/raid1/www/Hosts/bankrupt/TCR_Public/070707.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Saturday, July 7, 2007, Vol. 11, No. 159

                             Headlines

ASARCO LLC: Earns $35.6 Million in Period Ended May 31
DELPHI CORPORATION: Posts $45 Million Net Loss in May 2007
FEDERAL-MOGUL: Posts $3.4 Million Net Loss in May 2007
INTERSTATE BAKERIES: Posts $3.7MM Net Loss in Period Ended May 5
PACIFIC LUMBER: Scotia Development's May 2007 Operating Report

PACIFIC LUMBER: Scopac Posts $4 Million Net Loss in May 2007
SOLUTIA INC: Earns $48 Million in May 2007

                             *********

ASARCO LLC: Earns $35.6 Million in Period Ended May 31
------------------------------------------------------

                      ASARCO LLC, et al.
                        Balance Sheet
                      As of May 31, 2007

ASSETS
  Current Assets:
  Cash                                            $546,281,000
  Restricted Cash                                   27,597,000
  Accounts receivable, net                         160,631,000
  Inventory                                        249,902,000
  Prepaid expenses                                   4,651,000
  Deferred income tax assets                                 0
  Other current assets                              32,561,000
                                               ---------------
Total Current Assets                             1,021,623,000

Net property, plant and equipment                  459,510,000
Other Assets
  Investments in subs                              105,662,000
  Advances to affiliates                               351,000
  Prepaid pension & retirement plan                 82,675,000
  Non-current deferred tax asset                    40,951,000
  Other                                             97,788,000
                                               ---------------
Total assets                                    $1,808,559,000
                                               ===============

LIABILITIES
  Postpetition liabilities:
  Accounts payable                                 $55,464,000
  Accrued liabilities                              130,469,000
  Debtor-in-possession financing                             0
                                               ---------------
Total postpetition liabilities                     185,933,000

Prepetition liabilities:
Not subject to compromise - credit                     658,000
Not subject to compromise - other                   84,167,000
Advances from affiliates                            24,490,000
Subject to compromise                            1,506,813,000
                                               ---------------
Total prepetition liabilities                    1,616,128,000
                                               ---------------
Total liabilities                                1,802,060,000
                                               ---------------

OWNERS' EQUITY (DEFICIT)
Common stock                                       508,325,000
Additional paid-in capital                         104,578,000
Other comprehensive income                        (122,848,000)
Retained earnings: filing date                  (1,111,165,000)
                                               ---------------
Total prepetition owners' equity                  (621,111,000)
Retained earnings: post-filing date                627,610,000
                                               ---------------
Total owners' equity (net worth)                     6,499,000

Total liabilities and owners' equity            $1,808,559,000
                                               ===============

                     ASARCO LLC, et al.
            Consolidated Statement of Operations
                 Month Ending May 31, 2007

Sales                                             $162,492,000
Cost of products and services                      102,506,000
                                               ---------------
Gross profit                                        59,986,000

Operating expenses:
Selling and general & admin expenses                 3,053,000
Depreciation & amortization                          3,005,000
Provision accretion expense of asset
  retirement obligation                                163,000
                                               ---------------
Operating income                                    53,765,000

Interest expense                                        63,000
Interest income                                     (3,101,000)
Reorganization expenses                              7,025,000
Other miscellaneous (income) expenses               (8,448,000)
                                               ---------------
Income (loss) before taxes                          58,226,000
Income taxes                                        22,641,000
                                               ---------------
Net income (loss)                                  $35,584,000
                                               ===============

                     ASARCO LLC, et al.
         Consolidated Cash Receipts & Disbursements
                 Month Ending May 31, 2007

Receipts                                          $160,640,000
Disbursements:
Inventory material                                  55,730,000
Operating disbursements                             58,199,000
Capital expenditures                                10,310,000
                                               ---------------
Total disbursements                                124,239,000

Operating cash flow                                 36,401,000
Reorganization disbursements                         6,358,000
                                               ---------------
Net cash flow                                       30,043,000
Net payments to secured Lenders                              0
                                               ---------------
Net change in cash                                  30,043,000
Beginning cash balance                             543,835,000
                                               ---------------
Ending cash balances                              $573,878,000
                                               ===============

                         About ASARCO LLC

Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--  
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.  The
Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207).  James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts.  Lehman
Brothers Inc. provides the ASARCO with financial advisory services
And investment banking services.  Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee.

ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to
06-20776).  (ASARCO Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


DELPHI CORPORATION: Posts $45 Million Net Loss in May 2007
----------------------------------------------------------

                   Delphi Corporation, et al.
              Unaudited Consolidated Balance Sheet
                       As of May 31, 2007
                         (In Millions)

                             ASSETS

Current assets:
  Cash and cash equivalents                                 $33
  Restricted cash                                           109
  Accounts receivable, net:
     General Motors and affiliates                        1,620
     Other third parties                                  1,120
     Non-Debtor affiliates                                  384
  Notes receivable from non-Debtor affiliates               359
  Inventories, net:
     Productive material, work-in-process & supplies        847
     Finished goods                                         276
  Other current assets                                      272
                                                       --------
     TOTAL CURRENT ASSETS                                 5,020

Long-term assets:
  Property, net                                           1,942
  Investment in affiliates                                  381
  Investments in non-Debtor affiliates                    3,572
  Goodwill                                                  152
  Other intangible assets                                    31
  Other                                                     317
                                                       --------
     TOTAL LONG-TERM ASSETS                               6,395
                                                       --------
TOTAL ASSETS                                            $11,415
                                                       ========

             LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities not subject to compromise:
  Debtor-in-possession financing                         $3,110
  Accounts payable                                        1,305
  Accounts payable to non-Debtor affiliates                 453
  Accrued liabilities                                       746
                                                       --------
  TOTAL CURRENT LIABILITIES                               5,614

Long-term liabilities not subject to compromise:
  Employee benefit plan obligations and other               707

Liabilities subject to compromise                        17,681
                                                       --------
  TOTAL LIABILITIES                                      24,002

Stockholders' deficit:
  Common stock                                                6
  Additional paid-in capital                              2,775
  Accumulated deficit                                   (12,555)
  Accumulated other comprehensive loss                   (2,761)
  Treasury stock, at cost (3.2 million shares)              (52)
                                                       --------
  TOTAL STOCKHOLDERS' DEFICIT                           (12,587)
                                                       --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $11,415
                                                       ========

                   Delphi Corporation, et al.
         Unaudited Consolidated Statement of Operations
                    Month Ended May 31, 2007
                         (In Millions)

Net sales:  
  General Motors and affiliates                            $834
  Other customers                                           579
  Non-Debtor affiliates                                      53
                                                       --------
Total net sales                                           1,466
                                                       --------
Operating expenses:
  Cost of sales                                           1,389
  Long-lived asset impairment charges                         -
  Depreciation and amortization                              49
  Selling, general and administrative                        96
                                                       --------
Total operating expenses                                  1,534
                                                       --------
Operating loss                                              (68)

Interest expense                                            (23)
Loss on extinguishment of debt                                -
Other (expense) income, net                                  (5)

Reorganization items                                         (9)
Income tax benefit (expense)                                 (1)
Equity income from non-consolidated affiliates                2
Equity income from non-Debtor affiliates                     59
                                                       --------
NET LOSS                                                   ($45)
                                                       ========

                   Delphi Corporation, et al.
         Unaudited Consolidated Statement of Cash Flows
                    Month Ended May 31, 2007
                         (In Millions)

Cash flows from operating activities:
  Net loss                                                  
($45)
  Adjustments to reconcile net loss
   to net cash provided by operating activities:
   Depreciation and amortization                             49
   Pension and other postretirement benefit expenses         79
   Equity income from unconsolidated affiliates              (2)
   Equity income from non-Debtor affiliates                 (59)
   Reorganization items                                       9
  Changes in operating assets and liabilities:
   Accounts receivable, net                                 (14)
   Inventories, net                                          13
   Other assets                                              16
   Accounts payable, accrued and other long-term debt       (24)
   U.S. employee special attrition program                  (17)
   Pension contributions                                     (1)
   Other postretirement benefit payments                    (11)
   Payments for reorganization items                         (5)
   Other                                                     (9)
                                                       --------
Net cash used in operating activities                       (21)

Cash flows from investing activities:
  Capital expenditures                                      (13)
  Proceeds from sale of property                              3
                                                       --------
Net cash used in investing activities                       (10)

Cash flows from financing activities:
  Net proceeds from DIP facility                             40
  Net repayments of borrowings under other debt pacts        (1)
                                                       --------
Net cash used in financing activities                        39
                                                       --------
Decrease in cash and cash equivalents                         8
Cash and cash equivalents at beginning of period             25
                                                       --------
Cash and cash equivalents at end of period                  $33
                                                       ========

                        About Delphi Corp.

Headquartered in Troy, Mich., 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. 74; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or   
215/945-7000).


FEDERAL-MOGUL: Posts $3.4 Million Net Loss in May 2007
------------------------------------------------------

               Federal-Mogul Global, Inc., et al.
                    Unaudited Balance Sheet
                       As of May 31, 2007
                         (In millions)

                             Assets

Cash and equivalents                                      $66.9
Accounts receivable                                       654.4
Inventories                                               408.0
Deferred taxes                                            192.2
Prepaid expenses and other current assets                  87.4
                                                       --------
Total current assets                                    1,408.9

Summary of Unpaid Postpetition Debits                     (43.0)
Intercompany Loans Receivable (Payable)                 1,661.8
                                                       --------
Intercompany Balances                                   1,618.8

Property, plant and equipment                             780.8
Goodwill                                                  930.3
Other intangible assets                                   341.5
Insurance recoverable                                     867.2
Other non-current assets                                  520.9
                                                       --------
Total Assets                                           $6,438.3
                                                       ========

              Liabilities and Shareholders' Equity

Short-term debt                                          $747.2
Accounts payable                                          229.8
Accrued compensation                                       62.8
Restructuring and rationalization reserves                 19.3
Current portion of asbestos liability                         -
Interest payable                                            4.7
Other accrued liabilities                                 246.5
                                                       --------
Total current liabilities                               1,310.3

Long-term debt                                                -
Post-employment benefits                                  736.0
Other accrued liabilities                                 546.9
Liabilities subject to compromise                       5,492.3

Shareholders' equity:
  Preferred stock                                       1,050.6
  Common stock                                            658.1
  Additional paid-in capital                            7,988.5
  Accumulated deficit                                 (11,443.0)  
  Accumulated other comprehensive income                  129.5
  Other                                                       -
                                                       --------
Total Shareholders' Equity                             (1,617.1)
                                                       --------
Total Liabilities and Shareholders' Equity             $6,468.3
                                                       ========

               Federal-Mogul Global, Inc., et al.
               Unaudited Statement of Operations
                For the Month Ended May 31, 2007
                         (In millions)

Net sales                                                $283.5
Cost of products sold                                     225.5
                                                       --------
Gross margin                                               58.0

Selling, general & administrative expenses                (46.7)
Amortization                                               (1.2)
Reorganization items                                      (10.0)
Interest income (expense), net                            (16.6)
Other income (expense), net                                13.3
                                                       --------
Earnings before Income Taxes                               (3.1)

Income Tax (Expense) Benefit                               (0.3)
                                                       --------
Earnings before cumulative effect of change
  in accounting principle                                  (3.4)
                                                       --------
Net Earnings (loss)                                       ($3.4)
                                                       ========

               Federal-Mogul Global, Inc., et al.
               Unaudited Statement of Cash Flows
                For the month ended May 31, 2007
                         (In millions)

Cash Provided From (Used By) Operating Activities:
  Net earning (loss)                                      ($3.4)
Adjustments to reconcile net earnings (loss) to net cash:
  Depreciation and amortization                            13.0
  Adjustment of assets held for sale and
     other long-lived assets to fair value                    -
  Asbestos charge                                             -
  Summary of unpaid postpetition debits                       -
  Cumulative effect of change in acctg. principle             -
  Change in post-employment benefits                       (0.7)
  Decrease (increase) in accounts receivable               (6.5)
  Decrease (increase) in inventories                        5.4
  Increase (decrease) in accounts payable                   1.1
  Change in other assets & other liabilities               (4.4)
  Change in restructuring charge                              -
  Refunds (payments) against asbestos liability               -
                                                       --------
Net Cash Provided From Operating Activities                 4.5

Cash Provided From (Used By) Investing Activities:
  Expenditures for property, plant & equipment             (5.2)
  Proceeds from sale of property, plant & equipment           -
  Proceeds from sale of businesses                            -
  Business acquisitions, net of cash acquired                 -
  Other                                                       -
                                                       --------
Net Cash Provided From (Used By) Investing Activities      (5.2)

Cash Provided From (Used By) Financing Activities:
  Increase (decrease) in debt                              (1.9)
  Sale of accounts receivable under securitization            -
  Dividends                                                   -
  Other                                                    (0.3)
                                                       --------
Net Cash Provided From Financing Activities                (2.2)

Increase (Decrease) in Cash and Equivalents                (2.9)

Cash and equivalents at beginning of period                69.8
                                                       --------
Cash and equivalents at end of period                     $66.9
                                                       ========

                  About Federal-Mogul Corporation

Headquartered in Southfield, Mich., Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is an automotive parts company  
with worldwide revenue of some $6 billion.  Federal-Mogul also has
operations in Mexico and the Asia Pacific Region, which includes,
Malaysia, Australia, China, India, Japan, Korea, and Thailand.

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

On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003.  They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan.  On July 28, 2004, the
District Court approved the Disclosure Statement.  The estimation
hearing began on June 14, 2005.  They then submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007.  The confirmation hearing is set for June 8, 2007.
(Federal-Mogul Bankruptcy News, Issue No. 142; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).


INTERSTATE BAKERIES: Posts $3.7MM Net Loss in Period Ended May 5
----------------------------------------------------------------

       Interstate Bakeries Corporation and Subsidiaries
        Unaudited Consolidated Monthly Operating Report
                 Four Weeks Ended May 5, 2007

REVENUE

Gross Income                                       $234,861,168
Less Cost of Goods Sold
  Ingredients, Packaging & Outside Purchasing        58,365,570
  Direct & Indirect Labor                            41,557,799
  Overhead & Production Administration               12,102,889
                                                  -------------
     Total Cost of Goods Sold                       112,026,258
                                                  -------------
        Gross Profit                                122,834,910
                                                  -------------
OPERATING EXPENSES

Owner-Draws/Salaries                                          -
Selling & Delivery Employee Salaries                 53,955,349
Advertising and Marketing                             3,146,920
Insurance (Property, Casualty, & Medical)            12,062,601
Payroll Taxes                                         4,435,465
Lease and Rent                                        3,222,834
Telephone and Utilities                               1,298,532
Corporate Expense (Including Salaries)                6,088,600
Other Expenses                                       30,350,129
                                                  -------------
  Total Operating Expenses                          114,560,430
                                                  -------------
EBITDA                                                8,274,480

Restructuring & Reorganization Charges                  771,229
Depreciation and Amortization                         5,579,056
Abandonment                                           2,069,958
Other( Income)/Expense                                   16,302
Gain/Loss Sale of Property                                    -
Interest Expense                                      3,725,359
                                                  -------------
  Operating Income (Loss)                            (3,887,424)
Income Tax Expense (Benefit)                           (136,060)
                                                  -------------
NET Income (Loss)                                   ($3,751,364)
                                                  =============

CURRENT ASSETS
  Accounts Receivable at end of period             $152,013,520
  Increase (Dec.) in Accounts Receivable              6,917,097
  Inventory at end of period                         67,440,588
  Increase (Decrease) in Inventory for period           239,582
  Cash at end of period                              64,796,984
  Increase (Decrease) in Cash for period             (4,779,367)
  Restricted Cash                                    14,917,142
  Increase (Dec.) in Restricted Cash for period       6,088,249

LIABILITIES
  Increase (Decrease) in Liabilities
     Not Subject to Compromise                       (5,723,048)
  Increase (Decrease) in Liabilities
     Subject to Compromise                              588,139
  Taxes payable:
     Federal Payroll Taxes                            5,209,389
     State/Local Payroll Taxes                        1,413,573
     State Sales Taxes                                  802,008
     Real Estate and Personal Property Taxes          8,576,804
     Other                                            4,324,669
                                                  -------------
     Total Taxes Payable                            $20,326,443
                                                  =============

                     About Interstate Bakeries

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R).  Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.

The company and seven of its debtor-affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814).  J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014)
in total debts.  The Debtors' exclusive period to file a chapter
11 plan expires on Oct. 5, 2007.  (Interstate Bakeries
Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).  


PACIFIC LUMBER: Scotia Development's May 2007 Operating Report
--------------------------------------------------------------

                  Scotia Development LLC, et al.
                    Consolidated Balance Sheet
                       As of May 31, 2007

ASSETS
Current Assets
  Cash                                             $8,842,102
  Accounts receivable, net                          9,910,050
  Inventory: lower cost or market                  20,918,999
  Prepaid expenses                                  4,824,851
  Prepaid Restructuring                               100,000
  Investments                                               -
  Other                                               254,542
                                                 ------------
     Total Current Assets                          44,850,545

Property, Plant & Equipment                       212,224,161
Less: Accumulated Depreciation                   (135,192,135)
                                                 ------------
Net book value of property & plant                 77,032,026
Other Assets
  Notes Receivable                                    638,379
  Deferred Financing Costs                          5,170,594
  Long-term Investments                             2,570,206
  Restricted Cash                                   2,513,938
  Deferred Tax Assets                              13,652,208
                                                 ------------
     TOTAL ASSETS                                $146,427,896
                                                 ============

LIABILITIES & OWNERS EQUITY
Postpetition Liabilities
  Trade accounts payable                           $1,266,419
  Tax payable
     Federal payroll taxes                              7,878
     State payroll taxes                                7,957
     Ad valorem taxes                                 (96,942)
     Other taxes                                       20,662
                                                 ------------
        Total taxes payable                           (60,445)

     Secured debt postpetition
     Accrued interest payable                       5,445,050
     Accrued professional fees                      1,873,209
     Other accured liabilities
        Trade Accruals                              1,131,388
        Compensation and Benefits                   1,199,207
        Other Accrued                                 434,154
        Due to Affiliate/Parent                       880,528
                                                 ------------
     Total Postpetition Liabilities          [sic] 11,288,983

Prepetition Liabilities
  Notes payable - Secured                         114,048,529
  Priority debt                                     6,581,454
  Federal income tax                                  (17,006)
  FICA/ Withholding                                         -
  Unsecured debt                                    2,944,230
  Other                                            33,835,206
  Due to Affiliate/Parent                          41,661,505
                                                 ------------
     Total Prepetition Liabilities                199,053,918
                                                 ------------
     Total Liabilities                      [sic] 210,342,900

Owner's Equity (Deficit)
  Equity in Affiliates                            499,553,227
  Common Stock                                          1,001
  Additional Paid-in Capital                      275,546,288
  Retained Earnings: Filing Date                 (793,842,484)
  Retained Earnings: Post Filing Date             (45,173,037)
                                                 ------------
Total Owner's Equity                              (63,915,005)
                                                 ------------
TOTAL LIABILITIES & OWNERS EQUITY          [sic] $146,427,895
                                                 ============

                  Scotia Development LLC, et al.
                       Statement of Income
                For the Period Ended May 31, 2007

Revenues                                          $12,459,978
Total cost of revenues                             14,993,552
                                                 ------------
Gross Profit                                       (2,533,575)

Operating Expenses
  Selling & Marketing                                  97,084
  General & Administrative                            490,720
  Insiders Compensation                               117,001
  Professional Fees                                         -
  Idle Facilities                                      70,440
  Environmental                                        40,425
                                                 ------------
     Total Operating Expenses                         815,669
                                                 ------------
Income before interest, depreciation, tax          (3,349,243)
Interest Expense                                    1,269,346
Depreciation                                          866,698
Other (Income) Expenses                               (47,979)
Restructuring
  Professional Fees                                   581,543
  Other                                               594,516
Amortization of Deferred Financing Costs              225,900
Equity Loss (Earnings) in Subsidiary               (4,086,360)
Total Interest, Depreciation & Other Items          7,576,383
                                                 ------------
Net Income Before Taxes                           (10,925,626)
Federal Income Tax                                        800
                                                 ------------
Net Income (Loss)                                ($10,926,426)
                                                 ============

                   Scotia Development LLC, et al.
                  Cash Receipts and Disbursements
                 For the Month Ended May 31, 2007

Receipts
  Cash Sales                                          $76,491
  Collection of Accounts Receivable                10,132,966
  Loans & Advances                                      3,040
  Sale of Assets
  Other                                               281,436
                                                 ------------
     Total Receipts                                10,493,932

Disbursements
  Net payroll                                       1,135,500
  Payroll taxes paid                                  402,395
  Sales, use & other taxes paid                         7,191
  Secured/rentals/leases                               85,236
  Utilities & telephone                                81,932
  Insurance                                           964,076
  Cost of goods sold                                2,866,851
  Vehicle expenses                                      1,932
  Travel & entertainment                               22,074
  Repairs, maintenance & supplies                     895,812
  Administrative & selling                            475,603
  Other                                             2,939,295
                                                 ------------
     Total Disbursements from operations            9,877,897

Professional fees                                     806,915
U.S. Trustee fees                                           -
Other reorganization expenses                               -
                                                 ------------
     Total Disbursements                           10,684,811
                                                 ------------
Net Cash Flow                                        (190,879)
                                                 ------------
Cash, at the beginning of the month                 9,032,981
                                                 ------------
Cash, at the end of the month                      $8,842,102
                                                 ============

                       About Pacific Lumber

Headquartered in Oakland, Calif., The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several  
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel.  Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel.  Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel.  John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.

When Pacific Lumber filed for protection from its creditors, it
estimated assets and debts of more than $100 million.  Scotia
Pacific listed total assets of $932,000,000 and total debts of
$765,978,335.  The Debtors' exclusive period to file a chapter 11
plan expires on Sept. 18, 2007, as extended.  The Debtors'
exclusive period to solicit acceptances of that plan expires on
Nov. 19, 2007.  (Scotia/Pacific Lumber Bankruptcy News, Issue
No. 20, http://bankrupt.com/newsstand/or 215/945-7000).   


PACIFIC LUMBER: Scopac Posts $4 Million Net Loss in May 2007
------------------------------------------------------------

                    Scotia Pacific Company LLC
                    Consolidated Balance Sheet
                        As of May 31, 2007

ASSETS
Current Assets
  Cash                                            $50,986,768
  Accounts receivable, net                          5,146,573
  Inventory: lower cost or market                           -
  Prepaid expenses                                  5,765,672
  Prepaid Restructuring                               564,671
  Investments                                               -
  Other                                               316,813
                                                 ------------
     Total Current Assets                          62,780,497

Property, Plant & Equipment                       596,785,853
Less: Accumulated Depreciation                   (355,268,469)
                                                 ------------
Net book value of property & plant                241,517,383
Other Assets
  Tax Deposits                                              -
  Investments in Subsidiaries                               -
  Electric Deposit                                          -
  Capitalized Expenses                             11,702,126
                                                 ------------
     TOTAL ASSETS                                $316,000,006
                                                 ============

LIABILITIES & OWNERS EQUITY
Postpetition Liabilities
  Trade accounts payable                             $173,292
  Tax payable
     Federal payroll taxes                                242
     State payroll taxes                                1,878
     Ad valorem taxes                                  35,000
     Other taxes                                      191,575
                                                 ------------
        Total taxes payable                           228,696

     Secured debt postpetition                              -
     Accrued interest payable                      20,018,563
     Accrued professional fees                      5,142,464
     Other accured liabilities
        Unsecured Debt                                885,682
        Payroll                                       273,957
        Other                                         172,580
                                                 ------------
     Total Postpetition Liabilities                26,895,234

Prepetition Liabilities
  Notes payable - Secured                         767,262,853
  Priority debt                                       263,100
  Federal income tax                                        -
  FICA/ Withholding                                         -
  Unsecured debt                                    3,702,350
  Other                                               235,944
  Due to Affiliate/Parent                                   -
                                                 ------------
     Total Prepetition Liabilities                771,464,246
                                                 ------------
     Total Liabilities                            798,359,480

Owner's Equity (Deficit)
  Equity in Affiliates
  Common Stock                                     20,384,905
  Additional Paid-in Capital                      179,838,186
  Retained Earnings: Filing Date                 (662,058,832)
  Retained Earnings: Post Filing Date             (20,523,732)
                                                 ------------
Total Owner's Equity                             (482,359,474)
                                                 ------------
TOTAL LIABILITIES & OWNERS EQUITY                $316,000,006
                                                 ============

                    Scotia Pacific Company LLC
                       Statement of Income
                 For the Period Ended May 31, 2007

Revenues                                           $3,303,082
Total cost of revenues                                770,297
                                                 ------------
Gross Profit                                        2,532,784

Operating Expenses
  Selling & Marketing                                       -
  General & Administrative                            263,017
  Insiders Compensation                                     -
  Professional Fees                                         -
  Idle Facilities                                           -
  Environmental                                             -
                                                 ------------
     Total Operating Expenses                         263,017
                                                 ------------
Income before interest, depreciation, tax           2,269,768
Interest Expense                                    5,065,813
Depreciation                                          642,725
Other (Income) Expenses                              (127,591)
Restructuring
  Professional Fees                                   753,000
  Other                                                22,182
Amortization of Deferred Financing Costs                    -
Equity Loss (Earnings) in Subsidiary                        -
Total Interest, Depreciation & Other Items          6,356,128
                                                 ------------
Net Income Before Taxes                            (4,086,360)
Federal Income Tax                                          0
                                                 ------------
Net Income (Loss)                                 ($4,086,360)
                                                 ============

                     Scotia Pacific Company LLC
                   Cash Receipts and Disbursements
                  For the Month Ended May 31, 2007

Receipts
  Cash Sales                                               $0
  Collection of Accounts Receivable                         0
  Loans & Advances                                          0
  Sale of Assets                                            0
  Other
     Interest Income                                  210,693
     Log Sales                                      2,894,486
     Other                                                500
                                                 ------------
     Total Receipts                                 3,105,679

Disbursements
  Net payroll                                         193,008
  Payroll txes paid                                    84,211
  Sales, use & other taxes paid
  Secured/rentals/leases                               24,941
  Utilities & telephone                                   295
  Insurance                                            26,430
  Cost of goods sold
  Vehicle expenses                                      1,436
  Travel & entertainment                                6,929
  Repairs, maintenance & supplies                       4,223
  Administrative & selling                            358,535
  Other
                                                 ------------
     Total Disbursements from operations              700,008

Professional fees                                     857,098
U.S. Trustee fees
Interest                                              246,382
Other reorganization expenses
                                                 ------------
     Total Disbursements                            1,803,488
                                                 ------------
Net Cash Flow                                       1,302,191
                                                 ------------
Cash, at the beginning of the month                49,684,578
                                                 ------------
Cash, at the end of the month                     $50,986,768
                                                 ============

                       About Pacific Lumber

Headquartered in Oakland, Calif., The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jeffrey L. Schaffer, Esq.,
William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard
Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation
is Pacific Lumber's lead counsel.  Nathaniel Peter Holzer, Esq.,
Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at
Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-
counsel.  Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at
Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead
counsel.  John F. Higgins, Esq., and James Matthew Vaughn, Esq.,
at Porter & Hedges LLP, is Scotia Pacific's co-counsel.

When Pacific Lumber filed for protection from its creditors, it
estimated assets and debts of more than $100 million.  Scotia
Pacific listed total assets of $932,000,000 and total debts of
$765,978,335.  The Debtors' exclusive period to file a chapter 11
plan expires on Sept. 18, 2007, as extended.  The Debtors'
exclusive period to solicit acceptances of that plan expires on
Nov. 19, 2007.  (Scotia/Pacific Lumber Bankruptcy News, Issue
No. 20, http://bankrupt.com/newsstand/or 215/945-7000).   


SOLUTIA INC: Earns $48 Million in May 2007
------------------------------------------

                Solutia Chapter 11 Debtors
            Unaudited Statement of Consolidated
                   Financial Position
                   As of May 31, 2007

                         ASSETS

Cash                                                $59,000,000
Trade Receivables, net                              203,000,000
Account Receivables-Unconsolidated Subsidiaries      78,000,000
Inventories                                         185,000,000
Other Current Assets                                147,000,000
Assets of Discontinued Operations                     9,000,000
                                                 --------------
Total Current Assets                                681,000,000

Property, Plant and Equipment, net                  655,000,000
Investments in Subsidiaries and Affiliates          687,000,000
Intangible Assets, net                              100,000,000
Other Assets                                         58,000,000
                                                 --------------
Total Assets                                     $2,181,000,000
                                                 ==============

             LIABILITIES AND SHAREHOLDERS' DEFICIT

Accounts Payable                                   $186,000,000
Short Term Debt                                     975,000,000
Other Current Liabilities                           157,000,000
Liabilities of Discontinued Operations               31,000,000
                                                 --------------
Total Current Liabilities                         1,349,000,000

Long-Term Debt                                                0
Other Long-Term Liabilities                         191,000,000
                                                 --------------
Total Liabilities not Subject to Compromise       1,540,000,000

Liabilities Subject to Compromise                 1,896,000,000

Shareholders' Deficit                            (1,255,000,000)
                                                 --------------
Total Liabilities & Shareholders' Deficit        $2,181,000,000
                                                 ==============

                Solutia Chapter 11 Debtors
      Unaudited Consolidated Statement of Operations
            For the Month Ended May 31, 2007

Total Net Sales                                    $234,000,000
Total Cost Of Goods Sold                            218,000,000
                                                 --------------
Gross Profit                                         16,000,000

Total MAT Expense                                    18,000,000
                                                 --------------
Operating Income (Loss)                              (2,000,000)

Equity Earnings from Affiliates                               0
Interest Expense, net                                (9,000,000)
Other Income, net                                    34,000,000

Reorganization Items:
Professional fees                                    (5,000,000)
Employee severance and retention costs                        0
Other                                                 1,000,000
                                                 --------------
                                                    (4,000,000)
                                                 --------------
Income from continuing operations before taxes       19,000,000

Income tax expense (benefit)                                  0

Income from discontinued operations                  29,000,000
                                                 --------------
Net Income                                          $48,000,000
                                                 ==============

                          About Solutia Inc.

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

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

The Court is set to consider approval of the Disclosure
Statement describing Solutia's First Amended Reorganization
Plan on July 10, 2007.  The Debtors' exclusive period to file
a plan expires on July 30, 2007.  (Solutia Bankruptcy News,
Issue No. 91; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).    

                             *********

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
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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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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The TCR subscription rate is $775 for 6 months delivered via e-
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for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
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                    *** End of Transmission ***