TCR_Public/070626.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, June 26, 2007, Vol. 11, No. 149

                             Headlines

17914 JOHN CONNOR: Voluntary Chapter 11 Case Summary
ACA ABS: Fitch Puts Class C Notes' BB Rating Under Negative Watch
ADELPHIA COMMS: Completes "True Up" Mechanism under Confirmed Plan
AES CORPORATION: Posts $455 Million Loss in Quarter Ended March 31
ALLEGHENY ENERGY: PJM Okays 765-kV Transmission Project with AEP

ALLIED DEFENSE: Inks Pact with Noteholders to Settle Default Row
AMERICAN CAMPUS: Moody's Affirm Ba2 Rating with Stable Outlook
AMERICAN CAMSHAFT: Wants to Sell Assets to Hilco for $5.5 Million
AQUILA INC: Moody's Lifts Corporate Family Rating to Ba2 from B1
AVISTA CORP: Moody's Places All Ratings Under Review

BCE INC: Telus Merger to Pass Through Critical Review
BEAR STEARNS: Moody's Affirm Low-B Ratings on Six Certificates
BILL PHILLPS: Case Summary & 15 Largest Unsecured Creditors
BIOMET INC: Moody's Confirms Corporate Family Rating at P(B2)
CALPINE CORP: Lloyd Will Joins as Structuring & Analytics VP

CALPINE CORP: Discloses Liquidation Analysis Under Joint Plan
CANWEST MEDIAWORKS: Moody's Lowers Corporate Family Rating to B1
CAPITAL RESERVE: Posts $188,745 Net Loss in Year Ended December 31
CATHOLIC CHURCH: Victims Join Panel vs. San Diego's Bar Date Plea
CATHOLIC CHURCH: Panel Objects to San Diego's Lease Extension Plea

CATHOLIC CHURCH: Davenport Can Sell Farm for $310,000
CITIGROUP MORTGAGE: Fitch Affirms B Ratings on Two Classes
COMMERCIAL MORTGAGE: Moody's Affirm Low-B Ratings on Five Certs.
CREDIT SUISSE: Fitch Affirms Low-B Ratings on Two Classes
CROSSWINDS AT MESQUITE: Voluntary Chapter 11 Case Summary

CWALT 2006-43CB: Fitch Puts Low-B Ratings Under Negative Watch
DAYTON SUPERIOR: Moody's Lifts Corporate Family Rating to B2
DEATH ROW: Marion Knight to Sell Malibu Mansion for $6.2 Million
DELPHI CORP: Reaches Tentative Deal with UAW and General Motors
DELTA FUNDING: S&P Downgrades Rating on Class M-2 Certs. to CCC

DELUXE CORP: Appoints Baldwin, McGrath, and Metviner as Directors
DEUTSCH ALT-A: Fitch Puts Ratings on Two Classes on Watch Negative
DOBSON COMM: Mulls Sale of Firm, Hires Morgan Stanley
DORAL FINANCIAL: FBOP Decides Not to Proceed with Investment Plan
ENCORE ACQUISITION: Moody's Holds Corporate Family Rating at Ba3

FINLAY ENT: Inks Amended Pact with GE to Expand Credit Facility
FORD MOTOR: Denies Plans to Build Slovak Plant; Eyes Romania
FURNITURE BRANDS: Weak Performance Cues S&P to Cut Rating to BB-
GENERAL MOTORS: Reaches Tentative Deal with UAW and Delphi Corp.
GSAA HOME: Moody's Puts Ba1 Rating Under Review

HARGRAY COMMS: Moody's Says Loan Changes Won't Affect Ratings
HARLAN SPRAGUE: Moody's Affirms Corporate Family Rating at B2
HEALTH NET: Moody's Rates Shelf Registration at P(Ba2)
INDYMAC MBS: Fitch Puts BB Rating on Class 2B-5 on Watch Negative
INTEGRATED HEALTH: Claims Objection Deadline Moved to August 30

INTERFACE INC: Fabrics Division Sale Cues S&P's Positive Watch
ION MEDIA: Board Appoints Todd Gjervold as Director
IPSWICH STREET: Fitch Puts Class E Notes' Rating on Watch Negative
JABIL CIRCUIT: Third Quarter 2007 Net Income Down to $6.2 Million
JOAN FABRICS: U.S. Trustee and GE Balk at Proposed Asset Sale

JOAN FABRICS: Judge Sontchi Approves Incentive Program
JSC RESOURCES: Voluntary Chapter 11 Case Summary
LB-UBS COMM: Fitch Affirms C Ratings on Class N and P Certs.
LEAR CORP: Reschedules 2007 Annual Meeting to July 12
LEXINGTON RESOURCES: Posts $549,837 Net Loss in Qtr. Ended Mar. 31

LIMITED BRANDS: Debt Increase Cues Moody's Ratings Review
LSF 5 WAGON: S&P Places Corporate Credit Rating at B
MACKINAW POWER: S&P Rates $147MM Senior Secured Term Loan at BB-
MARCAL PAPER: Files Chapter 11 Plan of Reorganization
MASSACHUSETTS HEALTH: S&P Downgrades Bonds' Rating to BB+

MERRILL LYNCH: Moody's Affirm Low-B Ratings on Three Certificates
MERRILL LYNCH: Moody's Junks Rating on Class B-3 Certificates
MERITAGE MORTGAGE: Moody's Junks Rating on Class B-1 Certificates
MITEL NETWORKS: ISS Urges Shareholders to Snub Inter-Tel Merger
MORTGAGE ASSET: Fitch Affirms B Rating on Class B-5 Certificates

MORTGAGE ASSET: Fitch Holds B Rating on 2003-8 Class B-5 Certs.
MORTGAGE ASSET: Fitch Affirms BB Ratings on Two Cert. Classes
NEWFIELD EXPLORATION: Inks New $1.25 Billion Credit Facility
NUANCE COMMS: Inks Pact To Acquire Tegic for $265 Million in Cash
ONEIDA INC: Moody's Places Corporate Family Rating at B2

PAETEC HOLDING: S&P Junks Rating on Proposed $300 Mil. Sr. Notes
PLEASANT CARE: Wants to Sell All Assets on July 2 Auction
PLEASANT CARE: Taps Paul Gulbrandson as Medicare Appeals Counsel
PLEASANT CARE: Files Schedules of Assets & Liabilities
PPM AMERICA: Fitch Downgrades Ratings on Three Note Classes

PRICELINE.COM INC: Strong Performance Cues S&P's Upgrade to B+
PRIMERA HOMES: Case Summary & 20 Largest Unsecured Creditors
PSEG ENERGY: S&P Affirms Corporate Credit Rating at BB-
QUEENS SEAPORT: Trustee Wants Further Use of Cash Collateral
RCN CORP: To Acquire NEON Communications for $260 Million in Cash

RESIDENTIAL ACCREDIT: Fitch Downgrades Ratings on Three Classes
SACO I: S&P Lowers Ratings on 13 Classes
SALOMON BROTHERS: Fitch Affirms B- Rating on $5.9MM Class K Loans
SCOTTISH RE: Annual Shareholders Meeting Scheduled on July 18
SEA CONTAINERS: Court Okays Deloitte & Touche as Auditors

SEA CONTAINERS: Trustee & GE Capital Opposes $176MM DIP Financing
SEQUOIA MORTGAGE: Fitch Affirms BB Rating on Class B-5 Certs.
SIERRA PACIFIC: Affiliates Close Mortgage Securities Tender Offer
SOVEREIGN COMMERCIAL: Fitch Puts Low-B Ratings on Three Certs.
SPEAKING ROSES: March 31 Balance Sheet Upside-Down by $5.6 Million

STA-BILT PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
STRATS: S&P Affirms BB+ Ratings on Classes A-1 and A-2 Certs.
STRUCTURED ASSET: Fitch Downgrades Ratings on Two Cert. Classes
TERWIN MORTGAGE: S&P Lowers Ratings on 51 Certificate Classes
TRAINER WORTHAM: Fitch Puts BB Rating on Watch Negative

TRANS ENERGY: Completes Financing Deal with CIT Energy
TRINITY INDUSTRIES: S&P Lifts Corp. Credit Rating to BB+ from BB
U.S. ENERGY: UK Financing Failure Could Prompt Bankruptcy Filing
U.S. ENERGY: Board Suspends UK Unit CEO Grant Emms
U.S. ENERGY: Weiser LLP Expresses Going Concern Doubt

UNITED AMERICAN: March 31 Balance Sheet Upside-Down by $741,332
VENTURE CDO: S&P Withdraws BB Rating on $8 Million Class D Notes
VONAGE HOLDINGS: Appeals Court Wants "Middle Ground" Considered
W.R. GRACE: Wants Exclusive Plan-Filing Period Further Extended
W.R. GRACE: Wants to Sell Washcoat Business for $21.9 Million

WAVE WIRELESS: Court Confirms Amended Plan of Reorganization
WHITING PETROLEUM: Commences 5 Million Common Stock Offering
WHX CORP: March 31 Balance Sheet Upside-down by $73.3 Million
WINN-DIXIE STORES: Hires Dan Portnoy as Senior Vice-President
WINSTAR COMMS: Court Okays Wellspring Media Settlement Agreement

WINSTAR COMMS: Lucent Brings $244MM Dispute to 3rd Circuit Court
XENONICS HOLDINGS: Posts $177,000 Net Loss in Qtr. Ended March 31
XILLIX TECHNOLOGIES: Court Gives Interim Nod on Plan of Compromise

* Dewey Ballantine Adds Three Partners to IP Litigation Group
* Reed Smith Adds E. Estrada to Commercial Restructuring Practice

* S&P Takes Various Rating Actions on 133 Classes from 23 Issuers

* Large Companies with Insolvent Balance Sheets

                             *********

17914 JOHN CONNOR: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: 17914 John Connor, L.L.C.
        P.O. Box 576
        Lincolnton, NC 28093-0576

Bankruptcy Case No.: 07-40355

Chapter 11 Petition Date: June 22, 2007

Court: Western District of North Carolina (Shelby)

Judge: George R. Hodges

Debtor's Counsel: Richard M. Mitchell, Esq.
                  Mitchell & Culp, P.L.L.C.
                  1001 Morehead Square Drive, Suite 330
                  Charlotte, NC 28203
                  Tel: (704) 333-0630
                  Fax: (704) 333-4975

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $100,000 to $1 Million

The Debtor does not have any creditors who are not insiders.


ACA ABS: Fitch Puts Class C Notes' BB Rating Under Negative Watch
-----------------------------------------------------------------
Fitch has placed the ratings on three classes of notes issued by
ACA ABS 2003-2, Limited on Rating Watch Negative:

    -- $7,000,000 class B-F notes 'BBB';
    -- $14,901,123 class B-V notes 'BBB';
    -- $2,980,225 class C notes 'BB'.

ACA ABS 2003-2 is a collateralized debt obligation that closed
Nov. 6, 2003 and is managed by ACA Management, LLC. ACA ABS 2003-2
has a reinvestment period that ends in December 2007, and
currently has a portfolio composed primarily of residential
mortgage-backed securities, along with asset-backed securities,
CDOs, commercial mortgage-backed securities and real estate
investment trust debt.

These rating actions are the result of a combination of credit
deterioration within the portfolio and the high exposure ACA ABS
2003-2 has to under-performing 2006 vintage closed-end second lien
RMBS assets.

So far in 2007, approximately 9.2% of the portfolio has been
downgraded and another 7.9% of the portfolio is currently on
Rating Watch Negative.  These negative rating actions have mostly
affected subprime RMBS assets, and they have caused the portion of
bonds rated 'BB+' or below in the portfolio to increase to 3.6% as
of the May 31, 2007 trustee report from 0.2% at the end of 2006.  
The Fitch weighted average rating factor test has increased to 5
('BBB/BBB-') from 4 ('BBB/BBB-') during this same time period, but
was still passing its trigger of 5 as of the latest trustee
report.  However, there have been several additional downgrades
since the last report, which will have a further negative effect
on the WARF.

Specifically, ACA ABS 2003-2 contains fifteen 2006 vintage CES
RMBS bonds comprising approximately 8.7% of the portfolio.  Of
these fifteen bonds, four have been downgraded by at least a full
rating category, accounting for 2.8% of the downgraded assets
referred to above.  These bonds remain on Rating Watch Negative,
along with four additional CES RMBS bonds in the portfolio.

Although ACA ABS 2003-2 is still in its reinvestment period until
December 2007, the asset manager chose to use almost $100 million
of accumulated principal proceeds to partially redeem the senior
notes at the June 11, 2007 payment date.  The acceleration of the
redemption of the senior notes will benefit these notes through
increased credit enhancement and a shorter expected life, but the
failure to reinvest the principal proceeds leaves the notes lower
in the capital structure highly exposed to the troubled assets in
the existing portfolio.

The ratings of the classes B-F, B-V and C 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.


ADELPHIA COMMS: Completes "True Up" Mechanism under Confirmed Plan
------------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates have
completed the "True Up" Mechanism under their confirmed First
Modified Fifth Amended Joint Chapter 11 Plan of Reorganization.

On Feb. 13, 2007, the effective date of the Plan, 23,158,360
shares of TWC Class A Common Stock were withheld from the
Settlement Consideration and from distributions to holders of
Claims against the Subsidiary Debtors and holders of Claims
against the parent corporation Adelphia Communications and
deposited in a True Up Holdback account as provided in the Plan.

Under the True Up Mechanism, the recipient of the Settlement
Consideration and holders of Allowed Claims against the Subsidiary
Debtors received an initial distribution of shares of TWC Class A
Common Stock, and had the potential of receiving additional shares
of TWC Class A Common Stock from the True Up Holdback based on a
recalculated Deemed Value.  The Deemed Value is recalculated to be
the volume weighted average price per share during market hours of
the TWC Class A Common Stock during a 60-day test period as
specified in the Plan.

To the extent the shares in the True Up Holdback are not
distributed to the recipient of the Settlement Consideration and
creditors of the Subsidiary Debtors, the shares will be
distributed to holders of Allowed Claims against the parent
corporation or reserved on account of Disputed Claims against the
parent Debtor.

Additional information relating to the True Up Mechanism is
contained in the Second Disclosure Statement Supplement, filed
with the Bankruptcy Court on Oct. 16, 2006, Section 10.12 of the
Plan, and Section 2.15 of the Plan Administrator Agreement, which
is available at http://www.adelphiarestructuring.com/

On June 15, 2007, the Plan Administrator filed a notice and an
explanation of the method of recalculation of the Deemed Value
with the U.S. Bankruptcy Court for the Southern District of New
York.  The notice stated that the Deemed Value of the TWC Class A
Common Stock at the conclusion of the Test Period was recalculated
pursuant to the Plan Administrator Agreement to be $37.80.

No objections to the recalculation were received by 4:00 p.m. on
June 20, 2007, the objection deadline set in the notice.
Accordingly, the new Deemed Value of the TWC Class A Common Stock
for purposes of the Plan is $37.8038, and the company will
commence distribution of all shares in the True Up Holdback in the
manner set forth in the Plan to holders of record of Note Claims
as of Feb. 13, 2007 and to holders of record of all other claims
as of Jan. 10, 2007.

A copy of the notice and the chart summarizing the distribution of
shares of TWC Class A Common Stock to be made to certain classes
of Claims from the True Up Holdback is also available in the
important documents sections of the company's website at
http://www.adelphiarestructuring.com/

                      About Adelphia Comms

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

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

The Court confirmed the Debtors' First Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Feb. 13, 2007.


AES CORPORATION: Posts $455 Million Loss in Quarter Ended March 31
------------------------------------------------------------------
The AES Corporation reported that revenues increased 11% to
$3.1 billion at March 31, 2007, compared to $2.8 billion for the
first quarter of 2006, while net cash from operating activities
increased 14% to $581 million compared to $509 million last year.  

The company had a net loss of $455 million for the quarter ended
March 31, 2007, as compared with a net income of $348 million for
the same quarter a year ago.

First quarter income from continuing operations was $119 million,
compare to 2006 first quarter income from continuing operations of
$330 million.

As anticipated and previously disclosed the company recognized an
impairment charge of about $638 million, in connection with the
sale of its equity stake in its Venezuelan subsidiary C.A. La
Electricidad de Caracas.

At March 31, 2007, the company had total assets of $31.9 billion,
total liabilities of $29.4 billion, and total stockholders' equity
of $2.5 billion.  

At March 31, 2007, the company had $4.9 billion of recourse debt
and $12 billion of non-recourse debt outstanding.  

At March 31, 2007, cash and cash equivalents increased by
$69 million from Dec. 31, 2006, to $1.4 billion.  The change in
cash was due to $581 million of cash provided by operating
activities, $677 million of cash used by investing activities,
$148 million of cash provided by financing activities and the
positive effect of exchange rates on cash of $17 million.

                     Discontinued Operations

In May 2007, the company's wholly-owned subsidiary, Central
Valley, reached an agreement to sell 100% of its indirect interest
in two biomass fired power plants located in central California,
the 50MW Delano facility and the 25MW Mendota facility, for
$51 million.  The AES Board of Directors approved the sale of the
Central Valley Businesses in February 2007.

In February 2007, the company entered into a definitive agreement
to sell its shares of La Electricidad de Caracas subsidiary for
$739 million net of withholding taxes.  In addition, the agreement
provided for the payment of a $120 million dividend in 2007 that
was approved and declared by EDC shareholders on March 1, 2007.

                    Partnership with GE Energy

During the quarter, the company signed a memorandum of
understanding and subsequently entered into a partnership with
GE Energy Financial Services to develop greenhouse gas emission
reduction projects in the United States.  The company also
acquired two new power plants with long-term power agreements in
Tamuin, Mexico totaling 460 MW of capacity.

A full-text copy of the company's first quarter 2007 report is
available for free at http://ResearchArchives.com/t/s?2125

"The quarter reflected strong revenues, cash flow and underlying
operating performance," said Paul Hanrahan, AES president and
chief executive officer.  "We continued to implement our growth
strategy focusing on meeting increasing demand for energy in
fast-growing markets while expanding our presence in renewables
and the growing market for emission offsets."

                      About AES Corporation

AES Corporation -- http://www.aes.com/-- is a global power  
companies, with 2006 revenues of $12.3 billion.  With a global
workforce of 32,000 people and operations in 28 countries on five
continents, AES's generation and distribution facilities have the
capacity to serve 100 million people worldwide.  Its 13 utilities
amass annual sales of over 73,000 GWh and its 121 generation
facilities have the capacity to generate about 40,000 megawatts.

                           *     *     *

To date, AES Corporation carries Moody's Ba3 senior secured debt
rating, B1 long-term corporate family, senior unsecured debt and
probability-of-default ratings, and Ba1 bank loan debt rating.  
The outlook remains stable.

Also, the company continues to carry Standard & Poor's BB- long-
term foreign and local issuer credit ratings.  The outlook remains
stable.

The company also carries Fitch B+ long-term issuer default rating,
BB+ senior secured debt and bank loan debt ratings, BB senior
unsecured debt rating and B senior subordinated debt rating.  The
outlook remains stable.


ALLEGHENY ENERGY: PJM Okays 765-kV Transmission Project with AEP
----------------------------------------------------------------
PJM Interconnection has approved American Electric Power's 765-
kilovolt joint transmission line proposal with Allegheny Energy
Inc.

The PJM board included the Potomac-Appalachian Transmission
Highline project in their five-year PJM Regional Transmission
Expansion Plan designed to maintain the reliability of the
transmission grid.  The PJM plan approves the building of 250
miles of 765-kV extra-high voltage trans- mission from AEP's Amos
substation near St. Albans, West Virginia, to Bedington
substation, northeast of Martinsburg, West Virginia.  Another 40
miles of transmission, consisting of twin-circuit 500-kV
transmission, will be constructed from Bedington to a new
substation to be built at Kemptown, located southeast of
Frederick, Maryland.

AEP and Allegheny announced plans April 18 to form a joint venture
to build PATH.  The total project is estimated to cost
approximately $1.8 billion.  AEP's estimated share of the costs
will be approximately $600 million.  The PJM RTEP calls for the
PATH line to be put in service by June 2012 to meet the
reliability needs of the region.

"PJM approval allows us to move forward with construction of a
significant portion of the I-765(TM) transmission superhighway
that is urgently needed to help relieve transmission congestion
and enhance reliability in PJM.  PJM's analysis shows that the
transmission system in this region will be overloaded as soon as
2012 unless upgrades are made.  This project will expand the
benefits of 765-kV extra-high voltage transmission in PJM to
enhance reliability and address issues preventing efficient flow
of electricity into this area," said Michael G. Morris, AEP
chairman, president and chief executive officer.

AEP and Allegheny expect to formalize their joint venture
agreement for PATH within the coming weeks and file for incentive
rate recovery from the Federal Energy Regulatory Commission.  AEP
and Allegheny also will begin work on a routing study and
environmental assessment for the project.  The companies will seek
regulatory approvals from the utility commissions in both West
Virginia and Maryland for the project following the completion of
the routing study.

AEP will have lead responsibility for engineering, designing and
managing the construction of the 765-kV elements of the project.
Allegheny will have similar responsibilities for the twin-
circuited 500-kV line.  Each company will provide services to the
joint venture for siting, acquiring rights-of-way, securing
regulatory approvals from the states the line crosses and
maintenance of the project.

The PATH project encompasses the first half of the AEP I-765(TM)
Interstate Project, a 550-mile, $3 billion 765-kV transmission
line proposed by AEP in January 2006.  The remaining portion of
AEP's proposed I-765(TM) Interstate Project from Kemptown Station
into New Jersey remains under study by PJM and is not part of the
joint venture.

                   About American Electric Power

Based in Columbus, Ohio, American Electric Power (NYSE: AEP) is
one of the largest electric utilities in the United States,
delivering electricity to more than 5 million customers in 11
states.  AEP ranks among the nation's largest generators of
electricity, owning more than 38,000 megawatts of generating
capacity in the U.S.  AEP also owns the nation's largest
electricity transmission system, a nearly 39,000-mile network that
includes more 765 kilovolt extra-high voltage transmission lines
than all other U.S. transmission systems combined.  AEP's
transmission system directly or indirectly serves about 10 percent
of the electricity demand in the Eastern Interconnection, the
interconnected transmission system that covers 38 eastern and
central U.S. states and eastern Canada, and approximately 11
percent of the electricity demand in ERCOT, the transmission
system that covers much of Texas.

                      About Allegheny Energy

Based in Greensburg, Pennsylvania, Allegheny Energy, Inc.,
(NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor-
owned utility consisting of two major businesses.  Allegheny
Energy Supply owns and operates electric generating facilities,
and Allegheny Power delivers low-cost, reliable electric service
to customers in Pennsylvania, West Virginia, Maryland and
Virginia.

                          *     *     *

As reported in the Troubled Company Reporter on May 8, 2007,
Standard & Poor's Ratings Services raised its corporate credit
rating on diversified energy company Allegheny Energy Inc., its
utility subsidiaries, Monongahela Power Co., West Penn Power Co.,
and Potomac Edison Co., and its unregulated generation company,
Allegheny Energy Supply Co. LLC, to 'BBB-' from 'BB+'.
     
The outlook is stable.  The rating action affects nearly
$3.3 billion of debt, excluding securitized debt.  The upgrade
reflects the company's successful operations and maintenance cost
reductions and significant credit metric improvement.


ALLIED DEFENSE: Inks Pact with Noteholders to Settle Default Row
----------------------------------------------------------------
The Allied Defense Group Inc. entered into definitive agreements
with all investors of the company's $30 million convertible notes
for recapitalization and resolution of all outstanding disputes of
default between the company and its debt holders.

Under the terms of the agreement, the convertible note investors
have agreed to amend certain terms of the existing notes, provide
up to $15 million in new funding, and release the company of all
alleged defaults and penalties under the convertible note
agreement.
    
The transaction is subject to various closing conditions,
including approval of the American Stock Exchange, and is expected
to close within five business days.
    
Under the terms of the agreement, the company will exchange the
existing $30 million convertible debt issue for new approximately
$27.1 million senior secured notes carrying an 8.95% coupon,
payable quarterly and convertible into shares of The Allied
Defense Group's common stock at a price of $9.35 per share, equal
to the closing bid price of the common stock on the day of
signing, and 1.288 million shares of common stock.
    
The company will also receive an incremental $15 million cash of
new funding, subject to similar interest and conversion provisions
as the approximately $27.1 million notes.
    
Of the $15 million in new funding, $5 million will be available
immediately upon closing.  The remaining $10 million will be
available once a large anticipated ammunition contract award is
received by the company's wholly-owned MECAR S.A. subsidiary.
Allied's expectations with respect to the order have not changed
and the company is currently working to establish a performance
bond guarantee, which is a final requirement before the client can
issue the contract award to MECAR.
    
"The company has reached a consensual resolution with its
convertible debt holders," Retired Major General John J. Marcello,
president and chief executive officer of Allied Defense, said.  
"This restructuring will recapitalize the company and eliminate
any uncertainties associated with the alleged defaults under the
original notes.  The management team and board of directors
believes that this restructuring is in the best interests of all
shareholders and one of several steps needed to refocus the
company on a path of maximizing shareholder value.  The company
continues to work closely with its advisors to improve operational
performance and evaluate all strategic options in an effort to
maximize shareholder value."
    
                        About Allied Defense

Headquartered in Vienna, Virginia, The Allied Defense Group Inc. -
- (AMEX: ADG) -- http://www.allieddefensegroup.com/-- is a  
diversified International defense and security firm which develops
and produces conventional medium caliber ammunition marketed to
defense departments worldwide; designs, produces and markets
sophisticated electronic and microwave security systems
principally for European and North American markets; manufactures
battlefield effects simulators and other training devices for the
military; and designs and produces state-of-the-art weather and
navigation software, data, and systems for commercial and military
customers.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 18, 2007,
BDO Seidman LLP, in Bethesda, Maryland, expressed substantial
doubt about The Allied Defense Group 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 losses from operations in 2006 and 2005.

The auditing firm also cited that the company has received default
notices from certain convertible debt holders in 2007.  The
auditing firm further disclosed that if the company fails to
register the underlying shares related to the company's
$30 million convertible debt facility by March 29, 2007, the debt
will be in default and the face value of the notes along with
redemption premiums and all accrued interest will become due.


AMERICAN CAMPUS: Moody's Affirm Ba2 Rating with Stable Outlook
--------------------------------------------------------------
Moody's Investors Service affirmed the underlying rating of Ba2 on
American Campus Properties University College Apartments, Phases
IV-V, on Prairie View A&M campus.  The rating outlook is changed
to stable from negative.

The bonds are also rated Aaa based on a municipal bond insurance
policy provided by MBIA.  The affirmation is based upon below
average but improved occupancy and debt service coverage that is
consistent with the Ba2 rating level.  The stable outlook is based
upon a stabilization of freshman enrollment at the University.

                        Legal Security

The bonds are limited obligations of American Campus Properties
Student Housing Financing LTD, secured by trust estate assets.

                       Credit Strengths

The University's stated commitment to ensure the housing for
students and the University's 50% share of the net revenues of the
project giving it a stake in the project's financial success.

                       Credit Challenges

-- Occupancy and debt service coverage that are below levels
projected at underwriting.

-- Freshman enrollment at the University declined a substantial
25.9% in 2005/06, but increased 3.3% 2006/007.

-- An absence of any long-term legal commitment to bondholders
from the University, the University System, or the State of Texas.

                       Recent Developments

Enrollment at the University declined substantially after academic
standards were implemented for the first time in 2005/06.  The
2005/06 freshman class was 25.9% smaller than the freshman class
in 2004/05.  Freshman enrollment stabilized in 2006/07 when the
entering class was 3.3% larger than the 2005/06 class.

Audited financial statements for fiscal 2006 produce relatively
thin debt service coverage of 1.09x.  The weakening debt service
was a direct result of low occupancy which was 80.5% in spring
2006.  Interim financial statements through March 2007 indicate
debt service coverage is likely to improve.  The forecasted
improvement is due to increased occupancy (89.4% fall 2006; 87.8%
spring 2007) and a 3.5% increase in rents for the academic year.
Moody's has incorporated the relatively thin debt service coverage
and less than satisfactory occupancy into the Ba2 rating
assignment.

What could change the rating - UP

Sustained improvements in occupancy and debt service coverage.

What could change the rating - DOWN

Continued declines in occupancy and debt service coverage.  The
University rescinding its stated commitment to ensuring the
financial success of the project.

The outlook on the bonds is stable based upon the stabilization of
freshmen enrollment.


AMERICAN CAMSHAFT: Wants to Sell Assets to Hilco for $5.5 Million
-----------------------------------------------------------------
American Camshaft Specialties Inc. and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Eastern District of Michigan
to grant accelerated approval of a sale of the Debtors' machinery
and equipment for $5.5 million to Hilco Industrial LLC, Bill
Rochelle of Bloomberg News reports.

The Court is set to consider the request on June 29, 2007, the
report said.

Last month, the Court extended the Debtors' exclusive period to
file a combined plan and disclosure statement until Aug. 7, 2007.

In their request, published in the Troubled Company Reporter on
May 14, 2007, the Debtors told the Court that they have
encountered a variety of logistical and practical issues which
have made it impracticable for them to have the ability to propose
and file a plan, including:

   a) the attempt of the Debtors' senior management to satisfy all
      filing requirements for its Chapter 11 cases; and

   b) the search for a buyer of substantially all of the Debtors'
      assets either as a going concern or as an orderly
      liquidation.

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

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


AQUILA INC: Moody's Lifts Corporate Family Rating to Ba2 from B1
----------------------------------------------------------------
Moody's Investors Service upgraded Aquila Inc.'s corporate family
rating to Ba2 from B1 and its probability-of-default rating to Ba3
from B2.  At the same time Moody's upgraded Aquila's senior
unsecured rating to Ba3 from B2.

Moody's rating action is reflective of the improvement in Aquila's
credit profile following several events including the recent
outcome of its rate case in Missouri, related authorization to
implement a fuel adjustment clause in its Missouri electric
service area, and, importantly, lower leverage following the June
15, 2007 repayment of approximately $344 million of long-term
debt.  Moody's note that the rating action is based on the
standalone credit profile of Aquila and that Aquila's ratings will
remain on review for further possible upgrade based on its pending
merger with Great Plains Energy Incorporated.  That transaction,
announced in February 2007, has been approved by Aquila's Board of
Directors, but is subject to shareholder and regulatory approval.  
Aquila and Great Plains (Baa2 senior unsecured) have announced
that they expect the merger to be completed during the first
quarter of 2008.

The corporate family rating upgrade to Ba2 acknowledges the
continued progress Aquila is making to improve its credit profile.
Utilizing existing cash on deposit and proceeds from the recent
sale of its Kansas electric business to reduce leverage, Aquila's
balance sheet debt has been reduced from $1.4 billion at year-end
2006 to approximately $1.0 billion.  This action follows
significant debt reduction achieved in 2006.  With the lower debt
burden and incremental cash flows expected from its recently
allowed rate increase in Missouri (approximately $59 million
annually), beginning in the second half of 2007, Moody's expects
that Aquila should exhibit credit metrics more appropriate for the
Ba rating category over the next twelve to eighteen months,
including a funds from operations to adjusted debt metric at or
near 10%.  Moody's note as well that the Missouri Public Service
Commission's approval to implement a fuel adjustment clause for up
to 95% of energy costs not covered in existing rate authorization
could provide some added protection against volatility in fuel
costs in 2008.  The corporate family rating also reflects the
longer-term challenges that will need to be addressed before
further upgrades would likely be considered including careful
management of the sizeable capital program through 2010 and
further improvement in credit metrics considering the additional
debt to be incurred to finance the capital expenditures.

Ratings upgraded include:

-- Corporate family rating: to Ba2 from B1
-- Probability of default rating to Ba3 from B2

-- Senior secured delayed draw term loan: to Baa2 (LGD-1, 3%)
    from B1 (LGD-1, 2%)

-- Senior unsecured: to Ba3 (LGD-3, 46%) from B2 (LGD-3, 43%)
-- Subordinate: to B2 (LGD-5, 88%) from Caa1 (LGD-5, 88%)

At this time Moody's will also withdraw the B2 rating assigned to
Aquila's $2.0 million of convertible subordinated debentures as
they are now substantially repaid.

Headquartered in Kansas City, Missouri, Aquila, Inc, is an
integrated electric and gas utility operating in Missouri, Kansas,
Colorado, Nebraska and Iowa.  Aquila reported revenues from
continuing operations of $1.4 billion for the LTM period ended
March 31, 2007.


AVISTA CORP: Moody's Places All Ratings Under Review
----------------------------------------------------
Moody's Investors Service placed all of the ratings of Avista
Corp. (Ba1 senior unsecured) under review for possible upgrade.
The rating action reflects the faster than anticipated progress
toward the sale of its unregulated Avista Energy, Inc. subsidiary
and Moody's expectation that the sale proceeds will initially be
used to reduce debt.

In April, Avista Energy signed a definitive agreement to sell,
subject to requisite regulatory approvals and other pre-closing
conditions, substantially all of its contracts and ongoing
operations to Coral Energy Holding, L.P. and certain of its
subsidiaries (collectively Coral Energy), a subsidiary of Shell.
With virtually all required regulatory approvals in hand and
substantially all closing conditions met, we expect that Avista
can close the sale of Avista Energy by June 30, 2007.

As structured, the transaction calls for the sale of Avista
Energy's trading portfolio at net book value, subject to various
adjustments at closing.  At the same time, Avista Corp. is
expected to liquidate assets not subject to the sale or transfer
to Coral Energy.  These assets, which are largely comprised of
receivables and restricted cash and deposits with counterparties,
could generate proceeds near $175 million.

If successful, the sale of Avista Energy contracts and operations
would reduce the earnings volatility associated with the energy
resource management and trading operations, lower Avista Corp.'s
overall business risk profile, and leave it largely focused on the
regulated electric and natural gas utility business operated
through the Avista Utilities division.  The lone remaining non-
regulated business activity of any significance would then be the
facility and information and cost management services business
conducted by Advantage IQ (formerly known as Avista Advantage).

In addition to taking into account the likely significant
improvement in Avista's overall business risk profile, the review
will also consider our view of Avista's ability to cope with the
challenges of a somewhat higher capital spending program over the
next couple of years.  The capital program, which primarily
relates to the Avista Utilities division, could constrain Avista's
ability to further strengthen its financial metrics if the
Washington and Idaho state regulators do not provide timely and
adequate recovery of the capital investments.  This is especially
so when considering the lost cash flow contributions formerly
derived from Avista Energy.  Against this backdrop, the review
will also entail increased weighting to our assessment of likely
future outcomes in regulatory proceedings, especially those in
Washington, which is Avista's largest jurisdiction by far.

Avista ratings under review for possible upgrade include:

-- senior secured debt, Baa3
-- senior unsecured debt and Issuer Rating, Ba1
-- preferred stock, Ba3
-- senior secured shelf, (P)Baa3
-- senior unsecured shelf, (P)Ba1
-- preferred stock shelf, (P)Ba3
-- AVA Trust III, trust preferred securities, Ba2
-- Avista Corp Capital II, trust preferred securities, Ba2

Avista Corp. is an energy company involved in the production,
transmission and distribution of energy as well as other energy-
related businesses.  It is headquartered in Spokane, Washington.


BCE INC: Telus Merger to Pass Through Critical Review
-----------------------------------------------------
Canadian Prime Minister Stephen Harper said that regulators will
be critical in reviewing the issue on the possible merger of BCE
Inc. and Telus Corp., a merger that will likely create a company
that is 59% of the wireless industry, Theophilos Argitis and
Alexandre Deslongchamps of Bloomberg News reports.

Mr. Harper however said that he would not meddle in any decision
of the competition bureau.

"The government is going to be very loathe to substitute political
judgment on a matter that we think should be settled at arm's
length from the government," Mr. Harper told reporters in Ottawa.  
"There are regulatory processes under the law. The government will
respect those."

Several vital matters will be probed, especially on aspects of
competition and foreign ownership.  According to Bloomberg News,
Canadian law states that no foreign company should own more than
46.7% of a domestic telephone company or should establish a
network.

As reported in yesterday's Troubled Company Reporter, the
Strategic Oversight Committee of the Board of Directors of BCE
Inc. disclosed that TELUS Corporation has entered into discussions
to explore the possibility of a business combination with BCE.  

                         About TELUS

TELUS Corp. (TSX: T, T.A; NYSE: TU) is a telecommunications
company in Canada, which provides a range of communications
products and services including data, Internet protocol, voice,
entertainment and video.

                       About BCE Inc.

Headquartered in Montreal, Canada, Bell Canada International Inc.
(TSX, NYSE: BCE) (NEX:BI.H) -- http://www.bci.ca/-- provides a  
suite of communication services to residential and business
customers in Canada.  Under the Bell brand, the company's services
include local, long distance and wireless phone services, high-
speed and wireless Internet access, IP-broadband services,
information and communications technology services and direct-to-
home satellite and VDSL television services.  Other BCE businesses
include Canada's premier media company, Bell Globemedia, and
Telesat Canada, a pioneer and world leader in satellite operations
and systems management.

The company is operating under a Plan of Arrangement approved by
the Ontario Superior Court of Justice, pursuant to which BCI
intends to monetize its assets in an orderly fashion and resolve
outstanding claims against it in an expeditious manner with the
ultimate objective of distributing the net proceeds to its
shareholders and dissolving the company.


BEAR STEARNS: Moody's Affirm Low-B Ratings on Six Certificates
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 22 classes of
Bear Stearns Commercial Mortgage Securities Trust 2005, Series
2005-PWR8 Commercial Mortgage Pass-Through Certificates as:

-- Class A-1, $72,576,960, affirmed at Aaa
-- Class A-2, $46,500,000, affirmed at Aaa
-- Class A-3, $63,000,000, affirmed at Aaa
-- Class A-AB, $128,000,000, affirmed at Aaa
-- Class A-4, $1,020,394,000, affirmed at Aaa
-- Class A-4FL, $50,000,000, affirmed at Aaa
-- Class A-J, $150,046,000, affirmed at Aaa
-- Class X-1, Notional, affirmed at Aaa
-- Class X-2, Notional, affirmed at Aaa
-- Class B, $37,511,000, affirmed at Aa2
-- Class C, $17,653,000, affirmed at Aa3
-- Class D, $26,478,000, affirmed at A2
-- Class E, $17,653,000, affirmed at A3
-- Class F, $19,859,000, affirmed at Baa1
-- Class G, $15,446,000, affirmed at Baa2
-- Class H, $17,652,000, affirmed at Baa3
-- Class J, $8,826,000, affirmed at Ba1
-- Class K, $4,413,000, affirmed at Ba2
-- Class L, $6,620,000, affirmed at Ba3
-- Class M, $6,620,000, affirmed at B1
-- Class N, $2,206,000, affirmed at B2
-- Class P, $4,413,000, affirmed at B3

As of the June 11, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 1.8%
to $1.7 billion from $1.8 billion at securitization.  The
Certificates are collateralized by 193 loans, ranging in size from
less than 1.0% to 10.4% of the pool, with the top 10 loans
representing 29.9% of the pool.  The pool includes nine investment
grade shadow rated loans, representing 18.4% of the pool.

The pool has not realized any losses since securitization and
currently there are no loans in special servicing.  Eight loans,
representing 4.3% of the pool, are on the master servicer's
watchlist.

Moody's was provided with year-end 2005 and full- or partial-year
2006 operating results for 95.7% and 75.1%, respectively, of the
pool.  Moody's weighted average loan to value ratio for the
conduit component is 91.9%, compared to 93.5% at securitization,
resulting in an affirmation of all classes.

The largest shadow rated loan is the One MetroTech Center Loan
($180.0 million -- 10.4%), which is secured by a 933,000 square
foot Class A office building located in Brooklyn, New York.  The
property was 96.8% occupied as of January 2007, compared to 93.7%
at securitization.  Moody's current shadow rating is Baa2, the
same as at securitization.

The second largest shadow rated loan is the Lock Up Storage
Centers Loan ($53.7 million -- 3.1%), which is secured by 14 self
storage facilities located in Illinois (10 properties), Florida
(2) and New Jersey (2).  Moody's current shadow rating is A2, the
same as at securitization.

The remaining seven shadow rated loans comprise 4.9% of the pool.
The current shadow ratings, which are the same as at
securitization, are as follows: JL Holdings -- Burger King
Portfolio A-Note ($14.5 million; 0.8%) -- A3; The Landings at
Cypress Meadows ($14.4 million; 0.8%) - Baa3; Canyon Park Place
($14.3 million; 0.8%) -- Baa3; Glendale Plaza ($12.1 million;
0.7%) -- Baa3; Woodhaven Terrace Apartments ($11.7 million; 0.7%)
-- Baa3; The Legends at Champions Gate ($10.0 million; 0.6%) -- A3
and Plaza at Riverlakes ($9.4 million; 0.5%) -- Baa3.

The top three conduit loans represent 7.8% of the pool. The
largest conduit loan is the Park Place Loan ($50.9 million --
2.9%), which is secured by a four building office complex totaling
352,000 square feet.  The complex, which is located in Florham
Park, New Jersey, was 93.7% occupied as of January 2007, the same
as at securitization.  Moody's LTV is 79.5%, the same as at
securitization.

The second largest conduit loan is the Ballston Office Center Loan
($46.0 million -- 2.7%), which is secured by a 178,000 square foot
Class A office building located in Arlington, Virginia.  The
property is 100.0% occupied, the same as at securitization.
Moody's LTV is 109.8%, the same as at securitization.

The third largest conduit loan is the Marriott Troy Loan ($38.6
million -- 2.2%), which is secured by a 350- room full service
hotel located in Troy, Michigan.  Moody's LTV is 84.4%,
essentially the same as at securitization.


BILL PHILLPS: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Bill Phillps Construction Company, L.L.C.
        39641 Alabama Highway 69
        Moundville, AL, AL 35474

Bankruptcy Case No.: 07-71061

Chapter 11 Petition Date: June 22, 2007

Court: Northern District of Alabama (Tuscaloosa)

Debtor's Counsel: Harry P. Long, Esq.
                  P.O. Box 1468
                  Anniston, AL 36202
                  Tel: (256) 237-3266

Estimated Assets: $100,000 to $1 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's 15 Largest Unsecured Creditors:

Entity                      Nature of Claim       Claim Amount
------                      ---------------       ------------
West Alabama Bank & Trust                             $260,000
7680 Highway 69 South
Tuscaloosa, AL 35401

R.B.C. Centura                                        $209,000
2330 University Boulevard
Tuscaloosa, AL 35401

Moore's Asphalt & Paving                              $145,000
2731 Allison Bonnett
Parkway
Bessemer, AL 35023

R.S.C. Equipment Rental                                $57,000

Town & Country Leasing                                 $55,000

Southern States Equipment                              $50,000
Sales, Inc.

Northwest Supply                                       $48,000

Powell Oil Company                                     $26,000

Internal Revenue Service                               $25,000

Bama Concrete Products, Inc.                           $24,000

Hanson Pipe                                            $23,500

Tuscaloosa Engineering                                 $21,000

Isbell Insulation & Vinyl                              $13,000
Siding

Johnston Floor Covering                                $12,000

Autery Land Surveying                                   $9,000


BIOMET INC: Moody's Confirms Corporate Family Rating at P(B2)
-------------------------------------------------------------
Moody's Investors Service confirmed the provisional ratings of
Biomet Inc. ((P)B2 Corporate Family Rating.)

The confirmation is based on Moody's expectation that the
consortium of equity sponsors will finance the incremental
purchase price ($500 million) with common stock.  The rating
action assumes that the company will not use incremental debt -
including draws on its revolving credit facility - to fund a
dividend in conjunction with this incremental purchase price.  The
rating outlook is negative. This concludes Moody's rating review
that was initiated on June 7, 2007.

The ratings are provisional, subject to the closing of the
transaction and receipt and review of final documentation.  
Moody's anticipates that the closing will occur prior to the end
of August 2007.

Ratings confirmed with a negative outlook:

Biomet, Inc.

-- Corporate Family Rating at (P)B2
-- $350 Million Asset backed revolver at (P)Ba2, (LGD2, 14%)
-- $400 Million Secured cash flow revolver at (P)B1, (LGD3, 36%)
-- $3.6 Billion Secured term loan at (P)B1, (LGD3, 36%)
-- $775 Million Unsecured senior notes at (P)B3, (LGD4, 63%)
-- $775 Million Unsecured PIK option notes at (P)B3, (LGD4, 63%)

-- $1.015 Billion Unsecured subordinated notes at (P)Caa1,
    (LGD6, 93%)

-- PDR at B2
-- SGL-2

Moody's believes that Biomet's very high leverage and weak
financial strength and financial policy ratios - some of which are
positioned at the low-end of the "Caa" category - are a key credit
risk.  In particular, interest coverage is negligible and the
ability to repay debt with cash flow is extremely limited.
Further, the absence of financial covenants in the proposed bank
agreements provides less protection to creditors.  However, in our
opinion, the presence of external liquidity sources as well as
equity sponsors that have committed significant capital (of about
$5.4 billion) provide greater assurance that a default is unlikely
within the next twelve months.  As a result, Moody's believes that
the (P)B2 Corporate Family Rating is appropriate even though
leverage (estimated at about 8.5 times pro forma Debt/ EBITDA
based on twelve months ended February 28, 2007 financial
statements) and coverage measures (estimated at 1.2 times pro
forma EBITA/interest) are more consistent with lower ratings.

The methodology implied rating under Moody's Global Methodology
for the Medical Products & Device Industry based on pro-forma
financial statements for the twelve months ended February 28, 2007
is a "B1".  However, Moody's believes that this degree of leverage
is not fully captured under the methodology.

The company recently filed financial statements including a
restated Form 10-K for the period ended May 31, 2006 as well as
Form 10-Qs for the quarters ended August 31, 2006, November 30,
2006 and February 28, 2007.  As anticipated, the auditors cited a
material weakness related to the backdating of stock options.
However, Moody's believes that these restated financial statements
are not materially different from previous financial statements.  
The rating outlook remains negative, however, reflecting Biomet's
weak position in the B2 category due primarily to Moody's concerns
regarding extremely high debt levels.  Moody's believes that the
company will need to see operating improvements as well as grow at
industry rates in order to meaningfully de-leverage over the next
12-24 months.

Biomet's SGL-2 rating reflects our expectation that despite weak
free cash flow, the company's liquidity should be solid, supported
by external liquidity.  Following the transaction, Biomet is
expected to have about $750 million of capacity under two secured
bank revolvers.

Biomet, Inc, based in Warsaw, Indiana, is one of the leading
manufacturers of orthopedic implants, specializing in
reconstructive devices.


CALPINE CORP: Lloyd Will Joins as Structuring & Analytics VP
------------------------------------------------------------
Calpine Corporation disclosed that Lloyd Will has joined Calpine
as the Senior Vice President of Structuring and Analytics.  In
this role, Mr. Will oversees Calpine's fundamental and technical
market analysis, commercial execution analytics, contract
structuring and valuation, transmission support and analytics
and gross margin forecasting and valuation.

"Calpine continues to enhance our management team and is pleased
to have attracted another talented individual with a proven track
record of leading large organizations," said Thomas N. May,
Calpine's Executive Vice President, Commercial Operations.  
"Lloyd's experience in project management and plant and commercial
operations will help drive a more integrated operation for the
company's commercial operations and its fleet of fuel-efficient
natural gas and geothermal plants in key power markets," he
continued.

Prior to joining Calpine, Lloyd filled various leadership
roles at NRG, Areva, UBS Bank, Enron and Manitoba Hydro.  Mr.
Will has more than 30 years of experience in energy including
roles in control area and system operations, power system
maintenance, energy trading, structuring and fundamental
analysis.  Mr. Will maintains a NERC security coordinator
certification and is also a certified Six Sigma Black Belt
project manager with extensive experience leading projects and
enabling teams in the merchant, financial and utility
environments.

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

The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts.  Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.  (Calpine Bankruptcy News, Issue No. 52 Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or    
215/945-7000).


CALPINE CORP: Discloses Liquidation Analysis Under Joint Plan
-------------------------------------------------------------
Calpine Corporation's executive vice president, general counsel
and secretary, Gregory L. Doody, relates that the Debtors have
prepared a liquidation analysis to create a reasonable good-faith
estimate of the proceeds that might be generated if their estates
were liquidated under Chapter 7 of the Bankruptcy Code.

If no Chapter 11 Plan is confirmed, the Debtors' Chapter 11 cases
would be converted to cases Chapter 7.  In this event, a trustee
will be appointed to liquidate the Debtors' assets.  The Debtors'
Liquidation Analysis assumes that conversion to Chapter 7 would
be on Dec. 31, 2007.

The Liquidation Analysis assumes a liquidation of all of the
Debtors' assets, including the Debtors' interests in all non-
debtor Affiliates after third-party claims against those
Affiliates are satisfied.

The Debtors have two major categories of assets:

  (1) About 72 power generating facilities primarily owned by
      Debtors Calpine Power Company and Calpine International
      Holdings, Inc.; and

  (2) A portfolio of trading assets, primarily consisting of
      energy and commodity trading contracts held by Debtor
      Calpine Energy Services, L.P.

The remainder of Calpine Corporation's "first tier" subsidiaries
are shell companies that hold no material saleable assets, and
thus, no value is attributed to them in the Liquidation Analysis,
Mr. Doody says.

The Debtors' net operating losses are assumed to offset federal
taxes expected to be incurred by the Trustee in a liquidation.  
Any NOLs remaining are ascribed no value in the Liquidation
Analysis because the remaining NOLs do not retain value in a
Chapter 7 liquidation.  The Liquidation Analysis does not
attribute any value to the Debtors' intangible assets like the
Calpine trade name.

Finally, other than certain Cash the U.S. Debtors will receive
from the Canadian Debtors' arising out of their reorganization
proceedings under the Canadian Companies' Creditors Arrangement
Act, the Liquidation Analysis does not attribute any value to the
Canadian Debtors' assets.

Mr. Doody asserts that the value of distributions, if any, in a
Chapter 7 liquidation to holders of allowed unsecured claims and
interests would be less than the value of distributions to the
holders under the proposed Plan of Reorganization.

A full-text copy of Calpine's liquidation analysis is available
at no charge at: http://ResearchArchives.com/t/s?2129

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

The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts.  Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.  (Calpine Bankruptcy News, Issue No. 52 Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or    
215/945-7000).


CANWEST MEDIAWORKS: Moody's Lowers Corporate Family Rating to B1
----------------------------------------------------------------
Moody's Investors Service downgraded CanWest MediaWorks Inc.'s
corporate family rating to B1 from Ba3, downgraded its senior
subordinated rating to B3 from B2 and affirmed its SGL-2 liquidity
rating.  At the same time, Moody's assigned Ba1 senior secured and
B2 senior subordinated ratings to CanWest MediaWorks Limited
Partnership's planned debt issues.  The long term ratings reflect
a B1 probability of default and loss-given-default assessments as
noted below.  This action concludes the rating review for CanWest
which commenced in January 2007.  The outlook is stable.

The downgrade to CanWest's corporate family rating primarily
reflects the meaningful increase in consolidated adjusted pro-
forma leverage towards 7x that will occur from CanWest's debt-
financed privatization of LP, and its 29% equity investment in the
Alliance Atlantis specialty channels.  Moody's views the use of
debt proceeds to facilitate these investments as a departure from
the company's leverage reduction initiatives that it had
undertaken through the past couple of years, which had supported
the former Ba3 corporate family rating, despite weakening key
credit metrics arising from the significant downturn of its
Canadian and Australian broadcasting operations.  

While Moody's expects that a continuation of the very recent
improving trends at these two operations, together with relative
stability in the newspaper operations may provide CanWest with the
ability to generate modest free cash flow and reduce leverage
towards 5.5x by the end of fiscal 2008, key metrics will remain
inconsistent with a Ba3 rating through much of the ratings
horizon.  Additionally, CanWest's recently announced plans to take
control of Network TEN and its concurrent indications that it may
seek to increase leverage at that entity may delay leverage
reduction from the above estimates, in Moody's opinion.  As well,
Moody's believes the potential exists that CanWest may ultimately
seek a controlling interest in the Alliance Atlantis specialty
channels, which may pressure leverage over the longer term.

The Ba1 rating assignment to LP's senior secured bank facility and
B2 rating to its senior subordinated notes reflects the priority
ranking of these instruments in Moody's loss-given-default
methodology under the corporate family rating of CanWest.

Ratings Lowered:

CanWest MediaWorks Inc:

-- corporate family rating to B1 from Ba3
-- probability of default rating to B1 from Ba3

-- $760 million senior subordinated notes, due 2012 to B3,
    LGD 5, 89% from B2, LGD 5, 87%

Ratings Assigned:

CanWest MediaWorks Limited Partnership:

-- senior secured rating at Ba1, LGD 1, 7%
-- $250 million senior secured revolver, due 2012
-- $250 million senior secured term loan A, due 2012
-- $450 million senior secured term loan B, due 2014

-- $700 million senior subordinated notes, due 2017 at B2,
    LGD 5, 73%

CanWest MediaWorks Inc. is a communications company based in
Winnipeg, Manitoba Canada, which owns, operates and/or holds
substantial interests in TV, radio, publishing and out-of home
advertising operations in Canada, Australia, New Zealand, the
United Kingdom, the United States as well as other international
locations.


CAPITAL RESERVE: Posts $188,745 Net Loss in Year Ended December 31
------------------------------------------------------------------
Capital Reserve Canada Limited reported a net loss of $188,745 on
revenue of $1,714,925 for the year ended Dec. 31, 2006, compared
with a net loss of $258,114 on revenue of $355,017 for the four
(4) month period ended Dec. 31, 2005.  The company reported a net
loss of $643,469 on revenue of $933,441 for the year ended Aug.
31, 2005.

Prior to the fiscal year ended Aug. 31, 2005, KCP Innovative
Services Inc., the company's wholly owned operating subsidiary,
changed its fiscal year end from Aug. 31 to Dec. 31.  The
financial information reported herein are for the transitional
four month period ended Dec. 31, 2005, and for the fiscal years
ended Aug. 31, 2005, and Dec. 31, 2006.

Revenues for the fiscal year ended Dec. 31, 2006, were $1,714,925
and showed a substantial increase over revenues from the previous
fiscal year ended Aug. 31, 2005, of $933,441.  The increase in
revenues for 2006 can be predominantly attributed to the
availability of additional equipment for operations in KCP and
increased marketing efforts of management.

For the year ended Dec. 31, 2006, the company incurred operating
losses of $188,745 as compared to operating losses of $862,266 for
the fiscal year ended Aug. 31, 2005.

Cost of sales for the year ended Dec. 31, 2006, increased to
$846,090 from cost of sales of $605,370 for the fiscal year ended
Aug. 31, 2005.  This was mainly due to a corresponding increase in
sales and from economies of scale of a larger business.  Expenses
for Dec. 31, 2006, fell to $1,057,580 from Aug. 31, 2005, expenses
of $1,190,337.

As at the four month period ended Dec. 31, 2005, the company
reported revenues of $355,017.  Costs of sales were $184,165.
Expenses for the four month period were $570,682 and were
comprised of $54,358 for salaries and benefits, $279,027 for
general and administrative, $229,154 for amortization and interest
costs of $8,143.  There are no comparable periods for 2004.

At Dec. 31, 2006, the company's consolidated balance sheet showed
$7,128,645 in total assets, $1,310,377 in total liabilities, and
$5,818,271 in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?2121

                  Acquisition of KCP Innovative

Pursuant to a share exchange agreement dated Aug. 12, 2005, the
company indirectly, through its wholly owned subsidiary, Capital
Reserve Projects Ltd., acquired a 78.2% interest in KCP Innovative
Services Inc.  Because the shareholders of KCP became the
company's controlling shareholders, this transaction was accounted
for as a reverse merger whereby KCP is deemed to be the parent
company and Capital Reserve Projects Ltd. is deemed to be the
subsidiary company for accounting purposes.  The financial
statements of the combined entity are issued under the name of the
company, but are considered a continuation of the financial
statements of KCP.

                       Going Concern Doubt

Child, Van Wagoner & Bradshaw CPAs, in Salt Lake City, expressed
substantial doubt about Capital Reserve Canada Limited's ability
to continue as a going concern after auditing the company's
consolidated financial statements as of Dec. 31, 2006, and 2005,
and Aug. 31, 2005.  The auditing firm reported that the company
currently has cash flow constraints and an accumulated deficit of
$2,547,871 at Dec. 31, 2006.  In addition, because of the
operating losses of the past four periods, the company's
continuance as a going concern is dependent upon its ability to
obtain adequate financing and to reach profitable levels of
operation.

                      About Capital Reserve

Based in Edmonton, Alberta, Capital Reserve Canada Ltd. (OTC BB:
CRSVF.OB) -- http://capitalreservecanada.com/-- is an oil and gas  
services company.  Through its wholly owned subsidiary, KCP
Innovative Services Inc., the company provides testing and
development services, measurement of existing wells' productivity,
well abandonment services, and through its proprietary hardware
and software technologies, determination of the profitability of
coal bed methane deposits, which may be developed and sold as
natural gas.  The company has a second wholly owned subsidiary,
Two Hills Environmental, to assist with problem waste from oil &
gas companies, and provide underground storage.


CATHOLIC CHURCH: Victims Join Panel vs. San Diego's Bar Date Plea
-----------------------------------------------------------------
Certain state court plaintiffs, who are holding sexual abuse
claims against The Roman Catholic Bishop of San Diego, tells the
U.S. Bankruptcy Court for the Southern District of California
that the establishment of a bar date with respect to childhood
sexual abuse, or CSA, for whom the California limitations period
has not expired, is entirely inappropriate and should be denied.

                         Bar Date Plea

As reported in the Troubled Company Reporter on May 22, 2007, the
Diocese asked the Court to:

    (a) fix the deadline to file proofs of claim as 150 days after
        the Court approves the request;

    (b) set the Bar Date for claims resulting from the rejection
        of executory contracts or unexpired leases, as the earlier
        of 30 days from the rejection date, or 30 days from the
        confirmation of a plan of reorganization;

    (c) approve the proposed forms for the Tort Claim Form, Other
        Claims Form, Notice Forms and the Publication Notice;

    (d) approve the Publication program and schedule;

    (e) rule that individuals asserting Tort Claims by filing
        Tort Claim Forms will not be deemed to have waived their
        right to a jury trial; and

    (f) declare that Tort Claims Forms filed with Court will be
        confidential and under seal, unless the Tort Claimant
        specifically elects to make his or her identity public.

                     Committee's Objection

As further reported in the Troubled Company Reporter on May 22,
2007, the Official Committee of Unsecured Creditors asked the
Court to deny the Debtor's request because it believes that the
Diocese:

    (i) has sufficient assets to pay timely and in full all
        survivors of childhood sexual abuse, and

   (ii) is attempting to use a present bar date notice to limit
        the rights of future tort claimants, which raises
        avoidable constitutional and fairness issues.

James I. Stang, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub LLP, in Los Angeles, California, said that if the Court
determines to set a bar date, the Creditors Committee asks for (i)
a longer Bar Date period, (ii) changes in the forms and manner of
notice, and (iii) a "clear" order assuring that the California
limitations period is not truncated or shortened.

                              Joinder

Christine E. Baur, Esq., at Baker & McKenzie LLP, in San Diego,
California, contends that as the Creditors Committee correctly
notes, the establishment of a Bar Date is not mandatory and the
decision of whether or not to set one must depend on the specific
facts and circumstances of each case.  The Diocese is seeking to
impose a bar date on future CSA claimants, thereby triggering
constitutional and fairness-related issues that can, and should be
avoided, Ms. Baur insists.

The CSA survivors, who are currently unable to either understand
their injury or come forward with respect to it, may be denied
their right to participate in San Diego's bankruptcy case before
having their claims discharged, Ms. Baur asserts.  She points out
that no future claims representative has been requested or
appointed for future CSA claims.

                     Diocese Talks Back

The Diocese contends that the joinder of the 49 Plaintiffs should
be struck as untimely because it was filed 28 days after the
deadline for filing objections to the request expired.  The
Diocese also notes, among others, that the Joinder's additional
grounds and authorities lack merit.  Accordingly, the Diocese
asks the Court to strike the Joinder.

                   About the San Diego Diocese

Roman Catholic Diocese of San Diego in California --
http://www.diocese-sdiego.org/-- employs approximately
3,000 people in various areas of work.  The Diocese filed for
Chapter 11 protection just before commencement of the first of
court proceedings for 140 sexual abuse lawsuits filed against the
Diocese.  Authorities of the San Diego Diocese said they were not
in favor of litigating their cases.

The San Diego Diocese filed for chapter 11 protection on Feb. 27,
2007 (Bankr. S.D. Calif. Case No. 07-00939).  Gerald P. Kennedy,
Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents
the Diocese.  In its schedules of assets and liabilities, the
Diocese listed total assets of $152,510,888 and total liabilities
of $72,754,092.

The Diocese's exclusive period to file a chapter 11 plan of
reorganization expires tomorrow, June 27, 2007.  On March 27,
2007, the Debtor filed its plan and disclosure statement.  
(Catholic Church Bankruptcy News, Issue No. 95; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


CATHOLIC CHURCH: Panel Objects to San Diego's Lease Extension Plea
------------------------------------------------------------------
The Official Committee of Unsecured Creditors asks the United
States Bankruptcy Court for the Southern District of California to
deny the extension request filed by The Roman Catholic Bishop of
San Diego because it did not contain any information regarding the
Diocese's liability under the four unexpired nonresidential real
property leases.

                  Lease Decision Extension

As reported in the Troubled Company Reporter on June 6, 2007, the
Debtor asked the Court to extend its lease decision period to
September 25, 2007.

Susan G. Boswell, Esq., at Quarles & Brady LLP, in Tucson,
Arizona, told the Court that since San Diego's Chapter 11 case has
been pending for three months, the Diocese has not had sufficient
time to evaluate and decide which Leases should be assumed or
rejected.

                   Committee's Contention

James I. Stang, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub LLP, in Los Angeles, California, points out that copies
of the Leases were not attached to the request,

Mr. Stang relates that in its monthly operating report for March
2007, the Diocese listed four payments to Frank J. Patonai, Jr.,
aggregating $6,616 for a certain Pomerado Road property.  The
Property was not listed on Schedule G of the Diocese's Second
Amended Schedule of Assets and Liabilities.  Mr. Stang contends
that the purpose of the Payments is not clear.  He adds that it
is not clear whether the Property should also be subject to the
request.

                   About the San Diego Diocese

Roman Catholic Diocese of San Diego in California --
http://www.diocese-sdiego.org/-- employs approximately
3,000 people in various areas of work.  The Diocese filed for
Chapter 11 protection just before commencement of the first of
court proceedings for 140 sexual abuse lawsuits filed against the
Diocese.  Authorities of the San Diego Diocese said they were not
in favor of litigating their cases.

The San Diego Diocese filed for chapter 11 protection on Feb. 27,
2007 (Bankr. S.D. Calif. Case No. 07-00939).  Gerald P. Kennedy,
Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents
the Diocese.  In its schedules of assets and liabilities, the
Diocese listed total assets of $152,510,888 and total liabilities
of $72,754,092.

The Diocese's exclusive period to file a chapter 11 plan of
reorganization expires tomorrow, June 27, 2007.  On March 27,
2007, the Debtor filed its plan and disclosure statement.  
(Catholic Church Bankruptcy News, Issue No. 95; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


CATHOLIC CHURCH: Davenport Can Sell Farm for $310,000
-----------------------------------------------------
The Diocese of Davenport obtained authority from the United States
Bankruptcy Court for the Southern District of Iowa to sell one of
its surplus properties, free and clear of interest, including
prepetition and postpetition claims, tax lien claims or any other
claims.

As reported in the Troubled Company Reporter on June 6, 2007,
Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport,
Iowa, related that following Davenport's employment of three real
estate agents, the Diocese entered into a real estate listing
agreement with Ruhl Commercial, Inc.  The Agent has also procured
a real estate agreement from a prospective buyer, which is
acceptable to the Diocese.

Mr. Davidson disclosed that the farm at 3718 Telegraph Road, in
Davenport, Iowa, will be sold to Charles Van Fossen for $310,000.   
Mr. Davidson informs the Court that the Diocese has determined
that the purchase agreement with Mr. Van Fossen, which was
negotiated at arm's-length and in good faith, represent the
highest and best offer for the Property.

The only known adverse interest in the Property is a judgment
lien held by Michl D. Uhde by virtue of a judgment entered
against the Diocese in September 2006, Mr. Davidson discloses.   
He adds that notice will be given pursuant to Rule 9014(b) of the
Federal Rules of Bankruptcy Procedure.

The Property is being sold AS-IS, WHERE-IS, with no
representations or warranties, except for what is stated in the
Purchase Agreement between the Diocese and the Purchaser.

The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006.  
Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the
Davenport Diocese in its restructuring efforts.  Hamid R.
Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang
Zhiel Young Jones & Weintraub LLP represent the Official Committee
of Unsecured Creditors.  In its schedules of assets and
liabilities, the Davenport Diocese reported $4,492,809 in assets
and $1,650,439 in liabilities.  

Davenport's exclusive period to file a plan will expire on
Aug. 15, 2007.  Its exclusive period to solicit acceptances of
its plan will expire on Oct. 14, 2007.  (Catholic Church
Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CITIGROUP MORTGAGE: Fitch Affirms B Ratings on Two Classes
----------------------------------------------------------
Fitch Ratings has taken rating actions on the following Citigroup
Mortgage Loan Trust transactions:

Series 2005-5

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

Series 2006-AR5

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

The mortgage loans consist of fixed- and adjustable- rate loans,
extended to Alt-A borrowers and are secured by first liens,
primarily on one- to four-family residential properties.  As of
the May 2007 distribution date, the transactions were seasoned 21
and 11 months respectively and the pool factors were 74.4% and
83.6% respectively.  The loans are master serviced by CitiMortgage
(rated 'RMS1' by Fitch).

The affirmations reflect a stable relationship between credit
enhancement and future loss expectations and affect approximately
$1.62 billion of outstanding certificates.  To date the 2006-AR5
transaction has not suffered any realized losses, and the 2005-5
transaction has suffered minimal losses.


COMMERCIAL MORTGAGE: Moody's Affirm Low-B Ratings on Five Certs.
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 25 classes of
COMM 2005-LP5, Commercial Mortgage Pass-Through Certificates,
Series 2005-LP5 as:

-- Class A-1, $1,861,274, affirmed at Aaa
-- Class A-1A, $243,376,627, affirmed at Aaa
-- Class A-2, $592,379,000, affirmed at Aaa
-- Class A-3, $71,321,000, affirmed at Aaa
-- Class A-4, $305,071,000, affirmed at Aaa
-- Class A-J, $117,014,000, affirmed at Aaa
-- Class A-SB, $86,687,000, affirmed at Aaa
-- Class X-C, Notional, affirmed at Aaa
-- Class X-P, Notional, affirmed at Aaa
-- Class B, $46,806,000 affirmed at Aa2
-- Class C, $14,892,000, affirmed at Aa3
-- Class D, $27,658,000, affirmed at A2
-- Class E, $21,275,000, affirmed at A3
-- Class F, $23,403,000, affirmed at Baa1
-- Class G, $14,893,000, affirmed at Baa2
-- Class H, $17,020,000, affirmed at Baa3
-- Class J, $12,765,000, affirmed at Ba1
-- Class K, $6,383,000, affirmed at Ba2
-- Class L, $4,255,000, affirmed at Ba3
-- Class M, $4,255,000, affirmed at B1
-- Class O, $4,255,000, affirmed at B3
-- Class GMB-1, $27,500,000, affirmed at Baa1
-- Class GMB-2, $28,000,000, affirmed at Baa2
-- Class GMB-3, $16,200,000, affirmed at Baa3
-- Class GMB-4, $14,300,000, affirmed at Baa3

As of the June 11, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 3.6%
to $1.7 billion from $1.8 billion at securitization.  The
Certificates are collateralized by 136 loans, ranging in size from
less than 1.0% to 15.8% of the pool, with the top 10 loans
representing 50.1% of the pool.  The pool includes four investment
grade shadow rated loans, representing 23.5% of the pool.

The pool has not realized any losses since securitization and
currently there are no loans in special servicing.  Ten loans,
representing 6.1% of the pool, are on the master servicer's
watchlist.

Moody's was provided with full-year 2005 and full- or partial-year
2006 operating results for 97.6% and 92.2%, respectively, of the
pool.  Moody's weighted average loan to value ratio for the
conduit component is 97.5%, compared to 97.8% at securitization,
resulting in an affirmation of all classes.

The largest shadow rated loan is the General Motors Building Loan
($260.0 million -- 15.8%), which represents a pari passu interest
in a $800.0 first mortgage loan secured by a 1.9 million square
foot Class A office building located in New York City.  An $86.0
million junior non pool first mortgage loan component is also
included in the trust and is the security for non pooled Classes
GMB-1, GMB-2, GMB-3 and GMB-4.  The property was 93.0% occupied as
of April 2007, compared to 96.0% at securitization.  Moody's
current shadow ratings of the pooled and non pooled loan
components are A3 and Baa3, respectively, the same as at
securitization.

The second largest shadow rated loan is the Lakeside Mall Loan
($93.6 million -- 5.7%), which represents a pari passu interest in
a $194.0 million loan secured by the borrower's interest in a 1.5
million square foot regional mall located in Sterling Heights,
Michigan.  The mall is anchored by Sears, two Macy's stores, J.C.
Penney and Lord & Taylor.  Moody's current shadow rating is Baa3,
the same as at securitization.

The other two shadow rated loans comprise 2.0% of the pool.  The
Woodfield Commons Loan ($17.5 million -- 1.1%) is secured by a
208,000 square foot retail center located in Schaumburg, Illinois.
Moody's current shadow rating is Baa3, the same as at
securitization.  The Chatham Ridge Shopping Center Loan ($15.0
million -- 0.9%) is secured by a 176,000 square foot retail center
located in Chicago, Illinois.  Moody's current shadow rating is
A3, the same as at securitization.

The top three conduit loans represent 15.2% of the pool.  The
largest conduit loan is the 63 Madison Avenue Loan ($105.0 million
-- 6.4%), which represents a pari passu interest in a $165.0
million loan secured by a 798,000 square foot office building
located in New York City.  The property is 100.0% occupied, the
same as at securitization.  Moody's LTV is 118.4%, the same as at
securitization.

The second largest conduit loan is the Bank of America Tower at
Las Olas City Centre Loan ($90.0 million -- 5.5%), which is
secured by a 409,000 square foot Class A office building located
in Fort Lauderdale, Florida.  The property was 92.0% occupied as
of year end 2006, compared to 80.0% at securitization.  Moody's
initial analysis assumed a stabilized occupancy level for this
property which has now been achieved.  Moody's LTV is 99.8%, the
same as at securitization.

The third largest conduit loan is the Continental Park Plaza Loan
($55.0 million -- 3.3%), which is secured by a 477,000 square foot
Class A office building located in El Segundo, California.  The
property's occupancy declined to 80.0% as of November 2006 from
87.8% at securitization due to the early termination of Union Oil
Company, which occupied 18.5% of the premises at securitization.
The borrower has re-leased a significant portion of this space and
has subdivided the remaining space for small space users.  Moody's
LTV is 84.9%, compared to 74.8% at securitization.


CREDIT SUISSE: Fitch Affirms Low-B Ratings on Two Classes
---------------------------------------------------------
Fitch affirms 14, downgrades two and Places one class on Rating
Watch Negative from these Credit Suisse transactions:

CSMC series 2006-7, Groups 1-5

    -- Class A affirmed at 'AAA';
    -- Class B-1 affirmed at 'AA';
    -- Class B-2 affirmed at 'A';
    -- Class B-3 affirmed at 'BBB+';
    -- Class B-4 affirmed at 'BBB';
    -- Class B-5 affirmed at 'BBB-';
    -- Class B-6 affirmed at 'BB';
    -- Class B-7 affirmed at 'B'.

CSMC series 2006-7, Groups 6-12

    -- Class A affirmed at 'AAA';
    -- Class DB-2 affirmed at 'AA-';
    -- Class DB-3 affirmed at 'A+';
    -- Class DB-4 affirmed at 'A';
    -- Class DB-5 affirmed at 'BBB+';
    -- Class DB-6 affirmed at 'BBB';
    -- Class DB-7 rated 'BBB-', placed on Rating Watch Negative;
    -- Class DB-8 is downgraded to 'B+' from 'BB';

    -- Class DB-9 is downgraded to 'C' from 'B' and assigned a
       distressed recovery rating of 'DR4'.

The collateral of the above transaction consists of first lien
fixed-rate alt-A mortgage loans.  As of the May 2007 distribution
date, the transaction is seasoned 10 months, and the pool factor
is approximately 87%.  All of the mortgage loans were purchased by
an affiliate of the depositor from various sellers in secondary
market transactions.

The affirmations reflect adequate relationships of credit
enhancement to future loss expectations and affect approximately
$1.0 billion of outstanding certificates.  The downgrades,
affecting approximately $6.1 million of outstanding certificates,
are taken as a result of a deteriorating relationship between CE
and expected loss.  The class DB-7 bond was placed on Rating Watch
Negative due to early negative trends in the relationship between
serious delinquency and credit enhancement.

For CSMC 2006-7 Groups 6-12, the amount of loans in Foreclosure
and REO at ten months seasoning as a percentage of the current
pool balance is 1.52%.  The subordination of the DB-8 and DB-9
classes is 1.20% and 0.57%, respectively.

The mortgage loans are being serviced by Wells Fargo Home
Mortgage, Inc. ('RPS1' rated by Fitch), and Select Portfolio
Servicing, Inc. ('RPS2').  The depositor is Credit Suisse First
Boston Mortgage Securities Corp.


CROSSWINDS AT MESQUITE: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Crosswinds at Mesquite Trails, L.L.C.
        2929 North Power Road
        Suite 101
        Mesa, AZ 85215

Bankruptcy Case No.: 07-bk-02939

Type of business: The Debtor owns a 640-acre residential
                  subdivision.

Chapter 11 Petition Date: June 22, 2007

Court: District of Arizona (Phoenix)

Judge: Charles G. Case II

Debtor's Counsel: Bryan A. Albue, Esq.
                  Fennemore Craig
                  3003 North Central Avenue, Suite 2600
                  Phoenix, AZ 85012-2913
                  Tel: (602) 916-5311
                  Fax: (602) 916-5511

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

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


CWALT 2006-43CB: Fitch Puts Low-B Ratings Under Negative Watch
--------------------------------------------------------------
Fitch Ratings has taken these rating actions on CWALT 2006-43CB:

Group 1 & 2

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

Group 3

    -- Class A affirmed at 'AAA';
    -- Class III-M affirmed at 'AA';
    -- Class III-B-1 affirmed at 'A';
    -- Class III-B-2 affirmed at 'BBB';
    -- Class III-B-3 rated 'BB'; placed on Rating Watch Negative;
    -- Class III-B-4 rated 'B'; placed on Rating Watch Negative.

The above transaction is collateralized primarily by conventional,
fully amortizing, 15- to 30-year fixed-rate, mortgage loans either
originated under Countrywide Home Loans, Inc.'s Standard
Underwriting Guidelines extended to Prime borrowers or Expanded
Underwriting Guidelines extended to Alt-A borrowers secured by
first liens on one- to four-family residential properties.  
Mortgage loans underwritten pursuant to the Expanded Underwriting
Guidelines may have higher loan-to-value ratios, higher loan
amounts, higher debt-to-income ratios and different documentation
requirements than those associated with the Standard Underwriting
Guidelines.

These affirmations, representing approximately $846 million of
outstanding principal, reflect adequate relationships of credit
enhancement to future loss expectations.

The class III-B-3 and III-B-4 were placed on rating watch negative
due to the relationship of serious delinquency to CE and reflect
approximately $1.68 million in outstanding certificates.  As of
the May 2007 remittance period, Group 3 of the trust has a 60+
delinquency percentage of 5.60%.  The CE of the class III-B-3 and
III-B-4 is 1.28% and 0.61%, respectively.  There have been no
losses date.

CWALT purchased the mortgage loans from CHL and deposited the
loans in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust.  The loans are being
serviced by Countrywide Home Loans Servicing LP, a direct wholly
owned subsidiary of CHL. Countrywide Servicing is rated 'RPS1' for
primary servicing and 'RMS2' for master servicing by Fitch.


DAYTON SUPERIOR: Moody's Lifts Corporate Family Rating to B2
------------------------------------------------------------
Moody's Investors Service upgraded Dayton Superior Corporation's
CFR to B2 from B3.  Moody's has also assigned a B2 to the
company's proposed $195 million term loan B and a B3 to the
company's proposed $85 million second lien loan.  The proposed
term loan B and second lien loan, together with a $130 million
asset based revolver, will refinance the company's existing
indebtedness, including the company's 10.75% and 13% notes.
Dayton's ratings consider the company's improved debt burden post
the December 2006 IPO, as well as anticipated continued
improvement in the company's credit metrics due to operational
improvement, anticipated ongoing strong demand for Dayton's
products, and the benefits of the proposed refinancing including
reduced interest burden.

These ratings for Dayton have been upgraded:

-- Corporate family rating, upgraded to B2 from B3;
-- Probability of default rating, upgraded to B2 from B3.

These ratings/assessments have been assigned:

-- $195 million gtd. sr. secured term loan B, rated B2
    (LGD4, 58%);

-- $85 million gtd. sr. secured 2nd lien loan, rated B3
    (LGD5, 73%).

These ratings will be withdrawn at the close of the transaction:

-- $165 million 10.75% senior secured second priority notes due
    2008, B2 (LGD3, 42%);

-- $155 million 13% senior subordinated notes due 2009, Caa2
    (LGD5, 83%).

The ratings outlook is stable.

Dayton Superior's ratings and outlook reflect the company's
improved financial performance as well as the expectation for
continued improvement.  Dayton is expected to continue benefiting
from strong spending in the commercial and infrastructure end
markets.  The proposed refinancing will provide significant
interest savings and give Dayton the flexibility to make
additional debt prepayments.

The ratings and/or outlook may improve if the company continues to
deliver.  The ratings would particularly benefit if the company
were able to generate strong consistent annual positive free cash
to total debt over 8% and if Dayton were able to reduce leverage
to under 3.5 times.

The rating and/or outlook could decline if the company's margins
contract, if raw materials price increases were unable to be
passed on to customers in a timely basis, and if the commercial
construction business were to slow meaningfully.  As 95% of
Dayton's total revenue is generated from non-residential and
infrastructure construction, a rebound in residential construction
would have minimal influence in the company's performance.  The
ratings would also be negatively impacted if debt to EBITDA were
to increase to 6 times on a projected basis.

Headquartered in Dayton, Ohio, Dayton Superior Corporation is the
largest North American manufacturer and distributor of metal
accessories and forms used in concrete construction, and metal
accessories used in masonry construction.  Dayton provides these
specialized products to the non-residential construction market
for use in infrastructure, institutional, and commercial projects.
Total revenues for 2006 were $479 million.


DEATH ROW: Marion Knight to Sell Malibu Mansion for $6.2 Million
----------------------------------------------------------------
Rap mogul Marion "Suge" Knight, co-founder of recording company
Death Row Records, is selling his Malibu mansion for $6.2 million,
according to various reports.

The sale of the seven-bedroom, 9-1/2 bath home is subject to the
approval of the U.S. Bankruptcy Court for the Central District of
California.

Reports discloses that the Mediterranean-style house sits on a
6.79-acre hill above the Pacific Ocean, with pool and tennis
courts.  An addition of 2.11 acres of land is included in the real
estate sale.

Headquartered in Compton, California, Death Row Records Inc.
-- http://www.deathrowrecords.net/-- is an independent record
producer.  The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187).  Daniel J. McCarthy, Esq.,
at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts.  R. Todd
Neilson serves as Chapter 11 Trustee for the Debtors' estate.
When the Debtors filed for protection from their creditors,
they listed total assets of $1,500,000 and total debts of
$119,794,000.


DELPHI CORP: Reaches Tentative Deal with UAW and General Motors
---------------------------------------------------------------
Delphi Corp. reached a tentative agreement and signed a Memorandum
of Understanding with the UAW and General Motors Corp. covering
site plans, workforce transition as well as other comprehensive
transformational issues.  The agreement is subject to union
ratification and approval by the U.S. Bankruptcy Court.

"If ratified, we believe this agreement will be a significant
milestone in our transformation and a major step towards
emergence," John Sheehan, Delphi's chief restructuring officer,
said.  "The Memorandum is a testament to the dedication and hard
work of the UAW, Delphi and General Motors teams."

UAW President Ron Gettelfinger and UAW Vice President Cal Rapson
have issued a statement, "The UAW finalized an understanding with
General Motors earlier [Fri]day that has resulted in a tentative
agreement with their former parts operations.  Details are being
withheld based on explanation and ratification meetings by our
local unions."

The Detroit Free Press reports that Delphi is offering its offers
workers buyouts, severance packages, early retirement incentives
and other payments in exchange for ratifying the Tentative
Agreement.

The TA, the Free Press said, would significantly shrink the size
of the Troy-based parts supplier in North America and reduce
hourly wages to what the company considers competitive rates.  
The accord will also free up the UAW's negotiating staff to tackle
summer contract talks with the Detroit automakers.

The incentives, according to the Free Press, include:

   (1) A $105,000 buy-down -- paid in $35,000 installments over
       three years -- for about 4,000 workers who now receive
       the same wages and benefits as GM employees.  In exchange,
       those workers would see their hourly wages cut from about
       $28 to so-called supplemental rates of $14.50 to $18.50,
       beginning Oct. 1.  During the buy-down period, those
       workers also can try to return to GM.

   (2) A $140,000 buyout for workers with more than 10 years of
       service.

   (3) A $70,000 buyout for workers with less than 10 years of
       service.  Workers who take either buyout will have to
       leave the company by Sept. 15.

   (4) A $35,000 payout to encourage workers with at least 30
       years of service to retire.

   (5) Retirement benefits for workers who are at least 50 years
       old and have at least 10 years of service.

   (6) A so-called grow-in package for workers with 26 years of
       service as of Sept. 1.  The package would allow those
       workers to stop working but be compensated as active  
       workers -- at the new lower rates -- until they hit 30
       years of service, and then retire.

   (7) Severance pay of $1,500 per month for every month worked -
       - up to $40,000 -- for all supplemental and temporary
       employees who choose to leave the company.

   (8) Skilled trade workers wouldn't see a change in hourly
       wages.

   (9) All workers compensated at GM rates also would have their
       health benefits changed to include the same higher
       deductibles and co-pays offered to employees hired since
       the two-tier wage and benefit structure took effect.

  (10) Skilled trade workers would receive a $10,000 payment to
       supplement the increase in health-care costs.

The Wall Street Journal said that the TA shifts much of Delphi's
labor burden to its former parent, GM.

General Motors, according to the Free Press, expects to pay Delphi
between $300,000,000 and $400,000,000 in annual labor-related
charges on top of $7,000,000,000 in retirement and labor costs.  
But the Detroit automaker, according to the report, sees these
costs to be offset by nearly $2,000,000,000 in annual savings once
Delphi's costs are competitive.

GM has also agreed to pay $450,000,000 into an existing Voluntary
Employees' Beneficiary Association account, according to WSJ.

The agreement outlines what products GM will buy from Delphi
plants, some of which will be shut down or sold.

According to WSJ, the agreement says Delphi will keep open only
its sites in Kokomo, Indiana; Grand Rapids, Michigan; Lockport,
New York; and Rochester, New York.  Four other sites will be held
for divestiture by 2009 and 10 sites will be "wound down."  Three
additional sites will be operated as "footprint sites," i.e., GM
will operate the sites until a later date.

The Free Press said that four plans to be sold are Saginaw
steering; Adrian; Sandusky, Ohio; and Cottondale, Alabama.  Plants
due for closure are located in Coopersville; Columbus, Ohio; and
Milwaukee.

Delphi said in its June 22 news release that it "will not provide
commentary on the details of the Memorandum at the current time."

As widely reported, the union, the bankrupt auto-parts supplier
and GM are trying to get the deal ratified before a two-week
summer shutdown that begins July 1.  When the parties return from
the shutdown, the UAW will begin formal contract negotiations with
GM, Ford Motor Co. and Chrysler Group.

                           About the UAW

The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America is one of the largest
and most diverse unions in North America, with members in
virtually every sector of the economy.

UAW-represented workplaces range from multinational corporations,
small manufacturers and state and local governments to colleges
and universities, hospitals and private non-profit organizations.

The UAW has approximately 640,000 active members and over 500,000
retired members in the United States, Canada and Puerto Rico.

                       About General Motors

Headquartered in Detroit, GM General Motors Corp. (NYSE: GM) --
http://www.gm.com/-- was  founded in 1908, GM employs about   
280,000 people around the world.  With global manufactures its
cars and trucks in 33 countries.  In 2006, nearly 9.1 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn and Vauxhall.  GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.

                        About Delphi Corp.

Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ)
-- http://www.delphi.com/-- is the single largest global supplier  
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology.  The
company's technology and products are present in more than 75
million vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors.  As of
Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.  The Debtors'
exclusive plan-filing period expires on July 31, 2007.

(Delphi Corporation Bankruptcy News, Issue No. 73; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


DELTA FUNDING: S&P Downgrades Rating on Class M-2 Certs. to CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
M-2 asset-backed certificates issued by Delta Funding Home Equity
Loan Trust 2000-4 to 'CCC' from 'BB-' and removed it from
CreditWatch with negative implications.  In addition, S&P affirmed
its 'AA' rating on class M-1 from the same series.
     
The downgrade of class M-2 reflects the continued erosion of
credit support as losses outpace excess interest.  Loss
projections indicate that the current performance trend may result
in a principal write-down to the class M-2 certificates in the
near future.  As of the June 2007 distribution date, severe
delinquencies (90-plus days, foreclosures, and REOs) were
$3.353 million (37.79%) compared with 0.263 million in available
credit support provided by class B.  Cumulative realized losses to
date are approximately 9.41% of the original pool balance.
     
S&P removed the rating on class M-2 from CreditWatch negative
because it was lowered to 'CCC'.  According to Standard & Poor's
surveillance practices, classes of certificates or notes from RMBS
transactions with ratings lower than 'B-' are no longer eligible
to be on CreditWatch negative.
     
S&P affirmed the 'AA' rating on class M-1 because actual projected
credit support is adequate to maintain the rating, despite the
high level of severe delinquencies.
     
The collateral consists of fixed- and adjustable-rate home equity
first- and second-lien loans secured by one- to four-family
residential properties.
   

       Rating Lowered and Removed from Creditwatch Negative
   
           Delta Funding Home Equity Loan Trust 2000-4

                                  Rating
                                  ------
                Class       To              From
                -----       --              ----
                M-2         CCC             BB-/Watch Neg
   

                          Rating Affirmed
   
           Delta Funding Home Equity Loan Trust 2000-4

                         Class       Rating
                         -----       ------
                          M-1         AA


DELUXE CORP: Appoints Baldwin, McGrath, and Metviner as Directors
-----------------------------------------------------------------
Deluxe Corporation's board of directors named Ronald C. Baldwin,
Don J. McGrath and Neil Metviner as company director effective
July 1, 2007.  This brings the total number of directors to 11, 10
of whom are independent of management.

Mr. Baldwin, 60, is the retired vice chairman, regional banking of
Huntington Bancshares Incorporated in Columbus, OH.  Huntington is
a $36 billion regional bank holding company which provides
innovative retail and commercial financial products and services.  
Mr. Baldwin brings nearly 35 years of banking experience to Deluxe
and holds a M.B.A. from the University of Michigan.

Mr. McGrath, 59, is chief executive officer of BancWest Corp and
Bank of the West, both of which are wholly owned subsidiaries of
BNP Paribas.  Bank of the West, the 4th largest bank headquartered
in the west, offers customers a full range of personal and
business products and services.  Mr. McGrath has nearly 37 years
experience in marketing and advertising coupled with product
development.  He has been with Bank of the West since 1975 and
holds a M.B.A. from Boston University.

Mr. Metviner, 49, is president of Pitney Bowes Direct in Stamford,
CT, which is an operating unit of Pitney Bowes, Inc.,
a global provider of integrated mail, messaging and document
management solutions.  Mr. Metviner brings nearly 27 years of
banking and small business experience to Deluxe.  He has been with
Pitney Bowes since 2000 and before that was with Cendant
Corporation and National Westminster Bancorp.  He holds a M.B.A.
from Case Western Reserve University.

"Earlier we had communicated to our shareholders we were actively
recruiting additional board members.  These individuals are proven
executives and add almost a century of combined experience working
with banks and small businesses to our board," said Stephen
Nachtsheim, chairman of Deluxe.  "We are thrilled to add their
capabilities and expertise to complement our board and look
forward to Ron, Don and Neil's many contributions."

                    About Deluxe Corporation

Headquartered in St. Paul, Minnesota, Deluxe Corporation (NYSE:
DLX) -- http://www.deluxe.com/-- helps financial institutions and  
small businesses better manage, promote, and grow their
businesses.  The company uses direct marketing, distributors, and
a North American sales force to provide a wide range of customized
products and services: personalized printed items such as checks,
forms, business cards, stationery, greeting cards, labels, and
retail packaging supplies, promotional products and merchandising
materials, fraud prevention services, and customer retention
programs.  The company also sells personalized checks and
accessories directly to consumers.

                          *     *     *

As of June 25, 2007, the company continues to carry Moody's Ba2
ratings on its long term corporate family rating, senior unsecured
debt, and probability of default rating.  The outlook is stable.

Also, the company still carries Standard & Poor's BB- ratings on
its long term foreign and local issuer credits and B ratings on
its short term foreign and local issuer credits.  The outlook is
negative.


DEUTSCH ALT-A: Fitch Puts Ratings on Two Classes on Watch Negative
------------------------------------------------------------------
Fitch has affirmed four and downgraded two classes from Deutsch
Alt-A Securities Inc. 2006-AR1 (Groups 2, 3, 4 & 5):

    -- Class A affirmed at 'AAA';
    -- Class M affirmed at 'AA';
    -- Class B-1 affirmed at 'A';
    -- Class B-2 affirmed at 'BBB';
    -- Class B-3 (rated 'BB') placed on Rating Watch Negative;
    -- Class B-4 (rated 'B') placed on Rating Watch Negative.

The affirmations reflect a stable relationship between credit
enhancement and expected losses, and affect approximately
$340.25 million in outstanding certificates.  The negative rating
actions reflect deterioration in the relationship between CE and
expected losses, and affect approximately $4.25 million in
outstanding certificates.

Since the January 2007 distribution, the transaction has
experienced rapidly growing delinquencies, notably in foreclosures
and real estate owned.  Since then, 60+ delinquencies (includes
bankruptcy, FC, and REO) have more than doubled, from 0.92% to
2.14%.  Approximately 80% of this 2.14% is concentrated in FC and
REO.  The 'B'-rated class currently has 0.41% in CE.

The collateral in the pool consists of mixed adjustable rate
mortgages on residential properties, extended to Alt-A borrowers.  
The loans are originated by various lenders, and are master
serviced by Wells Fargo Bank, N.A (rated 'RMS1' by Fitch).


DOBSON COMM: Mulls Sale of Firm, Hires Morgan Stanley
-----------------------------------------------------
Dobson Communications Corp. is considering strategic options,
including a sale of the company as deal activity among the
telecom industry's smaller players quickens, The Wall Street
Journal said on its Web site Monday, citing people familiar
with the matter.

The company, the WSJ's source said, has hired Morgan Stanley
to explore its options.

According to WSJ, the move comes as private-equity firms are
increasingly striking high-profile telecom deals, leading to
higher share prices for some smaller telecom companies in
recent weeks.

Based in Oklahoma City, Dobson Communications Corporation
(Nasdaq: DCEL) - http://www.dobson/-- provides rural and  
suburban wireless voice and data services in portions of
the United States.  The company's operations are encompassed
in its two wholly owned primary subsidiaries, Dobson Cellular
Systems Inc. and American Cellular Corp.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 16, 2007,
Fitch Ratings affirmed the 'B-' Issuer Default Rating for
Dobson Communications Corporation with a stable outlook.


DORAL FINANCIAL: FBOP Decides Not to Proceed with Investment Plan
-----------------------------------------------------------------
Doral Financial Corporation said in a press statement that it has
been notified by FBOP Corporation that after completion of its
diligence process FBOP has decided that it will not proceed with
its previously announced proposal to invest in Doral.

FBOP, which is Doral's second largest shareholder, also informed
Doral that it currently plans to vote in favor of the proposed
$610 million investment transaction between Doral and Doral
Holdings Delaware LLC.  

In a letter to Doral, FBOP thanked Doral's Board, management and
employees for the assistance and cooperation given to FBOP
throughout its diligence review.

Previously, the proposed investment transaction between Doral
Financial and Holdings provides for the issuance to Holdings of
$610 million in shares of common stock and would result in
Holdings' owning 90% of the company's outstanding shares.

Holdings is a newly formed entity in which Bear Stearns Merchant
Banking and other investors, including Marathon Asset Management,
Perry Capital, the D. E. Shaw group, Tennenbaum Capital Partners,
Eton Park Capital Management, Goldman Sachs & Co., Canyon Capital
Advisors and GE Asset Management, will invest.

Doral further said that it is soliciting proxies from shareholders
of record as of June 11, 2007 for its annual meeting of
shareholders to be held on July 17, 2007, at which shareholders
will be asked to approve, among other matters, the Holdings
investment.

FBOP, which is not an investor in Holdings, currently owns
approximately 4.6% of the company's outstanding common shares.

Doral Board members Edgar Cullman, Jr. and John Ernst and certain
members of their families, who collectively own approximately
10.7% of the company's outstanding common shares, have agreed to
vote in favor of the Holdings transaction.

Dennis Buchert, Chairman of the Board of Doral Financial, stated,
"We are now focusing our attention on obtaining the necessary
shareholder approval of the Holdings investment, which is a
critical component of Doral's recapitalization process.  The
recapitalization of Doral will mean that the company is
positioned to move forward with its efforts to build the
potential of the franchise and, in turn, value for all
shareholders and the communities Doral serves."

Glen R. Wakeman, Chief Executive Officer of Doral, said,
"Doral's new management team has worked diligently to put
in place a business strategy designed to grow Doral's
profitability over the long term.  This involves transforming
Doral into a community banking organization, providing our
customers with state of the art products and services to
meet their needs, and operating with strong controls and
procedures.  The anchor of our organization is Doral Bank,
which is well capitalized from a regulatory perspective, and
represents the engine with which we will build the Doral
brand."

                    About Doral Financial Corp.

Based in New York City, Doral Financial Corporation (NYSE: DRL) --
http://www.doralfinancial.com/-- is a diversified financial   
services company engaged in mortgage banking, banking, investment
banking activities, institutional securities and insurance agency
operations.  Its activities are principally conducted in Puerto
Rico and in the New York City metropolitan area.  Doral is the
parent company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency Inc. and
Doral Bank FSB, a federal savings bank based in New York City.

                          *     *     *

As reported in the Troubled Company Reporter on May 21, 2007,
Fitch Ratings lowered Doral Financial Corporation's Long-term
Issuer Default Rating to 'B' from 'B+'; Senior debt rating to
'B-' from 'B'; Preferred stock rating to 'CCC' from 'CCC+'; and
Individual to 'E' from 'D/E'.

At the same time, Moody's Investors Service said it is continuing
its review of Doral Financial Corporation for possible downgrade.  
The ratings have been on review for possible downgrade since
Jan. 5, 2007, when Doral was downgraded to B2 from B1 for senior
debt.  The review has centered on Doral's prospects for
refinancing $625 million of debt maturing in July.


ENCORE ACQUISITION: Moody's Holds Corporate Family Rating at Ba3
----------------------------------------------------------------
Moody's Investors Service confirmed Encore Acquisition's Ba3
corporate family rating, Ba3 probability of default rating, and B1
senior subordinated note rating.  Due to an increase proportion of
current and expect first secured debt in EAC's capital structure,
under Moody's Loss Given Default methodology the LGD rating for
its senior subordinated notes has been moved down to LGD 5 (81%).  
However, a negative rating outlook is assigned pending EAC's
execution of sustained debt reduction policies.  These actions
conclude Moody's review for downgrade.

To retain its ratings, EAC would need to reduce leverage
considerably in the next twelve months and conduct its subsequent
acquisitions and its drop downs of properties into its pending
master limited partnership in a fashion that reduces consolidated
and parent company leverage relative to its consolidated and its
parent proven developed reserves.  Even pro-forma for its pending
asset sales and MLP initial public offering, EAC's leverage on PD
reserves exceeds levels suitable to its current ratings.

EAC has stated that all pending asset sale proceeds and all
proceeds of its pending initial public offering of its subsidiary
MLP will reduce both parent and consolidated debt.  In addition to
that debt reduction, EAC will likely need to reduce debt further
with discretionary cash flow or any further MLP unit offerings
until leverage on PD reserves reaches the $5/Boe to $6/Boe range.

Moody's initiated the review for downgrade in late 2006 due to
EAC's intention to conduct two proportionately sizable and fully
debt funded acquisitions, and due to EAC's intention to form a
public MLP with attendant added uncertainty concerning its
corporate and capital structures.

The review also came on the heels of tough second half 2006
operating results.  EAC faced rig delays and incurred downhole
restraints that reduced air injection volumes and largely were
responsible for missed production targets at its core Cedar Creek
Anticline high-pressure air injection tertiary recovery program.
EAC also incurred less robust results in East Texas and Oklahoma
relative to capital expended.

EAC's $400 million acquisition of Anadarko Petroleum's Big Horn
Basin assets and $393 million acquisition of Anadarko's Williston
Basin properties closed during first half 2007.

Ratings support includes a management team historically committed
to conservative leverage, the lower geologic risk of its mature
properties, an expanded consolidated property base with an
expected favorable impact on drillbit reserve replacement costs, a
durable production base, and expected reasonably supportive
prices.

Ratings restraints include high leverage, the uncertainty
surrounding the evolving apportionment of assets and debt amongst
the parent and the MLP, and an approximately $355 million pro-
forma net increase in debt after two acquisitions and debt
reductions with MLP proceeds and the after tax proceeds of its
$300 million Mid-Continent asset divestiture.  Restraints also
include somewhat negative operating trends prior to EAC's
acquisitions, partly due to downhole restraints that reduced air
injection volumes resulting in missed production targets at its
Cedar Creek Anticline high-pressure air injection tertiary
recovery program.  EAC also incurred disappointing drilling
results in East Texas and Oklahoma.  As well, exacerbated by high
natural gas prices and deep price discounts on most of its
production, EAC's energy intensive air injection, water flooding,
downhole pumping, water re-injection, and surface processing
activities have driven production costs to high levels and
restrained operating margins.

The credit impact of the Encore Energy Partners MLP will be a
function of:

    * the parent's pro-forma reserve and production scale,
      diversification, and property risk mix,

    * the amount of debt at the parent relative to the parent's
      PD reserves and production,

    * the health of the parent's reserve replacement effort as
      gauged by its unit full-cycle economics and leveraged
      recycle ratio,

    * cash margin outlook relative to sustaining capital
      spending,

    * commitment of the parent management to prioritize EAC
      shareholder interest with respect to the MLP, and

    * the MLP debt recourse covenants in relation to the parent.  

Moody's believes the MLP could eventually hold comparatively large
proportions of EAC's lower risk properties.  It will be important
to reduce parent debt in tandem with the drop down of properties
into the MLP.  Moody's anticipates that the MLP may eventually,
though not initially, have significant debt in its capital
structure.  Given the comparatively higher cash flow multiples at
which an MLP's equity units trade, we expect the MLP to be used as
basin consolidation acquisition vehicle.

Per Moody's global ratings methodology for independent exploration
and production firms, EAC maps to a B1 corporate family rating,
one notch lower than its assigned Ba3 rating.  The assigned rating
reflects our expectation that leverage will be reduced
significantly and that operating trends will stabilize.  EAC
exhibits high full-cycle costs in the high $30/boe range,
relatively high three year average F&D costs of $15/boe, though
in-line with the higher cost trends across the industry, and high
debt to proven developed leverage at just under $7/boe, mapping to
a B3 rating.

The rating uplift to B1 from the indicated methodology also
reflects a reserve and production base mapping to the Ba range and
Ba range leverage on total reserves fully adjusted for future
development spending.  The relatively low future development capex
is due to the nature of EAC's non-producing reserves, which
primarily are brought to production with enhanced recovery
stimulation.  Enhanced recovery costs considerably less than a
full blown exploitation program.

Encore Acquisition Company is headquartered in Forth Worth, Texas.


FINLAY ENT: Inks Amended Pact with GE to Expand Credit Facility
---------------------------------------------------------------
Finlay Enterprises Inc. completed an amendment to its revolving
credit facility provided by GE Corporate Lending.  The amendment
expands total availability from $225 million to $300 million.  GE
Capital Markets Inc. arranged the transaction.  The new terms of
the credit facility became effective June 20, 2007.
    
"The company is pleased with the expansion of its credit facility
and the continued confidence shown in Finlay Enterprises by
its financial partners," Arthur E. Reiner, chairman and chief
executive officer of Finlay Enterprises commented.  "The expanded
facility provides the company with additional financial
flexibility and liquidity.  The company continues to manage its
balance sheet as it focuses on expanding its business."
    
During the fourth quarter of fiscal 2006, the company terminated
and retired the obligation under its gold consignment agreement
and converted its gold lease inventory to asset which increased
the company's collateral base.  

Subsequently, the company amended its credit agreement to give it
the option to expand the size of the facility and extended the
maturity date to January 2011.

                    About GE Corporate Lending
    
Headquartered in Norwalk, Connecticut, GE Commercial Finance
Corporate Lending -- http://www.gelending.com/-- is one of North  
America's providers of asset-based, cash flow, structured finance
and other capital solutions for mid-size and large companies.  
From over 30 offices throughout the U.S. and Canada, Corporate
Lending specializes in serving the unique needs of borrowers
seeking $20 million to $2 billion and more for working capital,
growth, acquisitions, project finance and turnarounds.

                   About Finlay Enterprises Inc.
    
Headquartered in New York City, Finlay Enterprises Inc. (Nasdaq:
FNLY)  --  http://www.finlayenterprises.com/-- through its  
wholly-owned subsidiary, Finlay Fine Jewelry Corporation, retails
fine jewelry and operates licensed fine jewelry departments in
department stores throughout the United States.  The company also
operates luxury stand-alone jewelry stores primarily located in
the southeastern United States.  The number of locations at the
end of the first quarter of fiscal 2007 totaled 749, including 33
Carlyle and five Congress specialty jewelry stores.

                           *     *     *

Standard & Poor's Rating Services assigned 'B' long term foreign
and local issuer credit ratings to Finlay Enterprises Inc.


FORD MOTOR: Denies Plans to Build Slovak Plant; Eyes Romania
------------------------------------------------------------
Ford Motor Company has dismissed a report by Slovak daily
Hospodarske Noviny saying the U.S. carmaker was considering
building a new assembly plant in an industrial park near the
eastern Slovak town of Kechnec, where a Ford-Getrag joint
venture already makes gearboxes, Reuters says.

The Slovak paper also quoted the Kechnec mayor as saying he was in
talks with a renowned producer to make higher-class cars in the
east, Reuters notes.  The investment should be worth tens of
billions of crowns and create hundreds of jobs, the mayor said.

Ford of Europe Spokesman told Reuters the report was "speculative"
and they "cannot confirm anything like that (story)."

The state investment agency SARIO has also denied any negotiations
with Ford about a new plant in Slovakia, which has been a magnet
for investment inflows in the auto sector.

Mr. Nissen reiterated Ford's interest in an upcoming privatization
of Romania's Automobile Craiova, Reuters states.

"Eastern Europe is certainly the area where markets are growing
and we have to consider how to increase our presence there.  We
are preparing a bid for the plant in Romania, which we are also
referring to as eastern Europe," Mr. Nissen said.

Mr. Nissen did not disclose details of the bid, but said that Ford
was looking to expand the plant, Reuters says.  The Romanian
privatization agency AVAS had previously warned that the buyer
would have to ensure a minimum yearly output of 300,000 cars.

General Motors Corp. and Russian Machines, a unit of one of the
largest privately held conglomerates in Russia, have also
expressed interest in the Romanian plant, Reuters reveals.  

The deadline for binding bids is July 5, 2007.

                      About Ford Motor Co.

Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles  
in 200 markets across six continents.  With about 260,000
employees and about 100 plants worldwide, the company's core and
affiliated automotive brands include Ford, Jaguar, Land Rover,
Lincoln, Mercury, Volvo, Aston Martin, and Mazda.  The company
provides financial services through Ford Motor Credit Company.

                          *    *    *

As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services affirmed its 'B' bank loan
and '2' recovery ratings on Ford Motor Co.

As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4'.

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


FURNITURE BRANDS: Weak Performance Cues S&P to Cut Rating to BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Furniture Brands International Inc. to 'BB-' from
'BBB-'.  The rating remains on CreditWatch with negative
implications, where it was placed on Feb. 28, 2007, because of
weakness in the company's business lines, and credit protection
measures below S&P's expectations for the rating.
     
"The downgrade reflects the company's weak operating performance
in recent quarters, and credit measures that are well below our
prior expectations," said Standard & Poor's credit analyst Rick
Joy.  "We believe that the company will continue to experience
challenging market conditions given the weak retail environment
for its brands and continued softness in the housing market."
     
The company's profitability continues to be negatively affected by
lower sales volume and discounting to reduce inventory levels.  
EBITDA margins of about 5.5% for the 12 months ended March 31,
2007, have continued to decline from about 10% in 2002, and remain
very weak for a consumer products company.
     
St. Louis, Missouri-based Furniture Brands is one of the largest
residential furniture manufacturers in the U.S.  The company sells
a broad range of home furnishings under well-recognized brands,
including Broyhill, Lane, Thomasville, Henredon, Drexel Heritage,
and Maitland-Smith.


GENERAL MOTORS: Reaches Tentative Deal with UAW and Delphi Corp.
----------------------------------------------------------------
Delphi Corp. reached a tentative agreement and signed a Memorandum
of Understanding with the UAW and General Motors Corp. covering
site plans, workforce transition as well as other comprehensive
transformational issues.  The agreement is subject to union
ratification and approval by the U.S. Bankruptcy Court.

"If ratified, we believe this agreement will be a significant
milestone in our transformation and a major step towards
emergence," John Sheehan, Delphi's chief restructuring officer,
said.  "The Memorandum is a testament to the dedication and hard
work of the UAW, Delphi and General Motors teams."

UAW President Ron Gettelfinger and UAW Vice President Cal Rapson
have issued a statement, "The UAW finalized an understanding with
General Motors earlier [Fri]day that has resulted in a tentative
agreement with their former parts operations.  Details are being
withheld based on explanation and ratification meetings by our
local unions."

The Detroit Free Press reports that Delphi is offering its offers
workers buyouts, severance packages, early retirement incentives
and other payments in exchange for ratifying the Tentative
Agreement.

The TA, the Free Press said, would significantly shrink the size
of the Troy-based parts supplier in North America and reduce
hourly wages to what the company considers competitive rates.  The
accord will also free up the UAW's negotiating staff to tackle
summer contract talks with the Detroit automakers.

The incentives, according to the Free Press, include:

   (1) A $105,000 buy-down -- paid in $35,000 installments over
       three years -- for about 4,000 workers who now receive
       the same wages and benefits as GM employees.  In exchange,
       those workers would see their hourly wages cut from about
       $28 to so-called supplemental rates of $14.50 to $18.50,
       beginning Oct. 1.  During the buy-down period, those
       workers also can try to return to GM.

   (2) A $140,000 buyout for workers with more than 10 years of
       service.

   (3) A $70,000 buyout for workers with less than 10 years of
       service.  Workers who take either buyout will have to
       leave the company by Sept. 15.

   (4) A $35,000 payout to encourage workers with at least 30
       years of service to retire.

   (5) Retirement benefits for workers who are at least 50 years
       old and have at least 10 years of service.

   (6) A so-called grow-in package for workers with 26 years of
       service as of Sept. 1.  The package would allow those
       workers to stop working but be compensated as active  
       workers -- at the new lower rates -- until they hit 30
       years of service, and then retire.

   (7) Severance pay of $1,500 per month for every month worked -
       - up to $40,000 -- for all supplemental and temporary
       employees who choose to leave the company.

   (8) Skilled trade workers wouldn't see a change in hourly
       wages.

   (9) All workers compensated at GM rates also would have their
       health benefits changed to include the same higher
       deductibles and co-pays offered to employees hired since
       the two-tier wage and benefit structure took effect.

  (10) Skilled trade workers would receive a $10,000 payment to
       supplement the increase in health-care costs.

The Wall Street Journal said that the TA shifts much of Delphi's
labor burden to its former parent, GM.

General Motors, according to the Free Press, expects to pay Delphi
between $300,000,000 and $400,000,000 in annual labor-related
charges on top of $7,000,000,000 in retirement and labor costs.  
But the Detroit automaker, according to the report, sees these
costs to be offset by nearly $2,000,000,000 in annual savings once
Delphi's costs are competitive.

GM has also agreed to pay $450,000,000 into an existing Voluntary
Employees' Beneficiary Association account, according to WSJ.

The agreement outlines what products GM will buy from Delphi
plants, some of which will be shut down or sold.

According to WSJ, the agreement says Delphi will keep open only
its sites in Kokomo, Indiana; Grand Rapids, Michigan; Lockport,
New York; and Rochester, New York.  Four other sites will be held
for divestiture by 2009 and 10 sites will be "wound down."  Three
additional sites will be operated as "footprint sites," i.e., GM
will operate the sites until a later date.

The Free Press said that four plans to be sold are Saginaw
steering; Adrian; Sandusky, Ohio; and Cottondale, Alabama.  Plants
due for closure are located in Coopersville; Columbus, Ohio; and
Milwaukee.

Delphi said in its June 22 news release that it "will not provide
commentary on the details of the Memorandum at the current time."

As widely reported, the union, the bankrupt auto-parts supplier
and GM are trying to get the deal ratified before a two-week
summer shutdown that begins July 1.  When the parties return from
the shutdown, the UAW will begin formal contract negotiations with
GM, Ford Motor Co. and Chrysler Group.

                           About the UAW

The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America is one of the largest
and most diverse unions in North America, with members in
virtually every sector of the economy.

UAW-represented workplaces range from multinational corporations,
small manufacturers and state and local governments to colleges
and universities, hospitals and private non-profit organizations.

The UAW has approximately 640,000 active members and over 500,000
retired members in the United States, Canada and Puerto Rico.

                        About Delphi Corp.

Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ)
-- http://www.delphi.com/-- is the single largest global supplier  
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology.  The
company's technology and products are present in more than 75
million vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors.  As of
Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.  The Debtors'
exclusive plan-filing period expires on July 31, 2007.

                       About General Motors

Headquartered in Detroit, GM General Motors Corp. (NYSE: GM) --
http://www.gm.com/-- was  founded in 1908, GM employs about   
280,000 people around the world.  With global manufactures its
cars and trucks in 33 countries.  In 2006, nearly 9.1 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn and Vauxhall.  GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.

                          *     *     *

As reported in the Troubled Company Reporter on May 28, 2007,
Standard & Poor's Ratings Services placed General Motors Corp.'s
corporate credit rating at B/Negative/B-3.

At the same time, Moody's Investors Service affirmed GM's B3
Corporate Family Rating and B3 Probability of Default Rating, and
maintained its SGL-3 Speculative Grade Liquidity Rating.  The
rating outlook remains negative.


GSAA HOME: Moody's Puts Ba1 Rating Under Review
-----------------------------------------------
Moody's Investors Service placed on review three classes of
certificates from a transaction issued by GSAA Home Equity Trust
in 2006.  The transaction is backed by closed-end second lien
loans.

The projected pipeline loss has increased over the past few months
and may affect the credit support for these certificates.  The
certificates are being placed on review for possible downgrade
based on the fact that the bonds' current credit enhancement
levels, including excess spread, may be too low compared to the
current projected loss numbers at the current rating level.

Complete rating actions are:

Issuer: GSAA Home Equity Trust

Review for Possible Downgrade:

-- Series 2006-S1, Class I-M-6, Current rating Baa2, under
    review for possible downgrade;

-- Series 2006-S1, Class I-M-7, Current rating Baa3, under
    review for possible downgrade;

-- Series 2006-S1, Class I-B-1, Current rating Ba1, under review
    for possible downgrade.


HARGRAY COMMS: Moody's Says Loan Changes Won't Affect Ratings
-------------------------------------------------------------
Hargray Communications Group, Inc. upsized its 1st lien secured
term loan by $15 million, for a total 1st lien term loan amount of
$210 million, and reduced the 2nd lien term loan by $5 million to
$90 million.  The senior secured revolving credit facility is
unchanged at $25 million.

While no ratings changed as a result of these changes, the LGD
point estimates have been revised as:

Issuer -- Hargray Communications Group, Inc. (DPC Acquisition LLC
and HCP Acquisition LLC as co-borrowers)

Senior Secured Revolving Credit Facility

-- Changed to B1 (LGD3 -- 37%), from B1 (LGD3 -- 36%)

1st Lien Senior Secured Term Loan

-- Changed to B1 (LGD3 -- 37%), from B1 (LGD3 -- 36%)

2nd Lien Senior Secured Term Loan

-- Changed to Caa1 (LGD5 -- 88%), from Caa1 (LGD5 -- 87%)


HARLAN SPRAGUE: Moody's Affirms Corporate Family Rating at B2
-------------------------------------------------------------
Moody's Investors Service affirmed Harlan Sprague Dawley, Inc.'s
B2 Corporate Family Rating.  Moody's also assigned ratings to the
company's new senior credit facilities.  Moody's expects that
Harlan will finance its acquisition of a contract research
organization with a newly proposed senior secured credit facility,
including a $330 million first lien term loan and $30 million
revolving credit facility.  Moody's expects that a majority of
these proceeds will be used to refinance Harlan's existing credit
facility and subordinated notes.  The transaction is expected to
close in July 2007 at which time Moody's will withdraw its
existing ratings.  The ratings outlook is stable.

Despite the increase in leverage to finance the acquisition,
Moody's affirmation of Harlan's B2 Corporate Family Rating
reflects the strategic benefits of improved geographic, product
and consumer diversification, as well as the expected
strengthening of its contract research business.  Moody's also
believes that the acquisition will be immediately accretive to
earnings and cash flow.

The strategic acquisition provides a comprehensive range of
contract research services to clients on a global basis.  The
acquisition will allow Harlan to further penetrate pharmaceutical
markets and diversify Harlan's service offerings and already broad
client base.

These ratings are being assigned to Harlan Sprague Dawley, Inc.:

-- $15 Million First Lien U.S. Revolving Credit Facility, due
    2013, rated Ba2, LGD-1, 3%

-- $330 Million First Lien Term Loan, due 2014, rated B2, LGD-4,
    53%

This rating is being assigned to Harlan Netherlands B.V.:

-- $15 Million First Lien EURO Revolving Credit Facility, due
    2013, rated Ba2, LGD-1, 3%

These ratings assigned to Harlan Sprague Dawley, Inc. are being
affirmed:

-- Corporate Family Rating, B2
-- Probability of Default Rating, B2

These ratings will be withdrawn once the financing is completed:

-- U.S. Dollar-Denominated Senior Secured Revolver, due 2010,
    rated B1, LGD3, 33%

-- Euro-Denominated Senior Secured Revolver, due 2010, rated B1,
    LGD3, 33%

-- First Lien Secured Term Loan, due 2011, rated B1, LGD3, 33%

Harlan Sprague Dawley, Inc. (Harlan), founded in 1931, is a global
provider of preclinical tools and services that allow for
innovative and efficient research in the pharmaceutical,
biotechnology, chemical and food industries.


HEALTH NET: Moody's Rates Shelf Registration at P(Ba2)
------------------------------------------------------
Moody's Investors Service assigned provisional ratings (senior
debt at (P)Ba2) to Health Net, Inc.'s recently filed shelf
registration.  Health Net maintains its shelf for general
operational purposes, including capital expenditures and debt
refinancing. The outlook on the shelf ratings is stable.

On May 15, 2007, Moody's rated Health Net's $400 million takedown
of senior unsecured notes Ba2 with a stable outlook.  The company
used the proceeds to refinance their term loan and outstanding
amounts on the credit facility.

Moody's has assigned these provisional ratings with a stable
outlook:

Health Net, Inc.

    - senior unsecured debt at (P)Ba2
    - senior subordinated debt at (P)Ba3
    - subordinated debt at (P)Ba3

Health Net, based in Woodland Hills, California, reported total
revenues of $3.4 billion for the first three months of 2007.  As
of March 31, 2007, the company had total membership (excluding
Medicare Part D) of approximately 6.3 million and reported
shareholder's equity of $1.9 billion.


INDYMAC MBS: Fitch Puts BB Rating on Class 2B-5 on Watch Negative
-----------------------------------------------------------------
Fitch Ratings has taken the following rating actions on the
IndyMac MBS, Inc., Residential Asset Securitization Trust issue
listed below:

Series 2004-A2 Group 1

    -- Class 1A affirmed at 'AAA'.

Series 2004-A2 Group 2

    -- Class 2A affirmed at 'AAA';
    -- Class 2B-1 affirmed at 'AA';
    -- Class 2B-2 affirmed at 'A';
    -- Class 2B-3 affirmed at 'BBB';
    -- Class 2B-4 rated 'BB', placed on Rating Watch Negative;
    -- Class 2B-5 rated 'B', placed on Rating Watch Negative.

The affirmations reflect a stable relationship between credit
enhancement and future loss expectations and affect approximately
$13 million in outstanding certificates.

Classes 2B-4 and 2B-5 were placed on Rating Watch Negative due to
the deterioration in the relationship of credit enhancement to
future loss expectations, and affects approximately $147,000 of
outstanding certificates.  The amount of loans in Foreclosure and
REO at 38 months seasoning as a percentage of the current pool
balance is 2%.  The subordination of the 2B-4 and 2B-5 classes is
1.12% and 0.64%, respectively.

The collateral consists of conventional, fixed-rate, fully
amortizing, first lien, one- to four-family residential mortgage
loans with original terms to stated maturity of 360 months. The
loans were originated or purchased by IndyMac Bank, F.S.B., which
it subsequently sold to IndyMac MBS, Inc.  None of the mortgage
loans are 'high cost' loans as defined under any local, state or
federal laws.

The above transaction is seasoned 38 months and the pool factors
(current mortgage loan principal outstanding as a percentage of
the initial pool) of Groups 1 and 2 are 42% and 21%, respectively.

The mortgage loans are being serviced by Indymac Bank F.S.B.
(rated 'RPS2+' for Alt-A products by Fitch).


INTEGRATED HEALTH: Claims Objection Deadline Moved to August 30
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved IHS Liquidating LLC's request to
further extend to Aug. 30, 2007, its deadline to object to certain
proofs of claim without prejudice to IHS Liquidating's right to
seek additional extensions.

Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, told the Court that since the Effective
Date, IHS Liquidating LLC and its professionals have worked
diligently to:

  a) file additional claims objections;

  b) review pending claims objections;    

  c) perform required diligence to determine which of the pending
     objections should be prosecuted;

  d) prosecute or consensually resolve the pending claims     
     objections;

  e) ensure that all disputed claims are made the subject of a
     proper objection deadline before the expiration of the Claims
     Objection Deadline.

IHS Liquidating believes it is appropriate to extend the current
deadline to avoid a circumstance where objectionable claims are
inadvertently allowed.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--    
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 115; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)  


INTERFACE INC: Fabrics Division Sale Cues S&P's Positive Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Interface
Inc., including the 'B' corporate credit rating, on CreditWatch
with positive implications.
     
"This action follows the company's announcement that it will sell
its fabrics division in an all-cash transaction valued at
approximately $70 million, to an affiliate of Sun Capital
Partners, a private equity firm," said Standard & Poor's credit
analyst Kenneth Shea.
     
InterfaceFABRIC, which produces interior fabrics and upholstery
products under the Guilford of Maine, Chatham, and Terratex
brands, generated revenue of $161 million and an operating loss of
$27.3 million during 2006 (this includes the European fabrics
business which was sold in April 2006).
     
"We expect management will use the proceeds to reduce debt to
about 3x and strengthen credit measures in the near term," said
Mr. Shea, adding that Standard & Poor's also expects that
management will focus on the company's growing modular carpet and
Bentley Price Street divisions.
     
Standard & Poor's will meet with management shortly in order to
assess the implications for the ratings.  "Our analysis in
resolving the CreditWatch will focus on the company's financial
policies and operating strategies going forward," said Mr. Shea.


ION MEDIA: Board Appoints Todd Gjervold as Director
---------------------------------------------------
ION Media Networks Inc.'s board of directors appointed
Todd E. Gjervold as a director of the company by June 22, 2007.  

Mr. Gjervold is not expected to be named to any committee of the
board.

Mr. Gjervold is an employee of Citadel Investment Group, L.L.C.,
which is an affiliate of CIG Media.  He was appointed to the board
in accordance with the terms of the master transaction agreement,
dated as of May 3, 2007, among the company, NBC Universal Inc.,
NBC Palm Beach Investment I Inc., NBC Palm Beach Investment II
Inc. and CIG Media LLC.

Pursuant to the master transaction agreement, from and after the
closing of CIG Media's tender offer for the company's outstanding
shares of class a common stock, CIG Media has the right to
designate up to two directors of the company.

On May 4, 2007, CIG Media commenced a cash tender offer to
purchase any and all shares of the company's class a common stock
at a price of $1.46 per share.  The initial tender offer period
closed on June 1, 2007, and the subsequent offering period closed
on June 15, 2007.  CIG Media then exercised its right by
designating Mr. Gjervold for appointment to the board.

                          About ION Media

ION Media Networks Inc. in West Palm Beach, Florida (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.  

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.


IPSWICH STREET: Fitch Puts Class E Notes' Rating on Watch Negative
------------------------------------------------------------------
Fitch has placed two classes of notes issued by Ipswich Street
CDO, Ltd. and Ipswich Street CDO, LLC. on Rating Watch Negative:

    -- $9,948,789 class D notes 'BBB';
    -- $7,859,543 class E notes 'BB+'.

Ipswich Street is a high grade collateralized debt obligation that
closed on June 27, 2006 and is managed by MFS Investment
Management.  The notes issued by Ipswich Street are supported by a
portfolio composed of residential mortgage-backed securities
(RMBS; 54%), collateralized debt obligations (27%), and commercial
mortgage-backed securities (CMBS; 19%).

Since the transaction closed, three subprime closed end second
lien RMBS bonds comprising 1.04% of the underlying portfolio
collateral has been downgraded while an additional 2.18% of the
portfolio has been placed on rating watch negative.  Two of the
three downgraded assets were downgraded below investment grade to
Fitch-derived ratings of 'B-' (.19%) and 'BB' (.43%) and remain on
watch for future downgrade.  Both from assets were originally
rated 'A'.

Additionally, both assets remain on Rating Watch Negative at this
time.  All of the assets affected by both rating actions have been
comprised of 2006 vintage CES RMBS assets.  As of the May 29, 2007
trustee report, the class D overcollateralization ratio increased
to 100.74% from 100.73% as of the effective date versus a trigger
of 100.37% and the weighted average rating factor was 1.17 versus
a maximum threshold of 1.45.  The recent rating actions on the
three CES bonds will have a negative effect on the class D OC
ratio as bonds rated below 'BBB-' are haircut for OC calculation
purposes.


JABIL CIRCUIT: Third Quarter 2007 Net Income Down to $6.2 Million
-----------------------------------------------------------------
Jabil Circuit Inc. reported that for its third quarter ended
May 31, 2007, net revenue was $3 billion, compared to $2.6 billion
for the same period of fiscal 2006.  Operating income for the
third quarter of fiscal 2007 decreased to $33.6 million compared
to $77.3 million for the same period of fiscal 2006.

Net income for the third quarter of fiscal 2007 decreased to
$6.2 million, compared to $64.2 million for the same period in
fiscal 2006.

Jabil's third quarter of fiscal 2007 core operating income
decreased to $87.1 million or 2.9% of net revenue compared to
$93.4 million or 3.6% of net revenue for the third quarter of
fiscal 2006.  Core earnings decreased to $47.4 million, compared
to $78.5 million for the third quarter of fiscal 2006.

As of May 31, 2007, the company's balance sheet showed total
assets of $6.2 billion and total liabilities of $3.8 billion,
resulting in a total stockholders' equity of $2.4 million.

Third quarter 2007 operational and balance sheet sequential
highlights include:

     -- Cash flow from operations for the quarter was about
        $192 million.

     -- Third quarter sales cycle improved from 29 days in the
        second quarter to 26 days.

     -- Annualized inventory turns improved from seven turns in
        the second quarter to eight turns.

     -- Core Return on Invested Capital increased to 10% from
        seven% in the second quarter.

     -- A $0.07 dividend was paid on June 1, 2007.

"We are pleased with the improvements we have made both in
operating efficiencies and progress on our balance sheet metrics,"
said president and chief executive officer, Timothy L. Main.

                          Business Update

Jabil said it expects revenue for its fourth fiscal quarter of
2007 to remain at the $3 billion level, with an estimated core
operating margin range of 3% to 3.5%.

"We will continue to focus on making step by step improvements in
our operational efficiency and in our financial performance.  We
believe we are on the right path and intend to demonstrate this to
our investors over the next several quarters," said Mr. Main.

                        About Jabil Circuit
        
Jabil Circuit Inc., headquartered in St. Petersburg, Florida --
http://www.jabil.com/-- provides electronics design,  
manufacturing and product management services to global
electronics and technology companies.  Jabil Circuit has more than
75,000 employees and facilities in 20 countries, including Brazil,
Mexico, United Kingdom and Japan.  Revenues for the 12 months
ended Feb. 28, 2007 were $11.7 billion.

                           *     *     *

As reported in the Troubled Company Reporter on June 4, 2007,
Moody's Investors Service confirmed Jabil Circuit Inc.'s Ba1
corporate family rating and revised the outlook to negative
following the recent filing of its fiscal 2006 (August year-end)
10-K and fiscal 2007 first and second quarter tenth-quarters.
Simultaneously, Moody's upgraded the rating on the existing
$300 million senior unsecured notes to Ba1 from Ba2.


JOAN FABRICS: U.S. Trustee and GE Balk at Proposed Asset Sale
-------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
opposes Joan Fabrics Corporation's motion to sell substantially
all of its assets.

The Trustee argues that the Debtor has not provided sufficient
information to interested parties to allow them to evaluate the
sales.  Moreover, the Trustee said that despite the Debtor's
agreement to do so, the Debtor has not addressed issues in the
sale motion related to consumer privacy and consumer fraud.

GE Commercial Finance Business Property Corporation fka General
Electric Capital Business Asset Funding Corporation for its part
argues that the Debtor has obligation to GE pursuant to a leased
property.

The Debtor, through its predecessor, Mastercraft Fabrics LLC,
leases a property from Cramerton Associates LLC.  The property
is located at 345 Eastwood Drive, in Cramerton, North Carolina.

Cramerton owes GE $3.7 million pursuant to a promissory note dated
July 18, 2002.  The note is secured by the leased property.

GE contends that the lease property is not part of the estate
under Section 541 of the Bankruptcy Code.  It is undisputed, GE
says, that the property is owned by Cramerton, a non-debtor
entity and is leased to the Debtor.

GE further argues that it was never contacted by the Debtor
regarding the proposed asset sale.

About two weeks ago, Bill Rochelle of Bloomberg News reported
that the Debtor received a $13.5 million offer from Greystone
Private Equity LLC for the purchase of its fabric-manufacturing
assets.

The assets, which have been approved for sale on May 21, 2007,
will be auctioned today, June 26, the source said.

If outbid, Greystone is entitled to a 2.5% breakup fee.

The Court is set to consider approval of the results of the
sale on June 28, 2007.

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).  Curtis A. Hehn, Esq., Laura Davis Jones, Esq., and
Michael Seidl, Esq., at Pachulski Stang Ziehl Young Jones &
Wein represent the Debtors in their restructuring efforts.
Bradford J. Sandler, Esq., at Benesch Friedlander Coplan &
Aronoff and David A. Matthews, Esq., at Shumaker, Loop &
Kendrick, LLP represent the Official Committee of Unsecured
Creditors.  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 plan
expires on Aug. 8, 2007.


JOAN FABRICS: Judge Sontchi Approves Incentive Program
------------------------------------------------------
The Honorable Christopher S. Sontchi United States Bankruptcy
Court for the District of Delaware authorized Joan Fabrics
Corporation and its debtor-affiliates to implement the incentive
program to certain employees, specifically:

   -- John Lenox
   -- Margaret Coffin
   -- Bill Garner
   -- Mark Hefner
   -- Ghani Khanani
   -- Margaret Dunford
   -- Ed DiPetrillo
   -- Paul Buffum
   -- Garry Hicks
   -- Rise Ladebauche

The Debtors tell the Court that these employees require additional
incentives to close any anticipated sales, including, the
marketing of their assets.

The Debtors explained that the incentive program will motivate
these employees to use their skills to maximize the sale price for
the Debtors' assets.  However, no incentive payments will be given
if the Debtors failed to receive a gross sale price from the sale.

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).  Curtis A. Hehn, Esq., at Pachulski
Stang Ziehl Young Jones & Wein, represents the Debtors.  Bradford
J. Sandler, Esq., at Benesch Friedlander Coplan, represents the
Official Committee of Unsecured Creditors.  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.


JSC RESOURCES: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: JSC Resources International, Inc.
        P.O. Box 464
        Louisville, GA 30434

Bankruptcy Case No.: 07-11104

Chapter 11 Petition Date: June 22, 2007

Court: Southern District of Georgia (Augusta)

Debtor's Counsel: H. Lehman Franklin, Jr., Esq.
                  H. Lehman Franklin, P.C.
                  P. O. Box 964
                  Statesboro, GA 30459
                  Tel: (912) 764-9616
                  Fax: (912) 764-8789

Estimated Assets: $1 Million to $100 Million

Estimated Debts:  $1 Million to $100 Million

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


LB-UBS COMM: Fitch Affirms C Ratings on Class N and P Certs.
------------------------------------------------------------
Fitch affirms LB-UBS Commercial Mortgage Trust's commercial
mortgage pass-through certificates, series 2001-C2 as:

    -- $110.5 million class A-1 at 'AAA';
    -- $789.3 million class A-2 at 'AAA';
    -- Interest-Only class X at 'AAA';
    -- $49.5 million class B at 'AAA';
    -- $62.7 million class C at 'AAA';
    -- $16.5 million Class D at 'AAA';
    -- $13.2 million class E at 'AAA' ;
    -- $19.8 million class F at 'AA+' ;
    -- $16.5 million class G at 'AA-' ;
    -- $23.1 million class H at 'BBB+'
    -- $14.8 million class J at 'BB+'.
    -- $11.5 million Class K at 'BB-';
    -- $9.9 million class L at 'B+';
    -- $13.2 million class M at 'B-/DR1'.
    -- $6.6 million class N remains at 'C/DR5';
    -- $3.3 million class P remains at 'C/DR6'.

The $5.6 million class Q is not rated by Fitch.

Fitch affirms all classes in spite of 11.6% pay down and 14.5%
defeasance since the last rating action because there is a high
percentage of loans of concern.  As of the June 2007 distribution
date, the pool's aggregate certificate balance has decreased by
11.6% to $1.2 billion from $1.32 billion at issuance.  A total of
38 loans (37.2%) have defeased since issuance.  Twenty-nine loans,
14.4% of the pool, are considered loans of concern.  These include
four specially serviced loans containing six assets (3.6%) along
with other loans with performance issues.

The first specially-serviced loan is comprised of two hotel
properties (2.1%) located in Atlanta, both of which are real
estate owned.  The hotels were renovated and re-flagged and are
being marketed for sale by the special servicer.

The second specially-serviced loan (1.5%) is secured by a 543,572
square foot office building in Tulsa, OK that is 90+ days
delinquent.  The loan was transferred to special servicing in
November 2005 after the borrower requested a loan modification due
to declining occupancy and rents.

The third specially-serviced loan (0.3%) is comprised of two hotel
properties located in Houston, TX.  One of the hotels has received
an extended franchise agreement while the other hotel received a
new franchise agreement.  Both are being marketed for sale by the
special servicer.  The fourth specially-serviced loan (0.5%) is
collateralized by a 3,300 square foot retail property located in
Chicago, Illinois.  The loan is current.

Losses are expected on the specially serviced assets, which are
anticipated to deplete the balance on Class Q and impact classes N
and M.

At issuance, Fitch considered six loans to have investment grade
credit assessments, two of which are fully defeased: 10950 Tantau
Avenue (2.2%) and Courtyard by Marriott (2.6%). Three of the
remaining four credit loans maintain investment-grade credit
assessments: Westfield Shoppingtown Meriden, New Park Mall and 400
Plaza Drive.  The 529 Bryant Street loan no longer maintains an
investment-grade credit assessment.

Westfield Shoppingtown Meriden (6.3%) is located in Meriden, CT
and is anchored by Macy's, JC Penney, Sears, Best Buy, and Dick's
Sporting Goods.  The collateral consists of 371,688 sf of in-line
space within a 913,625 sf regional mall.  As of February 20, 2007,
in-line occupancy decreased to 88% compared to 95.7% at issuance,
with total occupancy down to 94% from 98.2% at issuance.  The A-
note portion of the whole loan is held in the trust, while the B-
note portion ($18.2 million) is held outside the trust.  Fitch
will monitor the leasing activity at this property.

NewPark Mall (6.0%) is secured by 389,682 sf of a 1.2 million sf
regional mall located in Newark, CA.  As of March 2007, in-line
occupancy was 96% compared to 88.9% at issuance.

400 Plaza Drive (1.7%), also known as Hartz Mountain Industries,
is secured by a four-story multi-tenanted office building, located
in Secaucus, NJ.  The occupancy was 96.0% as of May 2007 compared
to 100% at issuance.

529 Bryant Street (1.6%) is secured by a 45,161 sf office building
located in Palo Alto, CA.  The property is 100% occupied by a
single tenant, whose lease expires May 2025.


LEAR CORP: Reschedules 2007 Annual Meeting to July 12
-----------------------------------------------------
Lear Corporation has rescheduled its 2007 Annual Meeting to
July 12, 2007 to allow stockholders sufficient time to evaluate
the company's response to recent criticisms of the proposed merger
with American Real Estate Partners, L.P., a diversified holding
company and an affiliate of Carl C. Icahn.

The company has also filed with the Securities and Exchange
Commission a letter to all stockholders from an independent
special committee of Lear's Board of Directors, reviewing the
major reasons why the Board strongly recommends a vote in favor of
the AREP proposal and addressing certain inaccurate statements by
opponents of the transaction.

In the letter to stockholders, the special committee emphasizes
that:

   1) Under objective valuation measures, the $36 per share offer
      price is fair to stockholders, and is more than double
      Lear's stock price of just over a year ago.

   2) The company aggressively sought out higher bids by
      contacting 41 potential strategic and financial buyers, with
      no competing offers being received.

   3) There is significant execution risk to Lear's long-term
      business plan:

      * Lear's results are highly dependent on SUV and light truck
        sales, which are trending lower;

      * A significant labor disruption or strike would materially
        impact Lear and its supply chain;

      * Recent improvements in the company's financial performance
        do not materially change the long-term outlook;

      * CEO Bob Rossiter's personal interests had no impact on the
        merger decision-making process or outcome.  Ultimate
        authority for the merger rested with an active special
        committee and Lear's Board; and

      * Volatility and structural change within the automotive
        sector are likely to continue for the foreseeable future.

Lear's Annual Meeting, originally scheduled for June 27, 2007, is
now scheduled to be held on July 12, 2007 at 10:00 a.m., E.S.T.,
at Hotel du Pont, 11th and Market Streets in Wilmington, Delaware.  
Lear will continue to solicit proxies between now and the Annual
Meeting.

The record date for stockholders entitled to vote on the Merger
Proposal and other such matters that may be considered at the
Annual Meeting remains May 14, 2007.

The company's Board of Directors, on the unanimous recommendation
of a special committee of independent directors, has approved the
merger agreement and recommends that Lear's stockholders vote
"FOR" adoption of the Merger Proposal.  As announced on
Feb. 9, 2007, Lear entered into the merger agreement pursuant to
which Lear's stockholders will be entitled to receive, subject to
consummation of the merger, $36.00 in cash for each share they
own, without interest and less any applicable withholding tax.

                    About American Real Estate

American Real Estate Partners, L.P. (NYSE: ACP) --
http://www.arep.com/-- is a diversified holding company engaged  
in a variety of businesses including hotel and casino operations,
rental real estate, real estate development, hotel and resort
operation, home fashion and investments in equity and debt
securities.

                         About Lear Corp.

Based in Southfield, Michigan, Lear Corporation (NYSE:
LEA) -- http://www.lear.com/-- supplies automotive interior
systems and components.  Lear provides complete seat systems,
electronic products and electrical distribution systems and
other interior products.

Lear also operates in Latin American countries including
Argentina, Mexico, and Venezuela.  Its European operations are
located in Czech Republic, United Kingdom, France, Germany,
Honduras, Hungary, Poland, Portugal, Romania, Russia, Slovakia,
Spain, Sweden, South Africa, Morocco, Netherlands, Tunisia and
Turkey.  Its Asian facilities are in China, India, Japan,
Philippines, Singapore, South Korea, and Thailand.

                     *     *     *

As reported in the Troubled Company Reporter on May 16, 2007,
Moody's Investors Service confirmed Lear Corp.'s existing
ratings consisting of a B2 corporate family rating, B3 senior
unsecured notes, and B2 secured bank term loan.


LEXINGTON RESOURCES: Posts $549,837 Net Loss in Qtr. Ended Mar. 31
------------------------------------------------------------------
Lexington Resources Inc. reported a net loss of $549,837 for the
first quarter ended March 31, 2007, compared with a net loss of
$3,809,589 for the same period ended March 31, 2006.

During the three-month period ended March 31, 2007, the company
generated $208,871 in gross revenue compared to $301,306 in gross
revenue generated during the three-month period ended March 31,
2006, resulting from oil and gas revenue of $156,165 and $52,706
in well drilling and services revenue generated by the company's
subsidiary, Oak Hills.  

During the three-month period ended March 31, 2007, the company
incurred operating expenses in the aggregate amount of $595,178
compared to $2,489,820 incurred during the three-month period
ended March 31, 2006, a decrease of $1,894,642.  

The company's net loss from operations during the three-month
period ended March 31, 2007, includes $395,506 related to interest
and finance fees, a loss of $110,219 related to a contingent
liability from the adoption of EITF 00-19-2, and a gain of
$342,195 related to the disposal of other equipment.

The decrease in net loss during the three-month period ended March
31, 2007, is attributable primarily to the decrease in operating
expenditures, a decrease in the scale and scope of well drilling
operations and related capital expenditure, a decrease in overall
general administration, and a decrease in investor relations and
promotion relating to investor awareness programs.

At March 31, 2007, the company's consolidated financial statements  
showed $15,292,348 in total assets, $9,426,770 in total
liabilities, and $5,865,578 in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $1,724,810 in total current assets
available to pay $9,426,770 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?2122

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 25, 2007,
Whitley Penn L.L.P., in Dallas, Texas, expressed substantial doubt
about Lexington Resources 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 recurring losses from operations, net working capital
deficiency and accumulated deficit.

                    About Lexington Resources

Lexington Resources Inc. -- (OTC BB: LXRS) (FSE: LXR) (BER: LXR)
(WKN: AOBKLP) -- http://www.lexingtonresources.com/-- acquires    
and develops oil and natural gas properties in the United States.
The company owns a 590 gross acre section of farm-out acreage in
Pittsburg County, Oklahoma for the development and production of
coal bed methane gas known as the Wagnon Property.  The company is
producing gas from four wells drilled on the Wagnon Property.
Lexington has a 53.2% back-in working interest in each of the
wells.  Its current operational focus is gas development
initiatives in the Arkoma Basin, Oklahoma, and the Fort Worth
Basin, in Dallas, Texas.


LIMITED BRANDS: Debt Increase Cues Moody's Ratings Review
---------------------------------------------------------
Moody's Investors Service placed the Baa2 long term and Prime-2
short-term rating of Limited Brands, Inc. on review for possible
downgrade following the company's announcement that it intends to
raise an additional $1.25 billion of debt to finance a
$500 million increase in its share repurchase program, the La
Senza acquisition, and for general corporate purposes.  The review
for downgrade reflects the high likelihood that the increase in
debt will cause the company to not be able to meet two out of the
three credit metrics that were outlined as potentially prompting a
downgrade in Moody's press release dated November 15, 2006.

These ratings are placed under review for possible downgrade:

-- Senior unsecured at Baa2;
-- Senior unsecured shelf at (P) Baa2;
-- Subordinated shelf at (P) Baa3;
-- Preferred shelf at (P) Ba1;
-- Commercial paper at Prime-2.

Moody's review of Limited Brands ratings will focus on the impact
on credit metrics of this sizable increase in debt, the components
of the company's adjusted debt levels as a result of the increase
in funded leverage, the planned divestiture of the apparel
business, and its ongoing financial policies.  Moody's review will
also consider whether or not the company's weak first quarter
operating performance will likely continue, the status of the
integration of the La Senza acquisition, and the likelihood of the
company achieving its announced cost savings.  The review will
also assess the likelihood that the company's remaining US
businesses, Victoria's Secret and BBW, are approaching maturity in
terms of store count and margin expansion.  The review is expected
to conclude prior to the company raising the proposed $1.25
billion of debt and any downgrade, if it were to occur, would be
unlikely to lower the company's ratings below investment grade.

Headquartered in Columbus, Ohio, Limitied Brands, Inc. operates
3,764 specialty stores under the Victoria's Secret, Bath & Body
Works, C.O. Bigelow, Express, Limited Stores, La Senza, White Barn
Candle Co., Henri Bendel and Diva London name plates.  The
companies products are also available online.  Revenues for the
fiscal year ended February 3, 2007 were nearly $10.7 billion.


LSF 5 WAGON: S&P Places Corporate Credit Rating at B
----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Dallas-based LSF 5 Wagon Investments LLC.  The
outlook is negative.
     
At the same time, Standard & Poor's assigned its 'B' rating to the
company's planned $110 million term loan B and $20 million
revolving credit facility.  The bank loan rating and the '3'
recovery rating indicate the expectation for meaningful (50%-70%)
recovery of principal in the event of default.  The proceeds of
the loan will predominately be used to repay existing debt and pay
fees associated with the transaction.  
      
"The ratings on LSF 5 reflect," said Standard & Poor's credit
analyst Charles Pinson-Rose, "among other factors, the company's
small size in the highly competitive fine-dining steakhouse
segment of the restaurant industry and the likelihood that the
company will not generate positive free operating cash flows in
the near future."  He went on to explain that the negative outlook
indicates that S&P could lower the rating if the company cannot
meet its expected operating performance necessary to generate
sufficient cash flows to fund capital expenditures for new
restaurants.


MACKINAW POWER: S&P Rates $147MM Senior Secured Term Loan at BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' rating to
Mackinaw Power LLC's $288.9 million senior secured bonds maturing
2023.

At the same time, Standard & Poor's assigned its 'BB-' rating to
Mackinaw Power Holdings LLC's $147 million senior secured term
loan due 2015.  The recovery rating on the term loan is '2',
indicating the expectation for substantial (70%-90%) recovery of
principal if a payment default occurs.  The ratings had been
preliminary.  The outlook is stable.
     
Mackinaw Power is a special-purpose, bankruptcy-remote operating
company formed to own and operate power plants.  Mackinaw Power is
100% indirectly owned by Holdings, which is 100% indirectly owned
by ArcLight Energy Partners Fund III L.P., a $2.1 billion fund
that is one of three private equity funds managed by ArcLight
Capital Partners LLC.
     
Proceeds from the issue will be used to purchase five contracted
natural gas-fired electricity generation assets from Progress
Ventures Inc. and Progress Genco Ventures LLC, subsidiaries of
Progress Energy Inc.  The portfolio consists of one combined-cycle
unit (500 MW) and four peaking units (1,370 MW), aggregating
1,870 MW.
     
During the contracted period, predictable cash flow from the
projects supports a stable outlook for Mackinaw Power.  The rating
or outlook could be lowered if any asset significantly
contributing to cash flow experiences a sustained operating issue
that precludes execution under the tolls.  There is little
potential for an upgrade in the medium term given the contracted
cash flow position.  In the long term, under a low gas price
scenario, Holdings will suffer without the benefit of contracted
revenues and loan pay-down could lag expectations.  On the other
hand, the ratings could improve if market conditions get better,
allowing Mackinaw Power to enter more longer term contracts, and
continuing good operating performance allows the company to repay
sufficient debt.


MARCAL PAPER: Files Chapter 11 Plan of Reorganization
-----------------------------------------------------
Marcal Paper Mills, Inc. has filed its Plan of Reorganization with
the U.S. Bankruptcy Court for the District of New Jersey.

The company also disclosed that it has secured a $60 million
commitment from Apollo Capital Management, L.P.  This investment
is a key component of the company's restructuring efforts.

"This is an important and positive step forward for the company,
and we are pleased that all of the parties were able to work
together to formalize this Plan of Reorganization.  We appreciate
the confidence that the parties have shown in the company, our
management team, our employees and our business strategy," said
Company Chairman and CEO Nicholas Marcalus.  "I am particularly
pleased that, under the Plan, the Marcalus family will partner
with Apollo to allow Marcal to reach new heights."

"The Plan underscores the unwavering commitment of our valued
customers, suppliers and employees, who continue to bring
tremendous passion and dedication to their work.  We expect that
the company will successfully emerge from Chapter 11 in September.
In the interim, we remain focused on providing superior service to
our customers, strengthening our core businesses, and solidifying
our position in the marketplace," added Marcalus.

Representatives of the company's Official Unsecured Creditors
Committee support the economic terms of the proposed Plan.  Under
the Plan, these creditors are projected to receive 52 cents on the
dollar on their unsecured claims.

As part of the Plan, members of the Marcalus family and Apollo
Capital Management will together invest more than $11.5 million,
plus other forms of consideration, to acquire and hold 100 percent
of the capital stock of a new holding company, which in turn will
own 100 percent of the outstanding shares of a reorganized Marcal
Paper Mills.  "Apollo is pleased to enter into this partnership
with the Marcalus family.  We are highly supportive of
management's strategic plan focused on further developing its
reputation as a strong consumer brand and strengthening its
commitment as a partner to its customers and vendors," said Mathew
Constantino, a partner with Apollo.

The company simultaneously filed a Disclosure Statement that
explains the details of the proposed Plan.  The company will
request that a hearing on the adequacy of the Disclosure Statement
and related procedures to solicit votes in favor of the Plan be
scheduled by the Court for July 13, 2007.

                       About Marcal Paper

Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of   
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories.  Marcal, founded in
1932, is a privately-held, fourth generation family business.  It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.

The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886).  Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard P.A. represent the Debtor.  Kenneth Rosen, Esq., and Mary
E. Seymour, Esq., at Lowenstein Sandler PC represent the Official
Committee of Unsecured Creditors.  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.


MASSACHUSETTS HEALTH: S&P Downgrades Bonds' Rating to BB+
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
Massachusetts Health and Educational Facilities Authority's series
1992B, 1998D, and 2003E bonds, issued for Jordan Hospital, to
'BB+' from 'BBB-', reflecting Jordan's weak financial results for
fiscal 2006, which reflected a greater loss than management
originally expected, and the organization's extremely thin
liquidity.  The outlook is stable.
      
"The results through the first eight months of fiscal 2007, ended
May 31, 2007, reflect operational improvement; however, Jordan
Hospital's overall financial picture is more in-line with a
speculative-grade rating at this time," said Standard & Poor's
credit analyst Jennifer Soule.  "The stable outlook reflects our
expectation that Jordan's fiscal 2007 will close in-line with
management's projections or better and that it will continue to
strengthen its weak liquidity position."
     
Offsetting rating factors include strong volume growth through
fiscal 2006 and through the interim period, as Jordan's new
capacity from a major renovation and expansion project in 2006 is
becoming well utilized; and a continued robust business position
in the service area.
     
The lowered rating affects about $87.7 million in rated debt.


MERRILL LYNCH: Moody's Affirm Low-B Ratings on Three Certificates
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Merrill Lynch
Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2005-CIP1 as:

-- Class A-1, $60,013,340, affirmed at Aaa
-- Class A-2, $533,800,000, affirmed at Aaa
-- Class A-3A, $157,900,000, affirmed at Aaa
-- Class A-3B, $50,000,000, affirmed at Aaa
-- Class A-SB, $108,000,000, affirmed at Aaa
-- Class A-4, $510,325,000, affirmed at Aaa
-- Class A-M, $205,675,000, affirmed at Aaa
-- Class A-J, 138,830,000, affirmed at Aaa
-- Class XP, Notional, affirmed at Aaa
-- Class XC, Notional, affirmed at Aaa
-- Class B, $43,706,000, affirmed at Aa2
-- Class C, $17,997,000, affirmed at Aa3
-- Class D, $38,564,000, affirmed at A2
-- Class E, $25,709,000, affirmed at A3
-- Class F, $33,423,000, affirmed at Baa1
-- Class G, $20,567,000, affirmed at Baa2
-- Class H, $25,709,000, affirmed at Baa3
-- Class J, $10,284,000, affirmed at Ba1
-- Class K, $5,142,000, affirmed at Ba2
-- Class L, $7,713,000, affirmed at Ba3

As of the June 12, 2007 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 1.0%
to $2.04 billion from $2.06 billion at securitization.  The
Certificates are collateralized by 135 mortgage loans.  The loans
range in size from less than 1.0% to 9.0% of the pool, with the
top 10 loans representing 44.6% of the pool.  The pool includes
three shadow rated loans, representing 15.1% of the outstanding
pool balance.  There are no loans in special servicing.  There
have been no loans liquidated from the pool and no loans have
defeased.  Seventeen loans, representing 15.6% of the pool, are on
the master servicer's watchlist.

Moody's was provided with full-year 2006 and partial-year 2006
operating results for 80.6% and 94.4%, of the pool. Moody's
weighted average loan to value ratio for the conduit component is
100.6%, compared to 102.9% at securitization.

The largest shadow rated loan is the Financial Center Loan ($130.0
million -- 6.3%), which is secured by a 1.03 million square foot,
36-story Class A office building located in the Financial District
of New York City.  The loan is interest only for its entire term.
Moody's current shadow rating is Baa1, the same as at
securitization.

The second largest shadow rated loan is the Westchester Mall Loan
($100.0 million -- 4.8%), which is secured by the borrower's
interest in a 832,000 square foot, regional mall (482,442 square
feet of collateral) located in White Plains, New York.  The loan
represents a 20.0% pari-passu interest in a $500.0 million loan.
The loan is interest only for its entire term.  Moody's current
shadow rating is A3, the same as at securitization.

The third largest shadow rated loan is the E Walk on New 42nd
Street Loan ($77.5 million -- 3.7%), which is secured by a
leasehold interest in an 177,000 square foot theater anchored
retail center located on 42nd Street in New York City.  The
property is subject to a ground lease that expires in July 2096.
The loan is interest only for the entire term.  Moody's current
shadow rating is Baa2, the same as at securitization.

The three largest conduit loans represent 25.5% of the pool.  The
largest conduit loan is the Glenbrook Mall Loan ($182.9 million --
9.0%), which is secured by the borrower's interest in a 1.2
million square foot, regional mall (873,230 square feet of
collateral) located in Fort Wayne, Indiana.  Moody's LTV is 98.7%
compared to in excess of 100.0% at securitization.

The second largest conduit loan is the Highwoods Portfolio Loan
($160.0 million -- 7.9%), which is secured by an office building
pool. The portfolio consists of 33 buildings containing in the
aggregate 2.0 million square feet of space.  The space is
allocated between Tampa, Florida (64.0%) and Charlotte, North
Carolina (36.0%).  The loan is interest only for its entire term.
Moody's LTV is in excess of 100.0%, the same as at securitization.

The third largest conduit loan is the U-Haul Self-Storage
Portfolio Loan ($84.0 million -- 4.1%), which is secured by a pool
of 50 U-Haul Self Storage facilities located in various locations
across 26 states.  The largest state concentrations are New York
(20.3%), Texas (11.1%) and Pennsylvania (7.9%).  The facilities
contain a total of 1.11 million square feet distributed among
14,725 Units.  As of year-end 2006 the pool's occupancy was 88.0%,
compared to 83.4% at securitization.  The pool's performance has
improved due to increased revenue and loan amortization.  The loan
amortizes on a 300-month schedule.  Moody's LTV is 80.4%, compared
to 89.4% at securitization.


MERRILL LYNCH: Moody's Junks Rating on Class B-3 Certificates
-------------------------------------------------------------
Moody's Investors Service has upgraded two classes of certificates
and downgraded one class of certificates issued by a Merrill Lynch
Mortgage Investors Trust in 2004.  These actions are based on the
analysis of the credit enhancement provided by subordination,
overcollateralization and excess spread relative to the expected
loss.  The transaction is failing its cumulative loss trigger and
delinquency trigger, allowing the transaction to pay sequentially.
The transaction is backed by sub-prime second-liens, and has seen
recent losses that have exceeded the excess spread available
thereby depleting the overcollateralization.

Complete rating actions are:

Issuer: Merrill Lynch Mortgage Investors Trust

Upgrade:

-- Series 2004-SL1, Class B-1, Upgraded to Aaa from Baa2;
-- Series 2004-SL1, Class B-2, Upgraded to Aaa from Baa3.

Downgrade:

-- Series 2004-SL1, Class B-3, Downgraded to Caa2 from Ba2.


MERITAGE MORTGAGE: Moody's Junks Rating on Class B-1 Certificates
-----------------------------------------------------------------
Moody's Investors Service downgraded three certificates from a
transaction issued in 2004 by Meritage Mortgage Loan Trust.  The
transactions are backed by primarily first lien, adjustable and
fixed rate subprime mortgage loans.

The actions are based on the analysis of the credit enhancement
provided by subordination, overcollateralization and excess spread
relative to expected losses.

Complete rating actions are:

DOWNGRADE:

Issuer: Meritage Mortgage Loan Trust, 2004-1

-- Class M-7, downgraded to Ba3 from Baa2;
-- Class M-8, downgraded to B3 from Baa3;
-- Class B-1, downgraded to C from Ba1.


MITEL NETWORKS: ISS Urges Shareholders to Snub Inter-Tel Merger
---------------------------------------------------------------
Institutional Shareholder Services, providers of proxy voting and
corporate governance solutions to the institutional marketplace,
recommended that shareholders vote against Mitel Networks
Corporation's merger with Inter-Tel (Delaware) Incorporated.
    
"Based on ISS review of the terms of the transaction, the merger
agreement does not warrant shareholder support due to low 7.6%
1-day offer premium; flawed sale process; lack of an imminent
reason to sell the company without conducting a proper sale
process; and valuation.
    
"I am gratified ISS agrees with my position that shareholders
should not vote in favor of the Mitel buyout at $25.60 per share.
I believe the company is here due to a flawed process that
resulted in an undervalued offer," Steven G. Mihaylo, founder and
former chief executive officer of Inter-Tel (Delaware)
Incorporated, stated.  "Based on the assumptions underlying the
recapitalization analysis, the company is worth more than the
Mitel offer.  Indeed, I believe a proper auction should be
conducted to win the highest price for shareholders," he said.
    
Furthermore, as ISS recognized, Mr. Mihaylo is not alone in his
concerns regarding the process and valuation: Millenium Management
LLC, which owns approximately 3.2% of the outstanding shares, sent
a letter to Inter-Tel on June 13, 2007, stating that, in the
company's view, the process was not a full and fair auction and
the proposed purchase price fails to value the company adequately.

"Absent a higher bid, I believe Inter-Tel has a better alternative
through a leveraged recapitalization, which will provide greater
value to all shareholders and will at the same time preserve the
opportunity for future growth and upside potential, including a
potential sale at a later date," Mr. Mihaylo added.  "I urge all
shareholders, especially current and former employees who care
about the company as I do, to stand up, be heard and vote their
shares against this buyout proposal."
    
Mr. Mihaylo also disclosed, with regard to his proposed
recapitalization plan, that the Royal Bank of Canada and RBC
Capital Markets have committed a total of $255 million to finance
Mr. Mihaylo's recapitalization plan subject to customary closing
conditions similar to those contained in the Mitel financing
commitments.
    
The Senior Secured Financing Commitment Letter consists of:

   -- First-lien term loan facility in an aggregate principal
      amount of up to $125 million;

   -- $30 million revolving credit facility; and

   -- Second-lien term loan facility in an aggregate principal
      amount of up to $100 million.
    
"With Royal Bank of Canada and RBC Capital Markets as my financing
partners and their firm commitment to my recapitalization plan, I
am confident Inter-Tel shareholders will agree that my proposal is
superior to Mitel's buyout offer and will vote against the merger
at the upcoming meeting of shareholders Friday, June 29, 2007,"
Mihaylo stated.  "I believe the $255 million commitment should
more than adequately address concerns raised by the board
concerning the finance ability of the recapitalization proposal
and should not require any asset disposition."
    
"The board has had ample time to pursue its 'strategic options'
but I believe the board never had a coherent plan as evidenced by
its recent agreement to sell the company to Mitel, Mr. Mihaylo
added.  "Thus, if the shareholders vote against the merger, I
believe it should be viewed as an unequivocal vote of no-
confidence for the board and the company's leadership over the
past 15 months."
    
The preliminary proxy statement was filed on June 8, 2007, and
along with other relevant documents, is available by contacting
MacKenzie Partners Inc. by telephone at (800) 322-2885.  

              About Inter-Tel (Delaware) Incorporated

Headquartered in Tempe, Arizona Inter-Tel (Delaware) Incorporated
(Nasdaq: INTL) -- http://www.inter-tel.com/-- has grown from  
providing simple business telephone systems, to offering value-
driven communications products; applications utilizing networks
and server-based communications software; and a wide range of
managed services that include voice and data network design and
traffic provisioning, custom application development and financial
solutions.  Founded in 1969 by Steven G. Mihaylo, Inter-Tel
employs over 1,900 communications professionals, and services
business customers through a network of 59 company-owned, direct
sales offices and over 350 authorized providers in North America
and 60 resellers in Europe.

                 About Mitel Networks Corporation

Headquartered in Herndon, Virginia, Mitel Networks Corporation
-- http://www.mitel.com/-- delivers the full value of IP  
Communications through networked business solutions that help
customers achieve success through business process integration,
enhanced employee productivity, increased customer loyalty and
helping to generate new revenue streams.

                           *     *     *

As reported in the Troubled Company Reporter on June 22, 2007,
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Ottawa-based Mitel Networks Corp.  The
outlook is stable.


MORTGAGE ASSET: Fitch Affirms B Rating on Class B-5 Certificates
----------------------------------------------------------------
Fitch Ratings has affirmed the following Mortgage Asset
Securitization Transactions Adjustable-Rate Mortgages Trust
mortgage pass-through certificates:

Series 2004-8

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

Series 2006-2

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

The affirmations, affecting approximately $850 million of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  Both of the above
transactions have experienced a growth in CE and have suffered
only minimal or no loss to date.

The collateral of the above transactions consists of conventional,
fully amortizing, 30-year adjustable-rate mortgage loans secured
by first liens on one- to four-family residential properties.  The
loans were acquired by UBS from various originators and are
serviced by various servicers.  Both of the above transactions are
master serviced by Wells Fargo Bank N.A. (rated 'RMS1' by Fitch).


MORTGAGE ASSET: Fitch Holds B Rating on 2003-8 Class B-5 Certs.
---------------------------------------------------------------
Fitch Ratings has taken the following rating actions on the
Mortgage Asset Securitization Transactions residential mortgage
pass-through certificates listed below:

Series 2003-1 Total Pool 2

    -- Class A affirmed at 'AAA';
    -- Class 30-B-1 affirmed at 'AAA';
    -- Class 30-B-2 affirmed at 'AAA';
    -- Class 30-B-4 upgraded to 'A+' from 'A'.

Series 2003-1 Total Pools 1 & 3

    -- Class A affirmed at 'AAA';
    -- Class 15-B-1 affirmed at 'AAA';
    -- Class 15-B-2 affirmed at 'AAA';
    -- Class 15-B-5 affirmed at 'BB'.

Series 2003-3

    -- Class A affirmed at 'AAA';
    -- Class B-2 affirmed at 'AA+';
    -- Class B-3 affirmed at 'A+';
    -- Class B-5 affirmed at 'BB+'.

Series 2003-8

    -- Class A affirmed at 'AAA';
    -- Class B-5 affirmed at 'B'.

The affirmations, affecting approximately $1.2 billion of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  The upgrade, affecting
approximately $1 million of the outstanding certificates, reflects
an improvement in the relationship between CE and expected loss.  
In addition, all of the above transactions have experienced a
growth in CE and have suffered minimal or no loss to date.

The collateral of the above transactions primarily consists of
conventional, fully amortizing, jumbo-prime, 10-year to 30-year
fixed-rate mortgage loans secured by first liens on one- to four-
family residential properties.  The loans were acquired by UBS
from various originators and are serviced by various servicers.
All of the above transactions are master serviced by Wells Fargo
Bank N.A. (rated 'RMS1' by Fitch).


MORTGAGE ASSET: Fitch Affirms BB Ratings on Two Cert. Classes
-------------------------------------------------------------
Fitch Ratings has affirmed the following Mortgage Asset
Securitization Transactions, Inc. Alternative Loan Trust mortgage
pass-through certificates:

Series 2003-1

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

Series 2003-6

    -- Class A affirmed at 'AAA'.

Series 2004-1

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

Series 2004-2 Total Pools 1-5

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

Series 2004-2 Total Pools 6-8

    -- Class A affirmed at 'AAA'.

The affirmations, affecting approximately $605 million of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  In addition, all of the
above transactions have experienced a growth in CE and suffered
only minimal losses to date.

The collateral of the above transactions primarily consists of 15-
year and 30-year fixed-rate mortgage loans extended to Alt-A
borrowers and secured by first liens on one- to four-family
residential properties.  The loans were acquired by UBS from
various originators and are serviced by various servicers.  All of
the above transactions are master serviced by Wells Fargo Bank
N.A., which is rated 'RMS1' by Fitch.


NEWFIELD EXPLORATION: Inks New $1.25 Billion Credit Facility
------------------------------------------------------------
Newfield Exploration Company entered into a new $1.25 billion
revolving credit facility to replace its previous $1 billion
facility.  The parties to the credit agreement, dated as of
June 22, 2007, are the company, the lenders, and JPMorgan Chase
Bank, N.A., as administrative agent and issuing bank.

Loans under the credit agreement bear interest, at the company's
option, based on:

     (a) a rate per annum equal to the higher of the prime rate
         announced from time to time by JPMorgan Chase Bank, N.A.
         or the weighted average of the rates on overnight
         federal funds transactions with members of the Federal
         Reserve System during the last preceding business day
         Plus 50 basis points or

     (b) a base Eurodollar rate substantially equal to the London
         Interbank Offered Rate adjusted for statutory reserve
         requirements for Eurodollar liabilities, plus a margin
         that is based on a grid of our debt rating.  All other
         terms and conditions of the credit agreement are
         substantially the same as those of the prior credit
         facility.

                  About Newfield Exploration

Headquartered in Houston, Texas, Newfield Exploration Co. (NYSE:
NFX) -- http://www.newfld.com/-- is an independent oil and gas  
company that explores, develops and acquires crude oil and natural
gas properties.

                          *      *     *

As of June 25, 2007, the company continues to carry Fitch's BB+
long term issuer default rating.  Fitch rates the company's bank
loan debt and senior unsecured debt at BB+ while its senior
subordinate rating is at BB-.  The outlook remains stable.

At the same time, the company also bears Moody's Investor
Services' Ba2 long term corporate family rating and probability of
default rating, Ba1 senior unsecured debt, Ba3 senior subordinate
rating, and B1 preferred stock rating.  The outlook is stable.

The company also continues to carry Standard & Poor's BB+ long
term foreign and local issuer debt ratings.  The outlook remains
stable.


NUANCE COMMS: Inks Pact To Acquire Tegic for $265 Million in Cash
-----------------------------------------------------------------
Nuance Communications Inc. and AOL LLC signed a definitive
agreement whereby Nuance will acquire Tegic Communications Inc.

Under the terms of the agreement, total consideration is about
$265 million in cash.  The transaction is expected to close in
Nuance's fiscal fourth quarter and is subject to customary closing
conditions and regulatory approvals.

The transaction expands Nuance's presence in the mobile industry
and allows it to further accelerate the delivery of solutions that
unlock the power of mobile devices and networks.  Tegic brings
industry-leading T9 predictive text input software, which has
shipped on more than 2.5 billion devices, and next-generation
integrated text and touch input solutions to Nuance's portfolio of
voice-enabled applications for device control, mobile search,
email and text messaging.

Building on a partnership between Nuance and Tegic established in
2005, Nuance intends to deliver an all-in-one interface that
integrates Nuance and Tegic solutions to support predictive text,
speech and touch input.  This multimodal interface will provide
easier access for users of mobile devices and will be available to
all manufacturers across their product lines.

In its fiscal year 2008, Nuance expects Tegic to contribute
between $65 million and $68 million in non-GAAP revenue;
$45 million and $48 million in GAAP revenue; a GAAP loss between
$0.12 and $0.13 per share; and non-GAAP earnings between $0.04 and
$0.05 per diluted share.  The combination is expected to generate
about $8 million to $10 million in cost synergies in fiscal year
2008.  

The addition of Tegic brings resources and capabilities that are
expected to expand Nuance's market presence and leadership in the
rapidly expanding mobile industry:

    * Focus on Mobile Opportunities - The companies share core
      competencies in mobile infrastructure, work closely with a
      common OEM customer base and maintain similar relationships
      with leading carriers.  Supporting more than 60 languages
      and 15 different character scripts, Tegic shares Nuance's
      commitment to broad language coverage based on custom
      dictionaries and grammars.

    * Strong Industry Relationships - Shipped on more than
      2.5 billion mobile devices worldwide, including
      about two-thirds of mobile devices shipped last year, Tegic
      maintains longstanding relationships with the largest
      companies in the industry, including Nokia, Samsung, Sony
      Ericsson, LG and Motorola.  This established customer base
      can be leveraged to generate new opportunities for Nuance's
      existing mobile product portfolio.  In addition, Tegic's
      established distribution channel to all major Chinese
      handset manufacturers offers tremendous growth opportunities
      for the product lines of each organization in this fertile
      market.

    * Technological Leadership - Tegic embedded software solutions
      have set the bar for text input on mobile devices, making
      mobile experiences faster, easier and more compelling.  In
      addition to its core T9 product, it has expanded its
      portfolio to support multimodal interfaces, broad languages
      and additional databases.  More than 50 software engineers
      continue to advance Tegic's solutions and bring to Nuance
      more than 70 patents and 140 patents pending worldwide.  

    * Talented, Experienced Team - Nuance benefits from the
      addition of Tegic's strong management, customer support, and
      engineering teams, with their proven competencies in
      creating, selling and supporting mobile embedded software.

On this transaction, UBS and Citigroup are acting as financial
advisors to Nuance and Time Warner, respectively.

"The enhanced capabilities of mobile devices and networks have
fueled significant innovation in features and services, but their
potential has been tempered by the traditional interface on most
mobile devices," said Paul Ricci, chairman and chief executive
officer, at Nuance.  "Tegic shares our vision of delivering an
integrated, superior and flexible user experience for today's
wireless subscribers. Together, we are poised to redefine the way
people interact with their mobile devices, delivering a more
convenient, simple way for consumers to control features and
access information on their phones, and search and navigate the
mobile Web."

Time Warner Inc. chairman and chief executive Dick Parsons said:
"AOL's sale of Tegic marks yet another step in our overall
strategy of focusing on our core assets to drive profitable growth
for our shareholders. As AOL continues to make impressive
progress, it's more important than ever that AOL's resources are
fully aligned behind growing its worldwide advertising
businesses."

AOL chairman and CEO Randy Falco said: "We believe that Nuance is
a good match for Tegic, its employees and its business partners,
and we value our relationships with both companies.  This sale
also lets us focus our mobile business on building strong
consumer-based, ad-supported mobile experiences."

                    About Tegic Communications

Tegic Communications Inc. -- http://www.tegic.com/-- provides  
software for mobile data services, including market-leading T9
software.  A wholly owned subsidiary of AOL LLC, Tegic was founded
in 1995 to develop and market communication technologies for the
telecommunications and computing industries.  The company is
headquartered in Seattle, Washington and has offices in London,
Paris, Tokyo, Hong Kong, Seoul, Beijing, New Delhi, Singapore and
Sao Paulo.

                    About Nuance Communications

Based in Burlington, Massachusetts, Nuance Communications Inc.
(NASDAQ: NUAN), fka ScanSoft, Inc., -- http://www.nuance.com/--  
provides speech and imaging solutions for businesses and consumers
around the world.  Its technologies, applications and services
that help users interact with information, and create, share and
use documents.

                          *     *     *

As reported in the Troubled Company Reporter on June 25, 2007,
Standard & Poor's Ratings Services affirmed its B+/Positive/--
corporate credit and other ratings on Nuance Communications.


ONEIDA INC: Moody's Places Corporate Family Rating at B2
--------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Oneida, Inc.'s
new senior secured first lien bank facility and a B2 corporate
family rating to the company.  The rating outlook is stable.  The
ratings assigned are based on preliminary terms as outlined by the
company, and are subject to receipt and final review of executed
documents.  These represent first time ratings for Oneida
following its emergence from voluntary bankruptcy in September
2006.  The company plans to use proceeds from the term loan and a
portion of cash to refinance the existing term loan that was put
in place following the emergence, pay a $30 million special
dividend to preferred equity holders, and pay related fees,
expenses and prepayment penalties.

Ratings assigned are as follows:

Oneida, Inc.:

-- Corporate family rating at B2
-- Probability of default rating at B2
-- $120 million first-lien Term Loan due 2013 at B3 (LGD 4, 62%)

Oneida's B2 corporate family rating reflects the company's lower
debt obligations, stronger liquidity and improved credit metrics
that came as a direct result of its emergence from bankruptcy in
September 2006.  As part of this process, the company was able to
reduce debt by about $100 million and terminate $41 million of
pension plan obligations.  Pro forma for the current transaction,
Moody's estimates debt to be about 5.0 times latest twelve months'
EBITDA of about $40 million, which is comfortably in the "B"
rating category.  The rating also reflects the significant
improvement in its cost structure as a result of completing the
shift to a 100% outsourced business model in March 2005, which
resulted in gross margin improvement to over 35% as of March 2007
from about 22% at the end of January 2005.  These actions should
provide sufficient cushion, enabling the company to invest in
future growth.  Further supporting the rating is the company's
leading market positions in the tableware industry, its
diversified customer base in both the consumer and foodservice
segments, and its continued-strong brand name recognition.

However, the rating is constrained by the significant revenue
declines that have occurred over the last several years as a
result of past service issues and failure to react to changing
consumer tastes, which the company has corrected, and shifting
industry trends and planned declines such as exiting unprofitable
businesses.  Oneida's revenue has declined from over $500 million
in 2001 to about $350 million today.  Although the company has
identified and begun to implement several new growth initiatives,
it could be met with challenges including the need to improve
brand relevance, or fundamental industry issues such as increased
penetration from private label goods, consolidation among
department store customers and the shift toward dual sourcing or
direct sourcing from foreign manufacturers by certain key
customers.

The stable outlook reflects Moody's expectation that Oneida's
post-emergence cost structure and adequate liquidity will provide
satisfactory flexibility to withstand near-term challenges as the
company continues to implement its operational restructuring plan
and growth initiatives.  The outlook assumes that the company will
steadily improve operating and financial performance in 2007, and
2008 through modest revenue growth and profit retention, will
generate solid free cash flows and steadily reduce debt.

Headquartered in Oneida, New York, Oneida, Inc. is a leading
marketer and distributor of tableware products, including
metalware, dinnerware, glassware and other tabletop accessories.
The company's key operations are in North America, U.K. and
Australia, and revenue is estimated to be about $350 million.


PAETEC HOLDING: S&P Junks Rating on Proposed $300 Mil. Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Fairport, New York-based PAETEC Holding Corp. to positive from
stable.  At the same time, S&P assigned a 'CCC+' rating to
PAETEC's proposed $300 million senior unsecured notes due 2015.  
All existing ratings are affirmed, including the 'B' corporate
credit rating.
      
"The outlook revision is based on our expectations for continued
growth in the company's customer base and our belief that
integration risks from the merger between subsidiary PAETEC Corp.
and US LEC Corp. have been largely mitigated," said Standard &
Poor's credit analyst Allyn Arden.  "While the merger is still in
the early stages, our discussions with management indicate that
the company will be able to achieve its budgeted cost savings of
$33 million this year."  If PAETEC, a competitive local exchange
carrier, is able to demonstrate further progress in operational
integration over the next couple of quarters, we could raise the
rating.
     
Proceeds from the proposed note issue will be used to repay
$300 million of the existing first-lien term loan.  The notes are
being offered under rule 144A with registration rights.  PAETEC's
debt will be about $875 million on an operating lease-adjusted
basis after the repayment.
     
The ratings on PAETEC reflect a vulnerable business risk profile
stemming from significant competition from larger, better-
capitalized regional Bell operating companies and other CLECs; the
lack of any sustainable competitive advantages; low barriers to
entry and low switching costs; and a highly leveraged financial
profile.  PAETEC mainly competes with Verizon Communications Inc.
and AT&T Inc. for midsize and large business customers.   These
customers generate average monthly recurring revenue of about
$2,000, considerably higher than most other rated CLECs.  
Tempering factors include reasonable prospects for solid
discretionary cash flow generation, the potential for meaningful
operating synergies as a result of the merger, long average
contract durations and low churn, and market diversity.
     
PAETEC is one of the largest CLECs in the U.S. with more than two
million access lines and 45,000 midsize and large business
customers in 52 tier one and tier two markets in the eastern and
Midwest regions, as well as California.


PLEASANT CARE: Wants to Sell All Assets on July 2 Auction
---------------------------------------------------------
Pleasant Care Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Central District of California for
authority to sell substantially all of their assets at a July 2,
2007 auction.

To bid at the auction, buyers will need to provide the Debtors
with a deposit equal to at least 20% of the amount of the minimum
bid for the facilities they are interested in.

As of June 11, 2007, the Debtors have entered into stalking horse
bid agreements with two buyers for four of their 29 facilities.

A&C Health Care Services Inc. offered to purchase the Debtors'
facilities in Millbrae, Lodi, and Bakersfield, Calif. for
$3.5 million.  

A&C has provided the Debtors with a $700,000 deposit, however,
A&C wants to have until July 31, 2007, to close the sale.

So that A&C is not being provided a longer time to close than
other buyers, the Debtors request that all buyers be allowed to
extend their required closing date until July 31, 2007, by
increasing the amount of their non-refundable deposit by an
additional 5%.

GHC of Santa Ana Heights LLC also proposed to purchase the
Debtors' facility in San Diego, Calif. for $3,550,000.  GHC
has not yet provided the Debtors with the required $250,000
deposit.

The Debtors tell the Court that they considering the asset sale
because they are losing a substantial amount of money from their
business operations and their postpetition financing agreement
with their senior secured lender, which enables them to fund those
operating losses, is scheduled to expire on June 29, 2007.  

Last month, the Court issued a final order authorizing the Debtors
to obtain up to $17,400,000 in postpetition from Bridge Healthcare
Finance LLC and Bridge Opportunity Finance LLC -- the Debtors'
primary secured creditor.  

As adequate protection, the Debtors grant the lenders security
interests in all of their presently owned and after-acquired
personal property and prepetition collateral.

The Court is set to consider the results of the sale on
July 5, 2007, 1:30 pm, at Courtroom 1639, No. 255,
E. Temple St., in Los Angeles, Calif.

Based in La Canada, California, Pleasant Care Corporation and its
affiliates -- http://www.pleasantcare.com/-- provide nursing home  
care.  The company and four of its affiliates filed for chapter 11
protection on March 22, 2007 (Bankr. C.D. Calif. Lead Case No.
07-12312).  Ron Bender, Esq., Monica Y. Kim, Esq., and Jacqueline
L. Rodriguez, Esq., at Levene, Neale, Bender, Rankin & Brill LLP,
represent the Debtors.  Samuel R. Maizel, Esq., at Pachulski Stang
Ziehl Young Jones & Weintraub LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts between $1 million and $100 million.


PLEASANT CARE: Taps Paul Gulbrandson as Medicare Appeals Counsel
----------------------------------------------------------------
Pleasant Care Corporation and its debtor-affiliates ask authority
from the U.S. Bankruptcy Court for the Central District of
California to employ Paul R. Gulbrandson, C.P.A. as their Medicare
Appeals Consultant.

The Debtors disclose that they are required to submit annual cost
reports, which detail costs and perform cost allocation.  The cost
reports reconcile reimbursement to the Debtors at the end of the
year.  The cost reports and other data provided by the Debtors are
subjected to audits performed by Medicare or their agents.

Before the filing for bankruptcy, the Debtors challenged certain
adjustments made by Mutual Omaha, who conducted the audits, with
respect to Medicare reimbursements to which the Debtors believed
they are entitled for the period of approximately 2001 to 2004.  

Mr. Gulbrandson will assist them in the challenge to the audits.

The Debtors tell the Court that Mr. Gulbrandson will receive a fee
equal to 25% of all funds recovered as a result of the trial
before the board on the matter.

Mr. Gulbrandson assures the Court that he is disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.

                       About Pleasant Care

Based in La Canada, California, Pleasant Care Corporation and its
affiliates -- http://www.pleasantcare.com/-- provide nursing home
care.  The company and four of its affiliates filed for chapter 11
protection on March 22, 2007 (Bankr. C.D. Calif. Lead Case No.
07-12312).  Ron Bender, Esq., Monica Y. Kim, Esq., and Jacqueline
L. Rodriguez, Esq., at Levene, Neale, Bender, Rankin & Brill LLP,
represent the Debtors.  Samuel R. Maizel, Esq., at Pachulski Stang
Ziehl Young Jones & Weintraub LLP, represents the Official
Committee of Unsecured Creditors.


PLEASANT CARE: Files Schedules of Assets & Liabilities
------------------------------------------------------
Pleasant Care Corporation, delivered its Schedules of Assets and
Liabilities to the U.S. Bankruptcy Court for the Central District
of California, disclosing:


     Name of Schedule                Assets      Liabilities
     ----------------                ------      -----------
  A. Real Property               $3,000,000
  B. Personal Property          $14,202,730
  C. Property Claimed
     as Exempt
  D. Creditors Holding                           $11,826,528
     Secured Claims                              
  E. Creditors Holding                            $9,576,039
     Unsecured Priority Claims
  F. Creditors Holding                           $11,208,243
     Unsecured Nonpriority
     Claims
                                -----------       ----------
     Total                      $17,202,730      $32,610,810

                       About Pleasant Care

Based in La Canada, California, Pleasant Care Corporation and its
affiliates -- http://www.pleasantcare.com/-- provide nursing home
care.  The company and four of its affiliates filed for chapter 11
protection on March 22, 2007 (Bankr. C.D. Calif. Lead Case No.
07-12312).  Ron Bender, Esq., Monica Y. Kim, Esq., and Jacqueline
L. Rodriguez, Esq., at Levene, Neale, Bender, Rankin & Brill LLP,
represent the Debtors.  Samuel R. Maizel, Esq., at Pachulski Stang
Ziehl Young Jones & Weintraub LLP, represents the Official
Committee of Unsecured Creditors.


PPM AMERICA: Fitch Downgrades Ratings on Three Note Classes
-----------------------------------------------------------
Fitch has affirmed four classes and downgraded three classes of
notes issued by PPM America High Grade CBO I, Ltd.  These actions
are the result of Fitch's review process and are effective
immediately:

    -- $49,011,935 class A-1 affirmed at 'AAA/F1+';
    -- $183,487,366 class A-2A affirmed at 'AAA';
    -- $384,744,034 class A-2B affirmed at 'AAA';
    -- $24,528,903 class A3 affirmed at 'AAA';
    -- $48,000,000 class B-1 downgraded to 'B+' from 'BB+';
    -- $10,000,000 class B-2 downgraded to 'B+' from 'BB+';
    -- $14,193,562 class C downgraded to 'C/DR6' from 'CCC+/DR2'.

PPM High Grade I is a collateralized bond obligation that closed
Dec. 19, 2000 and is managed by PPM America, Inc.  PPM High Grade
I has a portfolio with a large component of investment grade
corporate bonds.  Included in this review, Fitch discussed the
current state of the portfolio with the asset manager and their
portfolio management strategy going forward.  In addition, Fitch
conducted cash flow modeling utilizing various default timing and
interest rate scenarios to measure the breakeven default rates
going forward relative to the minimum cumulative default rates
required for the rated liabilities.

The downgrades to the class B and C notes are the result of
several factors, including negative credit migration of the
portfolio, a reduction in weighted average coupon, and a declining
class B interest coverage ratio.  According to the portfolio dated
June 15, 2007, the WAC of the assets decreased to 6.41%.  The
weighted average rating factor also deteriorated to 28.30 ('BBB-
/BB+'), and the class B IC ratio decreased to 102.85%, relative to
a trigger of 102.5%.  Given the current state of the portfolio,
Fitch has conducted cash flow model simulations that show that the
deal may not be able to withstand a requisite level of defaults
that are commensurate with the current ratings of the class B and
C notes.

The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the governing documents, as well as the stated balance of
principal by the legal final maturity date.  The rating of the
class A-3 notes addresses the return of the accreted investment
amount by the legal final maturity.  The ratings of the class B-1
and class B-2 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 C notes
addresses the likelihood that investors will ultimately receive
the stated balance of principal by the legal final maturity date.  
Since the close of the deal, the class C noteholders have received
distributions totaling $3,656,438, bringing the rated balance to
$14,193,562, or 79.5% of the original balance.


PRICELINE.COM INC: Strong Performance Cues S&P's Upgrade to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on
Priceline.com Inc., including raising the corporate credit rating
to 'B+' from 'B'.  The ratings were removed from CreditWatch with
positive implications, where they were placed on April 9, 2007.  
The outlook is positive.
     
"The upgrade is based on strong operating performance and
improving credit measures," said Standard & Poor's credit analyst
Andy Liu.  "We expect Priceline.com to continue its strong
performance and market share gain, especially in the growing
international markets, in the absence of an unexpected shock to
the travel industry."

Norwalk, Connecticut-based Priceline.com is a provider of retail
and consumer bid-based travel services in airline tickets, hotel
rooms, rental cars, vacation packages, and cruises.
     
The ratings on Priceline.com reflect the highly competitive online
travel agency market, some supplier concentrations in airlines and
hotels, relatively low profit margins even with recent years'
improvement, and decreased incentive fees from global distribution
systems.  These factors are partially offset by the company's good
competitive position in the European online travel market, market-
leading "name-your-own-price" bid-based business, and positive
discretionary cash flow.

This unsolicited rating(s) was initiated by Standard & Poor's.  It
may be based solely on publicly available information and may or
may not involve the participation of the issuer's management.  
Standard & Poor's has used information from sources believed to be
reliable, but does not guarantee the accuracy, adequacy, or
completeness of any information used.


PRIMERA HOMES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Primera Homes Corporation
        dba Maravilla Homes
        fka Primera Homes, Ltd.
        12105 Bell Avenue
        Austin, TX 78727

Bankruptcy Case No.: 07-11125

Type of Business: The Debtor develops real estate property.

Chapter 11 Petition Date: June 21, 2007

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtor's Counsel: Ray Fisher, Esq.
                  Fisher Law Offices
                  P.O. Box 684565
                  Austin, TX 78768-4565
                  Tel: (512) 478-9810
                  Fax: (877) 346-2241

Estimated Assets: $100,000 to $1 Million

Estimated Debts:  $1 Million to $100 Million

Debtor's List of its 20 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
Michael P. Kelly                              $1,973,684
12105 Bell Avenue
Austin, TX 78727

Mark Baxter                                     $762,037
Baxter Family Trust
1-5-28 Motoazabu
Tokyo, Japan

First State Bank Central Texas                  $397,150
c/o Opper & Gambrell, PLLC
8582 Katy Freeway, Suite 200
Houston, TX 77024

JW Contracting LLC                              $282,499
c/o Jeff Wyss
5114 Balcones Woods Drive, Suite 307-244
Austin, TX 78759

Mindy Bakker & Jason Brown                      $124,930

RAM Foundation                                  $123,982

Your Plumber, Inc.                              $105,237

John Jones                                      $102,365

Siena Landscaping                                $88,897

Chasco Contracting                               $83,632

Diego Roofing                                    $80,724

Security State Bank                              $74,362

Aya E. Tsuchimochi                               $63,158

Jimmy Evans Company                              $57,745

Leonards Electric                                $50,644

Allison Kelly                                    $46,249

Infinity Design                                  $45,824

Jerald Broussard                                 $45,000

ECamSecure, Inc.                                 $42,836

Rumgay dba C&D Bobcat                            $41,450


PSEG ENERGY: S&P Affirms Corporate Credit Rating at BB-
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its long-term 'BBB'
corporate credit rating on utility company Public Service
Enterprise Group Inc. and on affiliates Public Service Electric &
Gas Co. and PSEG Power LLC.  In addition, Standard & Poor's
revised the outlook on the rating to stable from negative.  The
outlook revision follows meaningful improvement in the group's
consolidated financial profile and liquidity.
     
At the same time, Standard & Poor's raised Enterprises' and
PSE&G's short-term ratings to 'A-2' from 'A-3'.  The outlook is
stable.
     
The corporate credit rating for affiliate PSEG Energy Holdings LLC
is affirmed at 'BB-'.  The outlook is negative.
     
Newark, New Jersey-based Enterprise has about $8.2 billion in
consolidated recourse debt, net of $822 million of nonrecourse
project level bonds and the utility's $1.67 billion of stranded-
cost securitization bonds.
      
"Enterprise's rating reflects unregulated operations that are
volatile, but are currently generating strong cash flow," said
Standard & Poor's credit analyst Aneesh Prabhu.
     
Strengths include supply subsidiary PSEG Power's well-positioned
base-load generation assets that benefit from tightening reserve
margins in the PJM region.  S&P also expect PSEG Power's large
base-load fleet to perform well as gas increasingly sets the
marginal cost of power in the eastern Mid-Atlantic Area Council.  
These strengths are offset to an extent by full requirements
contracting that expose PSEG Power's margins to market risks,
including load-shaping, fuel, and volume risks.  A significant
decline in natural gas prices would negatively affect gross
margins from coal and nuclear assets.  Other risks include a
slippage in PSEG Power's ability to improve and maintain
availability of its nuclear units, and a fairly high environmental
capital-spending program.
     
The stable outlook on Enterprise, PSE&G, and PSEG Power reflect
strong operating performance and an improving, albeit still weak,
financial profile.  S&P expect continuation of strong cash flow
generation by PSEG Power over the short to medium term resulting
in an improvement in the financial risk profile.  Yet, an outlook
revision to positive will depend more on the company's financial
policy.  Should the company deploy the higher anticipated cash
from operations in a credit supportive manner, financial measures
could support a higher business risk and ratings may even improve.  
If instead Enterprises' business risk increases due to increased
merchant exposure or if its consolidated financial risk profile
weakens from operational issues, the outlook could be revised to
negative.


QUEENS SEAPORT: Trustee Wants Further Use of Cash Collateral
------------------------------------------------------------
Howard M. Ehrendberg, Esq., the chapter 11 trustee appointed in
Queen's Seaport Development Inc.'s bankruptcy case, asks the U.S.
Bankruptcy Court for the Central District of California for
permission to further use Bar-K Inc.'s cash collateral securing
repayment of its obligations.

As reported in the Troubled Company Reporter, Jan. 22, 2007,
Bar-K Inc., a secured creditor, is the loan servicing agent for:
R.E. Loans LLC, a California Limited Liability Company, and Bruce
Horowitz Family Partnership, a California Limited Partnership, as
successor to Gold Mountain Financial Institution Inc.; and RMS
Foundation Inc.

The Trustee also wants authority to deviate from the total
expenses contained in that budget by nor more than 10% without the
need for Bar-K's further agreement, provided that the total amount
of the expenditures for the month will not exceed 110% of the
aggregate amount of expenditures for the period.

As adequate protection, the Trustee will make a $190,000 monthly
payment to Bar-K, and RMS Foundation will make a $95,000 monthly
payment to the Trustee as its share in the Trustee's advance
payment of the adequate protection.

RMS is the sub-lessee of the Debtor and the Debtor's co-obligor
under various loan documents with Bar-K.  

In consideration for the making of the adequate protection
payments, Bar-K agreed not to:

   a) file a plan of reorganization in the Debtor's case until
      Oct. 20, 2007;

   b) declare a default under the Bar-K Loan Documents.

Headquartered in Long Beach, California, Queen's Seaport
Development Inc. -- http://www.queenmary.com/-- operates the     
Queen Mary ocean liner, various attractions and a hotel.  The
company filed for chapter 11 protection on March 15, 2005
(Bankr. C.D. Calif. Case No. 05-15175).  Joseph A. Eisenberg,
Esq., at Jeffer Mangles Butler & Marmaro LLP represented the
Debtor.  Ira Benjamin Katz serves as counsel to unsecured
creditors.  On April 12, 2006, the Court appointed Howard M.
Ehrenberg as the Debtor's chapter 11 trustee.  Mr. Ehrenberg is
represented by Larry D. Simons, Esq., at SulmeyerKupetz PC in Los
Angeles, California.  When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.


RCN CORP: To Acquire NEON Communications for $260 Million in Cash
-----------------------------------------------------------------
RCN Corporation and NEON Communications Group, Inc. entered into a
definitive agreement for RCN to acquire NEON for up to $5.25 per
share of NGI common stock, in cash, for expected total
consideration of up to approximately $260 million.  The
transaction has been approved by the Board of Directors of both
companies, and is expected to close during the fourth quarter of
2007, subject to regulatory approvals and the approval of NEON's
stockholders as well as certain other closing conditions described
below.

The transaction combines RCN, a leading competitive provider of
video, data, and voice services to residential and business
customers in the Northeast, mid-Atlantic, and Chicago metro
markets, with NEON's pure play network transport services to
carrier and enterprise customers in the twelve-state New England
and mid-Atlantic regions.  NEON offers RCN a complementary network
and a customer base that fits very well into RCN Business
Solutions' growth strategy.  Pro forma for the quarter ended March
31, 2007 (assuming that the transaction had closed on Jan. 1,
2007), combined RCN Business Solutions' annualized Revenue and
EBITDA would have been approximately $160 million and $40 million,
respectively, nearly twice the actual results of RCN Business
Solutions.  These figures exclude an estimated $10 million of
expected revenue and expense synergies to be achieved during the
integration period following the closing of the transaction.  
In addition, this acquisition expands RCN's overall network
footprint, including over 1,000 combined on-net commercial
locations, and creating an opportunity to increase its addressable
residential homes in markets both inside and adjacent to its
existing core footprint.

NEON brings to RCN:

   * A densely built fiber optic network with approximately 4,800
     route miles, over 230,000 fiber miles, 22 colocation
     facilities, and more than 200 points of presence from Maine
     to Virginia;
   
   * A facilities-based wholesale communications provider that
     supplies high bandwidth fiber optic capacity and
     comprehensive end-to-end telecom services to approximately
     120 carrier and enterprise customers;
   
   * Unique fiber routes along utility rights-of-way, expanding
     RCN's commitment to diversity from the legacy telecom
     Infrastructure;
   
   * Complementary network and similar sales approach, which will
     help facilitate integration and open up new markets for RCN
     products; and
    
   * Complementary customer base -- NEON's carrier focus and RCN's
     enterprise focus together offer enhanced growth and sales
     opportunities.

"We are thrilled to be joining forces with NEON and look forward
to welcoming its customers and team members to RCN," Peter Aquino,
President and Chief Executive Officer of RCN added.  "This is a
significant strategic acquisition for RCN that scales our high-
value commercial segment with another premier regional service
provider in our own footprint.  NEON brings an extensive fiber
network in New England and the mid-Atlantic with diverse intercity
fiber assets.  This combination of NEON, ConEd Communications and
RCN's existing metro and intercity rings will now reach into both
Tier 1 and Tier 2 markets for enterprise and carrier customers who
are looking for robust alternatives to incumbent providers.  
Additionally, NEON's dense capillarity improves our ability to
deliver seamless, high quality services and creates significant
growth potential.  We are very excited about combining RCN
Business Solutions, under RBS President Felipe Alvarez's
leadership, with NEON, creating one of the best Regional CLECs on
the East Coast and in Chicago."

"We are pleased with this transaction and believe that it
represents a good outcome for our stockholders, customers and
employees," Kurt Van Wagenen, President and CEO of NEON
Communications Group, said.  "NEON and RCN have had a positive,
long standing working relationship.  Through this merger, our
customers gain access to an enhanced set of services, additional
on-net buildings and an expanded geography including a network in
Chicago and deeper capillarity in New York City and Washington DC.  
The combined entity will have more than 14,000 route miles and
more than 1,000 on-net buildings."

RCN expects to fund the purchase price for the transaction with
$250 million of debt financing, consisting of a combination of
senior secured term loans as well as unsecured borrowings, with
the remainder funded from its existing cash reserves.  RCN has
received commitment from affiliates of Deutsche Bank to provide
the full $250 million of debt financing.  Neither the acquisition
nor the additional debt financing require the consent of RCN's
existing lenders.

The transaction is expected to close during the fourth quarter of
2007, subject to FCC and state regulatory approvals, NEON's
stockholder approval, and NEON achieving minimum agreed-upon
revenue and EBITDA milestones during the second half of 2007.  In
addition, assuming the required approvals are received and minimum
financial milestones are met, the purchase price could be reduced
by up to $0.10 per share if NEON does not meet supplementary
revenue targets specified in the agreement during the second half
of 2007.

Deutsche Bank Securities, Inc. and Andrews Kurth LLP acted as
financial and legal advisors to RCN, and The Bank Street Group LLC
and Clifford Chance US LLP acted as financial and legal advisors
to NEON.

                    About NEON Communications

NEON Communications Group, Inc., (AMEX: NGI) is a facilities-based
wholesale communications provider, supplying high bandwidth fiber
optic capacity and comprehensive end-to-end telecom services to
communications companies and enterprise customers on an intercity,
regional and metro network in the 12-state Northeast and mid-
Atlantic region.  With 4,800 route miles and over 230,000 fiber
miles from Maine to Virginia, NEON is providing unparalleled
capillarity and central office connectivity in the world's most
demanding telecom market.

                           About RCN

Headquartered in Herndon, Virginia, RCN Corp. (Nasdaq: RCNI) --
http://www.rcn.com/-- is a communications company marketing  
video, voice and data services to residential and commercial
customers located in high-density northeast and Midwest markets.  
Its video programming services include basic analog cable
television, expanded basic cable TV, digital cable TV, channels,
video on demand and subscription video on demand, high definition
television, and digital video recorder services.

                          *     *     *

As reported in the Troubled Company Reporter on March 30, 2007,
Moody's confirmed RCN Corporation's B1 corporate family rating and
stable outlook, following the company's proposed $375 million
special dividend to shareholders and refinancing of the company's
existing first lien debt and likely re-financing of its second
lien debt with a new $520 million senior secured term loan and
approximately $80 million in cash.  The company will also have a
$75 million revolving credit facility, unused at inception.  

In addition, Moody's downgraded the company's first lien loan
rating to B1, LGD3, 33% from Ba2 and the probability of default
rating to B2 from B1 in line with Moody's Loss Given Default
Methodology and due to the significant increase in the first lien
debt relative to its overall capitalization and the transition to
an all bank capital structure, respectively.


RESIDENTIAL ACCREDIT: Fitch Downgrades Ratings on Three Classes
---------------------------------------------------------------
Fitch Ratings has taken these rating actions on the Residential
Accredit Loans, Inc. mortgage-pass through certificates listed
below:

Series 2003-QS23

    -- Class A affirmed at 'AAA';
    -- Class M-1 affirmed at 'AA';
    -- Class M-2 affirmed at 'A';
    -- Class M-3 affirmed at 'BBB';

    -- Class B-1 downgraded to 'B' from 'BB'; placed on Rating
       Watch Negative;

    -- Class B-2 downgraded to 'CC/DR4' from 'B'.

Series 2005-QS12

    -- Class A affirmed at 'AAA'
    -- Class M-1 affirmed at 'AA';
    -- Class M-2 affirmed at 'A';
    -- Class M-3 affirmed at 'BBB';
    -- Class B-1 rated 'BB', placed on Rating Watch Negative.
    -- Class B-2 downgraded to 'C/DR4' from 'B'.

Series 2006-QS11

    -- Class A affirmed at 'AAA';
    -- Class M-1 affirmed at 'AA';
    -- Class M-2 affirmed at 'A';
    -- Class M-3 affirmed at 'BBB';
    -- Class B-1 affirmed at 'BB'.
    -- Class B-2 rated 'B', placed on Rating Watch Negative.

Series 2006-QS15

    -- Class A affirmed at 'AAA';
    -- Class M-1 affirmed at 'AA';
    -- Class M-2 affirmed at 'A';
    -- Class M-3 affirmed at 'BBB'.
    -- Class B-1 rated 'BB', placed on Rating Watch Negative.
    -- Class B-2 rated 'B', placed on Rating Watch Negative.

The affirmations, affecting approximately $1.7 billion of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss.  The downgrades, affecting
approximately $2.2 million, reflect a deteriorating relationship
between CE and expected losses.

Series 2003-QS23, classes B-1 and B-2 are downgraded because of
high delinquencies.  The 90+ DQ is 0.79% of the current collateral
balance.  To date, the transaction has experienced losses of
approximately $116,000 or 0.07% of the original collateral
balance.  Losses have deteriorated the CE for the B-2 bond from
0.15% at issuance to 0.11% currently.

The negative rating actions on the 2005 and 2006 vintage RALI
transactions are due to current trends in the relationship between
serious delinquency and credit enhancement.  For series 2005-QS12,
the 90+ DQ is 1.71% of the current collateral balance, while the
CE of classes B-1 and B-2 is 0.90% and 0.44%, respectively.  For
series 2006-QS11, the 90+ DQ is 2.01% of the current collateral
balance, while the CE of class B-2 is 0.40%.  For series 2006-
QS15, the 90+ DQ is 2.32% of the current collateral balance, while
the CE of classes B-1 and B-2 is 0.95% and 0.44%, respectively.

The collateral of the above transactions primarily consists of 30-
year and 15-year fixed-rate mortgage loans extended to Alt-A
borrowers.  The loans are primarily secured by first liens on one-
to four-family residential properties.  All of the above
transactions are master serviced by GMAC-RFC, (rated 'RMS1' by
Fitch).

As of the May 2007 distribution date, the pool factors (current
principal balance as a percentage of original) of the above
transactions range from 49% (series 2003-QS23) to 88% (series
2006-QS11 & 2006-QS15).  The seasoning ranges from 7 months
(series 2006-QS15) to 41 months (series 2003-QS23).


SACO I: S&P Lowers Ratings on 13 Classes
----------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 13
classes from SACO I Trust's series 2005-GP1, 2006-5, 2006-6, 2006-
7, and 2006-8.  S&P placed the ratings on two of the downgraded
classes on CreditWatch with negative implications, left seven of
the ratings on the downgraded classes on CreditWatch negative, and
S&P removed the ratings on three of the downgraded classes from
CreditWatch with negative implications.  At the same time, S&P
placed three ratings from SACO I Trust's 2005-GP1, 2005-5, and
2006-7 on CreditWatch with negative implications, and the ratings
on five classes from series 2006-5 and 2006-6 remain on
CreditWatch negative.  Lastly, S&P affirmed its ratings on the
remaining classes from these six SACO I Trust transactions.
     
The downgrades and negative CreditWatch placements reflect the
deteriorating collateral performance of the collateral pools
backing these transactions.  All of the deals contain primarily
second-lien mortgage loans as collateral, which usually incur
losses when the loans become 180-plus-days delinquent, and are
subsequently charged off.  Realized losses have been outpacing
excess interest spread, which has reduced credit enhancement to
levels that are not sufficient to support the previous ratings on
the downgraded classes.  As of the May 2007 remittance period,
overcollateralization is below its target for each of the six
mortgage loan pools.
     
For the six pools with negative rating actions, cumulative losses
ranged from 0.98% (series 2005-GP1) to 6.58% (2005-5, group 1) of
the original pool balances.  Severe delinquencies (90-plus days,
foreclosures, and REOs) ranged from 2.58% (2006-8) to 8.88% (2006-
5, group 2) of the current pool balances.  Total delinquencies
ranged from 6.09% (2005-GP1) to 14.51% (2006-6) of the current
pool balances.
     
Standard & Poor's will continue to closely monitor the performance
of the classes with ratings on CreditWatch.  If the delinquent
loans cure to a point at which monthly excess interest begins to
outpace monthly net losses, thereby allowing O/C to build and
provide sufficient credit enhancement, S&P will affirm the ratings
and remove them from CreditWatch.  Conversely, if delinquencies
cause substantial realized losses in the coming months and
continue to erode credit enhancement, S&P will take further
negative rating actions on these classes.
     
The ratings on classes II-B-4 from series 2006-5, B-4 from series
2006-6, and B-4 from series 2006-7 were removed from CreditWatch
because they were lowered to 'CCC'.  According to Standard &
Poor's surveillance practices, ratings lower than 'B-' on classes
of certificates or notes from RMBS transactions are not eligible
to be on CreditWatch negative.
     
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings.
     
Credit support for these deals is derived from a combination of
subordination, excess interest, and O/C.  Series 2006-8 also
benefits from a bond insurance policy from Ambac Assurance Corp.
('AAA').  These transactions were initially backed by either
subprime/Alt-A closed-end second-lien mortgage loans or home
equity lines of credit.  The guidelines used in the origination
process generally employed standards intended to assess the credit
risk of borrowers with imperfect credit histories or relatively
high ratios of monthly mortgage payments to income.
    

       Ratings Lowered And Placed On Creditwatch Negative
   
                         SACO I Trust

                                      Rating
                                      ------
          Series    Class      To               From
          ------    -----      --               ----
          2006-5    II-B-1     BB/Watch Neg     BBB+
          2006-7    B-1        BB+/ Watch Neg   BBB+
  

     Ratings Lowered and Remaining on Creditwatch Negative

                         SACO I Trust

                                      Rating
                                      ------
          Series    Class      To              From
          ------    -----      --              ----
          2006-5    II-B-2     B/Watch Neg     BB/Watch Neg
          2006-5    II-B-3     B-/Watch Neg    BB-/Watch Neg
          2006-6    B-2        B/Watch Neg     BB/Watch Neg
          2006-6    B-3        B-/Watch Neg    BB-/Watch Neg
          2006-7    B-3        B-/Watch Neg    BB-/Watch Neg
          2006-7    B-2        BB/ Watch Neg   BBB/Watch Neg    
          2006-8    B          B/ Watch Neg    BB/Watch Neg
              

      Ratings Lowered and Removed from Creditwatch Negative
    
                          SACO I Trust

                                     Rating
                                     ------
         Series    Class      To              From
         ------    -----      --              ----
         2006-5    II-B-4     CCC             B/Watch Neg
         2006-6    B-4        CCC             B/Watch Neg
         2006-7    B-4        CCC             B/Watch Neg


                        Rating Lowered

                         SACO I Trust

                                   Rating
                                   ------
        Series    Class      To              From
        ------    -----      --              -----
        2005-GP1  B-4        CCC             B+


            Ratings Placed on Creditwatch Negative
    
                        SACO I Trust

                                  Rating
                                  ------
        Series    Class      To              From
        ------    -----      --              -----
        2005-GP1  B-3        BB-/Watch Neg   BB-
        2005-5    I-B-4      BB/Watch Neg    BB
        2006-7    M-6        A-/Watch Neg    A-


          Ratings Remaining on Creditwatch Negative
   
                       SACO I Trust

        Series    Class                      Rating
        ------    -----                      ------
        2006-5    I-B-2                      BBB/Watch Neg
        2006-5    I-B-3                      BB/Watch Neg
        2006-5    I-B-4                      B/Watch Neg
        2006-6    B-1                        BB+/Watch Neg
        2006-6    M-6                        A-/Watch Neg
           

                       Ratings Affirmed
     
                        SACO I Trust

     Series    Class                                Rating
     ------    -----                                ------
     2005-5    I-A                                  AAA
     2005-5    I-M-1                                AA
     2005-5    I-M-2                                AA-
     2005-5    I-M-3                                A+
     2005-5    I-M-4                                A
     2005-5    I-M-5                                A-
     2005-5    I-B-1                                BBB+
     2005-5    I-B-2                                BBB
     2005-5    I-B-3                                BBB-
     2005-GP1  A-1, A-2, M-1                        AAA
     2005-GP1  M-2                                  BBB-
     2005-GP1  B-1                                  BB+
     2005-GP1  B-2                                  BB
     2006-5    I-A                                  AAA
     2006-5    I-M-1                                AA+
     2006-5    I-M-2                                AA
     2006-5    I-M-3                                AA-
     2006-5    I-M-4                                A+
     2006-5    I-M-5                                A
     2006-5    I-M-6                                A-
     2006-5    I-B-1                                BBB+
     2006-5    II-A-1, II-A-2, II-A-3               AAA
     2006-5    II-M-1                               AA+
     2006-5    II-M-2                               AA
     2006-5    II-M-3                               AA-
     2006-5    II-M-4                               A+
     2006-5    II-M-5                               A
     2006-5    II-M-6                               A-
     2006-6    A                                    AAA
     2006-6    M-1                                  AA+
     2006-6    M-2                                  AA
     2006-6    M-3                                  AA-
     2006-6    M-4                                  A+
     2006-6    M-5                                  A
     2006-7    A                                    AAA
     2006-7    M-1                                  AA+
     2006-7    M-2                                  AA
     2006-7    M-3                                  AA-
     2006-7    M-4                                  A+
     2006-7    M-5                                  A
     2006-8    A, A-IO                              AAA


SALOMON BROTHERS: Fitch Affirms B- Rating on $5.9MM Class K Loans
-----------------------------------------------------------------
Fitch Ratings has affirmed Salomon Brothers Mortgage Securities
VII, Inc., series 2000-C2 as:

    -- $437.6 million class A-2 at 'AAA';
    -- Interest-only class X at 'AAA';
    -- $33.2 million class B at 'AAA';
    -- $33.2 million class C at 'AAA';
    -- $7.8 million class D at 'AAA';
    -- $11.7 million class E at 'AAA';
    -- $13.7 million class F at 'AA-';
    -- $9.8 million class G at 'A-';
    -- $21.5 million class H at 'BBB-';
    -- $13.7 million class J at 'BB-';
    -- $5.9 million class K at 'B-/DR1'.

Class L remains at 'C' and Fitch has downgraded the Distressed
Recovery rating to 'DR6' from 'DR5' due to additional projected
losses. Class M and Class N remain 'C/DR6'.

Although the transaction benefits from additional defeasance and
paydown, affirmations are warranted due to high Fitch Loans of
Concern concentration and additional losses expected on the
specially serviced assets.

As of the May 2007 distribution date, the pool's aggregate
certificate balance has been reduced 22.5% since issuance, to $606
million from $781.5 million.  A total of forty loans (31.1%) have
defeased since issuance.

Three assets (4.6%) are currently in special servicing.  The
largest specially serviced asset (2.4%) is secured by a 251,365
square foot retail center located in Baltimore, MD.  It has been
real estate owned since February 2006.  The special servicer is
marketing the property for sale.  Several tentative offers have
been received for the purchase of the property.  Based on recent
appraisal valuations, significant losses are expected upon the
liquidation of this asset.

The second largest specially serviced asset (1.3%) is secured by
136,796 sf office property located in Houston, TX.  It has been
REO since November 2003 and the special servicer has been
marketing the property for sale.  Based on recent appraisal
valuations, substantial losses are expected upon the sale of this
asset.


SCOTTISH RE: Annual Shareholders Meeting Scheduled on July 18
-------------------------------------------------------------
Scottish Re Group Limited will have its Annual General Meeting of
Shareholders at 11:00 a.m. (Bermuda time) on July 18, 2007.  The
meeting will be held at Crown House, Second Floor, 4 Par-la-Ville
Road, in Hamilton, Bermuda.

At the meeting, shareholders will be asked to:

    * consider and vote upon the election of eleven directors,

    * approve the 2007 Stock Option Plan, and

    * ratify the appointment of Ernst & Young LLP as the company's
      independent registered public accounting firm for 2007.

A copy of the Proxy Statement may be viewed for free at:

            http://ResearchArchives.com/t/s?2126

                       About Scottish Re

Scottish Re Group Ltd. -- http://www.scottishre.com/-- (NYSE:SCT)    
is a global life reinsurance company.  Scottish Re has operating
businesses in Bermuda, Grand Cayman, Guernsey, Ireland, Singapore,
the United Kingdom and the United States.  Its flagship operating
subsidiaries include Scottish Annuity & Life Insurance Company
(Cayman) Ltd., Scottish Re (U.S.) Inc. and Scottish Re Limited.

                         *     *     *

As reported in the Troubled Company Reporter on June 7, 2007,
Fitch Ratings has upgraded Scottish Re's Issuer Default Rating to
'BB-' from 'B+' and the Insurer Financial Strength ratings of its
primary operating subsidiaries to 'BBB-' from 'BB+'.  The ratings
have been removed from Rating Watch Positive; the Rating Outlook
is Stable.


SEA CONTAINERS: Court Okays Deloitte & Touche as Auditors
---------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates obtained permission
from the U.S. Bankruptcy Court for the District of Delaware to
employ Deloitte & Touche LLP as their auditors, nunc pro tunc to
Jan. 1, 2007.

Deloitte & Touche has served as the independent auditor for Sea
Containers Ltd. since 2006, and for certain Non-Debtor
subsidiaries since 1995.  In the course of its retention, Deloitte
& Touche has developed a great deal of institutional knowledge and
intimate understanding of the Debtors' businesses, finances,
operations, systems and capital structure.

As the Debtors' auditors, Deloitte & Touche is expected to perform
an integrated audit and report on the Debtors' financial
statements.

In addition, the firm is expected to express its opinion on the:

  (a) fairness of the presentation of the Debtors' financial
      statements,

  (b) management's assessment of the effectiveness of the
      Debtors' internal control over financial reporting, and

  (c) effectiveness of the Debtors' internal control over
      financial reporting.

The Debtors will pay Deloitte & Touche in accordance with the
firm's customary hourly billing rates:

         Professional                  Hourly Rates
         ------------                ---------------
         Partners                    GBP315 - GBP650
         Managers/Directors          GBP150 - GBP500
         Staff                        GBP75 - GBP230

J. Gerard Murphy, member of Deloitte & Touche, relates that the
firm received GBP183,365 within 90 days from the Petition Date.

The firm, however, does not believe the payments were preferences
under Section 547 of the Bankruptcy Code.

Mr. Murphy assures the Court that the firm does not hold or
represent any interest adverse to the Debtors, and is deemed a
"disinterested person" as defined under Section 101(14) of the
Bankruptcy Code.

                      About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight           
transport and marine container leasing.  Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore.  The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974.  On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland.  It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.

Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).  
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.

The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP.  Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.

In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083.  (Sea Containers Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

The Court extended the Debtors' exclusive period to file a Plan of
Reorganization to Sept. 28, 2007.


SEA CONTAINERS: Trustee & GE Capital Opposes $176MM DIP Financing
-----------------------------------------------------------------
The U.S. Trustee for Region 3 and GE Capital Container SRL and its
affiliates have raised objections to Sea Containers, Ltd. and its
debtor-affiliates' move to borrow and obtain up to $176,500,000,
pursuant to a DIP credit facility between the Debtors and Mariner
LCD, Dune Capital LLC, Dune Capital LP, Wells Fargo Bank N.A.

As reported in the Troubled Company Reporter on June 14, 2007,
Mariner and Dune Capital, along with Trilogy Capital LLC and
Caspian Capital Partners LP, had committed on May 3, 2007, to
provide Sea Containers Ltd. with a $176,500,000 DIP facility.

Under the New DIP Facility, Marine and Dune Capital will provide
SCL with a term loan of up to $151,500,000, and a $25,000,000
revolving credit facility.  Wells Fargo will serve as the
administrative and collateral agent under the New DIP Facility.

The Debtors intend to use the proceeds of the Term Loan to make a
capital contribution to SPC Holdings Ltd., a non-debtor subsidiary
of which SCL holds the entire economic interest.  In turn,
Holdings will make a capital contribution to Sea Containers
SPC, a "bankruptcy remote" subsidiary.  SPC will then use the
proceeds of the capital contribution to repay an existing debt
securitization facility.

The repayment of the securitization facility will prevent
foreclosure by SPC's lenders, which have alleged a default under
that facility.

In addition, the Term Loan will also be used to pay all costs and
expenses of the DIP Lenders and the DIP Agent relating to the
structuring of the proposed financing for SCL or SPC.  On the
other hand, the proceeds of the Revolving Credit Facility will be
used for SCL's general corporate purposes in the ordinary course
of business.

A full-text copy of the of the Wells Fargo Draft DIP Agreement is
available for free at:

              http://researcharchives.com/t/s?20e1  

              http://researcharchives.com/t/s?20e2

              http://researcharchives.com/t/s?20e3

                          Objections

(1) GE Capital Container, et al.

GE Capital Container SRL, GE Capital Container Two SRL, and GE
SeaCo SRL tells the U.S. Bankruptcy Court for the District of
Delaware that the Term Loan is not necessary to preserve
the Debtors' assets, and is not in the best interests of the
Debtors' creditors.

"The Debtors provide no detail to support their belief that
incurring the Term Loan to repay SPC's debts will avoid
additional claims against their estates," Andrew C. Kassner,
Esq., at Drinker Biddle & Reath LLP, in Wilmington, Delaware,
argues.

Mr. Kassner also reveals that SPC's equity "is under water."  
SCL's equity in SPC will never have value unless there is some
dramatic increase in the future sale price of containers.

In addition, the Term Loan prevents the Debtors from preserving
their estates' assets if they have future liquidity needs in
excess of the amounts available under the Revolving Loan, or need
to restructure the Revolving Loan.

Mr. Kassner adds that there is a big probability that the Debtors
will not be able to secure any future financing needs to protect
the estate if they put up their available assets to repay SPC's
creditors.

In this case, the Term Loan should face rigid scrutiny because it
favors SPC's creditors over the Debtors' creditors, Mr. Kassner
points out.  Accordingly, the Debtors must prove that:

  (a) absent the Term Loan, the Debtors' business operations
      will not survive,

  (b) the Debtors cannot obtain alternative financing on
      acceptable terms, and

  (c) the proposed postpetition lenders will not accede to less
      preferential terms.

"Indeed, a postpetition financing that benefits one existing
creditor group over another should only be approved as a last
resort," Mr. Kassner asserts.

Accordingly, GE Capital Container asks the Court to deny the
Debtors' incurrence of the Term Loan.

(2) U.S. Trustee

To the extent that the proceeds of the Term Loan will be used
exclusively to make the capital contributions, the use of cash is
governed by Section 345 of the Bankruptcy Code, David L.
Buchbinder, Esq., at the Office of the U.S. Trustee, in
Wilmington, Delaware, argues.

The Debtors are proposing to make an investment of cash into a
twice removed "bankruptcy remote subsidiary," Mr. Buchbinder
notes.  "They may not do so unless they can comply with Section
345, and protect the funds for the creditor body," Mr. Buchbinder
contends.

The legislative intent behind Section 345 is to protect existing
cash, and not permit speculation while the property is subject to
the jurisdiction of the Court, Mr. Buchbinder explains.

Accordingly, the Debtors must comply with Section 345 and post a
bond to secure repayment of the funds should they desire to make
the requested investment, Mr. Buchbinder asserts.

Mr. Buchbinder also points out that the Debtors failed to cite
factual support on the Debtors' interest in Holdings or SPC, and
SPC's ability to repay the funds as the Guarantor.

In addition, the U.S. Trustee contends that the proposed Loan
Terms appears to prejudice the estate.

The DIP Lenders are owed collectively $100,000,000 as unsecured
creditors.  The scheduled unsecured claims reach more than
$1,000,000,000.

"Given all these factors, numerous terms of the proposed DIP
Credit Agreement appear to place the [DIP] Lenders in a position
of control over the outcome of these cases," Mr. Buchbinder
argues.

Mr. Buchbinder also points out that the DIP Credit Agreement
contains a clause that requires the Court to make a finding in
the Final DIP Order with respect to the DIP Lenders that the
transaction, standing alone, will cause their removal from the
Official Committee of Unsecured Creditors.

The U.S. Trustee says Clause is inappropriate.  It is among the
statutory duties of the U.S. Trustee to appoint or remove
creditor committee members, Mr. Buchbinder argues.

Accordingly, the U.S. Trustee asks the Court to deny the Motion.

                      About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight           
transport and marine container leasing.  Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore.  The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974.  On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland.  It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.

Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).  
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.

The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP.  Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.

In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of $62,400,718 and total liabilities of
$1,545,384,083.  (Sea Containers Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

The Court extended the Debtors' exclusive period to file a Plan of
Reorganization to Sept. 28, 2007.


SEQUOIA MORTGAGE: Fitch Affirms BB Rating on Class B-5 Certs.
-------------------------------------------------------------
Fitch Ratings has affirmed the following classes from Sequoia
Mortgage Trust pass-through certificates, series 2003-3:

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

The underlying collateral for the Sequoia Mortgage transaction
consists of 30-year adjustable-rate mortgages extended to prime
borrowers.  The Sequoia Mortgage Trust loans are acquired from
various originators by a subsidiary of Redwood Trust Inc., a
mortgage real estate investment trust that invests in residential
real estate loans and securities.

The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$98.4 million outstanding certificates as detailed above.

As of the May 2007 distribution date, the transaction is seasoned
47 months and has a pool factor of 17.64%.

The master servicer for the deal is Wells Fargo Bank Minnesota,
which is currently rated 'RMS1' by Fitch.


SIERRA PACIFIC: Affiliates Close Mortgage Securities Tender Offer
------------------------------------------------------------------
Nevada Power Company and Sierra Pacific Power Company, two wholly-
owned subsidiaries of Sierra Pacific Resources, each completed its
tender offer, at 9 a.m., New York City time, June 22, 2007, for
any and all of a certain series of its General and Refunding
Mortgage securities.
    
As of the expiration of Nevada Power's tender offer for its
9% General and Refunding Mortgage Notes, Series G, due 2013, a
total of $210,256,000 aggregate principal amount of the Notes had
been tendered for purchase, representing approximately 92% of the
aggregate outstanding principal amount.  Assuming a settlement
date of June 28, 2007, Nevada Power will pay $1,079.75 plus
accrued interest for each $1,000 principal amount of Notes
purchased in the offer.
    
As of the expiration of Sierra Pacific Power's tender offer for
its 8% General and Refunding Mortgage Bonds, Series A, due 2008, a
total of $220,757,000 aggregate principal amount of the Bonds had
been tendered for purchase, representing approximately 69% of the
aggregate outstanding principal amount.  Assuming a settlement
date of June 28, 2007, Sierra Pacific Power will pay $1,022.10
plus accrued interest for each $1,000 principal amount of Bonds
purchased in the offer.
    
Credit Suisse and Goldman, Sachs & Co. are the Dealer Managers for
each of the tender offers.  Morrow & Co., Inc. is the Information
Agent.  Requests for documents may be directed to Morrow & Co.,
Inc. by telephone at (800) 607-0088 (toll-free) or (203) 658-9400.  
Questions regarding the tender offers may be directed to Credit
Suisse at (800) 820-1653 (toll-free) or (212) 325-4008 (collect),
or to Goldman Sachs & Co. at (800) 828-3182 (toll-free) or (212)
902-9077 (collect).

                    About Nevada Power Company
    
Nevada Power Company is a regulated public utility engaged in the
distribution, transmission, generation, purchase and sale of
electric energy in the southern Nevada communities of Las Vegas,
North Las Vegas, Henderson, Searchlight, Laughlin and their
adjoining areas, including Nellis Air Force Base and the
Department of Energy's Nevada Test Site in Nye County.  Nevada
Power provides electricity to approximately 807,000 residential
and business customers.

                    About Sierra Pacific Power
    
Sierra Pacific Power Company is the principal utility for most of
northern Nevada and the Lake Tahoe area of California.  Sierra
Pacific Power also distributes natural gas in the Reno-Sparks area
of northern Nevada.  Sierra Pacific Power provides electricity to
approximately 361,000 residential and business customers and
natural gas to approximately 140,000 residential and business
customers.

                 About Sierra Pacific Resources

Headquartered in Las Vegas, Nevada, Sierra Pacific Resources
(NYSE: SRP) -- http://www.sierrapacificresources.com/-- is a    
holding company whose principal subsidiaries, Nevada Power Company
and Sierra Pacific Power Company, are electric and electric and
gas utilities, respectively.  Sierra Pacific Resources also holds
relatively modest non-utility investments through other
subsidiaries.  

                          *     *     *

Moody's Investors Services rated Sierra Pacific Resources' long
term corporate family rating at 'Ba2' and probability of default
at 'Ba3'.

Standard and Poor's assigned a 'BB-' rating on the company's long
term foreign and local issuer credit.  The outlook is stable.

Fitch assigned 'BB-' rating on the company's long term issuer
default.


SOVEREIGN COMMERCIAL: Fitch Puts Low-B Ratings on Three Certs.
--------------------------------------------------------------
Sovereign Commercial Mortgage Securities Trust 2007-C1 commercial
mortgage pass-through certificates are rated by Fitch Ratings as:

    -- $1,014,026,928 class 'X' 'AAA' (notional amount);
    -- $50,000,000 class A-1 'AAA';
    -- $529,727,000 class A-1A 'AAA';
    -- $231,494,000 class A-2 'AAA';
    -- $105,205,000 class A-J 'AAA';
    -- $15,211,000 class B 'AA';
    -- $17,745,000 class C 'A';
    -- $20,281,000 Class D 'BBB+';
    -- $10,140,000 Class E 'BBB';
    -- $7,605,000 class F 'BBB-';
    -- $2,535,000 class G 'BB+';
    -- $2,535,000 class H 'BB';
    -- $3,803,000 class J 'BB-';
    -- $2,535,000 class K 'B+';
    -- $3,803,000 class L 'B';
    -- $2,535,000 class M 'B-'.

Fitch does not rate the $8.9 million dollar class N.

All classes are privately placed pursuant to rule 144A of the
Securities Act of 1933.  The certificates represent beneficial
ownership interest in the trust, primary assets of which are 261
fixed loans having an aggregate principal balance of approximately
$1,014,026,928, as of the cutoff date.


SPEAKING ROSES: March 31 Balance Sheet Upside-Down by $5.6 Million
------------------------------------------------------------------
Speaking Roses International Inc. reported a net loss of $684,559
on net sales of $563,028 for the first quarter ended March 31,
2007, compared with a net loss of $1,484,308 on net sales of
$460,908 for the same period ended March 31, 2006.

At March 31, 2007, the company's consolidated financial statements
for the quarter ended March 31, 2007, showed $1,265,426 in total
assets and $6,936,910 in total liabilities, resulting in a
$5,671,484 in total stockholders' deficit.

The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $478,551 in total current assets
available to pay $2,049,375 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?2128

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 24, 2007,
Tanner LC of Salt Lake City, Utah, expressed substantial doubt
about Speaking Roses International Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the year ended Dec. 31, 2006.  The auditor pointed to the
company's minimal cash, working capital deficit and accumulated
deficit as of Dec. 31, 2006, significant losses and negative cash
flows from operating activities since inception.

                       About Speaking Roses

Salt Lake City, Utah-based Speaking Roses International, Inc.
(OTC BB: SRII) -- http://www.speakingroses.com/-- engages in    
marketing, distribution, retailing, and franchising floral and
ancillary products, primarily roses.  The company also sells
embossed flowers and bouquets through its patented embossing
technology.


STA-BILT PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Sta-Bilt Products, Inc.
        902 West 13th Street
        P.O. Box 9
        Blanco, TX 78606

Bankruptcy Case No.: 07-11121

Type of Business: The Debtor retails lumber, plywood, trusses,
                  roofing, and other wooden building products.  
                  See http://www.stabilt.com/

Chapter 11 Petition Date: June 21, 2007

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtor's Counsel: Stephen W. Sather, Esq.
                  Barron & Newburger, P.C.
                  1212 Guadalupe, Suite 104
                  Austin, TX 78701
                  Tel: (512) 476-9103 Ext. 220
                  Fax: (512) 476-9253

Total Assets: $1,921,911

Total Debts:  $2,041,783

Debtor's List of its 20 Largest Unsecured Creditors:

   Entity                        Nature Of Claim      Claim Amount
   ------                        ---------------      ------------
Handy Hardware Wholesale, Inc.   Goods & Services         $116,802
P.O. Box 203419
Houston, TX 77216

Bank of America, N.A.            Promissory Note           $95,139
CCS-Small Business/Premier
TX1-609-06-01
P.O. Box 830632
Dallas, TX 75283-0632

Wells Fargo Business Card        Business Line             $94,055
P.O. Box 348750
Sacramento, CA 95834

Chase Bank                       Line of Credit            $48,410

Bank of America                  Business Credit Line      $47,226

Robert Bray                      Employee Loan             $39,791

Jim Fender, Inc.                 Promissory Note           $24,409

American Express                 Business Capital Line     $19,418

American Express                 Business Credit Card      $17,782

Truserv Corporation              Service                   $14,684

Alpine Engineered                Computer Supplies         $12,564
Products, Inc.

Texas State Comptroller          Sales Taxes                $9,119

Meter Loops & Power Poles, Inc.  Services                   $7,730

Handy Hardware Wholesale, Inc.   Trade Debt                 $7,114

Buttery Hardware Company         Goods and Services         $6,340

PPG Industries, Inc.             Service                    $6,272

Cox Lumber Company               Goods and Services         $4,803

Headwaters Construction          Services                   $4,640

Sheppard-Jones, Mildred          Accountant                 $3,235

Key Equipment Finance            Contract/Lease             $3,004


STRATS: S&P Affirms BB+ Ratings on Classes A-1 and A-2 Certs.
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' ratings on
classes A-1 and A-2 of the $12 million fixed-rate callable
certificates issued by STRATS for United States Cellular Corp.
Securities Series 2004-6.  Concurrently, S&P removed these ratings
from CreditWatch, where they were originally placed with negative
implications on Nov. 17, 2006.
     
The rating actions follow the June 21, 2007, affirmation of the
corporate credit rating on United States Cellular Corp.
(BB+/Developing/--) and its removal from CreditWatch negative.
     
STRATS for United States Cellular Corp. Securities Series 2004-6
is a pass-through transaction, and its ratings are based solely on
the rating assigned to United States Cellular Corp.'s 6.70% senior
notes due Dec. 15, 2033.


STRUCTURED ASSET: Fitch Downgrades Ratings on Two Cert. Classes
---------------------------------------------------------------
Fitch has taken rating actions on these Structured Asset
Securities Corp., mortgage pass-through certificates, as follows:

Structured Adjustable Rate Mortgage (SARM), Series 2004-11

    -- Class A affirmed at 'AAA';
    -- Class B1 affirmed at 'AAA';
    -- Class B2 affirmed at 'AA';
    -- Class B3 affirmed at 'BBB';

    -- Class B4 downgraded to 'CC' from 'B' and assigned
       Distressed Recovery rating 'DR3';

    -- Class B5 downgraded to 'C/DR6' from 'C/DR5'.

SARM, Series 2006-9 Group 1

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

SARM, Series 2006-9 Group 2

    -- Class A affirmed at 'AAA';
    -- Class B1-II affirmed at 'AA';
    -- Class B2-II affirmed at 'AA';
    -- Class B3-II affirmed at 'A+';
    -- Class B4-II affirmed at 'A';
    -- Class B5-II affirmed at 'BBB+';
    -- Class B6-II affirmed at 'BBB';
    -- Class B7-II affirmed at 'BB';
    -- Class B8-II affirmed at 'B'.

SARM, Series 2006-12 Group 2

    -- Class A affirmed at 'AAA';
    -- Class B1-II affirmed at 'AA';
    -- Class B2-II affirmed at 'A';
    -- Class B3-II affirmed at 'BBB';
    -- Class B4-II (rated 'BB') placed on Rating Watch Negative;
    -- Class B5-II (rated 'B') placed on Rating Watch Negative;

Structured Asset Securities Corp., Lehman Mortgage Trust (LMT),
Series 2006-6 Group 1

    -- Class A affirmed at 'AAA';
    -- Class IB1 affirmed at 'AA';
    -- Class IB2 affirmed at 'A';
    -- Class IB3 affirmed at 'BBB';
    -- Class IB4 affirmed at 'BB';
    -- Class IB5 (rated 'B') placed on Rating Watch Negative.

LMT, Series 2006-6 Group 2

    -- Class A affirmed at 'AAA';
    -- Class 2B1 affirmed at 'AA';
    -- Class 2B2 affirmed at 'A';
    -- Class 2B3 affirmed at 'BBB';
    -- Class 2B4 affirmed at 'BB';
    -- Class 2B5 affirmed at 'B'.

The mortgage loans were originated by various banks and other
mortgage lending institutions.  The largest percentage of
originations was made by Lehman Brothers Bank, FSB. The
transactions consist of fixed and adjustable rate, conventional,
fully amortizing mortgage loans, substantially all of which have
original terms to stated maturity of 30 years.  The mortgage loans
are master serviced by Aurora Loan Services, Inc., which is rated
'RMS1-' by Fitch.

The affirmations reflect credit enhancement consistent with future
loss expectations and affect $1.498 billion of outstanding
certificates.  The affirmed classes detailed above have
experienced small to moderate growth in CE since closing.

The downgraded classes and the classes placed on Rating Watch
Negative reflect the deterioration in the relationship of CE to
future loss expectations and affect approximately $999,590 and
$3.534 million in outstanding certificates, respectively.

The pools are seasoned from a range of 5 to 34 months. The pool
factors (current principal balance as a percentage of original)
range from 11% (series 2004-11) to 94% (series 2006-12 group 2).

For 2004-11, the loans in 90+ delinquency (including foreclosure
and real estate owned) at 34 months seasoning as a percentage of
the current pool balance is 8.54%.  The CE of the B-4 class is
1.50% and B-5 class is completely depleted.

For 2006-12 Group 2, the loans in 90+ delinquency at 5 months
seasoning as a percentage of the current pool balance is 1.28%.  
The CE of the B4-II and B5-II classes are 0.85% and 0.37%,
respectively.

For LMT 2006-6 Group 1, the loans in 90+ delinquency at 8 months
seasoning as a percentage of the current pool balance is 1.46%.
The CE of the IB5 class is 0.37%.


TERWIN MORTGAGE: S&P Lowers Ratings on 51 Certificate Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 51
classes of certificates from 21 Terwin Mortgage Trust
transactions.  The ratings on 26 of these classes remain on
CreditWatch with negative implications, nine were placed on
CreditWatch with negative implications, and eight were removed
from CreditWatch with negative implications.  Eight of the lowered
ratings were defaults from 'CCC'.  At the same time, S&P placed
its ratings on 15 other classes on CreditWatch with negative
implications.  The 66 negative rating actions affected 21 Terwin
Mortgage Trust deals.
     
Of the 21 affected deals, which have between six and 36 months of
seasoning, 14 are backed by closed-end second liens and seven are
backed by subprime loans.
     
The lowered ratings and negative CreditWatch placements reflect
rapid deterioration of available credit support to the respective
classes as of the May 2007 remittance period.  Many of these
pools, particularly those backed by second-lien collateral, have
experienced greater-than-expected losses during recent months.  
While the majority of these deals are less than two years
seasoned, losses have been front-loaded; excess interest has not
been sufficient to cover these immense unexpected losses, leading
to the early erosion of credit support.  Twelve of the 14 second-
lien deals currently have no credit enhancement from
overcollateralization remaining, while O/C levels for the
remaining two transactions are below their targets.

All of the second-lien transactions (with the exception of series
2006-12SL, which was fully funded at issuance) were structured so
that monthly excess interest would build O/C levels closer to
their respective targets as the pools became more seasoned.  
However, collateral performance for these deals has not allowed
O/C levels to reach their respective targets, and the O/C
deficiencies continue to increase every period.  O/C is also below
its target for the seven affected subprime transactions.
     
Cumulative losses on the second-lien pools range from 1.21%
(series 2006-12SL) to 6.68% (series 2004-18SL, loan group 2) of
the respective original principal balances, and delinquencies
remain moderate.  Cumulative losses on the subprime transactions
range from 0.24% (loan group 1 from series 2004-21HE) to 1.38%
(series 2004-3HE), and delinquencies remain moderate.
     
Standard & Poor's will continue to closely monitor the 50 classes
with ratings on CreditWatch negative.  If losses decline to a
point at which they no longer exhaust available credit
enhancement, and the level of credit enhancement is not further
eroded, S&P will affirm the ratings on these classes and remove
them from CreditWatch.  Conversely, if delinquencies continue to
translate into substantial realized losses in the coming months
and continue to erode available credit enhancement, S&P will take
further negative rating actions on these classes, and possibly on
the more senior tranches.
     
The ratings on eight classes were removed from CreditWatch
negative because they were lowered to 'CCC'.  According to
Standard & Poor's surveillance practices, ratings lower than 'B-'
on classes of certificates or notes from RMBS transactions are not
eligible to be on CreditWatch negative.


       Ratings Lowered and Placed on Creditwatch Negative
   
                     Terwin Mortgage Trust

                                          Rating
                                          ------
      Series        Class          To              From
      ------        -----          --              ----
      2005-3SL      B-4            B/Watch Neg     BB+
      2005-11       I-B-5          BB/Watch Neg    BB+
      2005-11       I-B-6          B/Watch Neg     BB+
      2005-16HE     B-2            BB/Watch Neg    BBB
      2006-6        II-B-3         BB/Watch Neg    BBB
      2006-8        I-B-4          BB/Watch Neg    BBB
      2006-12SL     B-3            BB+/Watch Neg   BBB
      2006-12SL     B-4            BB/Watch Neg    BBB
      2006-12SL     B-5            BB-/Watch Neg   BBB-
      

     Ratings Lowered and Remaining on Creditwatch Negative

                    Terwin Mortgage Trust

                                         Rating
                                         ------
      Series        Class          To              From
      ------        -----          --              ----
      2004-9HE      B-3            BB/Watch Neg    BBB-/Watch Neg
      2004-19HE     B-3            BB/Watch Neg    BBB-/Watch Neg
      2004-18SL     1-B-4          B/Watch Neg     BB/Watch Neg
      2004-21HE     1-M-3          BB/Watch Neg    BBB/Watch Neg
      2005-2HE      B-3            BB/Watch Neg    BBB-/Watch Neg
      2005-3SL      B-5            B-/Watch Neg    BB+/Watch Neg
      2005-9HGS     B-5            B+/Watch Neg    BB+/Watch Neg
      2005-11       II-B-3         BB-/Watch Neg   BBB/Watch Neg
      2005-11       II-B-4         B-/Watch Neg    BB-/Watch Neg
      2005-16HE     B-3            B/Watch Neg     BBB-/Watch Neg
      2006-1        II-B-1         BBB-/Watch Neg  A-/Watch Neg
      2006-1        II-B-2         BB/Watch Neg    BBB+/Watch Neg
      2006-1        II-B-3         B/Watch Neg     BB/Watch Neg
      2006-1        II-B-4         B-/Watch Neg    BB-/Watch Neg
      2006-HF-1     B-4            BB-/Watch Neg   BBB-/Watch Neg
      2006-4SL      B-4            BB-/Watch Neg   BBB-/Watch Neg
      2006-4SL      B-5            B-/Watch Neg    BB-/Watch Neg
      2006-6        I-B-4          BB/Watch Neg    BBB-/Watch Neg
      2006-6        I-B-5          BB-/Watch Neg   BBB-/Watch Neg
      2006-6        I-B-6          B-/Watch Neg    BB-/Watch Neg
      2006-6        II-B-4         B-/Watch Neg    BBB-/Watch Neg
      2006-8        I-B-5          B-/Watch Neg    BB-/Watch Neg
      2006-8        II-B-4         BB-/Watch Neg   BBB-/Watch Neg
      2006-10SL     B-5            BB-/Watch Neg   BBB-/Watch Neg
      2006-10SL     B-6            B-/Watch Neg    BB-/Watch Neg
       

                Terwin Mortgage Trust Series TMTS

                                            Rating
                                            ------
         Series        Class          To              From
         ------        -----          --              -----
         2004-3HE      B-3            B/Watch Neg     BB/Watch Neg


        Ratings Lowered and Removed from Creditwatch Negative

                      Terwin Mortgage Trust

                                           Rating
                                           ------
        Series        Class          To              From
        ------        -----          --              ----
        2004-10SL     B-3            CCC             B/Watch Neg
        2006-4SL      B-6            CCC             B/Watch Neg
        2006-6        I-B-7          CCC             B-/Watch Neg
        2006-6        II-B-5         D               B-/Watch Neg
        2006-8        I-B-6          CCC             B/Watch Neg
        2006-8        II-B-5         CCC             B/Watch Neg
        2006-10SL     B-7            D               B/Watch Neg
         

                  Terwin Mortgage Trust Series TMTS

                                          Rating
                                          ------
       Series        Class          To              From
       ------        -----          --              ----
       2005-10HE     B-7            CCC             B/Watch Neg


                         Ratings Lowered
    
                      Terwin Mortgage Trust

                                          Rating
                                          ------
       Series        Class          To              From
       ------        -----          --              ----
       2004-16SL     B-3            D               CCC
       2004-18SL     2-B-3          D               CCC
       2005-9HGS     B-6            D               CCC
       2005-11       I-B-7          D               CCC
       2006-HF-1     B-6            D               CCC
       2006-2HGS     B-6            D               CCC
       2006-8        II-B-6         D               CCC
       2006-10SL     B-8            D               CCC
       

            Ratings Placed on Creditwatch Negative

                    Terwin Mortgage Trust

                                          Rating
                                          ------
     Series        Class           To               From
     ------        -----           --               ----
     2005-3SL      B-3             BBB-/Watch Neg   BBB-
     2005-9HGS     B-4             BBB-/Watch Neg   BBB-
     2005-11       II-B-2          BBB+/Watch Neg   BBB+
     2005-16HE     B-1             BBB+/Watch Neg   BBB+
     2006-1        II-M-3          A/Watch Neg      A
     2006-HF-1     B-3             BBB/Watch Neg    BBB
     2006-4SL      B-3             BBB/Watch Neg    BBB
     2006-6        I-B-3           BBB/Watch Neg    BBB
     2006-6        II-B-2          BBB+/Watch Neg   BBB+
     2006-8        I-B-3           BBB+/Watch Neg   BBB+
     2006-8        II-B-2          BBB+/Watch Neg   BBB+
     2006-8        II-B-3          BBB/Watch Neg    BBB
     2006-10SL     B-3             BBB+/Watch Neg   BBB+
     2006-10SL     B-4             BBB/Watch Neg    BBB
     2006-12SL     B-2             BBB+/Watch Neg   BBB+


TRAINER WORTHAM: Fitch Puts BB Rating on Watch Negative
-------------------------------------------------------
Fitch has placed two classes of notes issued by Trainer Wortham
First Republic CBO III Ltd, on Rating Watch Negative.

    -- $13,651,023 class D notes 'BBB';
    -- $6,196,889 preference shares 'BB'.

Trainer Wortham III is a collateralized bond obligation that
closed on Feb. 19, 2003 and is managed by Trainer Wortham &
Company, Inc. (rated 'CAM2' as a CDO asset manager by Fitch).  The
notes issued by Trainer Wortham III are supported by a portfolio
composed of residential mortgage-backed securities, commercial
mortgage-backed securities, asset-backed securities, corporate
debt, and CDOs.

Since the last review on April 9, 2007, approximately 8.8% of the
underlying portfolio collateral has been downgraded, while an
additional 3.75% of the portfolio has been placed on Rating Watch
Negative.  The majority of both rating actions have been comprised
of 2005 and 2006 vintage closed end second lien RMBS assets with
the remaining downgrades from subprime RMBS assets of various
vintages.  As of the May 30, 2007 trustee report, the class D
overcollateralization ratio was 102.86% versus a trigger of
101.75% and the weighted average rating factor was 16.56 versus a
maximum threshold of 14.

Trainer Wortham III has a total of seven 2006 vintage CES bonds
comprising approximately 6% of the portfolio.  

The ratings of the 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 preference shares addresses the likelihood that investors
will ultimately receive the stated balance of principal by the
legal final maturity date.


TRANS ENERGY: Completes Financing Deal with CIT Energy
------------------------------------------------------
Trans Energy Inc. has closed a financing agreement with CIT
Energy, a unit of CIT Group Inc.

"The company been working to put the best possible financing
structure for the company in place and believe it has done that
with CIT," James K. Abcouwer, president and CEO of Trans Energy
said.  "The company was the operational team in place now to turn
this new capital into producing oil and gas wells, exploiting the
company's attractive leasehold position."
    
"CIT Energy is pleased to provide Trans Energy with the financing
it needs for its development drilling program," George McKean,
director of CIT Energy, said.  "The company's goal is to build
long-term relationships through customized capital solutions that
help its clients achieve their growth objectives.  Reserve based
lending is one of its core product offerings, and the company
looks forward to working with Trans Energy on future
developments."
    
Trans Energy also has begun drilling the Lyons No. 7, the first of
up to 35 wells the company plans to drill in its 2007 drilling
program.  Trans Energy has contracted with Union Drilling Company
for an RD-20 top-drive drilling rig for the balance of the year
with an option to extend through 2008.  The program will develop
properties with proven reserves in Wetzel, Marion and Tyler
Counties in West Virginia.
    
"The company will contract for a second, larger drilling rig
from UDC to drill the deeper wells in our program, including
Marcellus Shale wells as deep as 7,000 feet,"  Mr. Abcouwer
concluded.  "In addition, the company will do some up-hole
completions in the Marcellus Shale in its older wells that
formerly produced from deeper zones.  The deployment of this new
capital is targeted to boost our on-line production to over 3
million cubic feet of gas or oil equivalents by the end of the
year. "
    
The company's board of directors has approved to implement a
policy to lock-in forward prices and use hedge programs to take
advantage of the favorable forward market prices on approximately
70% to 80% of the planned production.
    
                      About Trans Energy Inc.
    
Headquartered in St Mary's West Virginia, Trans Energy Inc. (OTC
BB: TENG.OB) -- http://www.transenergy.com/-- has been in the  
business of production, transportation, transmission, sales and
marketing of oil and natural gas in the Appalachian and Powder
River basins since 1993.  With interests in West Virginia, Ohio,
Pennsylvania, Virginia, Kentucky, New York, and Wyoming; Trans
Energy and its subsidiaries own and operate oil and gas wells, gas
transmission lines, transportation systems and well construction
equipment and services.

                           *     *     *

As reported in the Troubled Company Reporter on April 23, 2007,
Malone & Bailey PC, in Houston, expressed substantial doubt about
Trans Energy 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
significant losses from operations, accumulated deficit of
$33,026,735, and working capital deficit of $2,610,953 at
Dec. 31, 2006.


TRINITY INDUSTRIES: S&P Lifts Corp. Credit Rating to BB+ from BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Trinity
Industries Inc., including its corporate credit rating to 'BB+'
from 'BB'.  The outlook is positive.
      
"The upgrade reflects Trinity's continued improvement in operating
performance and business risk profile, underpinned by the
company's strong market position in railcar manufacturing and by
its diversity of operations," said Standard & Poor's credit
analyst James Siahaan.
     
The ratings continue to reflect Trinity's aggressive financial
risk profile, marked by the debt-financed growth of its leasing
business; its participation in cyclical end-markets; and the
company's exposure to steel and component costs.  These factors
are partially offset by the company's satisfactory business risk
profile, marked by industry-leading positions in railcar, inland
barge, and wind tower manufacturing, the stable earnings from its
expanding leasing operations, as well as its competitive cost
structure, derived in part from lower-cost foreign manufacturing
operations.
     
Demand for railcars is cyclical and can significantly vary.  
However, railcar deliveries and backlog have meaningfully
increased over the past couple of years because companies are
replenishing their aging fleets and North American railroad
traffic has risen.  Although the number of railcar deliveries in
the first quarter of 2007 came in on the weak side at roughly
11,000 railcars, this is expected to be only a temporary setback;
demand for tank cars and covered hoppers remains at high levels.  
The tank cars and covered hoppers are the main car types involved
in ethanol production and are those in which Trinity is well-
entrenched.  Full-year orders may remain at relatively healthy
levels over the next few years.  Reported operating profit in
Trinity's rail group rose to $270 million from $183 million,
driving an increase in overall margins.  Margin improvement has
also come from better operating leverage and actions the company
has taken to temper the impact of raw material cost fluctuations.  
Production and pricing in the industry depend on the availability
and cost of steel and components.


U.S. ENERGY: UK Financing Failure Could Prompt Bankruptcy Filing
----------------------------------------------------------------
U.S. Energy Systems, Inc., in a filing with the U.S. Securities
and Exchange Commission yesterday reported on recent business
developments relating to its UK natural gas exploration and
production subsidiary, and provided an update on USEY's financial
position.

In addition, USEY reported that its board of directors has
determined to seek to engage independent third party financial
advisors for purposes of assisting the board in its evaluation of
potential refinancing or restructuring transactions as well as
other strategic alternatives available to the company.

                Description of UK Gas Assets

The assets comprising USEY's UK business were acquired by USEY in
August 2006 through a series of transactions and financings.  They
consist of:

    (i) gas licenses for 100,000 acres of onshore natural gas
        properties located in 6 fields (four of which are
        producing and two of which are to be developed) in North
        Yorkshire, England,

   (ii) an on-site 42MW gas-fired power plant, and

  (iii) a Power Purchase Agreement and a Gas Sales Agreement with
        Scottish Power Energy Management Ltd, under which Scottish
        Power has an obligation to take all of the electricity
        generated by the plant and all of the natural gas produced
        from the surrounding reserves up to 100 bcf, in each case
        at a small discount to market for the first 67 bcf and at
        a reduced discount for the remaining 33 bcf.  Both
        agreements are for up to 12 years or a combined 100 bcf of
        gas sold, whichever occurs first.

                        Expansion Costs

The company previously reported that it has insufficient funds for
the planned expansion of the UK Gas Assets.  Based on forecasts
provided to the company by independent third party engineers, the
capital expenditure requirements for completion of the planned
expansion of the UK Gas Assets are expected to significantly
exceed the current capital expenditure budget of US$ 36,000,000
and may exceed that amount by more than 100%.  The company will
determine the actual extent of the capital requirement necessary
for implementing the planned expansion through discussions with
independent engineers over the upcoming four to six week period.

However, absent a refinancing or the raising of additional capital
by the company in an amount sufficient to meet the capital
requirements for the expansion, the company will not have
sufficient funds to complete the expansion of the UK Gas Assets.

Failure to complete the expansion of the UK Gas Assets will result
in the company's inability to generate sufficient revenue to
service the debt under the UK financing agreements.

The company is also evaluating measures which may reduce the
capital requirements for the expansion, however there can be no
assurance that the company will be successful in reducing the
capital needs through the adoption of such measures.  In addition,
there can be no assurance that the company will be able to
complete a refinancing or the raising of additional capital in a
timely manner or on acceptable terms.  Any raising of capital
involving the issuance of equity is expected to result in a
significant dilution to existing shareholders.

              Working Capital Deficiencies

The company previously reported that there can be no assurance
that the company will have sufficient cash flow from operations,
financings or equity issuances to fund anticipated cash
requirements for the next twelve months.  The company believes
that absent a refinancing, the raising of additional capital or
other financial restructuring (including a restructuring involving
the permitted sale of certain of the company's assets), the
company will be unable to meet operating requirements and certain
contractual obligations as they become due as early as August
2007.

The company currently is projecting a shortfall in working capital
in the UK for the year 2007 in an amount up to $3.2 million and is
currently evaluating cost saving measures intended to reduce such
shortfall.  There can be no assurance that the company will be
able to complete a refinancing or additional capital raise (which,
in the case of an equity issuance, would result in the dilution of
existing shareholders) on acceptable terms, or implement cost
saving measures within the timeframe required to permit the
Company to meet its working capital needs or comply with such
contractual obligations.

             Compliance with Financing Arrangements

The company previously reported that it has insufficient funds to
make certain capital contributions required under the UK financing
arrangements between September and December of 2007.  Absent a
refinancing or the raising of additional capital (which, in the
case of an equity issuance, would result in the significant
dilution of existing shareholders), the company will not be able
to meet its capital contribution obligations starting in September
2007 and will be in default under the UK financing arrangements.

The company is not currently in compliance with certain of its
non-monetary obligations under the UK financing arrangements.  The
company has notified the financing parties under the UK financing
arrangements of such current and anticipated failure and is in
discussions with the UK financing parties.  To date, no financing
party has taken any action or notified the company that it intends
to take action under the financing arrangements in response to
such non-compliance.  However, there can be no assurance that the
financing parties will not take action in response to such non-
compliance, including the declaration of a default under the
financing arrangements and the acceleration of all outstanding
indebtedness.

If the UK financing parties were to declare the UK financing
arrangements in default and exercise remedies, such action could
involve foreclosure on substantially all of the company's assets
and would have a material adverse effect on the company.  In that
circumstance, the company is unable to provide assurances that it
would be able to avoid bankruptcy or insolvency proceedings.

There has been no payment default under the UK financing
agreements.

       Connection to UK's National Transmission System

The company anticipated that it would be in a position to deliver
gas to the NTS on a firm capacity (i.e., uninterrupted) basis upon
completion of the expansion plans by August 2009.

Based on information recently provided to the company by the
operator of the NTS, the Company has determined that it would not
be permitted to deliver gas from the UK Gas Assets to the NTS on a
firm capacity basis before April 2011 at the earliest.

Consequently, the company is revising its plans to enable it to
deliver gas from the UK Gas Assets to the NTS on an interruptible
basis by August 2009 until deliveries to the NTS on a firm
capacity basis become possible.  Until connection to the NTS is
made on a firm capacity basis, interruptions of the Company's
deliveries of gas to the NTS could reduce revenues generated from
the sale of gas which may adversely affect the company's ability
to service its debt or to comply with certain liquidity covenants
under the UK financing agreements.

                         Correction

The company further reported that certain statements with respect
to the company's working capital position attributed to USEY
personnel in a June 18 Reuters article were inaccurate and should
be interpreted in the context of the information presented its
recent report filed with the SEC.

In that June 18 reports, Reuters, citing a company spokesman,
disclosed that the company was exploring strategic options over
the next six months.

The reported further cited the spokesman as saying that the
company did not have any capital deficiency.

               About U.S. Energy Systems, Inc.

U.S. Energy Systems, Inc. -- http://www.useyinc.com/-- (Nasdaq:  
USEY) owns of green power and clean energy and resources.  USEY
owns and operates energy projects in the United States and United
Kingdom that generate electricity, thermal energy and gas
production.

The company has a 100% interest in U.S. Energy Biogas Corp., which
owns and operates 23 landfill gas to energy projects in the United
States, 20 of which produce electricity and three of which sell
landfill gas as an alternative to natural gas.  The company also
has a 100% interest in Plymouth Envirosystems, Inc., which owns a
50% interest in Plymouth Cogeneration Limited Partnership.
Plymouth Cogeneration Limited Partnership owns and operates a
combined heat and power plant in Massachusetts that produces
1.2MWs of electricity and 7 MWs of heat.  The company further has
a 79% interest in GBGH, LLC, which owns energy assets and mineral
rights in the United Kingdom including a 42MW gas-fired power
plant and gas licenses for approximately 100,000 acres of onshore
natural gas properties and mineral rights in North Yorkshire,
England.  GBGH is the parent company of UK Energy Systems, LTD.


U.S. ENERGY: Board Suspends UK Unit CEO Grant Emms
--------------------------------------------------
U.S. Energy Systems, Inc., disclosed in a regulatory filing with
the U.S. Securities and Exchange Commission that on June 24, 2007,
its board of directors suspended Mr. Grant Emms, the Chief
Executive Officer and a director of its subsidiary, UK Energy
Systems Ltd.  Mr. Emms, the company further discloses is suspended
with pay and other contractual benefits pending investigation by
the audit committee.

Mr. Joseph Reynolds, UK Energy's Program Director, will serve as
the interim CEO.

               About U.S. Energy Systems, Inc.

U.S. Energy Systems, Inc. -- http://www.useyinc.com/-- (Nasdaq:  
USEY) owns of green power and clean energy and resources.  USEY
owns and operates energy projects in the United States and United
Kingdom that generate electricity, thermal energy and gas
production.

The company has a 100% interest in U.S. Energy Biogas Corp., which
owns and operates 23 landfill gas to energy projects in the United
States, 20 of which produce electricity and three of which sell
landfill gas as an alternative to natural gas.  The company also
has a 100% interest in Plymouth Envirosystems, Inc., which owns a
50% interest in Plymouth Cogeneration Limited Partnership.
Plymouth Cogeneration Limited Partnership owns and operates a
combined heat and power plant in Massachusetts that produces
1.2MWs of electricity and 7 MWs of heat.  The company further has
a 79% interest in GBGH, LLC, which owns energy assets and mineral
rights in the United Kingdom including a 42MW gas-fired power
plant and gas licenses for approximately 100,000 acres of onshore
natural gas properties and mineral rights in North Yorkshire,
England.  GBGH is the parent company of UK Energy Systems, LTD.


U.S. ENERGY: Weiser LLP Expresses Going Concern Doubt
-----------------------------------------------------
Weiser LLP in New York expressed substantial doubt on U.S. Energy
Systems, Inc.'s ability to continue as a going concern after it
audited the company's financial statements for the year ended
Dec. 31, 2006.

In the company's Form 10-K filed with the U.S. Securities and
Exchange Commission on June 8, 2007, the auditing firm pointed to
the company's working capital deficiency and continuing operating
losses.

                        Financial Results

Net loss for the year ended Dec. 31, 2006 was $27,835,000, up
$17,543,000 from a net loss of $10,292,000 for the year ended
Dec. 31, 2005.

Net loss for 2006 included:

    * $996,000 of legal costs and other expenses related to the
      Countryside settlement,

    * $1,688,000 of expense related to the valuing of previously
      granted employee equity grants as required by SFAS 123R,

    * a $3,595,000 reserve against the outstanding balance related
      to a note receivable for the sale of U.S. Energy Biogas'
      ownership interest in certain gasco entities, and

    * $872,000 of expenses related to the settlement of the Zahren
      lawsuit.

The balance of the change is primarily due to $9,137,000 of net
operating losses from the UK operations which commenced operations
on Aug. 7, 2006.

              Liquidity and Capital Resources

As of Dec. 31, 2006, the company had a working capital deficit of
$1,085,000.  Included in current liabilities is $5,250,000
representing the amount of the Illinois Subsidy Liability due by
May 31, 2007 per USEB's settlement with the Illinois Commerce
Commission.  This amount was paid on May 31, 2007 from proceeds
from USEB's financing which closed on that day.

At Dec. 31, 2006, the company's balance sheet showed total assets
of $346,930,000, total liabilities of $297,445,000, and a
stockholders' equity of $31,480,000.  Equity at Dec. 31, 2005, was
$16,173,000.

The company also disclosed that accumulated deficit at Dec. 31,
2006, was $73,275,000, up from accumulated deficit of $46,528,000
at Dec. 31, 2005.

                  USEB's Bankruptcy Proceeding

As reported in the Troubled Company Reporter on June 4, 2007, the
company's U.S.-based renewable energy business, U.S. Energy Biogas
Corp., completed its reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the Southern District of New York.

U.S. Energy Biogas' confirmed plan provided full payment with
interest to creditors.

U.S. Energy Biogas filed a voluntary chapter 11 petition on
Nov. 29, 2006.

A full-text copy of the company's financial statements for the
year ended Dec. 31, 2006, is available for free at:

              http://ResearchArchives.com/t/s?20cc

               About U.S. Energy Systems, Inc.

U.S. Energy Systems, Inc. -- http://www.useyinc.com/-- (Nasdaq:  
USEY) owns of green power and clean energy and resources.  USEY
owns and operates energy projects in the United States and United
Kingdom that generate electricity, thermal energy and gas
production.

The company has a 100% interest in U.S. Energy Biogas Corp., which
owns and operates 23 landfill gas to energy projects in the United
States, 20 of which produce electricity and three of which sell
landfill gas as an alternative to natural gas.  The company also
has a 100% interest in Plymouth Envirosystems, Inc., which owns a
50% interest in Plymouth Cogeneration Limited Partnership.
Plymouth Cogeneration Limited Partnership owns and operates a
combined heat and power plant in Massachusetts that produces
1.2MWs of electricity and 7 MWs of heat.  The company further has
a 79% interest in GBGH, LLC, which owns energy assets and mineral
rights in the United Kingdom including a 42MW gas-fired power
plant and gas licenses for approximately 100,000 acres of onshore
natural gas properties and mineral rights in North Yorkshire,
England.  GBGH is the parent company of UK Energy Systems, LTD.


UNITED AMERICAN: March 31 Balance Sheet Upside-Down by $741,332
---------------------------------------------------------------
United American Corp. reported net income of $30,672 on sales of
$5,483,752, compared with a net loss of $286,481 on sales of
$2,463,170 for the same period in 2006.

The increase in revenue is primarily attributable to increases in
sales of VoIP termination services in both the brokered
international telecom routes as well as the direct routes.  

The company reported a gross profit of $928,517 and $137,639 for
the three months ended March 31, 2007, and 2006 respectively. The
increase in gross profit is a result of increase sales of brokered
routes.

The company incurred operating expenses in the amount of $854,473
for the three months ended March 31, 2007, compared to $447,682
for the three months ended March 31, 2006.  The increase is
primarily attributable to increases in commissions paid on the
increased revenues as well as increases in management fees.  

At March 31, 2007, the company's consolidated financial statements
showed $1,927,704 in total assets and $2,669,036 in total
liabilities, resulting in a total stockholders' deficit of
$741,332.  

The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $1,504,741 in total current assets
available to pay $2,669,036 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?2124

                       Going Concern Doubt

Michael Pollack CPA, in Cherry Hill, New Jersey, expressed
substantial doubt about United American Corp.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2006.  Mr. Pollack pointed to the company's operating losses and
capital deficits.

                      About United American

Headquartered in Las Vegas, Nevada, United American Corp. (OTC BB:  
UAMA.OB) -- http://www.unitedamericancorp.com/ -- is a next-
generation, facilities-based, marketing and sales-oriented
telecommunications holding company.  The company utilizes the
Internet to provide economical local and international
telecommunications services.


VENTURE CDO: S&P Withdraws BB Rating on $8 Million Class D Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on all of
the notes issued by Venture CDO 2002 Ltd., a cash flow arbitrage
high-yield CLO transaction, following their complete redemption.
     
The rating withdrawals follow the paydown of all the notes on the
June 15, 2007, payment date.
   

                        Ratings Withdrawn
   
                      Venture CDO 2002 Ltd.

                       Rating               Balance
                       ------               -------
         Class      To      From      Original    Current
         -----      --      ----      --------    -------
          A         NR      AAA     $237,000,000   0.00
          B         NR      A-       $20,000,000   0.00
          C-1       NR      BBB       $8,250,000   0.00
          C-2       NR      BBB       $5,000,000   0.00
          D         NR      BB        $8,000,000   0.00
           
                         NR - Not rated.


VONAGE HOLDINGS: Appeals Court Wants "Middle Ground" Considered
---------------------------------------------------------------
An appeals court judge in Vonage Holdings Corp.'s patent dispute
with Verizon Communications Inc. questioned whether it would be
possible to reach a "middle ground" which would not result in
Vonage going out of business, Corey Boles of The Wall Street
Journal reports.

Vonage previously said in a regulatory filing that its ongoing
patent litigation with Verizon, if determined against the company,
could, among others, lead to the bankruptcy or liquidation of the
company.

According to WSJ, Judge Timothy Dyke, one of a three-judge panel
hearing the case, asked whether the ultimate punishment meted out
to Vonage for infringing three of Verizon's patents could not be a
middle ground.

WSJ says Verizon's lawyer, Richard Tarranto, Esq., told Judge
Dyke that in the abstract, a middle ground could be possible if
Vonage had asked for time to come up with a "work-around" solution
and had demonstrated it was close to finding one, something it had
none done.

                        Verizon Litigation

On June 12, 2006, Verizon filed a suit against Vonage and
its subsidiary Vonage America Inc., with the U.S. District Court
for the Eastern District of Virginia.

Verizon alleged that the company infringed seven patents in
connection with providing VoIP services and sought injunctive
relief, compensatory and treble damages and attorneys' fees.
Verizon dismissed its claims with respect to two of its patents
prior to trial, which commenced on Feb. 21, 2007.

After trial on the merits, a jury returned a verdict finding that
the company infringed three of the patents-in-suit.  The jury
rejected Verizon's claim for willful infringement, treble damages,
and attorneys' fees, and awarded compensatory damages in the
amount of $58 million.  The trial court subsequently indicated
that it would award Verizon $1.6 million in prejudgment interest
on the $58 million jury award.  The trial court issued a permanent
injunction with respect to the three patents the jury found to be
infringed effective April 12, 2007.

The trial court then permitted the company to continue to service
existing customers pending appeal, subject to deposit into escrow
of a 5.5% royalty on a quarterly basis.  The trial court also
ordered that the company may not use its technology that was found
to be infringing to provide services to new customers.  In
addition, Vonage posted a $66 million bond to stay execution of
the monetary judgment pending appeal.

On April 6, 2007, the company brought the trial court's ruling
to the Federal Circuit Court, which Court allowed Vonage to
continue to sign up new customers while Vonage appeals the jury's
decision and set June 25, 2007, as the commencement of the oral
arguments on the matter.

                           About Vonage

Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- is a  
provider of broadband telephone services with over 1.4 million
subscriber lines as of February 8, 2006.  Utilizing its voice over
Internet protocol technology platform, the company offers feature-
rich, low-cost communications services with a call quality
comparable to traditional telephone services.  While customers in
the United States represent over 95% of its subscriber lines,
Vonage continues to expand internationally, having launched its
service in Canada in November 2004, and in the United Kingdom in
May 2005.


W.R. GRACE: Wants Exclusive Plan-Filing Period Further Extended
---------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates ask the Hon. Judith
Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to further extend their exclusive period to:

  (i) file a plan of reorganization until 90 days after the
      Court issues a final order on the personal injury claims
      estimation trial; and

(ii) solicit acceptances of that plan until 60 days after a
      reorganization plan is filed.

The trial dates for the estimation of the Debtors' personal
injury liabilities will begin January 2008, Timothy P Cairns,
Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, LLP, in
Wilmington, Delaware, relates.

Mr. Cairns asserts that the PI Estimation Trial remains the key
event in the Debtors' Chapter 11 cases and is required for the
confirmation of any reorganization plan.  It is through the PI
Estimation Trial and other asbestos claims litigation that the
issue of insolvency will be resolved, Mr. Cairns contends.

Competing plans of reorganization will only distract the parties
and the Court, and create yet more litigation, Mr. Cairns
asserts.  The Debtors suspect that various other constituents
including the Official Committee of Asbestos Personal Injury
Claimants and the Future Claims Representative want to file a
competing plan that presumes the Debtors' insolvency to send a
message to the market that the Debtors appear substantially
insolvent thereby eroding the Debtors' stock price and, in turn,
possibly weakening the equity holders' ability to negotiate
effectively.

"Lifting exclusivity will not advance formulation of a
confirmable reorganization plan and a quicker exit from Chapter
11," Mr. Cairns says.  "The other constituents in the Debtors'
cases could not confirm a plan without incorporating the results
from the PI Estimation Trial."

Accordingly, the Debtors insist that exclusivity should be
extended to allow the results from the PI Estimation Trial to be
incorporated into a plan of reorganization

Mr. Cairns points out that the Debtors have made significant
progress in their bankruptcy cases.  Among other things, the pool
of property damage claims have been reduced from 4,042 in March
2003 to 483 PD Claims as of June 11, 2007.  From 2003 to June
2007, the Debtors have also settled several of the PD Claims.  
Other PD Claims have been withdrawn or disallowed by the Court.  
Of the remaining 483 PD Claims, about 268 are subject to
settlements and 215 are not.

Mr. Cairns adds that as of June 1, 2007, the Debtors have
resolved approximately 2,900 non-asbestos claims, leaving only
approximately 348 open and unresolved non-asbestos claims.  More
than 14,000 non-asbestos claims were filed against the Debtors in
March 2003.

By application of Delaware Local Rule 9006-2, the Debtors'
exclusive period is automatically extended until July 23, 2007,
when the Court will convene a hearing on the extension request.

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
P.C., represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004.  On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement.  The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005.  The
Debtors' exclusive period to file a chapter 11 plan expires on
July 23, 2007.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.  (W.R.
Grace Bankruptcy News, Issue No. 132; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


W.R. GRACE: Wants to Sell Washcoat Business for $21.9 Million
-------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates operate a business line
-- the Washcoat Business -- that designs, manufactures, and
markets alumina and mixed-oxide materials used in catalytic
converters to remove pollutants produced by automotive and other
engines.

The Washcoat Business also sells into the automobile supply chain
end in which the Debtors have no other presence and have limited
leverage, Timothy P. Cairns, Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub, LLP, in Wilmington, Delaware, tells the United
States Bankruptcy Court for the District of Delaware.

In 2006, the Washcoat Business had sales of approximately
$25,800,000, which is less than 1% of the Debtors' consolidated
revenue for that year, according to Mr. Cairns.

In the third quarter of 2006, the Debtors made known that they
were considering strategic alternatives for the Washcoat
Business.  The Debtors determined that the Washcoat Business is
not complementary to their other business lines, had low sales
and yet required frequent management attention.

Thus, the Debtors and their financial advisor began marketing and
soliciting potential buyers for the Washcoat Business and have
since contacted numerous strategic and financial buyers.  The
marketing efforts culminated in the entry of a sale agreement
with Rhodia, Inc., who agreed to purchase the Business for
approximately $21,900,000 subject to certain post-closing
adjustments through a private sale process.

Under the Sale Agreement, all of the Debtors' right, title and
interest in assets used exclusively in the Washcoat Business,
including real property, leases, machinery, equipment, inventory,
accounts receivable, books and record, software, and claims under
insurance policies will be transferred to Rhodia.

Rhodia, however, will not assume certain of the Debtors' assets,  
including:

  -- all of the Debtors' assets not used for the Business;

  -- the Washcoat intellectual property, which is being provided
     to Rhodia under a license agreement; and

  -- the assets of the Debtors' silica manufacturing operations
     that have shared facilities with the Washcoat Business in
     Cincinnati, Ohio.

Rhodia will also assume all liabilities and obligations arising
out of the operation or ownership of the Transferred Assets post-
closing, including (i) post-closing employment liabilities and
(ii) all removal, repair or abatement-related liabilities related
to the presence of lead or asbestos in any of the buildings,
structures, improvements and fixtures in the Washcoat real
property.

Rhodia will not assume all pre-closing liabilities arising from
exposure to hazardous substance related to the Debtors'
businesses other than the Washcoat Business and all liabilities
arising out of the Transferred Assets arising on or before the
Closing Date.

The Debtors will make an offer concerning certain conditions of
employment to non-bargaining unit employees and no more than 27
bargaining unit employees, provided that the terms of the
compensation is comparable to the existing compensation to the
employees.  The Debtors will also use reasonable commercial
efforts to offer a voluntary severance plan to their bargaining
unit employees located at the Cincinnati facility.  Rhodia will
not assume any employee benefit plans.

The Debtors will assume and assign several executory contracts
and unexpired leases of the Washcoat Business to Rhodia.  
Payments of the Cure Amounts will be shared equally between the
Debtors and Rhodia.  As of June 18, 2007, the Debtors estimate
that the cure amounts for the Assumed Contracts is $0.

The Sale Agreement provides that the Debtors will indemnify
Rhodia for certain intellectual property-related indemnities for
up to five years after the Closing Date provided that the
indemnification will not exceed 15% of the Purchase Price.

Accordingly, the Debtors seek the Court's permission to sell the
Washcoat Business to Rhodia, free and clear of all liens and
claims through a private sale process.

The Debtors assert that if they are to proceed with a public
auction, their estates will incur significant market risk with
low probability of identifying a higher and better offer.  The
Debtors believe that further delays in completing the sale could
lead to deteriorating financial performance of the Washcoat
Business.

In any event, the Debtors seek the Court for permission to pay
Rhodia $547,500 as Break-Up Fee in the event they complete a sale
of the Washcoat Business to another bidder other than Rhodia.

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
P.C., represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors.  The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice.  David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA.  Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants.  The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it.  Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004.  On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement.  The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005.  The
Debtors' exclusive period to file a chapter 11 plan expires on
July 23, 2007.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.  (W.R.
Grace Bankruptcy News, Issue No. 132; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WAVE WIRELESS: Court Confirms Amended Plan of Reorganization
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
the Amended Joint Plan of Reorganization proposed by Wave Wireless
Corporation and its Official Committee of Unsecured Creditors.

The purpose of the plan is to restructure the Debtor's outstanding
indebtedness and resolve its liquidity concerns, thereby enhancing
the recovery the Debtor's creditors and enabling it to continue as
a going concern, with operations that are far more limited in
breath and scope than prior to the petition date.

Under the Plan, SDS Capital Group SPC, LTD. will become the owner
of not less than 70% of the issued and outstanding shares of
Common Stock, depending on participation in the equity financing,
described below.  All existing equity interests in the Debtor will
be cancelled.  The Debtor estimates that SDS has waived $600,000
or more of its secured claim against the Debtor in exchange for
the grant of new Common Stock, and the releases set forth in the
Plan.

All priority unsecured claims and administrative claims will be
paid in full, through either:

   (i) payment on the effective date of the Plan;

  (ii) payment through an escrow account established with the  
       Plan Administration Trust; or

(iii) payment from the reorganized Debtor following the  
       allowance of a claim.

To facilitate a distribution to the Debtor's general unsecured
creditors, the Plan calls for the formation of a Plan
Administration Trust.  The initial funding for the Plan
Administration Trust will be $250,000 less certain professional
fees and other charges set forth in the plan.  This initial
funding will be provided from funds that were otherwise
distributable to SDS.

The Plan Administration Trust will be responsible for, among other
things, objecting to general unsecured claims and making
distributions, as appropriate, to holders of general unsecured
claims.  The plan also permits general unsecured claimants and
preferred shareholders to participate in an equity financing,
pursuant to which each party is permitted to purchase a portion of
30,000 shares of new Common Stock at $1 per share, based upon the
terms and conditions set forth in the Plan.

Pursuant to the terms of the plan and the Debtor's proposed
Amended Certificate of Incorporation, the Registrant will have
authorized 250,000 shares of Common Stock.  Under the Plan, the
Debtor will issue 100,000 shares of Common Stock, 70,000 shares of
which will be issued to SDS, and the remaining 30,000 will be
issued to participants in the Equity Financing.

As of May 31, 2007, the total assets of the Debtor were
approximately $3.2 million, and the total liabilities were
approximately $4.5 million.

Based in San Jose, California, Wave Wireless Corporation
fka PCom Inc. is a wireless broadband developer.  The company
filed a chapter 11 petition on Oct. 31, 2006 (Bankr. Del. Case No.
06-11267) Anthony M. Saccullo, Esq. and Neal J. Levitsky, Esq., at
Fox Rothschild LLP represent the Debtor.  When the Debtor sought
protection from its creditors, it listed $1,000,000 in total
assets and $5,000,000 in total debts.


WHITING PETROLEUM: Commences 5 Million Common Stock Offering
------------------------------------------------------------
Whiting Petroleum Corporation commenced a public offering of its
5 million shares of common stock.  Whiting will grant the
underwriters for the offering an option to purchase up to an
additional 750,000 shares to cover over-allotments.
    
Whiting will use the net proceeds from the proposed offering:

   a) to repay a portion of the debt currently outstanding under
      its credit agreement; and

   b) to use the increased credit availability to pay for capital
      expenditures related to accelerated drilling and completion
      of wells and construction of processing facilities primarily
      at its Boies Ranch and Jimmy Gulch prospect areas in the
      Piceance Basin and Robinson Lake prospect area in the
      Williston Basin.
    
Merrill Lynch & Co. and J.P. Morgan Securities Inc. will act as
joint book-running managers for the offering.  

The offering was made by means of a prospectus and related
prospectus supplement, copies of which may be obtained from:

     Merrill Lynch & Co.
     4 World Financial Center
     New York, New York 10080

              and

     J.P. Morgan Securities Inc.
     4 Chase Metrotech Center, CS Level
     Brooklyn, New York 11245

                About Whiting Petroleum Corporation
    
Headquartered in Denver, Colorado, Whiting Petroleum Corporation,
(NYSE: WLL) -- http://www.whiting.com/-- is an independent oil  
and gas company that acquires, exploits, develops and explores for
crude oil, natural gas and natural gas liquids primarily in the
Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and
Michigan regions of the United States.

                           *     *     *

Moody's Investor Services assigned a 'Ba3' on Whiting Petroleum
Corp.'s long term corporate family rating and probability of
default.  The outlook is stable.

The company's long term foreign and local issuer credit carry
Standard and Poor's 'BB-' ratings.  The outlook is stable.


WHX CORP: March 31 Balance Sheet Upside-down by $73.3 Million
-------------------------------------------------------------
WHX Corp.'s consolidated balance sheet at March 31, 2007, showed
$296,235,000 in total assets, $369,602,000 in total liabilities,
resulting in a $73,367,000 total stockholders' deficit.

The company's consolidated balance sheet at March 31, 2007, also
showed strained liquidity with $135,832,000 in total current
assets available to pay $151,521,000 in total current liabilities.

WHX Corp. reported a net loss of $8,533,000 for the first quarter
ended March 31, 2007, compared with a net loss of $7,066,000 for
the same period ended March 31, 2006.

Net sales for the first quarter of 2007 increased to
$117.8 million, compared to $112.8 million in the first quarter of
2006, mainly due the $5.1 million increase in sales at the
Engineered Materials Segment.  

Gross profit decreased to $19,482,000 from $21,409,000 in 2006, as
the 2006 quarter included a positive impact of $700,000 from the
liquidation of precious metal inventories valued at LIFO, while
the 2007 quarter was negatively affected by a $400,000 loss on the
sale of HHEM inventory (related to the sale of the Handy & Harman
Electronic Materials Corporation subsidiary, located in East
Providence, Rhode Island, as well as certain of its assets and
inventory located in Malaysia for net proceeds of approximately
$3.8 million).

Selling, general and administrative expenses increased
$3.8 million to $18.8 million in the first quarter of 2007 from
$15.0 million in the comparable 2006 period.  A significant factor
that increased SG&A expenses in the first quarter of 2007 was the  
acquisition of OMG Midwest, a roofing fastener business acquired
by the company in late 2006.  In addition, costs also rose in the  
2007 period due to additional audit, legal, and professional fees,  
partially offset by reduced costs resulting from the closure
of the HHEM and Norristown facilities.

There were no environmental remediation costs in the first quarter
of 2007; however, environmental remediation expenses of
$2.9 million were recorded in the first quarter of 2006.  These
expenses include $1.5 million related to the company's estimated  
exposure at the Shpack landfill site, and $800,000 in connection
with the company's former Norristown facility.  

Operating income for the first quarter of 2007 was $577,000
compared to $3.5 million for the first quarter of 2006.  The
decrease in operating income can be attributed to the reduced  
gross margin percentage, as well as higher SG&A expenses, partly
offset by environmental remediation expenses of $2.9 million in
2006.

Interest expense for the first quarter of 2007 increased
$3.0 million to $7.6 million from $4.6 million in the first
quarter of 2006.  Approximately half of the increase was due to
additional borrowings after the first quarter of 2006.  Proceeds
from the additional borrowings were used principally to fund the
acquisition of OMG Midwest in December 2006, and to pay
substantial environmental remediation costs and pension-related  
payments in excess of the company's operating cash flow.  The
balance of the increase was attributable to higher interest rates
and amortization of deferred financing costs in 2007 compared to
the same period of 2006.  

Realized and unrealized losses on derivatives were $691,000 in the
first quarter of 2007, compared to $5.5 million in the first
quarter of 2006.  The derivative financial instruments utilized by
the company are precious metal forward contracts, which are used
to economically hedge the company's precious metal inventory  
against price fluctuations.  While precious metal market prices  
increased in the first quarter of both 2007 and 2006, the rate of
increase was lower during the first quarter of 2007 compared to
the first quarter of 2006.  In addition, there was a significantly  
lower quantity of precious metal ounces under contract in the
first quarter of 2007.

Net cash used by operating activities for the three months ended
March 31, 2007, totaled $10.4 million, compared with net cash used
in operating activities of $13.8 million for the same period in
2006.   

Investing activities provided $1.9 million in the first quarter of
2007, driven by $3.6 million received principally from the sale of
the HHEM and certain Norristown assets.  Investing activities used
$5.1 million in the same period of 2006.  Cash used for investing  
activities in the first quarter of 2006 was higher than in 2007  
because of net cash paid out for precious metal derivative
contracts in 2006 of $4.4 million, compared to $700,000 in 2007.
In addition, capital spending in 2006 was $2.2 million, as
compared to $1.0 million spent on capital improvements in the same
quarter of 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?2123

                         About WHX Corp.

Headquartered in New York, WHX Corporation (Pink Sheets: WXCP.PK)
-- http://www.whxcorp.com/-- is a holding company that invests   
in and manages a group of businesses.  WHX's primary business  
currently is Handy & Harman, a diversified manufacturing company
whose strategic business units encompass three reportable
segments:  precious metals, tubing, and engineered materials.
The company filed for chapter 11 protection on March 7, 2005
(Bankr. S.D.N.Y. Case No. 05-11444).  WHX Corp. emerged from
bankruptcy on July 29, 2005.


WINN-DIXIE STORES: Hires Dan Portnoy as Senior Vice-President
-------------------------------------------------------------
Winn-Dixie Stores, Inc. has hired Dan Portnoy as its senior vice
president and chief merchandising and marketing officer, in
connection with its realignment of its merchandising and marketing
departments.

Mr. Portnoy, who is set to join the company in mid-July, will be
responsible for leading the merchandising and marketing efforts of
the 521-store chain which emerged from Chapter 11 bankruptcy
protection late last year.

Mr. Portnoy most recently served as president and chief executive
officer of Kings Super Markets in Parsipanny, New Jersey.  Prior
to that, he was senior vice president of Cott Corporation, the
world's largest retailer branded manufacturer.  He has also held
numerous executive level positions with companies such as Daymon
Worldwide, American Stores, The Food Emporium and Great Atlantic &
Pacific Tea Company.

"Dan brings with him more than 30 years of experience in the food
industry on both the retail and manufacturing sides," said Peter
Lynch, president, CEO and chairman of the board for Winn-Dixie.
"Aligning our merchandising and marketing departments under his
leadership will allow us to strengthen both of those functions and
provide the framework to build a stronger and more competitive
company."

A native of Boston, Portnoy received his M.B.A. in Marketing and
Consumer Research from Bernard M. Baruch College, City University
of New York, and holds a B.S. in finance from Babson College in
Wellesley, Massachusetts.

Tom Robbins, who has served as Winn-Dixie's senior vice president
of merchandising since 2005, will be retiring.

"As a member of our senior management team, Tom has helped to
guide our Company through very difficult times and to lay the
groundwork for returning Winn-Dixie to profitability," said Lynch.
"The support that he provided to me personally during this time
was invaluable and he will continue his support to Dan and all of
us for the next couple of months as we transition his role."

Dave Henry will continue to serve as the senior vice president of
marketing reporting directly to Mr. Portnoy.

                         About Winn-Dixie

Based in Jacksonville, Florida, Winn-Dixie Stores Inc. (Nasdaq:
WINN) -- http://www.winn-dixie.com/-- is one of the nation's  
largest food retailers.  The company operates 527 stores in
Florida, Alabama, Louisiana, Georgia, and Mississippi.  The
Company, along with 23 of its U.S. subsidiaries, filed for chapter
11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840).

D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.

When the Debtors filed for protection from their creditors, they
listed $2,235,557,000 in total assets and $1,870,785,000 in total
debts.  The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint
Plan of Reorganization on Nov. 9, 2006.  Winn-Dixie emerged from
bankruptcy on Nov. 21, 2006.


WINSTAR COMMS: Court Okays Wellspring Media Settlement Agreement
----------------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee overseeing the
liquidation of the estates of Winstar Communications, Inc. and
its debtor-affiliates, obtained approval from the U.S. Bankruptcy
Court for the District of Delaware Court of a settlement agreement
she entered into with Wellspring Media, Inc., formerly known as
Regulus International Capital Co., Inc.

The agreement resolves a pending adversary proceeding the Chapter
7 Trustee commenced against Wellspring Media.  The dispute arose
from a unit purchase in which Wellspring paid $2,000,000 in cash
and executed a $3,000,000 promissory note to Winstar.  The Note
was rendered payable in two installments over a two-year period.  
Following the Court order converting the Debtors' Chapter 11
cases to Chapter 7, Wellspring refused to honor the Note.

After a lengthy dispute involving terminologies and provisions in
the original purchase agreement between the parties, the Chapter
7 Trustee and Wellspring agreed that:

  (a) Wellspring will pay $563,700 to the Chapter 7 Trustee;

  (b) the Trustee will dismiss the Adversary Action with
      prejudice, as well as all other liabilities relating to
      Wellspring; and

  (c) Wellspring will release all liabilities relating to the
      Trustee.

Sheldon K. Rennie, Esq., at Fox Rothschild LLP in Wilmington,
Delaware, tells the Court that the Trustee is obligated to
maximize the value of the estate and decide in the best interests
of all of the creditors of the estate.  The Trustee believes the
Agreement will benefit the creditors, especially in light of the
cost, uncertainty and delay of litigation, Mr. Rennie states.

                 About Winstar Communications

Based in New York, New York, Winstar Communications, Inc.,
provides broadband services to business customers.  The company
and its debtor-affiliates filed for chapter 11 protection on
April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through
01-01462).  The Debtors obtained the court's approval converting
their case to a chapter 7 liquidation proceeding in January 2002.
Christine C. Shubert serves as the Debtors' chapter 7 trustee.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts. (Winstar
Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

The Debtor's bankruptcy case has been converted to a Chapter 7
liquidation proceeding.


WINSTAR COMMS: Lucent Brings $244MM Dispute to 3rd Circuit Court
----------------------------------------------------------------
Lucent Technologies, Inc., has taken an appeal from a district
court ruling on its dispute with Winstar Communications, Inc.

The Honorable Joseph J. Farnan of the U.S. District Court for
the District of Delaware in April 2007 affirmed in all respects
the Bankruptcy Court's December 2005 judgment:

  -- awarding $243,930,742, plus interest to Winstar on account
     of preferential and other claims; and

  -- subordinating Lucent Technologies' claim against Winstar to
     the claims of all creditors and certain equity holders, and
     transferring to the estate any lien or claim held by Lucent
     on Winstar's assets.

Lucent has asked the U.S. Court of Appeals for the Third Circuit
to review the District Court's decision.  Lucent posted a
$306,000,000 letter of credit to secure the judgment.

In a 16-page decision, Judge Farnan said the Bankruptcy Court
correctly concluded that Lucent was a Winstar insider and that
the parties' relationship was more than a mere debtor-creditor
relationship conducted at arm's-length.

According to Judge Farnan, Lucent is a "person in control of the
debtor."  Lucent controlled Winstar's purchasing decisions to
inflate its own revenue, even when Winstar neither needed Lucent
equipment or services, Judge Farnan said.

With respect to the Siemens loan funds, the Bankruptcy Court
correctly found that Lucent demanded that Winstar agree to
transfer the funds to Lucent or it would terminate negotiations
for a necessary transition agreement and would further refuse
financing under the parties' credit agreement, Judge Farnan held.

More than 90 days but less than a year before Winstar's
bankruptcy filing, Winstar transferred to Lucent $188,200,000
from a loan made to Winstar by Siemens on the same day.

The Bankruptcy Court correctly held that the Siemens loan funds
were not earmarked for Lucent, Judge Farnan said.

Judge Farnan also pointed out that the Bankruptcy Court correctly
concluded that Winstar and its creditors were substantially
harmed by, and Lucent substantially benefitted, from Lucent's
inequitable conduct.

Judge Farnan also noted that Lucent was obligated to make
payments under a subcontract with Winstar Wireless.  Lucent
breached that subcontract when it refused to pay for services
performed by Wireless.

Enforcement of the Judgment will be stayed until issuance of a
mandate following the Third Circuit Appeal.  JPMorgan Chase Bank,
N.A., issued the letter of credit in favor of Christine C.
Shubert, the Chapter 7 Trustee overseeing the liquidation of
Winstar's estates.

In a stipulation approved by the Bankruptcy Court, Lucent and the
Winstar Trustee have agreed that Lucent will amend the Letter of
Credit to increase the amount to $318,904,554, if the Appeal has
not been resolved by April 30, 2008.  Afterwards, the Letter of
Credit will be increased by $12,162,515 annually until the Appeal
has been resolved.

Lucent is represented in the Appeal by Craig T. Goldblatt, Esq.,
at Wilmer Cutler Pickering Hale and Dorr, LLP, in Washington,
D.C., and Daniel J. DeFranceschi, Esq., and Jason M. Madron,
Esq., at Richards Layton & Finger, Pennsylvania, in Wilmington,
Delaware.

                 About Winstar Communications

Based in New York, New York, Winstar Communications, Inc.,
provides broadband services to business customers.  The company
and its debtor-affiliates filed for chapter 11 protection on
April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through
01-01462).  The Debtors obtained the court's approval converting
their case to a chapter 7 liquidation proceeding in January 2002.
Christine C. Shubert serves as the Debtors' chapter 7 trustee.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts. (Winstar
Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

The Debtor's bankruptcy case has been converted to a Chapter 7
liquidation proceeding.


XENONICS HOLDINGS: Posts $177,000 Net Loss in Qtr. Ended March 31
-----------------------------------------------------------------
Xenonics Holdings Inc. reported a net loss of $177,000 for the
second quarter ended March 31, 2007, compared with a net loss of
$682,000 for the same period ended March 31, 2006.

Revenue for the three months ended March 31, 2007, from the sale
of the company's NightHunter high-intensity illumination devices
increased to $1,646,000 compared to $718,000 for the second
quarter of fiscal 2006.

Gross profit for this year's second quarter was $1,307,000, which
included $640,000 related to the sale of excess inventory of the
NightHunter II product during the period.  This compares to gross
profit of $310,000 for the second quarter last year.

Selling, general and administrative expenses for the three months
ended March 31, 2007, increased to $1,352,000 compared to $915,000
a year earlier, primarily reflecting increased head count and
advertising expenses associated with the launch of SuperVision.

"We are ramping production of SuperVision to meet demand for this
exciting new product that is exceeding our expectations.  
Following modest initial shipments in March and April, we expect
to ship more than 1,000 units in May.  We expect to increase the
pace to at least 2,000 units in June as we improve our
manufacturing process.  We expect SuperVision sales to have a
substantial positive impact on our financial performance beginning
in the current quarter," said chairman Alan Magerman.

"Also noteworthy is that we generated nearly $400,000 in cash from
operations for this year's first six months, compared to absorbing
more than $620,000 in cash for the same period last year, even as
we invested in future growth.  With working capital at the end of
the second quarter of more than $5 million and no debt, we believe
we have the resources we need to achieve our aggressive goals for
Xenonics' long-term growth," Magerman added.

At March 31, 2007, the company's consolidated balance sheet showed
$6,363,000 in total assets, $1,024,000 in total liabilities, and
$5,339,000 in total stockholders' equity.

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?2127

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Jan. 8, 2007,
Eisner LLP, in New York, raised substantial doubt about Xenonics
Holdings Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Sept. 30, 2006.  The auditor pointed to the
company's recurring losses and accumulated deficit.

                     About Xenonics Holdings

Xenonics Holdings Inc. (AMEX: XNN) -- http://www.xenonics.com/--  
develops and produces advanced, lightweight and compact ultra-high
intensity illumination and low-light vision products for military,
law enforcement, public safety, and commercial and private sector
applications.  Xenonics' NightHunter line of illumination products
are used by every branch of the U.S. Armed Forces as well as law
enforcement and security agencies.  Its SuperVision night vision
device is designed for commercial and military applications.


XILLIX TECHNOLOGIES: Court Gives Interim Nod on Plan of Compromise
------------------------------------------------------------------
Xillix Technologies Corp. (TSX: XLX) disclosed last week that the
Supreme Court of British Columbia granted an interim order
approving a consolidated plan of compromise and arrangement under
the Companies Creditors Arrangement Act and the British Columbia
Business Corporations Act.

The arrangement provided for in the Plan would recapitalize and
reorganize the company, resulting in funding of $4.4 million.

The Plan provides for:

    (i) an investment in the company by Cavalon Capital Partners
        Ltd., a Calgary based private investment company, in the
        amount of $4,400,000, structured as a non-interest bearing
        loan;

   (ii) the settlement and release of all of the company's
        secured and unsecured creditors' claims in exchange for
        the payment of a total of $3,600,000, of which not less
        than $600,000 will be paid to the unsecured creditors (on
        a pro rata basis), leaving the company with a cash balance
        of $800,000;

  (iii) the conversion of approximately 94.5% of the Convertible
        Loan into common shares and a new class of non-voting
        shares of the company, such that immediately following
        such conversion Cavalon would hold 45% of the (voting)
        common shares and 100% of the non-voting shares then
        outstanding, providing it with the ownership of 45% of the
        voting and 80% of the equity interests in the company;

   (iv) the cancellation of all outstanding options, warrants,
        exchange rights and conversion rights; and

    (v) the change of the company's name to "Zillion Technologies
        Corp." or such other name as its directors may approve.

The remaining sum of $240,000 would then be owing by the company
to Cavalon under the Convertible Loan.

The completion of the Arrangement will be subject to a number of
conditions, including the entering into of a definitive agreement
by the company and Cavalon providing for the Convertible Loan, the
approval of the Plan by the company's secured and unsecured
creditors, the granting of a final Court order approving the Plan,
and the receipt of all required regulatory approvals, including
the approval of the Toronto Stock Exchange.

The company expects to hold a creditors meeting to consider and
approve the Plan on July 9, 2007.  If the Plan is approved by the
creditors, it is anticipated that the company will apply to Court
for a final order approving the Plan on or about July 25, 2007 and
that the Arrangement will be completed by the end of July.

On May 3, 2007, the company sold substantially all of its assets,
including its intellectual property, certain capital assets and
inventory to Novadaq Technologies Inc., of Toronto, Ontario.  The
completion of the Arrangement would enable the company to seek
additional capital and pursue potential acquisitions.


* Dewey Ballantine Adds Three Partners to IP Litigation Group
-------------------------------------------------------------
Dewey Ballantine LLP employed Dirk D. Thomas, Robert A. Auchter
and Kenneth A. Freeling, as partners in the Intellectual Property
Litigation Group, Washington, D.C. office on June 25, 2007.  

Mr. Thomas will serve as co-chair of the firm-wide IP Litigation
Group alongside Aldo A. Badini.  Messrs. Thomas, Auchter and
Freeling all join Dewey Ballantine from the Washington, D.C.
office of Robins, Kaplan, Miller & Ciresi LLP.
    
"I am pleased to welcome Dirk, Bob, Ken and their entire team to
the Washington, D.C. office," Alan Wm. Wolff, a member of Dewey
Ballantine's Management Committee and managing partner of the
firm's Washington, D.C. office, said.  "They are IP lawyers of the
highest quality and their arrival will have an immediate positive
impact on the firm and its clients.  Their arrivals come at a time
when many of the company's clients are looking for ways to
protect, preserve and promote their intellectual property assets
in a complex and competitive marketplace."
    
Mr. Thomas has more than 20 years of experience focusing on
intellectual property litigation.  He has represented clients in a
range of technology industries, including telephone systems,
medical devices, computer hardware and software, power generation,
and refining equipment/systems.  

He has first-chaired patent infringement jury trials and
arbitration hearings related to patent license disputes, and has
served as lead trial counsel on many patent infringement
litigations, coordinating simultaneous patent infringement
litigations in the U.S. and Europe.  

Clients Mr. Thomas has represented include Medtronic, Tulip
Computers, Nikon, Taro Pharmaceuticals, Eli Lilly, Foster Wheeler,
Unisys, Prism Technologies, Rexnord, Dr. Gary Michelson, American
Catherization Systems, Cordis and Regeneration Technologies Inc.
He has argued numerous appeals before the Court of Appeals for the
Federal Circuit that has resulted in precedential opinions from
that appeals court.  Mr. Thomas is a registered patent attorney
and has experience in all ex parte and inter partes matters
before the United States Patent and Trademark Office and the
European Patent Office.  

He graduated from the University of Maryland in 1982 where he
received his Bachelor of Science in Mechanical Engineering and
went on to George Washington University National Law Center where
he received his J.D.
    
Mr. Freeling has more than 20 years of experience litigating and
trying antitrust and patent cases with a particular concentration
in the pharmaceutical, biological, and medical device industries,
representing clients including Pfizer, CIBA Vision, Bayer, NYU and
MIT.  Recently Mr. Freeling first-chaired two significant
antitrust/patent jury trials back-to- back for major insurers.  

He also has broad trial experience with complex commercial cases
involving financial institutions and other major industries for
clients such as AIG, Morgan Stanley, Merrill Lynch and Citibank
before federal and state courts as well as arbitration panels.
Mr. Freeling graduated from Georgetown University, A.B., magna cum
laude in 1979.  He received his J.D. from Georgetown University
Law Center in 1982.
    
Mr. Auchter has more than 10 years of intellectual property
litigation experience representing clients in District and
Appellate Courts, the Court of Federal Claims and the
International Trade Commission in patent litigation relating to
electronic, biomedical and consumer products and processes.  

He represented ExxonMobil Chemical Company on patents involving
unique polymers and assisted the company in reaching resolution
with a licensee, well as internet-based clients, such as the
largest provider of computer technology test preparation
materials, with copyright litigation.  He has also represented
clients in commercial litigation involving significant commercial
real estate dispositions.  

Mr. Auchter graduated cum laude from George Washington University
School of Engineering and Applied Sciences, B.S.E.E., and was a
member of Tau Beta Pi and Eta Kappa Nu engineering honor
societies.  He received his J.D. with high honors from the George
Washington University Law School in 1993.
    
"Dirk, Bob and Ken join the firm at a time of explosive growth,"
Jeffrey L. Kessler, co-chair of the firm's Litigation Department
and a member of its executive and management committees said.  
"They complement and will be tremendous assets to, the company's
strong IP and antitrust litigation capabilities in New York,
Austin, Los Angeles, Silicon Valley and Washington, D.C.  Under
Dirk and Aldo's leadership, I look forward to even greater growth
of the IP litigation practice going forward."
   
                       About Dewey Ballantine

Dewey Ballantine LLP, an international law firm with approximately
550 lawyers located in New York, Washington, D.C., Los Angeles,
East Palo Alto, Austin, London, Warsaw, Frankfurt, Milan, Rome,
Beijing and Charlotte, was founded in 1909.  Through its network
of offices, the firm handles some of the largest, most complex
corporate transactions, litigation and tax matters in areas such
as M&A, private equity, project finance, corporate finance,
corporate reorganization and bankruptcy, antitrust, intellectual
property, sports law, structured finance and international trade.
Industry specializations include energy and utilities, health
care, insurance, financial services, media, consumer and
industrial goods, consumer electronics, technology,
telecommunications and transportation.


* Reed Smith Adds E. Estrada to Commercial Restructuring Practice
-----------------------------------------------------------------
Edward J. Estrada, Esq. has joined Reed Smith LLP as partner in
the firm's Commercial Restructuring and Bankruptcy Group.

He will be resident in the firm's New York City office, effective
June 21, 2007, bringing the total number of lawyers in the firm's
restructuring practice to more than 45 worldwide.

"Reed Smith is noted for strong client relationships and its
support of partners interested in generating business
independently," said Mr. Estrada.  "These are important to me at
this stage of my career.  I believe this is a firm in which my
opportunities for success are very promising."

Mr. Estrada joins Reed Smith from the New York office of LeBoeuf,
Lamb, Greene & MacRae LLP, which he joined in 2002, where he was
an associate.  He was previously with Nixon Peabody LLP and
Jackson & Campbell, P.C.

"Members of our Commercial Restructuring and Bankruptcy practice
have collaborated with Ed for more than a year on a major
industrial bankruptcy matter," said Peter S. Clark, head of Reed
Smith's CRB Group.  "We have seen Ed in action and know he brings
us the right combination of experience with complex indenture
analysis, strong hedge fund and indenture trustee contacts, and a
fundamental drive to assist and participate with other Reed Smith
partners in developing our commercial restructuring and bankruptcy
practice in New York."

Reed Smith's Corporate Restructuring & Bankruptcy Group was
recently ranked by The Deal as one of the top five most active
practices in the US, with more than 200 active cases.

Mr. Estrada's practice at LeBoeuf included representation of
trustees, debtors, secured and unsecured creditors in bankruptcy
proceedings, as well as subordinated and distressed debtholders in
cases aimed at maximizing recoveries.  His efforts have included
arguing before the Second Circuit Court of Appeals on issues of
first impression, representation of a foreign pilots' union in a
domestic bankruptcy, representation of foreign representatives in
a Chapter 15 (section 304) ancillary proceeding, and the
protection of a utility company's secured, unsecured and setoff
claims.

In addition, Mr. Estrada has represented debtors and creditors in
bankruptcy adversary proceedings, including preference and
fraudulent transfer actions, and parties in non-bankruptcy state
and federal court litigations.

Mr. Estrada earned his J.D. from George Washington University in
1997 and his B.A. from Cornell University in 1994.

"Not only does he bolster our presence in New York and fit in well
with the national scope of our bankruptcy practice, he also adds
to our sophisticated indenture trustee and bondholder talent pool,
which will help us expand our impact now and during the next
credit cycle downturn locally and nationwide," said Robert
Nicholas, Managing Partner of Reed Smith's New York office.

Mr. Estrada is the second partner and third lawyer who has joined
Reed Smith's global commercial restructuring and bankruptcy
practice this month.  On June 1, 2007, Jeff Drew, who previously
headed the financial restructuring group at Akin Gump's London
Office, joined the group in the firm's London office.  Mr. Drew's
Associate Nuala Barratt joined him in the move, bringing the total
number of lawyers in the firm's global practice to over 45.

                         About Reed Smith

Reed Smith -- http://www.reedsmith.com/-- is one of the 15   
largest law firms in the world, with more than 1,500 lawyers in 21
offices throughout the United States, Europe and the Middle East.  
Founded in 1877, the firm represents leading international
businesses from Fortune 100 corporations to mid-market and
emerging enterprises.  Its attorneys provide litigation services
in multi-jurisdictional matters and other high stake disputes,
deliver regulatory counsel, and execute the full range of
strategic domestic and cross-border transactions.  Reed Smith is a
preeminent advisor to industries including financial services,
life sciences, health care, advertising and media, shipping,
international trade and commodities, real estate, manufacturing
and education.


* S&P Takes Various Rating Actions on 133 Classes from 23 Issuers
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
133 subordinate classes from 62 different transactions from 23
different issuers. We downgraded 45 classes backed by closed-end
second-lien collateral.  S&P placed 27 of those classes on
CreditWatch with negative implications, left 12 on CreditWatch
negative, and removed six from CreditWatch negative.  In addition,
we placed the ratings on 46 other classes backed by closed-end
second-lien collateral on CreditWatch negative.  S&P rating
actions affected a total of 34 closed-end second-lien deals from
12 different issuers.  S&P rating actions also affected 42 classes
backed by subprime collateral from 30 different transactions from
15 different issuers.  S&P placed 31 classes on CreditWatch
negative and downgraded 11 classes: five were placed on
CreditWatch negative, four remain on CreditWatch negative, and two
were removed from CreditWatch negative.
     
The downgrades and CreditWatch placements reflect early signs of
poor performance of the collateral backing these transactions.  
For the closed-end second-lien transactions, the percentage of
severely delinquent (90-plus days, foreclosure, and REO) loans in
these pools ranges from 3.30% (Structured Asset Securities Corp.
Mortgage Loan Trust 2006-S2) to 18.20% (New Century Home Equity
Loan Trust 2006-S1) of the current pool balances.  Cumulative
losses range from 0.00% (Home Equity Mortgage Trust 2006-2) to
5.15% (Ace Securities Corp. Home Equity Loan Trust 2006-SL1) of
the original pool balances.  For the subprime transactions, the
percentage of severely delinquent loans in these pools ranges from
5.27% (American Home Mortgage Investment Trust 2006-2) to 17.06%
(Argent Securities Trust 2006-W5) of the current pool balances.  
Cumulative losses range from 0.00% (American Home Mortgage
Investment Trust 2006-2, loan groups two and three) to 1.45%
(Soundview Home Equity Loan Trust 2005-1) of the original pool
balances.
     
S&P removed eight ratings from CreditWatch negative because they
were lowered below 'B-'.  According to Standard & Poor's
surveillance practices, ratings lower than 'B-' on classes of
certificates or notes from RMBS transactions are not eligible to
be on CreditWatch negative.
     
Most of the transactions with classes placed on CreditWatch have
not experienced significant losses.  The placement of S&P's
ratings on CreditWatch when a transaction has not experienced
significant losses represents a new methodology derived from their
normal surveillance practice.  S&P began using this methodology
with the 2006 and 2005 vintages because transactions from earlier
vintages did not see the same combination of early high
delinquencies and minimal losses.  Since the deals have not
incurred substantial cumulative realized losses, S&P measured deal
performance against the stressed time to disposition of the loans,
assuming a reinstatement rate of zero for all severely delinquent
loans.
     
Many of the 2005 and 2006-vintage transactions may be showing
weakness because of origination issues: aggressive residential
mortgage loan underwriting, first-time homebuyer programs,
piggyback second-lien mortgages, hybrid ARMs entering their reset
periods, and the concentration of affordability loans.
     
Credit support for each series is derived from either
subordination or a combination of subordination, excess interest,
and overcollateralization.  Generally, O/C levels are below their
targets because early losses are outpacing available excess
interest and prohibiting growth toward the targeted amounts.
     
Standard & Poor's will continue to closely monitor the performance
of these transactions.  Over the next three months, S&P will
monitor any losses incurred from the liquidation of REO assets.  
If these losses are material, and delinquencies continue at their
present pace, S&P will likely lower our ratings up to three
notches, depending on individual performance.  Conversely, if the
delinquency rates decline and the transactions do not realize
substantial cumulative losses, S&P will affirm the ratings and
remove them from CreditWatch negative.
     
These transactions are collateralized by closed-end second-lien or
subprime mortgage loans.  The transactions were initially backed
by pools of fixed- and adjustable-rate mortgage loans secured by
first, second, or third liens on one- to four-family residential
properties.

    
Second-Lien Ratings Lowered and Placed on Creditwatch Negative

          ACE Securities Corp. Home Equity Loan Trust

                                      Rating
                                      ------
         Series    Class        To              From
         ------    -----        --              -----
         2006-SL1  M-9          BB-/Watch Neg   BBB-


              Bear Stearns Mortgage Funding Trust

                                     Rating
                                     ------
         Series    Class        To              From
         ------    -----        --              ----
         2006-SL1  B-2          BB/Watch Neg    BBB
         2006-SL1  B-3          BB-/Watch Neg   BBB-


            CWABS Asset-Backed Certificates Trust

                                    Rating
                                    ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-SPS2 B            B/Watch Neg     BB+
    

                Home Equity Mortgage Trust

                                      Rating
                                      ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-3    M-9          BB-/Watch Neg   BBB-
        2006-4    M-7          BB/Watch Neg    BBB+
        2006-4    M-8          BB-/Watch Neg   BBB


           Morgan Stanley Mortgage Loan Trust

                                    Rating
                                    ------
       Series    Class        To              From
       ------    -----        --              ----
       2006-4SL  B-4          B/Watch Neg     BB+
       2006-4SL  B-5          B-/Watch Neg    BB
       2006-10SL B-4          B/Watch Neg     BB+
       2006-10SL B-5          B-/Watch Neg    BB


          New Century Home Equity Loan Trust

                                    Rating
                                    ------
      Series    Class        To              From
      ------    -----        --              ----
      2006-S1   M-2          BBB-/Watch Neg  A
      2006-S1   M-3          BB+/Watch Neg   A-
      2006-S1   M-4          BB/Watch Neg    BBB+
      2006-S1   M-5          BB-/Watch Neg   BBB
      2006-S1   M-6          B+/Watch Neg    BBB-


  Nomura Asset Acceptance Corp. Alternative Loan Trust

                                   Rating
                                   ------
      Series    Class        To              From
      ------    -----        --              ----
      2005-S1   B-3          B/Watch Neg     BB
      2006-S1   B-4          B/Watch Neg     BB+
      2006-S1   B-5          B-/Watch Neg    BB
      2006-S3   B-3          BB-/Watch Neg   BBB-
      2006-S3   B-4          B+/Watch Neg    BB+
       

    Structured Asset Securities Corp. Mortgage Loan Trust

                                      Rating
                                      ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-S1   M7           BB/Watch Neg    BBB
        2006-S2   B1           BB-/Watch Neg   BBB-
        2006-S2   B2           B+/Watch Neg    BB+
        2006-S2   B3           B/Watch Neg     BB+
        2006-S3   M7           BB/Watch Neg    BBB+
        2006-S3   M8           BB-/Watch Neg   BBB
            

Second-Lien Ratings Lowered and Remaining on Creditwatch Negative

         ACE Securities Corp. Home Equity Loan Trust

                                       Rating
                                       ------
         Series    Class        To              From
         ------    -----        --              -----
         2006-SL1  B-1          B/Watch Neg     BB+/Watch Neg


             Bear Stearns Mortgage Funding Trust

                                     Rating
                                     ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-SL1  B-4          B/Watch Neg     BB+/Watch Neg


       Home Equity Mortgage Loan Asset-Backed Trust INDS

                                     Rating
                                     ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-A    M-10         B+/Watch Neg    BB+/Watch Neg
        2006-A    B-2          B/Watch Neg     BB+/Watch Neg
        2006-A    B-3          B-/Watch Neg    BB/Watch Neg
   

                  Home Equity Mortgage Trust

                                     Rating
                                     ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-3    B-1          B/Watch Neg     BB+/Watch Neg
        2006-4    B-1          B-/Watch Neg    B/Watch Neg
   

              New Century Home Equity Loan Trust

                                       Rating
                                       ------
          Series    Class        To              From
          ------    -----        --              ----
          2006-S1   M7           B/Watch Neg     BB+/Watch Neg


      Nomura Asset Acceptance Corp. Alternative Loan Trust

                                       Rating
                                       ------
         Series    Class        To              From
         ------    -----        --              ----
         2006-S3   B-5          B/Watch Neg     BB/Watch Neg


       Structured Asset Securities Corp. Mortgage Loan

                                      Rating
                                      ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-S1   M8           B/Watch Neg     BBB-/Watch Neg
        2006-S3   M9           B+/Watch Neg    BBB-/Watch Neg
        2006-S3   B1           B/Watch Neg     BB+/Watch Neg


Second-Lien Ratings Lowered and Removed from Creditwatch Negative

                 Home Equity Mortgage Trust

                                      Rating
                                      ------
        Series    Class        To              From
        ------    -----        --              ----
        2006-3    B-2          CCC             BB/Watch Neg
        2006-4    B-2          CCC             B-/Watch Neg


            New Century Home Equity Loan Trust

                                       Rating
                                       ------
         Series    Class        To              From
         ------    -----        --              ----
         2006-S1   M-8          CCC             BB+/Watch Neg


     Structured Asset Securities Corp. Mortgage Loan

                                       Rating
                                       ------
         Series    Class        To              From
         ------    -----        --              ----
         2006-S1   B1           CCC             B/Watch Neg
         2006-S2   B4           CCC             BB/Watch Neg
         2006-S3   B2           CCC             BB/Watch Neg
  

    Second-Lien Ratings Placed on Creditwatch Negative

       Ace Securities Corp. Home Equity Loan Trust

                                    Rating
                                    ------
       Series    Class        To              From
       ------    -----        --              ----
       2006-SL1  M-7          BBB+/Watch Neg  BBB+
       2006-SL1  M-8          BBB/Watch Neg   BBB
       2006-SL3  M-9          BBB-/Watch Neg  BBB-
       2006-SL3  B-1          BB+/Watch Neg   BB+


         American Home Mortgage Investment Trust

                                    Rating
                                    ------

       Series    Class        To               From
       ------    -----        --               ----
       2006-2    IV-M-6       BBB-/Watch Neg   BBB-
       2006-2    IV-M-7       BB+/Watch Neg    BB+


          Bear Stearns Mortgage Funding Trust

                                    Rating
                                    ------
       Series    Class        To              From
       ------    -----        --              -----
       2006-SL1  B-1          BBB+/Watch Neg  BBB+
       2006-SL2  B-3          BBB-/Watch Neg  BBB-
       2006-SL2  B-4          BB+/Watch Neg   BB+
       2006-SL3  B-3          BBB-/Watch Neg  BBB-
       2006-SL3  B-4          BB+/Watch Neg   BB+
       2006-SL4  B-3          BBB-/Watch Neg  BBB-
       2006-SL4  B-4          BB+/Watch Neg   BB+


         CWABS Asset-Backed Certificates Trust

                                    Rating
                                    ------
       Series    Class        To              From
       ------    -----        --              ----
       2006-SPS2 M-9          BBB-/Watch Neg  BBB-


          First Franklin Mortgage Loan Trust

                                     Rating
                                     ------
       Series    Class        To              From
       ------    ------       --              ----
       2006-FFA  B2           BB/Watch Neg    BB
       2006-FFB  B2           BB/Watch Neg    BB


    Home Equity Mortgage Loan Asset-Backed Trust INDS

                                   Rating
                                   ------
      Series    Class        To              From
      ------    -----        --              ----
      2006-1    B-2          BB+/Watch Neg   BB+
      2006-1    B-3          BB/Watch Neg    BB
      2006-A    M-9          BBB-/Watch Neg  BBB-


             Home Equity Mortgage Loan Trust

                                   Rating
                                   ------
      Series    Class        To              From
      ------    -----        --              ----
      2005-1    B-2          BB/Watch Neg    BB
      2005-3    B-2          BB/Watch Neg    BB
      2005-4    B-2          BB+/Watch Neg   BB+
      2006-2    1B-1         BB+/Watch Neg   BB+
      2006-2    1B-2         BB/Watch Neg    BB
      2006-3    M-8          BBB/Watch Neg   BBB
      2006-5    B-1          BB+/Watch Neg   BB+
       

       Merrill Lynch Mortgage Investors Trust

                                 Rating
                                 ------
     Series    Class        To              From
     ------    -----        --              ----
     2006-SL1  B-5          BB+/Watch Neg   BB+
     2006-SL2  B-1          BB+/Watch Neg   BB+
     2006-SL2  B-2          BB/Watch Neg    BB


        New Century Home Equity Loan Trust

                                 Rating
                                 ------
     Series    Class        To              From
     ------    -----        --              ----
     2006-S1   M-1          AA/Watch Neg    AA


    Nomura Asset Acceptance Corp. Alternative Loan Trust

                                     Rating
                                     ------
        Series    Class        To              From
        ------    ------       --              ----
        2005-S1   B2           BBB-/Watch Neg  BBB-
        2005-S3   B-4-IO       BB/Watch Neg    BB
        2005-S3   B-4-PO       BB/Watch Neg    BB
        2005-S4   B-4          BB+/Watch Neg   BB+
        2005-S4   B-5          BB/Watch Neg    BB
        2006-S1   B-2          BBB/Watch Neg   BBB
        2006-S1   B-3          BBB-/Watch Neg  BBB-
        2006-S3   B-2          BBB/Watch Neg   BBB
        2006-S4   B-3          BBB-/Watch Neg  BBB-
        2006-S4   B-4          BB+/Watch Neg   BB+
        2006-S5   M-7          BBB+/Watch Neg  BBB+
        2006-S5   M-8          BBB/Watch Neg   BBB
        2006-S5   M-9          BBB-/Watch Neg  BBB-
        2006-S5   M-10         BB+/Watch Neg   BB+
         

     Structured Asset Securities Corp. Mortgage Loan Trust

                                      Rating
                                      ------
         Series    Class        To              From
         ------    -----        --              -----
         2006-S2   M9           BBB-/Watch Neg  BBB-
         2006-S3   M6           A-/Watch Neg    A-
   

   Subprime Ratings Lowered and Placed on Creditwatch Negative
   
                 Soundview Home Loan Trust

                                      Rating
                                      ------
         Series    Class        To              From
         ------    -----        --              ----
         2005-1    B-3          B/Watch Neg     BB-
   

          Structured Asset Investment Loan Trust

                                     Rating
- -----
        Series    Class        To              From
        ------    -----        --              ----
        2006-2    M8           BB/Watch Neg    BBB-
        2006-BNC1 M7           BB/Watch Neg    BBB
        2006-BNC1 M8           BB-/Watch Neg   BBB-
        2006-BNC2 M8           BB-/Watch Neg   BBB-
  

Subprime Ratings Lowered and Remaining on Creditwatch Negative

             MASTR Asset Backed Securities Trust

                                     Rating
                                     ------
       Series    Class        To              From
       ------    -----        --              ----
       2006-WMC2 M-10         B/Watch Neg     BB+/Watch Neg


            Structured Asset Investment Loan Trust

                                       Rating
                                       ------
          Series    Class        To              From
          ------    -----        --              ----
          2006-2    B1           B/Watch Neg     BB+/Watch Neg
          2006-BNC2 B1           B+/Watch Neg    BB+/Watch Neg
          2006-BNC2 B2           B/Watch Neg     BB/Watch Neg
   

  Subprime Ratings Lowered and Removed from Creditwatch Negative

             Structured Asset Investment Loan Trust

                                        Rating
                                        ------
           Series    Class        To              From
           ------    -----        --              ----
           2006-2    B2           CCC             B/Watch Neg
           2006-BNC1 B1           CCC             B/Watch Neg
   

        Subprime Ratings Placed on Creditwatch Negative
   
           Ace Securities Corp. Home Equity Loan Trust

                                       Rating
                                       ------
           Series    Class        To              From
           ------    -----        --              -----
           2005-HE6  B-2          BB/Watch Neg    BB
           2006-FM1  M-11         BB/Watch Neg    BB


              Ameriquest Mortgage Securities Inc.

                                       Rating
                                       ------
          Series    Class        To              From
          ------    -----        --              ----
          2005-R4   M11          BB/Watch Neg    BB


            American Home Mortgage Investment Trust

                                       Rating
                                       ------
          Series    Class        To              From
          ------    -----        --              ----
          2006-2    II-M-5       BBB/Watch Neg   BBB
          2006-2    III-M-6      BBB-/Watch Neg  BBB-


                  Argent Securities Trust

                                       Rating
                                       ------
          Series    Class        To              From
          ------    -----        --              ----
          2006-M2   M-11         BB/Watch Neg    BB
          2006-W5   M-10         BBB/Watch Neg   BBB


      Asset Backed Securities Corp. Home Equity loan Trust

                                       Rating
                                       ------
          Series      Class      To              From
          ------      -----      --              ----
          NC2006-HE4  M10        BB/Watch Neg    BB


              Citigroup Mortgage Loan Trust Inc.

                                       Rating
                                       ------
          Series    Class        To               From
          ------    -----        --               ----
          2005-HE4  M-13         BB/Watch Neg     BB


            CWABS Asset-Backed Certificates Trust

                                       Rating
                                       ------
          Series    Class        To               From
          ------    -----        --               ----
          2005-AB2  B            BBB+/Watch Neg   BBB+
          2006-ABC1 M-8          A-/Watch Neg     A-


          HSI Asset Securitization Corporation Trust

                                       Rating
                                       ------
          Series    Class        To               From
          ------    -----        --               ----
          2005-NC1  M-14         BB/Watch Neg     BB


                     Lehman XS Trust

                                       Rating
                                       ------
         Series    Class        To               From
         ------    -----        --               ----
         2006-7    M10          BBB-/Watch Neg   BBB-


             MASTR Asset Backed Securities Trust

                                       Rating
                                       ------
         Series    Class        To               From
         -------   -----        --               ----
         2006-AM2  M-12         BBB-/Watch Neg   BBB-
         2006-WMC2 M-9          BBB-/Watch Neg   BBB-
    

               NovaStar Mortgage Funding Trust

                                      Rating
                                      ------
         Series    Class        To               From
         ------    -----        --               -----
         2006-3    M-11         BB+/Watch Neg    BB+
         2006-4    M-12         BB+/Watch Neg    BB+
         2006-5    M-12         BB/Watch Neg     BB


               Option One Mortgage Loan Trust

                                     Rating
                                     ------
        Series    Class        To               From
        ------    -----        --               ----
        2005-2    M-9          BBB-/Watch Neg   BBB-
  

                 Soundview Home Loan Trust

                                     Rating
                                     ------
        Series    Class        To               From
        ------    -----        --               -----
        2005-DO1  B-2          BB/Watch Neg     BB
        2005-3    B-3          BB/Watch Neg     BB
        2005-OPT1 M-10         BBB-/Watch Neg   BBB-
        2005-OPT2 M-9          BBB-/Watch Neg   BBB-
  

           Structured Asset Investment Loan Trust

                                    Rating
                                    ------
       Series    Class        To               From
       ------    -----        --               ----
       2005-2    B            BB/Watch Neg     BB
       2005-3    B            BB/Watch Neg     BB
       2005-6    M10-A        BBB-/Watch Neg   BBB-
       2005-6    M10-F        BBB-/Watch Neg   BBB-
       2006-2    M-7          BBB/Watch Neg    BBB
       2006-BNC1 M6           BBB+/Watch Neg   BBB+
       2006-BNC2 M7           BBB/Watch Neg    BBB
    

         Structured Asset Securities Corp. Trust

                                    Rating
                                    ------
       Series    Class        To               From
       ------    -----        --               ----
       2005-AR1  M9           BBB-/Watch Neg   BBB-


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------

                               Total  
                               Shareholders  Total     Working  
                               Equity        Assets    Capital      
Company               Ticker  ($MM)          ($MM)     ($MM)  
-------               ------  ------------  -------  --------  
Abraxas Petro           ABP         (22)         118       (4)
AFC Enterprises         AFCE        (25)         162        4
Alaska Comm Sys         ALSK        (29)         551       19
Alliance Imaging        AIQ          (4)         678       50
Bare Escentuals         BARE       (189)         184       91
Blount International    BLT         (98)         448      135
CableVision System      CVC      (5,349)       9,654     (638)
Calpine Corp            CPNLQ    (7,348)      18,594   (3,055)
Carrols Restaurant      TAST        (24)         453      (28)
Cell Therapeutic        CTIC       (101)          94       24
Centennial Comm         CYCL     (1,090)       1,393       92
Charter Comm            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        (50)         150       67
Compass Minerals        CMP         (46)         691      157
Corel Corp.             CRE         (21)         271      (42)
Crown Holdings          CCK        (225)       6,582      310
Crown Media HL          CRWN       (519)         759       64
CV Therapeutics         CVTX        (90)         356      263
Cyberonics              CYBX        (16)         137      (28)
Dayton Superior         DSUP       (106)         312       60
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
Eisntein Noah Re        BAGL       (131)         135       (9)
Embarq Corp             EQ         (331)       8,983     (409)
Emeritus Corp.          ESC        (112)         953      (55)
Empire Resorts I        NYNY        (10)          71       12
Encysive Pharmaceutical ENCY       (122)          87       52
Enzon Pharmaceutical    ENZN        (55)         369      180
Epix Pharmaceutical     EPIX        (51)         112       39
Extendicare Real        EXE-U       (20)       1,316       29
Foamex Intl             FMXI       (272)         579      150
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         (86)         772      241
Healthsouth Corp.       HLS      (1,602)       3,238     (398)
I2 Technologies         ITWO        (15)         185       32
ICOS Corp               ICOS        (18)         285      112
IDEARC Inc              IAR      (8,755)       1,508      171
IMAX Corp               IMX         (33)         243       84
Incyte Corp.            INCY       (104)         325      261
Indevus Pharma          IDEV       (144)          76       36
Intermune Inc           ITMN        (55)         249      195
Isolagen Inc            ILE         (48)          49       21
Ista Pharmaceuticals    ISTA        (15)          48       18
Jazz Pharmaceuticals    JAZZ       (195)         201       47
Koppers Holdings        KOP         (70)         671      177
Life Sciences           LSR          (1)         237       25
Lodgenet Entertainment  LNET        (54)         274        8
McMoran Exploration     MMR         (47)         446      (31)
Mediacom Comm           MCCC       (110)       3,620     (269)
National Cinemed        NCMI       (585)         401       43
Neurochem Inc            NRM        (34)          61       20
New River Pharma        NRPH       (110)         152      (19)
Nexstar Broadcasting    NXST        (80)         709       23
NPS Pharm Inc.          NPSP       (213)         180     (219)
ON Semiconductor        ONNN       (138)       1,441      309
Protection One          PONN        (85)         441       (1)
Qwest Communication     Q        (1,534)      20,701   (1,440)
Radnet Inc.             RDNT        (48)         396       31
Ram Energy Resources    RAME         (2)         184       (6)
Regal Entertainment     RGC        (130)       3,085     (131)
Riviera Holdings        RIV         (28)         221       13
RSC Holdings Inc        RRR        (408)       3,281   (3,410)
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
Senorx Inc              SENO         (4)          16        2
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)
Suncom Wire-CL          SCWH       (433)       1,639      209
TechTarget              TTGT        (66)          94       31
Town Sports Int.        CLUB        (20)         436      (52)
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        (108)         759      (55)
Worldspace Inc.         WRSP     (1,641)         527       85
WR Grace & Co.          GRA        (467)       3,628      912
XM Satellite            XMSR       (445)        1943      (76)
Xoma Ltd.               XOMA         (6)          70       28

                             *********

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, Sheena Jusay, and
Peter A. Chapman, Editors.

Copyright 2007.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***