-urban communities located throughout the United
States.  Upon completion of the pending transaction to sell the
125-bed Southwest Regional Medical Center, the 103-bed Summit
Medical Center, and the 76-bed Williamson Memorial Hospital, HMA
will operate 57 hospitals in 14 states with about 8,300 licensed
beds.

                          *     *     *

Health Management Associates Inc.'s proposed senior secured credit
facilities carry Moody's Investors Service Ba2 rating.  HMA also
carries Moody's Ba3 Corporate Family Rating.  The outlook for the
ratings is stable.


INNUITY INC: Posts $1.6 Million Net Loss in Quarter Ended March 31
------------------------------------------------------------------
Innuity Inc. reported a net loss of $1.6 million for the first
quarter ended March 31, 2007, compared with a net loss of
$2.5 million for the first quarter of 2006.  Consolidated revenues
for the first quarter of 2007 increased 6% to $5.3 million from
$5 million reported during the same quarter of 2006.  The
significant improvement to net loss is based on the elimination of
royalty payments, tightening of operating costs, and a decline in
interest expense.

"Innuity has already made substantial business and financial
progress in 2007.  In the second quarter, we closed $2 million in
funding with Imperium Master Fund Ltd., which allowed us to settle
a $1.2 million liability to Citysearch for $600,000," said John
Wall, Innuity chairman and chief executive officer.  "As we move
towards achieving cash flow positive operations over the next
several quarters we now have additional resources and an improved
balance sheet to effectively drive our progress."

Wall continued, "We also have successfully introduced a new
product line and created customer growth momentum with our launch
of LeadConnect, which provides cost-effective local search results
for small businesses.  Our new agreement with Amerivon should
accelerate the penetration of our products into the mass retail
market, and our agreement extension with International Merchant
Services designates that our Creditdiscovery product will serve as
their primary customer acquisition tool."

At March 31, 2007, the company's balance sheet showed $7,084,644
in total assets and $11,464,964 in total liabilities, resulting in
a $4,380,320 total stockholders' deficit.

The company's balance sheet at March 31, 2007, also showed
strained liquidity with $3,010,338 in total current assets
available to pay $10,782,786 in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1f08

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 19, 2007,
Hansen, Barnett & Maxwell P.C. expressed substantial doubt about
Innuity Inc.'s ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2006, and 2005.  The auditing firm pointed to
the company's accumulated deficit, losses from operations,
negative cash flows from operating activities, negative working
capital and capital deficiency.

                        About Innuity Inc.

Innuity Inc. (OTCBB: INNU) -- http://innuity.com/-- designs,
acquires, and integrates applications to deliver software for
small business.  Its Internet technology is based on an
affordable, on-demand model that allows small businesses to
interact simply with customers, business partners, and vendors and
to manage their businesses efficiently.  Using the company's on-
demand applications, small businesses can grow their revenues,
reach and serve customers, and run everyday operations.


INTERACT HOLDINGS: Gruber & Company Raises Concern Doubt
--------------------------------------------------------
Gruber & Company LLC, of Lake Saint Louis, Missouri, expressed
substantial doubt about Interact Holdings Group Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2006.  The auditing firm
pointed to the company's inability to generate sufficient cash
flows to meet its obligations and sustain its operations.

For the year ended Dec. 31, 2006, the company posted a net loss of
$2,820,095 compared to $1,750,382 in the prior year.  Net sales
increased to $3,198,853 from $2,193,685 in the previous year.

The company's selling, general and administrative expenses,
increased to $2,851,800 for the year ended Dec. 31, 2006, from
$1,363,490 in the prior year.

At Dec. 31, 2006, the company suffered negative working capital in
its balance sheet with $894,506 in total current assets and
$2,289,084 in total current liabilities.  The company had
stockholders' deficit of $1,463,467 from total assets of
$3,633,246 and total liabilities of $5,096,713.

                            Liquidity

The company used $2,026,287 of net cash used in operating
activities for the year ended Dec. 31, 2006, compared to $120,932
used in the prior year.

Net cash flows used in investing activities were $66,606 for the
year ended Dec. 31, 2006, compared to $9,753 in the prior year.  
The cash used in investing activities for the year ended Dec. 31,
2006, was for purchase of equipment and software.

Net cash flows provided by financing activities were $2,272,219
for the year ended Dec. 31, 2006, compared to net cash used for
financing activities of $71,189 in the prior year.  The difference
results primarily from proceeds of notes payable.

The company had a working capital deficit of $1,658,760 as of
Dec. 31, 2006.  The company is anticipating raising funds through
new issuances of stock or through private transactions.

A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1ef7

                      About Interact Holdings

Headquartered in Houston, Texas, Interact Holdings Group, Inc. --
(OTC BB: IHGRE) -- http://www.diversenet.com/-- engages in the  
building and operation of wireless networks, and the provision of
consulting and engineering services to allow its customers to
build and operate their networks.  It also provides data
collection and management services between remote devices called
Machine to Machine services.  The company was founded in 2001 as
Diverse Networks, Inc. and changed its name to Jackson Rivers
Company in December 2005.  The company further changed its name to
Interact Holdings Group, Inc. in December 2006.


ION MEDIA: W. Lawrence Patrick to Resign from Board of Directors
----------------------------------------------------------------
ION Media Networks Inc. reported that on May 9, 2007, its Chairman
of the Board of Directors W. Lawrence Patrick, said that he
intends to announce his resignation from the Board of Directors on
June 18, 2007.

The effective date of Mr. Patrick's resignation has not been
determined, but is presently expected to be at the end of August
2007.

ION Media Networks Inc. (AMEX: ION) -- http://www.ionmedia.tv/--
owns and operates a broadcast television station group and ION
Television, reaching over 90 million U.S. television households
via its nationwide broadcast television, cable and satellite
distribution systems.  ION Television currently features popular
television series and movies from the award-winning libraries of
Warner Bros., Sony Pictures Television, CBS Television and NBC
Universal.  In addition, the network has partnered with RHI
Entertainment, which owns over 4,000 hours of acclaimed television
content, to provide high-quality primetime programming beginning
July 2007.  Utilizing its digital multicasting capability, ION
Media Networks has launched several new digital TV brands,
including qubo, a television and multimedia network for children
formed in partnership with Scholastic, Corus Entertainment,
Classic Media and NBC Universal, as well as ION Life, a television
and multimedia network dedicated to health and wellness for
consumers and families.

                          *      *      *

As reported in the Troubled Company Reporter on May 9, 2007,
Standard & Poor's Ratings Services placed its ratings on Ion Media
Networks Inc., including the 'CCC+' corporate credit rating, on
CreditWatch with developing implications.  The CreditWatch
placement follows Ion's announcement that it entered into an
agreement with Citadel Investment Group LLC and NBC Universal Inc.
for a comprehensive recapitalization of Ion.


ISP CHEMCO: Shareholder Cash Distribution Cues S&P to Cut Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings on ISP Chemco LLC (formerly ISP
Chemco Inc.) to 'B+' from 'BB-'.

The outlook is stable.

"The downgrade was prompted by the company's plans to increase
debt to finance an approximately $200 million cash distribution to
its shareholder," said Standard & Poor's credit analyst Cynthia
Werneth. "As a result, credit measures and the financial profile
will no longer support the former ratings."

At the same time, based on preliminary terms and conditions, S&P
assigned a 'B+' rating and '2' recovery rating to ISP Chemco's
proposed seven-year $1.16 billion term loan.  These ratings
indicate our expectation that lenders would experience substantial
(80% to 100%) recovery of principal in a payment default.  
Proceeds will be used to finance the cash distribution and
refinance an existing term loan. S&P expects the company's $250
million revolving credit facility to remain in place.  Pro forma
for the transaction, debt (adjusted to include about $100 million
of off-balance-sheet accounts receivable and operating lease
financing and unfunded postretirement obligations), will total
about $1.3 billion.

The ratings on ISP Chemco reflect its highly leveraged financial
profile and risks associated with private ownership as well as its
satisfactory business position as a global producer of specialty
and industrial chemicals with about $1.4 billion in annual sales.

The driver of Wayne, New Jersey-based ISP Chemco's credit quality
is its diverse portfolio of specialty chemicals, which make up
over 70% of its revenues and an even greater proportion of
operating income. The company's remaining sales are of industrial
chemicals.


JAMES RIVER: Increasing Leverage Prompts S&P to Junk Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings, including
its corporate credit rating, on Richmond, Va.-based James River
Coal Co. to 'CCC' from 'CCC+'.  The outlook remains negative.

"The downgrade reflects our concerns about the company's continued
inability to generate free cash flow, limited liquidity, and
increasing leverage."  said Standard & Poor's credit analyst Marie
Shmaruk.  "We have reservations about management's ability to
maintain the improved cost-per-ton level of the first quarter of
2007 compared to the fourth-quarter 2006 level."

Higher safety compliance costs and inherently difficult operating
conditions that continuously pressure costs challenge the
company's ability to sustain these levels.

James River's leverage is aggressive, with adjusted debt to total
capital ratio of about 82% at March 31, 2007. Although the new
credit agreement has provided the company with some breathing
room, S&P expects this to be short lived.

"We could lower the ratings if cost increases beyond current
company guidance, production declines, or liquidity shrinks as the
company continues to generate negative free cash flow," Ms.
Shmaruk said.  "We could revise the outlook to positive if we come
to expect positive free cash flow over the next couple of years
and financial performance becomes less volatile."


JARDEN CORPORATION: Earns $1.4 Million in First Quarter 2007
------------------------------------------------------------
Jarden Corporation reported that for the quarter ended March 31,
2007, net sales increased 4% to $820.9 million, as compared with
$791.7 million for the same period in the prior year.  Net income
was $1.4 million for the quarter ended March 31, 2007, as compared
with $5.7 million in the first quarter of 2006.

The company's balance sheet at March 31, 2007, reflected total
assets of about $4.1 billion and total liabilities of about
$2.8 billion, and total stockholders' equity of about
$1.3 billion.  At March 31, 2007, the company had cash and cash
equivalents of $391.5 million.

                           Acquisitions

In April 2007, the company announced the acquisition of Pure
Fishing Inc., a global provider of fishing tackle, lures, rods and
reels marketed under well known fishing brands including Abu
Garcia(R), Berkley(R), Mitchell(R), Strenr, Trilene(R) and
Gulp(R). The consideration consisted of $300 million in cash, a
$100 million five year subordinated note with a 2% coupon and a
warrant exercisable into approximately 2.2 million shares of
Jarden common stock with an initial exercise price of $45.32.

On April 24, 2007, the company entered into a definitive merger
agreement with K2 Inc., a provider of branded consumer products in
the global sports equipment market.  Under the terms of the
agreement, the company will pay $10.85 per share of K2 common
stock in cash and will issue 0.1086 of a share of Jarden common
stock for each share of K2 common stock outstanding as of the
closing.  The cash and Jarden common stock to be issued in the
transaction has a combined value of approximately $15.50 per K2
share, based on the closing price of Jarden common stock on the
date of signing the merger agreement.  The total estimated
purchase price is about $1.2 billion.

                    Debt and Capital Resources

During February 2007, the Company completed a registered public
offering for $650 million aggregate principal amount of 7-1/2%
Senior Subordinated Notes due 2017 and received net proceeds of
about $637 million.  Of these proceeds, about $184 million was
used to purchase 94.4% of the principal amount outstanding of the
9-3/4% Senior Subordinated Notes due 2012 plus the tender premium
and accrued interest.  As a result of the purchase of Senior
Subordinated Notes, the company recorded a $14.8 million loss on
the extinguishment of debt.

At March 31, 2007, there was no amount outstanding under the
revolving credit portion of the senior credit facility.  At March
31, 2007, net availability under the Facility was $183.4 million,
after deducting $16.6 million of outstanding letters of credit.  
The company is required to pay commitment fees on the unused
balance of the revolving credit facility.  At March 31, 2007, the
annual commitment fee on unused balances was 0.375%.

Full-text copies of the company's 2007 first quarter report are
available for free at http://ResearchArchives.com/t/s?1f0c

Martin E. Franklin, chairman and chief executive officer
commented, "Our strong positive momentum continued from 2006 into
the first quarter, as demonstrated by the growth in sales and
segment earnings reported today, as well as a significant
improvement in year over year cash flow from operations.  Our
strategy of building a world class, market leading, diversified
consumer products company based on our people, products and brands
continues to yield results.  While we performed well across the
entire company, I am particularly pleased with the expansion of
gross margins as demonstrated by the 100 basis point improvement
this quarter compared to the same period in 2006."

Mr. Franklin continued, "The healthy momentum in our segments,
despite continued pressure in supply chain costs and concerns
about the consumer, continued through the quarter. While it is
still early in the year, this forward progress coupled with the
recent acquisition of Pure Fishing positions us well for the
balance of the year, and I believe that we are on track to achieve
our long-term financial goals."

                        About Jarden Corp.

Headquartered in Rye, New York, Jarden Corporation (NYSE: JAH) --
http://www.jarden.com/-- manufactures and distributes niche  
consumer products used in and around the home.  The company's
primary segments include Consumer Solutions, Branded Consumables,
and Outdoor.

                          *     *     *

As reported in the Troubled Company Reporter on April 30, 2007,
Standard & Poor's Ratings Services affirmed its ratings and
outlook on Rye, New York-based Jarden Corp. (B+/Stable/--)
following the company's agreement to acquire K2 Inc., a global
sports equipment manufacturer with leading market positions in
several categories.  At the same time, Standard & Poor's placed
its ratings on K2, including its 'BB' corporate credit rating, on
CreditWatch with negative implications.


JER CRE: Moody's Puts Low-B Ratings to Class F & G Obligations
--------------------------------------------------------------
Moody's Investors Service affirmed the ratings of eight classes of
JER CRE CDO 2005-1, Limited and JER CRE CDO 2005-1, LLC,
Collateralized Debt Obligations, Series 2005-1:

   -- Class A, $81,725,000, Floating, affirmed at Aaa
   -- Class B-1, $38,130,000, Fixed, affirmed at Aa2
   -- Class B-2, $37,500,000, Floating, affirmed at Aa2
   -- Class C, $48,400,000, Fixed, affirmed at A2
   -- Class D, $46,500,000, Fixed, affirmed at Baa2
   -- Class E, $23,320,000, Fixed, affirmed at Baa3
   -- Class F, $15,000,000, Fixed, affirmed at Ba2
   -- Class G, $10,000,000, Fixed, affirmed at B2

As of the April 17, 2007 distribution date, the transaction's
aggregate collateral balance and bond balance are $418.7 million
and $416.00 million, respectively, the same as at securitization.  
The Certificates are collateralized by 73 classes of CMBS
securities from 13 transactions (96.6%) and three CDO classes from
one transaction (3.4%).

Moody's reviewed the ratings or shadow ratings of all the
collateral supporting the Certificates.  Since securitization
there have been no losses.  None of the CMBS classes were upgraded
or downgraded.  One shadow rating was downgraded and none were
upgraded.  Preferred equity of $115.4 million provides a cushion
to absorb potential losses to the pool.

Moody's uses a weighted average rating factor (WARF) as an overall
indicator of the credit quality of a CDO transaction. Based on
Moody's analysis, the WARF has increased slightly to 2,084, from
2,075 at securitization.  The distribution of ratings (actual and
shadow ratings) is as follows:

   -- Baa1-Baa3 (5.9% compared to 5.2% at securitization);
   -- Ba1-Ba3 (48.8% compared to 48.1% at securitization);
   -- B1-B3 (42.1% compared to 43.4% at securitization); and
   -- Caa1-NR (3.2%, compared to 3.3% at securitization).

The CMBS certificates are from pools securitized between 1998 and
2005. The vintage exposures are 2005 (74.1%), 2004 (23.8%) and
1998 (2.1%). The five largest CMBS exposures are MLMT 2005-CKI1
(11.6%), JPMCC 2005-LDP4 (10.2%), BACM 2005-1 (9.3%), MSCI 2005-
IQ10 (9.0%) and CSFB 2005-C2 (9.0%).


JOAN FABRICS: Proposes Bidding Procedures for Sale of Assets
------------------------------------------------------------
Joan Fabrics Corporation asked the U.S. Bankruptcy Court for the
District of Delaware to establish bidding procedures for the sale
of substantially all of its assets, Bill Rochelle of Bloomberg
News reports.

According to the report, the company told the Court that it has
received eight "non-binding preliminary indications of interest."

The company proposes a May 23, 2007 bid deadline, and expects to
hold an auction during the last week of June.  

Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation
manufactures automotive and furniture upholstery fabrics.  The
company has a manufacturing facility in North Carolina and an
affiliate entity in Mexico.

The Debtor and its affiliate, Madison Avenue Designs LLC filed
for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case
Nos. 07-10479 and 07-10480).  When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $1 million to $100 million.  The Debtors' exclusive
period to file a chapter 11 plan expires on Aug. 8, 2007.


KNOLL INC: First Quarter 2007 Net Income Increases to $14.8 Mil.
----------------------------------------------------------------
Knoll Inc. has reported net sales of $247.9 million for the first
quarter ended March 31, 2007, an increase of 13.7% from first
quarter 2006.  Operating income was $30.8 million, or 12.4% of net
sales, an increase of 40.6% from the first quarter 2006.  Net
income for the first quarter 2007 was $14.8 million, as compared
with $10.2 million for the same quarter in 2006.

Gross profit for the first quarter of 2007 was $84.5 million, an
increase of $14.7 million or 21.1%, over the same period in 2006.  
Operating expenses for the quarter were $53.7 million, or 21.7% of
sales, compared to $47.8 million, or 21.9% of sales, for the first
quarter of 2006.  The company' operating income increased to 12.4%
of sales from 10% of sales in the same period in the prior year.  
Interest expense increased $1.2 million due to increased average
debt for the quarter coupled with higher average interest rates.  
The effective tax rate was 38% for the quarter, as compared to
39.1% for the same period last year.  The decrease in the
effective tax rate is largely due to the mix of pretax income in
the countries in which we operate.  

Cash generated from operations during the first quarter 2007 was
$2 million, compared to $15.2 million used in operations the year
before.  Capital expenditures for the period totaled $3 million
compared to $1.2 million for 2006.  The company repurchased about
0.5 million shares of its stock for $13.5 million during the first
quarter of 2007 compared to 0.8 million shares for $16.3 million
during the first quarter of 2006.  The company also had net
borrowings during the first quarter of 2007 of $7 million
primarily to fund working capital compared to net borrowings of
$16.4 million during 2006.  The company also paid a quarterly
dividend of $5.3 million in the first quarter of 2007 compared to
$5.2 million in the first quarter of 2006.

At March 31, 2007, the company had total assets of $633 million
and total liabilities of $613.1 million, resulting in a total
stockholders' equity of $19.8 million.  The company recorded
retained earnings of $6.7 million at March 31, 2007, as compared
with retained deficit of $2.7 million at Dec. 31, 2006.

Full-text copies of the company's first quarter 2007 are available
for free at http://ResearchArchives.com/t/s?1ef6

"Knoll is firing on all cylinders," said Andrew Cogan, chief
executive officer.  "Thanks to the breadth and diversity of our
growth initiatives, for the third year in a row we are growing our
sales faster than the industry.  And, importantly in 2007,
investments in our operations are resulting in significant
improvements in both our gross and industry leading operating
margins."

"We are encouraged by the ongoing activity in the business and
look forward to an exciting NeoCon trade show in June, as we
continue to make investments in strengthening and expanding our
product portfolio.  I want to congratulate and thank our
associates and dealers for their strong performance and continued
commitment to our success."

Barry L. McCabe, chief financial officer said, "We are very
pleased with both our gross and operating margin expansions and
the strength of our balance sheet.  We reduced our leverage ratio
to 2.4 to 1 and have $106 million available to us under our
revolving credit facility."

                    Second Quarter 2007 Outlook

The company expects second quarter 2007 revenue to be in the
$262 million to 272 million range, an increase of 6% to 10% from
the second quarter of 2006.

                         About Knoll Inc.

Headquartered in East Greenville, Pennsylvania, Knoll Inc.,
(NYSE: KNL) -- http://www.knoll.com/-- designs and manufactures  
branded office furniture products and textiles, serves clients
worldwide.  It distributes its products through a network of more
than 300 dealerships and 100 showrooms and regional offices.  The
company has locations in Argentina, Australia, Bahamas, Cayman
Islands, China, Colombia, Denmark, Finland, Greece, Hong Kong,
India, Indonesia, Japan, Korea, Malaysia, Philippines, Poland,
Portugal and Singapore, among others.

                          *     *     *

Knoll Inc. carries Moody's Investors Service's B1 Corporate Family
Rating and the company's $200 million senior secured revolver and
$250 million senior secured term loan carry Moody's Ba2.   Moody's
assigned an LGD2 rating to both loans, suggesting note holders
will experience a 27% loss in the event of a default.


LEGENDS GAMING: Weak Performance Prompts S&P's Stable Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Legends Gaming LLC to stable from positive.  Outstanding ratings
on the company, including the 'B' corporate credit rating, were
affirmed.

"The outlook revision reflects somewhat weaker operating
performance than we previously expected, preventing near-term
upside potential for the rating," explained Standard & Poor's
credit analyst Ariel Silverberg.

The 'B' rating on Frankfort, Illinois-based Legends reflects the
company's high debt levels, small portfolio of gaming properties,
and competitive environments in both markets in which it operates.  
Legends' two facilities are located in Vicksburg, Miss. and
Bossier City, La., and are both branded Diamond Jacks.

Legends is a private company and, therefore, does not publicly
disclose its financial performance.  For the period since it has
operated the casinos (beginning in August 2006), operating
performance has been weaker than S&P's expectations, which has
prevented the improvement in credit measures that S&P previously
anticipated.

The weakness in earnings reflects, in part, the inability to
successfully execute marketing initiatives and generate sufficient
customer volumes, while maintaining margins.  This is highlighted
more so in the Bossier City/Shreveport market, where aggregate
market revenue was up 9% between August and December 2006,
demonstrating the existence of solid demand, and highlighting
Legends' inability to capture this demand.

Management has, however, taken steps to adjust its marketing
strategy and improve customer experience at the properties. If the
company is successful in building its customer base, we believe
that revenue growth, combined with a more efficient use of
marketing spend, will sustain credit measures in line with the
current rating.


MAGNA ENTERTAINMENT: Unit Completes Credit Refinancing
------------------------------------------------------
Magna Entertainment Corp.'s wholly owned subsidiary, AmTote
International Inc., has completed a refinancing of its existing
credit facilities, with SunTrust Bank as the new lender.  

The refinancing with SunTrust includes:

   a) a $4.2 million term loan for the repayment of AmTote's
      existing debt outstanding under its Lasalle Bank term loan
      facilities;

   b) $3 million revolving credit facility to finance working
      capital needs; and

   c) a $10 million term loan facility to finance up to 80% of
      eligible capital costs related to tote service contracts.
    
"The company expects that the new credit facilities will provide
increased flexibility and growth capacity for AmTote," Blake
Tohana, executive vice-president and chief financial officer of
MEC, said.  "These credit facilities will allow AmTote to finance
a substantial portion of the capital costs related to new tote
service contacts, which includes the recent contract with
Alberta's Northlands Park and the anticipated contract with
Woodbine Entertainment Group."

Headquartered in Hunt Valley, Maryland, AmTote International Inc.  
-- http://www.amtote.com/-- is an industry in real-time  
transaction processing, providing computerized pari-mutuel
wagering services and equipment to both domestic and international
customers.
    
                     About Magna Entertainment

Headquartered in Aurora, Ontario, Magna Entertainment Corp.
(NASDAQ: MECA; TSX: MEC.A) -- http://www.magnaentertainment.com/  
-- owns and operates horse racetracks, based on revenue, acquires,
develops, owns and operates horse racetracks and related pari-
mutuel wagering operations, including off-track betting
facilities.  The company also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.  The
company owns and operates AmTote International Inc., XpressBet(R),
a national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally.  Pursuant to joint ventures, the
company has a 50% interest in HorseRacing TV(TM), a 24-hour horse
racing television network, and TrackNet Media Group, LLC, a
content management company formed for distribution of the full
breadth of MEC's horse racing content.

                        Going Concern Doubt

Chartered accountants, Ernst & Young LLP raised substantial doubt
of Magna Entertainment Corp.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005.  The accountants pointed to
the company's recurring operating losses and working capital
deficiency.


MASTR ASSET: Moody's Puts Low-B Ratings on Two Cert. Classes
------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
certificates issued by MASTR Asset Backed Securities Trust 2007-
HE1.

The complete provisional rating actions are:

   * MASTR Asset Backed Securities Trust 2007-HE1
     Mortgage Pass-Through Certificates, Series 2007-HE1

     -- Class A-1, Assigned (P)Aaa
     -- Class A-2, Assigned (P)Aaa
     -- Class A-3, Assigned (P)Aaa
     -- Class A-4, Assigned (P)Aaa
     -- Class M-1, Assigned (P)Aa1
     -- Class M-2, Assigned (P)Aa2
     -- Class M-3, Assigned (P)Aa3
     -- Class M-4, Assigned (P)Aa3
     -- Class M-5, Assigned (P)A1
     -- Class M-6, Assigned (P)A2
     -- Class M-7, Assigned (P)A3
     -- Class M-8, Assigned (P)Baa1
     -- Class M-9, Assigned (P)Baa2
     -- Class M-10, Assigned (P)Baa3
     -- Class M-11, Assigned (P)Ba1
     -- Class M-12, Assigned (P)Ba2

Investors should be aware that the certificates have not yet been
issued.  Upon issuance of the certificates and upon conclusive
review of all documents and information about the transaction, as
well as any subsequent changes in information, Moody's will
endeavor to assign definitive ratings, which may differ from the
provisional ratings.


MORGAN STANLEY: Moody's Lifts Ratings on Class H Certificates
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes and
affirmed the rating of one class of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1997-ALIC as
follows:

   -- Class X, Notional, affirmed at Aaa
   -- Class F, $39,640,133, Fixed, upgraded to Aaa from A2
   -- Class H, $14,047,000, Fixed, upgraded to A2 from Ba1

As of the April 16, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 83.7%
to $130.9 million from $802.7 million at securitization.  The
Certificates are collateralized by seven loans ranging in size
from 6.5% to 25.6% of the pool. Two loans have been liquidated
from the pool resulting in aggregate realized losses of
approximately $9.1 million. Currently there are no loans in
special servicing.

Moody's was provided with year-end 2005 and partial-year 2006
operating results for 100.0% of the pool.  Moody's weighted
average loan to value ratio is 72.5%, compared to 80.5% at Moody's
last full review in March 2005 and compared to 84.0% at
securitization. Moody's is upgrading Classes F and H due to
increased subordination levels and improved overall pool
performance.

The top three loans represent 67.7% of the outstanding pool
balance.  The largest loan is the Glen Pointe Centre West Loan
($33.5 million -- 25.6%), which is secured by a 330,000 square
foot Class A office building located in Teaneck, New Jersey.  The
property is 70.0% occupied, compared to 97.0% at last review.  The
decline in occupancy is due to the February 2007 lease expiration
of EISAI Corp., which formerly occupied approximately 30.0% of the
property's GLA.  Moody's LTV is 91.6%, compared to 62.5% at last
review.

The second largest loan is the Court Plaza Loan ($33.1 million
-- 25.3%), which is secured by a 325,000 square foot office
property located in Hackensack, New Jersey.  The property was
81.7% leased as of December 2006, compared to 72.1% at last
review. Performance has improved since last review, but property
performance is still depressed due to low occupancy.  The loan is
on the master servicer's watchlist due to low debt service
coverage. Moody's LTV is in excess of 100.0%, the same as at last
review.

The third largest loan is the Doubletree Hotel -- Fisherman's
Wharf Loan ($21.9 million -- 16.8%), which is secured by a 374-
room hotel located in Monterey, California.  Performance has
improved since last review due to increased revenues and loan
amortization. RevPAR for the trailing 12-month period ending
September 2006 was $132.88, compared to $122.27 at last review.  
The loan has amortized by approximately 18.0% since
securitization.  Moody's LTV is 38.3%, compared to 42.9% at last
review.

The pool's collateral is a mix of office (65.7%), lodging (26.0%)
and retail (8.3%).  The collateral properties are located in New
Jersey (50.8%), California (25.1%), Kansas (14.8%) and Indiana
(9.3%).  The pool's weighted average maturity is 41 months.


MUELLER WATER: Plans Offering of $350 Million of Senior Notes
-------------------------------------------------------------
Mueller Water Products, Inc., disclosed last week that it intends
to offer, subject to market and other conditions, $350 million
aggregate principal amount of senior subordinated notes due 2017.

The company intends to use the net proceeds from the offering of
the notes, together with cash on hand and borrowings under credit
facilities, to pay the purchase price for the 14-3/4% senior
discount notes due 2014 and 10% senior subordinated notes due 2012
tendered by holders and the consent payment relating to amendments
to the underlying indentures pursuant to its previously announced
outstanding offers to purchase and consent solicitations.

The notes will be offered only to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended, and outside the United States to non-U.S. persons
pursuant to Regulation S under the Securities Act.  The notes have
not been registered under the Securities Act, or the securities
laws of any state or other jurisdiction, and may not be offered or
sold in the United States without registration or an applicable
exemption from the Securities Act.

                       About Mueller Water

Based in Atlanta Georgia, Mueller Water Products, Inc. (NYSE: MWA)
-- http://www.muellerwaterproducts.com/-- is a leading North  
American manufacturer and marketer of infrastructure and flow
control products for use in water distribution networks and
treatment facilities.  Its broad product portfolio includes
engineered valves, hydrants, pipe fittings and ductile iron pipe,
which are used by municipalities, as well as the commercial and
residential construction, oil and gas, HVAC and fire protection
industries.  With revenues of approximately $1.9 billion, the
company is comprised of three main operating segments: Mueller
Co., U.S. Pipe and Anvil.  The company employs approximately 6,600
people.


MUELLER WATER: Earns $17.9 Million in Quarter Ended March 31
------------------------------------------------------------
Muller Water Products, Inc., filed with the U.S. Securities and
Exchange Commission it quarterly report on Form 10-Q for the
quarter ended March 31, 2007.

For the quarter ended March 31, 2007, the company reported net
income of $17.9 million on net sales of $459.7 million compared to
net loss of $1.8 million on net sales of $434.9 million for the
same period in 2006.

Total assets at March 31 $2.9 billion while total liabilities were
$1.7 billion.

For the six months ended March 31, 2007, net income was $34.9
million on net sales of $871.6 million.  This compares to net loss
of $50.6 million on net sales of $915.3 million for the half-year
ended March 31, 2006.

A full-text copy of the company's Form 10-Q for the quarter ended
March 31, 2007 is available for free at:

              http://ResearchArchives.com/t/s?1f0b

                        About Mueller Water

Based in Atlanta Georgia, Mueller Water Products, Inc. (NYSE: MWA)
-- http://www.muellerwaterproducts.com/-- is a leading North  
American manufacturer and marketer of infrastructure and flow
control products for use in water distribution networks and
treatment facilities.  Its broad product portfolio includes
engineered valves, hydrants, pipe fittings and ductile iron pipe,
which are used by municipalities, as well as the commercial and
residential construction, oil and gas, HVAC and fire protection
industries.  With revenues of approximately $1.9 billion, the
company is comprised of three main operating segments: Mueller
Co., U.S. Pipe and Anvil.  The company employs approximately 6,600
people.


MUELLER WATER: S&P Rates Proposed $1.1 Billion Facilities at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its loan and recovery
ratings to Mueller Water Products Inc.'s proposed $1.1 billion
senior secured credit facilities.  They were rated 'BB', one notch
higher than the corporate credit rating, with a recovery rating of
'1', indicating the expectation for full (100%) recovery of
principal in the event of a payment default.

All ratings are based on preliminary offering statements and are
subject to review upon final documentation.

S&P We also assigned its 'B' issue rating to the company's
proposed $350 million senior subordinated note offering that
matures in 2017.  The proposed facilities, which consist of a $300
million revolving credit facility, a $150 million term loan A, and
a $640 million term loan B, along with the note offering, will be
used to refinance existing debt.

S&P's 'BB-' corporate credit rating has been affirmed.  The
outlook is stable.


NEOMEDIA TECH: Posts $11.5 Million Net Loss in Qtr Ended March 31
-----------------------------------------------------------------
NeoMedia Technologies Inc. reported a net loss of $11.5 million on
net sales of $399,000 for the first quarter ended March 31, 2007,
compared with a net loss of $1.3 million on net sales of $199,000
for the same period last year.

General and administrative expenses increased by $1,093,000, or
81%, to $2,440,000.  The increase resulted from higher accounting,
professional, and legal services of $1,054,000, higher audit fees
and general and administrative expenses of $39,000 from Gavitec
AG, which was acquired during the first quarter of 2006.  

Results for the first quarter ended March 31, 2007, included a
loss on derivative financial instruments of $3,508,000, associated
with the company's Series C preferred stock, warrants, and
convertible debenture, compared with a gain of $4,768,000 in the
same period in 2006,

Results for the quarter ended March 31, 2006, included a loss on
extinguishment of debt in the amount of $1,964,000, resulting from
debt retired in connection with the Series C preferred stock
issued and sold to Cornell Capital Partners on Feb. 17, 2007, with
no corresponding charge in the same period in 2007.

Interest expense increased $1,704,000 to $1,698,000 for the
quarter ended March 31, 2007, from interest income of $6,000 for
the quarter ended March 31, 2006.  The increase resulted from a
charge to expense the costs of obtaining the debenture financing
in March 2007 of $781,000, $500,000 of interest expense and
liquidated damages related to the company's convertible financing
arrangements, and $417,000 of other interest expense.

Loss from discontinued operations were $2.6 million in the 2007
quarter, compared to loss from discontinued operations of
$1.2 million in the 2006 quarter.  

At March 31, 2007, the company's balance sheet showed
$33.7 million in total assets and $85.6 million in total
liabilities, resulting in a $51.9 million total stockholders'
equity.

The company's balance sheet at March 31, 2007, also showed
strained liquidity with $19.1 million in total current assets
available to pay $85.6 million in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1efe

                  Default upon Senior Securities

NeoMedia is currently in default of the Investor Registration
Rights Agreement entered into on Feb. 17, 2006, in connection with
the $22 million Series C Convertible preferred Stock Sale, the
Investor Registration Rights Agreement entered into on Aug. 24,
2006, in connection with the $5 million secured convertible
debenture, the Investor Registration Rights Agreement entered into
on Dec. 29, 2006, in connection with the $2.5 million secured
convertible debenture, and the Investor Registration Rights
Agreement entered into on Mar. 27, 2007, in connection with the
$7.5 million secured convertible debenture.  

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 13, 2007,
Stonefield Josephson Inc. expressed substantial doubt about
NeoMedia Technologies Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005.  Stonefield Josephson pointed
to the company's significant operating losses, negative cash flows
from operations and working capital deficit.

                    About NeoMedia Technologies

NeoMedia Technologies Inc. (OTC BB: NEOM) -- http://www.neom.com/   
-- is a mobile enterprise and marketing technology company and
offers direct-to-mobile-Web technology solutions.  NeoMedia's
flagship qode(R) service links the world's leading companies to
the wireless, electronic world.  NeoMedia is headquartered in Fort
Myers, Fla., with an office in Aachen, Germany.


NEW CENTURY: Wants to Hire Manatt Phelps as Securitization Counsel
------------------------------------------------------------------
New Century Financial Corporation and its debtor-affiliates seek
authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy
Court for the District of Delaware to employ Manatt, Phelps &
Phillips, LLP, as their special securitization counsel, effective
as of their bankruptcy filing.

MPP is a law firm with offices at Park Tower, 695 Town Center
Drive, 14th Floor, in Costa Mesa, California.  The firm was
selected based on its broad based experience in the areas of
Securitization and structured finance.

The firm will, among others:

    -- assist with the proposed auction and sale of the Debtors'
       mortgage loan servicing platform, servicing rights and
       servicing advance reimbursement rights;

    -- review and analyze the agreements under which the mortgage
       loan servicing is performed for loans owned by
       Securitization trusts and other third parties;

    -- interface with bankruptcy counsel regarding the contracts
       and regarding industry practice;

    -- assist with the negotiation and documentation of the sale
       of the Debtors' assets; and

    -- render other services as are customary in engagements of
       this type.

Monika L. McCarthy, senior vice president and assistant general
counsel of the Debtors, assures the Court that the services to be
rendered by MPP will not duplicate the services to be rendered by
any other professionals retained by the Debtors in their Chapter
11 cases.

The Debtors will pay the firm based on its professionals'
customary hourly rates:

              Ellen R. Marshall                   $650
              Ivan L. Kallick                     $590
              Robert J. Sherman                   $550
              Matthew S. O'Loughlin               $415
              Michael E. Wong                     $385

The fees for any additional MPP attorneys, paralegals or other
professionals will be based on the firm's standard, customary
hourly rates for the performance of services of this nature.

MPP will be reimbursed for all reasonable out-of-pocket expenses
incurred in connection with the engagement.

Ms. Marshall, a partner at MPP, discloses that the firm has
represented the Debtors in the past in matters unrelated to their
Chapter 11 cases, specifically in several secondary mortgage
market transactions involving purchases and sales of mortgage
loans and mortgage servicing.

MPP's principals and professionals do not have any connection
with the Debtors, their creditors, or any other party-in-interest
and do not hold or represent an interest materially adverse to
the Debtors or their estates, Ms. Marshall states.

Ms. Marshall attests that the firm is a disinterested person, as
the term is defined in Section 101(14) of the Bankruptcy Code,
and represents or holds no interest adverse to the interests of
the estates with respect to the matters upon which they are to be
employed.

                        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.

The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416).  Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors.  When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.  The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007.  (New Century Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000).

The Debtors' exclusive period to file a plan expires on July 31,
2007.


NEW CENTURY: Taps Sheppard Mulling as Special Litigation Counsel
----------------------------------------------------------------
New Century Financial Corporation, its debtor-affiliates and New
Century Warehouse Corporation, a wholly owned non-debtor
subsidiary of New Century TRS Holdings Inc., seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Sheppard, Mulling, Richter & Hampton LLP, as their special
corporate and litigation counsel, nunc pro tunc to April 2, 2007.

SMRH has been providing the Debtors with legal services since
March 2004.  On Feb. 7, 2007, New Century Financial Corporation,
New Century Mortgage Corporation, Home 123 Corporation, NC
Capital Corporation, and certain of their affiliates entered into
a comprehensive retainer letter, which superseded all prior
engagement agreements between the parties.

In December 2005, New Century Warehouse entered into an agreement
to acquire substantially all of the assets of Access Lending
Corporation.  SMRH represented New Century Warehouse in
connection with the transaction.  Access Lending was in the
business of financing residential mortgage loans originated by a
network of loan brokers and smaller financial institutions.  It
provided financing to these loan originators that was used, in
turn, by these originators to fund the loans provided to
individual borrowers of the originators.

Access Lending obtained its financing from three warehouse
lenders who entered into various receivable purchase agreements,
credit agreements and repurchase agreements.  Since the
acquisition, New Century Warehouse has operated largely
independently of the Debtors.  However, the Debtors' financial
difficulties triggered cross-defaults under New Century
Warehouse's warehouse loan agreements, Christopher M. Samis,
Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, notes.

One of the warehouse lenders, Goldman Sachs Mortgage Corporation,
declared an event of default under a master repurchase agreement
dated as of Feb. 15, 2006, as amended.  New Century Warehouse's
other warehouse lenders were willing to work with the company.

New Century Warehouse has entered into forbearance agreements,
which allowed it to continue to operate, with Galleon Capital,
LLC, State Street Global Markets, LLC, and State Street Bank and
Trust Company -- collectively, State Street -- and Guaranty Bank.  
The forbearance agreements expire on April 27, 2007.

Mr. Samis tells the Court that if State Street and Guaranty Bank
exercise their remedies, it is possible that there will be no
value for any other creditors or shareholders in New Century
Warehouse.  Moreover, New Century Warehouse's employees would be
likely to quit and New Century Warehouse could cease functioning
as an operating business, he asserts.

On March 29, 2007, SMRH was engaged to represent New Century
Warehouse in restructuring and negotiating a sale of
substantially all of its assets.  With SMRH's assistance, New
Century Warehouse has reached an agreement to sell substantially
all of its assets as a going concern, which transaction also
included a release that was negotiated for the benefit of the
Debtors, Mr. Samis says.

Daniel J. Rubio, John Hicks, David Vizcarra, individually and on
behalf of themselves, all others similarly situated, and the
general public commenced a lawsuit against New Century Mortgage
entitled Daniel J. Rubio v. New Century Mortgage Corporation,
Orange County Superior Court Case No. 05CC00063.  In May 2005,
SMRH was retained to represent New Century Mortgage in the Rubio
Litigation, together with any related claims and proceedings.

Mr. Samis points out that SMRH has a long-standing relationship
with the Debtors and is already familiar with the various
corporate and litigation issues faced by the company, and the
Debtors desire to continue SMRH's engagement with respect to
these matters.

According to Mr. Samis, SMRH also has extensive experience
representing clients in the defense of employment and benefit-
related class action suits.  It has represented clients in a
broad spectrum of collective and class actions, including
disputes under the Fair Labor Standards Act and state wage/hour
laws involving employee classification and exemption matters.

SMRH will provide, in accordance with the retainer letter,
ordinary and necessary legal services, as may be required in
connection with representing the Debtors in connection with
litigation, general corporate legal work, and related legal
matters such as:

    -- labor and employment matters, specifically in defense of
       the Rubio Litigation;

    -- corporate governance and SEC matters;

    -- regulatory matters; and

    -- mergers and acquisitions and asset sales, including the
       pending New Century Warehouse sale transaction.

Mr. Samis clarifies that the Debtors do not intend for SMRH to be
responsible for the provision of substantive legal advice outside
of litigation and corporate legal work, including advice in areas
such as patent, trademark, taxation, criminal or real estate law.  
He adds that the Debtors do not intend for SMRH to be required to
devote attention to, form professional opinions as to, or advise
the Debtors with respect to its disclosure obligations under
federal securities or other non-bankruptcy laws or agreements.

David H. Sands, a partner at SMRH, has advised the Debtors that
the firm has not, does not, and will not represent any interested
party with respect to matters related to the Debtors' Chapter 11
cases.  He states that neither the firm nor any of the attorneys
employed by it have any connection with the Debtors, creditors,
Official Committee of Unsecured Creditors, Office of the United
States Trustee, and any other party with an actual or potential
interest in the Debtors' Chapter 11 cases, or their respective
attorneys or accountants.

The Debtors will pay SMRH based on its customary hourly rates:

              Attorneys                    $300 - $615
              Paralegals and Clerks        $195 - $225

SMRH will be reimbursed of all reasonable costs and expenses
incurred in connection with the services.

The Debtors paid $373,879 to SMRH for services provided during
the 90 days before the Petition Date.  As of the Petition Date,
the Debtors owed $48,125 to SMRH for unpaid legal services and
unreimbursed expenses incurred before the Petition Date,
Mr. Samis informs the Court.  The firm believes it is entitled to
assert a $48,125 claim against the Debtors' estates, he adds.

Mr. Sands discloses that SMRH:

    -- formerly represented AMERITECH Credit Corporation, Bank of
       the West, Barclays Bank, PLC, Greenwich Capital Financial
       Products, Inc., and Nomura Securities, in matters
       unrelated to the Debtors' cases;

    -- currently represents certain interested parties in matters
       unrelated to the Debtors' cases, including Bank of
       America, NA, Bank of the West, Barclays Bank, and
       Countrywide Home Loans, Inc.; and

    -- represents, or has represented, entities that might be
       affiliated with, or related to, various of the interested
       parties, in matters unrelated to the Debtors' cases.  
       Among these are Citigroup, which is affiliated with CDC
       Holdings, Inc. that is affiliated with or related to CDC
       Mortgage Capital, Inc. or Citigroup Global Markets Realty
       Corp.; and Gemini Partners, Inc., which might be an
       affiliate of Goldman Sachs Mortgage Company.

Mr. Sands tells the Court that the firm represents no interest
adverse to the Debtors.

                        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.

The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416).  Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors.  When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.  The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007.  (New Century Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000).

The Debtors' exclusive period to file a plan expires on July 31,
2007.


NEW CENTURY: Gets Court Okay to Hire Lazard as Financial Advisor
----------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized New Century Financial Corporation
and its debtor-affiliates to employ Lazard Freres & Co. LLC as
their financial advisor.

Judge Carey modified certain terms and definitions in the
engagement letter.  Lazard will be paid:

    -- a fee equal to $4,250,000 payable upon the consummation of
       any sale transaction;

    -- an additional fee payable upon the consummation of any
       Sale Transaction, equal to 5% of the total amount of cash
       and the fair market value of all other property paid and
       payable for the Carrington Capital Management, LLC, and
       Carrington Mortgage Services, LLC assets; or the Greenwich
       Capital Financial Products, Inc. assets, as applicable, in
       excess of the purchase price stated in the Carrington
       Agreement or Greenwich Agreement, as applicable;

    -- if the consideration payable in respect of the Carrington
       Assets or the Greenwich Assets is subject to increase by
       contingent payments related to future events, the portion
       of Lazard's fee relating thereto will be calculated based
       on the probability adjusted, net present value of the
       contingent payments and paid to Lazard upon consummation
       of the relevant Sale Transaction;

    -- an additional fee, payable upon consummation of any Sale
       Transaction involving all or part of the Origination
       Business, equal to the greater of (i) 5% of the
       Origination Business Consideration, which is the total
       amount of cash and the fair market value of all property
       paid and payable for any part of the Origination Business,
       plus the amount of all indebtedness and any other
       liabilities directly or indirectly transferred or assumed,
       and (ii) $1,000,000;

    -- the retainer and all monthly fees will be credited,
       without duplication, against any Sale Transaction Fee or
       Alternative Transaction Fee, and the Alternative
       Transaction Fee will be credited against any Sale
       Transaction Fee.  All other references to crediting fees
       will be eliminated from the engagement letter;

    -- notwithstanding anything to the contrary in the Engagement
       Letter, the aggregate fees paid to Lazard will not exceed
       $6,000,000 if no part of the Origination Business is sold
       and will, in no event, exceed $7,000,000.

All of Lazard's fees and expenses in the Debtors' Chapter 11
cases are approved; provided, however that all fees and expenses
will be subject to approval by the Court.

The Debtors will seek the approval of the Court for services
rendered by Lazard beyond those stated in the Debtors' request
and relevant fees.

Lazard will not be entitled to reimbursement of fees of counsel
or other professional advisors pursuant to the Engagement Letter.

                     Original Engagement Terms

In the Debtors' application filed last month, Lazard has agreed to
advise the Debtors in connection with a variety of financial
matters, including a review of the Debtors' financial position and
obligations, and a review and evaluation of possible strategic
alternatives, liquidity alternatives and transactions.

Moreover, Lazard has agreed to advise the Debtors in connection
with any Restructuring, Bankruptcy Sale Transaction, Alternative
Transaction or Non-Bankruptcy Sale Transaction pursued by the
Debtors, and has already provided the Debtors with certain advice
in this regard.

Lazard has agreed to this compensation structure:

   (a) A $1,000,000 retainer that was paid upon the execution
       of the engagement letter signed by the Debtors and Lazard.
       Payment of the Retainer will be credited against a
       Strategic Advisory Fee, a Bankruptcy Sale Fee, or an
       Alternative Transaction Fee;

   (b) A $200,000 monthly financial advisory fee payable upon
       the first day of each month during the term of the
       engagement, with the first payment due on April 1, 2007.
       All Monthly Fees paid will be credited against a Strategic
       Advisory Fee, an Alternative Transaction Fee or a
       Bankruptcy Sale Fee;

   (c) A fee equal to $2,000,000, payable upon announcement of,
       or the execution of a definitive agreement for, a
       Non-Bankruptcy Sale Transaction, Restructuring or
       Bankruptcy Sale Transaction.  An Announcement Fee will be
       credited against a Strategic Advisory Fee, an Alternative
       Transaction Fee or a Bankruptcy Sale Fee;

   (d) A fee equal to $5,000,000, payable upon the consummation
       of a Non-Bankruptcy Other Assets Sale, and a fee equal to
       $7,000,000, payable upon the consummation of either a Full
       Non-Bankruptcy Sale or a Non-Bankruptcy Control Sale;

   (e) A fee equal to $5,000,000, payable upon the consummation
       of a Bankruptcy Other Assets Sale, and a fee equal to
       $7,000,000, payable upon the consummation of a Full
       Bankruptcy Sale; and

   (f) A fee to be mutually agreed in good faith, payable in
       connection with any Alternative Transaction, which will
       appropriately compensate Lazard in light of the magnitude
       and complexity of the Alternative Transaction and the fees
       customarily paid to investment bankers of similar standing
       for similar transactions.  Any Alternative Transaction Fee
       will be credited against a Strategic Advisory Fee or a
       Bankruptcy Sale Fee.

Lazard and the Debtors have agreed that the aggregate fees to be
paid to Lazard under the Engagement Letter will not exceed
$7,000,000.

The Debtors have also agreed to reimburse Lazard for all its
reasonable expenses incurred in connection with the performance
of the engagement, including travel costs, document production
and other expenses of this type, and also including the
reasonable expenses of outside counsel and other professional
advisors.

The Debtors say they do not owe Lazard any amount for any services
performed or expenses incurred before their bankruptcy filing.

The parties have signed an Indemnification Agreement, pursuant to
which the Debtors agree to, among others, indemnify Lazard and
its employees for claims and liabilities arising out from the
engagement.

David S. Kurtz, managing director at Lazard, assured the Court
that the firm:

   (a) is a "disinterested person" within the meaning of Section
       101(14) of the Bankruptcy Code, and holds no interest
       adverse to the Debtors or their estates in connection
       with the matters for which Lazard is to be retained by the
       Debtors; and

   (b) has no connection with the Debtors, their creditors, the
       U.S. Trustee, or other parties-in-interest in the Chapter
       11 cases.

                        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.

The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416).  Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors.  When the
Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.  The Debtors'
exclusive period to file a chapter 11 plan expires on July 31,
2007.  (New Century Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000).

The Debtors' exclusive period to file a plan expires on July 31,
2007.


PEOPLE'S CHOICE: RFC Selling 1,029 Res'l. Mortgage Loans on May 22
------------------------------------------------------------------
Residential Funding Company LLC, a secured creditor in People's
Choice Financial Corp. and debtor-affiliates' bankruptcy cases,
will be conducting a public sale of approximately 1,029
residential mortgage loans at 11:00 a.m. CDT on Tuesday, May 22,
2007.

The sale will be held at Residential Funding Company's office at
8400 Normandale, Lake Boulevard, in Bloomington, Minnesota.

The loans, originated by People's Choice Home Loan Inc. or its
affiliates, have an aggregate unpaid principal balance of
approximately $262,000,000.

For information regarding the bidding process, contact Gregg Brown
at (301) 664-6901 or Mike Mead at (952) 352-0581.  

Headquartered in Irvine, California, People's Choice Financial
Corp. -- http://www.pchl.com/-- is a residential mortgage banking    
company, through its subsidiaries, originates, sells, securitizes
and services primarily single-family, non-prime, residential
mortgage loans.  

The company and two of its affiliates, People's Choice Home Loan,
Inc., and People's Choice Funding, Inc., filed for chapter 11
protection on March 20, 2007 (Bankr. C.D. Calif. Case No.
07-10772).  J. Rudy Freeman, Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub LLP, represents the Debtors.  At March 31, 2006,
the Debtors' financial conditions showed total assets of
$4,711,747,000 and total debts of $4,368,966,000.  The Debtors'
exclusive period to file a chapter 11 plan expires on July 18,
2007.


PETROL OIL: Weaver & Martin Raises Going Concern Doubt
------------------------------------------------------
Petrol Oil and Gas Inc.'s auditors, Weaver & Martin LLC in Kansas
City, Missouri, have included an explanatory paragraph in their
audit report regarding a substantial doubt about Petrol Oil's
ability to continue as a going concern after auditing the
company's financial statements as of Dec. 31, 2006, and 2005.  The
going concern doubt was raised as a result of the company's
deficiency in working capital at Dec. 31, 2006, and other factors.

Petrol ended year 2006 with cash of about $5.9 million in the
bank, as compared with $8.44 million at the end of 2005.

The company's balance sheet at the end of the year 2006 reflected
total assets of $36.5 million, total liabilities of $29.2 million,
resulting in a total stockholders' equity of $7.3 million.  The
company had a negative working capital with total current assets
at $6.6 million and total current liabilities at $15.1 million as
of Dec. 31, 2006.

For the 12 months ended Dec. 31, 2006, revenues after royalties
and overrides increased about 25% over the year ended Dec. 31,
2005.  The increase in revenue resulted from higher overall gas
production and sales, higher hedged prices that Petrol negotiated
for gas, and higher daily spot gas prices for the first eight
months of 2006.

Petrol reported a 2006 net loss of $7.8 million, versus a net loss
of $6 million in 2005.  The 2006 net loss included interest
expense of $3.08 million, as compared with $1.8 million in 2005,
as Petrol utilized its credit facility to fund drilling activities
and pipeline/compressor facilities, primarily at the company's
Coal Creek Project.

Net operating loss for the year ended Dec. 31, 2006 totaled
$4.7 million, as compared with a net operating loss of
$4.2 million in 2005.

A full-text copy of the company's 2006 annual report is available
for free at http://ResearchArchives.com/t/s?1f02

"We reported a greater-than-expected 24% increase in oil and gas
revenue for 2006, when compared with the previous year," observed
Paul Branagan, president and chief executive officer of Petrol.  
"This was a challenging year for Petrol, primarily due to
technical issues involving extended de-watering periods that we
encountered in the pursuit of coal bed methane production from our
new Coal Creek Project in Kansas.  In the wells wherein we have
installed new high-rate pumps and larger diameter pump rods and
included chemical shocks, we have increased water production
rates, improved run times and lowered the fluid levels in our Coal
Creek model wells.  Meanwhile, gas production from our established
Petrol-Neodesha Project continued to improve as we drilled or re-
completed 14 additional wells during 2006.  I am pleased with our
ability to complete multiple coal seams and produce from the
deeper additional coals that represent new producing resources in
the area."

                         About Petrol Oil

Petrol Oil and Gas Inc. in Overland Park, Kansas (OTC BB: POIG) --
http://www.petroloilandgas.com/-- develops and acquires gas and  
oil assets.  Its properties are located in the Cherokee and
Forrest City Basins along the Kansas and Missouri border.  Its
current focus is Coal Bed Methane reservoirs in the central U.S.,
which produce both Coal Bed Methane and at times conventional gas.


POLYPORE INC: Earns $6.2 Million in Quarter Ended March 31
----------------------------------------------------------
Polypore Inc. reported results for the quarter ended March 31,
2007, in a Form 10-Q filing with the U.S. Securities and Exchange
Commission.

For the quarter ended March 31, 2007, the company reported net
income of $6,293,000 compared to net income of $3,365,000 for the
same period in 2006.  Net sales for the quarter ended March 31,
2007 was $129,781,000 compared to a year ago of $115,293,000.

                     2006 Restructuring Plan

In response to a significant decline in demand for cellulosic
hemodialysis membranes driven by a shift in industry demand toward
synthetic membranes, the company's separations media segment
decided to exit the production of cellulosic membranes and realign
its cost structure at its Wuppertal, Germany facility.

On Aug. 24, 2006, the company announced a layoff of approximately
150 employees.  Production of cellulosic hemodialysis membranes
ceased on Dec. 27, 2006 and the majority of the employees were
laid off effective Jan. 1, 2007.  The total cost of the plan is
expected to be approximately $17,040,000, consisting of
$11,403,000 for the employee layoffs and $5,637,000 for other
costs related to the shutdown of portions of the Wuppertal
facility that will no longer be used.

The other costs included in the restructuring plan are related to
local regulations surrounding complete or partial shutdowns of a
facility.  The company expects to complete these activities by the
end of the second quarter of 2008.

                     2005 Restructuring Plan

In order to better accommodate customer growth and related demand
for both lead-acid and lithium battery separators in the greater
Asian market, the company's energy storage segment transferred
certain assets from Europe and the United States to its facilities
in Thailand and China.  The capacity realignment plan included the
closure of the company's facility in Feistritz, Austria, the
downsizing of its Norderstedt, Germany facility and the relocation
of certain assets from these two plants to the Company's
facilities in Prachinburi, Thailand.

During the three months ended Sept. 30, 2006, the company
completed installation and started production with the assets
relocated to Thailand.  Additionally, finishing equipment from the
Company's facility in Charlotte, North Carolina was relocated to
its facility in Shanghai, China.  The total cost of the
realignment plan is expected to be approximately $8,831,000, of
which $8,798,000 was recognized through March 31, 2007. The
remaining expenses will be recognized in 2007.  In addition to the
benefit of realigning capacity with market growth, the Company
expects to realize the full impact of cost savings in 2007.

                     2004 Restructuring Plan

In an effort to manage costs and in response to the decision of a
customer to outsource its dialyzer production, the company
implemented a number of cost reduction measures in 2004 relating
to the separations media segment, including employee layoffs, the
relocation of certain research and development operations
conducted in a leased facility in Europe to facilities where the
related manufacturing operations are conducted and other cost
reductions.  All activities and charges relating to the 2004
Restructuring Plan have been completed as of December 30, 2006.

                            Acquisition

Effective Jan. 1, 2007, the company purchased from Nippon Sheet
Glass Company, Limited a 60% share in Daramic NSG Tianjin PE
Separator Co., LTD for $5,181,000.  DNPET is a lead-acid battery
separator manufacturing facility located in Tianjin, China.  The
acquisition supports the company's strategy of expanding capacity
in the high growth Asia-Pacific region.

A full-text copy of the company's Form 10-Q filed with the U.S.
SEC is available for free at http://ResearchArchives.com/t/s?1f0d

                          About Polypore

Headquartered in Charlotte, North Carolina, Polypore Inc. --
http://www.polypore.net/-- develops, manufactures and markets  
specialized polymer-based microporous membranes used in separation
and filtration processes. The company is a wholly owned subsidiary
of Polypore International Inc.

Polypore's business segments includes Daramic --
http://www.daramic.com-- which manufactures and supplies battery  
separators for automotive, industrial, and specialty applications.  
Daramic has marketing and sales offices in North and South
America, Europe, Australia, South East Asia and China.


POLYPORE INC: S&P Rates Proposed $470MM Credit Facilities at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its bank loan and
recovery ratings to Polypore Inc.'s proposed first-lien $100
million revolving credit facility due in 2013 and $370 million
term loans due in 2014.

The 'B+' rating (one notch above the corporate credit rating) and
a recovery rating of '1' indicate the likelihood of full recovery
of principal (100%) in the event of a payment default.

At the same time, Standard & Poor's affirmed its 'B' corporate
credit rating on the company.  The outlook is stable.

Proceeds from the facilities will be used to refinance existing
bank facilities, and closing of the financing is contingent on the
successful completion of Polypore International Inc.'s IPO.  
Polypore International Inc. is the parent company of Polypore Inc.  
Should an IPO be successfully completed, the bank loan ratings
would then be affirmed.  As previously indicated, Standard &
Poor's would then reevaluate Polypore's capital structure, its
financial policies as a public company, and its growth strategy.  
"Subject to the final terms of the transaction, we expect that the
full redemption of the senior discount notes resulting in the
permanent reduction in financial leverage would result in the
revision of the outlook to positive," said Standard & Poor's
credit analyst Gregoire Buet.

                          About Polypore

Headquartered in Charlotte, North Carolina, Polypore Inc. --
http://www.polypore.net/-- develops, manufactures and markets  
specialized polymer-based microporous membranes used in separation
and filtration processes. The company is a wholly owned subsidiary
of Polypore International Inc.

Polypore's business segments includes Daramic --
http://www.daramic.com-- which manufactures and supplies battery  
separators for automotive, industrial, and specialty applications.  
Daramic has marketing and sales offices in North and South
America, Europe, Australia, South East Asia and China.


PRO-BUILD: S&P Places All Ratings Under Negative CreditWatch
------------------------------------------------------------
Standard & Poor's Ratings Services placed all of its ratings, on
building materials supplier Pro-Build Holdings Inc., including its
'BB' corporate credit rating, on CreditWatch with negative
implications.

"The CreditWatch action was prompted by our concerns that
depressed residential construction markets and dismal wood
commodity prices will cause weaker-than-expected financial
performance," said Standard & Poor's credit analyst John Kennedy.

The company's year-end financials produced weaker-than-expected
credit metrics, with EBITDA significantly lower than anticipated.  
Since end markets have deteriorated even further, we expect Pro-
build will be highly challenged to maintain a financial profile
appropriate for the current rating.

Pro-Build's total debt, adjusted for operating leases as of
Dec. 31, 2006, was $1.4 billion.

"We expect that the near-term market environment could
significantly erode financial performance," Mr. Kennedy said.

S&P will meet with management as soon as possible to discuss
liquidity and to review its financial projections to resolve the
CreditWatch listing.


REDDY ICE: Incurs $10.2 Million Net Loss in First Quarter 2007
--------------------------------------------------------------
Reddy Ice Holdings Inc. reported revenues for the first quarter
ended March 31, 2007, of $47 million, compared to $44.8 million in
the same quarter of 2006.  Its net loss was $10.2 million in the
first quarter of 2007, compared to a net loss of $8.2 million in
the same period of 2006.

Available cash for the first quarter of 2007 was negative
$9.2 million compared to negative $6.9 million in the first
quarter of 2006.

"As expected, results for the first quarter of 2007 were
challenging as compared to the first quarter of 2006," commented
chairman and chief executive officer William P. Brick.  "Our
ongoing operating initiatives and acquisitions resulted in modest
increases in revenues and volumes as compared to last year.
However, our results were adversely impacted by additional costs
associated with acquisitions, slight increases in energy costs and
continued weakness in our non-ice operations."

In connection with the company's previously announced acquisition
strategy, five transactions were completed during the first
quarter of 2007.  

The company's board of directors has approved an increase in the
annual rate at which the company expects to pay dividends from
$1.60 per share to $1.68 per share, beginning in the second
quarter of 2007.

"Based on the past performance of our operations, recent
acquisitions and the outlook for the remainder of 2007 and the
foreseeable future, we are pleased to increase our dividend for
the second consecutive year," commented Mr. Brick.

At March 31, 2007, the company's balance sheet reflected total
assets of $591.4 million and total liabilities of $444.4 million,
resulting in a total stockholders' equity of $147 million.

Accumulated deficit at March 31, 2007, increased to $72.9 million,
from $52 million at Dec. 31, 2006.  The company had $10 million in
cash and cash equivalents at March 2007, as compared with
$39.4 million at Dec. 31, 2006.

Full-text copies of the company's first quarter 2007 report are
available for free at http://ResearchArchives.com/t/s?1f07

                             Outlook

The company affirmed its guidance for 2007. Revenues in 2007 are
expected to range between $360 million and $370 million and net
income to range from $19.2 million to $23.4 million.  Adjusted
EBITDA for 2007 is expected to be in the range of $95 million to
$100 million.  Available cash, as defined on the company's credit
agreement, is expected to range from $58.5 million to
$67.9 million in 2007.  Capital expenditures for the full year
2007 are expected to range between $19 million and $21 million and
dispositions to total $2 million to $3 million, for net capital
expenditures of $16 million to $19 million.

The projections for 2007 include the effects of the acquisitions
completed through the date of the company's press release.  

                         About Reddy Ice
    
Headquartered in Dallas, Texas, Reddy Ice Holdings Inc. (NYSE:
FRZ) -- http://www.reddyice.com/and its subsidiaries manufacture  
and distribute packaged ice in the U.S. serving about 82,000
customer locations in 31 states and the District of Columbia under
the Reddy Ice brand name.  Typical end markets include
supermarkets, mass merchants, and convenience stores.  

                          *     *     *

Reddy Ice Holdings Inc. carries Moody's Investors Service's 'B1'
long-term corporate family rating and 'B1' probability of default
rating.

Also, the company carries Standard and Poor's 'B+' on long-term
foreign issuer credit rating.


RELIANCE INSURANCE: Supplemental Claims Resolution Procedures OK'd
------------------------------------------------------------------
In a supplemental order regarding claims procedures in Reliance
Insurance Company's liquidation proceeding, the Commonwealth Court
of Pennsylvania gave all holders of proofs of claim 180 days, from
the date of the service of the supplement order, to submit:

   -- proof of payment; and

   -- full and complete supporting documentation for
      each proof of claims; or

   -- a written explanation as to why the information
      cannot be obtained.

The bar date refers to proofs of claims where underlying claim is
resolved, where underlying claim is not resolved, or no underlying
claim has yet been asserted.

The Court's supplemental order is in response to a petition filed
by M. Diane Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania, serving as statutory liquidator of Reliance, seeking
complete information and supporting documentation from proof of
claim holders.

A free copy of the May 1, 2007 Order can be obtained by:

   a) writing to:

      Proof of Claim Department
      Statutory Liquidator
         of Reliance Insurance Company
      P.O. Box 13527   
      Philadelphia, PA 19101-3527

   b) or downloading a copy from http://www.reliancedocuments.com/

Based in New York City, Reliance Group Holdings Inc. is a holding
company that owns 100% of Reliance Financial Services Corporation.  
Reliance Financial, in turn, owns 100% of Reliance Insurance
Company.  The holding and intermediate finance companies filed for
chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No.
01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in
debts.  The insurance unit is being liquidated by order of the
Commonwealth Court of Pennsylvania dated Oct. 3, 2001.  The
Bankruptcy Court confirmed the Creditors' Committee's Plan of
Reorganization on Jan. 25, 2005.


REMINGTON ARMS: S&P Removes Watch and Lifts Credit Rating to B-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Remington
Arms Co. Inc.), including its corporate credit rating, to 'B-'
from 'CCC+'.  S&P removed the ratings from CreditWatch, where they
were placed April 6, 2007, with positive implications.  The
outlook is positive.

"The upgrade reflects strengthening credit measures," said
Standard & Poor's credit analyst Andy Liu, "resulting from
improved operating performance in 2006, which we believe may be
sustained," and modest debt reduction following the company's
acquisition by an affiliate of Cerberus Capital Management L.P.


RFSC SERIES 2004-RP1: Moody's Cuts Two Tranches to Low-B
--------------------------------------------------------
Moody's Investors Service downgraded two tranches issued by RFSC
Series 2004-RP1 securitization.  

The underlying collateral for the securitization is comprised of
subprime and re-performing residential mortgage loans.  The
re-performing mortgage collateral consists of fixed-rate and
adjustable-rate residential mortgage loans that were delinquent at
the time of securitization or had been delinquent at some point
prior to securitization.

The downgrade is attributed to the fact that in recent months the
transaction has experienced continued losses leading to
significant deterioration in overcollateralization.  In turn, this
has reduced the credit enhancement available to the lowest rated
tranches to levels that are inconsistent with the current ratings.

Complete rating action includes:

   * RFSC Series 2004-RP1 Trust

      -- Class M-3, downgraded to Ba2, previously Baa2
      -- Class M-4, downgraded B2, previously Baa3


RITE AID: Fitch Rates Proposed $1.22 Billion Notes at CCC+
----------------------------------------------------------
Fitch Ratings has assigned ratings to Rite Aid Corp.'s proposed
notes as:

    * $1.22 billion guaranteed senior unsecured notes 'CCC+/RR5'.

Fitch has also affirmed its existing ratings on Rite Aid as:

    * Issuer Default Rating 'B-';
    * $1.75 billion bank credit facility 'BB-/RR1';
    * $1.25 billion term loans 'BB-/RR1'.
    * $1.058 billion 2nd lien senior secured notes 'BB-/RR1';
    * $648 million guaranteed senior unsecured notes 'CCC+/RR5'.

Fitch has also downgraded its rating on Rite Aid's $758 million
non guaranteed senior unsecured notes to 'CCC'/RR6' from
'CCC+/RR5'.  The Rating Outlook is Stable.

These actions are in anticipation of the completion of Rite Aid's
acquisition of 1,858 drug stores and 6 distribution centers from
The Jean Coutu Group (Jean Coutu) for $3.4 billion comprised of
$2.3 billion in cash and 250 million newly-issued Rite Aid common
shares.  The cash portion of the transaction will be financed with
the new $1.22 billion issuance and borrowings under the
$1.105 billion term loan.

The transaction has received approval from the boards of directors
and shareholders of both companies but is still awaiting final
regulatory approval by the Federal Trade Commission.  However,
Rite Aid has reached an agreement with the FTC staff to divest 24
stores, within the transaction limits, and expects to close the
acquisition by the end of May 2007.

The terms loans and revolving credit facility have a first lien on
the company's cash, accounts receivable, investment property,
inventory and scrip lists, and is guaranteed by all Rite Aid and
Jean Coutu domestic subsidiaries giving them an outstanding
recovery ('RR1').  The company's senior secured notes have a
second lien on the same collateral as the revolver and term loans
and are guaranteed by all Rite Aid and Jean Coutu domestic
subsidiaries and are also expected to have an outstanding recovery
('RR1').  The company's new $1.22 billion senior unsecured notes
as well as its $148 million 9.25% senior unsecured notes due 2013
and $500 million 8.625% senior unsecured notes due 2015 will have
guarantees from all Rite Aid and Jean Coutu domestic subsidiaries
and therefore are expected to have recovery prospects that are
below average ('RR5') but above the poor recovery prospects
('RR6') for the senior unsecured notes that do not have
guarantees.

The ratings consider the risk associated with integrating 1,858
Brooks and Eckerd stores with Rite Aid's existing store base and
improving operations at these stores, the higher leverage of about
7.0 times following the completion of the transaction, operating
statistics that trail those of competitors, and the intense
competition in the drug retailing sector.  The ratings also
reflect Rite Aid's operating strategy to improve its store base
and in-store service levels, the positive demographics of the drug
retailing industry as well as the benefits received from
leveraging larger store base.  Pro forma for the transaction, Rite
Aid will have about 5,000 stores and generate about $28 billion in
revenues.

Headquartered in Harrisburg, Pa., Rite Aid Corporation
(NYSE, PCX: RAD) -- http://www.riteaid.com/-- is one of the  
nation's leading drugstore chains with annual revenues of
approximately  $17.5 billion and more than 3,330 stores in 27
states and the District of Columbia.


ROSEDALE CLO: S&P Rates $12.5 Million Class E Notes at BB
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Rosedale CLO II Ltd./ Rosedale CLO II LLC's $289.9 million notes.

The transaction is a CLO backed primarily by loans.  The ratings
reflect:

    -- Adequate credit support provided in the form of
       overcollateralization, subordination, and excess spread;

    -- The characteristics of the underlying collateral pool,
       which consists primarily of senior secured loans;

    -- Scenario default rates of 50.23% for class A, 47.23% for
       class B, 44.64% for class C, 39.80% for class D, and 33.51%
       for class E;

    -- Scenario break-even loss rates of 82.90% for class A,
       69.14% for class B, 71.98% for class C, 67.64% for class D,
       and 60.13% for class E;

    -- A weighted average rating of 'B+';

    -- A weighted average maturity for the portfolio of 7.953
       years;

    -- An S&P default measure of 3.69%;

    -- An S&P variability measure of 2.85%; and

    -- An S&P correlation measure of 2.51.

Interest on the class C, D, and E notes may be deferred up until
the legal final maturity in June 2022 without causing a default
under these obligations.  The ratings on these notes, therefore,
address the ultimate payment of interest and principal.
   
                         Ratings Assigned

           Rosedale CLO II Ltd./Rosedale CLO II LLC

         Class                Rating           Amount
         -----                ------         ----------
         X                    AAA            $5,000,000
         A                    AAA          $218,000,000
         B                    AA            $26,000,000
         C                    A             $15,000,000
         D                    BBB           $13,400,000
         E                    BB            $12,500,000
         Preferred shares     NR            $19,400,000
   
                           NR - Not rated.


ROTECH HEALTHCARE: Posts $21.8 Mil. Net Loss in Qtr Ended March 31
------------------------------------------------------------------
Rotech Healthcare Inc. reported a net loss of $21.8 million on net
revenues of $135.4 million for the first quarter ended March 31,
2007, compared with a net loss of $2.9 million on net revenues of
$132.5 million for the same period in 2006.

Cost of net revenues totaled $53.3 million for the three months
ended March 31, 2007, an increase of $9.8 million or 22.4% from
the comparable period in 2006.  The net increase was primarily
attributable to an increase in product and supply costs from the
transition of patients formerly receiving compounded budesonide to
commercially available alternative products.

The loss on extinguishment of debt of $12.2 million equals the
unamortized debt issuance costs from the Sept. 15, 2006,
refinancing, as well as prepayment premiums paid in accordance
with the former credit agreement.  This amount was written off on
March 30, 2007, upon closing of the company's new $180 million
term loan and repayment of all amounts associated with the former
credit facility.

At March 31, 2007, the company's balance sheet showed
$571.1 million in total assets, $551.7 million in total
liabilities, $5.5 million in series A convertible redeemable
preferred stock, and $13.9 million in total stockholders' equity.

Net cash provided by operating activities was $17.4 million for
the three months ended March 31, 2007, as compared to $343,000 for
the same period in 2006.  

As of March 31, 2007, the company had the following debt
facilities and outstanding debt:

  -- $180.0 million senior secured term loan with a maturity date
     of Sept. 26, 2011, the proceeds of which were used to repay
     the outstanding balance under the company's former term loan
     and revolving credit facility.  As of March 31, 2007, the
     entire amount of the term loan was outstanding.

  -- $300.0 million aggregate principal amount of 9 1/2% senior
     subordinated notes, the proceeds of which were used to repay
     certain pre-petition claims owed to the creditors of the
     predecessor company as part of its plan of reorganization.   
     The notes mature on April 1, 2012.  As of March 31, 2007,  
     $287 million was outstanding.  The company made no interest
     payments during either of the three month periods ended
     March 31, 2006, or 2007.  Accrued interest on the senior
     subordinated notes totaled $13.6 million at March 31, 2007.  

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1f0a  

                     About Rotech Healthcare

Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/ -- provides home medical equipment and  
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services.  The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.

                          *     *     *

As reported in the Troubled Company Reporter on April 2, 2007,
Standard & Poor's raised Rotech Healthcare Inc.'s corporate credit
rating to 'B-' from 'CCC'.  


SHARP HOLDINGS: Loan Add-On Prompts S&P to Revise Rating to B-
--------------------------------------------------------------
Standard & Poor's Rating Services revised its bank loan rating on
Commerce, California-based Sharp Holdings Corp.'s (B-/Stable/--)
first-lien term loan to 'B-' from 'B'.

The recovery rating was also revised to '2' from '1' indicating
the expectation for substantial (80%-100%) recovery of principal
in the event of a payment default.  These actions reflect the
company's decision to increase the size of the first-lien term
loan due 2014 to $395.0 million from $360.0 million.  The size of
the second-lien term loan is being reduced to $140.0 million from
$175.0 million.

The first-lien term loan is rated the same as the corporate credit
rating of Sharp Holdings Corp. Ratings on the second-lien term
loan were affirmed at 'CCC' with a recovery rating of '5',
reflecting the expectation for negligible (0%-25%) recovery of
principal in the event of payment default.

Ratings List

Ratings Affirmed

Sharp Holdings Corp.

Corporate credit rating         B-/Stable/--

$140 million second-lien term loan due 2014   CCC
  Recovery rating                              5

Ratings Revised
                                             To        From
                                             --        ----
$395 million first-lien term loan due 2014  B-        B
  Recovery rating                            2         1


SHIFT NETWORKS: Obtains CCAA Protection in Alberta
--------------------------------------------------
Shift Networks Inc. discloses that, after careful consideration of
all available alternatives, to maintain regular business
operations and to continue uninterrupted delivery of services to
Shift clients, Shift's Board of Directors has determined that it
is in the best interests of all of its stakeholders to seek
creditor protection under the Companies' Creditors Arrangement Act
(Canada), and has obtained such protection pursuant to an Order
from the Alberta Court of Queen's Bench.

Shift has obtained debtor-in-possession financing order to finance
its working capital needs and the continued growth of its customer
base while under CCAA protection.  The DIP Loan is in the
aggregate amount of $1,500,000 and available in multiple
drawdowns.

Since late 2006, Shift has been hampered by capital market and
financial challenges.  CCAA protection will stay creditors,
suppliers and others from enforcing rights against Shift and will
afford Shift the opportunity to restructure its affairs.  While
under CCAA protection, Shift will continue with its day-to-day
operations, including the provisioning of and continuing voice
over IP services to it's customers.

The Court has granted CCAA protection for an initial period of 30
days, expiring June 7, 2007, to be extended thereafter as the
Court deems appropriate.

Notwithstanding the current market and financial challenges, Shift
continues to be the pre-eminent provider of small-to-medium
business VoIP telephone services in Calgary, Edmonton, Vancouver,
Victoria, Toronto and Ottawa, experiencing over 300% subscriber
growth in fiscal 2006 compared to 2005 and continued adoption of
its unique hosted VoIP services.

Three of the independent directors of Shift, Mr. Donald J. Page,
Mr. Donald Hathaway and Mr. Neil McPherson have resigned.  Mr.
Trent Johnsen remains as Director, President and Chief Executive
Officer.

While under CCAA protection, management of Shift will remain
responsible for its operations.  The Court appointed monitor,
PricewaterhouseCoopers Inc., will monitor Shift's ongoing
operations, assist with the development and filing of a plan of
compromise and arrangement with its creditors and other
stakeholders, liaise with creditors, customers and other
stakeholders and report to the Court.  Management will also be
responsible for formulating the Plan for restructuring Shift's
financial affairs. The Monitor will post the court filings and
other information relating to Shift on its website at
http://www.pwc.com/brs-shift/

The Plan is the proposed compromise that, in due course, Shift
intends to present to its stakeholders affected by the Plan.  This
Plan will describe how Shift proposes to restructure its affairs.  
Those stakeholders affected by the Plan will have an opportunity
to vote upon the offer proposed in the Plan.  If the Plan is
approved by the requisite number and value of the affected
stakeholders, the Court must also approve the Plan before it may
be implemented.

Although CCAA protection enables Shift to continue its day-to-day
operations until its CCAA status changes, the implications for
Shift shareholders are less clear.  At the end of the
restructuring process, the value of what remains for the
shareholders will depend upon the terms of the Plan approved by
the affected stakeholders.

Shift Networks Inc. -- http://shiftnetworks.com/-- (TSX VENTURE:  
SHF) is a voice and high-speed Internet access provider to small
and medium businesses.  The company generates revenues through two
sources: offering a suite of voice-over Internet protocol services
to commercial clients through its network and the resale of
telecommunications services provided by third parties.  During the
year ended December 31, 2005, it discontinued the legacy line of
business in order to focus specifically on VoIP services.


SINCLAIR BROADCAST: Affiliate to Redeem $300 Million of 2012 Notes
------------------------------------------------------------------
Sinclair Broadcast Group Inc.'s wholly owned subsidiary, Sinclair
Television Group, will redeem $300 million aggregate principal
amount of the 2012 Notes plus the associated call premium and
accrued interest on June 11, 2007.  The trustee for its existing
8% Senior Subordinated Notes due 2012 has been notified of this
action.

The redemption will be effected in accordance with the terms of
the indenture governing the 2012 Notes at a redemption price of
104% of the principal amount of the 2012 Notes plus accrued and
unpaid interest.  The redemption of the 2012 Notes, plus the
associated call premium and accrued interest, thereon will be
funded from the net proceeds of Sinclair Broadcast Group's
recently completed offering of $300 million aggregate principal
amount of 3% Senior Convertible Notes due 2027, cash on hand and
bank debt.

Headquartered in Baltimore, Maryland, Sinclair Broadcast Group
Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is one of the
diversified television broadcasting companies, that owns and
operates, programs or provides sales services to 61 television
stations in 38 markets.  Sinclair's television group includes FOX,
WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately
23.0% of all U.S. television households.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2007,
Standard & Poor's Ratings Services assigned a 'B' rating to the
$300 million convertible senior notes due 2027 proposed by
Sinclair Broadcast Group Inc. (BB-/Negative/--).  At the same
time, S&P lowered the senior unsecured rating on company's shelf
registration to 'B' from 'B+', based on the structural
subordination of senior unsecured debt to priority obligations at
the operating company, Sinclair Television Group Inc.


SINCLAIR BROADCAST: Closes $300MM Convertible Sr. Notes Offering
----------------------------------------------------------------
Sinclair Broadcast Group Inc. has completed its public offering
of $300 million aggregate principal amount of convertible senior
notes due 2027.  In addition, Sinclair has granted the
underwriters of the notes an option, solely to cover over-
allotments, to purchase up to an additional $45 million aggregate
principal amount of the notes.
    
The notes mature in 2027 and, upon certain conditions, will be
convertible into cash and, in certain circumstances, shares of
Class A common stock of Sinclair Broadcast prior to maturity at an
initial conversion price of $20.43 per share, subject to
adjustment, which is equal to an initial conversion rate of
approximately 48.95 shares of Sinclair Class A common stock per
$1,000 principal amount of notes.  The notes may not be redeemed
prior to May 20, 2010 and may thereafter be redeemed by Sinclair
at par.  The offering was made pursuant to an effective shelf
registration statement previously filed with the Securities and
Exchange Commission.
    
Sinclair intends to use the net proceeds from the offering,
together with available cash on hand and/or bank debt, to finance
the redemption of $300 million aggregate principal amount of
Sinclair Television Group Inc.'s, its wholly-owned subsidiary,
existing 8% Senior Subordinated Notes due 2012.

                   About Sinclair Broadcast Group

Headquartered in Baltimore, Maryland, Sinclair Broadcast Group
Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is one of the
diversified television broadcasting companies, that owns and
operates, programs or provides sales services to 61 television
stations in 38 markets.  Sinclair's television group includes FOX,
WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately
23.0% of all U.S. television households.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2007,
Standard & Poor's Ratings Services assigned a 'B' rating to the
$300 million convertible senior notes due 2027 proposed by
Sinclair Broadcast Group Inc. (BB-/Negative/--).  At the same
time, S&P lowered the senior unsecured rating on company's shelf
registration to 'B' from 'B+', based on the structural
subordination of senior unsecured debt to priority obligations at
the operating company, Sinclair Television Group Inc.


SMARTIRE SYSTEMS: Declares Changes in Board & Leadership Structure
------------------------------------------------------------------
SmarTire Systems Inc. disclosed several changes to its board of
directors and leadership structure.  Former chairman of the board
Robert Rudman and director Johnny Christiansen have resigned in
order to pursue other opportunities.  William Cronin, a board
member since 2001, and previously from 1995 to 1998, has been
appointed to serve as Interim Chairman.

Messrs. Rudman and Christiansen have agreed to accept 5,719,601
common shares of the company in lieu of approximately $113,000 in
outstanding director's fees.

"The company wishes Robert and Johnny all the best in their future
endeavors, and appreciate their efforts in getting SmarTire to
this point in its corporate evolution," David Warkentin,
SmarTire's ceo, said.
    
In other board news, David Warkentin and George O'Leary have
joined the board of directors.  Mr. O'Leary is the ceo of SKS
Consulting, which he formed in 2000 with the mission to help
companies focus on executing their core business strategy.  SKS
Consulting is currently a consultant to SmarTire.  From 1996 to
2000, Mr. O'Leary was ceo and president of Communication Resources
Inc., where annual revenues grew from $5 million to $40 million
during his tenure.
    
"These changes reflect SmarTire's growth process and strategic
focus," Mr. Warkentin said.  "As the company moves into an era in
which the trucking and fleet industry becomes the company's
primary market, it is focused on the company's products, and on
taking SmarTire to a higher performance level with efficient
operations, increased revenues and profits.  The company plans to
focus on fiscal disciplines and demonstrating its achievements to
shareholders through clearer communications and a more focused
strategy."
    
The company also has promoted Greg Tooke to vice president,
Product and Supply Chain.  A nine-year SmarTire veteran, Tooke
was previously director of Business and Product Development.

As part of its focus on better communications with shareholders,
SmarTire has engaged the services of Walek & Associates, a New
York-based public relations and investor relations agency.
    
                    About SmarTire Systems Inc.

Headquartered in Richmond, British Columbia, Canada, SmarTire
Systems Inc. (OTC BB: SMTR.OB) -- http://smartire.com/--develops    
and markets technically advanced tire pressure monitoring systems
for the transportation and automotive industries that monitor tire
pressure and tire temperature.  Its TPMSs are designed for
improved vehicle safety, performance, reliability and fuel
efficiency.  The company has three wholly owned subsidiaries:
SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe
Limited.

At Jan. 31, 2007, the company's balance sheet showed $5.3 million
in total assets, and $17.6 million in total liabilities, resulting
in a $12.3 million total stockholders' deficit.

The company's Jan. 31 balance sheet also showed strained
liquidity with $3.2 million in total current assets available to
pay $4.3 million in total current liabilities.


STARBOUND RE: S&P Rates Proposed $66.5 Million Bank Loan at BB
--------------------------------------------------------------
Standard & Poor's Ratings Services its 'BBB+' senior unsecured
bank loan rating to Starbound Re II Ltd.'s proposed $64.9 million
bank loan (Debt III), its 'BBB-' senior unsecured bank loan rating
to Starbound II's proposed $159.5 million bank loan (Debt II), and
its 'BB' senior secured bank loan rating to Starbound II's
proposed $66.5 million bank loan (Debt I).

"The differences in ratings reflect the probabilities of the debt
becoming impaired," said Standard & Poor's credit analyst James
Brender.  Starbound II is also raising $123.9 million of common
equity.  The ratings are preliminary pending review of final legal
documents related to the transaction.

Starbound II is a limited-life, special-purpose Class-3
reinsurance company domiciled in Bermuda and set up specifically
to provide additional capacity to the Florida insurance market.  
Renaissance Reinsurance Ltd. (Ren Re; A+/Stable/--) has agreed to
underwrite policies on behalf of Starbound II.  These types of
entities are commonly referred to as sidecars.  Starbound II's
structure and portfolio of risks bear a strong resemblance to
Starbound Re Ltd. (its predecessor), though Debt I and Debt III
have slightly higher
modeled probabilities of default.

"The ratings on Debt I and Debt II are based on analysis of the
modeled probabilities of default, with qualitative adjustments to
address risks not captured in the model," Mr. Brender added.  
"Debt I and Debt II have modeled probabilities of default of 100
basis points (bps) and 20 bps, respectively."

The modeled probabilities of default refer to the percentage of
100,000 simulations of annual catastrophe losses for Starbound
II's pro forma portfolio that resulted in a default of the term
loan.  Catastrophe losses incurred by Starbound II is the only
variable in the model.

Standard & Poor's qualitative adjustments create an appropriate
cushion on the rating, given the possibility for modeling error or
unfavorable variances between Starbound II's business plan
assumptions and actual results.  The adjusted probabilities of
default for Debt I and Debt II are 231 bps and 54 bps,
respectively.  The adjustments reduce the model catastrophe losses
required to cause a default of Debt I to $126 million from $172
million.  The difference of 26% creates an appropriate cushion for
the rating, given the potential for modeling error or deviation
from Starbound II's pro forma portfolio.  The adjustments reduce
the modeled catastrophe losses required to cause a default of Debt
II to $201 million from $239 million.  The difference is 16%.

The qualitative adjustments consider Ren Re's strong competitive
position and risk management, Starbound II's predetermined
exposures and risk tolerances, and healthy rate adequacy for
reinsuring homeowners' risks in Florida, which is more than 95% of
Starbound II's exposure.  These positive factors are offset in
part by the difficulties of modeling exposure to natural
disasters, which is exacerbated by Starbound II's significant
concentration of risk in Florida.  The lack of a strong alignment
of interest between Ren Re and Starbound II is a minor negative
rating factor.

The rating on Debt III reflects application of Standard & Poor's
criteria for second-event risk.  Ratings for securities that
expose investors to potential loss of principal or interest from
two natural disasters are capped at 'BBB+'.  The modeled and
adjusted probabilities of attachment are 1 bp and 15 bps,
respectively.  The adjusted probability of default implies a
rating above the 'BBB+' cap.  The adjustments reduce the model
catastrophe losses required to cause a default to $252 million
from $398 million.  The difference is 37%.

This cushion is larger than most sidecars, resulting primarily
from Standard & Poor's general concerns regarding catastrophe
modeling for extremely remote events and the impact on the
modeling risk of Starbound II's specific concentration in Florida.

The proceeds from capital-raising transactions will be placed in
one or more collateral trusts and will provide Ren Re with a
source of indemnity cover for losses relating to its property
catastrophe lines of business and other related lines.  Certain
collateral trusts may enable cedents of Ren Re and Starbound II to
receive credit for reinsurance recoverables.  The duration of
Starbound II's assets will generally be consistent with that of
its obligations.

Ren Re will retain a minimum of 20% of the premium from a defined
selection of its property catastrophe business ceded to Starbound
through multiple quota share reinsurance treaties, under which
Starbound's liability will attach simultaneously with that of Ren
Re and otherwise follow the fortunes with respect to the business
retroceded to Starbound.


STRATUS SERVICES: Posts $85,982 Net Loss in Quarter Ended March 31
------------------------------------------------------------------
Stratus Services Group Inc. reported a net loss of $85,982 on
revenues of $1,810,705 for the second quarter ended March 31,
2007, compared with a net loss of $468,554 on revenues of
$1,190,086 for the same period last year.

At March 31, 2007, the company's balance sheet showed $1,730,821
in total assets and $9,798,665 in total liabilities, resulting in
an $8,067,844 total stockholders' deficit.

The company's balance sheet at March 31, 2007, also showed
strained liquidity with $1,534,372 in total current assets
available to pay $9,154,596 in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1f00

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Jan. 15, 2007,
Gruber & Company LLC, in Lake Saint Louis, Mo., expressed
substantial doubt about Stratus Services Group Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the years ended Sept. 30, 2006, and 2005.  The
auditing firm pointed to the company's recurring losses from
operations and net capital deficiency.

                   About Stratus Services Group

Headquartered in Manalapan, N.J., Stratus Services Group Inc.
(OTCBB: SSVG.OB) -- http://www.stratusservices.com/-- provided a
wide range of staffing and productivity consulting services
nationally through a network of offices located throughout the
United States until December 2005.  The company plans on expanding
its information technology staffing solutions business through its
50% owned consolidated joint venture, Stratus Technology Services
LLC.


TALCOTT NOTCH: S&P Puts Class A-4 Notes' Rating under Pos. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on the class
A-4 notes issued by Talcott Notch CBO I Ltd., a high-yield
arbitrage CBO transaction managed by General Re-New England Asset
Management, on CreditWatch with positive implications.  At the
same time, the ratings on the class A-3L and A-3B notes were
affirmed based on the credit enhancement available to support the
notes.

The CreditWatch placement reflects factors that have positively
affected the credit enhancement available to support the class A-4
notes since the rating on these notes was affirmed at 'BB-' in
January 2006.  The primary factor is an increase in the level of
overcollateralization available to support the class A-4 notes due
to de-levering of the class A-3L and A-3B notes.

Standard & Poor's will review the results of current cash flow
runs generated for Talcott Notch CBO I Ltd. to determine the level
of future defaults the rated notes can withstand under various
stressed default timing and interest rate scenarios while still
paying all of the interest and principal due on the notes.  The
results of these cash flow runs will be compared with the
projected default performance of the performing assets in the
collateral pool to determine whether the ratings currently
assigned to the notes remain consistent with the credit
enhancement available.
   
                Rating Placed on Creditwatch Positive
   
                        Talcott Notch CBO I Ltd.

                                   Rating
                                   ------
                     Class   To               From
                     -----   --               ----
                     A-4     BB-/Watch Pos    BB-
    
                           Ratings Affirmed
   
                       Talcott Notch CBO I Ltd.

                           Class   Rating
                           -----   ------
                           A-3L    AAA
                           A-3B    AAA
  
  
Tranche                              Prior      Current
Information                          Action     Action
Date (MM/YYYY)                       01/2006    05/2007
Class A-3L note balance (mil. $)     61.073     11.846
Class A-3B note balance (mil. $)     5.434      3.285
Class A-4 note balance (mil. $)      20.0       20.0
Senior class A O/C ratio (%)         170.1      274.34
Senior class A O/C ratio minimum (%) 120.0      120.0
Class A OC ratio (%)                 129.8      165.79
Class A OC ratio minimum (%)         110.0      110.0
    
Transaction Information
Issuer:              Talcott Notch CBO I Ltd.
Co-issuer:           Talcott Notch CBO I (Delaware) Corp.
Underwriter:         Bear Stearns Cos. Inc.
Trustee:             JPMorgan Chase Bank N.A.
Transaction type:    Arbitrage corporate high-yield CBO


TOUSA INC: Posts $66 Million Net Loss in Quarter Ended March 31
---------------------------------------------------------------
Tousa Inc. reported a net loss of $66 million on revenues of
$588.2 million for the first quarter ended March 31, 2007,
compared with net income of $55 million on revenues of
$614.3 million for the same period ended March 31, 2006.

The company's results for the first quarter of 2007 include a
$78.9 million estimated pre-tax loss contingency relating to the
potential restructuring of the Transeastern joint venture pursuant
to a proposed settlement.  Also adversely impacting net income is
$42 million of pre-tax charges resulting from the write-down of
assets including, inventory impairments and write-off of deposits
and abandonment costs.  Of this amount, $8 million of inventory
impairments are related to active communities, and $34 million are
related to land impairments, deposit write-offs and abandonment
costs.

Excluding the impact of inventory impairments, deposit write-offs
and abandonment costs, and estimated loss contingency, net income,
using an effective tax rate of 35.5%, was $21.7 million.  Land
sale profit during the first quarter 2007 was $900,000 compared to
$400,000 in the prior year's period.

"Currently it is difficult to gauge the timing of a potential
housing recovery, as conditions continue to vary greatly.
Affordability is improving largely because of lower net pricing
driven by extensive use of sales incentives and changes in our
product mix.  We are concerned that housing inventories appear to
be on the rise again in most of our markets, and sales in March
and April were disappointing.  This leads us to believe that we
have not reached the point of stabilization as we had previously
anticipated and that the difficult conditions could persist for
the foreseeable future," said Antonio B. Mon, president and chief
executive officer of TOUSA.

Homebuilding revenues for the first quarter of 2007 were $588.2
million, a 4% decrease from the $614.3 million of homebuilding
revenues in the first quarter of 2006, due primarily to a decrease
in revenue from land sales, which was down 88%.  

SG&A expenses decreased to $95.8 million for the three months
ended March 31, 2007, from $97.4 million for the three months
ended March 31, 2006.  The decrease in SG&A expenses is due
primarily to a reduction in overhead and related expenses,
partially offset by an increase of $10.2 million in direct selling
and advertising expenses, and $7.5 million in professional fees
related to the Transeastern Joint Venture.  

EBITDA for the first quarter of 2007 was $57.6 million compared to
$114.5 million in the first quarter of 2006.

For the three months ended March 31, 2007, cash used in operating
activities was $52.4 million, as compared to $146 million during
the three months ended March 31, 2006.  

                   Transeastern Joint Venture

TOUSA acquired its 50% interest in the Transeastern JV on Aug. 1,
2005, when the Transeastern JV acquired substantially all of the
homebuilding assets and operations of Transeastern Properties
Inc., including work in process, finished lots and certain land
option rights.  The Transeastern joint venture paid approximately
$826.2 million for these assets and operations, which included the
assumption of $127.1 million of liabilities and certain
transaction costs, net of $30.1 million of cash.  

Upon formation of the Transeastern JV, for the benefit of the
senior and mezzanine lenders to the joint venture, TOUSA entered
into completion guarantees in which they guaranteed the payment of
costs, the payment or bonding of mechanics' liens, and the
completion of development activities associated with the
completion of real estate projects started as of Aug. 1, 2005, in
the event that the borrowers defaulted on such obligations.  

As of Dec. 31, 2006, the Transeastern JV had approximately
$625 million of bank debt outstanding of which $400.0 million was
senior debt.  The borrowers under the credit agreements are
subsidiaries of the Transeastern JV.  

Deutsche Bank Trust Company Americas, as administrative agent for
the lenders, claims that a voluntary bankruptcy filing or
commencement of insolvency proceedings by any of the borrowers,
even at the ultimate direction of the lenders, would trigger the
company's obligations to repay all amounts due under the credit
agreements governing the loans.

The company disputes that a voluntary bankruptcy filed at the
direction of the lenders, either directly or indirectly, would
trigger such obligations.  

Currently, the company is in settlement discussions with
representatives of the holders of the Transeastern JV loans and
with the other member of the joint venture.  TOUSA has proposed a
structure in which either the joint venture or the successor to
some or all of its assets would become TOUSA's wholly or majority
owned subsidiary.  The proposal also contemplates paying the joint
venture's $400.0 million of senior debt in full through the
incurrence of additional indebtedness.

During the year ended Dec. 31, 2006, TOUSA evaluated the
recoverability of its investment in the Transeastern JV, and
determined its investment to be fully impaired.  As of Dec. 31,
2006, the company wrote-off $145.1 million related to its
investment in the Transeastern JV, which included $31.3 million of
member loans receivable and $21.4 million of receivables for
management fees, advances and interest due to TOUSA from the
Transeastern JV.

As of Dec. 31, 2006, the company accrued an estimated loss of
$275 million, reflecting its estimate of the low end of the range
of the estimated loss as determined by computing the difference
between the estimated fair market value of the consideration the
company expects to pay in connection with the global settlement
less the estimated fair market value of the business it would
acquire pursuant to its proposal.

During the three months ended March 31, 2007, the company accrued
an additional $78.9 million due to changes in the proposed
settlement and in the estimated fair market value of the business
it would acquire.  

                         About TOUSA Inc.

Headquartered in Hollywood, Florida, TOUSA Inc. (NYSE: TOA) --
http://www.tousa.com/-- builds and sells single-family homes  
largely for the move-up homebuyer.  It also provides financial
services to its homebuyers and to others through its subsidiaries,
Preferred Home Mortgage Company and Universal Land Title Inc.  It
is 67%-owned by Technical Olympic S.A.

                          *     *     *

As reported in the Troubled Company Reporter on April 10, 2007,
Fitch Ratings has downgraded Technical Olympic USA Inc.'s Issuer
Default Rating to 'B-' from 'B+'.  TOA's ratings remain on Rating
Watch Negative.


UNIGENE LABORATORIES: Restructures $15.7 Million Credit Balance
---------------------------------------------------------------
Unigene Laboratories Inc. has repaid $1 million in stockholder
debt and restructured the remaining $15.7 million debt balance as
eight-year term notes with a fixed simple interest rate of 9% per
annum.  

The new notes replace short-term debt, a portion of which was in
default.  Payments under the new notes are not required for the
first three years.

"This transaction will immediately replace all notes that have
been in default, reduce the company's aggregate annual interest
payments to a rate that is just .75% above the prime lending rate
and extend the term required for repayment," Dr. Warren Levy,
president and ceo of Unigene, commented.  "The terms of the new
notes are favorable to Unigene and they substantially improve the
company's balance sheet.  The company appreciates Jay Levy's
continued support of Unigene, and his willingness to accommodate
these new terms, that will further strengthen the company's  
ability to advance its product pipeline."

Based in Fairfield, New Jersey, Unigene Laboratories Inc. (OTCBB:
UGNE) -- http://www.unigene.com/or http://www.fortical.com/--
is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.  Due to the size of the
worldwide osteoporosis market, Unigene is targeting its initial
efforts on developing calcitonin and PTH-based therapies.  
Fortical(R), Unigene's nasal calcitonin product for the treatment
of postmenopausal osteoporosis, received FDA approval and was
launched in August 2005.  Unigene has licensed the U.S. rights for
Fortical to Upsher-Smith Laboratories, worldwide rights for its
oral PTH technology to GlaxoSmithKline and worldwide rights for
its calcitonin manufacturing technology to Novartis.

                       Going Concern Doubt

Grant Thornton LLP, in Edison, New Jersey, expressed substantial
doubt about Unigene Laboratories Inc.'s ability to continue as a
going after auditing the company's financial statements for the
years ended Dec. 31, 2006, and 2005.  The auditing firm pointed to
the company's recurring losses from operations and working capital
deficiency.  The auditing firm also stated that the company has
stockholders demand loans in default at Dec. 31, 2006.


UNION PLANTERS: Fitch Affirms BB Ratings on Class B5 Certificates
-----------------------------------------------------------------
Fitch Ratings has taken rating action on Union Planters Mortgage
Finance Corp. mortgage pass-through certificates:

  Series 1998-1

     -- Class A affirmed at 'AAA';
     -- Class B1 affirmed at 'AAA';
     -- Class B2 affirmed at 'AA';
     -- Class B3 affirmed at 'A+';
     -- Class B4 affirmed at 'BBB';
     -- Class B5 affirmed at 'BB'.

  Series 1999-1

     -- Class A affirmed at 'AAA';
     -- Class B1 affirmed at 'AAA';
     -- Class B2 affirmed at 'AAA';
     -- Class B3 affirmed at 'AA';
     -- Class B4 affirmed at 'BBB+';
     -- Class B5 affirmed at 'BB'.

  Series 2000 -1

     -- Class A affirmed at 'AAA'.

The affirmations, affecting approximately $69.7 million of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  The CE levels for all of
the above transactions have increased by at least 3 times the
original levels.

As of the April 2007 distribution date, series 1998-1 has a pool
factor (i.e., current mortgage loans outstanding as a percentage
of the initial pool) of 10% and is seasoned 107 months.  Series
1999-1 has a pool factor of 11% and is seasoned 98 months. Series
2000-1 has a pool factor of 16% and is seasoned 81 months.


UNIVERSAL HOSPITAL: March 31 Balance Sheet Upside-Down by $89.3MM
-----------------------------------------------------------------
Universal Hospital Services, Inc., disclosed financial results for
the quarter ended March 31, 2007.

Total revenues were $63.5 million for the first quarter of 2007,
representing a $5.5 million or 10% increase from total revenues of
$58.0 million for the same period of 2006.  Net income for the
quarter was $3.2 million, compared to net income of $3.6 million
for the same quarter last year.

Adjusted EBITDA for the first quarter of 2007 increased $2.3
million, or 10% to $25.2 million from $22.9 million in 2006.

At March 31, 2007, the company's balance sheet showed $281,384,000
in total assets and total liabilities of $370,744,000 resulting in
a shareholders' deficit of $89,360,000.

A full-text copy of the company's quarterly report is available
for free at http://ResearchArchives.com/t/s?1f06    

                      About Universal Hospital

Universal Hospital Services, Inc. is a medical equipment lifecycle
services company.  UHS offers comprehensive solutions that
maximize utilization, increase productivity and support optimal
patient care resulting in capital and operational efficiencies.
UHS currently operates through more than 75 offices, serving
customers in all 50 states and the District of Columbia.


UNIVERSAL HOSPITAL: UHS Merger Plans to Offer $230MM Senior Notes
-----------------------------------------------------------------
Universal Hospital Services Inc. disclosed that UHS Merger Sub
Inc., a subsidiary of UHS Holdco Inc., is planning to offer
$230 million aggregate principal amount of second lien senior
secured floating rate notes due 2015 and $230 million aggregate
principal amount of second lien senior secured PIK toggle notes
due 2015 as part of the financing that will be used to consummate
the acquisition of UHS by Holdco, an affiliate of Bear Stearns
Merchant Banking.

The issuer of the notes has been formed solely for the purpose of
completing the acquisition and, concurrently with the closing of
this offering, will be merged with and into UHS, which will be the
surviving corporation and will assume the obligations of UHS
Merger Sub Inc. under the notes and related indenture.

The offering is conditioned upon the consummation of the
acquisition of UHS.  The notes will be secured by a second
priority lien on substantially all of the assets of UHS that will
secure its new first priority senior secured credit facility.

The notes will be offered in the United States to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended, and outside the United States in reliance
on Regulation S under the Securities Act.  The notes have not been
registered under the Securities Act and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements.

Any offers of the notes will be made only by means of a private
offering memorandum.

                     About Universal Hospital

Based in Bloomington, Minnesota, Universal Hospital Services Inc.
-- http://www.uhs.com/-- is a medical equipment lifecycle  
services company.  UHS offers comprehensive solutions that
maximize utilization, increase productivity and support optimal
patient care resulting in capital and operational efficiencies.
UHS currently operates through more than 75 offices, serving
customers in all 50 states and the District of Columbia.

                          *     *      *

Universal Hospital Services Inc.'s 10-1/8% Series A Senior Notes
due 2011 carry Moody's Investors Service's 'B3' rating and
Standard & Poor's B- rating.


UNIVERSAL HOSPITAL: S&P Holds B+ Rating and Removes Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Edina, Minnesota-based Universal Hospital
Services Inc. and removed the rating from CreditWatch with
negative implications, where it was placed April 17, 2007.  The
outlook is negative.

At the same time, Standard & Poor's assigned its loan and recovery
ratings to Universal's proposed $135 million first-lien senior
secured revolving credit facility maturing in 2013. The first-lien
debt is rated 'BB' (two notches higher than the corporate credit
rating on Universal) with a recovery rating of '1', indicating the
expectation for full (100%) recovery of principal in the event of
a payment default.

S&P also assigned its loan and recovery ratings to the company's
proposed $230 million second-lien senior secured fixed-rate paid-
in-kind toggle notes maturing in 2015 and $230 million second-lien
senior secured floating-rate notes maturing in 2015. The second-
lien debt is rated 'B-' (two notches lower than the corporate
credit rating on Universal) with a recovery rating of '4',
indicating the expectation for marginal (25%-50%) recovery of
principal in the event of a payment default.  The proceeds, in
addition to about $252 million of common equity, will be used to
finance Bear Stearns Merchant Banking's $712 million acquisition
of Universal.

"The negative outlook reflects our concern with Universal's very
large post-transaction debt obligations," said Standard & Poor's
credit analyst Jesse Juliano.  "However, the corporate credit
rating on Universal is affirmed given the company's significant
liquidity and our expectation that Universal's financial risk
profile will be more in line with a 'B+' rating within two years."

The ratings on Universal reflect its dependence on a narrow but
relatively predictable business, relatively small scale, heavy
debt burden, and significant capital expenditure requirements.
These concerns are partially mitigated by Universal's leading
position, consistent growth despite its cyclical industry, and
strong liquidity relative to the ratings.

Universal is a leading provider of supplemental and outsourced
movable medical equipment to hospitals.  The company's customers
include more than 7,100 hospitals and alternate-site providers.


UNIVISION COMMUNICATIONS: Fitch Cuts Issuer Default Rating to B
---------------------------------------------------------------
Fitch Ratings downgrades and removes Univision Communications Inc.
from Rating Watch Negative.  On Feb. 16, 2007, Fitch disclosed
that it expected Univision's Issuer Default Rating to be lowered
to 'B' from 'BB' following the filing of debt documentation
consistent with Fitch's expectations.  The action incorporates a
review of the final debt documentation filed yesterday by the
Company.  The Rating Outlook is now Stable.

The company's debt structure is rated as:

     -- $7.7 billion senior secured bank loans due 2014 'B+/RR3';

     -- 3.50% senior secured notes due 2007 to 'B+/RR3' from 'BB';

     -- 3.875% senior secured notes due 2008 to 'B+/RR3' from
        'BB';

     -- 7.85% senior secured notes due 2011 to 'B+/RR3' from 'BB';

     -- $500 million second lien term loan due 2009 'B-/RR5';

     -- $1.5 billion 9.75%/10.50% senior unsecured notes due 2015
        'CCC+/RR6'.

Headquartered in Los Angeles, Calif., Univision Communications
Inc., (NYSE: UVN) -- http://www.univision.net/-- owns and  
operates more than 60 television stations in the U.S. and Puerto
Rico offering a variety of news, sports, and entertainment
programming.  The company had about $2.6 billion in debt at
Dec. 31, 2006.


VALHI INC: Earns $26.1 Million 2007 First Quarter
-------------------------------------------------
Valhi, Inc., reported net income of $26.1 million in the first
quarter of 2007 compared to income of $23.4 million in the first
quarter of 2006.

Chemicals sales increased $9.7 million in the first quarter of
2007 compared to the first quarter of 2006 due primarily to net
effects of favorable fluctuations in currency exchange rates,
which increased chemicals sales by approximately $16 million, and
lower average TiO2 prices.  Kronos' average TiO2 selling prices in
the first quarter of 2007 were 3% lower than the first quarter of
2006. Kronos' TiO2 sales volumes in the first quarter of 2007
increased less than 1% compared to the first quarter of 2006, with
higher volumes in Europe and export markets offsetting the effect
of lower volumes in the U.S.

Chemicals operating income declined $2.9 million in the first
quarter of 2007 as compared to the same period in 2006 due
primarily to lower average TiO2 selling prices and higher raw
material and energy costs, partially offset by the favorable
effects of fluctuation in currency exchange rates, which increased
chemicals operating income by approximately $3 million, and higher
TiO2 production volumes.  Kronos' TiO2 production volumes
increased 5% in the first quarter of 2007 as compared to the first
quarer of 2006. Kronos' TiO2 production facilities were operating
at near full capacity in both periods, and Kronos' sales and
production volumes in the first quarter of 2007 were new records
for Kronos for a first quarter.  

In December 2006, Kronos adopted a new accounting standard related
to planned major maintenance expense. Under the new standard,
Kronos no longer accrues the cost of planned major maintenance
expense in advance but instead recognizes the cost of planned
major maintenance when incurred.  The new standard was adopted
retroactively, and accordingly the Company's net income in the
first quarter of 2006 is approximately $500,000 higher than
previously reported.

Component product net sales decreased $3.5 million in the first
quarter of 2007 as compared to the same quarter of 2006 due to
lower sales to the office furniture market where, for certain
products, Asian competitors have established selling prices at a
level below which CompX considers would return an acceptable
margin, partially offset by new sales volumes as a result of a
performance marine acquisition in April 2006.  Despite the lower
level of component product sales and increasing raw material
costs, component products operating income increased $.5 million
in the first quarter of 2007 as compared to the first quarter of
2006 due to a more favorable product mix and a continued focus on
reducing costs and improving efficiency.  Waste management sales
decreased, and its operating loss increased, due to lower
utilization of waste management services.

TIMET's sales increased 19% from $286.9 million in the first
quarter of 2006 to $341.7 million in the first quarter of 2007.
TIMET's operating income also increased 22% from $95.1 million to
$116.2 million in the quarter.  TIMET's average selling prices for
melted and mill products in the first quarter of 2007 increased
37% and 20%, respectively, over the same period in 2006.  While
combined volume of melted and mill product shipments during the
first quarter of 2007 approximated prior year volumes, market
demands resulted in a shift of TIMET's product mix towards an
increased level of mill products which require additional
processing and resources as compared to melted products, but which
also command higher selling prices.  TIMET's operating income
comparisons were favorably impacted by improved plant operating
rates, which increased from 88% in the first quarter of 2006 to
95% in the first quarter of 2007.  In addition to higher
production costs associated with the shift in product mix,
comparing the first quarter of 2006 and 2007, cost of sales also
increased due to higher costs of certain raw materials, including
titanium sponge.

On March 26, 2007 the company paid a special dividend in the form
of all of the TIMET common stock it owns.  As a result, the
company will no longer report equity in earnings of TIMET after
the first quarter of 2007.

General corporate interest and dividend income declined in the
first quarter of 2007 as compared to the first quarter of 2006 due
primarily to lower dividend distributions from The Amalgamated
Sugar Company LLC.  Insurance recoveries represent NL's recovery
from certain former insurance carriers in settlements of claims
related to certain environmental, indemnity and past litigation
defense costs . These insurance recoveries (net of tax and
minority interest) aggregated $.01 per diluted share in each of
the first quarter of 2006 and 2007.  General corporate expenses
declined slightly in the first quarter of 2007 as compared to the
first quarter of 2006, as higher legal, litigation and
environmental expenses of NL were more than offset by lower
pension and other expenses for other subsidiaries.  Interest
expense was lower in the first quarter of 2007 due primarily to
Kronos' May 2006 redemption of its 8.875% Senior Secured Notes
using the proceeds from its April 2006 issuance of its 6.5% Senior
Secured Notes.

A full-text copy of the company's financial result for the quarter
ended March 31, 2007, is available for free at:

                http://ResearchArchives.com/t/s?1f09

                           About Valhi

Valhi, Inc. (NYSE: VHI) -- http://www.valhi.net/ -- is engaged in  
the titanium dioxide pigments, component products (security
products, furniture components and performance marine components)
and waste management industries.  The company's subsidiaries
include NL Industries, Inc., Kronos Worldwide, Inc., CompX
International, Inc., Tremont LLC and Waste Control Specialists
LLC.

Kronos Worldwide --  http://www.kronostio2.com/-- has locations  
in Louisiana, Canada, Norway, Germany and Belgium.


VALHI INC: Rhode Island Litigation Cues S&P to Cut Rating to B+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Valhi Inc. one notch to 'B+', and removed the rating
from CreditWatch where it had been placed with negative
implications on Feb. 23, 2006.  The outlook is stable.

At the same time, Standard & Poor's affirmed its rating on Kronos
International Inc.'s (a majority owned subsidiary of Valhi)
existing EUR400 million senior secured notes issue due 2013 and
assigned a recovery rating.

The notes rating was removed from CreditWatch and affirmed at 'B'
(one notch lower than the corporate credit rating) and a '3'
recovery rating was assigned, following the assessment of recovery
prospects that support the expectation for meaningful recovery of
principal (50%-80%) in the event of default.

"The downgrade of the corporate credit rating reflects ongoing
concerns related to the pending lead pigment litigation in Rhode
Island," said Standard & Poor's credit analyst David Bird.

During February 2007, a Superior Court judge rejected all post-
trial motions by Sherwin-Williams Co., Millennium Holdings, and NL
Industries (a majority owned subsidiary of Valhi) in the Rhode
Island lawsuit.  The judge's ruling follows the February 2006 jury
verdict in Rhode Island finding the companies liable for creating
a public nuisance by making lead-based paints decades ago.

S&P's assessment of Valhi's credit quality takes into
consideration the additional potential liability resulting from
the lead-pigment litigation, the resulting constraints it imposes
on cash flows and the company's ability to address future
investment opportunities, and the likelihood that a substantial
liability will weaken the financial profile beyond expectations at
the previous ratings.

The ratings on Valhi reflect the company's limited business
diversity, exposure to cyclical commodity product cycles, and a
highly leveraged financial profile. These factors are offset by
several considerations, including the company's well-established
position among the leading global titanium dioxide producers.


WARNER MUSIC: To Cut 400 Jobs to Realign Workforce
--------------------------------------------------
Warner Music Group Corp., on May 8, 2007, disclosed plans to
implement changes intended to better align its work force with the
changing nature of the music industry by the end of fiscal year
2007.  To implement the changes, the company expects to reduce its
headcount by about 400 employees.  It expects majority of any cost
savings to be offset by new hirings and ongoing investment focused
on new business initiatives such as the company's ongoing digital
and video business initiatives.

In connection with these reductions, the company expects to incur
a charge ranging from $55 million to $65 million for severance and
related benefits.  In addition, the company expects to incur
implementation charges ranging from $10 million to $15 million
related to consulting fees, costs of temporary workers and stay
bonuses.  All of these restructuring and implementation costs will
be paid in cash.

The changes are part of the company's continued evolution from a
traditional record and songs-based business to a music-based
content company and its ongoing management of its cost structure.
The changes include a continued redeployment of resources to focus
on new business initiatives to help the company diversify its
revenue streams, including digital opportunities.  The realignment
plan is also designed to improve the operating effectiveness of
the company's current businesses and to realign its management
structure to, among other things, effectively address the
continued development of digital distribution channels along with
the decline of industry-wide CD sales.

The company intends to enhance its effectiveness, flexibility,
structure and performance by reducing and realigning long-term
costs.  This will primarily consist of the reorganization of
management structures to more adequately and carefully address
regional needs and new business requirements, to reduce
organizational complexity and to improve leadership channels.

The company also intends to continue to shift resources from its
physical sales channels to efforts focused on digital distribution
and emerging technologies and other new revenue streams.  Part of
the plan will also result in the outsourcing of some back-office
functions as a cost-savings measure.

The company also expects to incur substantially all of the costs
associated with the restructuring plan by the end of the current
fiscal year.  Total costs of the restructuring plan are estimated
to range from $65 million to $80 million.  About $12 million of
restructuring costs were incurred in the company's fiscal second
quarter of 2007, consisting primarily of the elimination of
duplicative positions and redirecting of resources to growth areas
of its businesses in Europe.

                     About Warner Music Group

Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is  
a music company that operates through numerous international
affiliates and licensees in more than 50 countries, including the
Philippines.

                          *     *     *

In March 2007, Standard & Poor's Ratings Services placed its
ratings on Warner Music Group Corp., including the 'BB-' corporate
credit rating, on CreditWatch with negative implications,
following the company's statement that it is exploring a possible
merger agreement with EMI Group PLC (BB- /Watch Neg/B).

Warner Music Group Corp. carries Fitch Ratings' BB- issuer default
rating assigned in May 2006.


WEST CORP: March 31 Balance Sheet Upside-Down by $2.1 Billion
-------------------------------------------------------------
West Corp. filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q for the period ended March 31,
2007.

For the quarter ended March 31, 2007, the company reported net
income of $9,019,000 down from $41,064,000 for the same period in
2006.  Revenues however went up with $508,633,000 in the period
ended March 31, 2007 compared to $424,738,000 for the period ended
March 31, 2006.

At March 31, 2007, the company's balance sheet showed $2.7 billion
in total assets and $3.9 billion in total liabilities resulting in
a stockholders' deficit of $2.1 billion.  The balance sheet
however also that the company is liquid with $692 million in total
current assets and $535 million in total current liabilities.

A full-text copy of the company's March 31, 2007 quarterly report
is available for free at http://ResearchArchives.com/t/s?1f05

                            About West Corp.

Based in Omaha, Nebraska, West Corp. -- http://www.west.com/--  
provides outsourced communication solutions to many of the world's
largest companies, organizations and government agencies.  West
helps its clients communicate effectively, maximize the value of
their customer relationships and drive greater profitability from
every interaction.  The company's integrated suite of customized
solutions includes customer acquisition, customer care, automated
voice services, emergency communications, conferencing and
accounts receivable management services.
  
The company also has operations in Australia, Canada, China, Hong
Kong, India, Philippines, Singapore, Switzerland and the United
Kingdom.


WEST CORP: S&P Holds B+ Rating on $135 Million Loan Add-On
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' loan and '2'
recovery ratings on the senior secured first-lien bank facility of
business process outsourcer Omaha, Nebraska-based West Corp.
(B+/Stable/--), following the announcement that the company will
add $135 million to its first-lien term loan.

The bank loan rating is at the same level as the corporate credit
rating.  The '2' recovery rating indicates the expectation for
substantial (80%-100%) recovery of principal in the event of a
payment default.  Pro forma for the proposed add-on term loan, the
facility will consist of a $250 million revolving credit facility
due 2012 and a $2.4 billion term loan B due 2013.

The company will use proceeds from the proposed add-on term loan
to finance the acquisition of Omnium Worldwide Inc.  Omnium is a
provider of revenue cycle management services to the insurance,
financial services, communications, and health care industries.

                         About West Corp.

Based in Omaha, Nebraska, West Corp. -- http://www.west.com/--  
provides outsourced communication solutions to many of the world's
largest companies, organizations and government agencies.  West
helps its clients communicate effectively, maximize the value of
their customer relationships and drive greater profitability from
every interaction.  The company's integrated suite of customized
solutions includes customer acquisition, customer care, automated
voice services, emergency communications, conferencing and
accounts receivable management services.
  
The company also has operations in Australia, Canada, China, Hong
Kong, India, Philippines, Singapore, Switzerland and the United
Kingdom.


WEST PENN: Fitch Lifts Rating on $735 Million Revenue Bonds to BB
-----------------------------------------------------------------
Fitch Ratings has upgraded to 'BB' from 'BB-' and removed from
Rating Watch Positive the Allegheny County Hospital Development
Authority's $735 million health system revenue bonds (West Penn
Allegheny Health System, series 2007A).  WPAHS' outstanding series
2000 bonds are similarly upgraded.  The Rating Outlook is Stable.

The rating action reflects the agreement reached between WPAHS and
the Internal Revenue Service to the effect that federal
regulations will not prohibit the advance refunding of the entire
amount of the outstanding series 2000 bonds.  WPAHS has terminated
its invitation to tender the outstanding series.  


WESTAR ENERGY: Prices Public Offering of 2047 Mortgage Bonds
------------------------------------------------------------
Westar Energy Inc. has priced the public offering of its First
Mortgage Bonds, 6.10% Series due 2047, pursuant to an effective
shelf registration statement filed with the Securities and
Exchange Commission.

Westar will pay interest quarterly at a rate of 6.10% per year
beginning Aug. 15, 2007.  The bonds will mature on May 15, 2047,
and may be redeemed, at Westar's option, in whole or in part on or
after May 15, 2012.

Payments of principal and interest on the bonds will be insured by
Financial Guaranty Insurance Company.  

The bonds will be issued in minimum denominations of $25 and
multiples of $25.  Westar intends to apply to list the bonds on
the New York Stock Exchange.  The offering is expected to close on
or about May 16, 2007.
    
Net proceeds from the offering will be approximately
$144.1 million.  Westar expects to use the net proceeds of the
bonds:

   a) to repay revolver borrowings under Westar's Second Amended
      and Restated Credit Agreement; and

   b) the remainder, if any, for working capital and for general
      corporate purposes including funding operations and
      acquiring capital equipment.
    
Citigroup Global Markets Inc. and Wachovia Capital Markets LLC are
joint- bookrunning managers.

UBS Securities LLC is the senior co-manager.

Banc of America Securities LLC, Barclays Capital Inc. and Deutsche
Bank Securities Inc. are co-managers for the offering.
    
The offering of the bonds will be made only by means of a
prospectus and a related prospectus supplement, copies of
which may be obtained by contacting:
   
   -- Citigroup Global Markets Inc.
      Tel: 1-877-858-5407; or

   -- Wachovia Capital Markets LLC
      Tel: 1-800-289-1262 (toll-free)

                     About Westar Energy Inc.

Westar Energy, Inc. (NYSE: WR) -- http://www.westarenergy.com/--   
is an electric utility in Kansas, providing electric service to
about 669,000 customers in the state.  Westar Energy has about
6,100 megawatts of electric generation capacity and operates and
coordinates approximately 33,000 miles of electric distribution
and transmission lines.

                          *      *      *

As reported in the Troubled Company Reporter on April 16, 2007,
Standard & Poor's Ratings Services assigned its preliminary
'BBB-/BB+/BB' rating to Westar Energy Inc.'s omnibus Rule 415
shelf registration, covering an indeterminate amount of first
mortgage bonds, senior and subordinated debt securities, and
preferred and preference stock.  The outlook is stable.
     
The ratings on Westar Energy reflect a satisfactory consolidated
business risk position of '5' and an intermediate financial
profile that is commensurate with investment-grade
characteristics.


WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr Ended March 31
-----------------------------------------------------------------
Worldgate Communications Inc. reported a net loss of $4.6 million
for the three months ended March 31, 2007, compared with a net
loss of $2.7 million for the same period last year.

The three months ended March 31, 2007, included a non-cash charge
of $1.3 million associated with amortization of the debt discount
of the company's outstanding debentures fully offset by a
$1.4 million non-cash gain on derivative warrants and conversion
options.  

The three months ended March 31, 2006, included a non-cash gain of
$1.8 million associated with the termination agreement with the
company's former distributor.

Revenues for the three months ended March 31, 2007, were $310,000.
This represents a decrease of $199,000 or 39% versus revenues of
$509,000 for the three months ended March 31, 2006.  The revenue
for the quarter primarily reflects retail sales and associated
retail service revenue.  There were minimal sales to service
providers during the quarter.

Operating expenses for the three months ended March 31, 2007, were
$4.6 million and were slightly lower than the $4.8 million of
expenses recorded in the quarter ended March 31, 2006.  

At March 31, 2007, the company's balance sheet showed $9.3 million
in total assets, $153,000 in redeemable preferred stock, and
$9.8 million in total liabilities, resulting in a $658,000 total
stockholders' deficit.

The company's balance sheet at March 31, 2007, also showed
strained liquidity with $8 million in total current assets
available to pay $8.5 million in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2007, are available for
free at http://researcharchives.com/t/s?1eff

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 21, 2007,
Marcum & Kliegman LLP, in Melville, New York, expressed
substantial doubt about WorldGate Communications Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Dec. 31,
2006, and 2005.  The auditing firm pointed to the company's
recurring losses from operations and accumulated deficit
of $247 million at Dec. 31, 2006.

                  About WorldGate Communications

Trevose, Pennsylvania based WorldGate Communications Inc.
(NASDAQ: WGAT) -- http://www.wgate.com/ -- designs, manufactures,   
and distributes the Ojo line of personal video phones.  Ojo
personal video phones offer real-time, two-way video
communications with video messaging.  


* Fried Frank Adds John Sorkin as Partner in New York
-----------------------------------------------------
John E. Sorkin, Esq. will join Fried, Frank, Harris, Shriver &
Jacobson LLP as a corporate partner in the Mergers and
Acquisitions practice in New York.

Mr. Sorkin was a partner in the Corporate Department of Latham &
Watkins LLP in New York.

"We are delighted to welcome John to our firm. He has valuable
experience and market background in M&A and private equity," said
Valerie Ford Jacob, Fried Frank's Chairperson.

"John adds depth to our growing corporate practice allowing us to
broaden our scope of client service and capitalize on new business
opportunities," added Justin Spendlove, Fried Frank's Managing
Partner.

Mr. Sorkin focuses his practice on domestic and cross-border
merger and acquisition transactions and leveraged buyouts as well
as corporate advisory work related to corporate governance.  His
experience spans corporate transactions, including public and
private mergers and acquisitions, acquisitions of assets in
bankruptcy, proxy contests, spin-offs, exchange offers and
representation of financial advisors in a wide range of corporate
transactions.  He has represented private equity funds and their
portfolio companies in numerous transactions.

Mr. Sorkin received his JD from the University of Chicago Law
School, with Honors, and his BA, magna cum laude, from Yale
University. He is admitted to the bar in New York.

                         About Fried Frank

Fried, Frank, Harris, Shriver & Jacobson LLP --
http://www.friedfrank.com/-- is an international law firm with  
more than 600 attorneys in offices in New York, Washington, D.C.,
London, Paris, Frankfurt and Hong Kong.  Fried Frank lawyers
regularly represent major investment banking firms, private equity
houses and hedge funds, as well as many of the largest companies
in the world.  The firm offers legal counsel on M&A, capital
markets and corporate finance matters, white- collar criminal
defense and civil litigation, securities regulation, compliance
and enforcement, government contracts, environmental law and
litigation, real estate, tax, bankruptcy, antitrust, benefits and
compensation, intellectual property and technology, international
trade, and trusts and estates.  The firm has an association with
Huen Wong & Co. in Hong Kong.


* Hunton & Williams Names Two Attorneys as Washington Counsel
-------------------------------------------------------------
Hunton & Williams LLP has named Francine E. Friedman, Esq. and
Jeffrey B. Hardie, Esq. as Washington, D.C. counsel, effective
May 10, 2007.

"Francine and Jeff have strong track records in building robust
relationships with their clients, with their fellow lawyers, and
in the community," said Wally Martinez, Esq., managing partner of
the firm.  "They are tremendous assets to Hunton & Williams and I
am pleased to welcome them into their new positions."

Based in the firm's 150-lawyer Washington office, Ms. Friedman is
a member of the firm's regulated industries and government
relations practice, with first-rate government relations skills
and long-term, solid relationships with an extensive network of
contacts in Congress, the Executive Branch and in the Washington
government relations community.  Ms. Friedman's practice has
focused extensively on increasing the effectiveness of the
nation's low-income housing tax credit program.  Recently, she
secured the enactment of legislation wherein the program will play
a central role in federal relief efforts for states devastated by
Hurricane Katrina.  Ms. Friedman holds an undergraduate degree
from Georgetown University and a law degree from William & Mary.

Mr. Hardie, a member of the labor and employment practice, is
based in the firm's 50-lawyer McLean office.  An experienced
litigator and employment law counselor, Mr. Hardie has formed
integral relationships with several of the firm's major global
clients, built on his reputation and involvement in high risk and
complex labor law issues.  He provides preventative counseling and
training to clients and human relations groups on all federal
employment-related statutes.  Mr. Hardie holds an under-graduate
degree from Virginia Polytechnic Institute and State University
and a law degree from Tulane University.

                    About Hunton & Williams

Hunton & Williams LLP -- http://www.hunton.com/-- provides legal   
services to corporations, financial institutions, governments and
individuals, as well as to a broad array of other entities.  Since
its establishment more than a century ago, Hunton & Williams has
grown to more than 975 attorneys serving clients in 100 countries
from 19 offices around the world.  While the firm's practice has a
strong industry focus on energy, financial services, and life
sciences, its experience extends to more than 100 separate
practice areas, including bankruptcy and creditors rights,
commercial litigation, corporate transactions and securities law,
intellectual property, international and government relations,
regulatory law, products liability, and privacy and information
management.


* King & Spalding Adds Two Senior Counsel in Houston Office
-----------------------------------------------------------
King & Spalding LLP adds Myron Sheinfeld, Esq. and Jarrel
McDaniel, Esq. as senior counsel to its financial restructuring
practice in Houston, Texas.

Their addition to the Houston office complements the firm's
existing financial restructuring practices in Atlanta and New
York, bringing to 24 the total number of lawyers in the group.  
Mr. Sheinfeld and Mr. McDaniel are joining King & Spalding from
Akin Gump Strauss Hauer & Feld LLP, where they were also senior
counsel.

"Mickey and Jerry are highly recognized bankruptcy lawyers with a
long history of handling high-profile matters," said Robert E.
Meadows, managing partner of King & Spalding's Houston office.  
"We are thrilled these outstanding lawyers have joined King &
Spalding and look forward to the contributions they will make to
our clients."

Mr. Sheinfeld, widely regarded as the "dean" of the bankruptcy bar
in Houston, has more than 40 years of experience in bankruptcy and
reorganization.  His practice also includes bankruptcy tax,
creditors' rights, financial restructuring, corporate governance
and director duties and responsibilities.  A former Unites States
Attorney for the Southern District of Texas, he had spent the
majority of his legal career at his own firm, Sheinfeld, Maley &
Kay, P.C.

Mr. McDaniel focuses his practice on reorganization and insolvency
matters and has extensive experience litigating the value of
assets.  He began practicing law in 1957 and spent most of his
career at Vinson & Elkins, where he formed and headed its creditor
rights and insolvency group.  He is a Fellow of the American
College of Bankruptcy.

Sarah R. Borders, Esq., head of King & Spalding's financial
restructuring practice, said, "We are proud to welcome Jerry and
Mickey to King & Spalding.  In handling some of the most
significant bankruptcies and financial restructurings in Texas and
throughout the country, they have been at the cutting edge of the
legal profession."

                     About King & Spalding

King & Spalding, LLP -- http://www.kslaw.com/-- is an  
international law firm with more than 800 lawyers in Atlanta,
Dubai, Houston, London, New York, Riyadh (affiliated office) and
Washington, D.C.  The firm represents half of the Fortune 100, and
in a Corporate Counsel survey in August 2006 was ranked one of the
top ten firms representing Fortune 250 companies overall.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  

                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital      
   Company              Ticker  ($MM)          ($MM)     ($MM)  
   -------              ------  ------------  ------    -------  
Abraxas Petro           ABP         (22)         117       (4)
AFC Enterprises         AFCE        (31)         163        7
Alaska Comm Sys         ALSK        (29)         551       19
Alliance Imaging        AIQ          (6)         677       49
Bare Escentuals         BARE       (189)         184       91
Blount International    BLT         (98)         448      135
CableVision System      CVC      (5,349)       9,654     (638)
Calpine Corp            CPNLQ    (6,887)      18,590   (2,890)
Carrols Restaurant      TAST        (26)         453      (31)
Centennial Comm         CYCL     (1,090)       1,393       92
Charter Comm-A          CHTR     (6,345)      15,177   (1,015)
Cheniere Energy         CQP        (168)       2,104      108
Choice Hotels           CHH         (70)         305      (55)
Cincinnati Bell         CBB        (773)       1,951       27
Claymont Stell          PLTE        (40)         240      165
Compass Minerals        CMP         (46)         691      157
Corel Corp.             CRE         (21)         271       42
Crown Holdings I        CCK        (225)       6,582      310
Crown Media HL          CRWN       (519)         759       64
CV Therapeutics         CVTX        (90)         356      263
Dayton Superior         DSUP       (106)         312       79
Deluxe Corp             DLX         (40)       1,223     (402)
Denny's Corporation     DENN       (221)         444      (67)
Depomed Inc.            DEPO        (37)          37       16
Domino's Pizza          DPZ        (561)         421       39
Dun & Bradstreet        DNB        (458)       1,392     (238)
Echostar Comm           DISH        (30)       9,066    1,150
Embarq Corp             EQ         (331)       8,983     (409)
Emeritus Corp.          ESC        (119)         703      (42)
Empire Resorts I        NYNY        (10)          71       12
Encysive Pharmaceutical ENCY       (122)          87       41
Enzon Pharmaceutical    ENZN        (55)         369      180
Epix  Pharmaceutical    EPIX        (32)         125       75
Extendicare Real        EXE-U       (20)       1,236       29
Foamex Intl             FMXI       (396)         565       24
Ford Motor Co           F        (3,447)     281,491   (8,138)
Gencorp Inc.            GY          (65)       1,037       31
General Motors          GM       (3,202)     185,198   (5,059)
Graftech International  GTI         (85)         772      241
Healthsouth Corp.       HLS      (1,602)       3,238     (398)
I2 Technologies         ITWO        (15)         185       28
ICOS Corp               ICOS        (18)         285      112
IDEARC Inc              IAR      (8,755)       1,508      171
IMAX Corp               IMAX        (33)         243       84
IMAX Corp               IMX         (33)         243       84
Incyte Corp.            INCY       (104)         325      261
Indevus Pharma          IDEV       (144)          76       51
Intermune Inc           ITMN        (55)         249      218
Interstate Bakeries     IBCIQ      (293)       1,147     (423)
Investools Inc.         SWIM        (64)         132      (65)
Ista Pharmaceuticals    ISTA        (15)          48       18
Koppers Holdings        KOP         (70)         671      177
Life Sciences           LSR          (1)         237       25
Lodgenet Entertainment  LNET        (54)         274        8
Maxxam Inc              MXM        (212)       1,010       28
McMoran Exploration     MMR         (47)         446      (31)
Mediacom Comm           MCCC       (110)       3,620     (269)
Mervelo Maddux P        MMPI        (45)         508      N.A.
Molecular Insight       MIPI        (14)          13        1
National Cinemed        NCMI       (575)         308       (1)
Neurochem Inc            NRM        (34)          61       20
New River Pharma        NRPH       (110)         152      (19)
New World Restaurant    NWRG        (75)         133       (8)
Nexstar Broadcasting    NXST        (73)         725       22
NPS Pharm Inc.          NPSP       (213)         180      121
ON Semiconductor        ONNN       (138)       1,441      309
Paetec Holding          PAET       (288)         237       22
Protection One          PONN        (80)         444       (5)
Qwest Communication     Q        (1,534)      20,701   (1,440)
Radnet Inc.             RDNT        (79)         131        2
Ram Energy Resources    RAME        (28)         162        2
Regal Entertainment     RGC        (130)       3,085     (131)
Riviera Holdings        RIV         (28)         221       13
Rural Cellular          RCCC       (587)       1,362      183
Rural/Metro Corp.       RURL        (93)         298       38
Savvis Inc.             SVVS        (14)         640      145
Sealy Corp.             ZZ         (154)       1,021       61
Sipex Corp              SIPX        (12)          53        7
St. John Knits Inc.     SJKI        (52)         213       80
Station Casinos         STN        (178)       3,694      (46)
Stelco Inc              STE         (83)       2,788      656
Sun-Times Media         SVN        (369)         929     (265)
Switch & Data FA        SDXC        (20)         152       (8)
Syntroleum Corp.        SYNM        (14)          44       29
Town Sports Int.        CLUB        (18)         436      (58)
Unisys Corp.            UIS          (5)       3,913      317
Weight Watchers         WTW      (1,053)       1,019      (82)
Western Union           WU         (172)       5,354      972
Westmoreland Coal       WLB        (121)         761      (67)
WR Grace & Co.          GRA        (467)       3,628      912
XM Satellite            XMSR       (445)        1943      (76)
Xoma Ltd.               XOMA         (6)          70       28
YTB International       YTBL         (2)          29      (13)

                             *********

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,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, John Paul C. Canonigo, and Peter A. Chapman,
Editors.

Copyright 2007.  All rights reserved.  ISSN: 1520-9474.

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